Dhariwalcorp Ltd Management Discussions

a) The Chemical Industry:

Covering more than 80,000 commercial products, Indias chemical industry is extremely diversified and can be broadly classified into bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers, and fertilisers. India is the 6th largest producer of chemicals in the world and 3rd in Asia, contributing 7% to Indias GDP. Indias chemical sector, which was estimated to be worth US$ 220 billion in 2022, is anticipated to grow to US$ 300 billion by 2025 and US$ 1 trillion by 2040.

Globally, India is the fourth-largest producer of agrochemicals after the United States, Japan and China. India accounts for 16-18% of the worlds production of dyestuffs and dye intermediates. Indias agrochemicals export was estimated to be at US$ 3.12 billion from April 2023 to December 2023. Indian colourants industry has emerged as a key player with a global market share of ~15%. The countrys chemicals industry is de-licensed, except for a few hazardous chemicals. India has traditionally been a world leader in generics and biosimilars and a major Indian vaccine manufacturer, contributing more than 50% of the global vaccine supply. India holds a strong position in exports and imports of chemicals at a global level and ranks 14th in exports and 8th in imports at the global level (excluding pharmaceuticals)

In addition to waxes, other chemical products such as liquid paraffin, rubber process oils, citric acid, refined glycerin, bitumen, petroleum jelly, and paraffin-based petroleum jelly form an integral part of the Companys trading portfolio. These products are indispensable across pharmaceuticals, cosmetics, food preservation, construction, and rubber manufacturing industries. Indias chemical sector has evolved into a global hub for both specialty and commodity chemicals, driven by strong domestic demand, growing export opportunities, and significant investments in advanced refining technologies. The industry is increasingly focused on adopting sustainable practices, bio-based alternatives, and digital solutions to enhance operational efficiencies and align with stringent global environmental and quality standards.

b) The Spice & Agro products Industry:

The spice and agro products industry continues to be a cornerstone of Indias agricultural economy and a key driver of global trade, with India retaining its position as the worlds largest producer and exporter of a diverse range of spices. The Company is actively engaged in forward trading of various spice and agro products, leveraging its deep understanding of market dynamics to offer competitive advantages to buyers and ensure timely delivery of high-quality products.

Government Initiatives

The government has started various initiatives such as mandating BIS-like certification for imported chemicals to prevent dumping of cheap and substandard chemicals into the country. The Indian government recognises the chemical industry as a key growth element.

Under the Interim Budget 2024-25 the government allocated Rs. 192.21 crore (US$ 23.13 million) to the Department of Chemicals and Petrochemicals.

Government to open 25,000 Jan Aushadhi Kendras to make medicines available at affordable prices.

In April 2023, the Cabinet approved the National Medical Devices Policy, 2023.

The Department of Chemicals & Petrochemicals intend to bring PLI in the chemical & petrochemical sector and will redraft the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) guidelines.

PLI schemes have been introduced to promote Bulk Drug Parks, with a budget of Rs. 1,629 crore (US$ 213.81 million).

The Government of India is considering launching a production-linked incentive (PLI) scheme in the chemical sector to boost domestic manufacturing and exports.

A 2034 vision for the chemicals and petrochemicals sector has been set up by the government to explore opportunities to improve domestic production, reduce imports and attract investments in the sector. The government plans to implement a production-link incentive system with 10-20% output incentives for the agrochemical sector; to create an end-to-end manufacturing ecosystem through the growth of clusters.

In October 2020, the government urged players in the agrochemicals industry to come out with new molecules of global standards for the farmers benefit, while CropLife India, the industry body, pitched for stable policies and regulatory regimes to boost growth in the sector.

100% FDI is allowed under the automatic route in the chemicals sector with few exceptions that include hazardous chemicals. FDI inflows in the chemicals sector (other than fertilisers) reached US$ 21.48 billion between April 2000-June 2023.

The government has proposed several incentives for setting up a sourcing or manufacturing platform within an Indian SEZ.

Effective April 1, 2020, 100% Income Tax exemption on export income for SEZ units for the first five years, 50% for the next five years thereafter and 50% of the ploughed back export profit for the next five years.

Single window clearance for central and state-level approvals.

Duty-free import/domestic procurement of goods for development, operation and maintenance of SEZ units.

In December 2020, the PCPIR policy is being completely redesigned. Under the new PCPIR Policy 2020-35, a combined investment of Rs. 10 lakh crore (US$ 142 billion) is targeted by 2025, Rs. 15 lakh crore (US$ 213 billion) by 2030 and Rs. 20 lakh crore (US$ 284 billion) by 2035 in all PCPIRs across the country. The four PCPIRs are expected to generate employment for ~33.83 lakh people. ~3.50 lakh persons have been employed in direct and indirect activities related to PCPIRs by the end of 2020. The Gujarat Infrastructure Development Corporation (GIDC) has made an investment of around US$ 2.09 billion (Rs. 17,317 crore) for infrastructure development in the PCPIR.

