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, Hot Coiled Compression Springs, Air-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 LTD. 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 four plants to meet the demand
requirements of the above stated Industries at 1. Springs-unit,
KM-25/4, Rania Kanpur Dehat, 2. Air-Springs-unit, KM-
25/4, Rania Kanpur Dehat, 3. Springs-units, 91/2, Kunja,
Paonta Sahib, Sirmour Himachal Pradesh 4. Forging Div. at
KM-25/4, Rania Kanpur Dehat.
1. Basis of Preparation of Financial Statements
(Ind AS 1)
The financial statements of the Company have been prepared
in accordance with Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies Act, 2013,
read with the Companies (Indian Accounting Standards) Rules,
2015, as amended from time to time. The financial statements
have been prepared on an accrual and going concern basis
under the historical cost convention, except for certain
financial instruments measured at fair values. All assets and
liabilities have been classified as current or non-current as per
the Company's normal operating cycle and other criteria set
out in Ind AS 1 and Schedule III to the Companies Act, 2013.
The financial statements also comply 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 and
guidelines issued by the Securities and Exchange Board of
India (SEBI).
2. Use of Estimates and Judgements (Ind AS 1 &
Ind AS 8)
The preparation of financial statements requires management
to make judgements, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures, and the
disclosure of contingent liabilities. Actual results may differ
from these estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is
revised and in any future periods affected.
3. Property, Plant and Equipment (Ind AS 16)
Property, Plant and Equipment are stated at cost, net of
accumulated depreciation and impairment losses, if any.
The cost includes expenditure directly attributable to the
acquisition of the asset. Subsequent costs are included in the
asset's carrying amount only when it is probable that future
economic benefits associated with the item will flow to the
Company. Depreciation on assets is provided on a straight¬
line basis over the useful life as prescribed in Schedule II
of the Companies Act, 2013, or based on a technical
evaluation. The residual values, useful lives and methods of
depreciation are reviewed at each financial year end and
adjusted prospectively, if appropriate. net charges on foreign
exchange contracts and adjustments arising from exchange
rate variations attributable to the fixed assets are capitalized.
4. Leases (Ind AS 116)
The Company assesses whether a contract is or contains a
lease, at inception. A right-of-use asset and a lease liability
are recognized at the lease commencement date. The right-
of-use asset is initially measured at cost and subsequently no
depreciation is charged being 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.
5. Intangible Assets (Ind AS 38)
The Company does not have any intangible assets as at the
reporting date. This conclusion is based on an evaluation
that no identifiable non-monetary assets without physical
substance exist that meet the recognition criteria laid down
under Ind AS 38, including control over the asset, expected
future economic benefits, and reliable measurement of cost.
6. Depreciation and Amortisation (Ind AS 16 &Ind AS 38)
Depreciation on tangible fixed assets is provided on a straight¬
line basis over the estimated useful lives. Depreciation for
assets purchased/sold during a period is proportionately
charged. Individual assets costing less than INR 5,000 are fully
depreciated in the year of acquisition. Useful lives are reviewed
periodically.
7. Impairment of Assets (Ind AS 36)
The Company assesses at each reporting date whether
there is any indication that an asset may be impaired. If any
such indication exists, the recoverable amount of the asset is
estimated. An impairment loss is recognized for the amount
by which the asset's carrying amount exceeds its recoverable
amount. Reversal of impairment loss is recognized when the
reasons for impairment cease to exist.
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).
8. Foreign Currency Transactions (Ind AS 21)
Transactions in foreign currencies are initially recorded by the
Company at the exchange rates prevailing at the date of the
transaction. Monetary assets and liabilities denominated in
foreign currencies are translated at the functional currency
spot rates of exchange at the reporting date. Exchange
differences arising on settlement or translation of monetary
items are recognized in profit or loss. please refer to the note
number 29(3)
9. Investments (Ind AS 109 & Ind AS 32)
Trade investments are the investments made to enhance the
Company's business interests. Investments are classified as
either measured at amortized cost, fair value through profit or
loss (FVTPL), or fair value through other comprehensive income
(FVOCI), depending on the Company's business model and the
contractual cash flow characteristics. Long-term investments
are carried at cost less provision for diminution, other than
temporary.
10. Inventories (Ind AS 2)
Inventories are valued at the lower of cost and net realizable
value. Cost includes all expenses incurred in bringing the
inventories to their present location and condition and is
determined on a FIFO basis. Net realizable value is the estimated
selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make
the sale. 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
? 2,06,79,044.00 (Pre.Yr. ? 2,01,17,542.00 of closing stock
of finished goods & scrap).
11. Revenue Recognition (Ind AS 115)
Revenue is recognized when control of the goods or services
is transferred to the customer at an amount that reflects the
consideration to which the Company expects to be entitled.
Revenue from the sale of goods is recognized when delivery
is made. Other income is recognized on an accrual basis. It
is further recognized 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.
12. Taxes on Income (Ind AS 12)
Tax expense comprises current and deferred tax. Current tax
is based on the taxable income for the year. Deferred tax is
recognized using the balance sheet approach, on temporary
differences between the tax bases of assets and liabilities and
their carrying amounts. Deferred tax assets are recognized only
to the extent it is probable that taxable profits will be available.
13. Employee Benefits (Ind AS 19)
The Company provides for gratuity (defined benefit plan)
and provident fund (defined contribution plan). The liability
for gratuity is determined on the basis of actuarial valuation
using the projected unit credit method. Re-measurements
are recognized in other comprehensive income and are not
reclassified to profit or loss in subsequent periods.
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.
Employee Separation Costs
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.
14. Borrowing Costs (Ind AS 23)
Borrowing costs that are directly attributable to the acquisition
or construction of a qualifying asset are capitalized as part of
the cost of the asset. All other borrowing costs are expensed in
the period in which they occur.
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