q) Provisions, Contingent Liabilities and
Contingent Assets
Provisions: A provision is recognized when an
enterprise has a present obligation as a result of
past event and it is probable that an outflow of
resources will be required to settle the obligation,
in respect of which a reliable estimate can be made.
Provisions are not discounted to their present
values and are determined based on management
estimates of the obligation required to settle at the
Balance Sheet date. These are reviewed at each
Balance Sheet date and adjusted to reflect the
current management estimates.
Provision for warranties: The estimated liability
for product warranties is recognised when
products are sold. These estimates are established
using historical information based on the nature,
frequency and average cost of warranty claims
and management estimates regarding possible
future incidence based on corrective actions on
product failures. The timing of outflows will vary as
and when warranty claim will arise. The company
accounts for the provision for warranties on the
basis of information available to the management
duly taking into account the current and past
technical estimates.
Contingent Liabilities: Contingent liabilities are
disclosed in respect of possible obligations that
have arisen from past events and the existence of
which will be confirmed only by the occurrence or
non-occurrence of future events not wholly within
the control of the Company.
When there is an obligation in respect of which the
likelihood of outflow of resources is remote, no
provision or disclosure is made.
Contingent assets: Contingent assets are not
disclosed in the financial statement unless an
inflow of economic benefit is probable.
r) Cash and Cash Equivalents
Cash and Cash Equivalents in the balance sheet
comprise cash at banks, cash in hand, term
deposits, and fixed deposits kept as security/
margin money for more than 3 months but less
than 12 months. For the purpose of the statement
of cash flows, cash and cash equivalents consist of
cash in hand, bank balances in current accounts
and bank deposits, as defined above, as they are
considered an integral part of the Company's cash
management. The deposits maintained by the
Company with banks comprise of deposits, which
can be withdrawn by the Company at any point
without prior notice or penalty on the principal.
s) Government Grants and Production Linked
Incentives
Government grants: Government grants are
recognised where there is reasonable assurance
that the grant will be received and all attached
conditions will be complied with. Where the grant
relates to an asset the cost of the asset is shown
at gross value and grant thereon is treated as
capital grant. The capital grant will be recognised
as income in the statement of profit and loss over
the period and in proportion in which depreciation
is charged. Revenue grants are recognised in the
statement of profit and loss in the same period
as the related cost, which they are intended to
compensate are accounted for.'
Production Linked Incentive: Production Linked
Incentives are recognised as income when, on
the basis of the judgment of the management
and based on the supporting data, as per which
the management of the company feels that the
company fulfils the eligibility conditions as per the
approval letter. Accordingly, as per the judgment
of management the incentive income has been
recognised as same is fully recoverable.
t) Impairment of Assets
The Management periodically assesses, using
external and internal sources, whether there
is an indication that an asset may be impaired.
An impairment loss is recognized wherever the
carrying value of an asset exceeds its recoverable
amount. The recoverable amount is the higher of
the asset's net selling price or value in use, which
means the present value of future cash flows
expected to arise from the continuing use of the
asset and its eventual disposal. An impairment loss
for an asset is reversed if, and only if, the reversal
can be related objectively to an event occurring
after the impairment loss was recognized. The
carrying amount of an asset is increased to its
revised recoverable amount, provided that this
amount does not exceed the carrying amount
that would have been determined (net of any
accumulated amortization or depreciation) had no
impairment loss been recognized for the asset in
prior years.
u) Research and Development Expenditure
Research and development expenditure that
do not meet the criteria for the recognition of
intangible assets are recognised as an expense as
incurred. Development costs previously recognised
as an expense are not recognised as an asset in a
subsequent period.
v) Subsequent Expenditure
Subsequent expenditure is recognised only if it
is probable that the future economic benefits
associated with the expenditure will flow to the
Company and the cost of the item can be measured
reliably.
w) Cash Flow Statement
Cash flows are reported using the indirect method as
per Accounting Standard 3, Cash Flow Statements,
whereby profit for the period 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 the operating,
investing and financing activities of the company
are segregated. The company considers all highly
liquid investments that are readily convertible to
known amounts of cash to be cash equivalents
x) Investment in subsidiary
The company has invested in three subsidiaries
which are carried in the books of accounts at cost.
