COSMO FERRITES LTD.
The Directors have pleasure in presenting the Annual Report on the business andoperations of the company along with Audited Balance Sheet and Profit & Loss A/c forthe year ended 31st March 2019.
1. SUMMARY FINANCIAL RESULTS
The Financial Results of the company for the financial year ended 31stMarch 2019 were as follows:
| || ||(Rs. in Lacs) |
|Particulars ||Year Ended 31st March 2019 ||Year Ended 31st March 2018 |
|Net Sales ||7842 ||7924 |
|Other Income ||120 ||128 |
|Profit before Interest ||312 ||258 |
|Depreciation and Tax || || |
|Finance Cost (including interest) ||514 ||514 |
|Depreciation ||414 ||430 |
|Exceptional Item ||530 ||- |
|Profit before Tax ||(1146) ||(686) |
|Provision for Taxation || || |
|- Current Tax ||- || |
|- Deferred Tax ||(311) ||(446) |
|Profit After Tax ||(835) ||(240) |
|Extraordinary Item ||14 ||(1) |
|Profit after Tax Including Extraordinary Item ||(821) ||(241) |
Note: The restated revenue for the quarter and year ended 31st March 2018 are lower byRs 224 lakhs respectively with the corresponding decrease in other expenses.
2. REVIEW OF OPERATIONS
For the year ending 31st March 2019 sales decreased to Rs 7842 Lacsas compared to Rs. 7924 Lacs for previous year.
Net loss for the year is Rs. 821 lacs as compared to Net Loss Rs. 241 Lacs inthe previous year.
In view of the null profitability during this year the Directors are unable torecommend any dividend on the equity shares for the year ended March 31 2019.
4. RESEARCH & DEVELOPMENT
Continuous efforts on Research & Development activities are being made to expandthe domestic and export markets.
5. CORPORATE GOVERNANCE
Company is committed to maintaining the best standards of Corporate Governance and hasalways tried to build the maximum trust with shareholders employees customers suppliersand other stakeholders. A separate section on Corporate Governance forming part of theDirectors' Report and the certificate from the Practicing Company Secretary confirmingcompliance of the Corporate Governance norms as stipulated in the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations") is included in the Annual Report in Annexure - A.
6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to regulations 34 of the Listing Regulations Management's Discussion andAnalysis Report for the year is presented in a separate section forming part of the AnnualReport
7. INTERNAL CONTROLS SYSTEMS
The Internal Control systems are routinely tested and certified by Statutory as well asInternal Auditors and cover all key areas of business. Independence of the internal auditand compliance is ensured by direct reporting to the Audit Committee of the Board. A CEOand CFO Certificate forming part of the Corporate Governance Report further confirms theexistence and effectiveness of internal controls and reiterates their responsibilities toreport deficiencies to the Audit Committee and rectify the same.
Mr. Ambrish Jaipuria is the Chairman of the Board.
(b) Reappointment and Appointment
Mr. Anil Kumar Jain Non-Independent and Non-Executive Director of the Company retiresby rotation and being eligible himself for reappointment at the ensuing Annual GeneralMeeting.
(c) Status of Directors
Mr. Ambrish Jaipuria is the Executive Director & CEO of the Company. Mr Anil KumarJain is Non-Independent and Non-Executive Director. Mr. Naresh Kumar Gupta Ms. JyotiDixit Dr. Rama Kant Dwivedi and Mr. Janardhan Pralhadrao Gupta are the IndependentDirectors of the Company.
*This clause may be read with Annexure-I to the Directors Report
(d) Declaration from Independent Directors
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersubsection (6) of Section 149 of the Companies Act 2013 and under Regulation 16 of SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015.
9. KEY MANAGERIAL PERSONNEL'S
Mr. Ambrish Jaipuria Executive Director & CEO Mr. Ramesh Chand Chief FinancialOfficer and Mr. Pawan Kumar Lakhotia Company Secretary are the Key Managerial Personnelof the Company in accordance with the provisions of Section 2(51) 203 of the CompaniesAct 2013 read with Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
During the year under review Mr. Pawan Kumar Lakhotia was appointed as CompanySecretary of the Company.
10. FAMILIARISATION PROGRAMME FOR DIRECTORS
At the time of appointing a Director a formal letter of appointment is given to himwhich inter alia explains the role function duties and responsibilities expected of himas a Director of the Company. The Director is also explained in detail the Compliancerequired from him under the Companies Act 2013 SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015 and other relevant regulations and affirmation taken withrespect to the same.
Management does one to one discussion with the newly appointed Director to familiarizehim with the Company's operations. Further the Company has put in place a system tofamiliarize the Independent Directors about the Company its products business and theongoing events relating to the Company
The details of the familiarisation programme may be accessed on the Company 's website(www.cosmoferrites.com).
11. EVALUATION OF BOARD'S PERFORMANCE
In compliance with the Companies Act 2013 and Regulation 17(10) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the performance evaluation ofthe Board was carried out during the year under review. More details on the same are givenin the Corporate Governance Report.
During the year five (5) Board Meetings and four (4) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under Companies Act2013.
Details of the composition of the Board and its Committees and of the Meetings heldattendance of the Directors at such meetings and other relevant details are provided inCorporate Governance Report.
13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
The Company has not accepted deposit from the public within the ambit of Section 73 ofthe Companies Act 2013 and The Companies (Acceptance of Deposits) Rules 2014.
15. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO
The details of energy conservation technology absorption and foreign exchange earningsand outgo as required under Section 134(3) of the Companies Act 2013 read with the Rule8 of Companies (Accounts of Companies) Rules 2014 is annexed herewith as Annexure - Cto this report.
16. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal mechanism to the Directors and employees to report their concerns aboutunethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct or ethics policy without fear of reprisal. The policy may be accessed on theCompany's website.
17. DIVERSITY OF BOARD
The Company sees increasing diversity at the Board level as an essential element insupporting the attainment of its strategic objectives and its sustainable development. Inparticular a diverse Board among others will enhance the quality of decisions byutilizing different skills qualifications and professional experience for achievingsustainable and balanced development.
18. REMUNERATION POLICY
Pursuant to the applicable provisions of the Companies Act 2013 and the ListingRegulations the Board in consultation with its Nomination & Remuneration Committeehas formulated a framework containing inter-alia the criteria for performance evaluationof the entire Board of the Company its Committees and Individual Directors includingIndependent Directors.
Members can download the complete remuneration policy on the Company 's website(www.cosmoferrites.com).
Disclosure of details of payment of remuneration to Managerial Personnel under ScheduleV Part II Section II (A) forms part of this Corporate Governance Report.
19. RELATED PARTY TRANSACTIONS
With reference to Section 134(3)(h) of the Companies Act 2013 all contracts andarrangements with related parties under Section 188(1) of the Act entered into by theCompany during the financial year were in the ordinary course of business and on an arm'slength basis. The details of the related party transactions as required under AccountingStandard-18 are set out in Note 34 to the financial statements forming part of this AnnualReport.
During the year there were no transactions with related parties which qualify asmaterial transactions under SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015. The Disclosure required in Form AOC-2 pursuant to Section 134 (3)(h) ofthe Companies Act 2013 is Not Applicable.
The Company has developed a Policy for Consideration and Approval of Related PartyTransactions which can be accessed on Company 's website (www.cosmoferrites.com).
20. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as Annexure D to this Report.
21. RISK MANAGEMENT
Every organization is exposed to a number of risks that it needs to effectivelyidentify manage and mitigate. Company has a process in place to identify key risks acrossthe organisation and relevant action plans to mitigate these risks. The Audit Committeehas been entrusted with the responsibility to assist the Board members about the riskassessment and its minimization procedures.
There are no risks which in the opinion of the Board threaten the existence of yourCompany. However some of the risks which may pose challenges are set out in theManagement Discussion and Analysis which forms part of this Report.
M/s. Suresh Kumar Mittal & Co. Chartered Accountants were appointed as StatutoryAuditors of the Company in 31st AGM (held on 25 September 2017) to hold officefor a period of 5 years until the conclusion of 36th AGM. There are noobservations (including any qualification reservation adverse remark or disclaimer) ofthe Auditors in their Audit Report that may call for any explanation from the Directors.Further the notes to accounts referred to in the Auditors Report areself-explanatory. During the year the Auditor had not reported any matter under Section143 (12) of the Act therefore no detail is required to be disclosed under Section134(3)(ca) of the Act.