Outlook

Our Company <Dhariwalcorp= engaged in the business of trading of comprehensive range of waxes, industrial chemicals, and petroleum jelly. Our company is involved in processing, purchasing, selling, importing, and trading various types of wax, including Paraffin Wax, Micro Wax, Slack Wax, Carnauba Wax, Microcrystalline Waxes, Semi Refined Paraffin Wax, Yellow

Beeswax, Hydrocarbon Wax, Montan Wax, Polyethylene Wax, Vegetable Wax, Residue Wax, Palm Wax, BN Micro Wax, Hydrogenated Palm Wax, Micro Slack Wax, PE Wax, Soya Wax, etc.

Additionally, Our Company trade in industrial chemicals such as Rubber Process Oil, Light Liquid Paraffin (LLP), Citric Acid Monohydrate, Refined Glycerin, Bitumen, Stearic Acid, and Petroleum Jelly, including Paraffin Petroleum Jelly and White Petroleum Jelly. Our product range encompasses all types of heavy and light chemicals, chemical elements and compounds, petrochemicals, industrial chemicals, mixtures, derivatives, articles, compounds, by-products, and activities of a similar nature.

Our company serves various industries including Plywood and Board, Paper Coating, Crayon Manufacturing, Candle Production, Textiles, Pharmaceuticals, Petroleum Jelly & Cosmetics, Tube & Tire Manufacturing, Match Production, Food Processing, and Adhesive Manufacturing. With our diverse range of products, we play a significant role in the supply chain of these sectors, ensuring quality products and timely delivery

Our products are sold both domestically and internationally. We have a PAN India presence with 21 states and 3 Union territories for our domestic market (based on sales made for the financial years ended March 31, 2025, 2024, 2023, and 2022). We have also initiated our export division and are supplying products to one country, namely Nepal, based on sales made for the financial year ended March 31, 2025.

To meet our PAN India presence and ensure timely supply of our products, we have one processing unit and three warehouses situated at Jodhpur, Rajasthan, one warehouse situated at Bhiwandi, Maharashtra, one warehouse situated at Ahmedabad, Gujarat, and one warehouse at Mundra, Dist. Kachchh, Gujarat, respectively. We also follow an outsourcing model for running our warehouses situated at Bhiwandi, Ahmedabad, and Mundra to ensure timely delivery of our products to customers across geographies.

The Company remains optimistic about its growth trajectory across its core business segments of chemicals, waxes, and spice & agro products. With a strong global presence and an extensive product portfolio, Dhariwalcorp Limited is well-positioned to capture opportunities arising from evolving market dynamics and increasing demand across diverse industries.

In the spice and agro products segment, the outlook remains equally promising, supported by rising international demand for high-quality, organic, and traceable agricultural produce. Government initiatives aimed at modernizing agricultural infrastructure, improving processing facilities, and promoting exports are expected to provide further momentum to the industry. The Company is focused on expanding its market reach by adopting advanced quality assurance measures, improving packaging solutions, and aligning with the evolving preferences of global consumers.

1. Plot No. 166, Kamod cow circle, Aslali- Sanathal Ring Road, Kamod, Ahmedabad 382405, India.

2. Ambaji Warehouse Park Phase Plot No.14 R.S. No. 275/1, Village Zarpara, Mundra, Kachchh 370415, Gujarat, India 3. C-27B, Phase I, Basni Industrial Area, Jodhpur, Rajasthan

4. Gala No. B-16, A-15, A-14, A-11, A-8, A-10, A-9, C-15, Servey No.189, 190 And 194, Mayashree Compound, Opp. Preeti Petrol Pump, Purnavillage, Bhiwandi, Thane 421302, Maharashtra, India. 5. Gala No. F-4, F-5, F-8, E-1, E-2, Survey No. 182/1, 182/3, 186/6, 186/9, Krishna Compaund, Purna Village, Bhiwandi, Thane 421302, Maharashtra, India 6. Gala No. 11, 16, 17, Ganesh Compound, Inside Krishna Compound, Survey No. 182, 186, 190, 194, Purna Village, Bhiwandi, Thane 421302, Maharashtra, India 7. Bharat Warehousing Corporation, Gala No. B 14, Servey No.189, 190 And 194, Mayashree Compound, Opposite Preeti Petrol Pump, Purna Village, Bhiwandi, Thane 421302, Maharashtra, India.

8. Khasra No. 25/1, Plot No. 1073/25, Salawas, Jodhpur, Rajasthan

Opportunities and Threats

Opportunities

Growing demand in downstream industries such as pharmaceuticals, personal care, food processing, packaging, and rubber is driving the need for chemical and wax products.

Shift towards specialty and sustainable chemicals, offering potential for portfolio diversification and adoption of eco-friendly solutions.

Indias position as a global manufacturing hub for specialty chemicals and agricultural commodities due to supply chain realignments in international markets.

Rising global consumption of organic and health-focused agro products, opening new export avenues for spices and agro-based goods.

Government initiatives supporting modernization of agricultural infrastructure, establishment of Spice Parks, and promotion of exports.

Digitalization and e-commerce providing platforms to expand reach, improve customer engagement, and tap into newer markets globally.

Threats

Interest Rate fluctuations and Banking crisis in foreign nations.

Volatility in raw material prices and global supply chain disruptions impacting cost structures and profitability in the chemical segment.

Stringent environmental regulations and increasing compliance requirements raising operational costs, especially in global markets.

Intense competition from other major producing countries like Vietnam, Indonesia, and Brazil in spices and agro products.

Climatic uncertainties and quality control challenges in the agro sector, affecting consistency and export readiness.

Global economic fluctuations and currency volatility potentially impacting export margins and competitiveness.

Changing consumer preferences and increasing demand for certifications (organic, fair trade, etc.) in agro exports requiring ongoing investments in quality assurance.

Risks and Concerns

Like every business, the Company faces risks, both internal and external, in the undertaking of its day-to-day operations and in pursuit of its longer-term objectives.

Internal Control System and Their Adequacy

The Company has an independent Internal Audit function with a well-established risk management framework. The Company has engaged a reputable external firm to support the Internal Audit function for carrying out the Internal Audit reviews. The Internal Audit team reviews and reports to the management and the Audit Committee about compliance with internal controls, and the efficiency and effectiveness of operations as well as the key process risks.

The Audit Committee meets periodically 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 Statutory Auditors of the Company have reported unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting for the FY 2025.

Discussion on Financial performance with respect to operational performance

The discussions in this section relate to the financial results pertaining to the year that ended March 31, 2025. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the financial statements.

New Projects Launch in FY 2024-25

Spices and Agro Processing Unit in Jodhpur

During the year, the company launched its new project for Cleaning, Grading, Sorting and Grinding of Spices and Agro products by establishing New Spices and Agro Processing Unit in

Jodhpur. This initiative aligns with the Make in India campaign, which aims to encourage national and international companies to manufacture their products in India, thereby boosting local manufacturing, creating jobs, and enhancing economic growth.

The project is expected to enhance processing capabilities and meet the growing demand for high-quality spice and agro products. However, the units primary focus will be on export indicating a strategic move to tap into international markets, which will boost the countrys export revenue and create a global footprint for Indian spices.

Memorandum of Understanding with Government of Rajasthan

The Company has signed a Memorandum of Understanding with Government of Rajasthan to establish a new Agro Processing Complex in Jodhpur, Rajasthan, with an investment of Rupees One Hundred Crores. The MOU represents a significant milestone enabling the Company to obtain necessary permissions or clearance etc. from the concerned departments of the State as per the existing policies or rules and regulations of the State Government.

Acquisition of Agricultural Land

The company had acquired the agricultural land ad measuring 5.5118 Hectare for strategic business purposes of expanding the business in the field of agro based production.

Segment-wise or product-wise performance

The Company is engaged in the business of Wax and Agro based products (including spices) and currently operates in two segments viz. A) WAX; and B) AGRO.

A) WAX:

Revenue from operations FY 2025 decreased to 193.55 crore from 228.80 crore in FY 2024.

B) AGRO:

Revenue from operations for FY 2025 increased to 39.96 Crores as compared to NIL revenue in FY 2024.

The Company has provided detailed financial performance of its segments the <Segment Reporting= section of its Financial Statements, which forms part of this Annual Report.

Material Developments in Human Resources/Industrial relations front, including number of people employed:

The Human Resources (HR) function of an organization is vital to the creation and development of good quality and dedicated human capital, essential to the Companys business and operations. The Company has Human Relations policies in place, which are reviewed and updated regularly in line with the Companys strategic plans. The human relations team continually conducts training programs for talent development. The Company aims to develop the potential of every individual associated with it as a part of its business goal.

The Company acknowledges the employees contribution towards leading, thinking, working, creating, processing and dealing to enhanced growth.

The Company values its human resources as the principal drivers of change. The Company focuses on providing individual development and growth in a work culture that encourages teamwork and high performance.

Ratio Analysis:

Detailed Explanation on Change in Return on Net Worth: