xv) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the company has present obligation as a result of past event, for which it is
probable that a cash outflow will be required and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to its present value and are determined based on management estimate required
to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the management estimates.
Contingent liabilities are disclosed when the company has a possible obligation and it is probable that a cash
flow will not be required to settle the obligation.
Contingent assets are neither recognised nor disclosed in the accounts.
xvi) Cash flow statement
Cash flows are reported using the indirect method, 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 operating,
investing and financing activities of the Company are segregated.
xvii) Segmental Reporting
The Company is engaged in the business of manufacturing and trading of gases in the domestic market
only and hence has only a single reportable segment, in terms of Ind AS - 108.
xviii) Leases
IND AS - 116 "Leases" was notified effective 01.04.2019. The Company's leases are "short-term" in nature as
contemplated by the Accounting Standard and hence payments are recognised on a straight line basis.
Leasehold Land of the Company has already been capitalised upon payment, no recurring amounts are due.
Hence Adoption of the said standard has no impact on the financials of the Company.
2-31 In the opinion of the Directors
a) Current Assets, Loans and Advances have at least the values at which they are stated in the Balance Sheet, when
realized in the ordinary course of business.
b) All known liabilities other than contingent liabilities are provided for.
c) The company has an internal control system which is adequate considering the size and operation of the
company. The operations and activities of the company is supervised by the directors and senior management on
a day -to-day basis. The executives of the company are involved in the approval and processing of payments and also
in the year -end financial reporting process
In view of the above, we have implemented an information systems consisting of off -the-shelf packaged software
which are extensively used with very high level of acceptance in the industry without much customization and
modification. The identification of risks and controls is not a separate evaluation but an integral part of the
processes and procedures followed by the company which includes internal audit being carried out by an external
professional firm on a periodical basis
2.32.2(i) The Assistant Commissioner, Central Tax - Aluva division has issued a show cause notice for non¬
payment of interest as per section 50 of the CGST Act, 2017 on delayed payment of GST for FY 2017 -18. The Company
has responded with letters explaining that the delay in payment was attributable to a technical lag on the GST
portal which took several months to get resolved. In view of the technical lag, login to the portal was blocked
and payments could not be made. The Company has made a plea that the interest be written off. The management
reckons that since the delay was attributable to the Department, no provision is considered necessary. Upon the
date for raising a demand for FY 2017 -18 having lapsed, the company no longer recognises this as a contingent
liability.
2.32.2(ii) The Karnataka Commercial Tax office (Audit) has issued an Audit Report in Form ADT 02 for the FY
2019 -20 indicating a liability of Rs. 73.00 lakhs based on Audit findings viz alleged excess availment of input GST
credit and short discharge of Output GST payable. The management reckons that this finding is based on an
incorrect premise and is sanguine that the demand will be dropped upon the company filing a response. Hence,
no provision is considered necessary.
vii Risk Analysis of Defined Benefit Obligations
Given the defined benefit nature of the plan, the Employer is exposed to a wide range of risks. Each of these risks, if materialised,
can increase the cost of benefits by an amount more than expected. Such an unexpected increase in costs can have an adverse
impact on the financial situation of the Employer.
Each actuarial assumption made in the measurement of the DBO is a source of risk. There are additional risks which can have a n
adverse impact on the plan, but are not allowed for in the measurement of the DBO, such as liquidity and counter party default risks.
Some of the most significant risks are listed below
1 Discount Rate
Variations in discount rate don't affect the level of benefits under the plan. However, it is still a very significant assumption as it
does affect the discount due to time value of money. A fall in discount rate will increase the present value of the obligation.
2 Salary Increases
Since the plan benefits are linked to final salary, higher than expected salary increases will increase the cost of benefits under the plan.
An increase in the salary escalation assumption will increase the present value of the obligation
3 Attrition Rates
Deviations in actual attrition experience compared to the attrition assumption will change the level of benefits and therefore the cost
of those benefits. A change in the attrition assumption will also affect the present value of the obligation
4 Mortality
Deviations in actual mortality experience compared to the mortality assumption will change the level of benefits and affect the cost
of those benefits. A change in the mortality assumption will affect the present value of the obligation.
5 Regulatory Risk
Since the minimum benefits under the plan are set by law, there is risk that a change in law could require the employer to pay
higherbenefits, increasing the cost as well as the present value of obligation.
2.37 Capital Management
The Company manages it's capital to ensure that it will be able to continue as a going concern while maximising the return
to stakeholders through the optimization of the debt and equity balance. The Company is not subject to any externally imposed capital
requirements
2.38 Financial Risk Management
The Company's principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities
is to finance the Company's operations and to provide guarantees to support its operations. The Company's principal
financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.
2.38.1 Market Risk
The Company's activities does not expose it to the financial risks of changes in foreign currency exchange rates and interest
rates.
2.38.2 Credit Risk Management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient
collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.
2.38.3 Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the board of directors. The Company manages liquidity risk
by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast
and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The table below summarises the maturity profile of the Company's financial liabilit ies based on contractual undiscounted
payments.
Note : Deposits taken from Customers against Cylinders has been shown as "current" liability since the Company does not
have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period, in compliance
with Schedule III and Ind AS. However, practically, the company expects not more than 4% - 5% of deposits to fall due for
repayment in the short term
Fair Value Hierarchy
Level 1 : Quoted Prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 : Inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 : Inputs for assets or liabilities that are not based on observable market data (unobservable inputs).
2.44 Additional Regulatory information required by schedule III
i) Details of benami property held
No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
ii) Willful defaulter
The Company has not been declared willful defaulter by any bank or financial institution or government or any government
authority.
iii) Compliance with number of layers of companies
The Company is in compliance with number of layers of companies.
iv) Compliance with approved scheme(s) of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous
Financial Year.
v) Utilisation of borrowed funds and share premium
(1) The Company has not advanced or loaned or invested funds to any other persons or entities, including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
(2) The Company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
a. 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
b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
vi) Undisclosed Income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under
the Income Tax Act, 1961, that has not been recorded in the books of account.
vii) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
viii) Title deeds of immovable properties not held in the name of the company
All the title deeds of immovable properties are held in the name of company.
ix) Relationship with Struck Off Companies
The company has no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560
of Companies Act, 1956.
x) Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and related parties
The Company has not granted loans or advances in the nature of loans to promoter, directors, KMPs and other related
parties.
xi) Registration of charges or satisfaction with Registrar of Companies (ROC)
There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.
2.45 Impact of Covid-19
On May 5th, 2023, the World Health Organisation (WHO) has announced that Covid-19 is no longer a "public health
emergency of international concern". This is aligned with the situation in India where Covid-19 is on its way to
becoming an "endemic". In view of this, the management expects there to be no impact on the financials.
For M R Hegde & Associates
Chartered Accountants
FRN N°. 122538W F0r and on behalf of the Board of Directors
Gautam V. Pai Kakode M-S- Keny
Managing Director Erector
DIN :02395512 DIN :06813111
CA. Manjunath M Hegde
Shashidhar Haridas Nirzara Kesarwani
M No 138268 Chief Financial Officer Company Secretary
' ' M. No. A61661
Place: Margao, Goa
Date: 28th May, 2024 P lace : M a rgao , Goa
Date: 28th May, 2024
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