Frontline Corporation Ltd Directors Report.

To

The Members,

Frontline Corporation Limited

Your Directors have pleasure in presenting their 30th Annual report along with Audited Accounts for the year ended on March 31, 2019.

Financial Performance and Appropriations : ( Rs in Lacs ) ( Rs in Lacs )
Current Year ended on 31-03-2019 Current Year ended on 31-03-2018
Revenue from Operations 4655.81 4425.29
Other Income 268.97 441.98
Total Income 4924.78 4867.28
Finance Charges 58.93 57.92
Depreciation 192.13 148.67
Profit /( Loss) before Taxation & (51.38) 232.34
Exceptional and Extra Ordinary Items
Exceptional Items 0 0
Profit / ( Loss ) before Tax (51.38) 232.34
Provision for Taxes – Current 0 52.50
Provision for Taxes – Deferred (17.99) (12.63)
Income Tax – Earlier Period 0 0
Profit /( Loss) for the year from continuing operations (33.39) 192.48
Other comprehensive Income ( Net of Tax ) 1.41 (0.47)
Total Comprehensive Income (31.97) 192.00
Appropriations
Opening Balance of Retained Earnings 237.92 45.92
Comprehensive Profit/ ( Loss) for the year (33.30) 192.00
Remeasurement benefit of defined plans (Net)Dividend 1.41 (0.47)
Balance Carried to Balance-Sheet 206.03 237.92

Notes:

Previous years figures have been regrouped wherever necessary to bring them in line with the current years representation of figures.

The Opening Balance of Retained Earnings is Rs 237.92 lacs. The Company has transferred the whole of the Comprehensive Income of Rs. (33.30) lacs to Retained Earnings. Remeasurement of defenied benefit plans net is Rs. 1.41 lacs. The Closing Balance of the Retained Earnings stands at Rs. 206.03 lacs.

Dividend :

In order to conserve resources, your Directors do not recommend any dividend for the year.

Review Of Operations:

Total Income has increased from Rs. 4867.28 lacs to Rs. 4924.78 lacs which is approximately increase of 1.18%. The financial charges has increased from Rs. 57.92 lacs to Rs. 58.93 lacs which is approximately increase of 1.74%.

Disclosure under Rule 8 (5) of Companies (Accounts) Rules, 2014:

Change in Nature of Company Business:

The Company is engaged in the business of transportation, wind energy, trading of automotive parts and renting of immovable properties. The Company has added Petroleum distribution to its business objects during the year. Other than this there is no change in nature of Company Business.

Details of Directors / Key Managerial Personnel Appointed / Resigned:

Appointments :

Mr. Rajesh Vasantlal Tripathi was appointed as Additional Director on 8th March, 2019. Mr. Sanket Dipakbhai Sheth was appointed as Additional Director on 29th March, 2019.

Resignation and Cessation:

Mr. Jiwraj Khaitan has expired on 28th September, 2018. Mr. Sital Kumar Banerjee has resigned on 28th March, 2019.

Other than above no Directors / Key Managerial Personnel were appointed or have resigned during the year under the review.

Details of Holding / Subsidiary Companies / Joint Ventures / Associate Companies:

During the year under review, there was no holding / Subsidiary Company / Joint Ventures / Associate Companies were there.

Deposit:

The Company has not invited any deposit other than the exempted deposit as prescribed under the provision of the Companies Act, 2013 and the rules framed there under, as amended from time to time. Hence there are no particulars to report about the deposit falling under Rule 8 (5) (v)and ( vi ) of Companies ( Accounts ) Rules, 2014.

Pursuant to Provisions of Rule 2 ( 1 ) ( c ) ( viii ) of the Companies ( Acceptance of Deposit ) Rules, 2014no amount is outstanding as on 31st March, 2019 from the Directors of the Company in the financial year.

Inter Corporate Deposit

Further an amount of Rs. 60.78 lacs was outstanding towards Inter Corporate Deposit at the end of the financial year.

Details of Significant and Material Orders passed by Regulators or Courts or Tribunals:

During the year under review there were no significant and material orders passed by any Regulators or Court or Tribunals which may have impact on the going concern status. No order has been passed by any Regulators or Court or Tribunals which may have impact on the Companys operation in future.

Internal Financial Controls:

The Company has adequate internal financial controls to support the preparation of the financial statements.

INSURANCE:

The properties of the Company stand adequately insured against risks of fire, strike, riot, earthquake, explosion and malicious damage.

DIRECTORS RESPONSIBILITY STATEMENT:

As required under the provisions of Section 134 of the Act, your Directors report that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(b) The Directors have 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 at the end of the financial year and of the Loss of the Company for that period.

(c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) The Directors have prepared the annual accounts on a going concern basis.

