Accel Ltd Directors Report.

To

The Members, Accel Limited

Your directors are delighted to present their report on Companys business operations along with the Audited Financial Statements for the year ended 31 March 2019.

1. Financial Highlights

Standalone Consolidated
Particulars For Financial Year ended 31 March 2019 For Financial Year ended 31 March 2018 For Financial Year ended 31 March 2019 For Financial Year ended 31 March 2018
Total Income 26,417,860 212,708,858 84,868,221 271,337,561
Total Expenditure 30,906,902 33,386,238 102,027,703 121,316,328
Profit/(loss) before Interest, (4,489,042) 179,322,620 (17,159,481) 150,021,233
Depreciation & Tax (EBITDA)
Finance Charges 1,705,032 7,250,339 3,978,369 9,423,497
Depreciation 8,294,837 10,523,567 16,581,628 20,243,151
Profit/(loss) before Tax (14,488,911) 87,715,467 47,314,152 42,094,915
Tax Expense - - (12,503) 45,785
Net Profit/(Loss) After Tax (14,488,911) 87,715,467 47,301,648 42,049,130
Earnings Per Basic (0.25) 1.54 (0.66) 2.11
Share Diluted (0.25) 2.83 (0.66) 2.11

2. Review of Operations

During the year under review, your company recorded total income of 264.17 mn (Previous Year Rs. 212.70 mn) comprising of Income from Animation services Rs.1.83 mn (Previous Year Rs.1.23 mn) Engineering Services Rs.5.59 mn (Previous Year Rs.6.8 mn) other services Rs.0.10 mn (Previous Year Rs. 0.04 mn). The Company reported a loss of Rs.14.48 mn.

The Company continued to carry on the business of electronic manufacturing services and animation content development during the year under review. 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 has not declared any dividend.

4. Transfer To Reserves

No amount was transferred to reserves during the FY 2018-19.

5. 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.

6. 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.

7. Consolidated Financial Statement

In accordance with the provisions of Companies Act, 2013 (hereinafter referred to as "the Act"), Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations") and applicable Accounting Standards, the Audited Consolidated Financial Statements of the Company for the financial year 2018-19, together with the Auditors Report form part of this Annual Report.

8. Subsidiary Companies/ Associate Companies/ Holding Companies/ Joint Ventures

A statement containing the salient features of the financial statement of Subsidiary Companies/ Associate Companies, as per Section 129(3) of the Companies Act, 2013 is provided in Form No. AOC 1 is attached as Annexure I to the consolidated financial statement and therefore not repeated, to avoid duplication.

9. Directors Responsibility Statement

As required under clause (c) of sub-section (3) of section 134 of the Companies 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 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. 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 2019 and of the profit/loss 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.

10. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India ("SEBI"). The Company has also implemented several best governance practices. The report on Corporate Governance as stipulated under the Listing Regulations forms part of the Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

11. Related Party Transactions

During the FY 2018-19, 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 arms length and in ordinary course of business. Omnibus approval for related party transactions (at arms 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 entered 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, disclosure in Form AOC-2 is annexed as ‘Annexure A to this Report.

12.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.

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

The Company has in place adequate financial controls commensurate with the size of the business. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

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

14. Directors and Key Managerial Personnel

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.

I. Changes in Directors

Re-appointment of Managing Director:

The Board at its meeting held on 29 March 2019 took into account the recommendation of Nomination and Remuneration Committee and re-appointed N.R. Panicker as the Managing Director of the Company for a second term of three years w.e.f. 1 April 2019.

Re-appointment of Independent Directors:

The Board at its meeting held on 14 August 2019 took into account the recommendation of Nomination and Remuneration Committee and re-appointed following independent directors for a second consecutive term:

S.No Name of Tenure of
Independent Director Second Term
1 C.N. Ramchand Three years w.e.f.
29 September 2019
2 M. Ayyappan Three years w.e.f.
29 September 2019

Necessary details regarding their appointment and re-appointment as required under the Companies Act, 2013 and Listing Regulations, are given in the notice of annual general meeting. The aforesaid appointments are subject to approval of shareholders at the ensuing annual general meeting.

