The financial statements have been prepared in accordance with
generally accepted accounting principles in India (Indian GAAP) under
the historical cost convention on an accrual basis in compliance with
all material aspect of the Accounting Standard (AS) Notified under
section 133 of the Companies Act, 2013, read together with paragraph 7
of the Companies (Accounts) Rules, 2014. The accounting policies have
been consistently applied by the Company and are consistent with those
used in the previous year, except for the change in accounting policy
explained in paragraph II below.

All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle, and other
criteria set out in the Schedule III to the Companies Act, 2013. Based
on the nature of products and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as up to
twelve months for the purpose of current/non-current classification of
assets and liabilities.


Till the year ended 31 March, 2014, Schedule XIV to the Companies Act,
1956, prescribed requirements concerning depreciation of fixed assets.
From the current year, Schedule XIV has been replaced by Schedule II to
the Companies Act, 2013. Effective from 1st April, 2014, the Company
has provided depreciation on fixed assets based on useful lives as
provided in Schedule II to the Companies Act, 2013 or as re-assessed by
the Company. The management believes that depreciation rates currently
used fairly reflect its estimate of the useful lives and residual
values of fixed assets, though these rates in certain cases are
different from lives prescribed under Schedule II.

Further, on application of Schedule II to the Companies Act, 2013, the
Company has changed the manner of depreciation for its fixed assets.
Now, the Company identifies and determines separate useful life for
each major component of the fixed asset, if they have useful life that
is materially different from that of the remaining asset.

Based on transitional provision given in Schedule II to the Companies
Act, 2013, the carrying value of assets whose useful lives are already
exhausted amounting to Rs. 12.51 Crore (net of deferred tax Rs. 6.44
Crore) has been charged to opening balance of retained earnings. Had
there been no change in useful lives of fixed assets, the charge to the
Statement of Profit and Loss would have been higher by Rs. 19.03 Crore.


The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and disclosure of contingent liabilities, at the end of the
reporting period. Although, these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.


Tangible Fixed Assets are stated at cost, less accumulated depreciation
and impairment loss, if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use. Each part of an item of property, plant and equipment
with a cost, that is significant in relation to the total cost of the
item, is depreciated separately. This applies mainly to components for
machinery. When significant parts of fixed assets are required to be
replaced at intervals, the Company recognises such parts as individual
assets with specific useful lives and depreciates them accordingly. Any
trade discounts and rebates are deducted in arriving at the purchase

Depreciation on Tangible Fixed Assets is provided on Straight Line
method using the rates arrived at based on the useful lives as
specified in the Schedule II to the Companies Act, 2013 or estimated by
the management. The Company has used the following useful life to
provide depreciation on its fixed assets.


Intangible Assets are stated at acquisition cost, net of accumulated
amortisation and accumulated impairment losses, if any. Intangible
Assets are amortised on a straight-line basis over their estimated
useful lives.


The carrying amounts of assets are reviewed at each Balance Sheet date,
if there is any indication of impairment based on internal/external
factors. An asset is treated as impaired when the carrying cost of the
assets exceeds its recoverable value. An impairment loss, if any, is
charged to the Statement of Profit and Loss in the year in which an
asset is identified as impaired. Reversal of impairment losses
recognised in the prior years is recorded when there is an indication
that the impairment losses recognised for the assets no longer exist or
have decreased.


Borrowing Costs attributable to acquisition and construction of
qualifying assets are capitalised as a part of the cost of such assets
up to the date when such assets are ready for its intended use.

Other borrowing costs are charged to the Statement of Profit and Loss
in the period in which they are incurred.


Transactions in foreign currency are recorded at the rate of exchange
prevailing on the date of transaction. Foreign currency monetary items
are reported using closing rate of exchange at the end of the year.
With respect to the exchange difference arising on
translation/settlement of long-term foreign currency items from 1st
April, 2011, the Company has adopted the following policy:

(i) Foreign exchange difference on account of a depreciable asset is
adjusted in the cost of the depreciable asset, which would be
depreciated over the balance life of the asset.

(ii) In other cases, the foreign exchange difference is accumulated in
a Foreign Currency Monetary Item Translation Difference Account, and
amortised over the balance period of such long-term asset/liability.

Exchange difference on restatement of all other monetary items is
recognised in the Statement of Profit and Loss. Other non- monetary
items like fixed assets, investments in equity shares are carried in
terms of historical cost using the exchange rate at the date of


Premium/Discount, in respect of forward foreign exchange contract to
hedge an underlying recorded asset or liability, is recognised over the
life of the contracts. Exchange differences on such contracts, except
the contracts which are long-term foreign currency monetary items, are
recognised in the Statement of Profit and Loss in the year in which the
exchange rate changes. Profit/Loss on cancellation/renewal of forward
exchange contract is recognised as income/expense for the year.

The Company enters into forward contracts to hedge the foreign currency
risk of firm commitments and highly probable forecast transactions and
designates such forward contracts as cash flow hedge by applying the
principles set out in the Accounting Standard-30 - Financial
Instruments: Recognition and Measurement. All such forward contracts
are used as risk management tools and not for speculative purposes.

