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DIRECTOR'S REPORT

ACCEL Ltd.

You can view full text of the latest Director's Report for the company.
Market Cap. (₹) 35.63 Cr. P/BV 0.55 Book Value (₹) 11.36
52 Week High/Low (₹) 11/3 FV/ML 2/1 P/E(X) 6.93
Bookclosure 25/06/2018 EPS (₹) 0.90 Div Yield (%) 0.00
Year End :2018-03 

The directors are delighted to present their report on Company's Business Operations along with the Audited Financial Statements for the year 31 March 2018.

1. FINANCIAL HIGHLIGHTS INR in Millions

Particulars

2018

2017

Income from Operations

213.39

50.92

Profit /(Loss) before interest, depreciation and tax

179.42

1.56

Interest

7.25

6.32

Depreciation & Amortisation

10.52

14.78

Exceptional item

73.83

-

Profit/(Loss) before tax

87.82

(19.54)

Provision for Taxation

-

-

Profit/(Loss) after tax

87.82

(19.54)

2. REVIEW OF OPERATIONS

During the year under review, your company recorded total income of Rs. 213.39 mn (Previous Year Rs.50.92 mn) comprising of Income from Animation services Rs.1.23 mn (Previous Year Rs.4.23 mn) Engineering Services Rs.6.80 mn (Previous Year Rs.5.13 mn) other services Rs.0.04 mn (Previous Year Rs.2.57 mn) and other income Rs.205.32 mn (Previous Year Rs.38.99 mn). The Company reported a net profit of Rs.87.82 mn.

The Company continued to carry on the business of electronic manufacturing services and animation content development during the year under review. As the Company's amalgamation proposal of parent company merging with the company got sanctioned only in March 2018, the company could not pursue any major initiatives for lack of working capital finances. However you will be pleased to know that the company has been successful in monetizing one of our real estate assets towards the end of March 2018, which is part of the revenue reported in the accounts.

By way of a Settlement Agreement and Release dated 15 March 2017, signed by and between the company, Accel Limited and other Promoters M/s. CAC Holdings Corporation, Japan and Accel Frontline Limited, a settlement has been arrived at wherein all the parties have withdrawn their disputes and the litigation and as a part of the settlement, the company had transferred its holding in Accel Frontline Limited to a Trust without any consideration, the beneficiary of which will be Accel Frontline Limited. The accounts include loss on transfer of the shares amounting to Rs.73.83 mn which has been shown under Exceptional Item.

Detailed information on the operations of the Company and details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report.

3). Dividend Distribution

During the year under review, the Company declared and paid to the shareholders, an interim dividend of Rs.0.40 per equity share (i.e. 20% of face value Rs.2 per share) in the month of June, 2018 and this is being proposed as final dividend also.

4). Transfer To Reserves

No amount was transferred to reserves during the FY 2017-18 as this is no longer mandatory.

5).Amalgamation of Holding company Accel Limited with company

On 5 March 2018, the Company received the order from National Company Law Tribunal, Chennai Bench, approving the Scheme of Amalgamation and Arrangement between Accel Transmatic Limited "Transferee Company" and Accel Limited "Transferor Company".

Pursuant to the approved Scheme

- The face value of the equity share of the transferee company has been reduced from Rs.10 per share to Rs. 2 per share and members of the Transferee Company other than Accel Limited have been issued 54,07,401 (Fifty Four Lakhs Seven Thousand Four Hundred and One) shares of Rs.2/- each.

- 16 (Sixteen) equity shares at par of the Transferee Company having face value of Rs.2/-per share fully paid up for every 1 (One) Equity shares of the face value of Rs.10/- per share fully paid up held by such member of the Transferor Company and the total number of shares so issued shall be 5,16,00,000 (Five Crore Sixteen Lakhs)shares of Rs.2/- each.

- The 56,30,000 equity shares held by transferor company in transferee company (cross holding) has been cancelled.

- The name of the transferee company has changed from "Accel Transmatic Limited" to "Accel Limited".

The Company has received the listing and trading approval from the Bombay Stock Exchange for new securities issued pursuant to the Scheme of Amalgamation an d Arrangement.

6. Material changes and commitments affecting the financial position between the end of financial year and date of report after the balance sheet date

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relates and the date of this report.

7. Reporting under the Sexual Harassment 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. No case was reported relating to Sexual harassment complaints during FY 2017-18.

8. Meetings Of The Board And Its Committees

The board of directors, in compliance with Section 173 of the Companies Act, 2013('the Act'), read along with Secretarial Standard on Meetings of the Board of Directors (SS-1) and the Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India, meets at regular intervals to discuss on Company/business policy, strategy and financial results apart from other Board Business. The board has met six times during the financial year. The maximum interval between any 2 board meetings did not exceed 120 days.

The Company's board has the following committees:

- Audit Committee

- Nomination and Remuneration committee

- Stakeholder relationship committee

The details of Composition, number of meetings, quorum at the meetings of the board and its committees listed above, during the FY 2017-18 and its terms of reference are briefly provided in Corporate Governance Report.

AUDIT COMMITTEE

Your company has an Audit Committee of the Board of Directors in place. The terms of reference of the Audit committee are in line with Section 177 of the Act read with the Companies (Meetings of the Board and its Powers) Rules 2014 and the Listing Regulations as amended. There were no frauds reported by Auditors of your Company under sub-section 12 of section 143 of the Act for the FY 2017-18.

