motherson sumi wiring india ltd share price Management discussions

Motherson Sumi Wiring India Limited (MSWIL or the Company) was incorporated on July 02, 2020. FY 202223 is the first complete year of operation for MSWIL after scheme of Demerger of Domestic Wiring Harness business by Samvardhana Motherson International Limited (then known as Motherson Sumi Systems Limited) to MSWIL was given effect. MSWIL was listed on BSE and National Stock Exchange on March 28, 2022. As on March 31, 2023, the Company had 685,401 shareholders (March 31, 2022: 678,238 shareholders).

MSWIL is focused on the wiring harness business in the Indian market, offering a wide variety of harnesses for different vehicles including passenger and commercial vehicles, two and three-wheelers, farm equipment and off-road vehicles. The Company portfolio consists of products manufactured using state-of-the-art technology and forward-thinking approaches. We have the capability to accompany our customers throughout their entire product journey. We support our customers right from design to finished products. Our services encompass 3D computer-aided design (CAD), printed circuit board (PCB) design and routing, 3D printing, prototyping, virtual and physical validation and technology implementation support. This enables us to delight our customers every step of the way.

MSWIL has a strong parentage provided by both Sumitomo Wiring Systems, Ltd. (SWS) and Samvardhana Motherson International Limited (SAMIL). Samvardhana Motherson International Ltd. (SAMIL) holds 33.4% and Sumitomo Wiring Systems (SWS), Ltd., Japan holds 25.3% of shares of MSWIL.

As one of the fastest-growing global automotive suppliers, Samvardhana Motherson International Limited (SAMIL) offers a wide range of solutions for OEMs globally. This gives MSWIL access to global solutions from any of SAMILs units and subsidiaries relevant to MSWILs Indian wiring harness customers. In addition, through SAMIL, MSWIL benefits from a seasoned and strong professional management team with years of entrepreneurial experience, operational expertise and deep industry knowledge.

Sumitomo Wiring Systems, Ltd. (SWS), a 100% subsidiary of Sumitomo Electric Industries Japan, is a world leader in producing wiring harnesses, harness components and other electric wires. MSWIL benefits from the vast wiring harness expertise of SWS, especially in the area of R&D capabilities and technical knowledge.

The collective backing of SAMIL and SWS establishes a robust framework for MSWILs sustained growth within the Indian wiring harness segment. MSWIL excels in meeting customer requirements, accommodating industry dynamics, and maintaining a competitive advantage by leveraging the expertise, resources, and collaborative endeavours of these parent companies. With their unwavering support, MSWIL is strategically positioned to forge ahead, capitalising on opportunities and upholding its prominence in the Indian automotive sector.

Our proximity to our customers also aligns us with sustainability goals. OEMs are seeking further localization as an environment friendly & more secure option compared to imports which strengthens supply chain synergies, cut costs & reduce lead times for components. The automotive sector was moving towards a global supply chain model, but the Covid-19 pandemic has resulted in OEMs looking to mitigate supply chain risks & move towards a more localized production ecosystem as a part of contingency planning.

MSWIL is in a favourable position to capitalise on the rapidly evolving trends in the automotive market. The increasing demand for customisation leads to more wiring harnesses per vehicle, increasing content per vehicle. More connectivity features in a vehicle lead to the demand for high-value SMART harness components.

As the demand for sustainable technologies and advanced safety and emission norms rises, the value per harness escalates, and so do the electronics and EV solutions offered by the company. For electric vehicles/ alternative powertrains, the company is fully equipped to provide high-voltage solutions, wiring harnesses and components.

Through continuous advancement, MSWIL has cemented its reputation as a trusted provider of comprehensive system solutions. The company remains dedicated to staying at the forefront of technological developments, ensuring its continued commitment to excellence.

Indian Economy outlook

According to the latest India Development Update, a biannual flagship publication by the World Bank, Indias growth continues to be resilient despite signs of moderation. The report highlights that India continues to be one of the fastest-growing economies globally, although significant challenges persist in the global landscape. The overall growth remains robust, with an estimated full-year growth rate of 6.9%. The real GDP

grew by 7.7% year-on-year during the first three quarters of the fiscal year 2022-23.

