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 Sixth Director's Report of theCompany and the Audited Financial Statements for the Financial Year (FY) ended 31stMarch 2020.
1. AFFAIRS OF THE COMPANY:
A. Financial Results:
(Amount in Rs.)
During the period under review the Company has earned a total income of Rs. 8338630as against Rs. 178000 in the previous year. The loss before the tax was Rs. 62804131as against the loss of Rs. 11333000 in previous year. The loss after tax was Rs.62804131 as against the loss of Rs. 11925000in previous year.
Note: Current year and previous years figures are revised and represented as per INDAS. IND AS were applicable to your company from 1st April 2019. According towhich current year and previous year financials are prepared.
C. Business review and outlook
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.
Outlook for the coming financial year continues to remain uncertain with the COVID-19situation evolving each day. Apart from agriculture and related activities most othersectors of the economy have been adversely impacted by the pandemic and are expected toshow de-growth.
The company has formulated a dividend distribution policy in compliance with regulation43A of SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015 (ListingRegulations).
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 2020 to thedate of this Report. There has been no change in the nature of business of the Company.
2. Share Capital
The Company has converted Rs. 140000000 of CCPS into 14000000 Equity Shares ofRs. 10 each and issued 2500000 Equity Shares of Rs. 10 each to Inimitable CapitalFinance Private Limited issued any shares in the year 2019-20. Hence as on 31stMarch 2020 the paid up share capital of the company is Rs. 167621630 divided into16762163 Equity shares of Rs. 10/- 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 special resolution was passed for re-appointment of Mr.Hemendranath Choudhary as a Whole time director for the period of 2 years.
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 Company Secretaries of India (ICSI)brief resume of the Director proposed to be re-appointed in the ensuing Annual GeneralMeeting is annexed in Notice of 36th Annual General Meeting of the Company.
Following is the list of Directors and KMPs as on 31st March 2020. 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 7 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 2020 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 to Board 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 2019-20.
There is no increase in the remuneration of Whole-time Director from FY 2019-20.
I. Directors' Responsibility Statement:
The board of directors have instituted / put in place a framework of internal financialcontrols and compliance systems which is reviewed by the management and the relevantboard committees including the audit committee and independently reviewed by theinternal statutory and secretarial auditors.
Pursuant to section 134(5) of the Companies Act 2013 the board of directors confirmthat:
in the preparation of the annual accounts for the financial year ended 31stMarch 2020 the applicable accounting standards had been followed along with properexplanation 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 2020 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 were 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 victimization of employees who availthe mechanism. No employee or directors of the Company has been denied access to the AuditCommittee.
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 M/s A.C Bhuteria Chartered is hereby proposed to reappointment for the periodof 5 years i. e. from the conclusion of the 36th Annual General Meeting heldtill the conclusion of the 41st Annual General Meeting to be held in year 2026.
The Statutory Auditors have given a confirmation to the effect that they are eligibleto continue with their appointment and that they have not been disqualified in any mannerfrom continuing as the Statutory Auditors.
B. Remarks or qualifications by Statutory Auditors:
There are no negative remarks or qualification from Statutory Auditors.
C. 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.
D. Remarks or qualifications by Secretarial Auditors:
There are several remark made by the Auditor in their report as attached in annexure2. In respect to the Secretarial Auditors' remarks in their report the Company would liketo state as under:
1. Due to lack of IT personnel website of the company and Structured Digital Databaseas required under SEBI (PIT) 2015 is not maintained by the Company. Company is lookingfor suitable candidates or proposals from third party for maintenance of website and tolook after IT compliances on regular basis.
2. Due to financial stress from last 3 years with minimal transaction and no incomegeneration company was unable to appoint Internal auditor and is looking for the same.
3. Provision related Chapter IV of SEBI (LODR) 2015 was not applicable to the companyuntil the issue and allotment of 16500000 Equity shares took place in August 2019.According to the Reg 15 of SEBI (LODR) 2015 company shall comply with the provisionwithing six months from the applicability of these chapter. Company is looking for thesuitable candidates to appoint on Board as required under Chapter IV of SEBI (LODR) 2015but due to amended Independent Directors guidelines and COVID 19 pandemic with prolongedlockdowns imposed company has not received any application for the same. Company is stillin the search for suitable Independent Director candidate.
4. Some of the E-forms as required under Companies Act 2013 and information or detailsas required under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015was not filed / delayed. Board took the note for the same and shall take the necessarysteps file the same and condone the delay of non-compliances.
5. Indian Accounting standards were applicable to the Company from 1stApril 2019 and company was required to submit the financials from 1st April2019 under IND AS only. This was further required company to make valuation of all assetsand liabilities under fair value methods and prepare previous year financials under IND ASalso for comparison purpose.
Due to unavailability of professional account team support with lack of funds to takethird party support financial results was filed delayed with the BSE for the 1stQuarter of FY 2019-20. Company has received the penalty for the same from BSE.
As COVID 19 pandemic has effected the entire world your company is no exception forthe same. There are no business transaction and income generation in the Company from lastseveral years and this year also has no income generation. Board and senior management isworking on the edge to meet the compliances as required under various acts and Listingregulations. Company has maintained the minimum net worth criteria as required under RBIGuidelines. Board is looking for potential investments to revive the company and are alsoopen for the M & A or takeover strategies.
E. 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.
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.
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:
A report on corporate governance as per the Listing Regulations is attached and formspart of this report Annexure 6. The report also contains the details as required to beprovided on the composition and category of directors number of meetings of the boardcomposition of the various committees annual board evaluation remuneration policycriteria for board nomination and senior management appointment whistle blowerpolicy/vigil mechanism disclosure of relationships between directors inter-se state ofcompany's affairs etc.
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.
For and on behalf of the Board of Directors