Your Directors have pleasure in presenting the 42nd Board's Report along with theBalance Sheet the Statement of Profit and Loss the Statement of Changes in Equity andthe Statement of Cash Flows for the financial year ended March 31st 2021.
|PARTICULARS ||CURRENT YEAR ENDED 31-03-2021 ||PREVIOUS YEAR ENDED 31-03-2020 |
|Revenue from operations ||14799.28 ||13382.01 |
|Other income ||91.40 ||53.81 |
|Total revenue ||14890.68 ||13435.82 |
|Total Expenses before Depreciation & amortisation expenses and Finance costs ||13698.45 ||12627.51 |
|Profit before depreciation & amortisation ||1192.23 ||808.31 |
|Finance costs and Tax expense || || |
|Less: Depreciation / Amortisation / Impairment ||152.06 ||146.33 |
|Profit before Finance costs and Tax expense ||1040.17 ||661.98 |
|Less Finance costs ||408.15 ||440.20 |
|Profit before Tax expenses ||632.02 ||221.78 |
|Tax expenses : || || |
|Current tax ||178.02 ||84.08 |
|Tax adjustment related to earlier years ||- ||2.49 |
|Deferred tax charges/(Credit) ||3.20 ||(45.51) |
|Total Tax: ||181.22 ||41.06 |
|Profit for the period from continuing operations ||450.80 ||180.72 |
|Other Comprehensive Income (Net of Income tax) || || |
|) Item that will not be reclassified to profit or (loss) ||0.57 ||(1.25) |
|ii) Income tax relating to items that will not be reclassified to profit or (loss) ||(0.14) ||0.34 |
|Total Comprehensive income for the year ||451.23 ||179.81 |
COMPANY'S PERFORMANCE AND STATE OF AFFAIRS FOR FINANCIAL YEAR 2020-21
The Revenue from Sale of Products for the current year ended 31.03.2021 was 14747.02Lakhs against previous year's sales of 13338.38 Lakhs registering growth in doubledigit of about 10.56 % over the previous year. The exports were lower at 214.61 Lakhs(Previous year 311.63 Lakhs) in F.O.B value terms. The Revenue from services for thecurrent year amounted to 3.51 Lakhs (Previous year 6.78 Lakhs). Other Operating Income was48.75 Lakhs (Previous Year 36.85 Lakhs) which includes Export Incentives viz. DutyDrawback 3.88 Lakhs (Previous Year 5.24 Lakhs) & PFSL 4.62 Lakhs (Previous Year 17.64Lakhs).
The Covid19 pandemic has caused significant disturbance and slowdown of economicactivities globally. FY 2020-21 has been an unprecedented year in modern times with theCOVID-19 pandemic impacting human life extensively across the globe. The adverse impact ofthe Covid pandemic on the economic front too has been significant. The slowdown acrosseconomies witnessed in 2019 exacerbated further in 2020 by the shock delivered by thepandemic. As a result the global GDP is believed to have contracted by 3.3% in 2020 withall major economies moving into negative territory.
The Indian economy too witnessed similar stress with the nationwide lockdown from endMarch 2020 bringing business activities to a standstill for the major part of April andMay 2020. Revenues and savings declined and unemployment had risen. India's real grossdomestic product (GDP) which had slumped to 4.2 per cent in 2019-20 the lowest since2009-10 further contracted by 7.3% in 2020-21. An accommodative monetary policy from theReserve Bank of India (RBI) and fiscal policy interventions by the Central Governmentcoupled with the gradual reopening of the economic activities from June 2020 onwards haveled to a sequential recovery in economic output. The situation gradually stabilized andshowed improvement. As indicated by provisional estimates released by the NationalStatistical Office (NSO) India posted a V-shaped recovery in the second half of FY21. Asper these estimates India registered an increase of 1.1% in the second half of FY21; thiswas driven by the gradual and phased unlocking of industrial activities increasedinvestments and growth in government expenditure and financial assistance of theGovernment.
Our company's operations were also impacted by the COVID-19 pandemic during the firsttwo quarters of the FY 2020-21 resulting in loss of revenue. Inspite of the lockdown inthe first quarter and restrictions of outdoor activities the total turnover of thecompany has registered an increase of 10.56% during FY 2020-21 as compared to the Previousyear 2019-20 mainly due to increase in the sales of company's health & fitnessproducts. This along with reduction of administrative and selling expenses has resulted inincrease in PBT of 410.24 lakhs.
