To
The Members,
Cosboard Industries Ltd.
(Undergoing CIRP under IBC)
Your Directors are pleased to present herewith the 41st Annual Report on the business and operations of your Company and the Audited Financial Statements of the Company for the year ended 31st March, 2021 together with the Auditors Report thereon.
KEY FINANCIAL HIGHLIGHTS:
The Company's financial performance, for the financial year ended 31st March, 2021 is summarized below:
PROCEDDINGS OF CORPORATE INSOLVANCY RESOLUTION PROCESS UNDER INSOLVENCY AND BANKRUPTCYCODE 2016 (IBC) A.
M/s Cos Board Industries Limited ("Abbreviated term" or "the Corporate Debtor") incorporated in 30/12/1980, Corporate Debtor has COS Board Industries Limited is engaged into manufacturing, marketing and distributing paper product. The Honble National Company Law Tribunal ("NCLT"), 16.12.2019 vide order no. CP(IB) NO. 44/CTB/2019 dated 16.12.2019 commenced Corporate Insolvency Resolution Process in the matter of (Abbreviated term of the CD) under the provisions of Insolvency and Bankruptcy Code, 2016 ("IBC"); wherein Mr. Umesh Chandra Sahoo had been appointed as the Interim Resolution Professional.
The Committee of Creditors at its first meeting held on 24/01/2020 resolved to continue the appointment of Mr. Umesh Chandra Sahoo, as the Resolution Professional of the Corporate Debtor. Further, the tenure of Resolution Professional i.e. Mr. Umesh Chandra Sahoo has been extended to 02nd July, 2022.
The Committee of Creditors ("CoC") through Resolution Professional ("RP") is in the process of identifying Resolution Applicant(s) for (Abbreviated term of the CD). Details regarding the Expression of Interest is available on the website of the Company, i.e https://www.cosboard.com/
COVID 19
In the last month of FY 2020-2021, the COVID-19 pandemic developed rapidly into a global crisis, forcing governments to enforce lockdowns of all economic activity in various areas of the country. Therefore, to ensure the safety and wellbeing of employees, workmen and all stakeholders, the company was temporarily closed the manufacturing and thereafter operated with 50% employee capacity other operations. Further the Company resumed partial operations with limited workforce subject to the conditions prescribed by the Government/Local Authorities.
FINANCIAL PERFORMANCE & HIGHLIGHTS:
The sales turnover of the Company for the year was NIL as compared to previous year Rs. 1,40,66,674.
DIVIDEND:
In view of the losses incurred by the Company and the liquidation proceedings under IBC, the Board of Directors of the Company has not recommended any dividend for the financial year under review. As the Company has incurred losses during the year, no amount has been transferred to reserves for the financial year 2020-2021.
AMOUNT TRANSFERRED TO RESERVE
During the year under review the Company has not transferred any amount to reserves.
HUMAN RESOURCES DEVELOPMENT:
The Company continues its focus on development of human resource. The relations of the management with employees during the year continued to be cordial. Learning and development has been strengthened to bring value addition in the employee and to enhance Team Building leading towards success. The Company focuses on providing the employees motivating work environment and excellent career development opportunities.
ENVIRONMENT, HEALTH AND SAFETY
The Company accords the highest importance to Environment, Health and Safety (EHS). Continuous investment in infrastructure, skill building and systems is done to ensure that the EHS of the company is maintained at the highest standards.
QUALITY
The Management of the Company is quality conscious and attaches utmost importance to the quality of the products. The Company continues to maintain industry-best standards in managing the quality of its products and services.
FINANCE & ACCOUNTS:
(i) Fixed Deposits:
During the year under review, the Company has not accepted any fixed deposits within the meaning of Section 73 and 74 of the Companies Act, 2013 during the period under review.
(ii) Income Tax Assessments:
The Company has not received any Assessment order / nor intimation U/S 143(1) of the Income Tax Act, 1961 during the Financial Year 2020-2021.
SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES:
Your Company has neither any Subsidiary nor Joint Venture nor Associate Company. During the year under review, none of the Companies have become or ceased to be Company's Subsidiaries, Joint Ventures or Associate Companies.
APPOINTMENT AND RESIGNATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the financial year, there were no change in composition of Board of Directors and Key Managerial Personnel of your Company. However, in accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Inderpal Singh Pasricha (DIN: 00016273), Independent Non- Executive Director of the Company has resigned from the post of Directorship vide his resignation letter dated 26/03/2019 which has been approved in the Board Meeting held on 24/04/2019 and Mr. Dayanidhi Biswal (DIN: 08431382) was appointed as Independent Non-Executive Director of the Company with effect from 24/04/2019
MANAGEMENT DISCUSSION & ANALYSIS REPORT:
Detailed Management Discussion and Analysis is enclosed by way of Annexure 'A' to this report.
