Sagar Systech Ltd Management Discussions

The Management is pleased to present the Management Discussion and Analysis Report for the financial year ended March 31, 2026. This report provides an overview of the Companys financial performance, business environment, industry outlook, opportunities, threats, risks, and future prospects.

A. FINANCIAL REVIEW

During the financial year 2025-26, the Company reported a profit of Rs. 95 thousand as compared to a profit of Rs. 151 thousand during the previous financial year. The financial performance of the Company was influenced by prevailing market conditions and business opportunities available during the year under review.

Despite a challenging business environment, the Company continued to maintain financial discipline and focused on effective utilization of resources, cost control measures, and operational efficiency. The management remains committed to strengthening the financial position of the Company through prudent planning and strategic decision-making.

No provision for depreciation was required during the year under review.

The details of key financial ratios are as follows:

Ratio	31-Mar-2026	31-Mar-25	% Variance	Reason for Variance
(a) Current Ratio	0.556	0.587	-5.41	Proportionate Reduction in Current Assets is more than the reduction in Current Liabilities
(b) Debt \u2010 Equity Ratio	2.351	2.994	-21.47	Reduction in borrowing
(c) Return on Investments	0.010	0.016	-37.98	Reduction in earnings
(d) Net Profit Ratio	0.016	0.030	-48.03	Reduction in earnings

The Company continues to adopt a conservative financial approach and remains focused on improving operational performance, maintaining adequate liquidity, and enhancing stakeholder value.

B. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established adequate internal control systems commensurate with the size, nature, and complexity of its operations. The internal control framework is designed to ensure:

The management periodically reviews the effectiveness of internal controls and takes necessary corrective actions wherever required. The internal control mechanisms are continuously strengthened to align with evolving business requirements and regulatory expectations.

The details relating to internal financial controls and their adequacy have been discussed in the Directors Report forming part of this Annual Report.

C. INDUSTRY STRUCTURE AND DEVELOPMENTS

The technology and systems solutions industry continues to play a significant role in supporting digital transformation initiatives across industries. Businesses worldwide are increasingly adopting advanced technologies to improve productivity, efficiency, security, and customer engagement.

Key industry developments during FY 2025 - 26 included:

Growing adoption of Artificial Intelligence (AI) and Machine Learning (ML) technologies.

Increased demand for cloud computing and hybrid cloud infrastructure. Rising investments in cybersecurity solutions and data protection frameworks. Expansion of digital services across public and private sectors. Growing adoption of data analytics and intelligent business solutions. Increased focus on sustainability - driven technology investments. Greater emphasis on digital transformation and automation initiatives. Rising investments in smart infrastructure and digital governance platforms.

The industry continues to evolve rapidly, creating both opportunities and challenges for technology-driven enterprises.

D. MACRO ECONOMIC REVIEW AND OUTLOOK

The Indian economy remained resilient during FY 2025-26 despite global economic uncertainties, geopolitical developments, inflationary pressures, and supply chain challenges.

Government initiatives such as Digital India, Make in India, Startup India, Smart Cities Mission, and Production Linked Incentive (PLI) schemes continued to support industrial growth and technology adoption.

The long-term outlook for the Indian economy remains positive due to:

However, challenges such as geopolitical uncertainties, commodity price volatility, inflationary pressures, and evolving regulatory requirements may continue to impact business sentiment.

E. OPPORTUNITIES

The Company believes that the evolving business landscape offers significant opportunities for growth and expansion.

1. Artificial Intelligence and Automation

Increasing enterprise adoption of AI-based solutions.

Growing demand for intelligent automation and process optimization. Expansion of AI applications across industries. Improved business efficiency through automation technologies.

2. Cybersecurity Solutions

Increased cybersecurity spending by enterprises. Growing focus on data privacy and information security. Rising demand for risk management and compliance solutions. Greater awareness regarding cyber threats.

3. Government Initiatives Digital India Mission. Smart Cities projects. E-Governance initiatives.

4. Digital Transformation Across Industries

Adoption of technology solutions in healthcare, education, banking, manufacturing, and retail sectors. Increased investment in digital customer engagement platforms. Demand for integrated technology solutions.

5. Emerging Technologies Internet of Things (IoT). Data analytics and business intelligence. Edge computing. Generative AI applications.

F. THREATS AND CHALLENGES

While the industry presents significant opportunities, the Company remains exposed to various risks and challenges.

1. Rapid Technological Changes Constant need for innovation. Frequent technology upgrades. Risk of technological obsolescence. Continuous investment requirements.

2. Regulatory and Compliance Risks Evolving data protection regulations. Cybersecurity compliance requirements. Regulatory reporting obligations.

3. Cybersecurity Risks

Increasing sophistication of cyber threats. Data security concerns. Business continuity risks. Information security challenges.

4. Economic and Geopolitical Uncertainty Global economic slowdown risks. Inflationary pressures. Commodity price volatility.

Geopolitical tensions affecting business sentiment.

G. RISK MANAGEMENT

The Company recognizes risk management as an integral part of its business strategy and decision-making process.

The Companys risk management framework focuses on:

Key risk areas monitored by management include:

The Company continuously strengthens its risk management processes to ensure long-term business sustainability.

H. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Human resources remain one of the Companys most valuable assets. The Company believes that its people are critical to achieving sustainable growth and operational excellence.

The Companys human resource strategy focuses on:

The Company strives to provide a positive work environment that encourages innovation, collaboration, integrity, and professional growth.

Industrial relations remained cordial throughout the year under review.

I. BUSINESS OUTLOOK AND FUTURE PROSPECTS

Looking ahead, the Company remains focused on strengthening its business fundamentals and creating long-term value for stakeholders.

The key strategic priorities include:

The Company remains optimistic about the long-term growth potential of the technology sector and believes that continued innovation, digital transformation, and increasing technology adoption will create significant opportunities in the years ahead.

References: Economic Survey 2025–26 , Ministry of Electronics and Information Technology (MeitY) Annual Report 2025–26 , and the ICRIER State of Indias Digital Economy (SIDE) Report 2026, Economic Survey 2025–26 , Reserve Bank of India publications , ICRIER State of Indias

Digital Economy Report 2026 , and industry research published by NASSCOM .

J. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations, plans, or predictions may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various factors including economic conditions, market developments, regulatory changes, competitive pressures, technological advancements, and other risks beyond the Companys control.

For and on behalf of the Board of Directors of SAGAR SYSTECH LIMITED

Meena Babu	Mukesh Babu
Managing Director	Director
DIN: 00799732	DIN: 00224300
Date: 13 th May, 2026
Place: Mumbai