Frontline Securities Ltd Management Discussions

1. Industry Structure and Development:

During the year under review, the performance of capital market has worsened, especially in the mid cap and small cap. During the year under review the indices growth compared to last year is given below:

Further, from January, 2020 onwards, the impact of Covid-19 started affecting the Indian Industry, business as well as stock market. In March 2020, the World Health Organization declared the Covid-19 to be a pandemic. It developed rapidly into a global crisis, forcing Governments to enforce lockdowns of most of the economic activities. Consequent to this, the Government of India declared a national lockdown on March 24, 2020 to prevent the spread of the virus. This unavoidable step has caused a severe blow to the economy. For the Company, the focus immediately shifted to ensuring the health and well-being of all employees, and on minimizing disruption in our operations and commitments to the customers.

Due to capital market not performing well in 2019-20, outbreak of Covid-19 and lockdown restrictions, the companys portfolios value declined substantially. Since, the said downfall in the opinion of the company was temporarily, therefore, the company did not sell its investments. However, being a listed company, Ind-AS 113 being applicable to the company w.e.f. 1^st April 2019, the company was required to recognize the unrealized loss as investment which were taken at market value. Due to this, a capital loss of Rs.737.20/-lakhs were recognised and is shown under other comprehensive income, due to which the composite loss for the year stood at Rs. 316.53/- lakhs.

2. Opportunities and threats

The growth of the Company is subject to opportunities and threats as are applicable to the industry from time to time. Further, the Company endeavors to evaluate opportunities considering the macro economic conditions both globally & domestically.

3. Segment wise performance &outlook

During the year under review, the Company operates in one geographical segment i.e. India & has identified three business segments i.e. Segment-I which is Consultancy Service, Commission &Brokerage & Segment-II Investments in Bonds, Fixed deposits & Loan & Advances and Segment III Renting and Co.Work. The company also earned profit before tax of Rs. 506.92/- lakhs.

4. Outlook

In the near future, the Company intends to continue to focus on its current business of investment, management consultation, Mutual Fund distribution etc.

5. Risk and Concerns

While risk is an inherent aspect of any business, the Company is conscious of the need to have an effective monitoring mechanism and has put in place appropriate measures for its mitigation including business portfolio risk, financial risk, legal risk and internal process risks. Risk can be broadly categorized into two broad categories: One Risk Associated at the Transactional Level and the other Risk Associated at the Decision Making Level. Appropriate attention is given to manage both the risks.

6. Internal Control Systems and their adequacy

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These systems are designed to ensure that all assets of the Company are safeguarded and protected against any loss and that all transactions are properly authorized, recorded and reported.

7. Financial Performance

The details of financial performance of the Company are appearing in the Balance Sheet and Statement of Profit and Loss for the year.

8. Human Resources

The Company lays due emphasis on sound Human Resource Management practices and appraisal systems with focus on cordial employer-employee relations to ensure higher level of productivity and operational efficiency. Adequate initiatives have been taken to strengthen and develop its human resources as a key strength through continues training inputs and focused development plan. As on 31^st March, 2020, the total number of employees was 6.

9. Details of the Significant changes in Key Financial Ratios

10. Disclosure of Accounting Treatment

The Financial Statement has been prepared in Accordance with the Principles laid down in Indian Accounting Standards (Ind-AS)

11. Cautionary Statement

Statement in this Management Discussion and Analysis Report describing the companys objective, projects, estimates and expectations may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied. Important factors that could make difference to the Companys operations within including change in government regulations, tax regimes, and economic development within and outside India.

By Order of the Board of Directors

For FRONTLINE SECURITIES LIMITED

DIN:00050614