Frontline Corporation Ltd Management Discussions.

Industry Scenario /opportunity & Out Look / Risk & Concern:

Your Company is basically engaged in Transportation, Wind Energy and Trading of Automotive Parts, Renting of Immovable Properties. The details in respect of sector wise outlook, strengths, threats and risks attached to each segment, performance of the Company in each segment is mentioned as under:

Transport Sector:

The road transportation industry has been the most significant constituent of the Indian logistics industry. However, the segment continues to struggle to cater to the countrys size and widely spread consumption hubs.

Opportunities in Transport Sector:

Increase in economic development of the Country will ultimately require increase in transportation of goods and Services. Further Road Transportation is one of the cheapest mode of transport and goods can be transported from one place to another, even in remote areas. Furthermore due to increase in prices of land, big industries are located in remote areas and which provides more opportunity for the transportation sector. Further, improvement in the quality of road infrastructure has played a critical role.. Further with the introduction of Goods and Services Tax movement of vehicles has become easier. Further the development of roads and highways have made the movement of vehicles easier.

Strength of the Company in Transport Sector :

Your Company has more than 60 Commercial Vehicles, either directly or indirectly and has entered into contract with various companies for the transportation of goods. The Company has experience of more than 2 decades in the Transportation Sector. Thus the Company has good network in the field of the transportation Sector.

Weakness of the Company in Transportation Sector:

Competition is one of the factors affecting the performance of the Company. Further the Sector requires capital investment which is getting costlier day by day for the purchase of new commercial vehicles. Lack of ability of the Company to invest in new commercial vehicles is one of the major weaknesses of the Company.

Risk in Transportation Sector:

Increase in overhead costs is also another risk associated with the transportation Sector. Further customers do not pay in proportion to the increase in the input prices, if any.

High cost of manpower also affects the transportation sector.

Further slowdown in the economic activity of the industries also affects the growth of the Sector.

Performance of the Company in Transportation Sector:

During the year under review, your Company continued to get / renewed transportation Contracts from valued customers to cater needs of its valued clients. The Revenue from Transport Operations marginally increased from Rs. 16.90 Crores to Rs. 18.14 Crores registering a increase of 7.33%

Industry Scenario /opportunity & Out Look / Risk & Concern:

The growth outlook for the automotive aftermarket industry in India continues to be positive, driven by sustained increase in vehicle population and a shift towards higher-end vehicles.

Except for large automotive distributors, players across the aftermarket faced margin pressure in the last few years. This trend is likely to continue as most players in the Indian aftermarket are still sub-scale and will be at risk of margin decline due to pricing pressures as well as rising costs.

Opportunities of the Company in Automotive Parts:

Your Company has distributorship of BOSCH Ltd and also of Mahindra & Mahindra Ltd, Tractor and Farm Equipment Limited which are very reputed international brands. Sale of such branded parts provides customer satisfaction and more demand from the Customers.

Strengths of the Company in Automotive Parts:

Your Company is acting as the Main Distributor for Auto Components manufactured by "BOSCH Ltd." for the Automotive Aftermarket and supplies such spares to Authorised Service Centers of Bosch as well as to retail outlets and neutral garages and workshops.

BOSCH is the global leader in Automotive Components and "BOSCH" brand products come as OE fitments in all ranges of vehicles worldwide. With newer models of vehicles being introduced in the market every year, the business has very good potential in future.

Your Company is acting as the Super Distributor for Auto Components & Farm Equipment manufactured by "Mahindra & Mahindra Ltd. and Tractor and Farm Equipment Limited," for the Automotive Aftermarket. With newer models of vehicles being introduced in the market every year, the business has very good potential in future.

Risk of the Company in Automotive Parts:

The margins from the automotive parts depend upon the policy and pricing of components by BOSCH Ltd., Tractor and Farm Equipment Limited and by Mahindra & Mahindra Ltd over which the Company has no control. Manufacturing of parts by local suppliers at cheap rate is also another risk associated with the automotive parts.

Performance of the Company in Automotive Parts:

The Revenue from trading Operations of automotive parts of decreased from Rs. 24.61 Crores to Rs. 25.23 Crores registering a increase of 2.51%.