On disposal of investments in subsidiaries, the
difference between net disposal proceeds and the
carrying amounts are recognized in the Statement
of Profit and Loss.
*The Board of Directors of company approved the Employee Stock Purchase Scheme 2023 (ESPS) during the Board Meeting
held on May 28th, 2023, and same scheme was subsequently approved by members during the Annual General Meeting
held on August 8th, 2023. The aggregate no. of shares under this Scheme shall not exceed 3,13,780 Equity Shares of Face
Value of '10.00 each fully paid up. The In-principle approval from NSE was received on November 22nd, 2023. The company
allotted 93,300 shares to its employees and employees of its subsidiary during the year ended March 31st, 2025 which were
approved by the Board of Directors in their respective meetings.
D. Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of ' 10 per share. Each holder of equity shares
is entitled to one vote per share. The distribution will be in proportion to the number of equity shares held by the
shareholders.
In the event of liquidation of the Company, the holders of equity shares would be entitled to receive remaining assets
of the Company, after distribution of all the preferential amounts.
No dividend is declared by the company during the year.
*The above borrowing was sanctioned on 17th January 2024 by ICICI Bank and is secured by hypothecation and a charge
to the bank, creating an exclusive charge over stocks and receivables, both present and future, as well as movable fixed
assets, including plant and machinery, furniture and fixtures, both present and future, as a continuing security. Additionally,
it is secured by immovable property of subsidiary company (Frog Tele Private limited). The sanctioned limit of cash credit is
' 2800.00 lakhs, and the rate of interest is the sum of the repo rate plus a spread per annum. The borrowing was renewed
on August 4th, 2024 with a sanctioned limit of ' 2,000 Lakhs and the rate of interest being the sum of repo rate plus spread
per annum.
**The above Bill Discounting facilities was availed on 5th March 2025 from ICICI Bank which is valid up to 23rd January 2026
unless the validity of the offer is expressly extended . The Sanctioned limit of Factoring of Receivables is ' 1200.00 lakhs,
and the rate of interest is the sum of the repo rate plus a spread per annum. In this factoring agreement, the Bank does not
assume the risk related to the Company's performance or any underlying transaction disputes with the Debtor. Recourse
to the Company is triggered if: 1) a dispute arises between the Company and Debtor; 2) the Company's representations or
warranties are found to be untrue; or 3) the Company breaches any obligation under the factoring agreement. This ensures
the Company remains liable for issues affecting the validity or collectability of the receivables due to their actions.
***The above borrowing was sanctioned on 19th July 2024 by HSBC bank which consists of Working capital Loan, Overdraft,
Import controlling unit Line(Fund or Non Fund Based), Import/Buyer Facility, Corporate Credit Card, Export Controlling
unit, Export/Seller Facility, Guarantee/Bonds Facility and Standby Documentary Credits Facility and is secured by Pari Passu
charge on Current assets and Movable fixed assets, in addition Mr Konark Trivedi, Managing Director providing personal
guarantee for ' 2,000 Lakhs for all facilities excluding all capital markets products and corporate credit card. The Sanctioned
limit of cash credit is ' 2025.00 lakhs, the rate of interest wil be charged at mutually agreed.
****This facility is a component of the total Cash Credit facility received from the HSBC Bank on July 19th, 2024 as above.
