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Frontier Capital Limited
Your Directors have pleasure in presenting the Thirty Fifth Directors Report of the Company and the Audited Financial Statements for the Financial Year (FY) ended 31st March 2019.
1. AFFAIRS OF THE COMPANY:
A. Financial Results:
|(Amount in Rs.)|
|Particulars||31st March, 2019||31st March, 2018|
|Less: Provisions and contingencies||8,83,89,264||7,59,65,428|
|Profit / (Loss) before tax||-9,20,28,446||-84,541,293|
|Less: Tax expenses||-||-|
|(Including deferred tax and tax for earlier years)||5,92,473||35,97,389|
|Profit / (loss) After Taxation||-9,26,20,919||-8,81,38,682|
|Less: Proposed Dividend||-||-|
|Less: Corporate Dividend Tax||-||-|
|Less: Transfer to Statutory Reserve||-||-|
|Add: Balance Brought||-6,65,72,668||21,566,014|
|Forward from Last Year|
|Balance Carried Forward to Balance Sheet||-15,91,93,587||-6,65,72,668|
During the period under review, the Company has earned a total revenue of Rs. 3,78,296 as against Rs. 2,47,945 in the previous year. The loss before the tax was Rs. 9,20,28,446 as against the loss of Rs. 8,45,41,293 in previous year. The loss after tax was Rs. 9,26,20,919 as against the loss of Rs. 8,81,38,682 in previous year.
C. Business review
The details of the Companys affairs including its operations are more specifically given in the Management Discussion and Analysis Report, which is given in this Annual Report.
The Board of Directors of your company, after considering holistically the relevant circumstances and keeping in view the companys dividend distribution policy and loss incurred, has decided that it would be prudent, not to recommend any Dividend for the year under review.
E. Transfer to Reserves
The Company did not transfer any amount to reserves in view of the losses incurred by the Company during the year under review.
F. Material changes and commitment if any affecting the financial position of the company occurred between the end of the financial year to which this financial statement relate and the date of the report
No material changes and commitments affecting the financial position of the Company during the period from the end of the financial year on 31st March 2019 to the date of this 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 31st March, 2019, the paid up share capital of the company is . 14,26,21,630 divided into 2,62,163 Equity shares of . 10/- each and 1,40,000 non-convertible redeemable preference shares of . 1000/- each.
A. Directors and Key Managerial Personnel:
Pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 and the Articles of Association of the Company, Ms. Usha Iyengar, is entitled to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible has offered himself for re-appointment.
During the year, Mr. Hemendranath Choudhary was re-appointed as a Whole time director, for the period of 3 years.
Mr. Farhan Shaikh, Company Secretary and Compliance officer of the Comapyn has resigned from the said position on July 31, 2018. The Company on record places its appreciation for the guidance and assistance in smooth functioning and compliances of the Company during his tenure.
Consequent to resignation of Mr. Shaikh and based on the recommendation of the Nomination & Remuneration Committee, Mr. Aniket Naresh Prabhu was appointed as the Company Secretary and Compliance officer of the Company w.e.f. August 31, 2018, by the Board of Directors.
Mr. Aniket Naresh Prabhu was also appointed as Chief Financial Officer of the Company w.e.f., 14th February 2019.
Pursuant to Regulation 36(3) of the SEBI (Listing Obligations & Disclosure Requirements) 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 General Meeting is annexed in Notice of 35th Annual General Meeting of the Company.
Following is the list of Directors and KMPs as on 31st March 2019. There is no change in the same till the date of Annual Report
|USHA SUNDAR IYENGAR||01/04/2015||03447551||Director|
|HEMENDRANATH||06641774||Whole Time Director|
|ASHOK KATRA||15/03/2017||07799527||Independent Director|
|ANIKET NARESH PRABHU||31/08/2018||BPYPP3319B||Company Secretary and Chief Financial Officer|
B. Declaration by Independent Director:
All the Independent Directors have given declaration as required under the provisions of section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulations 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
C. Number of Board Meetings
During the year under review, 5 Board Meetings were convened and held.
|Name of the Director||Director Identification Number||Category||No. of Board Meetings attended during the year||Attendance at the last AGM|
|Mrs. Usha Iyengar||03447551||Non Executive Women Director||5||Yes|
|Mr. H.N. Choudhary||06641774||Whole Time Director (14/08/2017)||5||Yes|
|Mr. Ashok Katra Date of Appointment - 15/03/2017||07799527||Independent Director||5||Yes|
D. Audit Committee:
i. The Audit Committee functions according to its charter defines its composition, authority, responsibility and reporting functions in accordance with the Act, listing requirements and the regulations applicable to the Company and is reviewed from time to time. As on 31st March, 2019, the Audit Committee comprised of three Directors viz. Mr. Ashok Katra (chairman), Mr. H. N. Choudhary and Ms. Usha Iyenger. All of them are financially 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 of Audit Committee Members along with Auditors.
Composition of the Audit Committee and attendance at its meetings are as follows:
|Mr. Ashok Katra||3|
|Mrs. Usha Iyenger||3|
|Mr. H.N. Choudhary||3|
E. Companys Policy Relating to Directors Appointment And Remuneration
Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Board framed a Policy relating to the selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration. The Policy includes criteria for determining qualifications, positive attributes and independence of a director and other matters. The same 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 median employees remuneration as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure 4 to this Report.
During the year under review, no employee was in receipt of remuneration exceeding the limits as prescribed under provisions of Section 197 of the Companies Act, 2013 read with Rule 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 the shareholders and others entitled thereto, excluding the said information which will be made available for inspection by the shareholders at the Registered Office of the company during business hours on any working days of the Company up to the date of the ensuing Annual General Meeting. If any shareholder is interested in inspecting the same, such shareholders 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, 2013, the Board has carried out evaluation of its own performance, the directors individually as well as the working of its Audit Committee. The Board has devised questionnaire to evaluate the performance of each directors. Such questions are prepared considering the business of the Company and the expectations that the Board has from each of the Directors. The evaluation framework for assessing the performance of Directors comprises of 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 its performance; Providing perspectives and feedback going beyond information provided by the management.
H. Remuneration Structure for Board and Senior Management:
Composition of the Board of Directors of the Company reflects in-depth understanding of the Company, including its strategies, operations, financial condition and compliance requirements.
The remuneration is fixed considering various parameters such as qualification, expertise, experience, prevailing remuneration in the industry and financial position of the Company.
The Independent Directors and Woman Director do not draw any remuneration from the Company except sitting fees of Rs. 20,000/- for each meeting attended by them, during the financial 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 3,60,000/- p.a. and revised the same after his appointment as Chief Financial Officer to 6,00,000/- p.a.
I. Directors Responsibility Statement:
Your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them and as required under Section 134(3)(c) of the Companies Act, 2013 hereby state that: in the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures;
your directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 of the Company for that period;
your directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other 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 internal financial controls to be followed by the company and that such internal financial controls are adequate and were opening effectively; and
your directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
J. Internal Control Systems and Their Adequacy
Pursuant to Rule (8)(5) of the Companies (Accounts) Rules, 2014 the Company has an internal control system, commensurate with the size, scale and complexity of its operations. The Company monitors and evaluates the efficacy and adequacy of internal control system in place, its compliance with operating systems, accounting procedures and policies.
During the year under review, no reportable material weakness in the operation was observed. Regular audit and review processes ensure that such systems are reinforced on an ongoing basis.
4. Holding, Subsidiaries, Joint Ventures and Associate Companies
The Company has no subsidiaries, Joint Venture or associate company during the period under 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 review falling under provisions of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.
6. Particulars of loans, Guarantees or Investments under Section 186 of the Companies Act, 2013
Being a Non-Banking Finance Company, the provision of Section 186 of Companies Act, 2013 are not applicable to the Company.
7. Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013:
All Contracts/ Arrangements/ transactions entered by the Company during the Financial Year with related parties were on arms length basis, in ordinary course of business and were in the compliance with the applicable provisions of the Act and the Listing Agreement.
There are no significant related party transactions made by the Company with Promoters, Directors, Key Managerial personnel or other designated persons as defined under Section 188 of the Companies Act, 2013.
Accordingly there are no material transactions that are required to be reported in Form AOC 2 and as such do not form part of the report.
The Company has made adequate disclosures regarding related party transactions, contingent liabilities, and significant accounting policy in the Notes to Accounts as an integral 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 the Companies Act, 2013 and rules made thereunder are not applicable to the Company. Therefore, the Company has not developed and implemented any policy on Corporate Social Responsibility initiatives.
9. Particulars of Conservation of energy, technology absorption, foreign exchange earnings and outgo:
Considering the nature of business activities of the Company, your Directors have nothing to report with respect to conservation of energy and technology absorption.
During the year under review, there was neither any foreign exchange earnings nor outgo.
10. Business Risk Management:
The Company has constituted a Risk Management Policy which has been entrusted with responsibility to Board in overseeing the Companys Risk Management process and controls, risk tolerance and capital liquidity and funding and also setting the strategic plans and objections for the risk management and review of risk management of the company and also review the companys risk appetite and strategy relating to key risks, including credit risk, liquidity and funding risk, market risk, product risk and reputational risk, as well as guidelines, policies and processes for monitoring and mitigating such risks.
The Board takes responsibility for the overall process of the risk management in the organization. The business risk is managed through cross functional involvement and communication across businesses.
11. Vigil Mechanism:
The Vigil Mechanism/Whistle Blower Policy has been put in place in accordance with Section 177 of the Companies Act, 2013 for the Directors and Employees to report their genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct. The mechanism provides for adequate safeguards against the victimization of Director(s) and Employee(s) who avail of the mechanism. Directors and Employees may make protected disclosure under the policy to the Compliance Committee constituted by the Company to administer the internal code of business conduct. In exceptional cases, Directors and Employees have direct access to the Chairman of the Audit Committee. 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 under review.
The Company has adopted a Whistle Blower Mechanism Policy establishing vigil mechanism, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the companys code of conduct or ethics policy. The policy provides for adequate safeguard against victimization of employees who avail the mechanism. No employee or directors of the Company has been denied access to the Audit Committee.
12. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
During the period under review, no significant or material order was passed by any regulatory authority or court or tribunals which may have bearing on going concern status 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 thereunder, M/s A.C Bhuteria, Chartered Accountants, Kolkata (having FRN: 303105E) were appointed as the Statutory Auditors of the Company for a period of 5 years to hold office from the conclusion of the 31st Annual General Meeting held on 25th September, 2015 till the conclusion of the 36th Annual General Meeting to be held 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 ratification of the members for appointment of Statutory Auditors has been withdrawn. In view of the same, the ratification of members for continuance of M/s A.C Bhuteria, Chartered Accountants, as the Statutory Auditors of the Company, is not being sought. The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as the Statutory Auditors.
B. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed AVS & Executives, partnership firm, Company Secretaries to undertake the Secretarial Audit of the 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 of Companies (Accounts) Rules, 2014, management is in search for the right candidature to appoint 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 to the Secretarial Auditors remarks in their report, the Company would like to state as under:
1. The Company was in search of suitable candidates for the post of Independent Director.
2. The Constitution of Audit Committee, Nomination and Remuneration Committee was not proper and meeting of Independent Directors was not held due to non-availability of suitable candidate to be appointed as an Independent Director of the Company. Also due to lack of personnel Company was unable to comply with the provision of section 152 of the Companies 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, 2018, Resolution was inadvertently passed as an ordinary on 28th September, 2018. Company has proposed the special resolution for the re-appointment of Mr. H. N. Choudhary in ensuing AGM, on 30th September, 2019
5. Due to lack of IT personnel, some of the disclosure was not uploaded on the website of the Company.
6. Inadvertently intimation of Closure of Trading Window has not been given to insiders while considering quarterly/yearly financial results and other UPSI matters; but same was uploaded on the BSE as required.
