TO THE MEMBERS OF THANGAMAYIL JEWELLERY LIMITED

The Directors are pleased to present the 18th Annual Report and the Audited Statement of Accounts for the year ended 31st March 2018.

1. FINANCIAL RESULTS:

Pursuant to the notification dated February 16, 2015 issued by the Ministry of corporate affairs, the company has adopted the Indian Accounting Standards (''Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2017. Financial statements for the year ended and as at March 31, 2017, have been restated to conform to Ind AS.

Rs. (In lakhs)

On a turnover of Rs.137,929 lakhs for the year, the Company made an operating profit of Rs.12,818 lakhs against ' 10,894 lakhs made in last year. It represents 18% increase over the last year.

The better results are due to stable gold price realisation and also due to better marketing initiatives under taken by the management. The company could perform better due to margin expansion resulted on account of better product mix sales. It is also marginally attributable 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 narrow band. However, due to various initiatives taken by the management the value addition to the products sold continuously improved from 3.75% in 2015 to 9.30% in 2018 resulting in the gross profit growth of 150% in the four years period.

Your management is continuously focusing on bottom line growth more than proportionately that of turnover growth and believes on the importance of areas of value creation by optimally exploring all the resources at its disposal. While, we plan to push the top line by enlarging market share of the business moderately, your management also strives to maintain the pricing power in a crowded place of competitive environment. The company consciously decided not to expand branches in haste and strategically played on the brand visibility created over two decades of operations by enlarging the size and inventory of the existing branches one by one for gettng improved results.

You may find from the financials that our size of Balance sheet significantly increased in 17-18 and the fruits of the enlarged Balance sheet would be positively felt in the year to come. To achieve results, going forward a business plan will be implemented with a better product mix, diamond sales promotion, capital productivity improvement and retention 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 of brand.

- 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 resulted in sales growth.

- Improvement in "same store" growth in turnover

- Planned improvement in gross profit margin by optimizing all resources of the Company.

3. DIVIDEND

The Board of Directors of the Company are pleased to recommend a dividend of Rs.3.50/- (35%) per equity share for 2017-18 (Rs.2 in 201617) on 1,37,19,582 equity shares of Rs.10 each. The proposed dividend is subject to the approval of shareholders in the ensuing Annual General Meeting of the company will result in cash outflow of Rs.579 lakhs including Dividend Distribution tax there on.

4.HEDGING

The company started availing more loan under metal loan category. It acted as a natural hedge for the fluctuations in the gold price movement. Currently, the hedge ratio is around 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 take in to 75:25 in future. Some portion of gold under own purchases is a necessity as sudden escalation in gold price often results in liquidity mismatch due to increase in margin calls. Based on our experience and the current gold price movement trend we are of the opinion 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 makes the 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 the gold import by the Government.

- Possible restrictions on gold retail industry in taking customer advances for future delivery post passing of regulatory bill by the parliament.

- Highly fluctuating gold price movement necessitate both on account of incremental gold price and also on account of INR-US$ currency behaviour;

- Enlarged risks associated with bank credit exposure to the industry may compel a reduction in credit rating by the credit rating agencies;

- Monsoon failures, structural changes witnessed in the saving / spending habits of the people, escalation in the minimum wage Act and Income tax regulatory constraints may cumulatively affect the growth and operations of the industry.

6. FUTURE PROSPECTS

- Due to strict implementation of regulatory matters the trade, would become more responsible & disciplined in future. We are also able to see a clear shift in the polarization 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 striving hard to improve the gross margin in operations.

- The inherent strength of the business model comprising of substantial sales of silver ornaments and a moderate improvement in Diamond sales to cover a part of the fixed over heads and to improve the margin of safety while bringing down the BEP level consistently is 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 the profitability of the company.

- Barring unforeseen circumstances, the current year 2018-19 would see a moderate but sustainable 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-mix realization.

- Net profit before tax also improved by 98 bps due to better cost management and savings in interest outgoes;

- Your Company will focus in further improvement of these factors to improve the overall profitability.

7. POSITIVE IMPACT OF BALANCE SHEET LIABILITY MANAGEMENT

The proactive steps taken in the past to reduce dependence on bank barrowings started to yield better results. The company consistently substituted costlier working capital facilities with metal loan, advance from customers and bill discounting facilities. The effective cost of funds got reduced as seen from below given chart in the past 4 years;

Limit Used vs Interest Payout Rs.. (In lakhs)

Franchisee Model

For the first time, your company is exploring the avenues for furtherance of business with the help of franchisee model. The company is already working on the modalities of that model by properly evaluating risk/ reward potentials. Your board is of the opinion, atleast on an experimental basis two/ three newly contemplated outlet may be tried with the franchisee model in the current year 2018-19. The progress in this direction as and when put to operation will be informed to the shareholders at appropriate time.

The net internal accruals expected out of operations will be deployed back into business 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 the company. From Rs.547 lakhs deferred tax assets of last year it got changed to Deferred Tax liabilities of Rs.159 lakhs. Under the previous GAAP, deferred tax accounting is done using income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 Income Taxes requires to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on temporary differences which were not required under previous GAAP in addition to the various temporary differences consequent to Ind AS transitional adjustments. Consequently, deferred tax assets (net) is reduced by Rs.216 lakhs as at 1st April 2016 and total equity decreased 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 Company has paid Value Added Tax and GST of Rs.3396 lakhs as compared to Rs.1,242 lakhs paid in the previous year and Advance income tax of Rs.738 lakhs for financial year 2017-18.

10. CAPITAL EXPENDITURE

During the year, we capitalized '1058 Lakhs to our gross block comprising of Rs.475 lakhs for Plant & Machinery and Furniture & Fittngs and other assets and balance of 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 be capitalised.

For the previous year, we capitalized Rs.441 lakhs to our gross block comprising Rs.349 lakhs for Plant & Machinery and Furniture & Fittngs and others and the balance of Rs.92 lakhs for Computer Equipments including Software.

11. FINANCE

In continuation of last year, this year is the best year wherein the quantum of absolute reduction is commensurate with the quantum of loan exposure. The interest cover ratio 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 gram of 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 up Rs.20,896 lakhs as against Rs.13,586 lacs in the previous year. The existing sanctioned limits along with bill discounting limit of Rs.1,000 lakhs aggregating to Rs.25,000 lakhs is sufficient to take care of current year requirement of the company. Out of Rs.3,000 lacs term loan obtained from Karur Vysya Bank only a sum of Rs.208 lakhs remains to be paid. It is pertinent to note that your company repaid term loan ahead of the schedule of repayment and currently has Rs.208 lakhs as against Rs.3,000 lakhs borrowed as long term loan from bank.

The eligible fixed deposits from public & shareholders is Rs.5302 lakhs. However, the company took only Rs.4686 lakhs as deposits as at 31st March 2018. Besides, the promoters brought in a sum of ' 1240 lakhs at lower interest rate of 6% per annum to support the Company as long term funds. In all, the liquidity position is quite sound and comfortable.

Interest outgoes have decreased marginally. We may have to relate it to the increase in current 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 SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act,2013 (including any statutory modification(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 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 had 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 affairs of the company at the end of the financial year and of the profit and loss of the company for the year;

c) The directors had taken proper and sufficient 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 had prepared the annual accounts on a 'going concern' basis;

e) The directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. Internal financial control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Company's 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 financial information; and

f) The directors had devised proper systems to ensure compliance with the provisions of all 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 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 commissioned.

15. DEPOSITORY SYSTEM

The trading in the Equity Shares of your Company is under compulsory dematerialization mode. As on March 31, 2018, Equity Shares representing 100% of the equity share capital are in dematerialized form. As the depository system offers numerous advantages, members are requested to take advantage of the same and avail of the facility of dematerialization of the Company's shares.

16. 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 certificate 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 certified to the Board on financial statements and other matters in accordance with Regulation 17 (8) of SEBI (LODR) 2015 of the listing agreement pertaining to 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 of operations of the Company for the year under review as required under Regulation 17 (7) of SEBI (LODR) 2015 of the Listing Agreement with the Stock Exchanges, is given as a separate statement forming part of this Annual Report.

18. 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 2018-19 have been paid to these Stock Exchanges. The Shares of the companies are compulsorily tradable in dematerialized form.

19. INSURANCE

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

20. HUMAN RESOURCE DEVELOPMENT

Many initiatives have been taken to support business through organizational efficiency, 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 significant effort 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 cordial relations without any interruption in work. As on 31st March 2018, the Company 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 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 -1.

Having regard to the provision of the first provision 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 office 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 main addresses and is available on the Company's website.

22. 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:

- Oversight of risk management performed by the executive management;

- The BRM policy and framework formulated in line with local legal requirements and SEBI guidelines;

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

- Defining framework for identification, assessment, monitoring, and mitigation and reporting of risks.

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

23. 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 specified in the Schedule . However, the company makes its best efforts to conserve energy in a more efficient and effective manner.

b) Technology Absorption, Adaptation and Innovation

The company has not carried out any specific 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 Outgo Rs. (In lakhs)

Potential Risks, Concerns and Mitigation Plan

Risk of loss of Positioning in the market place

Due to competition in the retail trade, there is a possibility that our market share from a particular place of operation or region may decline. A lot of new entrants to the retail trade suffer from lack of knowledge of customer's preference and on quality parameters and price war. Therefore, your company with its fuller penetration to rural market is well placed to participate in the rural success story of the country. In order to maintain/improve market share in the areas we operate in the light of sagging regressive demand trends, we have cautiously brought down the mark up value for our products moderately and also improved customer service through online and offline mode.

Monsoon

Monsoon failure for successive years in southern parts of Tamilnadu adversely affected the company's business. The purchasing power with rural people who depend on Agriculture substantially got marginalized. This has resulted in demand compression and led to a period of continuous recession unparalleled in the recent history of jewellery trade. Dwindling customer demands and purchase of other electronic goods by the customers have resulted in purchase of ornaments generally coming down in jewellery business. This has resulted in customer opting for light weight items. The company has decided to stock more of 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 life styles of people leads to shifting of consumer base to branded jewellery. Even though this will be a major risk factor for long term growth of the company, the change in people's taste and preferences are ascertained through various sources and accordingly change in our product mix were done by well-equipped team.

Economic risk

Economic slowdown can affect the demand and the sales for the company.

Mitigation: The Company has a diversified product portfolio that generates robust sales from either of the category to balance any uncertain circumstances. The present Indian economy is quite strong as commodity prices and bank lending rates have declined. Since jewellery industry is always associated with wedding and other traditional occasions and demand for jewellery remain constant.

Competition risk

Increasing competition from new entrants as well as existing ones.

Mitigation: The Company manufactures quality products and better services and offers that at a reasonable price to reach people through communications via different media. It undertakes extensive promotion and advertising to create value , positioning and recall for the power brands.

Margin risk

Due to lack of control over the cost, may lead to lower profitability and can impact future growth prospects.

The centralised procurement policy, by which our team anticipates stock requirement and make bulk purchases at the time when gold price is low. The economies of scale and correct procurement timing enable the company to significantly reduce the cost of the raw material. The company procures a certain quantum of gold on lease from banks, buying the gold on daily basis on the actual sale made by it. This strategy safeguards the company from gold price fluctuation.

Gold price fluctuation risks

Gold price fluctuation risk could arise on account of frequent changes in gold prices either up or downside momentum. It could have adverse impact on earnings. We are maintaining our inventory price hedging around 65:35 basis. This will help the company with any gold price fluctuation of gold price. Your Board will take appropriate action in managing the fluctuation impact in gold price movement from time to time to increase to 75:25 basis.

Change in Government Policies

New government regulations pertaining to taxation and banking stringent norms will affect the demand and supply chain. Your company with help of well-experienced IT and managerial personnel, the implications of all these regulations are clearly analysed, interpreted and necessary compliance measures are undertaken

Human Resources

Employee attrition may affect the operation of the Company.

Mitigation: The Company encourages new talent and provides specialised training to the sales force to ensure the roots are grounded well, improving the performance standards and positively contribute towards growth of the company.

Seasonal Risk:

Sluggish sales of products due to seasonal changes may affect profitability of the Company.

Mitigation: The wide ranged designed product profile and customer needs product will help against the season ups and down.

Compliance risk

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 all statutory rules and regulations are met including changes in taxation and other regulatory framework.

Cost management:

The Company is improving meticulously its focus on cost through a resourceful operating system, increase in the production Capacity and strengthening of manufacturing units and various sourcing points are being pursued to reduce manufacturing costs and also delivering 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 controls have been laid down in the Company and that such controls are adequate and is functioning effectively. TMJL has policies, procedures, control frameworks and management systems in place that map into the definition 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 financial and operational information.

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

The Audit Division continuously monitors the efficacy 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 effectiveness of the organisation's 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 significant audit observations and follow-up actions thereon were reported to the Audit Committee.

The Audit Committee also met the Company's Statutory Auditors to ascertain their views on financial statements, including the financial reporting system, compliance to accounting policies and procedures, the adequacy and effectiveness 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)

Based on last three years average Net profit, for the financial year ended 31st March 2018 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.53.34 lakhs was available in the previous year to spend towards CSR activities. The Company has spent the following categories for the financial year ended 31.03.2018:

Rs. (In lakhs)

The Company is making further efforts to identify suitable projects under Sch.VII of the 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 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 financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict 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 of a foreseen and repetitive in nature. The transactions entered into 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 3".

27. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished 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 Rule 12 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 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 accepted/renewed during the year under review are furnished hereunder:

32. DIRECTORS

Smt.Yamuna Vasini Deva Dasi Non-Executive and NonIndependent 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 fulfil 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 atwww.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 Company's websitewww.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 confirmed compliance with 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, (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 31^st March 2022. The Company has received letter from them to the effect that their appointment, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment. The companies amendment Act, 2018 has dispensed with ratification of appointment of auditors under section 139 by shareholders at every general meeting vide their notification 7th May 2018 once approved for five years. Hence no resolution need to be passed for their re appointment.

The Auditor's Report to the shareholders for the year under review does not contain any qualification.

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 qualifications, reservations or adverse remarks or disclaimers made by M/s.Srinivas 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 effective in-house internal audit system. The persons are well trained to cover various areas of verification inspection and system evaluation. All the mandatory compliance required to be followed under various statues are exhaustively covered in their scope. We have effective 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 significant 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 Company's 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 of 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 Company's 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 confirmed compliance with the Code. The same has been displayed at the company's website atwww.thangamayil.com

SHARES

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 & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include domestic demand and demand and supply conditions affecting 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.

46. ACKNOWLEDGEMENTS

Your directors express their sincere gratitude and appreciation to the employees of the company who have devotedly and steadfastly stood with the company and for the enduring hard work for the betterment of the company. Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Company's activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence 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