r. Provisions and Contingencies
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an
outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at
the end of the reporting period. A disclosure for contingent liabilities is made when there is a possible obligation arising from past events,
the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within
the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources
embodying economic benefits will be required to settle or a reliable estimate of the amount cannot be made.
s. Dividend
The Company recognises a liability for dividends to equity holders of the Company when the dividend is authorised and the dividend is no
longer at the discretion of the Company. As per the corporate laws in India, a dividend is authorised when it is approved by the shareholders.
A corresponding amount is recognised directly in equity.
t. Earnings per Share
(i) Basic Earnings per Share
Basic earnings per share is calculated by dividing: -
- the profit attributable to owners of the Company
- by the weighted average number of equity shares outstanding during the financial year
(ii) Diluted Earnings per Share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:¬
- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive
potential equity shares.
u. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The chief operating decision maker is responsible for allocating resources and assessing performance of the operating segments and has been
identified as the Managing Director of the Company. Presently Company has been working in single segment- Dyes & Dyes Intermediates.
Nature and purpose of each Reserve
Securities Premium Account
Securities Premium Account is used to record premium received on issue of shares. This reserve may be utilised in accordance with the provi¬
sions of Section 52 of the Act.
During the year, the Company has converted 4,00,000 warrants into equity shares at an issue price of ^308.50 per share, comprising a face
value of ^10.00 and a share premium of ^298.50 per share. As a result of this conversion Issued and subscribed capital increased by ^40.00
lakhs and Securities premium amount increased by Rs. 1194.00 lakhs.
15.1 Refer Note No. 38 for Related parties transaction.
^Security for Working Capital
(a) First pari passu hypothecation charge shared with HDFC Bank, Citi Bank and Kotak Mahindra Bank on all existing and future current
assets of the Company.
(b) Second pari passu hypothecation charge shared with HDFC Bank, Citi bank and Kotak Mahindra Bank on all Movable Fixed Assets of
the company at Unit 1 (situated at GIDC, Ankleshwar) and Unit 2 (situated at GIDC, Ankleshwar).
(c) Second pari passu hypothecation charge shared with HDFC Bank and Citi bank on Movable Fixed Assets of the company at Unit 3
(situated at GIDC, Dahej).
(d) Second Pari passu registered mortgage charge shared with HDFC Bank, Citi Bank and Kotak Mahindra Bank on immoveable properties
of the Company at Unit 1 (situated at GIDC, Ankleshwar) and Unit 2 (situated at GIDC, Ankleshwar), Unit 3 (situated at GIDC, Dahej)
and Head office (Registered Office situated at Ahmedabad).
*Security for Term loan
(a) Second pari passu hypothecation charge shared with HDFC Bank, Citi Bank and Kotak Mahindra Bank on all existing and future current
assets of the Company.
(b) First pari passu hypothecation charge shared with HDFC Bank, Citi Bank and Kotak Mahindra Bank on all Movable Fixed Assets of the
Company at Unit 1 (situated at GIDC, Ankleshwar) and Unit 2 (situated at GIDC, Ankleshwar).
(c) First pari passu hypothecation charge shared with HDFC Bank and Citi Bank on Movable Fixed Assets and Immovable assets of the
company at Unit 3 (situated at GIDC, Dahej).
(d) First Paripassu registered mortgage charge shared with HDFC Bank, Citi Bank and Kotak Mahindra Bank on immoveable properties
at Unit 1 (situated at GIDC, Ankleshwar), Unit 2 (situated at GIDC, Ankleshwar) and Head office (Registered Office situated at Ah-
medabad).
*Security for ECLGS Loan
(a) Second pari passu hypothecation charge shared with HDFC Bank on all existing and future current assets
(b) Second pari passu hypothecation charge shared with HDFC Bank on all Movable Fixed Assets of the company of Unit 1 (situated at
GIDC, Ankleshwar), Unit 2 (situated at GIDC, Ankleshwar) and Unit 3 (situated at GIDC, Dahej).
