T T Ltd Management Discussions.

INDUSTRY OVERVIEW

The business of the Company spans the entire textile chain - Fibre to Fashion. It also has some interests in renewable energy. However its predominant business is textiles. A brief overview is enclosed.

STATUS OF THE INDUSTRY:

The textile industry holds significant presence in Indian economy. The textile and apparel industry can be broadly divided into two segments - yarn and fiber, and processed fabrics and apparel. India accounts for -14 per cent of the worlds production of textile fibers and yarns. The domestic textile industry in India is estimated to reach US$ 250 billion by 2019 from US$ 150 billion in July 2017, while cotton production in India is estimated to reach 37.7 million bales in FY18. Textile and apparel exports from India are expected to increase to US$ 82 billion by 2021. Exports of textiles from India reached US$ 27.59 billion during April 2017-March 2018. Readymade garments remain the largest contributor to total textile and apparel exports from India, contributing 47.69 per cent to total textile and apparel exports. Yarn and made-ups were the other major contributors with shares of 14.36 per cent and 12.89 per cent, respectively. Further, the industry which accounts for 21% of the total employment generated in the economy, contributes to around 8% of the total excise revenue collection. Moreover, in February 2017, as special reforms package was announced to generate around 11 million jobs in apparel sector, increasing exports to about Rs 2 Lakh crore and bringing investments worth Rs 80,630 crore by 2020. Around 35 million people are directly employed in the textile manufacturing activities. Indirect employment including the manpower engaged in agricultural based raw-material production like cotton and related trade and handling could be stated to be around another 60 million.

Textile exports have gone downhill in the recent past. Textile and apparel exports between April 2017 and January 2018 have declined by 4 percent from a year ago, at the time when imports of yarn, fabric and readymade garments rose 15 percent. One of the major anomalies in the textile business is Indias continuing focus on cotton fabrics, at the time when world is moving into manmade fibers that are most convenient and cost effective. Nevertheless, Indian textile Industry has the potential to double itself in size over the next 6-7 years, if it continues to focus on value addition, improved efficiency, modernization and integrated operations.

AN INDUSTRY ANALYSIS:

Textiles have seen a lot of volatility in cotton prices over the last few years. Being a global business and exports been almost 1/3 of the total Indian production - the industry especially fiber, yarn and fabric are impacted by global events. The exports of garments are mainly influenced bythe demand in developed countries like USA, Europe and Japan. However the domestic branded value added garment segment is mainly impacted by the local demand and supply determinants and is relatively less prone to global shocks. The duty free opening up of Bangladesh/Sri Lanka however does have a limited impact on the local Indian brands.

The cotton fiber and yarn business success determinants are power rates, relative dollar difference of fiber prices between other competition countries like China, Pakistan, and USA etc. The Indian industry is enjoying a relatively favorable position on fibers prices due to a good cotton crop and weak currency. Power costs vary across states; however the southern states of India face a relative disadvantage, as they have to run on DG sets due to acute power shortage. However many mills are buying power from 3" party sources to reduce their average cost. Overall the environment is positive for both cotton yarn and fabric.

Garments or the apparel business is a segment where India has huge untapped potential. According to estimates, apparel is produced by about 77,000 small -scale units. Made-ups have still performed better due to inherent competitive advantages. However with Europe showing signs of stability, USA/Japan picking up - the worst seems to be over. This upturn coupled with a weaker currency has helped Indian garment exports grow by over 15% in 2015-16 and the trend is expected to continue as compliance issues is restricting growth of countries like Bangladesh.

Overall the Indian textile industry is expected to grow by 10-15% in the next 5 years. Apart from incentives from the Central Government, many State Governments like Gujarat, Maharashtra, Rajasthan, and Madhya Pradesh 8i West Bengal have given aggressive policies for making investments in textiles. This has provided a very attractive platform for expansion in textiles. Estimated investment requirements over next 5 years to meet estimated demand are Rs. 1.5 lakh crores - hence opportunities are immense. Further the FTA with European Union is in advanced stages of negotiation - the signing of this would open a whole new opportunity especially for garment/made up exporters.

