DirectorsYour directors present the 35th Annual report and the audited accounts forthe year ended March 31, 2012.
| | (Rs. in crores) |
| Standalone | Consolidated |
| FINANCIAL RESULTS | 2011-12 | 2010-11 | 2011-12 | 2010-11 |
| Net Sales | 918.95 | 938.02 | 1124.98 | 1129.79 |
| Other income | 5.27 | 10.48 | 18.16 | 9.59 |
| Profit before interest, depreciation and tax | 101.03 | 110.37 | 101.00 | 98.01 |
| Finance Cost (including Interest) | 22.50 | 19.48 | 28.46 | 26.30 |
| Depreciation | 30.15 | 28.30 | 35.91 | 34.39 |
| Exceptional Item | 6.90 | 5.10 | 2.15 | 3.19 |
| Profit before Tax | 55.28 | 67.69 | 38.78 | 40.51 |
| Provision for | | | | |
| – Current Tax | 08.41 | 18.20 | 12.42 | 21.72 |
| – Deferred tax | 01.30 | (2.03) | (3.82) | (12.20) |
| Profit after Tax | 45.57 | 51.52 | 30.18 | 30.99 |
| Extraordinary Item | - | - | - | - |
| Profit after tax including extraordinary item | 45.57 | 51.52 | 30.18 | 30.99 |
| Minority Interest | - | - | (1.34) | (3.77) |
| APPROPRIATIONS | | | | |
| Less: | | | | |
| Dividend-Equity shares | 9.72 | 9.72 | 9.72 | 9.72 |
| Dividend Tax | 1.58 | 1.58 | 1.58 | 1.58 |
| General Reserve | 4.56 | 40.22 | 3.15 | 23.46 |
| Balance carried forward to next year | 29.71 | - | 17.07 | |
DIVIDEND
Equity dividend of Rs. 5 per share (Previous Year Rs. 5/- per share) has beenrecommended by the Board of Directors for the year ended March 31, 2012 amounting to Rs.9.72 Crores (Previous Year Rs. 9.72 Crores) on the equity share capital.
OPERATIONS
On year to year basis net sales has declined by 2.03% (standalone) and by 0.43%(consolidated) mainly due to global slowdown. Expansion of new BOPP line of 40,000 MT perannum is as per schedule and will be commissioned by March 2013.
EXPORTS
Cosmo continues to maintain its position of largest BOPP film exporter from India.Exports were declined marginally from Rs. 462.86 crores in 2010-11 to Rs. 418.22 crores in2011-12.
R & D
Continuous efforts on R & D and Application Development activities are being madeto expand the domestic and export markets.
DIRECTORS
Dr. Surinder Kapur, Mr. Badri Agarwal and Mr. Rajeev Gupta, Directors of the Company,retire by rotation and being eligible offer themselves for reappointment at the ensuingAnnual General Meeting.
There are no inter se relationships of any of the directors in terms of disclosurerequirements of the listing Agreement with the Stock Exchanges.
FIXED DEPOSIT
The Company has stopped accepting fixed deposits since 17th October 2002. All depositsthat remained unclaimed have been deposited in Central Government fund known as InvestorEducation and Protection Fund.
AUDITORS' REMARKS
The Auditors' remarks on the annual accounts are self explanatory and do not requirefurther comments from the Company.
SUBSIDIARY
The Ministry of Corporate Affairs had through a notification dated February 8, 2011exempted companies from attaching the balance sheet & other documents of itssubsidiaries as required under Section 212(1) of the Companies Act, 1956 subject to theapproval of the Board and fulfillment of certain other conditions. The Board of Directorspursuant to the aforesaid notification had given their consent & resolved for notattaching the Balance Sheet of subsidiaries. Accordingly, these documents are not beingattached with the Balance Sheet of the Company. The Consolidated accounts of the companyduly audited by the Statutory Auditors forms part of the Annual Report. The Company willprovide the annual accounts of the subsidiary Companies and related detailed informationto any member of the company seeking such information at any point of time. The annualaccounts of the subsidiary companies shall also be kept for inspection for any member inits head office and that of the subsidiary companies.
STATUTORY STATEMENTS
As per the requirements of the Companies Act, 1956, the following information is givenin separate statements annexed hereto, which form part of this report:
a) Energy conservation, technology absorption and foreign exchange inflow/outgopursuant to section 217(1)(e) of the Companies Act, 1956.
b) Particulars of employees pursuant to section 217(2A) of the Companies Act, 1956.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of section 217(2AA) of the Companies Act, 1956, yourdirectors state that:
(i) In the preparation of the annual accounts, applicable accounting standards havebeen followed along with proper explanation relating to material departures.
(ii) Accounting policies selected were applied consistently.Reasonable and prudentjudgments and estimates are made so as to give a true and fair view of the state ofaffairs of the Company as of 31st March, 2012 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, 1956, 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.
CORPORATE GOVERNANCE
A Management Discussion and Analysis is annexed and form part of this report.
A separate report on Corporate Governance along with the Praticing Company Secretarycertificate on compliance of conditions of Corporate Governance as stipulated in clause 49of the listing Agreement with the Stock Exchanges form part of this report.
AUDITORS
M/s. Walker, Chandiok & Co., Chartered Accountants, retire as auditors of theCompany at the ensuing Annual General Meeting and have seek re-appointment at the ensuingAnnual General Meeting of the Company. The Company has received a letter from Walker,Chandiok & Co., Chartered Accountants, expressing their willingness to be reappointedas statutory auditors of the Company and further confirmed that their reappointment, ifmade, will be in compliance with provisions of Section 224 (1B) of the Companies Act,1956. The Board has proposed to appoint M/s. Walker, Chandiok & Co., CharteredAccountants, as statutory auditors of the Company from the conclusion of the ensuingAnnual General Meeting.
APPRECIATION
Your directors wish to place on record their appreciation of continued support extendedby the dealers, distributors, suppliers, investors, bankers, financial institutions. Yourdirectors also express their appreciation for the committed services by the employees ofthe Company.
| On behalf of the Board |
| New Delhi | Ashok Jaipuria |
| May 23, 2012 | Chairman |
INFORMATION AS PER SECTION 217(1)(e) READ WITH COMPANIES (DISCLOSURE OF PARTICULARS INTHE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS REPORT FORTHE YEAR ENDED 31ST MARCH, 2012.
I. CONSERVATION OF ENERGY
(a) Energy conservation measures taken
Improvement in energy efficiency is a continuous process at Cosmo and conservation ofenergy is given a very high priority in all our plants and offices.
The energy cost saving measures carried out by the company during the year are listedbelow:
i) New connection from State electricity Board at our Karjan plant is under process toreplace the energy consumption from own generation to state owned electricity which willreduce energy cost by atleast 15-20%
ii) Complete stoppage of own power generation at Waluj plant which was costly byapprox. 25-30% against state electricity power cost.
iii) Air pre-heating at Line VIII at Karjan plant is under implementation.
iv) Installed screw compressor in place of reciprocating compressor.
v) Installed automatic power factor control system to increase power factor.
(b) Additional investments and proposals, if any, being implemented for reduction ofconsumption of energy;
Appointment of outside professional consulting firm for detailed study & providingguidance in the area of energy saving.
(c) Impact of the measures at (a) and (b) for reduction of energy consumption andconsequent impact on the cost of production of goods;
The above measures have helped the Company to improve its energy management efficientlyand consequently reduce cost.
(d) Form A
Not Applicable
II. TECHNOLOGY ABSORPTION
Efforts made in technology absorption as per Form-B of the Annexure in the Rules.
1. Research and Development
(a) Specific areas in which R & D carried out by the Company:
Development of new products, Improvement in product quality and upgradation of productsas per customer needs.
(b) Benefits derived as a result of above R & D:
Development of new products, improvement and upgradation of products resulting inbetter product mix and realization.
(c) Future Plan of Action
The Company will continue its efforts towards the development of new products, newapplications and cost reduction measures.
(d) Expenditure on R & D
| Rs. Crores (approx) |
| (a) Capital | 0.00 |
| (b) Recurring | 4.77 |
| (c) Total | 4.77 |
| (d) Total R & D expenditure as percentage of net sales | 0.52% |
2. Technology Absorption, adoption and innovation.
(a) Efforts in brief, made towards technology absorption, adoption and innovation.
The Company's technology is developed in house, which has helped in improvingefficiency and developing new products.
(b) Benefits derived as a result of the above efforts.
Growth in business.
(c) In case of imported technology (Imported during the last 5 years reckoned from thebeginning of the financial year) following information may be furnished.
(a) Technology imported
(b) Year of import
(c) Has technology been fully absorbed
(d) If not fully absorbed, areas where this has not taken place, reason therefore andfuture plans of actions:
N.A. (The Company has not imported any technology)
III. FOREIGN EXCHANGE EARNINGS AND OUTGO
A. Activities relating to export initiatives taken to increase exports, development ofnew export markets for products and services and export plans.
Despite the Continuous tough market conditions, the Company was able to exportRs.418.22 crores in 2011-12 against 462.86 crores in 2010-11
B. Total Foreign Exchange used and earned
The Company's foreign exchange earnings were Rs. 418.22 Crores (Previous Year Rs.462.86 Crores). The total foreign exchange utilized during the year amounted to Rs. 175.84crores (Previous Year Rs. 204.65 crores). Details of foreign Exchange earned and utilizedduring the year are given in Notes to Accounts.
| On behalf of the Board |
| New Delhi | Ashok Jaipuria |
| May 22, 2012 | Chairman |