frog cellsat ltd share price Directors report

Dear Members

It gives me immense pleasure to present the 19th Boards Report, on behalf of the Board of Directors (the "Board") of the Company, along with the Balance Sheet, Profit and Loss account and Cash Flow statements, for the financial year ended March 31, 2023.

FINANCIAL PERFORMANCE:

Your Companys sales have remain constant compared to previous years due to delays in some of the project implementation from the customers end. We expect the revenue growth from these projects to be reflected in the current financial year 2023-24. Sales have been constant but the company has increased the product margin, which has been reflected in growth in profitability of the company.

Key highlights of financial performance of your Company for the financial year 2022-23 are provided below:-

DIVIDEND:

The Board of Directors has not recommended any dividend for the financial year (2022-23) as the profits are conserved to fund the future plans of the Company.

BUSINESS AND OPERATIONS

Your company is engaged in manufacturing of telecom equipments used by telecom operators especially in Telecom Towers. We manufacture 2G/3G/4G/5G Multi-band Digital RF Repeaters, Multi-band Frequency Shift Repeater, Multi-band Optical DAS system, relative software and accessories. We also offer In-Building Coverage Planning and Design services along with Radio Access Network (RAN) and Backhaul Network installation services. Also, our Production line is equipped with anti-static equipment, all products are subject to rigorous and reliability tests.

Your company has two production unit one is located in Noida and second one is located in Dehradun.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE BUSINESS OPERATIONS AND FINANCIAL POSITION OF THE COMPANY.

During the year, the following material changes and commitments have occurred, affecting the business operations and financial position of the Company.

9 Public Issue of Equity Shares (Initial Public Offer)

During the year under review, the Company had issued and allotted 40,75,200 equity shares of face value of 10.00 each ("equity shares") of our company for cash at a Price of 102 per equity share (including a share premium of 92 per equity share)

9 Scheme of Amalgamation/ Merger approved by Regional Director (RD)

During the year under review, The Scheme of Amalgamation or merger of Shiva Profiles Private Limited ("Transferor Company") into Frog Cellsat Limited (the "Company") has been approved by the Regional Director vide its order dated March 06, 2023 received on March 16, 2023.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

Pursuant to Regulation 34(2)(f) of the Listing Regulations and SEBI circular no. SEBI/LAD-NRO/GN/2021/2 dated May 5, 2021, your Company provides the prescribed disclosures in new reporting requirements on Environmental, Social and Governance ("ESG") parameters called the Business Responsibility and Sustainability Report ("BRSR") which includes performance against the nine principles of the National Guidelines on Responsible Business Conduct and the report under each principle which is divided into essential and leadership indicators. The BRSR is provided separately in the Annual Report.

OUTLOOK:

The organisation remains optimistic about the future opportunities that lie ahead. The market landscape continues to evolve rapidly with new growth prospects and innovation. 5G technology will finally become mainstream, enable 5G monetization, and enter the first stage of use cases. As the telecom industry will continue to grow rapidly, mainly because of 5G technology, we as a corporate are hoping to touch new growth heights in near future.

SHARE CAPITAL:

During the year under review there was a change in the authorized, issued, subscribed and paid-up equity share capital of the Company.

i. Increase in Authorized Share Capital

The Authorized Share Capital of the Company increased to 16,00,00,000 divided into 1,60,00,000 Equity Shares of 10 each effective from July 04, 2022.

ii. Bonus Issue

On August 03, 2022, the Company made an allotment of 1,12,50,000 equity shares of 10 each as fully paid- up bonus equity shares in the ratio of 225:1. Thereby the Paid-Up Share Capital of the Company increased to 11,30,00,000/- (Rupees Eleven crore thirty lacs only).

iii. Public Issue (Initial Public Offer)

Initial Public Issue of 40,75,200 equity shares of face value of 10.00 each ("equity shares") of our company for cash at a Price of 102 per equity share (including a share premium of 92 per equity share) ("offer price") aggregating up to 4156.70 Lakhs ("offer"). This offer includes a reservation of 2,04,000 equity shares aggregating up to 208.08 lakhs for subscription by Market maker ("Market Maker Reservation Portion"). The offer less the market maker reservation portion is hereinafter referred to as the "Net Issue". The Issue and the net Issue shall constitute 26.51% and 25.18%, respectively, of the Post Issue Paid-Up Equity Share Capital of Our Company.

Consequently, the Paid up, Issued and Subscribed Share Capital of your Company was also increased.

