Scoobee Day Garments India Ltd Management Discussions

Annexure F

Scoobee Day Garments (India] Limited is primarily involved in the business of Garments and Aluminium/ Galvanized Iron roofing sheet and accessories.

APPAREL MARKET - GLOBAL & INDIAN

India is the worlds second-largest producer of textiles and garments. It is also the fifth-largest exporter of textiles spanning apparel, home, and technical products. The textiles and apparel industry contributes 2.3% to the countrys GDP, 13% to industrial production and 10.5% to 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.

India has a 4.6% share of the global trade in textiles and apparel. Moreover, India is the worlds third largest exporter of Textiles and Apparel. India ranks among the top five global exporters in several textile categories. India has emerged as the second largest manufacturer of PPE globally; it is expected to exceed US$ 92.5 billion by 2025 as compared to US$ 52.7 billion in 2019. Around 45 million people are working in the textile business, including 3.5 million people who work on handlooms. Textile manufacturing in India has been steadily recovering amid the pandemic. Textile manufacturing in India has been steadily recovering amid the pandemic. The Manufacturing of Textiles Index for the month of June 2024 is 106.

Global apparel market is expected to grow at a CAGR of around 8% to reach US$ 2.37 trillion by 2030 and the Global Textile & Apparel trade is expected to grow at a CAGR of 4% to reach US$ 1.2 trillion by 2030. The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach US$ 350 billion by 2030, with exports expected to reach US$ 100 billion.

In current cotton season 2024-25, up to March 31, 2025, Government of India, through its nodal agency, the Cotton Corporation of India Ltd. (CCI) under Ministry of Textiles has successfully procured 525 lakh quintals of seed cotton, equivalent to 100 lakh bales, under Minimum Support Price (MSP) operations. This procurement accounts for 38% of the total cotton arrivals of 263 lakh bales and 34% of the estimated total cotton production of 294.25 lakh bales in the country.

India enjoys a comparative advantage in terms of skilled manpower and in cost of production relative to other major textile producers. In FY25, the total exports of textiles and apparels (incl. handicrafts) stood at Rs. 3,12,540 crore (US$ 36.61 billion). Ready Made Garments (RMG) category with export of US$ 15,989 million has the largest share (44%) in the total exports, followed by Cotton Textiles (33%, US$ 12,056 million) and Man- Made Textiles (13%, US$ 4,869 million).

Indias ready-made garment (RMG) exports are likely to surpass US$ 30 billion by 2027, growing at a CAGR of 12-13%. Exports for 247 technical textile items stood at Rs. 5,946 crore (US$ 715.48 million) between April-June (2023-24).

The government is planning to set up 12 new industrial parks and 5-6 mega textile parks, announced by Minister of Commerce and Industry Mr. Piyush Goyal. He also urged the private sector to capitalize on these initiatives.

Ministry of Textiles has sanctioned 19 research projects totaling approximately Rs. 21 crore (US$ 2.52 million) across various domains of Technical Textiles under the National Technical Textiles Mission.

Union Minister of Textiles, Mr. Giriraj Singh, expressed confidence that Indias technical textile industry will surpass the US$ 10 billion target set for 2030. The Gross Value Added (GVA) is expected to see a consistent growth rate of 9% during the period 2021 - 2028.

Total FDI inflows in the textiles sector stood at Rs. 29,291.05 crore (US$ 4.59 billion) between April 2000-December 2024. 100% FDI

(automatic route) is allowed in the Indian textile sector.

The Textile Ministrys allocation increases by 19%, rising from Rs. 4,417.03 crore (US$ 512 million) in 2024-25 to Rs. 5,272 crore (US$ 611 million) in 2025-26, reflecting the governments commitment to addressing longstanding challenges and unlocking new growth opportunities.

The Union Budget 2025-26 allocates Rs. 1,148 crore (US$ 133.1 million) for the PLI Scheme to boost domestic manufacturing and exports, and Rs. 635 crore (US$ 73.6 million) for the Amended Technology Upgradation Fund Scheme to modernize textile machinery.

The Governments Rs. 10,683 crore (US$ 1.44 billion) PLI scheme is expected to be a major booster for the textile manufacturers. The scheme proposes to incentivise MMF (manmade fibre) apparel, MMF fabrics and 10 segments of technical textiles products.

