The Directors have pleasure in presenting the Forty-Third Annual Report of the Company together with the Audited Financial Statements for the financial year ended 31st March, 2023.
FINANCIAL RESULTS
The summarized financial results of the Company for the year ended 31st March, 2023 as compared to the preceding year are as under:
|
(Amount in Lacs)
|
|
Particulars
|
2022-23
|
2021-22
|
|
Income from Operations/Turnover
|
10799.13
|
8463.08
|
|
Profit Before Interest, Depreciation and Tax
|
1330.88
|
1320.95
|
|
Less: Interest
|
33.43
|
28.12
|
|
Less: Depreciation
|
320.17
|
285.27
|
|
Profit Before Tax
|
977.28
|
1007.56
|
|
Income Tax
|
|
|
Less: Current year Tax
|
233.52
|
251.15
|
|
Less: Previous year Tax
|
0.00
|
1.73
|
|
Less: Deferred Tax
|
19.71
|
3.24
|
|
Net Profit
|
724.05
|
751.44
|
|
Add: Other Comprehensive Income (after Tax)
|
40.25
|
76.42
|
|
Total Comprehensive Income for the period
|
764.30
|
827.87
|
|
Proposed Dividend
|
39.39
|
39.39
|
|
Balance available for appropriation
|
724.91
|
788.48
|
|
Surplus B/F from Previous Year
|
6347.10
|
5558.63
|
|
Transfer to General Reserve
|
0.00
|
0.00
|
|
Surplus carried to Balance sheet
|
7072.02
|
6347.11
|
FINANCIAL AND OPERATIONAL PERFORMANCE
The financial statements for the year ended 31st March, 2023 forming part of this Annual Report, have been prepared in accordance with the Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs.
The total income of the Company was ' 10799.13 Lacs. The operating profit (EBIDTA) stood at ' 1330.88 lacs. During the year under review, the Company has earned at net profit of ' 724.05 lacs.
The performance of the Company during the current FY 202223 continues to be encouraging and barring unforeseen circumstances, your Directors except your Company to achieve better results during the year.
TRANSFER TO RESERVES
The Board of Directors has decided to retain the entire amount of profit for Financial Year 2022-23 in the statement of profit and loss.
SHARE CAPITAL
As on 31st March, 2023, your Company has Total Paid up Share Capital of ' 3,93,85110 divided into 39,38,511 Equity shares of ' 10/- each.
DIVIDEND
The Board is pleased to recommend a dividend of ' 1 per Equity Share (i.e @10%) of ' 10/- each of the Company for the financial year 2022-23, payable to those shareholders, whose names appear in the Register of Members/Beneficial Ownership list provided by the depositories on the record date, involving cash outflow of ' 39.39 Lacs of the Company's standalone net profit for the financial
year 2022-2023. Dividend is subject to approval of members at the ensuing Annual General Meeting (AGM) and shall be subject to deduction of income tax at source.
EXPANSION
• We have already supplied Air Springs to Indian Railways and fitment trials are underway which are nearly to be completed in the month of October 2023. In next financial year and comimg years, there will be substantial increase in the turnover and profitability because of addition of Air Springs in our product line.
• This year the Railway Board has finalized the tender of 45000 wagons from wagon builders in addition to 90,000 wagons orders finalized last years for which supplies will take place in next three years which will give us good orders and value addition for wagon springs and forgings which will increase the turnover manifold in coming three years.
• The orders for manufacturing of Springs/Forging for Linke-Hofmann Busch (LHB) coaches and Electric Locomotives Springs such as WAP-7 and WAG-9H which were being imported till date by Indian Railways continues manifold. The demand for products developed by the Forging Unit namely Anti Roll Bar, Anti Roll Bar Bracket and Roll Link used in the manufacturing of LHB Coaches continues to rise. The orders in the pipeline are good.
SUBSIDIARY COMPANY/ASSOCIATE/JOINT VENTURE COMPANY
The Company has no Subsidiary, Associate and Joint Venture Companies and as such the requirement of furnishing the information relating to the financial position of Subsidiary, Associate and Joint Venture Companies is not applicable.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
• Pursuant to the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company Shri Neeraj Bhatia (DIN: 00582395), Whole time Director of the Company retires from the Board by rotation, at the ensuing Annual General Meeting (AGM) of the Company and being eligible he has offered herself for re-appointment. The Board recommends the proposal of his re-appointment for consideration of the members at the ensuing AGM of the Company.
