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Frontier Capital Ltd.

BSE: 508980 | NSE: | Series: NA | ISIN: INE977E01013 | SECTOR: Finance - Leasing & Hire Purchase

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Annual Report

For Year :
2014 2013 2012 2011 2010 2009 2008 2005

Director’s Report

The Members of Frontier Leasing & Finance Limited Mumbai The Directors have pleasure in presenting the Thirtieth Annual Report of the Company and the Audited Statements of Accounts for the Financial Year (FY) ended 31st March, 2014. 1. Financial Results: Amt (in Rs.) Particulars For the Year For the Year ended on 31st ended on 31st March, 2014 March, 2013 Income 3.04.07.381 1,86,92,242 Less: Expenses 1.41.56,440 37,43,996 Profit / (Loss) 1,62,50,941 1,49,48,246 before tax_ Less: Provision for Taxation Current Tax Deferred Tax (60,04,000) (57,10,459) 13.336 26,192 Profit / (loss) 1,02,60,277 92,63,979 After Taxation Less: Proposed 2,45,000 2,45,000 Dividend_ Less: Corporate 41,638 41,638 Dividend Tax Less: Transfer to 20,52,055 18,52,796 Statutory Reserve_ Add: Balance 2,25,96,865 1,54,72,320 Brought Forward from Last Year Balance Carried 3,05,18,449 2,25,96,865 Forward to Balance Sheet 2. Operations Your Company continues to be profitable, dividend paying and debt free for the last three years. Profit after tax was 0.92 Crore and 1.23 Crore for Financial Year 2013 and 2012 respectively. In Financial Year 2014 total Income stood to Rs. 3.04 Crore with Profit after tax of Rs. 1.02 Crore. Key Highlights:- - As on 30th June 14, the Assets under Management stood at Rs. 23.34 Crores with Gross NPA and Net NPA at 0%. - During the year, the Company has built a Bill Discounting portfolio of Rs. 12.24 Crores and Corporate Loan of Rs. 6.2 Crores as of 30th June 14. 3. Dividend Your Directors are pleased to recommend a Dividend of Rs 1/- Per Equity share of Rs 10/- each for the Year end 31st March, 2014. The Dividend if approved at the forthcoming Annual General Meeting will be paid out of the profits of the Company. The Dividend will be paid to those shareholders whose name appear on the Register of the Members of the Company after giving effect to all the valid transfers lodged with the share transfer agent on or before the 9th September, 2014 and to those whose name appear as beneficial owners in the records of National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) as on the said date. After considering the Company''s profitability as well as working capital requirement for its growth plans, your directors are pleased to recommend a final dividend at the rate of 10% i.e. Re. 1/- per equity share. The dividend will be declared in the ensuing Annual General Meeting based on approval by the Shareholders. 4. Public Deposit: m Your company has not accepted any Deposits during the Year. Hence the provisions of Section 58A of the Companies Act, 1956 or Section 73 & 74 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 1975 and. Companies (Acceptance of Deposits) Rules, 2014 are not applicable to the Company. Companies (Acceptance of Deposits) Rules, 2014 are not applicable to the Company. 5. Auditors: M/s. Nisar & Kumar, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting. They have been Statutory Auditors of the Company since Financial Year 2008 i.e for a continuous period of 4 years including Financial Year 2014. In terms of the Companies Act, 2013 (the new Act) and the Rules framed thereunder, it is proposed to appoint them as Statutory Auditors of the Company to hold office from the conclusion of the Annual General Meeting, until the conclusion of the 31st Annual General Meeting of the Company to be held in the Year 2017 (subject to ratification of their appointment by the Members at every Annual General Meeting held after the ensuing Annual General Meeting). As required under the provisions of Section 139 (1) of the new Act, the company has received a written consent from M/s Nisar & Kumar, Chartered Accountants to their appointment and a Certificate, to the effect that their re-appointment, if made, would be in accordance with the new Act and Rules framed thereunder and that they satisfy the criteria provided in Section 141 of the new Act. The Members are requested to elect Auditors as aforesaid and fix their remuneration. 6. Directors: A] During the year, the following Directors resigned from the Board of FLFL. Sr. Name of DIN No. Designation Date of No the Resignation Director 1 Mr. 00023081 Non- 5th August, Manish Executive 2014 Kedia Director 2 Mr. 00055499 Non- 5th August, Narottam Executive 2014 Babulal Diretor Vyas 3 Mr. Sridhar 00004272 Independent 30th June, Srinivasan Director 2014 The Board extends its sincere appreciation to Mr. Sridhar Srinivasan, Mr. Manish Kedia and Mr. Narottam Babulal Vyas for their valuable guidance and support provided during their tenure as Directors in the Company. B] In accordance with the provisions of Section 149 of the Companies Act, 2013 and the Rules made thereunder, which came into effect from April 1, 2014, approval of the Members will be sought at the ensuing Annual General Meeting of the Company for formalizing the appointment of Mr. V.G Raghavan, Mr. Sridhar Srinivasan and Mr. Rajesh Kathuria as Independent Directors of the Company, liable to retire by rotation, for a term until September, 2017. 7. Subsidiary Company: A wholly owned subsidiary of the Company named Frontier Digital Technologies Private Limited'' (FDTPL) was incorporated on 21st March, 2014. A statement containing brief financial details of FDTPL for the year ended March 31, 2014 is included in the Annual Report. 8. Compliance: 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. 