The pace of global recovery appears to be moderating with the resurgence of infectionsin several parts of the world especially from the delta variant of the virus. Countriesthat are ahead in vaccination and have been able to provide or maintain policy stimulusare rebounding strongly. Growth in other economies remains subdued and vulnerable to newwaves of infections. There has been a slowing of momentum in global trade volumes inQ2:2021.
On the domestic front due to Lockdown/restrictions in many states in the second waveof Covid19 during April and May 2021 there has been reduction in the business operationsof the company in terms of production and sales. Economic activity picked up pace inJune-July with easing of pandemic containment measures.
Government initiated various measures in FY 2020-21 to boost the economy includingdirect benefit transfer increased allocations to key sectors like infrastructureagriculture MSMEs etc. During the current year Reserve Bank of India has kept repo ratestable at 4% after reducing it by 185 bps on a cumulative basis over a period and takenmeasures to support the aggregate demand and private investment as well as ease liquiditygiven the COVID-19 situation. The reduced corporate tax rate is a big boost to theindustry; it makes India much more competitive globally and is facilitating higherinvestments in the economy.
There is consistent demand of Sports goods and Health & Fitness goods fromIndividuals and Households. It is expected that in the second half of the current year thesales revenue shall be progressive. The management is optimistic that the company duringthe current year will keep the pace of growth with better profitability and will be on thegrowth path in the subsequent years.
'COSCO' is a leading brand in the Sports and Fitness segment in the domestic market.The Management is continuously taking effective steps to further boost 'COSCO' BrandValue. The Company manufactures/source internationally at competitive prices qualityproducts and develop/source new products on regular basis. The Company is expanding itsproduct range of quality products and the marketing network in its endeavor to improve topline as well as net margins. The company has also initiated steps for production of someof substitutes under 'Aatma Nirbhar Bharat Abhiyan'.
The company is closely monitoring the impact of Covid19 and is hopeful that there wouldnot be any impact on the recoverability of carrying amount of the assets. Given theuncertainties regarding the third wave the final impact of company's assets may differfrom the estimated as at the date of approval of these financial results.
Our strategic objective is to build a sustainable and resilient organization thatremains relevant to the agenda of our clients while creating growth opportunities for ouremployees generating profitable returns for our investors and contributing to thecommunities that we operate in. The Company has not laid off any employee due to Covid-19pandemic situation. The Management focused to ensure health and well being of all itsEmployees and has taken all necessary safety measures to run the organization.
The Net Worth of the Company as at 31.03.2021 was 4372.18 Lakhs (Previous Year3920.95 Lakhs).
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 480 lakhs (Equivalent INR 204.66 lakhs) and after deducting LKR 16.74 lakhs ( due forBoard of Investment (BOI ) of Sri Lanka as at the date of vesting the net compensationpayable is LKR 463.26 lakhs (Equivalent INR 197.52 lakhs) . The amount is yet to bereleased and the same shall be credited to Liquidator since Cosco Polymer Lanka (Private)Ltd. has been ordered to be wound up by the Hon'ble High Court of the Western Province(Exercising Civil Jurisdiction in Colombo (Sri Lanka)- Case Ref. No. HC (Civil)40/2013(CO). The management does not expect any net realisable value of its investment inthe erstwhile subsidiary. However realisation if any shall be accounted for in the yearof actual receipt.
"Consolidated Financial Statements" as per Accounting Standard 21/Ind AS 110issued by the Institute of Chartered Accountants of India have not been prepared sincethe company is under liquidation.
Board does not recommend any dividend for Financial Year 2020-21 to consolidatefinancial position of the Company.
TRANSFERS TO RESERVES
The opening balance of General Reserve is 1125.17 Lakhs and same is retained on31.03.2021. The Board of Directors of your company has decided not to transfer any amountto the Reserves for the year under review. The balance in Retained earnings 2528.56 Lakhs(Previous year 2077.76) includes Current year's Net Profit from continuing operations450.80 Lakhs (Previous year 180.72 Lakhs). .
