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Directors Report of Thangamayil Jewellery Ltd.

Mar 31, 2015

Dear Shareholders,

The Directors have pleasure in presenting their 15th Annual Report and the Audited Accounts for the financial year ended March 31, 2015.

1) Financial Results

Highlights of Financial results for the year are as here under:

(Rsln lakhs) I Particulars 2014-15 2013-14

Sales and Other Operating Income 1,42,283 1,19,611

Gross Profit 5,327 8,236

Earnings before Interest, Depreciation and Taxation 441 1,959 (EBITDA)

Finance Cost 2,914 3,476

Depreciation 826 565

Profit/(Loss) Before Tax (PBT) (3,298) (2,077)

Tax (1,070) (820)

Profit/(Loss) After Tax (PAT) (2,228) (1,257)

Sales and other income for the year increased by 19% to Rs.1,42,283 lakhs as compared to Rs.1,19,611 lakhs in 2014. During the year under review your company improved the volume offtake in gold ornaments by 30% and in the case of silver articles by 52% growth as against last year. The company incurred a net loss of Rs.2,228 lakhs in 2014-15 as against loss of Rs.1,257 lakhs in 2013-14.

On a revenue of Rs.1,42,283 lakhs for the year, the company made a gross profit of Rs.5,327 lakhs. However, on a metal to metal replacement basis, without considering inventory loss, the company would have made gross profit of Rs. 9,167 lakhs. Post expenses including interest outflow of Rs.7,800 lakhs, the company made a cash profit of Rs.1,367 lakhs. However, after giving effect to the adverse gold and silver price movement of Rs.3,840 lakhs witnessed throughout the year, the company's performance has resulted in a net loss of Rs. 3,298 lakhs before tax. But for the steep reduction in gold price by 11%(Rs.2,938-2,621 )i.e. Rs.317/= per gram and silver price by 30% (53-37) i.e. Rs. 16/= per gram, amounting in aggregate to Rs. 3,840 lakhs in the year the results as attained was moderate. For the current year, we carry the inventory at the lowest cost in the year and hopefully as per current indicators, barring unforeseen circumstances, the management is confident of achieving better results.

Pursuant to implementation of change in depreciation methodology as per the Companies Act 2013 adopted in this year by your company has impacted results as follows.

The Value of Assets whose useful life is exhausted as on 01-04-2014, calculated under the Companies Act, 2013, amounting to Rs.100.25 lakhs (excluding Deferred Tax amount of Rs. 48.15 lakhs ) have been adjusted to opening balance of retained earnings. The depreciation for the year ended 31st March 2015 is higher by Rs.212.12 lakhs when compared to the computation methodology under the erstwhile Companies Act, 1956.

Deferred Tax Assets

The Company is of the view that the business environment will become conducive to earn adequate profits in future years and will be able to recover fully the unabsorbed business and depreciation losses as per Income Tax Act and consequently the virtual certainty of recovering these loses being established. Deferred Tax Asset in accordance with Accounting Standard- 22 is recognized in the books in respect of these loses.

The major reasons for adverse performance are summarized hereunder

The company inspite of positive operating results post expenses could earn only part of the interest cost at EBITDA level due to steep reduction in inventory realisation on subsequent sales.

- The closing stock of earlier year was sold and realized at a lesser rate due to consistent fall in gold price witnessed during the major part of the year.

- A lot of price fluctuations favoured the customers to make use of every steep fall as a purchase opportunity. With the result, replacement purchases made at a higher level were sold at a relatively lower price during the major part of the year on a continuous basis.

- Withdrawal of concessional Metal Loan that was facilitating Natural Hedge cover forced the Company to settle for costly Cash Credit Facilities from the lenders that too without any hedging mechanism in place, even though pronounced reduction noticed in working capital borrowings.

Monsoon failed for the successive years. All our branches are located in rural / semi urban areas where the agricultural income being the main source of income to the people dwindled.

Due to steep increase in interest rate, even for the reduced utilization of limits, the Company was compelled to part relatively with huge interest and financial incidentals like processing fee, consortium charges, key man life cover charges, etc that led to a situation of under recovery of interest in the overall performance of the Company.

All these factors cumulatively resulted in the reporting of Net Loss of Rs.2,228 lakhs for 14-15 as against a net loss ofRs. 1,257 lakhs in 13-14.

2) Key Initiatives taken bv the management in 14-15

- Introduced a labour incentive system to promote sales in a competitive environment;

Better stock rotation and lower obsolete inventory helped to curtail expenses;

Participated in bank/ NBFC auctions to reduce the cost of purchase of primary gold;

- Significantly improved its own manufacturing portion of the finished inventory;

- Customer relationship management improved so that betterturnover could be achieved;

- Aggressive pricing strategy followed to beat the competition impact that enabled to maintain and improve our market share in the areas we operate;

- Strictly followed the game changer plan business model as conceived for 14-15 by the Board.

3) Continuing Challenges

The agony is not abated. No tangible shift in metal loan lending restoration is seen in spite of the fact that Government of India withdrew the import ban of 80:20 basis. The ground realities are far from satisfactory in conduct of operations on sustainable basis, due to prolonged recession in demand side. The shrinking business compelled competitors to extend steep and unworkable discounts to keep the business going in all respects. Due to falling gold price witnessed in the larger part of 14-15, the investment demand for gold ornament didn't take off. Excessive capacities built in inventory by new retail chains also added to the pain in the performance.

4) Future prospects

No perceptible changes are noticed in the demand off take for gold jewellery in the first two months of the current year. However, the gold price is moving within a narrow range and is not affecting the inventory realization of the Company. It is hoped that stable gold price will improve the demand in the months to come. On its part, in a continuous recessionary trend witnessed in the industry, the Company had taken some more proactive steps to retain its market share with a reasonable profit margin on sales. However, falling rural wages and the near stalemate prevailing in real estate sector, will have its adverse impact on the performance. The cost reduction initiatives undertaken by the Company and the effectiveness with which the Working Capital is managed will go a long way in improving the sagging bottom line of the Company.

5) Manufacturing facilities

The company improved its utilisation of own manufacturing facilities and with the overall cost saving obtained in own production, the company could manage the demand recession witnessed in the industry. The current capacity utilisation in our own manufacturing outfits is currently around 55% and is likelytogoupto75%in 15-16.

6) Impact on deleverage of Balance Sheet

Due to demand recession and high cost of funds necessitated by withdrawal of metal loan facility by lenders forced the company to deleverage the balance sheet to an extent feasible by market conditions.The company managed to bring down the working capital borrowings from Rs. 21,285 lakhs to Rs.15,378 lakhs in 31.03.15. In spite of this reduction, the gross turnover has improved by 19% in 2014-15 as against 2013-14.

The steep reduction in working capital borrowing's impact on interest payment was not felt. The lenders acted smartly by invoking "Risk reward rationale"and charged higher interest, on the industry that is already suffering due to rigid Government regulations. To bring out the ground realities, the extent to which your company was affected by this shift in stand taken by the lenders is given hereunder:

Year ended Limits used interest & Asa% 31st March (Average Other (on loan during the charges availed) year)

2013 34,112 3,434 10.06%

2014 28,071 3,223 11.50%

2015 18,043 2,524 14.00%

It may be seen from the above chart that the quantum of absolute interest reduction is not commensurate to the quantum of loan exposure reduction at a given point of time. Banks always ensured to get a more than reasonable portion of the revenue accretion.This has made the management to consistently reduce the working capital borrowings even though due to sharp inventory value reduction in 13-14 and 14-15, the company could not fully earn the interest outgoes. The steps painful but in a proactive manner taken in the past two years, resulted in a steep reduction in working capital borrowings from as high as Rs. 40,400 lakhs in 12-13, to Rs. 15,378 lakhs in 14-15. The current outstanding as of date is around Rs. 11,850 lakhs only. This was made possible due to better stock rotation. The company could reduce the cost of sales in all other components in the last two years. A substantial reduction in interest cost under the current context, will become a reality in the on-going year 15-16 due to certain strategy initiatives taken by the Company in the areas of working capital management.

7) Hedging for gold price fluctuations

In the absence of restoration of full facility under metal loan by lenders, the natural hedging associated with that kind of trade finance could not be availed. Slowly, some banks in the consortium started to issue SBLC to avail metal loan. We are hopeful during the first quarter of this fiscal, other banks also will fall in line. The company is inclined to cover at least 60% of

the stock by way of metal loan and customer's gold at creditor's risks.The balance 40% will be left uncovered in order to avail the cash credit facility extended by the lenders. The gold price is nearest to the bottom at 1180 US$ per ounce and we learn that at that price gold mines would not even breakeven. Moreover, INR is overvalued by 8% based on the PPP (Purchasing power parity) factor. Of late, INR started to depreciate by 3 to 4% and expected to be in the band of 63 to 66 per dollar for some more time. The Government is not in a hurry to reduce the import duty on gold due to revenue and current account deficit considerations. The profit on long term sustainable basis for gold industry is linked to modest appreciation in gold price. This is time tested phenomenon and therefore, in the absence of viable hedging mechanism keeping up to 40% of inventory under fixed price that too at a relatively lower price of purchase is not a bad proposition. At the same time, in order to protect the companyfrom any steep erosion of net worth, a major portion of (nearly 60% or more) gold inventory will be fixed to metal loan / customer advances category. All said and done, your company will watch and monitor the movement of gold price closely and take an appropriate call based on the then-emerging situation to ensure no real time loss / erosion to the net worth of the company in future. At the same time, what is sold on a daily basis will be covered on the same day and therefore on sales of gold ornaments, the issue of open position will notarise.

8) Dividend

The Board of Directors of the Company are pleased to recommend a dividend of ^1 /- (10%) per equity share for 2014-15 (Rs.1 in 2013-14) 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.

The register of members and share transfer books of the company will remain closed from 22nd July 2015 to29th July 2015 (both days inclusive)

Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 do not apply.

9) Material changes and commitment if any affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the date of the report

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and on the date of this report.

10) Capital Expenditure

During the year, we capitalized Rs.257 Lakhs to our gross block comprising Rs.104 lakhs for Plant & Machinery and Furniture & Fittings and other assets and balance of ^153 lakhs for Computer Equipment's including Software.

The Capital Work in Progress includes Rs. 644.85 lakhs spent on creating various infrastructural facilities required for centralized procurement, manufacturing, processing and warehousing functions relevant for the business operations that would significantly enable the competitive positioning of the Company in the Branch Networking Expansion Plan that would be fully operational in due course of time.

For the previous year, we capitalized ^1367 Lakhs to our gross block comprising Rs.572 lakhs for Plant & Machinery and Furniture & Fittings and others and the balance of ^795 lakhs for Computer Equipment's including Software.

11) Finance

The Secured working capital borrowings of the Company as on March 31,2015 stood at ^15,378 lakhs (previous year Rs. 21,285 lakhs). The phased reduction was on account of reduction in inventory in line with business realties. It is also due to withdrawal of metal loan extended by bankers in the past. The company is able to manage its requirement comfortably by improving the stock rotations. Cash and cash equivalents as on 31 st March 2015 stood at Rs.574 lakhs (previous year ^1,685 lakhs). Customer advances supported the company to manage to maintain its working capital requirement.

12) Contribution to exchequer

The Company is a regular payer of taxes and other duties to the Government. During the year under review, due to losses, your Company has not paid any advance tax as against ^200 lakhs paid during the previous year. The Company also paid Value Added Tax of Rs.1,400 lakhs for financial year 2014-15, as compared to Rs. 1,135 lakhs paid for last financial year.

13) Depository system

The trading in the Equity Shares of your Company is under compulsory dematerialization mode. As on March 31,2015, Equity Shares representing 99.95% 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.

14) 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 2015-16 have been paid to these Stock Exchanges. The Shares of the companies are compulsorily tradable in dematerialized form.

15) Insurance

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

16) Corporate Governance

Your Company has been practicing 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 Clause 49 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 the Clause 49 (V) of the Listing Agreement pertaining to CEO certification for the financial year ended 31 st March 2015.

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 Clause 49 of the Listing Agreement with the Stock Exchanges, is given as a separate statement forming part of this Annual Report.

18) 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 orderto meetfuture talent requirement.

The Company continues to maintain amicable relations without any interruption in work. As on 31 st March 2015, the Company has 1014 employees on its rolls as against 1053 employees in previous year.

19) 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 (ACCOUNTS) 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.

20) 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 proviso 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 registered 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.

21) Statement concerning development and Implementation of Risk Management Policy of the Company

The Company has adopted the following measures concerning the development and implementation of a

Risk Management Policy after identifying the following elements of risks which in the opinion of the Board may threaten the very existence of the Company itself.

22) Potential Risks, Concerns and Mitigation Plan

Risk of loss of Positioning in the market place

Due to severe 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 valuefor our products moderately.

