TO THE MEMBERS OF THANGAMAYIL JEWELLERY LIMITED
The Directors are pleased to present the 21st Annual Report and the Audited Statementof Accounts for the year ended 31st
|Particulars ||2020-2021 ||2019-2020 |
|Sales ||181862 ||169196 |
|Gross Prot ||20716 ||19506 |
|Earnings before Interest Depreciation and Taxation (EBITDA) ||14935 ||10075 |
|Finance Cost ||2291 ||2115 |
|Depreciation ||947 ||1019 |
|Prot Bef ore Tax (PBT) ||11697 ||6942 |
|Tax ||3039 ||2376 |
|Prot A fter Tax (PAT) ||8659 ||4566 |
|Other comprehensive income ||(59) ||(37) |
|Total comprehensive income for the year net of tax ||8600 ||4529 |
The unprecedented Covid 19 pandemic seriously impacted the general economy since March2020 followed by total lockdown for major part of Q1 of FY 21. Your Company could open theshowrooms and production unit in a limited way towards the end of May 2020. Your Companydrew up business contingency plans covering all the functions of the company during thelockdown period and bounced back from July 2020 onwards both in production and sales.Aided by normal monsoon and fullment of pent-up demand improved the sales in Q3 and Q4quarter.
The FY 21 ended in a positive note even though the second wave of Covid-19 pandemicstarted hitting some parts of the country from mid / late March 2021but this did notmaterially impact the Company's performance. From the 2nd week of April 2021 one by onethe State Governments have started announcing lockdowns to control the spread of secondwave of Covid-19 pandemic. There was no major impact to the sales in April and all theshow rooms were opened following the Covid-19 protocols announced by the respective StateGovernments. But by early May 2021 almost all States Governments have imposed lockdown ofvarying degrees to control the spread of second wave of Covid-19. This complete closuredoes have impact on the planned sales for the months of May and June 2021.
Against the backdrop of the turbulence period your Company showed an improvedperformance for the reported year with an all-time high Net Sales of Rs.181862 lakhs agrowth of 7.50% from Rs.169196 lakhs of the previous year. If the real operating periodof June 2020 to March 21 is considered the Year on Year growth for the ten month periodis in excess of 13%.
In spite of various constraints discussed above the Company delivered an all-time highEBITDA (before exceptional items) of Rs.14935 lakhs with a growth of 48% (PY 10075 lakhs) and Prot before tax at Rs.11697 lakhs with a growth of 68% (PY Rs.6945 lakhs).Operating EBITDA margin signiocantly
|Year ||Turn over ( in lakhs) ||EBITDA ( in lakhs) ||EBITDA % |
|2016-17 ||129946 ||4958 ||3.82% |
|2017-18 ||137929 ||6090 ||4.42% |
|2018-19 ||144335 ||7347 ||5.09% |
|2019-20 ||169196 ||10075 ||5.95% |
|2020-21 ||181862 ||14935 ||8.21% |
The proportionate increase in EBITDA margin Vs Turnover is brought out for last v eyears as under:
You may observe that our topline growth increased by 7.50% compared to previous yearthanks to gold price increase. The proactive managerial initiatives taken collectivelyover a v e years period have resulted in a CAGR (Compounded Annual Growth Rate) 8.76%.However in the areas of value addition the company made a gross prot of 17.43% CAGR inthe last 5 years.
The increased volume of Diamond sales & silver jewellery MRP items along with theexisting silver articles incrementally contributed to better return on the working capitalinvestment. The area of concern for growth remains with the gold ornaments. In recognitionof this fact your management has taken certain operational initiatives to improve the ROIon gold inventory in the days to come. Going forward we may have to improve the stockrotation aspect with the help of new technology (goldratt platform) in the given pricingmodel either by contracting the size of the Balance Sheet or by protabilit y exploringavenues to build up outlets to increase the turnover and other related strategies forsustained growth.
