We have audited the accompanying standalone financial
statements of Frontier Springs Limited (“the Company”),
which comprise the Balance Sheet as at March 31, 2026,
Statement of Profit and Loss (including other comprehensive
income), Statement of Changes in Equity and the Statement of
Cash Flows for the year then ended, and notes to the financial
statements, including a summary of the significant accounting
policies and other explanatory information.(Hereinafter
referred to as the Financial statements).
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone
financial statements give the information required by the
Companies Act, 2013 (“the Act”) in the manner so required
and give a true and fair view in conformity with the Indian
Accounting Standards prescribed under section 133 of the Act
read with the Companies (Indian Accounting Standards) Rules,
2015, as amended, and other accounting principles generally
accepted in India, of the state of affairs of the Company as
at March 31, 2026, and its profit and other comprehensive
loss, changes in equity and its cash flows for the year ended
on that date.
BASIS FOR OPINION
We have conducted our audit of the standalone financial
statements in accordance with the Standards on Auditing
specified under section 143(10) of the Act (SAs). Our
responsibilities under those Standards are further described in
the Auditor's Responsibilities for the Audit of the Standalone
Financial Statements section of our report. We are independent
of the Company in accordance with the Code of Ethics issued
by the Institute of Chartered Accountants of India (ICAI)
together with the ethical requirements that are relevant to
our audit of the financial statements under the provisions of
the Act and the Rules made there under, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements and the ICAI's Code of Ethics. We believe that
the audit evidence obtained by us referred to in paragraph
(a) of the “Others Matters” section below is sufficient and
appropriate to provide a basis for our audit opinion on the
financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone financial statements of the current period.
These matters were addressed in the context of our audit of
the standalone financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion
on these matters. We have determined the matters described
below to be the key audit matters to be communicated in our
report.
REVENUE RECOGNITION
Revenue from the sale of goods is recognized upon the transfer
of control of the goods to the customer (mainly being supply
to railways), usually on delivery of goods. The company uses a
variety of shipment terms across its operating markets and this
has an impact on the timing of revenue recognition. As well as
the company recognizes its revenue as per the various tenders
received from railways which has overall impact on the timing
of revenue recognition. There is a risk due to retention norms of
2% or 5% in all purchase orders by railways that revenue could
be recognized in the period for sales transactions occurring on
and around the year end therefore, revenue recognition has
been identified as a key audit matter.
Refer to Note No. 21and 22 of the Standalone Financial
Statements.
AUDITOR'S RESPONSE
Principal Audit Procedures
Our audit procedures includes reading the Company's revenue
recognition accounting policies to assess compliance with IND
AS 115 “Revenue from contracts with customers”.
We have performed test of controls of management's process
of recognizing the revenue from sales of goods and placed
specific attention on the timing of the revenue recognition as
per the sales terms with the customers.
We have performed test of details of the sales transactions
testing based on a representative sampling of the sales orders
to test that the related revenues and trade receivables are
recorded appropriately taking into consideration the terms
and conditions of the sale orders, including the shipping terms.
We have also performed sales cut off procedures by agreeing
deliveries occurring around the year end to supporting
documentation to establish that sales and corresponding trade
receivables are properly recorded in the correct period.
Retention by railways out of revenue received.
As per railway norms, terms and conditions there are
demurrage charges which are retained in the form of 2% or
5% of invoice value which is recovered when the tenure as per
terms and conditions of the purchase order is completed. The
total retention amount for the period ended 31/03/2026
amounts to ? 26,70,323/- out of total trade receivables
and out of which ? 18,73,080/- has been recovered up to
12/05/2026.
AUDITOR'S RESPONSE
Principal Audit Procedures
Our audit procedures includes reading the Company's revenue
recognition accounting policies to assess compliance with IND
AS 115 “Revenue from contracts with customers”.
We have performed test of controls of management's process
of recognizing the revenue from sales of goods and placed
specific attention on the timing of the revenue recognition as
per the sales terms with the customers.
We have performed test of details of the sales transactions
testing based on a representative sampling of the sales orders
to test that the related revenues and trade receivables are
recorded appropriately taking into consideration the terms
and conditions of the sale orders, including the shipping terms.
We have also performed sales cut off procedures by agreeing
deliveries occurring around the year end to supporting
documentation to establish that sales and corresponding trade
receivables are properly recorded in the correct period.
Taxes including provision for current tax, valuation of uncertain
tax positions and recognition of deferred taxes.
The company has recorded ? 20,28,39,126/-of
tax expense and deferred tax liabilities amounting to
? 73,94,488/- for the year ended 31st March, 2026.
The company is subject to periodic tax challenges by tax
authorities which may lead to protected litigations; as such
accounting for taxes involves management judgement in
developing estimates of tax exposures and contingencies in
order to assess the adequacy of tax provision.
AUDITOR'S RESPONSE
Principal Audit Procedures
Assessed the design, implementation and operating
effectiveness of key controls in respect of the company's
process of recognition of tax expense, including uncertain tax
provisions and deferred taxes.
Assessed the calculation for the current tax provisions and the
procedures performed to analyse movements, including the
rationale for any release, increase or continued provision in the
year.
Assessed management's judgments with respect to probability
of outflow arising out of litigation after considering the
status of recent tax assessments, audits and enquiries, recent
judicial pronouncements and judgements in similar matters,
developments in the tax environment and outcome of past
litigations.
Gratuity Accounting
Company has taken policy from Life Insurance Corporation
regarding the gratuity for its Springs, Air-springs and Forging
Div. units at Rania, Kanpur Dehat (U.P.) and other Springs
units at Paonta Sahib (H.P.) in regards to this as explained and
informed to us there is a trust titled as 'Trustees Frontier Springs
Ltd Employees Group'.
AUDITOR'S RESPONSE
Principal Audit Procedures
Our audit procedures includes reading the Company's revenue
recognition accounting policies to assess compliance with
IND AS 37 “Provisions, Contingent Liabilities and Contingent
Assets'.
We have performed test of controls of management's process
of recognizing the Provisions, Contingent Liabilities and
Contingent Assets and placed specific attention on the timing
of the provisions.
We have performed test of details of the expense transactions
testing based on a representative sampling of the Provisions to
test that the Provisions, Contingent Liabilities and Contingent
Assets are recorded appropriately.
We have also performed cut off procedures relating to
Provisions, Contingent Liabilities and Contingent Assets
occurring around the year end and the same are properly
recorded in the correct period.
INFORMATION OTHER THAN THE
STANDALONE FINANCIAL STATEMENTS AND
AUDITOR'S REPORT THEREON
The Company's Management and Board of Directors are
responsible for the preparation of the other information. The
other information comprises the information included in the
Company's Annual Report, Management Discussion and
Analysis, Board's Report including Annexures to Board's Report,
Business Responsibility Report, Corporate Governance and
Shareholder's Information, but does not include the standalone
financial statements and our auditor's report thereon. The
annual report is to be made available to us after the date of
the auditor's report.
Our opinion on the standalone financial statements does not
cover the other information and I do not express any form of
assurance conclusion thereon.
In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
identified above, when it becomes available and, in doing
so, consider whether the other information is materially
inconsistent with the standalone financial statements or our
knowledge obtained during the course of period under audit or
otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material
misstatement of this other information; we are required to
report that fact. We have nothing to report in this regard.
When we read the other information identified above, if we
conclude that there is a material misstatement therein, we are
required to communicate the matter to those charged with
governance and take necessary actions, as applicable under
the relevant laws and regulations.
MANAGEMENT'S AND BOARD OF DIRECTORS'
RESPONSIBILITY FOR THE STANDALONE
FINANCIAL STATEMENTS
The Company's Management and Board of Directors are
responsible for the matters stated in section 134(5) of the Act
with respect to the preparation of these standalone financial
statements that give a true and fair view of the financial
position, financial performance, changes in equity and cash
flows of the Company in accordance with the AS and other
accounting principles generally accepted in India including the
Indian Accounting Standards (IND AS ) specified under section
133 of the Act read with Companies( Indian Accounting
Standards) rules, 2015 as amended. This responsibility also
includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring
the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the standalone
financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management
and Board of Directors are responsible for assessing the
Company's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using
the going concern basis of accounting unless the Board of
Directors either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the
Company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT
OF THE STANDALONE FINANCIAL STATEMENTS
Our objective is to obtain reasonable assurance about whether
the standalone financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
> Identify and assess the risks of material misstatement
of the standalone financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.
> Obtain an understanding of internal financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section
143(3X0 of the Act, we are also responsible for expressing
our opinion on whether the Company has adequate
internal financial controls with reference to statements in
place and the operating effectiveness of such controls.
> Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management and Board of
Directors.
> Conclude on the appropriateness of management's and
Board of Directors use of the going concern basis of
accounting in preparation of financial statements and,
based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the Company's ability to
continue as a going concern. If I conclude that a material
uncertainty exists, we are required to draw attention
in our auditor's report to the related disclosures in the
standalone financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of
our auditor's report. However, future events or conditions
may cause the Company to cease to continue as a
going concern.
