Thangamayil Jewellery Ltd Directors Report.

TO THE MEMBERS OF THANGAMAYIL JEWELLERY LIMITED

The Directors are pleased to present the 21st Annual Report and the Audited Statement of Accounts for the year ended 31st

Particulars 2020-2021 2019-2020
Sales 1,81,862 1,69,196
Gross Prot 20,716 19,506
Earnings before Interest, Depreciation and Taxation (EBITDA) 14,935 10,075
Finance Cost 2,291 2,115
Depreciation 947 1,019
Prot Bef ore Tax (PBT) 11,697 6,942
Tax 3,039 2,376
Prot A fter Tax (PAT) 8,659 4,566
Other comprehensive income (59) (37)
Total comprehensive income for the year, net of tax 8,600 4,529

The unprecedented Covid 19 pandemic seriously impacted the general economy since March 2020 followed by total lockdown for major part of Q1 of FY 21. Your Company could open the showrooms and production unit in a limited way towards the end of May 2020. Your Company drew up business contingency plans covering all the functions of the company during the lockdown 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 Q4 quarter.

The FY 21 ended in a positive note even though the second wave of Covid-19 pandemic started hitting some parts of the country from mid / late March 2021but this did not materially impact the Companys performance. From the 2nd week of April 2021, one by one the State Governments have started announcing lockdowns to control the spread of second wave of Covid-19 pandemic. There was no major impact to the sales in April and all the show rooms were opened following the Covid-19 protocols announced by the respective State Governments. But by early May 2021 almost all States Governments have imposed lockdown of varying degrees to control the spread of second wave of Covid-19. This complete closure does 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 improved performance for the reported year with an all-time high Net Sales of Rs.1,81,862 lakhs, a growth of 7.50% from Rs.1,69,196 lakhs of the previous year. If the real operating period of June 2020 to March 21 is considered, the Year on Year growth for the ten month period is in excess of 13%.

In spite of various constraints discussed above, the Company delivered an all-time high EBITDA (before exceptional items) of Rs.14,935 lakhs with a growth of 48% (PY 10,075 lakhs ) and Prot before tax at Rs.11,697 lakhs with a growth of 68% (PY Rs.6945 lakhs). Operating EBITDA margin signiocantly

Year Turn over ( in lakhs) EBITDA ( in lakhs) EBITDA %
2016-17 129,946 4,958 3.82%
2017-18 137,929 6,090 4.42%
2018-19 144,335 7,347 5.09%
2019-20 169,196 10,075 5.95%
2020-21 181,862 14,935 8.21%

The proportionate increase in EBITDA margin Vs Turnover is brought out for last v e years as under:

You may observe that our topline growth increased by 7.50% compared to previous year thanks to gold price increase. The proactive managerial initiatives taken collectively over 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 in the last 5 years.

The increased volume of Diamond sales & silver jewellery MRP items along with the existing silver articles incrementally contributed to better return on the working capital investment. The area of concern for growth remains with the gold ornaments. In recognition of this fact, your management has taken certain operational initiatives to improve the ROI on gold inventory in the days to come. Going forward, we may have to improve the stock rotation aspect with the help of new technology (goldratt platform) in the given pricing model either by contracting the size of the Balance Sheet or by protabilit y exploring avenues to build up outlets to increase the turnover and other related strategies for sustained growth.

The major reasons for better bottom line performance are summarized hereunder; v Continuous 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 and visibility of our brand. v Improved portion of high value items in the product mix portfolio. v Appropriate working capital management. v Supporting pricing shift strategies adopted in the second half enabled the company to improve the absolute contribution quantum with the rise in the sales turnover;

v Results would have been better but for the prolonged shut down for 92 days in the nancial 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 down resulted 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 regular activities in the economy.

v The company has lost 92 working days nearly 25% of normal business days. It has resulted in very poor turnover in the rst half of

20-21. The speedy recovery in the third and the fourth quarters have, indeed, been a growth accretive for the nancial year.

v One silver lining in the complete constraints dominated year due to Covid conditions is 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 amidst recovery in the real economy. However, such recovery of sales in the third and fourth quarters could not be extended due to second wave of Covid-19 a ecting a larger population and demographics this time in April, May 2021 as compared to the rst wave dominated in the rst 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 of wedding 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 and sitting in a high liquidity to see through the

adverse e ect of the pandemic.

