T T Ltd Management Discussions

Indias textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum, with the capital-intensive sophisticated mills sector at the other end. The fundamental strength of the textile industry in India is its strong production base of a wide range of fibre/yarns from natural fibres like cotton, jute, silk, and wool, to synthetic/man-made fibres like polyester, viscose, nylon and acrylic.

The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of textiles industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles makes it unique in comparison to other industries in the country. Indias textiles industry has a capacity to produce a wide variety of products suitable for different market segments, both within India and across the world.

The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach USD 350 billion by

2030. Current annual size of the market is about USD 170 billion

India is the worlds 3rd largest exporter of Textiles and Apparel

India ranks among the top five global exporters in several textile categories, with current exports being around USD 35 billion

The textiles and apparel industry contributes 2.3% to the countrys GDP, 13% to industrial production and 12% to merchandise exports.

The textile industry in India is predicted to double its contribution to the GDP, rising from 2.3% to approximately 5% by the end of this decade.

Textile manufacturing in India has been steadily recovering amid the pandemic.

The Indian Technical Textile market has a huge potential of a 10% growth rate, increased penetration level of 9-10% and is the 5th largest technical textiles market in the world.

Indias textile industry is structured into two main sectors: the organized sectors which include large mills and unorganized sector, which consists of small scale, informal mills. The industry is segmented into various phases such as spinning, weaving, finishing and apparel manufacturing, each playing a critical role in the overall process.

The organized sector typically uses modern machinery and adheres to labour laws, providing higher wages and stable employment to its workers. On the other hand, the unorganized sector often operates with older equipment and lessformalworkingconditions,contributingsignificantlyto employment but often under less regulated environments.

Smart Textiles The future of textiles is moving toward functionality. Smart textiles, which can respond to external stimuli such as heat, light, or moisture, are expected to be a major trend by 2025. These textiles can be used in medical, sports, and fashion applications, such as garments that monitor health parameters or adapt to environmental conditions.

Example: Textile companies in India are already experimenting with fabrics that change color based on temperature and moisture levels, providing added value in sectors like sportswear and healthcare.

Technical Textiles Technical textiles, which include products used in industrial, medical, and aerospace applications, are rapidly growing in India. The government is promoting technical textiles as part of its focus on high-value-added products. By 2025, India aims to become a key player in the global technical textiles market, which is expected to grow substantially in the coming years.

Digital and 3D Printing Digital printing and 3D textile printing are emerging as game-changers in the Indian textile industry. These technologies enable faster and more customized production, reducing waste and allowing for greater design flexibility. As fashion trends change quickly, digital and 3D printing will allow manufacturers to keep up with demand and produce limited-edition, high-quality textiles.

Example: Textile designers in India are already using 3D printing to create intricate patterns and textures on fabric, offering consumers a unique, personalized experience.

1. Sustainability and eco-friendly textiles: With increasing global awareness around sustainability, Indian textile companies have a unique opportunity to lead in organic and eco-friendly fabrics. The demand for biodegradable materials, water-efficient processes, and ethical sourcing is rising, paving the way for innovative and sustainable business models.

2. Government initiatives and policy support: The Indian government continues to bolster the textile sector through schemes such as the Production Linked Incentive (PLI) scheme, Make in India, and tax incentives for exporters. These initiatives provide businesses with financial and infrastructural support, encouraging investment in modern manufacturing facilities.

3. Technological advancements and digital integration: Automation, AI-driven quality control, and smart textiles are transforming the industry. Digital platforms enable manufacturers to streamline supply chains, enhance production efficiency, and deliver better customer experiences. The rise of e-commerce has further opened direct-to-consumer opportunities for textile brands.

4. Export potential and global demand: India remains one of the top textile exporters globally. With rising global demand for affordable yet high-quality textiles, Indian manufacturers can leverage free trade agreements, diversified export markets, and global supply chain disruptions to strengthen their foothold in international markets. The two big game changers are the recently concluded UK FTA and the expected lower import tariffs from USA against its main competitors like China,

1. Supply chain disruptions and raw material costs: The volatility in raw material prices, particularly cotton and synthetic fibres, continues to impact production costs. Global supply chain disruptions, influenced by geopolitical tensions and climate change, also pose risks to material availability and pricing stability. Indias local fibre production reduces the risk substantially, however import duty and QCOs on raw materials reduces access to international competitive yarn and fibre.

