NFL Accounting Policy

1. SIGNIFICANT ACCOUNTING POLICIES 1.1 Basis of Preparation of Financial Statements


The financial statements are prepared on accrual basis, as a going concern, under the historical cost convention in accordance with the generally accepted accounting principles in India (GAAP) and the provisions of the Companies Act, 2013.


1.2 Use of Estimates


The preparation of the financial statements in conformity with GAAP in India requires management to make estimates and assumptions, wherever necessary, that affect the reported amount of assets and liabilities and contingent liabilities as at the date of financial statements and the amounts of revenue and expenses during the period. Actual results could differ from those estimates. Any revision to such estimates is recognized in the period in which the results are known/materialized and the effect if material, disclosed separately.


1.3 Fixed Assets


Fixed Assets are stated at cost of acquisition or construction (including Borrowing Cost) and expenses allocated wherever applicable during construction period, exchange gain/loss attributable to the asset less accumulated depreciation and impairment loss, if any.


Expenditure during construction attributable to the fixed assets incurred up to the date of commercial production is capitalized.


1.4 Impairment of Assets


An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.


1.5 Borrowing Costs


Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalized. A qualifying asset is one, which necessarily takes a substantial period of time to get ready for the intended use. Other borrowing costs are charged to revenue in the period in which these are incurred.


1.6 Depreciation/Amortization


Depreciation on fixed assets is provided as per useful life specified under Schedule II of the Companies Act, 2013 on straight-line method on historical cost. For significant part of plant & machinery, useful life based on component approach is determined on Technical evaluation basis. In respect of Plant and Machinery, Computer and data processing units residual value of five percent and rupee one in respect of other Fixed Assets is retained.


Leasehold land and buildings are amortized over the lease period. Buildings constructed over leasehold land are depreciated at the useful life specified under Schedule II of the Companies Act, 2013, where the lease period is beyond the useful life of the building.


License and process know-how having future economic benefits is amortized on straight line method over a period of ten years or licence period, whichever is less.


Software, which is not integral part of related hardware, is treated as intangible asset and amortized on straight line method over a period of five years or its license period, whichever is less.


Depreciation on Mobile Phone Handsets is provided by considering useful life as two years and retaining residual value of 5%.


Depreciation on Fixed Assets whose actual cost does not exceed five thousand rupees, are provided at the rate of 100% and residual value of Rupee one is retained.


1.7 Investments


Long term investments are carried at cost, after providing for diminution in value, if it is of a permanent nature. Current investments are valued (individually) at lower of cost and quoted/fair value


1.8 Inventories


Raw Materials, packing materials and stores & spares, are valued at lower of monthly weighted average cost and net realizable value.


In case of stores and spares not moved for more than two years and up to five years, provision for obsolescence is made at five percent per annum (on straight line basis) and charged to revenue. In case of stores and spares not moved for more than five years/identified as surplus or obsolete, value is taken as certified by Values and diminution, if any is charged to revenue.


Finished and semi-finished goods are valued at lower of annual average cost inclusive of excise duty where applicable and net realizable value based on the applicable Concession/Sale Price. In warehouses carrying Finished Goods of more than one Plant, the Plant wise finished stocks are determined on first-in-first-out basis and costs worked out accordingly.


Scrap and wastes are not valued.


1.9 Foreign Currency Transactions


Transactions in foreign currency are accounted at the exchange rate prevailing on the date of the transaction.


The value of assets and liabilities in foreign currency are translated at the exchange rate prevailing at the end of the year.


Exchange Gain/Loss on conversion of foreign currency transactions is recognized as income/expense except in case of long term liability, relating to acquisition of Fixed assets where the same are adjusted to the carrying cost of such assets.


Premium incurred on foreign currency forward contracts is amortized over the period of the contract.


1.10 Employees Benefits


Contribution to Provident Fund is accounted for on accrual basis. The Provident Fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the T rust shall not be lower than 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. Such shortfall on account of interest, if any, is recognized in the Statement of Profit and Loss.


Provision towards Defined Benefit Schemes is made based on the actuarial valuation as at the end of the year and is charged to Statement of Profit & Loss along with actuarial gains/losses and contribution made.


1.11 Adjustments pertaining to prior period and prepaid expenditure


Income/Expenditure pertaining to prior period and prepaid up to Rupee one lakh in each case not being considered material is included under the income/expenditure of the current year.


1.12 Revenue Recognition


Sales are recognized as per AS-9 on Revenue Recognition.


Sales include excise duty wherever applicable and are net of rebates.


Price and Freight Subsidy is recognized based on in principle recognition/ notifications received from Fertilizer Industry Coordination Committee (FICC) an office of Government of India which regulates such subsidy and the bills are raised based on such notification. Escalation/De-escalation in notified rates is estimated taking into account the effect of guidelines, policies, instructions and clarifications given by the Government. The difference, if any based on final notification received is treated as current year income or expenditure and the effect of change in estimate, if material, is disclosed separately.


Adjustment in Price and Freight subsidy, if any, is recognized in the year of payment of subsidy.


Sale of scrap/ waste materials is recognized on disposal.


1.13 Accounting for Government Grants:


Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.


Government Grants received/receivable from Government or other authorities towards capital expenditure are treated as ''''Deferred Government Grants'''' till utilization of grant. Government Grants are accounted for on accrual basis.


Fixed Assets acquired out of capital grants are treated on the basis of income approach and are treated as deferred income and recognized in the statement of Profit & Loss over the useful life of related assets and in proportion to which depreciation on these assets is provided.


Interest subsidy received/receivable from Government for changeover of Ammonia Feed Stock Conversion Project from FO/LSHS to Gas is recognized in the statement of Profit & Loss and deducted in reporting the related expense.


1.14 Claims


Pending settlement, claims made on underwriters /railways /others as assessed by the Company on a possible realization basis are recognized at the time of lodgment.


1.15 Leases


Lease arrangements, where the risks and rewards incidental to ownership of the asset substantially vest with the lessor, are recognized as an operating lease. Lease payments/receipts under operating lease are recognized as an expense/income in the Statement of Profit and Loss on a straight-line method over the period of lease.


1.16 Deferred Tax


The deferred tax resulting from timing differences between book profit and taxable profit for the year is accounted for, applying the tax rates and laws that have been enacted or substantially enacted as on the Balance Sheet date.


Deferred tax assets are recognized to the extent there is a virtual certainty that the assets can be realized in future and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.


1.17 Earning Per Share


Basic earnings per share is calculated by dividing the net profit/loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.


a. There has been no movement in the Issued, Subscribed and Paid -up capital of the Company during the year.


b. Terms/Rights attached to equity shares


The Company has only one class of equity share having a face value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share and entitled to dividends approved by shareholders.


In the event of liquidation of the company, the holders of equity share will be entitled to receive remaining assets of the company, after distribution to creditors and all preferential amounts. The distribution will be in proportion to the number of equity shares held by each shareholder

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.
“2019 © COPYRIGHT DYNAMIC EQUITIES PVT. LTD.”

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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