Your directors are pleased to present their 46th Annual
Report together with the Audited Statement of Accounts of the Company for the year ended
31 March 2023
1. SUMMARY FINANCIAL RESULTS
The Financial Results of the Company for the year ended 31 March 2023,
were as follows:
(Rs in Cr)
|
Standalone |
Consolidated |
Particulars |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Net Sales |
2,742 |
2,824 |
3,065 |
3,038 |
Other Income |
58 |
46 |
52 |
48 |
Profit before Interest, Depreciation and
Tax |
396 |
525 |
434 |
620 |
Finance Cost |
52 |
37 |
55 |
40 |
Depreciation |
69 |
58 |
75 |
63 |
Profit before Tax |
275 |
430 |
304 |
517 |
Provision for Taxation |
|
|
|
|
- Current Tax |
48 |
75 |
57 |
80 |
- Deferred Tax |
19 |
42 |
09 |
40 |
-Tax adjusted for earlier years |
(6) |
- |
(6) |
- |
Profit After Tax |
214 |
313 |
244 |
397 |
Earnings per Equity Share |
|
|
|
|
Basic (Rs) |
80 |
117 |
91 |
148 |
Diluted (Rs) |
78 |
114 |
89 |
145 |
2. PERFORMANCE SNAPSHOT
During the FY23, on consolidated basis the Company registered sales of
f 3,065 crores vs f 3,038 crores last year. Consolidated EBITDA for the year was f 434
crores as against f 620 crores in FY22 primarily due to margin pressure in BOPP &
BOPET industry due to commissioning of several new production lines during FY23. Despite
challenges, your Company has significantly outperformed the industry with two- third of
the revenue coming from the specialty films, which could withstand the margin pressure.
On Standalone basis, the Company registered sales of f 2,742 crores vs
f 2,824 crores last year. Standalone EBITDA for the year changed to f 396 crores against f
525 crores in FY22 primarily for the reasons explained above.
As on 31 March 2023, Return on Capital employed stands at 16% and
Return on Equity is 20%. The financials remain strong with Net Debt/EBITDA at one time.
During this financial year, your Company started commercial production
of specialized BOPET Line which has a total installed capacity of 30,000 MT per annum.
This is the world's largest line for shrink labels and heat control films.
This year, the Company has been successfully rebranded as Cosmo First
Ltd. The Companies new name exemplifies its unwavering commitment to prioritise customers
and stakeholders in all that we do.
The Company has recently entered into an agreement to source renewable
power on group captive basis. Accordingly, about 40% of power requirement for
Company's largest plant shall be from renewable sources. In near future, the Company
is targeting close to 50% of its power requirement from renewable sources.
The global flexible packaging industry in FY21 was approximately $
1,002.4 Billion1 and is expected to reach $ 1,275 Billion by 2027. The flexible
packaging market, which accounts for more than 60% of the total market, is mainly used for
food, personal care, pharmaceutical, household care, and industrial purposes. The global
flexible packaging market is expected to grow at a CAGR of 4.8%2 from $ 248.9
Billion in 2022 to $ 315.5 Billion in 2027. Western Europe, North America, Central &
East
Source: 1. Global Newwire
2. Markets and Markets
3. Technavio Report
Asia, and South East Asia & Oceania account for 85% of the global
market. The Asia-Pacific region has a significant share in the global packaging industry
and is expected to continue to grow with a CAGR of 4.3% over the period FY22 - FY27.
The flexible packaging market in India is estimated to grow at a CAGR
of 12.6% between 2022 and 20273.
With increasing long term demand potential for flexible packaging, the
Company has planned close to 75% capacity addition in flexible packaging business in
phases starting from FY23. While specialized BOPET line got commissioned during FY23, the
CPP line and BOPP line are expected to get commissioned within next two years in phases.
Both the lines will be the world's largest production capacity lines with lower cost
of production.
The Company's focus shall continue to be on improving speciality
films, R&D efforts particularly on sustainability which would yield results in coming
years. These actions would continue to de- commoditize business model and would contribute
in long term sustainable growth. The Company's speciality films sales stand at 62%
during FY23. On BOPET line as well, the company is looking to kick off few speciality
products which includes window films, security films, PET-G films, and many others.
The Company is currently having eight registered patents; three in
pipeline and another eight are being applied.
