To The Members Accel Limited
Your directors to present their report on Company's Business Operations along with theAudited Financial Statements for the year ended 31 March 2020.
1. Financial Highlights (In Rs.)
|Particulars ||Standalone ||Consolidated |
| ||For Financial Year ended 31 March 2020 ||For Financial Year ended 31 March 2019 ||For Financial Year ended 31 March 2020 ||For Financial Year ended 31 March 2019 |
| || || ||157417602 ||84868221 |
|Total Income ||23786917 ||26417860 || || |
|Total Expenditure ||35288236 ||30906902 ||189513725 ||102027703 |
|Profit/(loss) before Interest Depreciation & Tax (EBITDA) ||(11501319) ||(4489042) ||(32096123) ||(17159481) |
|Finance Charges ||4616653 ||1705032 ||7998586 ||3978369 |
|Depreciation ||7538613 ||8294837 ||14866343 ||16581628 |
|Profit/(loss) before Tax ||(23656585) ||(14488911) ||(54961052) ||47314152 |
|Tax Expense ||- ||- ||(160874) ||(12503) |
|Net Profit/(Loss) After Tax ||(23656585) ||(14488911) ||(55121926) ||47301648 |
|Earnings Per Share || || || || |
|Basic ||(0.41) ||(0.25) ||(0.96) ||(0.66) |
|Diluted ||(0.41) ||(0.25) ||(0.96) ||(0.66) |
2. Review of Operations
During the year under review your company recorded total income of Rs.237.86 mn(Previous Year Rs. 264.17 mn) comprising of Income from Animation services Rs.6.29 mn(Previous Year Rs.1.83 mn) Engineering Services Rs.1.07 mn (Previous Year Rs.5.59mn) other services Rs.1.33 mn (Previous Year Rs. 0.10 mn). The Company reported a loss ofRs.23.65 mn.
The Company continued to carry on the business of electronic manufacturing services andanimation content development during the year under review.
Detailed information on the operations of the Company and details on the state ofaffairs of the Company are covered in the Management Discussion and Analysis Report.
During the year under review the Company has not declared any dividend.
4. Transfer To Reserves
No amount was transferred to reserves during the FY 2019-20.
5. Material changes and commitments affecting the financial position between theend of financial year and date of report after the balance sheet date
Material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relatesand the date of this report.
Global Pandemic- COVID-19
The outbreak of Coronavirus (COVID-19) pandemic globally and in India is causingsignificant disturbance and slowdown of economic activity.
The Company has considered the possible risk that may result from the pandemic relatingto COVID -19 and expects to recover the carrying amount of all its assets both financialand non financial in the ordinary course of business based on the internal and externalinformation available. The company is continuously monitoring any material changes infuture economic conditions. The company is of the view that the impact of COVID -19 may bedifferent from those estimated presently.
Acquisition of IT Service Companies
The Company acquired in March 2020 M/s. Computer Factory (India) Private Limited for aconsideration of Rs.3 crores and the operational results of the company are included inthe consolidated financials. Computer Factory (India) Private Limited is engaged in thebusiness of IT Infrastructure Management and Systems integration
The Company in July 2020 has acquired Ensure Support Services (India) Limited for aconsideration of Rs. 31 Crores. Ensure is into IT related Distribution and services withan average annual turnover of over 100 Crores in the past three years.
Scheme of Merger
The Company has submitted a Scheme of Merger under Section 233 of the Companies Act2013 on 22nd September with the Regional Director Southern Regions. It proposesto merge the subsidiary companies Ensure Support Services India Limited and ComputerFactory (India) Private Limited with the company Accel Limited under a Scheme ofAmalgamation between Ensure Support Services India Limited (Transferor Company - I) andComputer Factory (India) Private Limited (Transferor Company - II) with Accel Limited(Transferee Company).
6. Management Discussion and Analysis
Management's Discussion and Analysis Report for the year under review as stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") is presented in aseparate section forming part of the Annual Report.
7. Consolidated Financial Statement
In accordance with the provisions of Companies Act 2013 (hereinafter referred to as"the Act")
Regulation 33 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (hereinafter referred to as "ListingRegulations") and applicable Accounting Standards the Audited Consolidated FinancialStatements of the Company for the financial year 2019-20 together with the Auditors'Report form part of this Annual Report.
8. Subsidiary Companies/ Associate Companies/Holding Companies/ Joint Ventures
A statement containing the salient features of the financial statement of SubsidiaryCompanies/ Associate Companies as per Section 129(3) of the Companies Act 2013 isprovided in Form No. AOC 1 is attached as Annexure I to the consolidatedfinancial statement and therefore not repeated to avoid duplication.
