Mar 31, 2023
COMPANY OVERVIEW
FRONTIER SPRINGS LIMITED is a Listed Public Limited Company having its Registered office at KM-25/4 Kalpi Road Rania Kanpur-Dehat and is mainly engaged in the production of L.H.B. Springs and Hot Coiled Compression Springs and Forging items for Wagon, Locomotives and Carriage and is regularly supplying to Railways, Bogie Manufactures, Chittaranjan Locomotive Works, Diesel Locomotive Works, Integral Coach Factory, Rail Coach Factory. In addition to the supply to the Railways, the Unit is also supplying the Springs to Heavy Engineering Industries & original earth movers Equipment manufacturers i.e. BEML, TELCON, Bharat Heavy Electricals Ltd.
Since last about 40 years FRONTIER SPRINGS LIMITED is registered with Research Designs and Standards Organisation (RDSO- Ministry of Railways) for supply of springs to Indian Railways and the unit has developed large number of Springs as per the latest specification of the RDSO.
The Company has set up three plants to meet the demand requirements of the above stated Industries at 1. KM-25/4, Rania Kanpur Dehat, 2. 91/2, Kunja, Paonta Sahib, Sirmaor Himanchal Pradesh 3. Forging Unit at KM-25/4, Rania Kanpur Dehat.
These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 2013 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.
Tangible Assets are stated at cost net of recoverable taxes and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.
As informed by the Management, the Company has a lease hold land allotted by U.P.S.I.D.C. situated at E-14, Panki Industrial Area, Site no.1, Kanpur -208022.
As informed by the Management, the Company has no Intangible Assets.
Depreciation on Fixed Assets is provided on the straightline method over the useful lives of assets estimated by the Management. Depreciation for assets purchased/sold during a period is proportionately charged. Individual low cost assets (acquired for ? 5,000/- or less) are depreciated as per the rates prescribed in Schedule II of the Companies Act, 2013, over a period of one year from the date of acquisition.
As informed by the Management, there is no indication of impairment in assets. (as it occurs where carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the assets and its eventual disposal).
Foreign-currency denominated monetary assets and liabilities are translated at exchange rates in effect at the date of the transaction. The gains or losses resulting from such transactions are included in the Statement of Profit and Loss. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
Revenue, expense and cash-flow items denominated in foreign currencies are translated using the exchange rate in effect on the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.
Trade investments are the investments made to enhance the Company''s business interests. Investments are either classified as current or long-term based on Management''s intention at the time of purchase and there is no current investment. Long term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.
(i) Value of Raw Materials, Stores & Spares and packing material are ascertained at cost on FIFO basis, Work in Process is valued at conversion cost exclusive of GST/Excise duty, Scrap are valued at Net Realisable value and Finished goods are valued at Net Realisable value.
(ii) Valuation of Closing Stock of Finished Goods & Scrap:
Closing stock of Finished Goods & Scrap amounting to ? 1,43,11,857.34 (Pre.Yr. ? 1,13,23,501.96 of closing stock of finished goods & scrap).
Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, sales tax, service tax, excise duty, GST and sales during trial run period, adjusted for discounts (net), Value Added Tax (VAT) & GST and gain/loss on corresponding hedge contracts. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
Excise duty/Service tax/Sales tax and GST are accounted on the basis of both, payments made in respect of goods cleared/services provides as rental income received and job-work received.
Gratuity
In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, a defined benefit retirement plans (''the Gratuity Plan'') covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment with the Company.
Liabilities with regard to the Gratuity Plan are determined by actuarial valuation at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Frontier Springs Limited Employees'' Gratuity Fund Trust (the Trust). Trustees administer contributions made to the Trust and contributions are invested in specific investments as permitted by the law. The Company recognizes the premium payable on account of said policy is charged to profit & loss account, respectively in accordance with Accounting Standard (AS) 15, ''Employee Benefits''.
Provident fund
Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee''s salary.
The Company''s contribution to Provident Fund and Family Pension Fund is charged to Profit & Loss account.
Compensation if any paid to employees who have opted for retirement from the Company is charged to the Profit and Loss account in the year of exercise of option.
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit and Loss account.
In respect of derivative contracts, premium paid, gains/losses on settlement and losses on restatement, if any are recognized in Balance Sheet, except in case where they relate to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets.
The Company has adopted Full Cost Method of accounting for consumption of Furnace oil, Diesel and Gas as well as the expenditure is accounted on the basis of available information.
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from âtiming differenceâ between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.
Company has not issued any Bonds/Debentures, since its incorporation.
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.
The Company is contingently liable towards Bank Guarantee provided to the tune of ? 9.84 Lacs in favour of Indian Railways and H.P.S.E.B. and contingently liable towards Letter of Credit provided to the tune of ? 1183.27 Lacs in favour of M/s Sun Flag Iron & Steel Co. Ltd., M/s Deepa Sales & M/s Contitech India Pvt. Ltd. Margin money ? 155.19 Lacs deposit with S.B.I. against Letter of Credit & Bank Guarantee (Prev. Yr. Bank guarantee of ? 73.33 Lacs in favour of Indian Railways and H.P.S.E.B. and Letter of credit of ? 676.52 Lacs in favour of M/s Sun Flag Iron & Steel Co. Ltd., M/s Deepa Sales and Margin money ? 148.04 Lacs deposit with S.B.I.).
Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic Earnings Per Share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
Mar 31, 2018
A Basis of Preparation of Financial Statements
These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 2013 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
B. Use of Estimates
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised.
C. Property, Plant and Equipment
Tangible Assets are stated at cost net of recoverable taxes and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.
D. Leased Assets
As informed by the Management, the Company has a lease hold land allotted by U.P.S.I.D.C. situated at E-14, Panki Industrial Area, Site no. I, Kanpur.
E. Intangible Assets
As informed by the Management, the Company has no Intangible Assets.
F. Depreciation and Amortisation
Depreciation on fixed assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Depreciation for assets purchased / sold during a period is proportionately charged. Individual low cost assets (acquired for '' 5,000/- or less) are depreciated as per the rates prescribed in Schedule II of the Companies Act, 2013, over a period of one year from the date of acquisition.
