The authorized share capital of the company increased by ' 10 lakhs (1 lakhs equity shares of ' 10 each) due to the merger of Shiva Profiles Private Limited (transferor company) with Frog Cellsat Limited (transferee company) with effect from April 1,2021, pursuant to section 233 and rule 25(5) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 vide order dated 06th March 2023. (Refer note 43).
* The Company has issued bonus shares to the existing equity shareholders amounting to ' 1125 lakhs by issuing 1,12,50,000 equity shares of ' 10 each in the ratio of 225:1 i.e. (two hundred twenty five bonus equity shares for every one share held) as on 3rd August, 2022.
** During the year ended on 31 March 2023, the company issued 40,75,200 fresh equity shares of ' 10 each at an issue price of ' 102 per share through Initial Public Offer (IPO). The equity shares of the company were allotted as on 10th October, 2022 and the same were listed on SME w.e.f 13th October,2022.
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.
As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.
*The above borrowing from ICICI bank is secured by hypothecation and charge to the bank by way of exclusive charge over stocks and receivables both present and future and movable fixed assets including Plant & Machinery, Furniture & Fixtures both present and future as a continuing security and personal property of directors and fixed deposits along with personal guarantees of two directors of the Company. The Company has filed monthly returns or statements with such banks, where applicable, which are in agreement with the books of account.
* As per the Schedule III, capital advances should be included under Long-term loans and advances and hence, cannot be included under capital work-in-progress.
**The company has incurred this expenditure on a capital project of construction of a multi level office and factory building on the leasehold land located at C-23, Sector 80, Noida. In order to assess the project's completion, management's assessment of its progress, and their intention to put the asset to its intended use, a certificate has been obtained from third-party management experts.
*Pursuant to the sanction of the scheme of merger or amalgamation, Shiva Profiles Private Limited (the transferor company) merged with the Frog Cellsat Limited (the transferee company) vide order dated 06th March 2023
**During the financial year 2022-23, the company sold one of its subsidiaries "Frog Profiles Private Limited on 21st June, 2022.
***The company has acquired 100% shares of the Frog Services Private Limited, making it the wholly owned subsidiary with effect from 30-06-2022.
13.1 Deferred tax assets have been reviewed at each reporting date and includes the effect of change in the tax rates applicable as per Income Tax Act, 1961.
13.2 Deferred tax assets and deferred tax liabilities have been offset wherever the company has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority.
14.1The Company had made payments to Unitech golf and Country Club aggregating to ' 221.35 lakhs till date, as per the construction linked payment plan of 'Agreement for Sale' dated October 05, 2011 for purchase of an apartment. The borrowing cost capitalised up to March 31, 2016 amounts to ' 28.34 lakhs. The Company has not made any additional payment as the construction has not progressed as per the construction linked plan and it has crossed its expected delivery date of March 31, 2014. Further, the Company has commenced legal proceeding against the real estate company on August 12, 2016 before the Hon'ble High Court of Delhi, for recovery of the amounts paid along with interest @ 10% in terms of the said agreement. Although the matter is scheduled for hearing and the decision by the court is pending, the management is still confident that it will be able to realise the capital advance through favourable outcome of the legal proceedings. However, the Company has made provision of ' 227.86 lakhs (previous year- ' 190.40 lakhs) against the aforesaid amounts. The provision on the doubtful advance is provided at 15% per annum of the gross amount starting from the year 2016 on the basis of estimations by the management.
14.2 The retention money is the amount retained from customers against the sales order until the project of the order is completed. Once the project is completed, retention money is returned to customers.
17.1The above provision includes ' 242.71 lakhs relating to raw material lying in the premises of a third party (Job work contractor). These goods were sealed by the PNB due to the default committed by the said contractor. The company is neither a borrower nor a guarantor to the said contractor. Hence the illegal act of the PNB is contested before the DRT. Since, the assets of the Company have got impoverished over a period of time and have lost their usability, and it is not probable to recover the amount from PNB, full provisioning for the same has been done in the books of accounts.
17.2 Raw materials, components, stores and spares are valued at lower of cost and net realizable value. Cost of raw materials, components and stores and spares is determined on weighted average basis.
Work in progress and finished goods are valued at lower of cost and net realizable value. Cost is determined on weighted average basis.
