Your Directors have pleasure in presenting the Fortieth Annual Report of the Companytogether with the Audited Statement of Accounts the for the year ended 31st March 2020.
The summarized financial results of the Company for the year ended 31stMarch 2020 as compared to the preceding year are as under:
| || ||(Rs. in Lacs) |
|Particulars ||2019-20 ||2018-19 |
|Income from Operations/ Turnover ||10077.73 ||8383.67 |
|Profit Before Interest Depreciation and Tax ||2060.52 ||1334.92 |
|Interest ||64.92 ||83.15 |
|Depreciation ||239.37 ||221.58 |
|Profit Before Tax ||1756.23 ||1030.19 |
|Income Tax : || || |
|Current year Tax ||309.90 ||227.07 |
|Deferred Tax ||42.27 ||(37.16) |
|Net Profit ||1404.06 ||840.28 |
|Other Comprehensive Income (after Tax) ||(1.32) ||11.16 |
|Total Comprehensive Income for the period ||1402.74 ||851.44 |
|Proposed Dividend ||43.32 ||39.38 |
|Dividend Distribution tax paid ||0.00 ||6.82 |
|Dividend Distribution Tax (F.Y 2018-19) ||1.37 ||0.00 |
|Corporate Social Responsibility Exps. ||2.10 ||0.00 |
|Balance available for appropriation ||1355.95 ||805.24 |
|Surplus B/F from Previous Year ||3380.32 ||2575.08 |
|Transfer to General Reserve ||0.00 ||0.00 |
|Surplus carried to Balance sheet ||4736.27 ||3380.32 |
REVIEW OF OPERATIONS
The financial statements for the year ended 31st March 2020 forming part of thisAnnual Report have been prepared in accordance with the Indian Accounting Standards (IndAS) as notified by the Ministry of Corporate Affairs.
The year under review had been a landmark in the history of company as it crossedturnover of Rs. 100 crores .The performance has been exceptional as revenue and profitsmounted new heights. The operations of the company during the financial year under reviewimproved with turnover of Rs.10077.73 Lacs as against Rs. 8383.66 Lacs in precedingyear. The net profit during the year was higher at Rs.1404.06 Lacs as against Rs. 840.28Lacs in the preceding year.The improvement in the turnover and profitability had beenmainly on account of growth in demand improvement in the operational efficiencies andcost cutting measures.
The performance of the company during the current year continues to be encouraging andbarring unforeseen circumstances your Directors expect your company to achieve betterresults during the current year as well.
As on 31.03.2020 Your Company has total share Capital of Rs. 39385110 divided into3938511 Equity shares of Rs. 10/- each.
Your Directors are pleased to recommend for approval of the members a dividend ofRs.1.1/- per share (i.e@11%) on Equity Shares of Rs. 10/- each of the Company.
Your company plans to buy to a Six Ton Hammer in this financial year as a result ofwhich we will be able to forge new products which was not possible due to capacityconstraints. The installation of this hammer will increase the turnover and profitabilityof the company in the years to come. We have also signed an agreement with CrescendoWorldwide. Crescendo Worldwide is an International Trade & FDI Generating Organizationbased in India which has presence in 22+ countries and aims at Supporting SME & Largecompanies for growing business globally.The orders for manufacturing of Springs/Forgingfor Linke-Hofmann Busch (LHB) coaches and Electric Locomotives Springs such as WAP- 7 andWAG-9 which were being imported till date by Indian Railways continues manifold. Thedemand for products developed by the Forging Unit namely Anti Roll Bar Anti Roll BarBracket and Roll Link used in the manufacturing of LHB Coaches continues to rise. Theorders in the pipeline are good. We have been approved by Bombardier Inc for supply ofCoil Springs for Metro Coaches. Bombardier Inc is engaged in the manufacturing of metrocoaches and has its presence worldwide.
SUBSIDIARY COMPANY / ASSOCIATE / JOINT VENTURE COMPANY
The Company has no Subsidiary Associate and Joint Venture Companies and as such therequirement of furnishing the information relating to the financial position ofSubsidiary Associate and Joint Venture Companies is not applicable.
Pursuant to the provisions of Section 152 of the Companies Act 2013 and the Articlesof Association of the Company Shri Neeraj Bhatia (DIN: 00582395) Director of the Companyretires from the Board by rotation at the ensuing Annual General Meeting of the Companyand being eligible he has offered himself for re-appointment.
