Sancode Technologies Ltd Management Discussions

1. INTRODUCTION:

Our Company is a technology-oriented company pursuing opportunities across technology and emerging business
segments, with a strategic focus on developing a presence in the semiconductor industry, particularly in the
Outsourced Semiconductor Assembly and Testing (OSAT) segment.

During FY2025-26, the Company continued its existing business activities while taking initial steps towards its
semiconductor initiative. The Company incorporated Sancode Semi Private Limited on September 22, 2025, as a
subsidiary to pursue opportunities in semiconductor manufacturing and OSAT.

The Companys semiconductor initiative is presently at the project development and planning stage. During the
year, Sancode Semi Private Limited received in-principle approval from the High-Level Clearance Authority of the
Government of Odisha for the proposed OSAT unit in Khordha district. Subsequent to the year-end, approval was
received for allotment of industrial land at Infovalley-II, Khorda, Odisha, for the proposed facility.

The proposed semiconductor operations have not commenced commercial production and have not materially
contributed to the Companys FY2025-26 operating revenues. The project remains subject to further project
development, statutory and regulatory requirements, technical and commercial evaluation, financing
arrangements and other implementation considerations.

2. INDUSTRY STRUCTURE:

The semiconductor industry forms a critical part of the global technology ecosystem and supports applications
across artificial intelligence, automotive, telecommunications, consumer electronics, industrial automation, data
centres, defence and other emerging technologies.

JB I I 1

The semiconductor value chain broadly comprises chip design, wafer fabrication, assembly and packaging, testing
and distribution. OSAT companies operate primarily in the back-end portion of this value chain and provide
specialised assembly, packaging and testing services to semiconductor manufacturers, fabless semiconductor
companies and other customers.

The industry is experiencing structural growth driven by increasing semiconductor content across end markets,
expansion of artificial intelligence and data-centre infrastructure, electrification and automation, and continued
development of connected devices. Supply-chain resilience and geographical diversification have also increased
the strategic importance of semiconductor assembly, packaging and testing.

India is progressively developing its semiconductor ecosystem, supported by policy initiatives, investments in
electronics manufacturing, engineering capabilities and the development of domestic semiconductor and
ATMP/OSAT capacity. Against this backdrop, the OSAT segment represents a potential long-term opportunity,
subject to technology capabilities, quality systems, customer qualification, capital requirements and sustained
execution.

3. INVESTMENTS/ DEVELOPMENTS:

During the year, the Company initiated steps towards developing its semiconductor business through its
subsidiary, Sancode Semi Private Limited.

- Project planning and evaluation of infrastructure, utilities and supporting facilities for the proposed OSAT
project.

- Evaluation of semiconductor assembly, packaging and testing processes based on technology feasibility,
customer requirements and commercial considerations.

- Evaluation of specialised semiconductor manufacturing and testing equipment and related infrastructure.

- Progressive assessment of technical and operational human-resource requirements.

- Development of relationships with potential technology, supply-chain and ecosystem participants.

The Company is pursuing the proposed project in a phased and disciplined manner. Further investments, capital
deployment and implementation will be undertaken based on project requirements, regulatory and statutory
approvals, technical feasibility, funding arrangements and commercial considerations.

4. OPPORTUNITIES AND THREATS:

Opportunities

- Growing semiconductor demand across artificial intelligence, data centres, electric vehicles,
telecommunications, connected devices, industrial automation and advanced electronics.

- Development of Indias domestic semiconductor and electronics ecosystem supported by policy initiatives and
increasing investments.

- Global supply-chain diversification and the resulting potential for additional semiconductor assembly,
packaging and testing capacity in India.

- Growth in domestic electronics manufacturing and potential long-term opportunities in advanced packaging
and specialised semiconductor services.

- Potential export opportunities, subject to technology readiness, quality standards and customer qualifications.
Threats and Risks

- High capital requirements for facilities, specialised equipment, utilities, technology and supporting
infrastructure.

- Dependence on project execution, statutory and regulatory approvals, funding, infrastructure development
and other implementation requirements.

- Stringent customer qualification, validation and approval processes, which may result in extended timelines
before commercial production or meaningful revenue generation.

- Risks relating to capacity utilisation, manufacturing yield, quality, reliability and commercial ramp-up.

- Competition from established domestic and international OSAT and semiconductor packaging and testing
players.

- Availability and retention of specialised technical manpower.

- Geopolitical, trade, regulatory, foreign exchange and supply-chain uncertainties.

Risk Mitigation

The Company intends to manage these risks through phased project development and capital deployment,
continuous evaluation of technology and equipment requirements, development of appropriate quality and
process-control systems, strengthening of technical capabilities, diversification of potential customers and
suppliers, prudent financial planning and continuous monitoring of industry, regulatory and geopolitical
developments.

5. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

The Company is currently at the development and planning stage in relation to its proposed semiconductor OSAT
initiative and commercial semiconductor manufacturing operations have not commenced. Accordingly, there was
no operating revenue from the proposed semiconductor business during FY2025-26.

The Companys existing business activities continued during the year. The Company has historically provided
technology and software-related services including digital transformation, workflow automation, artificial
intelligence and machine learning, robotic process automation and data analytics, and system integration. The
financial performance for the year reflects the Companys existing operating activities.

The Company will progressively evaluate and develop its business mix in line with its strategic priorities and the
commercial development of the proposed semiconductor initiative.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an effective and reliable internal control system commensurate with the size of its operations.
At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business,
safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of
accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and
control systems is validated by self-audits and internal as well as statutory auditors.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Share Capital:

During the year under review, the Companys Paid-up Share capital of Company stood at Rs. 4,06,88,670:

Reserves and Surplus:

The Reserve and Surplus of Company is Rs. 342.58 lakhs on Standalone and Rs. 205.54 Lakhs on Consolidated
basis as on period ended on 31st March, 2026.

Total Income:

The Company has earned total Income Rs. 80.01 Lakhs on Standalone and Rs. 1586.74 Lakhs on Consolidated basis
as on period ended on 31st March, 2026.

8. OUTLOOK

The Company remains focused on evaluating and developing opportunities in the semiconductor and OSAT sector
while continuing its existing business activities.

The immediate focus is on progressing the proposed semiconductor project through the various stages of project
development, including technical evaluation, infrastructure planning, regulatory requirements, financing,
technology assessment and ecosystem development.

The Company believes that the continuing development of Indias semiconductor ecosystem provides a long-term
opportunity. However, the timing and scale of the Companys semiconductor operations will depend on successful
project implementation, availability of capital, technology and equipment, customer qualifications, regulatory
approvals and prevailing market conditions.

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

Your Company follows a policy of building strong teams of talented professionals. People remain the most valuable
asset of your Company. The Company recognizes people as its most valuable asset and the Company has kept a
sharp focus on Employee Engagement. The Companys Human Resources is commensurate with the size, nature
and operations of the Company.

10. DETAILS OF KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFORE:
STANDALONE:

Particulars	Numerator	Denominator	31st March,	31st March,	Change	Remarks
			2026	2025
Current Ratio	Current Assets	Current Liabilities	48.07	47.70	0.76%	No significant variation noted, as the variance is below 25%.
Debt- Equity Ratio	Total Debt	Shareholders Equity	NA	NA	NA	Company has no debt.
Debt Service Coverage Ratio	Earnings for debt service = Net profit after taxes + non-cash operating expenses	Debt service = Interest & Lease Payments + Principal Repayments	NA	NA	NA	Company has no debt.
Return on Equity ratio	Net Profits after taxes -	Average Shareholders	0.01	0.01	-13.03%	No significant variation noted, as the variance is
(%)	Preference Dividend	Equity				below 25%.
Inventory Turnover Ratio	Cost of Goods Sold	Average Inventory	NA	NA	NA	Company is into service industry
Trade Receivable Turnover Ratio	Net credit Sales	Average Trade Receivables	1.35	1.12	21.02%	No significant variation noted, as the variance is below 25%.
Trade Payable Turnover Ratio	Net Credit purchase	Average Trade Payables	NA	NA	NA	Reduction in revenue during the year
Net Capital Turnover Ratio	Net sales = Total sales - sales return	Working capital = Current assets - Current liabilities	0.07	0.07	-3.74%	No significant variation noted, as the variance is below 25%.
Net Profit Ratio (%)	Net Profit	Net sales = Total sales - sales return	0.16	0.21	-24.44%	No significant variation noted, as the variance is below 25%.
Return on Capital Employed E%)	Earnings interest and taxes	Capital Employed = Tangible Net Worth + Total Debt + Deferred Tax Liability	0.01	0.01	13.03%	No significant variation noted, as the variance is below 25%.

11. CAUTIONARY STATEMENT:

Statements in this Management Discussion and Analysis describing the Companys objectives, expectations,
estimates, plans or future prospects may constitute forward-looking statements within the meaning of applicable
securities laws and regulations. These statements are based on certain assumptions and expectations of future
events and are subject to risks and uncertainties.

Actual results may differ materially from those expressed or implied due to various factors including changes in
economic and market conditions, regulatory developments, technology, competition, project implementation,
availability of capital and other factors beyond the Companys control.

The Company assumes no obligation to publicly update or revise any forward-looking statements, except as may
be required under applicable laws and regulations.