7. Inadvertently some information or details as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was not filed / delayed. Though this does not affect defacto compliance as the script ha not traded throughout the last year.
14. Secretarial Standards
Company complies with all applicable mandatory secretarial standards issued by Institute 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 Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in (Annexure 1 MGT-9) and is attached to this Report.
As amended by Companies (Amendment Bill), 2017, Annual Return of the Company is also uploaded 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 and Directions of the RBI and it does not carry on any activities other than those specifically permitted by the RBI.
B. Accounts and Accounting Standards
The Company adheres to the Accounting Standards as prescribed under section 133 of the Companies Act, 2013 and Rule 7 of the Companies (Accounts) Rules, 2014 in the preparation of its financial statements and also to the guidelines prescribed by the RBI.
C. Stock Exchanges Compliance of Listing Agreements/ SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
The Companys shares are listed on the BSE Ltd. The Company has paid the requisite listing fees to the Stock Exchange. Further, the Company has demat connectivity with both the 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 Company to send its financial statements by electronic mode to such members whose shareholding is in dematerialized format and whose email addresses are registered with Depository for communication purposes. As a responsible corporate citizen, the Company proposes to effect electronic delivery of the Annual Report of the Company in lieu of the paper form to the Members who have registered their email IDs with the Depositories. However, as a matter of practice, a physical copy of the Annual Report has also been sent to the members at their address 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 FY 2018-19 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 a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual harassment of women at workplace (prevention, prohibition ad Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. The Company is committed to provide equal opportunities to their race, caste, sex, religion, color, nationality, disability, etc. All women associates (permanent, temporary, contractual and trainees) as well as women visiting the companys office premises or women service providers are covered under this policy. All are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological.
During Fiscal Year 2019, the Company has not received any complaint on sexual harassment.
17. Management Discussion and Analysis Report (MDAR)
Pursuant to regulation 34(2) of the Listing Regulations, Management Discussion and Analysis 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 of the Listing Agreement and Regulation 15 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 related to the corporate governance would not be applicable to the Companies having paid up equity share capital not exceeding Rs.10 crore and Net Worth not exceeding Rs. 25 crore, as on the last day of the previous financial year.
Hence, in view of the above, para C, D and E of schedule V of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 is not applicable to the Company. However, as a measure of good governance, the Company complies with most of the requirements specified under Clause 49 and Regulation 15 of the SEBI (Listing Obligations and Disclosure 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 to the Companys management and directs, supervises and controls the activities of the Company.
II. The size of the Board is commensurate with the size and business of the Company. As on 31st March, 2019, the Board comprises of Mr. H N Choudhary, Mrs. Usha Iyengar, 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 on specific 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 have adopted the Code of Conduct and the same will be posted on the Companys website.
VI. The Company has adopted a Whistle Blower Policy which provides a formal mechanism for all employees of the Company to make protected disclosures to the management about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct. No employee of the Company has been denied access to the Audit Committee.
VII. The Companys website is www.flflindia.com.
The Directors would like to place on record their gratitude for the valuable guidance and support received from the Reserve Bank of India, Securities and Exchange Board of India, Bombay Stock Exchange Limited and other Government and Regulatory Authorities and convey their appreciation to all the stakeholders, customers, bankers, lenders, vendors and all business associated for their valuable and continuous support and encouragement towards the conduct of the efficient operations of the company.
|For and on behalf of the Board of Directors|
|Hemendranath Choudhary||Usha Iyengar|
|Place: Mumbai||Whole Time Director||Director|
|Date: 6th September, 2019||DIN:6641774||DIN: 03447551|