1) DIVIDEND

The Board of Directors at their meeting held on 24th June , 2021, has recommended payment 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. The payment of nal dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the Company.

During the year under review, the Board of Directors of the Company at their meeting held on 2nd March, 2021, declared an Interim dividend of 6.00 (Rupees six only) (60%) per equity share of the face value of 10 (Rupees ten only) each. The interim dividend was paid to the shareholders on 12th March , 2021.

The total dividend amount for the nancial year 2020-21, including the proposed nal dividend, 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 1,371.96 lakhs (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 value of 10 (Rupees ten only) each paid for the previous nancial year 2019-20 [total dividend payout for the FY 2019-20 amounting to 685.98 lakhs (Rupees six hundred eighty v e lakhs and ninety eight thousand only)] refer annexure 1 attached for details of dividend distribution policy of the company.

In view of the changes made under the Income-tax Act, 1961,by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. The Company shall, accordingly, make the payment of the nal dividend after deduction of tax at source.

2) HEDGING

The company has got a well-dened operative "Hedging" mechanism in place. The company availed more loan under "metal loan" category of nanc e from banks at concessional rate of interest besides ensuring a natural hedge on such procurement. It is 63% (previous year 73%) as against the internal set target of 75:25 due to stoppage of operation and relatively on lesser inventory level. Based on our experience and the current gold price movement trend we are of the opinion that the ratio at the most can go upto 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 appropriate action plan. v High level of volatility witnessed in the recent years in gold price movement is also matter of concern to be dealt with certain appropriate and adoptable strategies.

v Ongoing pricing war among the organised players is also a factor to reckon with. v Incremental requirement of working capital due to value escalation of gold metal will necessitate 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 leverage existing in the company. v Establishing a strong risk mitigating business model particularly with reference to management of wide uc tuations in gold price movement

v State of art information technology automation and concurrent review for adoption via Data Analysis. v Establish a exible working capital system and align it with business realities.

v Develop an Asset less model for further expansion in a calibrated manner with a view to adopt e ectively the success of the existing model blends both operation and expansion strategies.

v Modest leverage on nancial front that would ensure a self-liquidation model not a ecting the core fundamentals of existing nancial system.

v Liberal allocation of capital to shareholders via improved distribution of dividend payouts.

v Except for unforeseen circumstances like the one facing Covid, currently the management 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 as against deferred tax assets of 39.05 lakhs of previous year. The company chose to exercise the option permitted under section 115 BAA of the Income Tax Act 1961, as introduced by the Taxation Laws (Amendment) Ordinance, 2019. Accordingly, the company has recognised provision for Income tax for the year ended and re- measured its deferred tax basis 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 Company has paid GST of 5,513 lakhs as compared to 5,106 lakhs paid in the previous year and the Income tax amounts to 2,748 lakhs was paid as against 2,019 lakhs for nancial year 2019-20.

9) CAPITAL EXPENDITURE

During the year, we capitalized 561 Lakhs to our gross block comprising 479 lakhs for Plant & Machinery and Furniture & Fittings and other assets and balance of 82 lakhs for Computer Equipments 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 put in use and are yet to be capitalised.

For the previous year, we capitalized 784 lakhs to our gross block comprising 679 lakhs for Plant & Machinery and Furniture &

Fittings and others and the balance of 105 lakhs for Computer Equipments including Software.

10) FINANCE

For the required working capital for the current year based on the estimates, the company is fully supported by various sources of

nanc e.

The secured working capital outstanding borrowing of the company as at 31st March 2021 stood at 20,690 lakhs as against 20,655

lakhs of the previous year. The aggregate working capital facilities from members bankers are at 27,000 lakhs.

