Your Directors have pleasure in submitting their 36th Annual Report together with theAudited Financial Statements for the year ended 31st March 2015
|Particulars ||Current Year ended 31.03.2015 ||Previous Year ended 31.03.2014 |
| ||(Rs. in lacs) ||(Rs. in lacs) |
|Revenue from operations ||11882.87 ||10500.40 |
|Other Income ||31.22 ||53.56 |
|Total Revenue ||11914.09 ||10553.96 |
|Total Expenses ||11452.02 ||10023.27 |
|Profit before Prior Period Exceptional and ||462.07 ||530.69 |
|Extraordinary items and Tax || || |
|Prior Period Adjustments - charges ||0.84 ||4.78 |
|Exceptional Items charge/(income) ||(0.63) ||129.57 |
|Profit before Extraordinary items and Tax ||461.86 ||396.34 |
|Extraordinary items ||- ||- |
|Profit before Tax ||461.86 ||396.34 |
|Tax Expenses/(Income) : || || |
|Current Tax ||116.97 ||78.16 |
|Deferred Tax ||(35.66) ||44.66 |
|Profit for the period from continuing operations ||380.55 ||273.52 |
COMPANY S PERFORMANCE AND STATE OF AFFAIRS FOR FINANCIAL YEAR 2014-15
The Company over the last few years has shown consistent double digit growth in grossrevenues due to good domestic demand. The Revenue from Sale of Products (net of excise)for the current year ended 31.03.2015 was higher at J 11753.56 Lacs against previous years sales of J 10437.41 Lacs an increase of about 12.61 % over the previous year. Theexports were marginally higher at J 353.56 Lacs (previous year J 343.25 lacs) in f.o.b.value terms. The Revenue from services for the current year amounted to RS. 5.25 Lacs(Previous year J 4.03 Lacs). The other Operating Income aggregating J 124.06 Lacs(Previous Year RS. 58.96 Lacs) ineralia includes Royalty Income RS. 65.25 Lacs (Pr. Yr.Nil) and Export Incentives viz. Duty Drawback & PFSL J 45.02 Lacs (Previous Year J45.94 Lacs). During the current year ended 31.03.2015 the Company registered Profit beforeFinance Cost Depreciation and Tax RS. 942.09 Lacs (Previous year RS. 749.25 Lacs) and NetProfit after Tax J 380.85 Lacs (Previous Year J 273.52 lacs). Pursuant to the higher netprofits the financial position of the company has strengthened. The Net Worth of theCompany as at 31.03.2015 was J 2201.69 Lacs (Previous Year J 1853.93 Lacs).
The Cosco Brand is well established in the Domestic market. The Management iscontinuously taking effective steps to enhance its Brand Value. The Companymanufactures/source internationally at competitive prices quality products develop/sourcenew products on regular basis and is expanding its product range and the marketing networkto improve top line as well as net margins.
Status of Investments made in the erstwhile Subsidiary Company M/s Cosco Polymer Lanka(Private) Limited (CPLPL): As reported in earlier year(s) M/s Cosco Polymer Lanka(Private) Limited has been scheduled in the Revival of Underperforming Enterprises orUnderutilized Assets Act No 43 of 2011(of Sri Lanka). The Shares of the WOS are vested inSecretary to the Treasury of Government of Sri Lanka pursuant to acquisition by theGovernment under Revival of Under Performing Enterprises or Under Utilized Assets Act ofSri Lanka (Act No. 43 of 2011) . Competent Authority appointed under the Act iscontrolling administering and managing such Enterprises/Units/Assets. The Act (of SriLanka) provides for payment of compensation to the Shareholders. The Compensation claimfiled in Sri Lanka with the Compensation Tribunal constituted under the said Act is yet tobe adjudicated. No compensation has been received till date. CPLPL is under LiquidationCase Ref. No. HC (Civil) 40/2013(CO) under the Jurisdiction of Hon ble The Commercial HighCourt of The Western Province (Exercising Civil Jurisdiction) in Colombo (Sri Lanka).Therefore "Consolidated Financial Statements" as per Accounting Standard 21issued by the Institute of Chartered Accountants of India have not been prepared sincethe company is under liquidation.
Directors have not recommended any Dividend for the financial year ended 31.03.2015.However based on Company s consistent good performance in current FY 2015-16 yourDirectors have declared interim dividend of J 1 per equity share (face value of J 10 each)for the current year 2015-16 (Previous Year Nil). It involves Dividend pay out of J 41.61lacs (Previous Year Nil) and Dividend Distribution Tax J8.48 lacs.
