THE MEMBERS OF
THANGAMAYIL JEWELLERY LIMITED
The Directors are pleased to present the 18th Annual Report and the Audited Statementof Accounts for the year ended 31st March 2018.
1. FINANCIAL RESULTS:
Pursuant to the notification dated February 16 2015 issued by the Ministry ofcorporate affairs the company has adopted the Indian Accounting Standards (''IndAS") notified under the Companies (Indian Accounting Standards) Rules 2015 witheffect from April 1 2017. Financial statements for the year ended and as at March 312017 have been restated to conform to Ind AS.
| || ||(In lakhs) |
|Particulars ||2017-2018 ||2016-2017 |
|Sales ||137929 ||129946 |
|Gross Profit ||12818 ||10894 |
|Earnings before Interest Depreciation and Taxation (EBITDA) ||6090 ||4958 |
|Finance Cost ||1879 ||2084 |
|Depreciation ||817 ||943 |
|Profit Before Tax (PBT) ||3394 ||1930 |
|Tax ||1106 ||533 |
|Profit After Tax (PAT) ||2287 ||1397 |
|Other comprehensive income ||(13) ||(2) |
|Total comprehensive income for the year net of tax ||2274 ||1395 |
On a turnover of Rs.137929 lakhs for the year the Company made an operating profit ofRs. 12818 lakhs against Rs. 10894 lakhs made in last year. It represents 18% increaseover the last year.
The better results are due to stable gold price realisation and also due to bettermarketing initiatives under taken by the management. The company could perform better dueto margin expansion resulted on account of better product mix sales. It is also marginallyattributable to better volume of diamond ornaments on a comparable basis with last year.
You may notice that our top line growth over a period of four years remains in a narrowband. However due to various initiatives taken by the management the value addition tothe products sold continuously improved from 3.75% in 2015 to 9.30% in 2018 resulting inthe gross profit growth of 150% in the four years period.
Your management is continuously focusing on bottom line growth more thanproportionately that of turnover growth and believes on the importance of areas of valuecreation by optimally exploring all the resources at its disposal. While we plan to pushthe top line by enlarging market share of the business moderately your management alsostrives to maintain the pricing power in a crowded place of competitive environment. Thecompany consciously decided not to expand branches in haste and strategically played onthe brand visibility created over two decades of operations by enlarging the size andinventory of the existing branches one by one for gettng improved results.
You may find from the financials that our size of Balance sheet significantly increasedin 17-18 and the fruits of the enlarged Balance sheet would be positively felt in the yearto come. To achieve results going forward a business plan will be implemented with abetter product mix diamond sales promotion capital productivity improvement andretention of scale of economy to attain improved operating margin.
The major reasons for better bottom line performance are summarized hereunder;
+ Stable gold price realisation throughout the year.
+ Paradigm shift taken place in marketi'ng& promotional initiatives.
+ Improved production from own manufacturing units.
+ Higher level of metal loan resultant in interest savings.
+ Relaunching of old branches with a view to get facelift and better visibility ofbrand. + Better contribution from diamond sales.
+ Change in product mix to get optimum result on inventory management.
2.KEY STRATEGIES ADOPTED BY THE MANAGEMENT
+ Savings in making cost of jewellery due to change in procurement plan.
+ Cost of finance and promotional expenses were relatively reduced.
+ The commitments of carrying " Right product for Right Market" that resultedin sales growth.
+ Improvement in "same store" growth in turnover
+ Planned improvement in gross profit margin by optimizing all resources of theCompany.
The Board of Directors of the Company are pleased to recommend a dividend of Rs.3.50/-(35%) per equity share for 2017-18 ('2 in 201617) on 13719582 equity shares of Rs.10each. The proposed dividend is subject to the approval of shareholders in the ensuingAnnual General Meeting of the company will result in cash outflow of Rs.579 lakhsincluding Dividend Distribution tax there on.
The company started availing more loan under metal loan category. It acted as a naturalhedge for the fluctuations in the gold price movement. Currently the hedge ratio isaround 65:35 as against 50% of the last year. The increase in "Hedging"proportion for the current year augers well for the company. It is our endeavour to takein to 75:25 in future. Some portion of gold under own purchases is a necessity as suddenescalation in gold price often results in liquidity mismatch due to increase in margincalls. Based on our experience and the current gold price movement trend we are of theopinion that the ratio at the most can go up to 75:25 in the overall business /operational interest of the company.
5. CONTINUING CHALLENGES
+ Frequent failure of gold companies to meet their liabilities in the recent past makesthe industry to suffer for credit entitlements from Banks;
+ Exceptional regulatory mechanism placed by the Government on the industry;
+ Current account gap in trade perhaps as in the past may bring restrictions in thegold import by the Government.
+ Possible restrictions on gold retail industry in taking customer advances for futuredelivery post passing of regulatory bill by the parliament.
+ Highly fluctuating gold price movement necessitate both on account of incrementalgold price and also on account of INR-US$ currency behaviour;
+ Enlarged risks associated with bank credit exposure to the industry may compel areduction in credit rating by the credit rating agencies;
+ Monsoon failures structural changes witnessed in the saving / spending habits of thepeople escalation in the minimum wage Act and Income tax regulatory constraints maycumulatively affect the growth and operations of the industry.
6. FUTURE PROSPECTS
+ Due to strict implementation of regulatory matters the trade would become moreresponsible & disciplined in future. We are also able to see a clear shift in thepolarization impact in the industry.
+ The year went by clearly demonstrated your Company's potentials to improve"same store sales" with better top line and bottom line impact while strivinghard to improve the gross margin in operations.
+ The inherent strength of the business model comprising of substantial sales of silverornaments and a moderate improvement in Diamond sales to cover a part of the fixed overheads and to improve the margin of safety while bringing down the BEP level consistentlyis explored for sustenance of growth.
+ In general expanding gross margin better expected stock turnover times improved"same store sales" and planned reduction in per gram "cost of sales"of gold ornaments will go a long way in sustaining the growth while improving theprofitability of the company.
+ Barring unforeseen circumstances the current year 2018-19 would see a moderate butsustainable growth in performance on all fronts.
Key performance indicators to look at for future;
+ Increase in same store sales. Almost all outlets brought in improved sales in 17-18.
+ Diamond sales in value have gone up from Rs. 236 lakhs to Rs. 554 lakhs in 17-18.
+ Operating profit margin improved by 90 bps points due to better product-mixrealization.
+ Net profit before tax also improved by 98 bps due to better cost management andsavings in interest outgoes;
+ Your Company will focus in further improvement of these factors to improve theoverall profitability.
7. POSITIVE IMPACT OF BALANCE SHEET LIABILITY MANAGEMENT
The proactive steps taken in the past to reduce dependence on bank barrowings startedto yield better results. The company consistently substituted costlier working capitalfacilities with metal loan advance from customers and bill discounting facilities. Theeffective cost of funds got reduced as seen from below given chart in the past 4 years;
Limit Used vs Interest Payout Rs.. (In lakhs)
|Year ended 31st March ||Limit used ||Interest & other charges ||As a % of loan availed |
|2015 ||18043 ||2525 ||14.00% |
|2016 ||13355 ||1579 ||11.82% |
|2017 ||12722 ||1135 ||8.92% |
|2018 ||16805 ||1064 ||6.33% |
For the first time your company is exploring the avenues for furtherance of businesswith the help of franchisee model. The company is already working on the modalities ofthat model by properly evaluating risk/ reward potentials. Your board is of the opinionatleast on an experimental basis two/ three newly contemplated outlet may be tried withthe franchisee model in the current year 2018-19. The progress in this direction as andwhen put to operation will be informed to the shareholders at appropriate time.
The net internal accruals expected out of operations will be deployed back intobusiness to improve the profits of the company in the years to come.
8. DEFERRED TAX LIABILITIES
As expected in the last year report Deferred tax assets was fully absorbed by thecompany. From Rs. 547 lakhs deferred tax assets of last year it got changed to DeferredTax liabilities of Rs.159 lakhs. Under the previous GAAP deferred tax accounting is doneusing income statement approach which focuses on differences between taxable profits andaccounting profits for the period. Ind AS 12 Income Taxes requires to account for deferredtaxes using the balance sheet approach which focuses on temporary differences between thecarrying amount of an asset or liability in the balance sheet and its tax base. Theapplication of Ind AS 12 approach has resulted in recognition of deferred tax on temporarydifferences which were not required under previous GAAP in addition to the varioustemporary differences consequent to Ind AS transitional adjustments. Consequentlydeferred tax assets (net) is reduced by Rs.216 lakhs as at 1st April 2016 and total equitydecreased by Rs.216 lakhs as at 1st April 2017.
