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Directors Report of Accel Frontline Ltd.

Mar 31, 2015

To

THE MEMBERS OF ACCEL FRONTLINE LIMITED

The Directors have pleasure in presenting the 20th Annual Report of ACCEL FRONTLINE LIMITED (the Company) Standalone and Consolidated financial statement along with the audited financial statements for the financial year ended 31st March, 2015.

1. FINANCIAL RESULTS Rs. in lakhs

Consolidated Standalone Particulars 2015 2014 2015 2014

Sales, services & other income 48,734 42,825 34,209 30,089

Earnings before interest, tax, depreciation and amortization (EBITDA) 5,067 4,242 3,577 3,770

Finance costs 2,255 2,616 2,128 2,503

Depreciation and amortization expense 1,203 1,107 1,050 972

Operating Profit before Tax & Prior Period expenses 1,609 519 399 295

Prior Period Expenses / Income net 1,505 - 1,505 -

Provision for tax (Net) (216) 70 (361) 50

Profit after tax 320 449 (745) 245

Minority Interest 414 112 - -

Profit after Minority Interest (94) 337 (745) 245

Balance brought forward from previous year 1,514 1,177 1,574 1,329

Amount available for appropriation 1,420 1,514 829 1,574

Transfer to Depreciation Reserve 205 - 117 -

Balance carried to Balance Sheet 1,215 1,514 712 1,574

2. DIVIDEND

The Directors have not recommended dividend for the year ended 31st March, 2015 to conserve resources and to augment the long term working capital for future growth.

3. OPERATING RESULTS AND BUSINESS OPERATIONS

For the Financial Year 2014-15, your Company has achieved a revenue of Rs.48,734 lakhs on a consolidated basis and Rs.34,209 lakhs on a standalone basis. This represents a moderate growth of about 14% on a year to year basis. The EBIDTA on a consolidated basis Rs.5,067 lakhs and on a standalone basis stood at Rs.3,577 lakhs. The Company had to provide a sum of Rs.1,433 lakhs on a consolidated basis and Rs.1,433 lakhs on a stand-alone basis on account of the new revenue recognition policy adopted during the year. This resulted in a net loss of Rs.94 lakhs on a consolidated basis and Rs.745 lakhs on a standalone basis.

4. HUMAN RESOURCES DEVELOPMENT

The Company has continuously adopted structures that help attract best external talent and promote internal talent to higher roles and responsibilities. Accel people centric focus providing an open work environment fostering continuous improvement and development helped several employees realize their career aspirations during the year. Employees, whose collective efforts have enabled Accel to achieve its organisational goals and set the base right for the next phase of growth.

Accel has restructured its workforce into various businesses to ensure that every business is operated and supported equally. The human resource policies have evolved to stay relevant to the changing economic and business environment and enhance organizational agility.

The Company has a matured talent management process and environment where performance is rewarded and opportunities are provided for career growth and development. Focused imitates towards work life balance and safety of employees have helped the Company in gaining confidence level of the employees and bring down the attrition levels.

5. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Ant-Sexual Harassment policy in line with the requirements of The Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of Sexual harassment complaints received and disposed of during the year 2014-15.

No of complaints:- Nil.

No of Complaints disposed of- Nil.

6. BUSINESS EXCELLENCE AND QUALITY INITIATIVES

Accel believes in sustained efforts to maintain highest levels of quality to enhance customer satisfaction. During the year the company continued to invest in technologies, infrastructure and processes in order to keep our quality management systems updated.

The Company has certifications for:

- ISO 9001:2008 (Quality Management)

- ISO 27001:2005 (Security Management)

- ISO 20000-1:2005

- CMMI Level 3

These quality driven processes help in supporting Accel's global delivery model.

In order to achieve highest levels of quality and robust information security practices, the Company will endeavour to achieve enterprise-wide CMMI Level 5 (for Development) in the near future.

An employee portal exists for knowledge management and sharing useful information within the Company. Regular knowledge and skill up gradation training programs are conducted by internal as well as external knowledge management experts.

7. DOCUMENTS PLACED ON THE WEBSITE (WWW.ACCELFRONTLINE.IN)

The following documents have been placed on the Company's website in compliance with the Companies Act:

a. Financial Statements of the Company and Consolidated Financial Statements.

b. Separate audited accounts in respect of subsidiaries as per fourth proviso to Section 136(1).

c. Details of Vigil Mechanism for directors and employees to report genuine concerns as per proviso to Section 177(10).

d. The Terms and Conditions of appointment of independent directors.

e. Details of unpaid dividend as per Section 124(2).

8. SUBSIDIARY COMPANIES

The Company has subsidiaries operating in Singapore, UAE, Japan, North America and United Kingdom which are not listed in India or abroad as of date. The Company also has a wholly owned unlisted Indian Subsidiary.

The Statutory Audit Report of the Subsidiary Companies for the financial year are placed before the Audit Committee and reviewed by them.

Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary Companies may write to the Company Secretary.

In terms of proviso to sub Section (3) of Section 129 of the Act, the salient features of the financial Statement of the subsidiaries is set out in the prescribed Form AOC-1, which forms part of the Annual Report.

9. CORPORATE GOVERNANCE REPORT REQUIRED UNDER THE COMPANIES ACT, 2013 AND LISTING AGREEMENT

As per Clause 49 of the Listing Agreement entered into with the stock exchanges, Corporate Governance Report with Auditors' Certificate on Compliance with the conditions of Corporate Governance are attached and form part of this report.

10. MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis and various initiatives and future prospects of the Company are enclosed, separately as annexure-ii to this report.

11. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(5) of the Act, and based on the representations received from the management, the directors hereby confirm that:

i. in the preparation of the annual accounts for the financial year 2014-15, the applicable accounting standards have been followed and there are no material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit of the Company for the financial year;

iii. they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and

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

12. AUDITORS AND SECRETARIAL AUDITORS REPORT

The Secretarial Auditor has qualified in his report stating that the office of the Chief Financial Officer was left vacant for a period of more than 6 months from the date of previous vacancy during the year. However, the Company has subsequently appointed a Chief Financial officer on 09.06.2015.

Regarding the opinion expressed by the Statutory Auditors on inventory valuation, the Management is taking steps to work on the software to reflect the exact value of inventory.

Regarding the opinion expressed by the Statutory Auditors on revenue recognition, the Company has been following the policy of recognizing the revenue on account of sale of goods when materials are dispatched from the premises and /or handover the materials to the transporter against the lorry receipt/such other document and pay VAT on such sale. As the Company been following this practice for earlier financial years, it continued the same practice for the current financial year also as the practice meets all the 3 criteria a) prudence, b) substance over form and c) materiality. The management will ensure that the Company will change over to the new revenue recognition policy in the subsequent financial years.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Rule 8(3) of the Companies (Accounts) Rules, 2014, are set out in an annexure-iii to this Report.

14. SEPARATE MEETING OF INDEPENDENT DIRECTORS

The Independent Directors met on 5th May, 2015 and evaluated the performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company considering the views of other Directors. Further details are available in the Corporate Governance Report.

15. EVALUATION OF THE BOARD'S PERFORMANCE

The Board has carried out an evaluation of its own performance, also that of its Directors individually and its Committees. The manner in which the evaluation has been carried out is explained in the Corporate Governance report.

16. AUDITORS

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. Walker Chandiok & Co LLP, Chartered Accountants, Chennai, bearing (ICAI Registration No.001076N ), were appointed as Statutory Auditors for a period of five years till the conclusion of the 24th Annual General Meeting ( AGM) , which was subject to ratification at every AGM, be and is hereby rafted to hold the office from the conclusion of this AGM till the conclusion of the 21st AGM of the Company to be held in the year 2016.

17. 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. FIXED DEPOSITS FROM PUBLIC

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

19. ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to business associates for their support and contribution during the year. The Directors would also like to thank the employees, shareholders, customers, suppliers, alliance partners and bankers for the continued support given by them to the Company and their confidence reposed in the management.

For and on behalf of the Board

Place : Chennai N.R. Panicker

Date : 04th August, 2015 Executive Chairman


Mar 31, 2014

The Members

The Directors are pleased to present the 19th annual report along with the audited financial statements for the financial year ended March 31, 2014.

Financial results

Consolidated

2014 2013

Sales, Services & other income 42650.46 40,137.95

Earnings before interest, tax, depreciation 4066.84 3,325.05 and amortization (EBITDA)

Finance costs 2441.29 1,995.07

Depreciation and amortization expense 1106.53 1,067.77

Provision for tax (Net) 69.81 143.54

Profit after tax 449.21 118.67

Balance brought forward from previous year 1625.69 1.507.02

Amount available for appropriation 2074.90 1.625.69

Balance carried to Balance Sheet 2074.90 1625.59

Standalone 2014 2013

Sales, Services & other income 29914.11 32921.26

Earnings before interest, tax, depreciation 3594.12 3345.93 and amortization (EBITDA)

Finance costs 2327.49 1953.83

Depreciation and amortization expense 971.69 968.60

Provision for tax (Net) 50.04 143.54

Profit after tax 244.78 279.96

Balance brought forward from previous year 1329.15 1049.17

Amount available for appropriation 1573.93 1329.15

Balance carried to Balance Sheet 1573.93 1329.15

Consolidation

The domestic economy continued to languish recording a below 5 % growth for the second consequent year, during FY 14, The constant changes in domestic and global economic landscape continues to create uncertainty in the business environment .The expected recovery of the Indian economy during the second half did not materialize due to adverse political climate prevailed in the country,. However the exchange rates showed some stability during the second half bringing some comfort to our operations. The prospects of growth in the indian economy continues to be challenged due to various factors like depreciating rupee, inflation, current account deficit etc. The company is constantly monitoring the situation and taking various steps for risk mitigation.

On a standalone basis, the revenues from operations and other income stood at INR 29914 lakhs , representing a decline of 9% over previous year. However the EBITDA margins improved as compared to the previous year. Earnings before interest, tax, depreciation and amortization (EBITDA) at INR 3594 lakhs were higher by 7% over previous year.

On a consolidated basis, the revenues from operations and other income stood at INR 42,650 lakhs, representing a growth of 6% over previous year. Earnings before interest, tax, depreciation and amortization (EBITDA) at INR 4067 lakhs were higher by 22% over previous year, due to improvement in the EBITDA margins The decline in the standalone revenues is attributable to planned gradual reduction in system integration business, with lower margins compared to other IT service businesses. However this reduction in revenues was offset by growth in the overseas subsidiary operations and software services and which resulted in better EBITDA margins in FY14 compared to FY13.

