Vandana Knitwear Ltd Management Discussions

Your directors are pleased to present the Management Discussion and Analysis Report for the year ended 31^s1 March, 2025.

ECONOMIC AND INDUSTRY OVERVIEW GLOBAL ECONOMY Global Economic Overview - FY 2024-25

The global economy witnessed moderate but resilient growth during FY 2024-25, with global GDP expanding by 3.1% navigating challenges such as ongoing geopolitical tensions, evolving trade patterns and changing monetary policies. This was driven by easing inflationary pressures and robust consumer demand in key economies. Global inflation declined to 5.2% from 5.9% in FY24, reflecting normalization in commodity prices and improved supply chain efficiencies.

In response, governments worldwide recalibrated their economic strategies, focusing more on technological advancement, bolstering supply chain resilience and promoting economic diversification to drive long-term sustainable growth.

Global inflation eased from 6.6% in CY 2023 to 5.7% in CY 2024, largely due to effective monetary policy measures and improved stability in energy markets. These developments helped restore price stability and reinforced the momentum of global economic recovery. Emerging markets and developing nations were the primary engines of growth, expanding by 4.3%, compared to a 1.8% increase in advanced economies. This divergence was fuelled by robust domestic demand, rising foreign investment and reduced dependence on external trade.

Outlook

Global economic growth is anticipated to remain modest over the next few years, with forecasts indicating a 2.8% increase in CY 2025 and 3.0% in CY 2026. This outlook is supported by a gradual reduction in inflation and sustained efforts by central banks to maintain economic stability through targeted monetary measures. Emerging markets are projected to sustain robust growth, with an estimated expansion of 3.7% in CY 2025, whereas advanced economies are expected to recover at a slower pace, posing a growth rate of approximately 1.4% in the same year

inflation is expected to continue its downward trend, reaching 4.3% in CY 2025 and 3.6% in CY 2026, which is likely to bolster consumer spending. Despite recent tariff increases impacting global trade, the resilience and interdependence of the global economy remain intact.

In response to evolving market conditions, both governments and businesses are actively reconfiguring supply chains in response to shifting dynamics. Additionally, ongoing advancements in technology, rising workforce productivity and improved infrastructure are poised to support sustainable long-term economic growth, contributing to renewed global optimism.

Indias Economy and Industry Overview

India remains a standout performer on the international stage and is expected to continue leading global growth. Despite a slight downward revision from its earlier forecast in January 2025 to factor in heightened global trade tensions and uncertainty, the IMF has projected India to remain the fastest- growing major economy over the next two years, with Indias GDP expected to grow at 6.2% in 2025 and 6.3% in 2026

The global textile market size was valued at approximately USD 1,976.84 billion in 2024, with growth driven by increasing demand for functional fibres, technological progress and heightened customer awareness of environment-friendly and sustainable products. The Asia Pacific region dominated the market with 54% of the global share in 2024, with major contributions from India, China and Bangladesh.

Factors such as raw material availability, a young fashion-conscious population and favourable government policies fuelled the regions growth.

Looking ahead, the global textiles market is poised for substantial expansion, reaching an estimated USD 3,047.24 billion by 2030. The sectors future will be shaped by continued advancements in smart textiles, growing applications in technical fields and a shift towards sustainable production. India continues to play a significant role in driving global economic growth, with GDP grew by 6.5% in FY 2024-25 despite global challenges, such as geopolitical conflicts, supply chain disruptions and shifting trade dynamics.

This growth is supported by strong rural demand, increasing foreign investment and government initiatives aimed at boosting consumption and capital expenditure. While the service sector has seen steady expansion, manufacturing remains a major pillar of the economy. The governments emphasis on "Make in India" and the National Logistics Policy is catalysing a renewed focus on manufacturing, which is being positioned as a central pillar of Indias longterm economic strategy. With favourable demographics, improving ease of doing business, and supply-chain diversification, India is emerging as a global alternative manufacturing hub.

Within this broader context, the textile and apparel sector, a cornerstone of Indias industrial ecosystem, is witnessing significant transformation. Structural reforms such as the Production Linked Incentive (PLI) Scheme, establishment of PM-MITRA Textile Parks and programmes like Samarth for skill upgradation and the National Technical Textiles Mission (NTTM) further support innovation, capacity, and exports, all intended together to make the sector modern. Expansion in textile manufacturing is also being driven by rising domestic consumption, increased export potential, and greater adoption of automation and sustainable practices.

