2.10 Provisions and contingencies :

A provision is recognized when the Company has a present obligation as a result of past events and its
probable that an outflow of resources will be required to settle the obligation in respect of which a reliable
estimate can be made. Provisions (excluding retirement benefits) are not discontinues to their present
value and are determined based on the best estimate required to settle the obligation at the Balance Sheet
date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

However as per implementation of Ind AS there are no provision made for proposed dividend and their
dividend taxes, which will be approved in forthcoming Annual General Meeting. Only the actual
declaration of dividend and their taxes will be provided on the date of Annual General Meeting.

2.11 Revenue Recognisation and Government Grants :

The revenue axe recognized as follows :-

a) Sale of Manufactured Goods : Domestic Sale of Manufacturing Goods are recognized on Net of
GST. Export Sales in foreign currencies axe recognized on prevailing exchange rate on the date of
transaction of sales invoice less any export return of goods. The fluctuation of foreign currencies on
the date of transaction and the date of actual realization etc. are recognized in the Statement of Profit
and Loss under a separate account head. The IGST payment on exported goods, if any, are claimed as
rebate after successful export. The IGST payment on Domestic Sale of Goods same collected from
party and paid accordingly. However there is no amount of IGST on Exported/Domestic Goods
reflected through Statement of Profit and Loss.

b) Sale of Scrap : As per Ind AS method the Domestic Sales recognized on Net of GST Collection The
payment of above IGST/CGST/SGST collected from party and paid accordingly. The same is not
reflected through Statement of Profit and Loss.

c) Government Grants, subsidies and Export incentives : The Export benefit like Sale of Licence
and Duty Drawback are covered as export subsidies and the same are accounted for in the year of such
actually materialized.

2.12 Foreign currency transaction and translations :

The foreign currencies transactions are recognized as follows :-

a) Initial recognition : Transaction in foreign currencies entered into by the Company are accounted at
the exchange rates prevailing on the date of the transaction or at the rates that closely approximate the
rate at the date of transaction.

b) Measurement of foreign currency monetary items at the Balance Sheet date : Foreign currency
monetary items (other than derivative contracts) of the Company outstanding at the balance Sheet date
are restated at the year-end rates. Exchange differences arising out of these transactions are charged
to the Statement of Profit and Loss.

c) Treatment of exchange differences : Exchange differences arising on settlement/restatement of
short-term foreign currency monetary assets and liabilities of the Company relates to any transactions
are recognized as income or expense in the Statement of Profit and Loss.

d) Accounting of forward contracts : Premium/discount on forward exchange contracts, which are not

intended for trading or speculation purposes are amortised over the period of the contracts if such
contracts relate to monetary items as at the Balance Sheet date. Due to COVID-19 pandemic the short¬
. term fluctuation in foreign currencies rate adversely effected the forward exchange contracts and their

MTM (Marked to Market) Gain/losses of outstanding forward exchange contracts are not recognized
in the Statement of Profit and Loss, but same will be indicated in Notes of Accounts.

2.13 Other Income, Other Expenditures, Other Comprehensive Income and Exceptional Income :

a) Investment Income on actual transaction are recognized on actual basis.

b) Unrealised Gain on Investment Income recognized as Other Comprehensive Income and/or

• Exceptional Income along with their deferred tax liabilities on the basis of fair market value at the
prevailing Balance Sheet date as per implementation of Ind AS.

c) Interest Income are recognized on accrual basis.

d) Freight Outward Collection over Actual Freight Outward Expenses recognized as Other Income.

e) Other expenses (other than Borrowing Cost and Employees benefits, which shows separately) are
recognized on accrual basis.

2.14 Borrowing Cost i.e. Finance Cost:

The accounting for borrowing costs represented as Finance Cost in Statement of profit and Loss and Its
include interest, amortization of ancillary cost incurred and exchange differences, if any arises from
foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

2.15 Employee Benefits :

Employee benefit includes employees provident fund, group gratuity fund.

a) Defined contribution plans :

The Company’s contribution to provident fund are considered as defined contribution plans to

• Recognised Provident Fund (EPFO) which are fully funded and administered by the Central
Government.

b) Defined benefit plans :

For defined benefit plans in the form of Group Gratuity Fund, the cost of providing benefits is determined using
the actuarial valuations being carried out at each Balance Sheet date. Actuarial gain and losses are recognized .
in the Statement of Profit and Loss in the period in which they occur. The retirement benefit obligation
recognized in the Balance Sheet represents the present value of defined benefit obligation as adjusted for
unrecognized past service cost, as reduced by die fair value of scheme assets. Any assets resulting from
calculation is limited to past service cost plus the present value of available refunds and reductions in future
contributions to the schemes. The Company contributes to the Group Gratuity Fund under a Group Gratuity
cash Accumulated Scheme with Life Insurance Corporation of India (LICI) for future payment of Gratuity
liability to its employees.

c) Short-term employee benefits :

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the
service rendered by employees are recognized during the year when the employees render the service.

These benefits includes Leave Encashment benefit of unutilized leave and bonus/exgratia, both are
charged to the Statement of Profit and Loss each year on accrual basis. There are no rules in the
Company for any carried forward unutilized leave benefits.

2.16 GST Input Credit: Custom Duty payment elements, Goods and Services Tax payment elements on Purchase /

Import / Reverse Charges payment, whichever applied, covered and allowable as IGST/CGST/SGST credit are
accounted for in the books in the period in which the underlying service received is accounted.

2.17 Taxes on Income : The provision for current income tax and the amount of tax payable on taxable income for the
year as determined with exercising the section 115BAA of the Income Tax Act, 1961. Provision for deferred tax
liabilities/assets charged to Statement of Profit and Loss measured on differences of Valuation of Deferred Tax
Liabilities/Assets from one Balance Sheet date to next Balance Sheet date.

• 2.18 Earning per share : The Basic Earning Per Share is computed by dividing the Net Profit/(Loss) after Tax, by the
weighted average number of equity shares outstanding during the year. Diluted Earning Per Share is computed by
divining the Net Profit/(Loss) after Tax, as adjusted for dividend, interest and other charges to expense or income
relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for
deriving basic earnings per share and the weighted average number of equity shares which could have been issued
on conversion of all dilutive potential equity shares. The Company has not incurred any expenses for issue of
shares, hence the Basic and Diluted Earning Per Share of before and after extraordinary items are same.

2.19 Dividend : As per Ind AS presentation the Dividend appropriates from Profit and Loss on actual dividend
declaration basis. There are no provisions made for proposed dividend, if any, which will be approved in
forthcoming Annual General Meeting.

2.20 Hedge accounting: The Company used foreign currency forward contracts to hedge its risk associated with foreign
currency fluctuations relating to highly probable forecast transactions. The Company designates such forward
exchange contracts in a cash flow hedging relationship by applying the hedge accounting principles set out in
Accounting Standard (AS) - 30. This forward exchange contracts are stated at fair value of each reporting date.
The MTM (Marked to Market) Gains or (Losses) are a short-term phase, hence, no provision made in the Statement
of Profit and Loss Account, but the same has been disclosed in the Notes.

2.21 Derivative contracts : The Company enters into derivative contracts in the nature of forward exchange contracts
with an intension to hedge its existing assets and liabilities and highly probable transactions. Derivative contracts
which are closely linked to the existing assets and liabilities are accounted as per the policy stated for “Foreign
currency transactions and translations”. Derivative contracts designated as a hedging instrument for highly
probable forecast transactions are accounted as per the policy stated for “Hedge accounting”. The MTM (Marked
to Market) gains or (losses) are a short-term phase, hence, no provision made in the Statement of Profit and Loss
Account, but the same has been disclosed in the Notes.

2.22 Segment reporting : The Company has only one primary segment i.e. manufacturing of Engineering Goods i.e.
Liquified Petroleum Gas Regulator (LP Gas Regulator), accessories and parts thereof. The Secondary segment of
its geographical markets like domestics (within India) and export (outside India) are reportable regularly.

2.23 Operating Cycle : Based on the nature of products/activities of the Company and the normal time between
acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating
cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.