Notes to Accounts of Inspirisys Solutions Ltd.

Mar 31, 2025

i) All property, plant and equipment pledged as security. Refer note 17(d)

ii) There are no proceedings that have been initiated or pending against the Company under the Prohibition of Benami Property Transactions Act, 1988, as amended, as the Company does not hold any benami properties.

iii) The Company does not own any immovable properties and w.r.to the leased premises the lease agreements are duly executed in favour of the lessee.

iv) The Company has not revalued its property, plant and equipment or intangible assets or both during the current or previous year.

v) Software includes own developed software Gross block '' 1,426 Lakhs (31 March 2024''1,426 Lakhs); Net block '' 204 Lakhs (31 March 2024''273 Lakhs)

vi) 5 includes boughtout software Gross block '' 169 Lakhs (31 March 2024''147 Lakhs); Net block '' 42 Lakhs (31 March 2024''26 Lakhs)

vii) Intangibles under development (IUD)

Intangibles under development represents the internally developed software which will be used to earn licensing income.

viii) Goodwill

The Company in FY 2011-12 recognised Goodwill amounting to '' 1,610 Lakhs pertaining to an acquisition of software business. In accordance with the requirements of Indian Accounting Standard (Ind AS) 36 ''Impairment of Assets'', the management has tested the same for impairment using a Discounted Cash Flow (DCF) model all these years. For the year ended March 31, 2025, the Company through an external valuer obtained the report to determine the recoverable value of the Cash Generating Unit (CGU) to which the Goodwill was associated. Based on such testing, the carrying amount of the CGU is higher than the value of Goodwill that was being carried in the books of the Company. However, the management after considering the factors such as US foreign policy Changes, political climate prevailing and Contractual uncertainties of the business for this CGU, has impaired carrying value of Goodwill amounting to '' 542 Lakhs as at 31 March 2025. Following are the key assumptions used by the management to calculate the value in use.

1. Discounting rate used for the purpose of computing right of use asset is 8%.

2. Rental amount per annum is '' 257.13 lakhs, which also carries clause of extension of agreements based on mutual understanding between Lessor and Lesse.

3. Right of Use asset is depreciated on a straight line basis over their respective lease period.

4. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any major covenants other than security deposit in the leased assets that are held by the lessor. Lessed asset are not used as security for borrowing purposes.

5. The company did not enter into lease contracts that contain variable lease options.

* The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

a) The recoverable amount of investments in all the subsidiaries, were assessed by the management internally and it was observed that the estimated service potential of these investments have not increased materially. Hence, the impairment of these investments was not reversed during the current year.

b) The impairment provision for all subsidiaries, has already been recorded over the previous years.

c) The Company had a wholly owned subsidiary M/s Inspirisys Solutions IT Resources Limited (ISITRL). The investment made in this company was provided in the books of the Company during the financial year 2018-19. Based on the board resolution passed in the board meeting dated 08th August 2024, the company filed a volutary strike-off application with the Ministry of Corporate Affairs dated 15 November 2024, ISITRL has been struck-off from the Register of the Companies and considered dissolved vide order dated 30 January 2025 from that date. The dissolution of the wholly owned subsidiary does not have any material impact on the financial results of the holding company for the period ended 31 March 2025. Consequent to this , the Company had written off its investment in that holding company and the board of directors in their meeting held on 09 May 2025 have taken a note of the write off of investment as at 31 March 2025.

d) Inspirisys Solutions Kabhushiki Kaisha, Japan (ISJKK) is a wholly owned subsidiary of the Holding company. The board of

directors of the holding company in their meeting held on 07^th February 2025, given its consent and approved for initiating the process of voluntary liquidation of ISJKK. This decision has been taken in the interest of the group, since it had been inactive for a considerable period and is not currently engaged in any business operations with no foreseeable business opportunities or prospects that could ensure the revival or growth of ISJKK. _

a) Trade receivables include due from related parties amounting to '' 754 lakhs as on 31 March 2025 (31 March 2024: '' 4,628 lakhs). The carrying amount of the current trade receivables is considered a reasonable approximation of fair value as is expected to be collected within twelve months, such that the effect of any difference between the effective interest rate applied and the estimated current market rate is not significant.

b) All of the Company''s trade receivables have been reviewed for indicators of impairment. The Company has impaired its trade receivables using a provisioning matrix representing expected credit losses based on a range of outcomes.

c) The Company realised the overdue trade receivables which was outstanding since 2018-19 from one of its wholly owned subsidiary, Inspirisys Solutions North America Inc ("ISNA") during the quarter ended 31 March 2025. This was a subject matter of qualification in the audit reports for the year ended 31 March 2024.

d) Further, the Company has trade receivables of '' 378 Lakhs ('' 369 Lakhs as on 31 March 2024) from its wholly owned subsidiary named Inspirisys Solutions DMCC, Dubai (ISDMCC). ISDMCC has accumulated losses as at 31 March 2025 and 31 March 2024 and negative net-worth as at 31 March 2025. ISDMCC has incurred continuous losses over the last several years particularly during and after Covid Pandemic and the Board in their meeting held on 28^th September 2023 decided to voluntarily windup and liquidate ISDMCC in its best interest. Considering the financial position of the subsidiary, the Company has provided for allowance for credit losses for the entire receivables, investment and loan in the standalone financial statements of 31 March 2025 and 31 March 2024.

e) Customer credit risk is managed based on the Company''s established policy, procedures and control relating to customer credit risk management, pursuant to which outstanding customer receivables are regularly monitored by the management to ensure that the risk of credit loss is minimal. Credit quality of a customer is assessed based on historical information in relation to pattern of collections, defaults and credit worthiness of the customer.

*The Company has not recognised deferred tax asset till 31 March 2024 as it was not probable as on that date that the taxable profit will be available for utilizing the unused tax losses and temporary differences. However, as the Company started to make consistent profits and expects steady growth in profitability in upcoming years, it has recognised deferred tax asset as it is probable that the taxable profit will be available for utilizing the unused tax losses and temporary differences. Further the business loss have been utilised completely in the current year and hence no deferred tax has been created for the same. However, the MAT credit unutilised are due for expiry within 15 years from the end of the financial year in which they are created. The company on a prudent basis has not recognised MAT credit.

e) Terms / rights attached to equity shares

The Company has one class of equity shares having a par value of '' 10 per share. Each shareholder is eligible for one vote per share held. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts in proportion to their share holding.

f) There were no shares issued pursuant to contract without payment being received in cash, allotted as fully paid up by way of bonus issues and bought back during the last 5 years immediately preceding 31 March 2025.

g) In terms of the Settlement Agreement and Release dated 15 March 2017 entered into between Inspirisys Solutions Limited (''the Company''), CAC Holdings Corporation, Japan (the current promoter) and Accel Limited, Mr N R Panicker and Accel Systems Group Inc, (the erstwhile promoter group of Accel Frontline Limited) 44,64,279 shares (representing 11% (previous year: 11%) of the shareholding of the company) held by the erstwhile promoter group was transferred by such erstwhile promoter group to a Trust between 21 July 2017 and 25 August 2017. The Company does not control this trust including the decisions relating to dealing with these shares. However, the Company is the end beneficiary only of the consideration if and when the shares are sold by the trustees.

h) 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) Securities premium

Securities premium comprises of the amount of share issue price received over and above the face value of '' 10 each.

b) General reserve

General reserve represents an appropriation of profits by the Company.

c) 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.

d) Retained earnings

Retained earnings represents the amounts of accumulated earnings of the Company.

e) Foreign currency translation reserve

Exchange differences arising on translation of the foreign operations of branch is recognised in other comprehensive income as described in accounting policy and accumulated in a separate reserve within equity.

c) The loans and advances from related parties represents loan from the holding company, CAC Holdings Corporation, to the tune of '' Nil lakhs (including interest payable) (As at 31 March 2024: '' 4,140 lakhs) with an interest rate of 4.5 % 6 months SOFR rate, per annum; the entire amount being repaid in 2024-25.(Also, refer note 35). This loan from Holding Company was denominated in USD and was due on 01 December, 2024 which was renewed with a maturity date of 26 September, 2032.

d) Details of security

â¢ The Company has availed PSCFC (Post Shipment Credit in Foreign Currency) worth '' Nil (as at 31 March 2024: '' 248 lakhs) from Sumitomo Mitsui Banking Corporation at an interest rate of relevant period SOFR applicable credit cost 0.7% p.a. i.e., ranging from 7% to 8% for the year ended 31 March 2025 (as at 31 March 2024: 7% to 8%) which is secured by a Corporate Guarantee provided by CAC Holdings Corporation, Japan. The same is repayable on the respective due dates of each drawdown, which is generally less than 12 months.

â¢ The Company has a financing facility from HDFC bank limited to the tune of '' 2,000 lakhs ( Fund based '' 200 lakhs and Non

Fund Based '' 1,800 lakhs) as at 31 March 2025. This loan is secured by First and exclusive charge on the fixed assets and current assets of the company. The Company has not utilised this facility during the year and the balance as at 31 March 2025 is '' Nil.

â¢ The Company has a financing facility from Axis Bank to the tune of '' 260 lakhs (Non Fund Based '' 260 lakhs) as at 31 March

2025 ('' 260 lakhs (Non Fund Based '' 260 lakhs) as at 31 March 2024). This loan is secured by 100% Cash Collateral and is

being closed on a run down basis.

e) The outstanding short-term facilities are secured by the corporate guarantee provided by the holding company and these are not secured against the current assets of the Company.

f) The Company is generally regular in repayment of its borrowings and hence, it has not been declared as wilful defaulter by any bank or financial institutions.

g) The Company has duly registered all the creation and satisfaction of the charges with the Registrar of Companies on or before the prescribed time limit.

h) The below table contains details of undrawn facility as at 31 March 2025.