30.1 Pursuant to the approval of shareholders on 25-07-2022, the Company has issued Bonus shares in the ratio of 225 equity shares of ' 10/- each for every 1 existing equity share of ' 10/- each. Consequently, EPS has been restated and adjusted for all comparative periods presented in the standalone Financial Statement.
30.2 The Company has issued 40.75 lakhs fresh equity shares through IPO in October, 2022. Consequently, the weighted average no. of shares has increased as at 31-03-2023 and impacted the EPS of the current financial year ended on 3103-2023.
B. Pursuant to the IPO, the company has incurred IPO expenses amounting to ' 251.79 lakhs during the year. As these expenses are not regular in nature and distinct from the expenses incurred in the ordinary course of business, these have been disclosed as extra ordinary items in the statement of profit and loss.
33. Government Grant/ Production Linked Incentives
a) During the Financial years 2018-19, Global Innovation & Technology Alliance on the behalf of Department of Science and Technology ("the authority") had sanctioned government grant of ' 287.25 lakhs as conditional grant towards the project of Development of Cellular Interface Mitigation Solution for the Indian Market, based on UBiFix Solution. The accounting treatment for government grant received during the previous year has been done according to the income approach defined under Accounting Standard-12, Accounting for Government Grants. During the year, the Company has received the grant of ' 102.96 lakhs that had already been treated as deferred government grant receivable in earlier years. Further, the Company is liable to pay royalty expenses at the rate of 2% on the Sales Turnover achieved on account of this solution. Consequently, a royalty payment of ' 1.16 lakhs has been booked as an expense during the year.
b) During the financial year 2022-23, the Company has 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. As per the management, on the basis of the figures pertaining to the Sales Turnover and Investment made by the Company, the Company has fulfilled the eligibility conditions for Financial Year 2022-23 and is eligible to claim the incentive for the same. Accordingly it has recognized 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.
34. 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 are not non cancellable and 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 placed upon the Company by entering into these leases. 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, 2023 is ' 171.34 lakhs (March 31, 2022: ' 129.45 lakhs).
38. Provision for Warranties
A provision is recognized for expected warranty claims on products sold during the last three years, based on past experience of the level of repairs and returns. It is expected that significant portion of these costs will be incurred in the next financial year and all will have been incurred within two years after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the one to three years warranty period for all products sold.
39. Corporate Social Responsibility (CSR)
The Company has constituted Corporate Social Responsibility Committee in accordance with the provisions of Section 135 of the Companies Act. The average net profits of the Company for the last three financial years 2019-2020, 20202021 and 2021-2022 was ' 10.46 lakhs calculated in accordance with the provisions of Section 198 read with other applicable provisions of the Companies Act 2013. Further, as per the requirement under Section 135 of the Companies Act 2013, at least 2% of the average net profits amounting to ' 20.92 lakhs were to be contributed for carrying out Corporate Social Responsibility activities. The carried forward amount of CSR expenditure that the company overspent on in prior years amounting to ' 7.93 lakhs has been offset with the expenditure that must be done in the current year. During the year 2022-23, the company has spent a sum of ' 13 lakhs towards education development and the CSR committee is in the process of identifying the activities to discharge its CSR obligation.
Purpose to Section 135 of the companies Act, 2013, the details are as follows:-
1. Gross amount required to be spent during the year 2022-23'20.92 lakhs (previous year 2021-22'37.33 lakhs)
The company contributed ' 13 lakhs to Manav Kalyan Foundation out of its CSR budget for FY 2022-23 for the projects of "Food for everyone in Delhi-NCR" and "Child Literacy with mid-day meals".
40. Segment Reporting
As the Company collectively operates only in one business segment i.e. 'manufacturing and installation of in-building coverage solutions and mobile network accessories for mobile service providers and operators. There is no other Business or Geographical segment which fulfils the criteria of 10% or more of combined Revenue, thus Segment Reporting under Accounting Standard 17 'Segment Reporting' is not applicable to the Company.
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41. Contingent Liabilities and Commitments
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(' in Lakhs except otherwise stated)
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Particulars
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As at
31st March 2023
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As at
31st March 2022
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Contingent Liabilities
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a) Claims against the company not acknowledged as debt;
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-
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-
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b) Guarantees;
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-
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-
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c) Other money for which the company is contingently liable1
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Commitments
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a) Estimated amount of contracts remaining to be executed on capital account and not provided for
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-
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-
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b) Uncalled liability on shares and other investments partly paid
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-
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c) Other commitments 2 3
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Total
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-
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43. Scheme of Arrangements for amalgamation of subsidiary
A. Pursuant to the sanction of the scheme of merger or amalgamation, Shiva Profiles Private Limited (SPPL, the transferor company) is merged with the Frog Cellsat Limited (the transferee company) vide order dated 10th March 2023 by the Regional Director and the appointed date of 1st April 2021. SPPL was a wholly owned subsidiary of Frog Cellsat Limited and was engaged in manufacturing and trading of tele equipment and apart from that providing cellular services and other applications. The effect of the merger of SPPL with Frog Cellsat Limited has been accounted for under the pooling of interest method referred to in Accounting Standard 14, Accounting for Amalgamation.
B. Upon coming into effect of this Scheme and with the appointed date all the assets and liabilities of SPPL have vested in or deemed to be transferred to the Company as a going concern. Consequently, all the assets and liabilities of SPPL on and after the appointed date and prior to the sanction date have been transferred to Frog Cellsat Limited on a going concern basis. Accordingly, the impact of the scheme has been considered during the financial year 2022-23 in these Financial Statements and all the assets and liabilities as appearing in the books of SPPL as on 0104-2022 have been transferred at their respective book values.
D. Comparative figures as on 31-03-2022 do not include the figures of erstwhile SPPL which is amalgamated with the Company with appointed dated April 1, 2021. Consequently, the comparative figures are not comparable with the figures for the year ended March 31,2023 to this extent.
E. As SPPL was a wholly-owned subsidiary of Frog Cellsat Limited, no shares have been allotted to the shareholders upon the scheme becoming effective. Only the authorised share capital of the Frog Cellsat Limited has been increased by ' 10 lakhs (1,00,000 equity shares of ' 10 each) on the merger of Share capital of SPPL.
44. 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 2023.
(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.
45. Previous year Figures
Previous year figures have been regrouped / reclassified, where necessary, to conform to this year's classification.
46. Legal Proceedings
The company has initiated legal proceedings against various parties for recovery of dues and such legal proceedings are pending at different stages as at the Balance sheet and are expected to materialize in recovering the dues in the future. Based on the review of these accounts by the management, adequate provision has been made for doubtful recovery. Management is hopeful for their recovery. In the opinion of the Management adequate balance is lying in General Reserve / Retained earnings to meet the eventuality of such accounts being irrecoverable.
47. Subsequent Event
Based on the evaluation, the Company is not aware of any subsequent events or transactions, that would require recognition or disclosure in the financial statements.
48. Employee Benefits
The company has made provisions for the employees benefits in accordance with the Accounting Standard (AS) - 15 "Employee Benefits " . During the year , the company has recognised the following amounts in its financial statements:
b Defined Benefits Plan Gratuity
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service. The Company has provided a provision of ' 137.98 lakhs at the end of the year (Previous year ' 95.51 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. If not availed, the balance number of annual leaves at the end of the year will be carried forward and added to the next year's AL balance. Maximum number of annual leaves that can be carried forward to next year will be 30. A separate actuarial valuation is carried out for which recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The Company has provided a provision of ' 3.01 lakhs (Previous year ' 5.85 lakhs) towards leave salary.
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 remmuneration 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 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
51.1 Reasons for variations more than 25% as compared to previous year
1 Change in current ratio is due to increase in current assets during the year.
2 Change in debt-equity ratio and debt service coverage ratio is due to repayment of all the loans during the year.
3 Change in return on equity is due to an increase in the shareholder's equity of the company.
4 Change in net capital turnover ratio is due to increase in working capital during the year.
5 Change in ROCE is due to increase in the tangible net worth of the company
6 Change in return on investment is due to the lower dividend received in currnt year as compared to previous year.
1
A demand of TDS amounting to ' 5.99 lakhs is being reflected on TRACES portal that is rectifiable in nature. Also, no demand notice has been received by the company in this regard.
2
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.
3
Based on management analysis, Company are expected to capital commitment of '4138.01 lakhs in subsequent years out of which '3588.89 lakhs is already incurred by the company on the development of company building in Uttar Pradesh (March 31, 2022: ' 705.05 lakhs)
42. Loans or Advances disclosures
Company has granted Loans or Advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013,) either severally or jointly with any other person that are repayable on demand, without specifying the period of repayment.
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