The Government approved the Mega Integrated Textile Region and Apparel (MITRA) Park scheme worth Rs. 4,445 crore (US$ 594.26 million) to establish seven integrated mega textile parks with state-of- the-art infrastructure, common utilities, and R&D lab over a three-year period, which will boost textile manufacturing in the country.

The Indian government wants to establish 75 textile hubs, similar to Tiruppur, which will greatly increase employment opportunities while promoting the export of textile products and ensuring the use of sustainable technology.

For the export of handloom products globally, the Handloom Export Promotion Council (HEPC) is participating in various international fairs/events with handloom exporters/weavers to sell their handloom products in the international markets under the National Handloom Development Programme (NHDP). Alongside, the Ministry of Textiles has also been implementing Handloom Marketing Assistance (HMA), a component of the National Handloom Development Programme (NHDP) all across India. HMA provides a marketing platform to the handloom weavers/agencies to sell their products directly to the consumers and develop and promote the marketing channel through organizing expos/events in domestic as well as export markets.

The government has allocated funds worth Rs. 17,822 crore (US$ 2.38 billion) between FY16- 22 for the Amended Technology Up-gradation Fund Scheme (A-TUFS) to boost the Indian textile industry and enable ease of doing business.

The new Economic Cooperation and Trade Agreements with Australia and the UAE will open multiple opportunities for textiles and handloom. Indian textile exports to Australia and the UAE will now face zero duties, and the government is expecting that soon, Europe, Canada, the UK and GCC countries would also welcome Indian textile exports at zero duty.

National Technical Textiles Mission (NTTM) has been approved with an outlay of US$ 178.74 million (Rs. 1,480 crore); from Financial Year 2020-21 and valid up to 31.03.2026. So far, as of February 2024, 137 research projects have been approved under NTTM. The total cost approved of the said projects by the Government is US$ 57.33 million (Rs. 474.7 crore approx.)

ROOFING SHEETS - GLOBAL & INDIA

The Indian roofing market, valued at approximately $7.59 billion in 2025, is projected to experience robust growth, driven by a burgeoning construction sector, rapid urbanization, and increasing disposable incomes. The 6.50% CAGR indicates a significant expansion over the forecast period (2025-2033). Key market drivers include the ongoing infrastructure development projects, particularly in residential and commercial segments, a rising demand for durable and aesthetically pleasing roofing solutions, and government initiatives promoting affordable housing. The market is segmented by sector (commercial, residential, industrial), material (bituminous, tiles, metal, other), and roofing type (flat, slope), each exhibiting varying growth trajectories. While the residential sector is expected to dominate, driven by a burgeoning middle class, the commercial and industrial sectors are witnessing significant expansion due to large-scale infrastructural investment and industrial growth. Growth is further fueled by the introduction of innovative roofing materials offering enhanced durability, energy efficiency, and aesthetic appeal, including advanced metal roofing systems and energy-efficient tiles.

However, challenges like fluctuating raw material prices and potential supply chain disruptions could pose constraints to market growth.

The regional distribution of the market showcases a strong concentration within India, reflecting the nations significant construction activities. While the provided data encompasses a global perspective, Indias robust growth outlook dominates the market analysis. The presence of major players like CK Birla Group, Tata Bluescope Steel, and Everest Industries Limited signifies a competitive landscape characterized by established players and emerging innovative companies. The increasing preference for sustainable and eco-friendly roofing solutions presents an opportunity for manufacturers to focus on developing and promoting environmentally responsible products. Future market dynamics will hinge on government policies, economic growth, and the evolving needs of the construction industry.

This comprehensive report provides a detailed analysis of the burgeoning roofing industry in India, covering the period from 2019 to 2033. With a focus on market size, growth drivers, and competitive dynamics, this study offers invaluable insights for investors, industry players, and policymakers. The report uses 2025 as its base year, with estimations for 2025 and forecasts extending to 2033, leveraging historical data from 2019-2024. Key segments explored include residential construction, commercial construction, industrial construction, and materials such as bituminous, tiles, metal, and other materials. Roofing types such as flat roofs and slope roofs are also analyzed in detail.