(c) Second Paripassu registered mortgage charge shared with HDFC Bankon immoveable properties at Unit 1 (situated at GIDC, Ankle¬
shwar), Unit 2 (situated at GIDC, Ankleshwar) and Unit 3 (situated at GIDC, Dahej) and Head office (Registered Office situated at Ah-
medabad)
30.6 Corporate Social Responsibility Expenditure:
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average
net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities
are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment
sustainability, disaster relief, COVID-19 relief and rural development projects as specified in Schedule VII of the Companies Act, 2013
A CSR committee has been formed by the company as per the Act. The funds were primarily utilized through the year on these activities which
are specified in Schedule VII of the Companies Act, 2013:
36 Employee Benefits :-
(I) Post Employment Defined Benefits Plans :
(A) Gratuity (Funded)
The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the plan, the Gratuity Fund Trusts,
administered and managed by the Trustees and funded primarily with Life Insurance Corporation of India (LICI), make payment to vested
employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and
the tenure of employment. Vesting occurs upon completion of five years of service. The Trustees are responsible for the overall governance
of the plan and to act in accordance with the provisions of the trust deed and rules in the best interests of the plan participants. Each year an
Asset-Liability matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk and re¬
turn profiles. Investment and contribution policies are integrated within this study. Liabilities with regard to the Gratuity Plan are determined
by actuarial valuation as set out in Note 2(t)(ii) above, based upon which, the Company makes contributions to the Employees' Gratuity Funds.
The fair values of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values
are consistent with those used for the year ended 31st March, 2025.
The following methods and assumptions were used to estimate the fair values:
(a) In respect of investments in mutual funds, the fair values represent net asset value as stated by the issuers of these mutual fund units in
the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at
which issuers will redeem such units from the investors. Accordingly, such net asset values are analogous to fair market value with respect to
these investments, as transactions of these mutual funds are carried out at such prices between investors and the issuers of these units of
mutual funds.
(b) The fair value of foreign exchange forward contracts is determined using forward exchange rates at the Balance Sheet date.
(c) The management assessed that fair values, of trade receivables, cash and cash equivalents, other bank balances, other financial assets
(current), investments in commercial papers, trade payables, borrowings (current) and other financial liabilities (current), approximate to their
carrying amounts largely due to the short-term maturities of these instruments. Further, management also assessed the carrying amount of
certain loans and long-term borrowings at floating interest rates which are a reasonable approximation of their fair values and the difference
between the carrying amounts and fair values is not expected to be significant.
(d) The fair value of remaining financial instruments is determined on discounted cash flow analysis using a current lending/discount rate, as
considered appropriate. For financial assets carried at fair value, the carrying amounts are equal to their fair values.
(iii) Fair Value Hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised
and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments
into three levels prescribed under the accounting standard. An explanation of each level follows below.
Level-1 : Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level-2 : Inputs are other than quoted prices included within Level-1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
Level-3 : Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a
valuation model based on the assumptions that are neither supported by prices from observable current market transactions in
the same instrument nor are they based on available market data.
40 Financial Risk Management
The Company's activities expose it to credit risk, liquidity risk and market risk. In order to safeguard against any adverse effects on the finan¬
cial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered as per Company's
policy to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or specula¬
tive intruments The Company's senior management oversees the management of above risks. The senior executives working to manage the
financial risks are accountable to the Audit Committee and the Board of Directors. This process provides assurance to the Company's senior
management that the Company's financial risks-taking activities are governed by appropriate policies and procedures and that financial risks
are identified, measured and managed in accordance with the Company's policies and the Company's risk appetite.
This Note explains the sources of risk which the entity is exposed to and how the entity manages the risk. The Board of Directors reviews and
agrees policies for managing each of these risks, which are summarised below:
(A) Credit Risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The Company is exposed to credit risk
from its operating activities (primarily Trade Receivables) and from its investing activities (primarily Deposits with Banks and Investments in
Mutual Funds).
Trade Receivables
Trade receivables are typically unsecured and are derived from revenue earned from customers. Customer credit risk is managed by each
business unit subject to the Company's policy and procedures which involve credit approvals, establishing credit limits and continuously mon¬
itoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. Outstanding customer
receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit
assurance. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. The Company
uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available
external and internal credit risk factors and the Company's historical experience with customers.
