Diamines & Chemicals Ltd Management Discussions

Your Company is key producer of Ethylene amines based in India having its plant at PCC Area, P.O. Petrochemicals; Vadodara. The Products Ethylene Amines find their application in various industry segments such as Active Pharmaceutical Ingredients & Pharma-Intermediates, Specialty Chemicals, Agro-chemicals, Resins, Water treatment chemicals, Petroleum production chemicals, Additives and in many other vital specific sub applications. 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 an excellent team of experienced and qualified professionals to manage day- to-day operations efficiently. For more details please visit www.dacl.co.in.

Total Standalone revenue (net of taxes) for the year 2025-26 amounted to Rs.4,308.15 lakhs compared to Rs.7,514.57 lakhs of the previous year 2024-25. The Standalone operating profit/(loss) after tax amounted to Rs.(1,111.37) lakhs compared to Rs.448.73 lakhs in the previous year.

The company has identified and is working in two reportable primary segments viz. Specialty Chemicals and trading in Fruits and Vegetables. Thus, the disclosure particulars as per Ind AS-108 on Operating Segments Reporting are made part of this Annual Report in Note 40 of Standalone Financial Statements.

Your company is key manufacturer of ethylene amines in India which is a growth market. This offers regular opportunities & helps the company to cater to market needs very effectively. Over the years, the company has developed robust Systems which help to maintain and sustain the operations despite sever challenges it faces and is One of the premier suppliers of ethylene amines. Its geographical position & the vicinity to customers also offer added advantages in servicing the customers.

Ethylene Amines are building blocks for many industries & hence your company believes that this fact will continue to offer potential to grow by exploring manufacturing possibilities of derivatives based on homologues of Ethylene Amines.

Since companys core business is Ethylene amines, any negative Development or upheavals taking place in the marketplace may affect the performance of the company. Fluctuating prices of certain key raw materials also have the potential to impact on performance in the short term.

The company also has to compete with competitors who are either forward or backward integrated & has the advantage of scale of economies & thus can swamp the markets with excess & lower priced or even duty-free products. Additionally threat of product substitution is imminent especially with Chinese product incursions.

The Board of Directors has identified material impact on the operations and financials of the company as at March 31, 2026. Considering that the Company deals with Specialty Chemicals, there has been disruption with respect to operations including raw material cost, production and distribution activities.

The Company has experienced difficulties and uncertainty with respect to raw material costs, market demand, collections or liquidity. The company has witnessed decline in sales during FY 2025-26 is primarily attributable to adverse geopolitical developments that have impacted international demand and customer ordering patterns. These factors were largely external and beyond the Companys control.

The Management is actively realigning its sales strategy and exploring alternate markets to mitigate the impact going forward. The Company will continue to closely monitor material changes to future economic conditions.

For the year 2026-27, though the prices of raw materials and products are influenced by external factors, the company is also making all possible efforts to improve the margins. The Companys focus will continue sustaining and maintaining the market share in certain industry segment where company enjoys market leadership position. 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.

The Ethylene amines business is going through demand-supply imbalance on a global level and this is expected to continue in the year 2026-27 also. Your company is well aware of the challenging scenario lying ahead and taking necessary steps by planning activities properly at operational stages. Further, the company is also planning to introduce new products.

During the previous year, the Company had allotted 9,06,390 warrants, each convertible into, or exchangeable for, 1 (one) fully paid-up equity share of the Company of face value of Rs.10/- each ("Warrants") at a price of Rs.552/- (Rupees Five Hundred Fifty-Two only) each to Promoter, Promoter group and other Shareholders vide resolution passed in a duly convened board meeting on October 01,2024. Out of total issued warrants, the Company had made allotment of 2,69,402 equity shares (conversion of warrants issued on preferential basis) by passing board resolution at duly convened board meeting on March 24, 2026, to the applicant from whom entire money has been received and rest all warrants were lapsed as at March 31,2026 (Last date of conversion of warrants into Equity Shares).

