Your directors are pleased to present the 26th annual report together with the auditedaccounts of the company for the year ended March 31,2012.
| || |
INR in million
|Financial results || || |
| ||2012 ||2011 |
|Total Income ||237.42 ||202.69 |
|Profit before interest, depreciation & tax ||85.77 ||30.85 |
|Interest ||30.90 ||22.30 |
|Depreciation ||51.97 ||45.06 |
|Provision for tax ||- ||- |
|Profit /(loss) after tax ||2.89 ||(36.52) |
Review of operations:
During the financial year 2011-12, your company recorded total income of Rs 237.42 mn(previous year Rs 202.69 mn) comprising income from technology services of Rs 72.95 mn,animation services of Rs 17.18 mn , other services Rs.6.74 mn and profit on sale oftechnologies division of Rs 140.55 mn. During the year, the company completed developmentof its second intellectual property" Raju The Rickshaw" The company reported anet profit of Rs 2.89 mn.
During the year, the company sold its technology services business with effect from15.08.2011 to M/s Accel Frontline Limited for cash consideration of Rs. 199.70 mn afterobtaining necessary approval of the shareholders. The net tangible assets of the divisionon the date of transfer stood at Rs.59.15 mn, resulting in a profit on sale of undertakingof Rs.140.55 mn. The amount realized was used to repay liabilities of the company, apartfrom funding production of Intellectual properties, Raju the Rickshaw and Shaktimaan etc.During the financial year the company incurred cash losses mainly on account of AnimationBusiness and the same was also funded from the consideration.
With the transfer of the technologies division, the company's future focus will be incontent development services in Animation and other activities in media &entertainment space.
During the year the animation division reported a negative EBITDA of Rs 67.54 mn(previous year, a positive EBITDA of Rs.0.60 mn)and reported a loss of Rs 146.38 mn mainlydue to the high interest outgo on the term loan availed for creation of infrastructure andthe amortization of its Intellectual properties without realizing a matching revenue byexploiting the same through global distribution. During the financial year under review,the company capitalized amounts spent on development of the second intellectual propertyand a co production property amounting to Rs 38.34 mn.
The highlights of the performance are discussed in detail in the management discussionand analysis report attached as Annexure to this report.
Report on conservation of energy, technology absorption etc.
Information as required under section 217 (1) (e) of the Companies Act, 1956 read withCompanies (disclosure of particulars in the report of board of directors) rule, 1988regarding conservation of energy, technology absorption are given in Annexure I to thisReport. The details regarding foreign exchange earnings and outgo are mentioned in theNotes to the Accounts.
Management discussion and analysis
The management discussion and analysis and various initiatives and future prospects ofthe company are enclosed, separately as Annexure II to this Report.
Report of corporate governance
A report on Corporate Governance together with auditor's certificate on compliance withthe conditions of Corporate Governance as stipulated under Clause 49 of the ListingAgreement is provided in Annexure III to this Report.
Auditors Certificate on corporate governance
The certificate issued by the auditors of the company on corporate governance is givenin Annexure IV to this Report.
Directors responsibility statement
The directors responsibility statement pursuant to sub section 2 AA of Section 217 ofthe Companies Act 1956 is given in Annexure V to this Report.
CEO /CFO Certification
The Chairman and the Company Secretary have submitted a certificate to the Boardregarding the financial statements and other matters, as required under Clause 49 (V) ofthe Listing Agreement. This is provided as Annexure VI to this Report.
Particulars of employees
The particulars regarding employees of the company pursuant to Section 217 (2A) of theCompanies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 aregiven in Annexure VII to the Director's Report. However, in terms of sec 219 (1) (b) (iv)of the Companies Act, 1956 the Directors Report (excluding Annexure VII) is being sent toall the shareholders of the company. Any shareholder interested in obtaining a copy of thesaid Annexure may write to the Company Secretary at the registered office of the company.
Considering the losses and the necessity to conserve resources, the Directors do notrecommend any dividend on the equity shares.
Mr. N.R. Panicker and Mr. Philp John Directors of the company, retire by rotation.
Mr. N R Panicker being eligible for re-appointment offers himself for reappointment.
Mr. Philip John, though being eligible for reappointment, do not intend to offerhimself for reappointment and it has been decided that such vacancy is not filled up.
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 limits prescribed under Section 224(1 B) of the Companies Act, 1956. TheAudit Committee of the Board has recommended their reappointment. The necessary resolutionis being placed before the shareholders for approval.
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 2011-2012 was carried out by M/s.Vijayakumar & Easwaran, Chartered Accountants, Trivandrum covering all areas ofoperations. All significant observations were discussed in the Audit Committee, which met4 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) 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, 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 thededicated and sincere services rendered by the employees of the company for its success.
| ||For and on behalf of the Board of |
|Chennai. ||N.R. Panicker |
|Date :29th May 2012 ||Chairman |
Annexure I to the directors' report
Particulars pursuant to Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988
Conservation of energy. Technology Absorption, Adaptation and Innovation and ForeignExchange 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 basedtechnology for its communication needs.
The details regarding foreign exchange earnings and outgo are being mentioned in thenotes to the accounts.
ANNEXURE II TO THE DIRECTOR'S REPORT
MANAGEMENT DISCUSSION AND ANALYSIS THE YEAR IN BRIEF
The company reported a net turnover of Rs 237.42 mn for the year ended March 31,2012(previous year Rs 202.69 mn). The company reported a net profit of Rs 2.89 mn for the yearended March 31, 2012 (previous year Net Loss Rs.36.52 mn).
During the year, the company sold its Technology services division with effect from15.08.2011 to Accel Frontline Limited for a consideration of Rs. 199.70 Mn. Thetransaction was approved by the members of the company by way of a postal ballot on27.09.2011. This strategic decision was mainly taken to reduce the interest burden and theexternal liability and also to fund the losses of Animation division.
