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Dynemic Products Ltd.

BSE: 532707 Sector: Industrials
NSE: DYNPRO ISIN Code: INE256H01015
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OPEN 402.70
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VOLUME 2
52-Week high 766.68
52-Week low 365.00
P/E 31.88
Mkt Cap.(Rs cr) 456
Buy Price 403.45
Buy Qty 9.00
Sell Price 407.30
Sell Qty 2.00
OPEN 402.70
CLOSE 399.95
VOLUME 2
52-Week high 766.68
52-Week low 365.00
P/E 31.88
Mkt Cap.(Rs cr) 456
Buy Price 403.45
Buy Qty 9.00
Sell Price 407.30
Sell Qty 2.00

Dynemic Products Ltd. (DYNPRO) - Auditors Report

Company auditors report

To

The Members of

Dynemic Products Limited

Report on the Audit of the standalone Ind AS financial statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of DYNEMICPRODUCTS LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2020 the Statement of Profit and Loss including other comprehensive income theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020its profit including other comprehensive income its cash flows and the changes in equityfor the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the 'Auditor'sResponsibilities for the Audit of the standalone Ind AS financial statements' section ofour report. We are independent of the Company in accordance with the 'Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone Ind AS financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 31 2020. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfi lled the responsibilities described in theAuditor's responsibilities for the audit of the standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matters How our audit addressed the key audit matter
Revenue from sale of products (As described in Note 2(b) of the standalone Ind AS financial statements)
Revenue is recognized when performance obligations are satisfied by transferring promised goods to customers. Goods are considered transferred when the customer obtains 'control' of the promised goods. Control is the ability to direct the use of and obtain substantially all the Principal audit procedures performed include:
There is a risk of revenue not being recorded in the correct accounting period on account of the inability to establish with certainty the point of time when control passes. (1) Assessed the appropriateness of the relevant accounting policy.
(2) Evaluated the design and implementation of internal controls over management's assertion with respect to 'cut - off' to establish that control of promised goods has passed to customers.
(3) Tested the operating effectiveness of controls over revenue recognition with a focus on those related to the timing of revenue recognition.
(4) Performed testing on a sample of sales to confirm that 'cut - off' has been properly applied in particular the sales made before the year end
Pending litigations (As described in Note 34 of the standalone Ind AS financial statements)
As of March 31 2020 the Company has disclosed contingent liabilities of Rs. 53.34 lacs relating to tax and legal claims. Following procedures have been performed to address this key audit matter:
Taxation arbitration and litigation exposures have been identified as a key audit matter due to the uncertainties and timescales involved for the resolution of these claims. 1. Gained an understanding of the process of identification of claims litigations arbitrations and contingent liabilities and evaluated the design and tested the operating effectiveness of key controls.
Accordingly there is judgement required by management in assessing the exposure of each case and thus a risk that such cases may not be adequately provided for or disclosed in the standalone Ind AS financial statements. 2. Discussed and analysed material legal cases with the Company's legal department.
3. Analysed the responses obtained from the Company's legal advisors who conduct the court cases tax and administrative proceedings in which their status and possible expected manner of proceeding were described.
4. Evaluated management's assumptions and estimates relating to the recognition of the provisions for disputes and disclosures of contingent liabilities in the standalone Ind AS financial statements.
5. Assessed the adequacy of the disclosures with regard to facts and circumstances of the legal and litigation matters.

Information Other than the Financial Statements and Auditor's Report Thereon

• The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Management Discussion andAnalysis Directors' Report including Annexures to Directors' Report BusinessResponsibility Report and Corporate Governance but does not include the standalonefinancial statements and our auditor's report thereon.

• Our opinion on the standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

• In connection with our audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

• If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management for the standalone Ind AS financial statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the standalone Ind AS financial statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to infl uence the economic decisions of userstaken on the basis of these standalone Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also :

• Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant defi ciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most signifi cance in the audit of the standalone Ind AS financialstatements for the financial year ended March 31 2020 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspecifi ed in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profi t and Loss including other comprehensiveincome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifi edas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure B" to this report;

(g) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid/ provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements - Refer Note 34 to the standaloneInd AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For ASIM RAVINDRA & ASSOCIATES
CHARTERED ACCOUNTANTS
FRN. 118775W
Place : Ahmedabad [RAVINDRA MEHTA]
Date : 27-06-2020 PARTNER
M.No. 043051

ANNEXURE A TO TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in Paragraph 1 under the heading of "Report on other legal andregulatory requirements" of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets ;

(b) Fixed Assets have been physically verified by the management periodically in aphased manner and no material discrepancies have been noticed on physical verification asconfirmed by the management ;

(c) The title deeds of the immovable properties are held in the name of the company.