DIRECTORS' RESPONSIBILITY STATEMENT:
The Hon'ble National Company Law Tribunal (NCLT) had admitted the petition for initiating the Corporate Insolvency Resolution (CIR) Process under the provisions of the Insolvency Bankruptcy Code 2016 (IBC). Further vide the aforesaid NCLT order (Communicated on 16.12.2019). The power of the Board of Directors of the Company stood suspended. Furthermore Mr. Umesh Chandra Sahoo was appointed as the Resolution Professional.
In light of the aforesaid and pursuant to the requirements under sub section (3)(c) and (5) of Section 134 of the Companies Act, 2013 with respect to Directors' Responsibility Statement it is hereby confirmed by the Resolution Professional that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis; and
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CORPORATE GOVERNANCE:
As per provisions of Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, compliance with the provisions of the Corporate Governance are not applicable to the Companies having paid up equity share capital not exceeding Rs. 10 Crore and Net Worth not exceeding Rs. 25 Crore, as on the last day of previous financial year or on the Companies listed on SME Exchange. Thus, the Company is not falling into the ceiling limit, therefore no reporting is required to be done under the aforesaid provision.
CORPORATE SOCIAL RESPONSIBILITY:
Your Company does not fall in the criteria mentioned under Section 135 of the Companies Act, 2013 for applicability of the provisions of Corporate Social Responsibility. Hence, the Company is not required to constitute CSR Committee and to comply with other provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.
CONSERVATION OF ENERGY, TECHNOLOGY & FOREIGN EXCHANGE EARNINGS AND OUTGO:
Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, information on conservation of energy is given in the Annexure 'B' to this Report. There is no Research & Development activity, no import of technology or foreign exchange earnings or outgo hence details of the same are not annexed to this report.
GENERAL INFORMATION:
RETIREMENT BY ROTATION:
None of the Directors are liable to retire by rotation during the reporting period.
NUMBER OF MEETINGS OF THE BOARD
During the F.Y 2020-21, 6 (Six) meetings of the Board of Directors were held.
COMPOSITION OF BOARD OF DIRECTORS AND KMP
The Hon'ble National Company Law Tribunal (NCLT) had admitted the petition for initiating the Corporate Insolvency Resolution (CIR) Process under the provisions of the Insolvency Bankruptcy Code 2016 (IBC). Further vide NCLT order no. CP(IB) NO. 44/CTB/2019 dated 16.12.2019 and pursuant to Section 17 of the IBC the powers of the Board of Directors stood suspended and such powers were vested with the Interim Resolution Professional Mr. Umesh Chandra Sahoo.
COMMITTEES OF THE BOARD
The power of the Board of Directors of the Company stood suspended. Furthermore Mr. Umesh Chandra Sahoo was appointed as the Resolution Professional. The Company has several Committees which have been constituted in compliance with the requirements of the relevant provisions of applicable laws and statutes.
The Company has following Committees of the Board comprising of Directors and / or Executives of the Company:
Audit Committee which comprises of two Independent Directors i.e. Mr. Abu Akram (Chairman of Committee) and Mr. Dayanidhi Biswal (Member), and one executive Director Mr. Shiv Shankar Taparia (Member).
Stakeholders Relationship Committee which comprises of two Independent Directors i. e. Mr. Abu Akram (Chairman of Committee) and Mr. Dayanidhi Biswal (Member) and one Executive Director, Anil Kumar Gilra (Member).
Risk Management Committee which comprises of Mr. Shiv Shankar Taparia (Chairman of Committee) and Mr. Anil Kumar Gilra. (Member).
Internal Complaints Committee which comprises of Mr. Rekha Bhawsinka (Presiding Officer), Ms. Shobha John (Member) and Mary Jose (Member)
Nomination & Remuneration Committee which comprises of three Non-executive Directors out of which two are Independent Directors, Mr. Abu Akram (Chairman of Committee), Mr. Dayanidhi Biswal (Member) and one executive Director Mr. Shiv Shankar Taparia (Member)
Committee of Independent Directors which comprises of three Independent Directors namely Mr. Abu Akram, Mr. Dayanidhi Biswal and Mrs. Rekha Bhawsinka.