The eligible x ed deposits limit from public &shareholders is 7,705 lakhs. However, the company took only 5,515 lakhs as at 31st March 2021. Besides, the promoters x ed unsecured loan of 1,240 lakhs at 6% interest continued to be in the company to support its long-termfund requirements. In all, the liquidity position is quite good and comfortable. Interest outgoes have decreased marginally compared to previous year. The per gram interest payment on sales works out to 50 as proportionate month in operation as against 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 SECTION 143 OTHER THAN

THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

The Statutory Auditors of the Company have not reported any fraud as specied under the second proviso of Section 143(12) of the

Companies Act,2013 (including any statutory modication(s) or re-enactment(s) for the time being in force).

12) DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations 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 had been followed and there is no material

departure.

b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of a airs of the company at the end of the nancial year and of the prot and loss of the company for the year;

c) The directors have taken proper and su cient care for the maintenance of adequate accounting records in accordance with the

provisions of this Act for safeguarding the assets of the company and for preventing and 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 the company and that such internal nancial controls are adequate and were operating e ectively. Internal nancial control means the policies and procedures adopted by the Company for ensuring the orderly and e cient conduct of its business including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable nancial information; and

f) The directors have devised proper systems to ensure compliance with the provisions of 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 to attainment of scale of economics in the manufacturing facilities. It is expected to improve the own manufacturing capacity utilisation in forthcoming years. On a need basis, at short notice, handmade items capacity could be enlarged.

14) DEPOSITORY SYSTEM

The trading in the Equity Shares of your Company is under compulsory dematerialization mode. As on March 31, 2021, Equity Shares representing 100% of the equity share capital are in dematerialized form. As the depository system o ers numerous advantages, members are requested to take advantage of the same and avail of the facility of dematerialization of the Companys shares.

15) CORPORATE GOVERNANCE

Your Company has been practising the principles of good corporate governance over the years and lays strong emphasis on transparency, accountability and integrity.

A separate section on Corporate Governance and a certicat e from the statutory auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Regulation 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 Directors of the Company have certied to the Board on nancial statements and other matters in accordance with Regulation 17 (8) of SEBI (LODR) 2015 of the listing agreement pertaining to CEO certication for the nancial year ended 31st March 2021.

1) Large corporate entity :

SEBI vide their notication SEBI /HO/DDHS/CIR/2018/144 dated: 26.11.2018 have made mandatory to all listed entities the initial disclosure with regard to outstanding of long term borrowings of 100 crores and above in the specied format given by them with e ect from 01.04.2019. The respective stock exchanges intimated us to give a declaration in case we are not coming under large corporate as per the circular. Accordingly we have conrmed through our declaration that we are not coming under large corporate entity as there is no such long term borrowings of 100 crores as on the date during the nancial year ended 31.03.2021.

2) Independent Women Director :

In terms of R.17 of amended SEBI (LODR) Regulations, 2018 the Board of Directors of the company have appointed a Women Independent Director in the Board Meeting held on 21/09/2020 and her appointment is subject to the approval of shareholders in the ensuing Annual General Meeting to be held this year.

3) U/R 17, with regard to Non-Executivechair person of the Board since we do not come under 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 Independent Directors with e ect from 1st October 2018 as we do not fall under the category of top 500 listed 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 a certicat e from a practising company secretary with regard to Non-Disqualication certicat e and the same has been attached along with Corporate Governance report of the Annual Report as required.

6) In terms of amendment to SEBI (LODR) Regulations 2015, as top 1000 listed entities by market capitalization we are required to constitute a Risk Management Committee and accordingly the same has been constituted as per following details in the Board meeting held 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 independent directors 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 on 24/06/2021 in addition to the existing committee members, the details of which are available in the corporate governance report of our Annual Report. We have also included Sri. Balarama Govinda Das - Managing Director, as a member of the Nomination and Remuneration 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 are attached, which forms part of this report.

17) LISTING OF SHARES

The Equity Shares of your Company continue to remain listed with Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The listing fees for the year 2021-22 have been paid to these Stock Exchanges. The Shares of the companies are compulsorily tradable in dematerialized form.

18) INSURANCE

The assets of the Company are adequately insured against r e and such other risks, as are considered necessary by the Management.

19) HUMAN RESOURCE DEVELOPMENT

Many initiatives have been taken to support business through organizational e ciency, development, resourcing, performance & compensation management, competency-based development, career & succession planning and organization building. Leadership development is one of the primary key initiatives of the Company. Primary personal development program has been taken up as long term strategy of the Company. A signicant e ort has also been undertaken to develop leadership as well as administrative / functional capabilities 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

1,617 employees on its rolls as against 1,342 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) of the Companies ( Appointment and Remuneration of Managerial personnel) Rules, 2014 a statement showing the names and other particulars of the employees drawing remuneration in excess 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 section 197(12) of the Act read with Rule 5(1) of the

Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014 are provided in the Annexure -2.

Having regard to the provision of the rst pr ovision to Section 136(1) of the Act and as advised, the Annual Report, excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the corporate o ce of the Company during working hours and any member interested in obtaining such information 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 to all those members who have registered their mail addresses and is available on the Companys website.

21) STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

Pursuant to section 134 (3) (n) of the Companies Act, 2013 & under regulation 21 of the SEBI (Listing obligations and disclosure requirements) Regulations, 2015, the company has adopted risk management policies to monitor the business.

Business Risk Evaluation and Management (BRM) is an on-going process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize 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 and SEBI guidelines;

3. Risks and evaluate treatment including initiating mitigation actions and ownership as per a pre-dened cycle;

4. Dening framework for identication, assessment, monitoring, and mitigation and reporting of risks.

5. Within its overall scope as aforesaid, the Company shall review risks trends, exposure, and potential impact analysis and mitigation plan.

22) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

INFORMATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 134(3)(M) OF THE COMPANIES ACT, 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 to Section 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 e ective manner.

b) Technology Absorption, Adaptation and Innovation

The company has not carried out any specic research and development activities. The company uses indigenous technology for

its operations. Accordingly, the information related to technology absorption, adaptation 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 of internal and external and undertaking risk

mitigation measures so that monitoring their impact would be process driven with a view to take corrective course of actions.

Industry Risk

Jewellery industry dominated by gold metal in India and is going through a shrinking phase in the discretionary context of customers priorities for purchases together with wide gold price movements. Business is shifting from unorganized sector to corporates with deep pockets of resources to sustain the cyclical risk impact.

Your company enlarged its wings in semi and rural areas where the existing business is shifting to organized players like us. The shrinking size risk is mitigated by adding value added products in the portfolio and also by selling other popular brands under our umbrella.

Regulatory Risk

The Government has implemented stringent regulatory measures in all aspects of the trade starting from compliances under various acts and customer friendly Hallmarking, etc., in a speedier manner.

Your company has already adapted to the changes in the trade requirements and in fact would be a beneciar y under GST regulations.

Commodity Risk

Gold being a commodity, price is inuenc ed by various factors including demand and supply. Even though we buy gold we sell on the same day, in order not to carry the risk of price uc tuations, the underlying stock on a given date certainly a ected by the price movement. The impact of it either positive or negative often shadowed the real operating capabilities of the company. Your company has an inbuilt hedging mechanism to mitigate the extreme uc tuations in gold price movement. Currently we maintain 63:37 ratio between hedged and un-hedged closing stock inventory on any given date. This strategy helped us to maintain our performance, besides ensuring liquidity in the system.

Every aspect, of the risks components mentioned in the earlier paras, were carefully evaluated by the respective teams and reported to Board at intervals to reset the strategies and policies that may tend to be appropriate and re-assuring in the changed realities.

Cost Risk

The brand building and establishment cost increased in recent years due to growth aspirations. New business can be identied by enhancing the visibility of the Brand. It involves a huge cost on a recurring basis even though the positive impact could be seen in later years.

Your Company by taking advantage of low cost retailer tag has already spent larger sums for advertisement and publicity. This will go a long way in expanding the retail outlets in larger parts of Tamilnadu and the cost currently incurred would be amortized among larger number of retail outlets in the days to come.

Growth Risk

The industry su ers from the introduction of sovereign gold bond and also by the penetration of "E-commerce" activity in the trade. New territorial expansion often results in burning cash in the form of excessive x ed cost in the earlier years anticipating a sustainable business later that is not guaranteed.

Your Company though strategically decided to grow but restricted its inroads into current territorial places in a deeper and concentrated manner so that x ed cost impact will not be felt by the company as an adverse factor. We opt for Asset less model and therefore the risk of growth in unknown places is mitigated to that extent.

Financial risk

Stretched nancials could hamper business sustainability. The Companys gearing as at 31/03/21 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 is self liquidating in nature. All the nancial indicators are improving including risk weighted Return on Equity.

However, all our retail outlets expansion plan is going forward smoothly. Our learning out 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 lot of restrictions on the movement of men & material etc that could have an adverse impact on the performance. This is likely to a ect the companys earnings in the short term and medium term.

Mitigation: Guidance and mandate of appropriate social distancing measures and work places. Regular communication with big ticket customers about measures taken to maintain sales services. Drawing up of plans and identication of opportunities for proposing new solution post Covid -19 disruption.

24) INTERNAL CONTROL SYSTEMS

The Board of Directors is responsible for ensuring that internal nancial controls have been laid down in the Company and that such controls are adequate and is functioning e ectively. TMJL has policies, procedures, control frameworks and management systems in place that map into the denition of Internal Financial Controls as detailed in the Companies Act, 2013. These have been established at the entity and process levels and are designed to ensure compliance to internal control requirements, regulatory compliance, and appropriate recording of nancial and operational information.

Internal Financial Controls that encompass the policies, processes, and monitoring systems for assessing and mitigating operational, nancial and compliance risks and controls over related party transactions, substantially exist. The management reviews and certies the e ectiveness of the internal control mechanism over nancial reporting, adherence to the code of conduct and Companys policies for which they are responsible and also the compliance to established procedures relating to nancial or commercial transactions, where they have a personal interest or potential conic t of interest, if any.

The Audit Division continuously monitors the e cacy of Internal Financial Controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and e ectiveness of the organisations risk management, control and governance processes. The audit plan is approved by the Audit Committee, which reviews compliance to the plan.

During the year, the Audit Committee met regularly to review reports submitted by the Audit Division. All signicant audit observations and follow-up actions thereon were reported to the Audit Committee.

The Audit Committee also met the Companys Statutory Auditors to ascertain their views on nancial statements, including the nancial reporting system, compliance to accounting policies and procedures, the adequacy and e ectiveness of the internal controls and systems followed by the Company. The Management acted upon the observations and suggestions of the Audit Committee.

25) Details Of Policy Developed And Implemented By The Company On Its Corporate Social Responsibility Initiatives ( CSR)

During the nancial y ear ended 31st March, 2021, the Company incurred CSR Expenditure of 144.23 lakhs (Rupees One hundred forty four lakhs and twenty three thousand Only). The CSR initiatives of the Company were under the thrust area of health & hygiene, education, water management and vocational training. The CSR Policy of the Company is available on the website of the Company.

Ministry of Corporate A airs vide its Notication(s) dated 22nd January, 2021, notied the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, which, interalia, provides for the revised format of annual report for publishing the CSR activities undertaken during the nancial year ended 31st March, 2021. The other changes pursuant to said Notication(s) under the CSR provisions, have been briey highlight ed in the annual report of the Companys CSR activities for the nancial y ear ended 31st March, 2021.

The Companys CSR Policy statement and annual report on the CSR activities undertaken during the nancial year ended31st March, 2021, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy)Rules, 2014 is set out in Annexure to this report.

CORPORATE GOVERNANCE REPORT AND BUSINESS RESPONSIBILITY REPORT

In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a certicat e from the Auditors on its compliance and a Business Responsibility Report as per Regulation 34 of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and Governance front forms part of this Annual Report.

26) PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There were no loans & guarantees given or investments made by the Company under Section 186 of the Companies Act, 2013 during

the year under review.

Particulars of contracts or arrangements with related parties referred to in Section 188(1)

All related party transactions that were entered into during the nancial year were on an arms length basis and were in the ordinary course of business. There are no materially signicant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel, or other designated persons which may have a potential conic t with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also in the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are foreseen and repetitive in nature. The transactions entered pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

The Annual Report on related party is annexed herewith as "Annexure 4".

27) COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF

THEIR DUTIES

The Companys Policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualications , positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished 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 accordance with Section 92(3) of the Act read with the

Companies (Management and Administration) Rules, 2014, is available on the Companys website- 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 convened and held. The details of which are given in the Corporate Governance Report. The intervening gap 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.

31) DEPOSITS

The details of deposits remain unpaid during the year under review are furnished hereunder:

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

32) DIRECTORS

Smt.Yamuna Vasini Deva Dasi Non executive and Non Independent Director of the Company retires 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 full all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

The Details of familiarisation programme arranged for independent directors have been disclosed 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 the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviours of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Companys website www.thangamayil.com. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behaviour from an employee in a given situation and the reporting structure.

All the Board Members and the Senior Management personnel have conrmed c ompliance with the Code. All Management Sta

were given appropriate training in this regard.

35) STATUTORY AUDITORS

The Companys Auditors, Messrs Srinivas & Padmanabhan Chartered Accountants, (Firm Reg.No.004021S),Chennai ) were appointed as the Statutory Auditors of the company at the Annual General Meeting held on July 2017 up to AGM to be held in 2022. The Company has received letter from them to the e ect that their appointment, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualied from appointment. The Auditors Report to the shareholders for the year under review 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 has appointed Mr.S .Muthuraju, a Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as"Annexure 6".

37) COMMENTS ON AUDITORS REPORT

There are no qualications , reservations or adverse remarks or disclaimers made by Srinivasan and Padmanabhan, Statutory

Auditors, in their report and by Mr. S. Muthuraju , Company Secretary in Practice, in his secretarial audit report.

The Statutory Auditors have not reported any incident of fraud to the Audit Committee of 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 well trained to cover various areas of verication inspection and system evaluation. All the mandatory compliances required to be followed under various statutes are exhaustively covered in their scope. We have e ective and adequate internal audit and control systems, commensurate with our business size. Regular internal audit visits to the operations are undertaken to ensure that high standards of internal controls are maintained at each level. 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 the Audit 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 would impact 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 Companys operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to create value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions 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 Harassment of women at workplace and matters connected therewith or incidental thereto covering all the aspects as required under the "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. There were no such complaints received under 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 the SEBI (Listing obligations and disclosure requirements) Regulations, 2015, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance 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, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of Company employees and the Company.

43) ANNUAL EVALUATION BY THE BOARD

The evaluation framework for assessing the performance of Directors Comprises the following 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 its performance

4. Providing perspectives and feedback going beyond information provided by the management

5. Commitment to shareholders and other stakeholder interests

The evaluation involves self-evaluation by the Board Members and subsequently assessment 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 view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Directors and the designated employees have conrmed compliance with the Code. The same has been displayed at the companys website at www.thangamayil.com

45) SHARES

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 Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may di er materially from those expressed in the statement. Important factors that could inuenc e the Companys operations include domestic demand and demand and supply conditions a ecting selling prices , input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

47) ACKNOWLEDGEMENTS

The Board of Directors place on record sincere gratitude and appreciation for all the employees 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, business associates, consultants, and various Government Authorities for their continued support extended to your Companys activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and condenc e reposed on the Company.

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