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Cosmo Films Ltd.

BSE: 508814 Sector: Industrials
NSE: COSMOFILMS ISIN Code: INE757A01017
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VOLUME 167
52-Week high 491.00
52-Week low 187.20
P/E 5.36
Mkt Cap.(Rs cr) 864
Buy Price 445.70
Buy Qty 8.00
Sell Price 446.95
Sell Qty 30.00
OPEN 443.15
CLOSE 442.65
VOLUME 167
52-Week high 491.00
52-Week low 187.20
P/E 5.36
Mkt Cap.(Rs cr) 864
Buy Price 445.70
Buy Qty 8.00
Sell Price 446.95
Sell Qty 30.00

Cosmo Films Ltd. (COSMOFILMS) - Director Report

Company director report

Your Directors are pleased to present their 43rd Annual Report together withthe Audited Statement of Accounts of the Company for the year ended March 31 2020.

1. Summary Financial Results

The Financial Results of the Company for the year ended March 31 2020 were asfollows:

(Rs. in Cr)

Particulars Standalone Consolidated
Year Ended 31st March 2020 Year Ended 31st March 2019 Year Ended 31st March 2020 Year Ended 31st March 2019
Net Sales 2032.12 2050.39 2203.53 2156.52
Other Income 19.90 11.56 19.46 20.15
Profit before Interest Depreciation and Tax 262.41 169.19 280.46 181.37
Finance Cost 49.39 51.67 52.57 55.97
Depreciation 49.57 48.03 65.05 53.76
Profit before Tax 163.46 69.49 162.84 71.64
Provision for Taxation
- Current Tax 28.63 12.11 29.01 12.09
- Deferred Tax 20.79 (1.00) 20.38 (1.56)
Profit After Tax 114.04 58.38 113.44 61.10
Minority Interest - - - -
Appropriations:
Dividend-Equity Shares 40.24 11.50 40.24 11.50
Dividend Tax 8.39 2.40 8.39 2.40

2. Overview of Performance

During the financial year 2020 the Company registered sales of Rs. 2204 crores withdouble digit volume growth of speciality sales. Consolidated EBIDTA for the year increasedby 55% to Rs. 281 crores against Rs. 181 crores in financial year 2019 primarily due tohigher specialty sales by 11% better BOPP films margins due to balanced demand and supplyscenario operational efficiency and better performance by subsidiaries. Your Company hasregistered 86% growth in EPS during the year although PAT was impacted due to higherdeferred tax provisioning on temporary timing difference related to SEZ unit. Company'snet debt has reduced to Rs. 584 crores with 2.1 times net debt/EBITDA ratio.

Company launched several new products during the financial year including High BarrierCPP Film Digitally Printable Synthetic Paper and High Tear Resistance Synthetic Paper.

Company's focus shall continue to be on improving specialty films R&D effortsparticularly on sustainability which would yield results in coming years. These actionswould continue to de-commoditize business model and would contribute in long termsustainable growth.

Company is working on margin expansion projects with low capex and high paybackpotential which would yield result in coming quarters. This will also open new relatedbusiness line for the company.

3. Exports

The Company continues to strengthen its exports through brand visibility initiativestaken during the year. Exports during the year decreased to Rs. 853 Crores from Rs. 921Crores in financial year 2019.

4. Share Capital

During the year under review there was no change in the Company's issued subscribedand paid-up equity share capital. On March 31 2020 it stood at Rs. 19.44 Cr divided into19440076 equity shares of Rs. 10/- each.

5. Reserve

The Company has not transferred any amount to Reserve during the Year.

6. Dividend

During the year the Board of Directors declared an

Interim Dividend of Rs. 15/- per Equity share of Rs.10/-each (150%) on February 132020 which has been paid.

The Interim Dividend so declared is the Dividend on the Equity Shares of the Companyfor the Financial Year ended March 31 2020.

7. Details of Subsidiaries

The Company has eight wholly owned subsidiaries. Pursuant to Section 129(3) of theCompanies Act 2013 and Accounting Standards issued by the Institute of CharteredAccountants of India Consolidated Financial Statements presented by the Company includethe Financial Statements of its Subsidiaries.

Consolidated Financial Statements form part of this Annual Report. Statement containingthe salient feature of the financial statement of the Company's subsidiaries in FormAOC-1 is enclosed to this Annual Report.

In terms of provisions of Section 136 of the Companies Act 2013 the Company shallplace separate audited accounts of the Subsidiary

- Companies on its website at www.cosmsofilms.com. The subsidiaries of Cosmo FilmsLimited as on March 31 2020 are listed hereunder:

• CF (Netherlands) Holdings Limited B.V.

• Cosmo Films Japan GK

• Cosmo Films Singapore Pte Limited

• Cosmo Films Korea Limited

• Cosmo Films Inc.

• CF Investment Holding Private (Thailand)

Company Limited

• Cosmo Films Poland SP. Z.O.O.

• Cosmo Speciality Chemicals Private Limited*

*Incorporated as wholly-owned subsidiary on March 2nd 2020.

Operational Performance of Subsidiaries has improved during financial year 2020 whichis getting reflected in consolidated EBIDTA. Subsidiary's EBIDTA stood at Rs. 18.05 Croresagainst EBIDTA at Rs. 12.18 Crores last year. PBT and PAT were impacted due toprovisioning towards one-time impairment in market value of an asset in an overseassubsidiary. The company do not foresee further impairment from subsidiaries.

The Company's subsidiary project for master batches (as essential ingredient forflexible packaging film) is progressing as scheduled and is soon expected to commenceoperations. Growth in operational subsidiaries shall be key focus area for the Company infinancial year 2021.

8. Research and Development (R&D)

The Company takes pride in its continuous research and development which focus onproviding innovative solutions as opposed to simply producing commodity films. With theseconsistent efforts in research and development activities Cosmo is well placed to benefitfrom accelerated growth and drive new product development globally.

Expenditure on Research & Development

(Rs. in Cr)

Particulars 31st March 2020 31st March 2019
A. Capital 1.90 0.42
B. Recurring 5.63 6.91
Total 7.53 7.33

The Company is focussing its research activities on specialty labels high barrierfilms and synthetic paper film. Other focus area include:

• The identification of technical (product/ applications) growth areas throughcustomer activities exhibitions publications and technical interactions;

• Increasing the occupancy of value adds in the product baskets;

• Efforts towards down gauging in products;

• Reducing consumption of raw materials & fuel thereby reducing the carbonfootprint.

• Support water based printing and complete replacement of solvent based coatingswith water based coatings

9. Capital Expenditure

Your Company has four state of the art manufacturing facilities spread across India (3)and Korea (1) with a total installed capacity of 196000 MT per annum of BOPP films40000 MT per annum of Thermal Lamination Films 22000 MT per annum of Metalized Films20000 MT per annum of Coated Films and 10000 MT per annum of CPP Films. During the yearunder review your Company incurred capital expenditure of Rs. 47.40 Cr as compared to Rs.88.16 Cr for financial year 2019.

10. Corporate Governance

Cosmo is committed to maintaining best standards of Corporate Governance and has alwaystried to build the maximum trust with shareholders employees customers suppliers andother stakeholders.

A separate section on Corporate Governance forming part of the Directors' Report andthe certificate from the Practicing Company Secretary 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.

11. Internal Financial Control and its Adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to Company's policies safeguarding of itsassets prevention and detection of fraud error reporting mechanisms accuracy andcompleteness of the accounting records and timely preparation of reliable financialdisclosures.

The Internal Financial control is supplemented by an extensive program of internalaudit conducted by in house trained personnel and external firm of Chartered Accountantsappointed on recommendation of the Audit Committee and the Board. The audit observationsand corrective action if any taken thereon are periodically reviewed by the Auditcommittee to ensure effectiveness of the Internal Financial Control System. The internalfinancial control is designed to ensure that the financial and other records are reliablefor preparing financial statements and other data and for maintaining accountability ofpersons.

12. Risk Management

Cosmo has a robust process in place to identify key risks across the organisation andprioritise relevant action plans to mitigate these risks. The Audit Committee has beenentrusted with the responsibility to assist the Board members about the risk assessmentand its minimization procedures which includes discussing the management submissions onrisks prioritising key risks and approving action plans to mitigate such risks.

The risk management procedure is reviewed by the Audit Committee and Board of Directorson regular basis at the time of review of quarterly financial results of the Company. Areport on the various risks that may pose challenge to your Company are set out as a partof Management Discussion and Analysis section of this report.

13. Vigil Mechanism / Whistle Blower Policy

The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal mechanism for 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 is accessible on theCompany's website at www.cosmofilms.com.

14. Diversity of the Board

The Company believes that diversity is important to the work culture at anyorganisation. In particular a diverse Board among others will enhance the quality ofdecisions by utilizing different skills qualifications and professional experience forachieving sustainable and balanced development.

15. Directors

(a) Reappointment of Chairman

Mr. Ashok Jaipuria is the Chairman & Managing Director of the Company.

The tenure of Mr. Ashok Jaipuria Managing Director of the Company expired on April 12019. The Board of Directors in its meeting held on February 13 2019 on therecommendation of the HR Nomination & Remuneration Committee reappointed him for afurther period of five years w.e.f. April 2 2019 and same has been approved at the AnnualGeneral Meeting of the Company held on July 25 2019.

(b) Appointment and Reappointment- Other Directors

Mr. Rajeev Gupta Non-Independent Non-Executive Director retires by rotation and beingeligible offer himself for reappointment at the ensuing Annual General Meeting.

The Board of Directors in its meeting held on May 15 2019 on the recommendation ofthe HR Nomination & Remuneration Committee approved the change in classification ofMr. Rajeev Gupta and Mr. Pratip Chaudhuri to Non-Independent Non Executive Director w.e.fMay 15 2019 and same has been approved at the Annual General Meeting of the Company heldon July 25 2019.

The tenure of Mr. Anil Kumar Jain Whole Time of the Company expired on September 302019. The Board of Directors in its meeting held on May 15 2019 on the recommendation ofthe HR Nomination & Remuneration Committee reappointed him for a further period offive years w.e.f. October 01 2019 and same has been approved at the Annual GeneralMeeting of the Company held on July 25 2019.

The Board of Directors in its meeting held on May 15 2019 on the recommendation ofthe HR Nomination & Remuneration Committee reappointed Mr. H.K. Agrawal and Mr. H. N.Sinor as Independent Director for second term commencing from July 25 2019 and May 222020 respectively and same has been approved at the Annual General Meeting of the Companyheld on July 25 2019.

Ms. Alpana Parida was acting as Non Independent Non Executive Director of the Company.The Board of Directors in its meeting held on May 15 2019 on the recommendation of theHR Nomination & Remuneration Committee approved the change in classification of Ms.Alpana Parida to Independent Director w.e.f May 15 2019 and same has been approved at theAnnual General Meeting of the Company held on July 25 2019.

(c) Cessation of Director

Mr. Ashish Guha had expressed his non-availability for second term of appointment. Heceases to be Director of the Company w.e.f July 25 2019.

(d) Status of Other Directors

Mr. Anil Wadhwa is acting as Independent Director of the Company. His present tenureof five years is from 23rd May 2018 to 22nd May 2023.

Dr. Vivek Nangia is acting as Independent Director of the Company. His present tenureof five years is from 03rd November 2016 to 02nd November 2021.

(e) Independent Directors Declaration

The Company has received necessary declaration from each Independent Director undersection 149(7) of the Companies Act 2013 that they meet the criteria of independence laiddown in section 149(6) of the Companies Act 2013 and Regulation 16 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

16. Statement of Board of Directors

The Board of Directors of the Company are of the opinion that all the IndependentDirectors of the Company re-appointed during the year possesses integrity relevantexpertise and experience required to best serve the interest of the Company. TheIndependent Directors have confirmed compliance of relevant provisions of Rule 6 of theCompanies (Appointments and Qualifications of Directors) Rules 2014.

17. Key Managerial Personnel

During the year under review there was no change in KMP of the Company. The followingpersonnel's continue as KMPs as per the definition under Section 2(51) and Section 203 ofthe Act:

1. Mr. Ashok Jaipuria Chairman & Managing Director

2. Mr. A. K. Jain Director of Corporate Affairs

3. Mr. Pankaj Poddar Chief Executive Officer

4. Mr. Neeraj Jain Chief Financial Officer

5. Ms. Jyoti Dixit Company Secretary

18. Familiarization Programme for the Independent Directors

The Company follows a well-structured induction programme for orientation and trainingof Directors at the time of their joining so as to provide them with an opportunity tofamiliarise themselves with the Company its management its operations and the industryin which the Company operates.

At the time of appointing a Director a formal letter of appointment is given tohim/her which inter alia explains the role function duties and responsibilitiesexpected of him/her as a Director of the Company. The Director is also explained in detailthe Compliance required from him under the Companies Act 2013 the Listing Regulationsand other relevant regulations and affirmation taken with respect to the same.

The induction programme includes:

1) For each Director a one to one discussion with the Chairman and Managing Directorto familiarise the former with the Company's operations.

2) An opportunity to interact with the CEO CFO & Company Secretary business headsand other senior officials of the Company who also make presentations to the Boardmembers on a periodical basis briefing them on the operations of the Company strategyrisks new initiatives etc.

The details of the familiarisation programme may be accessed on the Company's corporatewebsite www.cosmofilms.com.

19. Remuneration Policy

Your Company is driven by the need to foster a culture of leadership with mutual trust.Cosmo's remuneration policy which is aligned to this philosophy is designed to attractmotivate retain manpower and improve productivity by creating a congenial workenvironment encouraging initiative personal growth and teamwork besides offeringappropriate remuneration package. Pursuant to the applicable provisions of the CompaniesAct 2013 and the Listing Regulations the Board in consultation with its HR Nomination& Remuneration Committee has formulated a framework containing inter-alia thecriteria for performance evaluation of the entire Board of the Company its Committees andIndividual Directors including Independent Directors.

Members can download the complete remuneration policy on the Company's websitewww.cosmofilms.com.

Disclosure of details of payment of remuneration to Managerial Personnel underSchedule V Part II Section II (A) forms part of this Corporate Governance Report.

20. Performance Evaluation of the Board Committees and Individual Directors

In terms of provisions of Companies Act 2013 read with the Rules issued thereunder andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hasadopted a formal mechanism for evaluating the performance of its Board Committees andindividual Directors including the chairman of the Board. Further a structuredperformance evaluation exercise was carried out based on criteria such as:

• Board/Committees composition;

• Structure and responsibilities thereof;

• Ethics and Compliance;

• Effectiveness of Board processes;

• Participation and contribution by members;

• Information and functioning;

• Specific Competency and Professional Experience /Expertise;

• Business Commitment & Organisational Leadership;

• Board/Committee culture and dynamics; and

• Degree of fulfilment of key responsibilities etc.

The performance of Board Committees thereof Chairman Executive and Non-ExecutiveDirectors and individual Directors is evaluated by the Board/ Separate meeting ofIndependent Directors. The results of such evaluation are presented to the Board ofDirectors.

21. Board and Committee Meetings

During Financial Year 2020 Five (5) meetings of the Board of Directors and Four (4)Audit Committee meetings were held. The intervening gap between the meetings was withinthe period prescribed under the Companies Act 2013.

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 inthe Corporate Governance Report.