However, there were some signs of moderation in the second half of FY 2022-23. The growth was underpinned by strong investment activity bolstered by the governments capex push and buoyant private consumption, particularly among higher-income groups. Inflation remained high, averaging around 6.7% in FY 2022-23. Nevertheless, the current-account deficit narrowed in Q3, thanks to the strong growth in service exports and easing global commodity prices.

Despite elevated headline inflation, projections suggest it will decline to an average of 5.2% in FY 2023-24, aided by easing global commodity prices and some moderation in domestic demand. To combat inflation, the Reserve Bank of India has withdrawn accommodative measures and raised the policy interest rate. Indias financial sector also remains strong, with improvements in asset quality and robust private-sector credit growth.

S&P Global Ratings recently maintained its forecast for Indias economic growth, unchanged at 6 per cent for FY 2023-24 before rising to 6.9 per cent in the following year. In its quarterly economic update for the Asia-Pacific region, S&P projects a decrease in inflation rate to 5 per cent in the fiscal year 2023-24, compared to 6.8 per cent in the current financial year. It also anticipates Indias gross domestic product (GDP) to grow by 6.9 per cent in the current financial year 2022-23 before slowing to 6 per cent in the following 2023-24 fiscal. "India leads, with average growth of 7 per cent in 2024-2026," the update said.

Automotive Industry

The performance of the Indian automobile industry during the last five years is as follows:

Category	FY 2018-19		FY 2020-21	FY 2021-22	FY 2022-23
Passenger Vehicles	4,028	3,425	3,062	3,651	4,579
Delta % [y-o-y]	-	-15%	-11%	19%	25%
Commercial Vehicles	1,112	757	625	806	1,036
Delta % [y-o-y]	24%	-32%	-17%	29%	29%
Three Wheelers	1,269	1,133	614	758	856
Delta % [y-o-y]	24%	-11%	-46%	23%	13%
Two Wheelers	24,500	21,033	18,350	17,714	19,459
Delta % [y-o-y]	6%	-14%	-13%	-3%	10%

All figures are production volumes in thousands

Source: Society of Indian Automobile Manufacturers (13/04/2023)

On a full-year basis, the highlights of the Indian automotive

industry together with future trends are as follows:

• Since the last year, staggered growth has been observed across segments/subsegments in the Indian automotive industry. The market is gradually returning to pre-pandemic levels of functioning.

• Commercial vehicles registered the highest growth, with a 29% year-on-year increase in production compared to the previous fiscal year, followed by Passenger Vehicles at 25% and Three Wheelers at 13% vis-a-vis numbers from the last fiscal year.

• Passenger car sales had been growing significantly before the Covid-19 pandemic hit in 2020. After a brief period of uncertainty, the market is now functioning well above pre-pandemic levels & the forecast for the upcoming years look promising for India, which is defined as a key emerging market till 2026 by S&P Global Mobility.

• An increase in the electrification of vehicles and the banning of fossil fuel vehicles by 2035 is expected to boost the Indian passenger cars market in the future. The governmental subsidies for BEV along with norms, continued encouragement of BEV adoption among private auto owners is making BEV the fastest growing segment in passenger car sales in India.

• Various international auto manufacturers are developing new models to capture customer attention in the Indian automobile market. Such new launches are expected to attract customers, further enhancing the passenger cars market across India during the forecast period.

• The India commercial vehicle market is anticipated to grow at an estimated CAGR of 8.6% in the forecast years 2024-2028, on the grounds of surging freight movements and growing production of commercial vehicles. Higher demands from end use industries for transportation and higher prevalence of public transportation for transits are driving the growth of the India commercial vehicle market in the upcoming five years. Growing investments in the commercial automobile technological advancements also aid the market growth.

