Ducol Organics & Colours Ltd Management Discussions

Economic Overview Global Economic Outlook

In CY 2025, the global economy registered 3.4% growth, reflecting resilience amid shifting trade dynamics, heightened policy uncertainty and geopolitical conflicts. Nevertheless, economic activity was supported by continued investments in technology, accommodative financial conditions and supportive fiscal and monetary policies across major economies.

Global inflation moderated to 4% during the year, aided by easing supply-side pressures and more balanced labour market conditions. Consequently, a significant influx of foreign investment and a weaker US dollar helped stabilise local currencies, reducing borrowing costs and providing Central Banks with greater flexibility in economic management.

Advanced economies recorded growth of 1.9%, with relatively stable domestic demand in some regions offset by subdued industrial activity and weaker external trade. In contrast, emerging economies expanded by 4.4%, supported by steady trade flows and manufacturing activity across key Asian markets.

The outlook remains highly uncertain due to trade and tariff- related headwinds, fiscal pressure and persistent geopolitical tensions. Continued policy support and sustained domestic demand, supported by monetary easing measures, are expected to partly offset the impact of higher tariffs. Concurrently, rising wages across several major economies are expected to bolster private consumption. Against this backdrop, global growth is projected at 3.1% in CY 2026.

The recent escalation of tensions in the Middle East has increased uncertainty in global energy markets. This has resulted in volatility in crude oil prices and increased pressure on input costs across industries linked to petroleum derivatives. This situation will likely cause a minor uptick in inflation, with current estimates at 4.4% for CY 2026. However, price pressures are expected to moderate to 3.5% in CY 2027 as job markets soften and demand for traded goods slows down.

Indian Economic Outlook

In FY 2025-26, the Indian economy maintained strong momentum, supported by stable macroeconomic fundamentals and continued policy support. Despite a challenging global environment, real GDP grew by 7.7%, positioning India among the fastest-growing major economies globally for the fourth consecutive time. Inflation moderated at 3.4%, remaining well within the Reserve Bank of Indias (RBI) target range of 2%-6%, supported by lower input costs and improved supply conditions.

Private consumption was supported by rising rural and urban demand, GST rationalisation and easing monetary measures, which lowered production costs for industries such as chemicals and petrochemicals. Simultaneously, industrial activity strengthened due to robust performance in manufacturing sectors, including chemicals.

Economic activity is expected to remain resilient, with GDP growth projected at 6.9% for FY 2026-27. This growth is underpinned by sustained momentum in the services sector, the continued impact of GST rationalisation and healthy corporate and financial balance sheets. These factors are expected to offset pressures on exports and investor sentiment caused by capital flow volatility and increased trade tariffs on Indian goods, specifically specialty chemicals.

Supply-chain disruptions from the conflict in West Asia may impact the availability of key inputs for downstream industries like plastics, rubber, chemicals and synthetic fibres. Despite these pressures, CPI inflation for FY 2026-27 is projected at 4.6%, aided by ongoing GST rate rationalisation and the RBIs decision to maintain a neutral stance on monetary policy, keeping the repo rate at 5.25% to support consumer demand.

Moreover, recent Free Trade Agreement negotiations have notably increased Indias specialty chemical exports to North America, Europe and the Asia-Pacific. Government initiatives such as Make in India and Production-Linked Incentive (PLI) schemes have incentivised domestic and international companies to establish manufacturing operations within the country.

Industry Overview

Indian Specialty Chemical Sector

Indias chemical sector contributes approximately 7% to the GDP and serves as a vital supplier to core manufacturing industries like textiles, automobiles and construction. The specialty chemicals segment has become a rapidly expanding area within this landscape, driven by rising global demand and a strategic shift in supply chains away from traditional manufacturing hubs. Consequently, India has fortified its position as a reliable, competitive alternative in the global chemical sector.

Indias specialty chemicals sector, which is supported by its skilled workforce and manufacturing base, is experiencing a significant rise in investments, largely driven by global companies adopting a ‘China+1 strategy due to stringent environmental regulations, rising manufacturing costs and supply chain disruptions in China. Rapid urbanisation and infrastructure development are strengthening the demand for construction chemicals, specifically adhesives and sealants. Concurrently, heightened consumer

focus on hygiene, skincare and grooming is driving growth in the specialty ingredients market. Additionally, the industry-wide shift towards sustainable textiles is fuelling innovation in eco-friendly dyes and performance-enhancing chemicals.