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 2021 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 2021 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 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 generally such internal financial controls are adequate and operatingeffectively; 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.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company the work performed by the internal statutoryand secretarial auditors and external consultants including the audit of internalfinancial controls over financial reporting by the statutory auditors and the reviewsperformed by management and the relevant board committees including the audit committeethe Board is of the opinion that the Company's internal financial controls were adequateand effective during FY 2021 and shall take needful effective steps / corrective measuresin some areas which need improvement as reported by the Auditors
DIRECTORSAND KEY MANAGERIAL PERSONNEL
In accordance with provisions of the Act and the Articles of Association of theCompany Mr. Arun Jain (DIN: 01054316) Director of the Company retire by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment.Board recommends his reappointment.
Ms. Tejal Jain has been appointed by Board as an Independent Director of the Companynot liable to retire by rotation to fill the casual vacancy caused by the death of ShriVijay Kumar Sood Independent Director. This term of the office of Ms. Tejal Jain shall betill 30th September 2022 the date upto which Late Shri Vijay Kumar Sood would have heldoffice.
She is a qualified Chartered Accountant having experience of around 9 years postqualification. She has knowledge of finance taxation and corporate laws and hasexperience for providing financial taxation and legal consultancy. Her professionalexperience will add expertise in the specified areas integrity and proficiency in theoverall management of the Company. The Board recommends her appointment to theshareholders. The notice convening the 42nd AGM to be held on September 30th 2021 setsout the details.
The term of appointment of Shri Devinder Kumar Jain (DIN:00191539) as Managing Directorand Chief Executive Officer of the Company and Shri Narinder Kumar Jain(DIN:00195619) asManaging Director of the Company expires on 15th March 2022. The Board recommends theirreappointment as Managing Directors and CEO and Managing Director respectively of theCompany for further period of Three (3) years w.e.f. 16th March 2022 to 15th March 2025upon the remuneration terms & conditions as set out in the Notice of the 42nd AnnualGeneral Meeting and approved by the Nomination & Remuneration Committee as per theprovisions of the Companies Act 2013 & Schedule V of the Companies Act 2013 andRules framed thereunder. The proposed Special Resolution(s) seeking approval of theMembers for the re-appointment and remuneration of Shri Devinder Kumar Jain and ShriNarinder Kumar Jain have been incorporated in the 42nd notice of the forthcoming AnnualGeneral Meeting of the Company at item no. 4 and 5 along with the brief details about themand relevant disclosures.
Pursuant to SEBI LODR the fees or compensation payable to Executive Directors who arepromoters or members of the promoter group shall be subject to the approval of theshareholders by Special Resolution(s) in a General Meeting if the annual remunerationpayable to such Executive Director exceeds 5 Crore or 2.5% of the net profits of theCompany whichever is higher; or where there is more than one such director the aggregateannual remuneration to such directors exceeds 5% of the net profits of the Company.Accordingly in compliance with SEBI (LODR) Regulation 2015 the proposed SpecialResolution(s) have been incorporated at Item No. 67 8 and 9 in the 42nd AGM Notice forthe ratification/approval of the Members for remuneration paid to the Whole TimeDirector(s) namely Mr. Arun Jain (DIN:01054316) Mr. Manish Jain (DIN:00191593) Mr.Pankaj Jain (DIN:00190414) and Mr. Neeraj Jain (DIN:00190592) during the financial year2020-21 and for the current period till 30th September 2021 and remuneration payable tothem for their current term of appointment.
The approval of the members to the proposed special resolution(s) set out at Item No.678 and 9 of this Notice shall also cover the requirements of SEBI LODR mentioned above.
The disclosures required pursuant to Regulation 36 of the SEBI Listing Regulations andthe SS-2 on General Meeting are given in the Notice of Annual General Meeting ('AGM')forming part of the Annual Report.
Pursuant to the provisions of section 203 of the Companies Act 2013 the keymanagerial personnel of the 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 of the Company.
Mr. Pankaj Jain (DIN:00190414) Whole Time Director and CFO of the Company.
Ms. Sudha Singh -Company Secretary w.e.f 1st May 2015.
Pursuant to the provisions of Section 149 of the Companies Act 2013 which came intoeffect from April 1st 2014 Shri Mahavir Prasad Gupta (DIN 00190550) Shri Sunil Jain(DIN 00387451) Shri Mohan Lal Mangla (DIN 00311895) Shri Vijender Kumar Jain (DIN06423328) Shri Vijay Kumar Sood* (DIN 01525607) and Ms. Nisha Paul (DIN 00325914) werereappointed for their 2nd Term as Independent Directors of the Company w.e.f 1st October2017 to 30th September 2022 at the Annual General Meeting of the Company held on 29thSeptember 2017 for a term of 5 years. The terms and conditions of appointment ofIndependent Directors are as per Schedule IV of the Companies Act 2013.
