Redtape Ltd Management Discussions

Forward Looking Statement

The statements in this Management Discussion and Analysis Report concerning the Companys goals, projections, estimates, expectations, or predictions may be considered ‘forward-looking statements as per applicable securities laws and regulations. It is important to acknowledge that actual outcomes may differ significantly from those indicated in these statements. Several key factors could influence the Companys operations, including the availability and pricing of raw materials, cyclical demand and pricing trends in its primary markets, changes in government regulations and tax regimes, economic developments both in India and in the countries where the Company operates, and other related factors.

Unless otherwise specified or the context otherwise requires, all references to "we," "us," "your", "our," "the Company," or "REDTAPE" pertain to REDTAPE Limited.

In 2025, the revenue generated in the Footwear market in India amounts to USD 33.86bn.

It is expected that the market will grow annually by 7.73% (CAGR 2025-2030).

In relation to the total population figures, it is expected that per person revenues of USD 23.28 will be generated in the Footwear market in India in 2025.

The market volume is expected to amount to 4.0bn pairs by 2030, with a volume growth of 9.5% expected in 2026.

The average volume per person in the Footwear market is expected to be 1.86pairs in 2025.

It is also noteworthy that by 2025, 97% of sales in the Footwear market in India will be attributable to non-luxury.

Indias footwear market is thriving due to a growing middle class and a rise in e-commerce sales.

India is increasingly adopting non-leather footwear, a trend driven by younger, fashion-conscious consumers with more disposable income. This shift is supported by factors like rising middle class, urbanization, and a preference for branded and casual footwear. E-commerce has also expanded access to various footwear styles. Footwear has become a fashion statement, leading to an increase in both the volume and price of sales. People now own multiple pairs of footwear for different occasions, including casual, formal, dress, and athletic styles.

India has solidified its position as the second-largest producer and consumer of footwear in the world, following only China.

The apparel market size has grown strongly in recent years. It will grow from $692.42 billion in 2024 to $736.58 billion in 2025 at a compound annual growth rate (CAGR) of 6.4%. The growth in the historic period can be attributed to strong economic growth in emerging markets, a rise in foreign direct investments, increased demand for man- made fibers, and technological development.

Due to the increasing disposable income among consumers in emerging economies is significantly driving the global apparel market.

Emerging economies such as China, India, Brazil, and others are experiencing rapid urbanization, industrialization, and economic growth, enabling the middle class with higher purchasing power.

Growing consumer demand for sustainable and environmentally friendly products, including apparel, is likely to develop growth trends for this market.

Consumers are urging brands to adopt transparent supply chains, minimize waste, and enforce fair labour practices to meet this demand.

Sustainable practices mitigate negative ecological, social, and economic impacts while promoting long- term well-being and resilience.

Social media has greatly influenced fashion preferences, shaping consumer choices and shopping preferences. Influencers use social media to showcase multiple fashion trends, offering inspiration and guidance on incorporating these styles into everyday or special occasion attire.

The female fashion industry is experiencing a surge in demand for new trends and diverse options.

Due to likelihood of returns or exchanges pursuant to incorrect sizing or dissatisfaction with the product, jolts the confidence of Customers.

Indias apparel industry faces challenges including economic instability and rising costs for raw materials and labour.

Whenever global supply chain disruptions and geopolitical events become adverse then apparel industry comes under the doldrums.

Intensified competition from international brands and an unorganized sector, alongside a talent deficit and outdated infrastructure, create barriers to growth.

The apparel industry continues to grapple with infrastructure gaps, leading to inefficiencies, especially in its supply chain.

Global brands are imposing stricter environmental norms and compliance requirements, demanding higher use of renewable energy and waste recycling.

While digital tools like AI and 3D design offer opportunities, widespread adoption for efficiency and innovation remains a challenge.

There is a significant need for increased textile recycling efforts to address the growing problem of fashion waste and meet sustainability goals.

