Gabion Technologies India Ltd Management Discussions

ANNEXURE III

OVERVIEW INDUSTRY STRUCTURE AND DEVLOPEMENT

The geosynthetics and geotechnical engineering industry plays a critical role in the development and maintenance of infrastructure, environmental protection, and ground improvement projects. Geosynthetic materials are increasingly being adopted as cost-effective, durable, and technically efficient alternatives or complements to conventional construction materials and methods. The industry caters to a wide range of applications, including roads, railways, airports, irrigation and water resources, mining, power, defence, real estate, and environmental protection. The industry broadly comprises manufacturers, designers, technology providers, contractors, and traders engaged in the development, supply, installation, and execution of geosynthetic and geotechnical solutions. Key products include gabions, rockfall protection systems, geogrids, geomats, geotextiles, geomembranes and other engineered solutions used for soil reinforcement, erosion control, slope stabilization, drainage, retaining structures, flood protection, and ground improvement.

OPPORTUNITIES AND OUTLOOK

The outlook for the coming year remains positive, supported by increasing infrastructure development, environmental protection requirements and growing adoption of geosynthetic and geotechnical solutions.

Opportunities:

Growing demand for gabions and geosynthetic solutions in roads, railways, airports, irrigation and other infrastructure projects. Increasing requirements for slope stabilization, erosion control, rockfall protection and flood management. Rising opportunities in mining, power and environmental projects, including ash pond lining and waste containment. Government infrastructure initiatives and increased investment in sustainable and resilient infrastructure. Growing demand for integrated design, engineering, supply and turnkey project execution.

RISK, CONCERNS AND THREATS

Risk:

Lag in modernization of plant and machinery can reduce competitive edge; Fluctuations in raw material prices; Lag in developing products of new specifications that competitors may introduce; Attrition of talent.

Threats:

Lag in modernization of plant and machinery can reduce competitive edge; Fluctuations in raw material prices; Lag in developing products of new specifications that competitors may introduce; Attrition of talent.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

Our ability to ensure the reliability of our financial reporting, compliance with applicable laws and regulations, and efficient operations depends on the effectiveness of our internal control and compliance systems. There have been certain lapses in terms of delay in statutory filings in past and any failure to design, implement, or maintain adequate internal controls, including those over financial reporting, information technology systems, and regulatory compliance, could result in errors or misstatements in our financial statements, regulatory noncompliance, operational inefficiencies, or reputational harm. In addition, undetected control deficiencies could adversely affect our ability to prevent fraud or misconduct. Any such failures could materially and adversely affect our business, financial condition, results of operations, and investor confidence.

SEGMENT WISE OR PRODUCT-WISE PERFORMANCE

"The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The companys financial performance has shown resilience despite challenging market conditions. Revenue growth has been primarily driven by the Engineering Solutions segment, which has seen increased demand across all sectors. Operational efficiencies have been improved through process optimization and cost control measures, contributing to a healthy profit margin.

A. Standalone and Consolidated Financial Performance:

(i) Net Sales and Other Income:

During the year ended 31st March 2026, the Company reported a Standalone Total Income of INR 11,258.21/- Lakhs and a Consolidated Total Income of INR 11,558.37/- Lakhs, as compared to a Standalone Total Income of INR 10,099.00/- Lakhs and a Consolidated Total Income of INR 10,125.34/- Lakhs for the corresponding previous year ended 31st March 2025.

(ii) Expenditure:

For the year ended 31st March 2026, the Company incurred Standalone Total Expenses of INR 10,127.47/- Lakhs and Consolidated Total Expenses of INR 10,424.11/- Lakhs, as compared to Standalone Total Expenses of INR 9,198.00/- Lakhs and Consolidated Total Expenses of INR 9,219.83/- Lakhs for the corresponding previous year ended 31st March 2025.