Government policies are also helping the sector grow. The Union Budget 2026-27 announced a Rs. 600-crore scheme to develop three dedicated Chemical Parks through a challenge-based selection process. These parks will provide cluster-based, plug- and-play ecosystems, aiding Indias goal to strengthen domestic manufacturing and reduce import dependence.

The Indian specialty chemicals market size had reached USD 67.0 billion in 2025. The market is expected to grow at a CAGR of 3.65% during the estimated period from 2026 to 2034, reaching a valuation of USD 93.4 billion by 2034. This growth is driven by high demand across agriculture, construction and automotive sectors, alongside increasing industrialisation and urbanisation, making specialty chemicals a significant sector for economic development.

Indian Paint Industry

Indias paint industry is transitioning from a decorative, consumption-based market into a diversified sector, driven by urbanisation, infrastructure projects and industrial expansion. The industry is shifting beyond aesthetics prioritising durable, eco-friendly and high-performance coatings. The industry is becoming a vital segment of the countrys building materials and manufacturing ecosystem.

Government schemes like the Pradhan Mantri Awas Yojana (PMAY) and the Smart Cities Mission are increasing a nationwide demand for decorative paints. Similarly, the automotive sector, led by electric vehicle growth, along with a middle class that prioritises durable, high-quality coatings, is driving market expansion. Additionally, stringent regulations and eco-conscious consumers are accelerating the shift toward sustainable paint products.

The domestic paint market was valued at USD 67.0 billion in 2025 and is projected to reach USD 11.9 billion by 2034, growing at a CAGR of 4.88% between 2026 and 2034. Rising income levels, urbanisation and infrastructure development support this expansion. Furthermore, the market is being driven by the integration of digital technologies to manage increasing demand and improve customer experience.

Indian Packaging Industry

The Indian packaging industry is expanding rapidly due to shifting consumer habits, adoption of technology and growth in sectors like e-commerce, pharmaceuticals and food and beverage. Demand is rising for high-performance packaging that provides product protection, traceability and brand differentiation within complex supply chains. Consequently, increasing requirements for safety, convenience and extended shelf life are transforming packaging from a basic protective tool into a strategic business asset.

The Indian packaging market is projected to expand from approximately USD 101 billion in 2025 to nearly USD 170 billion by 2030, representing a CAGR of 10-11%. Flexible packaging is a primary driver of this growth, with revenue forecast to rise from USD 21 billion to over USD 33 billion by 2030. This increase is fuelled by demand from the FMCG, food, pharmaceutical and e-commerce sectors, specifically for laminates and PET- based structures.

About the Company

Ducol Organics and Colours Ltd is a prominent pigment dispersion Company specialising in the manufacture and distribution of pigments, preparations, concentrates, pastes, colourants and masterbatches. Established in 1994, the Company has reinforced its position as a market leader through strong fundamentals, deep market expertise and longterm partnerships.

The Company operates four established manufacturing facilities located in Taloja and Mahad in Maharashtras Raigad district, which support the development of process capabilities and application techniques for its product portfolio. Through its range of pigment dispersions and colour solutions, the Company serves diverse sectors, including paints, inks, textiles, paper, rubber, plastics and FMCG.

Empowered by three decades of experience and a steadfast commitment to product development, Ducol is equipped to serve diverse customer needs, anticipate requirements and create tailored solutions. These capabilities position the Company to become a prominent player in the pigment dispersion industry.

Key Differentiators

Differentiator	Description
Experienced Leadership	The management team possesses over 30 years of expertise in pigments and dispersion technology.
Diversified Product Portfolio	The Company offers a broad range of products with diverse applications across multiple industries, providing customised solutions tailored to specific industry needs and requirements.
Client Relations and Retention	The Company maintains a satisfied global customer base with long-standing relationships spanning over two decades.
R&D and Technological Innovation	The Company utilises its robust in-house R&D and deep technical expertise to explore new product and process avenues. It ensures continuous improvement by integrating the latest technology and customer feedback to develop cost- effective products.

Strategic focus

Strategic Initiatives	Details
Capital Expenditure Plans	The Company is upgrading its Taloja plant with modern technology and infrastructure while developing two additional units at the Mahad facility.
Geographical Expansion	Geographical expansion was supported by leveraging global-standard manufacturing capacity, combined with targeted marketing investments to secure both domestic and export market share.
Expanding Product Portfolio & Growth Plans	Growth plans are supported by a focus on innovation, development of new products, value-addition to products and strategic opportunities for inorganic growth across sectors such as foam, footwear, furnishings and stationery.