G. Impairment of Assets
As informed by the Management, there is no indication of impairment in assets. (as it occurs where carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the assets and its eventual disposal).
H. Foreign Currency Transactions
Foreign-currency denominated monetary assets and liabilities are translated at exchange rates in effect at the date of the transaction. The gains or losses resulting from such transactions are included in the Statement of Profit and Loss. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
Revenue, expense and cash-flow items denominated in foreign currencies are translated using the exchange rate in effect on the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.
I. Investments
Trade investments are the investments made to enhance the Companyâs business interests. Investments are either classified as current or long-term based on Management''s intention at the time of purchase and there is no current investment. Long term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.
J. Inventories
(i) Value of Raw Materials, Stores & Spares and packing material are ascertained at cost on FIFO basis, Work in Process is valued at conversion cost exclusive of Excise duty, Scrap are valued at Net Realisable value and Finished goods are valued at Net Realisable value.
(ii) Valuation of Closing Stock of Finished Goods & Scrap:
Closing stock of Finished Goods & Scrap amounting to Rs.1,30,99,256.83 (Pre.Yr.Rs.2,05,57,782.16 includes the amount of Excise duty amounting to Rs.11,38,453.00 and provided the excise duty on closing stock of finished goods & scrap to Profit & Loss account).
K. Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, sales tax, service tax, excise duty and sales during trial run period, adjusted for discounts (net), Value Added Tax (VAT) and gain / loss on corresponding hedge contracts. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
L. Excise Duty / Service Tax and Sales Tax / Value Added Tax
Excise duty / Service tax / Sales tax and GST are accounted on the basis of both, payments made in respect of goods cleared / services provides as rental income received. Sales tax / Value added tax and GST paid is charged to Profit and Loss account.
M. Retirement benefits to employees Gratuity
In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, a defined benefit retirement plans (âthe Gratuity Plan'') covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment with the Company.
Liabilities with regard to the Gratuity Plan are determined by actuarial valuation at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Frontier Springs Limited Employees'' Gratuity Fund Trust (the Trust). Trustees administer contributions made to the Trust and contributions are invested in specific investments as permitted by the law. The Company recognizes the premium payable on account of said policy is charged to profit & loss account, respectively in accordance with Accounting Standard (AS) 15, âEmployee Benefits''.
Provident fund
Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee''s salary.
The Company''s contribution to Provident Fund and Family Pension Fund is charged to Profit & Loss account.
N. Employee Separation Costs
Compensation if any paid to employees who have opt for retirement from the Company is charged to the Profit and Loss account in the year of exercise of option.
O. Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit and Loss account.
P. Financial Derivatives and Commodity Hedging Transactions
In respect of derivative contracts, premium paid, gains / losses on settlement and losses on restatement, if any are recognized in Balance Sheet, except in case where they relate to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets.
Q. Accounting for Oil and Gas Activity
The Company has adopted Full Cost Method of accounting for consumption of Furnace oil, Diesel and Gas as well as the expenditure is accounted on the basis of available information.
R. Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from âtiming difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.
S. Premium on Redemption of Bonds / Debentures
Company has not issued any Bonds / Debentures, since its incorporation.
T. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.
The Company is contingently liable towards Bank Guarantee provided to the tune of Rs.218.27 lacs in favour of Indian Railways and H.PS.E.B. and contingently liable towards Letter of credit provided to the tune of Rs.440.83 lacs in favour of M/s Sun Flag Iron & Steel Co. Ltd., M/s Deepa Sales. (Prev. Yr. Bank guarantee of Rs. 218.27 lacs in favour of Indian Railways and H.PS.E.B. and Letter of credit of Rs.440.83 lacs in favour of M/s SunFlag Iron & Steel Co. Ltd., M/s Deepa Sales & M/s Asian Colour Coated Ispat Ltd and Central UP GAS Limited).
U. Earnings per share
Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic Earnings Per Share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
V. Cash and cash Equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.
W. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
Mar 31, 2015
Company Overview
FRONTIER SPRINGS LTD. is a Listed Public Limited Company having its
Registered Office at E-14, Panki Industrial Area Site-1, Kanpur and is
mainly engaged in the production of L.B.Springs and Hot Coiled
Compression Spring and forging items for Wagon, Locomotives and
Carriage and are regularly supplying to Railways, Bogie Manufactures,
Chittaranjan Locomotive Works, Diesel Locomotive Works, Integrate Coach
Factory, Rail Coach Factory. In addition to the supply to the Railways,
the Unit is also supplying the Springs to Heavy Engineering Industries
& original Earth Movers Equipment manufacturers i.e. BEML, TELCON,
Bharat Heavy Electricals Ltd.
Since last about 32 years FRONTIER SPRINGS LTD. is registered with RDSO
(Ministry of Railways) for supply of springs to Indian Railways and the
unit has developed large number of springs as per the latest
specification of the RDSO.
The Company has set up three plants to meet the demand requirements of
the above stated Industries at 1. Km 25/4, Rania Kanpur Dehat, 2. 91/2,
Kunja, Paonta Sahib, Sirmaor Himanchal Pradesh, 3. Forging Unit at
E-14, Site No.1, Panki Industrial Area, Panki, Kanpur.
A. Basis of Preparation of Financial Statements
These financial statements are prepared in accordance with Indian
Generally Accepted Accounting Principles (GAAP) under the historical
cost convention on the accrual basis except for certain financial
instruments which are measured at fair values. GAAP comprises mandatory
accounting standards as prescribed by the Companies (Accounting
Standards) Rules, 2006, the provisions of the Companies Act, 2013 and
guidelines issued by the Securities and Exchange Board of India (SEBI).
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use.
B. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known/ materialised.
C. Own Fixed Assets
Fixed Assets are stated at cost net of recoverable taxes and includes
amounts added on revaluation, less accumulated depreciation and
impairment loss, if any. All costs, including financing costs till
commencement of commercial production, net charges on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the fixed assets are capitalized.
D. Leased Assets
As informed by the Management, the Company has a lease hold land
allotted by U.PS.I.D.C. situated at E-14, Panki Industrial Area, Site
no. I, Kanpur
E. Intangible Assets
As informed by the Management, the Company has no Intangible Assets.
F. Depreciation and Amortisation
Depreciation on fixed assets is provided on the straight-line method
over the useful lives of assets estimated by the Management.
Depreciation for assets purchased / sold during a period is
proportionately charged. Individual low cost assets (acquired for
'5,000/- or less) are depreciated as per the rates prescribed in
Schedule II of the Companies Act, 2013, over a period of one year from
the date of acquisition.
G. Impairment of Assets
As informed by the Management, there is no indication of impairment in
assets. (as it occurs where carrying value exceeds the present value of
future cash flows expected to arise from the continuing use of the
assets and its eventual disposal).
H. Foreign Currency Transactions
Foreign-currency denominated monetary assets and liabilities are
translated at exchange rates in effect at the date of the transaction.
The gains or losses resulting from such transactions are included in
the Statement of Profit and Loss. Non-monetary assets and non-monetary
liabilities denominated in a foreign currency and measured at fair
value are translated at the exchange rate prevalent at the date when
the fair value was determined. Non-monetary assets and non-monetary
liabilities denominated in a foreign currency and measured at
historical cost are translated at the exchange rate prevalent at the
date of transaction.
Revenue, expense and cash-flow items denominated in foreign currencies
are translated using the exchange rate in effect on the date of the
transaction. Transaction gains or losses realized upon settlement of
foreign currency transactions are included in determining net profit
for the period in which the transaction is settled.
I. Investments
Trade investments are the investments made to enhance the Company's
business interests. Investments are either classified as current or
long-term based on Management's intention at the time of purchase and
there is no current investment. Long term investments are carried at
cost less provisions recorded to recognize any decline, other than
temporary, in the carrying value of each investment.
J. Inventories
(i) Value of Raw Materials, Stores & Spares and packing material are
ascertained at cost on FIFO basis, Work in Process is valued at
conversion cost exclusive of Excise duty, Scrap are valued at Net
Realisable value and Finished goods are valued at Net Realisable value.
(ii) Valuation of Closing Stock of Finished Goods & Scrap:
Closing stock of Finished Goods & Scrap amounting to Rs. 2,08,21,247.16
(Pre.Yr.Rs.1,24,05,485.85) includes the amount of Excise duty amounting
to Rs.13,84,464.00 (Pre.Yr. amount of excise duty, education cess and
higher secondary education cess Rs. 10,38,716.00). The Company has
provided the excise duty on closing stock of finished goods & scrap to
Profit & Loss account for the current year.
K. Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, sales tax, service tax, excise duty and sales
during trial run period, adjusted for discounts (net), Value Added Tax
(VAT) and gain / loss on corresponding hedge contracts. Dividend
income is recognized when right to receive is established. Interest
income is recognized on time proportion basis taking into account the
amount outstanding and rate applicable.
L. Excise Duty / Service Tax and Sales Tax / Value Added Tax
Excise duty / Service tax / Sales tax are accounted on the basis of
both, payments made in respect of goods cleared / services provides as
rental income received. Sales tax / Value added tax paid is charged to
Profit and Loss account.
M. Retirement benefits to employees Gratuity
In accordance with the Payment of Gratuity Act, 1972, the Company
provides for gratuity, a defined benefit retirement plans ('the
Gratuity Plan') covering eligible employees. The Gratuity Plan provides
a lump-sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employee's salary and the tenure of employment with the
Company.
Liabilities with regard to the Gratuity Plan are determined by actuarial
valuation at each Balance Sheet date using the projected unit credit
method. The Company fully contributes all ascertained liabilities to the
Frontier Springs Limited Employees' Gratuity Fund Trust (the Trust).
Trustees administer contributions made to the Trust and contributions
are invested in specific investments as permitted by the law. The
Company recognizes the premium payable on account of said policy is
charged to profit & loss account, respectively in accordance with
Accounting Standard (AS) 15, 'Employee Benefits'.
Provident fund
Eligible employees receive benefits from a provident fund, which is a
defined benefit plan. Both the employee and the Company make monthly
contributions to the provident fund plan equal to a specified
percentage of the covered employee's salary.
The Company's contribution to Provident Fund and Family Pension Fund is
charged to Profit & Loss account.
N. Employee Separation Costs
Compensation if any paid to employees who have opt for retirement from
the Company is charged to the Profit and Loss account in the year of
exercise of option.
O. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to Profit and Loss account.
P. Financial Derivatives and Commodity Hedging Transactions
In respect of derivative contracts, premium paid, gains / losses on
settlement and losses on restatement, if any are recognised in Balance
Sheet, except in case where they relate to the acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such assets.
Q. Accounting for Oil and Gas Activity
The Company has adopted Full Cost Method of accounting for consumption
of Furnace oil, Diesel and Gas as well as the expenditure is accounted
on the basis of available information.
R. Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income-tax Act, 1961.
Deferred tax resulting from "timing difference" between taxable and
accounting income is accounted for using the tax rates and laws that
are enacted or substantively enacted as on the balance sheet date.
Deferred tax asset is recognised and carried forward only to the extent
that there is a virtual certainty that the asset will be realised in
future.
S. Premium on Redemption of Bonds / Debentures
Company has not issued any Bonds / Debentures, since its incorporation.
T. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
The Company is contingently liable towards Bank Guarantee provided to
the tune of Rs.225.96 lacs in favour of Indian Railways and H.P.S.E.B.
and contingently liable towards Letter of credit provided to the tune
of Rs.436.76 lacs in favour of M/s SunFlag Iron & Steel Co. Ltd., M/s
Deepa Sales & M/s Asian Colour Coated Ispat Ltd. and Central UP GAS
Limited (Prev. Yr. Bank guarantee of Rs. 192.83 lacs in favour of
Indian Railways and H.P.S.E.B. and Letter of credit of Rs.232.37 lacs
in favour of M/s SunFlag Iron & Steel Co. Ltd. and Central UP GAS
Limited,).
U. Earnings per share
Basic earnings per share are computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by dividing the
profit after tax by the weighted average number of equity shares
considered for deriving basic Earnings Per Share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted
potential equity shares are adjusted for the proceeds receivable had the
shares been actually issued at fair value which is the average market
value of the outstanding shares. Dilutive potential equity shares are
deemed converted as of the beginning of the period, unless issued at a
later date. Dilutive potential equity shares are determined
independently for each period presented.
