3.21 Provisions and Contingencies
Provision:
A provision is recognised if, as a result of
a past event, the Company has a present
legal or constructive obligation that can be
estimated reliably, and it is probable that an
outflow of economic benefits will be required
to settle the obligation. If the effect of the time
value of money is material, Provisions are
determined by discounting the expected future
cash flows (representing the best estimate of
the expenditure required to settle the present
obligation at the balance sheet date) at a pre-tax
rate that reflects current market assessments
of the time value of money and the risks specific
to the liability. The increase in the provision due
to the passage of time is recognised as interest
expense. The unwinding of the discount is
recognised as finance cost. Expected future
operating losses are not provided for.
Contingent Liability:
A contingent liability is a possible obligation
that arises from past events whose existence
will be confirmed by the occurrence or non¬
occurrence of one or more uncertain future
events not wholly within the control of the
Group or a present obligation that is not
recognised because it is not probable that an
outflow of resources will be required to settle
the obligation or it cannot be measured with
sufficient reliability. Contingent liabilities are
disclosed by way of notes to the financial
statement. Provision is made in the accounts
in respect of those liabilities which are likely to
materialize after the year end, till the finalization
of accounts and have material effect on the
position stated in the Balance sheet.
Contingent Asset:
Contingent assets are neither recognized not
disclosed in the financial statements as a
matter of prudence.
3.22 Securities Premium
Where the Company issues shares at premium,
whether for cash or otherwise, a sum equal to
the aggregate amount of premium received on
those shares shall be transferred to " Securities
Premium”. The Company may issue fully paid
up bonus shares to its members out of the
securities premium and the Company can use
this reserve for buy back of shares.
3.23 General Reserve
General reserve is created out of the profits
earned by the Company by way of transfer from
surplus in the Statement of profit and loss. The
Company can use this reserve for payment of
dividend and issue fully paid up and allot paid
up bonus shares.
3.24 Trade Receivable
The Company applies approach permitted by
Ind AS 109 Financial Instruments, which requires
expected lifetime losses to be recognised from
initial recognition of receivables.
Default is considered to exist when the counter
party fails to make the contractual payment
within the Contractual period. A trade receivable
is considered to be credit impaired when the
management considers the amount to be non
recoverable.
Significant increase in credit risk is said to
have occurred when the recoverability has
not occurred post 365 days of becoming due.
Receivables are provided for 50% in the books,
if the dues are unpaid for more than 365 days,
100% of value of receivable if the dues are
unpaid for more than 730 days.
The Company is writing off the provision
permanently as "Bad debt” periodically
based on the case to case assessment after
testing the recoverability.
3.25 Measurement of fair values
A number of the Company's accounting policies
and disclosures require the measurement of
fair values, for both financial and non-financial
assets and liabilities.
The Company has an established framework
with respect to the measurement of fair values.
The Company regularly reviews significant
unobservable inputs and valuation adjustments.
If third party information, is used to measure
fair values, then the Company assesses the
evidence obtained from the third parties to
support the conclusion that these valuation
meet the requirements of Ind AS, including
the level in the fair value hierarchy in which the
valuations should be classified.
Fair values are categorised into different levels
in a fair value hierarchy based on the inputs
used in the valuation techniques as follows:
- Level 1: Quoted prices (unadjusted) in active
markets for identical assets or
liabilities.
- Level 2: Inputs other than quoted prices
included in Level 1 that are observable
for the asset or liability, either directly
(i.e., as prices) or indirectly (i.e.,
derived from prices).
- Level 3: Inputs for the asset or liability that are
not based on observable market data
(unobservable inputs).
When measuring the fair values of an asset
or a liability, the Company uses observable
market data as far as possible. If the inputs
used to measure the fair value of an asset or a
liability fall into different levels of the fair value
hierarchy, then the fair value measurement is
categorised in its entirety in the same level of
the fair value hierarchy as the lowest level input
that is significant to the entire measurement.
The Company recognises transfer between
levels of the fair value hierarchy at the end of
the reporting period during which the change
has occurred.