The Board of Directors of the Company at its meeting held on 9th August, 2023 has unanimously approved the re-appointment of Smt. Mamta Bhatia (DIN:03480368) and Smt. Manju Bhatia (DIN: 03480362) as Whole-Time Directors of the Company for a further period of 5 (Five) years with effect from 14th May, 2024 and 14th November, 2023 respectively, subject to the approval of the members at the ensuing AGM on the terms and conditions recommended by Nomination and Remuneration Committee. The Board recommends the proposal of re-appointment of the aforesaid Directors for consideration of the Members at the ensuing AGM of the Company. Appropriate resolutions seeking Member's approval for re-appointment of the Directors along-with the brief profile are placed in the Notice of the ensuing AGM of the Company.
KEY MANAGERIAL PERSONNEL
As per the provisions of Section 203 of the Companies Act, 2013 the following persons were designated as Key Managerial Personnel and there had been no change in KMP during the year under review:
|
Sr. No
|
Name
|
Designation
|
|
1)
|
Shri Kapil Bhatia
|
Managing Director
|
|
2)
|
Shri Dhruv Bhasin
|
Company Secretary
|
|
3)
|
Shri Neeraj Bhatia
|
Chief Financial Officer
|
DECLARATION FROM INDEPENDENT DIRECTORS
The Company had received the declarations u/s 149(7) of the Companies Act, 2013 from all Independent Directors that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations and they have also confirmed that they are not aware of any circumstance or situation which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.
In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs.
In the opinion of the Board, all the independent directors on the Board of the Company possess requisite qualifications and attributes of integrity, expertise and experience.
MEETINGS OF THE BOARD
During the financial year 2022-23, 4 (Four) meetings of the Board of Directors were held and, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between two consecutive meetings were within the period prescribed by the Companies Act, 2013 and the Securities Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulation”).
BOARD EVALUATION
The Board of Directors at its meeting held on 11th February, 2023 has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to provisions of the Act and SEBI Listing Regulations.
The performance of the Board and Individual Directors was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.
In the Board Meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the Board, its committees, and individual directors was also discussed. The Performance Evaluation of Independent Directors was done by the entire Board, excluding the director being evaluated. The Evaluation Process was conducted through a structured questionnaire prepared after taking into consideration the various aspects laid down under the Nomination and Remuneration Policy of the Company. The Board of Directors expressed satisfaction with the evaluation process.
In a separate meeting of Independent Directors held on 11th February, 2023 the performance of Non-Independent Directors, the Chairman of the Company and the Board as a whole was evaluated taking into account the views of Executive and Non-Executive Directors of the Company.
CORPORATE GOVERNANCE
The Company is committed to sound corporate governance practices as well as compliance with all applicable laws and regulations. The Board believes that combining the highest level of ethical principles with our unmatched brand, experience and expertise, will ensure that Frontier Springs Limited will continue to be the leading Company in the Railway Sector. The Corporate Governance Report, as stipulated under Regulations 17 to 27 and 46(2) and Paragraph C, D and E of Schedule V to the SEBI Listing Regulations, forms part of the Annual Report
The Report on Corporate Governance as stipulated under SEBI Listing Regulations is annexed to the Annual Report as Annexure-A and forms part of this report.
The Certificates from M/s P. Manghwani & Associates certifying that:
(1) the Company has complied with the requirements of Corporate Governance in terms of SEBI (LODR) Regulations, 2015;
(2) none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing directors of Companies by SEBI/MCA; are attached and forms part of this report
COMPANYS’ POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION
The current policy is to have an appropriate mix of Executive and Independent Directors to maintain the independence of the Board, and separate its functions of governance and management. The Company has duly constituted the Nomination and Remuneration Committee of the Board and the committee inter-alia periodically evaluates:
1. The need for change in composition and size of the Board;
2. Recommend/review remuneration of the Managing Director(s) and Whole-Time Director(s) based on their performance.
3. Recommend the policy for remuneration of Directors, KMPs & others senior level employees of the Company and review the same in accordance with the performance of the Company and industry trend.
The Nomination &Remuneration Policy of the Company is available on the website of the Company at the link https://frontiersprings. co.in/downloads/Nomination%20and%20Remuneration%20 Policy.pdf There has been no change in the policy during the year under review. We affirm that the remuneration paid to the Directors is as per the terms laid out in the Policy.
AUDITORS AND AUDITORS’ REPORT
(1) Statutory Auditors
M/s. Sanjeevani Raizada & Co., (FRN: 021960) Chartered Accountants, were appointed as Statutory Auditors of the Company for a period of 5 (Five) years at the 42nd Annual General Meeting of the Company held on 28th September, 2022 who shall hold office for a period of 5 (Five) from the conclusion of the 47th Annual General Meeting of the Company to be held in the year 2027 in accordance with the provisions of the Companies Act, 2013. The Auditors have confirmed that they not disqualified from continuing as Statutory Auditors of the Company.
