Motherson Sumi Wiring India Ltd Management Discussions

BUSINESS BACKGROUND AND UPDATE

Motherson Sumi Wiring India Limited (MSWIL or the Company) is a leading full-system solutions provider in Indias wiring harness segment, catering to all major OEMs across the Indian automotive industry. Originating in 1986 as part of strategic partnership between Samvardhana Motherson International Ltd and Japans Sumitomo Wiring Systems, MSWIL was formed with the Demerger of Wiring Harness Division of Samvardhana Motherson International Limited (then known as Motherson Sumi Systems Limited) and was listed on Bombay Stock Exchange and National Stock Exchange on March 28, 2022. As on March 31, 2025, the Company had 954,433 shareholders (March 31, 2024: 888,941 shareholders).

Strong Strategic Parentage

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 33.43% and Sumitomo Wiring Systems (SWS), Ltd., Japan (including affiliates) holds 25.34% 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.

MSWIL benefits significantly from its strong parentage providing a solid foundation for sustained growth and operational excellence. This partnership brings together world-class technical expertise, provenglobal manufacturing practices,anddeep-rootedcustomer relationships with leading automotive OEMs. The support from SWS ensures access to advanced wiring technologies and global quality standards, while SAMIL contributes robust operational capabilities, a highly integrated supply chain, and strong execution frameworks. The financial strength and governance standards of the parent entities have enabled MSWIL to maintain a debt-free balance sheet and deliver industry-leading return ratios. Moreover, the strategic guidance from its parent companies positions MSWIL to capitalize on emerging opportunities in electric vehicles, digitization, and next-generation mobility solutions. This strong foundation continues to enhance MSWILs credibility, resilience, and ability to innovate, supporting its vision to be a trusted and agile partner to the Indian automotive industry. As the Group marks its 50th year of excellence this year, MSWIL continue to build and thrive on this legacy by driving innovation, strengthening partnerships, and shaping the future of mobility.

Delivering on Customer Trust

Customer Trust is the foundation of all strategic and operational decisions. MSWIL remains deeply committed to delivering reliable, high-quality solutions that meet the evolving needs of our OEM partners. By working in close collaboration with its customers from the early stages as a design partner through the complete product lifecycle providing seamless integration and alignment with stringent quality and delivery benchmarks makes MSWIL a preferred solution provider in wiring harness segment.

MSWIL supports a diverse range of vehicle segments, including passenger vehicles (PVs), commercial vehicles (CVs), two- wheelers (2Ws), off-road, and agricultural machinery. Its offerings span both low and high voltage harnesses for internal combustion engines (ICE), electric vehicles (EV), hybrid, and compressed natural gas (CNG) vehicles.

During the year, MSWIL continued to strengthen this trust through consistent performance across its manufacturing network, adherence to QCDDMSES which is adherence to Quality, Cost, Delivery, Development, Management, Safety, Environment & Sustainability as a core process to capture the Measure of Performance of all the plants in the Company and an unwavering focus on operational excellence. Our teams dedication for creating value and ensuring delivery excellence continues to be the foundation of the trust we share with our customers. In 2025, this commitment was recognised through several prestigious awards, including global supplier excellence honours, top rankings in Daily Work Management among over 160 suppliers, and repeated accolades for overall performance. These recognitions across diverse customer platforms are a testament to the consistent, high-quality efforts of our teams across the organisation.

As a testament to its long-standing customer relationships and growing demand visibility, MSWIL has committed to expanding its manufacturing capacity through the establishment of two new greenfield facilities for new platforms across EV & ICE powertrains introduced by marquee OEMs. During the year the Pune (Maharashtra) facility was operationalised and the other two facilities in Navagam (Gujrat) and Kharkhauda (Haryana) will come onstream in the ensuing financial year.

These investments not only reflect the confidence placed in MSWIL by its customers but also demonstrates the Companys proactive approach for supporting future vehicle platforms, including electric mobility solutions. Through these efforts, MSWIL continues to reinforce its commitment as a trusted, agile, and forward-looking partner to the Indian automotive industry.

Thus, MSWIL has consistently evolved into a future-ready, customer-centric organisation, driven by agility, engineering excellence, and strategic foresight. The Company continues to reinforce its leadership as a powertrain agnostic wiring harness integrator with a portfolio servicing ICE, hybrid, and electric vehicle segments, responding swiftly to the dynamic needs of OEMs with high-quality, integrated wiring harness solutions.