9. CONTRIBUTION TO EXCHEQUER
The Company is a regular payer of taxes and other duties to the Government. The Companyhas paid Value Added Tax and GST of Rs. 3396 lakhs as compared to Rs. 1242 lakhs paid inthe previous year and Advance income tax of Rs. 738 lakhs for financial year 2017-18.
10. CAPITAL EXPENDITURE
During the year we capitalized Rs.1058 Lakhs to our gross block comprising of Rs.475lakhs for Plant & Machinery and Furniture & Fiffings and other assets and balanceof Rs.583 lakhs for Computer Equipment's including Software.
The capital work in progress amount outstanding as on 31st March 2018 is Rs. 87 lakhs.This is comprising of interiors and other assets still to be put in use and yet to becapitalised.
For the previous year we capitalized Rs. 441 lakhs to our gross block comprising Rs.349 lakhs for Plant & Machinery and Furniture & Fiffings and others and thebalance of Rs. 92 lakhs for Computer Equipments including Software.
In continuation of last year this year is the best year wherein the quantum ofabsolute reduction is commensurate with the quantum of loan exposure. The interest coverratio has also improved to 3.27 times due to better inventory utilization in this year.
Due to continued thrust and efforts made by the company interest outgo for every gramof gold ornaments sold to be lower than 17-18 in the years to come.
The secured working capital borrowings of the company as at 31st March 2018 stood upRs. 20896 lakhs as against Rs. 13586 lacs in the previous year. The existing sanctionedlimits along with bill discounting limit of Rs. 1000 lakhs aggregating to Rs. 25000lakhs is sufficient to take care of current year requirement of the company. Out of Rs.3000 lacs term loan obtained from Karur Vysya Bank only a sum of Rs. 208 lakhs remains tobe paid. It is pertinent to note that your company repaid term loan ahead of the scheduleof repayment and currently has Rs. 208 lakhs as against Rs. 3000 lakhs borrowed as longterm loan from bank.
The eligible fixed deposits from public & shareholders is Rs. 5302 lakhs. Howeverthe company took only Rs. 4686 lakhs as deposits as at 31st March 2018. Besides thepromoters brought in a sum of Rs. 1240 lakhs at lower interest rate of 6% per annum tosupport the Company as long term funds. In all the liquidity position is quite sound andcomfortable.
Interest outgoes have decreased marginally. We may have to relate it to the increase incurrent assets. The per gram interest payment works out to Rs.45 only.
12. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditors of the Company have not reported any fraud as specified underthe second proviso of Section 143(12) of the Companies Act2013 (including any statutorymodification(s) or re-enactment(s) for the time being in force).
13. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(5) of the Companies Act 2013:
a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed and there is no material departure.
b) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for the year;
c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) The directors had prepared the annual accounts on a Rs.going concern' basis;
e) The directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively. Internal financial control means the policies and procedures adopted by theCompany for ensuring the orderly and efficient conduct of its business including adherenceto Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information; and
f) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
14. MANUFACTURING FACILITIES
Utilisation of own manufacturing facilities including on job work basis is around 90%as against 70% of the earlier years. The overall cost of production has come down due toattainment of scale of economics in the manufacturing facilities. It is expected toimprove the own manufacturing capacity utilisation in forthcoming years. On a need basisat short notice handmade items capacity could be commissioned.
15. DEPOSITORY SYSTEM
The trading in the Equity Shares of your Company is under compulsory dematerializationmode. As on March 31 2018 Equity Shares representing 100% of the equity share capitalare in dematerialized form. As the depository system offers numerous advantages membersare requested to take advantage of the same and avail of the facility of dematerializationof the Company's shares.
16. CORPORATE GOVERNANCE
Your Company has been practising the principles of good corporate governance over theyears and lays strong emphasis on transparency accountability and integrity. A separatesection on Corporate Governance and a certificate from the statutory auditors of theCompany regarding compliance of conditions of Corporate Governance as stipulated underRegulation 27 of SEBI (LODR) 2015 of the Listing Agreement(s) with the Stock Exchange(s)forms part of this report. The Chairman and Managing Director and Joint Managing Directorsof the Company have certified to the Board on financial statements and other matters inaccordance with Regulation 17 (8) of SEBI (LODR) 2015 of the listing agreement pertainingto CEO certification for the financial year ended 31st March 2018.
17. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report of financial position and results ofoperations of the Company for the year under review as required under Regulation 17 (7) ofSEBI (LODR) 2015 of the Listing Agreement with the Stock Exchanges is given as a separatestatement forming part of this Annual Report.
18. LISTING OF SHARES
The Equity Shares of your Company continue to remain listed with Bombay Stock ExchangeLimited and National Stock Exchange of India Limited. The listing fees for the year2018-19 have been paid to these Stock Exchanges. The Shares of the companies arecompulsorily tradable in dematerialized form.
The assets of the Company are adequately insured against fire and such other risks asare considered necessary by the Management.
20. HUMAN RESOURCE DEVELOPMENT
Many initiatives have been taken to support business through organizational efficiencydevelopment resourcing performance & compensation management competency baseddevelopment career & succession planning and organization building. Leadershipdevelopment is one of the primary key initiatives of the Company. Primary personaldevelopment program has been taken up as long term strategy of the Company. A significanteffort has also been undertaken to develop leadership as well as administrative /functional capabilities in order to meet future talent requirement. The Company continuesto maintain cordial relations without any interruption in work. As on 31st March 2018 theCompany has 1434 employees on its rolls as against 1213 employees in the previous year.
21. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In term of the provision of Section 197(12) of Act read with rules 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial personnel) Rules 2014 a statementshowing the names and other particulars of the employees drawing remuneration in excess ofthe limits set out in the said rules are provided in the Annual Report. Disclosurespertaining to remuneration and other details as required under section 197(12) of the Actread with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules2014 are provided in the Annexure -1.
Having regard to the provision of the first provision to Section 136(1) of the Act andas advised the Annual Report excluding the aforesaid information is being sent to themembers of the Company. The said information is available for inspection at the corporateoffice of the Company during working hours and any member interested in obtaining suchinformation may write to the Company Secretary and the same will be furnished on request.The full Annual Report including the aforesaid information is being sent electronically toall those members who have registered their main addresses and is available on theCompany's website.
22. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OFTHE COMPANY
Pursuant to section 134 (3) (n) of the Companies Act 2013 & under regulation 21 ofthe SEBI (Listing obligations and disclosure requirements) Regulations 2015 the companyhas adopted risk management policies to monitor the business. Business Risk Evaluation andManagement (BRM) is an on-going process within the Organization. The Company has a robustrisk management framework to identify monitor and minimize risks as also identifybusiness opportunities.
The objectives and scope of the Risk Management Committee broadly reviews:
+ Oversight of risk management performed by the executive management;
+ The BRM policy and framework formulated in line with local legal requirements andSEBI guidelines;
+ Risks and evaluate treatment including initiating mitigation actions and ownership asper a pre-defined cycle;
+ Defining framework for identification assessment monitoring and mitigation andreporting of risks.
+ Within its overall scope as aforesaid the Company shall review risks trendsexposure and potential impact analysis and mitigation plan.
23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
INFORMATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 134 (3)(M) OF THE COMPANIESACT 2013 READ WITH RULE 8(3) OF THE COMPANIES RULES 2014.
a) Conservation of Energy
The disclosure of particulars with respect to conservation of energy pursuant toSection 134 (3) (m) of the Companies Act 2013 read with rule 8(3) of the companies(accounts) rules 2014 are not applicable as our business is not specified in the Schedule. However the company makes its best efforts to conserve energy in a more efficient andeffective manner.
b) Technology Absorption Adaptation and Innovation
The company has not carried out any specific research and development activities. Thecompany uses indigenous technology for its operations. Accordingly the informationrelated to technology absorption adaptation and innovation is reported to be NIL.
c) Foreign Exchange Outgo
Rs. (In lakhs)
|Particulars ||2017 -18 ||2016 -17 |
|Travelling Expenses ||1.14 ||- |
Potential Risks Concerns and Mitigation Plan Risk of loss of Positioning in the marketplace Due to competition in the retail trade there is a possibility that our market sharefrom a particular place of operation or region may decline. A lot of new entrants to theretail trade suffer from lack of knowledge of customer's preference and on qualityparameters and price war. Therefore your company with its fuller penetration to ruralmarket is well placed to participate in the rural success story of the country. In orderto maintain/improve market share in the areas we operate in the light of saggingregressive demand trends we have cautiously brought down the mark up value for ourproducts moderately and also improved customer service through online and offline mode.
