Frontline Financial Services Ltd Directors Report

Notes:

The Income from operations of the Company for the year 2025-26 has increased to Rs. 293.70 Lakhs from Rs. 49.92 Lakhs in previous year. The company had incurred profit of Rs. 00.77 Lakhs compared to the profit of Rs. 04.35 Lakhs in previous year.

OPERATIONS:

Your directors are pleased to inform the members that during the year under review. Your company reported operating revenue increased while profitability declined. Detailed information on the operations of the company and details on the state of affairs of the company are covered in the management discussion and analysis report.

CAPITAL STRUCTURE:

The capital Structure of the company as on 31.03.2026 stood as follows:

The authorized share capital of the company as on 31 st March 2026 is 6,50,00,000/- (Rs. Six Crore Fifty Lakhs) divided into 65,00,000/- (Sixty-Five Lakhs) equity shares of Rs. 10/- each ranking pari passu.

The paid-up equity share capital of the Company as on 31st March, 2026 is 5,90,11,000 (Rs. Five Crore Ninety Lakhs Eleven Thousand).

DIVIDEND:

With a view to conserve resources and expansion of business, your directors have thought it prudent not to recommend any dividend for the financial year under review.

TRANSFER TO RESERVES:

During the year under review the company has transferred Rs. 77,365 to the general reserves.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There is no change in the nature of business, during the year under review.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

Change in Company Secretary:

During the year, Ms. Isha Badruka (Membership No. A74355), Company Secretary and Compliance Officer of the Company, resigned from her position with effect from 31 July 2025. Subsequently, Ms. Anjali Abhay Asknani (Membership No. A41343) was appointed as the Company Secretary and Compliance Officer of the Company with effect from 10 October 2025. She thereafter resigned from the position of Company Secretary and Compliance Officer with effect from 10th February. 2026, citing her career growth and professional aspirations.

After the end of the financial year, Ms. Nisreen Kamari (Membership No. A80904) was appointed as the Company Secretary and Compliance Officer of the Company with effect from 1 August 2026. The Board welcomes her appointment and looks forward to her valuable contribution towards strengthening the Companys secretarial, regulatory and corporate governance functions.

The Board places on record its sincere appreciation and gratitude to the outgoing Company Secretaries for their valuable services, guidance and support extended to the Company during their respective tenures

Independent Directors:

Ms. Sejal Shah (DIN: 07489588), Independent Director of the Company, has resigned from the office of Independent Director of the Company with effect from 27/08/2026. The Board places on record its sincere appreciation for the valuable contributions and guidance provided by Ms. Sejal Shah during her tenure as Independent Director of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1) (b) of the SEBI Listing Regulations and there has been no change in the circumstances which may affect their status as an Independent Director. The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to their name appearing in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

None of the Directors of the Company are disqualified under section 164 (2) of the Companies Act, 2013.

Re-appointment of Directors

In accordance with the provisions of Section 152 of the Act, read with rules made thereunder and Articles of Association of the Company, Mr. Pradeep Babulal Shah (DIN: 05349427), Director of the Company is liable to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

Accordingly, the said matter forms part of the notice calling the ensuing 35th AGM of the company.

MEETING OF INDEPENDENT DIRECTORS:

In terms of Schedule IV to the Companies Act, 2013 read with Regulation 25(3) of the SEBI (LODR) Regulations, 2015, a separate meeting of the Independent Directors of the Company was held on 21st October, 2025 without the presence of Non-Independent Directors and members of the management. At the said meeting the Independent Directors reviewed the performance of the Non-Independent Directors and the Board as a whole, reviewed the performance of the Chairperson of the Company and assessed the quality, quantity and timeliness of the flow of information between the management and the Board.

SUBSIDIARY COMPANIES/JOINT VENTURE COMPANY/ASSOCIATE COMPANY:

The Company does not have any Subsidiary Companies or Joint Venture Company or Associate Company.

State of Affairs / Significant Events during the year

REASONS FOR REVISION OF FINANCIAL STATEMENT OR REPORT:

During the year the financial statement or report was not revised. Hence further details are not applicable.

POLICY ON DIRECTORS REMUNERATION:

The Board has framed a policy for selection and appointment of Directors, senior management and their remuneration is recommended by the Nomination & Remuneration Committee.

