TCNS Clothing Co. Ltd.
|BSE: 541700||Sector: Industrials|
|NSE: TCNSBRANDS||ISIN Code: INE778U01029|
|BSE 00:00 | 17 Feb||572.05||
|NSE 00:00 | 17 Feb||570.70||
|Mkt Cap.(Rs cr)||3,515|
|Mkt Cap.(Rs cr)||3515.25|
TCNS Clothing Co. Ltd. (TCNSBRANDS) - Director Report
Company director report
The Members of TCNS Clothing Co. Limited (Erstwhile TCNS Clothing Co. Pvt. Ltd)
Your Directors have pleasure in presenting the 22nd Annual Report on theoverall business operations of the Company and Audited Statements of Accounts for thefinancial year ended March 31 2019 and Auditors report thereon.
FINANCIAL PERFORMANCE Financial Results
Overview of Company Performance and Operations
The Company EBITDA and PAT were Rs. 1843.47 million and Rs. 1314.35 millionrespectively against the previous year's EBITDA and PAT of ' 1621.70 million and Rs.980.97 million respectively representing a growth of 13.7% and 34.0% respectively.
BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THE YEAR AND STATE OF COMPANY'SAFFAIRS Significant developments during the year Initial Public Offering(IPO): Your Company during the financial year under review filed Prospectuswith Registrar of Companies and Securities Exchange Board of India and the same wasapproved on July 09 2018. The public issue was completely an Offer for Sale(OFS) constituting of up to 15714038 Equity Shares of Face Value of Rs. 2/-each. The Company got listed on the Bombay Stock Exchange Limited (BSE) and National StockExchange Limited (NSE) on July 30 2018.
ERP Implementation: Your Company implemented a new ERP w.e.f April 1 2018. Theup-gradation will add strength in data mining capability and enable adoption of newerapplications including omnichannel enablers.
No dividend was recommended for the financial year as the Company intends to look forexpansion opportunities.
Transfer of Funds to Investor Education and Protection Fund
No Funds or shares were transferred to Investor Education and Protection Fund duringthe year under review.
Total comprehensive income for the year of Rs. 1318.23 million was added to Retainedearnings and the balance as at March 31 2019 stood at Rs. 2310.45 million. Your Companyhas not transferred any amount to the General Reserve for the financial year ended March31 2019.
Management Discussion and Analysis Report
The Management Discussion and Analysis for the period under review as required underSchedule V read with Regulation 34(2)(e) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 has been dealt with extensively in a separate sectionforming part of the Annual Report marked and annexed as Annexure A on page no. 47 Listing
During the year 8 (eight) existing shareholders of the
Company diluted their shareholding through an initial public offer of 15714038 equityshares of face value of Rs. 2/- each (the equity shares) for cash at a priceof Rs.716/- per equity share (the offer price) aggregating to Rs. 11251.25million (the offer) as an offer for sale. The equity shares of your Companywere listed at the Bombay Stock Exchange Limited (BSE) and National Stock Exchange Limited(NSE) on July 30 2018. Further the Company has paid the requisite listing fee to theStock Exchanges for the financial year 2019-20.
During the year under review the Company has allotted 4303660 (Forty three lakhsthree thousand six hundred and sixty only) Equity Shares of Rs. 2/-(Rupees Two) each underTCNS ESOP Scheme 2014-17 thereby the paid-up equity capital of the Company increased byRs. 8607320/-(Rupees Eighty six lakhs seven thousand three hundred and twenty Only)
Conversion of CCRDs (Compulsory Convertible Reedemable Debentures)
The company has issued an aggregate of 1298132 CCRDs of face value of Rs. 1/- (RupeeOne) each to Mr Onkar Singh Pasricha and Mr Arvinder Singh
Pasricha at a premium pursuant to approval of the Shareholders through resolutionsdated January 5 2018. These CCRD's were converted into 649066 Equity Shares of Rs. 2/-each aggregating to Rs. 1298132 (Twelve lakhs ninety eight thousand one hundred andthirty two only) on May 28 2018 by approval of the Board.
Material changes and commitments
There are no material changes and commitments effecting the financial position of theCompany occurred between the end of the financial year of the Company to which thefinancial statements relates and the date of the report. Further there has been no changein the nature of business of the Company during the year
Conservation of Energy Research and Development Technology Absorption ForeignExchange Earnings and Outgo.