Monsoon failure for successive years in southern parts of Tamilnadu adversely affectedthe company's business. The purchasing power with rural people who depend on Agriculturesubstantially got marginalized. This has resulted in demand compression and led to aperiod of continuous recession unparalleled in the recent history of jewellery trade.Dwindling customer demands and purchase of other electronic goods by the customers haveresulted in purchase of ornaments generally coming down in jewellery business. This hasresulted in customer opting for light weight items. The company has decided to stock moreof such items in order to get better share from sagging market as in the last year.
Change in lifestyle
The disposable income of both middle class and upper middle class and change in lifestyles of people leads to shifting of consumer base to branded jewellery. Even though thiswill be a major risk factor for long term growth of the company the change in people'staste and preferences are ascertained through various sources and accordingly change inour product mix were done by well- equipped team.
Economic slowdown can affect the demand and the sales for the company.
Mitigation: The Company has a diversified product portfolio that generates robust salesfrom either of the category to balance any uncertain circumstances. The present Indianeconomy is quite strong as commodity prices and bank lending rates have declined. Sincejewellery industry is always associated with wedding and other traditional occasions anddemand for jewellery remain constant.
Increasing competition from new entrants as well as existing ones.
Mitigation: The Company manufactures quality products and better services and offersthat at a reasonable price to reach people through communications via different media. Itundertakes extensive promotion and advertising to create value positioning and recallfor the power brands.
Due to lack of control over the cost may lead to lower profitability and can impactfuture growth prospects.
The centralised procurement policy by which our team anticipates stock requirement andmake bulk purchases at the time when gold price is low. The economies of scale and correctprocurement timing enable the company to significantly reduce the cost of the rawmaterial. The company procures a certain quantum of gold on lease from banks buying thegold on daily basis on the actual sale made by it. This strategy safeguards the companyfrom gold price fluctuation.
Gold price fluctuation risks
Gold price fluctuation risk could arise on account of frequent changes in gold priceseither up or downside momentum. It could have adverse impact on earnings. We aremaintaining our inventory price hedging around 65:35 basis. This will help the companywith any gold price fluctuation of gold price. Your Board will take appropriate action inmanaging the fluctuation impact in gold price movement from time to time to increase to75:25 basis.
Change in Government Policies
New government regulations pertaining to taxation and banking stringent norms willaffect the demand and supply chain. Your company with help of well-experienced IT andmanagerial personnel the implications of all these regulations are clearly analysedinterpreted and necessary compliance measures are undertaken
Employee attrition may affect the operation of the Company.
Mitigation: The Company encourages new talent and provides specialised training to thesales force to ensure the roots are grounded well improving the performance standards andpositively contribute towards growth of the company.
Sluggish sales of products due to seasonal changes may affect profitability of theCompany.
Mitigation: The wide ranged designed product profile and customer needs product willhelp against the season ups and down.
Non-compliance of regulations may raise the operation risk for the Company.
Mitigation: The Company has a structured internal control system in place to ensure allstatutory rules and regulations are met including changes in taxation and other regulatoryframework.
The Company is improving meticulously its focus on cost through a resourceful operatingsystem increase in the production Capacity and strengthening of manufacturing units andvarious sourcing points are being pursued to reduce manufacturing costs and alsodelivering quality of product at lower price. Logistics facilities are strengthened.Synergy optimization in various cost components is achieved.
24. INTERNAL CONTROL SYSTEMS
The Board of Directors is responsible for ensuring that internal financial controlshave been laid down in the Company and that such controls are adequate and is functioningeffectively. TMJL has policies procedures control frameworks and management systems inplace that map into the definition of Internal Financial Controls as detailed in theCompanies Act 2013. These have been established at the entity and process levels and aredesigned to ensure compliance to internal control requirements regulatory compliance andappropriate recording of financial and operational information.
Internal Financial Controls that encompass the policies processes and monitoringsystems for assessing and mitigating operational financial and compliance risks andcontrols over related party transactions substantially exist. The management reviews andcertifies the effectiveness of the internal control mechanism over financial reportingadherence to the code of conduct and Company's policies for which they are responsible andalso the compliance to established procedures relating to financial or commercialtransactions where they have a personal interest or potential conflict of interest ifany.
The Audit Division continuously monitors the efficacy of Internal Financial Controlswith the objective of providing to the Audit Committee and the Board of Directors anindependent objective and reasonable assurance on the adequacy and effectiveness of theorganisation's risk management control and governance processes. The audit plan isapproved by the Audit Committee which reviews compliance to the plan.
During the year the Audit Committee met regularly to review reports submitted by theAudit Division. All significant audit observations and follow-up actions thereon werereported to the Audit Committee.
The Audit Committee also met the Company's Statutory Auditors to ascertain their viewson financial statements including the financial reporting system compliance toaccounting policies and procedures the adequacy and effectiveness of the internalcontrols and systems followed by the Company. The Management acted upon the observationsand suggestions of the Audit Committee.
25. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES (CSR)
Based on last three years average Net profit for the financial year ended 31st March2018 the company is required to spend CSR expenses for Rs. 0.34 lakhs.
With an amount of Rs. 19.66 lakhs spent in the previous year a balance of Rs. 53.34lakhs was available in the previous year to spend towards CSR activities. The Company hasspent the following categories for the financial year ended 31.03.2018:
|Water seeding to plants and providing water to public use ||0.36 |
|2 Gaushala funding ||46.21 |
|3 Education purpose ||2.08 |
|4 Plant sapling for public benefit ||0.58 |
|5 Environment cleaning ||0.50 |
|6 Medical Camp ||2.03 |
|Total amount spent ||51.76 |
|Balance carried over to 2018-19 (Including current year) ||1.92 |
The Company is making further efforts to identify suitable projects under Sch.VII ofthe Act to spend on CSR as per the Companies Act 2013.
The Annual Report on CSR activities is annexed herewith as "Annexure 2".
26. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013
There were no loans & guarantees given or investments made by the Company underSection 186 of the Companies Act 2013 during the year under review.
Particulars of contracts or arrangements with related parties referred to in Section188(1)
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. All Related Party Transactions are placed before theAudit Committee as also in the Board for approval. Prior omnibus approval of the AuditCommittee is obtained on a quarterly basis for the transactions which are of a foreseenand repetitive in nature. The transactions entered into pursuant to the omnibus approvalso granted are audited and a statement giving details of all related party transactions isplaced before the Audit Committee and the Board of Directors for their approval on aquarterly basis.
The Annual Report on related party is annexed herewith as "Annexure 3".
27. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished in Annexure -4 and is attached to this report.
28. ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and Administration) Rules 2014 is furnished in Annexure -5 ( MGT-9 ) and is attached to this report.
29. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
During the year Six Board Meetings and four Audit Committee Meetings were convened andheld. The details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.
30. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
The details of deposits accepted/renewed during the year under review are furnishedhereunder:
|Sl.No ||Particulars ||' in Lakhs |
|1 ||Amount accepted during the year ||2021.44 |
|2 ||Amount remained unpaid or unclaimed as at the end of the year ||46.14 |
|3 ||Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved ||Nil |
Smt.Yamuna Vasini Deva Dasi Non-Executive and NonIndependent Director of the Companyretires by rotation and being eligible seeks reappointment. Your Board recommends herre-appointment.
33. DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfil all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
The Details of familiarisation programme arranged for independent directors have beendisclosed on website of the company and are available atwww.thangamayil.com
34. CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviours of any form and the Board has laid down thedirectives to counter such acts. The code laid down by the Board is known as "code ofbusiness conduct" which forms an Appendix to the Code. The Code has been posted onthe Company's website www.thangamayil.com.
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. The Code gives guidance through examples on the expectedbehaviour from an employee in a given situation and the reporting structure.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code. All Management Staff were given appropriate training in this regard.
35. STATUTORY AUDITORS
The Company's Auditors M/s Srinivas & Padmanabhan Chartered Accountants (FirmReg.No.004021S) Chennai.) were appointed as the Statutory Auditors of the company at theAnnual General Meeting held on July 2017 up to 31st March 2022. The Company has receivedletter from them to the effect that their appointment would be within the prescribedlimits under Section 141(3)(g) of the Companies Act 2013 and that they are notdisqualified from appointment. The companies amendment Act 2018 has dispensed withratification of appointment of auditors under section 139 by shareholders at every generalmeeting vide their notification 7th May 2018 once approved for five years. Hence noresolution need to be passed for their re appointment.
The Auditor's Report to the shareholders for the year under review does not contain anyqualification.
