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Cella Space Ltd.

BSE: 532701 Sector: Industrials
NSE: N.A. ISIN Code: INE266H01014
BSE 00:00 | 17 Sep 5.31 -0.27
(-4.84%)
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5.79

HIGH

5.79

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5.31

NSE 05:30 | 01 Jan Cella Space Ltd
OPEN 5.79
PREVIOUS CLOSE 5.58
VOLUME 6670
52-Week high 8.00
52-Week low 3.43
P/E 37.93
Mkt Cap.(Rs cr) 10
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5.79
CLOSE 5.58
VOLUME 6670
52-Week high 8.00
52-Week low 3.43
P/E 37.93
Mkt Cap.(Rs cr) 10
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Cella Space Ltd. (CELLASPACE) - Director Report

Company director report

Your Directors have pleasure in presenting their 29th Annual Report and the AuditedFinancial Statements of the Company for the year ended March 312020.

FINANCIAL PERFORMANCE

Brief Financial Highlights with comparison of previous financial year are as follows:

Particulars For the year ended 31.03.2020 For the year ended 31.03.2019
(Rs. In lacs) (Rs. In lacs)
Revenue from Operations 268.86 -
Other Income 62.69 393.34
Profit/loss before Depreciation Finance Costs Exceptional Items and Tax Expense 84.29 63.57
Less:- Depreciation/ Amortisation/Impairment 43.01 216.46
Profit/loss before Finance Costs Exceptional Items and Tax Expense 41.28 (152.89)
Less:- Finance Costs 159.21 8.16
Profit/loss before Exceptional Items and Tax Expense (117.93) (161.05)
Add/less;- Exceptional Items (203.84) (323.98)
Profit/loss before Tax Expense 85.91 162.93
Less:- Tax Expense (Current & Deferred) 0.00 (27.78)
Profit/Loss for the year (1) 85.91 190.71
Total Comprehensive Income/Loss (2) 0.50 1.64
Total (1+2) 86.41 192.35
Balance of profit/loss for earlier years (6625.23) (6711.14)
Less:- Transfer to Debenture Redemption Reserve 0.00 0.00
Less:- Transfer to Reserves 0.00 0.00
Less:- Dividend paid on Equity Shares 0.00 0.00
Less:- Dividend paid on Preference Shares 0.00 0.00
Less:- Dividend Distribution Tax 0.00 0.00
Balance carried forward (6625.23) (6711.14)

OPERATIONAL PERFORMANCE

During the FY 2019-20 the Company has realised monthly rental income of Rs.10.38 lakhsfrom Qwik Supply Chain Pvt Ltd (Formely Finetech Corporation Pvt Ltd) starting from May24 2019 with a yearly compounding annual escalation of 5% per year. The Company wasfurther able to enter into lease agreement with LG Electronics India Ltd for leasing out102547 sq.ft warehouse area for a rental income of Rs.24 per sq.ft per month for 7 yearsstarting from 01.10.2020 with a yearly compounding annual escalation of 5% per year.Besides the Company also entered into lease agreement for a period of 9 years with VIPIndustries Ltd for renting out 22245 sq.ft warehouse area for a rental income of Rs.15per sq.ft for the first twelve months starting from 25.06.2020 and Rs. 16 per sq.ft afterthe expiry of 12 months after that with a yearly compounding annual escalation of 5% peryear.

DIVIDEND & RESERVES

As the Company is in the process of revival your Directors decided not to recommendpayment of dividend on the equity shares and Non-Convertible Cumulative RedeemablePreference Shares for the financial year under review. Your Company has not transferredany amount to reserves during the financial year under review.