B. Profit/Loss:

The Standalone Net Profit for the year ended 31st March, 2026 was INR 807.69/- Lakhs and the Consolidated Net Profit was INR 811.09/- Lakhs, as compared to a Standalone Net Profit of INR 614.37/- Lakhs and a Consolidated Net Profit of INR 618.94/- Lakhs, respectively, for the corresponding year ended 31st March 2025.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The company continues to prioritize employee development and engagement. Significant investments have been made in upskilling our workforce to keep pace with technological advancements. The total number of employees as of the end of the financial year stood at 155. Industrial relations remained harmonious, with no significant disruptions during the year.

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

The Return on Net Worth for the current financial year improved compared to the previous year, primarily due to higher net profits and efficient capital allocation. The companys strategic focus on high-margin projects and cost optimization efforts contributed to this improvement.

ENVIRONMENT, HEALTH & SAFETY (EHS)

The Company commits to ethical and sustainable operation in all business activities. Company maintains and implements an Environmental Management System (EMS) for meeting the purpose of organizations policy and objectives regarding environment. The aims of the system is use of processes, practices, techniques, materials, products, services or energy to avoid, reduce or control the creation, emission or discharge of any type of pollutant or waste, in order to reduce adverse environmental impacts. Adequate Occupational Health & Safety Management System is adopted by the Company for ensuring the conformance to the Occupational Health & Safety Management System, legal & statutory requirements, continual improvement and satisfaction of interested parties (i.e. customers, suppliers, employees and public).

DISCLOSURE OF ACCOUNTING TREATMENT

The Company has followed all the treatments in the Financial Statements as per the prescribed Accounting Standard: our company has followed all required accounting standards also disclosed significant accounting policy. Financial statements include balance sheet, profit and loss, cash flow statement with schedules/Notes.

CORPORATE GOVERNANCE REPORT

As per regulation 15(2) of the Listing Regulation, the Compliance with the Corporate Governance provisions shall not apply in respect of the following class of the Companies:

a. Listed entity having paid up equity share capital not exceeding Rs. 10 Crore and Net worth not exceeding

Rs. 25 Crore, as on the last day of the previous financial year;

b. Listed entity which has listed its specified securities on the SME Exchange.

Since, our Company falls in the ambit of aforesaid exemption (b); hence compliance with the provisions of Corporate Governance shall not apply to the Company and it does not form the part of the Annual Report for the financial year 2025-26.

DECLARATION SIGNED BY THE CHIEF EXECUTIVE OFFICER STATING THAT THE MEMBERS OF BOARD OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL HAVE AFFIRMED COMPLIANCE WITH THE CODE OF CONDUCT OF BOARD OF DIRECTORS AND SENIOR MANAGEMENT

Since, our Company falls in the ambit of BSE SME Listed entity; hence compliance with the provisions of declaration signed by the chief executive officer stating that the members of board of directors and senior management personnel have affirmed compliance with the code of conduct of board of directors and senior management shall not apply to the Company and it does not form the part of the Annual Report for the financial year 2025-26.

COMPLIANCE CERTIFICATE FROM EITHER THE AUDITORS OR PRACTICING COMPANY SECRETARIES REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

Since, our Company falls in the ambit of SME Listed entity; hence compliance with the provisions of Compliance certificate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance shall not apply to the Company and it does not form the part of the Annual Report for the financial year 2025-26.

DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT

During the year under review there are no shares in the DEMAT suspense account or unclaimed suspense account, hence this provision is not applicable.

DISCLOSURE OF CERTAIN TYPES OF AGREEMENTS BINDING LISTED ENTITIES (1) INFORMATION DISCLOSED UNDER CLAUSE 5A OF PARAGRAPH A OF PART A OF SCHEDULE III OF THESE REGULATIONS

During the year under review the Company has not executed certain types of agreements binding listed entities as required to be disclosed under clause 5A of paragraph A of Part A of schedule III of the Listing Obligations and Regulations Act, 2015.

CAUTIONARY STATEMENT

The statements in the "Management Discussion and Analysis Report" section describes the company objectives, projections, estimates, expectations, and predictions, which may be "forward looking statements" within the meaning of the applicable laws and regulations. The annual results can differ materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.