*Shri Vijay Kumar Sood (DIN01525607) Non Executive and Independent Director of Companyhas passed away on 28th April 2021 and Ms. Tejal Jain appointed as IndependentDirector to fill the casual vacancy caused by the death of Shri Vijay Kumar Sood as statedherein above.
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.
All Independent Directors of the Company have given declarations under Section 149(7)of the Act that they meet the criteria of independence as laid down under Section 149(6)of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. In terms ofRegulations 25(8) of the Listing Regulations the Independent Directors have confirmedthat they are not aware of any circumstance or situation which exists or may bereasonably anticipated that could impair or impact their ability to discharge theirduties with an objective independent judgement and without any external influence.
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 2020-2021 Five (5) Board Meetings and Four (4) 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.
Pursuant to the provisions of Section 134 (3) (p) of the Companies Act 2013 and theRules made thereunder the Board required to carry out the Annual Performance Evaluationof the Board its Committees and individual Directors. Additionally as per provision ofRegulation 17 (10) of SEBI (LODR) Regulations 2015 the performance evaluation of theIndependent Directors was also to be done by the Board of Directors. Accordingly TheBoard of Directors has carried out an annual evaluation of its own performance BoardCommittees and individual Directors including the Independent Directors (wherein theconcerned director being evaluated did not participate).
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 thecommittees was evaluated by the Board after seeking inputs from the committee members onthe basis of the criteria such as the composition of committees effectiveness ofcommittee 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 Directors andthe Board as a whole was evaluated. Additionally they also evaluated the Chairman of theBoard taking into account the views of Executive and Non-Executive Directors in theaforesaid meeting. The Board also assessed the quality quantity and timeliness of flow ofinformation between the Company Management and the Board that is necessary for the Boardto effectively and reasonably perform their duties. The above evaluations were thendiscussed in the Board meeting and performance evaluation of Independent Directors wasdone by the entire Board excluding the Independent Director being evaluated.
POLICY ON DIRECTORS'APPOINTMENTAND REMUNERATIONAND OTHER DETAILS
The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act (salient features) has been briefly disclosedhereunder ;
Selection and procedure for nomination and appointment of Directors
The Policy of the Company on Directors' 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
In terms of the provisions of Section 178(3) of the Act and Regulation 19 of the SEBIListing Regulations the NRC has formulated the criteria for determining qualificationspositive attributes and independence of Directors. The key features of which are asfollows: Qualifications The Board nomination process encourages diversity ofthought experience knowledge age and gender. It also ensures that the Board has anappropriate blend of functional and industry expertise.
Positive Attributes - Apart from the duties of Directors as prescribed in the Act theDirectors are expected to demonstrate reasonable standards of ethical behaviorcommunication skills and independent judgment. The Directors are also expected to abide bythe respective Code of Conduct as applicable to them.
Independence - A Director will be considered independent if he / she meets the criterialaid down in Section 149(6) of the Act the Rules framed thereunder and Regulation16(1)(b) of the SEBI Listing Regulations.
The Directors affirm that the remuneration paid to Directors KMPs and employees is asper the Remuneration Policy of the Company.
INTERNAL FINANCIAL CONTROL SYSTEMSAND THEIRADEQUACY
The Company has adequate internal control systems inter alia including system ofinternal financial controls commensurate with the size and scale of its businessoperations. The system of internal financial control strives to ensure that alltransactions are evaluated authorized recorded and reported accurately and that allassets are safeguarded and protected against losses that may arise from unauthorized useor disposition. Based on the framework of internal financial controls and compliancesystems put 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 2020-21. The company will furtherstrengthen its Internal Financial Controls in areas observed by the Auditors.
The Company has adopted accounting policies which are in line with the IndianAccounting Standards notified under Section 133 of the Companies Act 2013 read togetherwith the Companies (Indian Accounting Standards) Rules 2015. These are in accordance withGenerally Accepted Accounting Principles in India. Changes in policies if any areapproved by the Audit Committee in consultation with the Statutory Auditors.
The details in respect of internal control and their adequacy included in themanagement discussion & analysis forms part of this report.
