The Members of Accel Transmatic Limited Your Directors have pleasure in presenting the30th Annual Report of ACCEL TRANSMATIC LIMITED (the Company) Standalone financialstatement along with the audited financial statements for the financial year ended 31March 2016.
FINANCIAL RESULTS INR in Millions
|Particulars ||2016 ||2015 |
|Income from Operations ||8.17 ||10.85 |
|Profit /(Loss) before interest depreciation and tax ||(32.98) ||(30.25) |
|Interest ||6.00 ||8.71 |
|Depreciation & Amortisation ||17.64 ||26.58 |
|Profit/(Loss) after tax ||(56.56) ||(70.66) |
REVIEW OF OPERATIONS
During the year under review your company recorded total Income of Rs.8.17 mn(Previous Year Rs.10.85 mn) comprising of income from Animation services Rs.4.61 mn.Engineering Services Rs.1.76 mn and other services Rs.0.5 mn. The company reported a netloss of Rs.56.56 mn including amortization costs of its Intellectual properties withoutmatching revenue on exploitation of those assets during the year under review.
The company also provided for certain doubtful receivables after a review and aftercontinuous follow up for years.
The company has filed a petition before the honorable High Court of Madras for a mergerof the holding company with the company with an intention to revive the company's businessactivities. The whole process is pending for final orders before the honorable High Court.The management is of the opinion that once the merger is completed the company will be ina position to invest and revive the existing as well as new lines of business to generatecash flows and profits. The company has drawn up plans for monetization of its real estateassets to create another revenue stream.
The company continued to carry on the business of content development services inAnimation and visual effects to a limited extent with available resources during the yearunder review and also pursued its efforts to monetize the existing IPRS.
During the year under review the company started its Engineering Services Division inChennai for contract manufacturing of electronic products. The company will grow thisbusiness in the coming years to exploit the opportunities opening up due to the "Makein India" initiatives by the central government.
The highlights of the performance are discussed in detail in the management discussionand analysis report attached as Annexure to this report.
The company has suffered losses for the past several years. The accumulated losses ason date on the Balance sheet is more than its networth. However considering the expectedfuture diversification with cash infusion planned by the promoters and the cash flowsexpected to be received by the company from exploiting its IPRS the management is of theopinion that the company would be in a position to continue as a going concern and hencethe accounts have been drawn up on such basis.
The Directors have not recommended dividend for the financial year ended 31st March2016 considering the losses and the necessity to conserve resources.
PARTICULARS OF EMPLOYEES The information required under section 197 of the Act andrules made there-under in respect of employees of the company is not required to beprovided since there are no employees covered under the provision.
DISCLOSURE AS PER SEXUAL HARRASMENT OF WOMAN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
"The company has in place an Anti-Sexual Harassment policy in line with therequirements of The Sexual Harassment of Women at the workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. The following is a summary of Sexualharassment complaints
received and disposed off during the year 2015-16.
No of complaints:- Nil
No of Complaints disposed off- Nil
DOCUMENTS PLACED ON THE WEBSITE (www.acceltransmatic.com )
The following documents have been placed on the company's website in compliance withthe Companies Act:
Financial Statements of the Company.
Details of Vigil Mechanism for directors and employees to report genuineconcerns as per proviso to Section 177(10).
The Terms and Conditions of appointment of independent directors.
Details of unpaid dividend as per Section 124(2).
CORPORATE GOVERNANCE REPORT REQUIRED UNDER THE COMPANIES ACT 2013 AND LISTINGAGREEMENT
As per Clause 49 of the Listing Agreement entered into with the stock exchangesCorporate Governance Report with Auditors' Certificate on Compliance with the conditionsof Corporate Governance are attached and form part of this report.
MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion and Analysis and various initiatives and future prospects ofthe company are enclosed separately as Annexure-II to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(5) of the Act and based on therepresentations received from the management the directors hereby confirm that:
i. in the preparation of the annual accounts for the financial year 2015-16 theapplicable accounting standards have been followed and there are no material departures;
ii. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the Loss ofthe Company for the financial year;
iii. they have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Act. They
confirm that there are adequate systems and controls for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
iv. they have prepared the annual accounts on a going concern basis;
v. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and operating properly; and
vi. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under Rule 8(3) of the Companies (Accounts) Rules 2014are set out in an Annexure- III to this Report FIXED DEPOSITS FROM PUBLIC TheCompany has not accepted any deposit from public and as such no amount on account ofprincipal or interest on deposits from public was outstanding as on the date of thebalance sheet. REPORT ON CORPORATE GOVERNANCE:
A Report on Corporate Governance on compliance with the conditions of CorporateGovernance as stipulated under Clause 49 of the Listing Agreement is provided in AnnexureV to the Report.
AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE
The certificate issued by the auditors of the company on Corporate Governance is givenin Annexure - VI to this Report.
The Chairman and Managing Director of the Company has submitted a certificate to theBoard regarding the financial statements and other matters as required under Clause 49(V)of the Listing Agreement. This is provided as Annexure - VII to this Report.
Mr. C.K. Kerala Varma though being eligible for reappointment does not intend tooffer himself for reappointment and it has been decided that such vacancy is not filledup.
Mr. C.K. Kerala Varma has been the Director of the company since 14-08-2014. YourDirectors place on record the valuable guidance support and advise
extended by Mr. C.K. Kerala Varma during his tenure as a Director.
Mr. N. Gopalakrishnan Nair though being eligible for reappointment does not intend tooffer himself for reappointment and it has been decided that such vacancy is not filledup.
Mr. N. Gopalakrishnan Nair has been the Director of the company since 14-11-2013. YourDirectors place on record the valuable guidance support and advise extended by Mr. N.Gopalakrishnan Nair during his tenure as a Director.
Mr. K.R. Chandrasekaran though being eligible for reappointment does not intend tooffer himself for reappointment and it has been decided that such vacancy is not filledup.
Mr. K.R. Chandrasekaran has been the Director of the company since 21.02.2012. YourDirectors place on record the valuable guidance support and advise extended by Mr. K.R.Chandrasekaran during his tenure as a Director.
Dr. C.N. Ramchand (holding DIN : 05166709) who was appointed as an Additional Directorunder Section 161(1) of the Companies Act 2013 with effect from 10th November 2016 andin respect of whom the Company has received a notice in writing from a member along withthe requisite deposit amount proposing his candidature for the office of Director as anIndependent Director of the Company to hold office for three consecutive years upto theconclusion of the Annual General Meeting of the Company to be held in the calendar year2019."
Dr. M Ayyappan (holding DIN : 00117374) who was appointed as an Additional Directorunder Section 161(1) of the Companies Act 2013 with effect from 10th November 2016 andin respect of whom the Company has received a notice in writing from a member along withthe requisite deposit amount proposing his candidature for the office of Director as anIndependent Director of the Company to hold office for three consecutive years upto theconclusion of the Annual General Meeting of the Company to be held in the calendar year2019."
Your company's quality policy is to enhance customer satisfaction through continuedimprovement of skills processes and technologies. During the year the company continuedto invest in technologies infrastructure and processes in order to keep our qualitymanagement systems updated
M/s. Varma & Varma Chartered Accountants Chennai auditors of the Company retireat the ensuing Annual General Meeting and being eligible offer themselves forreappointment. The Company has received confirmation from them that their appointment willbe within the limit prescribed under section 139 of the Companies Act 2013. The AuditCommittee of the Board has recommended their reappointment. The necessary resolution isbeing placed before the shareholders for approval.
The auditors have emphasized in their report about the realization of intangibleassets that the Company has incurred cash loss networth has been eroded and the currentliabilities exceeds the current assets.
The Board of Directors would like to clarify as below regarding "emphasismatter" expressed by the auditors in their report annexed with this Annual Report.
1. The Company continued to incur losses during the period under review due to variousreasons like lack of viable service orders interest cost on the borrowings made forinvestments in fixed assets and delays in monetizing the assets due to market slowdown foranimated content. The management is confident of sustaining the operations and recoveringthe investments made in the business
2. The promoters have lent funds to sustain the operations during the years theCompany incurred losses. These amount have been shown under current liabilities and hencethe mismatch between current assets and current liabilities. The holding company hasalready converted Rs. 5 Cr out of these funds into cumulative preference shares tostrengthen the equity base of the company and also to improve the current ratio
Further the promoters have proposed to merge the holding company M/s. Accel Limitedwith the company under a scheme of arrangement of amalgamation which is pending beforethe honorable High Court of Chennai.
3. The company is taking adequate steps to liquidate certain real estate assets ownedby the company to reduce the bank liabilities.
4. The management is committed to grow the media business and also venture into newbusiness and is confident of carrying on the business as a going concern and would bringin necessary support to the extent possible as and when required.
5. The Company had availed an asset backed loan for Rs.7.67 crores from a bank which ispayable over a period of 83 months and hence long term in nature. As on date theinstallment and interest has been paid. The long term assets were acquired / developed outof funds infused by the promoter companies.
6. The management is confident that it will be able to realize the intangible assetsand with the support of its holding company and also as explained in the notes to accountsand also explained above will continue to operate as a going concern.
INTERNAL CONTROL SYSTEMS
Your company has adequate internal control procedures commensurate with the size andnature of its operations. The Audit Committee constituted by the Board of Directors isfunctioning effectively. The Internal Audit for the year 2015-2016 was carried out by M/s.Vijayakumar & Easwaran covering all areas of operations. All significant observationswere discussed in the Audit Committee which met 4 times during the year under review
Your Company's shares are tradable compulsorily in electronic form and your Company hasestablished connectivity with both the depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of thenumerous advantages offered by the Depository system members are requested to avail ofthe facility of dematerialization of the Company's shares on either of the Depositories asaforesaid.
Your directors would like to express their grateful appreciation for the assistance andco-operation received from Central and State governments financial institutions banksgovernment authorities customers suppliers and investors during the year under review.Your Directors also wish to place on record their deep sense of appreciation towards thededicated and sincere services rendered by the employees of the company for its success.
|For and on behalf of the Board of Directors |
|Chennai. ||N.R. Panicker |
|10th November 2016 ||Chairman |
Annexure-1 - TO THE DIRECTORS REPORT
1. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as provided under Sub-Section (3) of Section 92 of theCompanies Act 2013 ( the "Act") is enclosed at Annexure-IV in the prescribedform MGT-9 and forms part of this Report.
NUMBER OF MEETINGS OF THE BOARD
04 meetings of the Board of Directors of the Company were held during the year. Fordetails of the meetings please refer the Corporate Governance Report which forms part ofthis Report INDEPENDENT DIRECTORS' DECLARATION
Mr. N. Gopalakrishnan Nair and Mr. C.K. Kerala Varma who are Independent Directorshave submitted a declaration that each of them meets the criteria of independence asprovided in SubSection (6) of Section 149 of the Act and revised Clause 49 of the ListingAgreements. Further there has been no change in the circumstances which may affect theirstatus as independent director during the year.
POLICY OF DIRECTORS' APPOINTMENT AND REMUNERATION
Company's policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided under section 178(3) of the Act are covered in Corporate GovernanceReport which forms part of this Report. Further information about elements ofremuneration package of individual directors as provided in the extract of Annual Returnas provided under Section 92(3) of the Act is enclosed as Annexure- IV in the prescribedform MGT-9 and forms part of this Report.
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT
As provided under Clause 49 of the listing agreement with the stock exchanges allBoard members & Senior Management Personnel have affirmed compliance with AccelTransmatic Limited's Code of Conduct for the year ended 31st March 2016
RELATIONSHIP BETWEEN DIRECTORS INTER-SE
Disclosure on materially significant related party transactions i.e the company'stransactions that are of material nature with its promoters directors and themanagement their relatives or subsidiaries among others that may have potential conflictwith the company's interest at large.
None of the transactions with any of the related parties were in conflict with thecompany's interest. Attention of members is drawn to the disclosure of transactions withrelated parties set out in note 23.4 of Summary of significant accounting policies andother explanatory information of financial Statements forming part of the Annual report.
All related party transactions are negotiated on arm's length basis and are intendedto further the company's interests.
