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Cella Space Ltd.

BSE: 532701 Sector: Industrials
NSE: N.A. ISIN Code: INE266H01014
BSE 15:20 | 19 Mar 5.90 -0.20






NSE 05:30 | 01 Jan Cella Space Ltd
OPEN 5.80
52-Week high 11.40
52-Week low 5.20
P/E 0.90
Mkt Cap.(Rs cr) 11
Buy Price 5.80
Buy Qty 280.00
Sell Price 6.36
Sell Qty 300.00
OPEN 5.80
CLOSE 6.10
52-Week high 11.40
52-Week low 5.20
P/E 0.90
Mkt Cap.(Rs cr) 11
Buy Price 5.80
Buy Qty 280.00
Sell Price 6.36
Sell Qty 300.00

Cella Space Ltd. (CELLASPACE) - Director Report

Company director report


Your Directors have pleasure in presenting their 27th Annual Report and the AuditedFinancial Statements of the Company for the year ended 31st March 2018.


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

(Rs. Lacs)
Particulars For the year ended 31.03.2018 For the year ended 31.03.2017
Sales (Gross) 26.89 2289.26
Add: Excise Duty 0.36 111.41
Sales (Net) 27.25 2400.67
Operation Profit/Loss (1297.46) (3561.90)
Interest and Finance 213.97 570.47
Depreciation 73.07 138.48
Profit Before Tax (1039.82) (4270.85)
Provision for Tax 0.00 0.00
Profit After Tax (767.43) (3684.05)
Balance of Profit brought forward (767.43) (3684.05)
Amount available for (902.83) (3819.45)
General Reserve 0.00 0.00
Proposed Dividend & tax on 0.00 0.00
Retained profit carried to Balance 0.00 0.00


The company has sold its plant and machinery of Edayar Unit during the year. Pursuantto change in the business activity of the company from Paper Business to LogisticsBusiness the Company is in the process for leasing the existing building which was usedas building for paper business by making slight modification and renovation work to makeinto a Warehouse.


As of 31st March 2018 your Company has 3 subsidiaries viz. Sree Kailas Palchuram HydroPower Limited Sree Adi sakthi 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 attached to the Financial Statements of your Company.

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.


In view of loss your Directors decided not to recommend payment of dividend on theequity shares and non convertible cumulative Redeemable Preference Shares for thefinancial year under review. Your Company has not transferred any amount to reservesduring the Financial Year under review.


Your company’s business of export of paper and paper boards during the year wasNIL.


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


During the period of FY 2016-17 the Company had received closure notice from KeralaState Pollution Control Board. In pursuance of this order the entire paper manufacturingbusiness was discontinued. After reviewing the various possibilities to resume productionthe board found that there are no prospects for re-opening of the units. Therefore theBoard of Directors had decided to change the Business activity from Kraft papermanufacturing to Dry Chill Cold Storage (Logistics Business). The Company had got approvalfrom Government of Kerala to establish Dry Chill Cold Storage (Logistics Business).

Your company has undertaken the implementation of Dry Chill Cold Storage (LogisticsBusiness) and planning to establish 2.50 lakhs sq. ft Warehousing space in the Next OneYear.


During the Financial Year 2017-18 Company has allotted 860000 shares on 29/03/2018.

As on date of this report the Authorized share capital of the Company is Rs.500000000/- (Rupees Fifty Crores Only) divided into 25000000 equity shares of Rs.10/- each and 25000000 preference shares of Rs. 10/- each. The total issued subscribedand paid up share capital of the Company as on the date of the report is Rs.172962170/- (Rupees Seventeen Crore Twenty Nine Lakhs Sixty Two Thousand One Hundredand Seventy Only) divided into 17296217 equity shares of Rs. 10/- each and Rs.100000000/- (Rupees Ten Crores Only) divided into 10000000 Preference shares of Rs.10/- each .


There were no material changes/events occurred between financial year end date and dateof the Board’s report.


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

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

C) Commitments

The Company has raised share capital by an amount of Rs. 3 (Three) Crore by way ofallotment of 30 lakhs 11.25% Non Convertible Cumulative Redeemable Preference Shares ofRs. 10/- each to the Promoter Directors to redeem the existing preference share capital ofthe Company issued to KSIDC during 4th Quarter 2018.All the repayment and interestcommitments were met as per terms of arrangement with the Banks.