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. Rising inflation and high interest rates are other areas of concern that would deplete the residual income of the people to be spent on discretionary items like gold ornaments.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.

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.

Withdrawal of metal loan facility forced the industry to establish hedge against gold price movement with commodity exchange instruments which are cost prohibitive. Therefore in the absence of natural hedging facility, the trade is left with no viable alternative except to leave a large portion of gold un- hedged. Your Board will take appropriate action in managing the fluctuation impact in gold price movement from time to time. Post RBI circular on restoration of metal loan some of our consortium bankers have reintroduced to SBLC facilities to avail metal loan and other banks may follow suit in 2015-16.

Human Capital Risks

Human Resources risks could arise from the non- availability of an adequately trained workforce. In order to mitigate this risk, the Company has in-house training programs and Operational development workshops and organised mentoring from management to motivate employees/supervisors and to attract and retain skilled/trained personnel.

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.

23) Details of policy developed and implemented by the Company on its Corporate Social Responsibility initiatives

Based on last three years average Net profit, the Company is entitled to spend a sum of Rs. 73.09 lakhs in the year 2014-15. The company is working out for schemes that could result in enduring benefits to the

community at large. The Company shall find out ways and means to spend the same in the coming months and shall submit the relevant report in the ensuing year.The Company could not spend the money before finalising this report as the time was too short to identify suitable projects for spending the same.

The Annual Report on CSR activities is annexed herewith as"Annexure 2".

24) Particulars of Loans, Guarantees or Investments made under Section 186 of the CompaniesAct,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".

25) Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the auditors and the practicing company secretary in their reports

There were no qualifications, reservations or adverse remarks made either by the Auditors or by the Practicing Company Secretary in their respective reports.

26) 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.

27) 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.

28) Number of Board Meetings conducted during the year under review

The Company had 6 Board meetings during the financial year under review.

29) 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(3)(c) of the Companies Act, 2013:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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, had 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.

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.

30) Subsidiaries, Joint Ventures and Associate

Companies

The Company does not have any Subsidiary, Joint

venture or Associate Company.

31) Fixed Deposits

The details of deposits accepted/renewed during the year under review are furnished hereunder

Particulars (Rs.In lakhs)

Amount accepted during the year 1274.94

Amount remained unpaid or unclaimed as at the end of the year 0.53

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 Nil the total amount involved

32) Directors

There was no Director who got re-elected/ reappointed during the year under review Mrs.Yamuna Vasini Deva Dasi who was appointed as Additional Director on 04.02.2015 and holds the said office till the date of the Annual General Meeting. A notice has been received as required under Companies Act from a shareholder signifying his intention to propose Mrs.Yamuna Vasini Deva Dasi as director of the company. The board of directors of the company recommend her appointment at the ensuing Annual General Meeting.

Mr.N.B.Kumar, director of the Company retires by rotation and being eligible seeks reappointment. Your Board re commends his reappointment.

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 program arranged for independent directors have been disclosed on website of the company and are available at www.thangamayil.com

34) Annual Evaluation by the Board

The evaluation framework for assessing the performance of Directors comprises of the following keyareas:

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.

35) Statutory Auditors

The Company's Auditors, M/s B.Thiagarajan & Co , Chartered Accountants, Chennai who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment.They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

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"Annexure6".

37) 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 compliances 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.

38) Significant and material orders passed bv 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.

39) 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.

40) Disclosure of composition of Audit Committee and providing vigil mechanism

The Audit Committee consists of the following members

a. Shri.S.Rethinavelu - Chairman

b. Shri.V.R.Muthu - Member

c. Shri.Ba.Ramesh - Member

The above composition of the Audit Committee consists of Independent Directors viz., Shri. S. Rethinavelu and Shri. 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.

41) 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.

42) 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.

43) 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 Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company.

BY ORDER OFTHE BOARD ForThangamayil Jewellery Limited

BALARAMA GOVINDA DAS Managing Director

Ba.RAMESH Joint Managing Director

N.B.KUMAR Joint Managing Director

Place-Madurai Date-May 25,2015


Mar 31, 2014

Dear Members,

Your Directors have pleasure in presenting their 14th Annual Report and the Audited Accounts for the financial year ended March 31, 2014.

FINANCIAL RESULTS

Highlights of Financial results for the year are as here under:

(Rs . in Lakhs)

Particulars 2013-2014 2012-2013

Sales and Other Operating Income 1,19,611 1,52,479

Gross Profit 8,236 16,527

Earnings before Interest, Depreciation 1,959 8,467 and Taxation (EBITDA)

Finance Cost 3,476 3,702

Depreciation 565 459

Profit/(Loss) Before Tax (PBT) (2,077) 4,306

Tax (820) 1,342

Profit/(Loss) After Tax (PAT) (1,257) 2,963

Financial Performance

Sales and Other Income at Rs 119,611 lakhs were 22% lower than that of previous year's Rs 152,479 lakhs. However on a comparable basis net sales (Net of Traded Goods) has come down by 16%. Apart from value compression, the quantity sold also declined in 2013-14 due to pronounced demand recession witnessed in the later part of the year. This reduction is mainly due to wide fluctuations in gold price movement and failed monsoon in southern part of the Tamilnadu that crippled the discretionary spending surplus income in the hand of the customers.

The major reasons for adverse performance are summarized hereunder:

* Withdrawal of metal loan facility (natural hedge) all of a sudden in August 2013 when the effective gold price was at peak forced the company to fix the price at the highest level. Post fixation, gold price declined by 15% that compelled the company to realize lesser amount on subsequent customer sales.

* Most of the early purchases were made by the customers in the first 4 months of the financial year when the gold price was at recent historic bottom ( around ' 2,550 per grams ) and in the next 8 months due to demand recession and fluctuating gold price movement public by and large refrained from buying. This has resulted in 16% drop in sales where as for the industry as a whole the drop was around 35% at the national level.

* Due to non availability of gold the premium for the metal in the local market shot up. This factor together with increase in customs duty to 10% from 6% and steep reduction of INR by 12% contributed to the widening of the local price parity upto 20% compared to international price. This in turn prompted the customers to source it from Middle East and Singapore markets at a cheaper price.

* The monsoon has failed for a continuous second year in succession. All our branches are located in rural/ semi urban area where the agricultural income is one of the main sources available for discretionary spending. In the absence of that, heavy weight ornament items sales drastically dwindled. In fact our average sale weight per invoice has come down from 12.28 grams to 8.25 grams in 2013-14. Even though, the customers base and aggregate bills have improved it has not resulted in increase in the volume based offtake.

* Absence of viable hedging mechanism as an alternative for metal loan withdrawal that acted as a natural hedge together with nearly 200% increase in interest cost due to opting for cash credit leverage as against withdrawal of concessional metal loan credit resulted in nearly 2.50% drop in profit margin. This has in fact resulted in negative EBIDTA margin in the second half of the year.

* The inventory valuation in accordance with AS-2 method ( Cost or net realizable value whichever is lower) also contributed to mark to market losses on the inventory carried forward on the date of reporting ie 31st March 2014 as net realizable value was lower than the cost of gold ornaments as on that date.

Consequent to these adverse factors, the company could not effectively utilize its extended infrastructure facilities created in the earlier years and in some recently opened branches it could not even recover the operational cost.

All these factors cumulatively resulted in the reporting of net loss of Rs 1,257 lakhs for 2013-14 as against net profit after tax of Rs 2,963 lakhs in 2012-13.

CONTINUING CHALLENGES

The industry is facing challenges on a continuous manner from July 2013 onwards. No tangible shift is noticed till now in the critical area of removal of ban on import of gold, extension of metal loan facilities, improvements in demand & relaxation of controls imposed directly and indirectly by the lenders.

Apart from these macro issues, the ground realities are far from satisfactory in conduct of operations on a sustainable basis. Due to prolonged demand recession the competitors were left with no option except to offer unhealthy discounts to retail customers. This has become a trend now and most of the leading organized players are compelled to forgo profits in the long term interest of sustenance of business. We do not see any perceptible change for better gold business and the fact remains that the challenges are extraordinary and continuing till date. However as a breather to ailing industry the RBI has come out with a recent notification dated 21st May 2014 where in it has restored metal loan facilities hitherto extended by banks subject to continuation of 80:20 policy for import of gold.

HEDGING FOR GOLD PRICE FLUCTUATIONS:

The jewellery industry for the past several years went through a secular bull run. Therefore, no need was felt to hedge the price to protect the capital intact. Of late, things are changing internationally as the gold price started to decline gradually after hitting a peak price of 1921US$ per ounce in August 2012. Currently, it is quoting around 1310US$ thereby registering a drop of 32% so far. Thanks to scores of restrictions brought in by Government and RBI Authorities, we could see only a marginal drop in local price of gold. It looks like the Government is in no hurry to relax the ban imposed on import of gold and to reduce the customs duty from 10% to original level. However, RBI by its recent notification permitted the banks to extend metal loan facilities to the jewellery trade borrowers so that substantial part hedging problem could be resolved in future.

In this back drop, the availability of metal in the local organized market continues to be dearer. Therefore, this structural shift at macro level made by the Government will ensure a stable price at escalated level for some more time as the pricing is left to the local demand / supply factors and not governed by international pricing. Due to demand recession and non availability of metal matched with international price, the industry is left with no option except to contract the balance sheet so that a lesser inventory could be rotated faster that would ensure a reasonable profits to the enterprise. Moreover, in the Indian context, we don't have a viable effective hedging platform that would ensure least cost and ensure better liquidity other than the metal loan facility.

On our part, we did resort to some hedging mechanism in the last year but it could not serve any purpose due to sudden withdrawal of metal loan facility and also due to steep devaluation of INR Vs US $. In case, metal loan / consignment sales are permitted, we may take advantage of the same in lifting delivery under price "unfixed basis".

We arrange with suppliers to fix the price at the time of actual sales to customers currently. We are also operating metal savings scheme where in price risk associated with the gold price fluctuations is borne by the customers. However, a better part of the inventory at any point is left fixed. We do not anticipate any big / sudden fall in gold price in local market for the reasons stated above. In the past, whenever gold prices steeply reduced, it bounced back to its support level and it is also a fact that we are not going to sell our entire inventory at the reduced price in one single day or a week.

The long term average of price realization will ensure better stability to price behaviour even though booking of notional losses as the one witnessed in second half of the year 13-14 couldn't be avoided in the absence of natural hedging product like metal loan facility. Nevertheless, your company will watch and monitor the movement of gold price closely and take an appropriate call based on the requirement to ensure no real time erosion to the net worth of the company.

MANUFACTURING FACILITIES

The company during the year increased its own manufacturing facilities to produce gold ornaments like chains and other low value mass volume items from 5 kg per day to 10 kg per day at its Madurai and Coimbatore outlets. This incremental production capacity will increase effective margin by 0.5% on sales. Similarly, the silver articles manufacturing capacity at its Salem facility is increased from 10kg to 30kg per day. This incremental production capacity will reduce the cost of making by at least 3% in the value of the items sold.

IMPACT ON CONTRACTION/ DELEVERAGE OF BALANCE SHEET

In consonance with decline in volume due to demand recession, your Company has taken a judicious call to reduce the stock of finished ornaments of gold by bringing it down to 975 kgs by 31st March 2014 as against inventory of 1288 kgs of last year. Consequent to this strategy, the bank borrowing has also declined steeply from higher level of '35,538 lakhs to ' 21,285 lakhs by 31st March 2014. This proactive action helped the Company to improve the stock turnover ratio and also enabled the management to bring down the associated interest cost to a viable level. The fullest impact of these dual decisions would be significantly felt in the current year 2014-15. This strategy will also help to consolidate the business at the current level but facilitate the company to improve the absolute contribution in this year. In the absence of any tangible proposal for expansion of branches the entire cash accretion will be retained in the system to improve the net working capital deployed.

KEY INITIATIVES TAKEN BY THE MANAGEMENT IN 2013-14

* Better Stock turnover & lower absolute inventory helped the company to curtail expenses including cost on Hedging mechanism.

* Slow moving stock were systematically removed, melted and converted into fast moving items ensuring better cost recovery by improvement in stock rotation.

* Increased the beaten gold portion of procurement to 40% as against 25% of earlier years, in order to partially remove the constraints caused by non availability of virgin metal in the market.

* Launched E-CAT and E-Commerce platforms to fall in line with customer's requirements/ preferences.

* Gold stock turnover ratio improved from 3.46 rotations to 4.39 rotations. Similarly, improvement in the silver stock rotation is established from 2.06 to 3.66 times.

GAME CHANGE PLAN 2014 - 15

The business plan to be followed by the company includes the following:

* De-leverage the balance sheet by making use of stable gold price scenario and demand recession witnessed currently.