The particulars of transactions between the Company and its related parties as per theAccounting Standard 18 "Related Party Disclosures" referred under section 188 ofthe Companies Act 2013 are set out in the notes to Accounts for the Annual Report. Therehave been no materially significant related party transactions which may have potentialconflict with the interest of the company.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Long term loans and advances as at 31 March 2016 include security deposits and depositswith statutory/government authorities. Short term loans and advances as at 31 March 2016include rent and other deposits advance to associate companies and other loans andadvances
TRANSACTIONS WITH RELATED PARTIES
The Company has entered into contract / arrangements with the related parties in theordinary course of business and on arm's length basis. Thus provisions of Section 188(1)of the Act is not applicable.
The company has adequate internal control procedures commensurate with the size andnature of its operations. The internal control systems were further strengthened byinternal audit carried by an independent firm of Chartered Accountants and a periodicalreview by the management. The Audit Committee of the board addresses issues raised byinternal auditors and the statutory auditors.
The financial objective of the company is to bring in efficiencies of operations at alllevels so as to maximize return on capital employed and to generate sufficient cashprofits to fund on-going expansions and to meet the growth objectives.
The audit committee and the Board periodically review performance parameters related tofinancial performance of the company to ensure smooth implementation of the internalcontrol systems and efficient management of the various resources. The audit committeeconducts periodic reviews with the management internal auditor and the statutory auditor.There is an on-going cost monitoring program to control various expenses and the Boardreviews the variance analysis.
The Risk Management is overseen by the Audit Committee of the Company on a continuousbasis. The Committee oversees Company's process and policies for determining risktolerance and review management's measurement and comparison of overall risk tolerance toestablished levels. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuous basis. For detailsplease refer to the Management Discussion and Analysis report which form part of the BoardReport
The Company has established a vigil mechanism for Directors and employees to reporttheir genuine concerns. For details please refer to the Corporate Governance Reportattached to this Report. PARTICULARS OF REMUNERATION The information required underSection 197 of the Act and the Rules made there-under in respect of employees of theCompany is follows:-
(a) the ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;
The company has not paid any remuneration to any Executive Director. The company onlyhad non-executive Chairman and non-executive Director. The company has paid only sittingfees to some of the non-executive Directors and these have not been considered asremuneration.
(b) Percentage increase in remuneration of each Director Chief Financial OfficerCompany Secretary or Manager if any in the financial year
|Name of the person ||% of increase in Remuneration |
|Ms. Shoba Giridharan ||Nil |
( c ) The percentage increase in the median remuneration of employees in the financialyear - NIL
(d) The number of permanent employees on the rolls of Company
There are 15 permanent employees on the rolls of the company.
(e) The explanation on the relationship between average increase in remuneration andCompany Performance.
(f) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company;
|Particulars ||Rs. in lakhs |
|Remuneration of Key Managerial Personnel(KMP) during the financial year 2015-16 (aggregated) ||2.64 |
|Revenue from Operations ||69.11 |
|Remuneration (as % of Revenue) ||3.82 |
|Profit Before Tax (PBT) ||(565.05) |
|Remuneration (as % of PBT) ||(0.47) |
(g) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration
The average increase in salaries of employees other than managerial personnel in2015-16 was Nil %. Percentage increase in the managerial remuneration for the year was 100% considering the KMPs joined during the year 2015-16.
(h) Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company
|Particulars ||Company Secretary Rs. In Lacs |
|Remuneration ||2.64 |
|Revenue from Operations ||69.11 |
|Remuneration (as % of Revenue) ||3.82 |
|Profit Before Tax (PBT) ||(565.55) |
|Remuneration (as % of PBT) ||- |
(j) Key Parameters for any variable component of remuneration availed by the Directors- Not Applicable
(j) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year;
(k) Affirmation that the remuneration is as per the remuneration policy of the Company
The Company's remuneration policy is driven by the success and performance of theindividual employees and the Company. Through its compensation package the Companyendeavours to attract retain develop and motivate a high performance staff. The Companyfollows a compensation mix of fixed pay benefits and performance based variable pay.Individual performance pay is determined by business performance and the performance ofthe individuals measured through the annual appraisal process. The Company affirmsremuneration is as per the remuneration policy of the Company.
PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NON-EXECUTIVE DIRECTORS
During the year the Non-Executive Directors of the Company had no pecuniaryrelationship or transactions with the Company.
|For and on behalf ||of the Board of Directors |
|Chennai. ||N.R. Panicker |
|10th November 2016 ||Chairman |