During the year, the company continued to incur losses in the animation servicesdivision. However, the company completed development of its second intellectual property"Raju the Rickshaw" a pre-school TV series of 78 episodes of 7 minutes each.This, together with our other IPR - India Fables, which is a TV series of 26 episodes of11 minutes each is expected to bring revenues in the coming years.
The company is yet to explore the India sub continent Right held by the company for the3D family adventure film, "The Flying Machine" produced by Oscar winningproducer Hugh Welchman of Breakthru Films, UK. The film has been produced with an uniquecombination of Cutting Edge Live Action, Stop Motion Animation and 3D stereoscopy.
During the year, the company along with Big Animation completed the first phase of anIndian animation property,"Shaktimaan" in 2D for broadcasting, which consists of13 episodes of 23 minutes each. This is the first initiative of its kind in India wheretwo Indian studios are joining hands to produce a world class property for worldwidedistribution. This has been a foundation for developing properties with sharedresponsibilities. The company had invested in this property development and had acquired40% share in the Rights.
The preferential warrants issued by the company in December 2010, for which the companyhas received Rs. 41.66 Lakhs has not been converted into Equity Shares, by paying the fullvalue of the shares. The warrant holder can exercise the conversion option on or before30th June 2012.
Animation Division (www.accelanimation.com)
Accel Animation Studios (AAS) was set up in July 2006, as an incubated unit. The mainlines of business include 3D Animation, content development, Visual Effects creation andMotion Capture Services. AAS provides International quality digital media content to itsclients. Focused on consistent and seamless delivery with emphasis on delivering on time,AAS offers end-to-end services in animation, Motion Capture, and VFX. The AnimationDivision is poised to capture a large share of the quality-oriented business in theanimation space in India. Currently the operations of AAS are being carried out in itsstudios situated in Chennai and Thiruvananthapuram Animation SEZ.
Indian Media & Entertainment Industry
The Indian M&E industry grew from INR 652 billion in 2010 to INR 728 billion in2011, registering an overall growth of 12percent. The industry is estimated to achieve agrowth of 13 percent in 2012 to touch INR 823 billion. Going forward, the sector isprojected to grow at a healthy CAGR of 14.9 percent to reach INR 1,457 billion by 2016.animation and VFX, digital advertising and gaming are fast increasing their share in theoverall pie. The animation and VFX industry in India has grown from INR 14 Bn in 2007 toInr 31 Bn in 2011. The growth in 2011 over 2010 is 31.2%. the industry is expected to beat a INR 69 Bn in 2016 registering a CAGR of 17% from 2011 to 2016.
Lack of capital is the biggest challenge
Capital continues to remain the primary challenge for most animation companies inIndia. While a high quality animated production is far more expensive to create than alive action film, given the wider appeal of the genre, it has the potential to bemonetized not only in India, but across several international markets as well. However,there is a significantly high cost involved in promoting and distributing this contentacross multiple markets. Also, post the economic slowdown, many of the projects were greenlit with limited funding options resulting in such projects either being delayed orshelved. Persistent escalations in the cost of production further drives up break evenpoints and studios therefore find it difficult to find distribution partners.
Some of the key success factors for animation and VFX industry going forward could be aplay on the following:
* Indian animation companies need to identify innovative avenues for growing licensingand merchandising revenues
* Players need to create a local market and drive domestic consumption for animatedcontent. However, it is imperative for players to do so at reasonable cost
* Invest in co-productions that have global appeal and are easier to distribute acrossglobal markets
* ontinue to lobby with the government for incentives to provide the necessary boost tothis sector for promoting outsourced work and co-production deals
The primarily engagement models will be to work on outsourced content development andpost production services for Indian and overseas clients, to engage in co-production withrenowned production houses, and to create own IPs for long term gains.
The studio has adopted creation of IPs as its primary engagement model. IP, oncecreated yields recurring revenues over a long period of time, as animation contents can betelecast or sold repeatedly over the years. The shelf life of animation content is roughlyaround 15 years. However, the IP creation is highly capital intensive and the revenues areexpected to accrue only after an initial development period of 18 to 24 months.. AccelAnimation Studios has already released two IPs, Indian Fables (www. southindiafables.com)and , Raju the Rickshaw for worldwide release. Raju the rickshaw is an IP developed by thecompany under a lisence agreement for 15 years with Kahani World Inc, Canada
Human resource management
As on March 31,2012, the company had an employee strength of 44 (PY 396). We have anestablished employee recruitment and retention policy, which involves identifying righttalents through recruitment training cum placement programme as well as lateralrecruitment and providing them with appropriate training and induction.
We ensure that all our employees receive technical and managerial inputs regularlythrough various training programs.
Our registered office is located in Trivandrum and our corporate office is located atChennai.. The Animation Division operates in fully equipped world class studios in Chennaiand Trivandrum. The Chennai facility is 7,000 sqft & the Trivandrum facility is about12,000 sqft. These offices are well equipped with all necessary infrastructure facilities.
Finance accounts and operational controls
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 external auditor.There is an on-going cost monitoring program to control various expenses and the Boardreviews the variance analysis.
During the year under review, the company, reported a net turnover of Rs 237.42 mn forthe year ended March 31,2012 (previous year Rs 202.69 mn) registering a growth of 14.60%.The company reported a net profit of Rs 2.89 mn (Previous year Loss 36.52 mn).
Sales from geographies
During the year under review, services exports contributed 79% to the total revenuewhereas domestic operations contributed 21% to the total revenue.
The major challenge during the year was working capital management. The company hasbeen incurring cash losses in the Animation Division for the past 5 years. The company hasnot been successful in securing a large value outsourcing order with substantial margins.However, the company had to keep pace with technology and had to upgrade its facilitiescontinuously resulting in additional expenditure. The management has taken steps tocontain losses and hopes to turnaround the operations of the animation division during thecurrent financial year.
Reserves and surpluses
The General Reserves stood at Rs 24.46 mn including capital reserves of Rs 12.16 mn.The company has not revalued any of its assets during the year under review
As on March 31,2012, the company had sanctioned working capital facility of Rs 195.00mn from the company's bankers, out of which Rs 180.00 mn is fund based and Rs 15.00 mn isnon-fund based. An amount of Rs.25 mn relates to the Technologies business which was soldduring the year to M/s Accel Frontline Limited. Pending transfer of liability in the booksof the bank, the utilized balance as at 31.03.2012 relating to the transferred businesswas Rs. 21.25 mn. The funds utilized and outstanding relating to the continuing businesswere Rs 69.18 mn. The total amount of performance guarantees issued by the banks stands atRs 0.11 mn,on the balance sheet date. The term loans were availed for creation offacilities for animation division.
Loans and advances
The loans and advances were Rs 12.08 mn as at the end for the year under review. Thisincludes an amount of Rs 4.67 mn lying as security deposits offered for various leasedpremises taken by the company and other deposits .deposits with government bodies Rs. 6.28mn, other advances amounting to Rs.0.34 mn and Rs 0.79 mn of unbilled revenues as on March31,2012.
The capital expenditure incurred during the year towards upgradation was Rs 0.64 mn.These capital expenditure were incurred mainly to enhance the infrastructure of thesoftware division. Apart from this, the expenditure involved in creation of intellectualproperty in the Animation Division for international exploitation, which got completed andready for commercialization amounting to Rs. 106.34 mn was also capitalised during theyear.
Depreciation and Amortization
The company has been following straight-line basis of depreciation at the prescribedrates mentioned in the Companies Act. The Digital Assets which are classified asIntangible Assets are currently amortized underwritten down value method at the ratesprescribed in the Income Tax Act. During the year, the amount of depreciation charged tothe Profit and Loss account was Rs 28.26 mn without matching revenue. The company expectsimproved revenue from licensing in the coming years, which is expected to exceed the valueof amortization of the digital assets. The company expects to receive revenues for thenext 15 years on the digital assets from licensing of worldwide rights through broadcastand other media, whereas the amortization charge will be completed in 7 years.
During the year, the company sold its investment held in Accel North America Inc, a100% subsidiary in USA to Accel Frontline Limited,as a part of the sale ofTechnologyservices business.
The company incurred a total outflow of Rs 34.05 mn towards interest and financecharges, out of which Rs 3.15 mn was capitalized as work in progress towards IPRdevelopment and the balance amount of Rs.30.90 mn charged to the Profit and Loss account.The interest outflow also includes an amount of Rs 15.03 Mn provided as interest towardsunsecured loans from associated companies.
During the year, the company has not provided for any taxes on income due to lossesincurred in the current year and carried forward losses. The company, as a matter ofprudence, has not accounted deferred tax assets.
During the year, the company has made a gain of Rs 3.16 mn (Previous year of Rs 0.32mn) on account of foreign exchange fluctuations.
We operate in highly competitive and fast changing market environment. We facechallenges due to the fast changing technology and shortage of technically competentprofessionals and the high attritions that are faced in the industry. We have mitigatedthese risks through geographical diversification of operations and IP based services. Inanimation, the company has invested in technologies not available elsewhere in our countryso that we can offer a bouquet of services for overseas customers. We believe that we haverequisite management and HRD capabilities to recruit, train and deploy professionals on anongoing basis, in order to make available sufficient manpower. We have a review systemwhich analyses various risk factors in the operations of the company and the businessrisks associated with various contracts in system integration as well as services. Webelieve that we have adequate checks and balances in place to identify and mitigate risksassociated with our business.
Room for optimism
The Animation business is all set to take a centre stage in various spears not limitingitself to entertainment and gaming. We believe our existing resources are capable to caterthe needs of the growing market. The company has equipped itself with the latesttechnology in the field of animation and is expected to generate reasonable revenues inthe future. With a specific focus on animation, the management is confident of seeing aturnaround through growth of these divisions in the coming years.
Statements in the Management Discussion and Analysis describing the company'sobjective, projections estimates and expectations may be forward-looking statements withinthe meaning of applicable securities laws and regulations. Actual results could differmaterially from those expressed or implied. Important factors that could make a differenceto the company's operations include economic conditions affecting demand/supply and priceconditions in the domestic and overseas market in which the company operates, change inGovernment regulations, tax laws, interest costs, other statutes and other incidentalfactors.
Thus the company should and need not be held responsible, if the future turns out to besomething quite different. The Discussion and Analysis should be pursued subject to thismanagement disclaimer.
ANNEXURE III TO DIRECTORS REPORT
REPORT ON CORPORATE GOVERNANCE
Your Company has been practicing the principle of good Corporate Governance, whichcomprises all activities that result in the control of the Company in a regulated manner,aiming to achieve transparent, accountable and fair management.
The details of Corporate Governance compliance by the Company as per Clause 49 of theListing Agreement with Stock Exchange are as under:
Company's philosophy on Corporate Governance
The basic philosophy of Corporate Governance in the Company is to achieve businessexcellence and dedicate itself to increasing long term Shareholder value, keeping in viewthe needs and interests of all its Stakeholders. The Company is committed to transparencyin all its dealings and places emphasis on business ethics.
Board of Directors
The Board of the Company is well structured with adequate blend of professional,executive and independent directors.
The Board of Directors comprises of 4 Directors out of which 3 Directors are Non-Executive Directors. The Company has a Non Executive Chairman and one half of Board ofDirectors are Independent Directors. The day to-day operations of the company are carriedout by the Divisional Heads designated as President and CEO of the respective Divisionsand supervised by the Board of Directors.
None of the Directors on the company's Board is a member of more than 10 committees andChairman of more than 5 Committees across all the companies in which he is a Director. Allthe Directors have made necessary disclosures regarding committee positions occupied bythem in other companies.
