Transteel Seating Technologies Ltd Management Discussions

Annexure C

INDUSTRY STRUCTURE AND DEVELOPMENTS India - Office Furniture Market

The Indian office furniture industry is experiencing strong growth, supported by evolving workplace trends, rising corporate expansion, and increasing awareness of ergonomics and employee well-being. The market has transitioned significantly over the past decade, with organized players steadily gaining market share over traditional unorganized manufacturers.

According to industry estimates, the Indian office furniture market is projected to grow at a CAGR of around 10-11% over 2024-2029, driven by demand from both commercial and institutional sectors. The growth is underpinned by the following factors:

• Expansion of Corporate Sector: Increasing investments in IT/ITeS, BFSI, start-ups, and manufacturing industries have resulted in rising demand for modern and modular office furniture.

• Workplace Transformation: The growing adoption of hybrid and flexible working models has created a need for ergonomic seating solutions, collaborative furniture, and modular layouts.

• Urbanization and Real Estate Growth: Rapid development of commercial real estate, technology parks, and co-working spaces across Tier I and Tier II cities is contributing to sustained demand.

• Digital Adoption: Online sales of office furniture have seen a sharp rise, with digital-first players and e-commerce platforms complementing traditional distribution networks.

• Sustainability Focus: Increasing preference for eco-friendly, recyclable, and durable furniture is influencing buying patterns among corporates and institutions.

Globally, the office furniture industry is also witnessing similar trends, with emphasis on ergonomic designs, environmentally sustainable materials, and smart workspace solutions. India, with its strong economic growth, rising urban workforce, and favourable government policies (such as higher import duties on finished furniture to encourage domestic manufacturing and BIS standards for modular furniture), remains well-positioned to emerge as a key manufacturing hub in the sector.

Overall, the outlook for the office furniture industry in India is positive, driven by demand across corporate, SME, institutional, and co-working segments, providing ample opportunities for growth for established manufacturers as well as innovative emerging players.

Company Overview

Incorporated in 1995, Transteel Seating Technologies Limited is a trusted furniture provider, and has been catering to businesses of all sizes for nearly three decades. The Company has developed the skill and expertise in making chairs, office furniture and other residential and commercial furniture. Over

the years Transteel has continued to focus on what it does well i.e. craft performance-oriented tables and chairs. The furniture solutions are a delightful mix of design, value, and ergonomics, which ensure that your back stays in good shape, day after day. The Companys professionals are devoted to developing an exclusive product range capable of gaining nationwide appreciation for its remarkable finish, unique designs, trendy colour combinations, flawless detailing, unbreakable quality and higher durability. The company has also developed an in-house technical & Design team to provide turnkey solution and implementation of interior and workspace in Commercial, Residential and Educational Institutions.

The Companys proficiency lies in understanding the specific requirements of its customers and based on which they take the orders, exclusively design products according to the requirements and deliver the final product.

In 2019, the Company took a significant leap by adopting a digital-first approach, revolutionizing the way customers engage with the brand. This shift has made it incredibly convenient for customers to browse and purchase the Companys exceptional range of high-quality furniture online. With its first digital approach, Transteel has empowered customers to effortlessly transform their office spaces by selecting furniture that suits their requirements, style, and budget. Transteel continues to lead the industry with our extensive product range, superior quality, and customer-centric approach.

Transteel differentiates itself from its competitors by introducing innovative products that address consumer needs, market trends, and provide superior value. Its diversified product portfolio caters to various preferences and segments, including education, healthcare, hospitality, banking, insurance, and InfoTech. This diversification makes them less susceptible to shifts in consumer preferences and market trends. The company consistently supply quality, ready-to-use products year-round, meeting safety standards and customizing them to market demand. Their stringent quality checks ensure high performance, and they continually strive to expand our product line, seeking complementary products that offer better value addition and higher margins.

Our Products:

1. WFH - Work from Home Furniture

2. Ergonomic Chair

3. Office Table

4. Workstation

5. Office Storage Units

OPPORTUNITIES AND THREATS

We operate in a market valued at approximately ^43,000 crore, growing at a healthy CAGR of 12%. Our strategic investments in digital technology, coupled with a digital first approach to customer acquisition, are delivering strong results and have helped us establish a robust pipeline of inquiries and orders.

The recent return-to-office mandates by large corporate occupiers further enhance growth prospects, aligning well with the strong brand equity we have built over the last three years.

At the same time, we must remain vigilant against certain threats. Rising input costs are compelling us to consider upward revisions in selling prices, which could impact competitiveness. The presence of a

large unorganized sector?primarily driven by personal networks and price sensitivity?remains a challenge. In addition, outward logistics and extended transit times, especially for customers in North India, continue to pose operational hurdles.

SEGMENT-WISE AND PRODUCT-WISE PERFORMANCE

We are currently operating exclusively within the office furniture segment, from which we derive 100% of our revenues.

FUTURE OUTLOOK

Transteel is a well-established name in the office furniture industry, known for its commitment to quality, durability, and affordability. Going forward, the company is focused on scaling through a collaborative, asset-light business model with forward integration, value delivery and passive growth without increasing overheads. The emphasis remains on error-free, data-driven design-build solutions rooted in sustainability and virtual design construction. With a sharp focus on improving profitability and enhancing company valuation, Transteel is strategically working toward its next milestone: achieving our revenue target of ?600 crore revenue target within the next three years.

RISKS AND CONCERNS

The large unorganized sector, which relies heavily on personal relationships, poses a significant threat to us. Additionally, challenges related to outward logistics and extended transit times, particularly for customers in North India, further impact our operations. Moreover, our ability to raise selling prices to offset rising input costs also presents a challenge.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of operations. These systems are routinely tested and certified by Statutory as well as Internal Auditor and cover all offices, factories and key business areas. Periodical reports and significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee is headed by an Independent Director, and this ensures independence of function and transparency of the process of supervision and oversight. The Audit Committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Companys risk management policies and systems. The Company conducts its business with integrity and high standard of ethical behaviour and in compliance with the laws and regulations that govern its business.

DISCLOSURE ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Please refer to the Boards Report.

HUMAN RESOURCES

Your Company fully values the Human capital; it deploys and credits its success to them. It has been the consistent endeavour of the Company to create a congenial and challenging working atmosphere wherein every employee can develop his own strength and deliver to his full potential.

During the year under review, industrial relations in the factory were cordial and pro-active and all employees and the Union supported productivity and process improvement measures undertaken at all the functions of the Company. Their unstinted co-operation has enabled the unit to achieve continuous growth, both quantitatively and qualitatively. Your Company continued to maintain excellent industrial relations with all its employees and independent job work firms. Adequate safety and welfare measures are in place and your Company will continue to improve the same on ongoing basis.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS COMPARED TO PREVIOUS YEAR

FORWARD-LOOKING STATEMENT

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates, and others may constitute forward-looking statements within the meaning of applicable laws and regulations.

Actual results may differ from such expectations, whether expressed or implied. Several factors could make a significant difference to our operations. These include climatic and economic conditions affecting demand and supply, government regulations and taxation, any epidemic or pandemic, and natural calamities over which we do not have any direct/indirect control.

For Transteel Seating Technologies Limited.