BOARD EVALUATION
During the period 2020-21, the evaluation cycle has been carried out which included the Evaluation of the Board as a whole, Board Committees and Directors. The exercise was led by the Independent Directors of the Company. The Evaluation process focused on various aspects of the Board and Committees functioning such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors on parameters such as attendance, contribution and independent judgment.
Mr. Anil Kumar Gilra carried out the Board evaluation and other matters and informed that all parameters has been maintained.
VIGIL MECHANISM/WHISTLE BLOWER POLICY FOR THE DIRECTORS AND EMPLOYEES
Your Company believes in promoting a fair, transparent, ethical and professional work environment. The Board of Directors of the Company pursuant to the provisions of Section 177 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has framed "Vigil - Mechanism/ Whistle Blower Policy" for Directors and employees of the Company for reporting the genuine concerns or grievances or cases of actual or suspected, fraud or violation of the Company's code of conduct and ethics policy.
PARTICULARS OF EMPLOYEES REMUNERATION
(A) The statement containing particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not being sent as the Company has no such employee who falls under the criteria specified in the said Rules.
(B) The ratio of the remuneration of each Director to the median employee's remuneration and other details in terms of Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this Report as Annexure 'C'.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the Financial Year / period with related parties were in the Ordinary Course of Business and on arm's length basis.
The Company has related party transactions relating to the financial year 2020-21, which is attached with Board Report in Form No. AOC-2 given in Annexure 'D'.
Your Directors draw attention of the members to Note 41 to the Financial Statements which sets out related party disclosures.
RISK MANAGEMENT
During the period under review, your Directors informed that Risk Management Committee have already been formed wherein all material Risks faced by the Company will be identified and assessed. For each of the risks identified, corresponding controls are assessed and policies and procedures are put in place for monitoring, mitigating and reporting risk on a periodic basis.
INTERNAL FINANCIAL CONTROL SYSTEMS
Details of the Internal Financial Control Systems is explained in the "Management Discussion and Analysis" to this report.
* Mr. Ashok Kumar Jena has resigned from the post of Chief Financial Officer with effect from 4th November, 2019 vide his resignation letter to the Company.
**Ms. Aka Jain has resigned from her post with effect from 31.03.2020, but the management of the Company has not yet accepted the resignation.
INSURANCE
The properties, stocks, stores, assets, etc. belonging to the Company continue to be adequately insured against fire, riot, civil commotion etc.
DEMATERIALIZATION OF SHARES
The Company's shares are listed on BSE Limited and the Company's Registrar and Share Transfer Agents have connectivity with National Securities Depository Ltd. & Central Depository Services (India) Ltd. The ISIN is INE496D01016 as on March 31, 2021, total dematerialized equity shares are 36,24,025 representing 84.40% of the total paid up share capital of the Company.
COMPANY'S WEBSITE
The Company has its website namely www.cosboard.com. The website provides detailed information about the business activity, locations of its offices. The Quarterly Results, Annual Reports and Shareholding patterns and various policies are placed on the website of the Company and the same are updated periodically.
MEANS OF COMMUNICATION
The Company has designated Registrar & Share Transfer Agent, info@bigshareonline.com as an email id for the purpose of registering complaints by investors and displayed the same on the website of the Company.
STATUTORY AUDITOR
M/s D. M. Rao & Co. Chartered Accountants, (Registration No. 006995S) were appointed as the Statutory Auditors to hold office upto the conclusion of 41st Annual General Meeting (AGM). The Company subject to the approval of members in ensuring AGM, hereby recommend and propose the reappointment of M/s D. M. Rao & Co., Chartered Accountants, as the Statutory Auditors of the Company from the conclusion of 41st Annual General Meeting till the conclusion of 46th Annual General Meeting of the Company, to examine and audit the accounts of the Company on such remuneration as may be mutually agreed between the Board of Directors of the Company and the Auditors.
AUDITORS REPORT
The notes forming part of the accounts referred in the Auditors' Report are self explanatory and give complete information. There are no qualifications, reservation or adverse remarks made by statutory auditors in the Audit Report.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Board has appointed M/s. Deepak Dhir & Associates, Company Secretaries, New Delhi, to conduct Secretarial Audit for the financial year 2020-21. The report of the Secretarial Auditors together with the explanations of the management on the qualifying remarks of Secretarial Auditors is enclosed as Annexure-E to this Board Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY
The Company has not given Loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has a policy on Prohibition/Prevention of Sexual Harassment of Women at workplace and matters connected therewith or incidental covering thereto all the aspects as contained in "The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
Acknowledgement
Your Directors wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers.
Your Directors also place on record their sincere appreciation for the assistance and co-operation received from the banks, customers, suppliers and the shareholders from time to time.