* Improve the "Product Mix" basket with bias on high volume low price products.

* Concentrate on further improvement in "Silver Articles" in rural area outlets.

* Continue to concentrate on synergy optimisation issues to get the optimum utilisation of resources.

* To retain and enlarge customer base, the selling price rationalisation shall be effected that would result in improved volume of business and significant increase in absolute contribution.

* Contract the size of the Balance sheet so that exceptional carrying cost on inventory could be moderated.

Position the company in order to enlarge market share as a low price deliverer of gold and silver oranaments.

FUTURE PROSPECTS

The initial trend in the first two months so far of the current year is encouraging in all aspects. The year started well with seasonal demand picking up. The initiatives taken by the company in the recent past started to yield results. A perceptible change has taken place in improvement of market share in the areas we operate. The change in product mix has resulted in better stock turnover ratio. Post rationalization of pricing policy, a moderate improvement is noticed in the volume off take of gold ornaments. In fact, silver volume sales have increased by 47% in the first two months of the current year 2014-15 as compared to the similar period in 2013-14. Most of the branches have surpassed BEP level of sales and started contributing to the bottom line of the company. Currently, the local gold price is stabilised. But for unforeseen adverse price movement in the later part of the quarter due to INR appreciation that could be caused by the change in Governance at the centre, the company is likely to realise notional valuation loss in the first half of the year 2014-15.

As no concrete positive steps taken by the regulators in relaxation of import ban (80:20 rationale) and reduction in customs duty, we do not expect a steep price correction locally as already recession parameters affecting the industry is priced in the local gold price. In case the regulators take steps to ease out restrictions in a phased manner the resultant possible underrealisation of existing inventory will be compensated by expected volume improvement in sales.

Your company has not only identified the areas that affected the growth and also positioned itself correctly in gaining market share by following appropriate strategies and planning in the area like improvement in the share of own manufacturing, competitive pricing, effective inventory management, systematic deleveraging initiatives taken to improve stock rotation, fuller utilization of operational leverage created that would facilitate the company to deliver better results in future.

POTENTIAL RISKS , CONCERNS AND MITIGATION PLAN

Risk of loss of Positioning in the market place

Due to severe 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.

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 unparallel in the recent history of jewellery trade. Rising inflation and high interest rates are other areas of concern that would deplete the residual income of the people to be spent on discretionary items like gold ornaments. 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.

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. Withdrawal of metal loan facility forced the industry to establish hedge against gold price movement with commodity exchange instruments which are cost prohibitive. Therefore in the absence of natural hedging facility, the trade is left with no viable alternative except to leave a large portion of gold un-hedged. Your Board will take appropriate action in managing the fluctuation impact in gold price movement from time to time.

Human Capital Risks

Human Resources risk could arise from the non-availability of an adequately trained workforce. In order to mitigate this risk, the Company has in-house training programs and operational development workshops and organised mentoring from management to motivate employees/supervisors and to attract and retain skilled/ trained personnel.

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.

Information technology

The Company values the necessity of an efficient and robust Information Technology system to aid the operations of the Company. The internal IT department has developed GRAMS ERP and Q LINK application, which is a state of the art jewellery add-on, on top of SAP Business One. The application used for Inventory rotations, identification of slow moving stock as well as branchwise product rotation and arriving at re- order level of each product. SAP strengthening of Supply chain module, POS module and a financial module seamlessly interlinked which provides data on-the-go about each and every store including sales, inventory levels and the like. We are currently working on re-architecting the Grams solution as a cross platform application with enhanced features and functionality. During the year, the Company has successfully launched E-commerce, e-catalogue and bank payment solutions to Grams ERP using a middle ware solution.

DIVIDEND

The Board of Directors of the Company are pleased to recommend a dividend of ' 1 /- (10%) per equity share for 2013-14 (' 5 in 2012-13) on 1,37,19,582 equity shares of Rs. 10 each. In order to augment resources in the changed difficult environment of business, the Board has decided to recommend a reduced payment of '161 lakhs for the year 2013-14 as against Rs 797 lakhs in 2012- 13 (including DDT).

The Proposed dividend is subject to the approval of share holders in the ensuing Annual General Meeting of the company.

The register of members and share transfer books of the company will remain closed from 21st July 2014 to 30th July 2014 (Both days inclusive).

Transfer to Reserve

We propose to transfer ' 200 lakhs to the General Reserve. The balance is carried forward to the Profit and Loss Account.

CAPITAL EXPENDITURE

During the year, we capitalized ' 1,367 lakhs to our gross block comprising Rs 572 lakhs for Plant & Machinery and Furniture & Fittings and others and the balance of Rs 795 lakhs for Computer Equipments including Software.

For the previous year, we capitalized Rs 1,720 lakhs to our gross block comprising '1,116 lakhs for show rooms opened during previous year and the balance of Rs 604 lakhs for Plant and Machinery, Vehicles and other assets for existing branches and corporate office Capex additions.

FINANCE

The Secured borrowings of the Company as on March 31, 2014 stood at RS 21,285 lakhs (previous year Rs 32,610 lakhs). The phased reduction is on account of reduction in inventory in line with business realties. It is also due to withdrawal of metal loan extended by bankers in the past. The company is able to manage its requirement comfortably.

Cash and cash equivalents as on 31st March 2014 stood at ' 1,685 lakhs (previous year ' 2,902 lakhs). Customer advances supported the company to manage to maintain its working capital requirement.

CONTRIBUTION TO EXCHEQUER

The Company is a regular payer of taxes and other duties to the Government. During the year under review, due to lower profit, your Company paid ' 200 lakhs towards Income Tax as compared to ' 2,470 lakhs paid during the last financial year. The Company also paid Value Added Tax of '1,135 lakhs for financial year 2013-14, as compared to Rs 1,482 lakhs paid for last financial year.

OPENING OF BRANCHES

Your Company has opened five more branches during the year as against eleven branches in the previous financial year. These branches have been well equipped with lots of choicest varieties to suit the preference of the customers and enhancing market penetration in and around tier II cities. The above branches are moderately doing well with potential for better future prospects in the years to come. For operational reasons, the company has merged the Vellakovil branch with that of Dharapuram by transferring the inventory and the customer base to Dharapuram. As at the end of 31st March 2014 total branches in operation are thirty consisting of medium/ small formats.

DIRECTORS

Retirement by Rotation

At the ensuing Annual General Meeting, Shri. Ba.Ramesh Joint Managing Director and Shri. T.R. Narayanaswamy, Director of the Company retires by rotation and are being eligible seeks re-appointment. Your Board commends their re-appointment.

MANAGERIAL REMUNERATION

Due to inadequacy of profits, Managing Director and two Joint Managing Directors being whole time Directors of the Company could not draw remuneration as approved by the shareholders. As per Schedule XIII of the Companies Act 1956, they are entitled to draw only up to ' 48 lakhs each. The remuneration that was paid in excess of the eligibility criterion under the Act, even though it permits the full payment subject to Central Government permission, the three whole time Directors of the company surrendered such excess payment of ' 126 lakhs voluntarily to the Company.

(Rs . in Lakhs)

Name Designation As approved Restricted to Excess by Inadequacy amount Share- of profit surre- holders ndered

Balarama Govinda Managing 90 48 42 Das Director

Ba.Ramesh Jt. Managing 90 48 42 Director

N.B.Kumar Jt. Managing 90 48 42 Director SUBSIDIARIES

Your company has no subsidiary and therefore no statement of consolidation or other details are furnished.

DEPOSITORY SYSTEM

The trading in the Equity Shares of your Company is under compulsory dematerialization mode. As on March 31, 2014, Equity Shares representing 99.95% 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 the facility of dematerialization of the Company's shares.

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 2014-15 have been paid to these Stock Exchanges. The Shares of the companies are compulsorily tradable in dematerialized form.

INSURANCE

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

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 as amended, the Directors confirm that:

i) In the preparation of the accounts for the financial year ended March 31, 2014, the applicable accounting standards have generally been followed along with proper explanation relating to material departures, if any.

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2014, and of the statement of profit and loss account and cash flow of the company for the year ended 31st March 2014.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended March 31, 2014 on a going concern basis.

AUDITORS

The Company's Statutory Auditors, M/s. B.Thiagarajan & Co., Chartered Accountants, retire at the ensuing Annual General Meeting. They have confirmed their eligibility for reappointment in terms of the provisions of Companies Act, 2013 and rules made there under.

The Audit Committee and the Board of Directors recommend appointment of M/s. B.Thiagarajan & Co., as the Company's Statutory Auditors for a residual period of three years from the conclusion of the ensuing Annual General Meeting. However, such re-appointment is to be confirmed in every Annual General Meeting to be held thereafter on a yearly basis.

The notes to the accounts referred to in the Auditors' Report are self-explanatory and therefore do not require any further comments under Section 217 (3) of the Companies Act, 1956.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The company is taking initiatives to form a CSR activity committee to explore various avenues to implement the plan as adopted by the Board from the current year 2014-15 in order to participate in the discharge of Corporate Social Responsibility particularly in the areas of education, health care and care for environment program either by the company itself or as sponsors of such developers.

FIXED DEPOSITS

Fixed Deposits from the public and shareholders stood at ' 1,968 lakhs as at March 31, 2014 (Previous year ' 2,210 lakhs). Matured deposits for which disposal instructions had not been received from the depositors concerned stood at '13 lakhs as at March 2014.

The company has complied with the provisions of section 58-A of the Companies Act, 1956 and rules made there under.

The Company is taking necessary steps to fall in line with mandatory requirement of the Companies Act, 2013 that are applicable to renewal , acceptance of fixed deposits as governed by Section 73 to 76 of the said Act and appropriate rules made there under. The Directors are happy to inform that our company is an eligible company under section 76 of the said act for acceptance of deposits from general public and members of the company upto 35% collectively of the effective net worth of the company as per the financial position reported as at 31.03.2014. Your company is taking all necessary steps to confirm to the conditions laid out in the Act and Rules framed for acceptances of deposits.

CORPORATE GOVERNANCE

Your Company has been practicing 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 Clause 49 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 the Clause 49 (V) of the Listing Agreement pertaining to CEO certification for the financial year ended 31st March 2014.

INTERNAL CONTROL AND THEIR ADEQUACY

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded, information provided to management is reliable & timely and statutory obligations are adhered to.

Your Company believes that internal control is a necessarily associated with the principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances. Your Company remains committed to ensuring an effective internal control environment that provides assurance on the efficiency of operations and security of assets.

Well established and robust internal audit processes, both at business and corporate levels, continuously monitoring the adequacy and effectiveness of the internal control environment across your company and the status of compliance with operating systems, internal policies, process and regulatory requirements. In the networked IT environment of your Company, validation of IT security continues to receive focused attention of the internal audit team which includes IT specialists.

The Audit Committee of your Board met four times during the year. It reviewed, inter-alia, the adequacy and effectiveness of the internal control environment and monitored implementation of internal audit recommendations including those relating to strengthening of your Company's risk management policies and systems. It also engaged in overseeing financial disclosures.

COMPANIES ACT 2013

The Companies Act 2013 which replaces more than five decades old Companies Act, 1956 was passed by the parliament. Subsequent to receiving the president's assent, the Ministry of Corporate Affairs notified 283 sections and also put up various rules under the new Act for the public comment. The objective behind the Companies Act, 2013 is lesser government approvals and enhanced self regulations coupled with emphasis on corporate democracy. The Companies Act, 2013 delinks the procedural aspects from the substantive law and provides greater flexibility in Rules making to enable adoption to the changing economic environment. This will lead to improved compliance and accountability from the corporate sector and will provide further transparency on the disclosure. Your Company takes into cognizance the relevant modified / new regulatory framework and will strictly follow the same with greater transparency in Corporate Governance.

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 Clause 49 of the Listing Agreement with the Stock Exchanges, is given as a separate statement forming part of this Annual Report.

HUMAN RESOURCE DEVELOPMENT

Human resource development is geared through structured approaches for employee encouragement and 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 personnel development program has been taken up as long term strategy of the Company. Your Company continues to work to develop capabilities and help its people realize their best potential. Your Company takes great pride in the commitment, competence and vigour shown by its workforce across all business realms.

The Company continues to maintain cordial relations without any interruption in work. As on 31st March 2014, the Company has 1053 employees on its rolls as against 1433 employees in previous year.

HUMAN RESOURCES

No employee of the company was in receipt of remuneration during the year, in excess of sum prescribed under Sections 217(2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules, 1975, as amended vide notification dated 31st March 2011.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

INFORMATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 217(1)(e) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.

a) Conservation of Energy

The disclosure of particulars with respect to conservation of energy pursuant to Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 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) Foreig* Exchange Outgo

(Rs in lakhs)

Particulars 2013-14 2012-13

Travelling Expenses 12.03 9.58

Interest on FCNRB Loan - 94.50

Purchase of Goods 2,568.70 -

Purchase of Capital Goods - 60.42

FORWARD-LOOKING STATEMENTS

This Report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words "expect", "consider", "estimation", "anticipate", "propose", "will" and other similar expressions as they relate to the Company and/or its business are intended to identify such forward- looking statements. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward- looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of now.