Details of energy conservation technology absorption in accordance with theprovisions of Section 134 (3) (m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 are annexed and marked as Annexure B' to thisReport. The details of foreign earnings and outgo are as follows:
Foreign exchange earnings and Outgo-
The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows are as follows:
Directors and Key Managerial Personnel Directors
In accordance with the provisions of Section 152 of the Companies Act 2013 and theArticles of Association of the Company Mr. Onkar Singh Pasricha (DIN - 00032290)Chairperson and Executive Director of the Company retiring by rotation at the ensuingAnnual General Meeting being eligible for reappointment offers himself forre-appointment. The brief resume of the Director seeking re-appointment along with theother details as stipulated under Regulation 26 and 36 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Secretarial Standards on General Meetings(SS-2) is provided in the Notice for convening 22nd Annual General Meeting ofthe Company.
Further there are no changes in the directorships during the financial year underreview.
Key Managerial Personnel
Mr Anant Kumar Daga Managing Director of the Company Mr Venkatesh Tarakkad ChiefFinancial Officer and Mr Piyush Asija Company Secretary and Compliance Officer of theCompany continued to be the Key Managerial Personnel of your Company in accordance withthe provisions of Section 2(51) and Section 203 of the Act read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
Director's Responsibility Statement Pursuant to section 134 (5) of the Companies Act2013 the Board of Directors to the best of their knowledge and ability confirm that:
i. The applicable accounting standards have been followed with no material departurein the preparation of the accounts for the financial year ended March 31 2019.
ii. The accounting policies selected were applied consistently and the judgments andestimates made are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 31 2019 and of the profit of the Company for theyear ended on that date.
iii. Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. The annual accounts have been prepared on a going concern basis.
v. Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and those systems are adequate and operating effectively.
vi. The directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultant(s) and the reviews made by the Management andthe relevant Board Committees including the Audit Committee the Board is of the opinionthat the Company's internal financial controls were adequate and operationally effectiveduring FY 2018-19.
The Independent Directors are appointed by the Members of the Company and letter ofappointment is issued to them as per Schedule IV of the Companies Act 2013. The terms andconditions of appointment of Independent Directors are disclosed on the website of theCompany at https://wforwoman.com/content/tnc-for-independent-directors/. Your Company has received declarations from all theIndependent Directors confirming that they meet the criteria of independence as prescribedunder section 149(6) of the Companies Act 2013 read with regulation 16 (1) (b) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
At the time of appointment of a Director a formal letter of appointment is given tohim/her which inter alia explains the role function duties and responsibilitiesexpected from him/her as a Director of the Company. The terms and conditions of theappointment are also placed on the website of the Company. Each newly appointed Directoris taken through a familiarisation program in terms of the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 including interactions with the ManagingDirector CFO & the Senior Management of the Company covering all important aspects ofthe Company.
The Independent Directors were provided with a presentation on the nature of theindustry in which the Company operates and the business model of the Company. Furthertime to time necessary presentations documents reports internal policies and updateswere provided to them to familiarise them with the Company's policies procedures andpractices. The policy on Familiarisation Programme for Independent Directors is placed onthe website of the Company at https://wforwoman.com/content/corporate-governance-familiarisation/.
Pursuant to the provisions of the Companies Act 2013 and the corporate governancerequirements as prescribed by the Securities and Exchange Board of India (ListingObligations and Disclosures Requirements) Regulations 2015 (SEBI ListingRegulations) the Board has adopted a process for evaluating its performance andeffectiveness as well as that of its Committees and carried out an annual evaluation ofits own performance Board Committees and the Directors individually. The Board and theNomination & Remuneration committee reviewed the performance of the individualDirectors on the basis of the criteria and framework adopted by the Board. The evaluationcriteria included various aspects such as functionality of Board compositions process& procedures including adequate & timely information attendance delegation ofresponsibility decision making roles & responsibility including monitoringbenchmarking feedback relationship with the stakeholders and as provided by the GuidanceNote on Board Evaluation issued by SEBI dated January 5 2017. In a separate meeting ofthe Independent Directors performance of the Non-Independent Directors the Board as awhole and the Chairman was also evaluated on the basis of pre-set criterion.