LISTING WITH STOCK EXCHANGE:

Equity shares of your Company are listed on the National Stock Exchange of India Limited on SME Platform under the Trading Symbol FROG. The ISIN code of the Company is INE385O01018.

LISTING FEES:

Your Company has paid requisite Annual Listing Fees to National Stock Exchange of India Limited (NSE) where its securities are listed.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Pursuant to Section 186 of the Companies Act, 2013 and Schedule V of the Listing Regulations, disclosure on

particulars relating to Loans, Guarantees and Investments are provided as part of the financial statements.

EXTRACT OF ANNUAL RETURN:

In accordance with section 134(3)(a) of the Act, the annual return as referred in section 92(3) of the Act, for the financial year under review shall be placed on the website of the Company www.frogcellsat.com under the Downloads Section.

DEMATERIALIZATION OF SHARES:

Companys shares are in dematerialization form with National Security Depository Limited (NSDL) and Central Depositary Services (India) Limited (CDSL)

RESEARCH AND DEVELOPMENT (R&D)

Your Company continues to focus on R&D and strongly believes that productive R&D is a key ingredient for success.

FIXED DEPOSITS:

We have not accepted any fixed deposits and no amount of principal or interest was outstanding as of the Balance Sheet date.

PUBLIC DEPOSITS:

The Company has not accepted any deposits from the public as defined under Chapter V of the Companies Act, 2013 and the Rules made thereunder.

DETAILS OF FRAUD REPORTED BY AUDITORS:

During the year under Review, No details of fraud reported by auditors of the company under Section 143(12) of the Companies Act, 2013.

PARTICULARS OF EMPLOYEES

There is no employees employed throughout the financial year who are in receipt of remuneration of 1,02,00,000 or more, or employed for part of the year in receipt of 8,50,000 or more a month, under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 & its amendment thereto, therefore there is no statement annexed.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES:

During the year under review, the company has been recruiting as per requirement from various department during the year.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

During the year under review, all contracts or arrangements with related parties were entered into at arms lengths basis and in the ordinary course of business. Particulars of contract or arrangement made with related parties referred to in section 188 (1) of the Companies Act 2013 in prescribed form AOC-2 is appended in "Annexure- I" to the Boards report.

AUDITORS:

M/s. Rajan K. Gupta & Co., Chartered Accountants (FRN

005945C), were appointed as the Statutory Auditors of the Company in the Annual General Meeting of the Company held on September 3, 2021 to hold the office upto the conclusion of Annual General Meeting to be held in the financial year 2026. However, M/s. Rajan K. Gupta & Co., vide its letter dated 3^rd October, 2022 resigned as the Statutory Auditors of the Company citing the reason that he will be appointed as Internal Auditor of the Company.

Based on the recommendations of the Audit Committee, the Board of Directors, at its meeting held on October 7, 2022 noted and accepted the resignation of M/s. Rajan K. Gupta & Co. The Board also placed on record its appreciation to outgoing Auditors for their contribution to the Company with their audit processes and standards of auditing.

In this regard, after obtaining their consent and eligibility certificate under Section 139(1) of the Companies Act, 2013, the Board of Directors of the Company at their meeting held on October 7, 2022 appointed M/s. Singhi Chugh & Kumar; Chartered Accountants, (FRN No - 013613N) as the Statutory Auditors of the Company under Section 139(8) of the Companies Act, 2013, to fill the casual vacancy consequent to the resignation of M/s Rajan K. Gupta & Co.

As required by Section 139(8) of the Companies Act, 2013, the appointment is also to be approved at a general meeting held on October 10, 2022 of the Company. Accordingly, the Board of Directors recommends the said appointment for the approval of shareholders at the ensuing AGM of the Company.

Further, the Board, on the recommendation of the Audit Committee and subject to the approval of the shareholders, approved appointment of M/s. Singhi Chugh & Kumar; Chartered Accountants, (FRN No - 013613N) as the Statutory Auditors of the Company for a period of 5 (five) years from the conclusion of the ensuing 19^th AGM till the conclusion of the 24^th AGM to be held in the year 2029 at such remuneration plus out of pocket expenses and applicable taxes, as may be mutually agreed between the Board of Directors of the Company and the Auditors.

Appropriate resolution seeking Members approval for the appointment of M/s Singhi Chugh & Kumar; Chartered Accountants, (FRN No - 013613N) as the Statutory Auditors of the Company is appearing in the Notice convening the ensuing AGM of the Company.