ANNUAL EVALUATION BY THE BOARD:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 (10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Committee has laid down the criteria for evaluation of the performance of individual Directors and the Board as a whole. Based on the criteria the exercise of

FAMILIARIZATION PROGRAMME:

The Company has put in place an induction and familiarization programme for all the Independent Directors. The familiarization programme for independent directors in terms of regulation 46(2)(i) of listing regulations, is uploaded on the website of the company.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of section 134(5) of the Companies Act 2013 with respect to Directors Responsibility Statement it is hereby confirmed:

1. That in the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanation relating to material departures.

2. that the 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 at the end of the financial year and of the profit or loss of the Company for that period

3. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that the Directors had prepared the annual accounts on a going concern basis; and

5. that the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

6. that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

RELATED PARTY TRANSACTIONS:

All related party transactions are placed before the Audit committee entered into during the financial year was on an arm length basis and in the ordinary course of

business. There were no material related party transactions made by the company with the key managerial person which may have potential conflict with the interest of the company at large,

related party transactions are provided in notes to financial statements

DEPOSITS:

The company has not accepted any deposit from public within the meaning of section 73 to 76 of the companies act, 2013 (“The Act”) and the rules framed there under.

LOANS, GUARANTEE & INVESTMENTS:

The Company has not granted any loan, made any investment or provided any security under Sections 185 and 186 of the Act during the year under review.

INTERNAL FINANCIAL CONTROL SYSTEM:

As per the provisions of the Companies Act, the director have the responsibility for ensuring that the company has proper internal financial control system to provide with resource assurance regarding adequacies and operative effectiveness of control to enable the director to meet their responsibility. Company has in place sound system to ensure for safeguarding of the assets, detection of fraud and error, reliable financial information and accuracy of accounting records etc.

COMMITTEES OF THE BOARD:

I. AUDIT COMMITTEE:

The company has constituted Audit committee as per requirement of section 177 of the Companies Act 2013 and Regulation 18 of SEBI (LODR) Regulations, 2015. The terms of reference of Audit Committee are broadly in accordance with the provisions of SEBI (LODR) Regulations, 2015 and Companies Act, 2013.

II. NOMINATION & REMUNERATION COMMITTEE:

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company does not meet the criteria of Section 135 of Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 so there is no requirement to constitution of Corporate Social Responsibility Committee.

PARTICULARS W ITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

(A) Conservation of energy and Technology absorption

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the company during the year under review.

(B) Foreign exchange earnings and Outgo

There were no foreign exchange earnings and outgo during the year under review.

RISK MANAGEMENT:

The Company does not have any Risk Management Policy as the element of risk threatening the Companys existence is very minimal.

NUMBER OF MEETINGS OF BOARD:

The Board of Directors duly met 5 (five) times during the year under review.

ANNUAL RETURN:

The copy of Annual Return is available on the website of the company as per section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, and the link of the website is https://frontlinefsl.com/

MAINTENANCE OF COST RECORDS:

The Company is required to maintain cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 read with Rule 8A of the Companies (Accounts) Rules, 2014, and such accounts and records are duly made and maintained by the Company.

DETAILS OF FRAUD REPORTED BY AUDITORS:

During the financial year under review, no fraud has been reported by the Statutory Auditors, the Secretarial Auditor or the Cost Auditor of the Company to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013.

ONE TIME SETTLEMENT WITH BANKS OR FINANCIAL INSTITUTIONS:

During the year under review, there was no one time settlement of loans taken from Banks or Financial Institutions. Accordingly, the disclosure regarding the difference between the amount of valuation done at the time of one time settlement and the valuation done while taking loans from Banks or Financial Institutions, as required under Rule 8(5)(xi) of the Companies (Accounts) Rules, 2014, is not applicable.

APPLICATION MADE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016:

No application has been made and no proceeding is pending against the Company under the Insolvency and Bankruptcy Code, 2016 during the year under review, as required to be disclosed under Rule 8(5)(x) of the Companies (Accounts) Rules, 2014.

MANAGERIAL REMUNERATION SECTION 197

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished in the auditor report of the company as attached herewith.

AUDITORS:

A) STATUTORY AUDITORS

M/s. J S Shah & Co., Chartered Accountants, are the statutory auditor of the company for the

year under review. There are qualifications or adverse remarks in the Auditors Report which require clarification/ explanation. Explanation to Comments of Statutory Auditor is annexed herewith for k ind perusal and information. The Notes o n financial statements are selfexplanatory, and needs no further explanation.

B) SECRETARIAL AUDITOR

During the financial year under review, M/s. Khushbu Trivedi & Associates, Practicing Company Secretaries, acted as the Secretarial Auditor of the Company. Subsequent to the end of the financial year, the Board of Directors has proposed to appoint M/s. Manali D & Co., Practicing Company Secretaries, as the Secretarial Auditor of the Company for a term of five consecutive years commencing from FY 2026-27 to FY 2030-31, subject to the approval of the Members at the ensuing Annual General Meeting, in accordance with the applicable provisions of the Companies Act, 2013 and SEBI LODR.

The Secretarial Audit Report in Form No. MR-3 is annexed herewith for you perusal Further, the Secretarial Audit report contains adverse remark /qualification etc.

Clarification to the qualifications or adverse remarks in the draft Secretarial Audit Report as mentioned below.

C) INTERNAL AUDITORS

The Company is in the process of appointing an Internal Auditor commensurate with the size and requirements of the Company. Further, the Company is in the process of implementing appropriate systems and processes to ensure compliance with applicable laws and regulations.”

D) COST AUDITOR

Cost Audit is not applicable to the Company.

PREVENTION OF INSIDER TRADING:

In view of the SEBI (Prohibition of Insider Trading) Regulation, 2015 the Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The details of the Insider Trading Policy have posted on the website of the Company.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

As per Regulation 34 (e) read with schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the management Discussion and Analysis Report of the Company for the year ended is set out in this Annual Report for your perusal.

CODE OF BUSINESS CONDUCT AND ETHICS:

The Company has laid down a Code of Conduct (COC) which is applicable to all the Board members and Senior Management of the Company. The COC is available on the website of the company. All the members of the Board and Senior Management have affirmed compliance with the Code.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, contractual, temporary, trainees) are covered under this policy.

COMPLIANCE WITH MATERNITY BENEFIT ACT, 1961

The Company has duly complied with the provisions of the Maternity Benefit Act, 1961, as amended from time to time. Frontline Financial Services Limited ensures that all eligible women employees are provided with the benefits and protections as mandated under the Act, including paid maternity leave, nursing breaks, and protection against dismissal during maternity leave.

During the financial year under review, no complaint or grievance was received in relation to the maternity benefits extended by the Company, and all applicable benefits were extended in a timely and satisfactory manner.

CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC)

No such process initiated during the period under review under the Insolvency and Bankruptcy Code, 2016 (IBC).

VIGIL MECHANISM POLICY / WHISTLE BLOWER POLICY:

As per Section 177(9) and (10) of the Companies Act, 2013, and as per the Clause 49 of the Listing Agreement, the company has established Vigil Mechanism for directors and employees to report genuine concerns and made provisions for direct access to the chairperson of the Audit Committee. Company has formulated the present policy for establishing the vigil mechanism/ Whistle Blower Policy to safeguard the interest of its stakeholders, Directors and employees, to freely communicate and address to the Company their genuine concerns in relation to any illegal or unethical practice being carried out in the Company.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

REGISTRAR AND SHARE TRANSFER AGENT:

The Company has appointed MUFG Intime India Private Limited as its Registrar and Share Transfer Agent. The Corporate Office of MUFG Intime India Private Limited is situated at Unit No 303, 3rd Floor, Shoppers Plaza V, Opp. Municipal Market, B/H, Shoppers Plaza II, Off C G Road, Ahmedabad (390009), Gujarat.

HEALTH, SAFETY AND ENVIRONMENT PROTECTION

Companys Health and Safety Policy commits to comply with applicable legal and other requirements connected with occupational Health, Safety and Environment matters and provide a healthy and safe work environment to all employees of the Company.

ENVIRONMENT:

As the company is not in the field of manufacture, the matter relating to produce any harmful gases and the liquid effluents are not applicable.

SECRETARIAL STANDARDS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board and General Meetings of the Company.

APPRECIATION: