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Cella Space Ltd.

BSE: 532701 Sector: Industrials
NSE: N.A. ISIN Code: INE266H01014
BSE 15:41 | 25 Sep 4.03 -0.21
(-4.95%)
OPEN

4.30

HIGH

4.45

LOW

4.03

NSE 05:30 | 01 Jan Cella Space Ltd
OPEN 4.30
PREVIOUS CLOSE 4.24
VOLUME 122
52-Week high 6.91
52-Week low 3.07
P/E
Mkt Cap.(Rs cr) 8
Buy Price 4.03
Buy Qty 98.00
Sell Price 4.20
Sell Qty 122.00
OPEN 4.30
CLOSE 4.24
VOLUME 122
52-Week high 6.91
52-Week low 3.07
P/E
Mkt Cap.(Rs cr) 8
Buy Price 4.03
Buy Qty 98.00
Sell Price 4.20
Sell Qty 122.00

Cella Space Ltd. (CELLASPACE) - Director Report

Company director report

Your Directors have pleasure in presenting their 28th Annual Report and the AuditedFinancial Statements of the Company for the year ended March 31 2019.

FINANCIAL PERFORMANCE

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

Lacs)
Particulars For the year ended 31.03.2019 For the year ended 31.03.2 018
Revenue from Operations - 162.79
Other Income 393.34 993.68
Profit/loss before Depreciation Finance Costs Exceptional Items and Tax Expense 63.56 919.73
Less:- Depreciation/ Amortisation/Impairment 216.45 161.07
Profit/loss before Finance Costs Exceptional Items and Tax Expense (152.89) 758.65
Less:- Finance Costs 8.16 213.97
Profit/loss before Exceptional (161.05) 544.69
Items and Tax Expense
Add/less;- Exceptional Items 323.98 (1584.5
0)
Profit/loss before Tax Expense 162.93 (1039.8
2)
Less:- Tax Expense (Current & Deferred) (27.78) (272.39)
Profit/Loss for the year (1) 190.71 (767.43)
Total Comprehensive 1.64 0.63
Income/Loss (2)
Total (1+2) 192.35 (766.79)

OPERATIONAL PERFORMANCE

Company has leased warehouse space of 56137 sq. ft during the current financial yearand rental income for the same has been started generating from May 2019.

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 transferred Rs.113712 (One Lakhs Thirteen Thousand Seven Hundred andTwelve) being the unpaid dividend amount pertaining to the financial year 2010-11towards Investor Education and Protection Fund (IEPF) on expiry of seven years.

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 (31.03.2019) till the date of report (30.08.2019).

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 25000000 (Two Crores and Fiftylakhs) equity shares of Rs. 10/- (Rupees Ten only) each and 25000000 (Two Crores andFifty lakhs) Preference Shares of Rs. 10/- (Rupees Ten only) each. The total IssuedSubscribed and Paid up Share Capital of the Company as on the date of the report is Rs.282012170/- (Rupees Twenty Eight Crores Nine Lakhs Twelve Thousand One Hundred andSeventy Only) divided into 18201217 (One Crores Eighty Two Lakhs One Thousand TwoHundred and Seventeen) equity shares of Rs. 10/- (Rupees Ten only) each and 10000000(One Crores) Preference shares of Rs. 10/- (Rupees Ten only) each . The Board ofDirectors in their meeting held on August 30 2019 has decided to recommendreclassification of the Authorised Share Capital into 38000000 (Three Crores and EightLakhs) equity shares of Rs. 10/- (Rupees Ten only) each and 12000000 (One Crores andTwenty Lakhs) Preference Shares of Rs. 10/- (Rupees Ten only) to the shareholders fortheir approval in the ensuing Annual General Meeting.

During the year under review the Company has converted 905000 (Nine Lakhs and FiveThousand) Convertible Equity Share Warrants allotted to Mr. S Rajkumar into 905000 (NineLakhs and Five Thousand) equity shares of Rs.10/- each at a premium of Rs.1 per share onJune 12 2018. Further the Board of Directors in their meeting held on August 30 2019has accorded their approval for the conversion of 950000 (Nine Lakhs Fifty Thousand)Convertible Equity Share Warrants allotted to Mr. S Rajkumar into 950000 (Nine LakhsFifty Thousand) equity shares of Rs.10/- each at a premium of Rs.1 per share and furtherrecommended forfeiture of the balance 285000 (Two Lakhs and Eighty Five Thousand)warrants allotted to Mr. S Rajkumar to the shareholders for their approval in the ensuingAnnual General Meeting as the tenure of the warrants will get expired by September 292019

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

Other than those disclosed in this report there were no material changes/eventsoccurred between financial year end date (31.03.2019) and date of the Board s report(30.08.2019).

FINANCE

A). Deposits

The Company has not accepted deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits) Rules2014.

B) Particulars of Loans Guarantees or Investments

The Company has neither rendered any loans or guarantee covered under 186 of theCompanies Act 2013 during the year under review nor has any outstanding loans orguarantee outstanding in its financial statements as on March 31 2019. The Investmentsalready made by the Company is given under Note 7A of the financial statements.

The Board has recommended its shareholders approval for rendering loans givingguarantee or security or making investments upto Rs.100 Crores in excess of the limitsspecified under Section 186(2) of the Companies Act 2013.

C) Commitments

The company has availed a short term loan amounting to Rs.250 lakhs from Andhra Bankduring the financial year under review. All the repayment and interest commitments weremet as per terms of arrangement with the Banks. This loan was closed during April 2019 outof the proceeds of loan against rent receivable received from Andhra Bank to the tune ofRs.764 lakhs.

During the financial year under review the Company has obtained Unsecured loans fromDirectors to the extent of Rs.515.71 lakhs.

INTERNAL CONTROL SYSTEM

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 AND KEY MANAGERIAL PERSONNEL

The Board of the Company at March 31 2019 consisted of 9 Directors and the BoardComposition is as follows:- 3 Independent Directors 1 Managing Director 1 AdditionalDirector 3 Promoter Directors and 1 Non Executive Director. The detailed list of theBoard of Directors is enclosed in the Corporate Governance Report. There has not been anychange in the Board of Directors since March 31 2019 till the date of report(30.08.2019).

Changes in the composition of the Board

During the financial year under review Mr. Visakh Rajkumar (DIN: 07079475) wasinducted as an Additional Director by the Board of Directors in their meeting held onFebruary 13 2019. Pursuant to Section 161 of the Companies Act 2013 he holds officetill the conclusion of the ensuing AGM and is eligible for appointment. His appointment isbeing proposed in the notice of the forthcoming AGM.

In accordance with the provisions of section 152(6) of the Act and the of Article 83 ofthe Articles of Association of the Company Mrs Isakai Kamalam (DIN: 01791001) Directorretires by rotation at the ensuing Annual General Meeting (AGM) and being eligibleoffers herself for re-appointment. The Board recommends her re-appointment. Furtherpursuant to sub-regulation (1A) of Regulation 17 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 inserted by theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)(Amendment) Regulations 2018 approval of the Members by way of a Special Resolution isnecessary for appointment/ continuation of appointment of any Non-Executive Director whohas attained the age of 75 (Seventy Five) years. Mrs Isakai Kamalam (DIN: 01791001) hascrossed 75 years of age. Hence the Board recommends her continuation as director to theshareholders of the Company in the ensuing Annual General Meeting.

The term of office of Mr. S Rajkumar as Managing Director has expired on August 122019. The Board of Directors of the Company in their meeting held on August 30 2019 hasapproved his appointment for a further period of 2 years from August 13 2019 to August12 2021 based on the recommendations of the Nomination and Remuneration Committee. Asapproval of shareholders is needed for the same the Board of Directors recommend theappointment of Mr. S Rajkumar as Managing Director to the shareholders for approval in theensuing Annual General Meeting.

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.

Declaration of independence

KEY MANAGERIAL PERSONNEL (KMP)

The details of the Key Managerial Personnel of the Company as on March 31 2019appointed pursuant to section to section 203 of the Companies Act 2013 are as follows:-

Name Designation With effect from To
1 Dr S.Rajkumar Managing Director 13.08.2018 12.08.2019
2 Mr. R.Ponnambalam Company Secretary 09-10-2013 NA
3 Mr. V.N. Sridharan Chief Financial officer 12-11-2016 NA

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors met Four (4) times on June 12 2018 which was adjourned on June13 2018 August 13 2018 November 14 2018 and February 13 2019 during the financialyear under review.

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.

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 Non-executive Directors for attending Meetings of Board of Directors isRs. 10000/- per meeting and for Audit Committee is Rs.5000/- per meeting. Besides 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-TimeDirector KMP and Senior Management Personnel will be determined by the Committee andrecommended to the Board for approval. The remuneration/compensation/ commission etc.shall be subject to the prior/post approval of the shareholders of the Company and CentralGovernment wherever required. The remuneration determined for MD/WTDs KMPs and SMPs aresubjected to the approval of the Board of Directors in due compliance of the provisions ofCompanies Act 2013. The remuneration for the KMP and the SMP at the time of theappointment has to be approved by the Board.

If in any financial year the Company has no profits or its profits are inadequate theCompany shall pay remuneration to its Managing Director / Whole-Time Director inaccordance with the provisions of Schedule V of the Act and if it is not able to complywith such provisions with the previous approval of the Central Government.

As a policy the Executive Directors are neither paid sitting fee nor any commission.

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.

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 and its compositions as on March 31 2019 areas follows:

(i) Audit Committee

Mr. N Subramanian Chairman

Mr. G Raghavan Member

Mr. U.G.Bhat Member

(ii) Nomination and Remuneration Committee

Mr. G Raghavan Chairman

Mr. N Subramanian Member

Mr. U.G.Bhat Member

(iii) Shareholders Relationship Committee

Mr. U.G. Bhat Chairman

Mr. S. Rajkumar Member

Mr. N Subramanian- Member

(iv) Corporate Social Responsibility Committee

Mr. S.Rajkumar-Chairman

Mr. Akhilesh Agarwal-Member

Mr. N Subramanian-Member

(v) Risk Management Committee

Mr. G Raghavan Chairman

Mr. U.G.Bhat Member

Mr. N Subramanian Member

(vi) Share Allotment /Transfer Committee

Mr. S. Rajkumar-Chairman

Mr. U.G.Bhat Member

Mr. N Subramanian Member

(vii) Machinery Disposal Committee

Mr. S. Rajkumar-Chairman

Mr. G Raghavan Chairman

Mr. N Subramanian Member

The composition and the details of meetings of the committees held during the financialyear 2018-19 is given in Corporate Governance Report.

POLICIES

All the policies as required under different statues are disclosed in the Companywebsite www.sreekailas.com

REMUNERATION POLICY

The Company s remuneration policy is directed towards rewarding performance based onreview of achievements periodically. The remuneration policy is in consonance with theexisting industry practice.

RISK MANAGEMENT POLICY

The Company has formulated a Risk Management Policy to identify assess monitor andmitigate various risks to the Company. Identified risks and the mitigation plans arediscussed at the meetings of the Risk Management Committee and the Board of Directors ofthe Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

Your Board has constituted a CSR Committee whose composition is already disclosed asabove. The Company has been incurring losses for the past 3 consecutive years .Hence thereis no requirement to spend under the CSR during the current year and hence the annualreport on CSR activities is not annexed with this report.

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 Directors and hence the same is not included in the AGM Notice.

The Company has received a letter from M/s. KPR & Co. (FRN: 005326S) CharteredAccountants Cochin Kerala to the effect that their appointment as Auditors if madewould be within the limits under Section 141 of the Companies Act 2013. Hence the Boardrecommends the fixation of the annual remuneration of Auditors for the financial year2019-20 to the shareholders

AUDITORfS REPORT AND MANAGEMENT REPLY

The Auditors Report rendered by the Statutory Auditors for the financial year 2018-19does not contain any qualification.

SECRETARIAL AUDIT REPORT AND MANAGEMENTS REPLY:

The Secretarial Audit Report rendered by M/s. Srividhya Practicing Company Secretaryforms part of the report. The Secretarial Audit Report for the financial year ended March31 2018 is annexed herewith marked as Annexure V to this Report.The remarks madeby the Secretarial Auditor is being taken up by the management.

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 s Certificate on

Compliance with the conditions of Corporate Governance is provided as a part of thisAnnual Report besides the Management Discussion and Analysis.

EXTRACT OF ANNUAL RETURN

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

SUBSIDIARY COMPANIES

As of 31st March 2019 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. Steps are being initiated to implement the project with the assistance ofGovernment / Private parties. Pursuant to the provisions of Section 129(3) of the Act astatement containing salient features of the financial statements of your Company sSubsidiaries in Form AOC-1 is annexed as Annexure III.

Annual accounts of the subsidiary companies and the related detailed information wouldbe sent to those shareholders seeking information in this regard at any point of time.Further annual accounts of the subsidiary companies would be available for inspection byany shareholders at the registered office of the company.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were onan arm s length 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 theAudit Committee for approval. Particulars of contract or arrangements with related partiesare annexed in Form AOC 2 as Annexure IV.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

In accordance with Section 177 of the Companies Act 2013 and Regulation 22 of SEBI(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 fraud or violation of the Company s code of conduct. The detail of the Whistle Blower Policy has been posted on the website of theCompany.

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 2018-19 there were no cases reported underSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

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 31st March2019 the applicable accounting standards had been followed along with proper explanationrelating to material departures. preventing and detecting fraud and other irregularities.

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 loss 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

4. The directors had prepared the Annual Accounts for the financial year ended 31stMarch 2019 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.

ACKNOWLEDGEMENT

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

By and on behalf of the Board of Directors
Sd/- Sd/-
S.Rajkumar N.Subramanian
Managing Director Director

Chennai 17

Date: 30/08/2019

.