The Board had re-appointed Shri K.L Bhatia Chairman Cum Managing Director Shri KapilBhatia Managing Director and Shri Neeraj Bhatia as Whole-time Director of the Company fora further period of five years w.e.f. April 1 2020; January 5 2020 and April 1 2020respectively and the matter is placed for approval of the shareholders of the Company atthe ensuing Annual General Meeting.
Appropriate Resolutions(s) seeking your approval for appointment/re-appointment of thedirectors are placed in the Notice of ensuing Annual General Meeting.
During the year under review Shri R.N Trivedi Independent Director of the Companyexpired on 20.08.2019 and Shri K.P Somkuwar was appointed as an Independent Director witheffect from 08.02.2020
Shri K.P Somkuwar has submitted to the Board a declaration that he meets the criteriaof Independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(1)(b) of the Listing Regulations.
KEY MANAGERIAL PERSONNEL
As per the provisions of Section 203 of the Companies Act 2013 the following personswere designated as Key Managerial Personnel and there had been no change in KMP during theyear under review :
|S.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 fromall Independent Directors that they meet the criteria of independence as laid down underSection 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the ListingRegulations.
MEETINGS OF THE BOARD
Four meetings of the Board of Directors were held during the year the details of whichare given in the Corporate Governance Report that forms part of this Annual
Report. The intervening gap between any two meetings was within the period prescribedby the Companies Act 2013 and the SEBI (Listing Obligations & DisclosureRequirements) 2015.
The Board of Directors at its meeting held on 8th February 2020 has carried out anannual evaluation of its own performance board committees and individual directorspursuant to provisions of the Act. Performance Evaluation of Independent Directors wasdone by the entire board excluding the director being evaluated. The Evaluation Processwas conducted through a structured questionnaire prepared after taking into considerationthe 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 8th February 2020 performanceof non-independent directors the Chairman of the Company and the Board as a whole wasevaluated taking into account the views of Executive and Non-Executive Directors.
The new Companies Act 2013 have strengthened the governance regime in the country.Corporate Governance is all about maintaining a valuable relationship and trust with allstakeholders. We consider stakeholders as partners in our success and we remain committedto maximizing stakeholders' value be it shareholders employees suppliers customersinvestors communities or policy makers. The business conduct can be ethical only when itrests on the six core values of Customer Value Ownership Mindset Respect IntegrityOne Team and Excellence. In line with the requirements of these core values and new lawthe Company through its Board and Committees endeavors to strike and deliver the highestgoverning standards for the benefits of its stakeholders.
As required under Schedule V to the Listing Regulations a separate section onCorporate Governance together with certificate from M/s P Manghwani & AssociatesPracticing Company Secretaries confirming compliance of the conditions of CorporateGovernance forms an integral part of this report and is annexed as Annex- ure A'.
The outbreak of Covid 19 and the full closure of your company's operations from the22nd of March 2020 affected the year end performance. However your company resumed itsoperations partially on the 24th of April 2020 gradually ramping up over the last threemonths and are glad to report that it is now fully operational.
COMPANYS' POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The current policy is to have an appropriate mix of Executive and Independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. The Company has duly constituted the Nomination and Remuneration Committee ofthe Board and the committee interalia 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 levelemployees of the Company and review the same in accordance with the performance of theCompany and industry trend.
The Nomination &Remuneration Policy of the Company is available on the website ofthe Company at the link http://frontiersprings.co.in/downloads/
Nomination%20and%20%Remuneration%20Policy.pdf There has been no change in the policyduring the year under review. We affirm that the remuneration paid to the Directors is asper the terms laid out in the Policy.
AUDITORS AND AUDITORS' REPORT
(1) statutory auditors
M/s. Sanjeevani Raizada & Co. (FRN:021960) Chartered Accountants were appointedas Statutory Auditors of the Company at the 37th Annual General Meeting of the Companyheld on 28.09.2017 who shall hold office till conclusion of the 42nd Annual GeneralMeeting in accordance with the provisions of Companies Act 2013.
Their appointment was subject to ratification by the members at every Annual GeneralMeeting to be held there after during their tenure of office. However pursuant to theamendments made to Section 139 of the Companies Act 2013 by the Companies (Amendment) Act2017 the requirement of seeking ratification of the Members for the appointment ofStatutory Auditors has been withdrawn. The Auditors have confirmed that they are notdisqualified from continuing as Statutory Auditors of the Company.
(2) COST AUDITORS
Pursuant to the Rules made by the Central Government of India the Company is requiredto maintain cost records as specified under Section 148 (1) of the Companies Act 2013 inrespect of its products and accordingly such accounts and records are made and maintainedM/s. R.M. Bansal & Co. Cost Accountants (Firm Regn. No.:000022) have been appointedas Cost Auditors of the Company to conduct the audit of the Cost Accounts of the Companyfor the financial year 2020-21. As required under the Companies Act 2013 the resolutionsseeking Members' ratification for the remuneration payable to Cost Auditors forms part ofthe 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 hadappointed M/s P. Manghwani & Associates Practicing Company Secretary as SecretarialAuditor of the Company for the year 2019-20. The Secretarial Audit Report for the yearended 31st March 2020 is annexed herewith as Annexure-B' to this report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
(4) INTERNAL AUDITORS
Pursuant to provisions of Section 138 read with Rule 13 of Companies (Accounts) Rules2014 your Company engaged the services of M/s J Chandra & Associates CharteredAccountants Kanpur to conduct the Internal Audit of the functions and activities of theCompany for the Financial Year 2019-20. The Internal Audit Report is placed before theAudit Committee of the Company at regular intervals.
EXTRACT OF ANNUAL RETURN
The extracts of the Annual Return in Form MGT-9 as required under Section 92(3) of theCompanies Act 2013 read with Rule 12(1) of the Companies (Management &Administration)Rules 2014 is included in this report as Annexure-C' and forms an integral part ofthis Report.
REPORTING OF FRAUDS
There was no instance of fraud during the year under review which required theStatutory 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 Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) aManagement Discussion & Analysis Report is annexed and forms part of this AnnualReport.
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 technologyabsorption and foreign exchange earnings and outgo for the financial year 2019-20 isannexed as Annexure D' 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 thebest of their knowledge and ability in respect of the financial year ended on 31st March2020 confirm that:
1) in the preparation of the Annual Accounts the applicable Accounting Standards hadbeen followed along with proper explanation relating to material departures;
2) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;
3) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 andthat such internal financial controls are adequate and were operating effectively; and
6) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY
Your Company is committed to focus on inclusive growth and improving lives bycontributing towards communities around which it operates. The CSR Committee of the Boardof Directors identifies the areas which require actions to be taken by the Board ofDirectors. During the year under review the Committee was reconstituted and thecomposition is disclosed in the detailed report which forms part of this report.
Annual report on CSR as required under rule 8(1) of the Companies (Corporate SocialResponsibility) Rules 2014 is annexed with this report as Annexure E'.
The CSR Policy has been uploaded on the Company's website and may be accessed athttp:// frontiersprings.co.in/downloads/ FSL_Corporate%20Social%20Responsibility%20Policy-.pdf
During the year under review the Company has neither accepted nor renewed any depositsfrom public in terms of provisions of Section 73 and 76 of the Companies Act 2013 readwith the Companies (Acceptance of Deposits) Rules 2014.
The Company did not accept any unsecured loans from Directors during the year.
PARTICULARS OF EMPLOYEES
None of the employees of the Company was in receipt of renuneration in excess of thelimits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014)
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS BY THE COMPANY
Your Company has not given any loans and guarantees or provided security attractingprovisions of Section 186 of the Companies Act 2013.However the details of investmentsmade are provided in the Note No.2 of the Notes to the Financial Statements for the yearended 31st March 2020.
The Equity Shares of Company continued to be listed at BSE Limited and the AnnualListing has been paid up-to date.
INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY
The Company has in place internal financial control systems commensurate with the sizeof the Company and the nature of its business with reference to financial statements. TheAudit Committee of the Board of Directors regularly reviews the adequacy and effectivenessof Internal Control Systems and suggests improvement to strengthen them.
compliance with secreterial standards
During the year under review the Company has duly complied with the applicableprovisions of the Secretarial Standards on Meetings of the Board of Directors (SS-1) andGeneral Meetings (SS-2) issued by The Institute of Company Secretaries of India.
composition of audit committee vigil mechanism & risk management
The composition of Audit Committee is in line with the provisions of Section 177 of theAct read with Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements)2015. The Audit Committee comprises of five members and all members are IndependentDirectors. The Company Secretary is the Secretary of the Committee. All transactions withrelated parties are on arms' length basis. During the year there are no instances wherethe Board had not accepted the recommendations of the Audit Committee. The Company has inplace a vigil mechanism for Directors and Employees to report genuine concerns about anywrongful conduct with respect to the Company or its business or affairs. This policycovers malpractices misuse or abuse of authority fraud violation of the Company'spolicies or rules manipulations negligence causing danger to public health and safetyand other matters or activity on account of which the interest of the company is affectedor likely to be affected and formally reported by whistle blowers. If an investigationleads the Chairman of the Audit Committee shall recommend to the management of the Companyto take such disciplinary or corrective action as he may deem fit.
Risk is an inherent factor in business cycle and cannot be avoided. However properplanning and checks lead to risk mitigation. The Audit Committee has also been delegatedthe responsibility for monitoring and reviewing risk management assessment andminimization procedures developing implementing and monitoring the risk management planand identifying reviewing and mitigating all elements of risks which the Company may beexposed to. The Board also reviews the risk management assessment and minimizationprocedures. Further in accordance with SEBI Regulations a Risk Management Committee hasalso been formed which also oversees the risk management of the company.
The Risk Management Policy has been uploaded on the Company's website and may beaccessed at the link http://frontiersprings.co.in/downloads/Risk%20Mangement%20Policy.pdf.
In compliance with the provisions of the SEBI (Prohibition of Insider Trading)Regulations 2015 and to preserve the confidentiality and prevent misuse of unpublishedprice sensitive information the Company has adopted a Code of Conduct to RegulateMonitor and Report Trading by Insiders (Insider Trading Code') and a Code ofPractices 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 sensitiveinformation by insiders and connected persons and ensures that the Directors and specifiedpersons of the Company and their dependents shall not derive any benefit or assist othersto derive any benefit from access to and possession of price sensitive information aboutthe 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 afair transparent and ethical manner keeping in view the needs and interest of all thestakeholders.
POLICY ON SEXUAL HARRASMENT
Prevention and control of sexual harassment at workplace constitutes an important partof corporate culture while aligning with best practices and improving managementprocesses. The company has zero tolerance for sexual harassment at workplace and hasadapted a policy on prevention prohibition and redressalof sexual harassment at workplacewith a mechanism of lodging complaints and has constituted an Internal ComplaintsCommittee 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. Nocomplaints were reported to the Board for sexual harassment of women at work place duringthe financial year 2019-20.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred from the end of the financial year 2019-20 till the date of this Report. Furtherthere 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 bythe Regulators or Courts or Tribunals which would impact the going concern status of theCompany and its future operations.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
During the financial year under review the transactions entered into with relatedparties were in the ordinary course of business and on an arm's length basis and they wereplaced before the Audit Committee as also to the Board for approval Omnibus approval fromthe Audit Committee was obtained on Annual basis for transactions of repetitive nature.During the year the
Company had not entered into any contract arrange- ment/transaction with relatedparties which could be considered material in accordance with the Company's related partytransaction policy.
Accordingly the disclosure of Related party transaction as required under Section134(3)(h) of the Companies Act 2013 in form AOC-2 is not applicable. The related partytransactions are disclosed under Note No.33 of the Notes to the financial statements forthe year ended 31st March 2020.
Your Directors take this opportunity to place on record appreciation for theco-operation and support extended by various departments of the Central and StateGovernments(s) Bankers and Business associates.
Your Directors also place on record their appreciation for the contribution made byemployees at all the levels Officers Staff and Workmen. The consistent growth of yourCompany was made possible by their hard work cooperation and support. Your Directors alsotake this opportunity to place on record their gratitude to the Members for theircontinued support and confidence with the company.
| ||For and on behalf of the Board |
| ||KUNDAN LAL BHATIA |
| ||Chairman cum Managing |
|Place : Kanpur ||Director |
|Date : 13.08.2020 ||(DIN No. 00581799) |