Wind Energy Generation:

Industry Scenario & Out Look:

India is moving towards energy sufficiency and at the same time emphasis is improving on renewable energy contribution. Emphasis of the Government is adding up renewable energy. Accelerated depreciation will help in furthering the cause of commissioning more wind mills.

Opportunities in Wind Energy Sector:

Thermal and Coal Power projects involve storage, transportation and pollution problems and hence Wind Energy is one of the cleanest sources of energy. Wind industry is attracting large investments.

Policies of the government are enabling the company to supply quality power to the consumers. Company has realized revenue faster from the group captive consumers than selling power to the utility.

Strength of the Company in Wind Energy Sector:

Your Company has installed Wind mills in the strategic areas whereby wind blows at a faster pace which helps the Company to generate more energy. It is one time investment leading to returns for number of years.

Weakness of the Company in Wind Energy Sector:

Competition from other energy source like Thermal, Solar and Bio Mass is impacting Wind Energy badly. Company has to follow industry norms and compete. Once the industrialization picks up, we may expect the prices to go up again.

Risks in Wind Energy Sector:

Generation of wind energy depends upon the weather. A good monsoon will enable generation of more power. Government policies also play an important role in determining the prices and also availability of Grid to export power to our consumers.

Our power is being utilized by the group captive consumers. Company may face problem if our consumers are facing impact on international / national prices of the commodities.

Performance of the Company in Wind Energy Sector:

The Revenue from Operations of the division decreased from Rs. 1.62 Crores to Rs. 1.27 Crores registering a decrease of 31.60%

Renting of immovable properties:

Industry Scenario & Outlook:

During the year under the review, the real sector has witnessed slowdown. The Slowdown in real sector is mainly due to huge supply and lower growth of economy. Rentals from real estate have also come down significantly. However it is expected that the demand of the real estate will increase in the years to come forward. Central Government and State Government also play an important role in the growth of the Sector.

Opportunities of the Company in Real Sector:

High Population growth and rapid expansion of the urban area, resulting in higher demand for real estate.

Further the company expects that in the years to come the economy will improve and will result in more demand which will also lead to increase in rental income and rental business.

Weakness of the Company in Real Sector:

Huge Interest Burden and liquidity crisis is one of the major weaknesses of the Company to invest in the real estate.

Risk of the Company in Real Sector:

High Investment in the Real Sector is one of the major risks that the Company foresee in the real estate. Further rentals from real estate will depend upon the growth of the economy.

In the recent past Bankers have attached / taken possession some of the properties from which the Company use to derive its rental income.

Performance of the Company in Real Sector:

The Revenue from Operations of the division increased from Rs. 0. 74 Crores to Rs. 0.80 Crores registering a increase of 8.1%.

Internal Control Systems and their adequacy:

The Company maintains adequate internal control systems, which provides, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of companys assets.

Internal Controls are adequately supported by internal audit and periodical review of by the management. The audit committee meets periodically to review with the management and statutory auditors, financial statements. The Audit Committee also meets with the internal auditors to review adequacy /scope of internal audit function, significant findings and follow up thereon and finding of abnormal nature.

Your Company has installed CCTV in some of its Divisions, which acts as safeguarding the assets from theft/burglary or any unforeseen events.

Human Relations:

Relations with the employees of the Company at various levels remained harmonial during the year under the review. The Company is making its best efforts to retain and attract talented employees. During the year under the review, the Company has complied with all legislative provisions of labour laws. As at 31st March, 2019 the Company has around 94.

Cautionary Statements:

Statements in this Directors Report & Management Discussion and Analysis describing the Companys Objectives, projections, estimates, expectations, or prediction may be "forward looking statements " within the meaning of applicable securities laws and regulations. Actual result might differ materially from those expressed or implied.

The Company assumes no responsibility in respect of the forward looking statements herein, which may undergo changes in future on the basis of subsequent developments, information or events.

The Corporate Governance & Management Discussion & Analysis ( MDA) Report:

The Corporate Governance & Management Discussion & Analysis (MDA) Report forms part of the Annual Report. The Certificate from the Statutory Auditors of the Company certifying compliance of the conditions of the Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the report on Corporate Governance.