Darjeeling Industriies Ltd Management Discussions

A. Overview of the Global Economy:

The global economy during F.Y. 2025-26 continued to operate in an uncertain and challenging environment, characterized by geopolitical tensions, evolving trade policies, inflationary pressures, financial market volatility and disruptions to global supply chains. Despite these challenges, the global economy remained resilient during calendar year 2025, supported by technology-related investment, particularly in artificial intelligence and related industries, as well as relatively resilient domestic demand across several major economies. Global headline inflation stood at approximately 4.1% in 2025, while global economic growth was estimated at 3.5%. However, the overall performance remained uneven across regions, with advanced economies recording moderate growth and emerging market and developing economies continuing to demonstrate comparatively stronger growth.

Against this backdrop, agricultural commodities continued to remain an essential component of the global economy, supported by population growth, food consumption, urbanisation and the continuing importance of food security. Demand for agricultural products remained broadly resilient; however, the sector continued to face volatility arising from weather conditions, crop yields, inventory levels, input costs, transportation expenses, geopolitical developments and changes in international trade policies.

Overall, the global economic environment remains uncertain, with both risks and opportunities for businesses. While geopolitical tensions, inflation, commodity price movements, trade policies and supply-chain disruptions may continue to create challenges, the underlying demand for essential goods and recurring services provides a degree of resilience. The institutional laundry, textile care and related services businesses are expected to benefit from the recurring nature of demand, while the agricultural products business is expected to continue to be supported by essential consumption requirements and the importance of food security.

B. Overview of the Indian Economy:

The Indian economy remained resilient during F.Y. 2025-26 despite global trade uncertainties, geopolitical tensions, and financial market volatility. According to the Provisional Estimates released by the National Statistics Office (NSO) in June, 2026, Indias real GDP is estimated to have grown by 7.7% during F.Y. 2025-26, while Gross Value Added (GVA) is estimated to have grown by 7.9%. The growth was supported by continued domestic demand, investment activity and the expansion of key services and other productive sectors. Strong macroeconomic fundamentals, stable financial conditions, and ongoing infrastructure development continued to support economic activity across industries.

Indias strong domestic demand, expanding middle class, increasing urbanisation and continued formalisation of the economy have contributed to a broad-based improvement in economic activity. Government initiatives relating to infrastructure, manufacturing, digitalisation, logistics and investment have further supported the development of the business environment. At the same time, businesses continued to operate amid uncertainties relating to global trade, commodity prices, interest rates, currency movements and geopolitical developments.

The agricultural sector continued to remain an important component of the Indian economy, supporting rural incomes, domestic consumption and the broader food and consumption ecosystem. Demand for agricultural products remained supported by population growth and essential consumption requirements. However, agricultural markets remained sensitive to monsoon conditions, crop production, input costs, commodity price movements, storage and logistics conditions, as well as changes in domestic and international trade policies. These factors may influence procurement costs, inventory levels and working capital requirements for businesses engaged in agricultural products.

Looking ahead, Indias economic outlook remains positive, supported by strong domestic demand, continued investment, infrastructure development, favourable demographic trends and the increasing formalisation of economic activity. While external uncertainties, commodity price volatility, weather-related factors and evolving trade policies may continue to present challenges, the underlying growth potential of the Indian economy remains strong.

C. Outlook:

The Company expects the overall business environment to remain supportive over the medium term, driven by resilient domestic demand, changing consumption patterns and the continuing growth of organised and professional services. The agricultural products business is expected to benefit from the essential nature of agricultural commodities and sustained demand arising from population growth and food consumption. The Company remains focused on strengthening its sourcing and supply-chain capabilities, improving operational efficiency, maintaining quality standards and managing costs effectively. Adoption of technology, process improvements, prudent working-capital management and market diversification are expected to support sustainable growth over the next 2 3 years.

D. Industry Structure and Developments:

The agricultural products industry forms an important part of the Indian economy and is supported by sustained domestic consumption, population growth and the essential nature of food and agricultural commodities. The industry encompasses a broad value chain covering production, procurement, aggregation, processing, storage, transportation, distribution and trading of agricultural products.

At the same time, the industry remains influenced by seasonal production cycles, monsoon and weather conditions, commodity price fluctuations, availability of agricultural produce, input costs, transportation and storage expenses, and government policies. International trade regulations, import and export restrictions and global commodity price movements may also impact domestic market conditions.

Overall, the agricultural products industry is expected to continue offering growth opportunities over the medium to long term, supported by essential consumption demand and the continuing importance of food security, while industry participants remain focused on efficiency, quality, cost management and supply-chain resilience.

E. Opportunities and Threats:

Opportunities:

Use of New Technology: Modern technologies such as machinery, irrigation systems, drones and digital farming can help improve productivity and reduce costs.

Expansion into New Markets: The business can explore new regions and export markets to increase sales and reduce dependence on existing markets.

Value-added products: Processing, packaging and branding agricultural products can increase their value and improve profit margins.

Government support: Various government schemes and initiatives for farmers, irrigation, technology and agricultural infrastructure can provide opportunities for business growth.

Growing Demand: Increasing demand for food and agricultural products provides opportunities to expand sales and business operations.

Threats:

Unpredictable Weather: Droughts, floods, excessive rainfall and high temperatures can reduce crop production, affect quality and impact profitability.

Fluctuation in Agricultural Prices: Changes in market prices due to supply, demand and weather conditions can affect revenue and profitability.

