Cosmo First and Cosmo Ferrites Agree on 1-Year Support Services

Cosmo First Limited has announced a new one-year service agreement with Cosmo Ferrites Limited, a company with a common promoter.

Under the terms of the agreement, Cosmo First will provide support services to Cosmo Ferrites. The fee for these services is set at ₹2.00 lakh per month, plus applicable GST. The agreement is scheduled to begin on April 1, 2026, and will conclude on March 31, 2027.

This arrangement is considered a related party transaction because Mr. Ashok Jaipuria serves as the common promoter for both Cosmo First and Cosmo Ferrites. The deal is being conducted at 'arm's length', indicating that the terms are fair and reflect market rates. The company stated this move aims to enhance its service revenue streams.

Cosmo First Limited, formerly known as Cosmo Films Limited, operates in the specialty films sector, serving packaging, labels, and industrial applications, while also expanding its chemical business. Cosmo Ferrites Limited specializes in manufacturing ferrite components essential for electronic devices.

The agreement provides Cosmo First with a new, albeit modest, service revenue stream for the upcoming year. It formalizes the services to be rendered and the financial terms between the two promoter group entities.

Key Terms Summary

The key terms of the contract include a monthly support services fee of ₹2.00 lakh for the period April 1, 2026, to March 31, 2027. This annualizes to ₹2.40 lakh. The duration of the agreement is exactly one year.

Investor Observation

The renewal of this service agreement upon its expiry in March 2027 will be a point of observation. The contribution of these support services to Cosmo First's overall revenue and profitability will be reported in subsequent financial statements. Any further announcements regarding related party transactions or strategic alliances within the promoter group may also be noted.