GOVERNMENT INITIATIVES

The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector underthe automatic route.

Initiative will be taken into consideration by Government of India.

• The Textiles Ministry will organize Hastkala Sahyog Shivirs in 421 handloom-handicrafts clusters across the country which will benefit over 1.2 lakh weavers and artisans.

• The Gujarat governments decision to extend its textile policy by a year is set. It is believes to attract Rs 5,000 crore (US$ 50 billion) of more investment in sectors across the value chain. The government estimates addition till now of a million units of spindle capacity in the spinning sectorand setting up of over 1,000 units in technicaltextiles.

The Textile Ministry of India earmarked Rs 690 crore (US$ 106.58 million) for setting up 21 readymade garment manufacturing units in seven states for development and modernization of Indian Textile Sector.

• The Directorate Generalof Foreign Trade (DGFT) has revised rates for incentives underthe Merchandise Exports from India Scheme (MEIS) for two subsectors of Textiles Industry - Readymade garments and Made ups - from 2 per cent to 4 per cent

OUTLOOK

The outlook for the Indian textile industry looks positive for medium to long term, buoyed by both strong domestic consumption as well as export demand. With massive economic development and subsequent rising labor costs coupled with appreciating Yuan, energy costs and domestic focus, China is slowly moving out of drivers seat vacating a textile trade space of more than $100 billion over next 5-6 years.

The implementation of Goods and Services Tax (GST) that will improve the textile industrys export competitiveness and the United States exit from the Trans-Pacific Partnership is likely to realign textile trade and investments towards the Indian subcontinent. A unified tax structure in the form of GST is likely to create a level playing field for the cotton and polyester industries, and promote enhanced sponsor interest towards the polyester chain. Further, textile companies would be able to deleverage their balance sheets in fiscal 2018 in the absence of major investments due to adequate capacities and pending uncertainty over the GST tax rates.

India Ratings expects an improvement in the credit profiles of textile companies, including raw cotton players, driven by lower cotton inventories, limited capital investments and reduced borrowing costs.

OPERATIONAL REVIEW

Please refer paragraph no. 2 & 3 i.e.; Review of Operations and Future Outlook in the Directors Report.

RISK MANAGEMENT

The Board of Directors in their meeting held on 11th November, 2015 had constituted Risk Management Committee of the Company. The committee has formulated Risk Management Policy of the Company which has been later on amended on 13th December, 2017 and subsequently approved by the Board of Directors of the Company. The aim of risk management policy is to maximize opportunities in all activities and to minimize adversity. The policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company.

The Risk Management Policy may be accessed on the Companys website at the link: http://www.ttlimited.co.in/investor/companypolicies

INTERNAL CONTROL SYSTEM

The Company maintains a system of internal control including suitable monitoring procedures. Real time, daily, weekly and monthly reporting systems are in place depending on the need to ensure suitable corrective measures are taken timely. Comprehensive internal Audit is also carried out by independent internal auditors to ensure compliance and identify weaknesses in the system. Findings of the Internal Auditors are quarterly reviewed by the Audit Committee. Furtherthe Company has in place an ERP system designed by Microsoft, USA.

Your Company is trying to achieve progressively "paperless" and "cash less" status by educating and emphasizing to all its partners the convenience, speed and accuracy of the same.

The top management is continuously involved in evolving better and newer systems/processes for more effective management of resources and better supervision/control.

HUMAN RESOURCES DEVELOPMENT

"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.

CAUTIONARY STATEM ENTS

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 Companys operations include economic developments within the country, demand and supply conditions in the industry, input prices, changes in government regulations, tax laws, and otherfactors such as litigation and industrial relations.

ACKNOWLEDGEMENT

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 thankall the employees of the Company fortheir contribution, support and continued cooperation throughout the year.