Share Capital

During the FY2014, the company allotted 55,00,000 Equity shares on 10th January 2014 by way of preferential allotment to M/s CAC Holdings Corporation.(" CAC") ( earlier CAC Corporation) as a part of the shareholders agreement dated 9th December 2013 entered

into between the company, its promoters and CAC wherein CAC had agreed to acquire 51% stake in the company. As on 31st March 2014 the paid up capital of the company stood at Rs. 29,76,18,730/-consisting of 2,97,61,873 Equity shares of face value Rs. 10/- each fully paid-up.

CAC have acquired 51,41,175 Equity Shares (i.e. 17.27%) of the company by way of a mandatory open offer. They have also acquired 75,00,000 Equity shares from the existing promoters by way of an Inter-se sale as part of the shareholders and share purchase agreement dated 9th December 2013. With this acquisition, CAC now holds 1,81,41,175 Equity Shares, constituting 60.95% of the Equity Share Capital of the company and have become the holding company. The total promoter holding is 2,64,93,951 Equity Shares (89.02%) and the public shareholding is 32,67,922 Equity Shares (10.98%) in the company.

Since the public shareholding has fallen below the stipulated minimum requirement of 25%, the company is not compliant with Rule 19A of securities contract Regulation( Rules) 1957 (SCRR) and Clause 40A of the Listing Agreement which stipulates a minimum public shareholding of 25%.

The company is taking necessary steps to reduce the promoter shareholding so as to achieve the minimum public shareholding of 25%. As per present regulations this can be achived on or before 31 March 2015.

Human resource development

Accel employs over 3059 full time employees with diverse background. Whose collective efforts have enabled Accel to achieve its organizational goals and set the base right for the next phase of growth.

Accel has restructured its work force into various businesses to ensure that every business is operated and supported equally. The human resource policies have evolved to stay relevant to the changing economic and business environment and enhance organizational agility.

The company has a matured talent management process and environment where performance is rewarded and opportunities are provided for career growth and development. Focused initiatives towards work life balance and safety of employees have helped the company in gaining confidence level of the employees and bring down the attrition levels.

Quality standards

Accel believes in sustained commitment to highest levels of quality to enhance customer satisfaction. During the year the company continued to invest in technologies, infrastructure and processes in order to keep our quality management systems updated.

The Company achieved certifications for:

- ISO 9001:2008 (Quality Management)

- ISO 27001:2005 (Security Management)

- ISO 20000-1:2005

- CMMI Level 3

An employee portal exists for knowledge management and sharing useful information within the Company. Regular knowledge and skill upgradation training programs are conducted by internal as well as external knowledge management experts.

These quality driven processes help in supporting Accel''s global delivery model

In order to achieve highest levels of quality and robust information security practices, the company will endeavor to achieve enterprise-wide CMMI Level 5 (for Development) in the near future

Finance, Accounts and Internal control systems

The company has adequate internal control procedures commensurate with the size and nature of its operations. The internal control systems were further strengthened by internal audit carried by an independent firm of Chartered Accountants and a periodical review by the management. The Audit Committee of the board addresses issues raised by internal auditors and the statutory auditors.

The financial objective of the company is to bring in efficiencies of operations at all levels so as to maximize return on capital employed and to generate sufficient cash profits to fund on-going expansions and to meet the growth objectives.

The audit committee and the Board periodically review performance parameters related to financial performance of the company to ensure smooth implementation of the internal control systems and efficient management of the various resources. The audit committee conducts periodic reviews with the management, internal auditor and the statutory auditor. There is an on-going cost monitoring program to control various expenses and the Board reviews the variance analysis.

Report of Corporate Governance and Auditors Certificate on Corporate Governance

A report on Corporate Governance together with auditor''s certificate on compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is provided as Annexure III to this report.

The certificate issued by the auditors of the company on corporate governance is given as Annexure IV to this report.

Management Discussion and Analysis

The Management Discussion and Analysis and various initiatives and future prospects of the company are enclosed, separately as Annexure II to this report.

Director''s responsibility statement

The directors'' responsibility statement pursuant to sub section 2 AA of Section 217 of the Companies Act 1956 is given as Annexure V to this report.

CEO/CFO Certification

The Executive Chairman and the Chief Finance Officer have sub- mitted a certificate to the Board regarding the financial statements and other matters as required under Clause 49 (V) of the Listing Agreement. This is provided as Annexure VI to this report

Financial Statements of Subsidiary companies:-

The Company has 8 subsidiaries as on March 31, 2014There has been no material change in the nature of the business of the subsidiaries.

As required under the Listing Agreement entered into with the Stock Exchanges, a consolidated financial statement of the Company and all its subsidiaries is attached. The consolidated financial statement has been prepared in accordance with the relevant accounting standards as prescribed Under Section 211 (3C) of the Act. The consolidated financial statement discloses the assets, liabilities, income, expenses and other details of the Company and its subsidiaries.

Pursuant to the provisions of Section 212(8)of the Act, the Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Statement of Profit & Loss and other documents of the subsidiary companies with the Balance Sheet of the Company. A statement containing brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2014 is included as an Annexure VIII to this report. The annual accounts of these subsidiaries and the related information will be made available to any member of the company/its subsidiaries seeking such information and are available for inspection by any member of the company/subsidiaries at the Registered Office of the Company. The annual accounts of the said subsidiaries will also be available for inspection, at the Head Offices/ Registered Offices of the respective subsidiary companies.

Dividend

The Directors have not recommended dividend for the year ended March 31, 2014 to conserve resources and to augment the long term working capital for future growth.