Financial results:

The Companys financial results are summarized in the table below:

INR in Million

Heads	Financial Year 2021-22	Financial Year 2022-23	% change
Total revenue from operations	56,350	70,574	25.2%
Cost of goods sold	36,093	46,317	28.3%
Employee cost	9,464	11,831	25.0%
Other expenses	3,490	4,612	32.1%
EBITDA*	7,585	7,980	5.2%
Finance costs (Net of Interest income)	267	221	-17.2%
Depreciation expense	1,055	1,237	17.3%
Profit before tax, before exceptional items	6,263	6,522	4.1%
Exceptional income / (expenses)	(654)
Profit before tax	5,609	6,522	16.3%
PAT	4,107	4,870	18.6%
Earnings per share	0.93**	1.10	18.3%

* Earnings before interest income, interest expense, tax, depreciation and exceptional items

** Earnings per share is calculated after considering the impact of issuance of bonus shares in FY22-23

Sourcing and other arrangements:

Over the years of operations & the vertical integrations, joint venture partners have achieved various synergies in the wiring harness business such as high quality, timely delivery, knowledge enhancement, research & development etc. MSWIL is also having vertical integrations with various businesses of Samvardhana Motherson International Limited (SAMIL) and Sumitomo Wiring Systems Limited, Japan (SWS). MSWIL sources wires, connectors, terminals, PVC tubes, rubber parts etc. from SAMIL. It also sources a large number of child parts from Sumitomo Wiring Systems Limited, Japan.

In continuation to the above, SAMIL and MSWIL have a central team for some of the key functions in the areas of design and development services, procurement engineering services, human resource and infrastructure support etc. The cost of these central teams is housed in SAMIL and is shared (other than directly attributable) between MSWIL and SAMIL.

Further, as part of the reorganisation scheme, the Company has entered into long-term leasing arrangements for taking land as well as premises on lease to operate factories. The lease rentals for these land and premises have been accounted for as per valuation by independent valuer and by following Accounting Standard Ind AS 116.

The Company has diverse customer portfolio in the domestic market and is serving different segments of the industry. The segment wise breakdown of Companys revenues for the year 2022-23 is as follows:

Sr. No.	Segment	% Breakdown
1	Passenger car market	58%
2	Commercial vehicles	12%
3	Two wheeler	12%
4	Special products groups such as off road vehicles, tractors etc.	7%
5	Others including tier 1/ 2 suppliers	11%
	Total	100%

Major cost contributors Cost of Material

For the financial year ended March 31, 2023, the cost of materials was INR 46,317 million against INR 36,093 million for the corresponding previous financial year ended March 31, 2022.

As a percentage of revenue, the cost of materials was 65.6% for the fiscal year ended March 31, 2023, which has increased as compared to 64.1% for the previous year ended March 31, 2022.

During the FY 2022-23, the industry witnessed:

• The key raw material for Wiring Harness is Copper and the price of the same is linked to LME (London Metal Exchange). Company witnessed a significant increase in copper prices. However, the Company has a pass-through arrangement for copper with a time lag, mostly a quarter.

• Further, the Company faced pricing pressure from component suppliers for increasing the prices due to increased commodity prices and inflationary pressures in developed countries.

• Freight cost continues to be at escalated level.

Further, the Company has been continuously working with customers for offsetting the increase in the landed cost of child parts, including customer nominated parts, in addition to working on localisation and alternate sourcing of some of the parts.

Employee cost

Overall employee cost for the year ended March 31, 2023 is 16.8% of the revenue which is in line with previous year of 16.8% of total revenue for the previous year. The employee cost has increased in absolute amount; with increase in head counts for increase in capacity due to new plants and expansion in existing plants, and revision in minimum wages in many of the states. For the year 2022-23, the Company reimbursed / shared with SAMIL its share of common expenses of INR 419 million at cost.

Employee cost is the second largest contributor after raw materials in the total cost structure. What determines this cost is the size of operations, geographical reach and skill requirements from customers including for future developments.