The current Auditors viz. M/s. V.P. Jain & Associates Chartered Accountants (Firmregistration number: 015260N) were appointed by the members at their Annual GeneralMeeting held on 29th September 2017 to hold the office of Auditor from the conclusion ofthe Thirty-Eighth Annual General Meeting till the conclusion of this Forty-Third AnnualGeneral Meeting. The requirement to place the matter relating to appointment of Auditorsfor ratification by members at every AGM has been done away by the Companies (Amendment)Act 2017 with effect from May 7 2018. Accordingly no resolution is being proposed forratification of appointment of Statutory Auditors at the ensuing AGM and a note in respectof same has been included in the Notice for this AGM.
M/s. V.P. Jain & Associates have confirmed their eligibility and qualificationrequired under section 139 and 141 and other applicable provisions of The Companies Act2013 and Rules issued thereunder (including any statutory modification(s) or re-enactmentthereof for the time being in force).
Pursuant to Section 141 of the Act the Auditors have represented that they are notdisqualified and continue to be eligible to act as the Auditors of the Company.
The Auditors' Report do not contain any qualifications or adverse remarks. The opinionof the Auditors is not qualified in respect of matters reported under Emphasis of theMatter .
Auditors have drawn attention to some specific Notes on Financial Statements viz: Noteno. 3.1 regarding possession of land in dispute Note no. 5.3 regarding recoverable amountof land compensation Note no. 8.2 & 8.4 regarding valuation of non moving and slowmoving stock Note no. 9.2 regarding confirmation of trade receivables/trade payables andprovision for expected credit loss Note no. 13.1 regarding reconciliation of GST InputNote no. 19.1 regarding identification of MSME suppliers Note no. 39.3 regarding value ofinvestment in erstwhile subsidiary of company and Note no. 39.4 regarding impact ofCOVID-19 which are self explanatory.
As stated in Note no. 3.1 the possession of Land belonging to the Company bearingKhasra no. 420 total area measuring 1 bigha 19 biswas and 3 biswansi situated at villageGurgaon is in dispute and company has filed a suit for getting possession of the same.Amount of Land Compensation Claim Receivable as per Note no. 5.3 is on account of enhancedcompensation awarded by the Court in respect of acquisition of land of about 325 sq. yardsof factory land and construction by PWD (B&R) Gurugram The company has filed a caseof recovery before Addl. Session Judge Gurugram which is pending. The slow movinginventories are valued at realistic realizable value as per values stated in Note No. 8.2& 8.4 and the Management is taking effective steps to liquidate them. As stated inNote no. 9.2 the Company make provisions for expected credit loss in respect of theoutstanding amounts for more than 3 years instead on the basis prescribed under IndAS 109as in the opinion of the management it is not significant. The GST Input receivable of78.67 Lakhs is under reconciliation with electronic credit ledger balance of 62.61 Lakhsas stated in Note no. 9.2 the appropriate accounting treatment shall be given uponreconciliation. As stated in Note no. 19.1 the information regarding Micro Small andMedium enterprises have been determined to the extent such parties are identified on thebasis of information available with the Company which has been relied upon by theAuditors. The status of the investment in the erstwhile subsidiary has been duly explainedin the within referred Note no. 39.3 on Financial Statements and also hereinabove underCompany's Performance and State of Affairs. Having regard to the factual state of affairsof the erstwhile Subsidiary (Under Liquidation) the Management do not expect any netrealization from its investment in the said Subsidiary. Point no. 39.4 explain the Impactof The outbreak of Covid-19 pandemic which has caused significant disturbance and slowdownof economic activities globally. Impact of the Nationwide lockdown in March/ April 2020and subsequently restrictions on outdoor activities which adversely affected many sectorsof the economy including sports and fitness industry. The Company registered growth of10.50% on turnover due to increase in the sale of Company's health and fitness products.The management has considered the possible effects that may result from the pandemic onthe recoverability/carrying value of the assets. Based on the current indicators of futureeconomic conditions the management expects to recover the carrying amount of the assetshowever the management will continue to closely monitor any material changes to futureeconomic conditions. Given the uncertainties the final impact on Company's assets infuture may differ from that estimated as at the date of approval of these financialresults. Regarding the Auditors' observation w.r.t. the Internal Audit System of thecompany the same is reasonably effective having regard to the size of the company.However the Management shall review scope coverage and compliance thereof to furtherstrengthen the same.