Sensitivity analysis is carried out by Projected Unit Credit Method (PUCM) by changing only the respective assumption and keeping all other assumption same as that used to estimate the liability. The impact given is the difference between the liability as on the date of valuation and the liability if the given assumption changes by the stated amount. The limitation of this method is that it considers the change in the respective assumption in isolation without affecting the other assumptions which in reality may not be the case.

A provision is recognized for expected warranty claims on supply of banking licenses, based on past experience of level of technical support costs incurred. The current and non-current classification of the provision is made based on the remaining warranty period of the licenses supplied as at the balance sheet date. The assumptions used to calculate the provision for warranties are based on the Company''s current status of licenses supplied that are under warranty and information available about expenditure more probable to be incurred based on the Company''s warranty terms which provides for a warranty period of about 12 months.

34 Employee benefits expenses 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 and the Company makes annual contribution to the gratuity fund maintained by Life Insurance Corporation.

The Company assesses these assumptions with the projected long-term plans of growth and prevalent industry standards.

The estimates of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Based on historical data, the Company expects contributions of '' 107 lakhs to be paid in 2025-26. The weighted average duration of the defined benefit obligation as at 31 March 2025 is 3 years (31 March 2024: 3 years).

Risk exposure

The defined benefit plan exposes the Company to actuarial risks such as interest rate risk, investment risk, longevity risk and inflation risk.

Interest rate risk

The present value of the defined benefit liability is calculated using a discount rate determined by reference to market yields of high quality corporate bonds. The estimated term of the bonds is consistent with the estimated term of the defined benefit obligation and it is denominated in Indian rupees. A decrease in market yield on high quality corporate bonds will increase the Company''s defined benefit liability, although it is expected that this would be offset partially by an increase in the fair value of certain of the plan assets. Investment risk

The company maintains plan assets in the form of fund with Life Insurance Corporation of India. The fair value of the plan assets is exposed to the market risks (in India).

Longevity risk

The Company is required to provide benefits for life for the members of the defined benefit liability. Increase in the life expectancy of the members, will increase the defined benefit liability.

Inflation risk

A significant proportion of the defined benefit liability is linked to inflation. An increase in the inflation rate will increase the Company''s liability.

b) Fair value measurement hierarchy

The Company records certain financial assets and financial liabilities at fair value on a recurring basis. The Company determines fair values based on the price it would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability.

The Company holds certain financial assets which must be measured using the fair value hierarchy and related valuation methodologies. The guidance specifies a hierarchy of valuation techniques based on whether the inputs to each measurement are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company''s assumptions about current market conditions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Financial assets and financial liabilities measured at fair value in the balance sheet are grouped into three Levels of fair value hierarchy. These levels are based on the observability of significant inputs to the measurement, 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 or

indirectly.

> Level 3: Unobservable inputs for the asset or liability.

Investment in Telesis Global Solutions Limited, India is impaired as more recent information is not available to measure fair value. The management had impaired the investment hence there is no carrying value for this investment.

* Does not include Investment in subsidiaries which are accounted at cost in accordance with Ind AS 27.

The fair values of the Company''s interest-bearing borrowings and loans are determined under amortised cost method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. These rates are considered to reflect the market rate of interest and hence the carrying value are considered to be at fair value.

Loans, cash and bank balances, trade receivables, other financial assets, trade payables and other financial liabilities have fair values that approximate to their carrying amounts due to their short-term nature.

37 Financial risk management

The Company''s principal financial liabilities comprise of loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its and group companies operations. The Company''s principal financial assets include loans, trade and other receivables, investments, cash and deposits that derive directly from its operations.

The Company is exposed to market risk, interest rate risk, foreign currency risk, credit risk and liquidity risk.

The Company''s senior management oversees the management of these risks. The Company''s senior management assesses the financial risks and the appropriate financial risk governance framework in accordance with the Company''s policies and risk objectives. The Board of Directors review and agree on policies for managing each of these risks, which are summarised below.

a) Market risk

The Company is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain other price risks, which result from both its operating and investing activities.

b) Interest rate risk

c) Interest rate sensitivity

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._

d) Foreign currency risk

Most of the Company''s transactions are carried out in Indian rupees. Exposures to currency exchange rates arise from the Company''s overseas sales and purchases, which are primarily denominated in US dollars (USD), United Arab Emirates dirham (AED) and Great Britain Pound (GBP). The Company''s foreign currency exposure is predominantly against the group and related entities.

Foreign currency denominated financial assets and financial liabilities which expose the Company to currency risk are disclosed below. The amounts shown are those reported to key management translated at the closing rate:-

The following table illustrates the sensitivity of profit and equity in regards to the Company''s financial assets and financial liabilities and the USD/'' exchange rate, AED/'' exchange rate and GBP/'' exchange rate , ''all other things being equal''. It assumes a /- 1% change of the USD/'' exchange rate for the year ended at 31 March 2025 (31 March 2024: /-1%), /- 1% change of the AED/'' exchange rate for the year ended 31 March 2025 (31 March 2024: /- 1%) , /- 1% change of the JPY/'' exchange rate for the year ended 31 March 2025 (31 March 2024: /- 1%) and a /- 1% change is considered for the GBP/'' exchange rate for the year ended at 31 March 2025 (31 March 2024: /-1%).

If the '' had strengthened against the USD by 1% during the year ended 31 March 2025 (31 March 2024: 1%), AED by 1% during the year ended 31 March 2025 (31 March 2024: 1%), JPY by 1% during the year ended 31 March 2025 (31 March 2024: 1%) and GBP by 1% during the year ended 31 March 2025 (31 March 2024: 1%) respectively then this would have had the following impact on profit before tax and equity before tax:

If the '' had weakened against the USD by 1% during the year ended 31 March 2025 (31 March 2024: 1%), AED by 1% during the year ended 31 March 2025 (31 March 2024: 1%), JPY by 1% during the year ended 31 March 2025 (31 March 2024: 1%) and GBP by 1% during the year ended 31 March 2025 (31 March 2024: 1%) respectively then there would an equal but opposite effect on the above currencies to the amount shown above, on the basis that all other variables remain constant.

e) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the Company. The Company is exposed to this risk for various financial instruments, for example trade receivables, placing deposits, investment etc. the Company''s maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at reporting period, as summarised below:

Particulars As at 31 March 2025 As at 31 March 2024

Classes of financial assets

Trade receivables 8,323 13,662

Cash and cash equivalents 2,376 4,559

Bank balances other than cash and cash equivalents 908 1,137

Loans, (net) - -

Other Financials assets 1,178 736

The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. The Company''s policy is to transact only with counterparties who are highly creditworthy which are assessed based on internal due diligence parameters.

In respect of trade receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics except subsidiaries. Trade receivables consist of a large number of customers in various geographical areas. Based on historical information about customer default rates management consider the credit quality of trade receivables that are not past due or impaired to be good.

The credit risk for cash and bank balances are considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

Other financial assets mainly comprises of rental deposits, security deposits and loans which are given to landlords or other governmental agencies in relation to contracts executed and related parties are assessed by the Company for credit risk on a continuous basis.

f) Liquidity risk

Liquidity risk is that the Company might be unable to meet its obligations. The Company manages its liquidity needs by monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash inflows and outflows due in day-today business. The data used for analysing these cash flows is consistent with that used in the contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on a monthly, quarterly, and yearly basis depending on the business needs. Net cash requirements are compared to available borrowing facilities in order to determine headroom or any shortfalls. This analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.

The Company''s objective is to maintain cash and bank''s short term credit facilities to meet its liquidity requirements for 30-day periods at a minimum. This objective was met for the reporting periods. Funding for long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities.

The Company considers expected cash flows from financial assets in assessing and managing liquidity risk, in particular its cash resources and trade receivables. Cash flows from trade receivables are all contractually due within twelve months except for retention and long term trade receivables which are governed by the relevant contract conditions.

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of short-term borrowings. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders.

g) Price risk

The Group is exposed to price risks arising from investments in Mutual funds. These investments are held to gain better returns on the surplus funds generated and not for trading purposes. The sensitivity analyses given below have been determined based on the exposure to price risks at the end of the reporting period.

If prices had been 1% higher/lower, profit/equity for the year ended 31 March 2025 would increase / decrease by '' 43.77 lakhs (31 March 2024: '' Nil) as a result of the changes in fair value of mutual funds measured at FVTPLI. There is no impact of change i_n price of mutual funds on other comprehensive income.

Reference

i. Total of current assets ii. Profit after tax iii. Profit before tax plus finance cost iv. Total of current liabilities v. Average of trade receivables vi. Working capital vii. Average of total equity viii.Net Profit after taxes Non-cash operating expenses like depreciation and other amortizations Interest other non cash adjustments ix.Total equity x. Total of Lease liabilities and Borrowing paid during the year (including interest paid) xi. Average of inventories xii. Net Credit Purchases during the year xiii. Average of trade payables xiv. Total equity, total borrowings and total lease liabilities Explanation

1. Variances are below 25%, hence no explanation is required.

2. The company had repaid the ECB loan availed from its holding company in full during the year and accordingly, the Current ratio has improved.

3. Favourable variance due to repayment of the borrowings from the holding company during the year which resulted in reduction of the total capital employed and debt outstanding as at the yearend.

4. Decrease in turnover days is on account of early payouts to certain vendors during the previous year.

5. Favourable variance on account of increase in profits during the year.

6. Favourable variance on account of repayment of the borrowing form holding company during the year as detailed in point 1 above.

7. Represents gain on investments in mutual funds in the current year.

(b) The Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

(d) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(e) There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(f) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(g) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any parties (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

39. Contingent liabilities
	Year ended	Year ended
Particulars	31 March 2025	31 March 2024
Disputed Demands on Sales tax (including Goods & Service Tax)	17	1,174
Disputed Income Tax demands	5,495	1,836
Customs duty demands	236	236
Others	76	76
	5,824	3,322

Note : (1) Sales Tax significantly represents claims against the company towards dispute on tax rates considered for certain

services rendered by the company and non-realisation of export proceeds.

(2) As at 31 March 2025, in respect of income tax matters disputed demands amounted to '' 5,495 Lakhs ('' 1,836 Lakhs as at 31 March 2024). The demands majorly represent demands arising on completion of assessment proceedings under the Income Tax Act, 1961. These claims are on account of multiple issues of disallowances such as prior period expenses, Depreciation on Lease hold Improvements, application software, goodwill, IPO expenses, disallowances of profits earned by STPI unit, and certain provisions for employee benefits. Amount paid to statutory authorities against the tax claims amounted to '' 1,836 lakhs and '' 1,836 lakhs as at March 31, 2025 and March 31, 2024, respectively. Future cash outflows in respect of contingent liabilities are determinable only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. The Company is contesting these demands and the Management, including its advisors, believe that its position will likely be upheld in the appellate process.

(3) Customs duty represents, claims towards dispute on duty rates considered for import of certain goods.

These matters are pending before various Appellate Authorities and the management including its tax advisors expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Company''s financial position and results of operations

(4) Others represents legal proceedings and claims, which have arisen in the ordinary course of business and Company''s management reasonably expects that these legal actions, when ultimately concluded and determined, will not have a material and adverse effect on the Company''s results or financial condition.

44. Events after the reporting period

a) No adjusting or significant non-adjusting events have occurred since the reporting date other than those disclosed.

b) Inspirisys Solutions DMCC (ISDMCC), a company registered under the laws of Dubai Multi Commodities Centre Authority (DMCC) is a wholly owned subsidiary of the holding company. ISDMCC has incurred continuous losses over the last several years particularly during and after Covid Pandemic. The Board in their meeting held on 28^th September 2023 decided to voluntarily windup and liquidate ISDMCC in the best interest of the company. The liquidation process got completed and the company received the dissolution order from DMCC authorities dated 05^th May 2025.

Mar 31, 2024

There is no CWIP whose completion is overdue or has exceeded its cost compared to its original plan as of 31 March 2024 and 31 March 2023.

d) Goodwill

The goodwill arose on account of purchase of a specific software business included in the services division (Cash Generating Unit - CGU). The useful life of the goodwill is estimated to be indefinite since the economic benefit to be derived from the asset cannot be restricted to definite period. As required by Ind AS, the Company has performed impairment test on a yearly basis using the value in use method. The calculations use cash flow projections based on the financial budgets approved by the management covering a five year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. These growth rates are consistent with forecasts included in industry reports specific to the industry in which the CGU operates. Following are the key assumptions used by the management to calculate the value in use. The recoverable value of the CGU is more than the carrying value as at 31 March 2024 of CGU, accordingly there is no impairment provision made during the year.

a) Trade receivables include due from related parties amounting to '' 4,628 lakhs as on 31 March 2024 (31 March 2023: '' 4,631 lakhs). The carrying amount of the current trade receivables is considered a reasonable approximation of fair value as is expected to be collected within twelve months, such that the effect of any difference between the effective interest rate applied and the estimated current market rate is not significant.

c) The Company has a trade receivable of '' 4,049 Lakhs as on 31 March 2024 ('' 4,033 Lakhs as on 31 March 2023) from one of its subsidiary companies Inspirisys Solutions North America, Inc (ISNA). The aforesaid balance reflects accumulation of receivables since 2018-19 and comprises of foreign currency receivable pending for settlement beyond the stipulated period as permitted under the Foreign Exchange Management, Act 1999 (as amended). ISNA, the wholly owned subsidiary of Inspirisys Solutions Limited (ISL), India is the marketing arm for the offshore services offered and delivered to the US customers of ISNA from ISL India. ISNA has been working with customers in North America and has been engaging them for onsite business in the US and offshore business for ISL India. The trade receivables in the books of ISL India represent services performed and billed on ISNA over the years in respect of offshore services for the clients of ISNA. The Management is working on turning around the business performance of ISNA and are hopeful of generating profits to pay ISL India against the trade receivables and to this effect has drawn up business plans for the subsidiary for the next few years. In view of the above, the Management considers not making any provision towards any expected credit loss against these Accounts Receivable from ISNA including GST liability if any, in accordance with sub rule 1 of 96A of Central Goods and Service Tax (CGST) Rules, 2017, as further described in Note 41, on such export receivables together with interest thereon as the management is hopeful of collecting the dues from ISNA. The impact of non-compliance with Clause C.20 of the Master Direction - Export of Goods and Services (Updated as on November 22, 2022) for nonrealization of export proceeds within stipulated timeline has been determined to be immaterial to the standalone financial statements.

d) The company reviews the recoverability of trade receivables and measures expected credit loss on its trade receivables as laid down under the AS 109 "Financial Instruments" and suitable provision is created. The Management is of the opinion adequate control exists and are operating effectively. The specific transactions relating to trade receivables and accrual of GST is a clear case of management estimates and judgement in terms of its recoverability. A detailed note on the recoverability of these trade receivables is provided in Management note no 7(c). With respect to the aforementioned matter, the statutory auditor of the Company has qualified their audit report on standalone financial statements and their report on internal financial controls with reference to the financial statements as provided under section 143(3)(i) of the Companies Act,2013 for the year ended 31 March 2024.

e) Further, the Company has trade receivables of '' 369 Lakhs ('' 364 Lakhs as on 31 March 2023) from its wholly owned subsidiary named Inspirisys Solutions DMCC, Dubai (ISDMCC). ISDMCC has accumulated losses as at 31 March 2024 and 31 March 2023 and negative net-worth as at 31 March 2023. ISDMCC has incurred continuous losses over the last several years particularly during and after Covid Pandemic and the Board in their meeting held on 28th September 2023 decided to voluntarily windup and liquidate ISDMCC in its best interest. Considering the financial position of the subsidiary, the Company has provided for allowance for credit losses for the entire receivables, investment and loan in the standalone financial statements of 31 March 2024 and 31 March 2023.

f) Customer credit risk is managed based on the Company''s established policy, procedures and control relating to customer credit risk

management, pursuant to which outstanding customer receivables are regularly monitored by the management to ensure that the risk of credit loss is minimal. Credit quality of a customer is assessed based on historical information in relation to pattern of collections, defaults and credit worthiness of the customer.

* excludes receivables from the related parties amounting to '' 4,628 Lakhs as at 31 March 2024 ft 4,631 Lakhs as at 31 March 2023) and its corresponding loss allowance amounting to '' 565 Lakhs as at 31 March 2024 ft 585 Lakhs as at 31 March 2023).

The expected credit loss percentages have been arrived based on the probability of default using the historic data of past 3 financial years.

*The Company has not recognised deferred tax asset as it is not probable that the taxable profit will be available for utilizing the unused tax losses and temporary differences. The Company has neither recognised deferred tax expense nor income in the statement of profit and loss and other comprehensive income for the year ended 31 March 2024 and 31 March 2023 and consequently reconciliation for the same is not disclosed. Also, the MAT credit and business loss unutilised are due for expiry within 15 years and 8 years respectively from the end of the financial year in which they are created. All other temporary differences does not have any expiry.

e) Terms / rights attached to equity shares

g) In terms of the Settlement Agreement and Release dated 15 March 2017 entered into between Inspirisys Solutions Limited (''the Company''), CAC Holdings Corporation, Japan (the current promoter) and Accel Limited, Mr N R Panicker and Accel Systems Group Inc, (the erstwhile promoter group of Accel Frontline Limited) 44,64,279 shares (representing 11% (previous year: 11%) of the shareholding of the company) held by the erstwhile promoter group was transferred by such erstwhile promoter group to a Trust between 21st July 2017 and 25th August 2017. The Company does not control this trust including the decisions relating to dealing with these shares. However, the Company is the end beneficiary only of the consideration if and when the shares are sold by the trustees.

h) 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.

a) Securities premium

Securities premium comprises of the amount of share issue price received over and above the face value of '' 10 each.

b) General reserve

General reserve represents an appropriation of profits by the Company.

c) Accumulated other comprehensive income

d) Retained earnings

Retained earnings represents the amounts of accumulated earnings of the Company.

e) Foreign currency translation reserve

a) These loans have been availed for acquiring certain business assets and are secured by hypothecation of specific assets purchased out of such loans. The loans are repaid in equated monthly instalments from date of loan and carry interest rate between 7% to 9.5% per annum (Also, refer note 4(a)).

c) The loans and advances from related parties represents loan from the holding company, CAC Holdings Corporation, to the tune of '' 4,140 lakhs as at 31 March 2024 (including interest payable) (as at 31 March 2023: '' 4,082 lakhs) with an interest rate of 4.5 % 6 months SOFR rate, per annum; the entire amount being repayable in 2023-24. (Also, refer note 36). This loan from Holding Company is denominated in USD.

e) Details of security

â¢ The Company has availed PSCFC (Post Shipment Credit in Foreign Currency) worth '' 248 Lakhs (as at 31 March 2023: '' 119 Lakhs) from Sumitomo Mitsui Banking Corporation at an interest rate of relevant period SOFR applicable credit cost 0.7% p.a. i.e., ranging from 7% to 8% for the year ended 31 March 2024 (as at 31 March 2023: 8.25%) which is secured by a Corporate Guarantee provided by CAC Holdings Corporation, Japan. The same is repayable on the respective due dates of each drawdown, which is generally less than 12 months.

â¢ The Company has a financing facility from HDFC bank limited to the tune of '' 3,000 Lakhs (Fund based '' 500 Lakhs and Non Fund Based '' 2,500 Lakhs) as at 31 March 2024. This loan is secured by First and exclusive charge on the fixed assets and current assets of the company. The Company has not utilised this facility during the year and the balance as at 31 March 2024 is '' Nil.

â¢ The Company has a financing facility from Axis Bank to the tune of '' 260 Lakhs (Non Fund Based '' 260 Lakhs) as at 31 March 2024. This loan is secured by 100% Cash Collateral and is being closed on a run down basis.

g) The outstanding short-term facilities are secured by the corporate guarantee provided by the holding company and these are not secured against the current assets by the Company.

h) The Company is generally regular in repayment of its borrowings and hence, it has not been declared as wilful defaulter by any bank or financial institutions.

i) The Company has duly registered all the creation and satisfaction of the charges with the Registrar of Companies on or before the prescribed time limit.

a) Employee benefits

i) Gratuity

The Company assesses these assumptions with the projected long-term plans of growth and prevalent industry standards.

Based on historical data, the Company expects contributions of '' 82 lakhs to be paid in 2024-25. The weighted average duration of the defined benefit obligation as at 31 March 2024 is 3 years (31 March 2023: 3 years).

Risk exposure

The defined benefit plan exposes the Company to actuarial risks such as interest rate risk, investment risk, longevity risk and inflation risk.

Interest rate risk

The company maintains plan assets in the form of fund with Life Insurance Corporation of India. The fair value of the plan assets is exposed to the market risks (in India).

Longevity risk

The Company is required to provide benefits for life for the members of the defined benefit liability. Increase in the life expectancy of the members, will increase the defined benefit liability.

Inflation risk

A significant proportion of the defined benefit liability is linked to inflation. An increase in the inflation rate will increase the Company''s liability.

b) Fair value measurement hierarchy

> 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 or

indirectly.

> Level 3: Unobservable inputs for the asset or liability.

Investment in Telesis Global Solutions Limited, India is valued at the amount invested as sufficient more recent information is not available to measure fair value. The management had impaired the investment hence there is no carrying value for this investment.

38 Financial risk management

The Company is exposed to market risk, interest rate risk, foreign currency risk, credit risk and liquidity risk.

a) Market risk

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates are managed by borrowing at fixed interest rates. During the year, the Company did not have any floating rate borrowings except for the borrowings from the Holding Company which is charged at SOFR 4.5% and PSCFC facility which is charged at relevant period SOFR Applicable credit cost 0.7% p.a.

c) Interest rate sensitivity

The following table illustrates the sensitivity of profit to a reasonably possible change in interest rates of /- 1% for the year ended 31 March 2024 and 31 March 2023. 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.

d) Foreign currency risk

The following table illustrates the sensitivity of profit and equity in regards to the Company''s financial assets and financial liabilities and the USD/'' exchange rate, AED/'' exchange rate and GBP/'' exchange rate, ''all other things being equal''. It assumes a /- 1% change of the USD/'' exchange rate for the year ended at 31 March 2024 (31 March 2023: /-1%), /- 1% change of the AED/'' exchange rate for the year ended 31 March 2024 (31 March 2023: /- 1%) and a /- 1% change is considered for the GBP/'' exchange rate for the year ended at 31 March 2024 (31 March 2023: /-1%).

If the '' had strengthened against the USD by 1% during the year ended 31 March 2024 (31 March 2023: 1%), AED by 1% during the year ended 31 March 2024 (31 March 2023: 1%) and GBP by 1% during the year ended 31 March 2024 (31 March 2023: 1%) respectively then this would have had the following impact on profit before tax and equity before tax:

If the '' had weakened against the USD by 1% during the year ended 31 March 2024 (31 March 2023: 1%) and GBP by 1% during the year ended 31 March 2024 (31 March 2023: 1%) respectively then there would an equal but opposite effect on the above currencies to the amount shown above, on the basis that all other variables remain constant.

e) Credit risk

The credit risk for cash and bank balances are considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

f) Liquidity risk

Reference

i. Total of current assets ii. Profit after tax iii. Profit before tax plus finance cost iv. Total of current liabilities v. Average of trade receivables vi. Average of working capital vii. Average of total equity viii.Net Profit after taxes Non-cash operating expenses like depreciation and other amortizations Interest other non cash adjustments ix.Total equity x.Lease liabilities and Borrowing paid during the year (including interest paid) xi. Average of inventories xii. Net Credit Purchases during the year xiii. Average of trade payables xiv. Total equity, total borrowings and total lease liabilities.

Explanation

1. Variances are below 25%, hence no explanation is required

2. The variance is on account of increase in purchases, however reduction in inventory levels as at the year end.

3. The variance is on account of increase in cash profits.

(b) The Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

(d) The Company has not availed borrowings from banks or financial institutions on the basis of security of current assets. Hence, no statements are filed by the Company with banks and financial institutions.

(e) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(f) There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(g) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(h) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any parties (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(i) The Company has not revalued its property, plant and equipment or intangible assets or both during the current or previous year.

40. Contingent liabilities
	Year ended	Year ended
Particulars	31 March 2024	31 March 2023
a) Claims not acknowledged as debt
Sales tax (including Goods & services tax)	1,174	249
Income tax	1,836	1,717
Customs duty	236	236
Others	76	77
	3,322	2,279

Note : (1) Sales Tax significantly represents claims against the company towards dispute on tax rates considered for certain

services rendered by the company and non-realisation of export proceeds.

(2) As at 31 March 2024, claims against the Company not acknowledged as debts in respect of income tax matters amounted to '' 1,836 Lakhs ('' 1,717 Lakhs as at 31 March 2023). The claims against the Company majorly represent demands arising on completion of assessment proceedings under the Income Tax Act, 1961. These claims are on account of multiple issues of disallowances such as prior period expenses, Depreciation on Lease hold Improvements, application software, goodwill, IPO expenses, disallowances of profits earned by STPI unit, and certain provisions for employee benefits. Amount paid to statutory authorities against the tax claims amounted to '' 1,836 Lakhs and '' 1,717 Lakhs as at March 31, 2024 and March 31, 2023, respectively.

(3) Customs duty represents, claims against the company towards dispute on duty rates considered for import of certain goods. These matters are pending before various Appellate Authorities and the management including its tax advisors expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Company''s financial position and results of operations.

(4) Others represents, legal proceedings and claims, which have arisen in the ordinary course of business. The Company''s management reasonably expects that these legal actions, when ultimately concluded and determined, will not have a material and adverse effect on the Company''s results of operations or financial condition.

b) Show Cause Notice from SEBI

During the year 2021-22, the Company had received a show cause notice from SEBI under sections 11(1), 11(4), 11(4A), 11 B(1) and 11 B{2) read with 15HA and 15HB of the Securities Exchange Board of India Act, 1992 (''SEBI Act''), and Rule 4(1) of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 and Sections 12A(1 ), 12A(2) read with 23E and 23H of the Securities Contracts (Regulation) Act, 1956 (''SCRA'') and Rule 4(1) of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties) Rules, 2005 in the matter of alleged mis-representation of financials / manipulation of books of accounts of lnspirisys Solutions Limited, in relation to FY 2012-13 to FY 2015-16 which was duly corrected and reported in earlier years. In this regard, SEBI has issued a Final Order dated September 20, 2023 and imposed a penalty amount of Rs.10 Lacs on the Company under Section 15HB of the SEBI Act and Section 23E of SCRA, which was paid by the Company. Further, penalties were also imposed by SEBI on certain current and ex-employees/officers of the Company on account of aforesaid matter which have been duly paid by such persons.

42. The Company is in receipt of resignation letter from one of the Independent directors , Mr Raj Khalid, due to his name appearing in the list of disqualified directors released by the Registrar of companies, Mumbai on 7 September 2017 and 3 February 2020, for reasons as more particularly provided therein. The Board of Directors has taken record of his resignation with effect from 30 April 2023 basis the resignation letter submitted and has taken required steps in reconstituting its committees where such director was a member. The management is of the view that the stated events do not have a material impact on these financial statements or functioning of the company.

45. Audit trail

The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

The Company is using CSMS a sub system for contract management. Data from CSMS sub-system is entered into Oracle ERP system by way of a manual entry. Whilst the company has enabled the audit trail feature for Oracle ERP system, the feature was not available in the CSMS sub-system at both application and database level for the year ended 31 March 2024. Subsequently, audit trail feature is added and enabled from 08 May 2024.

The Company is using iCSMS a sub system for maintenance of inventory and call management records. The inventory valuation data is entered into Oracle ERP system by way of a manual entry. Whilst the company has enabled the audit trail feature for Oracle ERP system, the feature was not enabled in the iCSMS sub-system at both application and database level for inventory valuation, Goods Inward Receipt Note (GIRN) and Stores transactions for the year ended 31 March 2024. Subsequently, audit trail feature is enabled from 08 May 2024.

46. Events after the reporting period

No adjusting or significant non-adjusting events have occurred since the reporting date other than those disclosed.

Mar 31, 2018

1. During the year, the management has completed the process of valuation of its inventories to be in line with the requirements of Ind AS 2 - Valuation of Inventories. The exercise has been carried out by adopting purchase price data available with the company to arrive at the Weighted Average Price as also valuing the refurbished stocks adopting certain prudent estimates. The value of such inventory computed on weighted average basis is with respect to maintenance division of the Company. Further, based on data with respect to the

pattern of usage of inventories available with the company, the management has developed various estimates to determine the net realizable value of these inventories. The revised weighted average prices, estimates and assumptions were developed in the current year and that similar relevant data is not available for making reliable estimates for the earlier years for comparison purposes. The management believes that it is impracticable to recreate the information required to facilitate a retrospective restatement. Accordingly, the impact relating to this exercise, as at 31 March 2018, amounting to '' 1,566 is disclosed as exceptional items.

2. The Company has invested '' 790 in a subsidiary named Accel IT Resources Limited (AITRL). Further, the Company has advanced loan (including interest) amounting to '' 622. The net worth of AITRL is negative as at 31st March 2018. The management of the subsidiary has been revamped to restructure operations to optimize revenue generation by investing in technology and adding customer base. A new business plan has been put in place and the subsidiary has got the training centres accredited to National Skill Development Corporation (NSDC). The management of the subsidiary and the company is of the view that these business plans will help the company grow business and improve the financial position of the subsidiary thereby enabling the recovery of these investments and loans given along with interest. Consequently the Company Management is of the view that the investment and the loan will be recovered, hence no provision needs to be made for the same.

3.Related Parties

a) Names of related parties and nature of relationship Name of related party Nature of relationship

CAC Holdings Corporation, Tokyo, Japan Holding company

Accel Limited, Chennai Promoter company (till 21 August 2017)

CAC Corporation, Tokyo, Japan Fellow subsidiary

Accel Systems & Technologies Pte Limited Subsidiary (till 10 July 2017)

Accel Frontline DMCC, Dubai Subsidiary

Accel Japan Kabushiki Kaisha, Japan Subsidiary

Network Programs (Japan), Inc., USA Subsidiary (till 31 March 2018)

Network Programs (USA) Inc., USA Subsidiary

Accel North America Inc., USA Subsidiary

Accel IT Resources Limited, India Subsidiary

Accel Technologies Ltd, UK Subsidiary

Accel Transmatic Limited, Chennai Subsidiary of promoter company (till 21 August 2017)

Malcolm F. Mehta, Chairman and Chief Executive Officer Key Management Personnel (KMP)

R Neelakantan, Chief Financial Officer Key Management Personnel (KMP) (till 29 November 2017)

Murali Gopalakrishnan, Chief Financial Officer Key Management Personnel (KMP) (from 7 December 2017)

S Sundaramurthy, Company Secretary Key Management Personnel (KMP)

R RamarajIndependent director (till 10 October 2017)

Raj Khalid Independent director

Bin Cheng Independent director

Rajesh Ramniklal Muni Independent director (from 6 May 2017)

Ruchi Naithani Independent director

4. Fair value measurement

Fair value measurement hierarchy

- 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 or indirectly.

- Level 3: Unobservable inputs for the asset or liability.

The following table shows the Levels within the hierarchy of financial and non-financial assets and liabilities measured at fair value on a recurring basis at 31 March 2018, 31 March 2017 and 01 April 2016 :

The fair values of the Company''s interest-bearing borrowings and loans are determined under amortized cost method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. These rates are considered to reflect the market rate of interest and hence the carrying value are considered to be at fair value.

5. Financial risk management

The Company is exposed to market risk, interest rate risk, foreign currency risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management assesses the financial risks and the appropriate financial risk governance framework in accordance with the Company''s policies and risk objectives. The Board of Directors review and agree on policies for managing each of these risks, which are summarized below.

a) Market risk

The company is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain other price risks, which results from both its operation and investing activities.

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates are managed by borrowing at fixed interest rates. During the year Company did not have any floating rate borrowings expect for the borrowings from the Holding Company which is charged at LIBOR 4%.

c) Interest rate sensitivity

The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of /- 1% for the year ended 31 March 2018 (31 March 2017: /- 1%, 1 April 2016: /- 1%). 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.

Currency risk (or foreign exchange risk) arises on financial instruments that are denominated in a foreign currency, i.e. in a currency other than the functional currency in which they are measured. For the purpose of this disclosure, currency risk does not arise from financial instruments that are non-monetary items or from financial instruments denominated in the functional currency. The following table illustrates the sensitivity of profit and equity in regards to the Company''s financial assets and financial liabilities and the USD/INR exchange rate, AED/INR exchange rate and GBP/INR exchange rate , ''all other things being equal''. It assumes a /- 1% change of the USD/INR exchange rate for the year ended at 31 March 2018 (31 March 2017: 1%), /- 1% change of the AED/INR exchange rate for the year ended 31 March 2018 (31 March 2017: 1%) and a /- 1% change is considered for the GBP/ INR exchange rate for the year ended at 31 March 2018 (31 March 2017: 1%).

If the INR had strengthened against the USD by 1% during the year ended 31 March 2018 (31 March 2017: 1%), AED by 1% during the year edned 31 March 2018 (31 March 2017: 1%) and GBP by 1% during the year ended 31 March 2018 (31 March 2017: 1%) respectively then this would have had the following impact profit before tax and equity before tax:

If the INR had weakened against the USD by 1% during the year ended 31 March 2018 (31 March 2017: 1%) and EUR by 1% during the year ended 31 March 2018 (31 March 2017: 1%) respectively then there would an equal but opposite effect on the above currencies to the amount shown above, on the basis that all other variables remain constant.

e) Credit risk

In respect of trade receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various geographical areas. Based on historical information about customer default rates management consider the credit quality of trade receivables that are not past due or impaired to be good.

The credit risk for cash and cash equivalents and fixed deposits are considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

Other financial assets mainly comprises of rental deposits and security deposits which are given to landlords or other governmental agencies in relation to contracts executed and are assessed by the Company for credit risk on a continuous basis.

f) Liquidity risk

Liquidity risk is that the Company might be unable to meet its obligations. The Company manages its liquidity needs by monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash inflows and outflows due in day-to-day business. The data used for analyzing these cash flows is consistent with that used in the contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on a monthly, quarterly, and yearly basis depending on the business needs. Net cash requirements are compared to available borrowing facilities in order to determine headroom or any shortfalls. This analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.

39. First-time adoption of Ind AS

These are the Company''s first financial statements prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with Companies (Accounting Standard) Rules, 2006, notified under section 133 of the Act and other relevant provisions of the Act (Previous GAAP). Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on or after 31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017. This note explains the principal adjustments made by the Company in restating its statement of financial position as at 01 April 2016 and its previously published financial statements as at and for the year ended 31 March 2017 under previous GAAP

a) First time adoption exemptions applied

Upon transition, Ind AS 101 permits certain exemptions from full retrospective application of Ind AS. The Company has applied the mandatory exceptions and certain optional exemptions, as set out below:

Mandatory exceptions adopted by the Company

(i) De-recognition of financial assets and liabilities

The de-recognition criteria of Ind AS 109 Financial Instruments has been applied prospectively for transactions occurring on or after the date of transition to Ind AS. Non-derivative financial assets and non-derivative financial liabilities derecognized before date of transition under previous GAAP are not recognized on the opening Ind AS balance sheet.

(ii) Estimates

Hindsight is not used to create or revise estimates. The estimates made by the Company under previous GAAP were not revised for the application of Ind AS except where necessary to reflect any differences in accounting policies or errors.

(iii) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess the classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS. The Company has elected to apply this exemption to its financial assets.

Optional exemptions availed by the Company

(i) Property, Plant and Equipment

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. The Company has elected to use carrying value under previous GAAP as the deemed cost on the date of transition to Ind AS for all property, plant and equipment (including intangible assets). The Company has elected to regard those values of property as deemed cost at the date of the transition since they were broadly comparable to fair value.

(ii) Business combination

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.

The company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

(iii) Investment in subsidiaries

Investment in subsidiaries are measured at the carrying value under previous GAAP on the date of transition to Ind AS. These carrying value under previous GAAP are considered to be the deemed cost as at the date of transition.

a) Defined benefit obligation

Both under previous GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the entire cost, including actuarial gains and losses, are charged to statement of profit and loss. Under Ind-AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognized immediately in the balance sheet with a corresponding debit or credit to other equity through other comprehensive income.

b) Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ''other comprehensive income'' includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP

c) Excise Duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expense. This change has resulted in an increase of total revenue and total expense for the year ended 31 March 2017 by Rs, 43. There is no impact on the total equity and profit.

d) Financial assets

Under Ind AS, financial assets other than receivables having a fixed maturity period are to be measured at fair value less transaction costs under Ind AS 109. The Net present value of cash flows which are receivable as a contractual right is considered to be the "fair value" of the financial instrument. The rate used for discounting the rental deposits is the risk free government bond rate as on reporting date. The difference between the restated value and the carrying amount has been adjusted to the opening reserves. As per Ind AS 113, paragraphs B13-30 specify discount rate adjustment techniques which have been used for fair valuing the deposits having fixed maturity period. Under the previous GAAP, these financial assets were valued as the sum of cash flows receivable during their period of life.

e) Financial liabilities

Franchisee deposits are discounted using the risk free government bond rates and the difference between the restated value and the carrying value is adjusted to the opening reserves. As per Ind AS 113, paragraphs B13-30 specify discount rate adjustment techniques which have been used for fair valuing the franchisee deposits having fixed maturity period. Under the previous GAAP, these financial liabilities were valued as the sum of cash flows payable during their period of life.

40 Fair value

42 Segment reporting

The Company publishes standalone financial statements along with the consolidated financial statements in the annual report. In accordance with Ind AS 108, Operating segments, the Company has disclosed the segment information in the consolidated financial statements.

6. Commitments

The Company did not have any capital commitments as at the balance sheet data (Previous year: Nil). Other commitments are cancellable at the option of the company and hence not disclosed.

7. In terms of the Settlement Agreement and Release dated March 15, 2017 entered into between Accel Frontline Limited (''the Company''), CAC Holdings Corporation, Japan (the current promoter) and Accel Limited, Mr N R Panicker and Accel Systems Group Inc, (the erstwhile promoter group of Accel Frontline Limited) 44,64,279 shares (representing 15% of the shareholding of the company) held by the erstwhile promoter group was transferred by such erstwhile promoter group to a Trust between 21st July 2017 and 25th August 2017. The Company does not control this trust including the decisions relating to dealing with these shares. However, the Company is the end beneficiary only of the consideration if and when the shares are sold by the trustees.

Mar 31, 2016

d) Terms/ rights attached to equity shares

The Company has one class of equity shares having a par value of '' 10 per share. Each shareholder is eligible for one vote per share held. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts in proportion to their share holding.

e) The Company has achieved the Minimum Public Shareholding (MPS) requirements as stipulated by the listing agreement during the year. The Company was required to comply with the MPS requirement by 31 March 2015 as per the directions issued by Securities and Exchange Board of India (SEBI), whereas the same has been complied with on 12 August 2015 for which the Company wrote to SEBI and obtained an order dated 18 March 2016 revoking all earlier directions

a) The loans have been availed for acquiring certain business assets and are secured by hypothecation of specific assets purchased out of such loans. The loans are repaid in equated monthly installments over 60 months from date of loan and carry interest rate between 10% to 15% per annum . Also, refer note 12(v) .

The details of lease commitments in terms of minimum lease payments are as follows:

b. Represents loan availed from Life Insurance Corporation of India, repayable at the time of maturity of the policy or adjustment with maturity value of the policy and is secured against the keyman insurance policy placed with them, which is fully paid up.

c. The loans and advances from related parties represents loan from the holding company, CAC Holding Corporations, to the tune of Rs. 3,902 (As at 31 March 2015: 3,649) with an interest rate of 4.5 % 6 months LIBOR rate, per annum; the entire amount being repayable in 2021-22 and from Accel Limited to the tune of Rs. 1,366 (As at 31 March 2015: Rs. 1,366) with an interest rate of 11% per annum, the entire amount being repayable in 2019-20. Also, refer note 37(c).

a) Employee benefits

i) Gratuity

A provision is recognized for expected warranty claims on supply of goods, based on past experience of level of repairs and returns. The current and non-current classification of the provision is made based on the remaining warranty period of the goods supplied as at the balance sheet date. The assumptions used to calculate the provision for warranties are based on the Company''s current status of goods supplied that are under warranty and information available about expenditure more probable to be incurred based on the Company''s warranty terms which provides for a warranty period of about 36 months.

(b) Details of security

The Company has availed a working capital demand loan worth Rs. 4,500 (as at 31 March 2015: Rs. 4,500) valid till 31 March 2017 from Sumitomo Mitsui Banking Corporation at an interest rate of 10.90% which is secured by a Corporate Guarantee provided by CAC Holdings Corporation, Japan.

The Company has also availed cash credit facility from Sumitomo Mitsui Banking Corporation at an interest rate of 12.6% which is secured by a Corporate Guarantee provided by CAC Holdings corporation, Japan Cash credits guaranteed by promoter director and promoter company represents:

(i) borrowings availed from SBI bank at an interest rate of 14.35% which is secured by first charge on pari passu basis on all the current assets and moveable assets of the Company, including book debts and inventories and first and exclusive charge on certain properties owned by promoter company.

(ii) borrowings availed from IDBI bank at an interest rate of 14% which is secured by pari passu charge on all the current assets and moveable assets of the Company, including book debts and inventories.

Working capital loans guaranteed by promoter director and promoter company represents loan from IDBI at an interest rate of 14% which is secured by first charge on pari passu basis on all the current assets and moveable assets of the Company, including book debts and inventories and first and exclusive charge on certain properties owned by the promoter company. The Company has also availed cash credits from Axis bank at an interest rate of 13.40% which is secured by pari passu charge on all the current assets and moveable assets of the Company, including book debts and inventories.

The Company has availed letter of credits from banks which are secured by the hypothecation of goods purchased under the letter of credit.

* There are no micro and small enterprises, as defined under the provisions of Micro, Small and Medium Enterprises Development Act 2006, to whom the Company owes dues as at the reporting date. The micro and small enterprises have been identified by the management on the basis of information available with the Company and have been relied upon by the auditors.

(i) Capital work in progress amounting to Nil ( As at 31 March 2015: Rs. 25 ) as appearing in the balance sheet represents capital assets which are pending completion/installation.

(ii) As at 31 March 2016, the Company has incurred expenditure to the tune of Nil ( As at 31 March 2015: Rs. 74) for software development which was not operational as at the balance sheet date. This expenditure has been disclosed as "Intangible assets under development".

(iii) Hitherto, depreciation on all tangible assets was provided on a straight-line method over the estimated useful life using the rates prescribed under Schedule XIV of the erstwhile Companies Act, 1956. Effective 1 April 2014, in accordance with Schedule II of the Companies Act, 2013, the Company has re-assessed the useful life and adopted the rates prescribed except for certain computers for which the Company has carried out certain technical evaluation to assess the useful life based on which the useful life has been determined to be higher than the life prescribed by Schedule II. Had the Company continued to use the earlier estimate for depreciation of all tangible assets the loss for the year ended 31 March 2015 would have been lower by '' 145 and further an amount of '' 117 (net of deferred taxes) has been charged to the opening balance of the reserves and surplus in respect of the assets whose remaining life is Nil as at 1 April 2014 in accordance with Schedule II to the Act.

(iv) As at 31 March 2016, the Company has assessed the indications of impairment and identified that certain computer and application software needs to be impaired on account of no future economic outflow from such softwares. Since, no cash flows could be estimated the Company has impaired the carrying value of such assets amounting to Rs. 110. (Also refer note 29 (b)).

(v) Adjustments refers to reclassification of certain assets among the different classes based on their nature.

a) During the year 2014-15, the Company has recognized revenue of Rs. 397 with a corresponding cost in changes in inventories of stock-in-trade of Rs. 368 for shipments made during the year whereas the shipment was received and acknowledged by the customer after 31 March 2015. The management believes that the risk relating to the shipments has been transferred before 31 March 2015 and hence believes that this accounting treatment reflects a true and fair view.

c) During the financial year 2015-16, effective 5 May 2015, the operational control of the IT Technology Services (''ITS'') and Software Services Division (''SSD'') were handed over to the present Executive Director of the Company by the erstwhile Executive Chairman of the Company who was operationally managing such divisions till the hand over. Effective 18 September, 2015, the entire operational control and management of the remaining divisions of the company, viz., Warranty Management Services (''WMS'') and all its subsidiaries, were handed over to the present Executive Director of the Company by the erstwhile Executive Chairman of the Company who was operationally managing such division/ subsidiaries till the hand over.

The erstwhile Executive Chairman''s term as a director of the Company ended on 31 March 2016 and he has ceased to be a director of the Company with effect from such date.

In August 2015, certain concerns had been raised by the Audit Committee to the Board on the quality of trade receivables. The internal auditors were instructed by the Audit Committee to carry out line item-wise check on the trade receivables. The need for a general provisioning policy was also recommended by the statutory auditors. The interim report of the internal auditors was tabled in the November 2015 Board Meeting. Based on this report the new management provided for certain bad and doubtful debts. The report had findings that needed further confirmation which was looked into by the newly appointed Chief financial officer. The Chief financial officer provided an internal note to the Audit Committee which called for a Board Meeting in early December 2015. Consequently, in December 2015, the Company engaged an independent consultant, from one of the "big four" accounting firms to investigate the quality of outstanding receivables of the Company for the 3 year period - 2012-13, 2013-14 and 2014-15, which was subsequently extended to 31 December 2015. The consultant report also covered certain specific financial transactions, identified during their work procedures including recording of sales invoices/ fixed assets without adequate supporting documents, improper adjustments and unrecorded purchases.

The impact of all the above and those identified thus far based on the procedures the management has performed subsequently has been provided for or written off and disclosed as prior period items (which pertain to transactions prior to 31st March, 2015) and exceptional items, which in the opinion of the management, are adequate as on date.

Post receipt of the independent consultant report on 14 March 2016, the Company has further undertaken the following processes:

- A subcommittee was constituted by the board of directors on 20 March 2016 to look into the findings of independent consultant and recommend on further steps/ actions to be taken to the board.

- Recommended process controls to strengthen the existing systems including improvements to the accounting software and procedures.

- A process of confirmations/ reconciliations with customers was initiated.

- Physical verification of all tangible and intangible assets.

- Physical verification of all its inventories.

There has been override of financial controls resulting in financial mis-management prior to operations being handed over to the present management, and the present management is in the process of completing the impact assessment and determining conclusively the reasons as to why such losses have been caused.

1 The Company has based on the independent consultant report provided/written off customer balances amounting to Rs. 3,301 (Also, refer note 29(a)). In addition, the company has also initiated a process of confirmation / reconciliation with customers, which is in progress. Based on the additional procedures performed and pending completion of the confirmation/ reconciliation process, the management has on a conservative basis, provided/written off Rs.1,948 in addition to the findings in the independent consultant report. In the opinion of the management the above provisions/ write-offs are adequate as on date.

2 Refer note 29 (a) and (b) above, the management has based on the independent consultant report, coupled with additional procedures performed by the company, written off fixed assets amounting to Rs.1,162 (Original cost of the asset Rs.1,362), wherever it was noticed that the assets were non-existent. In addition, the Company has commenced the process of physical verification of its fixed assets and reconciliation of the same with books of accounts. As at date, the Company has completed the process for certain block of assets. Pending completion of the said process, in the opinion of the management, the write offs are adequate as on date.

3 Refer note 29 above, the Company has during the year performed a 100% physical verification of its inventories and material discrepancies identified were provided as on date. Further, the Company has initiated a process of evaluating and strengthening the existing process

4 During the previous year, the Company has migrated to a new software, which facilitated recording of inventory transactions pertaining to maintenance divisions - Stores and spares. This software, due to certain inherent limitations, was not capable of computing the weighted average cost of consumption on transaction basis for the inventory used for rendering the services by maintenance division. During the current year, the issue was addressed for transactions recorded in the current financial year and the company is in the processing of replicating the same for opening inventory. Accordingly, valuation of the closing stock with respect to the opening stock of this division has not being performed in accordance with the requirements of Accounting Standard (AS) 2 - Valuation of inventories. Further, the Company has not being able to ascertain the net realizable value of the inventory pertaining to maintenance divisions.

5 For the year ended 31 March 2016, the Company had a net loss of Rs.13,759, negative cash flows of Rs.430, negative net worth of Rs.2,356 and current liabilities exceed current assets by Rs.6,458. These financial indicators cast a significant doubt upon the company''s ability to continue as a going concern. The Company has availed adequate facilities with various banks and strengthened the management team, which should enable the company to meet its obligations and operate over the next 12 months and accordingly the financials have been prepared on a going concern basis. Subsequent to year end, during the quarter ended 30 June 2016, the Company has also made a cash profit of Rs.423.

6 Segment reporting

"Considering the risk/return profiles of the segments between product and geography, the Company has identified business as primary segment in accordance with Accounting Standard (AS) 17 Segment Reporting"". The Company does not have any secondary segment.

The Company''s principal lines of business is IT services which includes, providing system integration (SI) solutions comprising network design, hardware and software, IT Infrastructure management solutions (IMS), software development and support (SS) and warranty management solutions (WMS) for imported and indigenous equipments, development, implementation and

7 Commitments

The Company did not have any capital commitments as at the balance sheet date. Other commitments are cancellable at the option of the company and hence not disclosed.

Mar 31, 2015

1. General Information:

(a) Background:

Accel Frontline Limited ("Accel" or the Company) was incorporated on 8th June, 1995. The Company's principal lines of business in IT services which includes, providing system integration solutions comprising network design, hardware and software, IT infrastructure management solutions, warranty management solutions for imported and indigenous equipment, development, implementation and maintenance of software applications.

(b) Comparatives:

All amounts in the standalone financial statements are presented in Rs.. in lakhs except per share data and as otherwise stated. Figures for the previous year have been regrouped / rearranged wherever considered necessary to conform to the figures presented in the current year. The previous year figures have been audited by a firm other than Walker Chandiok & Co LLP.

2 Transfer pricing

As per the Transfer pricing norms introduced in India with effect from 1st April, 2001, the Company is required to use certain specific methods in computing arm's length price of international transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions/class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The Transfer pricing study for the fiscal year ended 31st March, 2015 is in progress and accordingly, the contracts may be amended subsequently and related adjustment, if any, will be quantified upon completion of this study. However, in the opinion of the Management, the outcome of the study will not have material impact on the Company's results.

3 Segment reporting

Considering the risk/return profiles of the segments between product and geography, the Company has identified business as primary segment in accordance with Accounting Standard (AS) 17 Segment Reporting. The Company does not have any secondary segment.

The Company's principal lines of business is IT services which includes, providing system integration (SI) solutions comprising network design, hardware and software, IT Infrastructure management solutions (IMS), software development and support (SS) and warranty management solutions (WMS) for imported and indigenous equipments, development, implementation and maintenance of software applications.

4 Overseas Branch Operation

During the year, the branch at Singapore in the name of "Accel Frontline Limited - Singapore Branch" continued its operation. The revenue and expenses of the said Branch have been included in the financials of the company against each line item, translated into Indian rupees, as applicable. The summary of the financials of the Branch is as follows:

5 Disclosures in respect of non-cancellable operating leases

The lease rentals charged for the years ended 31st March, 2015 and 2014 and maximum obligations on long-term, non-cancellable operating leases payable as per the rentals stated in the respective agreements are as follows: The total of future minimum lease payments for each of the following periods:

6 Prior period item includes Rs.1,433, representing revenues pertaining to certain back to back annual maintenance contracts recognised in the previous year based on the billing instead of straight lining the revenue over the period of the contract. The Company has revised the process of revenue recognition retrospectively during the year ended 31st March, 2015. Further, it includes Rs.72 relating to employee benefit expenses.

7 Commitments

The Company did not have any capital commitments as at the balance sheet date. Other commitments are cancellable at the option of the company and hence not disclosed.

Mar 31, 2014

1.01 Background

Accel Frontline Limited ("Accel" or the Company) was incorporated in Chennai in 1995. The Company''s principal lines of business in IT services includes, providing system integration solutions comprising network design, hardware and software, IT Infrastructure management solutions, warranty management solutions for imported and indigenous equipments, development, implementation and maintenance of software applications. The company has the following subsidiaries.

1.02 Contingent liabilities

2014 2013

Sales tax 8,740,588 6,071,815

Service tax 584,433 4,428,905

Income tax 103,707,400 123,884,050

Central Excise 2,431,495 -

Bank Guarantees outstanding 257,960,823 297,344,600

Provident Fund Authorities 18,417,730 -

Claims against the company 22,233,262 21,952,808 not acknowledged as debt

Note : The contingent liability with respect to Income tax as mentioned above has been shown based on the various assessment orders received by the company. However, part of the disallowances as mentioned in the said orders has already been allowed in the subsequent assessment years. The adjustments (if any) will be made in the financials after our appeals before appropriate authorities are disposed off.

During the year 2010-2011, Accel IT Resources Limited hived off its outsourcing division for a total consideration of Rs.500 lacs based on independent valuation from a Chartered Accountant pursuant to the approval of the shareholders in their meeting held on 04th February, 2011 w.e.f closing business hours of 31st March, 2011. The amount of such consideration has been included under "Income from Sale of Business" in the year 31st March, 2011. The transaction included transfer of all contracts, consents, commercial rights, know how, employees outsourced to different organizations, all rights, powers, liabilities relating to or connected with business of providing/ outsourcing IT manpower etc. There was no transfer of tangible assets of the company.

As per clause no.10.7. of the agreement for the sale of the outsourcing division of the company, dated 15th March, 2011, in the unlikely event of the business getting reduced by the Group companies, the company agrees to indemnify the purchaser an amount equivalent to the short fall in the yearly minimum service charges of Rs.1.25 crores as mentioned in clause no.10.5 of the said agreement. The shortfall amount would be paid back to the purchaser at the end of each subsequent financial year. If the short fall is not made good in the next financial year the company has the right to adjust any such refunds on any time before 31st March, 2016.

Mar 31, 2013

1.01 Background

Accel Frontline Limited ("Accel" or the Company) was incorporated in Chennai in 1995. The Company''s principal lines of business in IT services includes, providing system integration solutions comprising network design, hardware and software, IT Infrastructure management solutions, warranty management solutions for imported and indigenous equipments, development, implementation and maintenance of software applications.

2.1.1.- Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of Rs.10 per share. Each share holder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts in proportion to their share holding.

2.2.A.1 Dividend added back to reserves in the previous year include Rs.114.94 lakhs representing dividend received by Accel Frontline Services Limited from the company which got cancelled as per the merger scheme and Rs.29.16 lakhs representing write back of dividend proposed in Accel Frontline Services Limited for the year 2010-11, but, not approved later in the AGM.

2.2.A.2 To give efect to the merger scheme in the previous year, 5,747,127 shares of the company held by Accel Frontline Services Limited was cancelled. The value of these shares was Rs.2,500 lakhs, out of this, Rs.574.71 lakhs was deducted from the Issued, Subscribed & Paid up capital and the balance of Rs.1,925.29 lakhs was deducted from Proft and Loss account

2.3.1 The term loan is secured by a pari passu charge by way of hypothecation of current assets and the moveable assets of the company. The loan carries an interest rate of 14% per annum.The loan is repayable over a period of three years in ten quaterly instalments (including current maturities) in the below mentioned repayment pattern

2.3.2 Term loan from fnancial institutions include the following:

a. Rs.497.08 lakhs which is secured against the immoveable property belonging to the managing director and is repayable over a period of 5 years, out of which, Rs.78.43 lakhs is repayable within one year

b. Rs.100 lakhs which is secured against certain shares held by the holding company M/s.Accel Limited and is repayable after 2 years

2.3.3 The loans have been availed for acquiring certain fxed assets and are secured by hypothecation of specifc assets purchased out of such loans. The loans are repaid in accordance to the repayment schedule agreed with the lender.

2.3.4 This loan is availed from Life Insurance Corporation of India and is secured against the keyman insurance policy placed with them

3.1 Investments in subsidiaries

As at March 31, 2013, the Company had an aggregate investment of Rs 215,107,541 in its subsidiaries. During the current year, the company increased its investment in Accel Systems & Technologies Pte Ltd. by Rs.69,430,441 (S$1,60,000) and the percentage of shares held by the company as at 31.3.13 is 57.39%. The Company also invested Rs 863,513 (Â£10,000) in Accel Technologies Limited, a newly incorporated 100% subsidiary company in United Kingdom.

3.2 Sundry debtors/sundry creditors/loans & advances

a) The balances stated at their values shown under sundry debtors, sundry creditors and loans & advances are subject to confrmation

b) During the year, a provision for doubtful debts was created for Rs.4,109,530 /- (previous year Rs. 2,501,075/- ). A sum of Rs.13,050,409/- (previous year Rs. 17,288,686/-) was written of as bad debts as the management felt that these are doubtful of recovery / irrecoverable.

3.3 Contingent liabilities (In Indian Rupees)

2013 2012

Sales tax 6,071,815 6,113,923

Service tax 4,428,905 8,955,820

Income tax 123,884,050 95,160,050

Letters of credit outstanding 20,325,636

Bank Guarantees outstanding 297,344,600 314,934,395

Claims against the company 21,952,808 21,915,411 not acknowledged as debt

Note : The contingent liability with respect to Income tax as mentioned above has been shown based on the various assessment orders received by the company. However, part of the disallowances as mentioned in the said orders has already been allowed in the subsequent assessment years. The adjustments (if any) will be made in the fnancials after our appeals before appropriate authorities are disposed of.