The Indian pet care industry is at about Rs 5k crores. On account of
rising nuclear families, doubleincome households, and change in lifestyle, urbanization,
and increasing pet ownership this market is expected to grow at the rate of 25%. There is
no large scale organized players in India offering end to end comprehensive solution. The
average spending on pets by Indian families is increasing significantly. Accordingly, the
Company launched its Pet care division Zigly in Sept 2021 with simultaneous launch of
website, mobile van and its flagship store in Delhi. With 15 experience centers
operational as on March 2023, the Company targets to have 100 experience centres in next
couple of years.
In Speciality Chemicals the Company has three verticals i.e.
masterbatch, coating chemicals and adhesive. While masterbatch and coating chemicals have
been operational during the year, adhesive is expected to commence commercial production
from FY24. In each of these segment, the Company plans to cater to niche speciality
focused either to address current problem area for the Industry or significantly better
product compared to currently available. The India masterbatch industry size is 500k mt
and it is growing at the rate of 11%. The global industry size of adhesives is USD 52
billion with a growth rate of 5% . The size of Indian adhesive industry is USD 3.5 billion
with a growth rate of 8% to 10%. The annual capacity of the Company for masterbatch is
10KMT, adhesives is 2.5KMT and Coating Chemicals is 5KMT. The Company targets to achieve
7%-8% of Company's consolidated revenue from speciality chemicals in 3-5 years with
25% ROCE.
Growth
The Company is targeting to add close to 75% capacity for flexible
packaging by March 2025 in phases, which will work as key growth engines for the coming
years. The capacity additions are specialized BOPET line, BOPP line and CPP line. The
Specialized BOPET line got commissioned during Sept 2022. The Company is targeting
complimentary growth from Specialized BOPET Line in medium term i.e. Heat Control Film,
Shrink labels and other high end specialty. This will partially substitute imports as
well.
Work on BOPP and CPP lines has commenced. Both the lines will be
world's largest production capacity lines. The CPP Line will promote sustainability
as it will offer mono-layered structure. The capacity additions i.e. Specialized BOPET
Line, BOPP and CPP lines will allow Company to further expand its specialty sales.
To fuel the growth in speciality chemicals, the Company is going to
launch adhesive during FY24 for already known customer base. In petcare segment Zigly, the
future plans are to significantly increase the experience centres to 100+ in a couple of
years besides promoting online business.
3. SUSTAINABILITY
The Company is working on several sustainability projects. The roof top
solar power plants have been installed for all manufacturing units. The Company has
recently entered into an agreement to source renewable power on group captive basis. It
will contribute to 40% of power requirement of company's largest plant. In coming
years, the Company expects close to 50% of its power requirements to come from renewable
sources.
The Company has taken several steps to minimise the waste generation.
Out of the total waste generated, 77% has been used reused and 22% has been re-processed.
The remaining 1% was safely disposed through incineration method.
Initiatives have been taken for installing Wet Scrubber for Thermopack
Boilers to improve resource efficiency and reduce impact due to emissions, effluent
discharge, waste generated. Wet scrubber is used to reduce the amount of air pollution. In
wet scrubbing processes, solid particles are removed from a gas stream by transferring
them to a liquid. The liquid most commonly used is water.
Several other sustainability initiatives are as under:
Offer mono layered structure for ease of recycling
Partnering with some of the best global brands to offer
structure rationalization & recyclability solutions.
Invest in R&D and grow its speciality film portfolio
offering sustainable solutions for a better tomorrow.
Offer Oxo-Biodegradable Films
Use of Water Based Coatings
Innovated heat resistant BOPP film to facilitate mono material
structure.
Both BOPP and CPP films offer better yield, hence enabling
reduced consumption of plastics.
UV stabilized Synthetic Paper can be used to replace PVC in
outdoor promotional applications for duration requirements up to one year.
Offer a suitable substitute for aluminium foil in form of its
Ultra-High Barrier Films.
Focus on reducing Green House Gas missions, green energy at
plants, waste reduction, water treatment etc.
Constant monitoring of parameters like noise, illumination,
ventilation, air quality etc.
Rain water harvesting and reuse of effluent treated water
Reutilization of reprocessed granules from waste material as
input for film production,
Continuous efforts to reduce water usage, waste generation and
GHG emissions.
Working on 3R principles i.e. Reducing waste, reusing and
recycling resources and products
Manufacturing environment friendly, sustainable polymers, which
are easily recycled and reused in a variety of ways.
These steps will not only contribute to the environment but will also
rationalize costs in coming quarters
4. EXPORTS
The Exports for the financial year are Rs 1,268 Crores which is 46% of
total sales. The Company exports to 80+ countries across the globe.