INVESTOR EDUCATION AND PROTECTION FUND

The Company has Rs. 235187/- (Rupees Two Lakhs Thirty Five Thousand One Hundred andEighty Seven) being the unpaid dividend amount pertaining to the financial year 2011-12due to be transferred to Investor Education and Protection Fund (IEPF) on expiry of sevenyears during the FY 2019- 20 . Even though the Company has tried several times to transferthe amount to IEPF it was unable to complete the same due to some technical issuepersisting in the MCA website. In spite of registering several complaints in MCA websiteand sending emails to IEPF authorities times the issue was unresolved. However theCompany is constantly taking every effort to transfer the amount to IEPF.

The Company has Rs.168195/- (Rupees One Lakhs Sixty Eight Thousand One Hundred andNinety Five only) being the unpaid dividend amount pertaining to the financial year2012-13 due to be transferred to Investor Education and Protection Fund (IEPF) on expiryof seven years during the FY 2020- 21.

INDUSTRIAL RELATIONS

The industrial relations remained cordial and satisfactory during the year underreview.

CHANGES IN NATURE OF BUSINESS

There has not been any change in the nature of business of the Company from the end offinancial year (31.03.2020) till the date of report (12.11.2020).

CHANGES IN SHARE CAPITAL DURING THE FINANCIAL YEAR IF ANY

As on date of this report the Authorized Share Capital of the Company is Rs.500000000/- (Rupees Fifty Crores Only) divided into 38000000 (Three Crores andEighty lakhs) equity shares of Rs. 10/- (Rupees Ten only) each and 12000000 (One Croresand Twenty lakhs) Preference Shares of Rs. 10/- (Rupees Ten only) each. The Company in thelast Annual General Meeting held on September 30 2019 has reclassified the AuthorisedShare Capital as given above.

The total Issued Subscribed and Paid up Share Capital of the Company as on the date ofthe report is Rs. 291512170/- (Rupees Twenty Nine Crores Fifteen Lakhs Twelve ThousandOne Hundred and Seventy Only) divided into 19151217 (One Crores Ninety One Lakhs FiftyOne Thousand Two Hundred and Seventeen) equity shares of Rs. 10/- (Rupees Ten only) eachand 10000000 (One Crores) Preference shares of Rs. 10/- (Rupees Ten only) each .

During the year under review the Company has converted 950000 (Nine Lakhs and FiftyThousand) Convertible Equity Share Warrants allotted to Mr. S Rajkumar into 950000 (NineLakhs and Fifty Thousand) equity shares of Rs.10/- each at a premium of Rs.1 per share onAugust 30 2019 with the approval of Board of Directors.

Further the Company in the last Annual General Meeting held on September 30 2019 hasforfeited 285000 (Two Lakhs and Eighty Five Thousand) Convertible Equity Share Warrantsallotted to Mr.S.Rajkumar as the time limit of 18 months available for conversion ofWarrants into equity shares was expired as per SEBI ICDR Regulations 2018.

MATERIAL CHANGES AND COMMITMENTS OCCURRED BETWEEN THE DATE OF BALANCE SHEET AND THEDATE OF REPORT

There were no material changes/events occurred between financial year end date(31.03.2020) and date of the Board's report (12.11.2020)

MEETING OF INDEPENDENT DIRECTORS

During the year under review the Independent Directors met on February 14 2020 interalia to:

i) Review the performance of Non-Independent Directors and the Board as a whole

ii) Review the performance of the Chairperson of the Company taking into account theviews of Executive Directors and Non-Executive Directors

iii) Assess the quality quantity and timeliness of flow of information between theCompany's Management and the Board that is necessary for the Board to effectively andreasonably perform their duties

FINANCE

A) . Deposits

The Company has not accepted deposits falling within the ambit of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 from public.

B) Particulars of Loans Guarantees or Investments

The particulars of loans and advances given by the Company is detailed under Note no.7.The Company has not rendered any guarantee to any parties. Details of Investment is givenin note no.6A of financial statement

C) Commitments

The company has availed a short term loan amounting to Rs.20.80 Crores from Union BankLtd (Formerly Andhra Bank Ltd) during the financial year under review. All the repaymentand interest commitments were met as per terms of arrangement with the Banks.

INTERNAL FINANCIAL CONTROL SYSTEM AND ITS ADEQUACY

Your Company has adequate internal control and internal check system commensurate withsize of the organization. Audit Committee periodically reviews the Internal FinancialControl and Risk Assessment System of the Company. During the year Internal FinancialControls were tested and no material weaknesses in the design or operating effectivenesswere observed.

BOARD OF DIRECTORS

The Board of the Company at March 312020 consisted of 9 Directors. The BoardComposition is as follows:-

• 1 Managing Director

• 1 Whole Time Director

• 3 Independent Directors

• 3 Promoter Non Executive Directors and

• 1 Non Executive Director

The detailed list of the Board of Directors is enclosed in the Corporate GovernanceReport.

During the financial year under review the following changes occurred in the Board ofDirectors of the Company:-

a) Mr. Visakh Rajkumar (DIN:- 07079475) was appointed as a Whole Time Director of theCompany for a period of 1 year in the last Annual General Meeting held on September 302019 for an annual remuneration of 12 lakhs.

b) The Company in the last Annual General Meeting held on September 30 2019 has takenthe approval of shareholders to continue the directorship of Mrs. Iasaki Kamalam (DIN:-01791001) as per Regulation 17(1A) of SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015

c) Mr. S Rajkumar (DIN:-01790870) was appointed as the Managing Director of the Companyfor a period of 2 years for an annual remuneration of 12 lakhs till August 12 2021.

The following changes occurred in the Board of Directors between the financial year enddate (31.03.2020) and the date of Report (12.11.2019 ):-

a) Mr. U Gururaja Bhat (DIN:- 00353361) Chairman and Non Executive IndependentDirector expired on June 16 2020

b) Mr. Narayanaswamy Subramanian (DIN:- 03602858) was appointed as Chairman of theBoard in the meeting of the Board of Directors held on September 12 2020

c) Mr. Akhilesh Agarwal (DIN:- 00918838) was redesignated as Non Executive IndependentDirector for a period of 5 (five) years with effect from September 12 2020 subject toapproval of members in the ensuing Annual General Meeting.

d) Mr.Visakh Rajkumar (DIN:- 07079475) was appointed as Whole Time Director for aperiod of 1(one) year with effect from October 12020 at an annual remuneration of 12lakhs subject to approval of members in the ensuing Annual General Meeting.

The following recommendations were made by the Board of Directors in the ensuingGeneral Meeting for approval by the shareholders:-

a) Appointment of Mr.Visakh Rajkumar (DIN:- 07079475) as Whole Time Director for aperiod of 1(one) year with effect from October 12020 at an annual remuneration of 12lakhs

b) Appointment of Mr. Akhilesh Agarwal (DIN:- 00918838) as Non Executive IndependentDirector for a period of five (5) years with effect from September 12 2020

BOARD DIVERSITY

The Company recognizes that building a Board of diverse and inclusive culture isintegral to its success. The Board considers that its diversity including genderdiversity is a vital asset to the business.

DECLARATION OF INDEPENDENCE

All independent directors have given declarations that they meet the criteria ofindependence as laid down under section 149 of the companies act 2013 and Regulation 16 ofSEBI(LODR) Regulations 2015 which have been relied on by Company and were placed at theBoard meeting. In the opinion of the Board the independent directors fulfill thenecessary criteria for independence as stipulated under the statutes.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The details of meeting of Board of Directors and the attendance of Directors areelaborated in the Corporate Governance Report.

The provisions of Companies Act 2013 and Listing Regulations were adhered to whileconsidering the time gap of 120 days between two meetings.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Regulations) Regulation 2015 the Board has carried out an annual performanceevaluation of its own performance the directors individually as well as the evaluation ofthe working of its Committee. The manner in which the evaluation has been carried out hasbeen explained in the Governance Report.

FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

The Company has practice of conducting familiarization program of the independentdirectors.

REMUNERATION TO DIRECTORS

The Remuneration paid to the Executive Directors and the Sitting Fees paid to theNon-Executive and Independent Directors are disclosed in the Extract to the Annual Return MGT -9 (Annexure II ) to the Board's Report.

POLICY OF DIRECTOR APPOINTMENT AND REMUNERATION:

Preamble

The Nomination and Remuneration policy is in compliance with Section 178 of theCompanies Act 2013 read along with the applicable rules thereto and as per the ListingRegulations.

The Remuneration Policy provides a framework for remuneration paid to the members ofthe Board of Directors ("Board") Key Managerial Personnel ("KMP") andthe Senior Management Personnel ("SMP") of the Company (collectively referred toas "Executives"). The expression "Senior management" means personnelof the Company who are members of its core management team excluding Board of Directorscomprising all members of management one level below the Executive Directors includingthe functional heads. The policy would be reviewed every year by the Nomination andRemuneration Committee of the Board of Directors.

1. Aims & Objectives

The aims and objectives of this remuneration policy may be summarized as follows:

The Remuneration Policy aims to enable the Company to attract retain and motivatehighly qualified members for the Board and Executive level. The Remuneration Policy seeksto enable the Company to provide a well balanced and performance- related compensationpackage taking into account shareholder interests industry standards and relevant Indiancorporate regulations.

The Remuneration Policy will ensure that the interests of Board Members &Executives are aligned with the business strategy and risk tolerance objectives valuesand long-term interests of the Company and will be consistent with the"pay-for-performance" principle.

The Remuneration Policy will ensure that remuneration to Directors and Executivesinvolves a balance between fixed and incentive pay reflecting short and long-termperformance objectives appropriate to the working of the Company and its goals.

2. Principles of Remuneration

Support for Strategic Objectives: Remuneration and reward frameworks and decisionsshall be developed in a manner that is consistent with supports and reinforces theachievement of the Company's vision and strategy.

Transparency: The process of remuneration management shall be transparent conducted ingood faith and in accordance with appropriate levels of confidentiality.

Internal equity: The Company shall remunerate the Board Members and the Executives interms of their roles within the organisation. Positions shall be formally evaluated todetermine their relative weight in relation to other positions within the Company.

External equity: The Company strives to pay an equitable remuneration capable ofattracting and retaining high quality personnel. Therefore the Company will remainlogically mindful of the ongoing need to attract and retain high quality people and theinfluence of external remuneration pressures.

Flexibility: Remuneration and reward offerings shall be sufficiently flexible to meetboth the needs of individuals and those of the Company whilst complying with relevant taxand other legislation.

Performance-Driven Remuneration: The Company shall entrench a culture of performancedriven remuneration through the implementation of the Performance Incentive System.

Affordability and Sustainability: The Company shall ensure that remuneration isaffordable on a sustainable basis.

3. Nomination and Remuneration Committee

The earlier Remuneration Committee of the Board of Directors now re-named as Nominationand Remuneration Committee. Members of the Committee shall be appointed by the Board andshall comprise of three or more Non-Executive Directors out of which not less thanone-half shall be Independent Directors.

The Committee shall be responsible for:

Formulating framework and/or policy for remuneration terms of employment includingservice contracts policy for and scope of pension arrangements etc for Executives andreviewing it on a periodic basis;

formulating the criteria for determining qualifications positive attributes andindependence of a Director and recommend to the Board a policy relating to theremuneration for the Director.

Identifying persons who are qualified to become Directors and who may be appointed asExecutives in accordance with the criteria laid down in this policy recommend to theBoard their appointment and removal and carry out their evaluation.

Formulating terms for cessation of employment and ensure that any payments made arefair to the individual and the Company that failure is not rewarded and that the duty tomitigate loss is fully recognised;

The Committee shall review the ongoing appropriateness and relevance of theRemuneration Policy; ensure that all provisions regarding disclosure of remunerationincluding pensions are fulfilled; obtain reliable up-to-date information aboutremuneration in other companies; ensure that no Director or Executive is involved in anydecisions as to their own remuneration.

Without prejudice to the generality of the terms of reference to the Nomination andRemuneration Committee set out above the Committee shall operate the Company's shareoption schemes (if any) or other incentives schemes (if any) as they apply to. It shallrecommend to the Board the total aggregate amount of any grants to employees (with thespecific grants to individuals to be at the discretion of the Board) and make amendmentsto the terms of such schemes (subject to the provisions of the schemes relating toamendment); liaise with the trustee / custodian of any employee share scheme which iscreated by the Company for the benefit of employees or Directors and review the terms ofExecutive Directors' service contracts from time to time.

4. Procedure for selection and appointment of the Board Members

Board membership criteria

• The Committee along with the Board reviews on an annual basis appropriateskills characteristics and experience required of the Board as a whole and its individualmembers. The objective is to have

a Board with diverse background and experience in business government academicstechnology and in areas that are relevant for the Company's global operations.

• In evaluating the suitability of individual Board Members the Committee takesinto account many factors including general understanding of the Company's businessdynamics global business and social perspective educational and professional backgroundand personal achievements.

• In addition Directors must be willing to devote sufficient time and energy incarrying out their duties and responsibilities effectively. They must have the aptitude tocritically evaluate management's working as part of a team in an environment ofcollegiality and trust.

• The Committee evaluates each individual with the objective of having a groupthat best enables the success of the Company's business.

Selection of Board Members/ extending invitation to a potential Director to join theBoard

One of the roles of the Committee is to periodically identify competency gaps in theBoard evaluate potential candidates as per the criteria laid above ascertain theiravailability and make suitable recommendations to the Board.

The objective is to ensure that the Company's Board is appropriate at all points oftime to be able to take decisions commensurate with the size and scale of operations ofthe Company. The Committee also identifies suitable candidates in the event of a vacancybeing created on the Board on account of retirement resignation or demise of an existingBoard member. Based on the recommendations of the Committee the Board evaluates thecandidate(s) and decides on the selection of the appropriate member.

The Board then makes an invitation (verbal / written) to the new member to join theBoard as a Director. On acceptance of the same the new Director is appointed by theBoard.

5. Procedure for selection and appointment of Executives other than Board Members

The Committee shall actively liaise with the relevant departments of the Company tostudy the requirement for management personnel and produce a written document thereon;The Committee may conduct a wide-ranging search for candidates for the positions ofEmployees within the Company within enterprises controlled by the Company or withinenterprises in which the Company holds equity if any and on the human resources market;The professional academic qualifications professional titles detailed work experienceand all concurrently held positions of the initial candidates shall be compiled as awritten document; A meeting of the Committee shall be convened and the qualifications ofthe initial candidates shall be examined on the basis of the conditions for appointment ofthe Employees; Before the selection of Employee the recommendations of and relevantinformation on the relevant candidate(s) shall be submitted to the Board of Directors; TheCommittee shall carry out other follow-up tasks based on the decisions of and feedbackfrom the Board of Directors.

6. Compensation Structure

(a) Remuneration to Non-Executive Directors:

The Non-executive Directors of the Company are paid remuneration by way of sitting feesonly for attending the Meetings of the Board of Directors and its Committees. The sittingfees paid to the Nonexecutive Directors for attending Meetings of Board of Directors isRs. 10000/- per meeting and for Audit Committee is Rs.5000/- per meeting. Beside thesitting fees they are also entitled to reimbursement of expenses. The Non-ExecutiveDirectors of the Company are not paid any other remuneration or commission.

The sitting fees of the Non-Executive Directors for attending meetings of Board ofDirectors and the Committees of Board of Directors may be modified or implemented fromtime to time only with the approval of the Board in due compliance of the provisions ofCompanies Act 2013.