3.4 Segment reporting

During the year under review, the company''s operations predominantly relate to IT related services and accordingly, this is the only primary reportable segment. The geographical segment is not relevant since export sales are less than 10% of the total sales.

3.5 Comparative fnancial information

The previous year''s balances have been regrouped/reclassifed wherever necessary to conform to the current year''s presentation in accordance with the Revised Schedule VI of the Companies Act 1956.

Mar 31, 2011

1.01 Background

Accel Frontline Limited ("Accel" or the Company) was incor- porated in Chennai in 1995. The Company's principal lines of business, in IT services includes, providing system integration solutions comprising network design, hardware software and website development and the sale and implementation of customized software products and IT Infrastructure manage- ment solutions,

1.02 Cash and bank balances

Cash and bank balances includes Rs.50,648,666 (Previous year Rs 49,403,191), held as Margin money for various guarantees and letters of credit issued by the company's bankers.

A balance with schedule banks in current accounts includes an amount of Rs.478,948 (previous year: Rs. 343,612) representing the balances in unclaimed dividend accounts as at March 31, 2011.

Note : Item under parenthesis represent previous year figures.

Balance in current accounts as on March 31, 2011 include an amount of Rs. 512,561 (USD 11,318 ) (PY: 63,521 (USD 1,411.46)) lying in the Exchange Earners Foreign Currency (EEFC) account maintained with State Bank of India in US Dollar account.

1.03 Secured loans

Working capital facilities from banks are secured by a pari passu charge by way of hypothecation of current assets and the moveable properties of the company. Hypothecation loans are secured by hypothecation of the respective assets acquired.

Secured loans include Rs. 904,565,253 (previous year - Rs. 40,106,917) due within one year.

1.04 Disclosures in accordance with Accounting Standard (AS) Ã15 on "Employee Benefits"

(a) Defined contribution plans

The Company has incurred the following amounts and charged to the Profit and Loss Account during the year

AS - 15 (Revised 2005) on "Employee Benefits" has been adopted by the Company and the disclosures as required by the said accounting standard are given hereunder:

The transition liability created out of the general reserve for compensated absence valuing Rs. 211.92 lakhs in the financial year 2007- 08 in accordance with revised AS - 15 is getting adjusted in the subsequent financial years based on the actuarial valuation report of that year through the profit and loss account.

1.05 Segment reporting

The company's operations predominantly relate to IT related services and accordingly this is the only primary reportable segment. The geographical segment is not relevant since export sales are less than 10% of the total sales.

1.06 Related party transactions

Related parties where control exists:

Name of the Party Nature of relationship

BT Frontline Pte Limited, Singapore. Controlling Company

Accel Limited, Chennai. Controlling company

ACL Systems & Technologies PTE Limited, Singapore Subsidiary Company

Accel Frontline FZE, Dubai Subsidiary Company

Network Programs USA Inc.,USA Subsidiary Company

Network Programs (Japan) Inc., USA Subsidiary Company

Network Programs Japan KK Japan Subsidiary Company

Other related parties with whom transactions have taken place during the year:

Name of the Party Nature of relationship

Accel Systems Group, Inc. USA Companies under common control

Accel Transmatic Limited, Chennai. Companies under common control

Accel Frontline Services Limited Companies under common control

Accel IT Resources Limited, Chennai Companies under common control

Key Management Personnel

Mr. N.R. Panicker Managing Director

Mr. K.R Chandrasekaran Whole time Director

Relative of Key Management Personnel

Mrs. Sreekumari Panicker Wife of the Managing Director

Mrs. Shanthi Chandrasekaran Wife of Mr. K.R Chandrasekaran

1.07 Operating leases:

The company has deposited an amount of Rs.32,338,119 (Previous year: Rs. 29,540,200/-) as interest free security deposits towards the above leases and the same has been included in the Loans and advances.

1.08 Micro small and medium Enterprise development Act 2006.

As per the stipulations and conditions referred to in the above Act, the Company is not required to register under the above Act. Further, the Company has circulated letters to its suppliers seeking information about their status as mentioned in the Act. Since the information from the suppliers has not been received, the provisioning of the interest and disclosure requirements under Schedule VI to the Companies Act, 1956 could not be complied with.

1.09 Quantitative information as per companies Act 1956

The company has not disclosed the information as required under para 3(i)(a) and 3(ii)(b) of Part II of Schedule VI pursuant to the notification released by Ministry of Corporate Affairs given vide SO 301(E) dated February 8, 2011.

1.10 Comparative financial information

The previous year's balances have been regrouped/reclassified wherever necessary to conform to the current year's presentation.

Mar 31, 2010

1.01 Background

Accel Frontline Limited ("Accel" or the Company) was incorporated in Chennai in 1995. The Companys principal lines of business, in IT services includes, providing system integration solutions comprising network design, hardware software and website development and the sale and implementation of customized software products and IT Infrastructure management solutions,

1.02 Cash and bank balances

Cash and bank balances includes Rs.49,403,191 /- (previous year Rs 63,004,677/-), held as margin money for various guarantees and letters of credit issued by the companys bankers.

A balance with schedule banks in current accounts includes an amount of Rs. 343,612/- (previous year: Rs. 345,288/-) representing the balances in unclaimed dividend accounts as at March 31, 2010.

Balances in current account as on March 31, 2010, include an amount of Rs. 115,588,121/- (US$2,568,397) PY: Rs. 22,663,923/- (US$ 434,389) lying in DBS Bank, Singapore and an amount of Rs.1,670,391/-(Sing $ 51,932) PY: Rs. 774,382/-((Sing $ 22,563) lying in DBS Bank, Singapore in the name of Accel Frontline Limited, Singapore branch.

Balance in current accounts as on March 31, 2010 include an amount of Rs.63,521 (USD 1,411) (PY: Rs.4,211,276/- (USD 80,715) lying in the Exchange Earners Foreign Currency (EEFC) account maintained with State Bank of India in US Dollar account.

1.03 Secured loans

Working capital facilities from banks are secured by a pari passu charge by way of hypothecation of current assets and the moveable properties of the company. Hypothecation loans are secured by hypothecation of the respective assets acquired.

Secured loans include Rs.440,106,917 (previous year Ã Rs 337, 605,378/-) due within one year.

1.04 Payment to the Managing Director & whole time Director

The managerial remuneration mentioned above does not include an amount of Rs.520,135 paid to the Managing Director as salary as per the existing agreement approved by the shareholders, but not payable due to inadequacy of profts during the fnancial year 2009-10. The company will be fling an application with the Central Government for approval of this payment after the shareholders approval in the ensuing annual general meeting of the company.

1.05 Disclosures in accordance with Accounting Standard (AS) Ã15 on "Employee Benefts"

1.06 Remuneration to statutory auditors

1.07 Contingent liabilities

2010 2009

Sales tax matters 8,512,404 1,425,186

ESI matters 2,758,801 2,758,801

Income tax matters * 49,000,700 6,582,000

Letters of credit outstanding 89,557,099 176,558,127

Bank Guarantees outstanding 111,364,965 259,650,185

Claims against the company not ac knowledged as debt 16,435,381 31,182,586

Service tax matters 584,433 -

Estimated amount of contracts remai ning to be

executed on capital account and not provided for (net of advances) - 5,216,180

* The Income tax matters includes a demand notice received by the company for Rs.42,418,700 from the Income Tax department for the assessment year 2007-08. The company has fled an appeal application with appellate commissioner against this demand notice.

1.08 Segment reporting

The companys operations predominantly relate to IT related services and accordingly this is the only primary reportable segment. The geographical segment is not relevant since export revenue are less than 10% of the total revenue.

1.09 Related party transactions

1.10 Leasing arrangements in the capacity of a Lessor

Finance lease

The Companys business includes leasing of computers, peripherals, and accessories on long - term non - cancellable leases which are generally in the nature of fnance leases as described in AS - 19, "Accounting for leases " issued by the ICAI. The terms of the lease agreements do not provide for any unguaranteed residual value or contingent rents. The leased assets are insured by the lessor during the contract of the lease. Initial direct costs are recognised as an expense at the commencement of the lease period.

Sundry debtors include the present value of minimum lease payments on fnance leases accounted for in accordance with AS 19 ÃAccounting for leases issued by the ICAI. Reconciliation between the gross investment and the present value of minimal lease

1.11 Operating leases:

The company has taken various offce premises on operating lease and the lease payments are amortized on a straight-line basis over the lease term. The total of minimum future lease payments for various periods are as follows:

1.12 Micro Small and Medium Enterprise Development Act 2006.

As per the stipulations and conditions referred to in the above Act, the Company is not required to register under the above Act. Further, the Company has circulated letters to its suppliers seeking information about their status as mentioned in the Act. Since the information from the suppliers has not been received, the provisioning of the interest and disclosure requirements under Schedule VI to the Companies Act, 1956 could not be complied with.

1.13 Overseas branch operation

During the year, the branch at Singapore in the name of "Accel Frontline Limited - Singapore Branch" continued its operation. The revenue and expenses of the said Branch have been included in the fnancials of the company against each line item, translated into INR, as applicable. The summary of the fnancials of the Branch is as follows:

1.14 Quantitative information as per the companies Act 1956

1.15 Expenditure in foreign currency (on payment basis)

1.16 CIF value of Imports

1.17 Amount remitted in foreign currencies towards dividend

1.18 Earnings in foreign currency

1.19 Comparative fnancial information

The previous years balances have been regrouped/reclassifed wherever necessary to conform to the current years presentation.

1.20 The previous year fgures include the results of the Warranty Management Services Division which was hived-off from January 1, 2009 and hence not comparable with the current year fgures.

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