TRANSFERS TO RESERVES
The opening balance of General Reserve has been adjusted by deducting J 32.80 lacs onaccount of fixed assets whose useful life has already exhausted as on April 1 2014. Noother amount has been transferred to General Reserve. The current year s net profit of J380.85 lacs has been retained in Surplus in the Statement of Profit and Loss.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Sections 134 (3) (c) and 134(5) of the Companies Act2013 your Directors to the best of their knowledge and belief and according to theinformation and explanations obtained by them and based on the internal controlscompliance systems established and maintained by the Company make the following statementthat:
i. in the preparation of the annual accounts for the year ended 31st March 2015 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;
ii. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2015 and of the profitof the Company for the year ended on that date;
iii the Directors have taken proper and sufficient care 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 Directors have prepared the annual accounts on a going concern basis;
v. the Directors have laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and operating effectively; and
vi. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Your Directors inform with deep sorrow the sad demise of Shri Darshan Kumar Jain(DIN:00195789) Whole Time Director of the Company on 13th November 2014 and pay theirhomage to the departed soul. The Board acknowledges the invaluable contribution andguidance provided by him during his life time.
Shri Neeraj Jain (DIN: 00190592) and Shri Arun Jain (DIN: 01054316) Directors of theCompany retire by rotation at the ensuing Annual General Meeting and being eligibleoffer themselves for re-appointment. Board recommends their reappointment.
The term of appointment of Shri Devinder Kumar Jain (DIN: 00191539) as ManagingDirector and also designated as Chief Executive Officer of the Company and Shri NarinderKumar Jain (DIN: 00195619) as Managing Director of the Company expires on 15th March2016. The Board recommends their reappointment as Managing Director and Chief ExecutiveOfficer and as Managing Director respectively of the Company for further period of Three(3) years w.e.f. 16th March 2016 upon the remuneration terms & conditions as set outin the Notice of the ensuing Annual General Meeting and approved by the Nomination &Remuneration Committee as per the provisions of the Companies Act 2013 & Schedule Vof the Companies Act 2013 and Rules framed thereunder. The Resolutions seeking approvalof the Members for the re-appointment of Shri Devinder Kumar Jain as Managing Director andChief Executive Officer and Shri Narinder Kumar Jain as Managing Director of the Companyhave been incorporated in the Notice of the forthcoming Annual General Meeting of theCompany along with the details about them.
Pursuant to the provisions of Section 196197 & 203 read with Schedule V and allother applicable provisions of the Companies Act 2013 Shri Arun Jain (DIN:01054316) Shri Manish Jain (DIN: 00191593) Shri Pankaj Jain (DIN: 00190414) and Shri Neeraj Jain(DIN: 00190592) have been re-appointed as Whole Time Directors of the Company w.e.f 01stOctober 2014 for a term of 3 Years in the last Annual General Meeting of the Company heldon 30th September 2014.
Pursuant to the provisions of Section 203 of the Companies Act 2013 which came intoeffect from April 1 2014 Shri Devinder Kumar Jain (DIN: 00191539) Managing Director ofthe Company has been appointed as Chief Executive Officer of the Company w.e.f.31.01.2015 Shri Pankaj Jain (DIN : 00190414) Whole Time Director of the Company has beenappointed as Chief Financial Officer of the Company w.e.f 01.10.2014 and Ms. Neha Sharma(A25128) was appointed as Company Secretary of the Company w.e.f 30th September 2014. Ms.Neha Sharma (A25128) Company Secretary resigned from the Company w.e.f. 28th February2015. Ms Sudha Singh (A33371) has been appointed as Company Secretary of the Company w.e.fIst May 2015.
Pursuant to the provisions of Section 149 of the Companies Act 2013 which came intoeffect from April 1 2014 Shri. Mahavir Prasad Gupta (DIN 00190550) Shri. Sunil Jain(DIN 00387451) Shri. Gulshan Rai Jain (DIN 00737177) Shri. Mohan Lal Mangla (DIN00311895) Shri. Vijender Jain (DIN 06423328) Shri. Vijay Kumar Sood (DIN 01525607) andSmt. Nisha Paul (DIN 00325914) were appointed as Independent Directors of the Companyw.e.f 1st October 2014 for term of 3 years at the Annual General Meeting of the Companyheld on 30th September 2014. The terms and conditions of appointment of IndependentDirectors are as per Schedule IV of the Act. They have submitted a declaration that eachof them meets the criteria of Independent Director as provided in Section 149(6) of theAct and there has been no change in the circumstances which may affect their status asIndependent director during the Year.