Pursuant to conversion, the Issued, Subscribed and Paid-up Equity Share Capital of the Company stands increased from Rs.9,78,39,900/- consisting of 97,83,990 fully paid-up Equity Shares of Rs.10/- each to Rs.10,05,33,920/- consisting of 1,00,53,392 fully paid-up Equity Shares of Rs.10/- each.

Human Resource (HR) departments primary objective is to strategically manage the organizations most valuable asset - its people. This involves attracting and hiring the right talent, fostering employee development through training and performance management, ensuring a positive and productive work environment, and aligning workforce capabilities with organizational goals. HR also plays a critical role in maintaining legal compliance, promoting employee engagement and retention, and driving a culture of continuous improvement and innovation to support long-term business success.

HR department facilitates different kinds of training in all aspects like functional, Safety, Environment, BBS, Compliance etc. It helps to enhance employee skills, improve performance, support career growth, increase efficiency, ensure compliance, and boost engagement. It helps the organization adapt to change, stay competitive, and achieve its goals effectively. In the current reporting period, the company has invested 1112 man-hours in motivational training, alongside ongoing functional training programs. These efforts help the organization remain agile, competitive, and aligned with evolving business needs.

Our company prepares individual KRAs (Key Result Areas) and KPAs (Key Performance Areas) through structured meetings with the respective Heads of Departments (HODs). This collaborative approach ensures that every employees responsibility and performance indicators are well-defined and aligned with their departmental goals. Importantly, all individual objectives are directly linked to the overall corporate objectives, creating a clear line of sight from personal performance to organizational success. This alignment drives accountability, enhances focus, and supports the achievement of strategic business outcomes.

Quality dnven

In line with our growth strategy, the company has onboarded 21 new team members across projects, R&D, and support functions. This includes skilled workmen, engineers, and managers who bring technical expertise and functional knowledge. Our company is aggressively focusing on employee retention by creating a supportive, engaging, and growth-oriented work environment. We are implementing targeted initiatives such as structured career development programs, competitive compensation, regular recognition and rewards, employee wellness activities, and open communication channels. By listening to employee feedback and addressing their needs proactively, we aim to build long-term trust, reduce turnover, and foster a committed, high-performing workforce aligned with our organizational goals.

In employee engagement, our company has formed engagement committee to plan celebration of various cultural & religious festival throughout the year. These celebrations kept working culture positive & vibrant throughout the year. The Engagement Committee is responsible for fostering a positive, inclusive, and motivating workplace culture. Its main role is to design and implement initiatives that boost employee morale, strengthen team collaboration, and enhance overall job satisfaction. This includes organizing events, recognizing employee achievements, gathering feedback, promoting wellness, and encouraging open communication. By actively engaging employees, the committee supports higher productivity, lower turnover, and a stronger connection between employees and organizational goals.

We strongly believe in promoting a healthy work-life balance, enabling our employees to spend quality time with their families, enjoy their social lives, and recharge mentally and physically. By supporting flexible and balanced work environments, we empower our team members to maintain personal well-being, which in turn enhances focus, productivity, and overall performance at work. A happy, well-balanced employee is key to both individual success and organizational growth.

We are committed to maintaining 100% legal compliance across all our HR practices and organizational operations. Upholding full compliance with applicable laws and regulations is fundamental to our ethical standards and business integrity. This commitment ensures a fair, safe, and transparent workplace for all employees while protecting the companys reputation and long-term sustainability.

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.

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.

Interest Coverage and Debt Equity Ratio is not relevant here as the company has not availed any long-term debt during the year. No major utilization of working capital loan during the year.

The statements in this Management Discussion and Analysis describing the companys objectives, projections, estimates and expectations are "forward looking statements". The forward-looking statements made in the Management Discussion and Analysis Report are based on certain assumptions and expectations of future events. Actual results might differ materially from those anticipated because of changing ground realities. The Directors cannot guarantee that these assumptions are accurate, or these expectations will materialize.