(e) The Directors have laid down internal financial controls as required by Explanation to Section 134(5) (e) of the Act to be followed by the Company and such internal financial controls are adequate and are operating effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of applicable laws and such systems are adequate and operating effectively.

PARTICULARS OF EMPLOYEES:

There was no employee drawing remuneration requiring disclosure under the Rule 5 ( 2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Company is not required to conduct Cost audit during the year. The Company is not required to file Cost audit report during the year under review.

LISTING:

The Equity Shares of the Company are listed on BSE Limited and Calcutta Stock Exchange. The Company is regular in payment of listing fees. The Company has paid the listing fees for the year 2019 – 2020.

AUDITORS AND AUDITORS REPORT:

It is proposed to appoint S M PANSURIYA & CO., Chartered Accountants, Ahmedabad at the conclusion of the annual general meeting for the year 2019 for a period of five years. The Company has received a letter from S M PANSURIYA & CO., ( firm Registration No. 126729W ) Chartered Accountants, Ahmedabad granting consent to act as Statutory auditor of the Company and also confirming their eligibility to act Statutory auditor of the Company.

The existing term of M/s. Paresh Thothawala & Co., Chartered Accountants concludes at the annual general meeting for the year 2019.

The Company has received a certificate from the Auditors to the effect that their appointment if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013

The auditors observations and its reply are as under :

Basis for Qualified Opinion

1. Note No. 22tothe standalone financial results, regarding Non provision of interest of Rs. 549.64Lacs onNPA accountsfor the year under considerationThe exactamounts of the said non provisions of interest are not determined and accounted for by the Company and tothat extent Bankers loan liabilities are understated andlossisunderstated.

Reply:

The interest provision on loan of Punjab and Sindh Bank has not been accounted due to legal dispute. The Honourable Calcutta High Court larger Bench has ruled in favor of the Company. However the Bank has preferred an appeal to the Honourable Supreme Court of India. The matter pending before legal forum and hence the same is not accounted for.

2. Note No.16to the standalone financial results, regarding uncertainties relating to recoverability of loans & advances given to M/s. Gateway Commodities (P) Ltd. amounting to Rs. 5,14,01,172/-(Previous year Rs. Rs. 5,36,44,817/-) and Non Provision of interest @ 9% of Rs. 46,93,172/-as at 31st March, 2019. The management has explained that such advances have been given in the normal course of business. The management, based on internal assessments and evaluations, have represented that the balance outstanding advances are still recoverable/ adjustable and that no accrual for diminution of advances is necessary as at balance sheet date and the aforementioned balances are fully recoverable. However, we are unable to ascertain whether all the remaining outstanding advances, as above, are fully recoverable / adjustable since the outstanding balancesas at balance sheet date are outstanding for a long period of time. In the absence of sufficient appropriate evidence we are unable to comment upon the carrying value of these loans & advances and recoverability of the aforesaid dues and the consequentialimpact if any on the accompanying standalone financial statements. Our audit opinion on the standalone financial statements for the year ended 31 March 2019was also qualified in respect of this matter.

Reply :

The Company is in the process of making recovery of trade receivables and loans and advances. The Company is exploring all legal options for the same. It could be seen from the qualification itself that there is a reduction in the outstanding amount.

3. Note No. 5 to the standalone financial statements regarding taking physical and/ or symbolical possession and initiating auction process on various assets by lenders; however the company has received stay order against these proceedings and matter is sub-judicial till date. The management has not performed any impairment assessment for these assets. Accordingly we are unable to ascertain the appropriateness of the carrying value of these assets and consequential impact if any on the accompanying standalone financial statements. Our audit opinion on thestandalone financial statements for the year ended 31 March2019was also qualified in respect of this matter.

Reply to above Qualifications : In reply to the above mentioned qualification your Directors state that the attachment of properties by the Bank is a legal process and the Company is taking all legal steps to protect the property. The Properties were given as security for the loan availed by Fairdeal Supplies Limited. Fairdeal Supplies Limited has reached an Settlement agreement with UCO Bank and also with The Jammu and Kashmir Bank Limited. Consequent upon the paymentof the settlement amount with Banks, the Company expects to release the property.

4. Note No. 35.8 to the standalone financial statements regarding Corporate guarantee given against credit facilities availed by anassociate concernand non-complianceofprescribedsectionunder the provisions of the erstwhile Companies Act 1956/ Companies Act 2013 respectively and for which the Company has filed an application with respective authority; however approval in this regard is pending till date. Due to uncertain consequence in this matter we are unable to identify impact if any on standalone financial statement, our audit opinion is qualified.

In reply to the above mentioned qualification of the Independent Auditors Report the Board of Directors hereby replies that the Company at the time when M/s. Fairdeal Supplies Limited, a Group concern of the Company obtained the loan from the Banks, the financial conditions and other prospects of M/s. Fairdeal Supplies Limited were excellent. The Board of Directors of the Company did not forecast that loan availed by M/s. Fairdeal Supplies Limited will be defaulted. The Bankers of M/s. Fairdeal Supplies Limited have stipulated condition to give the collateral and guarantee for the facilities to be availed by the Fairdeal Supplies Limited.

The Board of Directors of the Company would further like to state that it has already filed necessary petition before the respective authorities for compounding the matter.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details in respect of the conservation of energy, technology absorption and foreign exchange earnings and outgo are more detailed in the Annexure I to the Directors Report.

CORPORATE GOVERNANCE:

Pursuant to SEBI ( Listing Obligations and DisclosureRequirements ) Regulations, 2015 Management

Discussion & Analysis, Corporate Governance Report and Auditors Certificate regarding compliance to conditions of corporate governance are made part of this Annual Report. The Management Discussion and Analysis which is attached herewith and forms part of the report and which is attached as Annexure VII and the Corporate Governance Report which is attached herewith and forms part of the report and which is attached as Annexure VIII.

Related Party Transactions

All related party transactions that were entered into during the year under report were on an arms length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company during the year. Related Party Transactions Policy is available on the website of the Company at www. frontlinecorporation.org. The details of transactions with the related party is provided in . No advance is / was paid for entering into related party transactions. The prices paid to the related party transactions are based on the ruling market rate at the relevant point of time. The requisite details in form AOC – 2 is attached herewith as Annexure - II which forms part of the Directors Report

Particulars of Loans / Guarantees / Investment:

The details of the investments and loans provided are mentioned in note no. 12 and 16 of the Balance Sheet. Members are requested to refer the same. Further with respect to loans / investment to and from the related parties are more detailed in note no. 35.5 of the Balance Sheet.

The Company has provided its Security and also provided its Corporate Guarantee for the loan availed by M/s. Fairdeal Supplies Limited for Rs. 318 Crores. The Security / Corporate Guarantee was provided under the erstwhile Companies Act, 1956 which is continuing till date.

Code for Prevention of Insider Trading Practices

Pursuant to Securities and Exchange Board of India (SEBI) has introduced SEBI (Prohibition of Insider Trading) Regulations, 2015 a new Code of Conduct was adopted by the Company with effect from 1st April, 2019. The Company has also adopted a policy and procedure for enquiry in case of leak of sensitive and unpublished price information. The Company has instituted a comprehensive code of conduct in compliance with the SEBI regulations on prevention of insider trading. The code lays down guidelines, which advise on procedures to be followed and disclosures to be made, while dealing in shares of the Company and cautions on the consequences of non-compliances. The Code is also available on the website of the Company i.e. www.frontlinecorporation.org

Risk Management Policy

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making. It is dealt with in greater details in the management discussion and analysis section. The Risk Management Policy is also available on the Companys website at www.frontlinecorporation.org

Declaration by Independent Directors:

The following Directors are independent in terms of Section 149(6) of the Act and SEBI ( Listing Obligations and Disclosure Requirements ) Regulations, 2015 :

(A) Mr. Virendra Sharma (B) Mr. Rajesh Vasantlal Tripathi (C) Mr. Sanket Dipakbhai Sheth (D) Mrs. Aarefa Kutub Kapasi

The Company has received requisite declarations/ confirmations from all the above Directors confirming their independence.

Extract of the Annual Return

Pursuant to provision of Section 92 and 134 and other applicable provision of the Companies Act, 2013 and of Rule 12 (1) of Companies (Management and Administration) Rules, 2014 the extract of the annual return in form MGT 9 for the Financial Year ended on 31st March, 2019 is annexed as Annexure III to this Report.

Number of Board Meetings

During the year the Board of Directors met 10 times ( including adjourned meetings). The dates of the Board meetings are as under :

02.04.2018, 30.05.2018, 14.06.2018, 14.08.2018, 17.08.2018, 14.11.2018, 13.02.2019, 14.02.2019, 08.03.2019and29.03.2019

Corporate Social Responsibility:

The Company is not covered under the criteria of the provision of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, and therefore it is not mandatory for the Company to have the Corporate Social Responsibility.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee are set up at shop floor level to redress complaints received regularly and are monitored by women line supervisors who directly report to the Chairman. All employees (permanent, contractual, temporary, trainees) are covered under the policy. There was no compliant received from any employee during the financial year 2018-19 and hence no complaint is outstanding as on 31.03.2019 for redressal.

The Company has constituted an internal complaint committee pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

SECRETARIAL STANDARDS:

The Company has complied with the mandatory Secretarial Standards issued pursuant to Section 110 of the Companies Act, 2013.

SECRETARIALAUDIT REPORT:

Pursuant to Section 204 of the Act, the Secretarial Audit Report for the Financial Year ended 31st March, 2019 given by M/s. Jalan Alkesh & Associates, Practising Company Secretary is annexed as Annexure IV to this Report.

The Qualifications made by the Secretarial Auditor and its reply is as under :

A ) Non filing and / or Delayed filing of certain forms with the Ministry of Corporate Affairs required under the Companies Act, 2013. However for late filing of forms the Company has paid additional fees.

Reply : The Company will take the necessary steps to ensure the due compliance of the law in time so that the Company do not have to pay additional fees for the same.

B) The Company has given Security / Guarantee to the Bankers for the loans obtained by M/s.

Fairdeal Supplies Limited in violation of erstwhile Companies Act, 1956 which is still continuing.

Reply : The same is given in the auditors and auditors report herein above.

C) Further with respect to the advances to M/s. Gateway Commodities Pvt. Ltd. we request the members to refer the Balance Sheet and the Statutory Auditors Report remarks. The advances to M/s. Gateway Commodities Private Limited were given under the erstwhile Companies Act, 1956.

Reply : The same is given in the auditors and auditors report herein above.

D) There was delay in submission of results for the quarter ended on 30th June, 2018 and consequently the BSE has imposed penalty for the same.

E) The quarter and year end results for the year ended on 31st March, 2018 were required to be submitted to the exchange latest by 30th May, 2018. However same was not declared in time and consequently BSE has imposed penalty for the same.

Reply for D and E : Due to implementation of IND AS the delay has occurred. The year end results were delayed as due to implementation of the Indian Accounting Standard and consequently this being the 1st year the Company will take adequate steps in advance for the compliance of the same The Company has taken necessary steps in this regard and will take care that in future the delay does not occur.

ANNUAL PERFORMANCE EVALUATION:

In compliance with the provisions of the Act and SEBI ( Listing Obligations and Disclosure Requirements ) Regulations, 2015 the performance evaluation was carried out as under:

Board:

In accordance with the criteria suggested by The Nomination and Remuneration Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of the Board as a whole based on various criteria. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory.

Committees of the Board:

The performance of the Audit Committee, the Nomination and Remuneration Committee and the Stakeholders Relationship Committee was evaluated by the Board having regard to various criteria such as committee composition, committee, processes, committee dynamics etc. The Board was of the unanimous view that all the committees were performing their functions satisfactorily and according to the mandate prescribed by the Board under the regulatory requirements including the provisions of the Act, the Rules framed thereunder and SEBI ( Listing Obligations and Disclosure Requirements ) Regulations, 2015.

Individual Directors:

(a) Independent Directors: In accordance with the criteria suggested by The Nomination and Remuneration Committee, the performance of each independent director was evaluated by the entire Board of Directors (excluding the director being evaluated) on various parameters like engagement, leadership, analysis, decision making, communication, governance and interest of stakeholders. The Board was of the unanimous view that each independent director was a reputed professional and brought his/her rich experience to the deliberations of the Board. The Board also appreciated the contribution made by all the independent directors in guiding the management in achieving higher growth and concluded that continuance of each independent director on the Board will be in the interest of the Company.

(b) Non-Independent Directors: The performance of each of the non-independent directors (including the chair person) was evaluated by the Independent Directors at their separate meeting. Further, their performance was also evaluated by the Board of Directors. The various criteria considered for the purpose of evaluation included leadership, engagement, transparency, analysis, decision making, functional knowledge, governance and interest of stakeholders. The Independent Directors and the Board were of the unanimous view that each of the non-independent directors was providing good business and people leadership

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The requisite details as required by Section 134(3) (e), Section 178(3) & (4) andSEBI ( Listing Obligations and Disclosure Requirements ) Regulations, 2015 is attached herewith and forms part of the Directors Report. The details of the remuneration policy of the Company as required in terms of the SEBI ( Listing Obligations and Disclosure Requirements ) Regulations 2015 is provided in Annexure V to the Report.

The details in respect Disclosure under Section 197 ( 12) and Rule 5 ( 1) of the Companies ( Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure VI of the Report.

MATERIAL CHANGES AND COMMITMENTS:

There are no material changes and commitments, if any, affecting the financial position of the Company subsequent to the date of the Balance sheet and up to the date of the report.

POLICIES:

The various Policies required to be adopted by the Company pursuant to provision of the Companies Act, 2013 and SEBI ( Listing Obligations and Disclosure Requirements ) 2015 are placed upon the website of the Company i.e. www. frontlinecorporation.org

APPRECIATION:

Your Directors acknowledge the continued support and cooperation received from the Central Government, Shareholders, Banks and other Lenders, suppliers and Dealers.

The Board also wishes to record its sincere appreciation of the total commitment, dedication and hard work, put in by every member of Frontline Group.