You are here » Home » Companies » Company Overview » TCNS Clothing Co. Ltd

TCNS Clothing Co. Ltd.

BSE: 541700 Sector: Industrials
NSE: TCNSBRANDS ISIN Code: INE778U01029
BSE 00:00 | 17 Aug 597.70 -2.95
(-0.49%)
OPEN

604.95

HIGH

604.95

LOW

593.75

NSE 00:00 | 17 Aug 596.95 -3.35
(-0.56%)
OPEN

600.05

HIGH

600.05

LOW

593.50

OPEN 604.95
PREVIOUS CLOSE 600.65
VOLUME 2491
52-Week high 932.55
52-Week low 493.65
P/E 112.35
Mkt Cap.(Rs cr) 3,685
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 604.95
CLOSE 600.65
VOLUME 2491
52-Week high 932.55
52-Week low 493.65
P/E 112.35
Mkt Cap.(Rs cr) 3,685
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

TCNS Clothing Co. Ltd. (TCNSBRANDS) - Auditors Report

Company auditors report

TO THE MEMBERS OF TCNS CLOTHING CO. LIMITED (FORMERLY KNOWN AS TCNS CLOTHING CO.PRIVATE LIMITED) Report on the Audit of the Financial Statements

OPINION

We have audited the accompanying financial statements of TCNS CLOTHING CO. LIMITED(Formerly known as TCNS CLOTHING CO. PRIVATE LIMITED) ("the Company") whichcomprise the Balance Sheet as at March 31 2021 the Statement of Profit and Loss(including Other Comprehensive

Income) the Cash Flow Statement and the Statement of Changes in Equity for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and its loss total comprehensiveloss its cash flows and the changes in equity for the year ended on that date.

BASIS FOR OPINION

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our described in the Auditor'sResponsibility for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

EMPHASIS OF MATTER

We draw attention to Note 42 of the financial statements which describes the possibleeffects of uncertainties relating to COVID-19 pandemic on the Company's operations andfinancial results for the year ended March 31 2021.

Our report on the financial statements is not modified in respect of this matter.

KEY AuDIT MATTERS

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the current period. Thesematters were addressed in the context of our audit of the financial statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters. We have determined the matter described below to be the key audit matter to becommunicated in our report.

Key Audit Matter Auditor's Response
Determination of provision for obsolescence and slow moving inventories (refer note 2.17 and 10 to the Financial Statements) Principal audit procedures:
Inventories are valued at the lower of cost (on weighted average basis) and the net realisable value after providing for obsolescence and other losses as considered necessary. We have:
As at March 31 2021 the Company held inventories of INR 2780.53 million net of provision of INR 917.71 million. Obtained understanding and evaluated the design implementation and tested the operating effectiveness of management's controls over the valuation of inventories including the identification of slow moving/obsolete inventories and determining the net realisable value of such inventories;
The Company considers year and seasonality to which inventory pertains for determining net realisable value for old inventories. Such old inventories are further marked down to its estimated realisable value based on amount which the Company has been able to realise on sale of old inventory around the period end. On sample basis verified that the inventories of finished goods are valued at lower of the cost or net realisable value. Assessed the appropriateness of the method of determining the cost of the inventory and the net realisable value;
As a result the management applies estimates in determining the appropriate provisions for slow moving and/ or obsolete stock based on the analysis of old season inventories past experience current trend and future expectations depending upon the category of goods. Obtained the working for the provision on slow moving/obsolete inventories and verified the estimate taken for provisioning on the basis of historical trend and re-performed the calculation for the provision computed by the management;
We identified such estimation process for old inventories as key audit matter due to material account balance. Evaluated the reasonability of the basis including historical trend of the management's estimations on the valuation of the slow moving/obsolete inventories and valuation thereof; and
Tested the adequacy and appropriateness of the disclosures made in the financial statements in respect of such provision created by the Company.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Board's report including annexuresto Board's Report but does not include the financial statements and our auditor's reportthereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report the fact. We havenothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the

Company in accordance with the Ind AS and other accounting principles generallyaccepted in India. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the

Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other Comprehensive

Income the Cash Flow Statement and Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Indian

Accounting Standards specified under

Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of

Directors none of the directors is disqualified as on March 31 2021 from beingappointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and

Auditors) Rules 2014 as amended in our opinion and to the best of our information andaccording to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements (Refer Note 32A to the financial statements).

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses (Refer Note 32.3 to the financialstatements).

