Frontier Informatics Limited
Your Directors hereby present the Thirtieth Annual Report together with the auditedaccounts of the Company for the year ended March 31 2018.
1. The Financial Results and operations are as follows:
(Rupees in Lakhs)
|PARTICULARS ||For the year 2017-18 ||For the year 2016-17 |
|Total Income ||3.05 ||3.42 |
|Gross Profit / (Loss) before Depreciation ||(26.29) ||(19.38) |
|Depreciation ||0.83 ||0.75 |
|Operating Profit / (Loss) ||(27.12) ||(20.13) |
|Interest ||4.50 ||0.00 |
|Prior Period Adjustments/ Write Offs/ Taxes ||0.00 ||0.00 |
|Net Profit / (Loss) after tax ||(31.63) ||(20.13) |
|Earnings per Share ||(0.25) ||(0.30) |
|Net Worth ||(178.22) ||(206.59) |
2. Change in nature of business if any
There is no change in the nature of business of the company.
3. Reserves & Surplus
During the year under review the Company has not transferred any amount to its GeneralReserve in Balance Sheet.
In view of the accumulated losses your directors express their inability to declare anydividend.
5. Business Operations
The Company has been executing AMC of Software products of the company. The Companyhopes to achieve sizable business as the Company is in the process of infusing furthercapital through Preferential Allotment of Shares. The management is of the firm beliefthat during the current Financial Year 2018-19 the company will mop up substantialbusiness and there will be turn around in the operations of the company.
6. Fixed Deposits
The Company has not accepted any fixed deposits from the public within the meaning ofsection 73/74 of the Companies Act 2013.
7. Particulars of Loan Guarantees and Investments under Section -186
The Company does not have any loans guarantees and investments covered under section186 of the Companies Act 2013.
8. Particulars of Contracts or Arrangements with Related Parties
Your Company has not entered into any Related Party Contracts under the provisions ofthe Section 188 (1) of the Companies Act 2013 during the year under review.
9. Conservation Of Energy Technology Absorption Foreign Exchange Earning And Outgo
As required under Section 134(3)(m) of the Companies Act 2013 read with The Companies(Accounts) Rules 2014 the particulars in respect of conservation of energy technologyabsorption and foreign exchange earnings and outgo are mentioned herein below:
A. Conservation of Energy: Nil
B. Technology Absorption: Nil
C. Foreign Exchange: Nil
10. Directors and Key Managerial Personnel
During the Year under review The Board of Directors of the company is duly constitutedand the following changes took place:
Mr. R. Anantha Chary and Mr. T. RajKumar have resigned from the office ofdirectors of the Company w.e.f. 14.08.2017
Mr. V K Premchand has been appointed as Managing Director of the company for aperiod of one year without any remuneration w.e.f. 01.10.2017
Mr. Sambasiva Prasad has been appointed as Executive director of the company fora period of one year without any remuneration w.e.f. 28.10.2017
Mr. V. K. Premchand has resigned from the directorship of the company w.e.f.
Mr. T. Raj Kumar has been appointed as Executive Non-Independent Director of thecompany with effect from 01.01.2018 and has resigned w.e.f. 18.04.2018
Mr. M. Samba Siva Prasad has resigned from the directorship of the companyw.e.f. 01.01.2018
The following changes have been made in the composition of the Board of Directors after31st March 2018:
Mr. Ramarao Atchuta Mullapudi has been appointed as Non Executive NonIndependent Director and Chairman of the company w.e.f. 13.04.2018
Mrs. Vuppuluri Sreedevi has been appointed as Executive Director of the companyw.e.f. 18.04.2018
Mrs. Kolia Sudha has been appointed as Independent Director of the Companyw.e.f. 19.07.2018
Mr. Vunnava Purnachandra Rao has resigned from the directorship of the companyw.e.f. 19.07.2018
The appointment is subject to approval of the share holders at the Annual Generalmeeting of the company in respect of whom the company has received a notice in writingproposing their candidature for appointment of Directors of the company.
The Board recommends the resolutions as set forth in item No.4 5 6 and 7 of thenotice for approval of the members. For the perusal of the shareholders brief resumes ofthe Directors being re-appointed along with necessary particulars are given in theExplanatory statement of the notice.
In accordance with the requirements of the Companies Act 2013 read with the Articlesof Association of the company Mr. Vivekananda Sreepakalapati is liable to retire byrotation and being eligible offer himself for re-appointment. The Board recommends for hisreappointment.
The committees of the Board have been reconstituted and also renamed in line with therequirements the details of which are provided elsewhere in this report.
B. Key Managerial Personnel
Pursuant to the provisions of section 203 of the Act there are no key managerialpersonnel for the Company as on the date. The Company is in search of competitiveindividuals for the Position of Key Managerial Personnel.
Number of meetings of the board:
Thirteen meetings of the board were held during the year. For details of the meetingsof the board please refer to the corporate governance report which forms part of thisreport.
No Extraordinary General Meetings of the company was held during the year.
The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.
The board of directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations").
The performance of the board was evaluated by the board after seeking inputs from allthe directors on the basis of the criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The board and the nomination and remuneration committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the chairman was also evaluated on the key aspects of his role.
In a separate meeting of independent directors performance of non-independentdirectors performance of the board as a whole and performance of the chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the board its committees andindividual directors was also discussed. Performance evaluation of independent directorswas done by the entire board excluding the independent director being evaluated.