The Audit Report from the Statutory Auditors forms part of this Annual Report. The said report does not contain any qualification, reservation or adverse remark.
(2) Cost Auditors
Pursuant to the Rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Companies Act, 2013 in respect of its products and accordingly such accounts and records are made and maintained M/s. R. M. Bansal & Co., Cost Accountants (Firm Registration. No.: 00022), have been appointed as Cost Auditors of the Company to conduct the audit of the Cost Accounts of the Company, for the financial year 2023-24. As required under the Companies Act, 2013, the resolutions seeking members' ratification for the remuneration payable to Cost Auditors forms part of the Notice convening the Annual General Meeting.
(3) Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s P. Manghwani & Associates, Practicing Company Secretary as Secretarial Auditor of the Company, to undertake Secretarial Audit for the financial year 2022-23. The Secretarial Audit Report for the year ended 31st March, 2023 is annexed herewith as Annexure-B to this report.
The Secretarial Audit Report for the financial year 2022-23 does not contain any qualification, reservation or adverse remark.
(4) Internal Auditors
Pursuant to provisions of Section 138 read with Rule 13 of Companies (Accounts) Rules 2014, your Company engaged the services of M/s J Chandra & Co., Chartered Accountants, Kanpur, to conduct the Internal Audit of the functions and activities of the Company for the Financial Year 2022-23. The Quarterly Internal Audit Report is placed before the Audit Committee of the Company for its review, at regular intervals.
ANNUAL RETURN
As per the requirement of Section 134(3)(a) read with Section 92(3) of the Companies Act, 2013, the Annual Return for the year 2022-23 has been placed on the Company's website at https:// frontiersprings.co.in/downloads/MGT-annual-report-2021-22.pdf
REPORTING OF FRAUDS
There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/or Board under Section 143(12) of the Act and Rules framed there under.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to Regulation 34(2) of the SEBI Listing Regulations), a Management Discussion & Analysis Report for the year under review is annexed on page 14 as a separate section forming part of this Annual Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as per Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo for the financial year 2022-23 is annexed as Annexure-C which forms part of this Report.
DIRECTORS’ RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013 the Board of Directors, to the best of their knowledge and ability in respect of the financial year ended on 31st March, 2023 confirm that:
1) in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;
2) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
3) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4) they have prepared the Annual Accounts of the Company on a going concern basis;
5) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
6) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY
In terms of Section 135 and Schedule VII of the Companies act 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended, the Board of Directors of your Company had constituted a Corporate Social Responsibility Committee which under take CSR activities, projects and programs as provided in the CSR Policy of the Company and identified under Schedule VII of the Companies Act, 2013. The Composition of the CSR Committee along-with the detailed report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended is annexed with this report as Annexure-D and forms an integral part of this Report.
Corporate Social Responsibility Committee of the Board has developed a CSR policy which can be accessed on https:// frontiersprings.co.in/downloads/Whistle%20Blower%20Policy.pdf
DEPOSITS
During the year under review, the Company has neither accepted nor renewed any deposits from public in terms of provisions of Section 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
In terms of Rule 2(1)(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014, the Company, during the year, had not accepted any unsecured loans from the Directors of the Company.
PARTICULARS OF EMPLOYEES
The disclosure required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure-E and forms an integral part of this report. The information showing names and other particulars of employees as per Rule 5(2) and 5(3) of the aforesaid rules forms part of this report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS BY THE COMPANY
Your Company has not given any loans or provided guarantees and/or any securities or provided security attracting provisions of Section 186 of the Companies Act, 2013 and Schedule V of the SEBI Listing Regulations. However, the details of investments made are provided in the Note No.2 of the Notes to the Financial Statements for the year ended 31st March, 2023.
LISTING
The Equity Shares of Company continued to be listed at BSE Limited and the Annual Listing Fee for the financial year 2022-23 has been paid up-to date within the stipulated time period.
INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY
The Company has in place internal financial control systems, commensurate with the size of the Company and the nature of its business, with reference to financial statements. The Audit Committee of the Board of Directors regularly reviews the adequacy and effectiveness of Internal Control Systems and suggests improvement to strengthen them.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, the Company has duly complied with the applicable provisions of the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India.
COMPOSITION OF AUDIT COMMITTEE
The composition of Audit Committee is in line with the provisions of Section 177 of the Act read with Regulation 18 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Audit Committee comprises of 5 (five) members and all members are Independent Directors of the Company. The Company Secretary is the Secretary of the Committee. All transactions with related parties are on arms' length basis. During the year, there are no instances where the Board had not accepted the recommendations of the Audit Committee.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act, 2013 and the SEBI Listing Regulations, the Company has in place a vigil mechanism for Directors and Employees, to report genuine concerns about any wrongful conduct with respect to the Company or its business or affairs. This policy covers malpractices, misuse or abuse of authority, fraud, violation of the Company's policies or rules, manipulations, negligence causing danger to public health and safety and other matters or activity on account of which the interest of the Company is affected or likely to be affected and formally reported by whistle blowers. If an investigation leads the Chairman of the Audit Committee shall recommend to the management of the Company to take such disciplinary or corrective action as he may deem fit.