This Report should be read in conjunction with the financial statements included herein and the notes thereto.

ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to the Company's employees for the massive personal efforts as well as their collective contribution to the Company's record performance. The Directors would also like to thank the Customers, Shareholders, Bankers and Suppliers for their continuous support given to the company and their confidence in the management.

BY ORDER OF THE BOARD For Thangamayil Jewellery Limited

BALARAMA GOVINDA DAS Ba. RAMESH N.B.KUMAR Managing Director Joint Managing Director Joint Managing Director

Place - Madurai Date - May 26, 2014


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting their 13th Annual Report and the Audited Accounts for the financial year ended March 31,2013.

FINANCIAL RESULTS

Highlights of Financial results for the year are as here under:

PARTICULARS 2012-2013 2011-2012

Sales and Other Operating Income 1,52,479 1,13,161

Gross Profit 16,527 15,074

Earnings before Interest, Depreciation 8,467 11,806 and Taxation (EBITDA)

Finance Cost 3,702 2,848

Depreciation 459 224

Profit Before Tax (PBT) 4,306 8,735

Tax 1,342 2,829

Profit After Tax (PAT) 2,963 5,906

Financial Performance

The operating income declined to Rs.8,467 lakhs as against Rs.11,806 lakhs of last year. This was mainly due to:

¦S Change in accounting policy in charging Advertisement and publicity expenses from Deferred Revenue Expenditure (DRE) treatment hitherto followed to full charge out including of earlier years as per Accounting Standard requirement amounting to Rs.2,817 lakhs.

-S Reduction in Gross profit margin by 250 bases on a comparable basis due to adverse gold price fluctuation witnessed in the second half of FY12-13.

But for the fuller write off of Advertisement and publicity of Rs.2,817 lakhs the Profit before tax would have been higher at Rs.7,123 lakhs as against Rs.8,735,lakhs for 2011-12. Even though, the enduring benefits of amount spent on Advertisement and publicity is available in the form of continued "Brand Equity "the Board thought it fit to treat the entire amount as Revenue Expenditure to fall in line with the Accounting Standards. This being a one time charge, your Board is confident of achieving better results in the years to come by fully exploiting the core competence of the retail business.

Commensurate to the requirement of increase in volume expected in the gold ornaments portfolio, due to continuous branch expansion, the company has expanded its own manufacturing capacities in the year ended March 2013. The product mix between ''own'' vs. ''bought out1 ornaments would undergo a comparable change in favour of our own manufacturing in the years to come. Similarly for silver items also, the company has recently started its own manufacturing facilities to start with for "Payal" (anklet) items. Both the initiatives will take the company to a significant stage in the fuller integration of the business model thereby ensuring cost advantages to the company.

Cost management:

The Company is improving meticulously its focus on cost through a resourceful operating system, increase in the production Capacity and strengthening of gold manufacturing units and various sourcing points are being pursued to reduce manufacturing costs.

Information technology:

The Company values the necessity of an efficient and robust Information Technology system to aid the operations of the Company. The internal IT department has developed GRAMS ERP application, which is a state of the art jewellery add-on on top of SAP Business One. The system has a supply chain module, POS module and a financial module seamlessly interlinked which provides data on-the-go about each and every store including sales, inventory levels and the like. The system throws out more than 100 different type of MIS reports that aids the decision making process of the management and the operations team. We are currently working on re-architecting the Grams solution as a cross platform application with enhanced features and functionality. Efforts are also underway to integrate our e-commerce, e-catalogue and bank payment solutions to Grams ERP using a middle ware solution.

POTENTIAL RISKS AND CONCERNS

Risk of loss of Positioning in the market place

Due to severe 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 the lack of knowledge of customer''s preference and on quality parameters. Therefore, our company with its fuller penetration to rural market is well placed to participate in the rural success story of the country.

Monsoon

Monsoon failure has the potential to adversely affect the company''s business and earnings particularly in south Tamil Nadu, where agricultural activities are dependent on monsoon. Rising inflation and high interest rates are other areas of concern that would deplete the residual income of the people to be spent on discretionary items like gold ornaments.

Gold price fluctuation risks

Gold price fluctuation risk could arise on account of frequent changes in gold prices either up or downslide momentum. It could have adverse impact on earnings. However with the help of sound hedging mechanism in the form of metal loan arrangement, the adverse impact could be mitigated and minimised.

From a secular bull run witnessed in the past one decade, gold price has started to fall in recent months. This has resulted in wide fluctuations in price movements and, at times, due to marked to market valuation consideration, it results in loss in inventory value to the extent the metal price is fixed at the time of delivery. A judicious mix between fixed and unfixed pricing becomes relevant that would ensure smooth operations without facing undue exposure on price front. A committee is constituted at the Board level to completely study the "pros and cons" of risks associated with the business so that the opportunities thrown open by the market behaviour in price trends are optimally exploited by the company. Your Board will take appropriate decision in managing the downfall in gold price.

Human Capital Risks

Human Resources risks could arise from the non-availability of an adequately trained workforce. In order to mitigate this risk, the Company has in-house training programs and Operational development workshops and organised mentoring from management to motivate employees/ supervisors and to attract and retain skilled/ trained personnel.

STRATEGY

Certain strategies formulated and implemented by the management in tune with the exploitation of functional synergies requirements have resulted positively in enhancing the bottom line profitability of the company.

To name a few:

a) Opening of Eleven more branches added to the volume off take.

b) Promoted simultaneously silver products in all branches to get the benefits of Rural India Penetration fully; Promoted a balanced product portfolio to cater to the requirements of middle/ lower middle class customers.

c) Customer friendly schemes like Gold Saving Scheme and Loyalty Bonus payments.

d) One large branch in a major city supported by four to five clusters of small branches in that area "business model" has been slated to be implemented to get the synergy optimization in various resource management.

The Board of Directors of the Company are pleased to recommend a dividend of Rs. 5/- (50%) per equity share for 2012-13 ( Rs. 7 in 2011-12) on

- 1,37,19,582 equity shares of Rs. 10 each. In order to

" ensure resources in the changed environment of business, the Board has decided to recommend a

- reduced payment of Rs. 797 lakhs as against Rs. 1116

" lakhs in 2011-12 (including DDT)

The Proposed dividend is subject to the approval of share holders in the ensuing Annual General Meeting of the company.

The register of members and share transfer books will remain closed from 16th July, 2013 to 22nd July, 2013(both days inclusive).

Transfer to Reserve

We propose to transfer Rs. 300 lakhs to the general reserve. The balance is carried forward to the Profit and Loss Account.

RETAIL EXPANSION PLAN

During the year under review, the efforts in retail expansion plan were further intensified and the company opened 11 more retail stores during the year. The company has virtually benefited by this expansion that helped to promote its brand name through customer satisfaction.

Based on the experience gained, it is decided to intensively play on the rural economic recovery card in the current year 13-14 as well. We are planning to open as many as 12 more branches in Tamilnadu spread over southern & western parts of the State. Silver business is looking up due to relative price stability and ornament appeal it makes to the rural womenfolk. In smaller towns, the silver acts as a complementary for gold ornaments and it makes the Tier 2 & Tier 3 towns branch expansion more viable and profitable particularly with respect to Return on capital employed criteria.

FUTURE BUSINESS PLAN

The business plan followed by the company includes the following:

1. Sustained penetration into rural areas by spreading the awareness of quality parameters in the minds of the customers.

2. Relatively de-leverage the balance sheet by making use of lower gold price scenario.

3. To consolidate the market position in the areas of operations to get the benefits of "Brand Loyalty"

4. To fill the gaps in every region so that cluster model adopted by the company gets the optimum penetration and economic results.

5. Continue to concentrate on synergy optimisation issues to get the optimum utilisation of resources.

FUTURE PROSPECTS

Going forward, the business model as demonstrated by your company can easily be replicated in various select towns. With the consumer awareness improving year after year, for the quality parameters and the effective polarization taking place on the supply side, the future prospects of the company is ensured. Though operating in a competitive environment, the uniqueness of the model ensures a comfortable level of net margin availability to your company. Price of gold is consolidating at lower level post steep correction witnessed in April 2013 and it augers well for reasonable accretion to bottom line by better volume and off take.

CAPITAL EXPENDITURE

During the year, we capitalized Rs.1,720 Lakhs to our gross block comprising Rs.1,116 lakhs for new show rooms opened during the year and the balance of ^604 lakhs for plant and machinery, vehicles and other assets for existing branches and corporate office Capex additions.

For the previous year, we capitalized Rs. 3,998 Lakhs to our gross block comprising ^3,037 lakhs for show room opened during previous year and addition to other show room renovation expenses. Balance of Rs. 961 lakhs for other assets.

FINANCE

The Secured borrowings of the Company as on March 31,2013 stood at Rs. 32,610 lakhs (previous year ^24,903 lakhs).

Cash and cash equivalents as on 31st March 2013 stood at Rs. 2,902 lakhs (previous year Rs. 950 lakhs). Your Company''s financial position is comfortable. The available internal accruals together with customer''s advances with a marginal increase in leveraged finance would be sufficient to achieve the target contemplated for 13-14.

CONTRIBUTION TO EXCHEQUER

The Company is a regular payer of taxes and other duties to the Government. During the year under review, your Company paid Rs.2,470 lakhs towards Income Tax as compared to Rs.2,258 lakhs paid during the last financial year. The Company also paid Value Added Tax of Rs.1,482 lakhs for financial year 2012-13, as compared to fl,104 lakhs paid for last financial year.

OPENING OF BRANCHES

Your Directors are delighted to announce the opening of eleven more branches during the year as against six branches in the previous financial year. These branches have been well equipped with lots of choicest varieties to suit the preference of the customers. These branches are doing well with potential for better future prospects in the years to come. As at the end of 31s'' March 2013 total branches in operation are twenty six consisting of medium/ small formats.

Moreover till 24th May 2013 in the current year your company had opened 2 more branches in Sivagangai (07.04.2013) and Gobichettipalayam (16.04.2013). Work is progressing simultaneously in four other towns and is likely that all branches will be opened during the first half of 13-14 financial year.

DIRECTORS

Retirement by Rotation

At the ensuing Annual General Meeting, Sri. Lalji Vora and Sri. N.B. Kumar Directors of the Company retire by rotation and being eligible seeks re-appointment. Your Board commends their re-appointment.

SUBSIDIARIES:

Your company has no subsidiary and therefore no statement of consolidation or other details are furnished.

DEPOSITORY SYSTEM

The trading in the Equity Shares of your Company is under compulsory dematerialization mode. As on March 31, 2013, Equity Shares representing 99.95% 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.

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 2013-14 have been paid to these Stock Exchanges. The Shares of the companies are compulsorily tradable in dematerialized form.

INSURANCE

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

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended March 31, 2013, the applicable accounting standards have generally been followed along with proper explanation relating to material departures, if any.

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under review;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) That the Directors have prepared the accounts for the financial year ended March 31,2013 on a ''going concern'' basis.

AUDITORS

M/s. B.Thiagarajan & Co., the present statutory auditors retire at the ensuing Annual General Meeting and are eligible for reappointment u/s 224(1B) of the Companies Act 1956. The company proposes to reappoint M/s. B. Thiagarajan & Co., Chartered Accountants as Statutory auditors of the company from the conclusion of the ensuing Annual General Meeting up to the conclusion of the next Annual General Meeting of the company.

CHANGE IN ACCOUNTING POLICIES

The company is effecting changes in accounting policies as follows:

Upto previous year, company accounted Costs incurred on advertisement / publicity has been deferred to be amortized as 20% both in the year of incurrence and ensuing year and the balance in equal installments in next two financial years.

In line with changes in Accounting Treatment and in accordance with generally accepted

Accounting Standards on Advertisement expenses the company opted to write off existing

Deferred Revenue expenditure of earlier years in current year together with fully charging of current year advertisement and publicity expenses to the profit and loss account of the current year itself.

Consequent to this it has resulted in understatement of profit after tax for the year ended 31st March 2013 by Rs. 1,903 lakhs on a comparable basis.

COST AUDITOR

The Company has received a letter from the Cost Auditor, stating that the appointment, if made, will be within the prescribed limit under Section 224(1B) of the Companies Act, 1956.

The board of directors, appointed Dr. I Ashok, a Cost Accountant holding certificate of practice No.M/11929, as a Cost Auditor for conducting the Cost Audit for the financial year 2012-2013.

FIXED DEPOSITS

Fixed Deposits from the public and shareholders, stood at Rs. 2,210.07 lakhs as at March 31, 2013 (Previous year Rs. 2,314.24 lakhs).

The company has complied with the provisions of section 58-A of the Companies Act, 1956 and rules made there under.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The company is taking initiatives to form a CSR activity committee to explore various avenues to implement the plan as adopted by the Board from the current year 2013-14. Participate in the discharge of Corporate Social Responsibility particularly in the area of education, health care and care for environment programme either by the company itself or as sponsors of such developers.

CORPORATE GOVERNANCE

Your Company has been practicing 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 Clause 49 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 the Clause 49 (V) of the Listing Agreement pertaining to CEO certification for the financial year ended 31st March 2013.

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

INFORMATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 217(1) (E) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

a) Conservation of Energy

The disclosure of particulars with respect to conservation of energy pursuant to Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 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, Adaptations 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.

INTERNAL CONTROL AND THEIR ADEQUACY

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded, information provided to management is reliable & timely and statutory obligations are adhered to.

Your Company believes that internal control is a necessarily associated with the principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances. Your Company remains committed to ensuring an effective internal control environment that provides assurance on the efficiency of operations and security of assets.

Well established and robust internal audit processes, both at business and corporate levels, continuously monitoring the adequacy and effectiveness of the internal control environment across your company and the status of compliance with operating systems, internal policies, process and regulatory requirements, in the Networked IT environment of your Company, validation of IT security continues to receive focused attention of the internal audit team which includes IT specialists.

The Audit Committee of your Board met four times during the year. It reviewed, inter-alia, the adequacy and effectiveness of the internal control environment and monitored implementation of internal audit recommendations including those relating to strengthening of your Company''s risk management policies and systems. It also engaged in overseeing financial disclosures.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis and results of operations of the Company for the year under review as required under Clause 49 of the Listing Agreement with the Stock Exchanges, is given as a separate statement forming part of this Annual Report.

HUMAN RESOURCE DEVELOPMENT

Human resource development is geared through structured approaches for employee encouragement and 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 personnel development program has been taken up as long term strategy of the Company. Towards this, the company has taken HR training development programs as one of the key objectives to support the sales activities this year in a very aggressive way.

The Company continues to maintain cordial relations without any interruption in work. As on 31st March 2013, the Company has 1433 employees on its rolls as against 957 employees in previous year.

HUMAN RESOURCES

In terms of the provisions of Sections 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is annexed forming part of this report.

FORWARD-LOOKING STATEMENTS

This Report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words "expect", "consider", "estimation", "anticipate", "propose", "will" and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of now.

This Report should be read in conjunction with the financial statements included herein and the notes thereto.

ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to the Company''s employees for the massive personal efforts as well as their collective contribution to the Company''s record performance. The Directors would also like to thank the Customers, Shareholders, Bankers, and Suppliers for their continued support given to the company and their confidence in the management.

BY ORDER OF THE BOARD

For Thangamayil Jewellery Limited

-Sd- -Sd-

BALARAMA GOVINDA DAS Ba. RAMESH

Managing Director Joint Managing Director

Place - Madurai

Date - May 24,2013


Mar 31, 2012

The Directors have pleasure in presenting their 12th Annual Report and the Audited Accounts for the financial year ended March 31, 2012.

FINANCIAL RESULTS

Highlights of Financial results for the year are as here under:

(Rs.in Crores)

Particulars 2011-2012 2010-2011

Sales and Other Operating Income 1,131.61 658.26

Earnings before Interest, Depreciation 118.06 58.55 and Taxation (EBITDA)

Interest and Finance Charges 28.48 10.02

Depreciation 2.24 1.48

Profit Before Tax (PBT) 87.35 47.04

Taxation 28.29 15.71

Profit / (Loss) for the Year (PAT) 59.06 31.33

YEAR WENT BY:

The company has achieved an all time record turnover of Rs 1,131.61 Crores for the year ended 31.03.2012, as against Rs 658.26 Crores of previous year, thereby, registering a top line growth of 71.91 %. In volume terms the company could achieve a quantity of 4,107 Kgs in this year as against previous year of 3,145 Kgs ,there by registering an increase on 31% in this year.

This performance was possible due to opening of six more branches during the financial year and also due to full year operations of branches opened in the previous year.

Sudden increase in gold price in the month of Aug / Sep 2011 and near sustenance of the price with small deviations throughout the second half of the financial year to some extent acted as a deterrent for achieving sustained volume growth due to customer's resistance for the higher price.

Your Company could achieve a volume growth of 31% with the help of additions of outlets. Though international price of gold had fallen from US$ 1921 per ounce to the current level of US$1656 per ounce, the domestic price couldn't favorably readjust due to increase in customs duty to 2% and falling rupee value. It continues to hover around Rs 2630-2680 per gram price band for 22ct gold ornaments.

Unexpected customs duty increase from 2 to 4% in the recent budget coupled with certain regulatory initiatives taken by the Government could not go well with the trade. The nationwide strike organized by various jewellers association had crippled the business more or less fully in the second fortnight of March 2012. By now, things are clear that increased customs duty will remain that but however the proposed levy of Central Excise on gold ornaments is shelved.

GOLD PRICE MOVEMENT:

During the year, gold price increased significantly registering a steep increase of around 30%. The increase in gold price has to some extent affected the volume off take particularly in the second half of the financial year. The gold price is almost stabilized during the later part of the year and getting consolidated at the current level well over 4 months. Continuation of stable gold price will go a along away in improving the volume off take in the trade in the years to come.

HIGHER INTEREST IMPACT

RBI continuously increased the repo interest rate that resulted in commercial banks steeply increasing the lending rate. Certain concessional credit products extended by banks upto 10-11 years were withdrawn. The effective interest rate has gone upto 14 % as against 10 % in last year. On a fuller utilization of limits, the effective interest increase was at Rs 18.45 Crores for the current level of exposure. Relatively lesser stock turnover due to prevailing high gold price coupled with high interest cost has affected the profitability of the company on a comparable basis. But for this escalation in interest cost the normal profitability might have increased better than the Actuals. However it is expected that interest rate may come down by at least 200 basis in 12-13 and judicious mix of cash credit with metal loans would result in considerable reduction in effective interest cost in 2012-13.

Certain strategies formulated and implemented by the management in tune with the exploitation of functional synergies requirements have resulted positively in the bottom line of the company. To name a few,

a) Opening of six more branches at Coimbatore, Salem, Palani, Thenkasi, Aruppukottai, and Cumbum significantly added to the volume off take;

b) Promoted simultaneously silver products in all branches to get the benefits of Rural India Penetration fully;

c) Promoted a balanced product portfolio to cater to the requirements of middle/lower middle class customers;

d) Introduced customer friendly schemes like Gold Saving Scheme and Loyalty Bonus payments in a big way;

e) One big branch in a major city supported by four to five clusters of small branches in that area "business model" started to be implemented to get the synergy optimization in the areas of advertisement and publicity.

In this background your Company made an EBIDTA of Rs118.06 Crores as against Rs 58.55 Crores achieved in the previous year registering a significant growth of 102% at EBITDA level of the Company. Consequently the Profit after tax also increased to Rs59.06 crores as against Rs 31.33 Crores in the previous year registering an increase of 89% over last year.

DIVIDEND

The Board of Directors of the Company are pleased to recommend a dividend of Rs 7.00 /- (70%) per equity share for 2012 on 1,37,19,582 equity shares of Rs. 10 each.

The Proposed dividend is subject to the approval of share holders in the ensuing Annual General Meeting of the company.

The register of members and share transfer books will remain closed from 9th July, 2012 to 18th July, 2012(both days inclusive).

Transfer to Reserve

We propose to transfer Rs 600.00 lakhs to the general reserve. The balance is carried forward to the Profit and Loss Account.

RETAIL EXPANSION PLAN

During the year under review, the efforts in retail expansion plan were further intensified and the company opened 6 more retail stores during the year. The company has virtually benefited by this expansion that helped to develop its brand name through customer satisfaction.

Based on the experience gained, it is decided to intensively play on the Rural economic recovery card in the current year 12-13 as well. We are planning to open as many as 12 branches in Tamilnadu spread over southern & western parts of the state. Silver business is looking up due to relative price stability and ornament appeal it makes to the rural womenfolk. In smaller towns, the silver acts as a complementary for gold ornaments and it makes the tier 3 & 4 town branch expansion more viable and profitable particularly with respect to Return on capital employed criteria.

"Rural India Growth Story" is taken forward penetrating deeper into rural towns particularly in the southern and western districts of Tamilnadu where a significant gold jewellery business takes place.

Your directors are actively considering the proposal of opening up of customer care centres in smaller towns attached to our main branches and also seriously considering a proposal of appointment of "Franchisee dealers" model in unrepresented areas in order to fully optimize the various synergies already established. All these "Retail area expansion plans" now implemented would bear fruits in the years to come and enable the company to maintain the leadership position in some parts of the State of Tamilnadu.

FUTURE BUSINESS PLAN

The business plan as followed by the company includes the following:

1. Sustained penetration into rural areas by spreading the awareness of quality parameters in the minds of the customers.

2. A proper mix between gold and silver to get the optimum results.

3. To follow one major city with four or five clusters business model for getting better synergies.

4. Slowly get into high value products including diamond in major cities to cater to the elite category customers.

5. Continue to concentrate on synergy optimization issues to get the optimum utilization of resources.

FUTURE PROSPECTS

Going forward, the business model as demonstrated by your company can easily be replicated in various selected towns. With the consumer awareness improving year after year, for the quality parameters on the one hand and the effective polarization taking place in the supply side on the other hand, the future prospects of the company is ensured. Though operating in a competitive environment, the uniqueness of the model ensures a comfortable level of net margin availability to your company. The improved visibility of our stores in existing towns coupled with new branches expansion will ensure the growth momentum experienced by the company in coming years.

FINANCE

The borrowings of the Company as on March 31, 2012 stood at Rs 250.93 Crores (previous year Rs121.46 Crores). Cash and cash equivalents as on 31st March 2012 stood at Rs 9.50 Crore (previous year Rs 5.58 Crores). Your Company's financial position is comfortable. The Company has obtained sanctions from new banks and submitted enhancement proposals with the existing bankers towards working capital requirements for the financial year 2012-13 aggregating to Rs406 Crores. With the available internal accruals and undrawn limit fixed for 12-13 from banks, the company should be in a position to comfortably complete the ongoing retail expansion plan for forthcoming year and meet its working capital requirements fully.

CAPITAL EXPENDITURE

During the year, we capitalized Rs 3998 Lakhs to our gross block comprising Rs 3037 lakhs for new show rooms opened during the year and addition to Madurai existing show room renovation and the balance of Rs 961 lakhs for plant and machinery, vehicles and other assets for existing branches and corporate office Capex additions.

During the previous year, we capitalized Rs.1138.73 Lakhs to our gross block comprising Rs.436.12 lakhs for Tuticorin and Madurai Anna Nagar Show room cost and the balance of Rs223.93 lakhs for plant and machinery, vehicles and other assets for existing branches. We have acquired lands in Trichy and Salem for Show rooms for Rs.478.68 lakhs.

CONTRIBUTION TO EXCHEQUER

The Company is a regular payer of taxes and other duties to the Government. During the year under review, your Company paid Rs. 22.58 Crores towards Income Tax as compared to Rs. 13.58 crores paid during the last financial year. The Company also paid Value Added Tax of Rs. 11.34 Crores for financial year 2011-12, as compared to Rs.6.51 Crores paid for last financial year.

OPENING OF BRANCHES

Your Directors are delighted to announce the opening of the Six more branches at Cumbum ( 15th June 2011) , Aruppukottai( 15th August 2011), Salem (30th September 2011), Tenkasi (13th October 2011), Palani (2nd November 2011) and Coimbatore (7th December 2011). These branches have been well equipped with lot of choicest varieties to suit the preference of the customers. The above branches are doing well with potential for better future prospects in the years to come.

Moreover till 16th May 2012 in the current year your company had opened 2 more branches in Vellakovil (16.04.2012) and Dharapuram (07.05.2012). Work is progressing simultaneously in 7 other towns and is likely that all branches will be opened during 20 12-13 financial year. DIRECTORS Retirement by Rotation At the ensuing Annual General Meeting, Sri.S.Rethinavelu and Sri. Ba. Ramesh Directors of the Company retires by rotation and being eligible seeks re-appointment. Your Board commends their re-appointment.

SUBSIDIARIES:

Your company has no subsidiary and therefore no statement of consolidation or other details are furnished.

DEPOSITORY SYSTEM

The trading in the Equity Shares of your Company is under compulsory dematerialization mode. As on March 31, 2012, Equity Shares representing 99.95% 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.

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 2012-13 have been paid to these Stock Exchanges. The Shares of the companies are compulsorily tradable in dematerialized form.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors' Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended March 31, 2012, the applicable accounting standards have generally been followed except for small deviations as explained in the Notes on accounts;

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under review;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) That the Directors have prepared the accounts for the financial year ended March 31, 2012 on a 'going concern' basis.

AUDITORS

M/s. B.Thiagarajan & Co., the present statutory auditors retire at the ensuing Annual General Meeting and are eligible for reappointment u/ s 224(1B) of the Companies Act 1956. The company proposes to reappoint M/ s.B.Thiagarajan & Co., Chartered Accountants as Statutory auditors of the company from the conclusion of the ensuing Annual General Meeting up to the conclusion of the next Annual General Meeting of the company.

In respect of the observations made by the Auditors in their report, your Directors wish to state that the respective notes to the accounts read with relevant Accounting policies are self explanatory and therefore do not call for any further comments.

INSURANCE

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

FIXED DEPOSITS

Fixed Deposits from the public and shareholders, stood at Rs2314.24 lakhs as at March 31, 2012 (Previous year Rs 1280.61 lakhs).

The company has complied with the provisions of section 58-A of the Companies Act, 1956 and rules made there under.

CORPORATE GOVERNANCE

Your Company has been practicing 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 Clause 49 of the Listing Agreement(s) with the Stock Exchange(s) form 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 the Clause 49 (V) of the Listing Agreement pertaining to CEO certification for the financial year ended 31st March 2012.

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

INFORMATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 217(1)(E) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

a) Conservation of Energy

The disclosure of particulars with respect to conservation of energy pursuant to Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 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, Adaptations 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)

Particulars 2011-12 2010-11

Travelling Expenses 3.50 7.47

Interest on FCNRB Loan 198.20 271.76

INTERNAL CONTROL SYSTEMS

Your Company has proper and adequate system of internal controls. The Internal Audit team conducts both Systems and Financial Audits which are carried out in Manufacturing unit, branches and corporate offices.

The audit findings are reviewed by the Audit Committee of Directors and corrective action, as deemed necessary is taken. Your Company also has laid down procedures and authority levels with suitable checks and balances encompassing the entire operations of the Company.

Your Company has identified various business risks and periodic reviews are conducted by the Management regarding the adequacy of mitigation procedures for the same.

PERSONNEL

The HR policies and procedures of your Company are geared towards encouragement and development of Human Capital. Your Company has transparent processes for rewarding performance and retaining talent. Skill Gap Analysis and other systems are also in place to identify the training interventions required. Priority is given to succession planning and talent management.

Employee relations continued to be cordial during the year. As on 31st March, 2012 your Company has 957 employees.

RISKS AND CONCERNS

The continued increase in gold price and huge fluctuations of gold price in India can lead to volume downturn. Gold price is influenced by USD movement and safe heaven considerations. A better Euro will increase the price of gold, whereas, a rising USD will impact adversely gold price movement. As for as India is concerned a falling rupee will increase the local gold price and rising rupee will positively influence the gold pricing. There are so many variable factors both quantitatively and sentimentally, that influence the pricing behavior of gold internationally.

Any failure of monsoon could trigger a significant rise in inflation and interest rates thus squeezing the disposable income of the customer. A further rise in interest rate would be detrimental to industry growth.

Company engaged in the business of gold trading, this will not have a greater impact on the bottom line as the replacement cost will take care of the fluctuation in the gold price even though overall volume growth is dependent on gold price movement.

However, your Company is able to counteract this threat to a considerable extent through consistency in maintaining quality of its products and efficient after sales services.

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 Clause 49 of the Listing Agreement with the Stock Exchanges, is given as a separate statement forming part of this Annual Report.

FUND UTILISATION:

India l Public Offering (IPO)

Members may be recalled of the fact that your company completed its Initial Public Offer (IPO) and listed its shares on the National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Ltd. (BSE), Mumbai.

In conformity with the terms of prospectus, board is empowered to reschedule the place of branch and increase or decrease the CAPEX to be spent for a particular purpose via -a- vis current plans at the discretion of the management. Accordingly certain changes required in the plan got approved by the board and the balance of unspent amount from IPO proceeds well spent for the same purpose on the basis for which approved modification of place of branch/ manner of expenditure was given.

The IPO proceeds of Rs2875.25 lakhs, the Company has utilized fully as on 31 /3/2012.The detailed statement of utilization of fund vis-a-vis IPO objects as given in the prospectus is given hereunder:

(Rs.in lakhs)

Objects of IPO as projected in the Prospectus Utilization till March

S No Purpose Total 31, 2012

1. Cost of setting up of retail outlets (Branches) 2250.59 1557.49

2. Working capital requirements 2278.00 2944.67

3. To meet the expenses of Issue 255.00 281.43

Total 4783.59 4783.59

The above cost of the project as modified and completed out of the following source of finance is given here under :

(Rs.in lakhs)

Particulars Amount

Proceeds from IPO 2875.25

Proceeds from Pre IPO 624.75

Internal Accruals 1283.59

Total 4783.59

Necessary resolution together with explanatory statement for the utilization of IPO funds is enclosed to be passed as a special resolution in the ensuing AGM Notice.

HUMAN RESOURCES

No employee of the company was in receipt of remuneration during the year , in excess of the sum prescribed under Section 217(2A) of the Companies Act, 1956 and read with the Companies (Particulars of Employees) Rules, 1975, as amended vide notification dated 31st March 2012.

ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to the Company's employees for the massive personal efforts as well as their collective contribution to the Company's record performance. The Directors would also like to thank the Customers, Shareholders, Bankers, and Suppliers for their continuous support given to the company and their confidence in the management.

BY ORDER OF THE BOARD

For Thangamayil Jewellery Limited

-sd- -sd-

BALARAMA GOVINDA DAS Ba. RAMESH

Managing Director Joint Managing Director

-sd-

Place: Madurai N. B. KUMAR

Date: 17.05.2012


Mar 31, 2011

The Directors have pleasure in presenting their 11th Annual Report and the Audited Accounts for the financial year ended March 31, 2011.

FINANCIAL RESULTS

Highlights of Financial results for the year are as here under:

(Rs.. in Lakhs)

Particulars 2010-2011 2009-2010

Sales and Other Operating Income 65,826.24 45,140.57

Earnings before Interest, Depreciation 5,841.73 3,092.04 and Taxation(EBITDA)

Interest and Finance Charges 989.34 649.99

Depreciation 148.08 90.65

Profit Before Tax (PBT) 4,704.31 2,351.40

Taxation 1,571.08 742.88

Profit/ (Loss) for the Year (PAT) 3,133.23 1,608.52

The company has achieved an all time record turnover of Rs. 65,826.24 Lakhs for the year ended 31.03.2011 as against Rs. 45,140.57 lakhs of previous year, thereby registering a top line growth of 45.82 %. In volume terms the company could achieve a quantity of 3,145 Kgs in this year as against previous year of 2,636 Kgs there by registering an increase of 20 % in this year.

This performance was possible due to opening of two more branches at Tuticorin, and Anna Nagar, Madurai during the financial year and also due to full year performance of branches opened in the previous year.

The Company made an EBIDTA of Rs.5,841.73 Lakhs as against Rs.3,092.04 Lakhs achieved in the previous year registering a significant growth of 89% in the EBITDA of the Company.

Consequently the Profit after tax also increased to Rs. 3,133.23 Lakhs as against Rs. 1,608.52 Lakhs in the previous year. After tax and dividend distribution the retained profit of Rs. 2,333.85 lakhs is added to the Reserve and surplus of the company. The networth of the company net of Deferred Revenue Expenditure stands at of Rs. 8,988.57 lakhs as against Rs. 6,926.72 in previous year. Registering healthy net worth increased by 30%.Similarly Net current assets also increased from Rs. 12,688.49 lakhs to Rs. 20,206.21 lakhs registering an improvement by 59 %.

Certain structural changes & strategies followed as given below by the management helped the company to post all time record turnover and profit after tax in the financial year.

1) Worked for volume improvement by bringing down the price in conformity to the competitors pricing.

2) Effective inventory management with the help of SAP system and close monitoring of inventory movement.

3) Significant improvement was made in the synergy optimization in the area of advertisement and publicity.

4) A better product mix in the areas of design, varities, and ranges is made.

5) Opening of two more branches at Tuticorin and Anna Nagar, Madurai added to the volume off take.

6) Introduction of "Customer Loyalty" discount cards to promote future sales.

DIVIDEND

The board of directors of the Company at their meeting held on 14th March 2011, declared interim dividend of Rs.4/- per share (40%) amounting to a sum of Rs.639.93 lakhs including dividend distribution tax for the year 2010-11. It was paid to the shareholders on 27th March 2011. The Board of Directors of the Company have recommended a final dividend of Rs.1/- per share (10%) on the paid up share capital as on 31st March 2011. With this the total dividend for the year works out to 50 % on the paid up capital (Rs.5 per share of Rs.10 face value) involving an aggregate pay out of Rs.799.38 lakhs inclusive of dividend tax payable (Tax free in the hands of share holders). Payment of final dividend is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The register of members and share transfer books will remain closed from 20th June, 2011 to 29th June, 2011(both days inclusive).

Transfer to Reserve

We propose to transfer Rs. 320.00 lakhs to the general reserve. The balance is carried forward in the Profit and Loss Account.

RETAIL EXPANSION PLAN

During the year under review, the efforts in retail expansion plan were further intensified and the company opened 2 more retail stores during the year. The company has virtually benefited by this expansion that helped to develop its brand name through customer satisfaction.

This business plan of exploiting potentials of tier 2 cities / town in the State of Tamilnadu on implementation, not only yielded results but also gave reasonable confidence to the management to complete the branch expansion plan as scheduled in the remaining places as mentioned in the Public issue Prospectus document and also in cities like Trichy and Salem.

We are now operating from Nine outlets and likely to improve our presence in Fifteen places by end of March 2012. We are placed in a vantage position to fully exploit the Rural India Growth Story by penetrating deeper into Rural towns particularly in the southern and western districts of

Tamilnadu where a significant gold jewellery business takes place.

Your directors are actively considering the proposal of opening up of customer care centers in smaller towns attached to our main branches and also are seriously considering a proposal of appointment of Franchisee dealers model in unrepresented areas in order to fully optimize the various synergies already established. All these Retail area expansion plans now implemented would bear fruits in the years to come and enable the company to maintain the leadership position in some parts of the State of Tamilnadu.

FUTURE BUSINESS PLAN

The envisaged business plan to be followed in the next five years "inter alia" includes the following.

Setting up commercial grade branches in and around major cities/ towns in the state of Tamil Nadu.

Setting up high value fashion oriented jewellery made out of Diamond and Precious stones to cater to the needs of the upcountry market.

Extension of Franchisee Model for marketing our products in the identified areas within the ambit of our overall operations to get the benefit of marketing expenses synergy optimization.

Sustained penetration into rural areas by spreading the awareness of quality criteria among rural people with a view to expand the loyal customer base for the company.

FUTURE PROSPECTS

Going forward, the business model as demonstrated by your company can easily be replicated in various selected towns. With the consumer awareness improving year after year, for the quality parameters on the one hand and the effective polarization taking place in the supply side on the other hand the future prospects of the company is ensured. Though operating in a competitive environment, the uniqueness of the model ensures a comfortable level of net margin availability to your company.

FINANCE

Your companys financial position is comfortable. As against the combined sanctioned working capital limit from banks of Rs.239 crores, the company utilized only up to Rs.121.43 crores. With the available internal accruals and balance un utilised money from IPO and with the undrawn limit from banks, the company should be in a position to comfortably complete the ongoing retail expansion plan for forth coming year and meet its working capital requirements fully.

CAPITAL EXPENDITURE

During the year, we capitalized Rs. 1138.73 Lakhs to our gross block comprising Rs. 436.12 lakhs for Tuticorin and Madurai Anna Nagar Show room cost and the balance of Rs. 223.93 lakhs for plant and machinery, vehicles and other assets for existing branches. We have acquired lands in Trichy and Salem for Show rooms for Rs. 478.68 lakhs.

During the previous year, we capitalized Rs. 583.50 lakhs to our gross block, consists of Plant and Machinery and Furniture & Fittings of Rs.381.04 lakhs and lease hold Building of Rs.28.91 lakhs , Rs.38.58 lakhs on Ramnad Show room Building , Rs. 134.97 lakhs towards Computer and Motor vehicles.

OPENING OF BRANCHES

Your Directors are delighted to announce the opening of the two more branches at Tuticorin (20lh August 2010) and Madurai Anna Nagar (14th March 2011). These branches have been well equipped with the lot of choices and various preferences and facilities. The above branches are doing extremely well and their performance has been excellent with potential growth and better future prospects. The company has successfully completed its renovation and modernization at Madurai Main Branch and opened the same for public on and from 29th April 2011. Work in other branches is at different stages of completion.

FUND UTILISATION:

Initial Public Offering (IPO)

Members might be recalled of the fact that your company completed its Initial Public Offer (IPO) and listed its shares on the National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Ltd.(BSE), Mumbai.

In conformity with the term of prospectus, board is empowered to reschedule the place of branch and increase or decrease the CAPEX to be spent for a particular purpose vis -a- vis current plans at the discretion of the management. Accordingly certain changes required in the plan got approved by the board and the balance of unspent amount from IPO proceeds would be spent for the same purpose on the basis of approved modification of place of branch/ manner of expenditure.

Out of the IPO proceeds of Rs.2875.25 lakhs, the Company has utilised Rs.2,629.74 lakhs up to 31/3/2011.The detailed statement of utilization of fund vis-a-vis IPO objects as given in the prospectus is given hereunder:

S No Objects of IPO as projected in the Prospectu Total Purpose

1. Cost of setting up of retail outlets (Branches) 1353.25

2. Working capital requirements 1267.00

3. To meet the expenses of Issue 255.00

Total

S No Objects of IPO as projected in the Prospectus Purposse Utilisation Balance till March 31,2011

1. Cost of setting up of retail outlets (Branches) 1220.83 132.42

2. Working capital requirements 1127.48 139.52

3. To meet the expenses of Issue 281.43 (26.43)

Total 2629.74 245.51

*Escalation in Printing and Advertisement cost

The unutilized amount is parked with Banks in conformity with the modification approved / consented by the empowered board and in accordance with terms of prospectus.

DIRECTORS

Retirement by Rotation

At the ensuing Annual General Meeting, Sri.V.R.Muthu, Sri. Lalji Vora, and Sri. N.B.Kumar Directors of the Company, retires by rotation and being eligible seeks re-appointment. Your Board commends their re-appointment.

The Board at its meeting held on July 15th , 2010, appointed Mr. T.R.Narayanaswamy as an independent Director, w.e.f that date, in accordance with section 260 of the Companies Act, 1956 and Article 151 of the Articles of Association of the Company. Notice has been received from a member signifying his intention to propose his appointment as a Director whose office of directorship is liable to retirement by rotation.

SUBSIDIARIES:

Your company has no subsidiary and therefore no statement of consolidation or other details are furnished.

DEPOSITORY SYSTEM

The trading in the Equity Shares of your Company is under compulsory dematerialization mode. As on March 31, 2011, Equity Shares representing 99.75% 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 Companys shares.

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 2011-12 have been paid to these Stock Exchanges. The Shares of the companies are compulsorily tradable in dematerialized form.

DEPOSITORY SYSTEM

The trading in the Equity Shares of your Company is under compulsory dematerialization mode. As on March 31, 2011, Equity Shares representing 99.75% 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 Companys shares.

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 2011-12 have been paid to these Stock Exchanges. The Shares of the companies are compulsorily tradable in dematerialized form.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended March 31, 2011, the applicable accounting standards have generally been followed except for small deviations as explained in the Notes on accounts;

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under review;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) That the Directors have prepared the accounts for the financial year ended March 31,2011 on a going concernbasis.

AUDITORS

M/s. B.Thiagarajan & Co., the present statutory auditors retire at the ensuing Annual General Meeting and are eligible for reappointment u/s 224(1B) of the Companies Act 1956. The company proposes to reappoint M/s.B.Thiagarajan & Co., Chartered Accountants as Statutory auditors of the company from the conclusion of the ensuing Annual General Meeting up to the conclusion of the next Annual General Meeting of the company.

In respect of the observations made by the Auditors in their report, your Directors wish to state that the respective notes to the accounts read with relevant Accounting policies are self explanatory and therefore do not call for any further comments.

INSURANCE

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

FIXED DEPOSITS

Fixed Deposits from the public and shareholders, stood at Rs. 1280.61 lakhs from 1,383 persons including members of the company as at March 31, 2011 (Previous year Rs. 415.10 lakhs). Matured Deposits for which disposal instructions had not been received from the Depositors concerned stood at Rs. 1.75 lakhs as at March 2011. The same amount has been paid as per instructions received after the year end.

The company has complied with the provisions of section 58-A of the Companies Act, 1956 and rules made there under.

INTANGIBLES

- Brand "Thangamayil" is a powerful retail brand in the southern districts of Tamil nadu.

- Leadership is established in all branches of operations.

- Satisfied customer base of well over 1 lakh spread over Seven Southern Districts of Tamil Nadu.

- Carries huge sentimental and relationship based business association from the rural customers.

- Enjoys the patronage of around 20,000 chit customers pledging their support for future purchase of gold ornaments.

- Maintaining the products brand premium over the immediate competitors in the area of operation.

- Huge potential for multiple retail showrooms penetration by exploiting the under utilised brand visibility in new areas.

- Huge potential for introduction of franchisee model in smaller towns where the brand is very popular as a house hold name.

- Brand is well known in the area of operations that would facilitate marketing of high value diamond products going forward.

- Brand loyalty is visible as evidenced by repeat purchase made by customers.

- Inspite of penetration of popular state level brands the uniqueness of Thangamayil Brand "ensures to maintain its "Number one "slot in most of the places it operates.

CORPORATE GOVERNANCE

Your Company has been practicing 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 Clause 49 of the Listing Agreement(s) with the Stock Exchange(s) form 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 the Clause 49 (V) of the Listing Agreement pertaining to CEO certification for the financial year ended 31st March 2011.

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

INFORMATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 217(1) (E) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

a) Conservation of Energy

The disclosure of particulars with respect to conservation of energy pursuant to Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 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, Adaptations 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 Particular 2010 -11 2009 -10

Travelling Expenses 7.47 4.70

Interest on FCNRB Loan 271.76 260.82

INTERNAL CONTROL SYSTEMS

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all transactions are properly authorized recorded and reported.

PERSONNEL

Employee relations continued to be cordial during the year. The company continued its thrust on Human Resource Development. The Board wishes to place on record its sincere appreciation to all employees in the Company for their sustained efforts and immense contribution to the high level of performance and growth of the business during the year.

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 Clause 49 of the Listing Agreement with the Stock Exchanges, is given as a separate statement forming part of this Annual Report.

HUMAN RESOURCES

No employee of the company was in receipt of remuneration during the year, in excess of the sum prescribed under Section 217(2A) of the Companies Act, 1956 and read with the Companies (Particulars of Employees) Rules, 1975, as amended vide notification dated 31st March 2011.

THANKYOU

The Directors wish to convey their appreciation to the Companys employees for the massive personal efforts as well as their collective contribution to the Companys record performance. The Directors would also like to thank the Customers, Shareholders, Bankers, and Suppliers for their continuous support given to the company and their confidence in the management.

BY ORDER OF THE BOARD

For Thangamayil Jewellery Limited

-sd- -sd-

BALARAMA GOVINDA DAS Ba. RAMESH

Managing Director Joint Managing Director

-sd- N. B. KUMAR Joint Managing Director

Place - Madurai

Date-May 9,2011


Mar 31, 2010

The Directors have pleasure in presenting their 10th Annual Report and the Audited Accounts for the financial year ended March 31, 2010.

FINANCIAL RESULTS

Highlights of Financial results for the year are as here under:

(Rs. in Lakhs)

Particulars 2009-2010 2008-2009

Sales and Other Operating Income 45,140.57 24,685.56

Earnings before Interest, Depreciation 3,092.04 1,877.87 and Taxation (EBITDA)

Interest and Finance Charges 649.99 460.49

Depreciation 90.65 62.22

Profit Before Tax (PBT) 2,351.40 1,355.14

Taxation 744.70 467.62

Profit / (Loss) for the Year (PAT) 1,606.70 887.52

OPERATIONAL REVIEW

The company has achieved a turnover of Rs.45,140.57 Lakhs for the year ended 31.03.2010 as against Rs.24,685.56 lakhs of previous year, thereby registering a top line growth of 83%. This tremendous growth was attained as the company opened three more Branches at Dindigul, Theni and Sivakasi, during the financial year 2009-2010.

The Company could make an EBIDTA of Rs.3,092.04 Lakhs as against Rs.1,877.87 Lakhs achieved in the previous year registering a significant growth of 65% in the EBITDA of the Company.

Consequently the Profit after tax also increased to Rs.1606.70 Lakhs as against Rs.887.52 Lakhs in the previous year.

For a better comprehension of the results of the year, we wish to report that certain structural changes and strategies as given below followed by the management helped the company to post all time record turnover and Profit after tax in the financial year.

a) A better product mix consists of improved varieties and ranges.

b) Gold price stability management practiced in the major part of the year enabled the company to improve the operating profits at gross level.

c) Successful implementation of cost effective initiatives undertaken by the management in all areas of operations.

d) Significant improvement was made in the synergy optimization in cost/efforts and opportunities, and other areas of operations.

e) The decision to expand in the Tier II and Tier III class towns enabled the company to maintain the operating profit margin at EBITDA level, inspite of competition prevailed in the retail market place.

DIVIDEND

Members may be aware that the company has already declared and paid an interim dividend of 30%on equity shares (Rs. 3 per Share) in March 2010. The Board of Directors of the Company has recommended a final dividend of 10 %( Rs. 1 per share) on the paid up share capital as on 31st March 2010. With this the total dividend for the year works out to 40 % on the paid up capital (Rs.4 per share) involving an aggregate of Rs.641.52 lakhs inclusive of dividend tax payable (Tax free in the hands of share holders). Payment of final dividend is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The register of members and share transfer books will remain closed from 18th June, 2010 to 24th June, 2010 (both days inclusive).

Transfer to Reserve

We propose to transfer Rs. 175.00 lakhs to the general reserve. The balance is carried forward in the Profit and Loss Account.

RETAIL EXPANSION PLAN

During the year under review, the efforts in retail expansion plan were further intensified and the company opened 3 more retail stores during the year. The company had launched a new chain of retail stores dealing in Fashion Jewellery, Silver items, accessories and gift items targeting at the medium-end customers. The company has virtually benefited by this expansion that helped to develop its brand name through customer satisfaction.

This business plan of exploiting the business potentials of tier 2 cities / town in the State of Tamilnadu on implementation, not only yielded results but also given reasonable confidence to the management to complete the branch expansion plan as scheduled in the remaining places as mentioned in the Public issue Prospectus document.

We are now operating from seven outlets and likely to improve our presence in eleven places by end of March 2011. We are suitably placed in a vantage position to fully exploit the Rural India Growth Story by penetrating deeper into Rural towns particularly in the southern districts of Tamilnadu where a significant gold jewellery business takes place.

Your directors are considering a proposal of opening up of customer care centers in smaller towns attached to our main branches and also are seriously considering a proposal of appointment of Franchise dealer model in unrepresented areas in order to fully optimize the various synergies already established. All these Retail area expansion plans evolved would bear fruits in the years to come and enable the company to maintain the leadership position in southern parts of the State of Tamilnadu.

FUTURE PROSPECTS

Going forward, the business model as demonstrated by your company can easily be replicated in various selected towns. With the consumer awareness improving year after year, for the quality parameters on the one hand, and the effective polarization taking place in the supply side on the other hand the future prospects of the company is ensured. Though operating in a competitive environment, the uniqueness of the model ensures a comfortable level of net margin availability to your company.

FINANCE

Your companys financial position is comfortable. As against the combined sanctioned working capital limit of Rs.120 crores, the company utilized only up to Rs.63.24 crores as at the end of financial year. With the available resource garnered out of IPO, together with internal accruals and with the undrawn limit from banks, the company should be in a position to comfortably complete the ongoing retail expansion plan and meet its working capital requirements fully.

SIGNIFICANT EVENTS

1) Initial Public Offer (IPO)

During the year under review, the Company made an initial public offer (IPO) of its Equity Shares in terms of prospectus dated 7th February 2010. The Company had issued and allotted 38,33,667 Equity Shares through Initial Public Offer (IPO) and 833,000 Equity Shares through Pre IPO placements at an issue price of Rs.75/- per share.

The post issue paid up capital of the Company stands at Rs. 13, 71,95,820 (Rupees Thirteen Crores Seventy One Lacs Ninety Five Thousand and Eight Hundred Twenty Only) divided into 1,37,19,582 equity Shares of Rs. 10/- each which is well within the Authorized Capital of the Company (Rs.20 crores) . The new shares are listed on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited, Mumbai on 19/02/2010.

The Company has duly complied with all the necessary requirements under the Companies Act, 1956, Securities and Exchange Board of India (Disclosure & Investor Protection) Guidelines, 2000, Foreign Exchange Management Act, 1999, Reserve Bank of India Act, 1934 and all the other related laws and regulations in respect of the composite issue.

