Directors' Report To The Members of Accel Transmatic Limited Your Directors have pleasure in presenting the 29th Annual Report of ACCEL TRANSMATIC LIMITED (the Company) Standalone financial statement along with the audited financial statements for the financial year ended 31 March, 2015. 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)com prising income from Animation services 7.73 mn and other services Rs.3.12mn. The company reported a net loss of 70.66 mn mainly due to the high interest outgo on borrowings from Banks and amortization of its Intellectual properties without realizing a matching revenue by monetizing the same through distribution. During the year, the animation division reported a negative EBITDA of Rs.(30.25)mn (previous year, a negative EBITDA of Rs.9.431 mn). The company continued to carry on the business of content development services in Animation and Visual Effects in a small way during the year under review, and also pursued its efforts to monetize the IPRs. During the financial year 2015-16, the company has started its Engineering Services Division at its factory premises in Chennai for contract manufacturing and Engineering services. The management: is hopeful of scaling operations in both the divisions substantially during the coming years. The highlights of the performance are discussed in detail in the management: discussion and analysis report attached as Annexure to this report. GOING CONCERN The company has suffered losses for the past several years. The accumulated losses as ondate of the Balance sheet is more than 102.75mn (184 %) of its networth. However, considering the expected future cash flows and the commitment of the promoters to try and revive the operations in the coming years, the potential cash flows expected to be received by the company from exploiting its IPRS, the management is of the opinion that the company would be in a position to continue as a going concern and hence the accounts have been drawn up on such basis. The proposal of merging of the holding company with the company also will assist the company to shore up it finances and operations. DIVIDEND: The Directors have not recommended dividend forth e financial year ended 31st March 2015 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, in respect of employees of the company, is not required to be provided si nee there are no employees covered under the provision. DISCLOSURE AS PER SEXUAL HARRASMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013. "The company has in place an Anti-Sexual Harassment policy in line with the requirements of The Sexual Harassment of Women at: the workplace ( Prevention , Prohibition & Redressal) Act, 2013. Internal Complaints committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy The following is a summary of Sexual harassment: complaints received and disposed off during the year 2014-15. No of complaints:- Nil No of Complaints disposed off- Nil DOCUMENTS PLACED ON THE WEBSlTECwww.acceItransmatic.com ); The following documents have been placed on the company's website in compliance with the Companies Act: 1. Financial Statements of the Company. 2. Separate audited accounts in respect of subsidiaries as per fourth proviso to Section 136(1). 3. Details of Vigil Mechanism for directors and employees to report genuine concerns as per 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 LISTING AGREEMENT As per Clause 49 of the Listing Agreement entered into with the stock exchanges, Corporate Governance Report with Auditors' Certificate on Compliance with the conditions of Corporate Governance are attached and form part of this report. MANAGEMENT DISCUSSION & ANALYSIS The Management Discussion and Analysis and various initiatives and future prospects of the company are enclosed, separately as Annexure-11 to this report. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement of Section 134(5} of the Act, and based on the representations received from the management, the directors hereby confirm that: i. in the preparation of the annual accounts for the financial year 2014-15, the applicable accounting standards have been followed and there are no material departures; ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that: are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Loss of the Company for the financial year; iii. they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company 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 and that such internal financial controls are adequate and operating properly; and vi. they have devised proper systems to ensure compliance with the provisions of all applicable 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, 2014, are 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 account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. CEO/CFO CERTIFICATION: The Chairman and the Whole time Director and CFO the Company have submitted a certificate to the Board regarding the financial statements and other matters, as required under Clause 49(V) of the Listing Agreement. DIRECTORS: Mr.N.Gopalaknshnan Nair Director of the Company retire by rotation and is proposed to be reappointed. Ms. Shruthi Panicker was co-opted as an Additional Director with effect from 31st March 2015 and is proposed to be reappointed. QUALITY MANAGEMENT: Your company's quality policy is to enhance customer satisfaction through continued improvement of skills, processes and technologies. During the year the company continued to invest in technologies, infrastructure and processes in order to keep our quality management systems updated AUDITORS REPORT: M/s. Varma & Varma, Chartered Accountants, Chennai, auditors of the Company retire at the ensuing Annual General Meeting, and being eligible, offer themselves for reappointment. The Company has received confirmation from them that their appointment will be within the limit prescribed under section 139 of the Companies Act, 2013. The Audit Committee of the Board has recommended their reappointment. The necessary resolution is being placed before the shareholders for approval. The auditors have emphasized in their report about the realization of intangible assets, that the Company has incurred cash loss, networth has been eroded and the current liabilities exceeds the current assets. The Board of Directors would like to clarify as below regarding "emphasis matter" 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 various reasons like lack of viable service orders, interest cost on the borrowings made for investments in fixed assets and delays in monetizing the assets due to market: slowdown for animated content. The management is confident of sustaining the operations and recovering the investments made in the business. 2. The promoters have lent funds to sustain the operations during the years, the Company incurred losses. These amount: have been shown under current liabilities and hence the mismatch between current assets and current liabilities. The holding company has already converted Rs. 5 Cr out of these funds into cumulative preference shares to strengthen 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 Limited with the company under a scheme of arrangement of amalgamation. 3. The company is taking adequate steps to liquidate certain real estate assets owned by the company to reduce the bank liabilities. 4. The management is committed to grow the media business and also venture into new business and is confident: of carrying on the business as a going concern basis and would bring 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 is payable over a period of 83 month and hence long term is nature. The long term assets were acquired / developed out of funds infused by the promoter companies. 6. The management is confident that it will be able to realise the intangible assets and with the support: of its holding company and also as explained in the notes to accounts and 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 and nature of its operations. The Audit Committee constituted by the Board of Directors is functioning effectively. The Internal Audit for the year 2014-2.015 was carried out by M/s. Vijayakumar & Easwaran covering all areas of operations. All significant observations were discussed in the Audit Committee, which met 4 times during the year under review DEPOSITORY SYSTEMS: Your Company's shares are tradable compulsorily in electronic form and your Company has established connectivity with both the depositories, i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the Depository system, members are requested to avail of the facility of demater ialization of the Company's shares on either of the Depositories as aforesaid. ACKNOWLEDGEMENT: Your directors would like to express their grateful appreciation for the assistance and co-operation received from Central and State governments, financial institutions, banks, government authorities, customers, suppliers and investors during the year under review. Your Directors also wish to place on record their deep sense of appreciation, towards the dedicated and sincere services rendered by the employees of the company for its success. For and on behalf of the Board of Directors N.R. Panicker Chairman Chennai. 13/11/2015 |