32. Government Grant/Production Linked Incentives
(i) During the financial year 2022-23, the Company had got the approval under Production Linked Incentive (PLI)
Scheme to promote Telecom and Networking products manufacturing in India vide approval letter PLI/GSCV/
OUT/17203/M4 dated 31-Oct-2022 wherein the Company is eligible for the incentives as a certain percentage
of its Sales of eligible products subject to the fulfilment of the eligibility conditions as mentioned in the approval
letter. This is valid for Financial Year 2022-23 to Financial year 2026-27. Against the amount of ' 276.27 lakhs
receivable on 31st March 2024, the company has received amount of ' 247.31 Lakhs lakhs during the year 2024¬
25. The remaining sum of '28.96 lakhs, related to Design Led Incentive (DLI), has been reversed in the books due
to uncertainty in receiving the amount, as the patent was not registered within the stipulated deadline, one of the
conditions for availing the DLI.
(ii) As per the management, on the basis of the figures pertaining to the Sales Turnover and Investment made by
the Company, the Company has also fulfilled the eligibility conditions for Financial Year 2024-25 and is eligible to
claim the incentive for the same. Accordingly it has recognized amount of ' 599.15 lakhs, the incentive income
based on the calculation of eligible amount of incentives as per the approval letter. The Company is regular in
filing the quarterly returns to the concerned authority and filing of claim application before the Department of
Telecommunication is under process.
33. Leases
Operating lease: Company as lessee
The Company has entered into operating leases for office premises, rentals for which are charged to the statement of
profit and loss for the year. These leases have an average life of between one to five years with renewal option included
in the contracts at the option of the lessee. There are no restrictions imposed by lease arrangements to the company .
There is no contingent rent recognised in the P&L.
Lease rentals recognised in the statement of profit and loss during the period ended 31st March, 2025 is NIL (March 31,
2024: ' 48.23lakhs).
Notes :
(i) The amount represents the Bank Guarantees exercised by the Company for ongoing projects and consists of
Performance Bank Guarantees and Advance Bank Guarantees. It includes advance bank guarantees amounting to
' 329.72 lakhs in Japanese Yen (¥ 581.00 lakhs) and ' 265.83 lakhs in US Dollar ($ 3.11 lakhs) which were restated in INR
as at March 31st, 2025.
(ii) The company had received a notice in the month of May 2024 from the GST Department amounting to ' 118.66 lakhs
for claiming extra Input tax credit in the month of April 2024. The company has filed an appropriate response for the
same in the month of May 2024.
(iii) No amount was required to be transferred to Investor Education and Protection Fund by the company during the year.
The Company did not have any long-term contracts including derivative contracts for which material foreseeable losses
may occur in future.
42. Other Statutory Compliance
(i) No proceedings have been initiated or pending against the company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
(ii) There are no transactions with the companies whose names are struck off under section 248 of the Companies Act,
2013 or section 560 of the Companies Act, 1956 during the year ended 31 March 2025.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company have not any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(vi) The company is not declared as a wilful defaulter by any bank or financial institution or any other lender.
(vii) The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with
Companies (Restriction on number of Layers) Rules, 2017.
(viii) The Company has utilised the borrowed funds for the purposes for which the fund is obtained.
(ix) 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 person(s) or entities, including foreign entities
("Intermediaries"), with the understanding that the intermediary shall whether directly or indirectly lend or invest
in other persons or entities identified in any manner by or on behalf of the company (Ultimate Beneficiaries) or
provide any guarantee, security or the like on behalf of ultimate beneficiaries;
(x) No funds have been received by the company from any person(s) or entities including foreign entities ("Funding
Parties") with the understanding that such company shall whether, directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries)
or provide guarantee, security or the like on behalf of the Ultimate beneficiaries.
