The Members of Accel Transmatic Limited
Your Directors have pleasure in presenting the 31st Annual Report of ACCEL TRANSMATICLIMITED (the Company) Standalone financial statement along with the audited financialstatements for the financial year ended 31 March 2017.
|FINANCIAL RESULTS ||INR in Millions |
|Particulars ||2017 ||2016 |
|Income from Operations ||21.95 ||8.17 |
|Profit /(Loss) before interest depreciation and tax ||(11.44) ||(32.98) |
|Interest ||4.88 ||6.00 |
|Depreciation & Amortisation ||12.99 ||17.64 |
|Profit/(Loss) after tax ||(29.31) ||(56.56) |
REVIEW OF OPERATIONS
During the year under review your company recorded total income of Rs. 21.95 mn(Previous Year Rs.8.17 mn) comprising of Income from Animation services Rs.4.23 mnPrevious Year Rs.4.61 mn) Engineering Services Rs.5.13 mn (Previous Year 1.76 mn) otherservices Rs. 2.57 mn (Previous Year 0.54 mn) and other income Rs.10.02 mn (Previous Year1.26mn) The Company reported a net loss of Rs.29.31 mn including amortization costs of itsintellectual properties without matching revenue on exploitation of those assets duringthe year under review.
The company also provided forfficertain doubtful receivables after a review and aftercontinuous follow up .
The company had led a petition before the honorable High Court of Madras for merger ofthe holding company with the company with an intention to revive the company's businessactivities. The whole process is pending for nal 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 also drawn up plans for monetization of its realestate assets to create another revenue stream.
The company continued to carry on the business of content development services inAnimation and Visual E ects in a small way during the year under review and also pursuedits efforts to monetize the IPRs. During the financial year 2016-17 the company startedits Engineering Services Division at its factory premises in Chennai contractmanufacturing and Engineering services. The management is hopeful of scaling theoperations in both divisions substantially during the coming years. The highlights of theperformance are discussed in detail in the management discussion and analysis reportattached as Annexure to this report.
The company has suffered losses for the past several years. The accumulated losses ason date of the Balance sheet is more than its net worth. However considering the expecteddiversi cation with cash infusion planned by the promoters and the cash flows expected tobe received 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 Directors have not recommended dividend for the financial year ended 31st March2017 considering the losses and the necessary to conserve available 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 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 o during the year 2016-17.
No of complaints:- Nil
No of Complaints disposed o - Nil
DOCUMENTS PLACED ON THE COMPANY 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.
Separate audited accounts in respect of subsidiaries as per fourth proviso to Section136(1).
Details of Vigil Mechanism for directors and employees to report genuine concerns asper 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'fficerti cate 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 con rm that: I. in thepreparation of the annual accounts for the financial year 2016-17 the applicableaccounting standards have been followed and there are no material departures; ii. theyhave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of a airs of the Company at the end of the financial year and of the Loss of theCompany for the financial year; iii. they have taken proper and su cient care to the bestof their knowledge and ability for the maintenance of adequate accounting records inaccordance with the provisions of the Act. They con rm that there are adequate systems andcontrols for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities; iv. they have prepared the annual accounts on a going concernbasis; v. they have laid down internal financial controls to be followed by the Companyand that 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 e ectively.
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.
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.
AUDITORSfficeRTIFICATE ON CORPORATE GOVERNANCE:
Thefficerti cate 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 have submitted afficerti cate 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.
Mrs. Shruthi Panicker Director retire by rotation at the ensuing Annual GeneralMeeting and is eligible for re-appointment. The necessary resolution is being placedbefore the shareholders for approval.
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.
As required section 139(2) of the Companies Act 2013 an audit rm can continue to bethe statutory auditors only for two consecutive terms of 5 years each only and there hasto be a change in statutory auditors after such two terms. M/s. Varma & Varma shall becompleting such two terms in the ensuing AGM and hence M/s. Varma & Varmashallfficease to be the statutory auditors and cannot be reappointed. Accordingly it isrecommended that M/s. Vijaykumar & Easwaran Chartered Accountants (Firm RegistrationNo. 004703S) be appointed as Statutory Auditors of the Company in place of retiringauditors M/s.Varma & Varma Chartered Accountants (Firm Regsitration No.04532S) tohold office till the conclusion of Thirty Sixth AGM to be held in the year 2022 (subjectto rati cation of their appointment at every AGM). The Audit Committee of the Board hasrecommended their appointment. The necessary resolution is being placed before theshareholders for approval. The Company has received con rmation from M/s. Vijaykumar &Easwaran Chartered Accountants that their appointment will be within the limit prescribedunder section 139 of the Companies Act 2013. The auditors have emphasized in their reportabout the realization of intangible assets that the Company has incurred cash loss networth has been ended and the current liabilities 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 con dent 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 developfficertain real estate assets flownedby the company for a sustainable business.
4. The management is committed to grow the media business and also venture into newbusiness and is con dent of carrying on the business on a going concern and would bring innecessary 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 is nature. The Company has beenservicing this loan and the outstanding as on 31st March 2017 was Rs.3.94 crores
6. The management is con dent that it will be able to realize the intangible assets andwith the support of its holding company and also as explained in the notes to accounts andalso 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 e ectively. The Internal Audit for the year 2016 2017 was carried out by M/s.Vijayakumar & Easwaran covering all areas of operations. All signi cant 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) andfficentral 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 Companys shares on either of theDepositories as aforesaid.
Your directors would like to express their grateful appreciation for the assistance andco-operation received fromfficentral 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 and on behalf of the Board of Directors Chennai. N.R. Panicker
Date : Chairman