9. Director''s Responsibility Statement: Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 the Directors, based on the representation received from the Operating management, confirm that: (i) in the preparation of the annual accounts for the financial period ended 31st March, 2014,the applicable accounting standards have been followed and there are no material departures. (ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit of the Company for the year ended on that date; (iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) the annual accounts have been prepared on a going concern basis. 10. Consolidated Financial Statements The Consolidated Financial Statements of the Company and its subsidiary FDTPL, prepared in accordance with Accounting Standard AS 21 form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary Company FDTPL. 11. Corporate Governance Report: With the introduction of the new 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 related to the corporate governance would be applicable to the Company with effect from 1st October, 2014. However, as a measure of good governance, the Company complies with most of the requirements specified under Clause 49. A summary of the Corporate Governance measures adopted by the Company is given below:- i. The Company recognizes its role as a corporate citizen and endeavors to adopt the best practices and the highest standards of corporate governance through transparency in business ethics, accountability to its customers, government and others. ii. The Company believes that good corporate governance practices enable the management to direct and control the affairs of the Company in an efficient manner and to achieve the Company''s goal of maximizing value for all its stakeholders. iii. The Board of Directors along with its Committees provides leadership and guidance to the Company''s management and directs, supervises and controls the activities of the Company. iv. The size of the Board is commensurate with the size and business of the Company. At present, the Board comprises of Mr. V.G Raghavan, Mr. Sridhar Srinivasan, Mr. Sandeep Soni and Mr. Rajesh Kathuria. Mr. V G Raghavan, Mr. Sridhar Srinivasan & Mr. Rajesh Kathuria are the Non - Executive Independent Directors of the Company and Mr. Sandeep Soni is the Executive, Whole Time Director of the Company. v. Mr. Sandeep Soni was re-appointed as the Whole time Executive Director of the Company for a period of 5 years commencing 1st April, 2014. It was decided at the Nomination and Remuneration Committee Meeting held on 25th March, 2014 and at a Board Meeting held on the same day, to pay Remuneration of INR 3 lakhs per month with effect from 1st April, 2014. vi. The Board has constituted Committees with specific terms of reference to focus on specific issues and ensure expedient resolution of diverse matters. These include the Audit Committee, Nomination & Remuneration Committee & Independent Directors Committee. vii. The Audit Committee, Nomination and Remuneration Committee and the Independent Directors Committee was constituted comprising three Non-Executive (NE) Independent Directors viz. Mr. V.G Raghavan, Mr. Sridhar Srinivasan and Mr. Rajesh Kathuria. viii. Minutes of Meetings of all Committees of the Board are placed before the Board for discussion/noting. A quarterly summary of the minutes of the meetings of the Boards of the Company''s subsidiary FDTPL is also placed before the Board for noting. ix. During the year, Ms. Neha Sanghavi, Associate Member of The Institute of Company Secretaries of India, was appointed as the Company Secretary and Compliance Officer of the Company. The Company Secretary is also the Secretary of all the aforementioned Committees. x. The Company, Directors (including the Independent Directors) and its employees have adopted the Code of Conduct and the same has been posted on the Company''s website. xi. 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 Company''s Code of Conduct. No employee of the Company has been denied access to the Audit Committee. xii. The Company''s website is www.flflindia.com 12. Accounts and Accounting Standards The Company adheres to the Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006 in the preparation of its financial statements and also to the guidelines prescribed by the RBI. 13. Conservation of energy, technology absorption, foreign exchange earnings and outgo: Information pertaining to section 217(1) (e) of the Companies Act, 1956 & 134 (3)(m) of the Companies Act, 2013 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 and Companies (accounts) Rules, 2014 with respect to conservation of energy, technology absorption may be treated as NIL since your Company is not a manufacturing Company. During the year under review, the Company had NIL foreign exchange earnings (Previous Year: NIL) and outgo (Previous Year: NIL) 14. Particulars of Employees: The disclosures as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, is not required as there are no employees covered by it. 15. Disclosures: 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 Profit & Loss Accounts. 16. Stock Exchanges - Compliance of Listing Agreements The Company''s shares are listed at The Bombay Stock Exchange and the Company has paid the 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. 17. 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''s subsidiaries for FY 2013-14 is also available on the website of the Company viz. www .flflindia. com 18. Acknowledgement: 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. By order of the Board Sd/- Sd/- Mr. Sandeep Soni Mr. Rajesh Kathuria Director Director Date: 11th August, 2014 Place: Mumbai

Director’s Report