We have strong Promoter relationships, and our credit rating has already been improved.

The outlook for the Indian economy remains optimistic. Structural tailwinds, including demographic advantage, sustained infrastructure investment, a deepening digital ecosystem and manufacturing competitiveness, are expected to drive long term growth. The Indias internet economy will likely to reach $ 1 Trillion by Financial Year 2030, accounting for roughly one fifth of the nations GDP in Financial Year 2030, as per State of Indias Digital Economy (SIDE) Report Financial Year 2025.

Through our live social media engagements & in stores events, we collaborate with leading fashion bloggers, vloggers & influencers and organise our brand messages to a wider audience. Our customers our largest influencers and advocates. We reach a growing online audience through Amazon, AJIO, Flipkart, Myntra, Nykaa Fashion & Tata CliQ etc.

We are striving to achieve the following undermentioned milestone by the Financial Year 2030-31. Also note that these milestones are projection which can be change as per the prevailing market conditions, cost of inputs & geopolitical scenarios.

Estimated turnover of Rs. 5000 Crore.

Creation of two brands.

Listing in the foreign county.

Opening of 1000 retail stores.

Enhancement of revenue from the women category by 50 %.

For our products, kindly refer initial pages the of Annual Report.

Apparel Industry

Increasing affluence, especially among urban and semi-urban middle-class households, is directly contributing to an elevation in fashion preferences, with consumers now seeking better quality, trend alignment, and brand value. This shift is further amplified by increasing social media influence and access to global fashion via digital platforms.

Indias demographic profile remains one of its greatest strategic advantages. With a median age of

28.2 years, the country boasts one of the youngest consumer bases among major global economies.

This youth-centric demographic is:

More open to experimental and fast fashion,

Highly responsive to digital marketing and influencer culture,

And naturally aligned with mobile commerce and app-based shopping.

The rising influence of Gen Z and Millennials—who together account for over 65% of Indias working population—is expected to be the single-largest driver of demand in the apparel sector over the next decade. These consumers are digitally savvy, brand-aware, and highly aspirational, propelling demand not only for western wear and athleisure, but also for sustainable and inclusive fashion

The Indian footwear industry is poised for robust growth in the coming years, driven by evolving consumer preferences, advancements in technology, and an increased focus on sustainability. Here are the key trends and opportunities shaping the future:

Indian consumers are increasingly leaning toward premium and branded footwear, with a focus on quality, design, and comfort. This shift is particularly prominent in urban areas, where global and domestic brands are expanding their reach.

Technology will play a pivotal role in shaping the future of the industry. From AI-driven manufacturing processes to smart footwear with integrated health trackers, innovation will cater to a tech-savvy consumer base.

Sustainability will remain a key focus area, with consumers demanding eco-friendly materials and ethical production practices. Companies like RedTape Footwear are expected to lead the way by adopting sustainable manufacturing practices and leveraging innovative, environmentally conscious materials.

Indias position as a leading footwear producer presents significant opportunities in global markets. With government support for exports and growing demand for affordable yet high-quality footwear, Indian brands have the potential to further strengthen their foothold in international markets.

The world is looking at India, and several developed economies are negotiating FTAs with our Country. The Commerce industry is engaged in the negotiations day in and day out. In the morning, offices open in Australia and Japan; by afternoon Europe is active; in the evening, discussion begin with the US and with Peru and Chile and such development will surely bring favourable result for our Economy.

The footwear market stands at a pivotal juncture where tradition meets innovation. As consumers increasingly expect personalized experiences, sustainable practices, and technological integration, brands must evolve their approaches to remain competitive. The most successful companies will blend digital convenience with authentic brand storytelling, creating meaningful connections with consumers across multiple touchpoints.

With projected growth exceeding $570 billion by 2030, the footwear industrys continued adaptation to changing consumer behaviours, technological advancements, and sustainability demands will define its success in the years ahead.

We have an adequate system of internal financial controls in place commensurate with the size, scale and complexity of the operations of the Company. We have documented policies and procedures covering all financial and operating functions. These controls have been designed to provide a management efficiency, measurability and verifiability, assurance regarding maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, and protecting assets from unauthorized use or losses, executing transactions with proper authorisation, compliances with regulations. This is to timely identify and manage the Companys risks (operational, compliance-related, economic and financial).

We have continued our efforts to align all our processes and controls with global best practices.

Some significant features of the internal control of systems are:

The Audit Committee has been constituted, and it regularly reviews the audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards as well as reasons for changes in accounting policies and practices, if any.

A monitoring process is in place to track the implementation of audit recommendations, including those related to enhancing the Companys risk management systems.

Documentation of major business processes and testing thereof including financial closing, computer controls and entity level controls, as part of compliance program, as required under the Companies Act, 2013.

Robust Enterprise Resource Planning, supplier relations management and customer relations management connect our different locations, dealers and vendors for efficient and seamless information exchange.

Detailed business plans for each segment, Investment Strategies, year-on-year reviews.

A well-established, independent, multi- disciplinary Internal Audit team operates in line with governance best practices. It reviews and reports to Management and the Audit Committee about compliance with internal controls and the efficiency and effectiveness of operations as well as the key process risks.

The Board of Directors, responsible for the internal control system, sets the guidelines and verifies its adequacy, effectiveness and application.

As part of the efforts to evaluate the effectiveness of internal control systems, the Internal Audit Department review control measures on a periodic basis and recommend improvement, wherever appropriate.

The Audit Committee regularly reviews the audit findings as well as adequacy and effectiveness of the Internal Control measures.

During the last year, our Company got its Internal Financial Control System (IFCS) checked & verified by the Grant Thornton Bharat LLP as well and the report of the same was duly presented to the Audit Committee, Internal Auditors, Statutory Auditors and further discussed with the Board of Directors. No adverse findings were recognized during such verification although there were suggestions for the more improvements. We shall endeavours our efforts for above financial controls for the better financial functioning of the Company because money saved is money earned.

The Company places significant emphasis on human resource development, focusing on identifying key competencies,

nurturing talent, and providing employees with structured training and learning opportunities. Continuous development initiatives ensure that employees are well-equipped to address present challenges while also preparing them for future growth prospects within the organization.

As a new-age organization, REDTAPEs approach to talent management includes:

To foster innovation, employees are encouraged to experiment with new ideas and processes that break away from routine practices. Teamwork is further strengthened through structured team-building events and collaborative initiatives. Additionally, strategic employee retention measures have been integrated across the companys operations to sustain long-term engagement.

The Human Resources and Secretarial Departments, in collaboration with functional heads, work actively to uphold workplace ethics and address concerns. Notably, during the year under review, no complaints were filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, reflecting our commitment to a safe and respectful workplace.

The Company is equally focused on employee health and safety, with robust systems in place to foster a safe working environment across all units. Our "zero-injury" culture is driven by continuous improvement initiatives and employee-driven suggestions, reinforcing a strong sense of belonging and accountability.

Sales Composition by Category:

Footwear & Footwear Material: 60%-61%

Garments & Accessories: 37%-38%

Others: 0%-1%

Retail Sales: 62% – 64%

Online Sales: 31% – 33%

Licensee Sales: 3% – 4%

The key indicators of the financial performance of the Company for the Financial Year 2024-25 were as under:

Amount in INR Lakhs

Amount in INR Lakhs

Actual results, performance, or achievements may differ materially from those expressed or implied in such forward-looking statements due to several factors, including but not limited to:

Demand and supply dynamics in domestic and international markets,

Volatility in raw material costs and availability,

Changes in government policies, regulatory frameworks, and tax regimes,

Global and regional economic and political developments,

Competitive pressures and market conditions,

Outcomes of legal proceedings and labour negotiations, and

Other risks inherent to the Companys business operations.

The Company does not undertake to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.