Retirement by Rotation:

The independent directors hold office for a fixed term not exceeding five years from the date of their appointment and are not liable to retire by rotation. The Companies Act, 2013 mandates that at least two–thirds of the total number of directors (excluding independent directors) shall be liable to retire by rotation. Accordingly, Mrs.Shruthi Panicker (DIN 07148631), Director, being the longest in the office amongst the directors liable to retire by rotation, retires from the Board by rotation this year and, being eligible, has offered her candidature for reappointment.

Brief detail of Mrs.Shruthi Panicker, who is seeking reappointment, is given in the notice of annual general meeting.

II. Change in Key Managerial Personnel:

The Board at its meeting held on 14 August 2018, pursuant to the recommendation of Nomination and Remuneration Committee appointed Mr.Sundaresan Gopalkrishnan as Chief Financial Officer and Key Managerial Personnel of the Company w.e.f. 14 August 2018. However, due to personal commitments Mr.Sundaresan Gopalkrishnan was unable to continue this position and ceased to be the Chief Financial Officer of the Company w.e.f. 31 May 2019.

There was no other change in the Directors and Key Managerial Personnel during the year under review. Detailed information on the directors is provided in the Corporate Governance Report.

15. Board Evaluation

The Company has a policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which include criteria for performance evaluation of Non-executive Directors and Executive Directors. In accordance with the manner specified by the Nomination and Remuneration Committee, the Board carried out annual performance evaluation of the Board, its Committees and Individual Directors. The Independent Directors carried out annual performance evaluation of the Chairperson. The Chairman of the respective Committees shared the report on evaluation with the respective Committee members.

The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Committees. A consolidated report was shared with the Chairman of the Board for his review and giving feedback to each Director.

16. 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.

Replies of Management to Audit queries

The Board of Directors would like to clarify as below regarding "emphasis of Matter" expressed by auditors in their report annexed along with this Annual Report. The management is committed to grow the media business and also venture into new business and is also confident that it will be able to realize the intangible asset.

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. J.M. & Associates, Company Secretaries to undertake the Secretarial Audit of your Company for FY 2018-19. The Report of the Secretarial Auditor for FY 2018-19 is annexed as ‘Annexure B to this Report.

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

17. Disclosures

I. Meetings Of The Board

Six Meetings of the Board of Directors were held during the year. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report.

II. Audit Committee

The Audit Committee comprises of 3 Directors namely Dr. M. Ayyappan (Chairman), Dr. C.N.Ramchand, Mrs. Shruthi Panicker. During the year all the recommendations made by the Audit Committee were accepted by the Board.

III. Nomination And Remuneration Committee

The Nomination and Remuneration Committee comprises of Dr. C.N.Ramchand (Chairman), Dr. M. Ayyappan, Mrs. Shruthi Panicker.

IV. Vigil Mechanism

The Company has established a robust Vigil Mechanism and a Whistle-blower policy in accordance with provisions of the Act and Listing Regulations. The Vigil Mechanism is supervised by an ‘Ethics & Compliance Task Force comprising a member of the Board as the Chairperson and senior executives as members.

Protected disclosures can be made by a whistle-blower through an e-mail, or dedicated telephone line or a letter to the Ethics & Compliance Task Force or to the Chairman of the Audit Committee. The Vigil Mechanism and Whistle-blower policy is put up on the Companys website and can be accessed at www.accel-india.com

V. 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 2018-19.

VI. 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.

VII. 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.

VIII. 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 D to this Report.

IX. 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.

18. General

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

• Details relating to deposits covered under Chapter V of the Act.

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employees Stock Options Schemes referred to in this Report.

• The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

• No fraud has been reported by the Auditors to the Audit Committee or the Board.

• There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.

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
Chairman & Managing Director
DIN 00236198
Place: Chennai
Date : 14/08/2019