CORPORATE SOCIAL RESPONSIBILITY REPORT (CSR)
Pursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 your Company as part ofits CSR initiatives has undertaken projects/programs in accordance with the CSR Policy.The details of the CSR activities are annexed and marked as Annexure C forming part ofthis Report. The CSR policy of the Company is available on the website of the Company athttps://wforwoman. com/content/lodr-policies/.
The Company has complied with applicable Secretarial Standards issued by Institute ofCompany Secretaries of India.
Particulars of Employees
The disclosure under Rule 5 (2) and Rule 5 (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended is annexed and marked asAnnexure D to this Report. Employee Stock Option Scheme (ESOS)
The disclosure pursuant to the provisions of Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014 and Section 62(1)(b) of the CompaniesAct 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules 2014is annexed and marked as Annexure E to this Report. Disclosure on Sexual Harassment ofWomen at Workplace
The Company has an Internal Complaints Committee for providing a redressal mechanismpertaining to sexual harassment of women employees at workplace. There were three (3)cases of sexual harassment reported during the year under review which were addressedwithin prescribed time frame.
GOVERNANCE AND SECRETARIAL Board and Committees Meetings
The Board has an optimum mix of Executive Non-Executive and Independent Directors andis headed by Mr Onkar Singh Pasricha an Executive Chairman. The Board of the Company isdiverse in terms of qualification competence experience and expertise which enables itto ensure long term value creation for all stakeholders. As on March 31 2019 the Boardcomprises of two executive directors
one non-executive director and three independent Directors. The details related tomeetings of the Board Directorships Committees and meetings of Committees are disclosedin the Corporate Governance Report forming part of the Annual Report as Annexure J.
POLICIES OF THE COMPANY Nomination & Remuneration Policy
Pursuant to the provisions of Section 178(3) of the Companies Act 2013 the Board hason the recommendation of the Nomination and Remuneration Committee framed a policy forselection and appointment of Senior Management and their remuneration. The policy formingpart of this report is annexed and marked as Annexure F and is also available on thewebsite of the Company at https:// wforwoman.com/content/lodr-policies/.
Policy for Determining Material Subsidiaries The policy for determining the materialsubsidiaries of the Company is available on the Website of the Company athttps://wforwoman.com/content/lodr- policies. There are no subsidiaries of the company ason 31st March 2019.
Dividend Distribution Policy
Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 mandates top 500 Listed Companies on their market capitalisation as calculated on the31st day of March of every year to frame a Policy for Distribution of Dividend.Accordingly the Company adopted the said Policy in the Board Meeting dated May 28 2019.This policy aims at laying down a broad framework for considering decisions by the Boardof the Company with regard to distribution of dividend to shareholders and/or retentionor plough back of its profits. The Policy is enclosed as Annexure - G of the Report and isalso available on the website of the Company at https://wforwoman.com/content/lodr-policies/.
Whistle Blower Policy
The Company has a Whistle Blower Policy to provide vigil mechanism for Directors andEmployees to voice their concerns in a responsible and effective manner regardingunethical behavior and actual or suspected fraud or violation of the Company's code ofconduct. It also provides adequate safeguards against victimisation of Directors andEmployees who avail the mechanism. The Company affirms that during financial year2018-2019 no personnel have been denied access to the Audit Committee to report suchinstances. The Whistle Blower Policy is available on the website of the Company athttps://wforwoman. com/content/lodr-policies/
Pursuant to section 134(3) (n) of the Companies Act 2013 the Company has developed andimplemented a risk management policy which identifies major risks which may threaten theexistence of the Company . The same has also been adopted by your Board and is subject toits review from time to time. Risk mitigation process and measures have been alsoformulated and clearly spelled out in the said policy. The Risk Management Committeecomprises of Mr Onkar Singh Pasricha Mr Anant Kumar Daga and Mr Venkatesh Tarakkad. Thepolicy is available on the website of the Company at https://wforwoman.com/content/lodr-policies.
Code of Conduct
The Board of Directors has adopted a Code of Conduct for Directors and SeniorManagement of the Company. An annual affirmation of compliance with the Code of Conduct istaken from all the Directors and Senior Management Members of the Company to whom the Codeapplies. The Code of Conduct has also been posted on the website of the Company athttps://wforwoman. com/content/lodr-policies.
