Dynamic Industries Ltd Management Discussions

INDUSTRIAL STRUCTURE AND DEVELOPMENT :

The Company is in the business of manufacturing of Chemical and Dye and Dye Stuffs. Your Company is key producer of Synthetic Organic Dyes, Acid Dyes, Direct Dyes and Solvent Dyes based in India having its Plants Situated at Gujarat Industrial Development Corporation (GIDC), Vatva, Ahmedabad, India. The Products find their application in various industry segments such as Textiles, leather, cosmetic, paper printing, plastics to shade their products etc. The plant facility is equipped with up-to-date manufacturing equipment and supported by R & D Center and quality assurance department which are equipped with advanced equipment and analytical instruments. The Company has a dedicated team of experienced and qualified professional to manage day to day operations efficiently. For more details, please visit www.dvnaind.com OVERVIEW :

The financial statements have been prepared in compliance with the Indian Accounting Standards (Ind AS) issued by The Institute of Chartered Accountants of India (ICAI) which have been notified under the Companies (Indian Accounting Standards) Rules, 2015 (‘Ind AS Rules), of the Companies Act, 2013 The management of the company accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present the companys state of affairs and profit for the year.

OPPORTUNITY :

India continues to hold a dominant position as a global hub for the production and export of dyes and dye intermediates, supported by its cost-effective manufacturing capabilities, skilled technical workforce, and consistent global demand. The companys strategic positioning as a leading producer in this segment enables it to capitalize on this momentum. With a strong operational base and customer-centric approach, the company is well-positioned to address evolving market demands efficiently. The robust internal systems, developed over time, provide the resilience to navigate industry challenges while sustaining growth. Additionally, the company benefits from its strategic location, enabling quicker turnaround times and enhanced service delivery to key markets, further strengthening its competitive edge.

THREATS:

1. Dynamic Regulatory Landscape: Frequent amendments in environmental laws, taxation structures, and government policies can lead to operational disruptions and increased compliance costs for the chemical industry.

2. Volatility in Energy and Raw Material Costs: The industry is highly sensitive to fluctuations in natural gas, electricity tariffs, and crude oil prices. A surge in these input costs directly impacts profitability, especially when cost escalation cannot be passed on to end customers.

3. Stringent Environmental and Safety Regulations: Increasingly strict norms around waste disposal, effluent treatment, and air emissions require continuous investments in sustainable practices. Non-compliance can lead to penalties, shutdowns, or reputational damage.

4. Global Trade Disruptions: The sector is exposed to risks from global geopolitical tensions, trade restrictions, and fluctuations in export-import regulations, which can hinder supply chains and market access.

COMPETITION :

1. Dependency on Imported Intermediates: Many specialty chemicals and advanced intermediates required in production are still largely imported due to limited domestic production, increasing vulnerability to global supply chain disruptions and currency volatility.

2. Uneven Policy Support Across States: While industrial hubs like Gujarat enjoy better policy incentives and infrastructure for the chemical sector, manufacturers in other states face less favourable conditions, creating an uneven competitive landscape across India.

3. Limited Scale Among Domestic Players: A significant portion of the Indian chemical industry is dominated by fragmented and unorganized players. This limits economies of scale, making it difficult to match the pricing power and efficiencies of global giants.

4. ESG Pressure from Global Clients: Export-oriented chemical manufacturers are under growing pressure to meet environmental, social, and governance (ESG) standards set by international buyers. Smaller players often struggle to meet these benchmarks, impacting their competitiveness in global markets.

5. Talent and Technology Gap: Global players invest significantly in automation, AI-driven process optimization, and high-end chemical engineering. Many Indian companies still operate with traditional systems, making it hard to compete on technology, consistency, and precision.

SEGMENT WISE AND PRODUCT WISE PERFORMANCE :

The Company operates within a solitary business segment i.e. manufacturing of chemicals and dyes. Further, all products of the company are classified as “Dyes”. Hence, Segment/Product wise report is not given separately.

RISK AND CONCERN :

Risk	Impact	Mitigation
Competitive Risk	Escalating competition from domestic and international players may erode market share and lead to price pressure, ultimately impacting profitability and growth potential.	The Company remains agile by investing in product differentiation, expanding into niche chemical segments, and maintaining strong customer relationships through quality assurance and reliable delivery.
Raw material price volatility	Sudden increase in the prices of critical inputs, such as natural gas, solvents, and dye intermediates, can adversely affect margins.	To mitigate this, the Company emphasizes backward integration where feasible, maintains long-term procurement contracts, and regularly evaluates alternative raw materials and supplier options to diversify risk.
Operational Disruptions / Natural Disasters	Events such as floods, fire, or industrial accidents could interrupt manufacturing and logistics, causing delays and financial loss.	The Company follows rigorous safety protocols, has comprehensive disaster response SOPs in place, and ensures full insurance coverage of key assets. Regular audits and emergency preparedness drills are also conducted
Foreign currency exchange rate risk	Foreign exchange rate changes mighthave a substantial influence on ourfinancial performance	Our strong foreign exchange hedging mechanism and processes, such as forwardcontracts, help us to manage this risk
Technology Obsolescence Risk	Delay in adopting new chemical technologies and automation trends may affect competitiveness and process efficiency.	The Company invests consistently in R&D, process automation, and digital transformation to stay ahead in innovation and maintain operational efficiency. Collaborations with tech partners and research institutions further enhance adaptability.