NOMINATION AND REMUNERATION POLICY

Your company has in place a Nomination and Remuneration Policy to ensure that the Board and Top Management is appropriately constituted to meet its fiduciary obligations to stakeholders, to identify and determine the integrity, qualification expertise and experience of persons who are qualified to become Directors or who may be appointed in senior management and/or as Key Managerial Personnel of the Company. This policy lays down the guidelines relating to appointment and remuneration for Executive Directors, Non-Executive Directors/ Independent Directors, Key Managerial Personnel and Senior Management which are in line with the provisions of the Companies Act, 2013 and rules prescribed therein, as amended from time to time and as per the Listing Agreement with Stock Exchange(s), as amended from time to time and/or such other statutory notification, amendment or modification, as may be applicable.

9. Auditors and Audit Report Statutory Auditors

The Statutory Auditors of the Company, M/s. Vijaykumar & Easwaran, Chartered Accountants (Firm Registration Number -004703S) were appointed at the 31st Annual General Meeting of the Company to hold office for a term of 5 (five) consecutive years until the conclusion of the 36th Annual General Meeting of the Company.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, your Directors appointed M/s. R. Kannan, Company Secretaries to undertake the Secretarial Audit of your Company for FY 2017-18. The Report of the Secretarial Auditor for FY 2017-18 is annexed as 'Annexure A' to this Report.

There were no qualifications, reservations, observations or adverse remarks made by the Auditors in their report.

For FY 2018-19 it is proposed to appoint J.M. & Associate, Company Secretaries as Secretarial Auditors.

10. Directors' Responsibility Statement

As required under clause (c) of sub-section (3) of section 134 of the Companies Act, 2013, directors, to the best of their knowledge and belief, state that-

i. in the preparation of the annual financial statements for the year ended 31 March 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

11. such accounting policies have been selected and applied consistently and made such 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 as at the end of the financial year 31 March 2018 and of the profit of the Company for that period;

iii. proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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 and that such internal financial controls are adequate and are operating effectively; and

vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

11. Fixed Deposit From Public

The Company has not accepted any deposits from the public and as such no amount on account of principal or interest on deposit from public was outstanding as on the date of the balance sheet.

12. Extract Of Annual Return

The extract of Annual Return as provided under sub-section (3) of section 92 of the Companies Act, 2013, in the prescribed form MGT-9 is annexed as 'Annexure B' to this Report.

13. Details in respect of frauds reported by auditors under section 143(12)

During the year under review, there were no frauds reported by the auditors to the Audit Committee or the Board under section 143(12) of the Companies Act, 2013.

14. Particulars of loans, guarantees or investments

Information regarding loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 are detailed in the Financial Statements.

15. Related Party Transactions

During the FY 2017-18, Related Party Transactions as defined under Section 188 of the Act read with Companies (Meeting of Board and its Powers) Rules, 2014, and the Listing Regulations, 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 course of business) which were foreseen and repetitive in nature was obtained from the Audit Committee from time to time. During the period under review, your Company did not enter into any Related Party Transaction which may be considered material in terms of Section 188 of the Act read with Companies (Meeting of Board and its Powers) Rules, 2014, as amended, and thus disclosure in Form AOC-2 is not applicable to the Company.

16. Management Discussion and Analysis

The Management Discussion and Analysis and various initiatives and future prospects of the Company is presented in a separate section, which forms part of this Annual Report.

17. Auditors' certificate on corporate governance

The Company has obtained the certificate from its statutory auditors regarding compliance with the provisions relating to corporate governance laid down in Part E of Schedule V to the SEBI Listing Regulations, 2015. This certificate is enclosed separately to this report.

18. 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 C' to this Report.

19. Risk Management Policy

Information on the development and implementation of a Risk Management Policy for the Company including identification therein of elements of risk, which in the opinion of the Board may threaten the existence of the Company, is given in the Corporate Governance Report.

20. Details of directors

During the year under review all independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in section 149 (6) of the said Act and Regulation 16(1)(b) of SEBI, Listing Regulations, 2015.

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. N.R. Panicker, Managing Director (DIN: 00236198) is liable to retire by rotation at the ensuing Annual General Meeting and offers himself for reappointment. The necessary resolution is being placed before the shareholders for approval.

21. Promoters shareholding

The Promoter shareholding is presented in the separate section in MGT-9 which forms part of this Annual Report.

22. Significant And Material Orders Passed By The Regulators Or Courts

There were no significant and material orders passed against your Company by the regulators or courts or tribunals during the FY 2017-18 impacting the going concern status and your Company's operations in future.

23. 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 since there are no employees covered under the provision.

24. Indian Accounting Standards, 2015

The annexed financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 (the Act), Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time and other relevant provisions of the Act.

25. Details of internal financial controls with reference to the financial statements

The Company has documented its internal financial controls considering the essential components of various critical processes, physical and operational. This includes its design, implementation and maintenance, along with periodical internal review of operational effectiveness and sustenance, which are commensurate with the nature of its business and the size and complexity of its operations.

This ensures orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention of errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The internal financial controls with reference to the financial statements were adequate and operating effectively.

26. Documents placed in the company's website (www.acceltransmatic.com/ www.accel-india.com)

Financial results for every fiscal year

Shareholding Pattern

Notes and Communication during each financial year.

Details on Corporate Governance initiatives.

26. Acknowledgements

The Board of Directors take this opportunity to thank all its shareholders, valued customers, banks, Government and statutory authorities, investors and stock exchanges for their continued support to the Company. Your Directors wish to place on record their deep sense of appreciation for the committed services by employees. Your Directors acknowledge with gratitude the encouragement and support extended by the valued shareholders and the Promoters of the Company.

For and on behalf of the Board of Directors

N.R.Panicker

Managing Director

DIN 00236198

Place: Chennai

Date: 14.08.2018

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