We have taken note of the observations of the Auditors for improvement in certain areasof Internal Financial Controls and the Company's Management will take necessary steps formore effective monitoring of Inventory levels; better documentation and MIS in areas ofAnnual procurement of materials & Expense budget Procurement Budgeting & Planningof Traded Goods Obtention of Quotation Management Negotiation & Selection;Improvement in Dealers selection and appointment to prevent appointment of non creditworthy dealers; HR attendance monitoring to prevent attendance modification & excesspayment of salary; ensuring verification of all fixed assets in scale of 3 years; Contractlabour management and Improvement to prevent penal provisions for any non compliance ofStatutory laws by contractor(s) ; The Statutory Auditor of the Company has not reportedany fraud as specified under the second proviso to Section 143(12) of the Act.
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.
M/s PARM & Associates LLP (formerly known as P A R M & S M R N Associates)Chartered Accountants performs the duties of Internal Auditors of the Company and theirreport is reviewed by the audit committee from time to time.
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 .
The composition terms of reference etc. of the Audit Committee is provided inCorporate Governance Report which forms part of this Annual Report. There have been noinstances of non-acceptance of any recommendations of the Audit Committee by the Boardduring the financial year under review.
NOMINATIONAND 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.
CORPORATE SOCIAL RESPONSIBILITY
The details pertaining to composition of Corporate Social Responsibility Committee areincluded in the Corporate Governance Report which forms part of this report.
During the financial year ended 31st March 2021 the company incurred CSR Expenditureof 8.83 Lakhs (Rupees Eight Lakhs Eighty Three Thousand only). The CSR initiatives of theCompany were under the thrust areas of Education. The contents of the CSR Policy of theCompany as approved by the Board on the recommendation of the CSR committee is availableon the website of the Company and can be accessed through the web link;
The Company's CSR Policy Statement and annual report on the CSR activities undertakenduring the financial year ended 31st March 2021 in accordance with Section 135 of theCompanies Act 2013 and Companies (Corporate Social responsibility Policy) Rules2014(including any statutory modification(s) or re-enactment thereof for the time being inforce) is set out in the Annexure F to this report.
RISK MANAGEMENT POLICY
The Company has an integrated risk management framework through which it identifiesmonitors mitigates and reports key risks that impacts its ability to meet the strategicobjectives. A note on the policy of the Company on risk management is provided in thisAnnual Report under Management Discussion and Analysis Report (Refer Annexure'E' which form part of this report).
PARTICULARS OF LOANS GUARANTEES INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
No additional Loans given Guarantee provided or Investment made by the Company duringthe reporting year which are covered under the provisions of Section 186 of the CompaniesAct 2013.
TRANSACTIONS WITH RELATED PARTIES
All transactions entered with related parties for the year under review were on anarm's length basis and placed before the Audit Committee on regular basis. Omnibusapproval was obtained for transactions which are of repetitive nature.
There are no materially significant related party transaction that may have potentialconflict with interest of Company at large. The details of RPTs during FY 2020-21including transaction with person or entity belonging to the promoter/ promoter groupwhich hold(s) 10% or more shareholding in the Company are provided in the accompanyingfinancial statements
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.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIALYEARAND DATE OF REPORT
Covid-19 pandemic has partially impacted the business operations of the Company. Asdiscussed herein before in this report. Apart from that there are no material changesaffecting the affairs of the company which have occurred between the end of the financialyear of the company to which the financial statements relate 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.
Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management andAdministration) Rules 2014 the Annual Return for FY 2020-21 is available on Company'swebsite at ;
SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES
Your Company does not have any subsidiary/joint venture/ associate company within themeaning of the Companies Act 2013.
In terms of Section 149 of the Companies Act 2013 and the SEBI Listing Regulations AllIndependent Directors of the Company have given declarations under Section 149(7) of theAct that they meet the criteria of independence as laid down under Section 149(6) of theAct and Regulation 16(1)(b) of the SEBI Listing Regulations and they have complied withthe Code of Independent Directors as prescribed in Schedule IV to the Act. All IndependentDirectors name have been included in the data bank of independent directors maintained byIndian Institute of Corporate Affairs.