AUDITORS REPORT:

The Audit for FY 2022-23 was conducted by M/s Singhi Chugh & Kumar; Chartered Accountants, (FRN No - 013613N) and there are no qualifications, reservations, adverse remarks or disclaimers made by the Statutory Auditor in their Audit Report. The Notes to the financial statements referred in the Auditors Report are self-explanatory and therefore do not call for any comments under Section 134 of the Companies Act, 2013. The Auditors Report is enclosed with the financial statements in the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY:

The Company had constituted a Corporate Social

In accordance with the provision of the Act, the Company currently is not required to constitute the CSR Committee, as the amount to be spent by a company does not exceed Rs. 50 lakh, and thus the CSR committee constituted previously stands dissolved. The functions of such Committee shall be discharged by the Board of Directors of the Company.

An Annual Report on CSR containing particulars as per annexure prescribed in the CSR Rules made thereunder is annexed herewith as Annexure IV.

BOARD OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND BOARD AND COMMITTEE MEETINGS:

Your Company have an appropriate mix of executive, non-executive and Independent Directors to maintain its independence, and separate its functions of governance and management. As on 31^st March, 2023, the Board comprised of 8 members, consisting of one Managing Director, 2 Executive Director, 1 Non-Independent Non - Executive Director, 4 Independent Directors and none of the directors are disqualified under Section 164 of the Companies Act 2013.

During the year under review, Mr. Barathy Sundaram, Mr. Ajay Chacko, and Mr. Ranjit Datta, were appointed as Additional Independent Directors by the directors at the board meetings; subject to the regularization by the members of the Company at the 18^th Annual General Meeting of the Company held on September 30, 2022 with effect from that date to hold office for a term of five (5) years from the date of their appointment. In the opinion of the Board, all the aforesaid Directors possess the integrity, expertise and experience (including proficiency) required for appointment as Independent Directors of the Company.

During the said financial year Mr. Charan Jeet Kalra ceased to be the Director of the Company w.e.f 19^th August 2022. He has also resigned from the position of Company

Secretary of the Company w.e.f September 01, 2022 and in his place Mrs. Manisha Makhija has been appointed to hold the position of Company Secretary and Compliance Officer of the Company with effect from the same date.

Mr. Konark Trivedi was appointed as Managing Director of the Company at the General Meeting held on September 01, 2022; for a period of 5 years consequently resulting to change in designation from Director to Managing Director. Further Mr. Charan Jeet Kalra was appointed as the Chief Financial Officer of the Company to be designated as Key Managerial Personnel of the Company.

Pursuant to provisions of Section 152 of the Companies Act, 2013 Mr. Satish Bhanu Trivedi will retire by rotation at the ensuing annual general meeting and is being eligible, offers himself for re-appointment. A resolution seeking approval of the members for the re-appointment of Mr. Satish Bhanu Trivedi as director of the Company shall be placed before the members of the Company at the ensuing annual general meeting of the Company.

Mrs. Sonal Trivedi was appointed as a Non-Executive Director of the Company on 3^rd June 2022. The board in the meeting held on January 29, 2023, has decided to change her designation from non-executive director to executive director subject to the approval of members in the ensuing annual general meeting and the approval of Central Government.

Also note that, Mr. Kamal Nath (DIN - 09094350) was appointed as Additional Independent Directors of the Company with effect from 29 January, 2023 for a period of five years with effect from 29^th January, 2023; subject to in the ensuing Annual General Meeting to be held on 8^th August, 2023.

KEY MANAGERIAL PERSONNEL

The summary of the Board & Committee Composition, Particulars of Directors, number of meetings attended by each Board Member:

A. Board Composition:-

Composition and Category of Directors as of

B. Board Meetings:

Number of Board Meetings held:

There were Sixteen Board Meetings held during the year as per below stated dates: -

1 18 April 2022

2 03 June 2022

3 30 June 2022

4 06 July 2022

5 12 July 2022

6 14 July 2022

7 03 August 2022

8 19 August 2022

9 01 September 2022

10 05 September 2022

11 23 September 2022

12 28 September 2022

13 07 October 2022

14 10 October 2022

15 11 November 2022

16 29January 2023

C. Board Committee Meetings:

Corporate Social Responsibility Committee

There was one CSR committee meeting held during the year as below: -

1 05 July 2022

Audit Committee

There were three Audit Committee Meetings held during the year as below:-

1. 03 October 2022

2. 11 November 2022

3. 27 January 2023

Nomination & Remuneration Committee

There was one Nomination & Remuneration Committee Meeting held during the year as below:-

1. 27 January 2023

D. Name and Designation of Compliance Officer:

Mrs. Manisha Makhija - Company Secretary COMMITTEES OF THE BOARD

The Company has constituted the following Statutory Committees of the Board of Directors as on September 05, 2022.