INITIATIVES BY THE COMPANY:

The Company has taken the following initiatives:

• Expansion of export activities, targeting new geographies and leveraging existing global partnerships to diversify the revenue base and reduce dependence on domestic demand cycles.

• Ongoing modernization of manufacturing processes by adopting automation, digital control systems, and lean manufacturing techniques, aimed at improving quality, consistency, and cost-efficiency

• Investment in clean and sustainable technology, including upgraded effluent treatment systems and environmentally friendly chemical processes, to align with global ESG standards and future-proof operations.

• Introduction of skill development and technical training programs for plant personnel to ensure effective handling of modern machinery and safety compliance

OUTLOOK:

For the year 2024-25, the Companys focus will continue to be stable, as the Company continues to work on distribution expansion and strengthening of supply chain. The Company is confident to meet the challenges with its strength in marketing network, its strategic planning, Research & Development productivity improvement and cost reduction exercise. This will be achieved by forging stronger relationship with customers and by negotiating and entering in to beneficial contracts with the suppliers of raw materials.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposal. The internal control systems are supplemented by an extensive program of internal audits, review by management guidelines & procedures. Companys control systems are time tested, documented and recognized under ISO Certification. On the financial side, periodic audits by Internal Auditors and External Auditors provide a means whereby identification of areas of improvement and corrective measures taken whenever applicable. The Company has an independent internal audit system, covering on a continuous basis, the entire gamut of operations and services spanning major business functions. The internal audit functions include evaluation of all financial & major operating system controls. The internal audit findings and recommendations are reviewed by the Audit Committee and are then reported to the Board.

HUMAN RESOURCE:

Your Company firmly believes that employees are the most valuable assets and key players of business success and sustained growth. Various employee benefits, recreational and team building efforts are made to enhance employee skills, motivation as also to foster team spirit. Industrial relations were cordial throughout the year. The Company has 61 employees excluding Directors & KMP as on year ended 31^stMarch, 2025.

WHISTLE BLOWER POLICY :

The Company has a Whistle Blower policy in place to deal with instances of fraud and mismanagement, if any. The details of the policy are explained in the Corporate Governance Report and the said whistle blower policy is posted on the website of the Company.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

In terms of performance, FY 2024-2025 has been a moderately good year. Company is focused on the task on hand in terms of better reliability of operations and more focussed market efforts. Our financial performance reflected the steady operational performance. Our revenue from continuing operations increased by 100.97% to Rs. 7265.30 Lakhs. Profit Before Tax was Rs.204.15 Lakhs and profit for the period was Rs.158.57 Lakhs. Cash and cash equivalents at the end of the year stood at Rs.28.17 lakhs.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR :

Sr. No. Particulars	2024-25	2023-24
1 Debtors Turnover Ratio	5.98	3.83
2 Inventory Turnover Ratio	4.61	2.83
3 Interest coverage ratio	3.65	3.12
4 Current Ratio	1.74	1.85
5 Debt Equity Ratio	0.34	0.32
6 Operating Profit Margin	9.97	(0.14)
7 Net Profit Margin	2.19	(0.84)
8 Return on Net worth	3.34	(0.64)
9 P/E Ratio	12.59	(66.65)

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

Through our continued focus on operational efficiency and strengthening our market presence, the Company has delivered improved financial performance this year. This has resulted in a higher profit compared to the previous year, leading to an increase in return on net worth.”

DISCLOSURE OF ACCOUNTING TREATMENT :

The Financial statements have been prepared in compliance with the Indian Accounting Standards (Ind AS) issued by The Institute of Chartered Accountants of India (ICAI) which have been notified under the Companies (Indian Accounting Standards) Rules, 2015 (‘Ind AS Rules), of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention.

CAUTIONARY STATEMENT

The statements in the “Management Discussion and Analysis Report” section describes the Companys objectives, projections, estimates, expectations and predictions, which may be “forward looking statements” within the meaning of the applicable laws and regulations. The annual results can differ materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.

	For and on behalf of the Board
	Dynamic Industries Limited
	-Sd/-
	NEERAJ SHAH
Place : Ahmedabad	Managing Director
Date : 01/08/2025	DIN : 05112261