TCNS Clothing Co. Ltd Directors 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 the overall business operations of the Company and Audited Statements of Accounts for the financial year ended March 31, 2019 and Auditors report thereon.
FINANCIAL PERFORMANCE Financial Results
|(Rs. in million)|
|Particulars||Financial Year 2018-2019||Financial Year 2017-2018|
|Depreciation and amortisation expense||222.10||166.71|
|Profit before tax||1,616.23||1,448.28|
|Profit for the year||1,314.35||980.97|
|Other Comprehensive Income||3.88||(3.30)|
|Total Comprehensive Income for the year||1,318.23||977.67|
Overview of Company Performance and Operations
The Company EBITDA and PAT were Rs. 1,843.47 million and Rs. 1,314.35 million respectively against the previous years 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 COMPANYS WORKING DURING THE YEAR AND STATE OF COMPANYS AFFAIRS Significant developments during the year Initial Public Offering (IPO): Your Company, during the financial year under review, filed Prospectus with Registrar of Companies and Securities Exchange Board of India and the same was approved on July 09, 2018. The public issue was completely an Offer for Sale (OFS) constituting of up to 1,57,14,038 Equity Shares of Face Value of Rs. 2/- each. The Company got listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange Limited (NSE) on July 30, 2018.
ERP Implementation: Your Company implemented a new ERP w.e.f April 1, 2018. The up-gradation will add strength in data mining capability and enable adoption of newer applications including omnichannel enablers.
No dividend was recommended for the financial year as the Company intends to look for expansion opportunities.
Transfer of Funds to Investor Education and Protection Fund
No Funds or shares were transferred to Investor Education and Protection Fund during the year under review.
Total comprehensive income for the year of Rs. 1318.23 million was added to Retained earnings and the balance as at March 31, 2019 stood at Rs. 2310.45 million. Your Company has not transferred any amount to the General Reserve for the financial year ended March 31, 2019.
Management Discussion and Analysis Report
The Management Discussion and Analysis for the period under review as required under Schedule V read with Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been dealt with extensively in a separate section forming 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 15,714,038 equity shares of face value of Rs. 2/- each (the equity shares) for cash at a price of Rs.716/- per equity share (the offer price) aggregating to Rs. 11,251.25 million (the offer) as an offer for sale. The equity shares of your Company were 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 the Stock Exchanges for the financial year 2019-20.
During the year under review, the Company has allotted 43,03,660 (Forty three lakhs three thousand six hundred and sixty only) Equity Shares of Rs. 2/-(Rupees Two) each under TCNS ESOP Scheme 2014-17, thereby the paid-up equity capital of the Company increased by Rs. 86,07,320/-(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 12,98,132 CCRDs of face value of Rs. 1/- (Rupee One) each to Mr Onkar Singh Pasricha and Mr Arvinder Singh
Pasricha at a premium, pursuant to approval of the Shareholders through resolutions dated January 5, 2018. These CCRDs were converted into 6,49,066 Equity Shares of Rs. 2/- each, aggregating to Rs. 12,98,132 (Twelve lakhs ninety eight thousand one hundred and thirty 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 the Company occurred between the end of the financial year of the Company to which the financial statements relates and the date of the report. Further, there has been no change in the nature of business of the Company during the year
Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo.
Details of energy conservation, technology absorption, in accordance with the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed and marked as Annexure B to this Report. 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 Foreign Exchange outgo during the year in terms of actual outflows are as follows:
|(Rs. in million)|
|Foreign Exchange Inflow||59.38||38.21|
|Foreign Exchange Outflow||5.66||2.20|
Directors and Key Managerial Personnel Directors
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Onkar Singh Pasricha (DIN - 00032290), Chairperson and Executive Director of the Company, retiring by rotation at the ensuing Annual General Meeting being eligible for reappointment, offers himself for re-appointment. The brief resume of the Director seeking re-appointment along with the other details as stipulated under Regulation 26 and 36 of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 and Secretarial Standards on General Meetings (SS-2), is provided in the Notice for convening 22nd Annual General Meeting of the Company.
Further, there are no changes in the directorships during the financial year under review.
