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)

Year ended 31st March	Revenue	Profit before tax	Profit after tax	Total Com- prehensive income	Net worth	Fixed Assets-net	Dividend %	Earnings per share (Rupees)
2017*	8481.53	32.02	68.00	63.92	9747.38	11103.87	9	1.81
2018*	9122.94	(202.55)	(79.29)	(75.14)	9326.27	10394.77	9	(4.41)
2019*	10830.58	(51.55)	(37.27)	(54.89)	9322.49	9976.87	9	(2.07)
2020	9795.49	19.94	11.94	7.66	9310.59	10022.96	-	0.66
2021	10360.20	448.17	292.18	280.67	9591.26	9920.12	15	16.23
2022	12004.73	1130.83	834.16	831.34	10395.59	9830.89	45	46.34
2023	11026.87	168.62	136.97	125.18	10439.78	8751.25	12	7.61
2024	10163.55	192.62	114.86	109.49	10527.62	9009.80	15	6.38
2025	10889.16	267.08	149.25	153.28	10653.90	8983.99	27	8.29
2026	14153.34	1165.40	1008.19	1001.97	11607.27	9611.37	45	56.01

*Figures are regrouped/restated as per Indian Accounting Standards

B. Industry Progress and outlook:

After a strong first quarter during 2025-26, exports moderated from the second quarter due to (including a 50% tariff on select goods). A trade rebound is higher UStariffs expected during 2026-27, supported by upcoming trade agreements with multiple countries other than USA, as well as diversification into services, electronics, and pharmaceuticals as indicated by the Government.

However, our Imports have been increasing during the same period, from the eastern countries consisting of Minerals / Solar Panels / Automotives / Other raw materials.

The cumulative volume of Boxes handled during the calendar year 2025 stands at 14.5 lakhs in Import and 10.4 lakhs in Exports through all the 4 container terminals in Chennai, an increase by 6% when compared with 2024 Volumes.

In 2025, an important structural reform milestone was achieved, with the long-pending labour codes finally coming into force with effect from 21.11.2025, simplifying compliance while safeguarding worker rights. The reform is expected to improve ease of doing business, accelerate job formalization, and attract fresh investment across manufacturing and services.

Tamil Nadu Government has announced during the month of January 2026, a State Warehousing Policy to boost large warehousing facilities to be created particularly to meet the third party logistics requirements.

C. Financial Review

During FY 2025-26 the company has registered a growth of 29.98% in Total Income. Revenue from operations has increased to Rs.139 Crores in FY 2025-26 as compared to Rs.105 Crores during FY 2024-25. Contribution has gone up in line with the increase in revenue from operations.

Profit before tax and exceptional items has increased by 221% during this year compared to previous year on account of increased warehouse earnings during FY 2025-26. EBIDTA has recorded an increase of Rs.625 Lakhs this year.

Finance costs has declined further in FY 2025-26 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.

D. Internal Control Systems and their adequacy

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.

E. Opportunities and Threats

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 operating 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.

F. Risk Management

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

G. Human Resources

During the year under review, the total number of people on the rolls of the company is 141 and the company sustained harmonious and cordial relations all through the year.

H. Ratios

Particulars	31.03.2026	31.03.2025
Debtors Turnover ratio	4.62	4.08
Interest Coverage ratio	10.90	4.04
Current ratio	1.42	1.28
Debt equity ratio	0.09	0.08
Operating profit margin (%)	10.37%	5.29%
Net profit margin (%)	7.25%	1.42%
Return on net worth (%)	10.04%	1.42%

Reason:

The reason for change in ratio during the year 2025-26 compared to the year 2024-25 by more than 25% is due to increase in profits / revenue during the current financial year.

I. Cautionary note

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.