The major reasons for better bottom line performance are summarized hereunder; vContinuous better gold price realisation at the point of sales except in the last quarter.v Heavy advertisement and publicity budget helped to increase the customer base andvisibility of our brand. v Improved portion of high value items in the product mixportfolio. v Appropriate working capital management. v Supporting pricing shift strategiesadopted in the second half enabled the company to improve the absolute contributionquantum with the rise in the sales turnover;
v Results would have been better but for the prolonged shut down for 92 days in thenancial year.
LIKELY IMPACT OF CORONA IN THE FINANCIAL YEAR 2021-22
v Currently we are not in a position to arrive at the impact of recent lock downresulted on account of second wave as we are not sure about the duration and its damage.It may take one more quarter to come back to normalcy subject to opening of the regularactivities in the economy.
v The company has lost 92 working days nearly 25% of normal business days. It hasresulted in very poor turnover in the rst half of
20-21. The speedy recovery in the third and the fourth quarters have indeed been agrowth accretive for the nancial year.
v One silver lining in the complete constraints dominated year due to Covid conditionsis that of better realisation of gold price
prevailed in the major part of the year.
v Towards the end of the nancial year gold prices started to move south wards amidstrecovery in the real economy. However such recovery of sales in the third and fourthquarters could not be extended due to second wave of Covid-19 a ecting a larger populationand demographics this time in April May 2021 as compared to the rst wave dominated in therst 2 months of 20-21 nancial year.
IMPACT OF COVID 19 ON THE FY 20-21 PERFORMANCE OF THE COMPANY
v Due to corona we missed the"Akshaya Thirithiyai" sales along with lots ofwedding days lost (muhurtham) that fell in rst quarter
of both the years.
v However we are able to manage all our obligations including interest servicing andsitting in a high liquidity to see through the
adverse e ect of the pandemic.
The Board of Directors at their meeting held on 24th June 2021 has recommendedpayment of `4.00 (Rupees four only) (40%) per equity share of the face value of `10(Rupees ten only) each as nal dividend for the nancial year ended 31st March 2021. Thepayment of nal dividend is subject to the approval of the shareholders at the ensuingAnnual General Meeting (AGM) of the Company.
During the year under review the Board of Directors of the Company at their meetingheld on 2nd March 2021 declared an Interim dividend of `6.00 (Rupees six only) (60%) perequity share of the face value of `10 (Rupees ten only) each. The interim dividend waspaid to the shareholders on 12th March 2021.
The total dividend amount for the nancial year 2020-21 including the proposed naldividend amounts to `10.00 (Rupees Ten only) per equity share of the face value of `10(Rupees ten only) each [total dividend payout for the FY 2020-21 amounting to `1371.96lakhs (Rupees one thousand three hundred seventy one lakhs and ninety six thousand only)as against the total dividend of `5 (Rupees v e only) per equity share of the face valueof `10 (Rupees ten only) each paid for the previous nancial year 2019-20 [total dividendpayout for the FY 2019-20 amounting to `685.98 lakhs (Rupees six hundred eighty v e lakhsand ninety eight thousand only)] refer annexure 1 attached for details of dividenddistribution policy of the company.
In view of the changes made under the Income-tax Act 1961by the Finance Act 2020dividends paid or distributed by the Company shall be taxable in the hands of theShareholders. The Company shall accordingly make the payment of the nal dividend afterdeduction of tax at source.
The company has got a well-dened operative "Hedging" mechanism in place. Thecompany availed more loan under "metal loan" category of nanc e from banks atconcessional rate of interest besides ensuring a natural hedge on such procurement. It is63% (previous year 73%) as against the internal set target of 75:25 due to stoppage ofoperation and relatively on lesser inventory level. Based on our experience and thecurrent gold price movement trend we are of the opinion that the ratio at the most can goupto 75:25 in the overall operational interest of the company.
3) CONTINUING CHALLENGES
v Extra ordinary regulatory conditions prevailing in the trade environment.
v Challenge arising on account of repeated covid 19 attack is to be met by appropriateaction plan. v High level of volatility witnessed in the recent years in gold pricemovement is also matter of concern to be dealt with certain appropriate and adoptablestrategies.
v Ongoing pricing war among the organised players is also a factor to reckon with. vIncremental requirement of working capital due to value escalation of gold metal willnecessitate earned income to meet the supplementary requirements.
