Vasa Retail and Overseas Ltd Management Discussions

1. Industry Structure and Developments:

The stationery industry continues to remain an essential sector driven by demand from schools, colleges, and offices. However, in recent years, the sector has faced headwinds due to increased adoption of digital alternatives, rising input costs, and intense competition from unorganized players. The demand from corporate customers has also been muted with reduced office activities and cost-cutting initiatives.

o Scope for diversification into eco-friendly, recyclable, and customized

stationery.

o Growing demand for institutional and bulk supplies in the education sector.

o E-commerce platforms offering wider reach to newer customer segments.

o Declining consumption of traditional stationery due to digitalization.

o Fluctuations in raw material costs, particularly paper and ink.

o Margin pressures due to competition from low-cost, unorganized sector

players.

o Reduced discretionary spending by corporates and retail customers.

During the year, the Company witnessed lower demand across retail and institutional segments, resulting in a slowdown in sales. Traditional products such as notebooks and writing instruments recorded subdued performance. The Company has initiated steps to explore newer product lines and cost efficiency measures to maintain competitiveness.

Given the current market environment, the Company expects demand to remain subdued in the short term. The management is focused on optimizing costs, improving operational efficiency, and exploring newer revenue streams such as customized and eco-friendly products. The outlook for the industry remains cautious, but opportunities exist in niche categories and digital integration.

The major concerns for the Company include sustained slowdown in demand, rising input costs, and increasing competition from digital tools. The Company is actively reviewing its business model and is adopting strategies to mitigate these risks, including rationalization of product portfolio and strengthening its distribution network.

The Company has in place adequate internal control systems, commensurate with the size of operations. These systems are periodically reviewed and strengthened to ensure reliability of financial reporting and compliance with applicable laws.

The details of Company performance is as follows, further the decline was mainly attributable to reduced demand and price pressure in the market. Profitability was impacted due to lower sales volumes and higher input costs, though the Company has initiated measures to control overheads and improve efficiency, also company doesnot have any income during the year.

The Company continues to focus on skill development, employee productivity, and efficient deployment of resources. Industrial relations remained cordial throughout the year.