3.26 Recent Accounting pronouncements
Ministry of corporate affairs (''MCA'') notifies
new standards or amendments to the existing
standards under the companies (Indian
accounting standards) Rules as issued from
the time to time. For the year ended 31st March
2025, MCA has notified new standards or
amendments to the existing standards which
are not applicable to the company.
(i) Interest amount incurred during the construction period amounting to INR 397.74 Lakh has been
capitalised during the year 2022-23 under Buildings as per provision of Ind AS 23.
(ii) Reclassification of items between Property,plant and Equipment and Investment Property
amounting to Rs.12.77 Lakh applied as per provisions of Ind AS 40 at the beginning of Financial
year 2022-23.
(iii) Building Includes building on lease hold land amounting to INR 3608.23 Lakh.
(iv) Reclassification of items between Property,plant and Equipment and asset held for sale amounting
to Rs.692.15 Lakh applied as per provisions of Ind AS 105 during the Financial year 2024-25.
1. The company investment of 26,09,000nos in the 6% cumulative preference share of AMVL ltd. has been
classified as loan and advances during this financial year consequent to the completion of redemption
period.
2 The company's unquoted investments are not held for trading but for long term strategic purposes.
The company believes that recognising short term fluctuations in the fair value of these investments
in profit & loss would not be consistent with the company's strategy of holding these investments for a
long term and realising the potential in the long term.
Rights, preferences and restrictions attached to equity shares
Equity shares
(i) The Company has only one class of equity shares having a par value of Rs.2/- per share. Each holder
of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian
Rupees.
(ii) In the event of the liquidation of the Company, the holder of equity share will be entitled to receive the
remaining assets of the Company, after distribution of all preferential amounts. The distribution will be
proportionate to the number of equity shares held by the shareholders.
Capital management policies and procedures
The Company's capital management objectives are:
- to safeguard the Company's ability to continue as a going concern, and continue to provide optimum
returns to the shareholders and all other stakeholders by building a strong capital base.
- to maintain an optimum capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the return capital to shareholders,
issue new shares, or sell investments / other assets to reduce debt.
For the purpose of the Company's capital management, capital includes issued equity capital and all other
equity reserves attributable to the equity holders plus its borrowings and cash credit facility, if any, less
cash and cash equivalents as presented on the face of the balance sheet. The Company manages the
Capital structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. The amounts managed as capital by the company for the reporting
years are summarized as follows:
a) Capital Reserve
Capital reserve created for the purpose of meeting company's unexpected expenses.
b) Capital Redemption Reserve
Capital Redemption Reserve created in order to compensate for the reduction of capital base during the
buy-back of shares.
c) Securities Premium
Securities premium comprises of the amount of share issue price received over and above the face
value of Rs.2/- each.
d) Assets Revaluation reserve
The Company had revalued assets and created the Assets revaluation reserve as per provisions of the
companies Act. The Revaluation reserve were converted into general reserve to the extent of revalued
assets sold during the year.
e) Retained earnings
Retained earnings represents the amounts of accumulated earnings of the Company.
f) Other reserve
Other reserve represents an appropriation of profits by the Company.
g) Accumulated other comprehensive income
Represents remeasurement of defined benefit liability which comprises of actuarial gains and losses, the
effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability.
Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial
instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and
for which fair values are disclosed in the financial statements. To provide an indication about the reliability
of the inputs used in determining fair value, the Company has classified its financial instruments into three
levels as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - I nputs for the assets or liabilities that are not based on observable market data (unobservable
inputs).
B. Measurement of fair values
There were no level 3 or unobservable inputs that were used in the valuation of financial assets or
liabilities noted above.
C. Financial risk management
The Company has exposure to the following risks arising from financial instruments:
- credit risk;
- liquidity risk; and
- market risk
i. Risk management framework
The Company's Board of Directors has the overall responsibility for the establishment and
oversight of the Company's risk management framework. The Board of Directors along with the
top management are responsible for developing and monitoring the Company's risk management
policies.