Yarn manufacturing, forming the upstream base of the textile value chain, plays a critical role in enabling downstream segments such as Apparel and garments, technical textiles, automotive fabrics, and home furnishings. The demand for Polyester Filament Yarn (PFY) in particular is growing steadily due to its durability, versatility, and alignment with sustainability trends, especially in dope-dyed variants that eliminate water intensive dyeing processes. Companies with integrated capabilities, cost-efficiency, environmentally friendly manufacturing practices, sustainable energy solutions, and proximity to key markets are well-positioned to benefit from this shift.

India ranks among top textile exporters with 4.6% global share.

5th largest producer of technical textile.

2nd largest producer of Cotton, Polyester, Viscose & Silk

Indias manufacturing sector, along with supportive government measures played a crucial role in expediting economic growth and bolstering employment opportunities. India has now become the 4th largest economy of the world, ahead of Japan. The countrys per capita income has also doubled in last 10 years.

Global Textile Industry

The global textile industry, valued at US $ 1,976.84 billion in FY 2024, exhibited steady growth driven by the increasing demand for natural fibres. Additionally, the Asia Pacific region, remained a dominant market owing to its easy access to raw materials, a young population driving demand for fashionable apparel and significant government investments in countries, such as India, China and Bangladesh. The industry is highly fragmented, with a broad spectrum of offerings, which spans clothing and home decor to technical and medical textiles. Moreover, it has major players continuously adopting strategies to strengthen their market positions.

The textile market size has grown strongly in recent years. It will grow from $640.43 billion in 2024 to $696.16 billion in 2025 at a compound annual growth rate (CAGR) of 8.7%. The growth in the historic period can be attributed to growth in world population, increased demand for man-made fibers, government initiatives for the textile industry, strong economic growth in emerging markets and a ban on plastic usage. The anticipated growth can be attributed to continued global population growth and urbanization, rapid e-commerce expansion, rising leisure spending, increased retail penetration, and greater internet and smartphone usage. Additionally, the demand for contactless delivery solutions is expected to propel market growth further.

AT VO Enterprises Limited

(Formerly Known as Vandana Knitwear Limited)

period can be attributed to growth in world population, increased demand for man-made fibers, government initiatives for the textile industry, strong economic growth in emerging markets and a ban on plastic usage. The anticipated growth can be attributed to continued global population growth and urbanization, rapid e-commerce expansion, rising leisure spending, increased retail penetration, and greater internet and smartphone usage. Additionally, the demand for contactless delivery solutions is expected to propel market growth further.

The textile market size is expected to see strong growth in the next few years. It will grow to $915.96 billion in 2029 at a compound annual growth rate (CAGR) of 7.1%. The growth in the forecast period can be attributed to global population growth and urbanization, a rapid growth in ecommerce, rising spend on leisure, increasing retail penetration, increasing internet penetration and smartphone usage and growing preference for contactless delivery solutions. Major trends in the forecast period include focus on adopting digital textile printing inks, focus on use of non-woven fabrics, focus on using organic fibers, focus on sustainable fibers, focus on using blockchain in the manufacturing processes, focus on implementing digital platforms in textile supply chain management, focus on collaborating with technology companies to design and develop smart fabrics, focus on adopting robotics and automation, focus on investing in artificial intelligence and focus on partnerships and collaborations to develop innovative products.

Key trends shaping the future of the textile market include the adoption of digital textile printing inks, non-woven and organic fibres, sustainable practices, blockchain technology in manufacturing, and digital platforms in supply chain management. Moreover, there is a growing focus on smart fabrics, robotics, automation, artificial intelligence, and strategic partnerships to develop innovative products.

Companies in the textile industry are well-positioned to capitalise on these trends by expanding their online presence, leveraging e-commerce platforms, and integrating advanced technologies.

Artificial intelligence (Al) in textile manufacturing is a key trend gaining popularity in the textile market. Textile manufacturers are increasingly using artificial intelligence (Al) to improve production processes and product quality. Artificial intelligence is also being used for the quality inspection of fabrics.

INDUSTRY OVERVIEW

Indian textile and apparel industry

The textile and apparel industry being a major economic driver, contributes significantly to the nations GDP and employment generation. As one of the largest sources of employment after agriculture, the sector engages over 45 million people directly.2 The industry witnessed steady growth 2024, with the market value reaching an estimated US$ 222.08 billion and is projected to sustain its growth in the upcoming years.3 This growth is expected to be propelled by rising domestic consumption, with Indias expanding middle class fueling demand for high-end and branded apparel and the exponential rise in online retail that has made fashion more accessible across both urban and rural markets. The sector benefits from a unique blend of traditional craftsmanship and modern innovation, displayed at landmark events like Bharat Tex 2025, which drew global attention to Indias capabilities in sustainable textiles.

Outlook

The textile and apparel industry stands as a key driver of economic growth. However, it has reinforced its global market presence as well. The sectors export potential strengthened, supported by expanded trade alliances, improved infrastructure and a favorable policy environment. Also, government support, technological advancement, rising consumer demand and FTA major consuming countries has set Indias textile and apparel industry for a high growth trajectory, thereby, propelling sustained expansion and innovation in the forthcoming years.

OPPORTUNITIES AND THREATS AND FUTURE OUTLOOK GLOBAL ECONOMIC CONDITIONS

Opportunities: The Indian textile industry is witnessing a growing emphasis on sustainability, transcending beyond organic cotton and improved working conditions. Companies are now overhauling their entire

value chain, from raw material sourcing to production, supply chain management, and waste recycling, shifting from a linear to a circular model. This comprehensive strategy addresses both pre- and postconsumer waste, positioning sustainability as a fundamental element of the industrys future.

The technical textiles sector is making strides by producing advanced fabrics through the application of cutting-edge technology to both natural and synthetic fibres. Emphasising durability, insulation, and heat resistance, fabrics like Nomex, Kevlar, and Spandex are finding applications across healthcare, automotive, construction, and security sectors. The growing demand for technical textiles, especially in medical, ecofriendly, industrial, sports, healthcare, automotive, and housing applications, is set to shape the future trajectory of the textile industry. Bharat Tex 2024 is an excellent platform to highlight Indias exceptional capabilities in the textile industry

Government initiatives

he Indian governments proactive initiatives and policies play a crucial role in driving growth in the textile industry. Programs such as the Make in India campaign and the National Textile Policy aim to promote domestic manufacturing, boost exports, and attract investments into the sector.

Government support and separate recognition of technical textiles in policy frameworks.

Policy and Export Incentives:

PLI scheme offers capital support for MMF investments and scale-up. PM-MITRA Textile parks promote integrated clusters with shared infrastructure. Indias strong cotton and growing polyester base improves export competitiveness.

Digital Transformation and E-Commerce:

The rapid growth of e-commerce platforms presents new avenues for market expansion in the Indian textile industry. With the increasing penetration of smartphones and internet connectivity, online retailing has become increasingly popular among Indian consumers. Textile companies can leverage digital channels to reach a wider audience, improve customer engagement, and enhance the overall shopping experience. According to the Ministry of Electronics and Information Technology, Indias digital economy is expected to reach USD 1 trillion by 2025, offering immense opportunities for textile businesses to capitalize on digital transformation and e-commerce trends.

Strength

Large integrated players benefit from economies of scale in production and procurement. Adoption of automation and advanced machinery ensures consistency and throughput. Integrated Polymerization Spinning and texturizing reduce handling costs and lead times.

Weaknesses

Synthetic yarns depend on crude oil derivatives (PTA, MEG), whose prices are unpredictable. Cotton yields are susceptible to climate variation and global supply trends. Fluctuations impact temporary demands, working capital and pricing strategy

Traditional dyeing processes are water-intensive and generate effluents. Energy consumption in spinning and heating processes adds to the carbon footprint. Growing need for compliance with environmental regulations adds cost and complexity.

Threats: The industry is grappling with high material prices, which have been a persistent issue. Fluctuations in the costs of essential raw materials, such as cotton and synthetic fibres, can lead to increased production expenses, affecting profit margins.

A notable decline in export demand has been observed, with textile and apparel exports registering a decrease of 3.24% in 2024-25 compared to the previous year. This downturn is attributed to various global economic factors, including geopolitical tensions that affect international trade dynamics.

The ongoing geopolitical conflicts, particularly the situation stemming from the Russia-Ukraine war, have disrupted supply chains and created uncertainties in the global market. These conflicts contribute to a slowdown in demand for goods, further impacting the textile sector.

