s Provisions (other than employee benefits)
(i) General
Provisions are recognised when the Company has
a present obligation (legal or constructive) as a
result of a 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. When
the Company expects some or all of a provision to
be reimbursed, the expense relating to a provision is
presented in the statement of profit and loss net of
any reimbursement."
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to
the liability. When discounting is used, the increase
in the provision due to the passage of time is
recognised as a finance cost.
(ii) Onerous contract:
Provision for onerous contracts. i.e. contracts
where the expected unavoidable cost of meeting
the obligations under the contract exceed the
economic benefits expected to be received under it,
are recognised when it is probable that an outflow
of resources embodying economic benefits will be
required to settle a present obligation as a result of
an obligating event based on a reliable estimate of
such obligation.
t Contingent Liability
A disclosure for contingent liabilities is made where
there is a possible obligation or a present obligation
arising from the past events that may probably not
require an outflow of resources. When there is a
possible or a present obligation where the likelihood
of outflow of resources is remote, no provision or
disclosure is made.
u Cash and cash equivalents
Cash and cash equivalent includes cash on hand,
other short-term, highly liquid investments with
original maturities of three months or less that are
readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes
in value, and bank overdrafts.
v Cash flow statement
Cash flows are reported using the indirect method,
whereby net profit before taxes for the period 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.
w Earnings per share
The basic earnings per share is computed by
dividing the net profit attributable to the owners of
the Company for the year by the weighted average
number of equity shares outstanding during reporting
period. The number of shares used in computing
diluted earnings per share comprises the weighted
average shares considered for deriving basic earnings
per share and also the weighted average number of
equity shares which could have been issued on the
conversion of all dilutive potential equity shares.
Dilutive potential equity shares are deemed converted
as of the beginning of the reporting date, unless they
have been issued at a later date. In computing diluted
earnings per share, only potential equity shares that
is dilutive and which either reduces earnings per
share or increase loss per share are included.
x Segment reporting
Based on the "management approach" as defined
in Ind AS 108, Operating Segments, the Chief
Operating Decision Maker evaluates the Company's
performance and allocates resources based on
an analysis of various performance indicators by
business segments. Accordingly, information has
been presented along these business segments viz.
Hydraulics, Aerospace, Automotive and aluminium
castings (Discontinued operations) and Others.
y Warranties
Warranty costs are estimated by the Management on
the basis of technical evaluation and past experience.
Provision is made for estimated liability in respect of
warranty costs in the period of sale of goods.
z Cash dividend to equity holders of the
Company
The Company recognises a liability to make cash
distributions to equity holders of the Company when
the distribution is authorised, and the distribution
is no longer at the discretion of the Company. Final
dividends on shares are recorded as a liability on the
date of approval by the shareholders and interim
dividends are recorded as a liability on the date of
declaration by the Company's Board of Directors.
aa Exceptional items
An item of income or expense which by its size,
type, nature or incidence requires disclosure in order
to improve an understanding of the performance of
the Company is treated as an exceptional item and
the same is disclosed in the notes to accounts.
3 Recent Pronouncements
On May 7, 2025, the Ministry of Corporate Affairs
(MCA) has notified Companies (Indian Accounting
Standards) Amendment Rules, 2025. This notification
has resulted into amendments in Ind AS 21 - Effects
of Changes in Foreign Exchange Rates which are
applicable to the Company from April 1, 2025.
The Company is assessing the impact of the above
amendments on the Company's financial statements.
(a) During the Current year, The Company has provided the corporate guarantee on behalf of Dynamatic Manufactur
Limited, wholly owned subsidiary to Bank towards the loan availed, accordingly the Company has recognised the Corpor
Guarantee (Refer Note 19 and 37).
Last year, the Company has subscribed to the Dynamatic Manufacturing Limited's equity share on 25 March 2024 un
Rights issue towards 3,50,00,000 equity shares at face value of INR 10 each.
(b) The Company has subscribed to the JKM Global Pte Limited 's ordinary share on 15 July 2024 towards 13,66,525
subscription price of SGD 2.36 per share (Face Value of Share is SGD 1 per share).
(c) The Company's investments in its German operations are held in Eisenwerk Erla GmbH, Germany (EEG), an indirect s
down wholly owned subsidiary of the Company. EEG, was a wholly owned by JKM Erla Holdings GmbH, Germany (J
Erla), which was a wholly owned subsidiary of JKM Erla Automotive Limited, India (JEAL), another wholly owned subsid
of the Company.
EEG, is currently undergoing a transformation from automotive and foundry businesses to the aerospace busine
Considering the various challenges involved, viz., the supply chain crisis at OEMs, current inflation in Europe, and the st<
and unpredictable increase in the cost of gas and electricity being faced by corporations across Europe, EEG undert
corporate restructuring measures through the "Protective Shield Process by Self-Administration" under the applica
German Laws, and in this regard, a financial resolution plan was filed before the local court at Chemnitz, which got appro'
by creditors in favour of EEG. Consequent to this, the local court at Chemnitz passed its final order and ended the protec
shield through self-administration proceedings effective 1 August 2023.