MANAGERIAL REMUNERATION & 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 ||43:1 |
|Shri Narinder Kumar Jain ||43:1 |
|Mr. Arun Jain ||33:1 |
|Mr. Manish Jain ||33:1 |
|Mr. Pankaj Jain ||33:1 |
|Mr. Neeraj Jain ||33:1 |
|Non Executive Directors ||Ratio to median remuneration |
|Shri Mahavir Prasad Gupta ||Not Applicable |
|Shri Mohan Lal Mangla ||(Independent Directors are paid only sitting fees |
|Shri Sunil Jain ||and reimbursement of expenses if any |
|Shri Vijender Kumar Jain ||for attending Board Meetings. No other |
|Ms. Nisha Paul ||Remuneration has been paid to the |
|Shri Vijay Kumar Sood ||Independent Directors) |
b. The percentage increase in Remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the financial year:
|Directors Chief Executive ||% increase in Remuneration in the financial year |
|Officers Chief Financial Officer || |
|and Company Secretary || |
|Executive Directors :- || |
|Shri Devinder Kumar Jain ||No increase as the Executives Directors have voluntarily not taken annual increment for the FY 2020-21 due w.e.f. |
|Shri Narinder Kumar Jain || |
|Mr. Arun Jain ||01.04.2020. [As approved by members in Annual General Meeting(s)] |
|Mr. Manish Jain || |
|Mr. Pankaj Jain || |
|Mr. Neeraj Jain || |
|Independent Directors || |
|Shri Mahavir Prasad Gupta || |
|Shri Mohan Lal Mangla ||Not Applicable (Independent Directors are paid only sitting fees and reimbursement of expenses if any for attending |
|Shri Sunil Jain || |
|Shri Vijay Kumar Sood ||Board Meetings. No other Remuneration has been paid to the Independent Directors).Details of Sitting fees paid/ payable incorporated in Corporate Governance report |
|Shri Vijender Kumar Jain || |
|Ms. Nisha Paul || |
|Ms. Sudha Singh ||- |
|Company Secretary || |
c. The percentage increase in the median remuneration of employees in the FinancialYear : 2.89 %
d. The number of permanent employees on the rolls of the Company: 430
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 Managerialremuneration:-Remuneration of Managerial Personnel was as per the Remuneration Policy ofthe Company and within limits as approved by the members in the Annual General Meetings asper statutory requirements.
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 andRemuneration of Managerial Personnel) Rules 2014.
Top Ten Employees in terms of Remuneration Drawn
|Employees Name ||Designation ||Remune ration in Lakhs ||Nature of employ- ment ||Qualifi- cation ||Experi- ence (in years) ||Year of commen cement of employ- ment ||Age ||Last employ- ment of ||% of Equity Shares ||Whether employee is relative of Director or Manger |
|Shri Devinder Kumar Jain ||Managing Director and CEO ||56.78 ||Permanent ||Graduate in B.Sc. ||60 ||1980 ||83 ||NA ||3.53 ||Relative of Shri Narinder Kumar Jain Mg. Director Mr. Arun Jain and Mr. Manish Jain WTD |
|Shri Narinder Kumar Jain ||Managing Director ||56.83 ||Permanent ||Graduate and Diplo- ma in Inte rnational Marketing ||55 ||1989 ||80 ||NA ||3.69 ||Relative of Shri Devinder Kumar Jain Mg. Director & CEO and Mr. Neeraj Jain WTD |
|Mr. Arun Jain ||Whole Time Director ||44.57 ||Permanent ||B.E. & M. Tech ||29 ||2007 ||55 ||NA ||2.03 ||Relative of Shri Devinder Kumar Jain Mg. Director & CEO and Mr. Manish Jain WTD |
|Mr. Manish Jain ||Whole Time Director ||44.80 ||Permanent ||Qualified Engineer and MBA ||28 ||1998 ||50 ||NA ||2.20 ||Relative of Shri Devinder Kumar Jain Mg.Director and Mr. Arun Jain WTD |
|Mr. Pankaj Jain ||Whole Time Director and CFO ||44.85 ||Permanent ||B.Com and MBA ||28 ||1998 ||50 ||NA ||7.55 ||Not related to any Director or KMP |
|Mr. Neeraj Jain ||Whole Time Director ||44.91 ||Permanent ||B.E. M.Sc. and MBA ||27 ||1998 ||49 ||NA ||2.37 ||Relative of Shri Narinder Kumar Jain Mg. Director |
|Mr. Rajesh Kumar Khurana ||Finance Mg & Head of Accounts ||11.94 ||Permanent ||B.Com (H) FCA ||39 ||1996 ||64 ||NA ||NIL ||NA |
|Ms Nikita Jain ||Markering Manager E-Commerce ||9.54 ||Permanent ||B.A. and MBA ||5 ||2016 ||26 ||NA ||NIL ||Relative of Mr. Arun Jain WTD |
|Mr. Manojit Chakraborty ||Manger (Costing) ||9.17 ||Permanent ||Cost Accountant ||23 ||2005 ||54 ||NA ||NIL ||NA |
|Mr. Gawesh Narula ||Senior Accounts Officer ||9.10 ||Permanent ||Graduate ||23 ||2005 ||51 ||NA ||Nil ||NA |
|Ms. Renu Vats ||Chief Cashier ||9.09 ||Permanent ||Graduate ||38 ||1983 ||59 ||NA ||Nil ||NA |
h. Name of other employees as required under Section 197(12) of the Companies Act 2013read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and Companies (Appointment and Remuneration of ManagerialPersonnel) Amendment Rules 2016 of the Companies Act 2013
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.
Policy on dealing with related party transactions is available on the website of theCompany.
There are no proceedings initiated/pending against your Company under the Insolvencyand Bankruptcy Code 2016 which materially impact the business of the Company.
Company had declared interim Dividend for FY 2015-16 . Details of unpaid / unclaimeddividend is available on the Company's website at :
Members who have not encashed their interim dividend warrants pertaining to theaforesaid year may approach the Company/its Registrar for obtaining their unclaimeddividend.
|Year ||Dividend Per ||Date of ||Due Date for ||Amount |
| ||Share in ||Declaration ||Transfer ||in |
|2015-16 ||1 ||12.08.2015 ||18th September ||82781 |
| || || ||2022 || |
VIGIL MECHANISM / WHISTLE BLOWER POLICY
To create enduring value for all stakeholders and ensure the highest level of honestyintegrity and ethical behaviour in all its operations the Company has adopted a 'WhistleBlower policy/Vigil Mechanism' which provides for adequate safeguard against victimizationof person who use such mechanism and the Directors and employees have direct access to theChairman of the Audit Committee in exceptional cases. The Vigil Mechanism (Whistle BlowerPolicy) is available on Company's website www.cosco.in (URL:https://www.cosco.in/uploads/investors/whistle_blower_policy_1566037432.pdf )
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITIONAND REDRESSAL)ACT 2013
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and Rules made there under the Company has anInternal Complaints Committee (ICC) for redressal of sexual harassment complaints and forensuring time bound treatment of such complaints. There was no complaint received from anyemployee during the financial year 2020-21 and hence no complaint is outstanding as onMarch 31st 2021 for redressal.
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- C annexedhereto and form part of this Report.
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 2020-21 and 2021 2022 paid to BSE Limited. No fees paid to DelhiStock Exchange Limited since DSE is non functional.
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 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 SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is annexed hereto as part ofthis report as Annexures 'D2 & D3' respectively.
Report on Management Discussion and Analysis is annexed hereto as Annexure 'E'and form part of this report.
The industrial relations remained cordial during the year. The Company lays emphasis onall round development of its human resource.
The Board mourns the death of Shri Vijay Kumar Sood- an Independent Director of theCompany and place on record the invaluable contributions of Shri Vijay Kumar Sood to theCompany and guidance provided by him to the Board. The Directors regret the loss of lifedue to COVID-19 pandemic and are deeply grateful and have immense respect for every personwho risked their life and safety to fight this pandemic.
The Directors acknowledge with thanks the continuous support and co-operation receivedfrom Bankers Statutory and Internal Auditors Customers Suppliers Dealers GovernmentAuthorities and Regulators and all other business associates and for their confidence inits management. The Board of Directors also wish to convey their appreciation to all theemployees for their sincere and dedicated services and unstinting efforts at all levels.The Management also place on record their appreciation for the confidence reposed by theStakeholders.
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) ||(Narinder Kumar Jain) |
|Managing Director and CEO ||Managing Director |
|DIN : 00191539 ||DIN :00195619 |
|Registered Office: || |
|2/8 Roop Nagar || |
|Delhi 110007 || |
|Dated: 27th August 2021 || |