Technology-Agnostic and Aligned with Mobility Megatrends

The powertrain agnostic product portfolio enables us to serve a broad spectrum of customer needs across conventional, hybrid, and electric vehicle platforms. With deep expertise in designing and manufacturing wiring harnesses, high-voltage & low-voltage systems, and integrated electrical distribution solutions.

MSWIL remains fully aligned with the evolving mobility landscape, with flexible engineering capabilities, manufacturing systems and operational excellence enables a future ready approach to mobility megatrends be it electrification, lightweighting, or connectivity. This agility allows us to remain a trusted partner to OEMs regardless of their technology path, supporting current requirements while anticipating future innovation.

We continue to develop high-voltage harnesses and advanced communication cables to support next-generation features like Advanced Driver Assistance Systems (ADAS), high-speed infotainment, and 360? vision systems. Our product development remains closely aligned with OEM roadmaps, ensuring we remain a trusted partner in future mobility.

Strengthening Capacity and Driving Innovation

Our continued focus on digitalisation, automation, and process innovation has resulted in tangible improvements in both operational efficiency and scalability. To address growing product complexity and evolving customer requirements, MSWIL has implemented several advanced manufacturing solutions. These include conveyorized assembly lines for two-wheeler wiring harnesses, 3D vision systems for precision inspection, and automated systems for continuity testing. The introduction of fully automated equipment for cutting, crimping, and twisting operations has further enhanced production consistency and speed. In addition, customised jigs for relay and fuse box validation and the development of indigenised high-voltage testing equipment have strengthened our ability to deliver high- quality solutions with greater cost efficiency.

Having established robust capabilities in low-voltage systems, MSWIL is also scaling its expertise in high-voltage harnesses to meet the requirements of battery electric vehicles (BEVs). The increasing number of new model launches featuring MSWIL products reflects the enduring trust OEMs place in our capabilities

These strategic investments not only boost productivity but also reaffirm MSWILs commitment to technology-led manufacturing excellence.

Indian Economy outlook

According to the International Monetary Fund (IMF), India is poised to lead the global economy once again, with projections indicating it will remain the fastest-growing major economy over the next two years. In the April 2025 edition of the IMFs World Economic Outlook (WEO), Indias economy is expected to grow by 6.2 per cent in 2025 and 6.3 per cent in 2026, maintaining a solid lead over global and regional peers.

The April 2025 WEO edition shows a downward revision in the 2025 forecast compared to the January 2025 update, primarily due to heightened global trade tensions and increasing uncertainty. Despite this slight moderation, the overall outlook remains strong. This consistency underscores the strength of Indias macroeconomic fundamentals and its capacity to sustain momentum in a complex international environment. As the IMF reaffirms Indias economic resilience, the countrys role as a key driver of global growth continues to gain prominence.

Indias economic outlook for 2025 and 2026 remains one of the most promising among major global economies, as highlighted by the IMF. Despite global uncertainties and downward revisions in growth forecasts for other large economies, India is set to maintain its leadership in global economic growth. Supported by strong fundamentals and strategic government initiatives, the country is well-positioned to navigate the challenges ahead. With ongoing reforms in infrastructure, innovation, and financial inclusion, India continues to enhance its position as a key contributor to global economic activity. The IMFs projections reaffirm Indias resilience, further solidifying its importance in shaping the future of the global economy.

Automotive Industry

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

Category	FY 2020-21	FY 2021-22	FY 2022-23	FY 2023-24	FY 2024-25
Passenger Vehicles	3,062	3,651	4,587	4,902	5,061
Delta % (y-o-y)	-11%	19%	26%	7%	3%
Commercial Vehicles	625	806	1,036	1,066	1,033
Delta % (y-o-y)	-17%	29%	29%	3%	-3%
Three Wheelers	614	758	856	993	1,050
Delta % (y-o-y)	-46%	23%	13%	16%	5%
Two Wheelers	18,350	17,714	19,459	21,469	23,884
Delta % (y-o-y)	-13%	-3%	10%	10%	11%

All figures are production volumes in thousands (000)

Source: Society of Indian Automobile Manufacturers (15/04/2025)

Highlights of the Indian automotive industry, together with future

trends are as below:

-Since the last fiscal year, a phase of cautious growth has been observed across segments/subsegments in the Indian automotive industry, except for Commercial Vehicles, which saw a 3% decline. The market is now operating well above pre-COVID levels and is expected to continue improving.