5. DETAILS OF SUBSIDIARIES
The Company has ten subsidiaries including step down subsidiaries.
Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standards issued by
the Institute of Chartered Accountants of India, Consolidated Financial Statements
presented by the Company include the Financial Statements of its Subsidiaries.
Consolidated Financial Statements form part of this Annual Report.
Statement containing the salient feature of the financial statement of the Company's
subsidiaries in Form AOC-1, is enclosed to this Annual Report.
In terms of provisions of Section 136 of the Companies Act, 2013, the
Company place separate audited accounts of the Subsidiary Companies on its website at
https://www.cosmofirst.com/ disclosure-under-regulation
The subsidiaries of Cosmo First Limited as on 31 March 2023, 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
Cosmo Speciality Polymers Private Limited
Cosmo Global Films Private Limited*
incorporated as wholly-owned subsidiary on 09 January 2023
Subsidiary's EBITDA stood at Rs. 38 Crores against EBITDA at Rs.
94 Crores last year.
The performance of the overseas subsidiaries is under pressure from
last year primarily for two reasons. One is reduced gap between the India raw material
price index and US raw material price index and second is weakening of foreign currencies
against the US dollar, particularly in Japan and Korea. The margin pressure in the US is
due to the lower gap between the two-price index. However, this is expected to improve in
FY24.
The vision behind establishing Cosmo Speciality Chemicals Private
Limited was providing the most competitive quality products through innovations based on
sustainable science. Its operational highlights are as follows:
The subsidiary has achieved Rs 159 Cr of sales.
Company has reached close to 75% capacity utilization on
masterbatch line and the complementary adhesive business for the packaging segment is
planned to be launched soon. This would add to topline and bottom line from next year.
New R&D laboratories are operational for coating chemicals
and Adhesive developmental work. The Company's R&D has successfully completed the
development of several coating chemicals .
Masterbatch production unit is fully operational and has
successfully produced various master batches for in-house and external customers. Its
consumption is growing continuously. Some recently developed masterbatches include white
masterbatch, anti-stat (with 30% concentration), master batch for blown films etc.
Adhesive line had been delayed due to delay in government
approvals. The Company will start test marketing soon and shall commence commercial
production in FY24.
6. SHARE CAPITAL
Pursuant to the approval of shareholders through postal ballot dated 11
June 2022, the authorized share capital of your Company increased from Rs 25,00,00,000/-
(Rupees Twenty-Five Crores) to Rs 60,00,00,000/- (Rupees Sixty Crores).
During the year under review, your Company, had issued and allotted
Bonus Equity Shares in the proportion of 1:2 (i.e. one equity shares for every two equity
shares) to the eligible Members whose names appeared in the Register of Members / list of
beneficial owners as on the record date fixed for this purpose. Consequently, the paid- up
share capital of the Company increased from Rs 18,17,27,150/- to Rs 27,25,90,720/-.
Subsequently, the Company bought back 10,09,345 equity shares (3.70% of
the paid up equity capital) through the "Tender Offer" route at a price of Rs.
1070/- per share. Consequently, the paid-up equity share capital has reduced from Rs
27,25,90,720/- to Rs 26,24,97,270/- divided into 2,62,49,727 equity shares of Rs 10/-
each. Consequent to the same, the paid up share capital of the Company stands reduced to
Rs 26,24,97,270/- as on 31 March 2023.
7. RESERVE
The Company has not transferred any amount to Reserve during the Year.
8. RETURN TO SHAREHOLDERS
Rewards (Dividend/Buyback) (% to PAT)
The Board of Directors of the Company recommended Equity dividend of Rs
5/- (50%) per share for the year ended 31 March 2023 amounting to Rs 13.12 Crores.
Previous Year Company declared total dividend of Rs 35/- (350%) per
Equity Share of Rs 10/- each. First Interim Equity Dividend of Rs 25/- (250%) per share
and Second Interim Equity Dividend of Rs 10/-(100%) per share on 16 September 2021 and 25
January 2022 respectively.
In terms of Regulation 43A of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing
Regulations") the Dividend Distribution Policy is available on the Company's
website at https://www.cosmofirst.com/investors/policies- and-code-of-conduct
Besides Dividend, during this financial year the Company allotted Bonus
Equity Shares in the ratio of 1:2 and bought back 10,09,345 equity shares (3.70% of the
paid up equity capital) through the "Tender Offer" route at a price of Rs 1070/-
per share. Details given above at point no 6.
