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COSCO (India) Ltd.

BSE: 530545 Sector: Others
NSE: N.A. ISIN Code: INE949B01018
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VOLUME 3346
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P/E 37.26
Mkt Cap.(Rs cr) 116
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OPEN 269.00
CLOSE 269.90
VOLUME 3346
52-Week high 308.55
52-Week low 127.00
P/E 37.26
Mkt Cap.(Rs cr) 116
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

COSCO (India) Ltd. (COSCOINDIA) - Director Report

Company director report

Dear Members

Your Directors have pleasure in submitting their 37 Annual Report together with theAudited Financial Statements for the year ended 31 March 2016.

FINANCIAL RESULTS

PARTICULARS CURRENT YEAR ENDED 31-03-2016 PREVIOUS YEAR ENDED 31-03-2015
(R in Lacs) (R in Lacs)
Revenue from operations 12579.79 11882.87
Other Income 13.99 31.22
Total Revenue 12593.78 11914.09
Total Expenses 12099.14 11452.86
Profit before Prior Period Exceptional and 494.64 461.23
Extraordinary item and Tax
Exceptional items-charge/(income) (1.47) (0.63)
Profit before Extraordinary items and Tax 496.11 461.86
Extraordinary items - -
Profit before Tax 496.11 461.86
Tax Expenses/(Income) :
Current Tax 186.88 116.97
Earlier Year Taxation (18.41) -
Deferred Tax (7.31) (35.66)
Profit for the period from continuing operations 334.95 380.55

COMPANY'S PERFORMANCE AND STATE OF AFFAIRS FOR FINANCIAL YEAR 2015-16

The Revenue from Sale of Products (net of excise) for the current year ended 31.03.2016was higher at R 12537.61 Lacs against previous year's sales of R 11753.56 Lacs registeringa moderate growth of about 6.67 % over the previous year. The exports were lower at R243.18 Lacs (previous year R 353.56 lacs) in f.o.b. value terms. The Revenue from servicesfor the current year amounted to R 4.52 Lacs (Previous year R 5.25 Lacs). The otherOperating Income was also lower at R 37.64 Lacs (Previous Year R 124.06 Lacs) comprisingof mainly Export Incentives viz. Duty Drawback & PFSL R 29.98 Lacs (Previous Year R45.02 Lacs). The Other operating income was lower due to Nil Royalty income during theCurrent year (Previous year R 65.25 Lacs). During the current year ended 31.03.2016 theCompany registered Profit before Finance Cost Depreciation and Tax R 967.89 Lacs(Previous year R 942.09 Lacs) Profit before Tax R 496.11 Lacs (Previous Year R 461.87Lacs) and Net Profit after Tax R 334.95 Lacs (Previous Year R 380.55 lacs). The Net Profitafter Tax was lower due to higher Current Tax Provision during the year. The Company inearlier few years has shown consistent double digit growth in gross revenues due to gooddomestic demand. However inspite of stagnancy in the market the company's performanceduring the year under review was stable .Management is hopeful for better performance inthe upcoming Financial year.

The Net Worth of the Company as at 31.03.2016 was R. 2486.56 Lacs (Previous Year R2201.69 Lacs).

The Company manufactures/source internationally at competitive prices quality productsdevelop/source new products on regular basis and is expanding its product range in itsendeavor to improve top line as well as net margins. The Company is also focusing onfurther strengthening the marketing network. The Management is continuously takingeffective steps to enhance 'COSCO' Brand Value which is well established in the Domesticmarket.

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 CompensationTribunal vide its letter Ref: Com T/01/27 dated 08.12.2015 has allowed compensation ofLKR 48000000 (Equivalent INR 21657600) and after deducting LKR 1674361.66 due forBoard of Investment (BOI) of Sri Lanka as at the date of vesting the net compensationpayable is LKR 46325638.34 (Equivalent INR 20902128). The amount is yet to be releasedand the same shall be credited to Liquidator since Cosco Polymer Lanka (Private) Ltd. hasbeen ordered to be wound up by the Hon'ble High Court of the Western Province (ExercisingCivil Jurisdiction in Colombo (Sri Lanka)- Case Ref. No. HC (Civil) 40/2013(CO). Themanagement does not expect any net realisable value of its investment in the erstwhilesubsidiary.However realisation if any shall be accounted for in the year of actualreceipt.