Owing to the aforesaid intra-group corporate restructuring measures, JKM Erla, engaged in the business of setting
automotive component processing/manufacturing units was decided to be dismantled with the aim of streamlir
the group's holding structure for German operations, and accordingly an application has been made before appropri
authorities and is awaiting necessary order. In the interim, the 100% shareholdings held by JKM Erla in EEG was assigi
to JEAL. During the year ended 31 March 2025, the order for the liquidation has been received.
The restructuring carried out by EEG also envisaged refinancing of certain borrowings of EEG by way intra-group loans.
part of the above restructuring:
1) The Company borrowed as sum of Rs. 7,000 lakhs from Axis Finance Limited
2) The Company granted a loan of SGD 111 lakhs to JKM Global Pte Ltd, a wholly owned subsidiary, which in t
provided a loan to EEG through its UK based subsidiary. The said loan recoverable from JKM Global Pte Ltd. contini
to be outstanding as at 31 March 2025 (Refer note 5).
As part of the annual impairment assessment of Investments, the Company has recognized an impairment provision of
Fair value hierarchy (Rs in Lakhs)
Level 1: It includes financial instruments measured using quoted prices. This includes investment in equity, preference
securities, mutual funds and debentures that have quoted price.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-
counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely
as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable,
the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level
3. This is the case for unquoted equity securities.
Fair Valuation Method
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and
assumptions were used to estimate the fair values:
A Financial Assets:
Fair value of all the above financial assets except investments are measured at balance sheet date value, as most of them
are settled within a short period and so their fair value are assumed to be almost equal to the balance sheet date value.
B Financial Liabilities:
(i) Borrowings: It includes loans taken from banks and financial institution, cash credit and bill discounting facilities. Borrowings
are classified and subsequently measured in the financial statements at amortized cost. Considering that the interest rate
on loans is reset on yearly basis, the carrying amount of the loan would be a reasonable approximation of its fair value.
(ii) Trade payables and other financial liabilities: Fair values of trade payables and other financial liabilities are measured
at balance sheet date value, as most of them are settled within a short period and so their fair values are assumed almost
equal to the balance sheet date values.
46 Financial risk management
The Company's activities expose to financial risks: credit risk, liquidity risk and market risk.
Risk management framework
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk
management framework. The Company's risk management policies are established to identify and analyse the risks faced
by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The
Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive
control environment in which all employees understand their roles and obligations.
The Company's Audit Committee oversees how management monitors compliance with the Company's risk management
policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the
Company. The Audit Committee is assisted in its oversight role by internal auditor. Internal Audit function includes both
regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit
Committee.
i) Credit risk
Credit risk is the risk of financial loss to the Company, if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the Company's receivables from customers and loans
given. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients,
including outstanding accounts receivables. The maximum exposure to credit risk is equal to the carrying value
of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets.
The Company assesses the credit quality of the counterparties, taking into account their financial position, past
experience and other factors. The carrying amount of financial asset represent the maximum credit exposure.
Trade and other receivables
The maximum exposure to credit risk at the reporting date is primarily from trade receivables. However, the
management also considers the factors that may influence the credit risk of its customer base. Customers of the
Company are spread across diverse industries and geographical areas. The Company limits its exposure to credit risk
from trade receivables by establishing a maximum credit period and takes appropriate measures to mitigate the risk
of financial loss from defaults. Recurring credit evaluation of credit worthiness is performed based on the financial
condition of respective customers.
Expected credit loss assessment for Trade Receivables as at 31 March 2025 and 31 March 2024 are as
follows:
The Company establishes an allowance for credit loss that represents its estimate of expected losses in respect of
trade and other receivables based on past and the recent collection trend. The maximum exposure to credit risk as at
reporting date is primarily from trade receivables as at 31 March 2025 amounting to INR 17,268 (31 March 2024: INR
20,688). The movement in allowance for credit loss in respect of trade and other receivables during the year was as
follows:
ii) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligation as the become due. The
Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet
its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company's reputation.
Management monitors rolling forecast of the Company's liquidity position and cash and bank balances on the basis
of expected cash flows. This is generally carried out by the Management of the Company in accordance with practice
and limits set by the Company. In addition, the Company's liquidity management policy involves projecting cash flows
and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against
internal and external regulatory requirements and maintaining debt financing plans.
i) Financing arrangement
The Company maintains the following line of credit:
(i) Term loan from bank aggregating to INR 8,822 (31 March 2024: INR 9,000) repayable in 28 quarterly instalments. First
instalment starting from 1 June 2024 with interest rate at 9.60% per annum (31 March 2024: 9.60% per annum).
First pari passu charge on the entire movable and immovable fixed assets of the Company, present and future.
Second pari passu charge on the entire current assets of the Company. First charge over Debt Service Reserve
Account (DSRA).
(ii) . Term loan from bank aggregating to INR 104 (31 March 2024: INR 129) repayable in 60 monthly instalments. First
instalment starting from 31 October 2023 with interest rate at 8.90% per annum (31 March 2024: 8.90% per annum).
This loan is secured by hypothecation of assets (cars).
(iii) . Working Capital Term loan from bank aggregating to INR 1,500 (31 March 2024: INR Nil) repayable in 36 equal
monthly instalments post 24 months of principal moratorium. First instalment starting from 1 April 2027 with fixed
interest rate at 9.20% per annum. First pari passu charge on the current assets of the Company. Second pari passu
charge on the movable and immovable fixed assets of the Company.
(iv) Term Loan from financial institutions aggregating to INR 2,407 (31 March 2024: INR 3,080) repayable in 20 quarterly
instalments first instalment starting from 30 June 2023 with interest rate of 10.75% per annum (31 March 2024:
10.75% per annum). First pari passu charge on movable and immovable fixed assets of the Company, present
and future. Second pari passu charge on all current assets of the Company. First charge over Debt Service Reserve
Account (DSRA). Personal guarantee issued by the promoter.
(v) Term Loan from financial institutions aggregating to INR 5,950 (31 March 2023: INR 7,000) repayable in 20 quarterly
instalments first instalment starting from 30 September 2024 with interest rate of 10.45% per annum (31 March
2024: 10.25% per annum). First pari passu charge on movable and immovable fixed assets of the Company, present
and future. Second pari passu charge on all current assets of the Company.
(v) Term Loan from financial institutions aggregating to INR 200 (31 March 2024: INR 282) repayable in 60 monthly
instalments with interest rate of 10.25% per annum (31 March 2024: 10.25%), this is secured by hypothecation of
assets (cars).
* Cash credit and working capital demand loans from banks carry interest ranging between 9.25% - 10.35% per annum (31
March 2024: 10.65%-12.65% per annum), computed on a monthly basis on the actual amount utilized, and are repayable
on demand. Packing Credit & Working Capital Demand loans in Foreign Currency from banks carry interest rate of 6m
SOFR 3.00% per annum (31 March 2024: 6m SOFR 3.00% and 6m SOFR 3.50% per annum). These are secured by first
pari passu charge by way of hypothecation of stock and book debts of the Company and second pari passu charge on the
movable and immovable fixed assets of the Company.
*Amount disclosed after considering Non-current and Current.
As disclosed in note 18 and 22, the Company has secured bank loan that contains loan covenants. A future breach of
covenant may require the Company to repay the loan earlier than indicated in the above table. Except for these financial
liabilities, it is not expected that cash flows included in maturity analysis could occur significantly earlier.
iii) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Company's income or the value of its holdings of financial instruments. Market risk is attributable to all market
risk sensitive financial instruments including foreign currency receivables and payables and long term debt. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while optimising
the return.
a) Currency risk
The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales,
purchases and borrowings are denominated and the respective functional currency of the Company. The functional currency
of the Company is INR. The currencies in which these transactions are primarily denominated are USD, GBP, Euro & CAD etc.
Management monitors the movement in foreign currency and the Company's exposure in each of the foreign currency.
Based on the analysis and study of movement in foreign currency, the Company decides to exchange its foreign currency.
Exposure to currency risk
The summary quantitative data about the Company's exposure to currency risk as reported to management is as follows:
(Rs in Lakhs)
(v) The Company has no 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).
(vi) The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the
related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, except as
disclosed in the financial statements.
(vii) The Company is not a declared wilful defaulter by any bank or financial institution or other lender.
(viii) The Company does not have any Capital-work-in progress whose completion is overdue or has exceeded its cost
compared to its original plan.
57 The Code on Wages, 2019 and Code on Social Security, 2020 ("the Codes") relating to employee compensation and post¬
employment benefits that received Presidential assent have not been notified. Further, the related rules for quantifying the
financial impact have not been notified. The Company will assess the impact of the Codes when the rules are notified and
will record any related impact in the period the Codes become effective.
58 The standalone financial statements were approved for issue by the board of directors on 27 May 2025.
for and on behalf of the Board of Directors of
Dynamatic Technologies Limited
UDAYANT MALHOUTRA CHALAPATHI P SHIVARAM V
Chief Executive Officer & Executive Director & Chief Legal Officer &
Managing Director Chief Financial Officer Company Secretary
DIN:00053714 DIN:08087615
Place: Bangalore
Date: 27 May 2025
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