The number of shares and potentially dilutive equity shares are
adjusted retrospectively for all periods presented for any share splits
and bonus shares issues including for changes effected prior to the
approval of the financial statements by the Board of Directors.
V. Cash and cash Equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The Company considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
cash equivalents.
W. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.
Mar 31, 2014
A. Basis of Preparation of Financial Statements
These financial statements are prepared in accordance with Indian
Generally Accepted Accounting Prin- ciples (GAAP) under the historical
cost convention on the accrual basis except for certain financial
instruments which are measured at fair values. GAAP comprises mandatory
accounting standards as prescribed by the Companies (Accounting
Standards) Rules, 2006, the provisions of the Companies Act, 1956 and
guidelines issued by the Securities and Exchange Board of India (SEBI).
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use.
B. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and esti- mates are recognised in the period
in which the results are known/ materialised.
C. Own Fixed Assets
Fixed Assets are stated at cost net of recoverable taxes and includes
amounts added on revaluation, less accumulated depreciation and
impairment loss, if any. All costs, including financing costs till com-
mencement of commercial production, net charges on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the fixed assets are capitalized.
D. Leased Assets
As informed by the Management, the Company has a lease hold land
allotted by U.PS.I.D.C. situated at E-14, Panki Industrial Area, Site
no. I, Kanpur
E. Intangible Assets
As informed by the Management, the Company has no intangible assets.
F. Depreciation and Amortisation
Depreciation on fixed assets is provided on the straight-line method
over the useful lives of assets estimated by the Management.
Depreciation for assets purchased / sold during a period is proportion-
ately charged. Individual low cost assets (acquired for Rs. 5,000/- or
less) are depreciated as per the rates
prescribed in Schedule XIV of the Companies Act, 1956, over a period of
one year from the date of acquisition.
G. Impairment of Assets
As informed by the Management, there is no indication of impairment in
assets. (as it occurs where carrying value exceeds the present value of
future cash flows expected to arise from the continuing use of the
assets and its eventual disposal).
H. Foreign Currency Transactions
Foreign-currency denominated monetary assets and liabilities are
translated at exchange rates in effect at the date of the transaction.
The gains or losses resulting from such transactions are included in
the Statement of profit and loss. Non-monetary assets and non-monetary
liabilities denominated in a foreign currency and measured at fair
value are translated at the exchange rate prevalent at the date when
the fair value was determined. Non-monetary assets and non-monetary
liabilities denominated in a foreign currency and measured at
historical cost are translated at the exchange rate prevalent at the
date of transaction.
Revenue, expense and cash-flow items denominated in foreign currencies
are translated using the ex- change rate in effect on the date of the
transaction. Transaction gains or losses realized upon settlement of
foreign currency transactions are included in determining net profit
for the period in which the transac- tion is settled.
I. Investments
Trade investments are the investments made to enhance the Company''s
business interests. Invest- ments are either classified as current or
long-term based on Management''s intention at the time of purchase and
there is no current investment. Long term investments are carried at
cost less provisions recorded to recognize any decline, other than
temporary, in the carrying value of each investment.
J. Inventories
(i) Value of Raw Materials, Stores & Spares and packing material are
ascertained at cost on FIFO basis, Work in Process is valued at
conversion cost exclusive of excise duty, Scrap are valued at net
realisable value and Finished goods are valued at net realisable value.
(ii) Valuation of Closing Stock of Finished Goods & Scrap:
Closing stock of Finished goods & Scrap amounting to Rs.1,24,05,485.85
(Pre.Yr.Rs.1,65,52,457.94) includes the amount of Excise duty,
education cess and higher secondary education cess on excise amounting
to Rs.10,38,716.00 (Pre.Yr. Rs. 13,15,928.00). The Company has provided
the excise duty, education cess & higher secondary education cess duty
on closing stock of finished goods & Scrap to Profit & Loss account for
the Current Year.
K. Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, sales tax, service tax, excise duty and sales
during trial run period, adjusted for discounts (net), Value Added Tax
(VAT) and gain / loss on corresponding hedge contracts. Dividend income
is recognized when right to receive is established. Interest income is
recognized on time proportion basis taking into account the amount
outstanding and rate applicable.
L. Excise Duty / Service Tax and Sales Tax / Value Added Tax
Excise duty / Service tax / Sales tax are accounted on the basis of
both, payments made in respect of goods cleared / services provides as
rental income received. Sales tax / Value added tax paid is charged to
Profit and Loss account.
M. Retirement benefits to Employees Gratuity
In accordance with the Payment of Gratuity Act, 1972, the Company
provides for gratuity, a defined benefit retirement plans (''the
Gratuity Plan'') covering eligible employees. The Gratuity Plan provides
a lump-sum payment to vested employees at retirement, death,
incapacitation or termination of employ- ment, of an amount based on
the respective employee''s salary and the tenure of employment with the
Company.
Liabilities with regard to the Gratuity Plan are determined by
actuarial valuation at each Balance Sheet date using the projected unit
credit method. The Company fully contributes all ascertained
liabilities to the Frontier Springs Limited Employees'' Gratuity Fund
Trust (the Trust). Trustees administer contributions made to the Trust
and contributions are invested in specific investments as permitted by
the law. The Company recognizes the premium payable on account of said
policy is charged to profit & loss account, respectively in accordance
with Accounting Standard (AS) 15, ''Employee Benefits''.
There was no provision for gratuity of directors. The provision of
gratuity on retirement of director is made on cash basis amounting to
Rs.10,00,000.
Provident fund
Eligible employees receive benefits from a provident fund, which is a
defined benefit plan. Both the employee and the Company make monthly
contributions to the provident fund plan equal to a specified
percentage of the covered employee''s salary.
The Company''s contribution to Provident Fund and Family Pension Fund is
charged to profit & loss account.
N. Employee Separation Costs
Compensation if any paid to employees who have opt for retirement from
the Company is charged to the Profit and Loss account in the year of
exercise of option.
O. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capital- ised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to Profit and Loss account.
P. Financial Derivatives and Commodity Hedging Transactions
In respect of derivative contracts, premium paid, gains / losses on
settlement and losses on restate- ment, if any are recognised in
Balance sheet except in case where they relate to the acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such assets.
Q. Accounting for Oil and Gas Activity
The Company has adopted Full Cost Method of accounting for consumption
of furnace oil, Diesel oil and Gas as well as the expenditure is
accounted on the basis of available information.
R. Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income-tax Act, 1961.
Deferred tax resulting from "timing difference" between taxable and ac-
counting income is accounted for using the tax rates and laws that are
enacted or substantively enacted as on the balance sheet date. Deferred
tax asset is recognised and carried forward only to the extent that
there is a virtual certainty that the asset will be realised in future.
S. Premium on Redemption of Bonds / Debentures
Company has not issued any Bonds / Debentures, since its incorporation.
T. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
The Company is contingently liable towards Bank guarantee provided to
the tune of Rs.192.83 lacs in favour of Indian Railways and H.P.S.E.B.
and contingently liable towards Letter of credit provided to the tune
of Rs.232.37 lacs in favour of M/s SunFlag Iron & Steel Co. Ltd. and
Central UP GAS Limited (Prev. Yr. Bank guarantee of Rs. 151.84 lacs in
favour of Indian Railways, BEML Ltd. and H.P.S.E.B. and Letter of
credit of Rs.362.82 lacs in favour of M/s SunFlag Iron & Steel Co. Ltd
.,Upper India Steel Mfg. & Engg.
Co. Ltd., Usha Martin Ltd. and Central UP GAS Limited,).
U. Earnings per share
Basic earnings per share are computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by divid- ing the
profit after tax by the weighted average number of equity shares
considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted
potential equity shares are adjusted for the proceeds receivable had
the shares been actually issued at fair value which is the average
market value of the outstanding shares. Dilutive potential equity
shares are deemed converted as of the begin- ning of the period, unless
issued at a later date. Dilutive potential equity shares are determined
indepen- dently for each period presented.
The number of shares and potentially dilutive equity shares are
adjusted retrospectively for all periods presented for any share splits
and bonus shares issues including for changes effected prior to the
approval of the financial statements by the Board of Directors.
V. Cash and Cash Equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The Com- pany considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
cash equivalents.
W. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.
Mar 31, 2013
Company overview
FRONTIER SPRINGS LTD. is a Listed Public Limited Company having its
registered office at E-14, Panki Industrial Area Site-1, Kanpur and is
mainly engaged in the production of L.B.Springs and Hot Coiled
compression Spring and forging items for Wagon, Locomotives and
Carriage and are regularly supplying to Railways, Bogie Manufactures,
Chittaranjan Locomotive Works, Diesel Locomotive Works, Integrate Coach
Factory, Rail Coach Factory. In addition to the supply to the Railways,
the Unit is also supplying the Springs to Heavy Engineering Industries
& original Earth Movers Equipment manufacturers i.e. BEML, TELCON,
Bharat Heavy Electricals Ltd.
Since last about 32 years FRONTIER SPRINGS LTD. is registered with RDSO
(Ministry of Railways) for supply of springs to Indian Railways and the
unit has developed large number of springs as per the latest
specification of the RDSO.
The Company has set up three plants to meet the demand requirements of
the above stated Industries at 1. Km 25/4, Rania Kanpur Dehat, 2. 91/2,
Kunja, Paonta Sahib, Sirmoar, Himanchal Pradesh, 3. Forging Unit at
E-14, Site No.1, Panki Industrial Area, Panki, Kanpur.
A. Basis of Preparation of Financial Statements
These financial statements are prepared in accordance with Indian
Generally Accepted Accounting Principles (GAAP) under the historical
cost convention on the accrual basis except for certain financial
instruments which are measured at fair values. GAAP comprises mandatory
accounting standards as prescribed by the Companies (Accounting
Standards) Rules, 2006, the provisions of the Companies Act, 1956 and
guidelines issued by the Securities and Exchange Board of India (SEBI).
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use.
B. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known/ materialised.
C. Own Fixed Assets
Fixed Assets are stated at cost net of recoverable taxes and includes
amounts added on revaluation, less accumulated depreciation and
impairment loss, if any. All costs, including financing costs till
commencement of commercial production, net charges on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the fixed assets are capitalized.
D. Leased Assets
As informed by the Management, the Company has a lease hold land
allotted by U.P.S.I.D.C. situated at E-14, Panki Industrial Area, Site
no. I, Kanpur
E. Intangible Assets
As informed by the Management, the Company has no intangible assets.
F. Depreciation and Amortisation
Depreciation on fixed assets is provided on the straight-line method
over the useful lives of assets estimated by the Management.
Depreciation for assets purchased / sold during a period is
proportionately charged. Individual low cost assets (acquired for
Rs. 5,000/- or less) are depreciated as per the rates prescribed in
Schedule XIV of the Companies Act, 1956, over a period of one year
from the date of acquisition.
G. Impairment of Assets
As informed by the Management, there is no indication of impairment in
assets. (as it occurs where carrying value exceeds the present value of
future cash flows expected to arise from the continuing use of the
assets and its eventual disposal).
H. Foreign Currency Transactions
Foreign-currency denominated monetary assets and liabilities are
translated at exchange rates in effect at the date of the transaction.
The gains or losses resulting from such transactions are included in
the Statement of profit and loss. Non-monetary assets and non-monetary
liabilities denominated in a foreign currency and measured at fair
value are translated at the exchange rate prevalent at the date when
the fair value was determined. Non-monetary assets and non-monetary
liabilities denominated in a foreign currency and measured at
historical cost are translated at the exchange rate prevalent at the
date of transaction.
Revenue, expense and cash-flow items denominated in foreign currencies
are translated using the ex- change rate in effect on the date of the
transaction. Transaction gains or losses realized upon settlement of
foreign currency transactions are included in determining net profit
for the period in which the transaction is settled.
I. Investments
Trade investments are the investments made to enhance the Company''s
business interests. Investments are either classified as current or
long-term based on Management''s intention at the time of purchase. Long
term investments are carried at cost less provisions recorded to
recognize any decline, other than temporary, in the carrying value of
each investment.