> Evaluate the overall presentation, structure and content
of the standalone financial statements, including the
disclosures, and whether the standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the
standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of
a reasonably knowledgeable user of the financial statements
may be influenced. We consider quantitative materiality and
qualitative factors in (i) planning the scope of our audit work
and in evaluating the results of our work; and (ii) to evaluate
the effect of any identified misstatements in the financial
statements.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be though to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor's report unless law
or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such
communication.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
As required by Section 143(3) of the Act, based on our audit,
we report that:
• We have sought and obtained all the information and
explanations which are to the best of our knowledge and
belief, as necessary for the purposes of our audit.
• In our opinion, proper books of account as required by
law have been kept by the Company so far as it appears
from our examination of those books.
• The Balance Sheet, the Statement of Profit and Loss
(includes other comprehensive income), Statement of
Changes in Equity and the Statement of Cash Flow dealt
with by this Report are in agreement with the relevant
books of account.
• In our opinion, the aforesaid standalone financial
statements comply with the AS specified under Section
133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
• On the basis of the written representations received from
the directors as on March 31, 2026 taken on record by
the Board of Directors, none of the directors is disqualified
as on March 31, 2026 from being appointed as a
director in terms of Section 164 (2) of the Act.
With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate Report in
"Annexure A". Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of the Company's
internal financial controls over financial reporting.
With respect to the other matters to be included in the Auditor's
Report in accordance with the requirements of section 197(16)
of the Act, as amended.
• Based on our examination, which included test checks,
the Company has used accounting software's for
maintaining its books of account for the financial year
ended March 31, 2026 which has a feature of recording
audit trail (edit log) facility and the same has operated
throughout the year for all relevant transactions recorded
in the software's. Further, during the course of our audit
we did not come across any instance of the audit trail
feature being tampered with.
In our opinion and to the best of our information and according
to the explanations given to us, the remuneration paid by the
Company to its directors during the year is in accordance with
the provisions of section 197 of the Act. The remuneration paid
to any director is in excess of the limit laid down under section
197 of the Act, and accordingly special resolutions were passed
in the Annual General Meeting Dated 22nd September, 2025
at the respective registered office and necessary approvals as
required under SEBI (LODR) Regulations 2015 have already
been complied with as explained and informed to us.
With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit
and Auditors) Rules, 2014, as amended in our opinion and to
the best of our information and according to the explanations
given to us:
> The Company has no pending litigations on its financial
position in its standalone financial statements as informed
and explained to us.
> The Company did not have any long-term contracts
including derivative contracts for which there were any
material foreseeable losses.
> There were no amounts which were required to be
transferred, to the Investor Education and Protection
Fund by the company as certified by the management.
> The management has represented that, to the best of
its knowledge and belief, other than as disclosed in the
notes to the accounts, no funds have been advanced or
loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the
company to or in any other persons or entities, including
foreign entities (“Intermediaries”), with the understanding,
whether recorded in writing or otherwise, that the
Intermediary shall:
• Directly or indirectly lend or inverts in other person
or entities identified in any manner whatsoever
(“Ultimate Beneficiaries”) by or on behalf of the
company; or
• Provide any guarantees, security or the like to or on
behalf of the Ultimate Beneficiaries.
> The management has represented, that, to the best of its
knowledge and belief, no funds have been received by the
company from any persons or entities, including foreign
entities (“Funding Parties'), with the understanding,
whether recorded in writing or otherwise, that the
company shall:
• Directly or indirectly lend or inverts in other person
or entities identified in any manner whatsoever
(“Ultimate Beneficiaries”) by or on behalf of the
Funding Party; or
• Provide any guarantees, security or the like to or on
behalf of the Ultimate Beneficiaries.
> Based on such audit procedures as considered reasonable
and appropriate in the circumstances, nothing has come
to our notice that has caused us to believe that the
representations under sub-clause (d) (i) and (d) (ii) contain
any material misstatement.
> The dividend declared or paid during the year by the
company is in compliance with section 123 of the act.
As required by the Companies (Auditor's Report) Order,
2020 (“the Order”) issued by the Central Government
in terms of Section 143(11) of the Act, we have given
"Annexure B" a statement on the matters specified in
paragraphs 3 and 4 of the Order.
For Sanjay Nandani &CO.
Chartered Accountant
Firm Registration No.: 006941C
Sanjay Malhotra
Partner
Place: Kanpur Membership No.: 0071140
Date: 28.05.2026 UDIN: 26071140FTVLHS4045
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