TUBE INVESTMENTS Accounting Policy

1. Summary of Significant Accounting Policies

1.1. Presentation and Disclosure of Financial Statements

An asset has been classified as current when it satisfies any of the
following criteria:

a) It is expected to be realized in, or is intended for sale or
consumption in, the Company''''s normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is expected to be realized within twelve months after the
reporting date; or

d) It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting date.

A liability has been classified as current when it satisfies any of the
following criteria:

a) It is expected to be settled in the Company''''s normal operating

b) It is held primarily for the purpose of being traded;

c) It is due to be settled within twelve months after the reporting
date; or

d) The Company does not have an unconditional right to defer
settlements of the liability for at least twelve months after the
reporting date. Terms of a liability that could, at the option of the
counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.

All other assets and liabilities have been classified as non-current.

Based on the nature of products/activities, the Company has determined
its operating cycle as twelve months for the above purpose of
classification as current and non-current.

1.2. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, like
provision for employee benefits, provision for doubtful trade
receivables/advances/contingencies, provision for warranties, allowance
for slow/ non-moving inventories, useful life of Fixed Assets,
provision for retrospective price revisions, provision for taxation,
etc., during and 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.

1.3. Cash and Cash Equivalents

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

1.4. Cash Flow Statement

Cash flows are reported using the indirect method, whereby
profit/(loss) before 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 the
available information.

1.5. Tangible Fixed Assets

Fixed Assets are stated at historical cost less accumulated
depreciation and impairment losses, if any. Cost includes related
taxes, duties, freight, insurance, etc. attributable to the
acquisition, installation of the fixed assets and borrowing cost if
capitalisation criteria are met but excludes duties and taxes that are
recoverable from tax authorities. When significant parts of plant and
equipment are required to be replaced at intervals, the Company
depreciates them separately based on their specific useful life.

Machinery spares which can be used only in connection with an item of
fixed asset and whose use is expected to be irregular are capitalised
and depreciated over the useful life of the principal item of the
relevant assets. Subsequent expenditure relating to fixed assets is
capitalised only if such expenditure results in an increase in the
future benefits from such asset beyond its previously assessed standard
of performance.

Fixed Assets retired from active use and held for sale are stated at
the lower of their net book value and net realisable value and are
disclosed separately in the Balance Sheet.

The Company identifies and determines cost of each component/part of
the asset separately, if the component/part has a cost which is
significant to the total cost of the asset and has useful life that is
materially different from that of the remaining asset.

Capital Work-in-Progress: Projects under which assets are not ready for
their intended use and other capital work-in-progress are carried at
cost, comprising direct cost and attributable interest.

1.6. Impairment of Assets

The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, the
Company estimates the asset''''s recoverable amount. An asset''''s
recoverable amount is the higher of an asset''''s or Cash-Generating
Unit''''s (CGU) net selling price and its value in use. The recoverable
amount is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other
assets or groups of assets. Where the carrying amount of an asset or
CGU exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount. In assessing value in
use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the
asset. In determining net selling price, recent market transactions are
taken into account, if available. If no such transactions can be
identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
Company''''s cash-generating units to which the individual assets are
allocated. These budgets and forecast calculations are generally
covering a period of three years. For longer periods, a long term
growth rate is calculated and applied to project future cash flows
after the third year.

Impairment including impairment on inventories, are recognized in the
statement of profit and loss.

An assessment is made at each reporting date as to whether there is any
indication that previously recognized impairment losses may no longer
exist or may have decreased. If such indication exists, the Company
estimates the asset''''s or cash-generating unit''''s recoverable amount. A
previously recognized impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset''''s
recoverable amount since the last impairment loss was recognized. The
reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss
been recognized for the asset in prior years. Such reversal is
recognized in the statement of profit and loss unless the asset is
carried at a revalued amount, in which case the reversal is treated as
a revaluation increase.

After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.

1.7. Investments

Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are made
or on the Balance Sheet date, are classified as Current investments.
All other investments are classified as Non Current investments.

On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis. Non
Current investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.

On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
Statement of Profit and Loss.

1.8. Inventories

Raw materials, stores & spare parts and stock- in-trade are valued at
lower of weighted average cost and estimated net realisable value.

Work-in-progress and finished goods are valued at lower of weighted
average cost and estimated net realisable value. Cost includes all
direct costs and appropriate proportion of overheads to bring the goods
to the present location and condition. Cost of finished goods includes
Excise Duty.

Due allowance is made for slow/non-moving items. Materials and other
items held for use in the production of inventories are not written
down below cost if the finished products in which they will be used are
expected to be sold at or above cost.

Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.

1.9. Revenue and Other Income

Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.

Revenue from sale of goods are recognised on transfer of significant
risk and rewards of ownership to the buyer which generally coincides
with shipment and comprise amounts invoiced for the goods, including
excise duty, but excluding Sales Tax/Value Added Tax, Quantity
Discounts and Sale Returns.

Service revenues are recognised on completion of services.

Dividend income is accounted for when the right to receive it is

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

1.10. Government Grants, Subsidies and Export Benefits

Government grants and subsidies are recognised when there is reasonable
assurance that the Company will comply with the conditions attached to
them and the grants/subsidy will be received.

When the grant or subsidy from the Government relates to revenue, it is
recognised as income on a systematic basis in the statement of profit
or loss over the period necessary to match them with the related costs,
which they are intended to compensate.

Where the Company receives non-monetary grants, the asset is accounted
for on the basis of its acquisition cost. In case a non-monetary asset
is given free of cost, it is recognized at a nominal value.

When the grant or subsidy from the Government is in the nature of
promoters'''' contribution, and where no repayment is ordinarily expected,
it is credited to Capital Reserve and treated as a part of the
Shareholders'''' funds on receipt basis.

Export benefits are accounted for in the year of exports based on
eligibility and when there is no uncertainty in receiving the same.

1.11. Employee Benefits

I. Defined Contribution Plan

a. Superannuation

The Company contributes a sum equivalent to 15% of the eligible
employees salary to a Superannuation Fund administered by trustees and
managed by Life Insurance Corporation of India (LIC). The Company has
no liability for future Superannuation Fund benefits other than its
annual contribution and recognizes such contributions as an expense in
the year in which the services are rendered.

b. Provident Fund

Contributions in respect of Employees who are not covered by Company''''s
Employees Provident Fund Trust are made to the Regional Provident Fund.
These Contributions are recognised as expense in the year in which the
services are rendered. The Company has no obligation other than the
contribution payable to the Regional Provident fund.

c. Employee State Insurance

Contributions to Employees State Insurance Scheme are recognised as
expense in the year in which the services are rendered.

II. Defined Benefit Plan

a. Gratuity

The Company makes annual contribution to a Gratuity Fund administered
by trustees and managed by LIC. The Company accounts its liability for
future gratuity benefits based on actuarial valuation, as at the
Balance Sheet date, determined every year using the Projected Unit
Credit method. Actuarial gains/losses are immediately recognised in
the Statement of Profit and Loss. Past service cost is recognised
immediately to the extent that the benefits are already vested and
otherwise is amortised on a straight-line basis over the average period
until the benefits become vested. The defined benefit obligation
recognised in the balance sheet represents the present value of the
Defined Benefit Obligation less the Fair Value of Plan Assets out of
which the obligations are expected to be settled and adjusted for
unrecognised past service cost, if any. Any asset arising out of this
calculation is limited to the past service cost plus the present value
of available refunds and reduction in future contributions.

b. Provident Fund

In respect of the employees not covered in Point Lb above,
contributions to the Company''''s Employees Provident Fund Trust are made
in accordance with the fund rules. The interest rate payable to the
beneficiaries every year is being notified by the Government.

In the case of contribution to the Trust, the Company has an obligation
to make good the shortfall, if any, between the return from the
investments of the Trust and the notified interest rate and recognizes
such obligation, if any, determined based on an actuarial valuation as
at the balance sheet date, as an expense.

III. Long Term Compensated Absences

The Company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains/losses are immediately taken to the statement
of profit and loss and are not deferred. The Company presents the leave
as a current liability in the balance sheet, to the extent it does not
have an unconditional right to defer its settlement for 12 months after
the reporting date. Where Company has the unconditional legal and
contractual right to defer the settlement for a period beyond 12
months, the same is presented as non-current liability.

IV. Short Term Employee Benefits

Short term employee benefits includes short term compensated absences
which is recognized based on the eligible leave at credit on the
Balance Sheet date, and the estimated cost is based on the terms of the
employment contract.

V. Voluntary Retirement Scheme

Compensation to employees under Voluntary Retirement Schemes is
expensed in the period in which the liability arises. The Company
recognizes termination benefit as a liability and an expense when the
Company has a present obligation as a result of past event, it is
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation.

1.12. Operating Leases

Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased assets are classified as
operating leases. Operating lease payments are recognised as an expense
in the Statement of Profit and Loss on a straight line basis over the
lease term.

1.13. Foreign Currency Transactions

Initial recognition

Transactions in foreign currencies entered into by the Company are
accounted at the exchange rates prevailing on the date of the
transaction or at the average rates that closely approximate the rate
at the date of the transaction.

Measurement as at Balance Sheet date

Foreign currency monetary items (other than derivative contracts) of
the Company outstanding at the Balance Sheet date are restated at year
end exchange rates.

Non-monetary items are carried at historical cost.

Treatment of Exchange Differences

Exchange differences arising on settlement/ restatement of foreign
currency monetary assets and liabilities of the Company are recognised
as income or expense in the Statement of Profit and Loss.

Accounting of Forward Contracts

The Company enters into forward exchange contracts and other
instruments that are in substance a forward exchange contract to hedge
its risks associated with foreign currency fluctuations. The premium or
discount arising at the inception of a forward exchange contract (other
than for a firm commitment or a highly probable forecast transaction)
or similar instrument is amortised as expense or income over the life
of the contract. Exchange differences on such a contract are recognised
in the Statement of Profit and Loss in the year in which the exchange
rates change. Any profit or loss arising on cancellation of such a
contract is recognised as income or expense for the year.

1.14. Derivative Instruments and Hedge Accounting

The Company uses forward contracts and currency swaps (Derivative
Contracts) to hedge its risks associated with foreign currency
fluctuations relating to firm commitment or highly probable forecast
transactions. The Company designates these in a hedging relationship by
applying the hedge accounting principles set out in Accounting Standard
30 - "Financial Instruments - Recognition and Measurement".

The use of Derivative Contracts is governed by the Company''''s policies
on the use of such financial derivatives consistent with the Company''''s
risk management strategy. The Company does not use derivative financial
instruments for speculative purposes.

Derivative Contracts are initially measured at fair value, and are
re-measured at subsequent reporting dates. Changes in the fair value of
these Derivative Contracts that are designated and effective as hedges
of future cash flows are recognised directly in "Hedge Reserve Account"
under Shareholders'''' Funds and the ineffective portion is recognized
immediately in the Statement of Profit and Loss.

Changes in the fair value of Derivative Contracts that do not qualify
for hedge accounting are recognized in the Statement of Profit and Loss
as they arise.

The amounts recognised in the Hedge reserve are transferred to the
statement of Profit and loss when the hedged transactions crystalizes.

If the forecast transaction is no longer expected to occur, the
cumulative gain or loss previously recognised in hedge reserve is
transferred to statement of Profit and loss.

Hedge accounting is discontinued when the hedging instrument expires or
is sold, terminated, or exercised, or no longer qualifies for hedge
accounting. If any of these events occur or if a hedged transaction is
no longer expected to occur, the net cumulative gain or loss recognised
under Shareholders'''' Funds is transferred to the Statement of Profit and
Loss for the year.

1.15. Depreciation and Amortisation

Depreciation has been provided on the straight- line method based on
the useful life as prescribed in Schedule II to the Companies Act, 2013
except in respect of the following categories of assets:

The Assets mentioned above are depreciated based on the Company''''s
estimate of their useful lives taking into consideration technical
factors such as product life cycle, durability based on use, etc.

Leasehold Land / Improvements are depreciated over the primary lease
period as the right to use these assets ceases on expiry of the lease

Individual Fixed Assets whose actual cost does not exceed Rs.5000/- are
fully depreciated in the year of acquisition considering the nature and
usage pattern of these assets.

Depreciation is provided pro-rata from the month of Capitalisation.

Certain Fixed Assets are treated as Continuous Process Plants based on
technical evaluation done by the Management and are depreciated on the
straight-line method based on the useful life as prescribed in Schedule
II to the Companies Act, 2013.