1. AUDIT COMMITTEE;

The Audit Committee of the Board of Directors was constituted with the requirement of the Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015

The Statutory Auditors, and Chief Financial Officer attend the Audit Committee Meetings as Invitees. The Company Secretary acts as Secretary to the Audit Committee. The Audit Committee has made observations and recommendations to the Board of Directors, which have been noted and accepted by the Board.

During the Financial Year 2022-23, all recommendations made by the Audit Committee to the Board of Director were accepted by the Board and there were no instances where the recommendations were not accepted.

2. STAKEHOLDERS RELATIONSHIP COMMITTEE

The Company has constituted a Stakeholders Relationship Committee pursuant to the provisions of Section 178(5) of the Companies Act 2013 and Regulation 20 of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.

3. NOMINATION AND REMUNERATION COMMITTEE

The Company has constituted a Nomination and Remuneration Committee pursuant to the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 and Section 178 of the Companies Act 2013.

COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

In order to ensure compliance with the requirements of Section 178 of the Companies Act, 2013 and any other applicable provisions, the Nomination and Remuneration Committee of the Board of Directors of the Company have formulated the Nomination and Remuneration Policy.

The Nomination and Remuneration Policy of your Company have been made available on the website of the Company

i.e., http:// www.frogcellsat.com

MEETING OF INDEPENDENT DIRECTORS

As per Schedule IV and subject to Section 149(8) of The Companies Act, 2013, the meeting of the Independent Directors was conducted on March 08, 2023.

DECLARATION OF INDEPENDENT DIRECTORS:

As on March 31,2023, the following Directors on your Board were Independent:

1. Mr. Ranjit Datta - Independent Director*

2. Mr. Barathy Sundaram - Independent Director

3. Mr. Ajay Chacko - Independent Director

Pursuant to the provisions of Section 134(3)(d) of the Companies Act, 2013, disclosure is hereby given that the Company has received declaration / confirmation of independence from all the 4 (four) Independent Directors, of the Company pursuant to Section 149(6) of the Companies Act, 2013, as may amended from time to time, after undertaking due assessment of the veracity of the same and the Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013. The certificates of Independence received from all the Independent Directors have been duly noted by the Board.

BOARD EVALUATIONS:

Pursuant to the corporate governance requirements as prescribed in the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, the Board of Directors has carried out an annual evaluation of its own performance, Board Committees and of individual directors.

In a separate meeting of independent directors, performance of non-independent directors, performance of the Board as a whole, performance of the Committee(s) of the Board and performance of the Chairman was evaluated, taking into account the views of other directors.

DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATES:

Your Company has no associate or joint venture company. The Company has below Wholly Owned Subsidiaries:-

1. Frog Tele Private Limited

2. Shiva Profiles Private Limited (Merged with Frog Cellsat Limited w.e.f. March 06, 2023 )

3. Frog Services Private Limited

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 a statement containing the salient features of financial statements of the Companys subsidiaries in Form No. AOC-1 is attached to the financial statements of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

Information required under Section 134 (3) (m) of the Companies Act, 2013 is given to this report

MANAGEMENT DISCUSSION & ANALYSIS REPORT

1. Industry Structure & Developments:

• Frog Cellsat is part of telecom equipment manufacture category and has been consistently performing as a leader among the Mobile Telecom equipment Manufacturers in India. Frog Cellsat has a brand value and known for Quality and competitiveness;

• Frog Cellsat has been adding new products to its portfolio during the past years and is quite successful.

2. Opportunities & Threats:

• Frog Cellsat being leader in its field do not foresee any major threats, which may affect its business and / or operations but being into the technology driven Industry, company has to be continuously work towards up gradation of all process/ production facility, R & D set up;

• Frog Cellsat see lot of opportunity in Indian market and also exploring to expanding in international arena.

3. Financial Performance of the Year -

Return on Capital Employed: - for the current year at 18.01 % as compared to 30.42 % in the previous year. The change in return on capital employed is due to an increase in the tangible net worth of the company.

4. Segment / Product-wise performance: As the

Company collectively operates only in one business segment i.e. manufacturing and installation of inbuilding 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.

5. Outlook: Management do not foresee any negative impact on the Industry and it seems to be going in right direction;

6. Risks and concerns: Frog Cellsat constantly keeping watch on all related risks and keep taking appropriate steps and controls under various department level to minimize the risks. The company do not see any material risks, which require explanations.