In the current financial year the Company has obtained Unsecured loans from Directorsto the extent of Rs. 676.15 lakhs.


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.


The Board of the Company at March 31 2018 consisted of 8 Directors out of which 3were independent directors one was Managing Director one was additional Director 2 waspromoter director and one was non executive director. The current composition of the boardconsisted of 8 Directors out of which 3 were independent directors one was ManagingDirector and one was additional Director 2 was promoter director and one was nonexecutive director.

Changes in the composition of the Board

The Board of Directors at their meeting held on 02.02.2018 approve the resignation ofMr. A Padmanabhan (DIN: 0037472) and Mr. S Giridhar (DIN: 0362916) from the Board witheffect from 11.01.2018.

During the financial year in order to fulfill the requirement of Independent Directorsby complying with SEBI (LODR) Regulations 2015 the Board of Directors of the Companyhave appointed Mr. G. Raghavan (DIN- 03630043) and Mr. N. Subramanian (DIN-03602858) asIndependent Directors of the Company with effect from 29th December 2017 to hold officefor a period of five consecutive years not liable to retire by rotation. Mr.AkhileshAgarwal (DIN: 00918838) has also been appointed as additional director at theBoard Meeting held on 24th June 2017 and reappointed as director at the 26th AGM on 29thDecember 2017.

The Board of Directors at their meeting held on 02.02.2018 approved the appointment ofMrs. Rajee Rajkumar (DIN: 0033280) additional director subject to the approval of members.She holds office till the conclusion of the ensuing AGM and is eligible for appointment.Her appointment is being 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 Mr. S Subramaniam Director is proposed toretire by rotation at the ensuing Annual General Meeting (AGM) and being eligible offershimself for reappointment. The Board recommends his re-appointment.

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 as amended bythe Companies (Amendment) Act 2017 and regulation 16 of SEBI(LODR) Regulations 2015which have been relied on by Company and were placed at the Board meeting. In the opinionof the Board the independent directors fulfill the necessary criteria for independence asstipulated under the statutes.


The details of the Key Managerial Personnel of the Company appointed pursuant tosection to section 203 of the Companies Act 2013 are as follows

Sl.No Name Designation With effect from To
1 DrS.Rajkumar Managing Director 14-08-2018 13-08-2019
2 Mr. R.Ponnambalam Company Secretary 09-10-2013
3 Mr. V.N. Sridharan Chief Financial officer 12-11-2016


The Board of Directors met Six (6) times during the financial year on 03rd April 201724th June 2017 27th September 2017 29th December 2017 02nd February 2018 12thFebruary 2018.

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


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.


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


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 Returni.e Annexure I to the Board’s Report.



The Board of Directors of Sree Sakthi Paper Mills Limited ("the Company")constituted the "Nomination and Remuneration Committee" at the meeting held on30 May 2014 with immediate effect after renaming the Remuneration Committee formedearlier consisting of Four (04) Non-Executive Directors of which majority are IndependentDirectors.

The Nomination and Remuneration Committee and this policy shall be in compliance withSection 178 of the Companies Act 2013 read along with the applicable rules thereto andclause 49 under the Listing Agreement. The Remuneration Policy provides a framework forremuneration paid to the members of the

Board of Directors ("Board") Key Managerial Personnel ("KMP") andthe Senior Management Personnel ("SMP") of the Company (collectively referred toas "Executives"). The expression ‘‘Senior management’’ meanspersonnel of 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 renamed 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; Formulate the criteria for determining qualificationspositive attributes and independence of a Director and recommend to the Board a policyrelating to the remuneration 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 appropriatenessand relevance of the Remuneration Policy; ensure that all provisions regarding disclosureof remuneration including pensions are fulfilled; obtain reliable up-to-dateinformation about remuneration in other companies; ensure that no Director or Executive isinvolved in any decisions as to their own remuneration. Without prejudice to thegenerality of the terms of reference to the Nomination and Remuneration Committee set outabove the Committee shall operate the Company’s share option schemes (if any) orother incentives schemes (if any) as they apply to. It shall recommend to the Board thetotal aggregate amount of any grants to employees (with the specific grants to individualsto be at the discretion of the Board) and make amendments to the terms of such schemes(subject to the provisions of the schemes relating to amendment); liaise with the trustee/ custodian of any employee share scheme which is created by the Company for the benefitof employees or

Directors and review the terms of Executive Directors’ service contracts from timeto 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 appropriate skillscharacteristics and experience required of the Board as a whole and its individualmembers. The objective is to have a Board with diverse background and experience inbusiness government academics technology and in areas that are relevant for theCompany’s global operations.

In evaluating the suitability of individual Board Members the

Committee takes into account many factors including general understanding of theCompany’s business dynamics global business and social perspective educational andprofessional background and personal achievements.

In addition Directors must be willing to devote sufficient time and energy in carryingout 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 group that bestenables 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 pointsof time 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 Non-executive Directors for attending Meetings of Board of DirectorsAudit Committee of Board of Directors and Nomination and Remuneration Committee is Rs.10000/- per meeting.

Beside the sitting fees they are also entitled to reimbursement of expenses. TheNon-Executive Directors 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 from time to time onlywith the approval of the Board in due compliance of the provisions of Companies 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 to the approval ofthe Board of Directors in due compliance of the provisions of Companies Act 2013. Theremuneration for the KMP and the SMP at the time of the appointment has to be approved bythe 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.

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 ofDirectors in terms of Companies Act 2013

9. Supplementary provisions

This Policy shall formally be implemented from the date on which they are adoptedpursuant to a resolution of the Board of Directors. Any matters not provided for in thisPolicy shall be handled in accordance with relevant State laws and regulations and theCompany’s Articles of Association. If this Policy conflict with any laws orregulations subsequently promulgated by the state or with the Company’s Articles ofAssociation as amended pursuant to lawful procedure the relevant state laws andregulations and the Company’s Articles of Association shall prevail and this Policyshall be amended in a timely manner and submitted to the Board of Directors for review andadoption. The right to interpret this Policy vests in the Board of Directors of theCompany.


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 are as 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. S. Rajkumar Chairman

Mr. U.G. Bhat Member

Mr. N Subramanian- Member

(iv) Risk Management Committee

Mr. G Raghavan Chairman

Mr. U.G.Bhat Member

Mr. N Subramanian Member

(v) Corporate Social Responsibility Committee

Mr. S. Rajkumar-Chairman

Mr. Akhilesh Agarwal-Member

Mr. N Subramanian-Member

(vi) Share Issue/Transfer Committee

Mr. S. Rajkumar-Chairman

Mr. G.Raghavan -Member

Mr. N Subramanian-Member

(vii) Machinery Disposal Committee

Mr. S. Rajkumar-Chairman

Mr. G.Raghavan -Member

Mr. N Subramanian-Member

(viii) Project Finance Committee

Mr. S. Rajkumar-Chairman

Mr. S.Subramanian-Member


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


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.


Your Board has constituted a CSR Committee consisting of the above mentioned threemembers. CSR policy is also framed and annexed. But during the year the profit asdetermined in Section 135 (5) of the Companies Act 2013 is less than the threshold limit.Hence there was no requirement to spend under the CSR policy. Statement is annexed isannexed as Annexure VI to this Report.


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.

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.


Conservation of Energy Technology Absorption

Statement of particulars under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed as Annexure III


Your Company is committed to good corporate governance aligned with the best corporatepractices. A separate Report on Corporate Governance in Annexure-IV along withAuditor’s Certificate on Compliance with the conditions of Corporate

Governance is provided as a part of this Annual Report besides the ManagementDiscussion and Analysis.


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


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 nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the 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 II.


The Board has appointed M/s. Sreevidhya Practising Company Secretary to conductSecretarial Audit for the financial year 2017-18. The Secretarial Audit Report for thefinancial year ended March 31 2018 is annexed herewith marked as Annexure V tothis Report.


In accordance with Section 177 of the Companies Act 2013 and Regulation 22 ofSEBI(LODR)Regulation2015 the Company has

constituted a Whistle Blower Policy/ Vigil Mechanism to establi sh a vigil mechanismfor the directors and employees to rep ort genuine concerns in such manner as may beprescribed and to report to the management instances of unethical behavi or actual orsuspected fraud or violation of the Company’s cod e of conduct.

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


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 up to redress thecomplaints received regarding sexual harassment. All employees are covered under thispolicy.

During the financial year 2017-18 there were no cases reported under Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013.


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 March2018 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 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 preventing and detecting fraud and other irregularities.

4. The directors had prepared the Annual Accounts for the financial year ended 31stMarch 2018 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.


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/-
Chennai 17 S.Rajkumar N.Subramanian
Date: 13/08/2018 Managing Director Director