"Consolidated Financial Statements" as per Accounting Standard 21 issued bythe Institute of Chartered Accountants of India have not been prepared since the companyis under liquidation.

DIVIDEND

Based on the Company's performance your Directors declared interim dividend of R 1 perequity share (face value of R 10 each) in its Board Meeting held on 12 August 2015 duringthe Financial year 2015-16 (Previous Year Nil). It involved Dividend pay out of R 41.61lacs (Previous Year Nil) and Dividend Distribution Tax R 8.48 lacs (Previous Year Nil). Inlieu of this Board does not recommend any further dividend by considering the interimdividend as final dividend.

TRANSFERS TO RESERVES

The opening balance of General Reserve is R 1125.16 and same is retained on 31.03.2016.No other amount has been transferred to General Reserve. The current year's net profit ofR 334.95 lacs (Previous year R 380.85 lacs) has been retained in Surplus in the Statementof 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 31 March 2016 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 31 March 2016 and of the profit ofthe Company for the year ended on that date;

iii. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

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

Mr. Pankaj Jain (DIN: 00190414) and Mr. Manish Jain (DIN: 00191593) Directors of theCompany retire by rotation at the ensuing Annual General Meeting and being eligibleoffer themselves for re-appointment. Board recommends their reappointment.

Pursuant to the provisions of section 203 of the Act the key managerial personnel ofthe Company are: -

Shri Devinder Kumar Jain (DIN: 00191539) - Managing Director and Chief ExecutiveOfficer of the company and Shri Narinder Kumar Jain (DIN: 00195619) - Managing Director ofthe Company who were reappointed for a period of Three (3) years with effect from 16March 2016 till 15 March 2019 in the last Annual General Meeting held on 30th September2015. Shri Arun Jain (DIN:01054316) Shri Manish Jain (DIN: 00191593) Shri Pankaj Jain(DIN: 00190414) and Shri Neeraj Jain (DIN: 00190592) who were re-appointed as Whole TimeDirectors of the Company w.e.f 01 October 2014 for a term of 3 Years in the Annual GeneralMeeting of the Company held on 30th September 2014. Ms. Sudha Singh -Company Secretarywho was appointed w.e.f 1 May 2015.

During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company other than the payment of sitting fees andreimbursement of expenses if any incurred by them for the purpose of attending meetingsof the Company. The Company has received declarations from all the Independent Directorsto this effect that each of them meets the criteria of independence as provided in section149(6) of the Act and there has been no change in the circumstances which may affect theirstatus as independent director during the year.

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 2015-2016 Five (5) 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.

BOARD EVALUATION

The board of directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations").

The performance of the board was evaluated by the board after seeking inputs from allthe directors on the basis of the criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.

The board and the nomination and remuneration committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. In aseparate meeting of independent directors performance of non-independent directorsperformance of the board as a whole and performance of the Managing Directors wereevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the board its committees andindividual directors was also discussed.

Performance evaluation of independent directors was done by the entire board excludingthe independent director being evaluated.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Policy of the Company on director's appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters as required under sub-section (3) of Section 178 of the Companies Act2013 is available on the Company website www.cosco.in . There has been no change in thepolicy since the last financial year. We affirm that the remuneration paid to theDirectors is as per the terms laid out in the Nomination and Remuneration policy of theCompany.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has internal control systems inter alia including system of internalfinancial controls commensurate with the size and scale of its business operations. Thesystem of internal financial control strives to ensure that all transactions areevaluated authorized recorded and reported accurately and that all assets aresafeguarded and protected against losses that may arise from unauthorized use ordisposition. Based on the framework of internal financial controls and compliance systemsput in place by the Company and the reviews performed by management and the auditcommittee the board is of the opinion that the Company's internal financial controls wereadequate and effective during the financial year 2015-16.

The details in respect of internal control and their adequacy included in themanagement discussion & analysis forms part of this report.

AUDIT COMMITTEE

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 is available on the Company website www.cosco.in . Therehas been no change in the policy since the last financial year.

AUDITORS

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 Annual General Meeting (AGM) held on30 September 2014 from the conclusion of that Annual General Meeting of the Company for aTerm of 3 years i.e. till the conclusion of 38 Annual General Meeting to be held in theYear 2017 subject to ratification of their appointment at every AGM. The Company hasreceived a certificate from the Auditors to the effect that ratification of theirappointment if made shall be in accordance with the provisions Section 141 of the Act.The Board recommends ratification of their Appointment as Statutory Auditors of theCompany.

INDEPENDENT AUDITORS' REPORT

The Auditors' Report do not contain any qualifications reservations adverse remarksemphasis of matter or disclaimer which needs any comments/ explanation.

SECRETARIAL AUDITORS' REPORT

Report of the Secretarial Auditor is given as an Annexure-A which forms part ofthis Report. 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. No additional Loans Guarantees or Investment covered under theprovisions of Section 186 of the Companies Act 2013 are given provided / made during thereporting year.

TRANSACTIONS 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 inAnnexure-B in Form AOC 2 and the same form part of this report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND DATE OF REPORT

There are no material changes affecting the affairs of the company which have occurredbetween the end of the financial year of the company to which the financial statementsrelate and the date of this report.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of the business during the financial year underreview.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of section 135 of the Companies Act 2013 are not applicable to ourcompany for the year ended 31.03.2016.

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Act the extract of Annual Return is given in Annexure-Cin 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 27:1
Shri Narinder Kumar Jain 27:1
Mr. Arun Jain 23:1
Mr. Manish Jain 23:1
Mr. Pankaj Jain 23:1
Mr. Neeraj Jain 23:1
Non Executive Directors Ratio to median remuneration
Shri Mahavir Prasad Gupta
Not Applicable
Shri Mohan Lal Mangla (Independent Directors are paid only sitting fees and reimbursement of expenses
Shri Sunil Kumar Jain
if any for attending Board Meetings.
Shri Vijender Kumar Jain No other Remuneration has been paid to the Independent Directors).
Smt. Nisha Paul
Shri Vijay Kumar Sood

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 Director-
Shri Devinder Kumar Jain 9.38%
Shri Narinder Kumar Jain 9.38%
Mr. Arun Jain 15.38%
Mr. Manish Jain 15.38%
Mr. Pankaj Jain 15.38%
Mr. Neeraj Jain 15.38%
Independent Directors :-
Shri Mahavir Prasad Gupta
Not Applicable
Shri Mohan Lal Mangla
(Independent Directors are paid only sitting fees and reimbursement of expenses if any for attending
Shri Sunil Kumar Jain
Shri Vijender Kumar Jain Board Meetings. No other Remuneration has been paid to the Independent Directors). Details of Sitting fees paid payable incorporated in Corporate Governance report)
Smt. Nisha Paul
Shri Vijay Kumar Sood
Ms. Sudha Singh
(Company Secretary) Appointed during the year as Company secretary w.e.f. 1 May 2015. No Comparative Figures are available.

c. The percentage increase in the median remuneration of employees in the FinancialYear : (10%)

d. The number of permanent employees on the rolls of the Company: 240

e. 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 2015-16 was approximately 6.33% -18% compare to the percentile increase of9.38% to 15.38% in the remuneration of Managerial Personnel.

Remuneration of Managerial Personnel was as per the Remuneration Policy of the Companyand as approved by the members in the Annual General Meetings as per statutoryrequirements.

f. 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

g. The statement containing particulars of employees as required under Section 197(12)of the Companies Act