Other Expenses

The other expenses, mainly include expenses on electricity and power, repairs to plant & equipment, building as well as consumables, insurance etc. For the year 2022-23, other expenses were 6.5% which has marginally increased from 6.2% in previous year. The expense is increased mainly due to purchases of stores and spares because of new launches of customer models. For the year 2022-23, the Company reimbursed / shared with SAMIL its share of common expenses of INR 451 million at cost. These expenses were either directly attributable to MSWIL or were allocated on suitable basis, mainly in the ratio of sales of domestic and non-domestic wiring harness business in India. During the year 2022-23, the company has provided, an amount of INR 395 million towards management fees to SAMIL, equivalent to the amount of royalty to SWS.

Finance Costs

Finance costs consist primarily of interest expenses on borrowings and finance leases. Total finance costs (net of Interest income) of INR 221 million for FY 2022-23 (INR 267 million for FY 2021-22) included finance costs of INR

199 million in FY 2022-23 (INR 203 million in FY 2021-22) provided for in respect of operating lease (including costs relating to lease arrangements with SAMIL in respect of premises used by MSWIL).

Exceptional expenses

There is no exceptional expense for the year ended March 31, 2023. Exceptional expenses amounting to INR 654 million for the year ended March 31, 2022 towards its share of expenses incurred for and in connection with the implementation of the Scheme of arrangement.

Depreciation Expenses

Depreciation refers to the amount recognized in the income statement reflecting the amortized value of the tangible and intangible assets on a straight-line basis over the estimated useful life of the asset and includes depreciation on Right of Use Assets recognized under Ind AS 116 in respect of leasing contracts.

For the financial year ended March 31, 2023, depreciation expenses were INR 1,237 million in comparison to INR 1,055 million for the previous year ended March 31, 2022.

Income Taxes

The provision for current tax for the FY 2022-23 amounted to INR 1,703 million (INR 1,626 million in FY 2021-22) and after providing for deferred tax credit of INR 51 million in FY 2022-23 (INR 124 million in FY 2021-22), the total tax charged to P/L account amounted to INR 1,652 million in FY 2022-23 (INR 1,502 million in FY 2021-22).

Financial position:

INR in Million

Financial Position	March 31, 2022	March 31, 2023
Property, plant and equipment	1,789	3,065
Right-to-use assets	2,532	2,727
Capital work-in-progress	323	270
Other assets
- Inventories	9,600	12,096
- Trade receivables	6,593	8,004
- Cash & bank balance	2,933	361
- Other assets	1,847	2,454
Total assets	25,617	28,977
Financial Position	March 31, 2022	March 31, 2023
Liabilities (other than loans)	11,643	11,946
Net assets	13,974	17,031
Source of funding:
Net worth	11,146	13,305
Debt outstanding
- Short-term loan	193	740
- Long-term loan	-	78
External debt	193	818
Less cash & bank balance	(2,933)	(361)
Net external debt	(2,740)	457
- Lease liabilities	2,635	2,908
Total debt including lease liability	(105)	3,365
Capital expenditure (Net of disposals)	1,008	1,977

Inventory levels were higher due to continued uncertainty on supply chain and ramp-up of the new models. Incremental working capital and CAPEX requirements have been largely funded with internal accruals.

All other movements are in line with increase in revenue or operations of the company.

CAPITAL EXPENDITURE

During the financial year 2022-23, the Company incurred capital expenditure of INR 1,977 million (INR 1,008 million in FY 2021-22) which has been financed from internal accruals within the Company. Total capital expenditure includes INR 666 million utilised for new plant at Chennai and Noida locations (INR 307 million utilised for new plant at Chennai location in FY 2021-22), remaining INR 1,311 million for addition in Property Plant and Equipment (PPE) for capacity enhancement as well as other customer related/ improvement projects in existing plants (INR 701 million was for capacity enhancement as well as other customer related/ improvement projects in FY 2021-22).

CASH FLOW

During the financial year 2022-23, the Company generated a positive cash flow position after meeting operating expenses including capital expenditure. The operating cash flows (before working capital) for FY 202223 were INR 7,935 million (INR 7,580 million in FY 2021-22) and CAPEX of INR 1,977 million in FY 2022-23 (INR 1,008 million in FY 2021-22). The following table summarises the companys cash flows for the current year and the previous year.

