Gillanders Arbuthnot & Company Ltd Management Discussions

Managements Discussion and Analysis Report for the year under review, as stipulated under Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations) is presented below forming part of this Annual Report. The industry structure, development, performance, opportunities, threats, outlook, risk and concerns, internal control systems and its adequacy, financial performance with respect to operational performance and material developments in human resource and industrial relations have been discussed in the paragraphs to follow.

The overall demand scenario continued to be poor with some signs of recovery in the second half of the year arising out of the political crisis in Bangladesh. Bangladesh is the major exporter of ready-made garments and the crisis in the country forced major international buyers to look for alternate source including India. This increased the flow of orders for ready-made garments primarily in the cotton value chain to our country which resulted in increased demand for cotton yarn in the domestic market. However this improvement in demand for cotton yarn was partly set off by the reduced export of yarn to Bangladesh, a very big market for Indian cotton yarn. The overall textile export although is showing a positive growth during the year as compared to the previous year but the total textile exports will still be much lower than the exports achieved during the previous year.

Though there has been some relief to the cotton value chain due to the above development, the synthetic value chain of the industry continued to face the poor demand scenario. Your division manufactures synthetic yarn and is continuing to face the problem of poor demand which has adversely affected the working of the division during the year under review.

The division is planning to start manufacturing of value added product in order to improve the working.

The global tea production (excluding China) in calendar year 2024 shows decline as compared to previous year due to lower crop in India and Uganda. All India tea production decreased to 1285 million kgs from 1394 million kgs, primarily due to adverse climatic conditions and mandatory early closure of factory in North India. Your Division production was further impacted due to lower processing of outsourced green leaf for better quality produce.

Average tea prices at auction centers in North India witnessed an increase of around Rs. 41/Kg due to lower supply 5 compare to previous year whereas your division reported an increase of Rs. 56/Kg due to thrust on quality. Your Directors believe that quality teas will continue gaining prominence and will thrust on further improving the quality in the current - year.

All six factories certified under ISO 22000:2018 and Trust Tea,

During the current year till date, the inclement weather continues. However, with a forecast of normal monsoon, we are " expecting higher crop compare to previous year. The demand for quality and clean tea is expected to remain good and with increased crop, your Directors expect better performance during the current year.

Engineering (MICCO) division continued to reinforce its position in the steel sector by executing several high-value and technically demanding projects across the country. Our performance reflected a healthy mix of continuing business and new opportunities, reflecting our clients confidence in our engineering expertise and capabilities in both the public and private sector. We are actively pursuing business development with major steel companies including Tata Steel, JSW, Arcelor Mittal Nippon Steel, Jindal Stainless Ltd., SAIL.

To support the expanding scale of operation, significant investment have been made in manpower augmentation, training and project management systems.

The EPC sector continues to offer abundant opportunities, especially with the Government focus on infrastructure, energy and industrial modernization. With a diversified project base, an experienced team and a commitment to quality and safety, MICCO is well positioned for sustainable long term growth and expected to perform better during the current year.

The Property Division reported revenue of Rs. 1,029 lakhs, slightly lower than the previous financial year. This decline was largely due to vacation of a significant portion of the tenancy, by a tenant. Despite this, the division has successfully inducted few new tenants and is endeavouring to fill the remaining vacancies. The division follows fire safety policy and also conduct fire safety drills at regular intervals. Your Directors are hopeful of stable performance during the current year.

As per the Schedule V to the SEBI Listing Regulations read with Regulation 34(3) of the SEBI Listing Regulations, details of significant changes (i.e., change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios and any changes in Return on Net Worth along with detailed explanations therefore, are given below:

For detailed explanation regarding significant changes in the abovementioned ratios, please refer to Note no. 53 of the Notes to Standalone Financial Statements for the financial year ended 31st March, 2025.

Your Company has adequate Internal Financial Control Systems in all areas of operation. Your Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its businesses, including adherence to the Companys policies, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures. Internal Audits are conducted by Independent firms of Chartered Accountants and the reports are discussed with the operational heads by the CFO, Managing Director & CEO of the Company, and thereafter, placed before the Meetings of the Audit Committee of the Board of Directors. Representatives of the Statutory Auditors, Cost Auditors and Internal Auditors are also invited at the Meetings of the Audit Committee as and when required. Corrective measures suggested at the Audit Committee Meetings are duly implemented.

The Audit Committee of the Board also reviews the adequacy of Internal Financial Control Systems at regular intervals. No fraud has been reported by the Statutory Auditors, Branch Auditors, Secretarial Auditor, Cost Auditors or Internal Auditors of the Company.

The Company has laid down the process for attracting, retaining and recognizing talent as it acknowledges the importance of good Human Resources. Company has cordial relation with employees and there is mutual respect and admiration for each other. The Directors wish to record their appreciation for the co-operation received from all employees. Industrial relation was good.

Management Discussion and Analysis Report contains forward-looking statements, which are based on certain assumptions and expectations of future events. The Companys actual results and performance may differ from those projected due to unforeseen circumstances viz., political, economic, pandemic etc., over which the Company does not have any control. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events. Readers are advised to apply their diligence and independent judgment.