Product Segment Analysis

As part of its diversified product portfolio, Ducol continues to strengthen its presence across the Pigment Dispersion and NonPigment Dispersion segments, which form an integral part of its overall growth strategy. The Company is focused on expanding its presence in high-growth and value-added applications by offering innovative, specialised and performance-oriented solutions across multiple industries. The increasing demand for quality, durability and application-specific products is creating significant opportunities for the Company to broaden its product portfolio, enhance customer value and drive sustainable growth across these segments.

Pigments Dispersion

Ducols Pigment Dispersion business continues to be an important contributor to the Companys growth, offering a diverse range of innovative and high-performance pigment solutions for applications across FMCG, decorative paints and other industrial segments. The Company focuses on delivering products that provide excellent colour consistency, superior dispersion, durability and application flexibility, enabling customers to achieve consistent and high-quality end products. With continued emphasis on product innovation, quality enhancement and development of environmentally responsible formulations, Ducol is well positioned to address evolving customer requirements and benefit from the growing demand for sustainable and performance-oriented pigment solutions.

Non-Pigments Dispersion

Ducol has expanded its presence in the non-pigment dispersion segment through strategic acquisitions in the waterproofing and construction chemicals space. In FY 2025, Ducol acquired Bitumag Industries, a leading player in high- performance waterproofing solutions serving both commercial and residential markets. Bitumag offers a comprehensive portfolio of waterproofing products, including polymer-modified bitumen, bitumen emulsions, and multigrade bitumen, catering to infrastructure and real estate applications from basements to rooftops.

Building on this platform, in FY 2026, Ducol acquired Xchem Industries, further strengthening its presence in the construction chemicals segment. The acquisition complements Ducols existing dispersion capabilities and expands its product portfolio into high-growth applications across waterproofing, construction, and infrastructure.

These acquisitions mark Ducols strategic evolution beyond traditional pigment dispersions into the broader construction

chemicals and waterproofing market, enabling the Company to address the growing demand for durable, high-performance solutions in infrastructure and real estate. With an expanded product portfolio and enhanced application capabilities, Ducol is well positioned to participate in the growing global dispersion and construction chemicals markets.

Indian Construction Chemical Industry

The Indian construction chemicals market is expected to witness strong growth over the medium to long term, supported by rising infrastructure investments, rapid urbanisation and increasing construction activity across residential, commercial and industrial segments. Demand is being driven by growing adoption of products such as concrete admixtures, waterproofing solutions, repair and rehabilitation chemicals, tile adhesives, sealants, flooring systems and protective coatings. Increasing emphasis on construction quality, durability, sustainability and lower lifecycle maintenance costs is further accelerating the shift towards technologically advanced and performance-oriented construction chemical solutions. The growth of infrastructure projects, redevelopment and renovation activities, along with increasing awareness among developers, contractors and consumers, is expected to provide significant opportunities for organised and established industry participants.

The market outlook remains favourable, with industry estimates indicating strong growth over the medium term. While market- size estimates vary across research agencies due to differences in product coverage and methodology, the broad consensus points towards a healthy expansion trajectory, supported by infrastructure development and increasing adoption of value- added construction solutions.

Indias Construction Chemicals Market Forecast

Indias construction chemicals market is expected to maintain a strong growth trajectory, supported by rapid urbanisation, increasing infrastructure investments and rising construction activity across residential, commercial and industrial segments. Recent industry estimates indicate that the market could grow from approximately USD 2.6 billion in 2025 to USD 4.8 billion by 2034, representing a CAGR of around 6.5%. Other market studies estimate a faster growth trajectory, highlighting the varying market definitions and methodologies used across industry reports.

Indian Waterproofing Industry

The Indian waterproofing industry is expected to witness healthy growth over the coming years, driven by rapid urbanisation, increasing infrastructure development and rising construction activity across residential, commercial and industrial segments. Demand for waterproofing solutions is being supported by the growing construction of high-rise buildings, basements, metro systems, tunnels, bridges, water-retaining structures and other critical infrastructure. Increasing awareness of structural durability, prevention of water-related damage and reduction in long-term maintenance costs is also encouraging the adoption of organised and technologically advanced waterproofing solutions. The market is gradually shifting from conventional waterproofing practices towards products such as polymer- modified membranes, polyurethane and acrylic coatings,

cementitious systems, crystalline waterproofing and other specialised solutions. Renovation, repair and redevelopment of ageing buildings and infrastructure are expected to provide an additional source of demand. Going forward, sustained infrastructure spending, urban development, increasing quality consciousness and the formalisation of the construction sector are expected to create significant growth opportunities for organised players with strong brands, technical capabilities and established distribution networks.

Indias Waterproofing Market Forecast

Indias waterproofing market is expected to witness sustained growth over the coming years, supported by rapid urbanisation, increasing infrastructure investments and rising construction activity across residential, commercial and industrial segments. The market is estimated at approximately USD 1.27 billion in 2025 and is projected to reach around USD 1.94 billion by 2031, registering a CAGR of approximately 7.3% during 2026-2031. Growth is expected to be driven by increasing demand for waterproofing solutions in buildings, basements, roofs, tunnels, bridges, water-retaining structures and other infrastructure projects, alongside growing awareness of structural durability and preventive maintenance. The adoption of advanced technologies such as membranes, liquid-applied systems, polyurethane, acrylic and cementitious waterproofing solutions is expected to further support market expansion. Government- led infrastructure development, housing projects and urban redevelopment, coupled with increasing focus on long-term asset protection and climate resilience, are likely to create attractive growth opportunities for organised players in the Indian waterproofing industry.

Production Capacity Expansion

The Company currently has adequate manufacturing capacity to support its anticipated business requirements over the next four to five years. the Companys focus will increasingly shift towards optimising capacity utilisation, improving product mix and increasing the contribution of high-value and higher-margin products. This strategy is expected to enable the Company to generate better value from its existing manufacturing infrastructure while improving operational efficiency and

profitability. The Company will continue to invest in product development, process improvements and technology upgrades to strengthen its portfolio of specialised and value-added products.

Financial Overview

The financial performance of the Company for the financial year ended March 31,2026 is as follows:

• Revenue from Operations stood at Rs. 136.07 crore in FY26. Standalone Revenue stood at Rs. 83.96 crore in FY26 as against Rs. 77.35 crore in FY25, Y-o-Y increase of 8.54% on standalone basis and 75.91% on consolidated basis. Consolidated revenue includes revenue from Bitumag operations as well. This growth was driven by volume growth in the core dispersion business and contributions from Bitumags waterproofing and construction chemical segment.

• The EBIDTA (earnings before interest, depreciation and tax, excluding other income) was Rs. 14.59crore for the year ended March 31, 2026, compared with Rs. 7.28 crore in FY25, registering a 100.41% year-on-year growth. The EBITDA margin improved to 10.72% in FY26, reflecting stronger operating performance, improved profitability, and the benefits of business growth during the year.

• The PAT (profit after tax) was Rs. 7.25 crore for the year ended March 31,2026. Standalone PAT stood at Rs. 4.06 crore in FY26 as against Rs. 4.62 crore in FY25. While standalone PAT declined by 12.28% YoY, consolidated PAT increased by 56.68% YoY. The decline in standalone PAT was primarily on account of additional finance costs of Rs. 2.20 crore arising from acquisition-led borrowings and one-time due diligence expenses of Rs. 0.38 crore. PAT Margin was at 5.32%.

• FY 2026 EPS was at Rs. 4.35vs Rs. 2.79 in FY 2025.

• The net worth stood at Rs. 97.33 crore as on March 31,2026.

• The consolidated debt was at Rs. 41.38 crore as on March 31,2026.

Changes in Key Financial Ratios

Pursuant to the provisions of Regulation 34 (3) of SEBI (LODR) Regulation, 2015, read with Schedule V part B (1), details of changes in Key Financial Ratios of the company, on a consolidated basis are given hereunder:

S. No. Key Financial Ratio		FY 2025-26	FY 2024-25
1. Debtors Turnover Ratio	Times	4.94	6.36
2. Inventory Turnover Ratio	Times	3.30	2.63
3. Interest Coverage Ratio	Times	3.40	3.74
4. Current Ratio	Times	1.68	2.01
5. Debt Equity Ratio	Times	0.43	0.30
6. Operating Profit Margin (%)	%	10.72	9.42
7. Net Profit Margin (%)	%	6.58	8.01

Chemical Infrastructure Support

Ducol benefits from new government-backed chemical parks and infrastructure incentives announced in the Union Budget 2026-27. These initiatives aim to lower logistics costs and streamline supply chains, providing a significant operational strength to the Companys manufacturing hubs.

Growth in End-User Industries

Rising demand from paints, printing inks, plastics and textiles industries is supporting growth in pigment dispersions and masterbatches, which are Ducols core product segments.

Infrastructure & Construction Chemicals Expansion

The Companys acquisition of Bitumag Industries has expanded its presence in waterproofing and construction chemicals, supported by rising demand from Indias real estate and infrastructure sectors including bridges, tunnels and industrial projects.

Export Growth Opportunities

Indias cost competitiveness, growing specialty chemicals ecosystem and new FTAs are supporting export opportunities for pigment dispersions and related products through improved market access and lower tariff barriers.

Crude Oil Volatility

Fluctuations in the price of crude oil-linked raw materials and imported specialty chemicals directly impact Ducols production costs. This volatility creates unpredictable pressure on profit margins, requiring agile pricing strategies to manage shifting input expenses.

Intense Industry Competition

Intense competition from domestic and global players, particularly Chinese manufacturers, creates pricing pressure and challenges market share and margins in the pigment dispersions and specialty chemicals sector.

Environmental & Regulatory Compliance

Stringent pollution control norms and rigorous chemical handling regulations are increasing the operating cost.

Risk and Management

The Company encounters both internal and external risks during its daily operations and long-term planning. To manage these contingencies, a comprehensive policy is in place and specialised workshops are held for every business unit and support function to identify, assess and analyse potential threats. Then, these risks are either managed or accepted based on the Companys risk tolerance. The risks are reviewed regularly to ensure it stays accurate and effective.

The Company faces the following Risks:

Risk Type	Definition	Mitigation
Market Risk	Market risk refers to the possibility that fluctuations in market factors such as foreign exchange rates and interest rates may adversely impact the Companys earnings, cash flows, or the value of its financial instruments.	The Company closely monitors movements in foreign exchange rates, interest rates and other relevant market factors and assesses their potential impact on earnings and cash flows.
Credit Risk	Credit risk refers to the risk of financial loss arising from a clients failure or delay in meeting payment obligations, which may affect the Companys cash flows and receivables.	The Company manages credit risk through a well-defined credit policy, including appropriate credit limits and approval procedures. Before undertaking projects, the Company assesses the financial standing, creditworthiness and project prospects of clients. Receivables are closely monitored, with regular follow-ups to ensure timely collections. The Company also undertakes periodic reviews of outstanding receivables and takes appropriate corrective measures to minimise the risk of delayed or non-payment.
Interest Rate Risk	Interest rate risk refers to unpredictable fluctuations in interest rates, which increase borrowing costs and affect the Companys financial obligations and profitability.	The Company has judiciously managed the debt-equity ratio through a mix of loans and internal cash accruals. It has also managed working capital efficiently to optimise the overall interest cost.
Contractual Risk	Contractual risk refers to the risk arising from contractual obligations, legal liabilities, or unfavourable terms that may result in financial or operational damage to the Company.	The Company follows a meticulous process to evaluate the legal risks involved in contracts and ascertain its legal responsibilities under applicable law of the contract. Various scenarios are considered and in consultation with advisors, stringent terms are incorporated to restrict liabilities to the maximum extent possible.
Competition Risk	Competition risk refers to the risk arising from increasing competition from domestic and multinational companies, which may affect the Companys market position and growth opportunities.	The Company continues to invest in technology and its people to maintain a competitive edge. Its stable and long-standing client base, comprising large and mid-sized companies, helps to maintain a strong order book. The Company also mitigates this risk through quality infrastructure, a customer-centric approach, innovation in customer-specific solutions, pricing and aggressive marketing strategy, disciplined project execution, prudent financial and human resource management and better control over costs.
Input Cost Risk	Input cost risk refers to the risk that changes in the prices of raw materials, power and other input costs that may affect the Companys profitability and cost effectiveness. Significant risks include fluctuations in raw material prices and the availability of power.	The Company monitors input costs closely, optimises procurement and resource utilisation, maintains alternative sourcing options, and, where feasible, factors cost fluctuations into pricing to minimise the impact on profitability.
Liability Risk	Liability risk refers to the risk arising from damage to cargo, equipment, life and third parties, which may adversely affect the Companys business.	The Company mitigates this risk through contractual obligations and insurance policies.

Human Resources

Ducol considers its workforce to be a key driver of organisational growth and change. The Company is committed to fostering individual development and professional growth through a work culture centred on teamwork, collaboration and high performance.

Ducol has Human Relations and Industrial Relations policies in place, which are reviewed and updated periodically in line with the Companys strategic objectives. The Company conducts regular training and talent development programmes to enhance the skills and capabilities of its employees and unlock their potential.

The Company leverages a balanced mix of experienced professionals and young talent to support its growth and business objectives.

As of March 31, 2026, the Company had a workforce of 192 permanent and contractual employees, including employees of Bitumag Industries.

Outlook

The Company remains optimistic about the medium- to long-term growth prospects of its pigments and dispersions, waterproofing and construction chemicals businesses. The recovery in the paints and coatings industry, along with continued growth in residential, infrastructure and renovation activities, is expected to support demand across these segments.

The Company currently has adequate manufacturing capacity to support its anticipated business requirements over the next four to five years. Accordingly, the focus will increasingly be on optimising capacity utilisation, improving the product mix and increasing the contribution of high-value and higher-margin products. This approach is expected to enable the Company to derive greater value from its existing manufacturing infrastructure while enhancing operational efficiency and profitability.

The upgradation of the Taloja facility is progressing and is expected to further strengthen the Companys production

capabilities and enable it to cater to evolving market requirements. The Company will continue to invest in product development, process improvements and technology upgrades to strengthen its portfolio of specialised and value-added products.

The Company also sees significant potential in its waterproofing business through Bitumag Industries and construction chemicals business through Xchem, supported by increasing construction activity, infrastructure development and growing demand for quality and performance-oriented solutions. These businesses provide opportunities to diversify the product portfolio, expand the customer base and strengthen the Companys presence across the construction and allied industries.

Going forward, the Company will remain focused on capacity utilisation, product mix enhancement, cost optimisation, innovation and sustainable growth. By leveraging its manufacturing capabilities, technical expertise, customer relationships and market presence, the Company is well positioned to capture emerging opportunities and deliver improved profitability over the coming years.

Internal Control Systems and Their Adequacy

The Company has appointed M/s. A.P & Co., Chartered Accountants (Firm Reg. No. 100040W) as an Internal Auditor of the Company for a term of five (5) years, i.e., from Financial Year 2022-23 to 2026-27.The Company has in place adequate internal controls that cover all significant areas of the Companys operations, such as accounting and finance, procurement, business operations, statutory compliance, IT processes, safeguarding the assets and their protection against unauthorised use, among others. The Internal Auditor performs the internal audit of the Companys activities based on an internal audit plan, which is reviewed each year and is approved by the Audit Committee. The Audit Committee reviews the report submitted by the internal auditors. Suggestions for improvement are considered and the audit committee follows up on corrective action. Disciplinary action is taken, wherever required, for noncompliance to corporate policies and controls.

The Company has also implemented effective systems for achieving the highest level of efficiency in operations, to achieve optimum and effective utilisation of resources, monitoring thereof, and compliance with provisions of all laws, including the Companies Act, 2013, Listing Agreement, directions issued by the Securities and Exchange Board of India, labour laws, tax laws, etc. It also aims at improvement in financial management and investment policy. The System ensures appropriate information flow to facilitate effective monitoring.

Forward-looking statement

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the Company describing the Companys objectives, expectations or predictions may be forward-looking within the meaning of applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events.

The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Company assumes no responsibility to publicly amend, modify, or revise forward-looking statements, based on any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include changes in government regulations, tax laws, economic developments within the country and such other factors globally.

The financial statements of the Company have been prepared under the historical cost convention, in accordance with generally accepted accounting principles in India (Indian GAAP) on an accrual basis. The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013, to the extent applicable and the guidance notes, standards issued by the Institute of Chartered Accountants of India. As per MCA notification dated 16^th February 2015, companies whose shares are listed on SME exchange as referred to in Chapter XB of SEBI (Issue of Capital and Disclosure requirements) Regulations, 2009 are exempted from the compulsory requirement of adoption of IND-AS. As the Company is covered under the exempted category, it has voluntarily adopted IND-AS for preparation of the financial results. The management of Ducol Organics and Colours limited has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner, the state of affairs and profit for the year.

The following discussions on our financial condition and result of operations should be read together with our audited consolidated financial statements and the notes to these statements included in the annual report. Unless otherwise specified or the context otherwise requires, all references herein to "we", "us", "our", "the Company", "Ducol" are to Ducol Organics and Colours Limited.