6) FUTURE PROSPECTS
v Supporting the momentum by deploying relevant strategies in improving the EBITDA(Earnings before Interest taxes depreciation and amortisation) in absolute quantum.
v To improve the risk weighted Return on Equity (ROE) by exploring Operating leverageexisting in the company. v Establishing a strong risk mitigating business modelparticularly with reference to management of wide uc tuations in gold price movement
v State of art information technology automation and concurrent review for adoption viaData Analysis. v Establish a exible working capital system and align it with businessrealities.
v Develop an Asset less model for further expansion in a calibrated manner with a viewto adopt e ectively the success of the existing model blends both operation and expansionstrategies.
v Modest leverage on nancial front that would ensure a self-liquidation model not aecting the core fundamentals of existing nancial system.
v Liberal allocation of capital to shareholders via improved distribution of dividendpayouts.
v Except for unforeseen circumstances like the one facing Covid currently themanagement is condent of performing in the areas prioritized .
7) DEFERRED TAX ASSETS
The company as per Ind AS requirements has created deferred tax assets `85.05 lakhs asagainst deferred tax assets of `39.05 lakhs of previous year. The company chose toexercise the option permitted under section 115 BAA of the Income Tax Act 1961 asintroduced by the Taxation Laws (Amendment) Ordinance 2019. Accordingly the company hasrecognised provision for Income tax for the year ended and re- measured its deferred taxbasis as per the rate prescribed in the said section.
8) CONTRIBUTION TO EXCHEQUER
The Company is a regular payer of taxes and other duties to the Government. The Companyhas paid GST of `5513 lakhs as compared to `5106 lakhs paid in the previous year and theIncome tax amounts to `2748 lakhs was paid as against `2019 lakhs for nancial year2019-20.
9) CAPITAL EXPENDITURE
During the year we capitalized `561 Lakhs to our gross block comprising `479 lakhs forPlant & Machinery and Furniture & Fittings and other assets and balance of `82lakhs for Computer Equipment's including Software.
The capital work in progress amount outstanding as on 31st March 2021is `228 lakhs(previous year `202 lakhs). This comprises of interiors and other assets still to be putin use and are yet to be capitalised.
For the previous year we capitalized `784 lakhs to our gross block comprising `679lakhs for Plant & Machinery and Furniture &
Fittings and others and the balance of `105 lakhs for Computer Equipments includingSoftware.
For the required working capital for the current year based on the estimates thecompany is fully supported by various sources of
The secured working capital outstanding borrowing of the company as at 31st March 2021stood at `20690 lakhs as against `20655
lakhs of the previous year. The aggregate working capital facilities from member'sbankers are at `27000 lakhs.
The eligible x ed deposits limit from public &shareholders is `7705 lakhs.However the company took only `5515 lakhs as at 31st March 2021. Besides the promoters'x ed unsecured loan of `1240 lakhs at 6% interest continued to be in the company tosupport its long-termfund requirements. In all the liquidity position is quite good andcomfortable. Interest outgoes have decreased marginally compared to previous year. The pergram interest payment on sales works out to `50 as proportionate month in operation asagainst `47of previous year. This marginal increase is on account of covid - 19 lockdown.
11) 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 specied under thesecond proviso of Section 143(12) of the
Companies Act2013 (including any statutory modication(s) or re-enactment(s) for thetime being in force).
12) 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 of Section 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
b) The directors have 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 a airs of the company at the end of the nancial year and of theprot and loss of the company for the year;
c) The directors have taken proper and su cient care for the maintenance of adequateaccounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and for preventingand detecting fraud and other irregularities;
d) The directors have prepared the annual accounts on a going concern' basis;
e) The directors have laid down internal nancial controls to be followed by thecompany and that such internal nancial controls are adequate and were operating eectively. Internal nancial control means the policies and procedures adopted by theCompany for ensuring the orderly and e cient 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 nancial information; and
f) The directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems
were adequate and operating e ectively.
13) MANUFACTURING FACILITIES
Utilisation of own manufacturing facilities including on job work basis is around 96%as against 95% 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 enlarged.
14) DEPOSITORY SYSTEM
The trading in the Equity Shares of your Company is under compulsory dematerializationmode. As on March 31 2021 Equity Shares representing 100% of the equity share capitalare in dematerialized form. As the depository system o ers numerous advantages membersare requested to take advantage of the same and avail of the facility of dematerializationof the Company's shares.
15) 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 separate section on Corporate Governance and a certicat e from the statutory auditorsof the Company regarding compliance of conditions of Corporate Governance as stipulatedunder Regulation 27 of SEBI (LODR) 2015 of the Listing Agreement(s) with the StockExchange(s) forms part of this report.
The Chairman and Managing Director and Joint Managing Directors of the Company havecertied to the Board on nancial statements and other matters in accordance with Regulation17 (8) of SEBI (LODR) 2015 of the listing agreement pertaining to CEO certication for thenancial year ended 31st March 2021.
1) Large corporate entity :
SEBI vide their notication SEBI /HO/DDHS/CIR/2018/144 dated: 26.11.2018 have mademandatory to all listed entities the initial disclosure with regard to outstanding of longterm borrowings of `100 crores and above in the specied format given by them with e ectfrom 01.04.2019. The respective stock exchanges intimated us to give a declaration in casewe are not coming under large corporate as per the circular. Accordingly we have conrmedthrough our declaration that we are not coming under large corporate entity as there is nosuch long term borrowings of `100 crores as on the date during the nancial year ended31.03.2021.
2) Independent Women Director :
In terms of R.17 of amended SEBI (LODR) Regulations 2018 the Board of Directors of thecompany have appointed a Women Independent Director in the Board Meeting held on21/09/2020 and her appointment is subject to the approval of shareholders in the ensuingAnnual General Meeting to be held this year.
3) U/R 17 with regard to Non-Executivechair person of the Board since we do not comeunder the top 500 listed entities the same is not applicable to us right now.
4) U/R 25(10) with regard to Directors and o cers Insurance for all IndependentDirectors with e ect from 1st October 2018 as we do not fall under the category of top 500listed entities the same is not applicable to us at present.
5) U/R 34(3) Vide SBEI (LODR) amendment regulation 2018 the company has obtained acerticat e from a practising company secretary with regard to Non-Disqualication certicate and the same has been attached along with Corporate Governance report of the AnnualReport as required.
6) In terms of amendment to SEBI (LODR) Regulations 2015 as top 1000 listed entitiesby market capitalization we are required to constitute a Risk Management Committee andaccordingly the same has been constituted as per following details in the Board meetingheld on 24/06/21:
|1. Mr. Balarama Govinda Das ||- Chairman |
|2. Mr. Ba. Ramesh ||- Member |
|3. Mr. N.B. Kumar ||- Member |
|4. Mr. Lalji Vora ||- Member (Independent Director) |
|5. Mr. S.M. Chandrasekaran ||- Member (Independent Director) |
7) By way of expanding the following committees we have included the independentdirectors as per details given below:
|1. Mr. S.M. Chandrasekaran ||- Member - Audit Committee |
|2. Mr. V. Ramasamy ||- Member Nomination and Remuneration Committee. |
The above independent directors are included with e ect from the board meeting held on24/06/2021 in addition to the existing committee members the details of which areavailable in the corporate governance report of our Annual Report. We have also includedSri. Balarama Govinda Das - Managing Director as a member of the Nomination andRemuneration Committee in the same meeting.
16) DISCLOSURE REQUIREMENTS
As per SEBI Listing Regulations the Corporate Governance Report with the Auditors'Certicat e thereon and the integrated
Management Discussion and Analysis including the Business Responsibility Report areattached which forms part of this report.
17) 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 year2021-22 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 r e and such other risks asare considered necessary by the Management.
19) HUMAN RESOURCE DEVELOPMENT
Many initiatives have been taken to support business through organizational e ciencydevelopment 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 signicant eort has also been undertaken to develop leadership as well as administrative / functionalcapabilities in order to meet future talent requirement.
The Company continues to maintain pleasant relations without any interruption in work.As on 31st March 2021 the Company has
1617 employees on its rolls as against 1342 employees in the previous year.
20) PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provision of Section 197(12) of Act read with rules 5(2) and 5(3) ofthe Companies ( Appointment and Remuneration of Managerial personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules are provided in the Annual Report.
Disclosures pertaining to remuneration and other details as required under section197(12) of the Act read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 areprovided in the Annexure -2.
Having regard to the provision of the rst pr ovision 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 corporateo ce 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 mail addresses and is available on theCompany's website.
21) 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 and Management (BRM) is an on-going process within theOrganization. The Company has a robust risk management framework to identify monitor andminimize risks as also identify business opportunities.
The objectives and scope of the Risk Management
Committee broadly reviews:
1. Overseeing of risk management performed by the executive management;
2. The BRM policy and framework formulated in line with local legal requirements andSEBI guidelines;
3. Risks and evaluate treatment including initiating mitigation actions and ownershipas per a pre-dened cycle;
4. Dening framework for identication assessment monitoring and mitigation andreporting of risks.
5. Within its overall scope as aforesaid the Company shall review risks trendsexposure and potential impact analysis and mitigation plan.
22) 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 specied in the Schedule .However the company makes its best e orts to conserve energy in a more e cient and eective manner.
b) Technology Absorption Adaptation and Innovation
The company has not carried out any specic research and development activities. Thecompany uses indigenous technology for
its operations. Accordingly the information related to technology absorptionadaptation and innovation is reported to be NIL.
c) Foreign Exchange Earning and Outgo
| ||FOREIGN EXCHANGE EARNING ||Rs.in Lakhs |
|Particulars ||2020-21 ||2019-20 |
|Export Sales ||- ||8.26 |
| ||FOREIGN EXCHANGE OUTGO || |
| || ||Rs.in Lakhs |
|Particulars ||2020-21 ||2019-20 |
|Consultancy Charges ||129.01 ||181.36 |
23) ESTABLISHED PROCESS OF MITIGATING RISKS IN TMJL
The Risk management process at TMJL revolves around identication of all risks ofinternal and external and undertaking risk
mitigation measures so that monitoring their impact would be process driven with a viewto take corrective course of actions.
Jewellery industry dominated by gold metal in India and is going through a shrinkingphase in the discretionary context of customers priorities for purchases together withwide gold price movements. Business is shifting from unorganized sector to corporates withdeep pockets of resources to sustain the cyclical risk impact.
Your company enlarged its wings in semi and rural areas where the existing business isshifting to organized players like us. The shrinking size risk is mitigated by addingvalue added products in the portfolio and also by selling other popular brands under ourumbrella.
The Government has implemented stringent regulatory measures in all aspects of thetrade starting from compliances under various acts and customer friendly Hallmarkingetc. in a speedier manner.
Your company has already adapted to the changes in the trade requirements and in factwould be a beneciar y under GST regulations.
Gold being a commodity price is inuenc ed by various factors including demand andsupply. Even though we buy gold we sell on the same day in order not to carry the risk ofprice uc tuations the underlying stock on a given date certainly a ected by the pricemovement. The impact of it either positive or negative often shadowed the real operatingcapabilities of the company. Your company has an inbuilt hedging mechanism to mitigate theextreme uc tuations in gold price movement. Currently we maintain 63:37 ratio betweenhedged and un-hedged closing stock inventory on any given date. This strategy helped us tomaintain our performance besides ensuring liquidity in the system.
Every aspect of the risks components mentioned in the earlier paras were carefullyevaluated by the respective teams and reported to Board at intervals to reset thestrategies and policies that may tend to be appropriate and re-assuring in the changedrealities.
The brand building and establishment cost increased in recent years due to growthaspirations. New business can be identied by enhancing the visibility of the Brand. Itinvolves a huge cost on a recurring basis even though the positive impact could be seen inlater years.
Your Company by taking advantage of low cost retailer tag has already spent larger sumsfor advertisement and publicity. This will go a long way in expanding the retail outletsin larger parts of Tamilnadu and the cost currently incurred would be amortized amonglarger number of retail outlets in the days to come.
The industry su ers from the introduction of sovereign gold bond and also by thepenetration of "E-commerce" activity in the trade. New territorial expansionoften results in burning cash in the form of excessive x ed cost in the earlier yearsanticipating a sustainable business later that is not guaranteed.
Your Company though strategically decided to grow but restricted its inroads intocurrent territorial places in a deeper and concentrated manner so that x ed cost impactwill not be felt by the company as an adverse factor. We opt for Asset less model andtherefore the risk of growth in unknown places is mitigated to that extent.
Stretched nancials could hamper business sustainability. The Company's gearing as at31/03/21 stood at 1.54 times which is among
one of the best in the target corporates of the industry.
The company is consistently reducing its high-cost debts and leverage only when it isself liquidating in nature. All the nancial indicators are improving including riskweighted Return on Equity.
However all our retail outlets expansion plan is going forward smoothly. Our learningout of rst wave has helped us to rearrange resources and improve our operating e ciencies.
Disruption and Uncertainty in Business due to COVID -19 pandemic
The COVID 19 pandemic has created a major challenge in conduct of business with a lotof restrictions on the movement of men & material etc that could have an adverseimpact on the performance. This is likely to a ect the company's earnings in the shortterm and medium term.
Mitigation: Guidance and mandate of appropriate social distancing measures and workplaces. Regular communication with big ticket customers about measures taken to maintainsales services. Drawing up of plans and identication of opportunities for proposing newsolution post Covid -19 disruption.
24) INTERNAL CONTROL SYSTEMS
The Board of Directors is responsible for ensuring that internal nancial controls havebeen laid down in the Company and that such controls are adequate and is functioning eectively. TMJL has policies procedures control frameworks and management systems inplace that map into the denition 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 nancial and operational information.
Internal Financial Controls that encompass the policies processes and monitoringsystems for assessing and mitigating operational nancial and compliance risks andcontrols over related party transactions substantially exist. The management reviews andcerties the e ectiveness of the internal control mechanism over nancial reportingadherence to the code of conduct and Company's policies for which they are responsible andalso the compliance to established procedures relating to nancial or commercialtransactions where they have a personal interest or potential conic t of interest ifany.
The Audit Division continuously monitors the e cacy of Internal Financial Controls withthe objective of providing to the Audit Committee and the Board of Directors anindependent objective and reasonable assurance on the adequacy and e ectiveness 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 signicant 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 nancial statements including the nancial reporting system compliance to accountingpolicies and procedures the adequacy and e ectiveness of the internal controls andsystems followed by the Company. The Management acted upon the observations andsuggestions of the Audit Committee.
25) Details Of Policy Developed And Implemented By The Company On Its Corporate SocialResponsibility Initiatives ( CSR)
During the nancial y ear ended 31st March 2021 the Company incurred CSR Expenditureof `144.23 lakhs (Rupees One hundred forty four lakhs and twenty three thousand Only). TheCSR initiatives of the Company were under the thrust area of health & hygieneeducation water management and vocational training. The CSR Policy of the Company isavailable on the website of the Company.
Ministry of Corporate A airs vide its Notication(s) dated 22nd January 2021 notiedthe Companies (Corporate Social Responsibility Policy) Amendment Rules 2021 whichinteralia provides for the revised format of annual report for publishing the CSRactivities undertaken during the nancial year ended 31st March 2021. The other changespursuant to said Notication(s) under the CSR provisions have been briey highlight ed inthe annual report of the Company's CSR activities for the nancial y ear ended 31st March2021.
The Company's CSR Policy statement and annual report on the CSR activities undertakenduring the nancial year ended31st March 2021 in accordance with Section 135 of the Actand Companies (Corporate Social Responsibility Policy)Rules 2014 is set out in Annexureto this report.
CORPORATE GOVERNANCE REPORT AND BUSINESS RESPONSIBILITY REPORT
In compliance with Regulation 34 of the Listing Regulations a separate report onCorporate Governance along with a certicat e from the Auditors on its compliance and aBusiness Responsibility Report as per Regulation 34 of the Listing Regulations detailingthe various initiatives taken by the Company on the environmental social and Governancefront forms part of this Annual Report.
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 nancial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignicant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conic t 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 foreseen andrepetitive in nature. The transactions entered pursuant to the omnibus approval so grantedare audited and a statement giving details of all related party transactions is placedbefore the Audit Committee and the Board of Directors for their approval on a quarterlybasis.
The Annual Report on related party is annexed herewith as "Annexure 4".
27) COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualications positive attributes independence of Directors andother related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished in Annexure -5and is attached to this report.
28) ANNUAL RETURN
The Annual Return of the Company as on 31st March 2021 in Form MGT - 7 in accordancewith Section 92(3) of the Act read with the
Companies (Management and Administration) Rules 2014 is available on the Company'swebsite- www.thangamayil.com.
29) NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
During the year Eight Board Meetings and four Audit Committee Meetings were convenedand held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.
30) SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
The details of deposits remain unpaid during the year under review are furnishedhereunder:
|S.No Particulars ||Rs.in Lakhs |
|1 Amount remained unpaid or unclaimed as at the end of the year ||8.76 |
|2 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 Non Independent Director of the Companyretires by rotation and being eligible
seeks reappointment.Your Board recommends her re-appointment.
33) DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that they fullall the requirements as stipulated in Section 149(6) of the Companies Act 2013 so as toqualify themselves to be appointed as Independent Directors under the provisions of theCompanies 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 at www.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 ofbusiness conduct which is expected to be followed by the Directors and the designatedemployees in their business dealings and in particular on matters relating to integrity inthe work place in business practices and in dealing with stakeholders. The Code givesguidance through examples on the expected behaviour from an employee in a given situationand the reporting structure.
All the Board Members and the Senior Management personnel have conrmed c ompliance withthe Code. All Management Sta
were given appropriate training in this regard.
35) STATUTORY AUDITORS
The Company's Auditors Messrs 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 AGM to be held in 2022. The Company hasreceived letter from them to the e ect that their appointment would be within theprescribed limits under Section 141(3)(g) of the Companies Act 2013 and that they are notdisqualied from appointment. The Auditor's Report to the shareholders for the year underreview does not contain any qualication.
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"Annexure6".
37) COMMENTS ON AUDITORS' REPORT
There are no qualications reservations or adverse remarks or disclaimers made bySrinivasan and Padmanabhan Statutory
Auditors in their report and by Mr. S. Muthuraju Company Secretary in Practice inhis 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 e ective in-house internal audit system. The persons are welltrained to cover various areas of verication inspection and system evaluation. All themandatory compliances required to be followed under various statutes are exhaustivelycovered in their scope. We have e ective 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 signicant 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 thefollowing key areas:
1. Attendance of Board Meeting and Board Committee Meetings 2. Quality of Contributionto 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 the discussion 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 conrmedcompliance with the Code. The same has been displayed at the company's website atwww.thangamayil.com
|a. Buy Back of Securities ||b. Sweat equity |
|The Company has not bought back any of its securities during the year under review. ||The Company has not issued any Sweat Equity Shares during the year under review. |
|c. Bonus shares ||d. Employees Stock Option Plan |
|No Bonus Shares were issued during the year under review. ||The Company has not provided any Stock Option Scheme to the employees. |
46) 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 may di ermaterially from those expressed in the statement. Important factors that could inuenc ethe Company's operations include domestic demand and demand and supply conditions a ectingselling prices input availability and prices changes in government regulations taxlaws economic developments within the country and other factors such as litigation andindustrial relations.
The Board of Directors place on record sincere gratitude and appreciation for all theemployees at all levels for their hard work team
spirit cooperation and dedication during the year.
Your Directors place on record their sincere thanks to bankers suppliers businessassociates consultants and various Government Authorities for their continued supportextended to your Company's activities during the year under review. Your Directors alsoacknowledges gratefully the shareholders for their support and condenc e reposed on theCompany.
|BY ORDER OF THE BOARD |
|For Thangamayil Jewellery Limited |
|BALARAMA GOVINDA DAS |
|Managing Director |
|Place Madurai |
|Date June 24 2021 |
|Ba. RAMESH ||N.B. KUMAR |
|Joint Managing Director ||Joint Managing Director |