The Company also has a system of providing additional depreciation,
where, in the opinion of the Management, the recovery of the Fixed
Assets is likely to be affected by the variation in demand and/or its

1.16. Research and Development

Revenue expenditure on research and development is expensed when
incurred. Capital expenditure on research and development is
capitalised under Fixed Assets and depreciated in accordance with Note
3.15 above.

1.17. Taxes on Income

Current Tax is the amount of tax payable on the taxable income for the
year and is determined in accordance with the provisions of the Income
Tax Act, 1961. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted, at the reporting

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future tax
liability, is considered as an asset if there is convincing evidence
that the Company will pay normal income tax. Accordingly, MAT is
recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
The carrying amount of MAT is reviewed at each reporting date and the
asset is written down to the extent the Company does not have
convincing evidence that it will pay normal income tax during the
specified period.

Deferred Tax is recognised on timing differences, being the differences
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred Tax is measured using the tax rates and tax laws enacted or
substantively enacted as at the reporting date.

In the situations where the Company is entitled to a tax holiday under
the Income-tax Act, 1961 enacted in India or tax laws prevailing in the
respective tax jurisdictions where it operates, no deferred tax (asset
or liability) is recognized in respect of timing differences which
reverse during the tax holiday period, to the extent the Company''''s
gross total income is subject to the deduction during the tax holiday
period. Deferred tax in respect of timing differences which reverse
after the tax holiday period is recognized in the year in which the
timing differences originate.

Deferred tax assets are recognised if there is reasonable certainty
that there will be sufficient future taxable income available to
realise such assets. However, if there are unabsorbed depreciation and
carry forward of losses, all deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence, that there
will be sufficient future taxable income available to realise such
assets. The carrying amount of deferred tax assets are reviewed at
each reporting date.

Current Tax and Deferred Tax relating to items directly recognised in
Reserves are recognised in Reserves and not in the Statement of Profit
and Loss.

1.18. Provisions and Contingencies

A provision is recognized when an enterprise has a present obligation
as a result of past event; 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 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

A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. The Company does not recognize a
contingent liability but discloses its existence in the financial

Provisions for warranty-related costs are recognized when the product
is sold or service provided. Provision is estimated based on historical
experience and technical estimates. The estimate of such
warranty-related costs is reviewed annually.

1.19. Segment Reporting

a. The Company''''s operating businesses are organized and managed
separately according to the nature of products and services provided,
with each segment representing a strategic business unit that offers
different products and serves different markets. The analysis of
geographical segments is based on location of customers of the Company.

b. The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.

c. Segment revenue and segment results include transfers between
business segments. Such transfers are accounted for at a competitive
market price and are eliminated in the consolidation of the segments.

d. Expenses that are directly identifiable to segments are considered
for determining the segment results. Expenses which relate to the
Company as a whole and are not allocable to segments are included under
unallocated corporate expenses.

e. Segment assets and liabilities include those directly identifiable
with the respective segments. Unallocated corporate assets and
liabilities represent the assets and liabilities that relate to the
Company as a whole and are not allocable to any segment.

1.20. Borrowing Costs

Borrowing Costs include interest, amortisation of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
borrowing costs. Discount on Commercial papers is amortised over the
tenor of the underlying instrument. Borrowing Costs, allocated to and
utilised for qualifying assets, pertaining to the period from
commencement of activities relating to construction / development of
the qualifying asset upto the date the asset is ready for its intended
use is added to the cost of the assets.

Capitalisation of Borrowing Costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted. All other
borrowing costs are expensed in the period they occur.

1.21. Earnings Per Share

Basic Earnings Per Share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders 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 shares, other than the conversion of potential equity 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 period
attributable to equity shareholders and the weighted average number of
shares outstanding during the period is adjusted for the effects of all
dilutive potential equity shares.

1.22. Employees Stock Option

Stock options granted to the employees under the stock option scheme
are evaluated as per the accounting treatment prescribed by Securities
and Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014 and the Guidance Note on Accounting for Employee
Share-based Payments. The Company follows the intrinsic value method of
accounting for the options and accordingly, the excess of market value
of the stock options as on date of grant, if any, over the exercise
price of the options is recognized as deferred employee compensation
and is charged to the Statement of Profit and Loss on graded vesting
basis over the vesting period of the options.

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

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