24th Annual Report 2017-2018
93Frontline Securities Ltd.
FSL
CORPORATE INFORMATION
BOARD OF DIRECTORS:
• Mr.RakeshK.Jain Non–ExecutiveChairman• Mr.GauriShankerPandey WholeTimeDirector• Mr.ArunK.Jain IndependentDirector• Mr.AtulK.Jain IndependentDirector• Dr.CharanjeetSinghBedi IndependentDirector• Mr.BaljitSinghBedi IndependentDirector• Mrs.SarabjeetKaur Non-ExecutiveDirector• Ms.RichaArora WholeTimeDirector&CompanySecretary
KEY MANAGERIAL PERSONNEL:
• Mr.GauriShankerPandey WholeTimeDirector• Ms.RichaArora CompanySecretary,Complianceofficer andWholeTimeDirector• CA.MayankAgarwal ChiefFinancialOfficer
CIN: L65100DL1994PLC058837
REGISTERED OFFICE: M-6,IIndFloor,MBlockMarket,Greater Kailash-II,NewDelhi-110048BRANCH OFFICE: B-22,Sector-4,Noida-201301 Tel:+91-120-2534066, Fax:+91-120-2534111WEBSITE: www.fslindia.com
AUDITORS: WalechaInder&Associates CharteredAccountants 6-8,Sanjaymarket,R-Block GreaterKailash-I, NewDelhi–110048
BANKERS: HDFCBank,NewDelhi
REGISTRAR & SHARE TRANSFER AGENTS: LinkIntimeIndiaPrivateLimited 44CommunityCentre,2ndFloor,Naraina IndustrialArea,Phase-I,NearPVR, Naraina,NewDelhi-110028
24thAnnualGeneralMeeting09:45a.m,Tuesday,September25th,2018
PHDHouse-LakshmipatSinghaniaAuditorium,4/2,SiriInstitutionalArea,AugustKrantiMarg,NewDelhi-110016
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94 Frontline Securities Ltd.
FSL
INDEX
Item Description Page No.
NoticeofAGM 1-12
Director’sReport 13-36
ManagementDiscussionandAnalysisreport 37-38
ReportonCorporateGovernance 39-61
BalanceSheet,Profit&LossAccountandCash 62-65 FlowStatement
AccountingPoliciesandNotestoAccounts 66-85
ShareholderInformationForm 86-87
ECSMandateForm 88-89
ProxyForm 90
AttendanceSlip 91
RouteMap 92
24th Annual Report 2017-2018
1Frontline Securities Ltd.
FSLNOTICE OF AGM
Noticeisherebygiventhatthe24th(TwentyFourth)AnnualGeneralMeetingofFrontline Securities Limited fortheFinancialYear2017-18willbeheldonTuesday,the25thdayofSeptember,2018at09:45A.M.atPHDHouse-LakshmipatSinghaniaAuditorium,4/2,Siri InstitutionalArea,AugustKrantiMarg,NewDelhi-110016totransactthefollowingbusiness:
ORDINARY BUSINESS:
1) Toreceive,considerandadopttheFinancialStatementsfortheFinancialYearended31stMarch,2018alongwithDirector’sReportandAuditor’sReportthereon.
2) Todeclaredividend@5%ontheequitysharesforthefinancialyearended31stMarch2018.
3) ToappointaDirectorinplaceofMrs.SarabjeetKaur(holdingDIN-00013395),whoretiresbyrotation,andbeingeligibleoffersherselfforre-appointment.
4) Ratification of Statutory Auditor
Toconsiderand,ifthoughtfit,topasswithorwithoutmodification(s),thefollowingresolutionasanORDINARY RESOLUTION.
“RESOLVED THATpursuanttotheprovisionsofSection139andotherapplicableprovisions,ifany,oftheCompaniesAct,2013andtheRulesframedthereunderasamendedfromtimetotime,theCompanyhereby ratifies the appointment ofM/s.Walecha Inder&Associates,CharteredAccountants, (FirmRegistrationNo.014205N),asStatutoryAuditorsoftheCompanytoholdofficefromtheconclusionofthisAnnualGeneralMeeting(AGM)tilltheconclusionoftheTwenty-FifthAnnualGeneralMeetingtobeheldfortheFinancialYear2018-2019atsuchremunerationplusservicetax,out-of-pocket,travellingandlivingexpenses,etc.asmaybemutuallyagreedbetweentheBoardofDirectorsandtheAuditor.
SPECIAL BUSINESS:
5) Sub-Division of equity shares from the Face Value of Rs. 10/- to Face Value of Rs. 5/- per share.
Toconsiderand,ifthoughtfit,topasswithorwithoutmodification(s),thefollowingResolutionasanORDINARY RESOLUTION:-
“RESOLVED THATpursuanttotheprovisionsofSection61andotherapplicableprovisions,ifany,oftheCompaniesAct,2013readwiththeRulesmadethereunder(includinganystatutorymodification(s)orre-enactment(s)thereofforthetimebeinginforce),andinaccordancewiththeprovisionsofArticlesofAssociationoftheCompanyandsubjecttootherapproval(s),consent(s),permission(s)andsanctions,ifany,requiredfromanyauthority,consentoftheMembersbeandisherebyaccordedtosub-divideeachEquityShareoftheCompanyhavingFacevalueofRs.10/-(RupeesTenonly)fullypaid-upinto2(Two)EquityShareshavingFaceValueofRs.5/-(RupeesFiveOnly)eachfullypaid-uponsuchdateasmaybefixedbytheBoardofDirectorsoftheCompanyforthispurpose(hereinreferredasthe“Record date”.)
RESOLVED FURTHER THATpursuant tosub-divisionof theEquitySharesof theCompany, theauthorized,issued,subscribedandpaidupEquityShareCapitalof1(one)EquityShareoftheFacevalueRs.10/-(RupeesTenonly)eachshallstandsub-dividedinto2(Two)EquitySharesoftheFacevalueofRs.5/-(RupeeFiveOnly)eachfromtheRecordDatesubjecttothetermsofMemorandumandArticlesofAssociationandshallrankparipassuinallrespectswithandcarrythesamerightsastheexistingfullypaid-upEquitySharesofRs.10/-(RupeesTenonly)eachoftheCompany.
RESOLVED FURTHER THATuponsub-divisionofEquitySharesoftheCompanyasaforesaid,theexistingsharecertificate(s)inrelationtotheexistingEquitySharesofFacevalueofRs.10/-(RupeesTenonly)eachheldinphysicalformshallbedeemedtohavebeenautomaticallycancelledandbeofnoeffectonandfromtheRecordDateandthatnoletterofallotmentshallbeissuedtotheallotteesofthenewEquitySharesofRs.5/-(RupeeFiveOnly)eachonsub-divisionandtheCompanymay,withoutrequiringthesurrenderofexistingsharecertificate(s),directlyissueanddispatchthenewsharecertificate(s)oftheCompany,inlieuofsuchexistingsharecertificate(s),withintheperiodprescribedorthatmaybeprescribedinthisbehalf,fromtimetotimeandinthecaseofsharesheldindematerializedform,thenumberofsub-dividedEquitySharesbecreditedtotherespectivebeneficiaryaccountsoftheshareholderswiththeDepositoryParticipants,inlieuoftheexistingcreditsrepresentingtheEquitySharesbeforesub-division.
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2 Frontline Securities Ltd.
FSL RESOLVED FURTHER THATtheBoardofDirectorsoftheCompanybeandisherebyauthorizedtofixaRecordDateandtotakesuchstepsasmaybenecessaryforobtainingapprovals,statutory,contractualorotherwise,inrelationtotheaboveandtosettleallmattersarisingoutofandincidentalthereto,andtoexecutealldeeds,applications,documentsandwritingsthatmayberequired,onbehalfoftheCompanyandgenerallytodoallsuchacts,deeds,mattersandthingsandtogive,fromtimetotime,suchdirectionsasmaybenecessary,properandexpedientorincidentalforthepurposeofgivingeffecttothisresolution.
RESOLVED FURTHER THATtheBoardbeandisherebyauthorizedtodelegatealloranyofitspowerstoanyCommitteethereofasitmaydeemappropriateinthisregard.”
6) Amendment to Clause V of the Memorandum of Association of the Company
Toconsiderand,ifthoughtfit,topasswithorwithoutmodification(s),thefollowingResolutionasanORDINARY RESOLUTION:-
“RESOLVED THATpursuanttotheprovisionscontainedinSection61andotherapplicableprovisions,ifany,oftheCompaniesAct,2013readwithRulesmadethereunder(includinganystatutorymodification(s),amendment(s)orre-enactment(s)thereof),theexistingClauseVoftheMemorandumofAssociationoftheCompanybeandisherebyamendedandsubstitutedthereofbythefollowingclause:
“TheAuthorisedShareCapitaloftheCompanyisRs.10,00,00,000/-(RupeesTenCrore)dividedinto2,00,00,000(TwoCrore)EquitySharesofRs.5/-(RupeesFiveOnly)eachfullypaid-up.”
RESOLVED FURTHER THATtheBoardofDirectorsoraCommitteethereofbeandisherebyauthorizedtodoallsuchacts,deeds,mattersandthingsasmaybeconsiderednecessary,desirableandexpedientforgivingeffecttothisresolutionand/orotherwiseconsideredbytheminthebestinterestoftheCompany.”
7) Alteration of Objects Clause in the Memorandum of Association of the Company
Toconsiderand,ifthoughtfit,topasswithorwithoutmodification,thefollowingresolutionasaSpecial Resolution:
“RESOLVEDthatpursuanttotheprovisionsofSection13andotherapplicableprovisions,ifany,oftheCompaniesAct,2013,includinganystatutorymodificationorre-enactmentthereofforthetimebeinginforceandtheRulesframedthereunder,asamendedfromtimetotime,andsubjecttotheapprovaloftheRegistrarofCompanies,Delhi(“ROC”)and/orofanyotherstatutoryorregulatoryauthority,asmaybenecessary,ClauseIII(ObjectsClause)oftheMemorandumofAssociationoftheCompany,beandisherebyalteredbyinsertingthefollowingsub-clausesunderPart-AofClauseIII,aftertheexistingsub-clause14:
15. “To let on lease, sub lease, mortgage, grant licenses, easements, options, virtual renting, co-working and other rights over and in any other manner deal with, or dispose of, all or any part of the undertaking, property (ies) and asset(s) (present and future) of the Company for any consideration and in particular (without prejudice to the generality) for any security or for a share of profit or royalty or other periodic deferred payment”.
16. To enter into franchise agreement(s) or contracts with various institution(s) , bodies, Government Companies, corporate(s), individual(s) in India or abroad to run, operate, construct, maintain restaurant(s)/café(s), hotel, education centre, day care etc or for carrying on all or any of the objects of the Company.
“RESOLVEDFURTHER THATpursuanttotheprovisionsofSection13andotherapplicableprovisions,ifany,of theCompaniesAct,2013, includinganystatutorymodificationor re-enactment thereof forthetimebeinginforceandtheRulesframedthereunder,asamendedfromtimetotime,andsubjecttotheapprovaloftheRegistrarofCompanies,Delhi(“ROC”)and/orofanyotherstatutoryorregulatoryauthority,asmaybenecessary,ClauseIII(ObjectsClause)oftheMemorandumofAssociationoftheCompany,beandisherebyalteredbyinsertingthefollowingsub-clausesunderPart-BofClauseIII,aftertheexistingsub-clause106:
107. To set up , purchase, take on lease, or otherwise acquire , establish, maintain, operate , run , manage, administer or let on lease hospitals, nursing homes ,clinics for in-door and out-door patients , rehabilitation centers , day care, healthcare centers and wellness centers.
108. To carry on, in India or elsewhere, either alone or jointly with one or more persons, companies, government, or other entities and bodies of any kind, the business of hotels of every kind and sort, including,
24th Annual Report 2017-2018
3Frontline Securities Ltd.
FSLbanquet facilities, conference facilities, meeting rooms, function halls, convention centers, shopping galleria, retail and service shops, offices, libraries, swimming pool, health club, spa, fitness centers, gym , beauty parlors, saloons, gaming center amusement and recreational facilities, parking, back offices, along with all the conveniences, amenities and facilities adjunct thereto and such other facilities as may be provided and to own, purchase, take over, acquire, erect, construct, build, set up, furnish, adapt, manage, franchise, run, use, maintain, operate or in any other manner and in all its aspects deal in, hotels/centers of every kind and sort.
“RESOLVED FURTHERthatanyDirectoroftheCompany,theChiefFinancialOfficerandtheCompanySecretary,beandareherebyseverallyauthorizedtofile,sign,verifyandexecuteallsuche-forms,papersordocuments,asmayberequiredanddoallsuchacts,deeds,mattersandthingsasmaybenecessaryandincidentalforgivingeffecttothisResolution,includingagreeingtoanychangetotheaforesaidClause4oftheMemorandumofAssociationoftheCompany,asmayberequiredbytheROCand/oranystatutory/regulatoryauthority.”
8) Re- Appointment of Mr. Gauri Shanker Pandey as the Whole time Director of the Company
Toconsiderandif thoughtfit, topasswithorwithoutmodification(s), thefollowingresolutionasanOrdinary Resolution:
“RESOLVED THATinaccordancewiththeprovisionsofSections196,197and203readwithScheduleVandotherapplicableprovisionsoftheCompaniesAct,2013andtheCompanies(AppointmentandRemuneration ofManagerial Personnel)Rules, 2014 (including any statutorymodification(s) or re-enactment(s)thereof,forthetimebeinginforce),approvalofthemembersbeandisherebyaccordedtore-appointMr.GauriShankerPandey(DIN:00050614)astheWholetimeDirectoroftheCompany,forafurtherperiodof5(five)yearsfromtheexpiryofhispresenttermofoffice,thatis,witheffectfrom16thMarch,2018,onsuchtermsandconditionsincludingremunerationassetoutintheexplanatorystatementannexedtotheNotice.
RESOLVED FURTHER THATthetermofofficeofMr.GauriShankerPandeyshallnotbeliabletoretirebyRotation.
RESOLVED FURTHER THATtheBoardofDirectorsoraCommitteethereofbeandisherebyauthorizedtodoallsuchacts,deeds,mattersandthingsasmaybeconsiderednecessary,desirableandexpedientforgivingeffecttothisresolutionand/orotherwiseconsideredbytheminthebestinterestoftheCompany.”
9) Increase in Remuneration payable to Ms. Richa Arora, Whole Time Director & Company Secretary of the Company.
Toconsiderandif thoughtfit, topasswithorwithoutmodification(s), thefollowingresolutionasanOrdinary Resolution:
“RESOLVED THATpursuanttotheprovisionsofSection197readwithScheduleVandotherapplicableprovision ofCompaniesAct, 2013 andCompanies (Appointment andRemuneration ofManagerialPersonnel)Rules,2014theapprovaloftheMembersoftheCompanybeandisherebyaccordedtoincreasetheremunerationpayabletoMs.RichaArora,WholeTimeDirector&CompanySecretaryw.e.fApril1st,2018onthetermsandconditionsassetoutintheexplanatorystatementattachedtotheNoticeofthisAnnualGeneralMeeting.
RESOLVED FURTHER THATforthepurposeofgivingeffecttothisresolutiontheBoardofDirectorsbeandareherebyseverallyand/orjointlyauthorisedtodoallsuchacts,deeds,mattersandthingsasmaybenecessary,properordesirabletogiveeffecttotheresolution”.
ByOrderoftheBoardofDirectors
For Frontline Securities Limited
Place: Noida Richa Arora
Date: 10.08.2018 Whole Time Director & Company Secretary
DIN: 07825684
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4 Frontline Securities Ltd.
FSLNOTES:
1. TheExplanatorystatementpursuanttoSection102oftheCompaniesAct,2013,inrespectofitemNo.4,5,6,7,8&9isannexedheretoandformsthepartoftheNotice.
2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE IN THE MEETING INSTEAD OF HIMSELF/HERSELF, AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.Theinstrumentappointingtheproxy,inordertobeeffective,mustbedepositedattheCompany’sRegisteredOffice,dulycompletedandsigned,notlessthanFORTY- EIGHT HOURSbeforethecommencementofthemeeting.Proxiessubmittedonbehalfoflimitedcompanies,societies,etc.,mustbesupportedbyappropriateresolutions/authority,asapplicable.
ApersoncanactasproxyonbehalfofMembersnotexceedingfifty(50)andholdingintheaggregatenotmorethan10%ofthetotalsharecapitaloftheCompany.IncaseaproxyisproposedtobeappointedbyaMemberholdingmorethan10%ofthetotalsharecapitaloftheCompanycarryingvotingrights,thensuchproxyshallnotactasaproxyforanyotherpersonorshareholder.
AproxyFormisannexedhereto.
3. CorporatemembersintendingtosendtheirauthorizedrepresentativetoattendthemeetingarerequestedtosendtotheCompanyacertifiedcopyoftheBoardResolutionauthorizingtheirrepresentativetoattendandvoteontheirbehalfatthemeeting.
4. Members/Proxiesshouldbringtheattendanceslipsdulyfilledinandsignedforattendingthemeeting.
5. At the ensuingAnnualGeneralMeeting,Mrs. SarabjeetKaur (holdingDIN- 00013395) retires byrotationandbeingeligibleoffersherselfforre-appointment.TheinformationordetailstobeprovidedintermsofRegulation34(3)&ScheduleVoftheSEBIListingObligationsandDisclosureRequirements)Regulation,2015isprovidedintheexplanatorystatementannexedherewith.TheBoardofDirectorsoftheCompanycommendsthesaidre-appointment.
6. M/sLinkIntimeIndiaPrivateLimited,44CommunityCentre,2ndFloor,NarainaIndustrialArea,Phase-I,NearPVRNaraina,NewDelhi–110028istheRegistrarandShareTransferAgentforphysicalsharesoftheCompany.LinkIntimeisalsothedepositoryinterfaceoftheCompanywithbothNSDLandCDSL.
7. Membersholdingsharesinphysicalformarerequestedtoimmediatelynotifychangeintheiraddress,ifany,totheCompanyatitsRegisteredOffice,quotingtheirFolioNumber(s).MembersholdingsharesinelectronicformmayupdatesuchdetailswiththeirrespectiveDepositoryParticipant(s).
8. Foreffectivecommunication,shareholdersarerequestedtoupdatetheirdetailsrelatedtotheiraddressande-mailid.Forshareholdersholdingsharesinphysicalform,thesamemaybeprovidedinShareholder Information Form provided in theAnnualReport. Shareholders holding shares in demat form arerequestedtoupdatethesamewiththeirDepositoryParticipant(s).
9. Allmaterialdocumentsrelating to themattersproposed in theNotice,MemorandumandArticlesofAssociationoftheCompanyetcareopenforinspectiontothememberstillthedateoftheAnnualGeneralMeetingfrom11a.m.to1p.m.onallworkingdaysattheregisteredofficeoftheCompany.
TheRegisterofDirectorsandKeyManagerialPersonnelandtheirShareholdingmaintainedundersection170oftheAct,theRegisterofContractsorArrangementsinwhichthedirectorsareinterested,maintainedundersection189oftheActwillbeavailableforinspectionbythemembersattheAGM.
10. EveryMemberentitledtovoteatthemeeting,shallbeentitledduringtheperiodbeginningtwentyfourhoursbeforethetimefixedforcommencementofthemeetingandendingwiththeconclusionofthemeetingtoinspecttheproxieslodgedatanytimeduringthebusinesshoursofthecompany,providednotlessthanthreedays’Noticeinwritingofsuchintentionisgiventothecompany.
11.TheRegisterofMembersandShareTransferBooksoftheCompanywillremainclosedfromWednesday,September19th,2018,toTuesday,September25th,2018(bothdaysinclusive).
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5Frontline Securities Ltd.
FSL12.FinalDividendonequityshares@5%onthepaid-upequitysharecapitali.e.Re0.50perequityshareasrecommendedbytheBoardofDirectors,ifdeclaredbytheshareholdersatthe24thAnnualGeneralMeeting,willbepaid to thoseshareholderswhosenamesappearon theRegisterofMembersof theCompanyasonSeptember19th,2018aftergivingeffecttoallvalidtransfersinPhysicalFormlodgedwiththeCompanyandRTAonorbefore18thSeptember,2018andinrespectofthememberswhosesharesareheldinelectronicform,tothoseBeneficialOwnersasperthedetailsfurnishedbytheDepositoriesatthecloseofbusinesshourson18thSeptember,2018.
13.TheSecuritiesandExchangeBoardofIndia(SEBI)hasmandatedthesubmissionofPermanentAccountNumber(PAN)byeveryparticipantinthesecuritiesmarket.Membersholdingsharesinelectronicformare,accordingly,requestedtosubmittheirPANtotheDepositoryParticipantwithwhomtheymaintaintheirdemataccounts.MembersholdingsharesinphysicalformshouldsubmittheirPANtotheCompany.
14.PursuanttoSection123and124ofCompaniesAct,2013,theCompanyhastransferredonduedates,theunclaimedFinalDividendforthefinancialyearendedon31stMarch,2010totheInvestorEducationProtectionFundestablishedbytheCentralGovernment.Further,shortlytheCompanywillinitiatetheprocess of transfer of unclaimeddividendpertaining to thefinancial year 2010-2011 to the InvestorEducationProtectionFundinNovember,2018.
Further,PursuanttotheSection124oftheCompaniesAct,2013,theCompanyisrequiredtotransferthesharesinrespectofwhichnodividendhasbeenclaimforsevenormoreconsecutiveyearstotheInvestorEducationProtectionFundestablishedbythecentralGovernment.ItmaybealsonotedallthecorporatebenefitaccruingontheseShareslikebonus,dividends,sub-divisionetcifanyshallbecreditedtosaidfund.TheCompanywilltransfersaidsharesintheMonthofNovember,2018.
Membersarethereforerequestedtoen-cashtheirdividendwarrantsimmediatelyfortheyear2010-2011andsubsequentfinancialyears.MembersarerequestedtowritetotheCompanyand/orRegistrarandShareTransferAgents,ifanydividendwarrantisdueandpendingtobepaidsothatfresh/revalidatedwarrantscouldbeissuedbytheCompany.
15. Payment of Dividend through ECS:
a) TheSecurities&ExchangeBoardofIndia(SEBI)andtheMinistryofCorporateAffairshavemadeitmandatoryforalltheListedCompaniestoofferElectronicClearingServices(ECS)facilitiesforpaymentofdividend,whereverapplicable.Inviewoftheabove,
• ShareholdersholdingsharesinphysicalformareadvisedtosubmitparticularsoftheirbankaccountintheECSMandateForm,annexedtothisreportlatestbyTuesday,September18th,2018,totheCompanySecretaryatB-22,Sector-4,Noida,UttarPradesh-201301orM/sLinkIntimeIndiaPrivateLimitedat44CommunityCentre,2ndFloor,NarainaIndustrialArea,Phase-I,NearPVRNaraina,NewDelhi–110028.
• Shareholdersholdingsharesindematformareadvisedtoinformtheparticularsoftheirbankaccounttotheirrespectivedepositoryparticipants.
16.Toprovidespeedyredressalofinvestorgrievances,theCompanyhasdesignatedE-mailID’[email protected]/secretarial@fsltechnologies.comexclusivelyforregisteringcomplaints/grievancesbyinvestors.
17.AnyqueriesrelatingtoAccountsmustbesenttothecompanyatleast10daysbeforethedateoftheAnnualGeneralMeeting.
18.FortheConvenienceoftheMembers,RouteMaptothevenueoftheAGMformspartoftheAnnualReportandisalsoavailableonthewebsiteoftheCompany.
19. Request to Shareholders:
a) Tosupportthe‘GreenInitiative’Memberswhohavenotregisteredtheire-mailaddressesarerequestedtoregisterthesamewithLinkIntimeIndiaPrivateLimited(RTA)/Depositories/theCompany.
b) ShareholdersarerequestedtonotethatcopiesoftheAnnualReportwillnotbedistributedatthevenueof
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6 Frontline Securities Ltd.
FSLthemeeting.Shareholders/Proxyholders/AuthorizedRepresentativesare,therefore,requestedtobringtheircopiesoftheAnnualReporttothemeeting.TheAnnualReportalongwithformatsisbeingpostedontheCompany’swebsiteatwww.fslindia.com.
c) Electroniccopyof theAnnualReportof the24thAnnualGeneralMeetingof theCompany inter-aliaindicatingtheprocessandmannerofelectronicvoting(e-voting)alongwiththeAttendanceslipandroutemapisbeingsenttoallmemberswhosee-mailidsareregisteredwithCompany/DP/RTAforthecommunicationpurposes,unlessanymemberhasrequestedforahardcopyofthesame.Formemberswhohavenotregisteredtheiremailaddress,physicalcopyoftheAnnualReportalongwithNotice,Attendanceslip,ProxyformandRoutemapisbeingsentinpermittedmode.
d) ShareholdersmayalsonotethattheNoticeofthe24thAGMandtheAnnualReportforFinancialYear2017-18will also be available on theCompany’swebsite i.ewww.fslindia.com for download.ThephysicalcopiesoftheaforesaiddocumentswillalsobeavailableattheCompany’sRegisteredOfficeatM-6,IIndFloor,M-BlockMarket,GreaterKailash-II,NewDelhi-110048forinspectionduringnormalbusinesshoursonworkingdays.Evenafterregisteringfore-communication,shareholdersareentitledtoreceivesuchcommunicationinphysicalform,freeofcost,uponmakingaspecificrequestbypost.TheshareholdersmayalsosendtheirrequeststotheCompany’sEmail-id’s:[email protected]/[email protected].
e) Shareholdersmaykindlynotethatnogift/giftcouponwillbedistributedatthemeeting.
20. Voting for transaction of Business through Electronic Means:
• IncompliancewiththeprovisionsofSection108oftheCompaniesAct,2013andtheRule20oftheCompanies (Management andAdministration)Rules, 2014 andRegulation44of theSEBI (ListingObligations andDisclosureRequirements),Regulations, 2015 andSecretarial Standard onGeneralMeeting(SS-2)issuedbyICSI,theCompanyisprovidingthefacilitytoShareholdertocasttheirvoteelectronically,throughthee-votingservicesprovidedbyCDSL,onalltheresolutionssetforthinthisnotice.
• Memberswhohavecasttheirvotebyremotee-votingshallnotbeentitledtocasttheirvoteagainattheAnnualGeneralMeeting.
• Thevotingperiodbeginsat9:00a.m.on22ndSeptember,2018andendsat5:00p.m.on24thSeptember,2018.During this period shareholders of theCompany, holding shares either in physical formor indematerializedform,asonthecut-offdatei.e18thSeptember,2018,maycasttheirvoteselectronically.Thee-votingmoduleshallbedisabledbyCDSLforvotingthereafter.Oncethevoteonaresolutioniscastbytheshareholder,theshareholdershallnotbeallowedtochangeitsubsequently.
Theprocedureandinstructionstomembersforvotingelectronicallyareasunder:
1. Theshareholdersshouldlogontothee-votingwebsite“www.evotingindia.com”.
2. ClickonShareholders/ Members
3. NowEnteryourUserID
a. ForCDSL:16digitsbeneficiaryID,
b. ForNSDL:8CharacterDPIDfollowedby8DigitsClientID,
c. MembersholdingsharesinPhysicalFormshouldenterFolioNumberregisteredwiththeCompany.
4. NextentertheImageVerificationasdisplayedandClickonLogin.
5. Ifyouareholdingsharesindematformandhadloggedontowww.evotingindia.comandvotedonanearliervotingofanycompany,thenyourexistingpasswordistobeused.
6. Ifyouareafirsttimeuserfollowthestepsgivenbelow:
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7Frontline Securities Ltd.
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7. Afterenteringthesedetailsappropriately,clickon“SUBMIT”tab.
8. MembersholdingsharesinphysicalformwillthendirectlyreachtheCompanyselectionscreen.However,membersholdingsharesindematformwillnowreach‘PasswordCreation’menuwhereintheyarerequiredtomandatorilyentertheirloginpasswordinthenewpasswordfield.Kindlynotethatthispasswordistobealsousedbythedematholdersforvotingforresolutionsofanyothercompanyonwhichtheyareeligibletovote,providedthatcompanyoptsfore-votingthroughCDSLplatform.Itisstronglyrecommendednottoshareyourpasswordwithanyotherpersonandtakeutmostcaretokeepyourpasswordconfidential.
9. ForMembersholdingsharesinphysicalform,thedetailscanbeusedonlyfore-votingontheresolutionscontainedinthisNotice.
10.ClickontheEVSNfortherelevant<CompanyName>onwhichyouchoosetovote.
11.Onthevotingpage,youwillsee“RESOLUTIONDESCRIPTION”andagainstthesametheoption“YES/NO”forvoting.SelecttheoptionYESorNOasdesired.TheoptionYESimpliesthatyouassenttotheResolutionandoptionNOimpliesthatyoudissenttotheResolution.
12.Clickonthe“RESOLUTIONSFILELINK”ifyouwishtoviewtheentireResolutiondetails.
13.Afterselecting theresolutionyouhavedecidedtovoteon,clickon“SUBMIT”.Aconfirmationboxwillbedisplayed.Ifyouwishtoconfirmyourvote,clickon“OK”,elsetochangeyourvote,clickon“CANCEL”andaccordinglymodifyyourvote.
14.Onceyou“CONFIRM”yourvoteontheresolution,youwillnotbeallowedtomodifyyourvote.
15.Youcanalsotakeaprintofthevotescastbyclickingon“Clickheretoprint”optionontheVotingpage.
16.IfademataccountholderhasforgottentheloginpasswordthenEntertheUserIDandtheimageverificationcodeandclickonForgotPassword&enterthedetailsaspromptedbythesystem.
17.Note for Non – Individual Shareholders and Custodians
• Non-Individualshareholders(i.e.otherthanIndividuals,HUF,NRIetc.)andCustodianare requiredtologontowww.evotingindia.comandregisterthemselvesasCorporate.
• AscannedcopyoftheRegistrationFormbearingthestampandsignoftheentityshouldbe [email protected]
• AfterreceivingthelogindetailsaComplianceUsershouldbecreatedusingtheadminlogin andpassword.TheComplianceUserwouldbeabletolinktheaccount(s)forwhichtheywish tovoteon.
For Members holding shares in Demat Form and Physical Form
PAN
DividendBankdetails
OrDateofBirth(DOB)
EntertheDividendBankDetailsorDateofBirth(indd/mm/yyyyformat)asrecordedinyourdemataccountorintheCompanyrecordsinordertologin.
• IfboththedetailsarenotrecordedwiththeDepositoryorcompanypleaseenter themember id/ folionumber in theDividendBankdetailsfieldasmentionedininstruction3.
Enteryour10digit alpha-numeric*PAN issuedby IncomeTaxDepartment(Applicableforbothdematshareholdersaswellasphysicalshareholders)
• Memberswhohavenotupdated/RegisteredtheirPANwiththeCompany/DepositoryParticipantarerequestedtousethesequencesnumberindicatedinthePANField,fromthestickerpastedonthecoverpageoftheAnnualReport.
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8 Frontline Securities Ltd.
FSL • Thelistofaccountslinkedintheloginshouldbemailedtohelpdesk.evoting@cdslindia.com andonapprovaloftheaccountstheywouldbeabletocasttheirvote.
• AscannedcopyoftheBoardResolutionandPowerofAttorney(POA)whichtheyhaveissuedinfavoroftheCustodian,ifany,shouldbeuploadedinPDFformatinthesystemforthescrutinizertoverifythesame.
18.Shareholderscanalsocast theirvoteusingCDSL’smobileappm-Votingavailableforandroidbasedmobiles.Them-VotingappcanbedownloadedfromGooglePlayStore.AppleandWindowsphoneuserscanalsodownloadtheapplication.Pleasefollowtheinstructionsaspromptedbythemobileappwhilevotingonyourmobile.
19.Incaseyouhaveanyqueriesorissuesregardinge-voting,youmayrefertheFrequentlyAskedQuestions(“FAQs”)ande-votingmanualavailableatwww.evotingindia.com,[email protected].
20.TheScrutinizershallimmediatelyaftertheconclusionofvotingatthegeneralmeeting,willfirstcountthevotescastatthemeetingandthereafterunblockthevotescastthroughremotee-votinginthepresenceofatleasttwowitnessesnotintheemploymentofthecompanyandshallmake,notlaterthan2daysoftheconclusionoftheAGM,aconsolidatedscrutinizer’sreportofthetotalvotescastinfavouroragainst,ifany,totheChairmanorpersonauthorizedbytheBoardwhoshallcountersignthesame.
ByOrderoftheBoardofDirectors
For Frontline Securities Limited
RICHA ARORA
Place: Noida Whole Time Director & Company Secretary
Date: 10.08.2018 DIN:07825684
24th Annual Report 2017-2018
9Frontline Securities Ltd.
FSLEXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013Item no-4:
ThisexplanatorystatementisprovidedthoughstrictlynotrequiredasperSection102oftheAct.
Ratification of appointment of Auditor –M/sWalecha Inder&Associates,CharteredAccountants(FRN:014205N)was appointed asStatutoryAuditors of theCompany for the period of Five yearscommencingfrom1stApril,2017toholdtheofficefromtheconclusionof23rdAnnualgeneralMeetingoftheCompanytilltheconclusionof28thAnnualGeneralMeetingtobeheldin2022.
AspertheprovisionsofSection139oftheCompaniesAct,2013,theirappointmentfortheabovetenureissubjecttoratificationbymembersateveryAnnualGeneralMeeting.Accordingly,approvalofmembersforratificationofappointmentisbeingsoughtassetoutinItemNo.4oftheNotice.
NoDirectors/keymanagerialpersonneloftheCompanyortheirrespectiverelativesaredeemedtobeconcernedorinterestedintheResolutionmentionedatItemNo.4oftheNoticeexcepttotheextentofsharesheldbythem,ifany,intheCompany.
TheBoardofDirectorrecommendstheOrdinaryResolutionsetforthinitemNo.4oftheaccompanyingnoticefortheapprovaloftheMembers.
Item No. 5 & 6:
TheEquitySharesoftheCompanyarelistedandbeingtradedontheBSELtd.Withaviewtoenhancethe investorbaseof thecompanybyencouraging theparticipationof thesmall investorsandalso toincreasetheliquidityoftheequitysharesoftheCompany,theBoardofDirectorsatitsmeetingheldon28thMay,2018hasrecommendedtosub-dividethenominalvalueoftheequityshareoftheCompanyfromRs.10/-persharetoRs.5/-pershare,subjecttoapprovalofMemberattheensuingAnnualGeneralMeeting.
Accordingly,eachfullypaidupequityshareofnominalvalueRs.10/-(RupeesTenOnly)oftheCompany,existingontherecorddateasmaybefixedbytheBoardofDirectors,shallstandssubdividedinto2(two)equitysharesofNominalValueofRs.5/-(RupeeFiveonly)eachfullypaidup.
Therecorddatefortheaforesaidsubdivisionoftheequityshareswillbefixedaftertheapprovaloftheshareholdersisobtained,pursuanttothisAnnualGeneralMeeting.
Consequent upon the sub-division of shares, theAuthorised ShareCapital of theCompany ofRs.10,00,00,000/-(RupeesTenCroresonly)wouldcompriseof2,00,00,000(TwoCrores)EquitySharesofRs.5/-(RupeesFiveonly)eachfullypaid-upandtheissued,subscribedandpaidupcapitaloftheCompanyisdividedinto1,18,55,692(OneCroreEighteenLakhsFiftyFiveThousandSixHundredandNinetyTwo)equitysharesofRs.5/-(RupeesFiveonly)eachfullypaid-upamountingtoRs.5,92,78,460/-(RupeesFiveCroreNinetyTwolakhsSeventyEightThousandFourHundredandSixtyonly).
TheproposedsubdivisionofequitysharesoftheCompanyfromRs.10/-(RupeeTenOnly)perequitysharetoRs.5/-(RupeesFiveOnly)perequityshare,requiresconsequentialalterationoftheMemorandumofAssociationoftheCompany.Accordingly,ClauseVoftheMemorandumofAssociationisproposedtobealteredinthemannersetoutinResolutionatItemNo.6.
TheBoardrecommendstheitemNo.5(OrdinaryResolution)andItemNo.6(OrdinaryResolution)ofthenotice,forapprovaloftheMembers.
AcopyoftheMemorandumofAssociationoftheCompanyalongwiththeproposedamendmentsisavailableforinspectionbythemembersattheregisteredOfficeoftheCompanyonallworkingdaysduringtheofficehoursoftheCompanytilltheconclusionoftheAnnualGeneralMeeting.
NoDirectors/keymanagerialpersonneloftheCompanyortheirrespectiverelativesaredeemedtobeconcernedorinterestedintheResolutionsmentionedatItemNo.5and6oftheNoticeexcepttotheextentofsharesheldbythem,ifany,intheCompany.
24th Annual Report 2017-2018
10 Frontline Securities Ltd.
FSL
Item no. 8:
TheBoardofDirectorsoftheCompany,(“theBoard”)has,subjecttoapprovalofmembers,reappointedMr.GauriShankerPandey(DIN:00050614)asaWholeTimeDirector,forafurtherperiodof5(five)years.Thisre-appointmentshallbeeffectivefrom16thMarch,2018ontermsandconditionsincludingremunerationassetoutbelow:
Components Amount Per Month (in Rs.) Basic 40,000 HRA 15,000 OtherAllowance 2,200 ConveyanceAllowance 1,600 Gross Salary 58,800 Bonus(PayableQuarterly) 1,400 PF(EmployeeContribution) 4,800 CTC ( Cost to Company) 65,000
Itisproposedtoseekthemembers’approvalforthere-appointmentofandremunerationpayabletoMr.GauriShankerPandey(DIN:00050614),intermsoftheapplicableprovisionsoftheAct.
Mr.GauriShankerPandey(DIN:00050614)satisfiesalltheconditionssetoutinPart-IofScheduleVtotheActasalsoconditionssetoutundersubsection(3)ofSection196oftheActforbeingeligibleforhisreappointment.HeisnotdisqualifiedfrombeingappointedasaDirectorintermsofSection164oftheAct.
Thetermsofremuneration,asstatedabovemaybetreatedasanabstractoftermsofremunerationundersection190oftheCompaniesAct,2013.
NoDirectors/keymanagerialpersonneloftheCompanyortheirrespectiverelativesexceptMr.GauriShankerPandeyaredeemedtobeconcernedorinterestedintheresolutionmentionedatItemNo.8oftheNoticeexcepttotheextentofsharesheldbythem,ifany,intheCompany.
Item no. 7:
TheCompany is presently engaged in the business of Investments.With a view tomaximizing overallstakeholders’value,themanagementofthecompanyhasbeenexploringnewavenuesofbusinesswhichwillgenerate revenue,whichmaybeconvenientlyandadvantageouslycombinedwithexistingbusinessof theCompany.InordertoelaborateandclarifytheexistingbusinessoftheCompanyandtoenabletheCompanytoundertaketheseadditionalbusinessesasstatedintheresolution,itisproposedtoamendtheObjectsClauseoftheMemorandumofAssociationoftheCompany.
Intheviewofthis,theBoardofDirectorsinitsmeetingheldon10thAugust,2018,hasdecidedtoamendtheMemorandumofAssociationoftheCompanyandseeksshareholdersapproval.
TheentiresetofproposednewMemorandumofAssociationisavailableonthewebsiteoftheCompanyi.e.www.fslindia.com.Memberscanalsoobtainacopyof thesamefromtheCompany’sregisteredofficeorcorporateoffice.
Membersarerequestedtonotethattheamendmentissubjecttotheintimation/approvalgiven/grantedby/totheSecuritiesExchangeBoardofIndia(“SEBI”),theRegistrarofCompanies,Delhi,MinistryofCorporateaffairsandsuchotherregulatoryauthorities,asmayberequired.
NoDirectors/keymanagerialpersonneloftheCompanyortheirrespectiverelativesaredeemedtobeconcernedorinterestedintheResolutionsmentionedatItemNo.7oftheNoticeexcepttotheextentofsharesheldbythem,ifany,intheCompany.
TheBoardrecommendstheSpecialResolutionassetoutintheitemNo.7oftheaccompanyingnotice,forapprovaloftheMembers.
24th Annual Report 2017-2018
11Frontline Securities Ltd.
FSL TheBoardofDirectorrecommendstheOrdinaryResolutionsetforthinitemNo.8oftheaccompanyingnoticefortheapprovaloftheMembers.
Item no. 9:
Intheviewofenhancedresponsibilitygiven,theBoardproposedtoincreasethesalarypayabletoMs.RichaArora,WholeTimeDirectorandCompanySecretaryoftheCompanyw.e.f01.04.2018aspertherevisedsalarystructuregivenbelow.TheremunerationissubjecttotheapprovaloftheMembersoftheCompanyintheensuingAnnualGeneralMeeting.
Thedetailsofrevisedremunerationare:
Components Amount Per Month (in Rs.)
Basic 12,500 HRA 12,500 TransportAllowance 1,600 OtherAllowance 19,875 Gross Salary 46,475 Gratuity 625 Bonus(PayableQuarterly) 1400 PF(EmployeeContribution) 1500 CTC ( Cost to Company) 50,000 All other benefit and entitlement, if any as per the policy of the Company.
Thetermsofremuneration,asstatedabovemaybetreatedasanabstractoftermsofremunerationundersection190oftheCompaniesAct,2013.
NoDirectors/keymanagerialpersonneloftheCompanyortheirrespectiverelativesexceptMs.RichaAroraaredeemedtobeconcernedorinterestedintheResolutionsmentionedatItemNo.9oftheNoticeexcepttotheextentofsharesheldbythem,ifany,intheCompany.
TheBoardofDirectorsrecommendstheordinaryresolutionsetforthinitemNo.9oftheaccompanyingnoticefortheapprovalofMembers.
24th Annual Report 2017-2018
12 Frontline Securities Ltd.
FSL
DETAILS OF DIRECTORS SEEKING APPOINTMENT/REAPPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL MEETING
[(Pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)]
ByOrderoftheBoardofDirectors
For Frontline Securities Limited
RICHA ARORA
Place: Noida Whole Time Director & Company Secretary
Date: 10.08.2018 DIN:07825684
Mrs. Sarabjeet Kaur01/02/19764201/07/200216YearsofexperienceinCompanySecretaryProfessionaswellasL.L.BAsmentionedintheCorporateGovernanceReportNILC.S,L.L.B0
0
Mr. Gauri Shanker Pandey13/07/19576016/03/201330YearsofExperienceasHumanResourceandAdministrationHead.
AsmentionedintheCorporateGovernanceReportNILB.Com2
0
Name of the DirectorDateofBirthAgeDateofAppointmentExperienceinSpecificFunctionalArea
Remunerationsoughtandlastdrawn
RelationshipwithotherDirectorsQualificationDirectorshipinotherPublicLimitedCompanies/excludingPrivateCompanieswhicharesubsidiaryofPublicCompanyMember/ChairmanofCommitteeoftheBoardoftheotherPublicLimitedCompaniesonwhichsheisDirector
24th Annual Report 2017-2018
13Frontline Securities Ltd.
FSLDIRECTOR’S REPORT
Dear Members,
TheDirectorsofyourCompanytakepleasureinpresentingthisTwentyFourthAnnualReportalongwiththeAuditedFinancialStatementsforthefinancialyearendedMarch31st,2018.
FINANCIAL RESULTS
ThefinancialperformanceoftheCompany,fortheyearendedMarch31st,2018issummarizedbelow:
REVIEW OF OPERATIONS
Duringtheyearunderreview,theCompanyhadachievedaGrossIncomeofRs.1,296.07LakhsasagainstRs560.00Lakhsinthepreviousyear.TheprofitbeforetaxstandsatRs.1,161.92LakhsasagainstRs.491.65Lakhsinthepreviousyear.
TheimprovementintheprofitabilityoftheCompanyhadbeenduetoimprovementinIndianStockMarket.Duringtheyearunderreview,NIFTYgrewfrom9,220.60ason1stApril,2017to10,113.70ason31stMarch,2018.Duetothis,theinvestmentgavebetterreturns,duringcurrentyearleadingtocapitalgainsofRs.860.65lakhsagainstcapitalgainsofRs.419.61duringthefinancialyear2016-17.Besides,thebusinessofMutualFunddistributionhasgrownsubstantiallyleadingtocommissionincomegrowthtoRs.309.52lakhsagainstRs.22.87lakhsduringthefinancialyear2016-17.
Particulars
Gross Income
Profit before Depreciation and Amortization Expenses,
Finance Costs and Tax Expenses
FinanceCosts
Depreciation&Amortizationexpenses
Profit before Tax
CurrentTax
MATCredit
DeferredTax
Profit for the year
Add:BalanceinProfit&LossAccount
Total
Less: Appropriation:
BuyBackofShares
TransferredtoRBIReserve
ProposedDividendonequityshares
ProposedDividendTax
ContingencyProvisionagainstStandardAssets
ShortProvisionmadeinthepreviousyear
Closing Balance
2017-18
1296.07
1194.19
(11.34)
(20.93)
1161.92
(231.02)
65.09
0.41
996.40
2,163.69
3160.09
542.94
199.28
29.64
6.09
0.15
-
2381.99
2016-17
560.00
495.08
(0.01)
(3.42)
491.65
(88.92)
46.85
0.39
449.97
1,845.96
2295.93
-
89.99
35.93
7.52
(1.26)
0.06
2163.69
(Rs In Lakhs)
24th Annual Report 2017-2018
14 Frontline Securities Ltd.
FSLSTATE OF COMPANY AFFAIRS
Duringtheyearunderreview,theCompanyoperatesinonegeographicalsegmenti.e.India&hasidentifiedtwobusiness segments i.e. Segment-Iwhich isConsultancy,Commission&Brokerage andSegment-IIInvestmentsinBonds,Fixeddeposits&Loan&Advances.
FUTURE OUTLOOK
ThevariousstepstakenbytheGovernmentinthelast3yearshavecreatedabetterbusinessenvironmentandbarringunforeseencircumstances,weexpectabettercapitalmarketincomingyearswhichwillimproveCompany’sperformances.Besides,theCompanyhasstartedaddingnewcustomerstothebusinessofMutualFundDistribution.Howeverthepriceofcrudeoilisincreasinginthecurrentperiod.Besides,theUSinterestRateisalsoincreasing.Duetoglobalstrategicsituations,increaseincrudeoilprices,USinterestratesandtheireconomy,IndianStockmarketmayremainvolatileduringthecurrentyear(i.e.2018-19).Hencetheincomefrominvestmentsmayremainlittlesubdued/uncertain.HoweverthebusinessofMutualFundDistributionisgivenmorestress,weexpecttodowellinthisregardduringthecurrentyear.
MATERIAL EVENTS OCCURING BETWEEN THE END OF FINANCIAL YEAR AND DATE OF REPORT
TheBoardofDirectorshasrecommendedthesub-divisionofequitysharesoftheCompanyinitsBoardMeetingheldon28thMay,2018fromRs.10/-(RupeeTenOnly)perequitysharetoRs.5/-(RupeesFiveOnly)perequityshare,subjecttoapprovalofMembersatensuingAnnualGeneralMeeting.
RBI GUIDELINES
TheCompanyhascompliedwiththeRegulationsoftheReserveBankofIndiaason31stMarch,2018,asareapplicabletoitasaNon-BankingFinancialCompany.
DEPOSITS
TheCompanyhasnotacceptedanypublicdepositsduringtheyear,withinthemeaningofSection73oftheCompaniesAct,2013readwithCompanies(AcceptanceofDeposits)Rules2014andSection2(i)(xii)oftheNon-BankingFinancialCompaniesAcceptanceofPublicDeposits(ReserveBank)Directions1998.
TherewasnounclaimeddepositoroverduedepositwiththeCompanyason31.03.2018.
RESERVE FUND
Aspersection45ICofRBIAct1934,theCompanyhastransferredRs.199.28LakhsinRBIreservefundi.e.aggregatingof20%ofitsnetprofit.
DIVIDEND
Consideringprofitsduringthecurrentyear,theBoardhasrecommendedafinaldividend@5%(i.e.Rs.0.5perEquityShareafterBuyBackoftheCompany)forthefinancialyearended31stMarch,2018.
LISTING OF EQUITY SHARES
TheequitysharesoftheCompanyarelistedontheBombayStockExchangeLimited,PhirozeJeejeebhoyTowers,DalalStreet,Mumbai-400001.TheListingFeesforthefinancialyearunderreviewhasbeenpaidbytheCompany.
SHARE CAPITAL
During theyearunder review, theCompanyhasneither issuedShareswithdifferentialvoting rights,norgrantedstockoptionandSweatEquityShares.
BUY BACK OF SHARES
TheBoardofDirectorsat itsmeetingon20thOctober,2017hasapprovedaproposalfor thecompanytoBuybackupto12,77,866fullypaidupequitysharesoffacevalueRs.10/-eachfromtheeligibleshareholdersofthecompanyforanamountnotexceedingRs.7,92,27,692/-.TheShareholdersoftheCompanyapprovedtheproposalofBuybackofequitysharesthroughpostalballotthatconcludedon8thDecember,2017.SincetheBuyBackofferwasundersubscribed,theCompanyhasboughtbackandextinguished12,58,843Equity
24th Annual Report 2017-2018
15Frontline Securities Ltd.
FSLshares inFebruary2017.TheBuybackwasoffered toall shareholdersason recorddate22ndDecember,2017onaproportionatebasisthroughtenderofferrouteinaccordancewiththeprovisionsoftheSEBI(BuybackofSecurities)Regulations,1998andCompaniesAct,2013.TheCompanyhasutilizedasumofRs.2,37,54,125/-fromitsSecurityPremiumAccounttotheextentavailableandRs.5,42,94,141/-fromitsProfit&LossAccounttopayRs7,80,48,266/-toitsshareholderfortheBuyBackofShares.
DIRECTORS
TheBoardoftheCompanyisstructuredinaccordancewiththerequirementsofCompaniesAct,2013andtheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.ThereisadequatenumberofIndependentDirectorsontheBoardoftheCompany.
TheDetailsofBoardComposition&itsMeetingsaregivenintheCorporateGovernanceReport.
InaccordancewiththeprovisionsoftheCompaniesAct,2013andtheArticlesofAssociationoftheCompany,Mrs.SarabjeetKaur,DirectoroftheCompany,retiresbyrotationattheensuingAnnualGeneralMeetingandbeingeligiblehasofferedherselfforre-appointment.
Further,theBoardhasre-appointedMr.GauriShankerPandey,asaWholetimeDirectoroftheCompanyfortheperiodoffiveyearsw.e.f16thMarch,2018subjecttoapprovalofMembersintheensuingAnnualGeneralMeeting.
BriefresumeandotherdetailsoftheDirectorsbeingre-appointedasrequiredundertheSecuritiesExchangeBoardofIndia(ListingObligationsAndDisclosuresRequirement)Regulations,2015areprovidedintheExplanatoryStatementannexedtotheNotice.
Duringtheyearunderreview,Nine(9)Meetingswereconvenedandheld,detailsofwhichareprovidedintheReportonCorporateGovernance.
KEY MANEGERIAL PERSONNEL
Presently,Mr.MayankAgarwal,CharteredAccountantistheChiefFinancialOfficeroftheCompany.HewasappointedastheChiefFinancialOfficerw.e.f21.10.2017duetotheresignationofMs.SwarnaGowriS.on21.10.2017.
DECLARATION FROM INDEPENDENT DIRECTORS
TheCompanyhas receiveddeclaration fromDr.CharanjeetSinghBedi,Mr.BaljitSinghBedi,Mr.ArunK.JainandMr.AtulK.Jain,theIndependentDirectorsoftheCompanyconfirmingthattheymeetwiththecriteriaofIndependenceasprescribedundertheCompaniesAct,2013andtheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.
POLICY ON APPOINTMENT & REMUNERATION
InrespectofNominationandRemunerationofDirectors,theCompanyhasadoptedthefollowingpolicies:
a) PolicyforselectionofDirectorsanddeterminingDirector’sindependence:and
b) RemunerationPolicyforDirectors,KeyManagerialPersonnelandotheremployees.
TheabovementionedpoliciesoftheCompanyareattachedherewithmarkedasAnnexureIandAnnexureII.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
TheCompanyhasputinplaceafamiliarizationprogramfortheIndependentDirectors,theirroles,rights,responsibilitiesintheCompanyandrelatedmatters.QuarterlyupdatesonrelevantstatutorymattersarealsoinformedtoDirectors.
DetailsoffamiliarizationprogramareavailableonthewebsiteoftheCompanyatthelinkhttp://fslindia.com/pdf/FAMILIARIZATION+PROGRAMMES.pdf.
PERFORMANCE EVALUATION
PursuanttotheprovisionsofCompaniesAct,2013andSecuritiesExchangeBoardofIndia(ListingObligationsandDisclosureRequirements)Regulations,2015,theBoardhascarriedoutannualperformanceevaluation
24th Annual Report 2017-2018
16 Frontline Securities Ltd.
FSLofitsownperformance,itscommitteesandalltheDirectorsindividually.
TheevaluationofNon–IndependentDirectors,ChairmanandtheBoardasawholewasdoneataseparatemeetingbytheIndependentDirectors.
DIRECTORS RESPONSIBILITY STATEMENT
YourDirectorsmakesthefollowingstatementintermsofSection134(3)ofCompaniesAct,2013:
a. InthepreparationoftheannualaccountsfortheyearendedMarch31st,2018,theapplicableaccountingstandardsreadwithrequirementssetoutunderScheduleIIItotheAct,havebeenfollowedandtherearenomaterialdeparturesfromthesame;
b. TheDirectorshaveselectedsuchaccountingpoliciesandappliedthemconsistently,andmadejudgmentsandestimatesthatarereasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsoftheCompanyasatMarch31st,2018andoftheprofitoftheCompanyfortheyearendedonthatdate;
c. TheDirectorshavetakenproperandsufficientcareforthemaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheActforsafeguardingtheassetsoftheCompanyandforpreventinganddetectingfraudandotherirregularities;
d. TheDirectorshavepreparedtheannualaccountsona‘goingconcern’basis;
e. TheDirectorshavelaiddowninternalfinancialcontrolstobefollowedbytheCompanyandthatsuchinternalfinancialcontrolsareadequateandareoperatingeffectively;and
f. TheDirectorshavedevisedpropersystemstoensurecompliancewiththeprovisionsofallapplicablelawsandthatsuchsystemsareadequateandoperatingeffectively.
PARTICULARS OF LOANS GIVEN AND INVESTMENTS MADE
BeingaNBFC(Non-BankingFinancialCompany),theCompanyisexemptedunderSection186(11)oftheCompaniesAct,2013.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A) Conservation of Energy & Technology Absorption
Particulars underCompanies (Accounts)Rules, 2014on conservationof energy,Technology absorption are not applicable to yourCompany. Accordinglynodisclosurehas beenmade in thisregard.
B) Foreign Exchange Earnings and Outgo
Thecompanyhasneitherearnednorspentanyforeignexchangeduringtheyearunderreview.
RELATED PARTY TRANSACTIONS
Allcontracts/arrangements/transactionsenteredbytheCompanyduringthefinancialyearunderreviewwithrelatedparty(s)wereintheordinarycourseofbusinessandonanarm’slengthbasis.Duringtheyear,theCompanyhadnotenteredintoanycontract/arrangement/transactionwithrelatedpartieswhichcouldbeconsideredmaterial inaccordancewiththepolicyoftheCompanyonmaterialityofrelatedpartytransactions.ThePolicyonmaterialityofrelatedpartytransactionsanddealingwithrelatedpartytransactionsasapprovedbytheBoardmaybeaccessedontheCompany’swebsiteatthelink:http://fslindia.com/pdf/RPT.pdf
ParticularsofcontractsorarrangementwithrelatedpartiesduringtheyearunderreviewareprovidedinAOC-2asAnnexureIII.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
IntermsofSection135andScheduleVIIoftheCompaniesAct,2013,theCompanyhasaCorporateSocialResponsibility(CSR)CommitteewhichcomprisestotalthreemembersofwhichtwoMembersincludingChairmanoftheCommitteeareIndependentDirectors.DetailsofCommittee&itsmeeting
24th Annual Report 2017-2018
17Frontline Securities Ltd.
FSLaregiveninReportonCorporateGovernance.
Duringtheyearunderreview,theCompanywasrequiredtospendRs.9.73lakhs(2%ofAveragenetprofitsoflast3financialyears)onCSRActivities.
TheCompanyshallutilizetheavailablefundsonlongtermprojectssuchasEducation,OldAgeHomes,Orphanageetc.(asspecifiedunderScheduleVIIofCompaniesAct,2013forCSRactivities).TheCompanyisundertheprocessoffindingthesuitableoptionsandfinalizationoftheimplementationplanforthesame.
InviewoftheabovetheCompanyispreservingthefundssothatasandwhentheadequateandappropriateoptionisavailabletotheCompany,itwillutilizethefundsforCSRactivities.Hence,theCompanyhasdecidednottospendtheamountonCSRduringtheyearunderreview.However,theCompanyhasbeencompliantwiththeprovisionsofSection135oftheCompaniesAct,2013inthepast.
TheCSRPolicymaybeaccessedontheCompany’swebsiteatthelink:http://www.fslindia.com/pdf/csr%201.pdf
TheAnnualreportonCSRactivitiesisannexedherewithasAnnexureIV.
AUDITORS AND AUDITORS’ REPORT
i) Statutory Auditors:
Pursuanttosection139oftheCompaniesAct,2013,theBoardofDirectorsoftheCompanyhasappointedM/sWalechaInder&Associates,CharteredAccountants(FRN:014205N)on17.05.2017asaStatutoryAuditorforatermofFiveYearstoholdtheofficefromtheconclusionofthe23rdAnnualGeneralMeetingheldintheFinancialyear2016-17tilltheconclusionofthe28thAnnualGeneralMeetingtobeheldfortheFinancialyear2021-22subjecttoratificationateveryAnnualGeneralMeeting.
Furthertheyhaveconfirmedtheireligibilitytotheeffectthattheirre-appointment,ifmade,wouldbewithintheprescribedlimitsundertheActandthattheyarenotdisqualifiedforthere-appointment.
ThenotesonfinancialstatementreferredtointheAuditor’sreportareself-explanatoryanddonotcallforanyfurthercomments.TheAuditor’sReportdoesnotcontainanyqualification,reservationandadverseremark.
DuringtheyearunderReviewtheAuditorhadnotreportedanymatterunderSection143(12)oftheCompaniesAct,2013;thereforenodetailisrequiredtobedisclosedunderSection134(3)oftheCompaniesAct,2013.
ii) Secretarial Audit:
TheBoardhas re-appointedM/s JainAarti&Associates,PracticingCompanySecretary, to conductSecretarialAuditforthefinancialyear2017-18.TheSecretarialAuditReportforthefinancialyearendedMarch31,2018isannexedherewithmarkedasAnnexureVtothisReport.TheSecretarialAuditReportdoesnotcontainanyqualification,reservationoradverseremark.
EXTRACT OF ANNUAL RETURN
ExtractofAnnualReturnoftheCompanyisannexedherewithinMGT-9asAnnexureVItothisReport.
ItmayalsobeaccessedonthewebsiteoftheCompanyathttp://www.fslindia.com/pdf/MGT_9%20new-1-5.pdf
INTERNAL FINANCIAL CONTROLS
TheCompanyhasinplaceadequateinternalfinancialcontrolswithreferencetofinancialstatements.Duringtheyear,suchcontrolsweretestedandnoreportablematerialweaknessinthedesignoroperationswereobserved.
VIGIL MECHANISM &WHISTLE BLOWER POLICY
TheCompanybelievesinconductingitsaffairsinfair&transparentmannerbyadoptinghigheststandardsofprofessionalism,honesty,integrityðicalbehavior.TheCompanyiscommittedtodevelopaculture
24th Annual Report 2017-2018
18 Frontline Securities Ltd.
FSLwhereitissafeforallemployeestoraiseconcernaboutanywrongfulconduct.ForthistheCompanyhasestablishedaVigilMechanismfordirectorsandemployeestoreportgenuineconcerns.
AspertheCompany’spolicy,anypersonnelcanapproachtheAuditCommittee.Howevernosuchinstancehasbeenreportedduringtheyearunderreview.
TheVigilMechanismPolicymaybeaccessedonthewebsiteoftheCompanyathttp://www.fslindia.com/pdf/FSL_VIGIL%20MECHANISM%20AND%20whistle-blower-policy.pdf
SIGNIFICANT AND MATERIAL ORDERS
TherearenoorderspassedbytheanyregulatoryauthoritiesorcourtsortribunalwhichwouldimpactthegoingconcernstatusoftheCompanyanditsoperationinfuture.
RISK MANAGEMENT
TheBoardofDirectorshasconstitutedaRiskManagementCommitteefor
a. evaluatingthevariousrisksimpactingtheCompany;and
b. overseeingthatalltherisksthattheorganizationfacessuchasstrategic,financial,credit,market,liquidity,security,property,IT,legal,regulatory,reputationandotherriskshavebeenidentifiedandassessedandthereisanadequateriskmanagementinfrastructureinplacecapableofaddressingthoserisks.
The riskmanagement policy of theCompanymay be accessed onwebsite of theCompany under thehttp://www.fslindia.com/pdf/RISK%20MNGT.pdflink.
AUDIT COMMITTEE
TheAuditCommitteecomprisesoffourmembersofwhichallmembersincludingChairmanofthecommitteeareIndependentDirectors.Duringtheyearsixmeetingswereconvenedandheld.DetailsofthesameareprovidedinReportonCorporateGovernance.
CORPORATE GOVERNANCE
TheCompanyhastakenadequatestepstoensurecomplianceswiththeprovisionofcorporategovernanceasprescribedunderSEBI(ListingObligationandDisclosuresRequirements)Regulations,2015.
AseparatesectiononCorporateGovernancePracticesfollowedbytheCompanytogetherwithCertificatefromCompany’sAuditor&CFOconfirming thecomplianceofCorporateGovernance formsan integralpartofthisAnnualReportasPerRegulation34&ScheduleVofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
TheCompanyisanequalopportunityemployerandconsciouslystrivestobuildaworkculturethatpromotesdignityofallemployees.Asrequiredunder theprovisionsofsexualharassmentofWomenatWorkplace(Prevention,ProhibitionandRedressal)Act,2013andRulesframedthereunder,theCompanyhasimplementedapolicyonprevention,prohibitionandredressalofsexualharassmentatworkplace.Allwomen,permanent,temporaryorcontractualincludingthoseofserviceproviderarecoveredunderthispolicy.
InternalComplaintsCommittee (ICC) has been set up to redress complaints received regarding sexualharassment.TherewereNoComplaintsreceivedfromanyemployeeduringthefinancialyear2017-18andhencenocomplaintisoutstandingason31.03.2018forredressal.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
ManagementDiscussionandAnalysiscomprisinganoverviewofthefinancialresults,operations/performancesandfutureaspectsformpartofthisannualreport.
PARTICULARS OF EMPLOYEE
TheinformationrequiredunderSection197oftheActreadwithrule5(1)oftheCompanies(AppointmentandRemunerationofManagerialPersonnel)Rules,2014aregivenbelow:
24th Annual Report 2017-2018
19Frontline Securities Ltd.
FSLa. TheratiooftheremunerationofeachdirectortothemedianremunerationoftheemployeesoftheCompanyforthefinancialyear:
Non-Executive Directors Ratio to median remuneration
NoremunerationhasbeenpaidtoNon-executivedirectors
Executive Directors Ratio to median remuneration
GauriShankerPandey 1.82
RichaArora 1.05
b. Thepercentageincreaseinremunerationofeachdirector,chiefexecutiveofficer,chieffinancialofficer,companysecretaryintheFinancialYear:
*Therewasnoincreaseinsalary.However,revisionofsalarywasdone.
**ResignedasChiefFinancialOfficerw.e.f21.10.2017
***AppointedasChiefFinancialOfficerw.e.f21.10.2017
c. Thepercentageincreaseinthemedianremunerationofemployeesinthefinancialyear:5.25%
d. ThenumberofpermanentemployeesontherollsofCompany:12(ason31stMarch,2018).
e.Averagepercentileincreasealreadymadeinthesalariesofemployeesotherthanthemanagerialpersonnelinthelastfinancialyearanditscomparisonwiththepercentileincreaseinthemanagerialremunerationandjustificationthereofandpointoutifthereareanyexceptionalcircumstancesforincreaseinthemanagerialremuneration:
Thepercentageincreaseinthemedianremunerationofemployeesinthefinancialyearis5.25%whereasincreaseinthemanagerialremunerationfortheyearwas5.74%
f. TopTenEmployeesintermsofRemunerationdrawnason31.03.2018:
Company’sBusinessModeldoesnotrequirelargeno.ofpeople.TotalNo.ofemployeesason31.03.2018is12whichincludesSeniorLevel,MiddleLevelandlowerlevel.Detailsofallseniorlevelemployeesdrawingsalaryaregivenbelow:
Directors,ChiefExecutiveOfficer,Chief
FinancialOfficerandCompanySecretary
GauriShankerPandey(WholeTimeDirector)
RichaArora(CompanySecretary)
**SwarnaGowriS.(ChiefFinancialOfficer)
***MayankAgarwal(ChiefFinancialOfficer)
%increaseinremunerationin
thefinancialyear
NIL*
36.36%
33.33%
NA
Particulars
Designation
RemunerationReceived(Rs.
InLakhs)
NatureofEmployment
Qualification
Mr. G.S Pandey
WholeTimeDirector
7.22
Permanent
B.com
Mr. Mayank Agarwal
ChiefFinancialOfficer
(from21.10.2017)
1.82*
Permanent
CA&B.com
Ms. Richa Arora
WholeTimeDirector
&CompanySecretary
4.17
Permanent
CS&B.com(H)
24th Annual Report 2017-2018
20 Frontline Securities Ltd.
FSLExperience
DateofCommencementof
Employment
Age
PreviousEmployment&
Designation
No.ofsharesheldinthe
Company
30yearsofExperience
inHumanResourceand
administration
16.03.2013(appointedas
aWholeTimeDirector)
60years
DolsunContainersPrivate
Limited,Manager
0
1yearofexperiencein
theFieldofAccounts,
taxation&Audit.
21.10.2017
25years
MJMJ&Associates
LLP,AuditManager
0
2yearsofExperience
inthefieldofCompany
law,SEBIRegulation
&othercorporatelaw
matter.
26.02.2016
25years
Tiwari&Mishra,
CharteredAccountant
asanAccounts
Executive
0
Note:#AppointedasChiefFinancialOfficeron21.10.2017
1. NoneoftheabovementionedemployeeisarelativeofanydirectorormangeroftheCompany.
2. TheabovementionedemployeesconstitutetheKMP’softheCompany,besidesthis,theother
employeesreceivesnominalsalarydependingupontheirworkprofile.
g. NoemployeewhowasemployedthroughouttheFinancialYear17-18wasinreceiptofremuneration,whichinaggregatewasofamountnotlessthanRupeesOneCroreandTwolakh.
h. NoemployeewhowasemployedforapartoftheFinancialYear17-18wasinreceiptofremunerationforanypartthereof,whichinaggregatewasofamountnotlessthanRupeesEightyLakhsandFiftyThousand.
i. NoemployeewhowasemployedthroughouttheFinancialYear17-18orpartthereofwasinreceiptofremunerationwhichinaggregateorasthecasemaybe,wasataratewhichinaggregatewasinexcessofthatdrawnbythewholetimedirector(s)andwhoheldbyhimselforalongwithhisspouseanddependentchildren,notlessthan2percentoftheEquitysharesoftheCompany.
j. AffirmationthattheremunerationisaspertheremunerationpolicyoftheCompany:theCompanyherebyaffirmsthatremunerationispaidaspertheremunerationpolicyoftheCompany.
ACKNOWLEDGEMENTYourDirectorsexpresstheirsincerethanksandgratitudetotheCompany’sesteemedShareholders,Clients,Associates, Financial Institutions,Bankers, theSecurities andExchangeBoard of India,BombayStockExchangeLimited,ReserveBankofIndiaandotherGovernmentDepartmentsfortheirvaluablecontributionandwholeheartedsupport.
WealsoacknowledgethesincereanddedicatedeffortsputinbytheemployeesoftheCompanyatalllevels.
ForOnbehalfoftheBoardofDirectors
FRONTLINE SECURITIES LIMITED
Gauri Shanker Pandey Rakesh K. Jain
Place:Noida Whole Time Director Chairman
Date: 28.05.2018 DIN: 00050614 DIN: 00050524
24th Annual Report 2017-2018
21Frontline Securities Ltd.
FSLAnnexure-I
Policy for Selection of Director and determining Director’s Independence
1. Introduction
1.1.FrontlineSecuritiesLimited(FSL)believesthatanenlightenedBoardconsciouslycreatesacultureofleadershiptoprovidealong-termvisionandpolicyapproachtoimprovethequalityofgovernance.Towardsthis,FSLensuresconstitutionofaBoardofDirectorswithanappropriatecomposition,size,diversifiedexpertiseandexperienceandcommitmenttodischargetheirresponsibilitiesanddutieseffectively.
1.2.FSLrecognizestheimportanceofIndependentDirectorsinachievingtheeffectivenessoftheBoard.FSLaimstohaveanoptimumcombinationofExecutive,Non-ExecutiveandIndependentDirectors.
2. Scope and Exclusion:
2.1ThisPolicy sets out the guidingprinciples for the “Nomination andRemunerationCommittee” foridentifyingpersonswhoarequalifiedtobecomeDirectorsandtodeterminetheindependenceofDirectors,incaseoftheirappointmentasIndependentDirectorsoftheCompany.
3. Terms and References:
InthisPolicy,thefollowingtermsshallhavethefollowingmeanings:
3.1 “Director”meansadirectorappointedtotheBoardofacompany.
3.2 “Nomination andRemunerationCommittee”means the committee constituted by FSL’sBoard inaccordancewiththeprovisionsofSection178oftheCompaniesAct,2013andRegulation19ofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.
3.3 “IndependentDirector”meansadirectorreferredtoinsub-section(6)ofSection149oftheCompaniesAct,2013andRegulation16(1)(b)ofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.
4. Policy:
4.1 Qualifications and criteria
4.1.1 The“NominationandRemuneration(N&R)Committee”,andtheBoard,shallreviewonanannualbasis,appropriateskills,knowledgeandexperiencerequiredoftheBoardasawholeanditsindividualmembers.TheobjectiveistohaveaBoardwithdiversebackgroundandexperiencethatarerelevantfortheCompany’sglobaloperations.
4.1.2 InevaluatingthesuitabilityofindividualBoardmembers,theN&RCommitteemaytakeintoaccountfactors,suchas:
• General understanding of theCompany’s business dynamics, global business and socialperspective;
• Educationalandprofessionalbackgroundstandingintheprofession;
• Personalandprofessionalethics,integrityandvalues/willingnesstodevotesufficienttimeandenergyincarryingouttheirdutiesandresponsibilitieseffectively.
4.1.3 Theproposedappointeeshallalsofulfillthefollowingrequirements:
• ShallpossessaDirectorIdentificationNumber;
• ShallnotbedisqualifiedundertheCompaniesAct,2013;
• ShallgivehiswrittenconsenttoactasaDirector;
• Shall endeavor to attend allBoardMeetings andwherever he is appointed as aCommitteeMember,theCommitteeMeetings;
24th Annual Report 2017-2018
22 Frontline Securities Ltd.
FSL • Shall abide by theCode ofConduct established by theCompany forDirectors andSenior
ManagementPersonnel;
• Shalldisclosehisconcernorinterestinanycompanyorcompaniesorbodiescorporate,firms,orotherassociationofindividualsincludinghisshareholdingatthefirstmeetingoftheBoardineveryfinancialyearandthereafterwheneverthereisachangeinthedisclosuresalreadymade;Suchotherrequirementsasmaybeprescribed,fromtimetotime,undertheCompaniesAct,2013,SEBI(ListingandObligationRequirements)Regulations,2015andotherrelevantlaws.
4.2 Criteria of Independence
4.2.1 TheN&RCommitteeshallassess the independenceofDirectorsat the timeofappointment/ re-appointment and theBoard shall assess the same annually.TheBoard shall re-assessdeterminations of independencewhen anynew interests or relationships are disclosed by aDirector.
4.2.2 ThecriteriaofindependenceshallbeaslaiddowninCompaniesAct,2013andRegulation16(1)(b)ofSEBI(ListingobligationsandDisclosureRequirements)Regulations,2015.
24th Annual Report 2017-2018
23Frontline Securities Ltd.
FSLAnnexure-II
Remuneration Policy for Directors, Key Managerial Personnel and other employees
1. Introduction FrontlineSecuritiesLimited(FSL)recognizestheimportanceofaligningthebusinessobjectiveswithspecificandmeasureableindividualobjectivesandtargets.TheCompanyhasthereforeformulatedtheremunerationpolicyforitsDirectors,KeyManagerialPersonnelandotheremployeeskeepinginviewthefollowingobjectives:
Ensuringthatthelevelandcompositionofremunerationisreasonableandsufficienttoattract,retainandmotivate,torunthecompanysuccessfully.
Ensuringthatrelationshipofremunerationtoperformanceisclearandmeetstheperformancebenchmarks. Ensuringthatremunerationinvolvesabalancebetweenfixedandincentivepayreflectingshortandlongtermperformanceobjectivesappropriatetotheworkingofthecompanyanditsgoals.
2. Scope and Exclusion: This Policy sets out the guiding principles for theNomination andRemunerationCommittee forrecommending to theBoard the remunerationof theDirectors,KeyManagerialPersonnel andotheremployeesoftheCompany.
3. Terms and References: InthisPolicy,thefollowingtermsshallhavethefollowingmeanings: 3.1 “Director”meansadirectorappointedtotheBoardoftheCompany. 3.2 “Key Managerial Personnel”means (i) theChiefExecutiveOfficerortheManagingDirectorortheManager; (ii) thecompanysecretary; (iii) thewhole-timedirector; (iv) theChiefFinancialOfficer;and (v) suchotherofficerasmaybeprescribedundertheCompaniesAct,2013 3.3 “Nomination and Remuneration Committee”meansthecommitteeconstitutedbyFSL’sBoard
inaccordancewiththeprovisionsofSection178oftheCompaniesAct,2013andRegulation19ofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.
4. Policy:4.1 Remuneration to Executive Directors and Key Managerial Personnel 4.1.1 TheBoard,ontherecommendationoftheNominationandRemuneration(N&R)Committee,
shallreviewandapprovetheremunerationpayabletotheExecutiveDirectorsoftheCompanywithintheoveralllimitsapprovedbytheshareholders.
4.1.2 TheBoard,ontherecommendationoftheN&RCommittee,shallalsoreviewandapprovetheremunerationpayabletotheKeyManagerialPersonneloftheCompany.
4.2 Remuneration to Non-Executive Directors 4.2.1 TheBoard, on the recommendationof theN&RCommittee, shall review and approve the
remunerationpayabletotheNon-ExecutiveDirectorsoftheCompanywithintheoveralllimitsapprovedbytheshareholders.
4.3 Remuneration to other employees 4.3.1 Employees shall be assigned grades according to their qualifications andwork experience,
competencies aswell as their roles and responsibilities in the organization. Individualremunerationshallbedeterminedwithintheappropriategradeandshallbebasedonvariousfactorssuchasjobprofile,skillsets,seniority,experienceandprevailingremunerationlevelsforequivalentjobs.
24th Annual Report 2017-2018
24 Frontline Securities Ltd.
FSL Annexure-III
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8 (2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso there to1. Detailsofcontractsorarrangementsortransactionsnotatarm’slengthbasis:
FrontlineSecuritiesLimited(FSL)hasnotenteredintoanycontractorarrangementortransactionwithitsrelatedpartieswhichisnotatarm’slengthduringfinancialyear2017-18.
2. Detailsofmaterialcontractsorarrangementortransactionsatarm’slengthbasis
(a) Name(s)oftherelatedpartyandnatureofrelationship:
I. AridhiJain,relativeofDirector
II. HopeConsultantsLimited,commonDirectors
III. FrontlineCapitalServicesLimited,commonDirector
IV. FSLSoftwareTechnologiesLimited,commonDirector
(b) Natureofcontracts/arrangements/transactions:
I. RentAgreement,
II. RentAgreement,
III. ShareBrokingandDepositoryServices:and
IV. RentAgreement,respectively
(c) Durationofthecontracts/arrangements/transactions
I. Contract datedApril 04, 2012 as renewed onApril 01, 2015whichwas terminated on14thAugust,2017.
II. ContractdatedApril01,2013asrenewedonApril04,2016whichisongoing.
III. Agreemententeredin1995,whichisongoing.
IV. ContractenteredonJuly01st,2017foraperiodofthreeyearswhichisstillongoing.
(d) Salienttermsofthecontractsorarrangementsortransactionsincludingthevalue,ifany:
I. TheCompanyhasgivenresidentialpremisesonleaseandrentbasisontermsand conditionsspeltoutintheRentAgreement.TheContracthasbeenterminatedw.e.f 14thAugust,2017.
II. TheCompanyhastakenofficepremisesonleaseandrentbasisonthetermsand conditionsspeltoutintheRentAgreement.
III. TheCompanyhasenteredintoShareBrokingandDepositoryServicesintheregularcourseofbusiness.
IV. TheCompanyhastakenofficepremisesonrentbasisonthetermsandconditionsspeltoutintheRentAgreement.
(e) Date(s) of approval by the Board, if any: Not applicable, since the contract was enteredintotheordinarycourseofbusinessandonarm’slengthbasis.
(f) Amountpaidasadvances,ifany:
I.NIL II.NIL III.NIL IV.NIL
24th Annual Report 2017-2018
25Frontline Securities Ltd.
FSLAnnexure-IV
ANNUAL REPORT ON CSR ACTIVITIESPursuant to Section 135 of the Act & Rules made there under
1. A brief outline of the company’s CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web link to the CSR policy and projects or programs:
FSL’sCSRpolicyisaimedat“capacitybuilding”oftheunderservedandmarginalized.IthasaCSRvisiontoupholdhumanvalueswithsustainablecommunitydevelopment.Undercapacitybuilding,majoremphasiswillbegiventoprogramsthatequipwomen&youthtobedriversofchangeandchildrenasthefutureofamaturingeconomy.
TheprojectsundertakenwillbewithinthebroadframeworkofScheduleVIIoftheCompaniesAct,2013.TheCompanyproposestopromoteorphanage,education,financialliteracyinitiativesandsettingupoldagehomes.
DetailsofCSRpolicyareavailableontheweblinkhttp://fslindia.com/pdf/csr%201.pdf
2. The Composition of the CSR Committee:
S.NO NAME CATEGORY DESIGNATION
1 Mr.AtulKJain IndependentDirector Chairman
2 Mr.GauriShankerPandey Whole–TimeDirector Member
3 Mr.ArunK.Jain IndependentDirector Member
3. Average net profit of the company for last three financial years for the purpose of computation of CSR: Rs. 48,668,603.33
4. Prescribed CSR Expenditure (two percent of the amount shown as in item 3 above): Rs.973,372.075. Details of CSR spent during the financial year: a. Total amount to be spent for the financial year: NIL b. Amount unspent, if any: Rs.973,372.07
c. Manner in which the amount spent during the financial year is detailed below:
(1)S.No
(2)CSRprojectoractivityidentified
(3)Sectorinwhichtheprojectiscovered
(4)Projectsorprograms1)Localareaor other2)Specifythestateanddistrictwhereprojectsorprogramswasundertaken
(5)Amountoutlay(budget)projectorprogramswise(RupeesinLakhs)
(6)AmountspentontheprojectsorprogramsSub-heads:1) Directexpenditureonprojectsorprograms2) Overheads:(RupeesinLakh
(7)Cumulativeexpenditureuptothereportingperiod(Rupeesinlakhs)
(8)AmountspentDirectorthroughimple-mentingagency.
NIL
24th Annual Report 2017-2018
26 Frontline Securities Ltd.
FSL6. In case the Company has failed to spend the two percent of the average net profits of the last three
financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board report.
TheCompanyshallutilizetheavailablefundsonlongtermprojectssuchasEducation,OldAgeHomes,Orphanageetc.(asspecifiedunderScheduleVIIofCompaniesAct,2013forCSRactivities).TheCompanyisundertheprocessoffindingthesuitableoptionsandfinalizationoftheimplementationplanforthesame.
InviewoftheabovetheCompanyispreservingthefundssothatasandwhentheadequateandappropriateoptionisavailabletotheCompany,itwillutilizethefundsforCSRactivities.Hence,theCompanyhasdecidednottospendtheamountonCSRduringtheyearunderreview.However,theCompanyhasbeencompliantwiththeprovisionsofSection135oftheCompaniesAct,2013inthepast.
7. A responsibility statement of the CSR Committee that the implementing and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.
WedeclarethatimplementingandmonitoringoftheCSRPolicyareincompliancewithCSRobjectivesandPolicyoftheCompany.
OnbehalfoftheBoardofDirectors
ForFRONTLINE SECURITIES LIMITED
Atul K. Jain Rakesh K. Jain
(Chairman CSR Committee) (Chairman)
DIN: 00133750 DIN: 00050524
24th Annual Report 2017-2018
27Frontline Securities Ltd.
FSL
Annexure-V
Jain Aarti & AssociatesCompany Secretaries
D-5,IIndFloor,R.K.Tower,Sector-4,Vaishali,Ghaziabad.Ph.No.9811894375,[email protected].
Form No. MR-3
SECRETARIAL AUDIT REPORTForTheFinancialYearEndedon31stMarch2018
[Pursuanttosection204(1)oftheCompaniesAct,2013andruleNo.9oftheCompanies(AppointmentandRemunerationofManagerialPersonnel)Rules,2014]
To,TheMembers,Frontline Securities Limited M-6,IIndFloor,M-BlockMarketGreaterKailash-II,NewDelhi-110048.
Ihaveconductedthesecretarialauditofthecomplianceofapplicablestatutoryprovisionsandtheadherencetogoodcorporatepracticesby‘Frontline Securities Limited’(hereinaftercalledthecompany).SecretarialAuditwasconductedinamannerthatprovidedmeareasonablebasisforevaluatingthecorporateconducts/statutorycompliancesandexpressingouropinionthereon.
I, Report That:
BasedonmyverificationoftheCompany’sbooks,papers,minutebooks,formsandreturnsfiledandotherrecordsmaintainedbytheCompanyandalsotheinformationprovidedbytheCompany,itscompanysecretary,itsofficersagentsandauthorizedrepresentativesduringtheconductofsecretarialaudit,Iherebyreportthatinmyopinionduringtheauditperiodcoveringthefinancialyearendedon31stMarch2018(‘AuditPeriod’)theCompanyhascompliedwith thestatutoryprovisions listedhereunderandalso that theCompanyhasproperBoard-processesandcompliance-mechanisminplacetotheextent,inthemannerandsubjecttothereportingmadehereinafter:
Ihaveexaminedthebooks,papers,minutebooks,formsandreturnsfiledandotherrecordsmaintainedbytheCompanyforthefinancialyearendedon31stMarch2018accordingtotheprovisionsof:
I. TheCompaniesAct,2013(theAct)andtheRulesmadethereunder;
II. TheSecuritiesContract(Regulation)Act,1956(SCRA)andtherulesmadethereunder;
III. TheDepositoriesAct,1996andtheRegulationsandByelawsframedthereunder;
IV. TheFollowingRegulationsandGuidelinesprescribedundertheSecuritiesandExchangeBoard ofIndiaAct,1992(SEBIAct)totheextentapplicabletotheCompany:
a) TheSecuritiesandExchangeBoardofIndia(SubstantialAcquisitionofSharesandTakeovers)Regulations,2011;
b) TheSecuritiesandExchangeBoardofIndia(ProhibitionofInsiderTrading)Regulations,1992;
24th Annual Report 2017-2018
28 Frontline Securities Ltd.
FSL c) TheSecuritiesandExchangeBoardofIndia(IssueofCapitalandDisclosureRequirements)
Regulations,2009;
d) TheSecuritiesandExchangeBoardofIndia(RegistrartoanIssue&ShareTransferAgents)Regulations,1993regardingtheCompaniesActanddealingwithClient.
e) TheSecuritiesandExchangeBoardofIndia(DelistingofequityShares)Regulations,2009.
f) TheSecuritiesandExchangeBoardofIndia(ESOSandESPS)Guidelines,1999;
g) TheSecuritiesandExchangeBoardofIndiaSEBI(BuybackofSecurities)Regulations,1998.
h) TheMemorandumandArticlesofAssociationoftheCompany.
Ihavealsoexaminedcompliancewiththeapplicableclausesofthefollowing:
a) SecretarialStandardsissuedbyTheInstituteofCompanySecretariesofIndia.
b) TheListingagreemententeredbytheCompanywithBombayStockExchange(BSE).
During the period of audit review, the companyhas compliedwith all the provisions of theAct,Rules,Regulations,Guidelines,Standards,ListingAgreementsetc.asmentionedabove.
I, Report That:
Duringtheperiodunderreviewandaspertheexplanationsandrepresentationsmadebythemanagementandsubjecttoclarificationsgiventous,theCompanyhassubstantiallycompliedwiththeprovisionsoftheAct,Rules,Regulations,Guidelines,etc.,thatareapplicabletotheCompany.;
IfurtherreportthatthecompliancebytheCompanyofapplicablefinanciallaws,likedirectandindirecttaxlaws,hasnotbeenreviewedinthisAuditsincethesamehavebeensubjecttoreviewbystatutoryfinancialauditandotherdesignatedprofessionals.
IfurtherreportthattheCompanyhas,inouropinion,compliedwiththeprovisionsoftheCompaniesAct,2013andtheRulesmadeunderthatActandtheMemorandumandArticlesofAssociationoftheCompany,withregardto:
a) Maintenanceofvariousstatutoryregistersanddocumentsandmakingnecessaryentriestherein;
b) Forms,returns,documentsandresolutionsrequiredtobefiledwiththeRegistrarofCompaniesandtheCentralGovernment;
c) ServiceofdocumentsbytheCompanyonitsMembers,AuditorsandtheRegistrarofCompanies;
d) NoticeofBoardMeetingsandCommitteeMeetingsofDirectors;
e) ThemeetingsofDirectorsandCommitteesofDirectorsincludingpassingofresolutionsby circulation;
f) TheAnnualGeneralMeetingduringtheperiodwasheldon9th August 2017;
g) MinutesofproceedingsofGeneralMeetingsandoftheBoardanditsCommitteemeetings;
h) ApprovalsoftheMembers,theBoardofDirectors,theCommitteesofDirectorsandthegovernmentauthorities,whereverrequired;
i) ConstitutionoftheBoardofDirectors/Committee(s)ofDirectors,appointment,retirementandreappointmentofDirectorsincludingtheManagingDirectorandWhole-timeDirectors;
j) PaymentofremunerationtoDirectorsincludingWhole-timeDirectors,
k) AppointmentandremunerationofAuditors;
l) TransfersandtransmissionsoftheCompany’sshares;
24th Annual Report 2017-2018
29Frontline Securities Ltd.
FSLm) Borrowingsandregistration,modificationandsatisfactionofchargeswhereverapplicable;
n) InvestmentoftheCompany’sfundsincludinginvestmentsandloanstoothers;
o) FormofBalanceSheetasprescribedunderPartI,formofstatementofprofitandlossasprescribedunderPartIIandGeneralInstructionsforpreparationofthesameasprescribedinSchedulestotheAct;
p) Directors’report;
q) Contracts,commonseal,registeredofficeandpublicationofnameoftheCompany;and
r) Generally,allotherapplicableprovisionsoftheActandtheRulesmadeundertheAct.
I, further report that:
• TheBoardofDirectorsoftheCompanyisdulyconstitutedwithproperbalanceofExecutiveDirectors,Non-ExecutiveDirectorsandIndependentDirectors.ThechangesinthecompositionoftheBoardofDirectorsthattookplaceduringtheperiodunderreviewwerecarriedoutincompliancewiththeprovisionsoftheAct.
• Inaccordancewithlaw,adequatenoticeisgiventoalldirectorstoscheduletheBoardMeetings,agendaanddetailednotesonagendaweresentatleastsevendaysinadvance,andasystemexistsforseekingandobtainingfurtherinformationandclarificationsontheagendaitemsbeforethemeetingandformeaningfulparticipationatthemeeting.
• Allthedecisionsarecarriedunanimously.ThemembersoftheBoardhavenotexpresseddissentingviewsonanyoftheagendaitems.
• TheCompanyhasobtainedallnecessaryapprovalsunderthevariousprovisionsoftheAct;andtherewasnoprosecutioninitiatedandnofinesorpenaltieswereimposedduringtheyearunderreviewundertheCompaniesAct2013,DepositoriesActandRules,RegulationsandGuidelinesframedundertheseActsagainst/ontheCompany,itsDirectorsandOfficers.