There have been no instances of non-acceptance of any recommendations of the AuditCommittee by the Board during the Financial Year under review.

22. Auditors

(a) Statutory Auditors

Pursuant to Section 139 (2) of the Companies Act 2013 read with Rule 6 of theCompanies (Audit and Auditors) Rules 2014 made thereunder it is mandatory for theCompany to rotate its current statutory auditors M/s. Walker Chandiok & Co. LLPChartered Accountants on the completion of the maximum period as prescribed under theact.

Accordingly based on the recommendations of the Audit Committee the Board ofDirectors of the Company at its meeting held on June 4 2020 have recommended theappointment of M/s. S.N. Dhawan & Co. LLP Chartered Accountants (ICAI FirmRegistration No. 000050N/N500045) as the statutory auditors of the Company who will holdoffice for a period of five consecutive years from the conclusion of the 43rdAnnual General Meeting of the Company scheduled to be held in the year 2020 till theconclusion of the 48rd Annual General Meeting to be held in the year 2025subject to the approval of the shareholders of the Company. Accordingly requisiteresolution forms part of the notice convening the AGM.

There are no observations (including any qualification reservation adverse remark ordisclaimer) of the Auditors in their Audit Report that may call for any explanation fromthe Directors. Further the notes to accounts referred to in the Auditor‘s Report areself-explanatory. During the year the Auditor had not reported any matter under Section143 (12) of the Act therefore no detail is required to be disclosed under Section134(3)(ca) of the Act.

(b) Cost Auditors

M/s. Jayant B. Galande Cost Accountants were appointed as Cost Auditors of the Companyfor the Financial Year 2021. In accordance with the provisions of Section 148 of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 since theremuneration payable to the Cost Auditors is required to be ratified by the shareholdersthe Board recommends the same for approval by shareholders at the ensuing AGM.

In terms of the Section 148 of the Companies Act 2013 (‘the Act') read with Rule8 of the Companies (Accounts) Rules 2014 it is stated that the cost accounts and recordsare made and maintained by the Company as specified by the Central Government undersub-section (1) of Section 148 of the Companies Act 2013.

During the year the Auditor had not reported any matter under Section 143 (12) of theAct therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

(c) Secretarial Auditors

The Company had appointed M/s. BLAK & Co. Company Secretaries New Delhi toconduct its Secretarial Audit for the Financial Year 2020. The Secretarial Audit report isannexed herewith as Annexure - B to this report. There are no qualificationsreservations or adverse remarks made by Secretarial Auditor in his report. During theyear the Auditor had not reported any matter under Section 143 (12) of the Act thereforeno detail is required to be disclosed under Section 134(3)(ca) of the Act.

23. Related Party Transaction

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 are set out in Note 44 to the standalone financial statements forming part ofthis Annual Report.

No Material Related Party Transactions i.e. transactions amounting to ten percent ormore of the annual consolidated turnover as per the last audited financial statementswere entered during the year by your Company. Accordingly the disclosure of Related PartyTransactions to be provided under section 134(3)(h) of the Companies Act 2013 in FormAOC – 2 is not applicable.

As per the Listing Regulations all related party transactions are placed before theAudit Committee for approval. Prior omnibus approval of the Audit Committee has beenobtained for the transactions which are of foreseen and repetitive nature. Thetransactions entered into pursuant to the omnibus approval are presented to the AuditCommittee by way of a statement giving details of all related party transactions. TheCompany has developed a Related Party Transactions Policy for the purpose ofidentification and monitoring of such transactions and can be accessed on the Company'swebsite www.cosmofilms.com.

24. Management's 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.

25. Business Responsibility Report

Pursuant to regulations 34 of the Listing Regulations Business Responsibility Reportfor the year is presented in a separate section forming part of the Annual Report.

26. Deposits

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.

27. Energy Conservation Technology Absorption and Foreign Exchange Earnings &Outgo

The details of energy conservation technology absorption and foreign exchange earningsand outgo as required under Section 134(3) of the Companies Act 2013 read with the Rule8 of Companies (Accounts of Companies) Rules 2014 is annexed herewith as Annexure - Cto this report.