- Two-wheelers registered the highest growth, with an 11.2% year- on-year increase in production compared to the previous fiscal year, followed by three-wheelers at 5.4% and Passenger Vehicles at 3.2% vis-a-vis numbers from the last fiscal year.

- The Passenger Vehicle market is now performing significantly above pre-pandemic levels & the forecast for the upcoming years looks promising for India, which is defined as a key emerging market till 2028 by S&P Global Mobility. Growth in this segment is driven by a rising preference for personal mobility and increasing consumer confidence in rural and semi-urban areas, coupled with new model launches creating excitement among consumers. The PV industry posted a record high of a little over 5 million units in FY 2024-25.

- The ongoing electrification of vehicles, supported by the governments push to phase out fossil fuel vehicles by 2040, is expected to accelerate growth in the Indian passenger car market. Government subsidies for BEV, along with norms, and continued encouragement of BEV adoption among private auto owners are making it the fastest growing segment in passenger car sales in India.

- Global automobile manufacturers are actively developing and launching new models tailored to the Indian market. These innovations are expected to attract increased customer interest and further strengthen the passenger car segment in India.

-The growing preference for personal mobility and improved consumer confidence in rural and semi-urban markets have bolstered the Indian market. It posted its best production numbers in 2024-25.

-The domestic market in India appears stable, supported by a softening of commodity prices, including crude oil, due to a decline in global demand.

REVIEW OF FINANCIALS Financial results:

The Companys financial results are summarized in the table below:

INR in million

Heads	FY 2023-24	FY 2024-25	% Change
Total revenue from operations	83,274	93,194	11.9%
Cost of goods sold	54,537	60,763	11.4%
Employee cost	13,551	16,033	18.3%
Other expenses	5,062	6,435	27.1%
EBITDA*	10,133	9,973	-1.6%
Finance costs (Net of Interest income)	205	129	-37.1%
Depreciation expense	1,473	1,789	21.5%
Profit before tax, before exceptional items	8,455	8,055	-4.7%
Profit before tax	8,455	8,055	-4.7%
PAT	6,383	6059	-5.1%
Earnings per share	1.44	1.37	-4.9%

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

Sourcing

Companys Joint Venture Partners have unlocked strong synergies in the business, underpinned by strong commitment to quality, timely delivery, and continuous innovation. The collaborative framework has enabled advancements in knowledge, product development, and customer responsiveness.

MSWIL benefits from robust vertical integration with group businesses of SAMIL and SWS. It strategically sources wires, terminals, connectors, PVC tubes, rubber components, and other materials from SAMIL. Additionally, a wide range of child parts is procured from SWS to ensure global quality standards and consistent reliability.

In line with evolving mobility trends, the team has also begun sourcing key components for electric vehicles (EVs) and alternate fuel systems from SAMIL, thereby enhancing MSWILs value proposition and product portfolio for future-ready wiring harness solutions.

Other arrangements:

SAMILandMSWILhaveacentralteamfor so me 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, the Company has entered into long-term leasing arrangements for taking land as well as premises on lease to operate factories from SAMIL. 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 2024-25 is as follows:

S.No.	Segment	% Breakdown
1	Passenger car market	61%
2	Commercial vehicles	10%
3	Two wheeler	13%
4	Special products groups such as off road vehicles, tractors etc.	7%
5	Others including tier 1/ 2 suppliers	9%
	Total	100%

Major cost contributors Cost of Material

For the financial year ended March 31, 2025, the cost of materials was INR 60,763 million against INR 54,537 million for the corresponding previous financial year ended March 31, 2024.

As a percentage of revenue, the cost of materials was 65.2% for the fiscal year ended March 31,2025, which is in line with 65.5% for the previous year ended March 31, 2024.

Company has been continuously focussing and 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, 2025 is 17.2% of the revenue as compared to 16.3% of revenue for the previous year. The employee cost has increased in absolute amount; with increase in head counts on account of increase in capacity due to expansion in existing plants, and revision in minimum wages in many of the states. For the year ended March 31, 2025, the Company reimbursed / shared with SAMIL its share of common expenses of INR 624 million (March 31, 2024: INR 522 million) at cost.