Directors

Mr. AP.Parigi having DIN 00087586 resigned from the Board with effect from 7th May 2014. The Board places on record its deep appreciation and gratitude for his guidance and contribution to the company during his tenure.

Mr. Steve Ting Tuan Toon having DIN 00114004 resigned from the board with effect from 13th August 2014. The Board places on record its deep appreciation and gratitude for his guidance and contribution to the company during his long tenure.

Mr. Bin Cheng ( Din No. 06913491) was appointed as a Director to fill a causal vacancy with effect from 13th August 2014, caused due to the resignation of Mr. Steve Ting Tuan Toon. Pursuant to section 161(4) of the companies Act 2013 Mr. Bin Cheng will hold office till such time the director in whose place he is appointed would have held office.

Mr. Steve Ting Tuan Toon who has resigned on 13th August 2014, would have retired by rotation at this Annual General Meeting. Mr. Bin cheng now retires by rotation and has offered himself for appointment.

Mr. Malcolm Farrokh Mehta having DIN 03277490 was appointed as an Additional Director of the Company with effect from 7th May 2014 and he was further appointed as a wholetime director designated as Executive Director with effect from 1st July 2014 to hold office till 30th June 2017.His appointment is being recommended for confirmation in the ensuing Annual General Meeting. The necessary resolutions are being placed before the shareholders for approval.

Mr. Sam (S) Santhosh Independent director has resigned fromt the baord with effect from 13th August 2014. The causal vacancy arisen on account of his resignation is not being filled. The Board places on record its deep appreciation and gratitude for his guidance and contribution to the company during his long tenure.

Mr. Masaaki Miura having Din no. 06915575 was appointed as an Additional Independent director with effect from 13th August 2014. Mr. Miura possess the qualifications and skills relevant for the company''s business . The company has received declarations from Mr. Miura that he meets with the criteria of independence as prescribed both under sub-section (6) of section 149 of the Act and under clause 49 of the Listing agreement. The necessary resolution is being placed before the shareholders for approval.

Auditors

M/s Walker Chandiok & Co.LLP, Chartered Accountants, Chennai bearing ICAI Registration No. 001076N are proposed to be appointed as Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the twenty fourth Annual General Meeting of the Company held thereafter (a period of five years), subject to ratification of the appointment by the members at every AGM held after the ensuing AGM.

As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from M/s Walker Chandiok & Co. LLP, to such appointment and also a certificate to the effect that their appointment, if made, would be in accordance with Section 139(1) of the Companies Act, 2013 and the rules made there under, as may be applicable.

The auditors M/s K S Aiyar & Co, Chartered Accountants have been the Statutory auditors of the company since 2005-2006. As per the Section 139 (2) of the Companies Act 2013 an audit firm can serve as auditors of the company for not more than two terms of five consecutive years. AS the Auditors have completed one term of five consecutive years the company felt the need to rotate the auditor.

Internal Auditors

M/s K S Aiyar and Co the erstwhile statutory Auditors of the company will be the Internal Auditor of the company for the financial year 2014-2015. w.e.f. the conclusion of this AGM.

Credit Rating

Secretarial Standards of the ICSI Secretarial standrads issued by the Institute of Company secretaries of India from time to time are currently recommendatory in nature. The company is , however, complying with most of the standards.

Internal compliants Committee

With regard to the Supreme Court Judgment and guidelines issued in Vishaka case - Gazette publication dated 22nd April 2013, to provide for the effective enforcement of the basic human right of gender equality and guarantee against sexual harassment and abuse, more particularly against sexual harassment at work places, the company has formed a policy for prevention, prohibition and redressal of Sexual harassment of women at workplace. The company has also constituted an Internal Complaints Committee: (ICC) and Enquiry committee to redress such complaints.

Particulars of Employees

The particulars regarding employees of the company pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are given as annexure VII to the Director''s Report. In terms of sec 219 (1) (b) (iv) of the Companies Act 1956 the Directors Report (excluding annexure VII) is being sent to all the shareholders of the company. Any shareholder interested in obtaining a copy of the said annexure may write to the company secretary at the registered office of the company.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Section 217(1)(e) of the Act, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are set out in an Annexure to this report.

Directors'' Responsibility Statement

Pursuant to Sub-Section 2AA of section 217 of the Companies Act 1956, the Directors confirm that:

1. In the preparation of annual accounts, the applicable accounting standards have been followed.

2. Appropriate Accounting Policies have been selected and applied consistently by the company and that the judgments and the estimates made thereat are prudent and reasonable so as to give a true and fair view of the state of affairs of the company as at March 31, 2012 and of the profit of the company for the year ended March 31, 2014

3. Proper and sufficient care has been taken in maintaining adequate accounting records of the company in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities and

4. The Annual Accounts of the company as aforesaid have been prepared on a going concern basis.

Acknowledgement

The directors would like to express their grateful appreciation for the assistance and co- operation received from central and state governments, financial institutions, banks, government authorities, customers, suppliers and investors during the year under review. The directors wish to place on record their deep sense of appreciation, of the dedicated and sincere services rendered by the employees of the company for its success.

For and on behalf of the Board

N.R. Panicker Executive Chairman

Chennai, May 7, 2014


Mar 31, 2013

To The Members

The Directors are pleased to present the 18th annual report along with the audited fnancial statements for the fnancial year ended March 31, 2013.