28. Particulars of Loans Guarantees or Investments

The Company have duly complied with the provision of Section 186 of the Companies Act2013 during the year under review. The details of loans guarantees and investments arecovered in the notes to the Financial Statements.

29. Significant and Material Orders Passed by the Regulators or Courts

During the year under review no significant / material orders were passed by theregulators or the Courts or the Tribunals impacting the going concern status and theCompany's operations in future.

30. Change in Nature of Business if any

There was no change in the nature of business during the year under review.

31. Material Changes and Commitments if any Affecting Financial Position of TheCompany

There were no other material changes / commitments affecting the financial position ofthe Company or that may require disclosure between March 31 2020 and the date of Board'sReport.

32. Listing with Stock Exchanges

The Company confirms that it has paid the Annual Listing Fees for the year FinancialYear 2020 to the NSE and the BSE where the Company's equity shares are listed.

33. Extract of the Annual Return

Pursuant to the provisions of section 92(3) of the Companies Act 2013 and rule 12(1)of the Companies (Management and Administration) Rules 2014 an extract of annual returnin form MGT 9 is enclosed as Annexure - D to this annual report and also availableon the website of the Company at www.cosmofilms.com.

34. Investor Education and Protection Fund (IEPF)

Details of unclaimed Dividend and Shares transferred to IEPF during 2019-20 are givenin Corporate Governance Report.

35. Corporate Social Responsibility

As a socially responsible Company Cosmo is committed to increasing its CorporateSocial Responsibility (CSR) impact with an aim of playing a bigger role in sustainabledevelopment of our society. In pursuit of this objective a Corporate SocialResponsibility (CSR) Committee had been formed by the Company which oversees andfacilitates deliberation on the social and environmental consequences of each of thedecisions made by the Board.

The Company has in place a Corporate Social Responsibility Policy pursuant to theprovisions of Section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014.

The initiatives undertaken by your Company during the year have been detailed in CSRSection of this Annual Report. The Annual Report on CSR activities in accordance with theCompanies (Corporate Social Responsibility Policy) Rules 2014 is set out herewith as Annexure- E to this Report.

36. Promotion of Women's Well Being at Work Place

Cosmo Films has zero tolerance for sexual harassment at workplace and has adopted aPolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules thereunder for prevention and redressalof complaints of sexual harassment at workplace. The Company has complied with provisionsrelating to the constitution of Internal Complaints Committee under the said act. Therehave been no complaints of sexual harassment received during the year.

37. 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 - F to this Report.

The information pursuant to Section 197(12) of the Companies Act 2013 read with Rule5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 pertaining to the top ten employees in terms of remuneration drawn and theirother particulars also form part of this report. However the report and the accounts arebeing sent to the members excluding the aforesaid annexure. In terms of Section 136 of theAct the said annexure is open for inspection at the Registered Office of the Company. Anyshareholder interested in obtaining a copy of the same may write to the Company Secretary.

38. Employee Stock Options

The Company has an Employee Stock Option Plan for the Employees of the Company and itsSubsidiaries named as "Cosmo Films Employee Stock Option Plan 2015". ThePlan is in compliance with the SEBI (Share Based Employee Benefits) Regulations 2014 andis administered by the HR Nomination and Remuneration Committee of the Board constitutedby the Company pursuant to the provision of Section 178 of the Companies Act 2013.

The details of the Employee Stock Options Plan form part of the Notes to accounts ofthe Financial Statements in this Annual Report and also available on our website www.cosmofilms.com

39. Director's Responsibility Statement

Pursuant to the section 134(5) of the Companies Act 2013 the Board of Directors tothe best of knowledge and belief and according to the information and explanationsobtained by them hereby confirm that:

I. In preparation of the annual accounts applicable accounting standards have beenfollowed 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 2020 and of the profits of the Company for theyear 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.