2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014-

Top Ten Employees in terms of Remuneration Drawn

Employess Name Designation Remuneration (in a) Nature of employment Qualification Experience (in years) Year of commencement of employment Age Last employment of % of Equity Shares Whether employee is relative of Director or Manger
Shri Devinder Kumar Jain Managing Director and CEO 3322443 Permanent Graduate in B.Sc. 55 1980 78 NA 4.02 Relative of Shri Narinder Kumar Jain Mr. Arun Jain and Mr. Minish Jain
Shri Narinder Kumar Jain Managing Director 3221760 Permanent Graduate and Diploma in International Marketing 50 1989 75 NA 4.02 Relative of Shri Devinder Kumar Jain and Mr. Neeraj Jain
Mr. Arun Jain Whole Time Director 2865808 Permanent B.E. M. Tech 24 2007 50 NA 2.03 Relative of. Shri Devinder Kumar Jain and Mr. Manish Jain
Mr. Manish Jain Whole Time Director 2776322 Permanent Qualified Engineer and MBA 23 1998 49 NA 2.19 Relative of. Shri Devinder Kumar Jain and Mr. Arun Jain
Mr. Pankaj Jain Whole Time Director CFO 2932681 Permanent B.Com and MBA 22 1998 45 NA 5.61 -
Mr. Neeraj Jain Whole Time Director 2772464 Permanent B.E. M.Sc. and MBA 22 1998 44 NA 2.20 Relative of. Shri Narinder Kumar Jain
Mr. Akash Deep Bhtia Marketing Executive 2160000 Contractual Graduate 23 2015 55 NA NIL NA
Ms Sadhana Bhtia Regional Manager 1800000 Contractual Graduate 20 2015 53 NA NIL NA
Mr. Rajesh Kumar Khurana Finance Manger & Head of Accounts 1117709 Permanent B.Com (H) FCA 34 1996 59 NA NIL NA
Ms Renu Vats Chief Cashier 623321 Permanent Graduate 32 1983 55 NA NIL NA

* Gratuity not included. h. Name of other employees as required under Section 197(12)of the Companies Act 2013 read with Rule 5(2) of thea Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and Companies (Appointment andRemuneration of Managerial Personnel) Amendment Rules 2016 of the Companies Act 2013 -Nil.

DISCLOSURE REQUIREMENTS

As per SEBI Listing Regulations corporate governance report with auditors' certificatethereon and management discussion and analysis are attached which form part of thisreport.

Details of the familiarization programme of the independent directors are available onthe website of the Company (URL:http://www.cosco.in/uploads/investors/familiarisation-programme-independent-directors15586272395.pdf) Policy on dealing with related party transactions is available on thewebsite of the Company (URL:http://www.cosco.in/uploads/investors/related-party-policy_86228442984.pdf)

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 as per (Listing Obligations and Disclosure Requirements) Regulations 2015("SEBI Listing Regulations")

(URL:http://www.cosco.in/uploads/investors/whistle_blower_policy_cosco_88209735742.pdf)

Directors of the Company state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

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.

COST AUDITORS

As per the Companies (Cost Records and Audit) Rules 2014 as amended by the Companies(Cost Records and Audit) Amendments Rules 2014 and 2016 the maintenance of Cost Recordshas not been specified by the Central Government and as such 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.

LISTING

Your Company is listed with Stock Exchanges at Mumbai and Delhi. Annual Listing fee forthe Financial Year 2015-16 and 2016 2017 paid to Bombay Stock Exchange Limited. No feespaid to Delhi Stock Exchange Limited since DSE is non functional.

CORPORATE GOVERNANCE

Your Company has taken adequate steps to ensure that mandatory provisions of 'CorporateGovernance' as provided in the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015/ Listing Agreement of the Stock Exchange with which the Company's sharesare listed and as per the provisions of Companies Act 2013 are duly complied with.

Report on 'Corporate Governance' along with 'Certificate by Practicing CompanySecretary' on compliance with the condition of Corporate Governance under clause 49 of theListing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is annexed hereto as part of this report as Annexures 'E1 & E2respectively.

Report on Management Discussion and Analysis is annexed hereto as Annexure 'F'and form part of this report.

INDUSTRIAL RELATIONS

The Company lays emphasis on all round development of its human resource. Theindustrial relations remained cordial during the year.

ACKNOWLEDGEMENTS

The Directors acknowledge with thanks the continuous support and co-operation receivedfrom Bankers Statutory and Internal Auditors Customers Suppliers Vendors GovernmentAuthorities and Regulators. Your Directors wish to place on record their sincereappreciation for the contribution made to the organization by Executives Staff andWorkers of the Company. The Management also place on record their appreciation for theconfidence reposed by the Stakeholders.

The directors appreciate and value the contributions made by every member of the Cosco(India) Limited.

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
th
Dated: 12 August 2016