Changing Customer Preferences: Increasing demand for high-quality, branded and healthier food products may require changes in product offerings.

Pests and Diseases: Pest attacks and crop diseases can reduce yields, affect product quality and increase crop protection costs.

Increasing Competition: Growing competition can put pressure on prices and profit margins and make it challenging to maintain market share.

F. Segment-wise or Product-wise performance:

The Company is primarily engaged in the Trading of Agricultural Products. The Company focuses on sourcing, trading and supplying quality agricultural products to meet the requirements of its customers. Since all operations are substantially carried out in one reportable business segment, segment-wise reporting is not applicable.

G. Future Outlook:

The Company remains positive about the future prospects of the Trading of Agricultural Products business. Growing demand for food and essential agricultural products is expected to provide opportunities for business growth. The Company intends to strengthen its supplier and customer relationships, expand its product range and explore new markets.

The Company will continue to focus on maintaining product quality, improving supply chain efficiency and controlling operating costs. It also aims to expand its distribution network and explore opportunities in wheat flour and other agricultural products to achieve sustainable growth and enhance shareholder value.

H. Risks and Concerns:

Operational Risk: Fluctuations in procurement, storage, transportation and logistics arrangements, as well as delays or disruptions in the supply chain, may affect the Companys ability to procure and deliver agricultural products in a timely and cost-effective manner.

Agricultural and Seasonal Risk: The availability and quality of agricultural products may be affected by seasonal variations, crop yields, adverse weather conditions, droughts, floods, pest attacks, diseases and other factors affecting agricultural production. Such factors may result in supply constraints and increased procurement costs.

Quality and Product Risk: Variations in the quality, quantity and specifications of agricultural products procured from suppliers may affect customer satisfaction, product acceptance and profitability. The Company may also face risks relating to storage, handling and deterioration of agricultural commodities.

Regulatory, Environmental and Food Safety Risk: Changes in applicable agricultural, food safety, quality, environmental, storage, transportation, labour and other regulatory requirements may increase compliance obligations and operating costs. Non-compliance with applicable standards relating to the handling, storage, processing, packaging and transportation of agricultural products may result in penalties, product rejection, reputational damage or disruption to business operations.

I. Material Developments in Human Resources / Industrial Relations:

Industrial Relations continued to be harmonious and cordial throughout the year. The Company always valued its Human Resources and believes in unlimited potential of each employee. Your directors believe and affirm the importance of developing human resources, which is the most valuable asset of your Company and the key element in bringing all round improvements and achieving growth. The human resource philosophy and strategy of your Company have been designed to attract and retain the best talent. In practice, it creates and nurtures a work environment that keeps employees engaged & motivated. Employee relations during the year under review were peaceful. The contribution and cooperation received from employees across all levels was excellent and the same has been appreciated & supported by the management through its continuous & systematic training programmes.

J. Internal Control Systems and their Adequacy:

The Company has an Independent Internal Audit function with a well-established Risk Management framework. The scope and authority of the Internal Audit function are derived from the Internal Audit Charter approved by the Audit Committee. The Company has engaged a reputable external firm to support the Internal Audit function for carrying out the Internal Audit reviews.

The Audit Committee meets every quarter to review and discuss the various Internal Audit reports and follow up on action plans of past significant audit issues and compliance with the audit plan. The Chairperson of the Audit Committee has periodic one-on-one meetings with the Internal Auditor to discuss any key concerns.

Additionally, the following measures are taken to ensure proper control:

Budgets are prepared for all the operational levels.

Any material variance from budget has to be approved by the Commercial director. Any major policy change is approved by the managing director. Any deficiency in not achieving target is reviewed at management meetings.

K. Discussion on financial performance with respect to operational performance

The financial performance of the Company for the Financial Year 2025-26 is described in the Directors Report of the Company.

L. Key Financial Ratios:

In accordance with the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector specific financial ratios. In this regard, the Company has significant changes in key sector specific financial ratios is described in the Financial Statement along with reason for the variance in this Annual Report.

M. Material developments in Human Resources / Industrial Relations front including number of people employed

The Company continued to maintain cordial and positive relations with its employees during FY 2025 26. The Company also remained committed to maintaining a healthy and productive work environment to support operational efficiency and quality of services.

N. Environmental, Health and Safety:

The Company remains committed to conducting its business in an environmentally responsible manner. It strives to comply with applicable environmental, health and safety regulations and encourages responsible use of natural resources wherever feasible.

O. Corporate Governance:

The Company continues to uphold the principles of transparency, accountability, ethical business practices and sound corporate governance. Management believes that effective governance enhances stakeholder confidence and contributes to sustainable long-term growth.

M. Caution Statement

Statements made in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may constitute "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially due to various factors including changes in economic conditions, government policies, market demand, competition, regulatory developments, technological changes and other risks beyond the Companys control. The Company assumes no responsibility to publicly amend or revise such forward-looking statements except as required under applicable laws.

Registered and Corporate Office:	By the Order of the Board
Krishna Complex ARK 203,	Darjeeling Industriies Limited (Formerly known as Darjeeling Ropeway
Nr. Suvidha Hospital Uni. Road,
Rajkot, Gujarat, India, 360005		Company Limited)
Date: 3rd September, 2026	Sd/-	Sd/-
Place: Rajkot	Ashok Dilipkumar Jain	Viha Ashok Jain
	Managing Director	Director
	DIN: 03013476	DIN: 09213749