2. Labour shortages and skill gaps: While India has a large workforce, a shortage of skilled labour in advanced textile manufacturing processes remains a challenge. Upskilling and vocational training programs are essential to equip workers with the expertise needed for modern textile production.

3. Competitive pressure from other markets: Countries like Bangladesh and Vietnam have emerged as strong competitors in textile exports due to lower labour costs and favourable trade agreements. Indian businesses must focus on innovation, announcement of FTA with UK along with the expected advantageous differential import tariff of USA will give India a clear advantage seeing unprecedented growth

4. Environmental regulations and compliance: As sustainability norms tighten globally, businesses must adapt to stricter environmental regulations. Investing in green technology, waste reduction strategies, and responsible sourcing is critical to meeting compliance standards and consumer expectations.

Increasing Global Demand for Textiles: India is positioned as a leading supplier of textiles globally. By growth in exports, driven by 2025,theindustryisexpectedtoseesignificant increasing demand in key markets such as the United States, Europe, and the Middle East. Indias textile exports are projected to reach $45 billion by 2026, up from the $38 billion mark in 2020. This growth is driven by Indias competitive manufacturing costs, skilled labor force, and the push to strengthen its export-friendly policies. The biggest game changer is going to be the recent UK FTA and the advantageous differential import tariff of USA against main competing nations like China, Bangladesh, Vietnam.

Sustainability and Eco-friendly Practices: As the world moves toward sustainability, the Indian textile industry is embracing eco-friendly manufacturing practices. Sustainable textiles, organic fibers, and eco-friendly dyes are expected to gain acceptance and become a standard in the coming years. The rise of sustainable brands and an increase in consumer awareness around eco-conscious products are prompting Indian manufacturers to adopt green technologies. Moreover, India is focusing on circular economy principles, recycling, and waste reduction in textile production. s is gaining momentum due to their low environmental fiber Example:Theuseofhemp,banana,andbamboo impact. Brands like Canaveda are leading the way in producing eco-friendly textiles from hemp and other sustainable fibers.

Technological Advancements and Automation: Technological innovations are revolutionizing the Indian textile industry. Automation, AI, and IoT (Internet of Things) are streamlining production processes, improving efficiency, and reducing costs. By 2025, we can expect more widespread adoption of technologies like smart textiles, digital printing, and automated stitching machines. The implementation of data analytics for real-time decision-making will also play a crucial role in optimizing supply chains and improving product quality.

Example: Automatic power looms, jacquard machines, and weaving technologies are already making an impact, helping Indian textile manufacturers scale production and meet international demand.

Government Initiatives and Policy Support: The Indian government is playing a pivotal role in transforming the textile sector through various schemes such as the Production Linked Incentive (PLI) Scheme for Textiles and the National Textile Policy. These initiatives aim to boost manufacturing, exports, and job creation. By 2025, the government plans to enhance the competitiveness of the Indian textile industry, especially in high-value-added segments like technical textiles and apparel.

Example: The PLI scheme, which focuses on enhancing the manufacturing of textiles and apparel, is expected to attract large investments, particularly in high-tech fabrics, and create numerous job opportunities. Growth in Domestic Market: The Indian textile industry is not just focusing on exports. Domestic demand for textiles is expected to grow at a steady pace. With the growing middle class, changing fashion trends, and rising disposable incomes, the demand for both traditional and modern textiles will soar. By 2025, the domestic market is expected to contribute significantly to the textile industrys growth.

Example: The increasing popularity of fusion wear, combining traditional and contemporary styles, is driving growth in the domestic fashion market. The rise of e-commerce platforms is further expanding the reach of textile brands in India.

These risks have a broad scope that covers elements like workers health and safety, product quality, management externalities, and regulatory compliance. Monitoring factory conditions and work processes can help gauge your overall risk exposure on specificoperations and facilitate the necessary improvements.

A study by the Institute of Supply Management revealed that about 75 percent of organizations reported supply disruptions since the commencement of the pandemic, and this brought about a renewed focus on supply chain risk mitigation. Maximum purchases are from india, hence not much logistic risk, however there is always risk of delayed supplies from Indiansuppliers.Thebiggerriskisthefluctuatinginternational freight rates and lead times while exporting.

With a birds-eye view of the entire industry, you must closely follow trends in trade policies, competitive landscape disruptions, and macroeconomic developments. Its also essential to monitor changes to your controls, especially in todays business environment that experiences quick and frequent adjustments. Staying ahead of these risk factors will help you anticipate market developments and adapt your business strategies accordingly. Textiles is a global industry and hence both supply & demand is impacted by the events across the globe.

To stay ahead of compliance risk, organizations in the textile industry must meticulously understand the regulations governing their sector, evaluate their adherence level with each, identify any control setbacks, and take relevant corrective measures. These steps will prevent the finesand reputational damage resulting from non-compliance.

H. RISK MANAGEMENT

Companyhas definedrisk management well- framework in place. Further, it has established procedures to periodically place before the committee and Board, the risk assessment and management measures.

The Company has reworked its dependence on cotton fibre and has shifted more of its fabric and garments to cotton/manmade fibre blends to reduce the risk of its business due to cotton volatility. However, we believe that risk has not subsided yet and we are constantly monitoring the situation. introduction of credit insurance that apart from reducing Asignificant bad debt, also give the Company confidence to sell more aggressively in the domestic market on credit. In exports, the Company does not sell anything on unsecured credit.

The continuous use of digitalization in life is also an important signal that the Company needs to connect more digitally with its distributors, retailers, and customers. The Company is continuously working on the same and recognises the importance to embrace technological changes sooner than later.

The Risk Management Policy may be accessed on the Companys website at the link .

I. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, the Company achieved Revenue from operations of Rs. 21443.15 lakhs as compared to Rs. 21,102.89 lakhs in the previous financial year. Further, the Company has earned profit after tax and exceptional items of Rs. 409.91 lakhs in the current financial year as against profit of Rs. 463.19 lakhs in the previous financial year.

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The internal Audit functions reports to the Chairman of the Audit Committee and to Chairman and Managing Director of the Company.

The Internal Audit monitors and evaluates the efficiency and adequacy of internal control systems in the company. Its compliances with operating systems, accounting procedure and policies at all locations of the Company.

“An organization is only as good as the people within” is an axiom, which the company understands and appreciates deeply. The Company continues to emphasize on its commitment to acquiring, developing and enhancing its human resources. Recruitment and retention of intellectual capital is a key management exercise. The Companys human capital constitutes a diverse pool of knowledge, a judicious mix of youth, imaginations, risk · taking ability and seasoned experience.

The Company follows a continuous performance appraisal system to ensure the employees are dynamically being trained and appraised about improvement areas and performance gaps. Further the management maintains an open-door policy, to ensure free flow communication with all levels.

The financial statements of the Company are prepared in accordance with Indian Accounting Standards (Ind AS) under historical cost convention on accrual basis except for certain financialinstruments which are measured at fair values, the provisions of the Companies Act 2013(the Act) and guidelines issued by the Securities & Exchange Board of India (SEBI). The Ind AS are prescribed under section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standard) Rules, 2015 and relevant amendment rules thereafter.

Statements made in this report forming part of the disclosure related to Management, Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be ‘forward·looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the operations include economic developments within the country, demand and supply conditions in the industry, input prices, changes in government regulations, tax laws, and other factors such as litigation and industrial relations.

The Directors of the Company wish to express their appreciation for the continued co·operation of the

Central and State Governments, bankers, financial institutions, customers, dealers and suppliers and all the valuable assistance received from the shareholders. The Directors also wish to thank all the employees of the Company for their contribution, support and continued cooperation throughout the year.