Shri. Gulshan Rai Jain (DIN 00737177) Independent Director has since resigned w.e.f31st January 2015 and Shri Joginder Pal Jain (DIN :00190482)Independent Directorresigned earlier w.e.f Ist October 2014. The Board places on record its appreciation forthe contribution and guidance provided by them during their tenure as IndependentDirectors of the Company.
During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company.
None of the Director is disqualified from being appointed as Director in terms ofsection 164 of the Companies Act 2013 and they have given their consent in writing to actas Director(s).
MEETINGS OF THE BOARD
During the year 2014-2015 Eight (8) Board Meetings and Five (5) Audit CommitteeMeetings were held. In accordance with requirement other committee meetings were heldfrom time to time and one separate meeting of Independent Directors was also held.Relevant details of the meetings are given in the Corporate Governance Report which formpart of this report.
The Board of Directors has carried out an annual performance evaluation of its ownperformance Board Committees and individual Directors pursuant to the provisions of theCompanies Act 2013 and clause 49 of the Listing Agreement(s).
The performance evaluation of the Board Committees and Directors was carried outhaving regard to the functional responsibilities and after seeking inputs from all thedirectors/committee members in terms of Performance Evaluation Framework and Policy of theCompany.
In a separate meeting of Independent Directors performance of non IndependentDirectors the Board as a whole and of the Chairman was evaluated taking into views ofDirectors.
Policy on Directors Appointment and Remuneration and other details
The Company s Policy on Directors Appointment and Remuneration and other mattersprovided in section 178(3) of the Companies Act 2013 has been disclosed in the CorporateGovernance Report which form part of the Directors Report.
Internal financial control systems and their adequacy
The Company has internal control systems inter alia including system of financialcontrols commensurate with the size and scale of its business operations. Based on theframework of internal financial controls and compliance systems put in place by theCompany and the reviews performed by management and the audit committee the board is ofthe opinion that the Company s internal financial controls were adequate and effectiveduring the financial year 2014-15.
The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of this report.
Nomination and Remuneration Committee
The details pertaining to composition of Nomination and Remuneration Committee areincluded in the Corporate Governance Report which forms part of this report.
Policy on determining the criteria for determining qualifications positives attributesand independence of a director are included in the Corporate Governance Report whichforms part of this report.
Pursuant to the provisions of Section 139 of the Act and rules framed thereunder M/sMadan & Associates Chartered Accountants (ICAI Registration No. 000185N) wereappointed as Statutory Auditors of the Company in the last Annual General Meeting (AGM)held on 30th September 2014 from the conclusion of that Annual General Meeting of theCompany for a Term of 3 years i.e. till the conclusion of 38th Annual General Meeting tobe held in the Year 2017 subject to ratification of their appointment at every AGM. TheBoard recommends ratification of their Appointment as Statutory Auditors of the Company.
INDEPENDENT AUDITORS REPORT
The Auditors Report do not contain any qualifications reservations adverse remarks ordisclaimers which needs any comments/ explanation.
Secretarial Auditors Report
Report of the Secretarial Auditor is given as an Annexure-A which forms part of thisReport. Secretarial Auditors Report do not contain any qualifications reservationsadverse remarks or disclaimers which needs any comments/ explanation.
Risk Management Policy
The details pertaining to Risk Management Policy and its implementation has beencovered in the Management discussion and analysis which form part of this report.
Particulars of Loans Guarantees and investments
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
Trasactions with related parties
All transactions entered with related parties for the year under review were in theordinary course of business and are placed before the Audit Committee on regular basis .omnibus approval was obtained for transactions which are of repetitive nature. All thetransactions entered with the related parties do not attract the provisions of Section 188of the Companies Act 2013.
Information on transactions with related parties pursuant to section 134(3)(h) of theAct read with Rule 8(2) of the Companies (Accounts) Rules 2014 are given in Annexure-Bin Form AOC 2 and the same form part of this report.
Corporate Social Responsibility
The provisions of section 135 of the Companies Act 2013 are not applicable to ourcompany for the year ended 31.03.2015.
Extract of Annual Rerturn
As provided under Section 92(3) of the Act the extract of Annual Return is given inAnnexure-C in the prescribed Form MGT-9 which form part of this report.