(ii) As explained to us inventories have been physically verified by the managementat reasonable intervals except for minor items and the inventories lying with outsideparties which have been confirmed by them. As explained to us the material discrepanciesif any noticed have been properly dealt with in the books of accounts by the management.

The year end physical verification of the inventory can not be carried out due to thelock down in view of the COVID 19 but the physical verification of inventory atreasonable intervals by the management is done and is dealt with in the books of accounts.

(iii) The company has not granted any loans secured or unsecured to companies firmsor other parties covered in the register maintained under section 189 of the CompaniesAct.

(iv) In our opinion and according to the information and explanation given to us thecompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of the loans investments security and guarantees.

(v) In our opinion and according to the information and explanation given to us thecompany has complied with the provisions of Section 73 to 76 or any relevant provisions ofthe Act and its Rules and also the directives of Reserve Bank of India with regard toacceptance of deposits.

(vi) According to the information and explanation given to us the maintenance of costrecords has been specified by the Central Government under sub section (1) of section 148of the Companies Act 2013 and we have broadly reviewed the accounts and recordsmainetained by the company as prescribed by the Government for the maintenance of the costrecords under section 148 (1) of the Companies Act and we are of the opinion that primafacie the prescribed accounts and records have been maintained. We have not however madedetailed examination of the records with a view to determine whether they are accurate andcomplete. The company has obtained the Cost Audit Report from the Cost Accountants.

(vii) (a) According to the information and explanation given to us and on the basis ofour examination of books of accounts the Company is regular in depositing undisputedstatutory dues including Provident Fund Employees State Insuarance Sales Tax IncomeTaxCustom Duty Excise Duty Wealth tax Service tax and other statutory dues with theappropriate authorities ;

(b) According to the information and explanation given to us the dues of Excise Dutyand Income tax which have not been deposited on account of any dispute and the forumwhere the dispute is pending are as under :-

Sr. no Name of the Statute Nature of Dues Amount ' Period to which matter relates Forum where dispute is pending
1 Central Excise Act 1944 Service Tax & Excise Duty 215278 2012-13 Appeal pending with Commissioner (Appeals) Surat-II
2 Income Tax Act 1961 Income Tax 3512712 AY 2017-18 Appeal pending with CIT (Appeals)- Ahmedabad-I

(viii) According to the information and explanation given to us the company has notdefaulted in repayment of dues to financial institutions and banks.

(ix) Based on the information and explanation given to us by the management term loanswere applied for the purpose for which the loans were taken. No moneys have been raised byway of initial public offer during the year under review.

(x) According to the information and explanation given to us and to the best of ourknowledge and belief no fraud on or by the company has been noticed or reported by thecompany during the year.

(xi) According to the information and explanation given to us and to the best of ourknowledge and belief the managerial remuneration has been paid or provided in accordancewith the requisite mandated by the provisions of Section 197 read with Schedule V to theCompanies Act.

(xii) The company is not Nidhi Company and so the clause is not applicable.

(xiii) According to the information and explanation given to us and to the best of ourknowledge and belief all the transactions with the related parties are in compliancewith Section 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the Financial Statements etc. as required by the applicable accountingstandards.

(xiv) According to the information and explanation given to us and to the best of ourknowledge and belief the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview.

(xv) According to the information and explanation given to us and to the best of ourknowledge and belief the company has not entered into any non-cash transactions withdirectors or persons connected with him.

(xvi) According to the information and explanation given to us and to the best of ourknowledge and belief the company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1943.

For ASIM RAVINDRA & ASSOCIATES
CHARTERED ACCOUNTANTS
FRN. 118775W
Place : Ahmedabad [RAVINDRA MEHTA]
Date : 27-06-2020 PARTNER
M.No. 043051

ANNEXURE B TO

TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 11(f) under 'Report on Other Legal and RegulatoryRequirements' of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of DynemicProducts Limited ("the Company") as of 31st March 2020 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of standalone Ind Asfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standaloneInd AS financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For ASIM RAVINDRA & ASSOCIATES
CHARTERED ACCOUNTANTS
FRN. 118775W
Place : Ahmedabad [RAVINDRA MEHTA]
Date : 27-06-2020 PARTNER
M. No. 043051

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