9. Directors' Responsibility Statement
As required under clause (c) of sub-section (3) of section 134 of the Companies Act2013 directors to the best of their knowledge and belief state that-
i. in the preparation of the annual financial statements for the year ended 31March 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
ii. such accounting policies have been selected and applied consistently and madesuch judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at the end of the financial year 31 March2020 and of the profit/loss of the Company for that period;
iii. proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. annual financial statements have been prepared on a going concern basis;
v. internal financial controls have been laid down and followed by the Company andthat such internal financial controls are adequate and are operating effectively; and
vi. proper systems have been devised to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
10. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India ("SEBI"). The Company has also implemented several bestgovernance practices. The report on Corporate Governance as stipulated under the ListingRegulations forms part of the Annual Report. The requisite certificate from the Auditorsof the Company confirming compliance with the conditions of Corporate Governance isattached to the report on Corporate Governance.
11. Related Party Transactions
During the FY 2019-20 Related Party Transactions as defined under Section 188 of theAct read with Companies (Meeting of Board and its Powers) Rules 2014 and the ListingRegulations as amended were at arm's length and in ordinary course of business.
Omnibus approval for related party transactions (at arm's length and in ordinary courseof business) which were foreseen and repetitive in nature was obtained from the AuditCommittee from time to time. During the period under review your Company did not enterinto any Related Party Transaction which may be considered material in terms of Section188 of the Act read with Companies (Meeting of Board and its Powers) Rules 2014 asamended and thus disclosure in Form AOC-2 is annexed as Annexure- I to thisReport.
12. Risk Management Policy
Information on the development and implementation of a Risk Management Policy for theCompany including identification therein of elements of risk which in the opinion of theBoard may threaten the existence of the Company is given in the Corporate GovernanceReport.
13. Details of internal financial controls with reference to the financial statements
The Company has in place adequate financial controls commensurate with the size of thebusiness. During the year such controls were tested and no reportable material weaknessin the design or operation was observed.
The internal financial controls with reference to the financial statements wereadequate and operating effectively.
14. Directors and Key Managerial Personnel
During the year under review all independent directors have submitted the declarationof independence as required pursuant to section 149(7) of the Companies Act 2013 statingthat they meet the criteria of independence as provided in section 149 (6) of the said Actand Regulation 16(1)(b) of SEBI Listing Regulations 2015.
I. Changes in Directors
Retirement by Rotation:
The independent directors hold office for a fixed term not exceeding five years fromthe date of their appointment and are not liable to retire by rotation.
The Companies Act 2013 mandates that at least two thirds of the total number ofdirectors (excluding independent directors) shall be liable to retire by rotation.Accordingly Mr. N R Panicker (DIN 00236198) Managing Director being the longest in theoffice amongst the directors liable to retire by rotation retires from the Board byrotation this year and being eligible has offered her candidature for re appointment.
Brief detail of Mr. N R Panicker who is seeking re appointment is given in the noticeof annual general meeting.
Appointment of Nominee Director
During the year KSIDC has appointed Mr. Biju Bijubhavan Gopinath as its nomineedirector on the Board of the Company on 18 December 2019.
Appointment of Independent Director
On 23 October 2020 Mr. Nagarajan Krishnamurthy was appointed as the AdditionalDirector by the Board of Directors of the company to hold office as Independent Directortill the conclusion of 34th Annual General Meeting of the Company.
II. Change in Key Managerial Personnel:
Due to some personal commitments Mr. Sundaresan Gopalakrishnan ceased to be the ChiefFinancial Officer of the Company w.e.f. 31 May 2019.
The Board at its meeting held on 13 November 2019 pursuant to the recommendation ofNomination and Remuneration Committee appointed Mr. P Subramanyam as Chief FinancialOfficer and Key Managerial Personnel of the Company w.e.f. 13 November 2019.
There was no other change in the Directors and Key Managerial Personnel during the yearunder review. The Company has received declarations from all the Independent Directors ofthe Company confirming that:
a) they meet the criteria of independence prescribed under the Act and the ListingRegulations and
b) they have registered their names in the Independent Directors' Databank.
Detailed information on the directors is provided in the Corporate Governance Report.
15. Performance Evaluation
The Company has a policy for performance evaluation of the Board Committees and otherindividual Directors including Independent Directors) which include criteria forperformance evaluation of Non-executive Directors and Executive Directors. In accordancewith the manner specified by the Nomination and Remuneration Committee the Board carriedout annual performance evaluation of the Board its Committees and Individual Directors.The Independent Directors carried out annual performance evaluation of the Chairperson.The Chairman of the respective Committees shared the report on evaluation with therespective Committee members.
The performance of each Committee was evaluated by the Board based on report onevaluation received from respective Committees. A consolidated report was shared with theChairman of the Board for his review and giving feedback to each Director.
16. Auditors and Audit Report
The Statutory Auditors of the Company M/s. Vijayakumar & Easwaran CharteredAccountants (Firm Registration Number 004703S) were appointed at the 31stAnnual General Meeting of the Company to hold office for a term of 5 (five) consecutiveyears until the conclusion of the 36th Annual General Meeting of the Company.
Necessary resolutions are proposed in this Annual General Meeting for the share holdersapproval for appointment of the statutory auditors to hold office till the conclusion ofthe 35th Annual General Meeting.
The statutory auditors of the company has resigned on 30th September 2020due to the dissolution of the firm.
The company has appointed K S Aiyar & Co Chartered Accountants as statutoryauditors of the company at its board meeting held on 23rd October 2020 subjectto approval of shareholders at annual general meeting.
The Board of Directors would like to clarify as below regarding "Emphasis ofMatter" expressed by auditors M/s. Vijayakumar and Easwaran in their report annexedalong with this Annual Report under Emphasis matter.
a) As mentioned in note no 3 & 4 the company has an investment of Rs 98 lakhs andloans of Rs 320 lakhs totaling to Rs 418 lakhs in Accel OEM Appliances Ltd (AOAL) asubsidiary of the Company. AOAL is yet to start business activities since the jointventure arrangement with a company in Hongkong has been delayed due to political issues inthe country. Since the company is hopeful of commencing the business activity soonadjustments relating to same has not been made in the books of accounts.
As planned AOAL couldn't commence its joint venture operation with Hong Kong companybecause of political issue in that county.
AOAL had invested the money in land and building for an value of 4.12 crores and thepresent market value will be more than 5 crores
b) As mentioned in note no 4 the company has to receive a sum of Rs 392 lakhs towardsInter Corporate deposits shown under "other financial assets Non- Current" inthe financial statements during the year.
The Company is hopeful in recovering this amount. So adjustments relating to same hasnot been made in the books of accounts
Despite the covid pandemic the company has been able to realize a small part of theamount after 31st July 2020 and the company is pursuing to collect the balance and ishopeful of the collection.
Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended yourDirectors appointed M/s. J.M. & Associates Company Secretaries to undertake theSecretarial Audit of your Company for FY 2019-20. The Report of the Secretarial Auditorfor FY 2019-20 is annexed as Annexure II' to this Report.
There were no qualifications reservations observations or adverse remarks made by theAuditors in their report.
I. Meetings Of The Board
Nine Meetings of the Board of Directors were held during the year. The particulars ofmeetings held and attended by each Director are detailed in the Corporate GovernanceReport.
II. Audit Committee
The Audit Committee comprises of 3 Directors namely Dr. M. Ayyappan (Chairman) Dr.C.N.Ramchand Mrs. Shruthi Panicker. During the year all the recommendations made by theAudit Committee were accepted by the Board.
III. Nomination And Remuneration Committee
The Nomination and Remuneration Committee comprises of Dr. C.N. Ramchand (Chairman)Dr. M. Ayyappan Mrs. Shruthi Panicker.
IV. Vigil Mechanism
The Company has established a robust Vigil Mechanism and a Whistle-blower policy inaccordance with provisions of the Act and Listing Regulations. The Vigil Mechanism issupervised by an Ethics & Compliance Task Force' comprising a member of theBoard as the Chairperson and senior executives as members.
Protected disclosures can be made by a whistle-blower through an e-mail or dedicatedtelephone line or a letter to the Ethics & Compliance Task Force or to the Chairman ofthe Audit Committee. The Vigil Mechanism and Whistle-blower policy is put up on theCompany's website and can be accessed at www.accel-india.com
V. Reporting under the Sexual Harassment of Woman at workplace (Prevention Prohibitionand Redressal) Act 2013.
The company has in place an Anti-Sexual Harassment policy in line with the requirementsof 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. No case was reported relating toSexual harassment complaints during FY 2019-20.
VI. Particulars of loans guarantees or investments
Information regarding loans guarantees and investments covered under the provisions ofsection 186 of the Companies Act 2013 are detailed in the Financial Statements.
VII. Conservation Of Energy Technology Absorption And Foreign Exchange Earnings AndOutgo
The particulars as prescribed under Rule 8(3) of the Companies (Accounts) Rules 2014are set out in an Annexure III' to this Report.
VIII. Extract Of Annual Return
The extract of Annual Return as provided under sub-section (3) of section 92 of theCompanies Act 2013 in the prescribed form MGT-9 is annexed as Annexure IV'to this Report.
IX. 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 under the provision.
Your Directors state that no disclosure or reporting is required in respect of thefollowing matters as there were no transactions on these items during the year underreview:
Details relating to deposits covered under Chapter V of the Act.
Issue of equity shares with differential rights as to dividend voting orotherwise.
Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme.
The Company does not have any scheme of provision of money for the purchase ofits own shares by employees or by trustees for the benefit of employees.
No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
No fraud has been reported by the Auditors to the Audit Committee or the Board.
There is no Corporate Insolvency Resolution Process initiated under theInsolvency and Bankruptcy Code 2016.
The Board of Directors take this opportunity to thank all its shareholders valuedcustomers banks Government and statutory authorities investors and stock exchanges fortheir continued support to the Company. Your Directors wish to place on record their deepsense of appreciation for the committed services by employees. Your Directors acknowledgewith gratitude the encouragement and support extended by the valued shareholders and thePromoters of the Company.
|For and on behalf of the Board of Directors || |
|N.R.Panicker ||C.N.Ramchand |
|Managing Director ||Director |
|DIN 00236198 ||DIN 05166709 |
|Place: Chennai || |
|Date: 12.11.2020 || |