Cash Flow statement:

Particulars	FY 2021-22	FY 2022-23
Cash flow from operations	7,623	4,011
Taxes paid	(1,962)	(1,775)
Exceptional income / (expense)	(654)	-
Cash flow from operating activities	5,007	2,236
Capital Expenditure (Net of disposal)	(1,008)	(1,977)
Interest received	-	40
Cash used in Investing activities	(1,008)	(1,937)
Interest paid	(310)	(272)
Proceeds / (repayments) of borrowings	(679)	649
Payment of lease liabilities	(450)	(571)
Dividend paid	-	(2,677)
Cash flow from / (used in) financing activities	(1,439)	(2,871)
Net Increase/(Decrease) in Cash & Cash Equivalents	2,560	(2,572)
Net Cash and Cash equivalents at the beginning of the year	373	2,933
Cash and cash equivalents as at the end of the year	2,933	361

Operating Activities

Net cash generated from operating activities during FY 2022-23, was INR 2,236 million (INR 5,007 million in FY 2021-22). Cash generated from operations before changes in working capital & income tax was INR 7,935 million in FY 2022-23 (INR 7,580 million in FY 2021-22).

Investing Activities

Net cash flow utilised in investing activities during FY 202223, was INR 1,937 million (INR 1,008 million in FY 2021-22). This was primarily utilised for capital expenditure that includes INR 895 million for new plant at Chennai and Noida locations (INR 307 million utilised for new plant at Chennai location in FY 2021-22), INR 1,082 million for addition in Property Plant and Equipment (PPE) for capacity enhancement as well as other customer related/ improvement projects in existing plants, (INR 701 million was for capacity enhancement as well as other customer related/ improvement projects in FY 2021-22). The expense is partially set off by interest income of INR 40 million.

Financing Activities

Net cash flow utilised in financing activities during FY 2022-23, was INR 2,871 million (INR 1,439 million in FY 2021-22). This includes payment of dividend of INR 2,677 million, payment of interest of INR 73 million and payment of rent of INR 770 million (INR 786 million for repayment of borrowings as well as interest and INR 653 million payment of rent in FY2021-22). The expense is partially set off by net proceeds from borrowing of INR 649 million.

Ratio Analysis:

Key Ratios	FY 2021-22	FY 2022-23	% change
Trade Receivable Turnover (days)	43	37	-14.0%
Inventory Turnover (days)	88	84	-4.5%
Trade Receivable Turnover (in times)	8.38	9.62	14.8%
Inventory turnover (in times)	4.10	4.27	4.1%
Interest Coverage Ratio (in times)	26.68	28.71	7.6%
Current ratio (in times)	1.65	1.66	0.6%
Debt Equity Ratio (in times)	0.25	0.28	12.0%
Operating Profit Margin (%)	11.2%	9.3%	-17.0%
Net profit Margin (%)	7.4%	6.9%	-6.8%
Net DebtA to EBITDA (in times)	(0.01)	0.4	-4100.0%

 

A including lease liabilities

Key indicators are mentioned at the end of Management Discussion and Analysis

Reasons for change of 25% or more as compared to the immediately previous financial year:

NET Debt to EBITDA (in times)

Net debt as on March 31, 2022 was negative INR 105 million, hence the ratio is not comparable.

The Company has paid final cash dividend of INR 2,684 million during the year. The Company proposed a dividend of INR 0.65 per share for FY 2022-23 which will be paid after approval at the ensuing annual general meeting. The dividend payout ratio for FY 2022-23 is 59% of profits (65% of profits in FY 2021-22).

Risks are an integral part of business growth and mitigating risks from all the directions is one of the challenges that the company targets. It is very important to have a Risk Management process in place with an objective to create an operational environment with a systematic, enterprise risk management at all levels of organization. Risk management and mitigation efforts must be calibrated according to the likelihood of exposure and the potential downside of an incident. The Company has set up a Risk Management Committee (RMC) at the board level to periodically review operating, financial, regulatory, IT and strategic risks in the business and their mitigating factors.

Risk Management Policy, which was approved by the Board, considers a holistic understanding of the risks that can potentially impact the operations, as well as taking action on how to effectively mitigate those risks to protect their assets and to keep operations running smoothly. The policy formulated outlines for the risk management framework to help minimise the impact of uncertainty on the companys strategic goals. The framework enables a structured and disciplined approach to risk management. The guidelines developed cover risk control and the use of financial instruments. These guidelines contain a clear allocation of duties. Risks are controlled and monitored by means of operational and financial measures.

The Company follows a robust process of risk management by following 3 step approach

1. Step 1: Risk Identification (which includes education on the identification of risk, probability evaluation as to likelihood and finally consequence evaluation as to the impact/ financial losses to determine the size of risk)

2. Step 2: Risk Evaluation

3. Step 3: Action to mitigate or eliminate the risk with a monitoring mechanism in place

During the regular management meetings at all management levels, opportunities, risks and optimisation measures are reviewed in detail. Any exceptional situations having potential risks are identified and treated at the early stage to minimise their impact on business and financial positions.

Based on analysis and evaluation, Risk Committee assesses various risks in the following categories:

1. Operating Risks which cover risks arising out of external factors which are outside the sphere of influence of the company as well as internal factors which are generated by the company and by processes/ operations. Some of the external factors include future industry trends, social, political, economic risks, environmental risks and Act of God etc.

2. Financial & Accounting risk in terms of forex risks as well as for financial reporting due to changes in various regulations.

3. Regulatory risks cover risks with respect to local laws and regulations, intellectual property, patents etc.

4. Strategic risks with respect to sourcing of various components as well as technical and other services from JV partners.

5. IT and Information security risks: These could relate to Unauthorized access and breach of Companys IT system and resources, theft of critical data etc.

The commitment to the companys code of conduct covering ethics, anti- bribery policies and newly added climate change impact analysis is core to risk evaluation and mitigation process.

The Company has an adequate system of internal control commensurate with its size and the nature of its operations. The internal control system & process are designed to ensure:

a) Transactions recorded are accurate, complete, authorised and in adherence to Accounting Standards.

b) Compliance with applicable statutes, corporate policies and procedures.

c) Effective usage of resources and safeguarding of assets and ensuring their authorized use.

d) With the support of technology using Data Analytics tools, the coverage and scope of internal audit has been further enhanced.

The Internal Audit function collaborates with independent internal auditors to periodically review compliance with respect to the established design of internal control and also assess the effectiveness as well as the efficiency of operations. The Company has a well-established internal audit system built on the annual risk-based Internal Audit plan as approved by the Audit Committee of the Board. The significant audit findings are reviewed at regular intervals by the Audit Committee of the Board of Directors, comprising independent directors. Further, the Audit Committee also monitors the status of management actions emanating from the internal audit reviews.

The Company is using the latest IT tools such as data analytics to enhance the scope and effect of the internal audit function. Adherence to the statutory compliances at each of the locations is also ensured by the committee through a continuous monitoring mechanism. The Company has also identified various business risks and laid down necessary procedures for mitigation of the same. Processes in the Internal Audit function have been continuously strengthened for enhanced effectiveness and productivity including the deployment of best in class tools for analytics in the Audit domain which has further enhanced the depth, coverage and sharpness of the internal audits.

Management has assessed the effectiveness of the companys internal control over financial reporting (as defined in Clause 17 of SEBI Regulations 2015 applicable to Indian entities) as on March 31, 2023

Employees: Our Valued Brand Ambassadors

MSWIL takes immense pride in embodying the benevolent spirit captured by the timeless adage, "for those who live magnanimously, the entire world constitutes but a family." Just like any family, MSWILs work-family is a harmonious blend of individuals with diverse traits and personalities who have been instrumental in our evolution as a successful company and a prominent player in the automotive industry.

Our employees consistently go the extra mile and put in additional hours of work, enabling us to earn accolades from our valued customers. It is no surprise that we place great importance on our people and strive to incorporate all aspects of employee experience within our organizational framework.

