1. CORPORATE INFORMATION

DHP India Limited (“the Company”) is a listed entity incorporated in India. The Company is a mid-sized manufacturing Company of Engineering Goods like Liquified Petroleum Gas Regulator (LP GAS Regulator), Accessories and Parts thereof. The Company is ISO 9001 : 2015 Certified. The Company manufactures various designs of LP Gas Regulators, its Parts and Accessories as per requirement of export markets. As per Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the product of the Company covered under Non-Regulated Sector, which are as below ___

2. SIGNIFICANT ACCOUNTING POLICIES :

2.1 Basis of Preparation of Financial Statements and Presentation :

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013, (“the Act”) and other relevant provisions of the Act.

Company’s financial statements are presented in Indian Rupees, which is also its functional currency.

The standalone financial statements have been prepared on the historical cost basis except the following items

a) Financial Assets - Current Investment in Mutual Fund - Valued at Fair Market Value.

b) Deferred Tax Liabilities — Valued at Fair Value on Balance Sheet approach.

c) Other Comprehensive Income and Exceptional Income on Unrealised Gain on Mutual Fund as Current Investment - Valued on Fair Market Value.

d) Current Assets/Liabilities in Foreign Currencies - Valued at Fair Market Value

e) Revenue from Operation includes Indirect Taxes collected from parties (IGST/CGST/SGST) and reflected as Gross Revenue recognized and the payment of the same Indirect Taxes (IGST/CGST/SGST) reflected from Statement of Profit & Loss.

2.2 Use of Estimates and Judgements :

In preparation these Standalone Financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.

The company has exercised due care in determining its significant accounting judgements and estimates while preparing its financial statements including internal control over financial reporting. As per the current assessment of the Company, there are no material impact on the carrying values of trade receivables, inventories and other financial / non financial assets as at the reporting date. The Company continues to closely monitor the developments in economic conditions and access their impact. However, considering the prevailing uncertainties, the final impact may differ from current estimates made as at the date of approval of financial statements for the year ended 31^st March, 2024.

2.3 Measurement of Fair values :

The Company has valued Financial Assets : (a) Investment in Mutual Funds, (b) Trade Receivable and Financial Liabilities - Trade Payables at a fair value. Impact of fair value changes, if any as on the date of transition, is recognized in opening reserves and changes thereafter are recognized in Statement of Profit & Loss during the period.

2.4 Cash Flow Statement and Cash and Cash Equivalents :

Cash flow statements are reported using the indirect method, where profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The Cash Flows from operating, investing and financing activities of the Company are segregated based on available information.

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisitions), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk or changes in value. ,

2.5 Property, Plant and Equipment and Depreciation :

Property, Plant and Equipment i.e. Tangible Fixed Assets are stated at cost, less allowable net recoverable taxes like GST (IGST/CGST/SGST) Credit allowable, Import Duty Credit allowable less accumulated depreciation and impairment losses, if any. Such costs include purchase price, overheads directly attributable to bringing the assets to its working condition for its intended use less any recoverable tax credit entitled.

Depreciation on such tangible assets have been provided on the written down value method as per the useful life prescribed in Schedule II of the Companies Act, 2013.

2.6 Impairment of assets :

The carrying amount of the Property, Plant & Equipment i.e. Fixed Assets are reviewed at each Balance Sheet date. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized. An impairment loss is charged to the Depreciation Schedule and Statement of Profit and Loss in the year which the assets is identified as impaired.

2.7 Deferred Tax Assets/Liabilities and Provision for Deferred Tax :

In Earlier Previous financial year i.e. F Y 2021-22, the Company has already adopted and exercise the Section 115BAA (Lower Tax Rate and simultaneously forgo certain tax incentives, deductions & accumulated MAT Credit) and the same will be continuing in current year as per I. T. Act, 1961.

Deferred Tax Liabilities/Assets valued on Balance Sheet approach on availability of future taxable profit against which tax losses and tax benefit carried forward can be used. Provision for Deferred Tax recognized on the timing differences between the taxable income and the accounting income that originate in one period and are capable of the reversal in one or more subsequent period enacted as at the reporting date.

2.8 Inventories:

Items of inventories are measured as per “Valuation of Inventories” guidelines issued by Institute of Chartered Accountants of India and Institute of Cost Accountants of India. The details as follows

a) Stock of Raw Materials (inclusive of various components), Stock of Stores, spares & Consumables are valued at Cost on FIFO (First in First Out) basis (excluding the amount of IGST/CGST/SGST Credit allowable). A separate Ledger of IGST/CGST/SGST credit allowable has been maintained for the purpose of utilization of IGST/CGST/SGST credit and the same adjusted against the payment of Output IGST/CGST/SGST liability on account of any Sales. However the IGST/CGST/SGST realization from party and paid shown in a separate head in the statement of Profit & Loss as per Ind AS format. Rebate on IGST on exported goods, if any realized or receivable has been adjusted against such payment of IGST liability on exported goods.

b) Stock of Finished Goods are valued at lower of cost (excluding of the amount of IGST/CGST/SGST credit allowable) or net realizable value.

c) Stock of Scrap Materials such as Brass Generated Scrap, Zinc Ash/Dross, M. S. Scrap & Aluminium Scrap etc. are valued at net realizable value.

d) There is no deviation in method of valuation of stock as prescribed under section 142 A of the Income Tax Act, 1961. Similarly there are no changes of method of accounting since previous year as per Ind AS accounting method.

2.9 Financial Assets & Financial Liabilities :

Financial Assets & Financial Liabilities are valued at fair market value. The details as below

a) Investments in Mutual Fund are valued at fair market value as per Ind AS method of accounting. Any differences from market value and cost treated as Unrealised Gain and their deferred tax liabilities are provided in Statement of Profit & Loss Account as Other Comprehensive Income and/or Exceptional Income.

b) Trade Payables and Trade receivables are valued fair Market value. Receivables and payable in Foreign Currencies are valued at lower of the closing market rate or relatively future forward contract rate on Balance Sheet date and any differences are recognized through Statement of Profit & Loss Account.

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 are recognized as follows

a) Sale of Manufactured Goods : Domestic Sale of Manufacturing Goods are recognized on Net of GST. Export Sales in foreign currencies are 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 shortterm 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 the 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.