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company (Refer Note 32.4 to the financialstatements).

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the

Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

ANNEXuRE ‘A' TO THE INDEPENDENT AuDITORS' REPORT

(Referred to in paragraph 1(f) under "Report on other

Legal and Regulatory Requirements" section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of TCNSCLOTHING CO. LIMITED (Formerly known as TCNS CLOTHING CO. PRIVATE LIMITED) ("theCompany") as of March 31 2021 in conjunction with our audit of the financialstatements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of

Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India. These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance

Note on Audit of Internal Financial Controls Over

Financial Reporting (the "Guidance Note") issued by the Institute ofChartered Accountants of India and the Standards on Auditing prescribed under

Section 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Company's internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial controls over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial controls over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of the

Company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information andaccordingtotheexplanationsgiventoustheCompany has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal financial controls over financial reporting criteria established by the

Company considering the essential components of internal control stated in the"Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India".

ANNEXuRE ‘B' TO THE INDEPENDENT AuDITORS' REPORT

(i) In respect of its Property Plant and Equipment

(fixed assets):

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular plan of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us the Company does nothave any immovable properties of freehold or leasehold land and building and hencereporting under clause (i)(c) of the

Order is not applicable.

(ii) In our opinion and according to the information and explanations given to us theinventories were physically verified during the year by the

Management at reasonable intervals other than goods in transit for which subsequentreceipts have been verified and no material discrepancies were noticed on physicalverification. In case of inventories lying with the third parties confirmations have beenreceived by the Management for stock held at the year-end and no material discrepancieswere noticed in respect of such confirmations.

(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the Register maintained underSection 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans made investments or provided guarantees and hencereporting under clause (iv) of the CARO 2016 is not applicable to the Company.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year. The Company does not have any unclaimed deposits andaccordingly the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act 2013 are not applicable to the Company.

(vi) The maintenance of cost records has not been specified by the Central Governmentunder Section 148(1) of the Companies Act 2013.

(vii) According to the information and explanations given to us in respect of statutorydues: a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees State

Insurance Income-tax Goods and Services

Tax Cess and other material statutory dues applicable to it with the appropriateauthorities. Also refer to the note 32.5 to the financial statements regarding managementassessment on certain matters relating to provident fund. b) There are no undisputedamounts payable in respect of Provident Fund Employees State

Insurance Income-tax Goods and Services

Tax Cess and other material statutory dues in arrears as at March 31 2021 for aperiod of more than six months from the date they became payable.

c) Details of dues of Income-tax and Sales tax which have not been deposited as onMarch 31 2021 on account of disputes are given below:

Name of Statute Nature of Dues

Forum where dispute is pending

Period to which the Amount Relates

Amount (in Rs. million)*
Income Tax Act 1961 Income Tax Income Tax Appellate Tribunal 2010 - 2011 2011 - 2012 2.70
Income Tax Act 1961 Income Tax Commissioner of Income Tax (Appeals) 2012 - 13 1.17
Income Tax Act 1961 Income Tax Commissioner of Income Tax 2013 - 14 5.72
Sales Tax/ Value Entry Tax Assessing Officer 2015 - 2016 1.74
Added Tax laws 2017 - 2018
Sales Tax/ Value Sales Tax Added Tax laws Objection hearing authority Value Added Tax 2006 - 2007 9.35
2009 - 2010
2014 - 2015
2015 – 2016
2016 - 2017
Sales Tax/ Value Sales Tax The Assistant Commissioner 2007 – 2008 1.26
Added Tax laws Trade and Tax Department 2008 – 2009
Sales Tax/ Value Sales Tax Appellate Tribunal of Value 2010 – 2011 0.16
Added Tax laws Added Tax Trade and Tax Department 2013 2014

*Net of Rs Nil paid under protest.

We have been informed that there are no dues of Goods and Services Tax and Custom Dutywhich have not been deposited as on March 31 2021 on account of disputes.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks. TheCompany has not taken any loan or borrowings from government or financial institutions andgovernment nor has issued any debentures.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer or term loans during the year and hence reporting under clause

(ix) of the CARO 2016 is not applicable to the Company.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct

2013

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO

2016 is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Sections 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the

CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with them and hence provisions of Section 192 of theCompanies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
SATPAL SINGH ARORA
Partner
Place: New Delhi (Membership No. 098564)
Date: June 21 2021 UDIN No. 21098564AAAABR2003

.