Building Trust and Ethical Practices and Promoting Diversity

Operating within a healthy atmosphere, we strictly adhere to business ethics principles and uphold human rights standards. We remain committed to operating ethically, responsibly, and sustainably. Our adherence to laws, rules, and the MSWIL Code of Conduct guides our everyday work. We foster open dialogue to address concerns and resolve issues, providing platforms such as "We Listen" programs that empower employees to raise their voice anonymously or confidentially against actions or behaviours contrary to our values. We embrace diversity in thought, experiences, values, skills, and perspectives, recognizing that it is our collective strength.

Investing in Growth

We acknowledge the importance of continuously upgrading the skills and competencies of our employees. MSWIL treasures its people, ensuring their holistic development through a comprehensive 360-degree learning approach. This involves imbibing knowledge not only from formal channels but also through collaborative learning among colleagues, senior management, and subordinates, fostering the seamless transfer of tacit knowledge throughout the organization. Cross-border collaboration and the sharing of best practices from group further enrich this vibrant learning ecosystem.

MSWILs unwavering commitment to continual improvement is ingrained in its very essence. The organization relentlessly pursues progress, striving to enhance the lives of its employees through a favourable work environment characterized by fairness, discipline, safety, and clarity of roles. This cultivates trust, transparency, and accountability within the workforce, while rewarding smart work based solely on meritocracy. MSWIL takes great pride in the success stories of its employees, many of whom have risen through the ranks, starting their journey on the shop floor. This approach fosters a sustainable employee outlook, mitigating risk throughout the employee lifecycle and bolstering overall business performance.

Empowering Growth and Professional Fulfilment

Our success stems from the passionate individuals who power our organization. With over 40,000 diverse employees, we leverage their knowledge and perspectives to make a meaningful impact. We take responsibility for their growth and ensure their personal goals align with their professional development. Through comprehensive training and recognition programs, we cultivate their skills, reward their efforts, and support their career aspirations.

In the pursuit of knowledge, skills serve as the crucial steppingstones toward achieving quality improvements. At MSWIL, employees at all levels, regardless of their positions, actively participate in various skill development programs. This includes comprehensive classroom training designed to enhance dexterity, memory, and quick decision-making. To further augment the skills of trained staff, we have also developed and deployed a web-based e-learning platform.

The organizations history boasts of the measures it has adopted to ensure continual skill enhancement for its associates as well. The Annual Wiring Harness Skill Competition instils a sense of victory and motivating employees to hone their skills through constant practice. Moreover, the organization has devised various internal activities, rewards, and recognition programs to inspire and motivate its employees.

Fostering Collaboration and Productivity

At MSWIL, we understand that an organizations progress relies on engaging the hearts and minds of its people. Effective employee engagement is a strategic investment in our productivity and performance. By aligning engagement practices with our vision, mission, and values, we strengthen connections among individuals, processes, and products, yielding remarkable outcomes. Quality Circles embody the spirit of teamwork and passion for problem-solving, empowering employees to present their best work to the world.

Through Quality Circles the organization is involving and evolving its employees in this movement, fostering a solution-oriented approach, and equipping them with diverse problem-solving techniques. For harbouring the culture of innovation and creativity, the Innovations Awards are awarded to the most Innovative Technical Paper among many based on the improvement done in the process in the past fiscal year. MSWIL encourages its employees to share their feedback regarding any improvements in their respective processes or outside the ambit of their work under its Suggestion Scheme. A panel of experts review the ideas received and if feasible implement them at the workplace. Kaizens are yet another powerful dose to enhance the thinking power of the employees.

Employee Health, Safety and Well-being:

Safety transcends mere terminology, signage, or labelling—it is a fundamental mindset ingrained within MSWIL. From the moment an employee joins our company, we prioritize the inculcation of safety through comprehensive induction sessions, sensitizing and acquainting them with our established safety practices.

The responsibility and accountability for a secure and healthy workplace lie with each individual. Responsible work performance begins with our management systems, policies, and procedures designed to uphold a safe working environment for all employees. The collective and unwavering commitment of every employee towards safety, health, and the environment directly contributes to enhanced performance, superior service quality, and ultimately, customer satisfaction.

To ensure the unwavering commitment to safety, MSWIL conducts various campaigns across its units, aiming to make safety non-negotiable and identify and eliminate potential hazards at the worksite. Emphasizing the use of safety equipment and devices, we foster an environment where employees prioritize not only their own safety but also the safety of their peers. These initiatives are carried out in an engaging manner, incorporating safety quizzes, poster-making competitions, skits, and role plays.

We encourage employees to actively report any unsafe practices, procedures, or conditions to their supervisors, fostering a culture of maintaining a safe workplace.

Regular safety audits are conducted, and specialized training modules are designed for new employees to provide insights into safety norms and ensure adherence. Comprehensive work permits covering all safety aspects are issued to employees before, during, and after their tasks. MSWIL places great emphasis on safety management, employee training, and injury prevention. Annually, we observe a Safety Week across all units (this year from 4^th to 10^th March, 2023) under the theme of "Making the workplace Safe, Secure & Injury Free." A series of programs and activities, including safety training sessions for staff, drivers, and forklift operators, are conducted. We also extend safety awareness training to external contractors such as canteen, housekeeping, and security personnel. Additionally, safety banners are displayed, safety badges are distributed, a quiz competition on safety measures is organized, and a safety march is conducted for workers on the shop floor across various units.

Creating a Nurturing and Supportive Workplace

In conclusion, MSWIL is steadfast in its commitment to creating a safe and nurturing work environment, fostering an atmosphere where employees can flourish and excel. We go above and beyond to ensure the holistic development of our people, organizing a multitude of engaging events such as the Annual Cricket Tournament, Annual Painting Competition, Poster competitions, Rangoli competitions, and In-Sync Quiz Competition. These activities not only promote creativity and camaraderie but also serve as platforms for recognizing outstanding achievements in various fields. Our Annual Day celebration brings together thousands of employees from diverse units, uniting them as one big family and instilling a profound sense of pride while motivating others to strive for excellence. At MSWIL, hard work is celebrated with utmost fervor, ensuring that our organization embraces a culture of jubilation and togetherness. As we forge ahead on our growth trajectory, the well-being and triumph of our employees will forever remain at the forefront of our priorities. Their invaluable contributions continue to shape our success, and we are immensely proud to have them as part of our remarkable journey.

Indian automotive sector is very dynamic in terms of safety, following global standards, green energy, environment friendly, customer satisfaction, price sensitivity and to achieve the same objective, MSWIL brings platform to offer solutions to OEMs in India, with technical support from Sumitomo Wiring Systems Limited, Japan and functional support from SAMIL. With the support from both JV partners and customers confidence earned with consistent performance on QCDDMSES, MSWIL is well positioned to convert changing trends into an opportunity.

The automobile sector in India gradually moving towards manufacturing of electric vehicles which is a favourable opportunity for the Company and Infrastructure as well as capacities are being enhanced according to the customer orders.

Calculation of Key Indicators (Ratio Analysis)

EBITDA	Profit before exceptional items and tax + Finance costs (net of interest income) + Depreciation expense
PBT	Profit before exceptional items and tax
Trade Receivable Turnover (days)	[Average trade receivables / (Gross credit sales - Sales return)] x 360 Average trade receivables = (opening trade receivables + Closing trade receivables)/2
Inventory Turnover (days)	[Average inventory / Cost of goods sold] x 360 Average inventory = (Opening inventory + Closing inventory)/2
Trade Receivable Turnover (in times)	[(Gross credit sales - Sales return) / Average trade receivables]
Inventory turnover (in times)	[Cost of goods sold / Average inventory]
Interest Coverage Ratio	[EBITDA/Finance Costs]
Current Ratio	[Current assets / Current liabilities]
Debt Equity Ratio	[Total Debt (Long term borrowing including current maturities + short term borrowing + Lease liabilities) / Total equity]
Operating Profit Margin	[(Profit before tax + Finance costs + Exceptional items (income)/ expense - Interest income) / (Total sales - Sales return)] x 100
Net Profit Margin	[Net Profit / (Total sales - Sales return)]
Net Debt to EBITDA	Net Debt (Total Debt - Cash and cash equivalents) / EBITDA