financials share price Management discussions

INDUSTRY STUCTURE AND DEVELOPMENT:

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 professional to manage day to day operations efficiently. For more details please visit www.dacl.co.in.

PERFORMANCE:

Total Standalone revenue (net of taxes) for the year 2022-23 amounted to Rs.11,330.69 lakhs compared to Rs.6792.85 lakhs of the previous year 2021-22. The Standalone operating profit after tax amounted to Rs.4221.95 lakhs compared to Rs.1672.35 lakhs in the previous year.

SEGMENT-WISE PERFORMANCE:

Earlier, the company has identified and is working in reportable primary segments viz. Specialty Chemicals. Thus, the disclosure particulars as per Ind AS-108 on Operating Segments Reporting are made part of this Annual Report in Note 38 of standalone Financial Statements.

STRENGTHS & OPPORTUNITIES:

Your company is key manufacturer of ethylene amines in India which is a growth market. This offers regular opportunities & helps 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 able to enjoy the market leadership position. Its geographical position & the vicinity to customers also offer added advantage 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.

CONCERNS & THREATS:

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

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.

OUTLOOK:

The Board of Directors has not identified any material impact on the operations and financials of the company as at March 31, 2023. Considering that the Company deals with Specialty Chemicals, there has been minimal disruption with respect to operations including production and distribution activities.

The Company has not experienced any difficulties with respect to market demand, collections or liquidity. The Company will continue to closely monitor any material changes to future economic conditions.

For the year 2023-24, the Companys focus will continue on 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 global level and this is expected to continue in the year 2023-24 also. Your company is well aware of the challenging scenario lying ahead and taking necessary steps by planning activities properly at operational stages.

KEY DEVELOPMENT DURING THE YEAR:

Your Company has transferred Industrial Plot situated at Dahej Industrial Estate, Dahej, Ankleshwar, to its Wholly Owned Subsidiary (WOS) Company during the year against consideration by way of preference shareson right basis.

The new pilot plant set up has been made recently with innovative facilities by installation of equipments / machineries. This will serve the purpose of an expansion of Research & development at large stage.

Your Company has started new line of business as a Trading Division of the company by seeing the potential business opportunities in the market with available set up, business expertise and customer relationship which may result into potentially better business volume encashed with opportunities in the market and to fetch the better margins with established customers.

HUMAN RESOURCE:

Human Resources Development, in all its aspects like training in safety and social values is under constant focus of the management. Relations between the management & the employees at all levels remained healthy & cordial throughout the year. The Management and the Employees are dedicated to achieve the corporate objectives and the targets set before the Company. The Company has been regularly monitoring its policy for enhancement in the skills of its employees by providing need-based training.

In employee recruitment part, your Company has recruited 66 new members in our team for new projects, R&D and for other support functions, which includes workmen, engineer & manager level employees who come with their functions expertise & technical knowhow. Your Company is also working on retaining our experienced members to have combination of young aggressive team & experienced senior team.

In employee welfare part, your Company has extended our subsided canteen service for contract workmen also, to ensure good health to all members. Your Company has also initiated new bus with air conditioning facility for members commuting from Vadodara city.

In employee relation part, workers trade union members willingly come forward to dissolve union activity as they have enough trust on management and they are also interested in peaceful working environment which is also in the priority list of management. Management has also gracefully accepted their wish & allows them to contribute in companys growth with the main stream members.

In employee training & development part, your Company has invested 2376 man hours only for motivational training & functional trainings are also going on.

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.

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.

KEY FINANCIAL RATIOS:

Ratio	FY 2022-23	FY 2021-22
Debtors Turnover Ratio (times)	7.37	6.22
Inventory Turnover Ratio (times)	2.91	2.81
Current Ratio (times)	5.46	8.41
Operating Profit Margin (%)	52.93	36.09
Net Profit Margin (%)	38.19	25.30
Dividend Per Share ()	6.00	3.00
Earnings Per Share (times)
Basic ()	43.15	17.09
Diluted ()	43.12	17.09
P/E Ratio (times)	9.31	15.90
Return on Net Worth (%)	35.91	18.05

Reason for significant change:

- Operating/Net Profit margin/EPS/Return on networth have increased due to Increase in earnings on account of increase in marginal sales price and other income. Marginal sales price affected due to gap in demand-supply in global markets.

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

- Current Ratio decreased due to comparative increase in inventory and receivables.

- P/E ratio decreased on account of increase in EPS factor.

CAUTIONARY STATEMENT:

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.