43. Previous year Figures
Previous year figures have been regrouped / reclassified, where necessary, to conform to this yea
44. Legal Proceedings
The company has initiated legal proceedings against various parties for recovery of dues and su
are pending at different stages as at the Balance sheet and are expected to materialize in recov
future. Based on the review of these accounts by the management, adequate provision has bee
recovery. Management is hopeful for their recovery. In the opinion of the Management adequa
General Reserve / Retained earnings to meet the eventuality of such accounts being irrecoverable
45. Subsequent Event
Based on the evaluation, the Company is not aware of any subsequent events or transactions
recognition or disclosure in the financial statements.
b Defined Benefits Plan
Gratuity
The Company provides gratuity benefit to employees in India as per the Payment of Gratuity Act, 1972. Employee:
who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable or
death/retirement/termination is the employee's last drawn basic salary per month computed proportionately for 1!
days multiplied for the number of years of completed service. The gratuity plan is a unfunded plan. The Compan
has provided a provision of ' 194.49 lakhs at the end of the year (Previous year ' 167.37 lakhs) towards gratuity.
Leave Encashment
All employees will be entitled for 15 days of AL in a leave calendar year from the time they join the organization. I
not availed, the balance number of annual leaves at the end of the year will be carried forward and added to th
next year's AL balance. The maximum number of annual leave days that can be accumulated in a particular year wi
be 30. A separate actuarial valuation is carried out for which recognizes each period of service as giving rise to ar
additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation
The Company has provided a provision of ' 14.96 lakhs (Previous year ' 12.48 lakhs) towards leave salary.
*The Amount is recoverable from Mr.Umesh Singh and Mr. Tarun Tularam Sharma as the TDS amount deducted and
deposited is more than the Employee Benefit expense payable in March. The increase in TDS amount deducted is due
to share allottment to the employees under the ESPS Scheme -2023 of the company in the month of January 2025.
Note:
1. As the future liability for gratuity and leave encashment is provided on an actuarial basis for the company as a
whole, the amount pertaining to individual is not ascertainable and therefore, not included above.
2. The independent directors are paid remuneration by way of sitting fee based on the number of meetings attended
by them and their membership of audit committee during the year.
3. Service income availed from related parties are made on the terms equivalent to those that prevail in arm length
transactions and in the ordinary course of business.
4. All the loans taken or provided, if any, are for the general purpose only.
Note:
(1) Total Debt - Long term Debt Short term Debt
(2) Earning for Debt Service = Net Profit before taxes Non-cash operating expenses like depreciation and other
amortizations Interest other adjustments like loss on sale of Fixed assets etc.
(3) Debt service = Interest & Lease Payments Principal Repayments
(4) Revenue includes Credit sales only
(5) Capital Employed = Tangible Net Worth Total Debt Deferred Tax Liability
(6) Net Sales includes sale of goods only
49.1 Reasons for variations more than 25% as compared to previous year
1 The ratio decreased due to increase in current liabilities as compared to FY 2023-24. Current Assets of the company
increased as compared to FY 2023-24. Increase in Current Liabilities was higher as compared to increase in Current
Assets.
2 The increase is due to rise in short term borrowings for the current financial year.
3 The return on equity ratio increased due increase in Net Profit and share capital for the year.
4 The ratio increased due to increase in sales and average inventory during the year.
5 The Trade Receivables Turnover Ratio has decreased due increase in Trade Receivables.
6 The ratio increased due to increase in the revenue and working capital for the year.
7 The Net Profit and capital employed have increased for the year ended March 31st, 2025. The percentage of
increase in Net profit is higher than percentage of increase in Capital Employed leading to rise in ROCE.
For Singhi Chugh and Kumar For and on behalf of the Board of Directors of
Chartered Accountants Frog Cellsat Limited
Firm Registration No. 013613N
Harsh Kumar Konark Trivedi Satish Bhanu Trivedi
Partner Director Director
Membership No.: 088123 DIN: 00537897 DIN: 02037127
Place: New Delhi Place: London Place: Noida
Date: 20-05-2025 Date: 20-05-2025 Date: 20-05-2025
Charan Jeet Kalra Rajat Sharma
CFO Company Secretary
Place: Noida Place: Noida
Date: 20-05-2025 Date: 20-05-2025
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