9. RESEARCH AND DEVELOPMENT (R&D)
The Company takes pride in its continuous research and development
which focus on providing innovative solutions as opposed to simply producing commodity
films. With these consistent efforts in research and development activities, Cosmo is well
placed to benefit from accelerated growth and drive new product development globally.
Cosmo First understands that innovation is not just an option but a necessity for staying
competitive in today's ever-changing market. The Company believes that continuous and
sustainable innovation is the key to adding value to society, and it is essential for the
growth and prosperity of the organisation. Cosmo First has made innovation a part of its
everyday work and is committed to exploring new and exciting ways to improve products and
services. From its innovation centres and labs to its 30+ team of researchers, Cosmo First
strives to keep innovation at the core of its business.
Cosmo First's Innovation Centre is a state-of-the- art facility
that boasts world-class laboratories, serving as a vital asset to the company's
operations. The centre is equipped with cutting- edge equipment and manned by a team of
highly qualified professionals dedicated to sustainable and economically viable science.
The Innovation Centre serves as a hub for research and development, providing the
necessary resources and infrastructure for the company's innovative endeavours. The
Company takes great pride in this facility, knowing that it plays a crucial role in
driving its continued growth and success.
Analytical laboratory
The analytical lab at Cosmo First's facility is at the forefront
of material characterisation, thanks to its state-of-the-art equipment. The lab is
well-equipped to perform microscopic analysis, which allows researchers to understand the
finer details of the material's chemical and physical properties. In addition, the
lab also boasts advanced thermogravimetric analysis (TGA) equipment, which enables
scientists to investigate the material's thermal stability and degradation
characteristics. By utilising these advanced techniques, the Company can accurately and
comprehensively analyse the formulated/ synthesised materials, providing invaluable
insights into their performance and behaviour.
Microscopic analysis
A high-resolution optical microscope (Leica) and a scanning electron
microscope (Phenom, ICON) are used for microscopic analysis. With a resolution of up to
nanometers, SEM is equipped with backscattered detectors and EDX (for elemental analysis).
Through elemental analysis, these tools are used to analyse the surface attributes of
materials such as size, shape and chemical identity.
Thermogravimetric analysis
Thermogravimetric (TGA) analysis is a technique for assessing a
material's thermal stability in the presence of nitrogen and the ambient atmosphere.
TGA is used to analyse the thermal stability of textile additives. TGA is attached to a
mass spectrometer, allowing for the analysis of evolved gases using the MS detector and,
as a corollary, chemical identification of unknown molecules is conducted using the
library.
During the year under review, your Company incurred expenditure on
Research and Development (R&D) of f 13 Cr.
10. CAPITAL EXPENDITURE
Your Company has four state of the art manufacturing facilities spread
across India (three plants ) and Korea (one plant ), with a total installed capacity of -
196,000 MT per annum of BOPP films,
40,000 MT per annum of Thermal Lamination Films,
22,000 MT per annum of Metalized Films,
20,000 MT per annum of Coated Films,
10,000 MT per annum of CPP Films and
7000MT per annum of CSP Line.
30,000 MT per annum of BOPET Line
During the year, your Company started commercial production of
specialized BOPET Line which has a total installed capacity of 30,000 MT per annum. This
is the world's largest line for shrink labels and heat control films.
During the year under review, your Company incurred capital expenditure
of Rs 380.4 Cr as compared to Rs 283 Cr for FY22.
The capital expenditure incurred during FY23 shall facilitate enhanced
sale of speciality films, sustainability initiatives and solar power as a source of
energy.
11. CORPORATE GOVERNANCE
Cosmo is committed to maintaining best standards of Corporate
Governance and has always tried to build the maximum trust with shareholders, employees,
customers, suppliers and other stakeholders.
A separate section on Corporate Governance forming part of the
Directors' Report and the certificate from the Practicing Company Secretary
confirming compliance of the Corporate Governance norms as stipulated in the Listing
Regulations is included in the Annual Report in Annexure - A.
12. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The Board has adopted policies and procedures for ensuring the orderly
and efficient conduct of its business, including adherence to Company's policies,
safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms,
accuracy and completeness of the accounting records, and timely preparation of reliable
financial disclosures.
The Internal Financial control is supplemented by an extensive program
of internal audit conducted by in house trained personnel and external firm of Chartered
Accountants appointed on recommendation of the Audit Committee and the Board. The audit
observations and corrective action, if any, taken thereon are periodically reviewed by the
Audit committee to ensure effectiveness of the Internal Financial Control System. The
internal financial control is designed to ensure that the financial and other records are
reliable for preparing financial statements and other data, and for maintaining
accountability of persons.