Policy on directors' appointment and remuneration and other details:
The Company's policy on directors' appointment and remuneration and other mattersprovided in section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of this report.
11. Statement on the declaration given by the Independent Directors as per Section149(6) of CompaniesAct 2013
The company has received necessary declarations from the Independent Directors undersection 149(7) of Companies Act 2013 that they meet the criteria of independence aslaid down under section 149(6) of the Companies Act 2013 and Regulation 25 of SecuritiesAnd Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations2016.
12. Directors' Responsibility Statement
In accordance with sub-section section 134 of the Companies Act 2013 the Directors ofthe Company state:
a. That in the preparation of the accounts for the financial year ended 31stMarch 2018; the applicable accounting standards have been followed along with properexplanation relating to material departures.
b. That the 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 at the end of thefinancial year and of the profit and loss of the Company for that period.
c. That the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and deleting fraud and otherirregularities.
d. That the directors had prepared the annual accounts on the going concern basis.
e. That the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
f. That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
13. Extract of annual return
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return inMGT-9 as a part of this Annual Report as Annexure I.
A. Statutory Auditors:
The Statutory Auditors of the company M/s Niranjan & Narayan CharteredAccountants Hyderabad retire at the conclusion of ensuing Annual General Meeting and areeligible for re-appointment. The Company has received a letter from the Auditors for theirreappointment to the effect that such re appointment will be in conformity with Section139 of the Companies Act 2013 and also in compliance of the Listing Agreement regardingPeer Review. The board and the Audit committee recommend the re-appointment of M/s.Niranjan & Narayan Chartered Accountants Hyderabad as Statutory Auditors to holdoffice till conclusion of the Next Annual General Meeting
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 Board hadappointed Mr. Ch. Veeranjaneyulu as Secretarial Auditor who is a partner of M/s VCSR &Associates Company Secretaries in Whole-time Practice to carry out Secretarial Audit forthe financial year 2017-18. The Secretarial Audit report is annexed herewith as"(Annexure 11)" & annexure to it. The report is self-explanatory and do notcall for any further comments.
Comments of Secretarial Auditors in their report and the respective Explanation of theBoard of Directors: Auditors Comment:
(a) The company is required to appoint Key Managerial persons i.e. Chief FinancialOfficer and Company Secretary
Director's Statement: The Company is in the process of selecting suitable persons andwould appoint them in due course of business.
15. Corporate Governance and Management Discussion & Analysis Reports
The Corporate Governance and Management Discussion & Analysis Report which form anintegral part of this Report are set out as Annexure respectively together with theCertificate from the auditors of the Company regarding compliance with the requirements ofCorporate Governance as per SEBI Listing Regulations.
16. Vigil Mechanism
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.fitlindia.com
17. Risk Management
The board of directors of the Company has formed a risk management committee to frameimplement and monitor the risk management plan for the Company. The committee isresponsible for reviewing the risk management plan and ensuring its effectiveness. Theaudit committee has additional oversight in the area of financial risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis. The development and implementation ofrisk management policy has been covered in the management discussion and analysis whichforms part of this report.
18. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition And Redressal) Act 2013.
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaint Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees are covered under this policy.
The following is the summary of sexual harassment complaints received and disposedduring the calendar year
No. of complaints received: Nil
No. of complaints disposed off: Nil
19. Corporate Social Responsibility (CSR)
Even though the provisions of Companies Act 2013 regarding Corporate SocialResponsibility are not attracted to the company yet the Company has been over the yearspursuing as part of its corporate philosophy an unwritten CSR policy voluntarily whichgoes much beyond mere philanthropic gestures and integrates interest welfare andaspirations of the community with those of the Company itself in an environment ofpartnership for inclusive development.
20. Code of Conduct
The Board has laid down a code of conduct for all Board Members senior management andemployees of the Company. The relevant Declaration is enclosed as an attachment to theDirectors' Report.
21. Details of Subsidiary/Joint Ventures/Associate Companies
The company does not have any Subsidiary/ Joint Venture/ Associate Companies requiringdisclosure pursuant to sub-section (3) of section 129 of the Act.
22. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report
During the year an open offer was made by Mr. Ramarao Atchuta Mullapudi and the companyhas allotted 6000000 equity shares of Rs.l/- each on preferential basis to Mr. RamaraoAtchuta Mullapudi and the company has obtained listing approval for the shares from BSEvide letter dated July 30 2018.
23. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future
There are no such events.
24. Internal Control Systems and Their Adequacy
The details in respect of internal financial control and their adequacy are included inthe management discussion & analysis which forms part of this report.
25. Particulars of Employees
There are no such employees requiring disclosure pursuant to the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 statement of particulars ofemployees.
26. Listing with Stock Exchanges
The equity shares of the Company are listed at the BSE Limited. The listing fee is paidfor the financial year 2018-19.
27. Additional Information
Information pursuant to Section 134 (3) (I) & (m) of the Companies Act 2013 whichis included as a part of Corporate Governance Report.
Your Directors wish to acknowledge the valuable support and cooperation extended byBank of India and State Bank of India and all other Government Agencies. Your Directorsalso express their appreciation to the shareholders of the Company for their forbearanceduring a difficult period and for reposing confidence in the future ahead. Your Directorswish to place on record their appreciation of the hard work dedication and commitmentexhibited by its employees at all levels.
By order of the Board
For Frontier Informatics Limited