Particulars of Employees
The information required under Section 197 of the Act read with rule 5(1) of theCompanies Appointment and Remuneration of managerial Personnel) Rules 2014 are givenbelow:
a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial Year:
|Executive Directors ||Ratio to median remuneration |
|Shri Devinder Kumar Jain ||23:1 |
|Shri Narinder Kumar Jain ||23:1 |
|**Shri Darshan Kumar Jain ||25:1 |
|Shri Arun Jain ||19:1 |
|Shri Manish Jain ||19:1 |
|Shri Pankaj Jain ||19:1 |
|Shri Neeraj Jain ||19:1 |
|Non Executive Directors ||Ratio to median remuneration |
|Shri Mahavir Prasad Gupta || |
|* Shri Joginder Pal Jain ||Not Applicable |
| ||(Independent Directors are paid only sitting fees for attending Board Meetings. No Remuneration has been paid to the Independent Directors). |
|*Shri. Gulshan Rai Jain || |
|Shri Mohan Lal Mangla || |
|Shri Sunil Kumar Jain || |
|Shri Vijay Kumar Sood || |
|Shri Vijender Kumar Jain || |
|Smt. Nisha Paul || |
b. The percentage increase in Remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the financial year:
|Directors Chief Executive Officers Chief Financial Officer and Company Secretary ||% increase in Remuneration in the financial year |
|Executive Directors :- || |
|Shri Devinder Kumar Jain ||10.34% |
|Shri Narinder Kumar Jain ||10.34% |
|**Shri Darshan Kumar Jain ||10.34% |
|Shri Arun Jain ||8.33% |
|Shri Manish Jain ||8.33% |
|Shri Pankaj Jain ||8.33% |
|Shri Neeraj Jain ||8.33% |
|Independent Directors :- || |
|Shri Mahavir Prasad Gupta || |
|Shri Mohan Lal Mangla || |
| ||Not Applicable |
|Shri Sunil Kumar Jain ||(Independent Directors are paid only sitting fees for attending Board Meetings. No Remuneration has been paid to the Independent Directors). |
|Shri Vijay Kumar Sood || |
|Shri Vijender Kumar Jain || |
|*Shri Gulshan Rai Jain || |
|* Shri Joginder Pal Jain || |
|Smt. Nisha Paul || |
|Ms. Neha Sharma Company Secretary ||Not Applicable |
| ||(Appointed during the year as Company secretary w.e.f. 30th September 2015. and Resigned on 28th February 2015.) |
*Shri. Gulshan Rai Jain (DIN 00737177) Independent Director has since resigned w.e.f31st January 2015 and Shri Joginder Pal Jain (DIN :001190482)Independent Directorresigned earlier w.e.f Ist October 2014.
**Shri Darshan Kumar Jain passed away on 13th November 2014. Ratio(s) calculated onannualized basis. c. The percentage increase in the median remuneration of employees inthe Financial Year : 28.67% d. The number of permanent employees on the rolls of theCompany: 225 e. The explanation on the relationship between average increase inremuneration and Company performance:
On an average employees received an annual increase varying from 8 to 20% in a year.The individual increments varied based on individual performance. The increase inremuneration is in line with the market trends of nature of our business/industry segment.
In order to ensure that remuneration reflects Company performance the performance payis also linked to organization performance apart from an individual s performance.
f. Comparison of the remuneration of the key managerial personnel against theperformance of the Company:
|Aggregate remuneration of Key Managerial Personnel (KMP) in FY 15(Rs. in lacs) ||177.89* |
|Revenue from operations(Rs. in lacs) ||11882.87 |
|Remuneration of KMPs (as % of Revenue) ||1.50% |
|Profit before Tax (PBT) ||461.86 |
|Remuneration of KMP(as % of PBT) ||38.51% |
* Gratuity and Leave Encashment not included.
g. Variation in the market capitalization of the Company price earnings as at theclosing date of the current financial year and previous financial Year:
|Particulars ||As at March 31 2015 ||As at March 31 2014 ||% Change |
|Market Capitalisation (Rs. Lacs) ||7411 ||2243 ||230% |
|Price Earning Ratio ||19.46 ||8.2 ||137% |
h. Percentage increase over decrease in the Market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer:
|Particulars ||Closing Market Price as at March 31 2015 ||Issue Price of last Public Offer in March1995 ||% Change |
|Market Price on BSE ||RS. 178.1 ||Rs. 40/- per Share of Face Value of Rs. 10/- each. ||345% |
|Market Price on DSE ||Delhi Stock Exchange Association Limited is not in operation || || |
i. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the Managerial remuneration:- Averagepercentile increase made in the employees remuneration other than Managerial Personnel inthe last FY 2014-15 was approximately 10.8% -20% compare to the percentile increase of8.33% to 10.34% in the remuneration of Managerial Personnel.
Remuneration of Managerial Personnel was as per the Remuneration Policy of the Company.
j. Comparison of each remuneration of the key managerial personnel against theperformance of the Company:
|Revenue from operations (Rs. Lacs) ||11882.87 |
|Profit before Tax (PBT) (Rs. Lacs) ||461.87 |
| ||Shri. Devinder Kumar Jain ||Shri. Narinder Kumar Jain ||Shri. Darshan Kumar Jain ||Shri. Arun Jain ||Shri. Manish Jain ||Shri. Pankaj Jain ||Shri. Neeraj Jain |
|Remuneration in FY 14-15 (Excluding Gratuity and Leave encashement) (Rs. in lacs) ||29.82 ||29.78 ||20.18* ||24.64 ||24.22 ||24.40 ||24.05 |
|Remuneration as % of Revenue ||0.25% ||0.25% ||0.17% ||0.21% ||0.20% ||0.21% ||0.20% |
|Remuneration (as % of PBT) ||6.46% ||6.45% ||4.37% ||5.34% ||5.24% ||5.28% ||5.21% |
*for the Period 1.4.2014 to 13.11.2014
Note : Gratuity and Leave Encashment not included.
k. The key parameters for any variable component of remuneration availed by thedirectors: None
l. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year: None
m. Affirmation that the remuneration is as per the remuneration policy of the Company:The Company affirms remuneration is as per the remuneration policy of the Company
n. The statement containing particulars of employees as required under Section 197(12)of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014- Not Applicable .
The report and the accounts are being sent to the members excluding the aforesaidannexure since Not Applicable .
As per Clause 49 of the listing agreements entered into with the stock exchangescorporate governance report along with Certificate by Practicing Company Secretary thereonand management discussion and analysis are attached which form part of this report.
Details of the familiarization programme of the independent directors are available onthe website of the Company (URL: http://cosco.in/code_of_conduct.htm).
Policy on dealing with related party transactions is available on the website of theCompany
The Company has formulated and published a Whistle Blower Policy to provide VigilMechanism for employees including directors of the Company to report genuine concerns. Theprovisions of this policy are in line with the provisions of the Section 177(9) of the Actand the revised Clause 49 of the Listing Agreements with stock exchanges (URL:http://cosco.in/policies.html
Deposits from public
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required by the Companies (Matters to be included in the Report of Board ofDirectors) Rules 2014 the relevant information and data is given in Annexure- D annexedhereto and form part of this Report.
Pursuant to the provisions of section 148 of the Companies Act 2013 M/s Ashish Jain& Co. Cost Accountants were appointed Cost Auditors of the Company to conduct auditof Cost Accounting Records of the Company for the Financial Year 2014-15. However as perthe amended Companies (Cost Records and Audit) Rules 2014 Cost Audit is not applicableto our Company
DEMATERIALISATION OF SHARES
The Company shares are being dealt in dematerialized form. Shareholding of thePromoters / Promoter Group has been substantially dematerialized.
Your Company is listed with Stock Exchanges at Mumbai and Delhi. Annual Listing fee forthe Financial Year 2014-15 and 2015 2016 paid to Bombay Stock Exchange Limited. No feespaid to Delhi Stock Exchange Limited since DSE is non functional.
Your Company has taken adequate steps to ensure that mandatory provisions of CorporateGovernance as provided in the listing agreement of the Stock Exchanges with which theCompany s shares are listed are duly complied with.
Report on Corporate Governance along with Certificate by Practicing Company Secretaryon compliance with the condition of Corporate Governance under clause 49 of the ListingAgreement and Nomination & Remuneration Policy is annexed hereto as part of thisreport as Annexures E1 E2 & E3 respectively.
Report on Management Discussion and Analysis is annexed hereto as Annexure F and formpart of this report.
The Company lays emphasis on all round development of its human resource. Theindustrial relations remained cordial during the year.
Your Directors wish to place on record their sincere appreciation for the contributionmade to the organization by Executives Staff and Workers of the Company. The Managementalso place on record their appreciation for the confidence reposed by the Stakeholders.The Directors acknowledge with thanks the continuous support and co-operation receivedfrom Bankers Statutory and Internal Auditors Customers Suppliers Vendors GovernmentAuthorities and Regulators.
| ||By order of the Board of Directors |
| ||Devinder Kumar Jain |
| ||Managing Director and CEO |
| ||DIN : 00191539 |
| ||Narinder Kumar Jain |
| ||Managing Director |
| ||DIN : 00195619 |
|Registered Office : || |
|2/8 Roop Nagar || |
|Delhi -110007 || |
|Place: Delhi || |
|Date: 12th August 2015 || |