For the forward contracts designated as cash flow hedges, the effective
portion of the fair value of forward contracts are recognised in
Hedging Reserve (net of taxes) under Reserves and Surplus, and
reclassified into, i.e., recognised in, the Statement of Profit and
Loss in the period or periods during which the underlying hedged item
assumed affects profit or loss. The ineffective portion of the change
in fair value of such instruments is recognised in the Statement of
Profit and Loss in the period in which they arise. If the hedging
relationship ceases to be effective or it becomes probable that the
expected transaction will no longer occur, the hedge accounting is
discontinued and the fair value changes, arising from the forward
contracts are recognised in the Statement of Profit and Loss.

The Company uses derivative financial instruments such as currency
swap, and interest rate swaps to hedge its risks associated with
foreign currency fluctuations and interest rate. As per the Institute
of Chartered Accountants of India (ICAI) announcement regarding
accounting for derivative contracts, other than covered under AS-11 and
foreign exchange contracts to hedge highly probable forecast
transactions and firm commitments described above, these are
mark-to-market on the portfolio basis and net loss after considering
the offsetting effect on the underlying hedged item is charged to the
income statement. Net gains are ignored.


Investments, which are readily realisable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.

Investments are recorded at cost on the date of purchase, which include
acquisition charges such as brokerage, stamp duty, taxes, etc. Current
Investments are stated at lower of cost and net realisable value.
Long-term investments are stated at cost after deducting provisions
made, if any, for other than temporary diminution in the value.


Raw materials, components, stores and spares, and packing materials are
valued at lower of cost and net realisable value.

However, these items are considered to be realisable at cost if the
finished products, in which they will be used, are expected to be sold
at or above cost.

Work-in-progress, finished goods and stock-in-trade are valued at lower
of cost and net realisable value. Finished goods and work-in-progress
include costs of conversion and other costs incurred in bringing the
inventories to their present location and condition.

Cost of inventories is computed on a weighted-average basis.

Proceeds in respect of sale of raw materials/stores are credited to the
respective heads. Obsolete, defective and unserviceable inventory are
duly provided for.

Certified Emission Reductions (CERs) are valued at lower of cost and
net realisable value. Cost includes consultant''s fee and the cash
payment made under the second levy to the concerned authorities for
obtaining the credit of CERs.


Government Grants are recognised when there is a reasonable assurance
that the same will be received and all attaching conditions will be
complied with. Revenue grants are recognised in the Statement of Profit
and Loss. Capital grants relating to specific Tangible/Intangible
Assets are reduced from the gross value of the respective
Tangible/Intangible Assets. Other capital grants in the nature of
promoter''s contribution are credited to capital reserve.


Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and can be reliably

Revenue from sale of products is recognised when the significant risks
and rewards of ownership of the goods have passed to the buyer. Sale of
goods are recorded net of trade discounts, rebates, Sales Tax, Value
Added Tax and gross of Excise Duty. Revenue from services are
recognised as they are rendered based on agreements/arrangements with
the concerned parties and recognised net of Service Tax.

Fertiliser price support under Group Concession and other Scheme of
Government of India is recognised based on management''s estimate taking
into account known policy parameters and input price

Income from Certified Emission Reductions (CERs) is recognised on sale
of CERs.

Interest Income is recognised on a time proportion basis taking into
account the amount outstanding and applicable interest rate.

Dividend income on investments is accounted for when the right to
receive the payment is established.


(a) Defined Contribution Plan

The Company makes defined contribution to Government Employee Provident
Fund, Government Employee Pension Fund, Employee Deposit Linked
Insurance, ESI and Superannuation Schemes, which are recognised in the
Statement of Profit and Loss on accrual basis.

(b) Defined Benefit Plan

The Company''s liabilities under Payment of Gratuity Act, long-term
compensated absences and pension are determined on the basis of
actuarial valuation made at the end of each financial year using the
projected unit credit method except for short-term compensated
absences, which are provided for based on estimates. Actuarial gains
and losses are recognised immediately in the Statement of Profit and
Loss as income or expense. Obligation is measured at the present value
of estimated future cash flows using a discounted rate that is
determined by reference to market yields at the Balance Sheet date on
Government bonds where the terms of the Government bonds are consistent
with the estimated terms of the defined benefit obligation.

In respect of certain employees, Provident Fund contributions are made
to a Trust, administered by the Company. The interest rate payable to
the members of the Trust shall not be lower than the statutory rate of
interest declared by the Central Government under the Employees''
Provident Funds and Miscellaneous Provisions Act, 1952, and shortfall,
if any, shall be made good by the Company. The Company''s liability is
actuarially determined (using the Projected Unit Credit Method) at the
end of the year and any shortfall in the Fund size maintained by the
Trust set up by the Company is additionally provided for. Actuarial
losses/gains are recognised in the Statement of Profit and Loss in the
year in which they arise.


