THE MEMBERS 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 201 7.
(Rs. in Lacs)
|FINANCIAL RESULTS ||2016-17 ||2015-16 |
|Sales ||7053.42 ||6333.16 |
|Other Income ||67.80 ||92.44 |
|Profit /(Loss)before depreciation & tax ||278.26 ||374.32 |
|Depreciation ||399.27 ||369.16 |
|Exceptional item ||- ||- |
|Profit/(Loss) before Tax ||(121.02) ||5.16 |
|Provision for current Tax ||- ||- |
|Provision for earlier Year ||- ||2.44 |
|Profit/(Loss) after current Tax ||(121.02) ||2.72 |
|Provision for deferred tax ||(39.45) ||2.40 |
|Profit/(Loss) After Deffered Tax ||(81.57) ||0.32 |
|Add:-Mat Credit Entitlement || || |
|Add: Balance brought forward ||233.25 ||232.93 |
|Less:-Transfer to Preference Share Capital ||- ||- |
|Redemption Reserve ||- ||- |
|Add:- Transfer from General Reserve ||- ||- |
|Profit/(Loss) available for appropriation ||(151.68) ||233.25 |
|Provision for arrears off Dividend on ||- ||- |
|Cumulative Redeemable Preference Shares || || |
|Proposed Dividend on Cumulative ||- ||- |
|Redeemable Preference Shares || || |
|Corporate Tax on Dividend ||- ||- |
|Balance carried to Balance Sheet ||151.68 ||233.25 |
| ||151.68 ||233.25 |
2. REVIEW OF OPERATIONS
For the year ending 31st March 2017 sales increased to Rs 7053.42Lacs as compared to Rs. 6333.16 Lacs for previous year.
Net loss for the year is Rs. 121.02 lacs as compared to Net Profit before taxRs. 5 lacs in the 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 31 201 7.
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 Auditors confirming compliance of theCorporate Governance norms as stipulated in the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") 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 CEO and CFO Certificate forming part of the Corporate Governance Report furtherconfirms the existence and effectiveness of internal controls and reiterates theirresponsibilities to report deficiencies to the Audit Committee and rectify the same.
Mr. Ashok Jaipuria is the Non Executive-Chairman of the Company.
Mr. Anil Kumar Jain Non-Independent and NonExecutive Director of the Company retiresby rotation and being eligible offer himself for reappointment at the ensuing AnnualGeneral Meeting.
(c) Status of Directors
Mr. Ambrish Jaipuria is the Executive Director & CEO of the Company. Mr. Anil KumarJain is NonIndependent and Non-Executive Director. Mr. Shreekant Somany Mr. RakeshNangia Mr. Naresh Kumar Gupta Ms. Jyoti Dixit Dr. Ramakant Dwivedi and Mr. JanardhanPralhadrao Gupta are the Independent Directors of the Company.
(d) Declaration from Independent Directors
The Company has received declarations from all
the Independent Directors of the Company confirming that they meet with the criteria ofindependence as prescribed both under subsection (6) of Section 149 of the Companies Act2013 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 Ms. Neha Pawar Company Secretary are the Key Managerial Personnel of theCompany in accordance with the provisions of Section 2(51) 203 of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.During the year under review there was no change in the KMP's 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.
The Chairman also has one to one discussion with the newly appointed Director tofamiliarize him with the Company's operations. Further the Company has put in place asystem to familiarize the Independent Directors about the Company its products businessand the on-going events relating to the Company The details of the familiarisationprogramme 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 four (4) 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 201 3 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 - C tothis 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 30 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 Risk &Operations Management Committee has been entrusted with the responsibility to assist theBoard members about the risk assessment 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. B.K. Shroff & Co. Chartered Accountants the existing Statutory Auditorswould retire from the conclusion of ensuing Annual General Meeting of the Company andshall not eligible for reappointment asper the provisions of rotation of Auditors underCompanies Act2013.
The Company has received a letter from M/s. S.K Mittal & Co. Chartered AccountantsNew Delhi expressing their willingness to be appointed as statutory auditors of theCompany and further confirmed that their appointment if made will be in compliance withprovisions of Section 141(3) (g) of the Companies Act 2013. The Board has proposed toappoint M/s. S.K Mittal & Co. Chartered Accountants (Firm Reg. No. 500063N) asstatutory Auditors of the Company for a tenure of 5 years (from the conclusion offorthcoming 31st Annual General Meeting to be held in calendar year 2017 to 36th AnnualGeneral Meeting to be held in calendar year 2022)
Pursuant to the Provisions of Section 204 of the Companies Act 201 3 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 Report of the Secretarial Audit is annexed herewith as "Annexure B." TheReport does not contain any qualification reservation or adverse remark.
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 2017-18 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.
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 2017- 18to the Bombay Stock Exchange where the Company's equity shares are listed.
28. PROMOTION OF WOMEN'S WELL BEING AT WORKPLACE
As required by the Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013 the Company has formulated and implemented a policy onprevention of sexual harassment at workplace with a mechanism of lodging complaints.During the year under review no complaints were reported to the Board.
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.
Particulars of the Employees pursuant to section 197(12) of the Companies Act 2013real with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is enclosed as Annexure E to this Report.
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 2017 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.
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 |
|New Delhi ||Chairman |
|11th August 2017 || |