40. Awards & Recognition

During the Year Company has bagged

• CII National Excellence Award 2019 for 5S Implementation at its Waluj plant BestEmployer Award at the 14th Employer Branding Award organized in Aurangabad.

• The Worldstar Packaging Award 2020 in the Beverages category for ourSterilisable Conduction Sealing Film.

• The National Level Scale Award (Exemplary Position) for Supply Chainand Logistics Excellence under Chemicals Category at the CII Conference in Bangalorein December 2019.

• Two Brand Excellence Awards for Effective Use of MarketingCommunication & for Engineering Research and Development Sector at the WorldMarketing Congress in Mumbai in November 2019; presented by ABP News.

• Cosmo Films' Waluj plant bagged the second position in the CIINational Excellence Award 2019 for 5S in October 2019.

• Cosmo Films' CEO Mr. Pankaj Poddar was honoured with the "CEO with HROrientation" by Zee Business and World HRD Congress in September 2019.

• Cosmo Films Aurangabad received the Best Employer Award at the 14thAurangabad Employer Branding Awards in August 2019.

• Cosmo Films received the Aurangabad Manufacturing Leadership Award by theWorld Quality Congress in September 2019. Product Awards

• IFCA Star Awards for Inherently Printable Label Films and Laser Printable CSPFilms in the categories of R&D Achievement and Innovations/Creativityrespectively in February 2020.

41. Secretarial Standards

During the year 2020 the Company has complied with applicable Secretarial Standardsissued by the Institute of the Company Secretaries of India.

42. Acknowledgement

Your Directors would also like to extend their gratitude for the co-operation receivedfrom financial institutions the Government of India and regulatory authorities and thegovernments of the countries we have operations in. The board places on record itsappreciation for the continued support received from customers vendors retailers andbusiness partners which is indispensable in the smooth functioning of Cosmo. YourDirectors also take this opportunity to thank all investors and shareholders and thestock exchanges for their continued support. Your Directors place on record their deepappreciation to employees at all levels for their hard work dedication and commitment.Their contribution to the success of this organization is immensely valuable.

ANNEXURE-1

Changes after Approval of Directors Report by Board on June 04 2020 and upto July 102020

Mr. Rajeev Gupta (DIN:00241501) has informed that he will not seek reappointment afterhis retirement by rotation as Director of the Company on the conclusion of the forthcomingAnnual General Meeting.

Annexure A

CERTIFICATE ON CORPORATE GOVERNANCE

To

The Members of

COSMO FILMS LIMITED

1008 DLF Tower-A Jasola District Centre New Delhi - 110025

1. We have examined the compliance of conditions of Corporate Governance by COSMO FilmsLimited (the Company) for the year ended on March 31 2020 as stipulated in Regulation 17to 27 and clause (b) to (i) of Regulation 46(2) and para C D and E of schedule V of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended ("SEBI Listing Regulation")

MANAGEMENT'S RESPONSIBILITY

2. The compliance of conditions of corporate governance is the responsibility of themanagement of the Company. This responsibility includes the designing implementing andoperating effectiveness of internal control to ensure compliance with the conditions ofCorporate Governance as stipulated in the Listing Regulations.

OUR RESPONSIBILITY

3. Our responsibility is limited to examine the procedure and implementation thereofadopted by the Company for ensuring the compliance of conditions of the CorporateGovernance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.

4. We have examined the relevant records and documents maintained by the Company forthe purposes of providing reasonable assurance on the compliance with Corporate Governancerequirements by the Company.

OPINION

5. Based on our examination of the relevant records and according to the informationand explanations provided to us and the representations provided by the Management wecertify that the Company has complied with the conditions of Corporate Governance asstipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para Cand D of Schedule V of the Listing Regulations during the year ended 31st March 2020.

6. We further state that such compliance is neither an assurance as to the futureviability of the Company nor of the efficiency or effectiveness with which the managementhas conducted the affairs of the Company.

.