cosmo ferrites ltd Directors report

THE MEMBERS

COSMO FERRITES LTD.

The Directors have pleasure in presenting the Annual Report on the business and operations of the company along with Audited Balance Sheet and Profit & Loss A/c for the year ended 31^st March 2023.

1. SUMMARY FINANCIAL RESULTS

The Financial Results of the company for the year ended 31^st March, 2023, were as follows:

		(Rs. in Lacs
Particulars	Year Ended 31st March 2023	Year Ended 31st March 2022
Net Sa les	10731	11384
Other Income	261	174
Profit before Interest, Depreciation and Tax	1255	2948
Finance Cost	550	407
Depreciation	390	392
Exceptional Item	-	(253)
Profit before Tax	315	1897
Provision for Taxation
- Current Tax	85	28
- Earlier year Taxes	(5)	-
- Deferred Tax	(7)	446
Profit After Tax	242	1423
Extraordinary Item	-	-
Profit after Tax Including Extraordinary Item	242	1423

2. REVIEW OF OPERATIONS

• For the year ending 31^st March 2023 sales decreased to Rs 10,731 Lacs as compared to Rs. 11,384 Lacs for previous year.

• Profit after tax for the year is Rs. 242 lacs as compared to Rs. 1,423 Lacs in the previous year.

3. DIVIDEND

In order to conserve the resources of the Company and to plough back the profits for growth, the Board of Directors of the Company have decided not to recommend any dividend on the equity shares of the Company for the financial year ended March 31,2023.

4. RESERVE

The Company has not transferred any amount to reserve during the year.

5. SHARE CAPITAL

During the year under review, there was no change in the Companys issued, subscribed and paid-up equity share capital. On 31^st March, 2023, it stood at Rs. 12.03 Cr divided into 1,20,30,000 equity shares of Rs. 10/- each.

6. RESEARCH & DEVELOPMENT

Continuous efforts on Research & Development activities are being made to expand the domestic and export markets.

7. CORPORATE GOVERNANCE

Company is committed to maintaining the 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 Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is included in the Annual Report in Annexure - A.

8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to regulations 34 of the Listing Regulations, Managements Discussion and Analysis Report for the year is presented in a separate section forming part of the Annual Report.

9. 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 Companys 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.

10. INTERNAL CONTROLS SYSTEMS

The Internal Control systems are routinely tested and certified by Statutory as well as Internal Auditors and cover all key areas of business. Independence of the internal audit and compliance is ensured by direct reporting to the Audit Committee of the Board.

A CEO and CFO Certificate, forming part of the Corporate Governance Report, further confirms the existence and effectiveness of internal controls and reiterates their responsibilities to report deficiencies to the Audit Committee and rectify the same.

11. DIVERSITY OF BOARD

The Company sees increasing diversity at the Board level as an essential element in supporting the attainment of its strategic objectives and its sustainable development. 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.

12. DIRECTORS

(a) Chairman

Mr. Ambrish Jaipuria is the Chairman of the Board.

(b) Re-appointment and Appointment

Mr. Pankaj Poddar; Mr. Neeraj Kumar Sharma and Ms. Himalyani Gupta were appointed as Additional

Directors by the Board on May 12, 2022 and approved as the Directors of the Company by the shareholders in their meeting held on June 30, 2022.

In terms of Articles of Association of the Company and provisions of the Companies Act, 2013, Mr. Pankaj Poddar (DIN: 02815660) Non Independent Non-Executive Director of the Company, is liable to retire by rotation at the ensuing AGM and being eligible, offered himself for re-appointment. The Board recommends his re-appointment to the members in the ensuing AGM.

(c) Status of Directors

Mr. Ambrish Jaipuria is the Managing Director of the Company. Mr. Pankaj Poddar is NonIndependent and Non-Executive Director. Mr. R.K. Gupta, Mr. Neeraj Kumar Sharma and Ms. Himalyani Gupta are the Independent Directors of the Company.

(d) Declaration from Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under subsection (6) of Section 149 of the Companies Act, 2013 and under Regulation 16 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

(e) Cessation of Directors

During the year, Ms. Abha Jaipuria and Mr. Kulbhushan Malik, Directors were ceased to hold office. Further, Mr. Janardhan Pralhadrao Gupta, took early retirement from the office of Directors of the Company with effect from 23^rd May, 2023.

During the year under review, except as stated above there was no change in the Directors of the Company.

13. STATEMENT OF BOARD OF DIRECTORS

The Board of Directors of the Company are of the opinion that all the Independent Directors of the Company appointed during the year possesses integrity, relevant expertise and experience 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.

14. KEY MANAGERIAL PERSONNELS

Mr. Ambrish Jaipuria, Managing Director, Mr. Sanjiv Jindal, Chief Financial Officer and Mr. Rahul Das, Company Secretary are the Key Managerial Personnel of the Company in accordance with the provisions of Section 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Further, Mr. Aditya Sharma has resigned from the post of Company Secretary and Compliance Officer of the Company from January 31, 2023 and Mr. Rahul Das has been appointed as the Company Secretary and Compliance Officer of the Company with effect from February 09, 2023.

During the year under review, except as stated above, there was no change in the KMPs of the Company.

15. FAMILIARISATION PROGRAMME FOR DIRECTORS

At the time of appointing a Director, a formal letter of appointment is given to him, which inter- alia explains the role, function, duties and responsibilities expected of him as a Director of the Company. The Director is also explained in detail the Compliance required from him under the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 and other relevant regulations and affirmation taken with respect to the same.

Management does one to one discussion with the newly appointed Director to familiarize him with the Companys operations. Further the Company has put in place a system to familiarize the Independent Directors about the Company, its products, business and the on-going events relating to the Company.

The details of the familiarisation programme may be accessed on the Companys website (www.cosmoferrites.com).

16. EVALUATION OF BOARDS PERFORMANCE

In compliance with the Companies Act, 2013 and Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the performance evaluation of the Board was carried out during the year under review. More details on the same are given in the Corporate Governance Report.

17. MEETINGS

During the year Six (6) Board Meetings and Five (5) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under Companies Act, 2013.

Details of the composition of the Board and its Committees and of the Meetings held, the attendance of the Directors at such meetings and other relevant details are provided in Corporate Governance Report.

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

19. 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.

20. 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 - C to this report.

21. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy establishing vigil mechanism, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy without fear of reprisal. The policy may be accessed on the Companys website.

22. REMUNERATION POLICY

Pursuant to the applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Board, in consultation with its 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 Companys website (www.cosmoferrites.com).

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

23. PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS

In terms of provisions of the Companies Act, 2013 read with the Rules issued there under and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, 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 & Organizational 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.

24. RELATED PARTY TRANSACTIONS

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 Act, entered into by the Company during the financial year, were in the ordinary course of business and on an arms length basis. The details of the related party transactions as required under Accounting Standard-18 are set out in Note 39 to the financial statements forming part of this Annual Report.

During the year, there were no transactions with related parties which qualify as material transactions under SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015. The Disclosure required in Form AOC-2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 is Not Applicable.

The Company has developed a Policy for Consideration and Approval of Related Party Transactions which can be accessed on Companys website (www.cosmoferrites.com).

25. 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.cosmoferrites.com/investor-relations/shareholder- information.

26. CORPORATE SOCIAL RESPONSIBILITY ("CSR")

During the financial year 2022-23, the Company has spent Rs. 25.00 lakhs towards CSR expenditure, in terms of the CSR annual action plan approved by the Board of Directors. The CSR initiatives of the Company were under the thrust area of health & hygiene.

The Board confirms that the implementation and monitoring of the CSR Policy was done in compliance with the CSR objectives and Policy of the Company. The Companys CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31^st March, 2023, in accordance with the Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules") is set out in Annexure (E) to this Report.

27. RISK MANAGEMENT

Every organization is exposed to a number of risks that it needs to effectively identify, manage and mitigate. Company has a process in place to identify key risks across the organisation and relevant action plans to mitigate these risks. The Audit Committee has been entrusted with the responsibility to assist the Board members about the risk assessment and its minimization procedures.

There are no risks which in the opinion of the Board threaten the existence of your Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this Report.

28. AUDITORS

Statutory Audit:

M/s. Suresh Kumar Mittal & Co., Chartered Accountants, were re-appointed as Statutory Auditors of the Company in 36^th AGM (held on 30 June, 2022) to hold office for a period of 5 years until the conclusion of 40^th AGM.

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

Secretarial Audit:

Pursuant to the Provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Managerial Personnel) Rules, 2014, the Company has appointed "M/s DMK Associates", a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company.

The Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of the applicable corporate laws. The Secretarial Audit Report annexed as Annexure-B.

Cost Auditor:

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s Ravi Sahni & Co., Cost Accountants, as Cost Auditor to audit the cost accounts of the Company for the Financial Year 202324 at a remuneration of Rs. 1,65,000/- plus taxes as applicable and reimbursement of out-of-pocket expenses. As required under the Companies Act, 2013, a resolution seeking members approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

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 Act, therefore no detail is required to be disclosed under section 134(3)(ca) of the Act.

29. AUDITORS REMARKS

The Auditors remarks on the annual accounts are selfexplanatory and do not require further comments from the Company.

30. CHANGE IN NATURE OF BUSINESS, IF ANY

No change in the nature of the business of the Company done during the year under review.

31. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments which have occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report that may affect the financial position of the Company.

32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

33. LISTING WITH STOCK EXCHANGES

The Company confirms that it has paid the Annual Listing Fees for the year FY 2022-2023, to the Bombay Stock Exchange where the Companys equity shares are listed.

34. PROMOTION OF WOMENS WELL BEING AT WORKPLACE

Cosmo Ferrites 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 there under 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.

35. 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 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is also enclosed as Annexure D 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 Sectio n 136 of the Act, the said an nexu re 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.

36. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of 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 the 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^st 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.

37. SECRETARIAL STANDARDS

During the year 2022-2023, the Company has complied with applicable Secretarial Standards issued by the Institute of the Company Secretaries of India.

38. OTHER DISCLOSURES

During the year, there were no transaction requiring disclosure or reporting in respect of matters relating to:

(a) pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016; and

(b) instance of one-time settlement with any bank or financial institution.

39. ACKNOWLDGEMENT

Your Directors would also like to extend their gratitude for the co-operation received from financial institutions, the Government of India, and regulatory authorities. 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 Company. Your Directors also take this opportunity to thank all investors and shareholders, and the stock exchange, 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
New Delhi	Ambrish Jaipuria
24th May, 2023	Chairman