Financial results

INR in lakhs

Standalone Consolidated

2013 2012 2013 2012

Sales, services & other incom 32,921.26 42,352.47 40,137.95 48,614.06 Earnings before interest, tax, depreciation 3,345.93 3,673.14 3,325.05 3,362.88 and amortization (EBITDA)

Finance costs 1,953.83 1,739.61 1,995.07 1,794.33

Depreciation and amortization expense 968.60 795.08 1,067.77 991.25

Provision for tax (Net) 143.53 199.84 143.54 199.84

Proft after tax 279.97 938.60 118.67 377.46

Balance brought forward from Previous year 1,049.18 2,414.74 1,507.02 3,433.72

Amount available for appropriation 1,329.15 3,497.44 1,625.69 3,955.28 Appropriations

Proposed Dividend on equity shares 363.93 363.93

Tax on Dividend 59.04 59.04

Transfer to General Reserve 100.00 100.00

Security Premium cancelled on account of merger 1,925.29 1,925.29

Balance carried to Balance Sheet 1,329.15 1,049.18 1,625.59 1,507.03

Total 1,329.15 3,497.44 1,625.69 3,955.28

Company''s performance

The global economic slowdown during the fnancial year 2012-13 with macro economic uncertainties impacted the business envi- ronment in India. The slowdown is expected to continue through f- nancial year 2013-14 with faster growth expected in few emerging markets. These uncertainties have prepared the industry to operate more efciently embedded with a disciplined cost management in order to strengthen the foundation of the businesses.

Financial year 2012-13 represents the full year operations after the consolidation of all the IT service business in 2011-12. The company has successfully integrated these merged business portfolios and could transform itself to ofer more value added services.

On a standalone basis, the revenues from operations and other in- come stood at INR 32,921.26 lakhs, representing a decline of 22% over previous year. Earnings before interest, tax, depreciation and amortization (EBITDA) at INR 3,345.93 lakhs were lower by 9% over previous year. However the EBITDA margins improved 10.16% in FY13 compared to 8.67% in FY12.

On a consolidated basis, the revenues from operations and other income stood at INR 40,137.95 lakhs, representing a decline of 17% over previous year. Earnings before interest, tax, depreciation and amortization (EBITDA) at INR 3,325.05 lakhs were lower by 1% over previous year. However the EBITDA margins improved to 8.28% in FY13 compared to 6.92% in FY12.

The decline in revenues is attributable to planned reduction in the IT hardware centric system integration business, which commands lower margins compared to IT service business. However this re- duction in revenues was partly ofset by growth in software and infrastructure management services revenues, which resulted in better EBITDA margins in FY13 compared to FY12.

Durring FY13 the company''s liquidity possition remained challeng- ing due to additional investment made in software assets and over- seas subsidiaries, to enhance the software business.

The compnay has initiated various steps to ease the liquidity po- sition and augment long term working capital required for future growth as planned.

Human resource development

The company employs over 1,722 full time employees with diverse background. The collective eforts of all these employees have en- abled the company to achieve its organizational goals and set the base right for the next phase of growth.

The company has restructured its work force into various busi- nesses to ensure that every business is operated and supported equally. The human resource policies have evolved to stay relevant to the changing economic and business environment and enhance organizational agility.

Workforce strategy was planned with a focus on sustainable utili- zation levels. A lot of eforts are being taken to implement these strategies to maintain costs at optimal levels.

The company has a matured talent management process and en- vironment where performance is rewarded and opportunities are provided for career growth and development. Focused initiatives towards work life balance and safety of employees have helped the company in gaining confdence level of the employees and bring down the attrition levels.

Quality standards

The company believes in sustained commitment to highest levels of quality to enhance customer satisfaction. During the year the company continued to invest in technologies, infrastructure and processes in order to keep our quality management systems up- dated.

The Company achieved certifcations for:

ISO 9001:2008 (Quality Management) ISO 27001:2005 (Security Management) ISO 20000-1:2005 (Service Management) CMMI Level 3 (Software Developemnt)

An employee portal exists for knowledge management and shar- ing useful information within the Company. Regular knowledge and skill up gradation training programs are conducted by internal as well as external knowledge management experts.

These quality driven processes help in supporting the company''s global delivery model

In order to achieve highest levels of quality and robust information security practices, the company has planned to achieve enterprise- wide CMMI Level 5 (for Development) during the next fnancial year.

Finance, Accounts and Internal control systems

The company has adequate internal control procedures commen- surate with the size and nature of its operations. The internal con- trol systems were further strengthened by internal audit carried by an independent frm of Chartered Accountants and a periodical review by the management. The Audit Committee of the board ad- dresses issues raised by internal auditors and the, statutory audi- tors.

The fnancial objective of the company is to bring in efciencies of operations at all levels so as to maximize return on capital em- ployed and to generate sufcient cash profts to fund on-going ex- pansions and to meet the growth objectives.

The audit committee and the Board periodically review perfor- mance parameters related to fnancial performance of the com- pany to ensure smooth implementation of the internal control systems and efcient management of the various resources. The audit committee conducts 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 Board re- views the variance analysis.

Report of Corporate Governance and Auditors Certifcate on Corporate Governance

A report on Corporate Governance together with auditor''s certif- cate on compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is provided as annexure III to this report.

The certifcate issued by the auditors of the company on corporate governance is given as Annexure IV to this report.

Management Discussion and Analysis

The Management Discussion and Analysis and various initiatives and future prospects of the company are enclosed, separately as annexure II to this report.

Director''s responsibility statement

The directors'' responsibility statement pursuant to sub section 2 AA of Section 217 of the Companies Act 1956 is given as Annexure V to this report.

CEO / CFO Certifcation

The Chairman and Managing director and the Chief Finance Ofcer have submitted a certifcate to the Board regarding the fnancial statements and other matters as required under Clause 49 (V) of the Listing Agreement. This is provided as Annexure VI to this re- port

Financial Statements of Subsidiary companies:-

The Company had 8 subsidiaries as on March 31, 2013, up from 7 as on March 31, 2012. Accel Technologies Limited, UK was incorpo- rated during fnancial year 2012-13 as a strategy to penetrate this market for its ‘Product engineering and Automotive embedded solutions''.

There has been no material change in the nature of the business of the subsidiaries.

As required under the Listing Agreement entered into with the Stock Exchanges, a consolidated fnancial statement of the Com- pany and all its subsidiaries is attached. The consolidated fnancial statement has been prepared in accordance with the relevant ac- counting standards as prescribed Under Section 211 (3C) of the Act. The consolidated fnancial statement discloses the assets, li- abilities, income, expenses and other details of the Company and its subsidiaries.

Pursuant to the provisions of Section 212(8)of the Act, the Min- istry of Corporate Afairs vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Statement of Proft & Loss and other documents of the subsidiary companies with the Balance Sheet of the Company. A statement containing brief fnancial details of the Company''s subsidiaries for the fnancial year ended March 31, 2013 is included as an annexure VIII to this report. The annual accounts of these subsidiaries and the related information will be made available to any member of the company/its subsidiaries seeking such information and are avail- able for inspection by any member of the company/subsidiaries at the Registered Ofce of the Company. The annual accounts of the said subsidiaries will also be available for inspection, at the Head Ofces / Registered Ofces of the respective subsidiary companies.

Dividend

The Directors have not recommended dividend for the period ended March 31, 2013 considering the lower profts achieved dur- ing the fnancial year 2012-13. Further, given that we are in a high leverage point, the available resources have to be conserved and efectively deployed for ramping up the operations in high growth and high margin services business.

Directors

Mr.A.P.Parigi and Mr. Alok Sharma retire by rotation and are eligible for re-appointment.

Auditors

K S Aiyar & Co., Chartered Accountants, who are the statutory audi- tors of the Company, retire at the ensuing Annual General Meeting and being eligible, ofer themselves for reappointment. The com- pany has received confrmation from them that their appointment will be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. The audit committee of the Board has rec- ommended their reappointment. The necessary resolution is being placed before the shareholders for approval.

Particulars of Employees

The particulars regarding employees of the company pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Com- panies (Particulars of Employees) Rules, 1975 are included as an- nexure VII to the Director''s Report. In terms of sec 219 (1) (b) (iv) of the Companies Act 1956 the Directors Report (excluding annex- ure VII) is being sent to all the shareholders of the company. Any shareholder interested in obtaining a copy of the said annexure may write to the company secretary at the registered ofce of the company.

Conservation of energy, technology absorption, foreign ex- change earnings and outgo

The particulars as prescribed under Section 217(1)(e) of the Act, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are set out in an annexure I to this report.

Acknowledgement

The directors would like to express their grateful appreciation for the assistance and co-operation received from central and state governments, fnancial institutions, banks, government authorities, customers, suppliers and investors during the year under review. The directors wish to place on record their deep sense of apprecia- tion, of the dedicated and sincere services rendered by the employ- ees of the company for its success.

For and on behalf of the Board

Chennai, N.R. Panicker

May 29, 2013 Chairman & Managing Director


Mar 31, 2011

Dear Shareholders,

The Directors are pleased to present the 16th annual report together with the audited accounts of the company for the year ended March 31, 2011.

INR in million

Financial results Standalone

2011 2010

Sales, services & other income 3320.15 2569.21

Profit before interest, depreciation & tax 210.99 163.17

Interest 63.29 42.50

Depreciation 58.48 57.61

Provision for tax 25.42 16.10

Profit after tax 63.79 46.97

Balance brought forward from previous year 227.71 224.38

Profit available for appropriation 298.97 272.21 Appropriations

Transfer to general reserve 5.00 5.00

Proposed dividend on equity shares 45.02 33.76

Tax on dividend 7.48 5.74

Balance carried to balance sheet 241.47 227.71

Total 298.97 272.21

Financial results Consolidated

2011 2010

Sales, services & other income 3960.49 2715.49

Profit before interest, depreciation & tax 252.74 175.05

Interest 66.60 42.61

Depreciation 58.78 57.82

Provision for tax 25.42 16.10

Profit after tax 101.94 58.52

Balance brought forward from previous year 291.46 276.56

Profit available for appropriation Appropriations 400.87 335.95

Transfer to general reserve 5.00 5.00

Proposed dividend on equity shares 45.02 33.76

Tax on dividend 7.48 5.74

Balance carried to balance sheet 343.37 291.45

Total 400.87 335.95

Review of operations

FY11 was a year of enhanced growth for your company. The company garnered fresh business and strengthened it's relationships with existing customers.

The company achieved a revenue growth of 29.23% on a standalone basis. Net turnover increased to Rs 3,320.15 mn for the year ended March 31, 2011 as compared to Rs 2,569.21 mn for the corresponding period last year. The company's focus continues to be on Infrastructure Management Services. Other businesses also performed reasonably well during the year under review. On a standalone basis, profit before tax stood at Rs. 89.21 mn as against Rs. 63.07 mn for the corresponding period last year. On a consolidated basis, the net turnover stood at Rs 3,960.49 mn, the EBITDA was Rs. 252.74 mn and the profit after tax was Rs 101.94 mn. The Top 10 customers now contribute 55% to the total revenue share. The company is pleased to announce a final dividend of Rs 2 per share (20% on the face value of Rs 10 per share) consistent with its policy to reward shareholders.