Employee cost is the second largest contributor after raw materials in the total cost structure. This cost is basis the size of operations, geographical reach and skill requirements 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 2024-25, other expenses were 6.9% as compared to 6.1% in previous year. The expenses also include purchases of stores and spares due to new launches of customer models. For the year 2024-25, the Company reimbursed / shared with SAMIL its share of common expenses of INR 418 million at cost (March 31, 2024: INR 423 Million). 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 2024-25, the company has provided, an amount of INR 545 million (March 31, 2024 : INR 475 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 129 million for FY 2024-25 (INR 205 million for FY 2023-24) included finance costs of INR 212 million in FY 2024-25 (INR 226 million in FY 2023-24) provided for in respect of operating lease (including costs relating to lease arrangements with SAMIL in respect of premises used by MSWIL).

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, 2025, depreciation expenses were INR 1,789 million in comparison to INR1,473 million for the previous year ended March 31, 2024.

Income Taxes

The provision for current tax for the FY 2024-25 amounted to INR 2,039 million (INR 2,144 million in FY 2023-24) and after providing for deferred tax credit of INR 43 million in FY 2024-25 (INR 72 million in FY 2023-24), the total tax charged to P/L account amounted to INR 1,996 million in FY 2024-25 (INR 2,072 million in FY 2023-24).

Financial position:

INR in million

Financial Position	March 31,2024	March 31,2025
Property, plant and equipment	3,769	4,610
Capital work-in-progress	237	367
Right-to-use assets	2,228	2,296
Other assets
- Inventories	11,399	12,824
- Trade receivables	8,959	12,437
- Cash & cash equivalents	1,670	143
- Other bank balances	1,013	2,232
- Other assets	2,114	2,379
Total assets	31,389	37,288
Liabilities (other then borrowings)	12,030	17,613
Net assets	19,359	19,675
Source of funding:
Net worth	16,768	16,983
Debt outstanding
- Short-term loan	-	-
- Long-term loan	86	95
External debt	86	95
Less: cash & cash equivalents	(1,670)	(143)
Less: fixed deposits with banks	(1,000)	-
Net external debt	(2,584)	(48)
- Lease liabilities	2,505	2,597
Total debt including lease liability	(79)	2,549
Capital expenditure (Net of disposals)	1,111	1,712

Incremental working capital and CAPEX requirements have been 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 2024-25, the Company incurred capital expenditure (Net of disposals) of INR 1,712 million (INR 1,111 million in FY 2023-24) which has been financed from internal accruals within the Company. Total capital expenditure includes INR 864 million utilised for new plants (INR 400 million in FY 2023- 24), remaining INR 848 million for addition in Property Plant and Equipment (PPE) for capacity enhancement as well as other customer related/ improvement projects in existing plants (INR 711 million was for capacity enhancement as well as other customer related/ improvement projects in FY 2023-24).

CASH FLOW

During the financial year 2024-25, the Company generated a positive cash flow position after meeting operating expenses including capital expenditure. The operating cash flows (before working capital) for FY 2024- 25 were INR 9,931 million (INR 10,102 million in FY2023-24) and CAPEX of INR 1,712 million in FY 2024-25 (INR 1,111 million in FY 2023-24). The following table summarises the companys cash flows for the current year and the previous year.

Cash Flow statement:

INR in million

Particulars	FY 2023-24	FY 2024-25
Cash flow from operations	10,081	5,587
Taxes paid	(2,171)	(1,939)
Cash flow from operating activities	7,910	3,648
Capital Expenditure (Net of disposal)	(1,111)	(1,712)
Proceeds / (Investments) in fixed deposits	(1,000)	1,000
Interest received	32	111
Cash used in Investing activities	(2,079)	(601)
Interest paid	(268)	(239)
Proceeds / (repayments) of borrowings	(740)	-
Payment of principal portion of lease liabilities	(646)	(807)
Dividend paid	(2,868)	(3,528)
Cash flow from / (used in) financing activities	(4,522)	(4,574)
Net lncrease/(Decrease) in Cash & Cash Equivalents	1,309	(1,527)
Net Cash and Cash equivalents at the beginning of the year	361	1670
Cash and cash equivalents as at the end of the year	1,670	143

Operating Activities

Net cash generated from operating activities during FY 2024- 25, was INR 3,648 million (INR 7,910 million in FY 2023-24). Cash generated from operations before changes in working capital & income tax was INR 9,931 million in FY 2024-25 (INR 10,102 million in FY 2023-24).

Investing Activities

Net cash flow utilised in investing activities during FY 2024-25, was INR 601 million (INR 2,079 million in FY 2023-24). This was primarily utilised for capital expenditure. Capital expenditure includes capital work in progress of INR 864 million for new plant (INR 400 million for new plant in FY 2023-24), INR 848 million for addition in Property Plant and Equipment (PPE) for capacity enhancement as well as other customer related/ improvement projects in existing plants, (INR 711 million was for capacity enhancement as well as other customer related/ improvement projects in FY 2023-24). Investment in bank fixed deposit is Nil in the current year against INR 1,000 million in FY 2023-24,which are utilised in investing activities partially set off by interest income of INR 111 million (INR 32 million in FY 2023-24).

Financing Activities

Net cash flow utilised in financing activities during FY 2024-25, was INR 4,574 million (INR 4,522 million in FY 2023-24). This includes INR 3,528 million towards payment of dividend, Nil amount as repayment of borrowings, INR 27 million as payment of interest & finance cost and INR 1,019 million as payment of lease rent (INR 2,868 million for payment of dividend, INR 41 million as payment of interest, INR 873 million as payment of lease rent and INR 740 million as net repayment of borrowings in FY 2023-24).

Ratio Analysis:

Key ratios	FY 2023-24	FY 2024-25	% Change
Trade Receivable Turnover (days)	37	42	12.6%
Inventory Turnover (days)	78	72	-7.5%
Trade Receivable Turnover (in times)	9.76	8.67	-11.2%
Inventory turnover (in times)	4.64	5.02	8.1%
Return on equity ratio (in times)	0.42	0.36	-15.4%
Interest Coverage Ratio (in times)	37.12	40.38	8.8%
Current ratio (in times)	1.94	1.58	-18.5%
Debt Equity Ratio (in times)	0.15	0.16	2.6%
Operating Profit Margin (%)	10.4%	8.8%	-15.6%
Net profit Margin (%)	7.7%	6.5%	-15.3%
Net DebtA to EBITDA (in times)	0.1	0.3	181.2%

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) increased on account of reduction in cash and cash equivalents as compared to 2023-24.

DIVIDEND PAYOUTS

The Company has paid interim divided of INR 0.50 per share during the FY 2024-25 and proposed a final dividend of INR 0.35 per share (INR 0.80 per share for FY 2023-24) which will be paid after approval at the ensuing annual general meeting. The dividend payout ratio for FY 2024-25 is 62% of profits (55% of profits in FY 2023-24).

RISK MANAGEMENT

The financial year 2024-25 saw multiple external and internal challenges continuing to shape the overall risk profile of the company. Macroeconomic and geo-political risks had an impact throughout the year. Risks are an integral part of business growth and mitigating risks from all directions is one of the challenges that company strives to minimise with full efforts. Management and mitigation efforts must be calibrated according to the likelihood of exposure and the potential downside of an incident.

We are committed to establishing an operational environment that integrates systematic enterprise risk management (ERM) across all levels of the organization. We recognize that risk is an inherent element of all business activity. Our structured Enterprise Risk Management (ERM) process enables us to proactively identify, evaluate, and address risks and opportunities across our operations. We adopt a Risk-Based Thinking (RBT) approach, which integrates risk awareness into every decision-making process— from new product development and supplier selection to plant setup and business diversification. This approach is essential not only for mitigating threats but also for capturing value-creating opportunities.

The Company has set up a Risk Management Committee (RMC) at a Board level with a robust framework to monitor and mitigate risks. Risk Management Committee periodically reviews operating, financial, regulatory, IT and strategic risks in the business and their mitigating factors

To continuously enhance risk mitigation strategiesand procedures, RMC has formulated a revised Risk Management Policy ("Policy") for the Company, which was approved by the Board on January 31, 2024. The Risk Management Policy lays down framework for identification of current and future material risk exposures of the Company and formulate proactive approach and procedures for mitigation of identified risks to the possible extent, in order to protect the brand value through strategic control and operational policies.

Key Elements of MSWILs Risk Management Framework:

• Risk Identification: All potential risks—whether strategic, operational, financial, environmental, or reputational—are identified through structured assessments involving cross-functional teams.

• Risk Mapping: Each risk is evaluated based on its magnitude and significance, using standardized impact and likelihood criteria. Risks are visually represented on a Risk Map, enabling prioritization.

• Risk Mitigation: Appropriate strategies are developed and implemented to eliminate, reduce, or manage identified risks. Treatment measures are selected based on the nature and severity of each risk.