13. RISK MANAGEMENT
Cosmo has a robust process in place to identify key risks across the
organisation and prioritise relevant action plans to mitigate these risks. The Company has
constituted a Risk Management Committee which has been entrusted with the responsibility
to assist the Board in (a) approving the Company's Risk Management Framework and (b)
Overseeing all the risks that the organization faces such as strategic, financial,
liquidity, security, regulatory, legal, reputational and other risks that have been
identified and assessed to ensure that there is a sound Risk Management Policy in place to
address such concerns / risks. The Risk Management process covers risk identification,
assessment, analysis and mitigation. Incorporating sustainability in the process also
helps to align potential exposures with the risk appetite and highlight risks associated
with chosen strategies.
The risk management procedure is reviewed by the Audit Committee and
Board of Directors on regular basis at the time of review of quarterly financial results
of the Company. The Audit Committee has additional oversight in the area of financial
risks and controls. Major risks identified by the business and functions are
systematically addressed through mitigating actions on a continuing basis.
A report on the various risks that may pose challenge to your Company
are set out as a part of Management, Discussion and Analysis section of this report.
Details of the composition of the Risk Management Committee, Meetings held, attendance of
the Directors at such Meetings and other relevant details are provided in the Corporate
Governance Report.
14. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy establishing vigil
mechanism, to provide a formal mechanism for the Directors and employees to report their
concerns about unethical behaviour, actual or suspected fraud or violation of the
Company's Code of Conduct or ethics policy without fear of reprisal. The policy is
accessible on the Company's website at https://www.cosmofirst.
com/investors/policies-and-code-of-conduct
15. DIVERSITY OF THE BOARD
The Company believes that diversity is important to the work culture at
any organisation. In particular, a diverse Board, among others, will enhance the quality
of decisions by utilizing different skills, qualifications and professional experience for
achieving sustainable and balanced development.
16. DIRECTORS
(a) Chairman
Mr. Ashok Jaipuria, is the Chairman & Managing Director of the
Company. The tenure of Mr. Ashok Jaipuria, Managing Director of the Company will expire on
1 April 2024. The Board of Directors in its meeting held on 29 May 2023, on the
recommendation of the HR, Nomination & Remuneration Committee and subject to the
approval of Members of the Company reappointed him for a further period of five years
w.e.f. 02 April 2024.
(b) Appointment and Re-appointment- Other Directors
Mr. Pratip Chaudhuri, Non-Executive NonIndependent Director retires by
rotation and being eligible offer himself for re-appointment at the ensuing Annual General
Meeting.
Mr. Anil Wadhwa, Independent Director of the Company was appointed for
a tenure of five years from 23 May 2018 to 22 May 2023. The Board of Directors in its
meeting held on 11 May 2023, on the recommendation of the HR, Nomination &
Remuneration Committee and subject to the approval of Members of the Company re-appointed
him for second term of five years commencing from 23 May 2023
Ms. Alpana Panda, Independent Director of the Company was appointed for
a tenure of five years from 15 May 2019 to 14 May 2024. The Board of Directors in its
meeting held on 29 May 2023, on the recommendation of the HR, Nomination &
Remuneration Committee and subject to the approval of Members of the Company re-appointed
him for second term of five years commencing from 15 May 2024.
The details of the proposed appointment/ reappointment of Directors are
mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the
Notice of 46th Annual General Meeting (AGM) of your Company.
(c) Status of Other Directors
Mr. A. K. Jain is acting as Whole time Director of the Company. His
present tenure of five years is from 01 October 2019 to 30 September 2024.
Mr. H. K. Agrawal, is acting as Independent Director of the Company.
His present tenure of five years is from 25 July 2019 to 24 July 2024.
Mr. H. N. Sinor, is acting as Independent Director of the Company. His
present tenure of five years is from 22 May 2020 to 21 May 2025.
Mr. Rakesh Nangia, is acting as Independent Director of the Company.
His present tenure of five years is from 10 November 2020 to 09 November 2025.
Mr. Arjun Singh, is acting as Independent Director of the Company. His
present tenure of five years is from 27 October 2021 to 26 October 2026.
(d) Independent Directors Declaration
The Company has received necessary declaration from each Independent
Director under section 149(7) of the Companies Act, 2013 that they meet the criteria of
independence laid down in section 149(6) of the Companies Act, 2013 and Regulation 16 of
Listing Regulations.
17. STATEMENT OF BOARD OF DIRECTORS
The Board of Directors of the Company are of the opinion that the
Independent Directors of the Company appointed/re-appointed during the year possesses
integrity, relevant expertise and experience (including the proficiency) required to best
serve the interest of the Company. The Independent Directors have confirmed compliance of
relevant provisions of Rule 6 of the Companies (Appointments and Qualifications of
Directors) Rules, 2014.
18. KEY MANAGERIAL PERSONNEL
During the year under review, there was no change in KMP of the
Company. The following personnel's continue as KMPs as per the definition under
Section 2(51) and Section 203 of the Companies Act, 2013:
1. Mr. Ashok Jaipuria, Chairman & Managing Director
2. Mr. A. K. Jain, Director - Corporate Affairs
3. Mr. Pankaj Poddar, Chief Executive Officer
4. Mr. Neeraj Jain, Chief Financial Officer
5. Ms. Jyoti Dixit, Company Secretary
19. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
The Company follows a well-structured induction programme for
orientation and training of Directors at the time of their joining so as to provide them
with an opportunity to familiarise themselves with the Company, its management, its
operations and the industry in which the Company operates.
At the time of appointing a Director, a formal letter of appointment is
given to him/her, which inter alia explains the role, function, duties and
responsibilities expected of him/her as a Director of the Company. The Director is also
explained in detail the Compliance required from him/ her under the Companies Act, 2013,
the Listing Regulations and 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 Director to familiarise the former with the Company's operations.
2) An opportunity to interact with the CEO, CFO & Company
Secretary, business heads and other senior officials of the Company, who also make
presentations to the Board members on a periodical basis, briefing them on the operations
of the Company, strategy, risks, new initiatives, etc.
The details of the familiarisation programme may be accessed on the
Company's corporate website at https://www.cosmofirst.com/
disclosure-under-regulation
20. 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 attract, motivate, retain manpower and improve productivity by creating a
congenial work environment, encouraging initiative, personal growth and teamwork besides
offering appropriate remuneration package. Pursuant to the applicable provisions of the
Companies Act, 2013 and the Listing Regulations, the Board, in consultation with its HR,
Nomination & Remuneration Committee, has formulated a framework containing,
inter-alia, the criteria for performance evaluation of the entire Board of the Company,
its Committees and Individual Directors, including Independent Directors.
Members can download the complete remuneration policy on the
Company's website at https://www.cosmofirst.com/invest.ors/policies-
and-code-of-conduct
Disclosure of details of payment of remuneration to Managerial
Personnel under Schedule V(C)(6) of Listing Regulations forms part of the Corporate
Governance Report.
21. PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND INDIVIDUAL
DIRECTORS
In terms of provisions of Companies Act, 2013 read with the Rules
issued thereunder and Listing Regulations, the Board has adopted a formal mechanism for
evaluating the performance of its Board, Committees and individual Directors, including
the Chairman of the Board. Further, a structured performance 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-Executive Directors and individual Directors is evaluated by the Board/ Separate
meeting of Independent Directors. The results of such evaluation are presented to the
Board of Directors.
22. BOARD AND COMMITTEE MEETINGS Diversity of Board/Committee's
ED: Executive Director; NED: Non-Executive
Director; ID: Non-Executive Independent Director
During FY23, Six (6) meetings of the Board of Directors and Four (4)
Audit Committee meetings were held. The intervening gap between the meetings was within
the period prescribed under the Companies Act, 2013 and Listing Regulations.
Details of the composition of the Board and its Committees and of the
Meetings held, attendance of the Directors at such Meetings and other relevant details are
provided in the Corporate Governance Report.
There have been no instances of non-acceptance of any recommendations
of the Audit Committee by the Board during the Financial Year under review.
23.AUDITORS
(a) Statutory Auditors
M/s. S.N. Dhawan & Co. LLP, Chartered Accountants (ICAI Firm
Registration No. 000050N/N500045) were appointed as the statutory auditors of the Company
in the 43rd Annual General Meeting held on 07 August 2020, to hold office for a
period of five consecutive years from the conclusion of the 43rd Annual General
till the conclusion of the 48th Annual General Meeting to be held in the year
2025. The Statutory Auditors have confirmed they are not disqualified from continuing as
Auditors of the Company.
There are no observations (including any qualification, reservation,
adverse remark or disclaimer) of the Auditors in their Audit Report that may call for any
explanation from the Directors. Further, the notes to accounts referred to in the
Auditor's Report are self-explanatory.
During the year, the Auditor had not reported any matter under Section
143 (12) of the Companies Act, 2013, therefore no detail is required to be disclosed under
Section 134(3) of the Companies Act, 2013.
(b) Cost Auditors
Mr. Jayant B. Galande, Cost Accountants were appointed as Cost Auditors
of the Company for the FY23. In accordance with the provisions of Section 148 of the
Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, since the
remuneration payable to the Cost Auditors is required to be ratified by the shareholders,
the 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 Rule 8 of the Companies (Accounts) Rules, 2014, it is stated that the
cost accounts and records are made and maintained by the Company as specified by the
Central Government under sub-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 the Companies Act, 2013, therefore no detail is required to be disclosed under
Section 134(3) of the Companies Act, 2013.
(c) Secretarial Auditors
The Company had appointed M/s. BLAK & Co., Company Secretaries, New
Delhi, to conduct its Secretarial Audit for the FY23. The Secretarial Audit report is
annexed herewith as Annexure - B to this report. There are no qualifications,
reservations or adverse remarks made by Secretarial Auditor in his report. During the
year, the Auditor had not reported any matter under Section 143 (12) of the Companies Act,
2013, therefore no detail is required to be disclosed under Section 134(3) of the
Companies Act, 2013.
24. RELATED PARTY TRANSACTION
With reference to Section 134(3) (h) of the
Companies Act, 2013, all contracts and arrangements with related
parties under Section 188(1) of the Companies Act, 2013, entered into by the Company
during the Financial Year, were in the ordinary course of business and on an arm's
length basis. The details of the related party transactions as required under Accounting
Standard are set out in Note No. 44 to the standalone financial statements forming part of
this Annual Report.
As per the Listing Regulations, all related party transactions are
placed before the Audit Committee for approval. Prior omnibus approval of the Audit
Committee has been obtained for the transactions which are of
unforeseen and repetitive nature. The transactions entered into pursuant to the omnibus
approval are presented to the Audit Committee by way of a statement giving details of all
related party transactions. The Company has developed a Related Party Transactions Policy
for the purpose of identification and monitoring of such transactions and can be accessed
on the Company's website at www.cosmofirst.com.
No Material Related Party Transactions (i.e. one thousand crore or ten
per cent of the annual consolidated turnover of the listed entity as per the last audited
financial statements, whichever is lower) were entered during the year by your Company
except the sale to its wholly owned subsidiary- Cosmo Films Inc. As per Listing
Regulations, transactions entered into between a holding company and its wholly owned
subsidiary whose accounts are consolidated with such holding company and placed before the
shareholders at the general meeting for approval are exempt from obtaining
shareholders' approval. The disclosure of Related Party Transactions as required
under section 134(3)(h) of the Companies Act, 2013, in Form AOC - 2 is attached as Annexure
- C.
25. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Pursuant to regulations 34 of the Listing Regulations,
Management's Discussion and Analysis Report for the year is presented in a separate
section forming part of the Annual Report.
26. BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT
Pursuant to regulations 34 of the Listing Regulations, Business
Responsibility and Sustainability Report for the year is presented in a separate section
forming part of the Annual Report.
27. DEPOSITS
The Company has not accepted deposit from the public within the ambit
of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules,
2014.
28. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS & OUTGO
The details of energy conservation, technology absorption and foreign
exchange earnings and outgo as required under Section 134(3) of the Companies Act, 2013,
read with the Rule 8 of Companies (Accounts of Companies) Rules, 2014 is annexed herewith
as Annexure - D to this report.
29.PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company have duly complied with the provision of Section 186 of the
Companies Act, 2013 during the year under review. The details of loans, guarantees and
investments are covered in the notes to the Financial Statements.
30.SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review, no significant / material orders were
passed by the regulators or the Courts or the Tribunals impacting the going concern status
and the Company's operations in future.
31. CHANGE IN NATURE OF BUSINESS, IF ANY
There was no change in the nature of business during the year under
review.
32. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING FINANCIAL
POSITION OF THE COMPANY
There were no other material changes / commitments affecting the
financial position of the
Company or that may require disclosure, between 31 March 2023 and the
date of Board's Report.
33. LISTING WITH STOCK EXCHANGES
The Company confirms that it has paid the Annual Listing Fees for the
year FY23 to the NSE and the BSE where the Company's equity shares are listed.
34. 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, the Annual
Return of the Company is available on the website of the Company at the link: https://www.
cosmofirst.com/investors/notifications-notices.
35.INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Details of Unclaimed Dividend and Shares transferred to IEPF during
FY23 are given in Corporate Governance Report.