• TheDirectorshavecompliedwiththedisclosurerequirementsinrespectoftheireligibilityofappointment,theirbeingindependentandcompliancewiththeCodeofConductforIndependentDirectors;
• IfurtherreportthatCompanyhascompliedwiththeprovisionsoftheDepositoriesAct,1996andtheByelawsframedthereunderbytheDepositorieswithregardtodematerialization/rematerialisationofsecurities and reconciliation of records of dematerialized securitieswith all securities issuedby theCompany.
BasedonthecompliancemechanismestablishedbytheCompany,Iamoftheopinionthatthemanagementhas:-
• Adequate systems andprocesses in the company commensuratewith the size andoperationsof thecompanytomonitorandensurecompliancewithapplicablelaws,rules,regulationsandguidelines.
• IfurtherreportthatCompanyhasproperlycompliedwiththeprovisionsofBuy-BackofSecuritiesunderCompaniesAct,2013andSEBI(BuyBackofSecurities)Regulations,1998withrespectto12,58,843sharesboughtbackduringtheyear.
I, further report that:thatduringtheauditperiod,therewerenoinstancesof:-
a) Foreigntechnicalcollaborationduringthefinancialyear;b) Merger/Amalgamation/Reconstructionetc.;c) Public/Right/Preferentialissueofshares/debentures/sweatequitysharesetc.;d) Majordecisiontakenbythemembersinpursuancetothesection180oftheCompaniesAct,2013.
Ifurtherreportthat:
a) Maintenance of secretarial records is the responsibility of themanagement of theCompany.Our
24th Annual Report 2017-2018
30 Frontline Securities Ltd.
FSLresponsibilityistoexpressanopiniononthesesecretarialrecordsbasedonouraudit.
b) Ihavefollowedtheauditpracticesandprocessesaswereappropriate toobtainreasonableassuranceaboutthecorrectnessofthecontentsofthesecretarialrecords.Theverificationwasdoneontestbasistoensurethatcorrectfactsarereflectedinsecretarialrecords.Ibelievethattheprocessesandpractices,wefollowedprovideareasonablebasisforouropinion.
c) IhavenotverifiedthecorrectnessandappropriatenessofthefinancialstatementsoftheCompany.
d) Thecomplianceoftheprovisionsofthecorporateandotherapplicablelaws,rules,regulation,standardsistheresponsibilityofthemanagement.Ourexaminationwaslimitedtotheverificationofproceduresontestbasis.
e) TheSecretarialAuditreportisneitheranassuranceastothefutureviabilityoftheCompanynoroftheefficacyoreffectivenesswithwhichthemanagementhasconductedtheaffairsoftheCompany.
Place: Vaishali For Jain Aarti & AssociatesDate: 21/05/2018 (Company Secretaries)
CS Chhaya Walia Membership No. A42947
COP No.19868
24th Annual Report 2017-2018
31Frontline Securities Ltd.
FSL
I. REGISTRATION & OTHER DETAILS:
1 CIN L65100DL1994PLC058837
2 RegistrationDate 5/5/1994
3 NameoftheCompany FRONTLINESECURITIESLIMITED
4 Category/Sub-categoryoftheCompany COMPANYLIMITEDBYSHARES
NON-GOVERNMENTCOMPANY
5 (i)AddressoftheRegisteredoffice&contactdetails M-6,IINDFLOOR,MBLOCKMARKET,
GREATERKAILASH-II,NEWDEL
HI-110048,PH:011-29216309,29212610,
(ii)Addressforcorrespondence B-22,SECTOR-4,NOIDA-201301,
UTTARPRADESH,PHN:0120-2534066
6 Whetherlistedcompany YES(ListedonBSE)
7 Name,Address&contactdetailsoftheRegistrar& LINKINTIMEINDIAPVT.LTD,
TransferAgent,ifany. 44,COMMUNITYCENTRE2ND,FLOOR,
NARAINAINDUSTRIALAREA,
PHASE-1,NEARPVRNARAIANA,
NEWDELHI-110028,PH:+91-1141410592,
FAX:+91-41410591
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
(Allthebusinessactivitiescontributing10%ormoreofthetotalturnoverofthecompanyshallbestated)
S.No. NameandDescriptionofmainproducts/services NICCodeofthe %tototalturnover
Product/service ofthecompany
1 TOBUY,SELL,ACQUIRE,ANDHOLDSHARES, 6599 72.70%
STOCKS,DEBENTURESANDBONDS
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
SN NameandaddressoftheCompany CIN/GLN Holding/Subsidiary %ofsharesheld Applicable
/Associate Section
1 NIL NIL NIL NIL NIL
Annexure VI
“Duringtheyear,thecompanyhasbroughtback12,58,843EquityShares,subsequentlythepaidupsharecapitaloftheCompanyason31.03.2018standsreducedfromRs.7,18,66,890/-toRs.5,92,78,460/-dividedinto59,27,846EquitySharesofRs.10/-each.”
FORM NO. MGT 9EXTRACT OF ANNUAL RETURN
As on financial year ended on 31.03.2018
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company
(Management & Administration) Rules, 2014.
24th Annual Report 2017-2018
32 Frontline Securities Ltd.
FSL IV. SHARE HOLDING PATTERN (Equitysharecapitalbreakupaspercentageoftotalequity) (i) Category-wise Share Holding CategoryofShareholders “No.ofSharesheldatthebeginningof “No.ofSharesheldattheendoftheyear %Changeduring theyear[Ason31-March-2017]” [Ason31-March-2018]” theyear Demat Physical Total %ofTotal Demat Physical Total %ofTotal Shares Shares
A. Promoters (1) Indian a)Individual/HUF 4,759,414 - 4,759,414 66.23% 3,884,414 - 3,884,414 65.53% -0.70%b)CentralGovt - - - - - - - - 0.00%c)StateGovt(s) - - - - - - - - 0.00%d)BodiesCorp. 410,043 - 410,043 5.71% 410,043 - 4,10,043 6.92% 1.21%e)Banks/FI - - - - - - - - 0.00%f)Anyother - - - - - - - - 0.00%Sub Total (A) (1) 5,169,457 - 5,169,457 71.93% 4,294,457 - 4,294,457 72.45% 4.41% (2) Foreign a)NRIIndividuals 32,820 - 32,820 0.46% 32,820 - 32,820 0.55% 0.10%b)OtherIndividuals - - - - - - - - 0.00%c)BodiesCorp. - - - - - - - - 0.00%d)Anyother - - - - - - - - 0.00%Sub Total (A) (2) 32,820 - 32,820 0.46% 32,820 - 32,820 0.55% 0.12%TOTAL (A) 5,202,277 - 5,202,277 72.39% 4,327,277 - 4,327,277 73.00% -0.61% B. Public Shareholding 1. Institutions a)MutualFunds - - - 0.00% - - - 0.00% 0.00%b)Banks/FI - - - 0.00% - - - 0.00% 0.00%c)CentralGovt - - - 0.00% - - - 0.00% 0.00%d)StateGovt(s) - - - 0.00% - - - 0.00% 0.00%e)VentureCapitalFunds - - - 0.00% - - - 0.00% 0.00%f)InsuranceCompanies - - - 0.00% - - - 0.00% 0.00%g)FIIs - - - 0.00% - - - 0.00% 0.00%h)ForeignVentureCapitalFunds - - - 0.00% - - - 0.00% 0.00%i)Others(specify) - - - 0.00% - - - 0.00% 0.00%Sub-total (B)(1):- - - - 0.00% - - - 0.00% 0.00% 2. Non-Institutions a)BodiesCorp. - - - - - - - 0.00% 0.00%i)Indian - - - - - - - 0.00% 0.00%ii)Overseas - - - - - - - 0.00% 0.00%b)Individuals - - - 0.00% - - - 0.00% 0.00%i)Individualshareholdersholding 212,423 308,752 521,175 7.25% 298,295 185,323 483,618 8.16% 0.91%nominalsharecapitaluptoRs.1lakh ii)Individualshareholdersholding 770,957 - 770,957 10.73% 838,211 - 838,211 14.14% 3.41%nominalsharecapitalinexcessofRs1lakh c)Others(specify) NonResidentIndians 307,528 - 307,528 4.28% 181,984 - 181,984 3.07% -1.21%NonResidentIndians(NonRepat) 100 - 100 0.00% 1,001 - 1,001 0.02% 0.02%HUF 1,302 - 1,302 0.02% 5,153 - 5,153 0.09% 0.07%ClearingMembers 5,351 - 5,351 0.07% 7,528 - 7,528 0.13% 0.05%BodiesCorporate 357,299 20,700 377,999 5.25% 70,774 12,300 83,074 1.40% -3.86%ForeignBodies-DR 0 - - 0.00% - - - 0.00% 0.00%Sub-total (B)(2):- 1,654,960 329,452 1,984,412 27.61% 1,402,946 197,623 1,600,569 27.00% -0.61%Total Public (B) 1,654,960 329,452 1,984,412 27.61% 1,402,946 197,623 1,600,569 27.00% -0.61%C. Shares held by Custodian 0 - - 0.00% - - - 0.00% 0.00%for GDRs & ADRs Grand Total (A+B+C) 6,857,237 329,452 7,186,689 100.00% 5,730,223 197,623 5,927,846 100.00% -17.52%
“Duringtheyear,thecompanyhasbroughtback12,58,843EquityShares,subsequentlythepaidupsharecapitaloftheCompanyason31.03.2018standsreducedfromRs.7,18,66,890/-toRs.5,92,78,460/-dividedinto59,27,846EquitySharesofRs.10/-each.”
24th Annual Report 2017-2018
33Frontline Securities Ltd.
FSL(ii) Shareholding of Promoter SN Shareholder’sName Shareholdingatthebeginningoftheyear Shareholdingattheendoftheyear (ason01stApril.2017) (ason31stMarch,2018) No.ofshares %oftotal %ofshares No.of %oftotal %of Sharesof Pledged Shares Sharesof shares the encombered the Pledged/ tototal company encumbered share tototal company shares1 Rakesh K. Jain 2,995,910 41.69% 0 2,495,910 42.10% 0 0.41%2 Prerna Jain 1,763,504 24.54% 0 1,388,504 23.42% 0 -1.12%3 Hope Consultants Limited 410,043 5.71% 0 410,043 6.92% 0 1.22%4 Vidha Jain 24,510 0.34% 0 24,510 0.41% 0 0.07%5 Aridhi Jain 8,310 0.12% 0 8,310 0.14% 0 0.02%6 Total 5,202,277 72.39% 0 4,327,277 73.00% 0 0.61%
(iii) Change in Promoters’ Shareholding (please specify, if there is no change) SN Particulars Date Reason ShareholdingatthebeginningoftheyearCumulativeShareholdingduringtheyear
No.ofShares %oftotalshares No.ofshares%oftotalshares1 Rakesh K. Jain Atthebeginningoftheyear 01/04/2017 2,995,910 41.69% 2,995,910 41.69% Changesduringtheyear 21/04/2017 Transfer 150,000 3145910 43.77% 09/02/2018 Transfer (650,000) 2,495,910 42.10% Attheendoftheyear 31/03/2018 2,495,910 42.10%2 Prerna Jain Atthebeginningoftheyear 01/04/2017 1,763,504 24.54% 1,763,504 24.54% Changesduringtheyear 21/04/2017 25,000 1,788,504 24.88% 09/02/2018 (400,000) 1,388,504 23.42% Attheendoftheyear 31/03/2018 1388504 23.42%3 Hope Consultants Limited Atthebeginningoftheyear 01/04/2017 410,043 5.70% 410,043 5.70% Changesduringtheyear Attheendoftheyear 31/03/2018 410,043 6.92%4 Aridhi Jain Atthebeginningoftheyear 01/04/2017 8,310 0.12% 8,310 0.12% Changesduringtheyear Attheendoftheyear 31/03/2018 8,310 0.14%5 Vidha Jain Atthebeginningoftheyear 04/01/2017 24,510 0.34% 24,510 0.34% Changesduringtheyear Attheendoftheyear 31/03/2018 24,510 0.41%
(iv) Shareholding Pattern of top ten Shareholders SN ForeachoftheTop Date Reason ShareholdingatthebeginningoftheyearCumulativeShareholdingduringtheyear 10shareholders (ason1stApril,2017) (ason31stMarch,2018) No.ofShares %oftotalshares No.ofshares%oftotalshares1 Ajai Chowdhry Atthebeginningoftheyear 04/01/2017 - 0.00% - 0.00% Changesduringtheyear 04/08/2017 Transfer 248,600 248,600 3.46% Attheendoftheyear 31/03/2018 248,600 4.19%2 Anita Mohan Atthebeginningoftheyear 01/04/2017 204,184 2.84% 204,184 2.84% Changesduringtheyear 10/11/2017 Transfer -21,000 183,184 2.55% 02/02/2018 Transfer -2,500 (2500) 180,684 2.51% Attheendoftheyear 31/03/2018 180,684 3.05%3 Manish Jain Atthebeginningoftheyear 01/04/2017 337,754 4.70% 337,754 4..70% Changesduringtheyear 04/08/2017 Transfer (170,000) 167,754 2.33% Attheendoftheyear 31/03/2018 167,754 2.83%
%changeinshareholdingduringtheyear
“Duringtheyear,thecompanyhasbroughtback12,58,843EquityShares,subsequentlythepaidupsharecapitaloftheCompanyason31.03.2018standsreducedfromRs.7,18,66,890/-toRs.5,92,78,460/-dividedinto59,27,846EquitySharesofRs.10/-each.”
24th Annual Report 2017-2018
34 Frontline Securities Ltd.
FSL4 Gita Chowdhry Atthebeginningoftheyear 01/04/2017 - 0.00% - 0.00% Changesduringtheyear 04/08/2017 Transfer 165,700 165,700 2.31% Attheendoftheyear 31/03/2018 165,700 165,700 2.80%5 Investor Education And Protection Fund Authority Atthebeginningoftheyear 01/04/2017 - 0.00% - 0.00% Changesduringtheyear 08/12/2017 Transfer 116,002 116,002 1.61% 15/12/2017 Transfer 2 116,004 1.61% Attheendoftheyear 31/03/2018 116,004 1.96%6 Leena Agarwal Atthebeginningoftheyear 01/04/2017 14,490 0.20% 14,490 0.20% Changesduringtheyear 04/04/2017 Transfer 25,000 39,490 0.55% Attheendoftheyear 31/03/2018 39,490 0.66%7 Sharad Jain Atthebeginningoftheyear 01/04/2017 77,935 1.08% 77,935 1.08% Changesduringtheyear 28/07/2017 Transfer (45,000) 32,935 0.46% Attheendoftheyear 31/03/2018 32,935 0.56%8 Pravin Agarwal Atthebeginningoftheyear 01/04/2017 172,584 2.40% 172,584 2.40% Changesduringtheyear 04/08/2017 Transfer (140,000) 32,584 0.45% Attheendoftheyear 31/03/2018 32,584 0.55%9 Renu Agrawala Atthebeginningoftheyear 01/04/2017 - 0.00% - 0.00% Changesduringtheyear 17/11/2017 Transfer 20,000 0.27% 20,000 0.28% Attheendoftheyear 31/03/2018 20,000 0.34% 20,000 0.34%10 Sunglow Capital Services Limited Atthebeginningoftheyear 01/04/2017 31,447 0.44% 31,447 0.44% Changesduringtheyear 07/04/2017 Transfer 1,772 33,219 0.46% 14/04/2017 Transfer 1,048 34,267 0.48% 21/04/2017 Transfer (28,939) 5,328 0.07% 28/04/2017 Transfer 7,124 12,452 0.17% 05/05/2017 Transfer 4,091 16,543 0.23% 12/05/2017 Transfer 18,248 34,791 0.48% 26/05/2017 Transfer 800 35,591 0.50% 02/06/2017 Transfer 565 36,156 0.50% 09/06/2017 Transfer 1,829 37,985 0.53% 16/06/2017 Transfer 2,725 40,710 0.57% 23/06/2017 Transfer 1,300 42,010 0.58% 28/07/2017 Transfer (1,099) 40,911 0.57% 04/08/2017 Transfer (13,000) 27,911 0.39% 25/08/2017 Transfer (200) 27,711 0.39% 01/09/2017 Transfer (700) 27,011 0.38% 08/09/2017 Transfer (130) 26,881 0.37% 15/09/2017 Transfer (650) 26,231 0.36% 22/09/2017 Transfer 496 26,727 0.37% 29/09/2017 Transfer 242 26,969 0.38% 06/10/2017 Transfer 300 27,269 0.38% 13/10/2017 Transfer 2,346 29,615 0.41% 20/10/2017 Transfer (1,653) 27,962 0.39% 27/10/2017 Transfer (1,396) 26,566 0.37% 03/11/2017 Transfer 100 26,666 0.37% 10/11/2017 Transfer 59 26,725 0.37% 17/11/2017 Transfer 508 27,233 0.38% 27/11/2017 Transfer 590 27,823 0.38% 01/12/2017 Transfer 150 27,973 0.39% 08/12/2017 Transfer (8,490) 19,483 0.27% 15/12/2017 Transfer (1,500) 17,983 0.25% 05/01/2018 Transfer (1,000) 16,983 0.24% 12/01/2018 Transfer (1,020) 15,963 0.22% 19/01/2018 Transfer (2,470) 13,493 0.19% 09/02/2018 Transfer 5,000 18,493 0.31% 09/03/2018 Transfer 528 19,021 0.32% 16/03/2018 Transfer 256 19,277 0.33% Attheendoftheyear 31/03/2018 19,277 0.33%
“Duringtheyear,thecompanyhasbroughtback12,58,843EquityShares,subsequentlythepaidupsharecapitaloftheCompanyason31.03.2018standsreducedfromRs.7,18,66,890/-toRs.5,92,78,460/-dividedinto59,27,846EquitySharesofRs.10/-each.”
24th Annual Report 2017-2018
35Frontline Securities Ltd.
FSL(v) Shareholding of Directors and Key Managerial Personnel: SN ShareholdingofeachDirectors Date Reason Shareholdingatthebeginningoftheyear CumulativeShareholdingduringtheyear andeachKeyManagerial Personnel No.ofShares %oftotalshares No.ofshares%oftotalshares1 Rakesh K. Jain Atthebeginningoftheyear 01/04/2017 2,995,910 41.69% 2,995,910 41.69% Changesduringtheyear 21/04/2017 Transfer 150,000 3,145,910 3145910 43.77% 09/02/2018 Transfer (650,000) 2,495,910 42.10% Attheendoftheyear 31/03/2018 2,495,910 42.10%2 Sarabjeet Kaur Atthebeginningoftheyear 01/04/2017 - 0.00% - 0.00% Changesduringtheyear - - 0.00% Attheendoftheyear 31/03/2018 - - 0.00%3 Baljit Singh Bedi Atthebeginningoftheyear 04/01/2017 600 0.01% 600 0.01% Changesduringtheyear - - 0.00% Attheendoftheyear 31/03/2018 600 600 0.01%4 Gauri Shanker Pandey Atthebeginningoftheyear 01/04/2017 - 0.00% - 0.00% Changesduringtheyear - - 0.00% Attheendoftheyear 31/03/2018 - - 0.00%5 Charanjeet Singh Bedi Atthebeginningoftheyear 01/04/2017 - 0.00% - 0.00% Changesduringtheyear - - 0.00% Attheendoftheyear 31/03/2018 - - 0.00%6 Atul K. Jain Atthebeginningoftheyear 01/04/2017 10 0.00% 10 0.00% Changesduringtheyear - - 0.00% Attheendoftheyear 31/03/2018 10 10 0.00%7 Arun K. Jain Atthebeginningoftheyear 01/04/2017 210 0.00% 210 0.00% Changesduringtheyear - - 0.00% Attheendoftheyear 31/03/2018 210 210 0.00%8 Richa Arora Atthebeginningoftheyear 01/04/2017 - 0.00% - 0.00% Changesduringtheyear - - 0.00% Attheendoftheyear 31/03/2018 - - 0.00%9 Swarna Gowri S.# Atthebeginningoftheyear 01/04/2017 - 0.00% - 0.00% Changesduringtheyear - - 0.00% Attheendoftheyear 31/03/2018 - - 0.00%10 Mayank Agarwal # Atthebeginningoftheyear 01/04/2017 - 0.00% - 0.00% Changesduringtheyear - - 0.00% Attheendoftheyear 31/03/2018 - - 0.00%
#Mr.MayankAgarwalwasappointedastheChiefFinancialOfficerw.e.f21.10.2017duetotheresignationofMs.SwarnaGowriS.on21.10.2017.
V. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A.RemunerationtoManagingDirector,Whole-timeDirectorsand/orManager: SN. ParticularsofRemuneration NameofMD/WTD/Manager TotalAmount Name GauriShankerPandey *RichaArora (Rs/Lac) Designation WholeTimeDirectors Whole-timeDirector 1 Grosssalary 7.22 4.17 11.39 (a)Salaryasperprovisionscontainedinsection - - - 17(1)oftheIncome-taxAct,1961 - - - (b)Valueofperquisitesu/s - - - 17(2)Income-taxAct,1961 - - - (c)Profitsinlieuofsalaryundersection - - - 17(3)Income-taxAct,1961 - - -2 StockOption - - -3 SweatEquity - - -4 Commission - - - -as%ofprofit - - - -others,specify - - -5 Others,pleasespecify(ConveyanceRembursement) - - - Total(A) 7.22 4.17 11.39 CeilingaspertheAct
“Duringtheyear,thecompanyhasbroughtback12,58,843EquityShares,subsequentlythepaidupsharecapitaloftheCompanyason31.03.2018standsreducedfromRs.7,18,66,890/-toRs.5,92,78,460/-dividedinto59,27,846EquitySharesofRs.10/-each.”
24th Annual Report 2017-2018
36 Frontline Securities Ltd.
FSL*Ms.RichaArorawasappointedasWhole-timeDirectoroftheCompanyw.e.f29.05.2017 B.RemunerationtootherDirectors
SN. ParticularsofRemuneration NameofDirectors TotalAmount (Rs/Lac)1 IndependentDirectors NIL NIL NIL - Feeforattendingboardcommitteemeetings NIL NIL NIL - Commission NIL NIL NIL - Others,pleasespecify NIL NIL NIL - Total(1) NIL NIL NIL -2 OtherNon-ExecutiveDirectors NIL NIL NIL - Feeforattendingboardcommitteemeetings NIL NIL NIL - Commission NIL NIL NIL - Others,pleasespecify NIL NIL NIL - Total(2) NIL NIL NIL - Total(B)=(1+2) NIL NIL NIL - TotalManagerialRemuneration NIL NIL NIL - OverallCeilingaspertheAct NIL NIL NIL -
C.RemunerationtoKeyManagerialPersonnelotherthanMD/Manager/WTD SN. ParticularsofRemuneration NameofKeyManagerialPersonnel TotalAmount MayankAgarwal (Rs/Lac) Designation CFO(ChiefFinancialOfficer)CS(CompanySecretary) 1 Grosssalary 5.01 5.01 (a)Salaryasperprovisionscontainedinsection 17(1)oftheIncome-taxAct,1961 - - - (b)Valueofperquisitesu/s - - - 17(2)Income-taxAct,1961 (c)Profitsinlieuofsalaryundersection - - - 17(3)Income-taxAct,19612 StockOption - - -3 SweatEquity - - -4 Commission - - - -as%ofprofit - - - -others,specify - - -5 Others,pleasespecify - - - Total 5.01 - 5.01
VI. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Type Sectionofthe BriefDescription DetailsofPenalty/Punishment/ Authority[RD/Appealmade,if CompaniesAct Compoundingfeesimposed NCLT/COURT]any(giveDeails) A.COMPANY Penalty NIL NIL NIL NIL NILPunishment Compounding B.DIRECTORS Penalty NIL NIL NIL NIL NILPunishment Compounding
C.OTHEROFFICERSINDEFAULT Penalty NIL NIL NIL NIL NILPunishment Compounding
“Duringtheyear,thecompanyhasbroughtback12,58,843EquityShares,subsequentlythepaidupsharecapitaloftheCompanyason31.03.2018standsreducedfromRs.7,18,66,890/-toRs.5,92,78,460/-dividedinto59,27,846EquitySharesofRs.10/-each.”
24th Annual Report 2017-2018
37Frontline Securities Ltd.
FSLMANAGEMENT DISCUSSION AND ANALYSIS REPORT
1. Industry Structure and Development: DuringtheyearunderreviewtheStockMarketinIndiaimprovedby9.68%.NiftyImprovedfrom9,220.06ason1stApril,2017to10,113.70ason31stMarch,2018.Barringunforeseencircumstances,theCompanyexpectstoseeimprovedStockmarketduring2018-19also.Howeverthepriceofcrudeoilisincreasinginthecurrentperiod.Besides,theUSinterestRateisalsoincreasing.Duetoglobalstrategicsituations,increaseincrudeoilprices,USinterestratesandtheireconomy,IndianStockmarketmayremainvolatileduringthecurrentyear(i.e.2018-19).Hencetheincomefrominvestmentsmayremainlittlesubdued/uncertain.HoweverthebusinessofMutualFundDistributionisgivenmorestress,weexpecttodowellinthisregardduringthecurrentyear.Consideringabove,barringunforeseencircumstances,thecompanyshouldbeabletomaintainitsperformancesinthecomingyears.
2. Opportunities and threats ThegrowthoftheCompanyissubjecttoopportunitiesandthreatsasareapplicabletotheindustryfromtimetotime.
3. Segment wise performance & outlook Duringtheyearunderreview,theCompanyoperatesinonegeographicalsegmenti.e.India&hasidentifiedtwobusinesssegmentsi.e.Segment-IwhichisConsultancy,Commission&Brokerage&Segment-IIInvestments inBonds,Fixeddeposits&Loan&Advances.Thecompanyearnedprofitbefore taxofRs.251.15lakhsandincurredalossofRs.18.30lakhfromSegment-IandSegment-IIrespectively.
4. Outlook Inthenearfuture,theCompanyintendstocontinuetofocusonitscurrentbusinessofinvestmentandmanagementconsultation.
5. Risk and Concerns Whileriskisaninherentaspectofanybusiness,theCompanyisconsciousoftheneedtohaveaneffectivemonitoringmechanismandhasputinplaceappropriatemeasuresforitsmitigationincludingbusinessportfoliorisk,financialrisk,legalriskandinternalprocessrisks.
6. Internal Control Systems and their adequacy TheCompany’sinternalcontrolsystemsarecommensuratewiththenatureofitsbusinessandthesizeandcomplexityofitsoperations.ThesesystemsaredesignedtoensurethatallassetsoftheCompanyaresafeguardedandprotectedagainstanylossandthatalltransactionsareproperlyauthorized,recordedandreported.
7. Financial Performance
(Rupees in Lakhs)
Particulars Year ended 31.03.2018 Year ended 31.03.2017
Sales/incomefromoperations 351.09 80.64
OtherIncome 944.97 479.36
Expenses 134.14 68.35
ProfitBeforeTax 1161.92 491.65
Less:TaxExpense
-CurrentTax 231.02 88.92
-MatCreditEntitlement (65.09) (46.85)
-DeferredIncomeTax (0.41) (0.39)
ProfitAfterTax 996.40 449.97
ProposedDividend 29.64 35.93
24th Annual Report 2017-2018
38 Frontline Securities Ltd.
FSL ThedetailsoffinancialperformanceoftheCompanyareappearingintheBalanceSheetandStatementofProfitandLossfortheyear.
8. Human Resources
TheCompanyseeksrespectsandvaluesthediversequalitiesandbackgroundthatitspeoplebringtoitandiscommittedtoutilizingtherichnessofknowledge,ideas,experiencethatthisdiversityprovides.TheCompanyhasbuiltaresourcebaseandcross-functionalmanagerstotakecareofmultidimensionalbusinesses.
9. Disclosure of Accounting Treatment
TheFinancialStatementhasbeenpreparedinAccordancewiththePrincipleslaiddowninAccountingStandards.
10. Cautionary Statement
StatementinthisManagementDiscussionandAnalysisReportdescribingthecompany’sobjective,projects,estimatesandexpectationsmaybe“forwardlookingstatements”withinthemeaningofapplicablelawsandregulations.Actualresultsmaydiffermateriallyfromthoseeitherexpressedorimplied.ImportantfactorsthatcouldmakedifferencetotheCompany’soperationswithinincludingchangeingovernmentregulations,taxregimes,andeconomicdevelopmentwithinandoutsideIndia.
ByOrderoftheBoardofDirectors
ForFRONTLINE SECURITIES LIMITED
Place: Noida RICHA ARORA
Date: 28.05.2018 Whole Time Director & Company Secretary
DIN:07825684
24th Annual Report 2017-2018
39Frontline Securities Ltd.
FSLREPORT ON CORPORATE GOVERNANCE
1. Company’s Philosophy on Code of Corporate Governance
FSL’s governance philosophy is based on entrustment, transparency and accountability.CorporateGovernance is the set of standardswhich aims to improve theCompany’s image, efficiency andeffectiveness.ItistheroadmapwhichguidestheBoardofDirectorsoftheCompanytogoverntheaffairsoftheCompanyinamannermostbeneficialtoalltheshareholders,thecreditors,theGovernmentandtheSociety.
TheBoardofDirectors believes thatCorporateGovernance is themost powerful tool for achievingCorporateexcellenceanditalsopresentsaComplianceReportontheCorporateGovernancepursuanttolistingRegulationsandtheCompanyendeavorstoadoptthebestpractices.
2. Board Composition and Particulars of Directors
TheBoardofDirectorsoftheCompanyhaveanoptimumcombinationofExecutive,Non-ExecutiveandIndependentDirectorswhohaveanin-depthknowledgeofbusiness,inadditiontotheexpertiseintheirareasofspecialization.Atpresent,theBoardoftheCompanycomprisesofEightDirectorsincludingtwoWomenDirectorsandfourIndependentDirectors.NoneoftheDirectorsontheBoardisamemberofmorethan10CommitteesandChairpersonofmorethanfivecommitteesacrossallthecompaniesinwhichhe/sheisadirector.
ThecompositionoftheBoardandcategoryofDirectorsareasfollows:
Category Name of Directors
Non-Executive&PromoterDirector(Chairman) Mr.RakeshK.Jain
Non-ExecutiveIndependentDirector Mr.ArunK.Jain
Dr.CharanjeetSinghBedi
Mr.BaljitSinghBedi
Mr.AtulK.Jain
Non-ExecutiveNonIndependentWomanDirector Mrs.SarabjeetKaur
WholeTimeDirector(ExecutiveDirector)* Mr.GauriShankerPandey
WholeTimeDirector(ExecutiveDirector) Ms.RichaArora
*TheBoardhasre-appointedMr.GauriShankerPandey,asaWholeTimeDirectoroftheCompany,fortheperiodoffiveyearsw.e.f16thMarch,2018subjecttotheapprovalofmembersintheensuingAnnualGeneralMeeting.
AlltheIndependentDirectorsoftheCompanyfurnishadeclarationannuallythattheyqualifytheconditionsoftheirbeingindependent.
TheCompanyhasputinplaceafamiliarizationprogramfortheIndependentDirectors,theirroles,rights,responsibilitiesintheCompanyandrelatedmatters.QuarterlyupdatesonrelevantstatutorymattersarealsoinformedtoDirectors.DetailsoffamiliarizationprogramareavailableonthewebsiteoftheCompanyatthelinkhttp://fslindia.com/pdf/FAMILIARIZATION+PROGRAMMES.pdf
24th Annual Report 2017-2018
40 Frontline Securities Ltd.
FSLDisclosure of Relationships between Directors Inter-Se
NoDirectorisrelatedtoanyotherDirectorontheBoardintermsofthedefinitionof“relative”givenundertheCompaniesAct,2013.
Theshareholdingofnon-executivedirectorsasonMarch31st,2018isasfollows:
Name No. of shares held
RakeshK.Jain 24,95,910
AtulK.Jain 10
ArunK.Jain 210
Dr.C.S.Bedi Nil
BaljitSinghBedi 600
SarabjeetKaur Nil
Total 24,96,730
Director Retiring by Rotation
DetailsofDirectorretiringbyrotationareasfollows:
Mrs.SarabjeetKaur,aCompanySecretaryandaLawGraduatehasbeenontheBoardoftheCompanysince2002.BesidesbeingaDirector,Mrs.SarabjeetKaurisamemberoftheStakeholderrelationshipCommitteeoftheCompany.WithherexpertiseincorporatelawsshehascontributedextensivelytothegrowthoftheCompany.
Mrs.SarabjeetKaurdoesnothaveanyInter-seRelationshipwiththeotherDirectorsontheBoardoftheCompanyandatpresentsheisnotholdinganysharesintheCompany.
Board Meetings and Board Committee Meetings
TheBoardofDirectorsistheapexbodyconstitutedbytheshareholdersforoverseeingtheoverallfunctioningoftheCompany.TheBoardprovidesandevaluatesthestrategicdirectionoftheCompany,managementpoliciesandtheireffectivenessandensuresthatthelong-terminterestsoftheshareholdersarebeingserved.TheBoardmeetsatregularintervals.ThedetailsofBoardMeetingsheldduringtheyearunderreviewareasfollows:
Number of Board Meetings and dates on which held
Duringtheyearunderreview,Nine(9)BoardMeetingswereheld.ThedetailsoftheBoardMeetingareasunder:
S. No. Date of Board Meeting Board Strength No. of Directors present
1. 8thApril,2017 7 6
2. 17thMay,2017 7 6
3. 29thMay,2017 7 6
4. 24thJune,2017 8 8
5. 14thAugust,2017 8 7
6. 20thOctober,2017 8 7
7. 10thNovember,2017 8 6
8. 15thJanuary,2018 8 8
9. 23rdMarch,2018 8 8
24th Annual Report 2017-2018
41Frontline Securities Ltd.
FSLAttendance of Each Director at the Board Meetings, last Annual General Meeting (AGM) and number of other Directorships and Memberships of Committee(s) of each Director in various companies are as follows:
Particulars of attendance at Board Meetings and last Annual General meeting
S.No
12345678
Name of Director
Mr.RakeshK.JainMr.AtulK.JainMr.ArunK.JainDr.CharanjeetSinghBediMrs.SarabjeetKaurMr.BaljitSinghBediMr.GauriShankerPandeyMs.RichaArora
Board Meetings
89969966*
Last AGM
YesYesYesYesYesYesYesYes
Other Directorships #
60120120
No. of Membership(s) / Chairmanship of Board Committee in other CompaniesNILNILNILNILNILNILNILNIL
Attendance at Meetings during 2017-2018
No. of other Directorship and Committee Member/ Chairmanship
*Ms. Richa Arora was appointed as a Whole Time Director w.e.f 29.05.2017.
# The Directorship held by Directors as mentioned above does not include the directorship in Foreign Companies and in Frontline Securities Limited.
Details of other Committee Position of Director/CFO in Company
Name of the
Committee
Audit
Committee
Stakeholders
Relationship
Committee
Nomination
and
Remuneration
Committee
Corporate
Social
Responsibility
Committee
Risk
Management
Committee
Chairman
ChairmanChairman
Chairman
AtulK.Jain
ArunK.Jain
Member
Dr.Charan
-jeetSingh.
Bedi
Baljit
SinghBedi
Sarabjeet
Kaur
Gauri
Shanker
Pandey
Mayank
Agarwal
Member Member -
Member Member
- -
- - -
- -- -
- -- - MemberMember
Member Member-- -Member
Chairman
- Member Member
24th Annual Report 2017-2018
42 Frontline Securities Ltd.
FSL3. Independent Directors
TheCompanyhascompliedwiththedefinitionofIndependenceasperRegulation16ofSEBI(ListingObligationandDisclosureRequirements)Regulations2015andaccordingtotheprovisionsofsection149(6)CompaniesAct,2013.TheCompanyhasalsoobtaineddeclarations fromall the IndependentDirectorspursuanttosection149(7)oftheCompaniesAct,2013.
Separate Meeting of the Independent Directors:
TheIndependentDirectorsheldameetingonJanuary15th,2018,withouttheattendanceofNon-IndependentDirectorsandmembersofManagementthereintoreviewtheperformanceofNon-IndependentDirectorsandtheBoardasawhole.AlltheIndependentDirectorswerepresentatthemeeting.
4. Audit Committee
1. Composition
Presently,theAuditCommitteecomprisesof4(four)membersviz.Mr.AtulKumarJain,Mr.ArunkumarJain,Mr.BaljitSinghBediandDr.CharanjeetSinghBedi.TheAuditCommitteeisbeingchairedbyMr.AtulK.Jain.AllthemembersoftheAuditCommitteearetheNon-ExecutiveandIndependentDirector,majorityofthemembersofAuditCommitteehaveaccountingandfinancialmanagementexpertise.
TheCompanySecretaryactasaSecretaryoftheAuditCommittee.
2. Terms of Reference
ThepowersandtermsofreferenceoftheAuditCommitteeareasmentionedinRegulation18ofSEBI(ListingObligationsandDisclosureRequirements)Regulations2015andsection177oftheCompaniesAct,2013whichinteralia,includeoverseeingfinancialreportingprocesses,reviewingwiththemanagementthefinancial statements, accountingpolicies andpractices, adequacyof internal audit functions anddiscussionwithinternalauditorsonanysignificantfindings,financialandriskmanagementpolicies.
3. Meetings and attendance during the year
TheAuditCommitteemetSix(6)timesduringtheFinancialYear2017-2018.Thedetailsofattendanceatthesemeetingsareasfollows:
TheMinutesoftheAuditCommitteeMeetingsarenotedattheBoardmeetings.
TheChiefFinancialOfficerandAuditorsareinviteestotheAuditCommitteeMeeting.
Name Position Attendance at the Meeting held on
Mr.AtulK.Jain Chairman Yes Yes Yes Yes Yes Yes
Mr.ArunK.Jain Member Yes Yes Yes Yes Yes Yes
Dr.Charanjeet Member Yes No No Yes No Yes
SinghBedi
Mr.Baljit Member Yes Yes Yes Yes Yes Yes
SinghBedi
8th April, 2017
17th May, 2017
29th May, 2017
14th Aug, 2017
10th Nov, 2017
15th Jan, 2018
24th Annual Report 2017-2018
43Frontline Securities Ltd.
FSL5. Stakeholder Relationship Committee
1. Terms of Reference
Thepowers and termsof referenceof theStakeholderRelationshipCommittee are asmentioned inRegulation20ofSEBI(ListingObligationsandDisclosureRequirements)Regulations2015andsection178oftheCompaniesAct,2013whichinteralia,includethemonitoringandexpeditiousredressalofinvestors/stakeholdersgrievancesandensuresthatallissues/concernsofstakeholdersareaddressed/resolvedpromptly.TheStakeholderRelationshipCommitteehasbeenconstitutedtoattend&resolvetherequestsofdematerializationofshares,rematerialisationofshares,sharetransferandtoredressinvestor’sgrievance/complaintsandregularcorrespondencesuchasnon-receiptofAnnualReport,non-receiptofDividendandentertainssuchotherrelatedmatters.
2. Composition of the Committee
TheCommitteeconsistsof2Non-ExecutiveIndependentDirectorsand1Non-ExecutiveNon-IndependentDirector.TheStakeholderRelationshipCommitteeisbeingchairedbyMr.AtulK.Jain.
3. Meetings and attendance during the year
DuringtheFinancialYearendedMarch31st,2018,Twenty(20)meetingsoftheStakeholderRelationshipCommitteewereheld.ThecompositionoftheCommitteeanddetailsofmeetingsheldandattendancerecordedofthemembersareasfollows:
ThemeetingswerepresidedoverbyMr.AtulK.Jain,aNon-ExecutiveDirector.
4. Name and Designation of Compliance Officer
RichaArora,CompanySecretary is theComplianceOfficer for complyingwith the requirementsofSecuritiesLawsandRegulation6ofSEBI(ListingObligationsandDisclosureRequirements)Regulations2015.
Duringtheyearunderreviewthecompanyhasreceived32complaints/correspondencefrominvestors/membersandnoinvestorcomplaints/correspondenceispendingasonMarch31st,2018.
AsonMarch31st,2018,thereisnopendingrequestforsharetransfer,dematerializationorrematerializationofshares.
6. Nomination and RemunerationCommittee
1. Terms of Reference
ThepowersandtermsofreferenceoftheNominationandRemunerationCommitteeareasmentionedinRegulation19ofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015andsection178oftheCompaniesAct,2013.
TheNominationandRemunerationcommitteerecommendstotheboardthesetupandcompositionoftheboardanditscommitteesincludingtheformulationofthecriteriafordeterminingqualifications,positiveattributesandindependenceofadirector.
The committee periodically reviews the composition of the boardwith the objective of achievingan optimumbalance of size, skills, independence, knowledge, age, gender and experience and alsorecommendstotheboardtheappointmentorreappointmentofdirectors.
Name of Member Position No. of Meetings held Attendance
AtulK.Jain Chairman 20 20
ArunK.Jain Member 20 20
SarabjeetKaur Member 20 20
24th Annual Report 2017-2018
44 Frontline Securities Ltd.
FSL2. Composition
TheNomination andRemunerationCommittee of theCompany consists of threeNon-ExecutiveIndependentDirectors.
3. Meetings and attendance during the year
DuringtheyeartheCommitteehadtwo(2)meetingsi.eon8thApril,2017and20thOctober,2017.
4. Composition, name of Members and attendance during the year
Name of Member Position No. of Meetings held Attendance
ArunK.Jain Chairman 2 2
Dr.CharanjeetSingh.Bedi Member 2 2
BaljitSinghBedi Member 2 2
5. Performance Evaluation of Non-Executive and Independent Directors
TheBoardevaluatestheperformanceofNon-executiveandIndependentDirectorseveryyear.AlltheNon-executiveandIndependentDirectorsareeminentpersonalitieshavingwideexperienceinthefieldofbusiness,industryandadministration.TheirpresenceontheBoardisadvantageousandfruitfulintakingbusinessdecisions.
6. Remuneration of Directors.
(a) Pecuniary relationship or transaction of the non-executive directors
CompanyhasnopecuniaryrelationshipwithNon-ExecutiveDirectors
(b) Criteria of making payment to Non-Executive Directors
AtpresentnoremunerationisbeingpaidtotheNon-ExecutiveDirectors.
(c) Disclosure with respect to remuneration made to executive director viz. Gauri Shanker Pandey & Ms. Richa Arora (Whole Time Directors of the Company) : in addition to disclosures required under the Companies Act, 2013
S.no
1234
567
Particulars
BasicHRAConveyanceOtherAllowancesGross SalaryGratuityBonus(QuarterlyPayable)PF(EmployeeContribution)CTC( Cost to Company)
Mr. Gauri Shanker Pandey40,00015,0001,6002,20058,800-
1,4004,80065,000
Ms. Richa Arora12,50012,5001,6007,37533,9756251,4001,50037500
Monthly Remuneration Amount (in Rs.)
24th Annual Report 2017-2018
45Frontline Securities Ltd.
FSLForanyterminationofcontract,theCompanyortheWholeTimeDirectorisrequiredtogiveanoticeofonemonthforeveryyearofserviceorapartthereofexceedingthreemonthssubjecttoamaximumoftwomonth’snoticeorpaymentofequivalentgrossmonthlysalaryinlieuthereofoneitherside.
TheCompanydoesnothaveanystockoptionscheme.
7. Corporate Social Responsibility Committee (CSR)
i) Terms of reference:
TheCSRCommitteeformulatesandrecommendstotheboard,aCorporateSocialResponsibility(CSR)Policy,recommendstheamountofexpendituretobeincurredtowardssocialresponsibilityandalsooverseesactivitiesimpactingthequalityoflifeofvariousstakeholders.
ii) Composition:
TheCSRCommitteeoftheCompanyconsistsoftwoNon-ExecutiveIndependentDirectorsandoneWholeTimeDirector.
iii) No. of Meetings held during the year:
DuringtheyeartheCommitteehadonemeetingheldon23rdMarch,2018.
iv) Composition, name of Members and attendance during the year
Name of Member Position No. of Meetings held Attendance
AtulK.Jain Chairman 1 1
ArunK.Jain Member 1 1
GauriShankerPandey Member 1 1
8. Risk Management committee
i) Terms of reference:
TheBoardoftheCompanyhasformedaRiskManagementCommitteetoframe,implementandmonitortheriskmanagementplanfortheCompany.Thecommitteeisresponsibleforreviewingtheriskmanagementplanandensuringitseffectiveness.
ii) Composition:
TheRiskManagementCommitteeof theCompanyconsistsof twoNon-ExecutiveIndependentDirectorsandoneWholeTimeDirectorandoneChiefFinancialOfficer.
iii) No. of Meetings held during the year:
DuringtheyeartheCommitteehadonemeetingon7thFebruary,2018.
iv) Composition, name of Members and attendance during the year
Name of Member Position No. of Meetings held Attendance
GauriShankerPandey Chairman 1 1
ArunK.Jain Member 1 1
AtulK.Jain Member 1 1
Mr.MayankAgarwal Member 1 1
24th Annual Report 2017-2018
46 Frontline Securities Ltd.
FSL9. Details of General Body Meetings
1. ThelocationandtimeforlastthreeAnnualGeneralMeetingsisasfollows:
Year
2014-15
2015-16
2016-17
Location
PHDHouse-LakshmipatSinghaniaAuditorium,4/2,SiriInstitutionalArea,
AugustKrantiMarg,NewDelhi-110016
PHDHouse-LakshmipatSinghaniaAuditorium,4/2,SiriInstitutionalArea,
AugustKrantiMarg,NewDelhi-110016
PHDHouse-LakshmipatSinghaniaAuditorium,4/2,SiriInstitutionalArea,AugustKrantiMarg,NewDelhi-110016
Date
September22,2015
September20,2016
August9,2017
Time
09.45A.M
09:45A.M
09:45A.M
Whether any special resolution passed therein
No
No
Yes
2. Postal Ballot
Duringthefinancialyear2017-18,theCompanyhasobtainedmembersapprovalthroughPostalBalloton8thDecember,2017forthefollowingresolutionsasstatedinthetablebelowalongwiththesnapshotofthevotingresultsareasfollows:
a) Agenda 1 : Approval for Buyback of Equity Shares
(i) Voted in favour of Resolution:
Number of
Members Voted
17
5
Mode of Voting
E-Voting
PostalBallot
Total
Number of Votes cast by them
64,20,547
90,939
65,11,486
% of total number of valid Votes cast
98.60341
1.39659
100.00%
Number of Members Voted
17
5
Mode of Voting
E-Voting
PostalBallot
Total
Number of Votes cast by them
-
-
-
% of total number of valid Votes cast
-
-
-
(ii) Voted against the Resolution :
24th Annual Report 2017-2018
47Frontline Securities Ltd.
FSLb) Agenda 2: Rearrangement and Realignment of the Object Clause of the Memorandum of Association of the Company
(i) Voted in favour of Resolution:
(ii) Voted against the Resolution :
3. Mr.MohitKhemka(M.No410605),ofM/sVMG&CompanyPracticingCharteredAccountant(FRN:024257N)wasappointedasscrutinizerforcarryingoutthevotingprocessinafairandtransparentmanner.
4. Nospecialresolutionisproposedtobepassedthroughpostalballot.However,Companywillconsiderasandwhenrequired.
5. Procedure for Postal Ballot:
i. InCompliancewiththeSection110andotherapplicableprovisionsoftheActreadwiththerelatedRules,theCompanyprovidede-votingfacilitytoallitsmembers.TheCompanyhasengagedtheservicesofCDSLforprovidingthee-votingfacilitytothemembers.
ii. ThemembershastheoptiontovoteelectronicallyorthroughPostalBallotforms.
iii. MemberswhosenamesappearontheRegisterofMembers/ListofBeneficialOwnersasontheCut-offdate,willbeconsideredforthepurposeofvoting.
iv. TheCompanyalsopublishedthenoticeinthenewspaperdeclaringthedetailsofcompletionofdispatchandotherrequirementsasmandatedintheActandotherapplicableRules.
v. TheCompanyhasdispatchedthePostalBallotnoticesalongwithPostalBallotformsthroughelectronicmodetothosemembers,whosee-mailaddressesareregisteredwiththeCompany/Depository,unlessanymemberhasrequestedforaphysicalcopyofthesame.Formemberswhohavenotregisteredtheire-mailaddresses,physicalcopiesarebeingsentbypermittedmode.
vi. ThePostalBallotFormandapostageprepaidself-addressedbusinessreplyenvelopearewereattachedtotheNotice.Theself-addressedenvelopecontainedtheaddresstowhichdulycompletedPostalBallotFormshouldbesent.
vii.ThevotingrightsfortheEquitySharesoftheCompanyareonevoteperequityshare,registeredinthenameofthemember.Thevotingrightsofthemembersshallbeinproportiontothepercentageofpaid-upsharecapitaloftheCompanyheldbythem,whichwillbedeterminedonthebasisofthepaid-upvalueofsharesregisteredinthenameofeachmemberasonthecutoffdate.
viii.TheScrutinizercarriedoutthescrutinyofthePostalBallotFormstogetherwithresultsoftheE-VotingandsubmittedhisreportonPostalBallotandE-VotingtotheChairmanoftheCompany.
Number of
Members Voted
17
5
Mode of Voting
E-Voting
PostalBallot
Total
Number of Votes cast by them
64,20,546
90,939
65,11,485
% of total number of valid Votes cast
98.60340
1.39659
99.99999
Number of
Members Voted
17
5
Mode of Voting
E-Voting
PostalBallot
Total
Number of Votes cast by them
1
-
1
% of total number of valid Votes cast
0.00001
-
0.00001
24th Annual Report 2017-2018
48 Frontline Securities Ltd.
FSL10. Disclosures
1. The particulars of transactions between theCompany and its related parties as per theAccountingStandard18“RelatedPartyDisclosures”issuedbytheInstituteofCharteredAccountantsofIndia(ICAI)aredisclosedinNoteNo.2.22ofNotestotheFinancialStatements.However,thesetransactionsarenotlikelytohaveanyconflictwiththeCompany’sinterest.
2. NoStrictures/PenaltieshavebeenimposedontheCompanybytheStockExchangeor theSecuritiesandExchangeBoardofIndia(SEBI)oranystatutoryauthorityonanymattersrelatedtocapitalmarketsduringthelastthreeyears.
3. TheCompanydoesnothaveanymateriallysignificantrelatedpartytransactionsthatmayhavepotentialconflictwiththeinterestsoflistedentity.
4. ThepolicyondealingwiththerelatedpartytransactionsisavailableontheWebsiteoftheCompanyonhttp://www.fslindia.com/pdf/RPT.pdf.
5. Inthepreparationofthefinancialstatements,theCompanyhasfollowedtheAccountingStandardsissuedbyICAI.Thesignificantaccountingpolicies,whichareconsistentlyapplied,havebeensetoutintheNotestotheFinancialStatements.
6. ThecompanyhasestablishedaVigilMechanismforalldirectors&employeestoreportconcernsaboutunethicalbehavior,actualorsuspectedfraudorviolationofthecompany’scodeofconduct.AndaspertheCompany’sPolicyanyPersonnelcanapproachAuditCommittee.Howevernosuchinstancehasbeenreportedduringtheyearunderreview.
7. TheCompanyhascompliedwithallthemandatoryrequirementsoftheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.
11. Means of Communication of Financial Results
• Thequarterlyun-auditedfinancialresultsareannouncedwithinthetimeframestipulatedundertheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.TheaforesaidfinancialresultsaretakenonrecordbytheBoardofDirectorsandarecommunicatedtotheBombayStockExchange(BSE)wherethecompany’ssecuritiesarelisted.
• OncetheStockExchangehasbeenintimated,theseresultsarepublishedinnewspapers,usually,EnglishNewspaper:FinancialExpressandHindiNewspaper:Jansatta.TheresultsandofficialnewsreleasesoftheCompanyarealsomadeavailableontheCompany’swebsitei.e.www.fslindia.com.
12. SEBI Complaints Redressal System(SCORES):
SEBIhasinitiatedSCORESforprocessingtheinvestorcomplaintsinacentralizedwebbasedredresssystemandonlineredressesofalltheshareholderscomplaints.ThecompanyisincompliancewiththeSCORESandredressedtheshareholderscomplaintswellwithinthestipulatedtime.
13. General MemberInformation
i) The Details of Annual General Meeting to beheld:
Date September25th,2018
Day Tuesday
Time 9:45A.M.
Venue PHDHouse-LakshmipatSinghaniaAuditorium,4/2,SiriInstitutionalArea,
AugustKrantiMarg,NewDelhi-110016
24th Annual Report 2017-2018
49Frontline Securities Ltd.
FSLii) Financial Calendar
Resultsforthequarterended30thJune,2018
Resultsforthequarterended30thSeptember,2018
Resultsforthequarterended31stDecember,2018
Resultsfortheyearended31stMarch,2019
Willbeannouncedon/before14thAugust,2018
Willbeannouncedon/before14thNovember,2018.
Willbeannouncedon/before14thFebruary,2019.
Willbeannouncedon/before30thMay,2019.
iii) Book Closure Dates: September19th,2018(Wednesday)
to
September25th,2018(Tuesday)
iv) Dividend Payment date:Credit/dispatchofdividendwarrantsbetweenSeptember25th,2018andOctober15th,2018.
ShareholderswhohaveoptedforECS,dividendwillbecrediteddirectlytotheirrespectivebankaccountsthroughECS.Forothers,dividendwarrantswillbedispatchedasperthedividendpaymentdatementionedabove.
v) Listing on Stock Exchange :TheEquitysharesoftheCompanyarelistedwithBombayStockExchangeLtd.(theListingFeeshasbeenpaidforFY17-18)
vi) Stock Code 533213
vii) ISIN INE773B01012
viii) Stock Market Price Data
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
61.20
61.60
52.55
63.00
62.90
63.00
63.00
63.00
62.00
81.50
80.90
78.00
40.00
49.00
46.05
50.50
55.00
50.60
55.10
53.20
57.85
57.50
63.65
59.65
Bombay stock Exchange(BSE) (in Rs. Per Share)Month’s High Price Month’s Low Price
MONTH
24th Annual Report 2017-2018
50 Frontline Securities Ltd.
FSLPerformanceincomparisontobroad-basedindicessuchasBSESensex:
ComparisonisdonebetweentheSharePriceDailyclosingandSensexIndexclosinglevel.
ix) Registrar & Share Transfer Agents: M/sLinkIntimeIndiaPrivateLimited, 44CommunityCentre,2ndFloor, NarianaIndustrialArea,PhaseI, NearPVRNaraina,N.D.-11008, Email:[email protected]
Share Transfer System
TheShareTransferspertainingtoshareinPhysicalModeareregisteredandreturnedwithinthestipulatedtime, ifdocumentsarecomplete inallrespects.Inrespectof thesharesheldindematerializedmode, thetransfertakesplaceinstantaneouslybetweenthetransferor,transfereeandtheDepositoryParticipantthroughelectronicdebit/creditoftheaccountsinvolved.
x) Distribution of Shareholding as on March 31st, 2018 is as follows:
Shareholding of Shares
1-500
501-1000
1001-2000
2001-3000
3001-4000
4001-5000
5001-10000
10001&above
TOTAL
Folios
Numbers2299
104
39
14
9
3
9
17
2494
%92.18
4.17
1.57
0.56
0.36
0.12
0.36
0.68
100.00
Shares
Numbers245135
86611
55716
36541
32649
13138
66238
5391818
5927846
%4.14
1.46
0.94
0.62
0.55
0.22
1.12
90.95
100.00
24th Annual Report 2017-2018
51Frontline Securities Ltd.
FSLxi) Shareholding Pattern as on March 31st , 2018 is as follows:
S. No.
1.
2.
Category
Promoters
SubTotal(A)
PublicShareholding
o BodiesCorporate
o Individuals
o Others
SubTotal(B)
Grand Total (A)+(B)
No. of equity shares
43,27,277
43,27,277
83,074
12,05,825
3,11,670
16,00,569
59,27,846
% of shares
73.00
73.00
1.40
20.34
5.26
27.00
100
xii) Dematerialization of shares andLiquidity
Ason31stMarch2018,57,30,223sharesaggregatingto96.67%ofthepaidupsharecapitalareheldindematerializedmode.
xiii) Outstanding GDRs/ADRs/Warrants
NoGDR/ADR/WarrantoranyconvertibleinstrumenthasbeenissuedbytheCompany.
xiv) Address for correspondence
Themembersmayaddresstheircommunication/grievances/queriestotheCompany/RegistrarandShareTransferAgentatthefollowingaddress:
Link Intime India Private Limited Frontline Securities Ltd.44,CommunityCentre Registered Office:2ndFloor,NarainaIndustrialArea, M-6,M-BlockMarketPhaseI,NearPVR,Naraina GreaterKailash-II,NewDelhi-110028 NewDelhi-110048ContactNo:011-41410592/93/94 Tel:+91-120-2534066 Branch Office: B-22,Sector-4,Noida-201301 Tel:+91-120-2534066 Fax:+91-120-2534111
Membersarerequestedtoquotetheirfolionumber/DPID&ClientIDinalltheircorrespondencewiththeCompany/RTA.
14. Prevention of Insider Trading
InaccordancewiththerequirementsofSEBI(ProhibitionofinsiderTrading)Regulations2015,thecompanyhasinstitutedacodeofconductforprohibitionofinsidertradinginthecompany’sshares.
15. Reconciliation of Share Capital Audit
AsstipulatedbySEBI,aqualifiedPracticingCompanySecretarycarriesouttheReconciliationofShareCapitalAudittoreconcilethetotaladmittedcapitalwithNationalSecuritiesDepositoryLimited(NSDL)andCentralDepositoryServices(India)Limited(CDSIL)andthetotalissuedandpaid-upcapital.ThisauditiscarriedouteveryquarterandthereportthereonissubmittedtothestockexchangesandisplacedbeforetheBoard
24th Annual Report 2017-2018
52 Frontline Securities Ltd.
FSLofDirectorsoftheCompany.Theaudit,interalia,confirmsthatthelistedandpaidupcapitalofthecompanyisinagreementwiththeaggregateofthetotalnumberofsharesindematerializedformheldwithNSDLandCDSILandthetotalnumberofsharesinphysicalform.
16. Transfer of Unclaimed Dividend To Investor Protection Fund
TransferofUnclaimedDividendtoInvestorEducationandProtectionFund(IEPF)PursuanttotheprovisionsofSection124oftheCompaniesAct,2013,thedividendamountswhichhaveremainunpaidorunclaimedforaperiodofsevenyearsfromthedateofdeclarationhavebeentransferredbytheCompanytotheInvestorEducationandProtectionFund(“IEPF”)establishedbytheCentralGovernmentpursuanttoSection125ofthesaidAct.ShareholderswhohavenotencashedtheirdividendwarrantsrelatingtothedividendrelatedtoFY2010-11andsubsequentyearssendtheirrequestforissueofduplicatewarrants.OnceunclaimeddividendistransferredtotheIEPFAuthority,thesamecanbeclaimedfromtheIEPFAuthorityafterfollowingtheproceduresprescribedintheIEPFRules.
DuringtheYear,Companyhastransferred1,16,004ofEquitysharestoIEPFSuspenseAccount.
17. CEO / CFO Certification
InaccordancewiththerequirementsofSEBI(ListingObligationsandDisclosureRequirements)Regulations2015,CA.MayankAgarwal, theCFOof theCompany,has certified to theBoard that to thebestofhisknowledgeandbelief,thefinancialstatementsandCashFlowstatementspresentatrueandfairviewoftheCompany’saffairs.TheCFOCertificationisprovidedintheAnnualReport.
18. Code of Conduct
TheCompanyhaslaiddownaCodeofConductforalltheBoardMembersandSeniorManagementPersonnel.AllBoardMembersandSeniorManagementPersonnelhaveconfirmedcompliancewiththesaidcodeofconductforthefinancialyearendedMarch31st,2018.ThedeclarationtothiseffectsignedbytheWhole-TimeDirectorformspartofthereport.
19. Compliance Certificate on the Corporate Governance from the Auditors
ThecertificatedatedMay28,2018obtainedfromStatutoryAuditorsoftheCompany,M/s.WalechaInder&Associates,confirmingcompliancewiththeCorporateGovernancerequirementsasstipulatedunderScheduleVreadwithRegulation34(3)ofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015,isannexedhereto.
20. Green Initiative in the Corporate Governance:
Aspartofthegreeninitiativeprocess,theCompanyhastakenaninitiativeofsendingdocuments/AnnualReportbyemail.Physicalcopiesaresentonlytothoseshareholderswhoseemailaddressesarenotregisteredwiththecompanyoronspecificrequest.ShareholdersarerequestedtoregistertheiremailidwithRegistrarandShareTransferAgent/concerneddepositoryandCompanytoenabletheCompanytosendthedocumentsinelectronicform.
ByOrderoftheBoardofDirectors
For Frontline Securities Limited
Place: Noida Richa Arora
Date: 28.05.2018 Whole Time Director and Company Secretary
DIN:07825684
24th Annual Report 2017-2018
53Frontline Securities Ltd.
FSLCERTIFICATE BY THE CHIEF FINANCIAL OFFICER (CFO)PURSUANT TO PART B SCHEDULE II READ WITH REGULATION 17(8) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS)REGULATIONS, 2015
TheBoardofDirectorsFrontlineSecuritiesLimitedM-6,IIndFloor,M-BlockMarket,GreaterKailash-II,NewDelhi-110048
I,C.A.MayankAgarwal.,ChiefFinancialOfficerofFrontlineSecuritieslimited,tothebestofmyknowledgeandbelief,certifythat:
A. Ihavereviewedfinancialstatementsandthecashflowstatementfortheyearandthattothebestofmyknowledgeandbelief:
1) Thesestatementsdonotcontainanymateriallyuntruestatementoromitanymaterialfactorcontainstatementsthatmightbemisleading;
2) ThesestatementstogetherpresentatrueandfairviewofCompany’saffairsandareincompliancewithexistingaccountingstandards,applicablelawsandregulations.
B. Thereare,tothebestofmyknowledgeandbelief,notransactionsenteredintobytheCompanyduringtheyearwhicharefraudulent,illegalorviolativeofcompany’scodeofconduct.
C. IacceptresponsibilityforestablishingandmaintaininginternalcontrolsforfinancialreportingandthatI have evaluated the effectivenessof internal control systemsof the companypertaining tofinancialreporting.Ihavenotcomeacrossanyreportabledeficienciesinthedesignoroperationofsuchinternalcontrols.
D. IhaveindicatedtotheauditorsandtheAuditCommittee- 1) Thattherearenosignificantchangesininternalcontroloverfinancialreportingduringtheyear; 2) Thattherearenosignificantchangesinaccountingpoliciesduringtheyear;and 3) ThattherearenoinstancesofsignificantfraudofwhichIhavebecomeaware.
Place:Noida Mayank AgarwalDate:28.05.2018 Chief Financial Officer
M.NO:544992
24th Annual Report 2017-2018
54 Frontline Securities Ltd.
FSLDeclaration by Whole Time Director under Regulation 34(4) and Schedule V of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 regarding the compliance with Code of Conduct
To,
TheMembers
In accordancewith theRegulation34(4) andScheduleVofSEBI (ListingObligations andDisclosuresRequirements)Regulations2015, Iherebyconfirm that, allBoardMembersand theSeniorManagementpersonneloftheCompanyhaveaffirmedcomplianceswiththeRulesofCodeofConduct,asapplicabletothem,fortheFinancialYearendedonMarch31,2018.
OnBehalfoftheBoardofDirector For Frontline Securities Limited
Place: Noida Gauri Shanker PandeyDate: 28.05.2018 Whole Time Director
DIN: 00050614
24th Annual Report 2017-2018
55Frontline Securities Ltd.
FSLINDEPENDENT AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE
To
TheMembersof
FrontlineSecuritiesLimited
1. Thiscertificateisissuedinaccordancewithtermsofourengagement,withFrontlineSecuritiesLimited(‘theCompany”).
2. WehaveexaminedthecomplianceofconditionsofCorporateGovernancebyFrontlineSecuritiesLimited(‘theCompany’),fortheyearended31stMarch2018,asstipulatedinRegulation17to27andclauses(b) to(i)of theRegulation46(2)andparaCandDofScheduleVofSEBI(ListingObligationsandDisclosuresRequirements)Regulations,2015(‘ListingRegulations’)asamendedfromtimetotime(the“ListingRegulations”).
Management’s responsibility
3. ThecomplianceofconditionsofCorporateGovernanceistheresponsibilityoftheManagement.Ourexaminationwaslimitedtoproceduresandimplementationthereof,adoptedbytheCompanyforensuringthecomplianceoftheconditionsofCorporateGovernance.ItisneitheranauditnoranexpressionofopiniononthefinancialstatementsoftheCompany.
Auditor’s responsibility
4. OurResponsibilityislimitedtoexaminingtheproceduresandimplementationthereof,adoptedbytheCompanyforensuringcomplianceoftheconditionsofCorporateGovernance.Itisneitheranauditnotanexpressionofopiniononthefinancialstatementsofthecompany.
5. WehaveexaminedthebooksofaccountsandotherrelevantrecordsanddocumentsmaintainedbytheCompanyforthepurposesofprovidingreasonableassuranceonthecompliancewiththeconditionsofCorporateGovernanceasstipulatedinListingRegulations.
6. Wehave carriedout an examinationof the relevant recordsof theCompany in accordancewith the“guidanceNoteontheCertificationofCorporateGovernance”,issuedbytheInstituteoftheCharteredAccountantsofIndia(“theICAI”),thestandardsontheAuditingspecifiedunderSection143(10)oftheCompaniesAct,2013,insofarasapplicableforthepurposeofthiscertificateandasperthe“GuidanceNoteontheReportsorCertificatesforSpecialPurposes”,issuedbytheICAI,whichrequiresthatwecomplywiththeethicalrequirementsoftheCodeofEthicsissuedbytheICAI.
7. WehavecompliedwiththerelevantapplicablerequirementsofthestandardonqualityControl(SOC)I.“QualityControlforFirmsthatPerformauditsandreviewsofHistoricalFinancialInformationandOtherAssuranceandRelatedServicesengagements”,issuedbytheICAI.
Opinion
8. Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,wecertifythattheCompanyhascompliedwiththeconditionsofCorporateGovernanceasstipulatedintheabove-mentionedListingRegulations,duringtheyearended31stMarch,2018.
9. WefurtherstatethatsuchcomplianceisneitheranassuranceastothefutureviabilityoftheCompanynortheefficiencyoreffectivenesswithwhichtheManagementhasconductedtheaffairsoftheCompany.
For Walecha Inder & Associates Chartered Accountant
FRN: 014205N
Walecha Inder JeetPlace: Noida PartnerDate: 28.05.2018 M. No. 093694
24th Annual Report 2017-2018
56 Frontline Securities Ltd.
FSLINDEPENDENT AUDITOR’S REPORT
ToTheMembersofFrontlineSecuritiesLimitedNewDelhi
Report on the Standalone Financial Statements
Wehave audited the accompanying standalonefinancial statements ofFrontlineSecuritiesLimited (“theCompany”),whichcomprisetheBalanceSheetasat31stMarch,2018,theStatementofProfitandLoss,theCashFlowStatementfortheyearthenended,andasummaryofthesignificantaccountingpoliciesandotherexplanatoryinformation.
Management’s Responsibility for the Standalone Financial Statements
TheCompany’sBoardofDirectorsisresponsibleforthemattersstatedinSection134(5)oftheCompaniesAct,2013(“theAct”)withrespecttothepreparationofthesestandalonestatementsthatgiveatrueandfairviewofthefinancialposition,financialperformanceandcashflowsoftheCompanyinaccordancewiththeaccountingprinciplesgenerallyacceptedinIndia,includingtheAccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.ThisresponsibilityalsoincludesmaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheActforsafeguardingoftheassetsoftheCompanyandforpreventinganddetectingfraudsandotherirregularities;selectionandapplication of appropriate accounting policies;making judgments and estimates that are reasonable andprudent; and design, implementation andmaintenance of adequate internal financial controls, thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.
Auditor’s Responsibility
Ourresponsibilityistoexpressanopiniononthesestandalonefinancialstatementsbasedonouraudit.
WehavetakenintoaccounttheprovisionsoftheAct,theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.
WeconductedourauditinaccordancewiththeStandardsonAuditingspecifiedunderSection143(10)oftheAct.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsandthedisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalfinancialcontrolrelevanttotheCompany’spreparationofthefinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstancesbutnotforthepurposeofexpressinganopiniononwhetherthecompanyhasanadequateinternalfinancial controls systemover thefinancial reporting in place and the operating effectiveness ofsuchcontrols.AnauditalsoincludesevaluatingtheappropriatenessoftheaccountingpoliciesusedandthereasonablenessoftheaccountingestimatesmadebytheCompany’sDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopiniononthestandalonefinancialstatements.
Opinion
Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,theaforesaidstandalonefinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgivea
24th Annual Report 2017-2018
57Frontline Securities Ltd.
FSLtrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia,
a) InthecaseoftheBalanceSheet,ofthestateofaffairsoftheCompanyasatMarch31,2018;and
b) InthecaseoftheStatementofProfitandLoss,oftheProfitofthecompanyfortheyearendedonthatdate.
c) InthecaseoftheCashFlowStatement,thecashflowofthecompanyfortheyearendedMarch31,2018
Report on Other Legal and Regulatory Requirements
1. As required by theCompanies (Auditor’sReport)Order, 2016 (“theOrder”) issued by theCentralGovernmentofIndiaintermsofsubsection11ofsection143oftheAct,wegiveintheAnnexureA,astatementonthemattersspecifiedintheparagraph3&4oftheOrder,totheextentapplicable.
2. AsrequiredbySection143(3)oftheAct,wereportthat:
(a) Wehavesoughtandobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposesofouraudit.
(b) Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbytheCompanysofarasitappearsfromourexaminationofthosebooks.
(c) Thecompanydoesnothaveanyotherbranchwhereseparateaccountingrecordismaintained.
(d) TheBalanceSheet,theStatementofProfitandLoss,andtheCashFlowStatementdealtwithbythisReportareinagreementwiththebooksofaccounts.
(e) Inouropinion,theaforesaidstandalonefinancialstatementscomplywiththeAccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.
(f) Onthebasisofthewrittenrepresentationsreceivedfromthedirectorsason31stMarch,2018takenonrecordbytheBoardofDirectors,noneofthedirectorsisdisqualifiedason31stMarch,2018frombeingappointedasadirectorintermsofSection164(2)oftheAct.
(g)WithrespecttotheadequacyoftheinternalfinancialcontrolsoverfinancialreportingoftheCompanyandtheoperatingeffectivenessofsuchcontrols,refertoourseparatereportin“AnnexureB”;and
(h)WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(AuditandAuditors)Rules,2014,inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:
a) Thecompanydoesnothaveanypendinglitigationwhichwouldimpactitsfinancialpositions.
b) Thecompanydidnothaveanylong-termcontractsincludingderivativescontractsforwhichtherewereanymaterialforeseeablelosses.
c) TherewasnoamountrequiredtobetransferredtotheInvestorEducationandProtectionFundbytheCompany.
For M/s Walecha Inder & AssociatesChartered Accountants
Registration No. 014205N
(Walecha Inder Jeet)Partner
Membership No. 093694Place: NoidaDate: 28.05.2018
24th Annual Report 2017-2018
58 Frontline Securities Ltd.
FSLAnnexure - A to the Auditors’ Report
TheAnnexurereferredtoinourIndependentAuditors’ReporttothemembersoftheCompanyonthestandalonefinancialstatementsfortheyearended31March2018,wereportthat:(i) (a) TheCompanyhasmaintainedproperrecordsshowingfullparticulars, includingquantitative
detailsandsituationoffixedassets. (b) TheCompanyhasaregularprogramofphysicalverificationofitsfixedassetsatregularintervals
andnomaterialdiscrepancieswerenoticedonsuchverification.Inouropinion,thisperiodicityofphysicalverificationisreasonablehavingregardtothesizeoftheCompanyandthenatureofitsassets.
(c) Accordingtotheinformationandexplanationsgiventousandonthebasisofourexaminationoftherecordsofthecompany,thetitledeedsofimmovablepropertiesareheldinthenameofcompany.
(ii) Thenatureofthecompanyissuchthatclause3(ii)oftheOrderisnotapplicable.(iii) Thecompanyhasnotgrantedanyloans,securedorunsecuredtocompanies,firmsorotherparties
coveredunderregistermaintainedunderSection189of theCompaniesAct,2013andtherefore,clause3(iii)oftheOrderisnotapplicable.
(iv) Inouropinion,andaccordingtoinformationandexplanationgiventous,companyhasnotgrantedanyloans,investment,guaranteesandsecuritytodirectororanyotherpersoninwhomdirectorisinterestedthereforeprovisionsofsection185and186oftheCompaniesAct,2013,isnotapplicabletothecompany.
(v) Accordingtotheinformationandexplanationsgiventous,thecompanyhasnotacceptedanydepositfromthepublicundertheprovisionsofsections73to76oranyotherrelevantprovisionsof theCompaniesAct,2013andtherulesframedthereunderandaccordinglytheclause3(v)oftheOrderisnotapplicable.
(vi) TheCentralGovernmenthasnotprescribedthemaintenanceofcostrecordsundersection148(1)oftheAct,foranyoftheservicesrenderedbytheCompany.
(vii) (a)Inouropinionandaccordingtotheinformationandexplanationsgiventous,andonthebasisofourexaminationoftherecordsoftheCompany,theprovisionsofCustomAct,ExciseDutyarenotapplicabletothecompanyduringtheyearandaccordinglynocommenthasbeenmadeinrespectofthesedues.FurtherthecompanyisregularindepositingotherundisputedstatutoryduesincludingIncomeTax,ServiceTax,Cessandanyotherstatutorydueswiththeappropriateauthority.TherearenoundisputedstatutoryduespayableinrespectofIncomeTax,ServiceTax,Cessandanyotherstatutorydueswhicharestandingasat31March2018foraperiodofmorethansixmonthsfromthedatetheybecamepayable.
(b) TherearenostatutoryduesofProvidentFund,EmployeeStateInsurance,InvestorEducation&ProtectionFund,IncomeTax,ServiceTax,Cessandanyotherstatutorydueswhichhavenotbeendepositedonaccountofanydispute.
(viii) Inouropinion,andaccordingtotheinformationandexplanationsgiventous,thecompanyisnotrequiredtorepayanyduestoafinancialinstitutionorbankordebentureholdersduringthecurrentfinancialyear.Accordingly,paragraph3(viii)oftheOrderisnotapplicable.
(ix) TheCompanydidnotraiseanymoneybywayofinitialpublicofferorfurtherpublicoffer(includingdebtinstruments)andtermloansduringtheyear.Accordingly,paragraph3(ix)oftheOrderisnotapplicable.
(x) Accordingtotheinformationandexplanationsgiventous,nomaterialfraudbytheCompanyorontheCompanybyitsofficersoremployeeshasbeennoticedorreportedduringthecourseofouraudit.
(xi) AccordingtotheinformationandexplanationsgivetousandbasedonourexaminationoftherecordsoftheCompany,theCompanyhaspaid/providedanymanagerialremunerationaspertheprovisionsofSec197ofCompaniesAct,2013readwithScheduleVoftheAct.
24th Annual Report 2017-2018
59Frontline Securities Ltd.
FSL(xii) Inouropinionandaccordingtotheinformationandexplanationsgiventous,theCompanyisnota
Nidhicompany.Accordingly,paragraph3(xii)oftheOrderisnotapplicable.(xiii) According to the informationandexplanationsgiven tousandbasedonourexaminationof the
recordsoftheCompany,transactionswiththerelatedpartiesareincompliancewithsections177and188oftheActwhereapplicableanddetailsofsuchtransactionshavebeendisclosedinthefinancialstatementsasrequiredbytheapplicableaccountingstandards
(xiv) AccordingtotheinformationandexplanationsgivetousandbasedonourexaminationoftherecordsoftheCompany,theCompanyhasnotmadeanypreferentialallotmentorprivateplacementofsharesorfullyorpartlyconvertibledebenturesduringtheyear.
(xv) According to the informationandexplanationsgiven tousandbasedonourexaminationof therecordsoftheCompany,theCompanyhasnotenteredintonon-cashtransactionswithdirectorsorpersonsconnectedwithhim.Accordingly,paragraph3(xv)oftheOrderisnotapplicable.
(xvi) Companyisregisteredundersection45-IAoftheReserveBankofIndiaAct,1934videCertificateofRegistrationnumberB-14.00089dated26.02.1998
For M/s Walecha Inder & Associates
Chartered Accountants
Registration No. 014205N
(Walecha Inder Jeet)
Partner
Membership No. 093694
Place: Noida
Date: 28.05.2018
24th Annual Report 2017-2018
60 Frontline Securities Ltd.
FSLAnnexure - B to the Auditors’ Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
WehaveauditedtheinternalfinancialcontrolsoverfinancialreportingofFrontlineSecuritiesLimited(“theCompany”)asof31March2018inconjunctionwithourauditofthestandalonefinancialstatementsoftheCompanyfortheyearendedonthatdate.
Management’s Responsibility for Internal Financial Controls
TheCompany’smanagementisresponsibleforestablishingandmaintaininginternalfinancialcontrolsbasedontheinternalcontroloverfinancialreportingcriteriaestablishedbytheCompanyconsideringtheessentialcomponentsof internal control stated in theGuidanceNoteonAuditof InternalFinancialControlsoverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia(‘ICAI’).Theseresponsibilitiesincludethedesign,implementationandmaintenanceofadequateinternalfinancialcontrolsthatwereoperatingeffectivelyforensuringtheorderlyandefficientconductofitsbusiness,includingadherencetocompany’spolicies,thesafeguardingofitsassets,thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimelypreparationofreliablefinancialinformation,asrequiredundertheCompaniesAct,2013.
Auditors’ Responsibility
OurresponsibilityistoexpressanopinionontheCompany’sinternalfinancialcontrolsoverfinancialreportingbasedonouraudit.WeconductedourauditinaccordancewiththeGuidanceNoteonAuditofInternalFinancialControlsoverFinancialReporting(the“GuidanceNote”)andtheStandardsonAuditing, issuedbyICAIprescribedundersection143(10)oftheCompaniesAct,2013,totheextentapplicabletoanauditofinternalfinancialcontrols,bothapplicabletoanauditofInternalFinancialControlsand,bothissuedbytheInstituteofCharteredAccountantsof India.ThoseStandardsand theGuidanceNoterequire thatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequateinternalfinancialcontrolsoverfinancialreportingwasestablishedandmaintainedandifsuchcontrolsoperatedeffectivelyinallmaterialrespects.
Ourauditinvolvesperformingprocedurestoobtainauditevidenceabouttheadequacyoftheinternalfinancialcontrols systemoverfinancial reporting and their operating effectiveness.Our audit of internalfinancialcontrols overfinancial reporting includedobtaining an understandingof internalfinancial controls overfinancialreporting,assessingtheriskthatamaterialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.
WebelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinionontheCompany’sinternalfinancialcontrolssystemoverfinancialreporting.
Meaning of Internal Financial Controls over Financial Reporting
Acompany’sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany’sinternalfinancialcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresof thecompanyarebeingmadeonly inaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(3)providereasonableassuranceregardingpreventionortimelydetectionof
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61Frontline Securities Ltd.
FSLunauthorisedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Becauseoftheinherentlimitationsofinternalfinancialcontrolsoverfinancialreporting,includingthepossibilityofcollusionorimpropermanagementoverrideofcontrols,materialmisstatementsduetoerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontroloverfinancialreportingmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.
Opinion
Inouropinion,theCompanyhas,inallmaterialrespects,anadequateinternalfinancialcontrolssystemoverfinancialreportingandsuchinternalfinancialcontrolsoverfinancialreportingwereoperatingeffectivelyasat31March2018,basedontheinternalcontroloverfinancialreportingcriteriaestablishedbytheCompanyconsideringtheessentialcomponentsofinternalcontrolstatedintheGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia.
For M/s Walecha Inder & Associates
Chartered Accountants
Registration No. 014205N
(Walecha Inder Jeet)
Partner
Membership No. 093694
Place: Noida
Date: 28.05.2018
24th Annual Report 2017-2018
62 Frontline Securities Ltd.
FSLBALANCE SHEET AS AT 31st March 2018
(Amount in Rs.)
PARTICULAR Note No As at 31.03.2018 As a 31.03.2017
I. EQUITY AND LIABILITIES
(1) Shareholder’s Funds (a) ShareCapital 2.1 5,92,78,460 71,866,890(b) ReservesandSurplus 2.2 395,337,651 364,744,883
(2) Non-Current Liabilities (a) Long-termborrowings 2.3 7,891,316 11,151,252(b) Otherlongtermliabilities 2.4 918,875 1,335,420(c) Longtermprovisions 2.5 32,642 17,673
(3) Current Liabilities (a) Short-termborrowings 2.6 3,259,940 2,874,158(b) Tradepayables 2.7 1,741,392 1,032,391(c) Othercurrentliabilities 2.8 3,582,042 1,653,685(d) Short-termprovisions 2.9 3,575,603 4,346,711
Total 475,617,921 459,023,063
II. ASSETS (1) Non-current assets (a)Property,Plants&Equipment 2.10 (i)TangibleAssets 129,286,557 55,400,548(ii)IntangibleAssets 91,100 154,123(iii)CapitalWorkInProgress - 41,289,073(b)Non-currentinvestments 2.11 291,309,357 327,842,215(c)DeferredtaxAssets(Net) 2.26 1,518,497 1,477,502(d)LongTermLoansandAdvances 2.12 14,928,945 8,175,172
(2) Current assets (a)TradeReceivables 2.13 7,086,869 -(b)Cashandbankbalances 2.14 14,672,283 14,503,044(c)Short-termloansandadvances 2.15 15,095,531 8,895,750(d)OtherCurrentAssets 2.16 1,628,782 1,285,636
Total 475,617,921 459,023,063
SignificantAccountingPolicy&NotestoAccounts 1&2
FOR AND ON BEHALF OF THE BOARD “AS PER OUR REPORT ATTACHED OF EVEN DATE” For M/s WALECHA INDER & ASSOCIATES Chartered Accountants Firm’s Registration Number : 014205N (RAKESH K. JAIN) (GAURI SHANKER PANDEY) Director Whole Time Director DIN : 00050524 DIN : 00050614 (Walecha Inder Jeet) Partner M.No: 093694(CS RICHA ARORA) (CA MAYANK AGARWAL) Company secretary Chief Financial Officer Place : NoidaM.No. : 42906 M.No. : 544992 Date : 28/05/2018
24th Annual Report 2017-2018
63Frontline Securities Ltd.
FSLSTATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2018
(Amount in Rs.)
Particulars Note No For the Year Ended For the Year Ended 31.03.2018 31.03.2017”I.Revenue: a)Revenuefromoperations 2.17 35,109,922 8,064,192b)OtherIncome 2.18 94,497,352 47,936,790Total Revenue 129,607,274 56,000,982
II. Expenses: a).Employeebenefitexpense 2.19 4,498,000 3,052,442b).Financecosts 2.20 1,133,784 1,433c).Administrative&OtherExpenses 2.21 5,690,074 3,440,034d).DepreciationandAmortizationexpense 2.10 2,092,723 341,650Total Expenses 13,414,581 6,835,559 III. Profit before tax (I - II) 116,192,693 49,165,423IV. Tax expense (1)Currenttax 23,102,965 8,892,395 (2)MatCredit (6,509,858) (4,684,818) 16,593,107 4,207,577(3)Deferredtax (40,995) (39,017) V. Profit/(Loss) for the period 99,640,581 44,996,863
VI. Earning per equity share: Basic 14.13 6.26 Diluted 14.13 6.26Weightedaveragenumberofequityshares 7,052,182 7,186,689Facevalueperequityshare(Rs.) 10.00 10.00 SignificantAccountingPolicy&NotestoAccounts1&2 FOR AND ON BEHALF OF THE BOARD
“AS PER OUR REPORT ATTACHED OF EVEN DATE”
For M/s WALECHA INDER & ASSOCIATES Chartered Accountants Firm’s Registration Number : 014205N (RAKESH K. JAIN) (GAURI SHANKER PANDEY) Director Whole Time Director DIN : 00050524 DIN : 00050614 (Walecha Inder Jeet) Partner M.No: 093694 (CS RICHA ARORA) (CA MAYANK AGARWAL) Company Secretary Chief Financial Officer Place : NoidaM.No. :-42906 M.No. :-544992 Date : 28/05/2018
24th Annual Report 2017-2018
64 Frontline Securities Ltd.
FSLCASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2018
Amount in Rs.Particulars For the year ended For the year ended 31.03.2018 31.03.2017A.Cash Flow from Operating Activities NetProfitBeforeTaxation 116,192,693 49,165,423Adjustments for Profit & Loss Account Depreciation 2,092,723 341,650 DividendIncome (8,023,312) (5,625,573) ProfitonSaleofInvestements(Net) (86,065,165) (41,961,114) RentalIncome (116,600) (349,800)Sundrybalanceswrittenoff - (5,919) Loss/(Gain)onSaleofFixedAssets - (92,112,354) 208,134 (47,392,622)Operating Profit before working capital 24,080,339 - 1,772,801Changes Adjustments for Working Capital Increase/(Decrease)inTradePayables 709,001 297,959 Increase/(Decrease)inShortTermBorrowings 385,782 - Increase/(Decrease)inOthercurrentliabilites 1,922,941 (373,631)Increase/(Decrease)inShorttermprovisions 1,129 (128,095)(Increase)/DecreaseinTradeReceivables (7,086,869) - (Increase)/DecreaseinShorttermloans (6,199,781) 33,836,335 &advances(Increase)/DecreaseinOthercurrentassets 547,928 1,665,234 Cash Generated from Operations (9,719,869) 35,297,802AdvanceTax/TDSPaid (23,994,042) (8,892,395)Net Cash From Operating Activities (9,633,572) 28,178,209B.Cash Flow from Investing Activites (Purchase)/SaleofFixedAssets[Net] (34,626,634) (30,543,377) (Purchase)/SaleofofInvestments[Net] 36,532,859 (3,068,073) ProfitonSaleofInvestment(Net) 86,065,165 - LongTermLoansandAdvances (243,914) 7,069,019 LongtermBorrowings (3,259,936) (3,174,039) RentalIncome 116,600 349,800 Increase/(Decrease)inOtherlongterm (416,545) 407,320 liabilitiesDividendIncome 8,023,312 5,625,573 Net Cash Used in Investing Activities 92,190,907 (23,333,777)C.CashFlowfromFinancingActivites Dividendspaid(includingunclaimed) (3,593,345) (3,593,345) DividendDistributionTax (751,901) (751,901)BuyBackofEquityShareCapital (78,048,266) - Net Cash Used in Financing Activities (82,393,512) (4,345,246)Net Increase/(Decrease)(In cash and cash equivalents) 163,823 499,185CashandcashEquivalentsatthebeginningoftheYear 801,612 302,427Cash and cash Equivalents at the end of the Year 965,435 801,612EarmarkedBalancewithBank 1,206,848 1,201,432ShortTermBankDeposits 12,500,000 12,500,000Cash and Bank Balances at the end of year 14,672,283 14,503,044
24th Annual Report 2017-2018
65Frontline Securities Ltd.
FSL
FOR AND ON BEHALF OF THE BOARD “AS PER OUR REPORT ATTACHED OF EVEN DATE” For M/s WALECHA INDER & ASSOCIATES Chartered Accountants Firm’s Registration Number : 014205N (RAKESH K. JAIN) (GAURI SHANKER PANDEY) (Walecha Inder Jeet)Director Whole Time Director PartnerDIN : 00050524 DIN : 00050614 M.No: 093694 (CS RICHA ARORA) (CA MAYANK AGARWAL) Place : NoidaCompany Secretary Chief Financial Officer Date : 28/05/2018M.No. :-42906 M.No.-544992
24th Annual Report 2017-2018
66 Frontline Securities Ltd.
FSLNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31.03.2018
1. ACCOUNTING POLICIES
a. Brief history and method of Accounting
ThecompanyisalistedpubliccompanyinBSE,registeredundertheCompaniesAct,1956.ThecompanyisregisteredasaNon–DeposittakingNon-SystematicallyImportantNon-BankingFinancialCompany(NBFC).
ThefinancialstatementshavebeenpreparedandpresentedunderthehistoricalcostconventiononaccrualbasisofaccountingandaccountingprinciplesgenerallyacceptedinIndiaandcomplywiththeAccountingStandardsnotifiedunderSection133oftheCompaniesAct,2013readtogetherwithparagraph7oftheCompanies(Accounts)Rules,2014totheextentapplicableandpracticesgenerallyprevalentinIndia.
b. Use of Estimates
Thepreparationofthefinancialstatementsinconformitywithgenerallyacceptedaccountingprinciples(‘GAAP’)inIndiarequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountofassetsandliabilitiesanddisclosureofcontingentliabilitiesonthedateofthefinancialstatements.Managementbelievesthattheestimatesmadeinthepreparationoffinancialstatementsareprudentandreasonable.Actual results coulddiffer from those estimates.Any revision to accountingestimates isrecognizedprospectivelyincurrentandfutureperiods.
c. Valuation of stock of securities
Stockofsecuritiesisvaluedatlowerofcostandmarketprice.However,thereisnostockonyearending.
d. Revenue Recognition
Gainorlossfrominvestmentinsecuritiesreflectsthenetgain/lossonredemptionandinvestmentsinsecurities.
Brokerage,interestandcommissionincomeisbeingrecordedonaccrualbasis.
Dividendincomeisbeingrecordedwhenthecompany’srighttoreceivethepaymentisestablished.
e. Expenses
Expensesareaccountedonaccrualbasisandprovisioningismadeforallknownliabilities.
f. Property, Plant and Equipment
(i) Property,Plantandequipment(PPE)arestatedatcostincludingexpensesincurreduptothedateoftheirinstallation/commissioningasreducedbyaccumulateddepreciation/impairmentprovidedintheaccounts.TheusefullifeofassetsistakenasprescribedinScheduleIItotheCompaniesAct,2013.ThecompanyhasadoptedStraightLineMethodforchargingDepreciation.
(ii)Capitalwork-in-progressisstatedatcost.
(iii)Softwareisclassifiedasintangibleassetsattheircostandamortizedoveraperiodof7Year.
g. Foreign currency Transactions
a) Initialrecognition:
Foreigncurrency transactions are recorded in the reportingcurrency,byapplying to the foreigncurrencyamounttheexchangeratebetweenthereportingcurrencyandtheforeigncurrencyatthedateofthetransaction.
b) Conversion:
Foreigncurrencymonetaryitemsareretranslatedusingtheexchangerateprevailingatthereportingdate.Non-monetaryitems,whicharemeasuredintermsofhistoricalcostdenominatedinaforeign
24th Annual Report 2017-2018
67Frontline Securities Ltd.
FSLcurrency,arereportedusingtheexchangerateatthedateofthetransaction.Non-monetaryitems,whicharemeasuredatfairvalueorothersimilarvaluationdenominatedinaforeigncurrency,aretranslatedusingtheexchangerateatthedatewhensuchvaluewasdetermined.
c) Exchangedifferences:
Exchangedifferencesarisingonthesettlementofmonetaryitemsarerecognizedasincomeorexpensesintheyearinwhichtheyarise.
Exchangedifferencesarisingonamonetaryitemthat,insubstance,formspartofthecompany’snetinvestmentinanon-integralforeignoperationisaccumulatedinaforeigncurrencytranslationreserveinthefinancialstatementsuntilthedisposalofthenet-investment,atwhichtimetheyarerecognizedasincomeorasexpenses.
However,therearenoforeigncurrencytransactionsintheyear.
h. Government Grants
Governmentgrantsarerecognizedwhenthereisreasonableassurancethatthecompanywillcomplywiththeconditionsattachedtothemandgrantswillbereceived.
Governmentgrantswhoseprimaryconditionisthatthecompanyshouldpurchase,constructorotherwiseacquirecapitalassetsarepresentedbydeductingthemfromthecarryingvalueoftheassets.Thegrantisrecognizedasincomeoverthelifeofadepreciableassetbywayofareduceddepreciationcharge.
Othergovernmentgrantsarerecognizedasincomeovertheperiodsnecessarytomatchthemwiththecostsforwhichtheyareintendedtocompensate,onasystematicandrationalbasis.
i. Valuation of the Investments
AsperAccountingStandard13(AS-13revised),investmentsareclassifiedas‘CurrentInvestments’&‘LongtermInvestments’dependingupontheintentiontoholdthesameatthetimeofmakinginvestments.Thelongterminvestmentsarevaluedatcost.However,ifthereisanydeclineinthevalueofinvestment,otherthantemporary,thecarryingamountofinvestmentisreducedforrecognizingthedeclineinvalueforeachinvestment.
j. Employee Benefits
GratuityBenefitsarerecognizedasanexpenseintheprofit&lossaccountfortheyearinwhichtheemployeehasrenderedservices.Theexpensesarerecognizedatthepresentvalueoftheamountspayabledeterminedusingactuarialvaluation techniques.Actuarialgainsand losses in respectofgratuityarechargedtoprofitandlossaccount.
k. Borrowing Cost
Borrowingcostincludesinterest.Suchcostsdirectlyattributabletotheacquisition,constructionorproductionofanassetthatnecessarilytakesasubstantialperiodoftimetogetreadyforitsintendeduseorsalearecapitalizedaspartofthecostoftherespectiveasset.Allotherborrowingcostsareexpensedintheperiodtheyoccur.
l. Segment Reporting
Thecompanyoperatesinonegeographicalsegment,i.e.Indiaandhasidentifiedtwobusinesssegmentsi.e.Segment-IwhichisConsultancyCommission&BrokerageandSegment-IIInvestmentsinBonds,FixedDeposits&Loans&Advances.SegmentProfit&LossismeasuredonthebasisofOperatingProfitorLossofeachrespectivesegment.SegmentAssetsandLiabilitieshavebeenapportionedsimilarly.
m. Leases
Where theCompany, as a lessor, leases assets underfinance lease, such amounts are recognised asreceivablesatanamountequaltothenetinvestmentintheleaseandthefinanceincomeisbasedonaconstantrateofreturnontheoutstandingnetinvestment.
24th Annual Report 2017-2018
68 Frontline Securities Ltd.
FSL Assetstakenonleasebythecompanyinitscapacityaslessee,wherethecompanyhassubstantiallyalltherisksandrewardsofownershipareclassifiedasfinancelease.Suchaleaseiscapitalisedattheinceptionoftheleaseatlowerofthefairvalueorthepresentvalueoftheminimumleasepaymentsandaliabilityisrecognisedforanequivalentamount.Eachleaserentalpaidisallocatedbetweentheliabilityandtheinterestcostsoastoobtainaconstantperiodicrateofinterestontheoutstandingliabilityforeachyear.
Leasearrangementswheretherisksandrewardsincidentaltoownershipofanassetsubstantiallyvestswiththelessor,arerecognisedasoperatinglease.Leaserentalsunderoperatingleasearerecognisedinthestatementofprofitandlossonastraight-linebasis.
n. Earning Per Share
BasicearningsperequitysharearebeingcomputedbydividingnetprofitaftertaxbytheweightedaveragenumberofsharesoutstandingduringtheyearasprescribedinAccountingStandard20prescribedintheCompanies(AccountingStandard)Rules,2016issuedbytheCentralGovernmentinconsultationwiththeNationalAdvisoryCommitteeonAccountingStandard.
o. Taxes on Income
Taxexpensescomprisecurrentanddeferredtaxes.CurrentincometaxismeasuredattheamountexpectedtobepaidtothetaxauthoritiesinaccordancewiththeIncomeTaxAct,1961.DeferredIncomeTaxreflectstheimpactofcurrentyeartimingdifferencebetweenthetaxableincomeandtheaccountingincomefortheyearandreversaloftimingdifferenceofearlieryears.
Deferred tax ismeasuredbasedon the taxratesand tax lawsenactedorsubstantivelyenactedat thebalancesheetdate.Deferredtaxassetsanddeferredtaxliabilitiesareoffset,ifalegallyenforceablerightexiststosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandthedeferredtaxassetsanddeferredtaxliabilitiesrelatetotaxesleviedbythesamegoverningtaxationlaws.Deferredtaxassetsarerecognizedonlytotheextentthatthereisreasonablecertaintythatsufficientfuturetaxableincomewillbeavailableagainstwhichsuchdeferredtaxassetscanberealised.Insituationwherethecompanyhasunabsorbeddepreciationorcarryforwardtaxlosses,alldeferredtaxassetsarerecognizedonlyif thereisvirtualcertaintysupportedbyconvincingevidencethattheycanberealisedagainstfuturetaxableprofits.
AteachBalancesheetdate,thecompanyre-assessesunrecognizeddeferredtaxassetsandrecognizesdeferredtaxassettotheextentthatithasbecomereasonablycertainorvirtuallycertain,asthecasemaybe,thatsufficientfuturetaxableincomewillbeavailableagainstwhichsuchdeferredtaxassetscanberealised.
p. Intangible assets
Cost incurredon intangibleassets, resulting in futureeconomicbenefitsarecapitalizedas intangibleassetsandamortizedonastraight-linemethodbeginningfromthedateofcapitalizationoveraperiodof7years.
q. Impairment of Fixed Asset
Managementperiodicallyassessesusingexternalandinternalsourceswhetherthereisanindicationthatfixedassetsofthecompanyhavesufferedanimpairmentloss.Impairmentloss,ifany,isprovidedasperAccountingStandard(AS-28)onImpairmentofAssets.
r. Provisions, Contingent Liabilities and Contingent Assets
AsperAccountingStandard29 (AS-29Revised), a provision is recognizedwhen there is a presentobligationasaresultofamountofapasteventthatprobablyrequiresanoutflowofresourcesandareliableestimatecanbemadeoftheamountoftheobligation.Disclosureforcontingentliabilityismadewhenthereisapossibleobligationorapresentobligationthatmay,butprobablywillnot,requireanoutflowofresources.
Noprovisionisrecognizedordisclosureforcontingentliabilityismadeasthereisnopossibleobligationorapresentobligationandthelikelihoodofoutflowofresourcesisremote.ContingentAssetsisneitherrecognizednordisclosedinthefinancialstatements.
24th Annual Report 2017-2018
69Frontline Securities Ltd.
FSL2. NOTES TO ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2018 Thepreviousyearfigureshavebeenregrouped/reclassified,wherevernecessarytoconfirmtothecurrentperiodpresentation. 2.1. SHARE CAPITAL (AmountinRs.)Particulars As at 31.03.2018 As at 31.03.2017 Nos. Amount Nos. AmountAUTHORISED EquitySharesofRs.10/-each 1,00,00,000 100,000,000 1,00,00,000 100,000,000 ISSUED, SUBSCRIBED & PAID-UP EquitysharesofRs.10/- 5,927,846 59,278,460 7,186,689 71,866,890eachfullypaidup
Total 5,927,846 59,278,460 7,186,689 71,866,890 Intheeventofliquidationofthecompany,theEquityshareholderswillbeentitledtoreceiveanyofremainingassetsofthecompany,afterdistributionofallpreferentialamounts.However,nosuchpreferentialamountsexistcurrently.Thedistributionwillbeinproportiontothenumberofequitysharesheldbytheshareholders. ThereconciliationofthenumberofsharesoutstandingandtheamountofsharecapitalasatMarch31,2018andMarch31,2017issetoutbelow- (Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.2017 Nos. Amount Nos. Amount No.ofshareatthebeginning 7,186,689 71,866,890 7,186,689 71,866,890Add-Sharesissuedduringtheyear - - - -Less-Sharesbuybackduringtheyear 1,258,843 12,588,430 - -
No. of share at the end 5,927,846 59,278,460 7,186,689 71,866,890 Detailsofsharesheldbyshareholdersholdingmorethan5%oftheaggregatesharesinthecompany Particulars As at 31.03.2018 As at 31.03.2017 Nos. % Nos. %
MrRakeshKJain 2,495,910 42.10 2,995,910 41.69Ms.PrernaJain 1,388,504 23.42 1,763,504 24.54HopeConsultantsLimited 410,043 6.92 410,043 5.71
Total 4,294,457 72.46 5,169,457 71.94 Proposed Dividend
Particulars As at 31.03.2018 As at 31.03.2017
DividendperShareonsharesofRs.10each 0.50 0.50DividendProposed% 5 5 ThecompanyhasonlyoneclassofsharesreferredtoasequityshareshavingaparvalueofRs.10/-,eachholderofequitysharesisentitledtoonevotepershare.ThedividendproposedbytheBoardofDirectorsissubjecttotheapprovaloftheshareholdersintheensuingAnnualGeneralMeeting.
Buy-back of Equity Shares
a.)TheCompanyhadbroughtBackof12,58,843/-fullypaidEquityShareshavingfaceValueofRs.10/-each
24th Annual Report 2017-2018
70 Frontline Securities Ltd.
FSLfromitsEquityshareholdersonaproportionatebasisthrough“TenderOffer”routeinFinancialyear2017-18atapriceofRs.62/-perequityshares.ThecompanyhasutilisedasumofRs.2,37,54,125/-fromitsSecurityPremiumAccount,totheextentavailableandRs.5,42,94,141/-fromProfit&LossAccounttopayasumofRs.7,80,48,266/-toitsshareholders.
b.) TheCompanyhadbroughtBackof23,75,000/-fullypaidEquityShareshavingfaceValueofRs.10/-eachfromitsEquityshareholdersonaproportionatebasisthrough“TenderOffer”routeinFinancialyear2013-14atapriceofRs.32.50/-perequityshares.
2.2 RESERVES AND SURPLUS (Amount in Rs.) As at 31.03.2018 As at 31.03.2017A) General Reserves OpeningBalance 5,047,852 5,047,852(+)Currentyeartransfer - -Closing Balance 5,047,852 5,047,852 B) Security Premium Account OpeningBalance 23,754,125 23,754,125(+)Currentyeartransfer - -(-)Deductionforcurrentyear (23,754,125) -Closing Balance - 23,754,125 C) RBI Reserve Fund OpeningBalance 96,391,529 87,392,156(+)Currentyeartransfer 19,928,116 8,999,373Closing Balance 116,319,645 96,391,529 D) Capital Redemption Reserve OpeningBalance 23,182,610 23,182,610(+)Currentyeartransfer 12,588,430 -Closing Balance 35,771,040 23,182,610 E) Surplus OpeningBalance 216,368,768 184,595,514(+)NetProfit/(NetLoss)forthecurrentyear 99,640,581 44,996,863(-)BuyBackofShares# (54,294,141) -(-)ProposedDividend (2,963,923) (3,593,345)(-)ProposedDividendTax (609,086) (751,901)(-)TransfertoRBIReserves (19,928,116) (8,999,373)(+/-)ContingencyProvisionagainstStandardAssets (14,969) 126,928(-)Shortprovisionmadeinthepreviousyear - (5,919)Closing Balance 238,199,114 216,368,768Grand Total 395,337,651 364,744,883 TheBoardofDirectorsatitsmeetingheldon28/05/2018hasrecommendedafinaldividendof5%(Rs.0.50perequityshareofRs.10/-each)fortheF.Y.2017-18subjecttotheapprovalofshareholders.
#TheamountincludesasumofRs.1,25,88,430/-transferedtoCapitalRedemptionReserveAccount(Nominalvalueofsharepurchased)incomplianceofSection69ofCompaniesAct,2013
24th Annual Report 2017-2018
71Frontline Securities Ltd.
FSL2.3 LONG TERM BORROWING
(Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.2017PayabletoGreaterNoidaAuthorityforLand 7,891,316 11,151,252 7,891,316 11,151,252 2.4 OTHER LONG TERM LIABILITIES (Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.2017SecurityDeposit - 159,000SecurityDepositfromContractor 918,875 1,176,420 918,875 1,335,420 2.5 LONG TERM PROVISIONS (Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.2017Contingentprovisionagainststandardasset 32,642 7,673Total 32,642 17,673 2.6 SHORT TERM BORROWING (Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.2017PayabletoGreaterNoidaAuthorityforLand 3,259,940 2,874,158 3,259,940 2,874,158 2.7 TRADE PAYABLE (Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.2017SundryCreditors 1,353,184 13,336Commission&BrokeragePayable 388,208 1,019,055 1,741,392 1,032,391 2.8 OTHER CURRENT LIABILITIES (Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.2017ExpensesPayable 486,599 259,356I.G.S.TPayable 1,787,830 -P.F.Payable 23,648 12,538LabourCessPayable - 41,309TDSpayable 77,117 45,626WCTpayable - 93,424UnclaimedDividend 1,206,848 1,201,432 3,582,042 1,653,685
ThereisnoamountdueforthepaymenttotheInvestorEducationandProtectionFundundersection124oftheCompaniesAct,2013asattheyearendinrespectofUnpaidDividend 2.9 SHORT TERM PROVISIONS (Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.2017GratuityPayable 2,594 1,465ProposedDividend 2,963,923 3,593,345CorporateDividendtax 609,086 751,901 3,575,603 4,346,711
24th Annual Report 2017-2018
72 Frontline Securities Ltd.
FSL
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Ass
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Lea
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52,196,178
607,768
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52,803,946-
-
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Bui
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69,368,690
-
73,687,6901,343,748
1,563,421
2,907,169
70,780,521
2,975,252
Veh
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-
4,070,887
-
4,070,887
-
292,700
-
292,700
3,778,187
-
Offi
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quip
men
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137,649
24,500
-
162,150
127,452
6,765
-
134,217
27,932
10,197
Com
pute
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quip
men
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190,650
54,618
-
245,268
59,956
54,173
-
114,129
131,139
130,694
Fur
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Fix
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238,610
-
-
238,610
150,384
19,755
-
170,139
68,471
88,226
Ele
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1,789,245
1,789,245
-92,885
-
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1,696,361
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Int
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Ass
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536,534
-
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536,534
382,411
63,024
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445,434
91,100
154,123
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29,868,86171,157,934-
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Tot
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24th Annual Report 2017-2018
73Frontline Securities Ltd.
FSL2.11 NON CURRENT INVESTMENTS
(Amount in As at 31.03.2018 As at 31.03.2017 ScripName Face Nos.of Value Nos.of Value Value Shares/Units Shares/Units (i) Unquoted Investments 1.SystmaShyamTeleservicesLtd.* 10 - - 154,830 1,228,102.JordEngineering(I)Ltd. 10 100 - 100 -3.Ballmerlaweriecont.ltd 10 200 210 200 210Total (A) 300 210 155,130 1,228,310(ii) Quoted (Non Trade Investments) 1.AdaniPortsandSEZLtd. 2 - - 25,000 7,256,9632.AdaniTransmissionLtd 10 - - 52,500 2,161,5243.AdityaBirlaCapitalLtd. 10 115,400 19,586,343 - -4.AmaraRajaBatteriesLtd. 1 500 352,873 1,500 1,294,2175.AndharaCementsLtd. 10 - - 599,934 4,535,1796.AshokLeylandLtd. 1 28,000 3,283,687 - -7.AtulLtd 10 - - 400 622,4738.BankOfBaroda 2 70,000 10,607,570 - -9.BSELtd. 2 100 98,357 - -10.BharatPetroleumCorporationLtd 10 - - 1,000 681,78411.CastrolIndiaLtd 5 - - 1,000 365,11612.CentralDepositoryServices 10 12,500 4,104,406 - -(India)Ltd13.ContainerCorporationLtd. 10 11,000 15,397,807 - -14.D-Link(India)Ltd 2 - - 45,000 5,969,95015.DeltaCorpLtd. 1 4,500 1,107,172 - -16.DevelopmentCreditBankLtd 10 - - 10,000 806,23217.DewanHousingFinanceCo.Ltd. 10 - - 20,000 6,128,91818.Divi’sLaboratoriesLtd 2 - - 2,000 1,492,66719.ESSLPropackLtd. 2 25,067 6,532,039 - -20.EquitasHoldingsLtd. 10 - - 18,900 3,147,31421.EsterIndustriesLtd. 5 32,500 2,070,183 - -22.FinolexIndustriesLtd. 10 6,200 3,848,461 - -23.ForceMotorsLtd. 10 750 2,384,881 - -24.TheFederalBankLtd. 2 - - 25,000 1,161,77725.GabrielIndiaLtd 1 - - 15,000 1,607,15726.GatewayDistriparksLtd 10 6,000 1,415,763 43,500 12,049,76427.GMRInfrastructureLtd 1 - - 150,000 1,844,93028.GodrejConsumerProductsLtd 1 - - 2,500 4,019,54229.GodrejAgrovetLtd. 10 2,500 1,464,112 - -30.HDFCBankLtd 2 3,000 4,891,289 3,250 3,362,75531.ICICIBankLtd. 2 - - 26,500 6,380,50732.IDFCLtd. 10 - - 65,000 3,114,43733.IDFCBankLtd. 10 203,500 11,899,654 21,500 1,077,86534.IndiabullsHousingFinanceLtd 2 - - 7,500 5,694,03135.JaiprakashPowerVenturesLtd 10 - - 500,000 2,916,442
24th Annual Report 2017-2018
74 Frontline Securities Ltd.
FSL36.J.K.CementLtd. 10 - - 2,250 1,350,90437.JyothyLaboratoriesLtd. 1 21,500 7,647,778 - -38.UdaipurCementWorksLtd. 4 10,100 9,599 10,100 9,59539.JKLakshmiCementLtd. 5 - - 6,000 2,183,99540.KalpatruPowerLtd 2 - - 11,500 2,593,24441.KansaiNerolacTransmissionLtd 1 - - 28,250 10,191,09442.LaOpalaRgLtd 2 16,623 4,632,132 - -43.LarsenTurboLtd 2 6,500 7,393,738 1,500 2,250,59344.LumaxAutomotiveSystemsLtd 10 - - 50 -45.MarutiSuzukiIndiaLtd 5 - - 900 5,436,51946.MercatorLinesLtd 1 - - 15,000 418,76947.MideastIntegratedSteelsLtd. 10 15,000 762,981 - -48.MuthootFinanceLtd 10 22,500 9,466,468 - -49.Network18Media&Inv.Ltd. 5 - - 68,500 2,765,59650.NationalBuildingsConst.Corp.Ltd. 1 5,000 1,259,121 - -51.NIITTechnologiesLtd 10 - - 17,000 7,212,34852.ONGCLtd 5 30,000 5,051,125 - -53.OrientRefractoriesLtd. 1 2,500 399,261 - -54.PhoenixLampsLtd. 10 - - 5,000 472,80355.PinconSpiritLtd. 10 - - 60,000 4,030,70256.PowerGridCorporationOf 10 51,000 10,111,348 10,500 1,984,579IndiaLtd57.PolyplexCorporationLtd. 10 4,000 1,984,213 - -58.RelianceCapitalLtd. 10 60 - 60 -59.RelianceCommunicaionVenturesLtd5 13,463 1,228,100 - -60.RelianceHomeFinanceLtd. 10 60 - - -61.RelianceNipponLifeAsset 10 33,000 8,686,388 - -ManagementLtd.62.ReliancePowerLtd. 10 300 - 300 -63.ShippingCorporationofIndiaLtd. 10 - - 50,000 3,448,44164.ShreeCementLtd. 10 450 7,546,914 - -65.SteelAuthorityofIndiaLtd. 10 8,000 673,872 125,000 5,697,73566.SuprajitEngineeringLtd. 1 5,000 1,049,080 32,000 6,250,91667.SequentScientificLtd. 2 15,000 1,609,222 - -68TechMahindraLtd. 5 - - 10,000 5,289,19669.TriveniTurbineLtd 1 - - 37,000 4,418,53970.TubeInvestmentsofIndiaLtd. 1 20,900 5,211,219 - -71.TV18BroadcastLtd 2 - - 160,000 6,612,47072.TVSSrichakaraLtd. 10 100 322,715 1,140 2,740,99873.UltratechCementLtd. 10 650 2,709,079 500 1,578,68874.VIPIndustriesLtd 2 5,000 609,010 30,000 3,558,35475.WonderlaHolidaysLtd 10 11,250 4,347,274 11,500 4,450,74576.ZeeEntertainmentEnter.Ltd 1 14,000 7,245,494 - -TOTAL (B) 833,473 179,000,728 2,331,034 162,638,369
24th Annual Report 2017-2018
75Frontline Securities Ltd.
FSL(Amount in Rs.)
As At 31.03.2018 As At 31.03.2017 Scheme Name Nos. of Value Nos. of Value Shares/Units Shares/Units MUTUAL FUND LIQUID/DEBT-GROWTH 1.BirlaSunLifeCashManagerFund-Growth - - 30,404 11,604,4932.BirlaSunLifeFloatingRate-ShortTerm-Growth-DirectPlan 22,578 5,200,000 - -3.DSPBlackRockMoneyManagerFund-RegularPlan-Growth - - 5,335 11,238,8664.DSPBlackRockLiquidityFund-DirectPlan-Growth 201 496,242 - -5.FranklinIndiaSavingsPlusFund-RetailPlan-Growth - - 227,469 6,585,6096.FranklinUSOpportunitiesFund - - 258,894 4,270,2987.HDFCCashManagamentFund-SavingsPlan-Growth - - 1,590 4,990,3368.HDFCCashManagementFund-Treasury - - 293,372 9,600,000AdvantagePlan-Retail-Growth9.HDFCCMSavings-DirectPlan-GrowthOption 1,773 6,326,948 - -10.HDFCLiquidFund-DirectPlan-GrowthOption 2,348 7,920,023 - -11.ICICIPrudentialFlexibleIncome-RegularPlan-Growth - - 6,969 2,000,00012.ICICIPrudentialLiquidPlan-RegularPlan-Growth 4,885 1,029,660 9,764 1,942,99613.RelianceMoneymanagerFund-InstOption-GrowthPlan - 501 3,471 7,021,36514.RelianceLiquidFund-GrowthPlan - - 216 755,56415.RelianceLiquidityFund-DirectPlanGrowthOption-Growth 2,270 5,900,000 - -16.TempletonIndiaTreasuryManagementAccount-Direct-Growth 3,204 8,250,000 - -17.TempletonIndiaUltra-shortBondFund-Growth - - 332,846 7,350,00018.Uti-FloatingRateFund-ShortTermPlan(GrowthOption) 956 2,707,667 - -19.UTITreasuryAdvantageFundInstitutionalPlan-Growth 1,765 3,960,002 3,733 6,578,93220.Uti-FloatingRateFund-ShortTermPlan(GrowthOption) - - 4,193 10,782,981 MUTUAL FUND-Gilt 1.HDFCGiltfundLongTermGrowth - - 58,846 1,700,0002.ICICIPrudentialGiltFundInvestmentGrowth - - 83,761 4,100,0003.RelianceGiltSecuritiesFundInstitutionalPlanGrowth - - 368,866 6,750,0004.TempletonIndiaGovt.Sec.Fund-LongTermPlanGrowth - - 126,979 4,250,0005.UTIGiltAdvantageLongTermGrowth - - 254,328 7,900,000 MUTUAL FUND-EQUITY 1.BirlaSunLifeAdvantageFund-PlanA(Dividend) 36,633 3,873,575 - -2.BirlaSunLifeBankingandFinancialServicesFund 102,947 1,789,376 - --RegularPlan-Dividend3.BirlaSunlifeEquityFundPlan-Dividend - - 49,185 5,000,0894.BirlaSunLfeMNCFund - - 10,850 1,499,9805.BirlaSunLifePureValueFund-Dividend 86,420 2,674,707 121,005 3,000,0006.DSPBlackrockFocus25Fund-Dividend - - 221,140 2,700,0007.DSPBlackRockOpportunitiesFund-DirectPlan-Dividend 18,163 1,000,000 - -8.DSPBlackRockOpportunitiesFund-DirectPlan-Growth 4,552 1,000,000 - -9.DSPBlackrockOpportunitiesFund-Regular 129,521 3,635,017 36,934 1,000,00010.DSPBlackrockSmallandMidCapFundRegularPlan-Dividend - - 137,637 2,800,00011.DSPBlackRockTechnology.comFund-RegularPlan-Dividend - - 34,458 1,000,00012.FranklinIndiaHighGrowthCompaniesFund 106,155 2,502,054 187,055 4,500,01713.FranklinIndiaPrimaPlus-Dividend 10,834 399,159 141,514 4,850,00014.FranklinIndiaSmallerCompaniesFund-Dividend 1 9 83,428 2,000,00015.FranklinIndiaBluechipFund-Dividend - - 55,381 2,000,00016.HDFCMid-CapOpportunitiesFund-Dividend 112,671 3,558,968 32,754 1,000,00017.HDFCCapitalBuilderFund-DirectPlan-DividendOption 178,114 6,058,116 - -18.HDFCCapitalBuilderFund-DirectPlan-GrowthOption 4,812 1,500,000 - -
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76 Frontline Securities Ltd.
FSL19.HSBCIndiaOpportunitiesFund-Dividend 137,249 3,484,183 - -20.HSBCMidcapEquityFund-Dividend 205,401 4,500,000 47,786 1,000,00021.ICICIPrudentialBankingandfinancialServicesfund-RetailFund - - 26,110 700,00022.ICICIPrudentialValueDiscoveryFund-Dividend - - 97,731 2,850,00023.KotakOpportunities-Dividend 20,022 547,654 - -24.KotakSelectFocusFund-Dividend 138,730 3,194,924 - -25.KotakSelectFocusFund-Dividend-Direct 157,064 3,950,000 - -26.KotakSelectFocusFund-Growth-Direct 29,191 1,000,000 - -27.MOStFocused25Fund-RegularPlanDividend 266,301 4,528,180 69,306 1,000,00028.MOStFocusedMulticap35-DirectPlan-DividendOption 194,284 5,317,371 - -29.MOStFocusedMulticap35-DirectPlan-GrowthOption 96,854 2,600,000 - -30..RelianceBankingFund-Dividend - - 66,052 2,500,00031.RelianceEquityOpportunitiesFund-Dividend - - 16,096 500,00032.UTIBankingSectorFund-IncomeOption - - 19,353 500,00033.UTIMidCapFund-IncomePlan 13,730 750,033 40,146 1,500,000 Total (C) 2,089,629 99,654,369 3,534,552 151,321,487 Bonds 01.01006GOI2021 50,000 5,910,720 50,000 5,910,72002.6.9%GOI2019(CentralGovt.Loan09009) 5,000 498,529 5,000 498,52903.Centralgovt.Loan07003GOI 62,000 6,244,801 62,000 6,244,80104.NationalThermalPowerCorporation-NCD 23,500 - 23,500 -Total (D) 140,500 12,654,050 140,500 12,654,050 Total(A+B+C+D) 291,309,357 327,842,215 Investmentofshareshasbeentakenaslongterminvestmentsastheintentionofmanagementatthetimeofpurchaseistoholdthemaslongterm.Howeveritmayhappen,inbenefitofcompanysomeinvestmentsmaybesoldinshortterm.Buttheintentionofmanagementwastoholdtheinvestmentaslongtermingeneral,hencethesamehasbeentakenaslongterminvestments. Notes: a.AggregatecostofunquotedinvestmentisRs.210/--(PreviousyearRs12,28,310/-) b.AggregatecostofquotedinvestmentisRs.179,000,728/-(PreviousyearRs162,638,369/-) c.AggregatecostofmutualfundisRs.99,654,369/-(PreviousyearRs.151,321,487/-) d.MarketvalueofquotedInvestmentisRs.172,086,840/-(PreviousyearRs.186,034,542/-) e.MarketvalueofMutualFundisRs.98,281,116/-(PreviousYearRs.166,824,833/-) f.Noprovisionhasbeenmadeforreductionifanyinmarketvalueasthesameistemporaryinnature. g.*Thecompanyhasbeenalloted13,463NosofequityshareofRelianceCommunicationLimitedunderschemeofarrangementbetweenRelianceCommunicationLtd&SystmaShyamTeleservicesLtd.
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FSL2.12 LONG TERM LOANS AND ADVANCES (Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.2017 Unsecured&consideredgood:- -MATCredit 14,685,030 8,175,172-GratuityTrust 243,915 - 14,928,945 8,175,172 2.13 TRADE RECEIVABLES (Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.201TradeReceivables:-foraperiodlessthan6month 7,086,869 --foraperiodmorethan6month - - 7,086,869 - 2.14 CASH AND BANK BALANCES (Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.2017a.Cashandcashequivalents i.Balanceswithbanks InCurrentAccount 957,375 799,767InSpecialAccount - -ii.Cashonhand 8,060 1,845iii.OtherBankbalances a.InUnpaidDividendAccount 1,206,848 1,201,432b.ShortTermBankdeposits 12,500,000 12,500,000(Lessthan12months) 14,672,283 14,503,044 2.15 SHORT TERM LOAN & ADVANCES Particulars As at 31.03.2018 As at 31.03.2017Loan&AdvancesRecoverableinCashorinKindorforvaluetobereceivedandconsiderasgood:Loan-Intercorporate 13,056,824 7,069,250Supplieradvance 2,017,180 1,826,500Staffadvances 21,527 - 15,095,531 8,895,750
2.16 OTHER CURRENT ASSETS (Amount in Rs.)Particulars As at 31.03.2018 As at 31.03.2017PrepaidExpenses 56,661 166,667SecurityDeposits 33,600 33,600InterestAccruedButNotreceived 401,650 422,183AdvanceTax/TDS(Netofprovision) 1,136,871 322,677SwacchBharatCessexcesspaid - 150Cenvatcredit - 59,507CenvatcreditonKrishiKalyanCess - 2,456Commissionandbrokeragereceivable - 278,396 1,628,782 1,285,636
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FSL2.17 REVENUE FROM OPERATIONS (Amount in Rs.)Particulars For the year ended For the year ended 31.03.2018 31.03.2017Commission&Brokerage(Net) 30,952,500 2,286,747Incomefromconsultancy - 1,200,000Interest -TaxFreeInterestonbonds 24,528 24,528 -Bonds 1,056,086 1,052,784 -OnLoans(ICD) 2,035,519 2,545,476 -OnBankDeposits 906,289 4,022,422 954,657 4,577,445ReferralFees 135,000 - 35,109,922 8,064,192 2.18 OTHER INCOME (Amount in Rs.)Particulars For the year ended For the year ended 31.03.2018 31.03.2017CapitalGain-LongTerm -STT 40,991,977 20,923,045 -NonSTT 3,251,227 4,521,582 CapitalGain-ShortTerm -STT 30,060,976 15,930,165-NonSTT 11,760,985 86,065,165 586,322 41,961,114Dividendreceived 8,023,312 5,625,573RentRecieved 116,600 349,800Gratuity(ActurialGain) 243,915 -InterestonIncomeTaxRefund 25,545 -MiscellaneousIncome 22,815 303 94,497,352 47,936,790
2.19 EMPLOYEES BENEFIT EXPENSES (Amount in Rs.)Particulars For the year ended For the year ended 31.03.2018 31.03.2017#Salary,Wages&OtherBenefits 4,214,817 2,783,033ContributiontoProvidentFund&OtherFunds 143,938 78,816StaffWelfare 136,651 139,128Gratuity 2,594 51,465 4,498,000 3,052,442 #AsumofRs.1,08,345being25%salaryofanaccountantisapportionedtowardexpenditureforearningexemptincome. 2.20 FINANCE COSTS (Amount in Rs.)Particulars For the year ended For the year ended 31.03.2018 31.03.2017Bankcharges 684 -Interestpaid 1,133,100 1,433 1,133,784 1,433
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79Frontline Securities Ltd.
FSL2.21 ADMINISTRATIVE & OTHER EXPENSES (Amount in Rs.)Particulars For the year ended For the year ended 31.03.2018 31.03.2017ProfessionalCharges 2,714,632 713,375CSRDonations - 960,000STTCharges 634,981 469,924Listingfee 251,250 229,000Rentpaid 402,165 134,200Travelling&Conveyance 39,432 112,669AGMExpenses 174,390 165,079Printing&Stationery 66,128 76,935Repairs&Maintenance 398,626 67,705Advertisement 244,034 63,413Payment to Auditors : -StatutoryAuditFee 21,000 21,000 -TaxAuditFee 9,000 30,000 9,000 30,000SecretarialAuditFee 10,000 10,050InternalAuditfee 10,000 10,000OfficeMaintenanceExp. 66,464 41,988Postage&Telegram 31,282 17,200Telephone&InternetExpenses 25,229 21,099ElectricityExpense 5,659 -OtherExpenses 585,802 317,397 5,690,074 3,440,034
2.22 RELATED PARTY DISCLOSURE FollowingdisclosuresaremadeasperAccountingStandard18,regarding“RelatedPartyDisclosures”asnotifiedbytheCompaniesAccountingStandardRules(2016): (A) List of Related Parties (i) Wholly Owned Subsidiary: Nil (ii) Fellow Subsidiary: Nil (iii) Enterprise for which Reporting Enterprise is an Associate: Nil (iv) Individual having significant influence or control MrRakeshKJain MsPrernaJain (v) Relatives of individual having significant influence or control MsAridhiJain (vi) Key Management Personnel: Mr.GauriShankerPandey(WholeTimeDirector) Ms.RichaArora(CompanySecretary)andbecameWholeTimeDirectoreffectivefrom29.05.2017 Ms.SwarnaGowriS(ChiefFinancialOfficerResignedEffectivefrom21.10.2017) Mr.MayankAgarwal(ChiefFinancialOfficerappointedEffectivefrom21.10.2017) (vii) List of companies/enterprises, in which any of person (including any of relative), listed in (iv),(v) & (vi) have significant influence or control 1. FrontlineCapitalServicesLimited 2. FSLSoftwareTechnologiesLimited 3. HopeConsultantsLimited 4. WonderBuildtechPrivateLimited 5. PetalConsultantsPrivateLimited 6. AssociationofNationalExchangeMembersofIndia(ceasedtobedirectorw.e.f10.06.2017) 7. FSLConsultantsPrivateLimited 8. JainSinghal&AssociatesLLP(CovertedfromJainSinghal&Associates(Partnershipfirm)w.e.f25.04.2017) 9. JSAAdvisorsLLP 10. FrontInvestments&FinancialConsultantsLLP 11. PetalResortsPrivateLimited 12. VardhmanElectricalsPrivateLimited
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80 Frontline Securities Ltd.
FSL(B) Details of transactions relating to persons referred in item A above (Amount in Rs.)
(A) (B) (C ) 1. Rent Received from Ms Aridhi Jain -CurrentYear 116,000 - - 116,000-PreviousYear (349,800) - - (349,800)2. Amount paid to key managerial personnel as remuneration, conveyance,etc. -CurrentYear(MrGSPandey) - 722,400 - 722,400-CurrentYear(Ms.RichaArora) - 417,437 - 417,437-CurrentYear(Ms.SwarnaGowriS) - 319,168 - 319,168-CurrentYear(Mr.MayankAgarwal) - 181,547 - 181,547-PreviousYear(MrGSPandey) - (643,318) - (643,318)-PreviousYear(OtherKMP) - (739,810) - (739,810)3. Rent paid -CurrentYear - - 402,165 402,165-PreviousYear - - (134,200) (134,200)4. Brokerage paid to Frontline Capital Services Limited -CurrentYear - - 2,204,937 2,204,937-PreviousYear - - (1,558,841) (1,558,841) 116,000 1,640,552 2,607,102 4,363,654 (349,800) (1,383,128) (1,693,041) (3,425,969)
Balance outstanding as on 31.03.2018 Security Deposit - Asset -CurrentYear - - - --PreviousYear (159,000) - - (159,000)
Remuneration Payable -CurrentYear - 127,013 - 127,013-PreviousYear - (131,624) - (131,624) Amount receivable from Brokers -CurrentYear - - - --PreviousYear - - - -
2.23 QUANTITATIVE DETAILS
TheCompanyisengagedinfinancialconsultancy,distributionoffinancialproductsandinvestmentsinfinancialsecurities.AsthecompanyisnietheramanufacturingcompanynoratradingcompanythereforetherequirementofQuantativeDetailofPurchasesandSalesarenotapplicable.
2.24 DUES TO MICRO SMALL AND MEDIUM ENTERPRISES
Thecompanyhasnoduestomicroandsmallenterprisesduringtheyearended31March,2018andMarch31,2017.
Nature of transactions
Relatives of individual having significant influence or control
Key managerial personnel
Transaction with the companies/enterprises have
TotalA+B+C
Nature of transactions
Relatives of individual having significant influence or control
Key managerial personnel
Transaction with the companies/enterprises have
TotalA+B+C
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81Frontline Securities Ltd.
FSL2.25 RETIREMENT BENEFITS A) GRATUITY Theemployees’GroupGratuitySchemeismanagedbyLifeInsuranceCorporationofIndia.ThepresentvalueofobligationisdeterminedbasedonactuarialvaluationusingtheProjectedUnitcreditMethod,whichrecognizeseachperiodofserviceasgivingrisetoadditionalunitofemployeebenefitentitlementandmeasureseachunitseparatelytobuildupthefinalobligation. Particulars Percentage Current Year Amount Percentage Previous Year Amount Actuarial assumptions DiscountRatePerAnnum 8% 8% SalaryEscalation 7% 6% Reconciliation of opening and closing balances of obligation Obligationatbeginningoftheyear 559,065 552,092CurrentServiceCost 39,831 28,771InterestCost 6,685 43,610Actuarial(gain)/loss 2,518 (65,408)Less:Benefitspaid (568,269) -Obligation at the end of the year 39,830 559,065 Reconciliation of opening and closing balances of fair value assets Fairvalueofplanassetsatbeginningoftheyear 805,574 711,964Employercontribution - 50,000Less:BenefitsPaid (568,269) -Add:Expectedreturnonplanassets 46,440 43,610Fair value of plan assets at the end of the year 283,745 805,574 Amount Recognized in Balance Sheet Presentvalueofobligation 39,830 559,065Fairvalueofplanassets 283,745 805,574Amount recognized in Balance Sheet (243,915) (246,509)Gratuity cost for the period CurrentServiceCost 39,831 28,771InterestCost 6,685 43,610Expectedreturnonplanassets (46,440) (43,610)Actuarial(gain)/loss 2,518 (65,408)Net Gratuity cost 2,594 (36,637)
B) Leaveaccumulatedduringtheyearlapseonthebalancesheetdateandthusnoprovisionforleaveencashmentismade.C) Contributiontoprovidentfundismademonthlyatpredeterminedratestotheappropriateauthorities. Note: 1. Thecompanyhasrecognisedthegratuityincome(actuarialgain)ofRs.2,43,915/-&gratuityexpensesofRs.2,594/-inFY 2017-18. 2. ThecompanyhasrecognisedtheexcessoffairvalueofplanassetsoverpresentvalueofobligationofRs.2,43,915/-asan assetsinFY17-18andGratuityPayableofRs.2,594/-asanliabilityinFY2017-18. 2.26 DEFERRED TAX BALANCES Particulars For the year For the year ended 31.03.2018 ended 31.03.2017a. Deferred Tax Liabilities (Net) (i)Depreciation 446,214 848,816 (ii)Others - - 446,214 848,816 b. Deferred Tax Assets (Net) (i)Depreciation - - (ii)Others(Capitalloss) 1,964,711 2,326,318 1,518,497 1,477,502
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FSL2.27 SEGMENT REPORTING Thecompanyoperatesinonegeographicalsegment,i.e.Indiaandhasidentifiedtwobusinesssegmentsi.e.Segment-IwhichisConsultancyCommission&BrokerageandSegment-IIInvestmentsinBonds,FixedDeposits&Loans&Advances.SegmentProfit&LossismeasuredonthebasisofOperatingProfitorLossofeachrespectivesegment.SegmentAssetsandLiabilitieshavebeenapportionedsimilarly
(Amount in Rs.) Service, Commission Investment in Bonds/ Unallocated Total & Brokerage FDR/Loans & AdvancesSegment Revenue (A) -CurrentYear 31,087,500 4,022,422 94,497,353 129,607,274-PreviousYear (3,486,747) (4,577,445) (47,936,791) (56,000,982)Segment expense (B) -CurrentYear 5,190,089 5,070,314 1,061,455 11,321,858-PreviousYear (2,551,640) (2,484,974) (1,457,295) (6,493,909)Depreciation -CurrentYear 781,710 781,710 529,302 2,092,723-PreviousYear (81,760) (81,760) (178,130) (341,650)Segment Result (A) - (B) - Current Year 25,115,701 (1,829,602) 92,906,596 116,192,693 - Previous Year (853,347) (2,010,711) (46,301,366) (49,165,424) Segment Assets (A) -CurrentYear 36,442,098 67,911,092 371,264,731 475,617,921-PreviousYear (48,616,306) (80,754,613) (329,652,145) (459,023,063)Segment Liabilities (B) -CurrentYear 8,965,351 7,256,602 4,779,856 21,001,809-PreviousYear (12,453,510) (7,845,447) (2,112,333) (22,411,291) Total (A) - (B) -CurrentYear 27,476,746 60,654,490 366,484,874 454,616,111-PreviousYear (36,162,796) (72,909,166) (327,539,812) (436,611,772) Capital Expenditure -CurrentYear 17,313,317 17,313,317 - 34,626,634-PreviousYear (14,797,603) (14,797,603) - (29,595,206)
2.28 EARNING PER SHARE 2.28.1 The Earning Per Share (EPS) is calculated as follows: Particulars For the year ended For the year ended 31.03.2018 31.03.2017(i) ProfitattributabletoEquityShareHolders 99,640,581 44,996,863(ii) #Weightedaveragenumberofequitysharesforcomputations ofBasicandDilutedEarningpershare 7,052,182 7,186,689(iii)NominalValueofEquityShare 10 10(iv) EPS-BasicandDiluted 14.13 6.26
2.28.2 The basic & diluted EPS as on 31.03.2018 has been computed on reduced weighted average share capital after buy back. 2.29 Payment to Auditor (Amount in Rs.)Particulars For the year ended For the year ended 31.03.2018 31.03.2017A)Auditor (i)StatutoryAuditFees 21,000 21,000(ii)TaxAuditFees 9,000 9,000 30,000 30,000
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83Frontline Securities Ltd.
FSL
2.33. [Schedule to the Balance sheet of a Non Banking Financial company as required in terms of paragraph 13 of Non Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007] LIABILITIES SIDE 1 Loans and advances availed by the NBFC inclusive of interest Amount Amount accrued thereon but not paid: Outstanding Overdue a. Debentures(otherthanfallingwithinthemeaningofpublicdeposits) -Secured - - -Unsecured - - b. DeferredCredits(NoteNo.1) 11,151,256 - c. TermLoans - - d. Inter-corporateloansandborrowings - - e. CommercialPaper - - f. PublicDeposits(Refernote2below) - - g. OtherLoans–Cashcredit - -
2 Break up of 1(f) above (Outstanding public deposits inclusive Amount Amount of interest accrued thereon but not paid); Outstanding Overdue a. Intheformofunsecureddebentures - - b. Intheformofpartlysecureddebenturesi.edebentures - - wherethereisashortfallinthevalueofsecurity c. Otherpublicdeposits - -
2.30 Capital & Other Commitments EstimatedamountofcontractsremainingtobeexecutedonCapitalaccountandnotprovidedfor(netofadvances)Rs.7.38Lakhsason31stMarch2018(PreviousYear-Rs.84.88lakhs). 2.31 Foreign Exchange Earning and Expenditure Thecompanyhasnotmadeanyforeignexchangetransactionduringtheyear. 2.32 Corporate Social Responsibility TheCompanyshallutilizetheavailablefundsonlongtermprojectssuchaseducation,oldagehome,orphanageetc(asspecifiedunderscheduleVIIoftheCompaniesAct,2013forCSRActivities).TheCompanyisunderprocessoffindingsuitableoptionsandfinalizationoftheimplementationplanforthesame.Inviewoftheabove,thecompanyispreservingthefundssothatasandwhenadequateandappropriateoptionisavailabletothecompany,itwillutilizethemforCSRactivities.HencetheCompanyhasdecidednottospendtheamountonCSRduringtheyearunderreview. FOR AND ON BEHALF OF THE BOARD “AS PER OUR REPORT ATTACHED OF EVEN DATE” For M/s WALECHA INDER & ASSOCIATES Chartered Accountants Firm’s Registration Number : 014205N (RAKESH K. JAIN) (GAURI SHANKER PANDEY)Director Whole Time DirectorDIN : 00050524 DIN : 00050614 (Walecha Inder Jeet) Partner M.No: 093694 (CS RICHA ARORA) (CA MAYANK AGARWAL) Company Secretary Chief Financial Officer Place : NoidaM.No. :-42906 M.No.-544992 Date : 28/05/2018
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FSLASSET SIDE 3 Break up of Loans and Advances including bills receivables Amount [other than those included in (4) below]: Outstanding a Secured - b Unsecured 13,056,824
4 Break up of Leased Assets and stocks on hire and other assets Amount counting towards AFC activities Outstanding i. LeaseAssetsincludingleaserentalundersundrydebtors: a. FinanceLease - b. OperatingLease - ii. Stocksonhireincludinghirechargesundersundrydebtors: a. Assetsonhire - b. RepossessedAssets - iii. OtherLoanscountingtowardsAFCactivities: a. Loanswhereassetshavebeenrepossessed - b. Loansotherthan(a)above -
5 Break up of Investments: Amounts Current Investments 1 Quoted i. Shares–Equity - –Preference - ii. DebenturesandBonds - iii. Unitsofmutualfunds - iv. GovernmentSecurities - v. Others - 2 Unquoted i. Share–Equity - –Preference - ii. DebenturesandBonds - iii. Unitsofmutualfunds - iv. GovernmentSecurities - v. Others - Long Term Investments 1 Quoted i. Shares–Equity 179,000,728 –Preference - ii. DebenturesandBonds 12,654,050 iii. Unitsofmutualfunds 99,654,369 iv. GovernmentSecurities - v. Others - 2 Unquoted i. Share–Equity 210 –Preference - ii. DebenturesandBonds - iii. Unitsofmutualfunds - iv GovernmentSecurities - v. Others -
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FSL6 Borrowergroupwiseclassificationofallleasedassets,stockonhireandloansandadvances(Refernote3below): Category Amountnetofprovision Secured Unsecured Total 1 RelatedParties** - - - a. Subsidiaries - - - b. Companiesinthesamegroup - - - c. Otherthanrelatedparties - 13,056,824 13,056,824 Total - 13,056,824 13,056,824
7 Investorgroupwiseclassificationofallinvestments(currentandlongterm)insharesandsecurities(both quotedandunquoted):(Refernote4below) Category MarketValue/Breakup BookValue(NetofProvisions) offairvalueorNAV 1 RelatedParties** a. Subsidiaries - - b. Companiesinthesamegroup - - c. Otherrelatedparties - - 2 Otherthanrelatedparties 283,022,006 291,309,357 Total 283,022,006 291,309,357 **AsperAccountingStandardissuedbytheInstituteofCharteredAccountantsofIndia(‘ICAI’). 8 Other Information Amount i. GrossNon-PerformingAssets a. RelatedParties - b. Otherthanrelatedparties - ii. NetNon-PerformingAssets a. RelatedParties - b. Otherthanrelatedparties - iii. Assetsacquiredinsatisfactionofdebt -Notes:
1 AmountisduetoGreaterNoidaAuthorityforpurhaseofleaseholdlandof90Year.
2 Asdefinedinparagraph2(1)(xii)oftheNon-BankingFinancialCompaniesAcceptanceofPublicDeposits (ReserveBank)Directions,1998
3 ProvisioningnormsshallbeapplicableasprescribedintheNon-BankingFinancialCompaniesPrudential Norms(ReserveBank)Directions,1998
4 AllAccountingStandardsandGuidanceNotesissuedbytheInstituteofCharteredAccountantsofIndia(‘ICAI’)areapplicableincludingforcalculationofinvestmentsandotherassetsasalsoassetsacquiredinsatisfactionofdebts.However,marketvalueinrespectofquotedinvestmentsandbreakup/fairvalue/NAVinrespectofunquotedinvestmentsshouldbedisclosedirrespectiveofwhethertheyareclassifiedaslongtermofcurrentincategory5above.
FOR AND ON BEHALF OF THE BOARD
“AS PER OUR REPORT ATTACHED OF EVEN DATE” For M/s Walecha Inder & Associates Chartered Accountants Firm’s Registration Number- 014205N (RAKESH K. JAIN) (GAURI SHANKER PANDEY) Director Director DIN : 00050524 DIN : 00050614
(Walecha Inder Jeet) Partner M.No: 093694(CS RICHA ARORA) (CA MAYANK AGARWAL) Company Secretary Chief Financial Officer Place : Noida M.No. :-42906 M.No. : 544992 Date: 28/05/2018
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86 Frontline Securities Ltd.
FSLSHAREHOLDER INFORMATION FORM
(ForusebyshareholdersholdingSharesinPhysicalmodeonly)
To,
TheCompanySecretary
M/sFrontlineSecuritiesLimited Place:........................
M-6,M-BlockMarket,GreaterKailash-II
NewDelhi-110048 Date:..................
DearSirs,
Iherebyrequestyoutoupdateyourrecordsasperinformationgivenbelow:
Membersarerequestedtoprovidethebelowmentionedinformation:
1. FolioNo.:..................................................................................................................................................
2. No.ofShares:.............................................................................................................................................
{FolioNo.asgiveninequitysharecertificate(s)}
3. Member’sName:Shri/Smt./Kum.:...........................................................................................................
4. Member’sAddress:...................................................................................................................................
..................................................................................................................................................................
5. EmailID:...................................................................................................................................................
Iherebydeclarethattheaboveparticularsgivenabovearecorrectandcomplete.
SignatureoftheFirstNamed/SoleMember
NOTE:
1. PleasecompletetheformandsendittoCompanyattheaboveaddressifyouareholdingsharecertificate(s)inphysicalform.
2. IncaseyoursharesareinDematerializedform,inform/updateyourinformationdirectlywiththeDepositoryParticipant(DP)withwhomyouaremaintainingDematAccountandnottotheCompanyoritsRegistrar.
3.Incaseofmorethanonefolio,pleasecompletethedetailsonseparatesheets.
24th Annual Report 2017-2018
87Frontline Securities Ltd.
FSL
Sender’sNameandAddress
3rdfold
1stfold
2ndfold
24th Annual Report 2017-2018
88 Frontline Securities Ltd.
FSLECS MANDATE FORM
(ForusebyshareholdersholdingSharesinPhysicalmodeonly)
To,
TheCompanySecretary
M/sFrontlineSecuritiesLimited Place:...............................
M-6,M-BlockMarket,GreaterKailash-II Date:...............................
NewDelhi-110048
DearSirs,
IherebyconsenttohavetheamountofDividendonmyequitysharescreditedthroughtheElectronicClearingSystem(CreditClearing)-(ECS).Theparticularsare:
1.FolioNo.:..................................................................................................................................................
{FolioNo.giveninequitysharecertificate(s)}
2.Member’sName:Shri/Smt./Kum.:...........................................................................................................
3.Member’sAddress:...................................................................................................................................
..................................................................................................................................................................
4. ParticularsoftheBankAccount:
BankName:..............................................................................................................................................
BranchName:...........................................................................................................................................
Mentionthe9-digitcodenumberofthebankandbranchappearingontheMICR
Chequeissuedbythebank:......................................................................................................................
(PleaseattachaphotocopyofaChequeorablankcancelledChequeissuedbyyourbankfor verifyingtheaccuracyofthecodenumber)
Accounttype(Please)SavingCurrentCashCredit
Accountnumber(asappearingontheChequebook:)
Iherebydeclarethattheparticularsgivenabovearecorrectandcomplete.Ifthetransactionisdelayedornoteffectedatallforreasonsofincompleteorincorrectinformationforanyreasons,IwouldnotholdtheCompanyresponsible.Ialsoundertaketoadvisechanges,ifany,intheparticularsofmyaccounttofacilitateupdationofrecordsforpurposesofcreditofDividendamountthroughECS.
Signature of the First Named /Sole Member
Note: 1. PleasecompletetheformandsendittoRegister&ShareTransferAgentattheaboveaddressifyouareholdingsharecertificate(s)inphysicalform,latestby,September18th,2018.
2. IncaseyoursharesareinDematerializedform,inform/updateyourinformationdirectlywiththeDepositoryParticipant(DP)withwhomyouaremaintainingDematAccountandnottotheCompanyoritsRegistrar.
3. Incaseofmorethanonefolio,pleasecompletethedetailsonseparatesheets.
4. SubjecttotherulesandregulationsoftheSchemeofECSoftheReserveBankofIndiafromtimetotime.
24th Annual Report 2017-2018
89Frontline Securities Ltd.
FSL
Sender’sNameandAddress
3rdfold1stfold
2ndfold
24th Annual Report 2017-2018
90 Frontline Securities Ltd.
FSLNO GIFTS WILL BE DISTRIBUTED AT THE AGM
FormNo.MGT-11PROXY FORM
[Pursuanttosection105(6)oftheCompaniesAct,2013andRule19(3)oftheCompanies
(ManagementandAdministration)Rules,2014]
CIN:L65100DL1994PLC058837
Name of the Company:FrontlineSecuritiesLimited
Registered Office:M-6,IIndFloorM-BlockMarket,GreaterKailash-II,NewDelhi-110048
I/We,beingthemember(s)of………….sharesoftheabovenamedcompany,
herebyappoint1. Name:............................................................................................................................................................. Address:........................................................................................................................................................ E-mailId:...................................................................................................................................................... Signature:.......................................................................................................................,orfailinghim/he2.Name:.......................................................................................................................................................... Address:........................................................................................................................................................ E-mailId:..................................................................................................................................................... Signature:......................................................................................................................,orfailinghim/her3.Name:.......................................................................................................................................................... Address:........................................................................................................................................................ E-mailId:...................................................................................................................................................... Signature:......................................................................................................................,orfailinghim/her
Asmy/ourproxytoattendandvote(onapoll)forme/usandonmy/ourbehalfatthe24thAnnualGeneralMeetingof thecompany, tobeheldon the25thSeptember,2018at9:45 a.m.atPHDHouseLaxmipatSinghaniyaAuditorium,NewDelhiandatanyadjournment thereof inrespectofsuchresolutionsasareindicatedbelow:
Resolution No.1 AdoptionofAuditedFinancialStatementsforthefinancialyearendedMarch31,20182 DeclarationofdividendontheequitysharesforthefinancialyearendedMarch31,20183 Re-appointmentofMs.SarabjeetKaur,Director,whoretiresbyrotation4 RatificationofAppointmentofM/sWalechaInder&AssociatesasStatutoryAuditor.5. Sub-DivisionofequitysharesfromtheFaceValueofRs.10/-toFaceValueofRs.5/-pershare.6. AmendmenttoClauseVoftheMemorandumofAssociationoftheCompany7. AlterationofObjectsClausesintheMemorandumofAssociationoftheCompany8. Re-AppointmentofMr.GauriShankerPandeyastheWholetimeDirectoroftheCompany9. IncreaseinRemunerationpayabletoMs.RichaArora,WholeTimeDirector&CompanySecretaryoftheCompany.
Signedthis...........................................dayof....................................2018
Signatureofshareholder..................................SignatureofProxyholder(s).........................................
Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.
1 Revenue
stamp
24th Annual Report 2017-2018
91Frontline Securities Ltd.
FSL
NO GIFTS WILL BE DISTRIBUTED AT THE AGMFRONTLINE SECURITIES LIMITED
RegisteredOffice:M-6,MBlockMarket,GreaterKailash-II,NewDelhi-110048
ATTENDANCE SLIP
Iherebyrecordmypresenceatthe24thAnnualGeneralMeetingheldatPHDHouse,LaxmipatSinghaniaAuditorium,NewDelhionTuesday,the25thSeptember,2018at9.45a.m.
NameoftheShareholder(s)....................................................................................................(InBlockLetter)
Father’s/Husband’sName.................................................................................................................................
NameoftheProxyorCompanyRepresentative...................................................................(InBlockLetters)
*DPID.............................................................................*ClientId..............................................................
Regd.FolioNo...................................................................No.ofSharesheld...............................................
SignatureoftheShareholder’sorProxyofCompanyRepresentative
............................................................................................................................................................................
Note: Members/Proxies are requested to bring the duly filled in Attendance slip to the Annual General Meeting to be handed over at the meeting.
*Applicable for investors holding shares in electronic form.
24th Annual Report 2017-2018
92 Frontline Securities Ltd.
FSL
(Landmark)
(AGM Venue)
Balbir Saxena Marg
PHD House
Siri Fort Auditorium
Outer Ring Road
Aug
ust
Kra
nti
Mar
gChaudhary Dalip singh marg
Aurobindo Marg