Consolidated financial statements

Consolidated financial statements, prepared in accordance with Accounting Standard AS 21, issued by the Institute of Chartered Accountants of India, and as required by the Listing Agreement are attached and forms part of the Annual Report and Accounts. The summary results are provided in the table above.

Report

Report on conservation of energy, technology absorption etc.

Information as required under section 217 (1) (e) of the companies act, 1956 read with companies (disclosure of particulars in the report of board of directors) rule, 1988 regarding conservation of energy, technology absorption are given in annexure I to this

Report. The details regarding foreign exchange earnings and outgo are being mentioned in the notes to the accounts.

Management discussion and analysis

The management discussion and analysis and various initiatives and future prospects of the company are enclosed, separately as annexure II

Report of Corporate Governance

A report on Corporate Governance together with auditor's certificate on compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement 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 given in Annexure IV

Directors responsibility statement

The directors responsibility statement pursuant to sub section 2 AA of Section 217 of the Companies Act 1956 is given in Annexure V

CEO /CFO Certification

The Chairman and Managing Director and the Chief Finance Officer have submitted a certificate to the Board regarding the financial statements and other matters as required under Clause 49 (V) of the 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 the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are given 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 to all the shareholders of the company. Any shareholder interested in obtaining a copy of the said annexure may write to the company secretary at the registered office of the company.

Financial Statements of Subsidiary companies:-

The statement pursuant to sub-section 3 of Section 212 of the Companies Act 1956 is given in annexure VIII to this Report. Pursuant to the exemption granted by the department of Company Affairs, Government of India, the parent company is publishing the consolidated and standalone financial statements of Accel Frontline Limited and its subsidiaries. The financial statements and auditors' report of the individual subsidiaries are available for inspection by the shareholders at the registered office and the same is posted in the company's website. The information in aggregate on capital, reserves, total assets, total liabilities, details of investments, turnover, profit before taxation, provision for taxation, profit after taxation and proposed dividend for each subsidiary are given in annexure VIII

Dividend

At the meeting held on July 27, 2011, the Board of Directors has recommended a dividend of 20% (Rs 2.00 per equity share of Rs 10/-) for the year ended March 31, 2011. This dividend will be paid subject to the shareholder's approval at the ensuing annual general meeting to be held on September 29, 2011.

Directors

Mrs. Lakshmi G Menon, Mr. Sinnakaruppan and Dr.Harrison Wang Hong She , retires by rotation and have not offered themselves for re-appointment and accordingly, they will cease to be the directors of the company with effect from the conclusion of the ensuing annual general meeting. The board placed on record its deep appreciation and gratitude for their guidance and contribution to the company.

Quality Management

Your company's quality policy is to enhance customer satisfaction through continued improvement of skills, processes and technologies. During the year the company continued to invest in technologies, infrastructure and processes in order to keep our quality management systems updated. We are a ISO 9001/2000 certified unit for IT infrastructure management services.

Auditors

K.S.Aiyar & Co., Chartered Accountants, Chennai, auditors of the Company retire at the ensuing Annual General Meeting, and being eligible, offer themselves for reappointment. The company has received confirmation from them that their appointment will be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. The audit committee of the Board has recommended their reappointment. The necessary resolution is being placed before the shareholders for approval.

INTERNAL CONTROL SYSTEMS

Your company has adequate internal control procedures commensurate with the size and nature of its operations. The internal control systems were further strengthened by internal audit carried by an independent firm of chartered accountants and a periodical review by the management. The audit committee of the board addresses issues raised by internal auditors, statutory auditors and management auditors.

Acknowledgement

Your directors would like to express their grateful appreciation for the assistance and co-operation received from central and state governments, financial institutions, banks, government authorities, customers, suppliers and investors during the year under review. Your Directors wish to place on record their deep sense of appreciation, of the dedicated and sincere services rendered by the employees of the company for its success.

For and on behalf of the board

Chennai, N.R. Panicker July 27,2011. Chairman & Managing Director


Mar 31, 2010

The Directors are pleased to present the 15th annual report together with the audited accounts of the company for the year ended March 31, 2010.