36. CORPORATE SOCIAL RESPONSIBILITY
As a socially responsible Company, Cosmo is committed to increasing its
Corporate Social Responsibility (CSR) impact with an aim of playing a bigger role in
sustainable development of our society. In pursuit of this objective, a Corporate Social
Responsibility (CSR) Committee had been formed by the Company which oversees and
facilitates deliberation on the social and environmental consequences of each of the
decisions made by the Board.
The Company has in place a Corporate Social Responsibility Policy
pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the
Companies (Corporate Social Responsibility Policy) Rules, 2014.
The initiatives undertaken by your Company during the year have been
detailed in CSR Section of this Annual Report. The Annual Report on CSR activities in
accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, is set
out herewith as Annexure - E to this Report.
37.PROMOTION OF WOMEN'S WELL BEING AT WORK PLACE
Cosmo First has zero tolerance for sexual harassment at workplace and
has adopted a Policy on prevention, prohibition and redressal of sexual harassment at
workplace in line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention
and redressal of complaints of sexual harassment at workplace. The Company has complied
with provisions relating to the constitution of Internal Complaints Committee under the
said act. There have been no complaints of sexual harassment received during the year.
38. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to Section 197(12) of the Companies
Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 is also enclosed as Annexure - F to this Report.
The information pursuant to Section 197(12) of the Companies Act, 2013
read with Rule 5(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 their other particulars also form part of this report. However, the
report and the accounts are being sent to the members excluding the aforesaid annexure. In
terms of Section 136 of the Companies Act, 2013, the said annexure is open for inspection
at the Registered Office of the Company. Any shareholder interested in obtaining a copy of
the same may write to the Company Secretary.
39. EMPLOYEE STOCK OPTIONS
The Company has an Employee Stock Option Plan for the Employees of the
Company and its Subsidiaries named as Cosmo Films Shares Based Employee Benefit Scheme,
2021 ("CF SBEB Scheme"). The Plan is in compliance with the SEBI (Share Based
Employee Benefits) Regulations 2014 and is administered by the HR, Nomination and
Remuneration Committee of the Board constituted by the Company pursuant to the provision
of Section 178 of the Companies Act, 2013 and Listing Regulations.
The details of the CF SBEB Scheme form part of the Notes to accounts of
the Financial Statements in this Annual Report and also available on our website at
www.cosmofirst.com.
40. DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the section 134 (5) of the Companies Act, 2013, the Board
of Directors, to the best of knowledge and belief and according to the information and
explanations obtained by them, hereby confirm that:
I. In preparation of the annual accounts, applicable accounting
standards have been followed along with proper explanation relating to material
departures.
II. Accounting policies selected were applied consistently. Reasonable
and prudent judgments and estimates are made so as to give a true and fair view of the
state of affairs of the Company as of 31 March 2023 and of the profits of the Company for
the year ended on that date.
III. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013,
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities.
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 Controls were adequate and were operating effectively.
VI. Systems to ensure compliance with the provisions of all applicable
laws were in place and were adequate and operating effectively.
41. AWARDS & ACCOLADES
During the Year, Company has bagged:
Featured as one of the Top 10 Companies from India in Forbes
Asia Best under A Billion 2022 list
Ranked as one of India's Fastest Growing Companies by BW
Business World Magazine
Cosmo First grabbed "Most enterprising Business Award"
by prestigious Entrepreneur Magazine
Zigly bagged the "Top 100 D2C Brands" of the year by
the Retailer Magazine.
Cosmo Speciality Chemicals won the Award for "20 Most
Promising Chemical Companies in India 2022" by Innovative Zone Magazine.
42. SECRETARIAL STANDARDS
During the FY23, the Company has complied with applicable Secretarial
Standards issued by the Institute of the Company Secretaries of India.
43. ACKNOWLEDGEMENT
Your Directors would also like to extend their gratitude for the
co-operation received from financial institutions, the Government of India and regulatory
authorities, and the governments of the countries we have operations in. The board places
on record its appreciation for the continued support received from customers, vendors,
retailers and business partners, which is indispensable in the smooth functioning of
Cosmo. Your Directors also take this opportunity to thank all investors and shareholders,
and the stock exchanges for their continued support. Your Directors place on record their
deep appreciation to employees at all levels for their hard work, dedication and
commitment. Their contribution to the success of this organization is immensely valuable.
|
For and on behalf of the
Board of Directors |
Date: 29 May 2023 |
Ashok Jaipuria |
Place: New Delhi |
Chairman |
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