Remuneration of Directors
The details of remuneration paid to Whole time Director during 2011 -12 are givenbelow:
| ||Mr. Philip John Rs. |
|Salary ||15,00,000 |
|Allowances & Perquisites ||15,06,000 |
|Contribution to Retiral Funds ||9,360 |
Details of Sitting Fees paid to Directors
The Company does not pay any remuneration to any nonexecutive directors.
No stock options have been granted to any of the non-executive directors.
The sitting fees paid to non-executive directors during the year as under:
|Summary || |
Board and Committee Meetings
|Name of Director ||Board ||Audit ||Total |
|Mr. M.R. Narayanan ||50,000 ||10,000 ||60,000 |
|Mr. Mohan Rao ||40,000 ||10,000 ||50,000 |
|MrAPParigi ||10,000 || ||10,000 |
|Grand Total ||1,00,000 ||20,000 ||1,20,000 |
During the year under review, 5 board meetings were held on 27.05.2011, 02.08.2011,27.09.2011, 09.11.2011 and 10.02.2012 and maximum interval between any two meeting was notmore than 120 days.
The composition of the Board, attendance at Board Meetings (BM) held during thefinancial year under review and at the last Annual General Meeting (AGM) and number ofDirectorships and memberships/Chairmanships in public companies (including the company)are given below.
| || ||FY 2011-2012 Attendance at || |
As on 31.03.2012
| || || || || || |
|Name of Director ||Category ||BM ||Last AGM ||No. of Directorship in Domestic Public Companies (including this company) ||Member ||Chairman |
|N.R. Panicker ||Non Executive Chairman, Promoter ||5 ||Yes ||06 ||02 ||01 |
|M.R. Narayanan ||Non Executive, Independent ||5 ||Yes ||02 ||03 ||Nil |
|A. Mohan Rao ||Non Executive, Independent ||4 ||Yes ||02 ||01 ||02 |
|Philip John ||Executive ||5 ||Yes ||01 ||Nil ||Nil |
|MrAPParigi upto 26.12.2011 ||Non Executive, Independent ||1 ||n/a ||10 ||Nil ||Nil |
The Board is presented with extensive information on vital matters affecting theworking of the company and risk assessment and mitigation procedures. Among others, thisincludes:
Operating plans, capital budgets and updates and reviews thereof.
Quarterly results of the company and its business segments. Financial statements suchas cash flow, inventories, sundry debtors and / or other liabilities of claims ofsubstantial nature. Performance against operating plans. Risks faced and steps taken tomitigate/minimize the risks. Minutes of meeting of audit committee and other committees.Details of any joint venture or collaboration agreement. Development in the industrial andhuman relations front.
Important show cause, demand and penalty notices. Materially relevant defaults infinancial obligations to and by the company or substantial non payment of goods sold bythe company.
Significant effluent or pollution problems.
Any issue which involves possible public or product liability claims of a substantialnature.
Foreign exchange exposure and steps taken by management to limit the risks of adverseexchange rate movement. Proposal for diversification, investment, disinvestments andrestructuring and Compliance of all laws applicable to the company including requirementsof listing agreement with stock exchange.
Attendance of last annual general meeting
All Directors of the Company attended the last Annual General Meeting held on 27thSeptember 2011.
Composition of committees of director and their attendance at the meetings.
The Board has constituted committees of Directors to take informed decisions in thebest interest of the Company. These committees monitor the activities falling within theirscope of reference. The Board's committees are as follows.
The Audit Committee has been mandated with the same terms of reference as specified inClause 49 of the Listing Agreement with Stock Exchange and covers all the aspectsstipulated by the SEBI Guidelines. The terms of reference also fully conform to therequirements of Section 292A of the Companies Act, 1956.
The Audit Committee of Directors comprises 2 independent directors and one non-executive Chairman of whom all have relevant finance and audit exposure.
During the period under review, 4 Audit Committee Meetings were held on27.05.2011,02.08.2011,09.11.2011 and 10.02.2012
The composition of the Audit Committee and their attendance at its meetings is givenbelow.
|Composition ||A. Mohan Rao Chairman ||N.R. Panicker Member ||M.R. Narayanan Member |
|Number of meetings attended ||03 ||04 ||04 |
The scope of the Committee includes:-
a. Overseeing the company's financial reporting process and the disclosure of itsfinancial information, to ensure that the financial statements are correct, sufficient andcredible;
b. Recommending the appointment/removal of external auditors, fixing audit fees andapproving payments for any other services;
c. Approving fees for non-audit consulting/ services provided by the firms of statutoryauditors;
d. Reviewing with the management the periodic financial statements before submission tothe Board, focusing primarily on:
Any changes in accounting policies and practices;
Qualifications in draft audit report;
Significant adjustments arising out of audit;
Compliance with accounting standards;
Compliance with Stock Exchange and legal requirements concerning financialstatements;
Any related party transactions i.e. transactions of the company of material nature,with the promoters or the management, their subsidiaries or relatives etc. that may have apotential conflict with the interests of the company at large;
e. Reviewing with the management, external and internal auditors, the adequacy ofinternal control systems and recommending improvements to the management;
f. Discussing with internal auditor any significant findings and follow-up thereon.
g. Discussing with statutory auditors before the audit commences,the nature and scopeof audit.as well as conduct pos-audit discussions to ascertain any areas of concern;
All the audit committee meetings were usually attended by the Chairman and members ofthe Committee, internal auditors and statutory auditors and the Divisional Heads.
Remuneration and compensation committee
The remuneration and compensation committee of the company is empowered to review theremuneration of whole-time directors including annual increment and commission afterreviewing their performance.
The Remuneration Policy followed by the company takes into consideration, theperformance of the Wholetime Directors and Senior Executives, on certain parameters. TheRemuneration Committee comprises 3 (including the Chairman of the Committee) Non-ExecutiveDirectors.
During the year under review, One Remuneration Committee meeting was held. Thecomposition of the Remuneration Committee is given below.
|Composition ||N.R. Panicker Chairman ||A. Mohan Rao Member ||M.R. Narayanan Member |
|Number of meetings attended ||01 ||01 ||01 |
The Chairman of the Remuneration Committee was present at the last Annual GeneralMeeting.
The company has complied with all the non-mandatory requirements under Clause 49regarding the Remuneration Committee.
Information pursuant to Clause 491V (G) of the Listing Agreement:
A brief resume and name of the companies in which Directors, who are beingre-appointed, hold Directorship / s Committee Memberships are given below:
1. Mr. NR Panicker-Chairman
Mr. N.R. Panicker is an IT professional with 30 years of experience; he is the Founderand Chairman of Accel Limited, the main promoter of Accel Transmatic. Also the Chairman& Managing Director of Accel Frontline Limited.
Mr. N.R. Panicker holds the following Directorships / Committee Memberships.
Mr. N.R. Panicker holds 525,986 equity shares of the company.
|Name of the Companies ||Nature of interest |
|1. Accel Limited ||Promoter & Director |
|2. Accel Frontline Limited ||Chairman and Managing Director |
|3. Accel Tele.net Limited ||Director |
|4. Accel IT Resources Limited ||Director |
|5. Accel Frontline Services Ltd. ||Director |
|6. Accel Systems Group Inc., USA ||Director |
|7. ACL Systems &Technologies Pte Ltd. Singapore ||Director |
|8. Accel Infotech FZE, Dubai ||Director |
|9. Network Programs USA Inc., USA ||Director |
|10. Network Programs Japan Inc., USA ||Director |
|11. Network Programs || |
|Kabushiki Kaisha, Japan ||Director |
Mr. ST. Prabhu, Company Secretary who is the Compliance Officer can be contacted at:
(a) For routine matters:
|Trivandrum || |
|T.C. 17/27 ||Tel. No.:(0471) 234 2215 / 234 2265 |
|Jagathy ||Fax No.:(0471)234 2208 |
|Trivandrum 695014 ||E-Mail:S T Prabhu@transmaticsytems.com |
(b) For Redressal of Complaints and Grievances:
|Chennai || |
|Third Floor, ||Tel. No. :(044) 4225 2200 |
|Accel House ||Telefax. No. :(044) 2374 1271 |
|75, Nelson Manickam Road ||E-Mail:S T Prabhu<s>accel-india.com |
|Aminjikarai, Chennai 600029. || |
The status of the total number of Investor complaints redressed during the year is asfollows:
General Body Meeting
Location and time of General Meetings
|Year ||Type ||Date ||Venue ||Time |
|2002-03 ||AGM ||30.09.2003 ||Lakshmi Chambers, III Floor, Vazhuthacaud, Trivandrum ||12.30 pm |
|2003-04 ||EGM ||09.07.2004 ||Salvation Army, Red Shield Guest House, Kowdiar, Trivandrum ||11.00 am |
|2003 - 04 ||Court Convened General meeting ||09.07.2004 ||Salvation Army, Red Shield Guest House, Kowdiar, Trivandrum ||02 pm to 4 pm. |
|2003-04 ||AGM ||14.03.2005 ||Lakshmi Chambers, II Floor, Vazhuthacaud, Trivandrum ||11.30 am |
|2004-05 ||AGM ||19.08..2005 ||USHESTECH,311,Technopark, Trivandrum ||02.00 pm |
|2005-06 ||AGM ||15.09.2006 ||Conference Room, comfort Inn Grand, Statue, Thiruvananthpuram ||02.00 pm |
|2006-07 ||AGM ||24.09.2007 ||Malabar Hall, Park Centre, Technopark, Trivandrum ||03.00 pm |
|2007-08 ||AGM ||27.09.2008 ||Malabar Hall, Park Centre, Technopark, Trivandrum ||11.00 am |
|2007-08 ||EGM ||04.12.2007 ||Malabar Hall, Park Centre, Technopark, Trivandrum ||03.00 pm |
|2008-09 ||AGM ||27.07.2009 ||Malabar Hall, Park Centre, Technopark, Trivandrum ||12.00 Noon |
|2009-10 ||AGM ||27.09.2010 ||Conference Hall, Park Centre, KINFRA Film & Video Park, Kazhakootam, Trivandrum 695 585 ||11.00 am |
|2009-10 ||EGM ||17.12.2010 ||Conference Room, Ushus Technologies, III Floor 311 NILA, Technopark, Trivandrum ||11.30 am |
|2010-11 ||AGM ||27.09.2011 ||Conference Hall, Park Centre, KINFRA Film & Video Park, Kazhakootam, Trivandrum 695 585 ||11.30 am |
1) The company has not entered into any materially significant transactions during theyear, which could have a potential conflict of interest between the company and itspromoters, Directors, management and / of their relatives, etc other than the transactionsentered into in the normal course of business. Details of related party transactionsentered into in the normal course of business are given in Notes to Accounts.
2) During the year under review, no penalties or strictures were imposed on the companyby the stock exchange were the company's shares are listed, SEBI or any statutoryauthority, on any matter relating to capital markets.
Compliance with mandatory requirements:
The company has complied with the mandatory requirements of the Code of CorporateGovernance as stipulated under clause 49 of the Listing Agreement with the Stock Exchange.The company has also complied with the requirements of amended Clause 49 after it cameinto force.
Means of communication
(i) Financial results and annual reports etc:
The Quarterly Unaudited Financial Results and the Annual Audited Financial Results asapproved and taken on record by the Board of Directors of the Company are published duringthe year under review in leading national newspaper in English and regional newspaper inMalayalam and are also sent immediately to the Stock Exchange in which the Shares of theCompany are listed. These results are also placed on Company's website. The Company is notin practice of sending half-yearly Report to each household of Shareholders.