India Roofing Market Trends

Roofing Industry in India Concentration & Characteristics

The Indian roofing industry is characterized by a fragmented landscape, with numerous small and medium-sized enterprises (SMEs) alongside larger players. Concentration is higher in certain geographic areas with significant construction activity. Innovation is driven by the need for cost-effective, durable, and weather-resistant roofing solutions tailored to Indias diverse climatic conditions. Regulations concerning building codes and material standards impact the industry. Product substitutes, such as innovative lightweight roofing materials, are emerging, creating competitive pressure. End-user concentration is largely tied to the real estate and construction sectors, with fluctuations influenced by economic cycles. Mergers and acquisitions (M&A) activity is moderate, with larger players strategically consolidating their market share.

Roofing Industry in India Trends

The Indian roofing market is experiencing robust growth, driven by factors such as rapid urbanization, increasing infrastructure development, and government initiatives promoting affordable housing. The residential sector remains the largest segment, but commercial and industrial construction are also contributing significantly. The demand for energy-efficient and sustainable roofing materials is rising, leading to the adoption of innovative solutions like solar roofing systems and insulated panels. Increased awareness of environmental concerns is driving the demand for eco-friendly roofing options. Government policies and regulations, such as those related to building codes and energy efficiency standards, are playing a vital role in shaping market trends. The market is also witnessing a shift towards organized players, as consumers increasingly prefer branded and quality-assured products. This trend is fueling competition and driving innovation within the industry. The total market size is projected to reach XXX Million units by 2033, presenting significant growth opportunities for players. Further, the rise of e-commerce platforms and improved supply chain management are enhancing market accessibility and improving efficiency.

Residential Construction: This segment consistently dominates the Indian roofing market due to the burgeoning population and rising demand for housing across urban and rural areas. The governments focus on affordable housing schemes further fuels this segments growth. The demand is spread across various price points, catering to both budget-conscious consumers and those seeking premium roofing solutions.

Metal Roofing: The increasing preference for durable, long-lasting, and aesthetically pleasing roofing solutions is driving the popularity of metal roofing materials. Metal offers superior weather resistance compared to traditional materials, making it suitable for Indias diverse climate. The ease of installation and relatively low maintenance cost also contributes to its popularity. This segment is experiencing substantial growth, especially in commercial and industrial projects.

Urban Centers: Major metropolitan areas and rapidly developing Tier-II cities exhibit the highest concentration of construction activities and subsequently the highest demand for roofing materials. These regions are witnessing large-scale infrastructure projects, housing developments, and commercial construction, driving the growth of the roofing market.

INTERNAL CONTROL

Internal Control comprises of the plan of organization and all the coordinate methods and measures adopted within a business to safeguard its assets; check the accuracy and reliability of its accounting data and completeness of accounting records; promote operational efficiency; to encourage adherence to the prescribed managerial policies, to assist in achieving the orderly and efficient conduct of business; prevention and detection of fraud and errors and timely preparation of financial statements.

Our Internal Control System is fully equipped with necessary checks and balances ensuring that the transactions are adequately authorized and reported correctly. The Internal Auditor conducts regular Audits of various departments and Units to ensure thatnecessary controls are in place. The Audit Committee while reviewing the system and the Internal Audit Report, call for comments of Auditors on internal control systems and discuss any related issues with the Auditors and the Management of the company before submission to the Board. The Independent Directors also satisfy themselves on theintegrity of financial information and ensure financial controls.

OPPORTUNITIES

Market opportunities are crucial for the consumer goods industry, it represent potential areas of growth, innovation, and competitive advantage. Identifying and leveraging these opportunities for the Roofing Sheets is essential to expand their market presence, increase profitability, and stay ahead of the competition. Market opportunities serve as catalysts for growth. Whether its tapping into new consumer segments, exploring emerging markets, or developing new products or services, opportunities provide the path to expansion.

The Indian Textile industry adds 14% to the industrial production and 8% to the GDP of India. It provides employment to 38 million people and thus, is the second largest employment provider after agriculture. The Indian Apparel & Textile Industry is one of the largest sources of foreign exchange flow into the country with the apparel exports accounting for almost 21% of the total exports of the country.

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avorable government initiatives such as the National Technical Textiles Mission (NTTM], 100% FDI in the sector, SAMARTH- Scheme for Capacity Building in the Textile Sector, etc. for the development of the textile industry.

• The China plus one diversification policy will benefit Indian manufacturers.

As global retailers are looking for an alternate supply base, India has emerged as an attractive option for manufacturing and exports of textiles and apparels.

• The government and NGOs offer training programs.

• The trade is growing between regional trade blocs due to bilateral agreements between participating countries.

• Supply Chain Management and

Information Technology has a crucial role in apparel manufacturing. Availability of EDI (Electronic Data Interchange], makes communication fast, easy, transparent and reduces duplication.

• The rapid growth of the retail sector and E-commerce will boost the growth of the textile and apparel industry.

• The growth of the technical textile market will create lucrative opportunities.

Opportunities in the roofing market represent external conditions that can be leveraged for business growth and competitive advantage. These are factors outside the companys control that, if capitalized on, could significantly enhance its market position, profitability, and ability to meet customer needs more effectively.

To identify opportunities, roofing companies need to look outward, examining market trends, emerging technologies, changing consumer preferences, and regulatory developments. Understanding these aspects can uncover new areas for expansion, innovation, and enhanced customer service. Here are some critical opportunities that could be available in the roofing market:

• Developing and marketing roofing materials designed to withstand extreme weather conditions.

• Utilizing technology for roof inspections, maintenance, and customer interactions.

• Exploring opportunities in underserved or emerging markets.

• Taking advantage of government incentives for green roofing and energy- efficient homes.

THREATS

Threats in the roofing industry are external challenges that could potentially harm a companys ability to succeed or maintain its market position. These are

factors beyond the control of the company but must be identified and monitored to devise effective mitigation strategies.

Recognizing and understanding these threats enable roofing companies to prepare and adapt in ways that safeguard their interests and longevity. Identifying threats involves analyzing the broader economic, technological, competitive, and regulatory landscapes. Below are key threats that roofing companies may face:

• Reduced consumer spending and delayed construction projects impacting revenue.

• Damage to projects and disruptions in service availability.

• Compliance costs and operational restrictions affecting profitability.

• Delays and increased costs due to global supply chain issues.

• Increasing prices of roofing materials squeezing margins.

• Negative reviews and public perception impacting customer trust.

SEGMENT- WISE PERFORMANCE

Roofing sheet division has contributed Rs.2.60 crores compared to Rs. 5.64 crores in the previous year. The garment division ofthe company has contributed Rs. 37.60 Crores compared to Rs. 45.26 Crores in the previous year. Both the sectors are growing with all the possible amenities and resources.

RISKS

Infrastructural blocks are one of the major problems faced by the industry. One of the major kerbs to the rapid development of the industry is a lengthy transaction processing and transportation time. Indian textile industry has been made poor attention towards product design and development. A significant attention is required in the Indian textile trade. Research and Development is still far away from the actual requirement and most of the companies do not have product development and innovation centers. The average contribution of Indian Textile firms towards R&D is very low.

The Indian textile industry has been facing a competition from other nations like China, Germany, Bangladesh, Sri Lanka, Turkey, Vietnam, Italy, etc. Monetary value of inputs in India is indicating the huge cost increase, which in yield would be a problem of increased production cost. It requires immediate attention by the regime. All sectors in the textile industry are affecting adversely due to faster hike in raw material costs.

Industry Risk:

The presence of diversified manufacturing facilities across various locations in India and internationally, coupled with the labour - intensive nature of work, pose various health risks to the workforce. These risks may arise from factors such as machinery breakdowns, human error and other related causes. The world economic growth has slowed and accordingly

International fashion retailers have reported rise in inventory and pressure on their margins since summer. This is also reflected in the slump in their off take from supplying countries. However, as we are in the basic segment, its impact is expected to be less. It is hoped that with the unstinted support from all the

Stakeholders SDGIL would be able to manage such risk.

Disaster Risks:

The Company has a well-designed safety management policy that eliminates / reduces the risk of workplace incidents, injuries, and fatalities through adoption of various well defined safety measures and devices. Its proper implementation and updation enable effective prevention besides equipping the employees to handle any incident that may occur. The properties of the Company are insured against natural risks like fire, earthquakes, etc. with periodical review of adequacy, rates and risks covered.

Financial Risks:

The Company has a well- managed risk management framework, anchored to policies and procedures and internal financial controls aimed at ensuring early identification, evaluation and management of key financial risks (such as liquidity risk, market risk, credit risk and foreign currency risk) that may arise as a consequence of its business operations as well as its investing and financing activities. Accordingly, the Companys risk management framework has the objective of ensuring that such risks are managed within acceptable risk parameters in a disciplined and consistent manner and in compliance with applicable regulation.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter due to difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

Market Risk

The exposure to interest rate risk from the perspective of Financial Liabilities is negligible. Further, treasury activities, focused on managing investments in debt instruments, are administered under a set of approved policies and procedures guided by the tenets of liquidity, safety and returns. This ensures that investments are only made within acceptable risk parameters after due evaluation. The Companys investments are predominantly held in fixed deposits. Fixed deposits are held with highly rated banks and have a short tenure and are not subject tointerest rate volatility.

Credit Risk

Credit risk refers to risk that counter party will default on its contractual obligations resulting in financial loss to the Company Credit risk arises primarily from financial assets such as trade receivables, other balances with banks and other receivables. The Company has adopted a policy of only dealing with counterparties that have sufficiently high credit rating. The Companys exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties. Credit risk arising from other balances with banks is limited because the counter parties are banks with high credit ratings.

Foreign Currency Risk

The Company undertakes transactions denominated in foreign currency (mainly US Dollar) which are subject to the risk of exchange rate fluctuations. Financial assets and liabilities denominated in foreign currency, are also subject to reinstatement risks.

Labour Shortage:

The scarcity of skilled workforce is a matter of concern for the Labour Intensive Indian culture. More than 70% of Indian workers are either illiterate or have just a basic education. The skill shortage in the Indian textile manufacturing is unable to take its skillset forward, or help the sector grow beyond a certain point. Considering the industrys growth potential and employment generation, in the recent years, the government introduced the Integrated Skill Development Service (ISDS) Scheme to address the skilled labour required to run the diverse textiles sector and its segments. However, SDGIL doesnt face this issue because of its best HR practices. Higher productivity, ability to source required work force is the fruits of its strategic HR policies and if there is any shortage in Labors we are handling the issues quickly by our associated agencies.

FINANCIAL PERFORMANCE AND OPERATIONAL EFFICIENCY

The standalone financial statements of Scoobee Day Garments (India) Limited (“the Company”), comprise the balance sheet as at 31st March 2025, and the statement of Profit and Loss, (statement of changes in equity) and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information give a

true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2025, and profit/loss, (changes in equity] and its cash flows for the year ended on that date.

Key Ratios*

Particulars	FY 2024 25	FY 20 23 24
Current Ratio	0.36	0.1 8
Debt - Equity Ratio	11.77	17. 27
Debt Service Coverage Ratio	0.76	1.4 5
Return on Equity Ratio	47.93%	30 7.4 0%
Inventory turnover ratio	2.41	2.2 6
Trade Receivables turnover ratio	10.92	43. 07
Trade Payables Ratio	12.17	10. 65
Net Profit Ratio	4.20%	9.2 3%
Return on Capital Employed	4.04%	11. 81 %
Return on Investment	64.96%	55 2.24%

Your Company has constantly trying to increase its sales as well as profitability. The detail of financial and operational performance is provided in the Boards Report.

LONG TERM AND SHORT TERM STRATERGY

The Company sells its products directly to the customers and its strategy is to work closely with its major customers and align its business operations and investment decisions according to their requirements. The Company will also make continuous efforts to explore other growth opportunities

DEVELOPMENT IN HUMAN RESOURCE / INDUSTRIAL RELATIONS

The company places high importance on the development of its human resources. It imparts regular training to its employees to make them more focused to adapt to the constant change in the business environment. The Company is giving direct employment to 642 employees Industrial relation in the units was satisfactory.

CAUTIONARY STATEMENT

Estimates and expectations stated in this Management Discussion and Analysis may be “forward-looking statement” within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Companys operations include economic conditions affecting demand / supply and price conditions in the domestic and international markets, changes in the Government regulations, tax laws, other statutes and other incidental factors.