The Company has incurred expenses of Rs. 281.43 lakhs in connection with its Initial Public Offer. In terms of Section 78 of the Companies Act, 1956, the same has been adjusted against the Securities Premium Account.

2) Opening of Branches

Your Directors are pleased to announce the opening of the three more branches at Dindigul (08/11/2009) and Theni (04/02/2010), and Sivakasi (14/03/2010). These branches have been well equipped with the choicest of various preferences. The above branches are doing extremely well and their performance has been excellent with potential growth and better future prospects.

DIRECTORS

Retirement by Rotation

At the ensuing Annual General Meeting, Sri. S. Rethinavelu & Sri. Ba. Ramesh, Directors of the Company, retire by rotation and being eligible seeks re-appointment. Your Board recommends their re-appointment.

Mr.L.Sivakumar who was the director of the board resigned on Jul y 09, 2009 and the same was taken on record by the board.

Subsidiaries:

Your company has no subsidiary and therefore no statement of consolidation or other details are furnished

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended March 31, 2010, the applicable accounting standards have generally been followed except for small deviations as explained in the Notes on accounts;

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under review;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) That the Directors have prepared the accounts for the financial year ended March 31, 2010 on a going concern basis.

CHANGE IN ACCOUNTING POLICIES

The company is effecting changes in accounting policies as follows:

i) Advertisement and Publicity expenses

The company was following the accounting policy upto last year of deferring the cost incurred on advertisement/publicity to be amortised over a five-year period commencing from the succeeding financial year.

It is decided to change the accounting policy of Deferred Revenue expense to amortize the cost incurred on advertisement/publicity as 20% in both of the year in which it is incurred and in the ensuing year and the balance to be amortised equally in next two years, (i.e. in the ratio of 20:20:30:30). Consequent to this change, the selling expenses is overstated by Rs.278.45 Lakhs resulting in understatement of Net Profit (Net of DTL) by Rs.183.81 lakhs. In the opinion of the directors, after taking into consideration the enduring life span of unexploited Advertisement and Publicity expenses the residual Deferred Revenue Expenditure as reflected in the Balance sheet is fair and proper.

ii) Bonus and Gratuity

The company was following cash basis of accounting for certain employee costs such as Bonus and Gratuity. It is now decided to change the above accounting policy as; to account bonus on accrual basis and adopting actuarial valuation for accounting the liability for gratuity under projected unit credit method.

The above effect has understated the Net profit after Tax by Rs. 14.20 lakhs for the year ended 31/3/2010.

The above changes in accounting policy were made in consonance with the applicability of Accounting Standard 15 on Accounting for Employee Benefits .

AUDITORS

B.Thiagarajan & Co., the present statutory auditors retire at the ensuing Annual General Meeting and are eligible for reappointment u/s 224(1B) of the Companies Act 1956. The company proposes to reappoint M/s.B.Thiagarajan & Co., Chartered Accountants as Statutory auditors of the company from the conclusion of the ensuing Annual General Meeting up to the conclusion of the next Annual General Meeting of the company.

The Audit committee and the Board recommend the appointment of M/s.B.Thiagarajan & Co., Chartered Accountants, as Statutory Auditors of the company.

In respect of the observations made by the Auditors in their report, your Directors wish to state that the respective notes to the accounts read with relevant Accounting policies and the change in accounting policies note forming part of this report (Point No.l of change in accounting policies) and are self explanatory and therefore do not call for any further comments.

INSURANCE

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

FIXED DEPOSITS

During the financial year 2008-09, the Company launched a public fixed deposit scheme to meet a part of the funding requirements of the Company. The scheme has received an overwhelming response and the management of the Company is thankful to all the depositors for participating in the scheme and the faith reposed in the Company. The aggregate amount collected under fixed deposit scheme as on March 31, 2010 was Rs. 415.10 Lakhs from 488 depositors. (Previous year -Rs.40.65 lakhs).

The Company has no overdue deposits and unclaimed deposits as on date.

The company has complied with the provisions of section 58-A of the Companies Act, 1956 and rules made there under.

CORPORATE GOVERNANCE

Your Company has been practicing 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 Clause 49 of the Listing Agreement(s) with the Stock Exchange(s) form 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 the Clause 49 (V) of the Listing Agreement pertaining to CEO certification for the financial year ended 31st March 2010.

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

INFORMATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 217(1)(E) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

a) Conservation of Energy

The disclosure of particulars with respect to conservation of energy pursuant to Section 217(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the company. However, the company makes its best efforts for conservation of energy.

b) Technology Absorption, Adaptations 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.

INTERNAL CONTROL SYSTEMS

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all transactions are properly authorized recorded and reported.

PERSONNEL

Employee relations continued to be cordial during the year. The company continued its thrust on Human Resource Development. The Board wishes to place on record its sincere appreciation to all employees in the Company for their sustained efforts and immense contribution to the high level of performance and growth of the business during the year.

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 Clause 49 of the Listing Agreement with the Stock Exchanges, is given as a separate statement forming part of this Annual Report.

FUND UTILISATION:

Initial Public Offering (IPO)

In January 2010, your company completed its Initial Public Offer (IPO) and listed its shares on the National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Ltd.(BSE), Mumbai. Out of the IPO proceeds of Rs.2875.25 lakhs, the Company has utilised Rs.1416.19 lakhs up to 31/3/2010.The detailed statement of utilization of fund vis-a-vis IPO objects as given in the prospectus is as follows:

(Rupees in Lakhs)

Objects of IPO as projected in the Prospectus Utilisation Balance Total till March S No Purpose 31,2010

1. Cost of setting up of retail outlets (Branches) 1353.25 409.76 943.49

2. Working capital requirements 1267.00 725.00 542.00

3. To meet the expenses of Issue 255.00 281.43 (26.43)*

Total 2875.25 1416.19 1459.06

* Escalation in Printing and Advertisement cost

The unutilized amount is parked with Banks in accordance with terms of prospectus

PARTICULARS UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956

In terms of the provisions of Sections 217(2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the Annexure A to the Directors report.

LISTING OF SHARES AND FEE

The Companys shares are listed at the Bombay Stock Exchanges Ltd.(BSE) and The National Stock Exchange of India Ltd.(NSE), Mumbai. The Company confirms that it has paid annual listing fee due to the above said Stock Exchanges, for the financial year 2010-2011.The Shares of the companies are compulsorily tradable in dematerialized form.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all the Companys employees for the massive personal efforts as well as their collective contribution to the Companys record performance. The Directors would also like to thank the Customers, Shareholders, Bankers, and Suppliers for their continuous support given to the company and their confidence in the management.

BY ORDER OF THE BOARD For Thangamayil Jewellery Limited

sd/- sd/-

BALARAMA GOVINDADAS Ba. RAMESH Managing Director Joint Managing Director

-sd-

N. B. KUMAR

Joint Managing Director

Place - Madurai Date - May 10, 2010


Mar 31, 2009

The Directors have pleasure in presenting their Ninth Annual Report and the Audited Accounts for the financial year ended March 31,2009.

FINANCIAL RESULTS

Highlights of Financial results for the year are as under:

(Rs. in Lakhs)

Particulars 2008-2009 2007-2008

Sales and Other Operating Income 24,685.56 22,460.11

Profit before Interest, Depreciation and 1,877.87 1,269.74 Taxation (PBITDA)

Interest and Finance Charges 460.49 197.34

Depreciation 62.22 29.94

Profit Before Tax 1,355.14 1,042.46

Taxation 467.62 356.38

Profit/ (Loss) for the Year (PAT) 887.52 686.07

OPERATIONAL REVIEW

In spite of recessionary tendencies witnessed in the economy, the Company could do a turnover of Rs.246.86 Crores as against Rs.224.60 Crores thereby registering a growth of around 10% in topline. Due to better operational synergies attained resultant on operationalization of three more branches in the financial year, the Company could make an PBIDTA profit of Rs.18.78 Crores as against Rs.12.70 Crores in the previous year registering a significant growth of 48% in the PBITDA profits of the Company.

The results are highly gratifying particularly in the context of fluctuating gold price movement experienced in the year passed by that was unprecedented in the history of gold trade.

A better product mix, speedier stock turnaround and cost effectiveness initiatives implemented in a systematic manner by the management are other main reasons for the all time record post tax profits earned by the Company.

DIVIDEND

Considering the Companys financial performance and growth plans envisaged, Directors have recommended for declaration of a dividend of 10% on the equity shares fully paid up for the financial year 2008 -2009.

RETAIL EXPANSION PLAN

During the year under review, the efforts in retail expansion plan were further intensified and the company opened totally 3 retail stores during the year. The company had launched a new chain of retail stores dealing in Fashion Jewellery, Silver items, accessories and gift items targeting at the medium-end customers. The company has virtually benefited by this expansion that helped to develop its brand name through customer satisfaction.

This revised business plan of exploiting the business potentials of tier 2 cities / town in the State of Tamilnadu on implementation not only yielded results but also given reasonable confidence to the management to complete the branch expansion plan as scheduled in the remaining places.

SIGNIFICANT EVENTS

Business Takeover of Balusamy Silvears Jewellery Private Limited

During the year, the business of Balusamy Silvears Jewellery Private Limited (BSSJ) was taken over by the Company via a Business Takeover Agreement dated August 1,2008. The business in silver will act as a good complementary to the main trade in gold. Besides, this takeover also would help the Company to optimize the synergies in marketing, promoting & distribution aspects of conduct of business.

2. Opening of Branches:

Your Directors are pleased to announce the opening of the two more branches at Karaikudi (since 11/09/08) and Ramnad (since 13/03/09), besides Rajapalayam (since 16/04/08). These branches have been well equipped with the choicest of amenities and staff who are well trained in the job. In such short span of inauguration, these branches have seen good sales in all the divisions.

3. Increase in Equity Share Capital

During the year, the paid up share capital of the Company was raised to Rs. 905.29 lakhs from Rs. 867.20 lakhs after obtaining the requisite consents, approvals and sanctions wherever required, by:

a) Issue of 2,46,300 Equity shares at a premium of Rs. 55 per share, through cash.

b) Issue of 84,615 Equity shares at a premium of Rs. 55 per share, to an associate company M/s. Balusamy Silvears Jewellery Private Limited; and

c) Issue of 50,000 Equity shares at a premium of Rs.55 per share on preferential basis to an associate company of M/s.Thangamayil Gold and Diamond Private Limited.

DIRECTORS

Retirement by Rotation

At the ensuing Annual General Meeting, Sri. Lalji Vora, & Sri. L. Sivakumar, Directors of the Company, retire by rotation and being eligible seek re-appointment. Your Board commends their re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors Responsibility Statement, it is hereby confirmed.

i) That in the preparation of the accounts for the financial year ended March 31, 2009, the applicable accounting standards have generally been followed except for small deviations as explained in the Notes on accounts;

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) That the Directors have prepared the accounts for the financial year ended March 31, 2009 on a going concern basis.

AUDITORS

B.Thiagarajan & Co., (BT&Co) , who are the Statutory Auditors of the Company hold office until the ensuing Annual General Meeting. It is proposed to re - appoint them to examine and audit the accounts of the Company for the Financial Year 2009 -2010. BT&Co have, under section 224 (1) of the Companies Act, 1956, furnished a certificate of their eligibility for re-appointment.

INSURANCE

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

FIXED DEPOSITS

During this year, the company invited Fixed Deposits from the Share holders and the Public . The Fixed Deposits mobilized/ renewed and outstanding from the public and shareholders aggregated to Rs. 40.65 Lacs as on 31 st March 2009 (Previous year Nil).

The company has complied with the provisions of section 58-A of the Companies Act, 1956 and rules made there under.

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

Information in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo is not applicable to the company, and hence not presented.

INTERNAL CONTROL SYSTEMS

The Company has adequate internal control systems and procedures, commensurate with its nature and size of business. The Board believes that appropriate procedures and monitoring mechanisms are in place.

PARTICULARS UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956

No employee of the company was in receipt of remuneration during the financial year 2008-09, in excess of the sum prescribed under section 217(2A) of the Companies Act, 1956 and read with the Companies (Particulars of Employees) Rules, 1975, as amended vide notification GSR 288 (E) dated 17th April 2002.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all the Companys employees for the massive personal efforts as well as their collective contribution to the Companys record performance. The Directors would also like to thank the employees, Customers, Shareholders, Bankers, and Suppliers for the continuous support given by them to the company and their confidence in their management.

BY ORDER OF THE BOARD For Thangamayil Jewellery Limited

BALARAMA GOVINDADAS Ba. RAMESH Managing Director Joint Managing Director

N.B.KUMAR Joint Managing Director

Place - Madurai Date -04th May 2009

 
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