J. Inventories
(i) Value of Raw Materials, Stores & Spares and packing material are
ascertained at cost on FIFO basis, Work in Process is valued at
conversion cost exclusive of excise duty, Scrap are valued at net
realisable value and Finished goods are valued at net realisable value.
(ii) Valuation of Closing Stock of Finished Goods & Scrap :
Closing stock of Finished goods & Scrap amounting to Rs.1,65,52,457.94
(Pre.Yr.Rs.1,19,17,767.89) includes the amount of Excise duty,
education cess and higher secondary education cess on excise amounting
to Rs.13,15,928.00 (Pre.Yr.Rs.7,67,407.00). The Company has provided
the excise duty, education cess & higher secondary education cess duty
on closing stock of finished goods & Scrap to Profit & Loss account for
the Current Year.
K. Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, sales tax, service tax, excise duty and sales
during trial run period, adjusted for discounts (net), Value Added Tax
(VAT) and gain / loss on corresponding hedge contracts. Dividend income
is recognized when right to receive is established. Interest income is
recognized on time proportion basis taking into account the amount
outstanding and rate applicable.
L. Excise Duty / Service Tax and Sales Tax / Value Added Tax
Excise duty / Service tax / Sales tax are accounted on the basis of
both, payments made in respect of goods cleared / services provides as
rental income received. Sales tax / Value added tax paid is charged to
Profit and Loss account.
M. Retirement benefits to employees Gratuity
In accordance with the Payment of Gratuity Act, 1972, the Company
provides for gratuity, a defined benefit retirement plans (''the
Gratuity Plan'') covering eligible employees. The Gratuity Plan provides
a lump-sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on
the respective employee''s salary and the tenure of employment with the
Company.
Liabilities with regard to the Gratuity Plan are determined by
actuarial valuation at each Balance Sheet date using the projected unit
credit method. The Company fully contributes all ascertained
liabilities to the Frontier Springs Limited Employees'' Gratuity Fund
Trust (the Trust). Trustees administer contributions made to the
Trust and contributions are invested in specific investments as
permitted by the law. The Company recognizes the premium payable on
account of said policy is charged to profit & loss account,
respectively in accordance with Accounting Standard (AS) 15, ''Employee
Benefits''.
Provident fund
Eligible employees receive benefits from a provident fund, which is a
defined benefit plan. Both the employee and the Company make monthly
contributions to the provident fund plan equal to a specified
percentage of the covered employee''s salary. The Company''s contribution
to Provident Fund and Family Pension Fund is charged to profit & loss
account.
N. Employee Separation Costs
Compensation to employees who have opt for retirement from the Company
is charged to the Profit and Loss account in the year of exercise of
option.
O. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to Profit and Loss account.
P. Financial Derivatives and Commodity Hedging Transactions
In respect of derivative contracts, premium paid, gains / losses on
settlement and losses on restatement if any are recognised in Balance
sheet except in case where they relate to the acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such assets.
Q. Accounting for Oil and Gas Activity
The Company has adopted Full Cost Method of accounting for consumption
of furnace oil, Diesel oil and Gas as well as the expenditure is
accounted on the basis of available information.
R. Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income-tax Act, 1961.
Deferred tax resulting from "timing difference" between taxable and ac-
counting income is accounted for using the tax rates and laws that are
enacted or substantively enacted as on the balance sheet date. Deferred
tax asset is recognised and carried forward only to the extent that
there is a virtual certainty that the asset will be realised in future.
S. Premium on Redemption of Bonds / Debentures
Company has not issued any Bonds / Debentures, since its incorporation.
T. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
(a) The Company is contingently liable towards Bank guarantee provided
to the tune of Rs.151.84 lacs in favor of Indian Railways, B.E.M.L.
and H.P.S.E.B and contingently liable towards Letter of credit provided
to the tune of Rs.362.82 lacs in favor of M/s SunFlag Iron & Steel Co.
Ltd., Upper India Steel Mfg. & Engg. Co. Ltd., Usha Martin Ltd. and
Central UP GAS Limited (Prev. Yr. Bank guaran- tee of Rs. 103.48 lacs
in favour of Indian Railways, H.P.S.E.B and Central UP GAS Limited, and
Letter of credit of Rs.308.06 lacs in favor of M/s SunFlag Iron &
Steel Co. Ltd., Upper India Steel Mfg. & Engg. Co. Ltd., Usha Martin
Ltd.).
U. Earnings per share
Basic earnings per share are computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by dividing the
profit after tax by the weighted average number of equity shares
considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted
potential equity shares are adjusted for the proceeds receivable had
the shares been actually issued at fair value which is the average
market value of the outstanding shares. Dilutive potential equity
shares are deemed converted as of the beginning of the period, unless
issued at a later date. Dilutive potential equity shares are determined
independently for each period presented.
The number of shares and potentially dilutive equity shares are
adjusted retrospectively for all periods presented for any share splits
and bonus shares issues including for changes effected prior to the
approval of the financial statements by the Board of Directors.
V. Cash and cash equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The Com- pany considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
cash equivalents.
W. Cash flow statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.
Mar 31, 2012
A. Basis of Preparation of Financial Statements
These financial statements are prepared in accordance with Indian
Generally Accepted Accounting Prin- ciples (GAAP) under the historical
cost convention on the accrual basis except for certain financial
instruments which are measured at fair values. GAAP comprises mandatory
accounting standards as prescribed by the Companies (Accounting
Standards) Rules, 2006, the provisions of the Companies Act, 1956 and
guidelines issued by the Securities and Exchange Board of India (SEBI).
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use.
B. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and esti- mates are recognised in the period
in which the results are known/ materialised.
C. Own Fixed Assets
Fixed Assets are stated at cost net of recoverable taxes and includes
amounts added on revaluation, less accumulated depreciation and
impairment loss, if any. All costs, including financing costs till com-
mencement of commercial production, net charges on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the fixed assets are capitalized.
D. Leased Assets
As informed by the Management, the Company has a lease hold land
allotted by U.P.S.I.D.C. situated at E-14, Panki Industrial Area, Site
No. I, Kanpur
E. Intangible Assets
As informed by the Management, the Company has no intangible assets.
F. Depreciation and Amortisation
Depreciation on fixed assets is provided on the straight-line method
over the useful lives of assets estimated by the Management.
