Sanco Industries Ltd Management Discussions

OVERVIEW OF OUR BUSINESS

We are into the manufacturing of wide range of products such as Rigid PVC pipes, PVC casing & capping, PVC Insulated Domestic and industrial Wires & Cables. The products are used in various electrical, cable and construction industries. Since FY 2010 our company started the trading operations of PVC Raw Materials along with various metal products.

Expanded into product segments that are complementary to the electrical wire and cable market i.e. LED lights and PVC insulation electrical tapes - this move has brought additional market reach at minimal cost expansion.

QUALITY AND ISO CERTIFICATION

Our Company is an ISO 9001:2008 certified Company and sells its varied range of products under various brand names such as "SATYAM", "MARSHALL", "SUPERPLAST" and "SANCO". We are among the first few companies in "North India" and in its category which got "IS-14927" certification for PVC Profiles for quality assurance since December2004. We are also awarded by the Government of NCT Delhi, for its outstanding performance in 1997. The manufacturing facility of our Company is located in Himachal Pradesh.

Capacity Expansion

During the year there is no capacity expansion in the company.

The total installed capacity is:

Activities	Capacity After Expansion
PVC Insulated Wires and Cables	36000 KMPA
PVC Pipes/Profiles	6000 MTPA

ECONOMIC OVERVIEW

2020 was a highly volatile and challenging year. 2020-21 started amidst a strict nationwide lockdown in India — with tough restrictions on economic activity and mobility — and an unprecedented uncertainty about the eventual impact of the Covid-19 pandemic. Covid-19 changed almost every aspect of human lives in ways never imagined. As the Covid-19 cases continued to rise exponentially, the economy declined sharply.

Global economic activity — which was already under protracted pressure since 2018 — contracted sharply in 2020 due to the Covid-19 pandemic. According to the IMF, decline in global output in 2020 is estimated at 3.3 per cent, which s unprecedented in the manner it impacted economic performance across sectors and geographic regions.

OPPORTUNITIES AND THREATS

Due to COVID 19 pandemic, the world and Indian economy is undergoing slowdown which has brought challenges for the Company However, still the Company is trying its best to recover by making most appropriate use of opportunities available in sectors like in irrigation, drinking water, affordable housing and Smart City projects etc

BUSINESS OUTLOOK

As the year started with the economy under complete lockdown and unprecedented uncertainty, the focus initially was on health risks posed by the Covid-19 pandemic. However, later the business, people and economy started its recovery mode.

RISKS AND CONCERNS

Based on the operations of the Company, new risks, if any, are identified, and appropriate steps are taken to mitigate them. The surplus generated during the course of business is sometimes invested with banks/ mutual funds. COVID 19 is another major concern of the Company as it has severely affected the Company.

Further, the Board is in the process of devising and implementing the risk management policy for the Company taking care of the unprecedented situation created by COVID 19.

INTERNAL CONTROL SYSTEMS

The Company employs rigorous internal controls to ensure commitment to operational effectiveness and efficiency, reliable financial reporting and compliance with laws, regulations and policies.

These internal control procedures are proportionate to the nature of business and size of operations for the smooth conduct of business.

Internal audits are conducted at regular intervals at all the plants and cover key areas of operations. These audits are independent, objective and responsible for evaluating and improving the effectiveness of risk management, control and governance processes monitored by the Audit Committee of the Company.

HUMAN RESOURCES

No organization can survive without a strong human resource. Being a hard believer of this fact, the Company provides the most suitable working environment to its manpower.

The Company keeps shuffling its manpower requiremnets as may be requied from time to time.

The Company has in place a Whistle Blower Policy and has established the necessary vigil mechanism for directors and employees to report concerns about unethical behavior. No person has been denied access to the Chairman of the Audit Committee.

Overview of Our Results of Operations

The following discussion of the financial condition and results of operations for the financial year ended March 31, 2019 & March 31, 2020.

The Audited Financial Statements are prepared in accordance with the Indian Accounting Standards

	Standalone
Particulars	(Rupees in Lacs)
	2020-21	2019-20
Total Income	267.55	3,741.79
Less: Total Expenses	2600.35	3,712.46
Profit before Exceptional Items, Prior Period Items and Tax	2332.80	29.32
Add: Exceptional Items	-	-
Less: Prior Period Items	-	-
Net Profit before Taxation (PBT)	2332.80	29.32
Tax Expense	6.81	0.48
Profit/(Loss) after Taxation (PAT)	(2339.61)	28.85
Provision for proposed Dividend	-	-
Dividend tax	-	-
Transfer to General Reserve (Profit for the year and depreciation written back)	(2339.61)	28.85

MANAGING DIRECTOR AND CFO CERTIFICATION

To,

The Board of Directors,

Sanco Industries Ltd.

We, Sanjay Gupta, Managing Director and Anurag Gupta, Chief Financial Officer of Sanco Industries Ltd., to the best of our knowledge and belief hereby certify that:

A. We have reviewed the financial statements and the cash flow statement of the Company for the year 31st March 2021 that to the best to our knowledge and belief:

1) These statements do not contain any materially untrue statement or omit any material fact or contains statement/statements that might be misleading;

2) These statements together present a true and fair view of the Companys affairs and are in compliance with existing accounting standards, applicable laws and regulations.

B. There are, to the best of our knowledge and belief, no transaction entered into by the Company during the year which is fraudulent, illegal or a violation of the companys code of conduct;

C. We accept responsibility for the establishing and maintaining internal control for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to the financial reporting and we have disclosed to the auditors and Audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or proposed to take to rectify these deficiencies.

D. We have indicated whatever applicable, to the auditor and to the audit committee.

i. Significant changes in internal control over financial reporting during the year;

ii. Significant changes in accounting policies during the year, if any and that the same have been disclosed in the notes to the financial statements; and

iii. Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the companys internal control system over financial reporting.

iv. Have not denied any personnel access to the audit committee of the Company (in respect of matters involving alleged misconduct) and we have provided protection to whistleblowers from unfair termination and other unfair or prejudicial employment practices.

v. All Board members and senior management personnel have affirmed compliance with the Code of Conduct and Ethics for the year covered by this report.

Sd/-	Sd/-
Sanjay Gupta	Anurag Gupta
DIN - 00726005	PAN - ACTPG0996L
(Managing Director)	(Chief Financial Officer)
Date: 03.09.2021
Place: New Delhi