INR in million

Financial results Standalone Consolidated

for the year ended March 31, 2010 2009 2010 2009

Sales, Services & other income 2569.21 2736.34 2715.49 2946.74

Proft before interest, depreci ation & tax 163.17 192.54 175.07 219.16

Interest 42.50 60.43 42.61 61.73

Depreciation 57.61 61.57 57.82 61.96

Provision for tax 16.10 28.07 16.10 28.07

Proft after tax 46.97 42.47 58.54 67.40

Balance brought forward from previous year 224.38 213.89 276.56 241.14

Proft available for appropriation272.21 260.71 335.96 312.90 Appropriations

Transfer to general reserve 5.00 10.00 5.00 10.00

Proposed dividend on equity shares33.76 22.51 33.76 22.51

Tax on dividend 5.74 3.83 5.74 3.83

Balance carried to balance sheet 227.71 224.37 291.46 276.56

Total 272.21 260.71 335.96 312.90

Review of operations

The performance of the company during the year under review was less than expected due to continued slowdown in the IT spending by the major corporate as an aftermath of the global economic problems. The company achieved a modest growth of 1.62% on its core business of IT infrastructure services after tak- ing into account the discontinued business of Warranty Man- agement Services division which was hived off with effect from January1, 2009. The highlights of the performance for the year are discussed in detail in the management discussion and analy- sis report attached as annexure to this report. The company, on a standalone basis, has posted a net turnover of Rs 2,569.21 mn for the year ended March 31, 2010, as compared to Rs 2,736.34 mn for the year ended March 31, 2009, which included the results of the WMS division and EBITDA of Rs 163.17 mn as against Rs 192.54 mn for the previous year ended March 31st 2009. The company reported a proft before tax of Rs.63.07 mn as against Rs. 70.54 mn for the corresponding period last year. On a consolidated basis, the net turnover was Rs 2,715.49 mn, the EBITDA was Rs.175.07 mn and the proft after tax was Rs 58.54 mn.

Consolidated fnancial statements

Consolidated fnancial statements, prepared in accordance with Accounting Standard AS 21, issued by the Institute of Chartered Accountants of India, and as required by the Listing Agreement are attached and forms part of the Annual Report and Accounts. The summary results are provided in the table above.

Report on conservation of energy, technology absorption etc.

Information as required under section 217 (1) (e) of the compa- nies act, 1956 read with companies (disclosure of particulars in the report of board of directors) rule, 1988 regarding conservation of energy, technology absorption are given in annexure I to this re- port. The details regarding foreign exchange earnings and outgo are being mentioned in the notes to the accounts.

Management discussion and analysis

The management discussion and analysis and various initiatives and future prospects of the company are enclosed, separately as annexure II.

Report of corporate governance

A report on Corporate Governance together with auditors certif- cate on compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is provided in annexure III to this report.

Auditors certifcate on corporate governance

The certifcate issued by the auditors of the company on corporate governance is given in Annexure IV.

Directors responsibility statement

The directors responsibility statement pursuant to sub sec- tion 2 AA of Section 217 of the Companies Act, 1956 is given in Annexure V.

CEO /CFO certifcation

The Chairman and Managing Director and the Chief Financial Of- fcer have submitted a certifcate to the Board regarding the fnan- cial statements and other matters as required under Clause 49 (V) of the 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 the Companies Act, 1956 read with the Compa- nies (Particulars of Employees) Rules, 1975 are given in annexure VII to the Directors Report. However, in terms of sec 219 (1) (b) (iv) of the Companies Act, 1956 the Directors Report (excluding annexure VII) is being sent to all the shareholders of the company. Any shareholder interested in obtaining a copy of the said annex- ure may write to the company secretary at the registered offce of the company.

Financial statements of subsidiary companies:-

The statement pursuant to sub-section 3 of Section 212 of the Companies Act, 1956 are given in annexure VIII to this Report. Pur- suant to the exemption granted by the department of Company Affairs, Government of India, the parent company is publishing the consolidated and standalone fnancial statements of Accel Front- line Limited and its subsidiaries. The fnancial statements and audi- tors report of the individual subsidiaries are available for inspec- tion by the shareholders at the registered offce. The information in aggregate on capital, reserves, total assets, total liabilities, details of investments, turnover, proft before taxation, provision for taxation, proft after taxation and proposed dividend for each subsidiary are given elsewhere in the report.

Dividend

At the meeting held on March 10, 2010, the Board of Directors had approved an interim dividend of 15% (Rs 1.50 per equity share of Rs 10/-) for the year ended March 31, 2010. This Interim dividend was paid to all the shareholders whose names appeared in the reg- ister of members as on the Record date i.e. March 22, 2010. The Board of Directors, keeping in mind the requirement of funds for future expansions, have not recommended any fnal dividend for the fnancial year ended March 31, 2010.

Directors

Mr. Sudhir Narang , Mr. Steve Ting Tuan Toon and Mr. Suresh K.Sharma , retires by rotation and are eligible for re-appointment. Mr. K.R.Chandrasekaran is being reappointed as a whole time di- rector for a further period of one year.

Quality management

Your companys quality policy is to enhance customer satisfaction through continued improvement of skills, processes and technol- ogies. During the year the company continued to invest in tech- nologies, infrastructure and processes in order to keep our quality management systems updated. We are a ISO 9001/2000 certifed unit for IT infrastructure management services.

Auditors

K S Aiyar & Co Chartered Accountants, Chennai, auditors of the Company retire at the ensuing Annual General Meeting, and be- ing eligible, offer themselves for reappointment. The company has received confrmation from them that their appointment will be

within the limits prescribed under Section 224(1B) of the Compa- nies Act, 1956. The audit committee of the Board has recommend- ed their reappointment. The necessary resolution is being placed before the shareholders for approval.

Internal control systems

Your company has adequate internal control procedures com- mensurate with the size and nature of its operations. The internal control system were further strengthened by internal audit carried by an independent frm of chartered accountants and a periodical review by the management. The audit committee of the board addresses issues raised by internal auditors, statutory auditors and management auditors.

Acknowledgement

Your directors would like to express their grateful appreciation for the assistance and co-operation received from Central and State Governments, fnancial institutions, banks, Government authori- ties, customers, suppliers and investors during the year under re- view. Your Directors wish to place on record their deep sense of appreciation, of the dedicated and sincere services rendered by the employees of the company for its success.

For and on behalf of the board

Chennai, N.R. Panicker

July 22 , 2010. Chairman & Managing Director

 
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