The Company's risk management policies are established to identify and analyse the risks faced
by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to
limits. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Company's activities. The Company, through its training and management
standards and procedures, aims to maintain a disciplined and constructive control environment in
which all employees understand their roles and obligations.
ii. Credit risk
Credit risk is the risk of financial loss to the Company, if a customer or counterparty to a financial
instrument fails to meet its contractual obligations and arises principally from the Company's
receivables from customers; loans and investments in debt securities.
The carrying amounts of financial assets represent the maximum credit risk exposure.
Credit risk is managed through credit approvals, establishing credit limits and continuously
monitoring the creditworthiness of customers to which the Company grants credit terms in
the normal course of business. The Company establishes an allowance for doubtful debts and
impairment that represents its estimate of incurred losses in respect of the Company's trade
receivables, certain loans and advances and other financial assets.
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each
customer. The demographics of the customer, including the default risk of the industry and country
in which the customer operates, also has an influence on credit risk assessment.
Exposures to customers outstanding at the end of each reporting period are reviewed by the
Company to determine incurred and expected credit losses. Given that the macro economic
indicators affecting customers of the Company have not undergone any substantial change, the
Company expects the historical trend of minimal credit losses to continue. Further, management
believes that the unimpaired amounts that are past due by more than 30 days are still collectible
in full , except to the extent already provided, based on historical payment behaviour and extensive
analysis of customer credit risk. The impairment loss at the reporting dates relates to several
customers who have defaulted on their payments to the Company and are not expected to be able
to pay their outstanding balances, mainly due to economic circumstances.
The Company determines credit risk based on a variety of factors including but not limited to the
age of the receivables, cash flow projections and available press information about customers. In
order to calculate the loss allowance, loss rates are calculated using a 'Roll rates' method based on
the probability of a receivable progressing through successive stages of delinquency through write¬
off. Roll rates are calculated separately for exposures in different stages of delinquency primarily
determined based on the time period for which they are past due. The Company assumes a 100%
loss rate in case of trade receivables that are more than 730 days past due as it believes that the
probability of collection in such cases are remote.
The Company holds Cash and Bank balances of Rs.145.78 Lakhs at 31 March 2025 (31 March 2024:
Rs.914.31 Lakhs). The credit worthiness of such Banks and financial institutions are evaluated by
the management on an ongoing basis and is considered to be good.
Security deposits
This balance is primarily constituted by deposit given in relation to leasehold premises
occupied by the Company for carrying out its operations. The Company does not expect any
losses from non-performance by these counter-parties.
iii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled by delivering cash or another financial
asset. The Company's approach to managing liquidity is to ensure, as far as possible, that
it will have sufficient liquidity to meet its liabilities when they are due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the
Company's reputation.
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting
date. The amounts are gross and undiscounted, and include contractual interest payments
and exclude the impact of netting agreements:
iv. Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates and interest
rates will affect the Company's income or the value of holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within
acceptable parameters and optimise the returns.
Sensitivity analysis
A reasonably possible strengthening (weakening) of the US Dollar against INR at 31 March would
have affected the measurement of financial instruments denominated in a foreign currency and
affected equity and profit or loss by the amounts shown below. This analysis assumes that all other
variables, in particular interest rates, remain constant and ignores any impact of forecast sales and
purchases.
Fair value sensitivity analysis for fixed rate instruments
In respect of the fixed rate borrowings and Bank deposits the Company is not exposed to any fair value
risk and as such any changes in the interest rates does not have any impact on equity or profit and loss.
The following table illustrates the sensitivity of profit to a reasonably possible change in interest rates
of /- 1% for the year ended 31 March 2025 and 31 March 2024. These changes are considered to be
reasonably possible based on observation of current market conditions. The calculations are based on
a change in the average market interest rate for each period, and the financial instruments held at each
reporting date that are sensitive to changes in interest rates. All other variables are held constant.
41 Due to Micro, Small and Medium enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26
August 2008 ,which recommends that the Micro and Small Enterprises should mention in their
correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of
the Memorandum in accordance with the Micro, Small and Medium Enterprise Development Act, 2006
('the Act'). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31
March 2025 has been made in the financial statements based on information received and available
with the Company.