(b) Remuneration to Executive Directors Key Managerial Personnel(s) (KMPs) &Senior Management Personnel (s) (SMPs):

• The remuneration/compensation/ commission etc. to the Managing Director/Whole-Time Director

KMP and Senior Management Personnel will be determined by the Committee and recommendedto the Board for approval. The remuneration/compensation/commission etc. shall be subjectto the prior/post approval of the shareholders of the Company and Central Governmentwherever required. The remuneration determined for MD/WTDs KMPs and SMPs are subjected tothe approval of the Board of Directors in due compliance of the provisions of CompaniesAct 2013. The remuneration for the KMP and the SMP at the time of the appointment has tobe approved by the Board.

• If in any financial year the Company has no profits or its profits areinadequate the Company shall pay remuneration to its Managing Director / Whole-TimeDirector in accordance with the provisions of Schedule V of the Act and if it is not ableto comply with such provisions with the previous approval of the Central Government.

• As a policy the Executive Directors are neither paid sitting fee nor anycommission.

7. Role of Independent Directors

The Committee shall in consultation with the Independent Directors of the Companyprepare and submit this policy to the Board for its approval. The Independent Directorsshall have power and authority to determine appropriate levels of remuneration ofExecutive Directors and Employees and have a prime role in appointing and where necessaryrecommend removal of Executive Directors and Employees.

The Independent Directors shall submit its recommendations/ proposals/ decisions to theCommittee which the Committee shall consult and take to the Board of Directors.

8. Approval and publication

This Remuneration Policy as framed by the Committee shall be recommended to the Boardof Directors for its approval. This policy shall be hosted on the Company's website.

The policy shall form part of Director's report to be issued by the Board of Directorsin terms of Companies Act 2013

9. Supplementary provisions

This Policy shall be amended in a timely manner and submitted to the Board of Directorsfor review and adoption. The right to interpret this Policy vests in the Board ofDirectors of the Company.

BOARD COMMITTEES

Board Committees plays a vital role in improving the Board effectiveness in areas wheremore focused and discussions are required. Board has constituted the following Committeesin accordance with the provisions of Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The Board consists of the following committeesand their compositions and attendance of members are detailed in the Corporate GovernanceReport.

(i) Audit Committee

(ii) Nomination and Remuneration Committee

(iii) Shareholders Relationship Committee

(iv) Corporate Social Responsibility Committee

(v) Risk Management Committee

(vi) Share Allotment /Transfer Committee

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

The Company already have a Corporate Social Responsibility Committee whose constitutionis already detailed under Corporate Governance Report. Since as per Section 135(5) of theCompanies Act 2013 the Company is not required to spend any expenditure on CSR forcurrent year annual report on CSR is not annexed with this report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION:-

The Company is in practice of following energy conservative techniques.

FOREIGN EXCHANGE INFLOW & OUTFLOW

During the year under review the Company has no foreign exchange inflows or outflows.

CORPORATE GOVERNANCE

Your Company is committed to good corporate governance aligned with the best corporatepractices. A separate Report on Corporate Governance in Annexure-I along with Auditor'sCertificate on Compliance with the conditions of Corporate Governance is provided as apart of this Annual Report besides the report on Management Discussion and Analysis.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return in Form MGT 9 of the Company is annexed as Annexure II tothis Report.

RELATED PARTY TRANSACTIONS

All related party transactions entered into during the financial year were on an arm'slength basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval.

Particulars of contract or arrangements with related parties are annexed in Form AOC 2as Annexure III.

SUBSIDIARY COMPANIES

As of 31st March 2020 your Company has 3 subsidiaries viz. Sree Kailas Palchuram HydroPower Limited Sree Adisakthi Mukkuttathode Hydro Power Limited and JalashaayiAlamparathode Hydro Power Limited by virtue of the Company having control on the Board ofthese companies. Pursuant to the provisions of Section 129(3) of the Act a statementcontaining salient features of the financial statements of your Company's Subsidiaries inForm AOC-1 is annexed as Annexure IV.