Key Managerial Personnel
Mr Anant Kumar Daga, Managing Director of the Company, Mr Venkatesh Tarakkad, Chief Financial Officer and Mr Piyush Asija, Company Secretary and Compliance Officer of the Company continued to be the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51) and Section 203 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Directors Responsibility Statement Pursuant to section 134 (5) of the Companies Act, 2013, 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 departure, in the preparation of the accounts for the financial year ended March 31, 2019.
ii. The accounting policies selected were applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit of the Company for the year ended on that date.
iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets 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 all applicable laws and those systems are adequate and operating effectively.
vi. 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.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultant(s) and the reviews made by the Management and the relevant Board Committees including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and operationally effective during FY 2018-19.
The Independent Directors are appointed by the Members of the Company and letter of appointment is issued to them as per Schedule IV of the Companies Act, 2013. The terms and conditions of appointment of Independent Directors are disclosed on the website of the Company at https://wforwoman.com/content/ tnc-for-independent-directors/. Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under 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 to him/her, which inter alia explains the role, function, duties and responsibilities expected from him/her as a Director of the Company. The terms and conditions of the appointment are also placed on the website of the Company. Each newly appointed Director is taken through a familiarisation program in terms of the SEBI (Listing Obligations & Disclosure Requirements), Regulations, 2015, including interactions with the Managing Director, CFO & the Senior Management of the Company covering all important aspects of the Company.
The Independent Directors were provided with a presentation on the nature of the industry in which the Company operates and the business model of the Company. Further, time to time, necessary presentations, documents, reports, internal policies and updates were provided to them to familiarise them with the Companys policies, procedures and practices. The policy on Familiarisation Programme for Independent Directors is placed on the website of the Company at https://wforwoman.com/content/ corporate-governance-familiarisation/.
Pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 (SEBI Listing Regulations), the Board has adopted a process for evaluating its performance and effectiveness as well as that of its Committees and carried out an annual evaluation of its own performance, Board Committees and the Directors individually,. The Board and the Nomination & Remuneration committee reviewed the performance of the individual Directors on the basis of the criteria and framework adopted by the Board. The evaluation criteria included various aspects such as, functionality of Board, compositions, process & procedures including adequate & timely information, attendance, delegation of responsibility, decision making, roles & responsibility including monitoring, benchmarking, feedback relationship with the stakeholders and as provided by the Guidance Note on Board Evaluation issued by SEBI dated January 5, 2017. In a separate meeting of the Independent Directors, performance of the Non-Independent Directors, the Board as a whole 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 the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company as part of its 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 of this Report. The CSR policy of the Company is available on the website of the Company at https://wforwoman. com/content/lodr-policies/.
The Company has complied with applicable Secretarial Standards issued by Institute of Company Secretaries of India.
Particulars of Employees
The disclosure under Rule 5 (2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is annexed and marked as Annexure 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 Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 is annexed and marked as Annexure E to this Report. Disclosure on Sexual Harassment of Women at Workplace
The Company has an Internal Complaints Committee for providing a redressal mechanism pertaining to sexual harassment of women employees at workplace. There were three (3) cases of sexual harassment reported during the year under review, which were addressed within prescribed time frame.
GOVERNANCE AND SECRETARIAL Board and Committees Meetings
The Board has an optimum mix of Executive, Non-Executive and Independent Directors and is headed by Mr Onkar Singh Pasricha, an Executive Chairman. The Board of the Company is diverse in terms of qualification, competence, experience and expertise which enables it to ensure long term value creation for all stakeholders. As on March 31, 2019 the Board comprises of two executive directors,
one non-executive director and three independent Directors. The details related to meetings of the Board, Directorships, Committees and meetings of Committees are disclosed in 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 has on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Senior Management and their remuneration. The policy forming part of this report is annexed and marked as Annexure F and is also available on the website of the Company at https:// wforwoman.com/content/lodr-policies/.
Policy for Determining Material Subsidiaries The policy for determining the material subsidiaries of the Company is available on the Website of the Company at https://wforwoman.com/content/lodr- policies. There are no subsidiaries of the company as on 31st March 2019.
