Dear Members,
The Directors have pleasure in presenting their 25th Annual report
along with Audited Accounts for the year ended on March 31,2014.
Financial Performance :
(Rs, in Lacs)
Current Year Past Year
31-03-2014 31-03-2013
Revenue from Operations 4198.46 4394.96
Other Income 404.90 344.39
Finance Charges 558.29 651.45
Depreciation 209.01 220.38
Profit Before Taxation (125.95) (490.56)
Provision for Income-Tax Current Taxes (104.26) (256.81)
Earlier Periods (7.92) NIL
Profit /( Loss) after (13.77) (233.75)
taxation but before
exceptional and Extra
Ordinary Items
Exceptional & Extra Ordinary Items 3.36 (72.55)
Profit/ ( Loss) for the year (17.13) (161.20)
Profit Brought Forward 694.06 855.26
Proposed Dividend NIL NIL
Balance Carried to Balance-Sheet 676.93 694.06
Notes:
Previous years' figures have been regrouped wherever necessary to bring
them in line with the current year's representation of figures.
Dividend:
Due to loss during the year under the review, your Directors do not
recommend any dividend for the year.
Review Of Operations:
The year 2013-2014 marked deterioration in the fundamentals of both the
global and the Indian economies. The year under review was a
challenging one for your company as well. Your Company made a Net Loss
of Rs. 17.13 Lacs against Net Loss of Rs. 161.20 Lacs in the earlier
year.
The company operates in four business segments viz. Transportation,
Trading, Generation of wind energy, and renting of immovable
properties.
During the year the company has achieved operational income of Rs.
4198.46 Lacs as against Rs. 4394.96 Lacs in the previous year. The
company posted Loss before tax of Rs. 125.95 Lacs as against Loss
before Tax of Rs. 490.56 Lacs in the previous year. The Company
incurred Loss after Tax of Rs. 17.13 Lacs as against Rs. Loss of Rs.
161.20 Lacs in the previous year. A balance of Rs. 676.93 Lacs has been
carried forward to Balance Sheet as against Rs. 694.06 Lacs in the
previous year.
Audit Committee:
The Company has constituted an Audit Committee pursuant to the
provisions of Section 292A of the Compa- nies Act, 1956 and clause 49
of the Listing Agreement. The Audit Committee consists of Shri Bharat
Arora, Shri Virendra Sharma and Shri Saurabh Jhunjhunwala. Shri Bharat
Arora, Independent Director is chairman of the Audit Committee.
The composition of the Audit committee and the attendance of each
director at these meetings are given below:-
Sr. Director Category of Chairman No. of No. of
No. Directorship /Member meetings meetings
held attended
1 Shri Bharat Arora Independent
Director Chairman 5 5
2 Shri Virendra Sharma Independent
Director Member 5 5
3 Shri Saurabh Jhunjhunwala Non- Executive
Director Member 5 5
The Chairman of the Committee was present at the last annual general
meeting to answer shareholders query.
Transfer to Reserve & Surplus
The opening Balance of Reserves and Surplus was Rs. 6.94 Crores. The
Board of Directors proposes to transfer Net Loss of Rs. 0.17 Crores to
Reserve & Surplus aggregating to Rs. 6.77 Crores.
Subsidiary of the Company.
The Company does not have any subsidiary Company.
Deposits :
The Company has not accepted any deposits from public to which the
provisions of Section 58 - A of the Companies Act, 1956 and rules made
there under are applicable.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo:
The Company is not engaged in any manufacturing activity and hence the
particulars with respect to conserva- tion of energy, technology
absorption are either not applicable or such particulars are Nil. The
details in respect of foreign exchange earnings and out go are as
under:
Particulars Amount in Foreign Amount
Currency
Total Foreign Exchange
earning Euro 17568 Rs. 12,66,958/-(Previous
( Previous Year Year Rs. 12,18,752/-)
Euro 17472 )
Total Foreign Exchange
outgo Euro 658.80(Previous
Year EURO 655.20) Rs.35,901 (Previous Year
Rs 35,535/- )
Activities relating to export, initiative taken to increase exports
development of new export markets for products and services, and export
plans:
No activities relating to export was undertaken during the year. Due to
high volatility in the iron ore market and low demand of iron ore, the
Company could not take any steps to explore the foreign market. The
Company is awaiting for the appropriate time for price stabilization of
iron ore and stability in foreign currency to explore the export of
iron ore.
Directors :
Shri Ram Prasad Agarwal and Shri Saurabh Jhunjhunwala, Directors of the
Company retire by rotation and being eligible offer themselves for
re-appointment. You are requested to accord your approval to their
appoint- ment.
Shri Bharat Arora, Independent Director of the Company resigned from
the office of Director on 25th Au- gust, 2014 due his pre-occupation in
other work. Consequently, he also resigned from the Chairmanship of
Audit Committee, Remuneration and Nomination Committee and Stakeholders
Committee on the same day and his resignation has been accepted by the
Board.
The Board places on record its appreciation for the assistance and
guidance provided by Shri Bharat Arora during his tenure as Director of
the Company.
Pursuant to Sections 149, 152, Schedule IV of the Companies Act, 2013
read with Companies (Appointment and Qualification of Directors) Rules,
2014, it is proposed to appoint Mr. Rahul Chomal as Independent Direc-
tors of the Company up to 5 (five) consecutive years, starting from his
date of appointment. Mr. Rahul Chomal was appointed by the Board of
directors in their meeting held on 14th August, 2014. The Company has
also received notice pursuant to Section 160 of the Companies Act, 2013
from members proposing the appointment of aforesaid Independent
Directors.
None of the Directors of your Company is disqualified as per provisions
of Section 274(1) (g) of the Companies Act, 1956. The Directors of the
Company have made necessary disclosures as required under various
provi- sions of the Companies Act, 1956 and Clause 49 of the Listing
Agreement.
Further, pursuant to Section 149 of the Companies Act, 2013 & rules
made thereunder and Clause 49 of the Listing Agreement, an independent
director shall hold office for a term upto five consecutive years on
the Board of a company and shall be eligible for re-appointment, for
another term of upto five consecutive years on passing of a special
resolution by the Company.
Accordingly, your Board hereby proposes to appoint Shri Virendra
Sharma, Mr. Jiwraj Khaitan and Mr. Sital Kumar Banerjee for 5 years
upto 31st March, 2019.
Directors' Responsibility Statement:
The Directors confirm:
Pursuant to Section 217
a) that in the preparation of Annual Accounts, the applicable
Accounting Standards have been followed and that no material departures
have been made from the same.
b) that they have selected such Accounting Policies and applied them
consistently and made judgments and estimates that are responsible and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the Financial year and of the Profit or Loss
of the Company for that period ;
c) that they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) that they have prepared the Annual Accounts on a going concern
basis.
Listing Fees:
The Company has already paid the necessary listing fees for the year
2014 - 2015 to the BSE Limited, Ahmedabad Stock Exchange Limited and
The Calcutta Stock Exchange Limited.
Auditors and Auditors' Report:
M/s. Paresh Thothawala & Co., Chartered Accountants, Ahmedabad,
Statutory Auditors of the Company holds office until the conclusion of
the ensuing Annual General Meeting and are eligible for re-appointment.
The Company has received a letter from them to the effect that their
re-appointment, if made, would be within the limits prescribed under
Section 141 and other applicable provisions, of the Companies Act 2013
and they are not disqualified for such re- appointment under the
applicable provisions of the Companies Act, 2013 and rules made
thereunder.
Based on the recommendations of the audit Committee, the Board of
Directors of the Company proposes the re- appointment of M/s. Paresh
Thothawala & Co., Chartered Accountants, as the Statutory Auditors of
the Company.
Auditors' observations:
The Auditors in their Report dated 30th May, 2014 have made certain
observations on the accounts for the year under review.
In reply to point No. 1,2 and 3 of Emphasis of Matter raised by the
Statutory Auditors of the Company in their Independent Auditors' Report
it is stated that the attachment of properties by the Bank is a legal
process and the Company is taking all legal steps to protect the
property. Further the Company is taking all steps to make the
settlement of the matter and the Company is actively undertaking the
settlement matter with the Banks. Further the Company is also making
all its efforts to repay the debt and to release the property.
In reply to para 4 of the Independent Auditors' Report it is stated
that the Company is making all its efforts to strengthen the internal
controls over the generation and disposal of scrap. Even though the
Company has during the current year implemented the process of
strengthening of internal controls over generation and disposal of
scrap by maintain the records and putting the required manpower for the
same. The Board of Directors of the Company feels that the process of
strengthening of internal controls is more costlier than the revenue
generated.
In reply to sub Para (a) of Para (ix) of the Independent Auditors'
Report it is stated that the Company could not pay VAT on due date on
account of liquidity crunch. However, the Company has since then paid
VAT on the fixed assets sold during the year.
In reply to Para (xi) of the Independent Auditors' Report it is stated
that the Company is facing liquidity and financial crisis and
consequently the Company is unable to pay to its Bankers. The Board of
Directors of the Company are making all their efforts to protect
legally properties of the Company and to repay the debt to the Bankers
at the earliest.
In reply to Para (xv) of the Independent Auditors' Report it is stated
that the Company at the time when M/s. Fairdeal Supplies Limited, a
Group concern of the Company obtained the loan from the Banks, the
financial conditions and other prospects of M/s. Fairdeal Supplies
Limited were excellent. The Board of Directors of the Company did not
forecast that loan availed by M/s. Fairdeal Supplies Limited will be
defaulted. The Bankers of M/s. Fairdeal Supplies Limited have
stipulated a condition to give the collateral and guarantee for the
facilities to be availed by the Fairdeal Supplies Limited.
The Board of Directors of the Company would further like to state that
it has already filed necessary petition before the respective
authorities for compounding the matter.
Particulars of Employees:
The information required under section 217(2A) of the Companies Act,
1956 read with the Companies (Particu- lars of the Employee) Rules,
1975 as amended to date is not attached as there are no employees who
are in receipt of remuneration in excess of prescribed limits.
Material Changes and Events occurring after Balance Sheet:
There are no material changes and events occurring after the Balance
Sheet date and upto the date of signing of the report, which may have
any material impact on the operations of the Company.
Acknowledgement:
The Board of Directors of the Company takes this opportunity to thank
the Banks, Financial Institutions, Central and State Government
Authorities, regulatory Authorities, Customers, Suppliers, Shareholders
and investors at large for their continued support to the Company and
look forward to having the same support to the Company and look forward
to having the same support in the years to come.
The Board of Directors of the Company also wish to place on record
their deep and special appreciation for the unstinting diligence and
dedication of the Company's employees.
By order of the Board of Directors of
Frontline Corporation Limited
Place : Ahmedabad Pawan K umar Agarwal
Date : August 25, 2014 Managing Director
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