Shiv Texchem Ltd Management Discussions

"ANNEXURE IV"

1. Industry Structure and Developments

The specialty chemicals and performance additives sector in India continues to evolve rapidly, supported by demand across diverse end-user industries such as textiles, paper, packaging, water treatment, and agrochemicals. India is increasingly becoming a global hub for specialty chemical solutions due to its cost-effective manufacturing, rising domestic consumption, and the global push for China+1 sourcing alternatives.

Shiv Texchem Limited operates primarily in the distribution and trading of hydrocarbon- based and performance chemicals, positioning itself in a niche yet essential segment of this value chain. The Company continues to align itself with customer expectations through responsive supply chain practices, product quality assurance, and technical support services, while capitalizing on the shift toward eco-friendly, high-performance formulations.

The post-listing visibility and capital infusion have also enabled Shiv Texchem to better leverage industry opportunities through deeper market penetration and working capital enhancement.

2. Opportunities and Threats:

Opportunities:

- Sustainable and Specialty Product Demand: Industries are increasingly shifting toward customized, biodegradable, and performance-oriented chemical solutions. Shiv Texchem is well-positioned to cater to this demand with product flexibility and sourcing capabilities.

- Policy Support and Domestic Manufacturing Growth: Initiatives like Atmanirbhar Bharat, Make in India, and Production-Linked Incentive (PLI) schemes are accelerating demand for specialty inputs and improving margins for quality distributors.

- Global Realignment of Supply Chains: The move away from over-reliance on Chinese chemical supply opens significant sourcing and distribution opportunities for companies with agile import capabilities like Shiv Texchem.

Threats:

- Price Volatility in Raw Materials and Imported Inputs: Global supply disruptions and geopolitical uncertainty may lead to erratic input pricing or logistics delays, impacting profitability.

- Regulatory Compliance Risk: Increased focus on environmental safety and chemical handling standards demands tighter adherence and documentation, particularly for import-based business models.

- Currency Fluctuation Risk: As the Company deals in imported goods, depreciation of the Indian rupee against major currencies may impact cost structures and margins.

- Rapid Technological Change: The continuous evolution of technologies and material sciences requires ongoing investment in R&D and process innovation. Falling behind in adopting new technologies could affect competitiveness and operational efficiency.

- Data Privacy and Security Concerns: With growing emphasis on data privacy and tighter security regulations, businesses must manage complex compliance obligations and proactively address potential risks. Inadequate protection of sensitive data can result in legal complications and reputational damage.

- Economic Uncertainty: Fluctuating economic conditions and the possibility of a slowdown or recession may impact customer spending and industrial demand. During such periods, businesses may prioritize cost control over new product adoption or capacity expansion, potentially affecting the Companys growth prospects.

3. Segment-Wise or Product-Wise Performance:

The Company operates in a single business segment, primarily comprising the import and distribution of hydrocarbon-based and performance chemicals. Accordingly, as per Ind

AS 108 - Operating Segments, the Company is not required to present segment-wise performance.

4. Outlook:

The outlook for the specialty and performance chemicals sector remains positive, driven by demand for sustainable, high-performance inputs across industries.

Shiv Texchem is well-positioned to respond to this demand, with efficient sourcing networks, product application know-how, and a customer-centric approach. The Company intends to broaden its chemical product basket, increase geographic reach, and explore downstream value addition to strengthen long-term competitiveness.

5. Risks and Concerns:

Operational Risks:

• Supply chain dependence on select international vendors may result in disruption due to logistics or policy barriers.

• Fluctuations in international freight rates and port delays impact landed costs and delivery timelines.

• Inventory obsolescence risk due to changes in customer specifications or regulatory approvals.

Strategic Risks:

• Shifts in global trade policy or sanctions may affect sourcing or pricing.

• Entry of new players offering low-cost alternatives may affect market share.

• R&D / Technological shifts in customer industries (e.g., shift away from hydrocarbon- based chemicals) could reduce relevance of current product lines.

Governance & Compliance Risks:

• Being a SME listed entity, non-compliance with SEBI regulations, FEMA, or GST laws may invite penalties.

• Environmental and safety compliance for chemical handling is critical; failure could impact brand and operations.

The Company actively monitors these risks and takes pre-emptive steps through supplier diversification, forward contracts (where feasible), robust documentation, and employee training.

6. Internal Control Systems and their Adequacy:

The Company has implemented adequate internal financial controls aligned with its scale of operations and regulatory requirements. These controls ensure accuracy in financial reporting, safeguarding of assets, compliance with applicable laws, and prevention of fraud.

An independent internal auditor has been appointed in accordance with Section 138 of the Companies Act, 2013. The internal audit mechanism is supported by defined policies and documented processes, and significant audit findings are regularly reviewed by the Audit Committee and the Board to ensure timely corrective actions.

7. Financial Performance of the Company:

(A) Analysis of Statement of Profit and Loss (Amount in INR Lakhs)

• Total Income: 2,20,480.33

• Revenue from Operations: 2,20,161.53

• Depreciation: 23.04

• Finance Cost: 2,344.68

• Other Income: 318.80

• Net Profit: 4,811.41

(B) Analysis of Balance Sheet (Amount in INR Lakhs)

• Net Worth: 33,284.30

• Long Term Borrowing: 9,478.96

• Short Term Borrowing: 31,445.57

• Total Assets: 1,25,357.82

• Inventories: 49,511.24

• Current Liabilities: 82,584.15

• Non-Current Liabilities: 9,489.38

8. Discussion on Financial Performance with Respect to Operational Performance:

Financial Results and performance for the financial period are elaborated in the Boards Report under Financial Summary.

9. Human Resources:

The Company is committed to fostering a high-performance work culture where every employee is encouraged to reach their full potential. The focus is on aligning individual growth with departmental goals, promoting excellence, and driving continuous improvement across all levels. Industrial relations remained harmonious and positive throughout the year. As of March 31, 2025, the Company had a total of 20 employees.

10. Details of Significant Changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios, along with detailed explanations therefore:

Particulars	31st March 2025	31st March 2024
Trade Receivable Turnover Ratio	7.03	9.98
Inventory Turnover	4.47	3.93
Current ratio	1.51	1.48
Debt Equity	1.23	1.54
Net Profit (%)	2.19%	1.96%
Debt service coverage	2.38	1.82
Return on Equity	18.30%	19.53%
Net Capital Turnover ratio	5.18	5.95
Return on capital employed	20.83%	23.00%

11. Disclosure of Accounting Treatment:

The Company has followed the same accounting treatment as prescribed in the relevant Accounting Standards while preparing the Financial Statements.

12. Cautionary Statement:

The statements made in this Management Discussion and Analysis Report regarding the Companys goals, plans, expectations, industry outlook, and future developments are forward-looking in nature, as defined under applicable laws and regulations. These statements are based on certain assumptions and anticipated future events, which may or may not occur. As a result, actual performance, outcomes, or results may differ significantly from those expressed or implied in these forward-looking statements.

Shiv Texchem Ltd does not undertake any obligation to update, revise, or modify these statements publicly in light of any future developments, new information, or unforeseen events, unless required by applicable laws.

Unless stated otherwise, all references to "the Company," "Shiv Texchem," or "we/our" in this document refer to Shiv Texchem Limited.

By the Orders of the Board of Directors
For Shiv Texchem Limited
SD/-	SD/-
Mr. Vikas Pavankumar	Mr. Shyamsundar Chokhani
Managing Director	Whole-time Director
DIN:00323118	DIN:00216976
Place: Mumbai
Date: 12/08/2025