The Members of
Accel Transmatic Limited
Your Directors have pleasure in presenting the 29th Annual Report of ACCELTRANSMATIC LIMITED (the Company) Standalone financial statement along with the auditedfinancial statements for the financial yearended 31 March 2015.
INR in Millions
|Particulars ||2015 ||2014 |
|Income from Operations ||10.85 ||15.07 |
|Proflt/(Loss) before interest depreciation and tax ||(30.25) ||(5.76) |
|Interest ||8.71 ||21.87 |
|Depreciation & Amortisation ||26.53 ||39.73 |
|Proflt/(Loss) after tax ||(70.66) ||(67.36) |
REVIEW OF OPERATIONS
During the financial year 2014-15 your company recorded total Income of Rs.10.85 mn(Previous Year Rs.15.07 mn)comprising income from Animation services 7.73 mn and otherservices Rs.3.12 mn. The company reported a net loss of 70.66 mn mainly due to the highinterest outgo on borrowings from Banks and amortization of its Intellectual propertieswithout realizing a matching revenue by monetizing the same through distribution. Duringthe year the animation division reported a negative EBITDA of Rs.(30.25) mn (previousyear a negative EBITDA of Rs.9.431 mn).
The company continued to carry on the business of content development services inAnimation and Visual Effects in a small way during the year under review and also pursuedits efforts to monetize the IPRs. During the financial year 2015-16 the company hasstarted its Engineering Services Division at its factory premises in Chennai for contractmanufacturing and Engineering services. The management is hopeful of scaling operations inboth the divisions substantially during the coming years.
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 asondate of the Balance sheet is more than 102.75mn (184 %) of its networth. Howeverconsidering the expected future cash flows and the commitment of the promoters to try andrevive the operations in the coming years the potential cash flows expected to bereceived by the company from exploiting its IPRS the management is of the opinion thatthe company would be in a position to continue as a going concern and hence the accountshave been drawn up on such basis. The proposal of merging of the holding company with thecompany also will assist the company to shore up it finances and operations.
The Directors have not recommended dividend for the financial year ended 31st March2015 considering the losses and the necessary to conserve resources.
PARTICULARS OF EMPLOYEES:
The information required under section 197 of the Act and rules made there-under inrespect of employees of the company is not required to be provided since there are noemployees covered underthe 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 2014-15.
No of complaints:- Nil
No of Complaints disposed off- Nil
DOCUMENTS PLACED ON THE WEBSITE
The following documents have been placed on the company's website in compliance withthe Companies Act:
1. Financial Statements of the Company.
2. Separate audited accounts in respect of subsidiaries as per fourth proviso toSection 136(1).
3. Details of Vigil Mechanism for directors and employees to report genuine concerns asper proviso to Section 177(10).
4. The Terms and Conditions of appointment of independent directors.
5. 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.
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 forthe financial year 2014-15 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 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
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
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
The Chairman and the Whole time Director and CFO the Company have submitted acertificate to the Board regarding the financial statements and other matters as requiredunder Clause 49(V) of the Listing Agreement.
Mr.N.Gopalakrishnan Nair Director of the Company retire by rotation and is proposed tobe reappointed.
Ms. Shruthi Panicker was co-opted as an Additional Director with effect from 31st March2015 and is proposed to be reappointed.
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 forapproval.
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.
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 basis and wouldbring in 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 month and hence long term is nature. The long term assets wereacquired / developed out of funds infused by the promoter companies.
6. The management is confident that it will be able to realise 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 2014-2015 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 underreview.
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 |
|13/11/2015 ||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
8 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 Directors havesubmitted a declaration that each of them meets the criteria of independence as providedin Sub-Section (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 is provided in the extract of Annual Returnas provided under Section 92(3) of the Act is enclosed at 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 2015.
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 that may have potential conflict with the interestsof the company 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 21.3 and 21.4 of Summary of significant accountingpolicies and other explanatory information of financial Statements forming part of theAnnual 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 potentialconflicts with the interest of the company.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Long term loans and advances as at 31 March 2015 include security deposits and depositswith statutory/government authorities. Short term loans and advances as at 31 March 2015include 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 are notapplicable.
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 under Section 197 ofthe Act and the Rules made there-under inrespect of employees ofthe Company is follows:-
(a) the ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;
|Name of the Nonexecutive Director ||Ratio to median remunera tion ||Remunerati on paid (Rs) |
|Mr. Mohan Rao ||54.15 ||25000 |
|Mr.C.K.Keralavarma ||146.23 ||67500 |
|Mr. N.Gopalakrisnan Nair ||151.06 ||72500 |
|Wholetime Director || || |
|Mr.K.R.Chandrasekaran ||2437.12 ||1125000 |
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 |
|Mr. K.R.Chandrasekaran^ ||100 |
|Ms. Shoba Giridharan@ ||100 |
^ Mr K.R. Chandrasekaran joined the company w.e.f. 01.04.2014
@ Ms. ShobaGiridharan Company Secretary joined the company w.e.f. 15.11.2014.
(c) The percentage of increase in the median remuneration of employees in the financialyear-Nil.
(d) The number of permanent employees on the rolls of Company
There are 09 permanent employees on the rolls ofthe company.