The affirmation by the Managing Director that the Code of Conduct has been complied bythe Board of Directors and Senior Management forms part of the Corporate Governancereport.
Prevention of Insider Trading
The Company has formulated and adopted a Policy and a Code of Fair Disclosure inaccordance with the requirements of SEBI (Prohibition of Insider Trading) Regulations2015. The Policy lays down the guidelines procedures to be followed and disclosures tobe made while dealing with the securities of the Company along with consequences forviolation. The policy is formulated to regulate monitor and ensure reporting of deals bydesignated persons and maintain highest level of ethical standards while dealing in theCompany's securities. The Company's Insider Trading Policy Code of Fair Disclosure is alsoplaced on the website of the Company at https://wforwoman.com/content/insider-trading-policy/.
The Company has formulated and adopted a Policy on Corporate Social Responsibility asper the requirement of Section 135 of Companies Act 2013 read with schedule VII of theAct and the same is placed on the website of the Company at https://wforwoman.com/content/lodr-policies/.
Web links of the other Statutory Policies of the Company
General Body Meetings:
During the financial year under review the 21st Annual General Meeting washeld on July 5 2018. No Extraordinary General Meeting was called or conducted during theyear under review.
Your Company has neither accepted nor renewed any deposits from public within themeaning of Section 73 of the Companies Act 2013 read with Companies (Acceptance ofDeposits) Rules 2014 during the year Particulars of Investments Loans and GuaranteesThere were no Investments Loans and Guarantees provided as covered under the provisionsof Section 186 of the Companies Act 2013 read with the rules made thereunder during thefinancial year under review.
Significant and Material Orders passed by the Regulators
There were no significant and material orders passed by the Regulators Courts orTribunals during the year impacting the going concern status and the operations of theCompany in future.
Environment Health and Safety Your Company is conscious of the importance ofenvironmentally clean and safe operations. Your Company ensures safety of all concernedand compliances with environmental regulations. The Company provides a safe and healthyworkplace with an aim to achieve zero injuries to all its employees and stakeholdersassociated with the Company 's operations.
Extract of Annual Return
The extracts of Annual Return pursuant to the provisions of Section 92(3) of theCompanies Act 2013 (the Act) read with Rule 12(1) of the Companies(Management and Administration) Rules 2014 in Form MGT-9 is forming part of this reportmarked and annexed as Annexure H and also placed on the website of the Company athttps://wforwoman.com/ content/general-meeting-disclosurefy-2018-19. BusinessResponsibility Report The SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 mandates the inclusion of Business Responsibility Statement ('BRR') fortop 500 listed companies based on market capitalisation. Business Responsibility Reportfor the year under review as stipulated under Regulation 34(2) (f) of SEBI (LODR)Regulations integrated BRR is part of the Annual Report marked and annexed as Annexure I.
Corporate Governance Report
In terms of Regulation 34 of the Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 a Report on CorporateGovernance along with Compliance Certificate issued by a Practising Company Secretary interms of Part E of Schedule V of the said Regulations of the Company forms integral partof Corporate Governance Report marked and annexed as Annexure J.
AUDITORS AND AUDIT REPORT
Adequacy of Internal Financial Controls with reference
To the financial statements:
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. Further audit procedures monitor and evaluate the efficacyand adequacy of internal control system in the Company its compliance with operatingprocedures accounting procedures and policies at all locations of the Company. Based onthe audit reports the units undertake corrective action in their respective areas andstrengthen the controls. Significant audit observations and corrective actions thereon arepresented to the Audit Committee of the Board periodically.
The Board of Directors of the Company have adopted various policies viz. Policy onRelated Party Transactions Whistle Blower Policy Policy to determine materialsubsidiaries and other procedures for ensuring the orderly and efficient conduct of itsbusiness for safeguarding its assets the prevention and detection of frauds and errorsthe accuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
There are no qualifications or observations or adverse remarks made by the Auditors intheir Report. Further there were no instances of frauds reported by auditors undersub-section (12) of section 143.
M/s. Deloitte Haskins & Sells LLP Chartered Accountants. (ICAI Firm Reg. No.117366W/W-100018) were appointed as Statutory Auditors of the Company by the members atthe 20th Annual General Meeting held on August 27 2017 for a term of 5consecutive years subject to ratification by the Members at every Annual General Meeting.However pursuant to the
Companies (Amendment) Act 2017 and Notification dated May 7 2018 issued by theMinistry of Corporate Affairs the requirement for ratification of appointment ofstatutory auditors has been dispensed with. Secretarial Audit
During the year the Board of Directors of the Company had appointed Himanshu G andAssociates C.P.No-10398 (Company Secretary in Whole-time Practice) to carry outSecretarial Audit under the provisions of Section 204 of the Companies Act 2013 and theRules framed thereunder and Regulation 24 A of the SEBI (LODR) Regulations for theFinancial Year 2018-19. The Secretarial Audit Report for the financial year ended March31 2019 was considered by the Board in its meeting held on May 28 2019 and the saidReport given by Secretarial Auditor is annexed to this Report as Annexure K. TheSecretarial Audit Report does not contain any material qualification reservation oradverse remarks which needs any explanation or comment of the Board.
RELATED PARTY TRANSACTIONS
Related Party Transactions entered during the financial year under review are disclosedin Note 38 of the Financial Statements. All these transactions entered were at an arm'slength basis and in the ordinary course of business.
There were no materially significant related party transactions with the Company'sPromoters Directors Management or their relatives which could have had a potentialconflict with the interests of the Company. Form AOC-2 containing the details on theaforesaid related party transactions is forming part of the Annual Report annexed asAnnexure L.
HUMAN RESOURCE INITIATIVES
To maintain and develop ongoing competitiveness and adaptability it is imperative toinvest in organisational capability development. The company has been addressing theseneeds through several initiatives. Maintenance of Statutory Cost records required underSection 148 (1) of Companies Act 2013 The Central government has not prescribedmaintenance of any statutory records as mentioned under section 148(1) of the Act for theproducts and services of the Company.
Your Directors would like to thank all customers shareholders dealers suppliersbankers employees and all other business associates for the continuous support given bythem to the Company and its Management.
The information as required under Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is as follows:
(a) conservation of ENERGY
The Company continually takes steps to absorb and adopt the latest technologies andinnovations in the Garment Industry. These initiatives enable its vendors to become moreefficient and productive as the Company expands and also leads to conservation of energy.Conservation of energy is considered to be a priority and therefore ensuring minimumconsumption by way of better energy conservation programmes training/ awareness of theemployees and prompt upkeep is a continuous exercise.
(i) The steps taken or impact on conservation of energy: The Company has beencontinuously encouraging its partners to improve focus on technology improvement andtraining to ensure efficient use of resources especially of common resources such aswater and energy.
(ii) The steps taken by the Company for utilising alternate sources of energy: NotApplicable
(iii) The capital investment on energy conservation equipments: Not Applicable
(b) technology absorption
Your company continues to use the latest technologies for improving the productivityand quality of its products. The Company is keeping track of latest development andadvancements in technology and steps are being taken to encourage our partners to adoptthe same.
The Company continues to make focused investments in technology and operations set-uptowards providing seamless shopping experiences and also improving exerience at physicalstore outlets by use of tablets etc.
(i) The efforts made towards technology absorption: Your Company keeps itself updatedon latest technology in the industry and encourages its partners to invest in the same.Further as a part of efforts in this regard the Company provides time to time support topartners with necessary guidance training and financial support if any required.
(ii) The benefits derived like product improvement cost reduction product developmentor import substitution: With the adoption of new technology from time to time theefficiency and capacity with respect to manufacturing has been increased resulting inbetter quality of products quicker and more efficient processing at lower costs.
(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)-
The Company does not directly import technology but encourages its partners to do so.
(a) The details of technology imported: Not Applicable
(b) The year of import: Not Applicable
(c) Whether the technology been fully absorbed: Not Applicable
(d If not fully absorbed areas where absorption has not taken place and the reasonsthereof: Not Applicable
(iv) The expenditure incurred on Research and Development: Not Applicable
For and on behalf of the Board of Directors
onkar Singh pasricha
Chairman & Executive Director
Date: May 28 2019.
place: New Delhi