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Thangamayil Jewellery Ltd.

BSE: 533158 Sector: Consumer
NSE: THANGAMAYL ISIN Code: INE085J01014
BSE 00:00 | 04 Jul 985.00 16.20
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NSE 00:00 | 04 Jul 971.65 2.00
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OPEN 982.15
PREVIOUS CLOSE 968.80
VOLUME 18
52-Week high 1520.00
52-Week low 790.00
P/E 35.07
Mkt Cap.(Rs cr) 1,351
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 982.15
CLOSE 968.80
VOLUME 18
52-Week high 1520.00
52-Week low 790.00
P/E 35.07
Mkt Cap.(Rs cr) 1,351
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Thangamayil Jewellery Ltd. (THANGAMAYL) - Auditors Report

Company auditors report

To the Members of Thangamayil Jewellery Limited Report on the Audit of the FinancialStatements Opinion

We have audited the accompanying Ind AS nancial statements of M/s. ThangamayilJewellery Limited ("the Company") which comprise the Balance Sheet as at March31 2021 the Statement of Prot and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and a summary of the signicant accounting policies and other explanatory information(hereinafter referred to as"the Ind AS Financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS Financial statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of a airs of the Company as at March 31 2021 the prot and totalcomprehensive income changes in equity and its cash o ws for the year ended on that date.

Basis for opinion

We conducted our audit of the Ind AS Financial statements in accordance with theStandards on Auditing specied under section 143(10) of the Act (SAs). Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Ind AS Financial statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the independence requirements that are relevantto our audit of the Ind AS Financial statements under the provisions of the Act and theRules made there under and we have fullled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained is su cient and appropriate to provide a basis for ouraudit opinion on the Ind AS Financial statements.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignicanc e in our audit of the Ind AS Financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS Financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated in our report.

1. Revenue Recognition

Revenue from sale of goods is recognized when control of the products being sold istransferred to the customer and when there are no other unfullled obligations. Theperformance obligations in the contracts are fullled at the time of dispatch delivery orupon formal customer acceptance depending on customer terms.

Auditor's Response

Principal Audit Procedures

Our audit approach consisted testing of the design and operating e ectiveness of theinternal controls and substantive testing as

follows:

v We assessed the appropriateness of the revenue recognition accounting policies andits compliances with applicable

accounting standards. We read the contracts with customer to determine appropriatenessof revenue recognition.

v Selected a sample of transactions and tested the operating e ectiveness of theinternal control relating to identication of the distinct performance obligations anddetermination of transaction price. We carried out a combination of procedures involvingenquiry and observation reperformance and inspection of evidence in respect of operationof these controls.

v We evaluated the design of key internal nancial controls and operating e ectivenessof the relevant key controls with respect

to revenue recognition on selected transactions.

v We performed substantive testing by selecting samples of sales made at the retailoutlets using statistical sampling and tested the underlying sales to collection reportsand bank statements. For other sales (excluding retail sales) we performed substantivetesting for the revenue transactions using statistical sampling and tested the underlyingdocumentation supporting the sales.

v Samples in respect of revenue recorded for materials were tested using a combinationof approved value of materials including

customer acceptances and disputes.

v We reviewed the collation of information used to prepare the disclosure relating tothe periods over which the remaining

performance obligations will be satised subsequent to the balance sheet date.

v We tested on a sample basis specic revenue transactions recorded before and afterthe nancial year end date to determine

whether the revenue had been recognised in the appropriate nancial period.

2. INVENTORIES

The Jewellery and other allied products stock held at various locations includingmanufacturing units stores and third-party locations. The Company has a plan whereininventory is veried on a periodic basis to ascertain the existence of inventory. Inventoryvaluation involves signicant assumptions and estimations made by the Management.Management also makes an estimate for non- moving inventory based on the age of theinventory.

We have identied inventory as a key audit matter because of the number of locationsthat inventory is held at and the judgement

applied in the valuation of inventory and provision for inventory.

Auditor's Response

In view of the signic ance of the matter we applied the following audit procedures inthis area among other procedures to obtain

su cientappropriateaudit evidence.

v We assessed the appropriateness of the inventories accounting policies and itscompliances with applicable accounting

standards.

v We evaluated the design of key internal nancial controls and operating e ectivenessof the relevant key controls with respect

to physical verication of inventory valuation of inventory and provision forinventory.

v We evaluated the design implementation and operating e ectiveness of management'sgeneral IT controls and key application controls over the Company's IT systems whichgovern inventories including access controls controls over program changes interfacesbetween di erent systems.

v For locations selected using statistical sampling and performed surprise stock countsat select stores on a sample basis.

v For samples selected using statistical sampling we have obtained conrmations ofinventories held with third parties and respective stores.

v We tested on a sample basis the valuation of inventories as at the year end and theManagement's assessment of provision required for obsolete and non moving inventories heldas at the balance sheet date if any.

v We considered the adequacy and appropriateness of the disclosures in the nancialstatements relating to the inventories.

3. EVALUATION OF UNCERTAIN TAX POSITIONS

The Company has material uncertain tax positions including matters under disputewhichinvolves signicant judgment to determine the possible outcome of these disputes.

Auditor's Response

Principal Audit Procedures

Obtained details of completed tax assessments and demands for the year ended March 312021 from management. We involved our internal experts to challenge the management'sunderlying assumptions in estimating the tax provision and the possible outcome of thedisputed taxes. Our internal experts also considered legal precedence and other rulings inevaluating management's position on these uncertain tax positions.

Information Other than the Ind AS Financial statements and Auditor's Report Thereon:

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexure to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the Ind AS Financial statements and our auditor's report thereon.

Our opinion on the Ind AS Financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS Financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the Ind AS Financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Ind AS Financial statements:

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS Financial statementsthat give a true and fair view of the nancial position nancial performance totalcomprehensive income changes in equity and cash o ws of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal nancial controls that wereoperating e ectively for ensuring the accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the Ind AS Financial statements that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the Ind AS Financial statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is responsible for overseeing the Company's nancial reportingprocess.

Auditor's Responsibilities for the Audit of the Ind AS Financial statements:

Our objectives are to obtain reasonable assurance about whether the Ind AS Financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to inuenc e the economic decisions of users taken on thebasis of these Ind AS Financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also :

1.Identify and assess the risks of material misstatement of the Ind AS Financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is su cient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

2. Obtain an understanding of internal nancial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(I) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal nancial controls system in place and the operating eectiveness of such controls.

3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast signicant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Ind AS Financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

5. Evaluate the overall presentation structure and content of the Ind AS Financialstatements including the disclosures and whether the Ind AS Financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the Financial Statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Financial Statements may be inuenc ed. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the e ect of anyidentied misstatements in the Financial Statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and signicant audit ndings including any signicantdeciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most signicanc e in the audit of the Ind AS Financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benets of such communication.

Report on Other Legal and Regulatory Requirements:

1. 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 speciedin paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act based on our audit we report that :

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary

for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our

examination of those books.

c) The Balance Sheet the Statement of Prot and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid Ind AS Financial statements comply with the Ind ASspecied 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 as on March31 2021 taken on record by the Board of Directors none of the directors is disqualied ason March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct.

f) With respect to the adequacy of the internal nancial controls over nancial reportingof the Company and the operating e ectiveness of such controls refer to our separateReport in"Annexure B".

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended :

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the

Company to its directors during the year is in accordance with the provisions ofsection 197 of the Act.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous :

I) The Company has disclosed the impact of pending litigations on its nancial positionin its Ind AS Financial statements.

ii)The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

iii)There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the

Company.

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of

Thangamayil Jewellery limited of even date)

I) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of x ed assets.

(b) The Company has a regular programme of physical verication of its x ed assets bywhich all x ed assets are veried in a phased manner over a period of three years. In ouropinion this periodicity of physical verication is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the programme certain x edassets were physically veried during the year and no material discrepancies were noticedon such verication.

(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the company

the title deeds of immovable properties of the Company are held in the name of theCompany.

ii) (a) The inventories have been physically veried at reasonable intervals during theyear by the management including inventory given to third parties / gold smiths on jobwork basis. For stocks lying with third parties at the year-end written conrmations havebeen obtained by the Management. In our opinion the frequency of such verication isadequate.

(b) In our opinion and according to the information and explanations given to us theprocedures for physical verication of inventory followed by the management were reasonableand adequate in relation to the size of the company and the nature of its business.

(c) In our opinion the company has maintained proper records of inventory. We areinformed that no major discrepancies were noticed on verication between the physical stockand book records.

iii) (a) The Company has not granted any loans secured or unsecured to companies rms Limited Liability Partnerships or other parties covered in the Register maintained underSection 189 of the Companies Act 2013. Accordingly sub Clause (a)(b) and (c) of theOrder are not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of loans given and investment made. Further there are no guarantees andsecurity given in respect of which provisions of section 185 and 186 of the Act areapplicable.

v) In our opinion and according to the information and explanations given to us theCompany has complied with the applicable directives issued by the Reserve Bank of Indiaprovisions of Section 73 to 76 of the Act any other relevant provisions of the Act andthe relevant rules framed thereunder with regard to deposits accepted from the public.Accordingly there have been no proceedings before the Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in thismatter and no order has been passed by any of the aforesaid authorities.

vi) The Central Government has not prescribed the maintenance of cost records underSection 148 of the Act for any of the products manufactured by the Company.

vii) a) According to the records provided to us the Company is regular in depositingwith the appropriate authorities undisputed statutory dues including Provident FundEmployees' State Insurance Income- Tax Goods and Service tax duty of Customs Cess andother material statutory dues applicable to the Company.

According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were in arrears as at 31 March 2021 for a periodof more than six months from the date they become payable.

b) According to the information and explanations given to us there are no materialdues of Provident Fund Employees' State Insurance Income- Tax Goods and Service taxduty of Customs Cess and other material statutory dues which have not been depositedby the Company on account of disputes except for the following:

Name of the Statute Nature of Dues Rs.Lakhs Period to which the amount relates Forum where disputes is pending
Tamil Nadu Value Added Tax 2006 Disallowance of Input tax disputes related reversal of input tax 56.00 2011-12 to 2012-13 Deputy Commissioner (Appeals) of Sales Tax Madurai
Customs Act 1962 Customs Duty 154.00 2011-12 Appellate Tribunal / Commissioner (Appeals)
Income Tax Act1961 Income tax Tax deducted at source 14.51 2012-13 and 2013-14 CIT Appeals- I Madurai
Income Tax Act 1961 Disallowance of normal loss on beaten gold melting 590.59 2016-2017 Commissioner of Income Tax (Appeals I)
Income Tax Act 1961 Disallowance of normal loss on beaten gold melting 857.58 2017-2018 Commissioner of Income Tax (Appeals I)

viii) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to nancialinstitutions and banks. The Company did not have any outstanding loans or borrowings fromgovernment and there are no dues to debenture holders during the year.

ix) In our opinion and according to the information and explanations given to us theCompany has not raised money by way of further public o er (including debt instruments)during the year and the term loans taken by the Company have been applied for the purposefor which they were raised.

x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its o cers

or employees has been noticed or reported during the course of our audit.

xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii) According to the information and explanations given to us in our opinion theCompany is not a Nidhi Company as prescribed

under Section 406 of the Act.

xiii) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the nancial statements as required by the applicable accounting standards.

xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review and therefore the provisions ofclause 3(xiv) of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany. xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.

Annexure - B to the Independent Auditors' Report

Report on the Internal Financial Controls over nancial reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies

Act 2013 ("the Act")

OPINION

We have audited the internal nancial controls with reference to nancial statements ofThangamayil Jewellery Limited ("the Company") as of 31 March 2021in conjunctionwith our audit of the nancial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequate internal nancialcontrols with reference to nancial statements and such internal nancial controls wereoperating e ectively as at 31 March 2021 based on the internal nancial controls withreference to nancial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the"Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalnancial controls based on the internal control over nancial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting ( the" Guidance Note") issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal nancial controls that were operating e ectively for ensuring theorderly and e cient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable nancial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal nancial controlsover nancial reporting based on our audit. We conducted our audit in accordance with theGuidance Note issued by ICAI and the Standards on Auditing prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalnancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal nancial controls over nancial reporting was established andmaintained and if such controls operated e ectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal nancial controls system over nancial reporting and their operating eectiveness. Our audit of internal nancial controls over nancial reporting includedobtaining an understanding of internal nancial controls over nancial reporting assessingthe risk that a material weakness exists and testing and evaluating the design andoperating e ectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the nancial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is su cient and appropriate toprovide a basis for our audit opinion on the Company's internal nancial controls systemover nancial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal nancial control over nancial reporting is a process designed toprovide reasonable assurance regarding the reliability of nancial reporting and thepreparation of nancial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal nancial control over nancialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reec t the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of onancial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material e ect on the nancial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal nancial controls over nancialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal nancial controls over nancialreporting to future periods are subject to the risk that the internal nancial control overnancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

For Srinivas&Padmanabhan

Chartered Accountants

F.Reg No: 004021S

K.M.Padmanabhan

Partner

M.No: 026594

Place Madurai

Date June 24 2021

.