(e) The explanation on the relationship between average increase in remuneration andCompany Performance.
The company has only a small work force. Hence the currentyearthis not applicable.
(f) Comparison of the remuneration of the Key Managerial Personnel against theperformance ofthe company;
|Particulars ||Rs. in lakhs |
|Remuneration of Key Managerial Personnel (KMP) during the financial year 2014-15 (aggregated) ||12.24 |
|Revenue from Operations ||77.26 |
|Remuneration (as % of Revenue) ||15.84% |
|Profit Before Tax (PBT) ||(654.90) |
|Remuneration (as % of PBT) ||(1.87%) |
g) Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations ofthe shares ofthe Company in comparisonto the rate at which the Company came out with the last public offer in case of listedcompanies and in case of unlisted companies the variations in the net worth of theCompany as at the close of the current financial year and previous financial year;
| || || || || |
|Particulars ||Unit ||Asat31 March 2015 ||As at 31 March 2014 ||Variation% |
|Closing rate of share at BSE ||INR ||9.39 ||4.37 ||-114.87 |
|EPS (consolidated) ||INR ||(6.89) ||(6.39) ||-7.82 |
|Market capitalization BSE ||INR in Lacs ||1036.41 ||482.33 ||-114.88 |
|Price Earning Ratio ||Ratio ||2.50 ||(2.02) ||-23.76 |
|BSE || || || || |
(h) 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 in2014-15 was Nil %. Percentage increase in the managerial remuneration for the year was 100% considering the KMPs joined during the year 2014-15.
(I) comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company
|Particulars ||Wholetime Director ||Company Secretary |
| ||Rs. in Lacs ||Rs. In Lacs |
|Remuneration ||11.25 ||0.99 |
|Revenue from Operations ||77.26 ||77.26 |
|Remuneration (as % of Revenue) ||14.56% ||1.28% |
|Profit Before Tax (PBT) ||(654.90) ||(654.90) |
|Remuneration (as % of PBT) ||(1.72)% ||(0.15)% |
(j) Key Parameters for any variable component of remuneration availed by the Directors
(k) 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;
(l) 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 |
|Chennai. ||N.R. Panicker |
|13/11/2015 ||Chairman |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The company's operations involve very low energy consumption and therefore the scope ofenergy conservation is limited. The company has taken steps to conserve electricityconsumption in offices.
The company is in high technology business and is constantly upgrading technology tomeet the current challenges at all levels. Almost all employees in the company usepersonal computers in a networked environment .The company uses internet based technologyfor its communication needs.
The details regarding foreign exchange earnings and outgo are being mentioned in thenotes to the accounts.
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31ST March 2015
[Pursuant to section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]
Accel Transmatic Limited Accel House
3rd Floor 75 Nelson Manickam Road
Chennai - 600029.
|Company No. : ||L30007TN1986PLC100219 |
|Authorized Capital ||: Rs.20 Crores |
We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s. AccelTransmatic Limited(hereinafter called the "Company"). Secretarial Audit was conducted in a mannerthat provided us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing our opinion thereon.
Based on ourverification ofthe Company's books papers minute books forms and returnsfiled and other records maintained by the Company and also the information provided by theCompany its officers agents and authorized representatives during the conduct ofSecretarial Audit we hereby report that in our opinion the company has during the auditperiod covering the financial year ended on 31st March 2015 complied with the statutoryprovisions listed hereunderand also that the Company has proper Board- processes andcompliance- mechanism in place to the extent in the manner and subject to the reportingmade hereinafter:
We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2015according to the provisions of:
The Companies Act 2013 (the Act) and the rules made thereunder;
The Securities Contracts (Regulation) Act 1956 ('SCRA') and the Rules madethereunder;
The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
Foreign Exchange Management Act 1999 and the rules and regulations madethereunderto the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;
The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act');
The Securities and Exchange Board of India (Substantial Acquisition of Sharesand Takeovers) Regulations 2011;
The Securities and Exchange Board of India (Prohibition of InsiderTrading)Regulations 1992;
The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009; (Not applicable to the Company during the audit period)
The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999; (Not applicable to the Company duringthe audit period)
The Securities and Exchange Board of India (Issue and Listing of DebtSecurities) Regulations 2008; (Not applicable to the Company during the audit period)
The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; (Not applicable to the Company during the audit period) and
The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;
(Not applicable to the Company during the audit period)
The Company has identified the following laws as specifically applicable to theCompany;
Various labour laws as applicable to the Company; and
Other applicable laws like Customs Act 1962 etc.
We have also examined compliance with the applicable clauses of the following:
Secretarial Standards issued by the Institute of Company Secretaries of India.
(Not applicable to the Company during the audit period)
The Listing Agreements entered into by the Company with Stock Exchanges.
During the year under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above.
We further report that the Board of Directors of the Company is duly constituted withproper balance of Executive Directors Non- Executive Directors Woman Director andIndependent Directors. The changes in the composition of the Board of Directors that tookplace during the year under review were carried out in compliance with the provisions ofthe Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members' views are capturedand recorded as part of the minutes.
We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
| ||S.T. PRABHU |
|Chennai ||PRACTISING COMPANY SECRETARY |
|13/11/2015 ||C.P. No.14682 |