The company has its own website www.acceltransmatic.com wherein official news releaseand other related information are available.
Notices relating to Annual General Meetings and Extraordinary General Meetings, if any,are sent to the Members at their registered address and email addresses as and whereprovided to the company.
(ii) Management discussion and analysis report:
The Management Discussion and Analysis Report set out in Annexure II forms part of theAnnual Report.
Non mandatory requirements
Revised sebi guidelines on corporate governance
SBI had notified on October 29, 2004, a revised /updated set of Guidelines relating toCorporate Governance which have been incorporated in the Company's Listing Agreement withthe Stock Exchanges.
The Company is fully compliant with the revised SEBI Guidelines.
As per the latest directive from Securities Exchange Board of India (SEBI), thetransferor and the transferee have to provide documentary evidence of their PAN numbers tothe effect the Share transfer.
Code of conduct
The Board of Directors has adopted the code of business conduct and ethics forDirectors and Senior Management. The said code has been communicated to the Directors andMembers of the Senior Management. The code has also been posted on the Company Web sitewww.acceltransmatic.com
Compliance certificate of the auditors
The statutory auditors have certified that the Company has complied with the conditionsof Corporate Governance as stipulated in clause 49 of the listing agreement with the stockexchange and the same is annexed to the Annual Report.
The certificate from the statutory auditors will be sent to the stock exchanges alongwith the annual report of the company.
General shareholder information
1.Annual General Meeting
|Date and Time : ||Tuesday, 14th August 2012 at 12.00 Noon |
|Venue ||Conference Hall, Park Centre |
| ||KINFRA Film& Video Park |
| ||Kazhakootam |
| ||Thiruvananthapuram - 695 585. |
2. Financial Calendar
|Financial Year ||: 01 st April 2011 to 31 st March 2012 |
|Results for the Ouarter; || |
|30th June ||Before 15th August |
|30th September ||Before 15th November |
|31st December ||Before 15th February |
|31st March ||Before 31st May |
| ||(Audited figures) as per Stock |
| ||Exchange guidelines |
|3. Book Closure Dates ||: 6th August 2012 to |
| ||14th August 2012 |
| ||(Both days inclusive) |
4. Listing of Shares
The Shares of the Company are presently listed on Mumbai Stock Exchange Ltd at Mumbai.The Annual Listing Fees have been paid to the Stock Exchange for Financial Year 2012-2013.
5. Stock Market Codes
|(i) Scrip Code ||: 517494 |
|(ii) Abbreviated Name ||: ACCEL TRANS |
|(iii) Demat ISIN Number ||: INE258CO1020 |
6. Stock Market Data
|Month ||High Price ||Low Price ||No. of Shares |
|Apr-11 ||25.30 ||17.90 ||50,485 |
|May-11 ||22.00 ||17.30 ||41,092 |
|Jun-11 ||20.45 ||14.00 ||98.574 |
|Jul-11 ||19.90 ||17.00 ||43,378 |
|Aug-11 ||19.70 ||13.45 ||48,661 |
|Sep-11 ||18.50 ||13.01 ||33,508 |
|Oct-11 ||18.85 ||13.15 ||1,19,125 |
|Nov-11 ||17.40 ||11.90 ||1,87,208 |
|Dec-11 ||14.74 ||11.11 ||39,393 |
|Jan-12 ||14.50 ||11.00 ||29,898 |
|Feb-12 ||13.50 ||11.41 ||36,365 |
|Mar-12 ||12.77 ||9.08 ||24,350 |
7. Registrars & transfer agents (RTA)
M/S. Integrated Enterprises India Limited,
Kences Towers, 2nd Floor,
No.1 Ramakrishna Street, North Usman Road
T.Nagar, Chennai - 600017
Tel.: 044-2814 0801 -0803
8. Distribution of shareholding and categories of shareholders
|Category ||No. of Share holders ||% of Share Holders ||No. of Shares ||% of total equity ||No. of Share holders ||% to Share Holders ||No. of Shares ||% of total equity |
|1 -500 ||6154 ||89.77 ||628951 ||5.70 ||6279 ||90.02 ||647844 ||5.87 |
|501 -1000 ||269 ||3.92 ||224279 ||2.03 ||265 ||3.80 ||223118 ||2.02 |
|1001 -2000 ||190 ||2.77 ||289948 ||2.63 ||197 ||2.82 ||306647 ||2.78 |
|2001 - 3000 ||64 ||0.93 ||168322 ||1.53 ||62 ||0.89 ||163506 ||1.48 |
|3001 -4000 ||29 ||0.42 ||104110 ||0.94 ||26 ||0.37 ||94751 ||0.86 |
|4001 -5000 ||37 ||0.54 ||173473 ||1.57 ||36 ||0.52 ||170666 ||1.55 |
|5001 - 10000 ||46 ||0.67 ||355201 ||3.22 ||41 ||0.59 ||306070 ||2.77 |
|10001 & above ||67 ||0.98 ||9093117 ||82.38 ||69 ||0.99 ||9124799 ||82.67 |
|TOTAL ||6856 ||100.00 ||11037401 ||100.00 ||6975 ||100.00 ||11037401 ||100.00 |
9. Share holding Pattern as on 31st March 2012
|Category Code ||Category of Shareholder ||No of Share holders ||Total Number of Shares || |
Number of shares held in dematerialized form
Total share holding as a percentage of total number of shares
Shares Pledges or otherwise encumbered
| || || || || ||As a percentage of (A+B)1 ||As a percentage of(A+B+C) || |
Number of Shares
|Asa percentage |
|(1) ||(II) ||(III) ||(IV) || |
|(VI) ||(VII) || |
|(IX) = (VIII)/ (IV)*100 |
|(A) ||Shareholding of Promoter and Promoter Group2 || || || || || || || |
|(a) ||Individuals/Hindu Undivided Family ||1 ||525,986 || |
|4.76 ||4.76 || |
|(b) ||Central Government / State Government(s) || ||- || |
|- ||- || |
|(c) ||Bodies Corporate ||1 ||5,630,000 || |
|51.01 ||51.01 || |
|(d) ||Financial Institutions/ Banks || ||- || |
|- ||- || |
|(e) ||Any Other (Specify) Relatives of Promoters /Subsidiary ||3 ||300,000 || |
|2.72 ||2.72 || |
| ||Sub-Total (A)(1) ||5 ||6,455,986 || |
|58.49 ||58.49 || |
|(2) ||Foreign || || || || || || || |
|(a) ||Individuals (Non Resident Individuals) /Foreign Individuals || ||- || ||- ||- || || |
|(b) ||Bodies Corporate ||- || || ||- ||- || || |
|(c) ||Institutions ||- ||- || |
|- ||- || || |
|(d) ||Any Other (Specify) ||- ||- || |
|- ||- || || |
| ||Sub-Total (A)(2) ||- ||- || |
|- ||- || || |
| ||Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+((A)(2) ||5 ||6,455,986 || |
|58.49 ||58.49 || |
|(B) ||Public Shareholding || || || || || || || |
|(1) ||Institutions || || || || || || || |
|(a) ||Mutual Funds/UTI ||4 ||2,144 || |
|0.02 ||0.02 || || |
|(b) ||Financial Institutions / Banks ||4 ||520 || |
|0.01 ||0.01 || || |
|(c) ||Central Government / State Government(s) ||- ||- || |
|- ||- || || |
|(d) ||Venture Capital Funds ||- ||- || |
|- ||- || || |
|(e) ||Insurance Companies ||- ||- || |
|- ||- || || |
|(f) ||Foreign Institutional Investors ||- ||- || |
|- ||- || || |
|(g) ||Foreign Venture Capital Investors ||- || || |
| ||- || || |
|'(h) ||Any Other (Specify) ||- ||- || |
|- ||- || || |
| ||Sub-Total (B)(1) ||8 ||2,664 ||400 || |
|0.02 || || |
|(2) ||Non-Institutions || || || || || || || |
|(a) ||Bodies Corporate ||98 ||468,562 ||463,962 || |
|4.25 || || |
|(b) ||Individuals || || || || || || || |
| ||i. Individual shareholders holding nominal share capital upto Rs.l lakh. ||6,664 ||1,846,764 ||1,552,246 || |
|16.73 || || |
| ||ii. Individual shareholders holding nominal share capital excess of Rs.l lakh. ||57 ||2,106,308 ||2,047,808 || |
|19.08 || || |
|(c) ||Any Other (Trust / Clearing Member-details enclosed) ||5 ||352 ||352 || |
|0.01 || || |
|1 ||Clearing members || || || || || || || |
|2 ||Corporate CM/TM - Client Margin A/c ||4 ||3,139 ||3,139 || |
|0.03 || || |
|3 ||Corporate CM/TM - Client Beneficiary A/c ||14 ||16,546 ||16,546 || |
|0.15 || || |
|4 ||Trust ||1 ||1,37,080 ||1,37,080 || |
|1.24 || || |
| ||Sub-Total (B(2) ||6843 ||4,578,751 ||4,221,133 || |
|41.49 || || |
| ||Total Public Share holding (B)=(B)(1 )+(B)(2) ||6851 ||4,581,415 ||4,221,133 || |
|41.51 || || |
| ||Total (A) + (B) ||6856 ||11,037,401 ||10,677,519 || |
|100.00 ||1,300,000 || |
| ||Shares held by Custodians and against which Depository Receipts have been issued ||- ||- ||- || ||- || || |
| ||GRAND TOTAL (A)+(B)+(C) ||6856 ||11,037,401 ||10,677,519 || |
|100.00 ||1,300,000 || |
Note: As approved by the Board of Directors of the company on a request received fromMr. T. Ravindran, an erstwhile Promoter and as intimated to the Stock Exchange, Mr. T.Ravindran has been considered as a Non-Promoter and added in the Public Holding category.
10. Statutory compliance
During the year, the Company has complied with all applicable provisions, filed allreturns / forms and furnished all relevant particulars as required under the Companiesact, 1956 and allied Acts and Rules, the Securities and Exchange Board of India (SEBI)Regulations and the Listing Agreements with Stock Exchanges.
11. Share transfer system
Transfer of shares in physical form has been delegated by the Board to certainofficials of the Registrars, to facilitate speedy service to the shareholders. Shares sentfor transfer in physical form are registered by the Registrar and Share Transfer Agentswithin 30 days of receipt of the documents, if found in order. Shares under objection arereturned within two weeks. All requests for dematerialization of shares are processed, iffound in order and confirmation is given to the respective depositories, i.e., NationalSecurities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) within15 days.
12. Investor services
Investor complaints received and replied during the year 2011 -2012:
|Nature of Queries ||Received ||Replied |
|Non receipt of Certificate after transfer/capital reduction ||NIL ||NIL |
|Procedure for Transmission ||NIL ||NIL |
|Correction in Certificate ||NIL ||NIL |
|Non receipt of Inter/Dividend Warrant/Cheque/DD ||NIL ||NIL |
|General queries ||2 ||2 |
|Change of address / Bank Mandate ||5 ||5 |
|Procedure for loss of share certificate ||2 ||2 |
|Total ||9 ||9 |
As at 31st March 2012, NIL investor complaints were pending. As at 31st March 2012, NILshare transfers and NIL demat requests were pending.
The Aggregate Promoters and Non - promoter shareholding of the Company as at 31st March2012 is as shown below:
|Category ||No. of Shares ||%to total paid up capital ||Shares held in Demateri-alized Form ||Shares held in Physical Form |
|Promoters ||6,455,986 ||58.49 ||6,455,986 ||NIL |
|Non Promoters ||4,581,415 ||41.51 ||4,221,533 ||359,882 |
|Total ||11,037,401 ||100.00 ||10,677,519 ||359,882 |
13. Dematerilisation of shares and liquidity
As on 31st March 2012, 96.74% of the company's Equity Capital are held indematerialized form with NSDL and CDSL. Trading in equity shares of the Company ispermitted only in dematerialized form, as per the notification issued by the Securitiesand Exchange Board of India (SEBI).
14. Investor Correspondence
(a) For all routine correspondence regarding transfer and transmission of shares,split, consolidation and issue of duplicate / renewed share certificates should beaddressed to the Company's Registrars and Share Transfer Agents at their followingaddress.
M/S. Integrated Enterprises India Limited,
Kences Towers, 2nd Floor,
No.1 Ramakrishna Street, North Usman Road
Tel: 044 28140801 / 0802/0803
Contact Person :Mr.Suresh Babu / Mr. Sriram
(b) For Complaints / grievances, if any, should be addressed to:
The Company Secretary,
Accel Transmatic Limited,
17/27,Jagathy, Trivandrum - 695 014
Tel.: 0471 -234 2215/234 2265 Fax:0471 -234 2208
Email:S T Prabhu@transmaticsystems.com
15. Company website
For any further information on the Company, please visit Company's websitewww.acceltransmatic.com
Annexure - IV to the Director's report
Certificate of compliance from auditors as stipulated under clause 49 of the listingagreement of the stock exchanges in India.
Accel Transmatic Limited.
1. We have examined the compliance conditions of Corporate Governance by AccelTransmatic Limited for the period ended 31st March 2012 as stipulated in Clause 49 of theListing Agreement of the said company with the Stock Exchanges.
2. The compliance of conditions of Corporate Governance is the responsibility of theManagement. Our examination is limited to procedures and implementation there of, adoptedby the company for ensuring the compliance of the conditions of the Corporate Governance.It is neither an audit nor an expression of opinion on the financial statements of theCompany.
3. In our opinion and to the best of our information and according to the explanationsgiven to us, we certify that the company has complied with the conditions of CorporateGovernance as stipulated in the above-mentioned Listing Agreement.
4. We state that such compliance is neither an assurance as to the future viability ofthe company nor the efficiency or effectiveness with which the Management has conductedthe affairs of the Company.
| ||For Varma & Varma |
| ||Chartered Accountants |
| ||F.R.N.4532S |
|Place: Chennai ||P.R. Prasanna Varma F.C.A |
|Date: May 29,2012 ||Membership No .25854 |
| ||Partner. |
Annexure V to the Director's report Directors responsibility statement
Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956, and basedon the representations received from the operating management, your Directors herebyconfirm that:
(a) That in the preparation of the annual accounts for the year ended March 31, 2012,the applicable accounting standards have been followed alongwith proper explanationrelating to material departures.
(b) That such accounting policies as mentioned in Note 1 of the Notes to the Accountshave been selected and applied consistently, and judgements and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at 31st March 2012 and of the profit of the Company for the year endedon that date.
(c) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
(d) The annual accounts have been prepared on going concern basis.
Annexure VI to the Director's report
Certification to the board by the Chairman and the Company Secretary
We, N R Panicker, Chairman and S T Prabhu, Company Secretary of Accel TransmaticLimited, certify that:
1. 1. We have reviewed the financial statements for the year ended 31.03.2012, and thatto the best of our knowledge and belief:
a) These statements do not containing any materially untrue statement or omit anymaterial fact or contain statements that might be misleading;
b) These statements give a true and fair view of the state of affairs of the companyand of the results of operations and cash flows. The financial statements have beenprepared in conformity, in all material respects, with the existing generally acceptedaccounting principles including Accounting Standards, applicable laws and regulations.
2. There are, to tht . ?st of our knowledge and belief, no transactions entered into bythe company during the year which are fraudulent, illegal or violative of the company'scode of conduct.
3. We accept overall responsibility for the company's internal control system forfinancial reporting. This is monitored by the internal audit function, which encompassesthe examination and evaluation of the adequacy and effectiveness. Internal audit workswith all levels of management and statutory auditors, and reports significant issues tothe Audit Committee of the Board. The auditors and audit committee are appraised of anycorrective action taken with regard to significant deficiencies and material weakness.
4. We have indicated to the auditors and to the audit committee:
a) Significant changes in internal control over financial reporting during the year.
b) Significant changes in accounting policies during the year;
c) Instances of significant fraud of which we have become
aware of and which involve management or other employees who have significant role inthe company's internal control system over financial reporting.
However, during the year there were no such changes or instances.
|N R Panicker ||S T Prabhu |
|Chairman ||Company secretary |
|Place: Chennai || |
|Date : 29.05.2012 || |
Annexure VIII to the Director's report
Persons constituting Group coming within the definition of "group" for thepurpose of the Regulation 3(1 )(e)(i) of SEBI (Substantial Acquisition of Shares andTakeover) Regulations, 1997, include the following.
|SI. No. ||Name of the Group Companies |
|01. ||Accel Limited |
|02 ||N.R.Panicker |
|03 ||Sreekumari Panicker |
|04 ||Shruthi Panicker |
|05 ||Harikrishna R |
|06 ||Accel Frontline Limited |
|07 ||Accel Frontline Services Limited |
|08 ||Accel IT Resources Limited |
|09 ||Accel Media Ventures Limited |
|10 ||Accel Tele.Net Limited |
|11 ||Network Programs USA Inc., USA |
|12 ||Network Programs Japan Inc., USA |
|13 ||Network Programs KK, Japan |
|14 ||ACL Systems & Technologies Pte. Ltd. Singapore |
|15 ||Accel Frontline FZE., Dubai |
|16 ||Accel Systems Group Inc, USA |
|17 ||Accel North America Inc., USA |