The policy has been posted on the website of the Company and may be accessed at the link: https://frontiersprings.co.in/downloads/ Whistle%20Blower%20Policy.pdf
RISK MANAGEMENT
Risk is an inherent factor in business cycle and cannot be avoided. However, proper planning and checks lead to risk mitigation. The Audit Committee has also been delegated the responsibility for monitoring and reviewing risk management, assessment and minimization procedures, developing, implementing and monitoring the risk management plan and identifying, reviewing and mitigating all elements of risks which the Company may be exposed to. The Board also reviews the risk management, assessment and minimization procedures.
The Risk Management Policy has been uploaded on the Company's website and may be accessed at the link https://frontiersprings. co.in/downloads/Risk%20Mangement%20Policy.pdf
INSIDER TRADING
In compliance with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015 and to preserve the confidentiality and prevent misuse of unpublished price sensitive information, the Company has adopted a Code of Conduct to Regulate, Monitor and Report Trading by Insiders ('Insider Trading Code') and a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ('Code of Fair Disclosure')
The Insider Trading Code is intended to prevent misuse of unpublished price sensitive information by insiders and connected persons and ensures that the Directors and specified persons of the Company and their dependents shall not derive any benefit or assist others to derive any benefit from access to and possession of price sensitive information about the Company which is not in the public domain, that is to say, insider information.
The Code of Fair Disclosure ensures that the affairs of the Company are managed in a fair, transparent and ethical manner keeping in view the needs and interest of all the stakeholders.
The Code of Conduct for Insider trading is placed on the website of the Company and can be accessed through the link: https:// frontiersprings.co.in/downloads/Code_of_Conduct_for_ Prevention_of_Insider_Trading_FSL%20(2).pdf
POLICY ON SEXUAL HARASSMENT
Prevention and control of sexual harassment at workplace constitutes an important part of corporate culture while aligning with best practices and improving management processes. The Company has zero tolerance for sexual harassment at workplace and has adapted a policy on prevention, prohibition and redressal of sexual harassment at workplace with a mechanism of lodging complaints and has constituted an Internal Complaints Committee in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. No complaints were reported to the Board for sexual harassment of women at work place during the financial year 2022-23.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Company occurred from the end of the financial year 2022-23 till the date of this Report. Further, there was no change in the nature of business of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review, there were no significant and material orders passed by the Regulators, or Courts or Tribunals which would impact the going concern status of the Company and its future operations.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
During the financial year under review, the transactions entered/ continue to be entered into with related parties were in the ordinary course of business and on an arm's length basis. The omnibus approval from the Audit Committee was obtained on Annual basis for transactions of repetitive nature and which are subsequently approved by the Board of Directors of the Company. During the year, the Company had not entered into any contract, arrangement/transaction with related parties which
could be considered material in accordance with the Company's related party transaction policy and accordingly, the disclosure of Related party transaction as required under Section 134(3)(h) of the Companies Act, 2013 and Regulation 23 of the SEBI Listing Regulations, in Form AOC-2 does not form part of this report. However, the related party transactions entered by the Company are disclosed under Note No. 32 of the Notes to the financial statements for the year ended 31st March, 2023.
In line with the requirements of the Act and the Listing Regulations, the Company has formulated a Policy on Related Party Transactions and the same can be accessed on the Company's website at https://frontiersprings.co.in/downloads/Policy%20 on%20Related%20Party%20Transactions.pdf
GENERAL
• The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise.
• The Company has not issued any shares (including sweat equity shares) to employees of the Company or its subsidiary under any scheme.
• There is no change in the Share Capital Structure of the Company during the year under review.
• There was no revision in the financial statements.
• There has been no change in the nature of business of the Company.
• There is no proceeding initiated/pending against the Company under the Insolvency/Bankruptcy Code, 2016.
• There was no instance of time settlement with any bank or financial institution.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to place on record appreciation for the co-operation and support extended by various departments of the Central and State Governments(s), Bankers and Business associates.
Your Directors also place on record their appreciation for the contribution made by employees at all the levels, Officers, Staff and Workmen. The consistent growth of your Company was made possible by their hard work, cooperation and support.
Your Directors also take this opportunity to place on record their gratitude to the Members for their continued support and confidence with the Company.
|