sree sakthi paper mills ltd Management discussions

The Management Discussion and Analysis for the financial year under review as stipulated under Regulation 34(2)(e) read with Part B of Schedule V of the SEBI Listing Regulations forms part of this Integrated Annual Report. It provides mandatory disclosures required under the Listing Regulations comprising of inter-alia details about the overall industry structure economic scenarios operational and financial performance of the Company, business strategy, internal controls and their adequacy risk and concerns and other material developments during the financial year 2022-23.

The global economy showed early signs of recovery in the beginning of 2021 and continued till March 2023. Though there has been recession in some of the major economics of the world India was an exception and showed steady growth during the year 2022-23. Economic Analyst report that the growth path will be steady during the next year also.

Indian Logistics sector plays a vital role in facilitating economic activity and trade movement in the country. The sector was estimated to be at Rs Rs. 20,56,913 crores in FY23 and is expected to reach Rs Rs. 31,26,508 crores by FY25. The contribution of logistics sector in Indias GDP is about 14.4% and it is expanding at a rapid space. At a compounded annual growth rate (CAGR) of 15.5% by 2025.

Further the government has implemented National Logistics Policy (NLP) that will enable the Indian logistic and warehousing sector to become more connected and transparent As a result the Indian warehousing and logistics companies will become more reliable as growth partners for not just Indian business but also the economy as a whole.

The e-commerce boom in India has deeply impacted the logistic industry. The customers preferred to shop online, and this has led to huge increase in demand for logistic services.

The warehousing industry in India is largely unorganised and there are very few opportunities to buy assets from the organised segment, as such players are few in number. However, compared to other real estate assets, warehousing assets can be built in a relatively shorter time span. Hence, the risks in green field investments are lower. With infrastructure status, the approval and funding risk for green field investments have reduced further. Earlier, due to the unorganised nature of the industry the equity IRR for a development project was low. Now with all the policy reforms that are being undertaken there is a paradigm shift in the industry structure where it is becoming favourable for organised players.

Demand for large warehousing spaces is likely to see steady increase as occupiers now to move out of their smaller warehouses and consolidate their activities in larger facilities, which are presently in short supply compared to the demand. This demand-supply gap is visible in the current premium commanded by organised players owning these assets. As more and more companies streamline their logistics networks, it would be observed that unorganised players or smaller organised players would consolidate or sell their assets to larger ones.

Your Company has got an internal audit system which thoroughly verifies various transactions and contracts entered into by the company. Your company also holds periodical performance review meeting wherein various parameters and budgetary norms fixed are compared with actual, reasons ascertained deviations if any and corrective actions taken then and there.

Your company during the year under review has very peaceful and cordial relationship with the employees. there was no instance of labour unrest.

The company has a total of 11 employees. Other mandatory disclosures like details of significant changes in key financial ratios along with detailed explanation is given in page no.94 of the Annual Report as additional disclosures to the standalone financial statements.