7. Internal control systems: The internal control system is an integral part of the general organizational structure of the Company. The system is highly structured and totally coordinated with the size and nature of its business. This process is aimed at pursuing the values of both procedural and substantial fairness, transparency, and accountability. External audit firms are appointed at various locations of the Company to conduct regular audits. The internal HR control system is a set of rules, regulations, policies, and procedures which run on software with in-built authorizations for enhanced control. The organisation is appropriately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment.

8. Discussion on financial performance with respect to operational performance: Statements in the management discussion and analysis describing the

Companys objectives, projections, estimates, expectations may be "forward-looking statement" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Key factors that could make a difference to the Companys operations include among others, economic conditions affecting demand/supply and price conditions in the domestic markets in which the Company operates, changes in the Government Regulations, tax laws and other statutes and incidental factors.

9. Entry/Exit of Key Managerial Personnel and overall employment status of the company: The organisation continued its endeavor of attracting & retaining best-in-class talent through multiple talent engagement initiatives. We have launched applicator recognition & incentivization plan to address the most important manpower of our business. "INVEST IN HUMAN" is expanding to the last possible lane within the Frog family. The company also conducted yearly reviews with all employees to assess their opinions & take them on board for future policy framework. During the year special recognition was given to employees who have completed 10 + years with Frog.

Change in Return on Net Worth in comparison to the previous year: During the financial year ended 31^st March 2023, the return on net worth of the Company was 17.54 % as compared to the previous financial year ended 31^st March 2022 which was at 24.79 %.

11. Disclosure of Accounting Treatment: The Company has followed the same accounting treatment as prescribed in the relevant Accounting Standards while preparing the Financial Statements.

DIRECTORS RESPONSIBILITY STATEMENT:

As required under section 134 (5) of the Companies Act,

2013, Directors of your Company hereby state and confirm

that:-

• The applicable Accounting Standards have been followed in preparation of annual accounts;

• The accounting policies selected were applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the State of affairs of the Company as at 31^st March, 2023;

• Proper and sufficient care has been taken for 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 fraud and other irregularities;

• The Annual Accounts for the year ended 31^st March, 2023 have been prepared on a going concern basis;

• Internalfinancialcontrols have laid down by the company and that such internal financial controls are adequate and were operating effectively;

• Company has proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

GENERAL DISCLOSURES:

• For the financial year ended 31^st March, 2023, the Company has transferred profit of 15,46,01,000/- to Reserves.

• There was no change in the nature of business of the Company during the financial year 2022-23.

• During the year under review, your Company was not required to maintain any cost records under provisions of Section 148 of Companies Act, 2013 and rules made thereunder.

• The Company has established a process to identify, assess, monitor and mitigate key financial, operational, business & compliance risks.

• The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof. - Not Applicable

• The Company has laid down adequate internal financial controls over financial reporting to be followed by the Company and such internal financial controls have been operating effectively.

• During the Financial year 2022-23, the company had received one complaint from the shareholders or investors which was duly resolved by the company.

• There was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year as at the end of the financial year.

• Your director state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

a) Issue of Equity Shares with differential rights as to dividend, voting rights or otherwise.

b) Issue of Sweat Equity Shares and issue of shares under ESOP scheme to the employees of the Company.

c) Buy-back of equity shares from existing Equity Shareholders.

d) Issue of Bonus Shares.

ADDITIONAL INFORMATIONS

The additional information required to be given under the Companies Act, 2013 and the Rules made thereunder, has been laid out in the Notes attached to and forming part of the Annual Accounts. The Notes to the Accounts referred to the Auditors Report are self-explanatory and therefore do not call for any further explanation.

The Consolidated Financial Statements of your Company form part of this Annual Report. Accordingly, this Annual Report of your Company does not contain the Financial Statements of its Subsidiaries. The Audited Annual Accounts and related information of the Companys subsidiaries will be made available upon request. These documents will also be available for inspection during all days except Saturdays, Sundays and public holidays from 10.00 a.m. (IST) to 4.00 p.m. (IST) at the Companys Corporate Office.

ACKNOWLEDGEMENT:

Directors take this opportunity to express thanks to various departments of the Central and State Government, Bankers, Material Suppliers, Customers and Shareholders for their continued support and guidance.

The Directors wish to place on record their appreciation for the dedicated efforts put in by the employees of the Company at all levels.

By Order of the Board of Directors For Frog Cellsat Limited

Sd/-

Konark Trivedi

Managing Director

Place: London Date: 13^th July 2023