Sanco Trans Ltd Management Discussions

A. About the Company

The Company was incorporated by late Sri K Santhanam Reddiar in the year 1979 as a Private Limited Company with a paid up share capital of Rs. 5 Lakhs which took over his proprietary business carried on in that name and was converted into a Public Limited Company in the year 1986. The key performance indicators of the company for 10 years are given below:

((Rs. in Lakhs))

Figures are regrouped/restated as per Indian Accounting Standards

Despite global economic headwinds, Indias growth remains stable at 6.5%, supported by strong domestic demand. Inflationis under control, though core inflation remains sticky, necessitating careful monetary management. Trade challenges persist due to weak global demand, but a narrowing trade deficit investment provides resilience. The RBIs proactive policies have played a crucial role in stabilizing liquidity and inflation expectations. Overall, Indias economy is well positioned for growth, but uncertainties in global markets, financial volatility, and trade disruptions remain key risks. Sustained policy support and domestic resilience will be essential in maintaining economic momentum.

The ongoing wars have continued to play a major role in the disruptions of global supply chain system , added to the recent political upheaval about reciprocal tariffs.

Our Agriculture sector is expected to grow at 3.8% while the Industry Sector is to grow at 6.2% & the services sector is to grow by 7.2 %.

As indicated earlier , the continued impetus shown by both the Central government and the State government in implementing the infrastructural spendings on the Multimodal park and the state government committing its share by following up on the state logistics policy and announcing to come out with a separate warehousing policy , will only bring in more focus and investment in the logistics space .

The state governments extended support in starting the ever stalled project to connect the Chennai port from outside the city by way of an elevated highway , has been a very positive sign as the National Highways have now extended the origin of the elevated road by another 10 kms approximately , to connect the Chennai – Outer Periphery road. This step will give the much required room for the authorities in planning for the future , which will contribute in the increase of the business volume to this region, benefitting the company with increased volume in Exports segment.

As of now between the 4 terminals in chennai , ports have have reached 90% of the capacity , indicating urgent need to augment the capacity , by adding another port or terminal . The government has initiated the right step and are adding capacity at Ennore Kamarajar port.

During FY 2024

25 the company has registered a growth of 7.14% in Total Income. Revenue from operations has increased to Rs. 105 Crores in FY 2024

25 as compared to 98 Crores during FY 2023

24. Contribution has gone up in line with the increase in revenue from operations.

Profit before tax has increased by 38.66% during this year compared to previous year despite increase in fixed costs. EBIDTA has recorded an increase of Rs.124 Lakhs this year.

Finance costs has declined further in FY 2024

25 on account of reduced utilization of cash credit facilities, repayment of borrowings and better interest rates on new borrowings.

Depreciation for the year has increased mainly on account of additions to vehicles.

The companys internal control system has been developed taking into account the size of operations to make sure that it would provide for accurate recording of transactions which in turn provides for safe guarding of assets and for compliance to mandatory accounting standards.

Consequent to the implementation of Companies Act, 2013 (Act), the Company has complied with the specific requirements in terms of Section 134(5)(e) of the said Act calling for establishment and implementation of an Internal Financial Control framework that supports compliance with requirements of the Act in relation to the Directors responsibility statement.

The Internal Auditor of the company carried out periodical verifications at all locations and all divisions as per the audit plan approved by Audit Committee. The observations are discussed with management and actions wherever required to strengthen the controls are taken. Significant observations are placed and discussed in Audit Committee every quarter.

Further, MD and CFO certification are provided in the Annual Report confirming the existence on adequacy of our internal financial control systems and procedures.

We believe that our strengths includes

Facilities to handle 7500 TEUs per month to handle Import Laden Container and 1000 TEUs per month to handle Export Laden Container.

9 acres of leasehold space dedicated for Maintenance & Repair service (International Standard M&R Licensed

IICL).

Availability of sufficient number of containers without delay.

Professionally engineered yard for economical stacking and delivery.

Warehouse space availability (bonded, general warehouse, export and import) 50,000 sq.ft Despite the above strengths, the companys business volume depends on the volume handled at

Chennai port. Consequently, the revenues/profits of the company are difficult to predict. Risk factors includes global economic condition and domestic demand and supply.

The Risk Management Committee discusses with Heads of Divisions for assessment of risks and will put risk mitigation plans wherever required.

During the year under review, the total number of people on the rolls of the company is 142 and the company sustained harmonious and cordial relations all through the year.

The reason for change in ratio during the year 2024

25 compared to the year 2023

24 by more than 25% due to increase in profits / revenue.

Statements in this report discloses forward looking information that set our anticipated results based on the managements plans and assumptions to enable investors to fully appreciate our prospects and take informed investment decisions. The company cannot, of course, guarantee that these forward looking statements will be realized, although the company believes it has been prudent in its assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize or should the underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected.