Frontier Capital Ltd.
|BSE: 508980||Sector: Financials|
|NSE: N.A.||ISIN Code: INE977E01013|
|BSE 05:30 | 01 Jan||Frontier Capital Ltd|
|NSE 05:30 | 01 Jan||Frontier Capital Ltd|
|BSE: 508980||Sector: Financials|
|NSE: N.A.||ISIN Code: INE977E01013|
|BSE 05:30 | 01 Jan||Frontier Capital Ltd|
|NSE 05:30 | 01 Jan||Frontier Capital Ltd|
Frontier Capital Limited
Your Directors have pleasure in presenting the Thirty Fifth Director's Report of theCompany and the Audited Financial Statements for the Financial Year (FY) ended 31stMarch 2019.
1. AFFAIRS OF THE COMPANY:
A. Financial Results:
During the period under review the Company has earned a total revenue of Rs. 378296as against Rs. 247945 in the previous year. The loss before the tax was Rs. 92028446as against the loss of Rs. 84541293 in previous year. The loss after tax was Rs.92620919 as against the loss of Rs. 88138682 in previous year.
C. Business review
The details of the Company's affairs including its operations are more specificallygiven in the Management Discussion and Analysis Report which is given in this AnnualReport.
The Board of Directors of your company after considering holistically the relevantcircumstances and keeping in view the company's dividend distribution policy and lossincurred has decided that it would be prudent not to recommend any Dividend for the yearunder review.
E. Transfer to Reserves
The Company did not transfer any amount to reserves in view of the losses incurred bythe Company during the year under review.
F. Material changes and commitment if any affecting the financial position of thecompany occurred between the end of the financial year to which this financial statementrelate and the date of the report
No material changes and commitments affecting the financial position of the Companyduring the period from the end of the financial year on 31st March 2019 to the date ofthis Report. There has been no change in the nature of business of the Company.
2. Share Capital
The Company has not issued any shares in the year 2018-19. Hence as on 31stMarch 2019 the paid up share capital of the company is . 142621630 divided into262163 Equity shares of . 10/- each and 140000 non-convertible redeemable preferenceshares of . 1000/- each.
A. Directors and Key Managerial Personnel:
Pursuant to the provisions of Section 152 of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 and the Articles of Association ofthe Company Ms. Usha Iyengar is entitled to retire by rotation at the ensuing AnnualGeneral Meeting (AGM) and being eligible has offered himself for re-appointment.
During the year Mr. Hemendranath Choudhary was re-appointed as a Whole time directorfor the period of 3 years.
Mr. Farhan Shaikh Company Secretary and Compliance officer of the Comapyn has resignedfrom the said position on July 31 2018. The Company on record places its appreciation forthe guidance and assistance in smooth functioning and compliances of the Company duringhis tenure.
Consequent to resignation of Mr. Shaikh and based on the recommendation of theNomination & Remuneration Committee Mr. Aniket Naresh Prabhu was appointed as theCompany Secretary and Compliance officer of the Company w.e.f. August 31 2018 by theBoard of Directors.
Mr. Aniket Naresh Prabhu was also appointed as Chief Financial Officer of the Companyw.e.f. 14th February 2019.
Pursuant to Regulation 36(3) of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 (hereinafter referred to as Listing Regulations')and Secretarial Standards on General Meeting (SS-2) issued by the Institute of CompanySecretaries of India (ICSI) brief resume of the Director proposed to be re-appointed inthe ensuing Annual General Meeting is annexed in Notice of 35th Annual GeneralMeeting of the Company.
Following is the list of Directors and KMPs as on 31st March 2019. There isno change in the same till the date of Annual Report
B. Declaration by Independent Director:
All the Independent Directors have given declaration as required under the provisionsof section 149(7) of the Companies Act 2013 that they meet the criteria of independenceas laid down under Section 149(6) of the Companies Act 2013 and Regulations 16 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
C. Number of Board Meetings
During the year under review 5 Board Meetings were convened and held.