The Company's exposure to customers is diversified and no single customer contributes to more than 10% of total revenues.
Other Financial Assets
Credit risk from balances with banks, term deposits, loans, investments and derivative instruments is managed by Company's finance de¬
partment. Investments of surplus funds are made only with approved counterparties who meet the minimum threshold requirements. The
Company monitors ratings, credit spreads and financial strength of its counterparties. The Company's maximum exposure to credit risk for the
components of the Balance Sheet as of 31st March, 2025, and 31st March, 2024 is the carrying amounts as disclosed in Note 39.
Financial Assets that are Neither Past Due Nor Impaired
None of the Company's cash equivalents with banks, loans and investments were past due or impaired as at 31st March, 2025 and 31st March,
2024 . Of the total trade receivables Rs. 6419.97 Lakhs as at 31st March, 2025 and Rs. 5506.49 Lakhs as at 31st March, 2024 consisted of
customer balances that were neither past due nor impaired.
Exposure to market risk with respect to commodity prices primarily arises from the Company's sales of dyes and intermediates, including the
raw material components for such products. Cost of raw materials forms the largest portion of the Company's cost of sales. Market forces
generally determine prices for the goods sold by the Company. These prices may be influenced by factors such as supply and demand, pro¬
duction costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any
of these factors may reduce the revenue that the Company earns from the sales of goods. Commodity price risk exposure is evaluated and
managed through operating procedures and sourcing policies. The Company has not entered into any derivative contracts to hedge exposure
to fluctuations in commodity prices.
41 Capital Management
(a) Risk Management
The Company's objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to
provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.
The Company monitors capital on the basis of the net debt to equity ratio. Net debt are long-term and short-term debts as reduced by cash
and cash equivalents. The Company is not subject to any externally imposed capital requirements.
45 Issue of Shares
During the year, the Company has converted 4,00,000 warrants into equity shares at an issue price of ^308.50 per share, comprising a face
value of ^10.00 and a share premium of ^298.50 per share. As a result of this conversion Issued and subscribed capital increased by ^40.00
lakhs and Securities premium amount increased by Rs. 1194.00 lakhs.
The Company has utilised net proceds to meet its working capital requirement and there is no unutilised funds.
46 Event Occurring after The Balance Sheet Date
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of financial statement
to determine the necessity for recognition and/or reporting of any of these eventsand transactions in the financial statements. As on date of
signing this statements there were no material subsequent events to be recognized or reported that are not already disclosed.
47 Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date.
48 No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohi¬
bition) Act, 1988 (45 of 1988) and the rules made thereunder during the year under audit.
49 Company has not declared and paid any dividend during the year.
50 Company has not been declared willful defaulter by any bank or financial Institution or other lender during the year under audit.
51 Company has no charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period during the year under
audit.
52 Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
53 The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as
income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of
the Income Tax Act, 1961
54 The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds)
any funds to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in
writing or otherwise, 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 (Ulti¬
mate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
55 The Company have not received any fund from any person(s) or entity(ies), 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
Ý-----—-----------— - ---------------- — Ý — — I —----------- ----—- ---- \- ------ -.....— - -----—I
56 The financial statements of the Company for the year ended 31st March, 2025 have been reviewed by the audit committee and approved by
the Board of Directors in its meeting held on 30th May, 2025.
57 The figures for the corresponding previous year have been regrouped / reclassified wherever necessary, to make them comparable with cur¬
rent year's figures.
AS PER OUR REPORT OF EVEN DATE
FOR, B. K. PATEL & CO. FOR AND ON BEHALF OF
CHARTERED ACCOUNTANTS DYNEMIC PRODUCTS LIMITED
FRN :- 112647W
CA B. K. PATEL B. K. PATEL D. B. PATEL
PARTNER MANAGING DIRECTOR JOINT MANAGING DIRECTOR
MEMBERSHIP NO.032199
PLACE : AHMEDABAD. R. B. PATEL ANKIT SHAH
DATE : 30.05.2025 JOINT MANAGING DIRECTOR CHIEF FINANCIAL OFFICER
PLACE : AHMEDABAD. VARSHA MEHTA
DATE : 30.05.2025 COMPANY SECRETARY
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