AUDITORS

At the AGM held on 29th December 2017 M/s. KPR & Co. (FRN: 005326S) CharteredAccountants Cochin Kerala was appointed as the Statutory Auditors of the Company to holdoffice for a period of five years commencing from the conclusion of 26th Annual GeneralMeeting till the conclusion of 31st Annual General Meeting subject to ratification byevery members every year. However the Companies (Amendment) Act 2017 has done away withthe annual ratification of Auditors and hence the same is not included in the AGM Notice.

The Statutory Auditor has given their eligibility certificate to be appointed as theAuditors as per Rule 4 of the Companies (Audit and Auditors) Rules 2014. Hence the Boardrecommends the fixation of the annual remuneration of Auditors for the financial year2020-21 to the shareholders

AUDITOR'S REPORT AND MANAGEMENT REPLY

The Auditors Report rendered by the Statutory Auditors for the financial year 2019-20does not contain any qualification.

During the year under review neither the Statutory Auditors nor the SecretarialAuditor has reported to the Audit Committee any instances of fraud committed against theCompany by its officers or employees under Section 143 (12) of the Companies Act 2013.

SECRETARIAL AUDITOR

The Board in its meeting held on February 14 2020 has appointed Mrs.CS NarasimhanSrividhya Practising Company Secretary as the Secretarial Auditor to conduct SecretarialAudit of the Company for 3(three) consecutive financial years till Financial Year 2021-22.

SECRETARIAL AUDIT REPORT AND MANAGEMENTS REPLY:

The Secretarial Audit Report rendered by Mrs. CS Narasimhan Sreevidhya PractisingCompany Secretary is enclosed as Annexure - V does not contain any qualification.

INTERNAL AUDITOR

Pursuant to Section 138(1) of the Companies Act 2013 Mr. Venkitesh ParasuramChartered Accountant was appointed as the Internal Auditor of the Company for a period of5 (five) consecutive years with effect financial year 2019-2020 till 2023-24 in the BoardMeeting of the Company held on February 14 2020.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

In accordance with Section 177 of the Companies Act 2013 and Regulation 22 ofSEBI(LODR) Regulation 2015 the Company has constituted a Whistle Blower Policy/ VigilMechanism to establish a vigil mechanism for the directors and employees to report genuineconcerns in such manner as may be prescribed and to report to the management instances ofunethical behavior actual or suspected fr aud or violation of the Company's code ofconduct.

The detail of the Whistle Blower Policy has been posted on the website of the Company.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT2013

Your Company has in place an Anti-Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. The Internal Complaints Committee ("ICC") has been set upto redress the complaints received regarding sexual harassment. All employees are coveredunder this policy.

During the financial year 2019-20 there were no cases reported under Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

COST AUDITORS

The provisions of Cost Auditor as mentioned under Section 148 of the Companies Act2013 is not applicable to the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under 134(3) (c) of the Companies Act 2013 Directorsreport that:

1. In the preparation of the annual accounts for the financial year ended March 312020 the applicable accounting standards had been followed along with proper explanationrelating to material departures.

2. The directors had selected such accounting policies and applied them consistentlyand made judgment and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the company for the year under review.

3. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities.

4. Directors had prepared the Annual Accounts for the financial year ended 31st March2020 on a ‘going concern' basis.

5. That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.

6. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

CODE OF CONDUCT

All the Board Members and Senior Management Personnel have affirmed compliance with theapplicable Code of Conduct for the Financial Year 2019-20. A declaration to this effectsigned by the Managing Director & CEO forms part of this Report.

ACKNOWLEDGEMENT

The Board places on record its appreciation for the co-operation and support receivedfrom shareholders customers suppliers employees government authorities and banks.

Shareholders customers suppliers employees government authorities and banks.

For and on behalf of Board of Directors
Sd/- Sd/-
S Rajkumar Visakh Rajkumar
Vice Chairman and Managing Director Whole Time Director
DIN:- 01790870 DIN:-07079475

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