Depreciation for assets purchased / sold during a period is proportion-
ately charged. Individual low cost assets (acquired for Rs. 5,000/- or
less) are depreciated as per the rates prescribed in Schedule XIV of
the Companies Act, 1956, over a period of one year from the date of
acquisition.
G. Impairment of Assets
As informed by the Management, there is no indication of impairment in
assets. (as it occurs where carrying value exceeds the present value of
future cash flows expected to arise from the continuing use of the
assets and its eventual disposal).
H. Foreign Currency Transactions
Foreign-currency denominated monetary assets and liabilities are
translated at exchange rates in effect at the Balance Sheet date. The
gains or losses resulting from such translations are included in the
Statement of profit and loss. Non-monetary assets and non-monetary
liabilities denominated in a foreign currency and measured at fair
value are translated at the exchange rate prevalent at the date when
the fair value was determined. Non-monetary assets and non-monetary
liabilities denominated in a foreign currency and measured at
historical cost are translated at the exchange rate prevalent at the
date of transaction.
Revenue, expense and cash-flow items denominated in foreign currencies
are translated using the ex- change rate in effect on the date of the
transaction. Transaction gains or losses realized upon settlement of
foreign currency transactions are included in determining net profit
for the period in which the transac- tion is settled.
I. Investments
Trade investments are the investments made to enhance the Company's
business interests. Invest- ments are either classified as current or
long-term based on Management's intention at the time of purchase.
Long term investments are carried at cost less provisions recorded to
recognize any decline, other than temporary, in the carrying value of
each investment.
J. Inventories
(i) Value of Raw Materials, Stores & Spares and packing material are
ascertained at cost on FIFO basis, Work in Process is valued at
conversion cost exclusive of excise duty, Scrap are valued at net
realisable value and Finished goods are valued at net realisable value.
(ii) Valuation of Closing Stock of Finished Goods & Scrap:
Closing stock of Finished goods & Scrap amounting to Rs.1,19,17,767.89
(Pre.Yr.Rs.1,72,02,750.41) includes the amount of Excise duty,
education & higher secondary education cess on excise amount- ing to
Rs.7,67,407.00 (Pre.Yr.Rs.10,32,782.00). The Company has provided the
excise duty, educa- tion cess & higher secondary education cess duty on
closing stock of finished goods & Scrap to Profit & Loss account for
the Current Year.
K. Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, sales tax, service tax, excise duty and sales
during trial run period, adjusted for discounts (net), Value Added Tax
(VAT) and gain / loss on corresponding hedge contracts. Dividend income
is recognized when right to receive is established. Interest income is
recognized on time proportion basis taking into account the amount
outstanding and rate applicable.
L. Excise Duty / Service Tax and Sales Tax / Value Added Tax
Excise duty / Service tax / Sales tax are accounted on the basis of
both, payments made in respect of goods cleared / services provided as
rental income received. Sales tax / Value added tax paid is charged to
Profit and Loss account.
M. Retirement benefits to employees Gratuity
In accordance with the Payment of Gratuity Act, 1972, the Company
provides for gratuity, a defined benefit retirement plans ('the
Gratuity Plan') covering eligible employees. The Gratuity Plan
provides a lump-sum payment to vested employees at retirement, death,
incapacitation or termination of employ- ment, of an amount based on
the respective employee's salary and the tenure of employment with
the Company.
Liabilities with regard to the Gratuity Plan are determined by
actuarial valuation at each Balance Sheet date using the projected unit
credit method. The Company fully contributes all ascertained
liabilities to the Frontier Springs Limited Employees' Gratuity Fund
Trust (the Trust). Trustees administer contributions made to the Trust
and contributions are invested in specific investments as permitted by
the law. The Company recognizes the premium payable on account of said
policy is charged to profit & loss account, respectively in accordance
with Accounting Standard (AS) 15, 'Employee Benefits'.
Provident fund
Eligible employees receive benefits from a provident fund, which is a
defined benefit plan. Both the employee and the Company make monthly
contributions to the provident fund plan equal to a specified
percentage of the covered employee's salary. The Company's
contribution to Provident Fund and Family Pension Fund is charged to
profit & loss account.
N. Employee Separation Costs
Compensation to employees who have opt for retirement from the Company
is charged to the Profit and Loss account in the year of exercise of
option.
O. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capital- ised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to Profit and Loss account.
P. Financial Derivatives and Commodity Hedging Transactions
In respect of derivative contracts, premium paid, gains / losses on
settlement and losses on restate- ment are recognised in Balance sheet
except in case where they relate to the acquisition or construction of
fixed assets, in which case, they are adjusted to the carrying cost of
such assets.
Q. Accounting for Oil and Gas Activity
The Company has adopted Full Cost Method of accounting for consumption
of furnace oil, Diesel oil and Gas as well as the expenditure is
accounted on the basis of available information on line by line basis
in the Company's financial statements, according to the participating
interest of the Company.
R Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income-tax Act, 1961.
Deferred tax resulting from "timing difference" between taxable and
ac- counting income is accounted for using the tax rates and laws that
are enacted or substantively enacted as on the balance sheet date.
Deferred tax asset is recognised and carried forward only to the extent
that there is a virtual certainty that the asset will be realised in
future.
S. Premium on Redemption of Bonds / Debentures
Company has not issued any Bonds / Debentures, since its incorporation.
T. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
(a) The Company is contingently liable towards bank guarantee provided
to the tune of Rs.103.48 lacs in favour of Indian Railways and
contingently liable towards Letter of Credit provided to the tune of
Rs.308.06 lacs in favour of M/s Sunflag Iron & Steel Co. Ltd. (Prev.
Yr. bank guarantee of Rs. 127.29 lacs in favour of Indian Railways and
Letter of Credit of Rs.328.85 lacs in favour of M/s Sunflag Iron &
Steel Co. Ltd.).
U. Earnings per share
Basic earnings per share are computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by divid- ing the
profit after tax by the weighted average number of equity shares
considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted
potential equity shares are adjusted for the proceeds receivable had
the shares been actually issued at fair value which is the average
market value of the outstanding shares. Dilutive potential equity
shares are deemed converted as of the begin- ning of the period, unless
issued at a later date. Dilutive potential equity shares are determined
indepen- dently for each period presented.
The number of shares and potentially dilutive equity shares are
adjusted retrospectively for all periods presented for any share splits
and bonus shares issues including for changes effected prior to the
approval of the financial statements by the Board of Directors.
V. Cash and cash equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The Com- pany considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
cash equivalents.
W. Cash flow statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.
Mar 31, 2010
(A) (i) Basis of Accounting AS-1 :
The financial statement have been prepared under the historical cost
and conversion, in accordance with generally accepted accounting
principles and the provisions of Companies Act, 1956 as adopted consis-
tently by the Company. The Company generally follows mercantile system
of accounting and recongnises significant items of income & expenditure
on accrual basis.
(ii) Consistency
Accounting policies not specifically referred to otherwise are
consistent and are in consonance with gener- ally accepted accounting
principles.
(B) Inventories AS-2 :
(i) Value of Raw Materials, Stores & Spares are ascertained at cost on
FIFO basis, Work in Process is valued at conversion cost exclusive of
excise duty, Scrap are valued at net realiseable value and Finished
goods are valued at net realiseable value.
The valuation of Raw Material, Store & Spares and Work in process are
valued as per AS-2 "Valuation of Inventories" issued by the Institute
of Chartered Accountants of India, however Finished goods are valued at
net realisable value, which is not as per AS-2, but this method of
valuation is being consistently followed in earlier years.
(ii) Valuation of Closing Stock of Finished Goods & Scrap :
Closing stock of Finished goods & Scrap amounting to Rs.1,64,68,328.72
(Pre.Yr. 1,94,52,430.35) includes the amount of Excise duty, education
& higher secondary education cess on excise amounting to
Rs.13,37,785.00 (Pre.Yr. Rs.14,80,858.00). The Company has provided the
excise duty, education cess & higher secondary education cess duty on
closing stock of finished goods & Scrap to Profit & Loss account for
the Current Year.
(C) Cash Flow AS-3 : A
AS-3 is applicable to the Company and indirect method has been
followed.
(D) Contingent Liabilities AS-4 :
Contingent liabilities are not provided for but are disclosed by way of
point No.10 of Notes on Accounts.
(E) Prior period items AS-5 :
Wherever required the item has been classified as per accounting
standard.
(F) Depreciation AS-6 :
Depreciation has been charged on straight line method as per the rates
given in Schedule XIV of the Companies Act, 1956.
(G) Revenue Recognition AS-9 :
All Income and Expenditure are accounted for on accrual basis.
(H) Sales
Sales are invoiced on completion of sale of goods and include Excise
duty, Education cess duty, Secondary higher education cess and Sales
Tax.
(I) Fixed Assets AS-10 :
(i) Fixed assets are stated at cost less depreciation. Such cost
comprises of purchase price and any attributable cost of bringing the
assets to working conditions for its intended use.
(ii) Expenditure for additions, improvements and renewals are
capitalised and expenditure for maintenance and repairs are charged to
Profit and Loss account. When assets are sold or discarded, their cost
and accumulated depreciation is removed from the account and any gain
or loss, resulting from their disposal is included in the Profit and
Loss account.
(J) Foreign Currency transaction during the current year AS-11:
The Company has no transaction in foreign currency for the import of
material and a transaction in foreign currency of Rs. 4,43,520/-
towards export sales. However, travelling expenses of Rs. 10,11,112.47
on foreign tour for attending trade fair has been incurred. There is no
exchange gain/loss arising out of the rates prevailing on the date of
transaction/remittance, hence not dealt with in Profit & Loss A/c for
the year in which remittance is affected.
(K) Cenvat :
The amount of cenvat benefit eligible is reduced for the amount of
purchase of raw material and consumption of raw material have been
arrived thereat accordingly.
(L) Service Tax :
The amount of service tax on input services availed by the Company has
been accounted for availing the benefits of credit allowable under the
statute.
(M) Investment AS-13 :
Investments have been stated at cost. Temporary increase/decrease in
the value of investments have not been recognised by the management of
the Company as all investments are considered by the Company as Long
Term investment (as shown in note no.4).
(N) Retirement Benefit to employees AS-15 :
(i) Gratuity liability under Gratuity Act, 1972 covered under LIC Staff
Gratuity Policy and premium payable on account of the said policy is
charged to the Profit & Loss account.
(ii) The Companys contribution to Provident Fund and Family Pension
Fund is charged to Profit & Loss account.
(iii) Leave retirement expenses is provided to Profit & Loss Account on
accrual basis. Leave encashment in case of retirement as well as on
continuing employees is provided for, and the same is at Rs.
7,00,503.69 (Pre.Yr. Rs. 7,30,455.00).
(O) Borrowing Cost AS-16 :
As informed by the Management of Company, there was no borrowing cost
occurred for the purpose of acquiring or buildup of Fixed Assets for
the preinstallation period.
(P) Segment Reporting AS-17 :
The Companys main business is manufacturing & selling of Coil Springs
& Leaf Springs. There is no separate segment within the Company as
defined by AS-17 Segment Reporting issued by the Institute of
Chartered Accountants of India.
(R) Accounting for Leases :- AS-19
There is no such items to be disclosed as explained by the management.
(T) Consolidated financial statement :- AS-21
AS-21 issued by the Institute of Chartered Accountants of India is not
applicable to the Company.
(V) Material events occurring after Balance Sheet date has been taken
into cognizance. (W) Interim financial reporting (IFR) :- AS-25
As per clause 41 Listing agreements the Company is publishing its
financial results on quarterly basis.
(X) Intangible Assets :- AS-26
As informed by the Management, the Company has no intangible assets.
(Y) Impairment of Assets :- AS-28
As informed by the Management, there is no indication of impairment in
assets (as it occurs where carrying value exceeds the present value of
future cash flows expected to arise from the continuing use of the
assets and its eventual disposal.
(Z) Deferred revenue expenditure are amortised over a period of ten
years.
Particulars of Balance Sheet Abstract and Companys General Business
Profile in compliance of notification No. 3/24/94-CL-V (a) of the
Ministry of Law, Justice and Company Affairs dt. 15.05.95 is enclosed
herewith as annexure I.
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