44 Property, Plant and Equipment and Investment Property
(a) Lease Hold Land
Leasehold property includes Rs.77.27 lakhs being the value of Land Lease ( for 90 years ) acquired
from KINFRA Film & Video Park (KINFRA), a Government of Kerala Undertaking to the company
for construction of building to carry on Animation related business which was later on changed
to IT and ITES business , for which the registration formalities were to be completed. As per the
original allotment, the said land is on a 90 year lease arrangement and has to be developed within
a period of 3 years from the date of allotment i.e. on or before 05 April 2010. The said Land could
not be developed within the time frame agreed on account of the difficult scenario being faced
by the Animation Industry in general and the Group in particular. KINFRA , in the meantime has
changed the status of the SEZ from Animation to include IT/ITES also. This has been approved by
the Ministry of Industries and Commerce vide its letter dated 7 February 2012. The Company has
completed the construction of a commercial building for IT/ITES under SEZ Status in May'2022.
As per the Lease Agreement dated 28 June 2021, the lease period is mentioned as 77 years and 1
month commencing from 5 March 2021 . Accordingly the Company has decided to amortise the
Land over the balance lease period as mentioned above.
(b) Impairment of Assets
In the opinion of the management there is no impairment as on the date of the balance sheet in the
value of the carrying cost of Intellectual Property Rights (IPR) of the company within the meaning
of Indian Accounting Standard - 36 on Impairment of Assets issued under Companies (Indian
Accounting Standards) Rules 2015, considering the revenue earning potential of the company
and based on the estimated future cash flows upon crystallization of enquiries received by the
company for the intellectual property rights carried in the books as intangible assets.
(c) Land and Building
The Company has created mortgage on the Land and building in favour of Banks for availing Cash
credit , Term loan, Rent securitisation loan for the Company and Cash credit facility and for availing
term loan for one of the subsidiary Company.
45 Investments
I nvestments in subsidiaries and Associate are stated at cost using the exemption provided as per
Ind AS 27 - Separate Financial Statements.
The management believes that the expected benefits from these investments , will take a longer than
earlier estimates due to various changes that have occurred in business conditions The management
believes that the carrying amounts are lower than the recoverable amounts based on discounted value
of the future cash flows to be generated and there won't be any impairment in the long run.
46 Leases as lessee (Ind AS 116)
The leased assets of the Company include warehouse buildings and plant and machineries which
are taken on lease for providing warehousing, printer managed services to the customers. The leases
typically run for a period of 1 to 5 years, with an option to renew certain leases after that date. Previously,
these leases were classified as operating leases under Ind AS 17. On transition to Ind AS 116, the
Company recognized right to use of assets at its carrying amount as if the standard has been applied
since the commencement of the lease. The summary of the movement of right-of-use assets for the
year is given below:
On transition to Ind AS 116, the Company recognized lease liabilities measured at the present value of
remaining lease payments. The following table sets out a maturity analysis of lease payments, showing
the undiscounted lease payments to be received after the reporting date.
47 Other Financial Assets
A. The Company had Invested in Preference Shares and had given unsecured loan to Accel Media
Ventures Limited, a subsidiary of the Company to meet the working capital requirements. The
investment in preference share has been converted into loans and advances during the year
consequent to the completion of redemption period. As at 31 March 2025 , the loan and advances
amount outstanding including the converted investment net of repayment received was Rs. 663.04
Lakhs ( 31 March 2024 : Rs. 490.89 Lakhs) as disclosed in the financial statements under "Loans
" - Note 11 in the financial statements. The company has tested the impairment of these assets
and is of the view that there is no diminution to the carrying value of these loans taking cognizance
of the proposal to amalgamate the subsidiary Company with Accel Limited.
B. The Company has made an investment of Rs 487.79 lakhs in equity shares of one Associate
company M/s. Secureinteli Technologies Private Limited at cost as on 31.03.2025. The latest fair
valuation report as on 28th February 2025, obtained from an independent valuer, reveals the fair
value of the said investment at Rs.. 172.82 lakhs as on 31.03.2025. The net impact of value excess
stated amounts to Rs. 314.97 Lakhs has not been provided as on 31.03.2025. The Management
is of the view that no impairment of this investment is necessary based on the steep growth of
the business prospects of the Associate Company and its subsidiary as disclosed in the financial
statement under'lnvestment" - note 10(iii).
48 Confirmation of Balances:
Balance at the end of the financial year for Trade receivable, Trade payable, Loans and advances,
advance received from customers are subject to confirmation. The Management is of the view that
there is no permanent change to the carrying value of these loans and advances, trade receivables
and trade payables except for the provision considered in this regard in the accompanying financial
statements.
49 a) Employee Benefits(Defined Benefit Plan)
The Company operates the following post-employment defined benefit plans:
i) Gratuity
In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit
retirement plan ("the Gratuity Plan”) covering eligible employees. The Gratuity Plan provides
for a lump sum payment to vested employees on retirement (subject to completion of five
years of continuous employment), death, incapacitation or termination of employment that
are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity
Plan are determined by actuarial valuation on the reporting date.
The company has established a trust by name , Accel Employees Group Gratuity Trust
w.e.f January 31, 2022 and has made necessary applications to Income Tax department for
approval.
These defined benefit plans expose the Company to actuarial risks, such as longevity risk and
interest rate risk.
A. Funding
The Company has a fund balance of INR 40.76 Lakhs in the gratuity fund ,maintained
with Bajaj Allianz Life Group Employee Care, net of gratuties settled , since inception,
which is approximately 15% of the total liabilily arrived at on actuarial basis as on 31
March 2025.
B. Reconciliation of the net defined benefit (asset)/ liability
The following table shows a reconciliation from the opening balances to the closing
balances for the net defined benefit (asset) liability and its components:
Although the analysis does not take account of the full distribution of cash flows expected under the
plan, it does provide an approximation of the sensitivity of the assumptions shown.
b) Employee Benefits(Defined Contribution Plan)
The Company makes contributions, determined as a specified percentage of employee salaries, in
respect of qualifying employees towards Provident Fund (PF) and employees' state insurance (ESI)
scheme which are defined contribution plans. The Company has no obligations other than to make
the specified contributions. The contributions are charged to the statement of profit and loss as they
accrue. The amount recognised as an expense towards contribution to Provident Fund and ESI for the
year aggregated to INR 299.14 Lakhs (31 March 2024: INR 359.86 Lakhs)
ii) Compensated Absences
The liability in respect of the company, for outstanding balance of privilege leave at the balance sheet
date is determined and provided on the basis of actuarial valuation performed by an independent
actuary. The Group does not maintain any plan assets to fund its obligation towards compensated
absences.
These defined benefit plans expose the Company to actuarial risks, such as longevity risk and interest
rate risk.
52 A. The Company has obtained in principle NOC (No Objection Certificate) from BSE for merger
application with respect to merger of M/s. Accel Media Ventures Limited [Amalgamating company]
with Accel Limited effective from 1st April 2024. The company has filed a merger application with
Hon'ble NCLT on 24th March 2025 and awaited directions from NCLT.
B. The associate company namely Secureinteli Technologies Private Limited proposed for the buy
back of share dated 7th April '2025.
54. Previous year's Figure have been regrouped, recasted and rearranged wherever necessary, to suit the
current period layout.
As per our report of even date attached
For and on behalf of the Board of Directors
For K.S Aiyar & Co
Chartered Accountants Accel Limited
Firm's Registration No. 100186W
Sd /- Sd /- Sd /-
S.Kalyanaraman K. Nagarajan N R Panicker
Partner Director Managing Director
Membership No. 200565 DIN: 02172617 DIN: 00236198
UDIN: 25200565BMIVSG3738 Sd /- Sd /-
Vishnu S Rajesh Kumar Nandi
Company Secretary Chief Financial Officer
Place: Chennai Place: Chennai Place: Chennai
Date: 29-05-2025 Date: 29-05-2025 Date: 29-05-2025
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