Delay in modernization may erode global market share. Pressure to reduce water usage, emissions, and chemical discharge. Buyers increasingly demand traceability, certifications, and green compliance. Noncompliance can lead to loss of large institutional and export orders. Inadequate transportation networks, outdated manufacturing facilities, and insufficient power supply infrastructure contribute to operational inefficiencies and higher production costs.

Fragmented Industry Structure

The Indian textile industry is highly fragmented, comprising numerous small-scale and unorganized players alongside larger corporations. This fragmented structure often leads to inefficiencies in production, distribution, and marketing. Small-scale producers face challenges such as limited access to finance, outdated technology, and lack of economies of scale.

Additionally, the presence of a large informal sector makes regulation and quality control difficult, impacting the overall reputation of Indian textiles in international markets.

• Intense competition between established brands and private label brands.

• Low-cost substitute products from other countries

• Significant presence of small suppliers has reduced the bargaining power.

• Major clothing brands have better bargaining power over textile manufacturers, as the product differentiation is low and numbers of players are high and fragmented.

BUSINESS OVERVIEW

India is expecting another year of solid economic performance. The investment momentum was solid through the fourth quarter and should continue this fiscal, driven by public investments and a gradual pick-up in private investments aided by the PLI scheme. Government Capex, led by infrastructure, is budgeted for a sharp rise. This fiscal, private consumption is expected to continue to face crosscurrents. While lower inflation will be supportive, higher interest rates may curtail sectors such as automobile and housing. The economists predict growth to slow in FY25 as global conditions weigh down the economy. Growth is likely to moderate, in part, due to normalization of base effect.

RISK MANAGEMENT

The Company considers risk management a vital aspect of its operations and has established a comprehensive framework to identify, evaluate and mitigate risks across all functional areas. This framework involves periodic risk assessments, continuous monitoring of key indicators and the formulation of appropriate mitigation strategies. Oversight is provided by a dedicated Risk Management Committee composed of Directors and senior leadership, which routinely reviews relevant policies and advises management on risk-related matters. The Audit Committee has additional oversight in the area of financial risks and controls. Additionally, a third-party organisation has benchmarked the Companys risk management practice with various companies in India and globally and pronounced it as a leader in FMCG category.

DISSCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial statements have been prepared in accordance with the requirements of the Companies Act, 2013 and applicable accounting standards issued by the Institute of Chartered Accountants of India. The

details of the financial performance of the Company are appearing in the Balance Sheet, Profit & Loss Accounts and other financial statements forming part of this annual report.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company has only One Reportable Segment i. e. Knitting Job work as per IND AS 108 Operation Segments and so therefore separate disclosure on reporting by business segments not required.

INTERNAL CONTROL SYSTEM

The Company has implemented a robust internal control system to ensure the efficiency and effectiveness of operations, accurate financial reporting and compliance with laws and regulations. The Company has established comprehensive policies and procedures for all major business processes, including management, human resources, procurement and inventory management. Regular audits are conducted by internal auditors to monitor compliance with these policies and procedures and to identify areas for improvement. The Company also maintains a system of checks and balances, including the segregation of duties and clear lines of authority and responsibility. Through these measures, the Company aims to minimise the risk of fraud, errors and other financial irregularities, to foster transparency and accountability throughout the organisation.

HUMAN RESOURCE DEVELOPMENT

The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognizes the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation.

Your Company believes in trust, transparency & teamwork to improve employees productivity at all levels. DISCLOSURE OF ACCOUNTING TREATMENT

While preparation of financial statements, a relevant Accounting Standard treatment has been followed. CAUTIONARY STATEMENT

This report on Management Discussion and Analysis includes forward-looking statements, which are predictions, expectations, projections, or estimates about the Companys objectives. These statements are based on certain assumptions and expectations of future events. However, actual results may differ from these statements due to various factors such as changes in government regulations, tax laws and other statutes. Additionally, unforeseen events such as force majeure could affect the actual result. It is important for readers to understand the context in which these statements are made and that they may not reflect future outcomes accurately.

	By Order Of the Board
	For ATVO Enterprises Limited
	(Formerly Known as Vandana Knitwear Limited)
	Sd/-
Date: 30-08-2025	Naresh Kumar Gattani
Place: Bhilwara	DIN:00125231
	Chairman &
	Managing Director