Dividend Distribution Policy
Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates top 500 Listed Companies on their market capitalisation as calculated on the 31st 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 Board of the Company, with regard to distribution of dividend to shareholders and/or retention or plough back of its profits. The Policy is enclosed as Annexure - G of the Report and is also 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 and Employees to voice their concerns in a responsible and effective manner regarding unethical behavior and actual or suspected fraud or violation of the Companys code of conduct. It also provides adequate safeguards against victimisation of Directors and Employees who avail the mechanism. The Company affirms that during financial year 2018-2019, no personnel have been denied access to the Audit Committee to report such instances. The Whistle Blower Policy is available on the website of the Company at https://wforwoman. com/content/lodr-policies/
Pursuant to section 134(3) (n) of the Companies Act, 2013 the Company has developed and implemented a risk management policy which identifies major risks which may threaten the existence of the Company . The same has also been adopted by your Board and is subject to its review from time to time. Risk mitigation process and measures have been also formulated and clearly spelled out in the said policy. The Risk Management Committee comprises of Mr Onkar Singh Pasricha, Mr Anant Kumar Daga and Mr Venkatesh Tarakkad. The policy 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 Senior Management of the Company. An annual affirmation of compliance with the Code of Conduct is taken from all the Directors and Senior Management Members of the Company to whom the Code applies. The Code of Conduct has also been posted on the website of the Company at https://wforwoman. com/content/lodr-policies.
The affirmation by the Managing Director that the Code of Conduct has been complied by the Board of Directors and Senior Management forms part of the Corporate Governance report.
Prevention of Insider Trading
The Company has formulated and adopted a Policy and a Code of Fair Disclosure in accordance with the requirements of SEBI (Prohibition of Insider Trading) Regulations, 2015. The Policy lays down the guidelines, procedures to be followed, and disclosures to be made while dealing with the securities of the Company, along with consequences for violation. The policy is formulated to regulate, monitor and ensure reporting of deals by designated persons and maintain highest level of ethical standards while dealing in the Companys securities. The Companys Insider Trading Policy Code of Fair Disclosure is also placed 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 as per the requirement of Section 135 of Companies Act, 2013 read with schedule VII of the Act 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
|Name of the Policy||Web link|
|Content Archival Policy||https://wforwoman.com/content/lodr-policies/|
|Code of Business Conduct & Ethics||https://wforwoman.com/content/lodr-policies/|
|Policy Determining Material Subsidiaries||https://wforwoman.com/content/lodr-policies/|
|Policy for Determination of Materiality and Disclosure of Information||https://wforwoman.com/content/lodr-policies/|
|Policy on Nomination Remuneration and Board Diversity||https://wforwoman.com/content/lodr-policies/|
|Policy on Dealing with Related Party Transactions||https://wforwoman.com/content/lodr-policies/|
|Risk Assessment and Management Policy||https://wforwoman.com/content/lodr-policies/|
|Preservation of Documents||https://wforwoman.com/content/lodr-policies/|
General Body Meetings:
During the financial year under review, the 21st Annual General Meeting was held on July 5, 2018. No Extraordinary General Meeting was called or conducted during the year under review.
Your Company has neither accepted nor renewed any deposits from public within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year Particulars of Investments, Loans and Guarantees There were no Investments, Loans and Guarantees provided, as covered under the provisions of Section 186 of the Companies Act, 2013 read with the rules made thereunder, during the financial year under review.
Significant and Material Orders passed by the Regulators
There were no significant and material orders passed by the Regulators, Courts or Tribunals during the year impacting the going concern status and the operations of the Company in future.
Environment, Health and Safety Your Company is conscious of the importance of environmentally clean and safe operations. Your Company ensures safety of all concerned and compliances with environmental regulations. The Company provides a safe and healthy workplace with an aim to achieve zero injuries to all its employees and stakeholders associated with the Company s operations.
Extract of Annual Return
The extracts of Annual Return pursuant to the provisions of Section 92(3) of the Companies 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 report marked and annexed as Annexure H and also placed on the website of the Company at https://wforwoman.com/ content/general-meeting-disclosurefy-2018-19. Business Responsibility Report The SEBI (Listing Obligations & Disclosure Requirements), Regulations 2015, mandates the inclusion of Business Responsibility Statement (BRR) for top 500 listed companies based on market capitalisation. Business Responsibility Report for 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 (Listing Obligations and Disclosure Requirements) Regulations, 2015 a Report on Corporate Governance along with Compliance Certificate issued by a Practising Company Secretary in terms of Part E of Schedule V of the said Regulations of the Company forms integral part of 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 and complexity of its operations. Further, audit procedures monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating procedures, accounting procedures and policies at all locations of the Company. Based on the audit reports the units undertake corrective action in their respective areas and strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board periodically.
The Board of Directors of the Company have adopted various policies viz. Policy on Related Party Transactions, Whistle Blower Policy, Policy to determine material subsidiaries and other procedures for ensuring the orderly and efficient conduct of its business for safeguarding 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.
There are no qualifications or observations or adverse remarks made by the Auditors in their Report. Further, there were no instances of frauds reported by auditors under sub-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 at the 20th Annual General Meeting held on August 27, 2017 for a term of 5 consecutive 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 the Ministry of Corporate Affairs, the requirement for ratification of appointment of statutory auditors has been dispensed with. Secretarial Audit
During the year, the Board of Directors of the Company had appointed Himanshu G and Associates C.P.No-10398 (Company Secretary in Whole-time Practice) to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 and the Rules framed thereunder and Regulation 24 A of the SEBI (LODR) Regulations, for the Financial Year 2018-19. The Secretarial Audit Report for the financial year ended March 31, 2019 was considered by the Board in its meeting held on May 28, 2019 and the said Report given by Secretarial Auditor is annexed to this Report as Annexure K. The Secretarial Audit Report does not contain any material qualification, reservation or adverse remarks which needs any explanation or comment of the Board.
RELATED PARTY TRANSACTIONS
Related Party Transactions entered during the financial year under review are disclosed in Note 38 of the Financial Statements. All these transactions entered were at an arms length basis and in the ordinary course of business.
There were no materially significant related party transactions with the Companys Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Form AOC-2, containing the details on the aforesaid related party transactions is forming part of the Annual Report annexed as Annexure L.
HUMAN RESOURCE INITIATIVES
To maintain and develop ongoing competitiveness and adaptability, it is imperative to invest in organisational capability development. The company has been addressing these needs through several initiatives. Maintenance of Statutory Cost records required under Section 148 (1) of Companies Act, 2013 The Central government has not prescribed maintenance of any statutory records as mentioned under section 148(1) of the Act for the products and services of the Company.
Your Directors would like to thank all customers, shareholders, dealers, suppliers, bankers, employees and all other business associates for the continuous support given by them to the Company and its Management.
|For TCNS Clothing Co. Limited|
|Anant Kumar Daga||Onkar Singh Pasricha|
|Managing Director||Chairman & Executive Director|
|DIN: 07604184||DIN: 00032290|
|Place: New Delhi|
|Date: May 28, 2019|
The information as required under Section 134 (3) (m) of the Companies Act, 2013 read with 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 and innovations in the Garment Industry. These initiatives enable its vendors to become more efficient 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 minimum consumption by way of better energy conservation programmes, training/ awareness of the employees and prompt upkeep is a continuous exercise.
(i) The steps taken or impact on conservation of energy: The Company has been continuously encouraging its partners to improve focus on technology improvement and training to ensure efficient use of resources, especially of common resources such as water and energy.
(ii) The steps taken by the Company for utilising alternate sources of energy: Not Applicable
(iii) The capital investment on energy conservation equipments: Not Applicable
(b) technology absorption
Your company continues to use the latest technologies for improving the productivity and quality of its products. The Company is keeping track of latest development and advancements in technology and steps are being taken to encourage our partners to adopt the same.
The Company continues to make focused investments in technology and operations set-up towards providing seamless shopping experiences and also improving exerience at physical store outlets by use of tablets etc.
(i) The efforts made towards technology absorption: Your Company keeps itself updated on 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 to partners with necessary guidance, training and financial support, if any required.
(ii) The benefits derived like product improvement, cost reduction, product development or import substitution: With the adoption of new technology from time to time, the efficiency and capacity with respect to manufacturing has been increased resulting in better quality of products, quicker and more efficient processing at lower costs.
(iii) In case of imported technology (imported during the last three years reckoned from 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 reasons thereof: 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