D. Audit Committee:
i. The Audit Committee functions according to its charter defines its compositionauthority responsibility and reporting functions in accordance with the Act listingrequirements and the regulations applicable to the Company and is reviewed from time totime. As on 31st March 2019 the Audit Committee comprised of three Directorsviz. Mr. Ashok Katra (chairman) Mr. H. N. Choudhary and Ms. Usha Iyenger. All of them arefinancially literate and have relevant finance and/or audit exposure.
ii. During the period under review 4 Audit Committee meetings were held.
iii. Each Board Meeting which considers financial results is preceded by meeting ofAudit Committee Members along with Auditors.
Composition of the Audit Committee and attendance at its meetings are as follows:
E. Company's Policy Relating to Directors Appointment And Remuneration
Pursuant to the provisions of Section 178 of the Companies Act 2013 the Board frameda Policy relating to the selection and appointment of Directors Key Managerial PersonnelSenior Management and their remuneration. The Policy includes criteria for determiningqualifications positive attributes and independence of a director and other matters. Thesame is attached herewith and marked as Annexure 3.
F. Particulars of Employees
Disclosure with respect to the ratio of remuneration of each Directors to the medianemployees' remuneration as required under Section 197 of the Companies Act 2013 read withRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014has been appended as Annexure 4 to this Report.
During the year under review no employee was in receipt of remuneration exceeding thelimits as prescribed under provisions of Section 197 of the Companies Act 2013 read withRule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
In terms of Section 136 of the Act the reports and accounts are being sent to theshareholders and others entitled thereto excluding the said information which will bemade available for inspection by the shareholders at the Registered Office of the companyduring business hours on any working days of the Company up to the date of the ensuingAnnual General Meeting. If any shareholder is interested in inspecting the same suchshareholders may write to the Company Secretary in advance
G. Board Evaluation:
Pursuant to the provisions of Sub Section (3) Section 134 of the Companies Act 2013the Board has carried out evaluation of its own performance the directors individually aswell as the working of its Audit Committee. The Board has devised questionnaire toevaluate the performance of each directors. Such questions are prepared considering thebusiness of the Company and the expectations that the Board has from each of theDirectors. The evaluation framework for assessing the performance of Directors comprisesof the following key areas:
Attendance of Board Meetings and Board Committee Meetings; Quality of contribution toBoard deliberations;
Strategic perspectives or inputs regarding future growth of Company and itsperformance; Providing perspectives and feedback going beyond information provided by themanagement.
H. Remuneration Structure for Board and Senior Management:
Composition of the Board of Directors of the Company reflects in-depth understanding ofthe Company including its strategies operations financial condition and compliancerequirements.
The remuneration is fixed considering various parameters such as qualificationexpertise experience prevailing remuneration in the industry and financial position ofthe Company.
The Independent Directors and Woman Director do not draw any remuneration from theCompany except sitting fees of Rs. 20000/- for each meeting attended by them during thefinancial year 2018-19.
There is no increase in the remuneration of Whole-time Director from FY 2017-18.
Mr. Aniket Prabhu was appointed as Company Secretary on the remuneration of 360000/-p.a. and revised the same after his appointment as Chief Financial Officer to 600000/-p.a.
I. Directors' Responsibility Statement:
Your Directors to the best of their knowledge and belief and according to theinformation and explanations obtained by them and as required under Section 134(3)(c) ofthe Companies Act 2013 hereby state that: in the preparation of the annual accounts forthe financial year ended 31st March 2019 the applicable accounting standardshad been followed along with proper explanation relating to material departures;
your directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31stMarch 2019 of the Company for that period;
your directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
your directors had prepared the annual accounts on a going concern basis;
your directors in the case of a listed company had laid down internalfinancial controls to be followed by the company and that such internal financial controlsare adequate and were opening effectively; and
your directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
J. Internal Control Systems and Their Adequacy
Pursuant to Rule (8)(5) of the Companies (Accounts) Rules 2014 the Company has aninternal control system commensurate with the size scale and complexity of itsoperations. The Company monitors and evaluates the efficacy and adequacy of internalcontrol system in place its compliance with operating systems accounting procedures andpolicies.
During the year under review no reportable material weakness in the operation wasobserved. Regular audit and review processes ensure that such systems are reinforced on anongoing basis.
4. Holding Subsidiaries Joint Ventures and Associate Companies
The Company has no subsidiaries Joint Venture or associate company during the periodunder review within the meaning of Section 2(6) of the Companies Act 2013.
The Company continues to be subsidiary of Inimitable Capital Finance Private Limited.
Your company has not accepted any Deposits during the financial year under reviewfalling under provisions of Section 73 and 76 of the Companies Act 2013 read withCompanies (Acceptance of Deposits) Rules 2014.
6. Particulars of loans Guarantees or Investments under Section 186 of theCompanies Act 2013
Being a Non-Banking Finance Company the provision of Section 186 of Companies Act2013 are not applicable to the Company.
7. Particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013:
All Contracts/ Arrangements/ transactions entered by the Company during the FinancialYear with related parties were on arm's length basis in ordinary course of business andwere in the compliance with the applicable provisions of the Act and the ListingAgreement.
There are no significant related party transactions made by the Company with PromotersDirectors Key Managerial personnel or other designated persons as defined under Section188 of the Companies Act 2013.
Accordingly there are no material transactions that are required to be reported in FormAOC 2 and as such do not form part of the report.
The Company has made adequate disclosures regarding related party transactionscontingent liabilities and significant accounting policy in the Notes to Accounts as anintegral part of the Balance Sheet and Statement of Profit & Loss.
8. Corporate Social Responsibility Report (CSR):
The provisions relating to Corporate Social Responsibility under Section 135 of theCompanies Act 2013 and rules made thereunder are not applicable to the Company.Therefore the Company has not developed and implemented any policy on Corporate SocialResponsibility initiatives.
9. Particulars of Conservation of energy technology absorption foreignexchange earnings and outgo:
Considering the nature of business activities of the Company your Directors havenothing to report with respect to conservation of energy and technology absorption.
During the year under review there was neither any foreign exchange earnings noroutgo.
10. Business Risk Management:
The Company has constituted a Risk Management Policy which has been entrusted withresponsibility to Board in overseeing the Company's Risk Management process and controlsrisk tolerance and capital liquidity and funding and also setting the strategic plans andobjections for the risk management and review of risk management of the company and alsoreview the company's risk appetite and strategy relating to key risks including creditrisk liquidity and funding risk market risk product risk and reputational risk as wellas guidelines policies and processes for monitoring and mitigating such risks.
The Board takes responsibility for the overall process of the risk management in theorganization. The business risk is managed through cross functional involvement andcommunication across businesses.
11. Vigil Mechanism:
The Vigil Mechanism/Whistle Blower Policy has been put in place in accordance withSection 177 of the Companies Act 2013 for the Directors and Employees to report theirgenuine concerns about unethical behaviour actual or suspected fraud or violation of theCompany's Code of Conduct. The mechanism provides for adequate safeguards against thevictimization of Director(s) and Employee(s) who avail of the mechanism. Directors andEmployees may make protected disclosure under the policy to the Compliance Committeeconstituted by the Company to administer the internal code of business conduct. Inexceptional cases Directors and Employees have direct access to the Chairman of the AuditCommittee. Further no personnel have been denied access to the Compliance Committee/Chairman of the Audit Committee as the case may be.
No complaints were received under whistle blower mechanism during the year underreview.
The Company has adopted a Whistle Blower Mechanism Policy establishing vigil mechanismto provide a formal mechanism to the Directors and employees to report their concernsabout unethical behavior actual or suspected fraud or violation of the company's code ofconduct or ethics policy. The policy provides for adequate safeguard against victimizationof employees who avail the mechanism. No employee or directors of the Company has beendenied access to the Audit Committee.
12. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the period under review no significant or material order was passed by anyregulatory authority or court or tribunals which may have bearing on going concernstatus or on operations of the company in future.
A. Appointment of Auditors:
Pursuant to the provision of Section 139(2) of the Act and the Rules framed thereunderM/s A.C Bhuteria Chartered Accountants Kolkata (having FRN: 303105E) were appointed asthe Statutory Auditors of the Company for a period of 5 years to hold office from theconclusion of the 31st Annual General Meeting held on 25thSeptember 2015 till the conclusion of the 36th Annual General Meeting to beheld for the year ending 31st March 2020.
However pursuant to the amendments made to Section 139 of the Act by the Companies(Amendment) Act 2017 effective from May 7 2018 the requirement of seeking ratificationof the members for appointment of Statutory Auditors has been withdrawn. In view of thesame the ratification of members for continuance of M/s A.C Bhuteria CharteredAccountants as the Statutory Auditors of the Company is not being sought. The StatutoryAuditors have given a confirmation to the effect that they are eligible to continue withtheir appointment and that they have not been disqualified in any manner from continuingas the Statutory Auditors.
B. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed AVS &Executives partnership firm Company Secretaries to undertake the Secretarial Audit ofthe company. The Report of the Secretarial Audit is annexed herewith as Annexure 2.
C. Internal Audit
Pursuant to provision of section 138 of the Companies Act 2013 & Rule 13 ofCompanies (Accounts) Rules 2014 management is in search for the right candidature toappoint as an internal auditor for Financial Year 2019-20.
D. Remarks or qualifications by Statutory Auditors and Secretarial Auditors:
There are no negative remarks or qualification from Statutory Auditors. In respect tothe Secretarial Auditors' remarks in their report the Company would like to state asunder:
1. The Company was in search of suitable candidates for the post of IndependentDirector.
2. The Constitution of Audit Committee Nomination and Remuneration Committee was notproper and meeting of Independent Directors was not held due to non-availability ofsuitable candidate to be appointed as an Independent Director of the Company. Also due tolack of personnel Company was unable to comply with the provision of section 152 of theCompanies Act 2013.
3. Company has now appointed Mr. Aniket Prabhu as a CFO of the Company.
4. Mr. H. N. Choudhary attained age of 70 years on 1st October 2018Resolution was inadvertently passed as an ordinary on 28th September 2018.Company has proposed the special resolution for the re-appointment of Mr. H. N. Choudharyin ensuing AGM on 30th September 2019
5. Due to lack of IT personnel some of the disclosure was not uploaded on the websiteof the Company.
6. Inadvertently intimation of Closure of Trading Window has not been given to insiderswhile considering quarterly/yearly financial results and other UPSI matters; but same wasuploaded on the BSE as required.
7. Inadvertently some information or details as required under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 was not filed / delayed. Thoughthis does not affect defacto' compliance as the script ha not traded throughout thelast year.
14. Secretarial Standards
Company complies with all applicable mandatory secretarial standards issued byInstitute of Company Secretaries of India.
15. Extract of the Annual Return
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in (Annexure1 MGT-9) and is attached to this Report.
As amended by Companies (Amendment Bill) 2017 Annual Return of the Company is alsouploaded on website of the Company. Web link for the MGT-9 is given below http://www.flflindia.com/investor/main_investor_rel.html
16. Other Compliance:
A. Reserve Bank of India
The Company is registered with RBI as an Asset Financing Non-Deposit Accepting NBFC.The Company has complied with and continues to comply with the applicable Regulations andDirections of the RBI and it does not carry on any activities other than thosespecifically permitted by the RBI.
B. Accounts and Accounting Standards
The Company adheres to the Accounting Standards as prescribed under section 133 of theCompanies Act 2013 and Rule 7 of the Companies (Accounts) Rules 2014 in the preparationof its financial statements and also to the guidelines prescribed by the RBI.
C. Stock Exchanges Compliance of Listing Agreements/ SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015
The Company's shares are listed on the BSE Ltd. The Company has paid the requisitelisting fees to the Stock Exchange. Further the Company has demat connectivity with boththe Depositories NSDL and CDSL and paid Annual Fees to both the Depositories.
D. Green Initiative
Section 136 of the Companies Act 2013 and the Rules made there under allow the Companyto send its financial statements by electronic mode to such members whose shareholding isin dematerialized format and whose email addresses are registered with Depository forcommunication purposes. As a responsible corporate citizen the Company proposes to effectelectronic delivery of the Annual Report of the Company in lieu of the paper form to theMembers who have registered their email IDs with the Depositories. However as a matter ofpractice a physical copy of the Annual Report has also been sent to the members at theiraddress registered with the Company and the Depository Participants.
A copy of this Annual Report along with the Annual Report of each of the Company for FY2018-19 will be placed on the website of the Company.
E. Prevention of Sexual harassment
The company has zero tolerance for sexual harassment at work place and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual harassment of women at workplace (preventionprohibition ad Redressal) Act 2013 and the rules thereunder for prevention and redressalof complaints of sexual harassment at workplace. The Company is committed to provide equalopportunities to their race caste sex religion color nationality disability etc.All women associates (permanent temporary contractual and trainees) as well as womenvisiting the company's office premises or women service providers are covered under thispolicy. All are treated with dignity with a view to maintain a work environment free ofsexual harassment whether physical verbal or psychological.
During Fiscal Year 2019 the Company has not received any complaint on sexualharassment.
17. Management Discussion and Analysis Report (MDAR)
Pursuant to regulation 34(2) of the Listing Regulations Management Discussion andAnalysis Report is attached in the Annexure 5
18. Corporate Governance Report:
With the introduction of the Companies Act 2013 and the issue of SEBI circular no.CIR/CFD/POLICY CELL/2/2014 dated April 17 2014 the provisions of amended Clause 49 ofthe Listing Agreement and Regulation 15 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 related to the corporate governance would not beapplicable to the Companies having paid up equity share capital not exceeding Rs.10 croreand Net Worth not exceeding Rs. 25 crore as on the last day of the previous financialyear.
Hence in view of the above para C D and E of schedule V of SEBI (Listing Obligationsand Disclosure Requirement) Regulations 2015 is not applicable to the Company. Howeveras a measure of good governance the Company complies with most of the requirementsspecified under Clause 49 and Regulation 15 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
A summary of the Corporate Governance measures adopted by the Company is given below:-
I. The Board of Directors along with its Committees provides leadership and guidance tothe Company's management and directs supervises and controls the activities of theCompany.
II. The size of the Board is commensurate with the size and business of the Company. Ason 31st March 2019 the Board comprises of Mr. H N Choudhary Mrs. UshaIyengar as Directors and Mr. Ashok Katra as an Independent Director of the Company.
III. The Board has constituted Committees with specific terms of reference to focus onspecific issues and ensure expedient resolution of diverse matters.
IV. As on 31st March 2019 the Audit Committee comprised of 3 Directors viz.Mr. Ashok Katra Mrs. Usha Iyengar and Mr. H. N. Choudhary.
V. The Company Directors (including the Independent Directors) and its employees haveadopted the Code of Conduct and the same will be posted on the Company's website.
VI. The Company has adopted a Whistle Blower Policy which provides a formal mechanismfor all employees of the Company to make protected disclosures to the management aboutunethical behavior actual or suspected fraud or violation of the Company's Code ofConduct. No employee of the Company has been denied access to the Audit Committee.
VII. The Company's website is www.flflindia.com.
The Directors would like to place on record their gratitude for the valuable guidanceand support received from the Reserve Bank of India Securities and Exchange Board ofIndia Bombay Stock Exchange Limited and other Government and Regulatory Authorities andconvey their appreciation to all the stakeholders customers bankers lenders vendorsand all business associated for their valuable and continuous support and encouragementtowards the conduct of the efficient operations of the company.