The stock options and stock appreciation rights (SAR) granted are
accounted for as per the accounting treatment prescribed by Securities
and Exchange Board of India (Share-Based Employee Benefits)
Regulations, 2014, issued by Securities and Exchange Board of India and
the Guidance Note on Accounting for Employee Share-based Payments,
issued by the ICAI, whereby the intrinsic value of the option is
recognised as employee compensation. The employee compensation is
charged to the Statement of Profit and Loss on the straight-line basis
over the vesting period of the option.

In respect of re-pricing of existing stock options, the incremental
intrinsic value of the options is accounted as employee cost over the
remaining vesting period.

In case of forfeiture stock option which is not vested, amortised
portion is reversed by credit to employee compensation expense. In a
situation where the stock option expires unexercised, the related
balance standing to the credit of the employees Stock Options
Outstanding Account are transferred to the General Reserve.


Tax expense comprises of current and deferred tax.

Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the
Income-tax Act, 1961.

Current tax assets and current tax liabilities are offset when there is
a legally enforceable right to set off the recognised amounts and there
is an intention to settle the asset and the liability on a net basis.

The deferred tax for timing differences between the book and tax
profits for the year is accounted for, using the tax rates and laws
that have been substantively enacted as of the Balance Sheet date.
Deferred tax assets arising from timing differences are recognised to
the extent there is reasonable certainty that these would be realised
in future.

The carrying amount of deferred tax assets are reviewed at each Balance
Sheet date. The Company writes down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain, that
sufficient future taxable income will be available against which
deferred tax asset can be realised. Any such write-down is reversed to
the extent that it becomes reasonably certain, that sufficient future
taxable income will be available.

In case of unabsorbed losses and unabsorbed depreciation, all deferred
tax assets are recognised only if there is virtual certainty supported
by convincing evidence that they can be realised against future taxable
profit. At each Balance Sheet date the Company reassesses the
unrecognised deferred tax assets.

Minimum Alternative Tax (MAT) credit is recognised as an asset only
when and to the extent there is convincing evidence that the Company
will pay normal Income Tax during the specified period. In the year in
which the MAT credit becomes eligible to be recognised as an asset in
accordance with the recommendations contained in the Guidance Note
issued by the ICAI, the said asset is created by way of a credit to the
Statement of Profit and Loss and shown as MAT Credit Entitlement. The
Company reviews the same at each Balance Sheet date and writes down the
carrying amount of MAT Credit Entitlement to the extent there is no
longer convincing evidence to the effect that the Company will pay
normal Income Tax during the specified period.


Revenue expenditure on research is expensed under the respective heads
of the account in the period in which it is incurred. Development
expenditure is capitalised as an asset if the following conditions can
be demonstrated:

a) The technical feasibility of completing the asset so that it can be
made available for use or sell.

b) The Company has intention to complete the asset and use or sell it.

c) The Company has the ability to sell the asset.

d) The future economic benefits are probable.

e) The Company has the ability to measure the expenditure attributable
to the asset during its development reliably. Other development costs
which do not meet the above criteria are expensed out during the period
in which they are incurred.


As a Lessee:

Leases, where substantially all the risks and benefits incidental to
ownership of the leased item are transferred to the Lessee, are
classified as finance lease. The Company has capitalised the leased
item at lower of fair value and present value of the minimum lease
payments at the inception of the lease and disclosed as leased assets.
Such assets are amortised over the period of lease or estimated life of
such asset, whichever is less.

Lease payments are apportioned between the finance charges and
reduction of the lease liability based on implicit rate of return.
Lease management fees, lease charges and other initial direct costs are


(a) As a Lessee:

Leases, where significant portion of risk and reward of ownership are
retained by the Lessor, are classified as Operating Leases and lease
rentals thereon are charged to the Statement of Profit and Loss on a
straight-line basis over the lease term.

(b) As a Lessor:

The Company has leased certain tangible assets, and such leases, where
the Company has substantially retained all the risks and rewards of
ownership, are classified as operating leases. Lease income is
recognised in the Statement of Profit and Loss on a straight-line basis
over lease term. Initial direct costs are recognised in the Statement
of Profit and Loss.


Cash and Cash Equivalents for the purpose of Cash Flow Statement
comprise cash on hand and cash at bank including fixed deposit with
original maturity period of three months or less and short-term highly
liquid investments with an original maturity of three months or less.


Cash flows are reported using the indirect method, whereby net profit
before tax 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.


Basic earnings per share are calculated by dividing the net profit for
the year attributable to equity shareholders (after deducting
preference dividends and attributable taxes) by the weighted-average
number of equity shares outstanding during the period. The
weighted-average number of equity shares outstanding during the period
and for all periods presented is adjusted for events such as bonus
issue; bonus element in a rights issue to the existing shareholders;
share split; and reverse share split (consolidation of shares) that
have changed the number of equity shares outstanding, without a
corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted-average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.


Contingent Liabilities are possible but not probable obligations as on
Balance Sheet date, based on the available evidence. Provisions are
recognised when there is a present obligation as a result of past
events, and it is probable that an outflow of resources will be
required to settle the obligation, in respect of which a reliable
estimate can be made. Provisions are not discounted to its present
value and are determined based on the best estimate required to settle
the obligation at the Balance Sheet date.

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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