Pursuant to the Provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Managerial Personnel) Rules 2014 the Company has appointed "M/sDMK Associates" a firm of Company Secretaries in Practice to undertake theSecretarial Audit of the Company.
The Secretarial Auditors have submitted their report confirming compliance by theCompany of all the provisions of the applicable corporate laws. As per the remark raisedby Secretarial Auditor in their report regarding filling of form MGT-14 the Company hasfilled necessary forms for Condonation of Delay. The Secretarial Audit Report annexed as Annexure- B
The Board of Directors on the recommendation of Audit Committee has appointed M/sRavi Sahni & Co. Cost Accountants as Cost Auditor to audit the cost accounts of theCompany for the Financial Year 2019-20 at a remuneration of Rs. 150000/- plus servicetax as applicable and reimbursement of out of pocket expenses. As required under theCompanies Act 2013 a resolution seeking members' approval for the remuneration payableto the Cost Auditor forms part of the Notice convening the Annual General Meeting.
In terms of the Section 148 of the Companies Act 2013 (the Act') read with Rule8 of the Companies (Accounts) Rules 2014 it is stated that the cost accounts and recordsare made and maintained by the Company as specified by the Central Government undersub-section (1) of Section 148 of the Companies Act 2013.
During the year the Auditor had not reported any matter under Section 143 (12) of theAct therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
23. AUDITORS' REMARKS
The Auditors' remarks on the annual accounts are self explanatory and do not requirefurther comments from the Company.
24. CHANGE IN NATURE OF BUSINESS IF ANY
No change in the nature of the business of the Company done during the year underreview.
25. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING FINANCIAL POSITION OF THECOMPANY
There are no material changes and commitments which have occurred subsequent to theclose of the financial year of the Company to which the balance sheet relates and the dateof the report that may affect the financial position of the Company.
26. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
27. LISTING WITH STOCK EXCHANGES
The Company confirms that it has paid the Annual Listing Fees for the year FY 2018- 19to the Bombay Stock Exchange where the Company's equity shares are listed.
28. PROMOTION OF WOMEN'S WELL BEING AT WORKPLACE
Cosmo Ferrites has zero tolerance for sexual harassment at workplace and has adopted aPolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under for prevention andredressal of complaints of sexual harassment at workplace. The Company has complied withprovisions relating to the constitution of Internal Complaints Committee under the saidact. There have been no complaints of sexual harassment received during the year.
29. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is also enclosed as Annexure E to this Report.
The information pursuant to Section 197(12) of the Companies Act 2013 read with Rule5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 pertaining to the top ten employees in terms of remuneration drawn and theirother particulars also form part of this report. However the report and the accounts arebeing sent to the members excluding the aforesaid annexure. In terms of Section 136 of theAct the said annexure is open for inspection at the Registered Office of the Company. Anyshareholder interested in obtaining a copy of the same may write to the Company Secretary.
30. DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of section 134 (5) of the Companies Act 2013 theBoard of Directors to the best of knowledge and belief and according to the informationand explanations obtained by them hereby confirm that:
(i) In the preparation of the annual accounts applicable accounting standards havebeen followed along with proper explanation relating to material departures.
(ii) Accounting policies selected were applied consistently. Reasonable and prudentjudgments and estimates are made so as to give a true and fair view of the state ofaffairs of the Company as of 31st March 2019 and of the profits of the Companyfor the year 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 Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) The annual accounts of the Company have been prepared on a going concern basis.
(v) Proper Internal Financial Controls were in place and that the Financial Controlswere adequate and were operating effectively.
(vi) Systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
31. SECRETARIAL STANDARDS
During the year 2019 the Company has complied with applicable Secretarial Standardsissued by the Institute of the Company Secretaries of India.
Your Directors wish to place on record their appreciation of continued support extendedby the dealers distributors suppliers investors bankers financial institutions. YourDirectors also express their appreciation for the committed services by the employees ofthe Company.
| ||For and on behalf of the Board |
| ||Ambrish Jaipuria |
| ||Chairman |
|New Delhi || |
|13th May 2019 || |