36. 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 the Company hasappointed Mr. S.Muthuraju a Company Secretary in Practice to undertake the SecretarialAudit of the Company. The Report of the Secretarial Auditor is annexed herewith as"Annexure 6".
37. COMMENTS ON AUDITORS' REPORT
There are no qualifications reservations or adverse remarks or disclaimers made byM/s.Srinivas and Padmanabhan Statutory Auditors in their report and by Mr. S. MuthurajuCompany Secretary in Practice in his secretarial audit report.
The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review.
38. INTERNAL AUDIT AND CONTROL SYSTEMS
The company has an effective in-house internal audit system. The persons are welltrained to cover various areas of verification inspection and system evaluation. All themandatory compliance required to be followed under various statues are exhaustivelycovered in their scope. We have effective and adequate internal audit and control systemscommensurate with our business size. Regular internal audit visits to the operations areundertaken to ensure that high standards of internal controls are maintained at eachlevel. Independence of the audit and compliance function is ensured by the auditors'direct reporting to the Audit Committee. Details on the composition and functions of theAudit Committee can be found in the chapter on Corporate Governance of the Annual Report
39. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
40. ENHANCING STAKEHOLDERS 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 create value for its other stakeholders byensuring that its corporate actions positively impact the socio-economic and environmentaldimensions and contribute to sustainable growth and development.
41. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has a Policy on Prohibition Prevention and Redressal of Sexual Harassmentof women at workplace and matters connected therewith or incidental thereto covering allthe aspects as required under the "The Sexual Harassment of Women at Workplace(Prohibition Prevention and Redressal) Act 2013. There were no such complaints receivedunder the policy during the year.
42. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM
Pursuant to the provisions of the Companies Act 2013 and under regulation 25 of theSEBI (Listing obligations and disclosure requirements) Regulations 2015 the Board hascarried out an evaluation of its own performance the directors individually as well asthe evaluation of the working of its Audit Nomination & Remuneration Committees. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance Report.
The Audit Committee consists of the following members
|a. ||Mr.S.Rethinavelu ||- Chairman |
|b. ||Mr.V.R.Muthu ||- Member |
|c. ||Mr.Ba.Ramesh ||- Member |
The above composition of the Audit Committee consists of independent Directors viz.Mr. S.Rethinavelu and Mr. V.R.Muthu who form the majority.
The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of Company employees and theCompany.
43. ANNUAL EVALUATION BY THE BOARD
The evaluation framework for assessing the performance of Directors Comprises of thefollowing key areas:
1. Attendance of Board Meeting and Board Committee Meetings
2. Quality of Contribution to Board deliberations
3. Strategic perspectives or inputs regarding future growth of Company and itsperformance
4. Providing perspectives and feedback going beyond information provided by themanagement
5. Commitment to shareholders and other stakeholder interests
The evaluation involves self-evaluation by the Board Members and subsequentlyassessment by the Board of Directors. A member of the Board will not participate in thediscussion of his/ her evaluation.
44. PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code. All Directors and the designated employees have confirmedcompliance with the Code. The same has been displayed at the company's website atwww.thangamayil.com
a. Buy Back of Securities
The Company has not bought back any of its securities during the year under review.
b. Sweat Equity
The Company has not issued any Sweat Equity Shares during the year under review.
c. Bonus shares
No Bonus Shares were issued during the year under review.
d. Employees Stock Option Plan
The Company has not provided any Stock Option Scheme to the employees.
45. FORWARD-LOOKING STATEMENTS
Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include domestic demand and demand and supplyconditions affecting selling prices input availability and prices changes in governmentregulations tax laws economic developments within the country and other factors such aslitigation and industrial relations.
Your directors express their sincere gratitude and appreciation to the employees of thecompany who have devotedly and steadfastly stood with the company and for the enduringhard work for the betterment of the company. Your Directors place on record their sincerethanks to bankers business associates consultants and various Government Authoritiesfor their continued support extended to your Company's activities during the year underreview. Your Directors also acknowledges gratefully the shareholders for their support andconfidence reposed on the Company.
|BY ORDER OF THE BOARD || |
|For Thangamayil Jewellery Limited || |
|BALARAMA GOVINDA DAS ||Managing Director |
|Ba. RAMESH ||Joint Managing Director |
|N.B.KUMAR ||Joint Managing Director |
|Place: Madurai || |
|Date: May 25 2018 || |