THE MEMBERS OF ACCEL FRONTLINE LIMITED
The Directors are pleased to present the 23rd Annual Report of the Company togetherwith Standalone and Consolidated Audited Financial Statements of the Company for thefinancial year ended 31st March 2018.
1. FINANCIAL RESULTS
| || |
|Particulars ||March 2018 ||March 2017 ||March 2018 ||March 2017 |
|Total Revenue ||51804 ||59134 ||40724 ||36550 |
|Earnings before interest tax depreciation and amortization (EBITDA) ||1233 ||3038 ||2109 ||1135 |
|Finance costs ||1923 ||2490 ||1810 ||2356 |
|Depreciation and amortization expense and impairment loss ||833 ||1464 ||643 ||890 |
|Profit / (loss) before tax and exceptional items ||(1523) ||(916) ||(344) ||(2111) |
|Exceptional items ||4071 ||(134) ||6661 ||- |
|Profit / (loss) before tax ||2548 ||(1050) ||6317 ||(2111) |
|Tax expense ||1338 ||377 ||1225 ||- |
|Profit / (loss) for the year ||1210 ||(1427) ||5092 ||(2111) |
|Other comprehensive income for the year net of tax ||137 ||(162) ||59 ||43 |
|Total comprehensive income for the year ||1347 ||(1589) ||5151 ||(2068) |
|Minority interest ||(224) ||(1009) ||- ||- |
|Total comprehensive income after Minority Interest ||1123 ||(2598) ||5151 ||(2068) |
2. BUSINESS PERFORMANCE
On a consolidated basis your Company achieved a revenue of Rs 51804 for FY 2017-18 asagainst Rs 59134 in the previous year. These are not comparable numbers as theperformance for FY 17 includes full 12 months operation of M/s. Accel Systems &Technologies Pte. Ltd. and FY 18 has only 3 months consequent to sale of this subsidiaryin July 17. Revenue from standalone operations for the FY 201718 stood at Rs 40089 whichis a growth of 10% over the FY 2016-17'36370. The EBITDA on a consolidated basis was Rs1233 and on a standalone basis stood at Rs 2109.
On disposal of M/s. Accel Systems & Technologies Pte. Ltd. (ASTL) a subsidiarycompany your Company earned a profit of Rs 8227 on a standalone basis and Rs 5637 on aconsolidated basis during the year.
In view of the fact the Company has incurred operating losses the Directors have notrecommended dividend for the year ended 31st March 2018.
4. HUMAN RESOURCES DEVELOPMENT
The Company understands that employees are vital and valuable assets for the Company.It also believes in transforming manpower resources from "Asset" to"Strategic Asset" by increasing their capabilities. The Company recognisespeople as the primary source of its competitiveness and continues
its focus on people development by leveraging technology. In line with this businessphilosophy the Company has initiated training of resources to meet the marketrequirements and deliver high quality services to our clients. The thrust of HumanResource has been on improvement of the performance of employees through training anddevelopment. The Company has rolled out a significant change in the Organisation Structureof the Company which has come into force from April 1 2018.
Employee relations remained cordial throughout the year and the Company had 2377permanent employees on its rolls as on March 31 2018. The Board places on record itssincere appreciation for the valuable contribution made by the employees across all levelsin the growth of the Company.
5. POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has adopted a Policy on Prevention of Sexual Harassment at Workplace whichis in line with the requirements of The Sexual Harassment of Women at the workplace(Prevention Prohibition & Redressal) Act 2013. The policy has been formed in orderto prohibit prevent or deter the commission acts of sexual harassment at workplace.Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees are covered under the Policy and the Policy isgender neutral. During the year under review there were no complaints received by the ICCand no cases were pending for disposal.
6. BUSINESS EXCELLENCE AND QUALITY INITIATIVES
The Company believes in sustained efforts to maintain highest levels of quality toenhance customer satisfaction.
During the year the company continued to invest in technologies infrastructure andprocesses in order to keep our quality management systems updated.
The company has certifications for:
ISO 9001:2015 (Quality Management System)
ISO 27001:2013 (Information Security Management System)
ISO 20000-1:2011 (Service Management System)
CMMI Level 3 Dev 1.3
The Company has various policies processes and systems in place that will not onlyenable strengthening and smooth functioning of the operations but also improve the qualityof operations. In order to achieve highest levels of quality and robust informationsecurity practices the Company will progressively endeavour to achieve enterprise-wideCMMI Level 5 (for Development) in the near future.
7. DOCUMENTS PLACED ON THE WEBSITE (www.accelfrontline.com)
The following documents have been placed on the Company's website in compliance withthe Companies Act:
a. Financial Statements of the Company and Consolidated Financial Statements.
b. Separate audited accounts in respect of subsidiaries as per fourth proviso toSection 136(1).
c. Details of Vigil Mechanism for Directors and Employees to report genuine concerns asper proviso to Section 177(10).
d. The Terms and Conditions of appointment of Independent Directors.
e. Details of unpaid dividend as per Section 124(2).
8. SUBSIDIARY COMPANIES
The Company has wholly owned subsidiaries operating in Japan UAE United States ofAmerica and United Kingdom which are not listed in India or abroad as of date. The Companyalso has a wholly owned unlisted Indian Subsidiary. The Statutory Audit Report of theSubsidiary Companies for the financial year are placed before the Audit Committee andreviewed by them. Shareholders interested in obtaining a copy of the audited annualaccounts of the subsidiary companies may write to the Company Secretary. Pursuant to theprovisions of sub-section (3) of Section 129 of the Act and read with rule 5 of theCompanies (Accounts) Rules 2014 the salient features of the financial Statement of thesubsidiaries are set out in the prescribed Form AOC-1 which forms part of the AnnualReport.
The Company had disposed off the entire investment (51% of equity) in M/s. AccelSystems & Technologies Pte. Ltd. (ASTL) Singapore. The sale proceeds of theinvestment has been reported under Exceptional Income in the Statement of Profit and Lossof the Company for the year ended March 31 2018.
9. CORPORATE GOVERNANCE REPORT REQUIRED UNDER THE COMPANIES ACT 2013 AND SEBI (LODR)REGULATIONS 2015.
As per SEBI LODR Regulations 2015 Corporate Governance Report with AuditorsCertificate on Compliance with the conditions of Corporate Governance is attached and formpart of this report.
10. MANAGEMENT DISCUSSION & ANALYSIS
In terms of Regulation 34 of SEBI (LODR) Regulations a separate Annexure II to thisReport is enclosed where the Management Discussion and Analysis and various initiativesand future prospects of the Company are provided.
11. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(5) of the Act the Board of Directors of theCompany hereby confirms that:
i. in the preparation of the annual accounts for the financial year ended March 312018 applicable Accounting Standards have been followed and there were no materialdepartures from the same;
ii. we have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at March 31 2018 and of the profit and loss of theCompany for the year ended on that date;
iii. we have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding of the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. we have prepared the annual accounts for the financial year ended March 31 2018 ona going concern basis;
v. we have laid down internal financial controls and the same have been followed by theCompany and that such internal financial controls are adequate and operating effectively;and
vi. we have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
12. Statutory Auditors Report.
Management response to the qualification in the Statutory Auditor's Report:
As disclosed in Note No. 32 to the Consolidated Financial Statements the management ofthe wholly owned Indian subsidiary M/s. Accel IT Resources Limited (AITRL) has beenrevamped to restructure operations to optimize revenue generation by investing intechnology and adding customer base. A new business plan has been put in place and thesubsidiary has got the training centres accredited to National Skill DevelopmentCorporation (NSDC). The management of the subsidiary and the company is of the view thatthese business plans will help the company grow business and improve the financialposition of the subsidiary thereby enabling the recovery of these investments and loansgiven along with interest in the standalone financial results. Consequently the CompanyManagement is of the view that no provision needs to be made for the investment or loangiven to the subsidiary.
13. IMPORTANT DISCLOSURES MADE BY THE COMPANY UNDER REGULATION 30 OF THE SEBI (LODR)REGULATIONS 2015 TO THE STOCK EXCHANGES
The petition filed by Accel Limited against the Company its Directors thenCompany Secretary and the then Chief Financial Officer is dismissed as withdrawn as perthe order received from NCLT on 6th September 2017.
The Board of Directors approved the closure / dissolution of the wholly ownedsubsidiary M/s. Network Programs (Japan) INC. in United States of America.
The receipt of orders from The Hon'ble Securities Appellate Tribunal on GradedSurveillance Measures (GSM) and about removal of scrip of the company from the GSM.
14. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The Company has strong commitment towards conservation of energy and adoption of latesttechnology in its areas of operations. The particulars as prescribed under Rule 8(3) ofthe Companies (Accounts) Rules 2014 are set out in an Annexure- III to this Report.
15. SEPARATE MEETING OF INDEPENDENT DIRECTORS
The Independent Directors met on February 6 2018 and evaluated the performance of Non-Independent Directors and the Board as a whole. Details regarding the same is provided inthe Corporate Governance Report.
16. EVALUATION OF THE BOARD'S PERFORMANCE
The Board has carried out an evaluation of its own performance also that of itsDirectors individually and it's Committees. The manner in which the evaluation has beencarried out is explained in the Corporate Governance report.
a) Statutory Auditors
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. Walker Chandiok & Co LLP Chartered Accountants (Firm's Registration No.001076N/N500013) were appointed as the Statutory Auditors for a period of five years tillthe conclusion of the 24th Annual General Meeting (AGM).
b) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. M.Alagar Practicing Company Secretary (Membership No. F7488 and CoP No.8196) of M/s. M.Alagar & Associates Practicing Company Secretaries Chennai toundertake the Secretarial Audit of the Company for the financial year ended March 312018. The Secretarial Audit Report is annexed as Annexure V to this report. The saidSecretarial Audit Report does not contain any qualifications reservations or adverseremarks.
18. PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rules 5(1) of the Company (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the Annual Report. Noemployee draws remuneration in excess of the limits in terms of the provisions of theSection 197(12) of the Companies Act 2013 read with Rules 5(2) & 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
19. FIXED DEPOSITS FROM PUBLIC
The Company has not accepted any deposits within the meaning of sub-section (31) ofSection 2 and Section 73 of the Companies Act 2013 and the Rules framed thereunder
from public and as such no amount on account of principal or interest on deposits frompublic were outstanding as on the date of the Balance Sheet.
20. CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of Section 135 and Schedule VII of the Companies Act 2013Corporate Social Responsibility Committee was formed to recommend: (a) the policy onCorporate Social Responsibility and (b) implementation of the CSR Projects or Programs tobe undertaken by the Company as per CSR Policy for consideration and approval by the Boardof Directors.
21. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) Directors
Mr. Bin Cheng Director is liable to retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for reappointment.
Mr. R.Ramaraj Non-Executive Independent Director of the Company had resignedfrom the Directorship of the Company with effect from 10th October 2017.
Key Managerial Personnel (KMP)
Mr. Murali Gopalakrishnan had been appointed as the
Chief Financial Officer (CFO) and Key Managerial
Personnel (KMP) of the Company with effect from 07th December 2017.
Mr. R.Neelakantan had resigned from the position of
Chief Financial Officer (CFO) and Key Managerial
Personnel (KMP) of the Company with effect from 29th November 2017.
22. NAME CHANGE PROCESS
The Board sought the consent of Shareholders of the Company by way of specialresolution through Postal Ballot as per the notice issued to the Shareholders on28-06-2018 for Change in the name of the Company from 'M/s. Accel Frontline Limited' to'M/s. Inspirisys Solutions Limited' and consequent amendment to Memorandum of Associationand Articles of Association of the Company. The special resolution was passed by theShareholders of the Company with requisite majority and accordingly the Postal Ballotresults were declared on 30-07-2018.
Your Directors take this opportunity to convey their appreciation to businessassociates for their support and contribution during the year. The Directors would alsolike to thank all valuable stakeholders viz. customers suppliers alliance partnersbankers and other business associates for the continued and excellent support given bythem to the Company and their confidence reposed in the management. The Directorsacknowledge the unstinted commitment and valuable contribution of all employees of theCompany.
Your Directors also appreciate and value the trust reposed in them by Members of theCompany.
| ||For and on behalf of the Board of Directors |
|Place: Chennai ||Malcolm F. Mehta |
|Date: 07th August 2018 ||Chairman & Chief Executive Officer |