• Monitoring & Effectiveness Review: A defined system is in place to track the implementation of mitigation actions and evaluate their effectiveness. Risk registers are reviewed periodically to ensure controls remain relevant and effective.

• Risk Reporting: Risk reporting at MSWIL is an ongoing, systematic, and integrated process, closely aligned with business operations. Key risks and emerging issues are escalated to the management and board-level governance forums, ensuring informed and timely decisions.

MSWIL applies this risk-based thinking across diverse functional areas. The objective is to build a culture of prevention, resilience, and continuous improvement. In an evolving automotive landscape—marked by sustainability targets, geopolitical uncertainties, and technological shifts—MSWILs structured risk management framework plays a critical role in safeguarding performance, ensuring regulatory compliance, and strengthening stakeholder trust.

Risk Description	Impact	Mitigation Plan
Uncertainty in customer schedules and inconsistent customer releases	Disruptions in production planning, material availability, and capacity utilization	Proactive customer engagement, buffer stock planning, and dynamic scheduling
Volatility in raw material prices (especially copper and plastics)	Adverse effect on cost structures and margins	Long-term purchase agreements, vendor negotiations, and periodic price review mechanisms
Shortage of semiconductors and electronic components	Potential production delays and unmet customer demand	Diversification of sourcing base and long-term planning with suppliers
Compliance risks related to tightening global ESG regulations	Reputational risk, penalties, and potential loss of business	Strengthened compliance monitoring, supplier audits, and ESG training programs
Cybersecurity threats and IT system vulnerabilities	Data breaches, business interruption, and loss of customer trust	Regular IT audits, firewall upgrades, employee awareness campaigns, and disaster recovery plans
Labour availability and skill gap in emerging locations	Productivity loss and quality challenges	Focused skilling programs, retention initiatives, and multiskilling of workforce
Fluctuations in logistics costs and delivery uncertainties	Higher freight costs, increased inventories, potential production disruption or customer line stop	Dedicated logistics vertical (SMGCL), experienced in- house logistics team managing domestic and international deliveries
Significant rise in minimum wages across geographies	Productivity loss, increased operating costs	Continuous skilling, retention, automation and digitalization to reduce labor content per unit
High dependency on a few customers or a single market	Business concentration risk, sensitivity to customer-specific changes	Diversified customer base, multi-location engagement, and selective program intake based on economic viability
Rising complexity in vehicle electronics and reduced validation times	Higher risk of product liability and potential impact on profitability and brand reputation	All units certified to IATF16949; annual third-party audits and periodic customer audits for process assurance
Weakness in internal controls	Potential fraud, misreporting, or audit qualifications	Single-instance ERP (Oracle), restricted access controls, independent internal audits supervised by COSA
Acts of God and natural disasters	Operational disruption, financial losses, injury risk, supply chain disturbance	Adequate insurance, multi-location backup, emergency drills, EHS audits, and fire safety systems in place
Climate change risks and sustainability compliance gaps	Reputational risk, regulatory non- compliance, financial impact	Net-zero transition initiatives, solar power adoption, development of EV-compatible products, public ESG disclosures
Changes in accounting standards or listing regulations	Impact on financial disclosures and ratios	Proactive compliance, staff training, immediate alignment with revised requirements
Regulatory non-compliance across multiple locations	Legal and financial penalties, reputational harm	Localized compliance teams, systemised monitoring, digital compliance tools (MTSL)
Cybersecurity and IT infrastructure vulnerabilities	Operational disruption, data theft, reputational risk	ISO 27001-certified systems managed by MTSL, central IT governance, advanced detection and security controls

At MSWIL, risk management is a strategic enabler for operational continuity and long-term value creation. Aligned with global standards, our Enterprise Risk Management (ERM) framework enables the proactive identification, assessment, mitigation, and monitoring of risks across all functions. This structured approach ensures resilience in a dynamic business environment while reinforcing stakeholder trust.

INTERNAL CONTROL SYSTEMS

The Company maintains adequate internal control systems commensurate with the nature of its business and size and complexity of its operations. These are regularly tested for their effectiveness by Statutory as well as Management Auditors.

Further Internal controls are strengthened by reassessments of processes and automations from time to time. The effectiveness of the process control and risk assessment is enhanced through continuous internal audits which forms the basis for the annual control assessment. These internal audits are conducted by independent third party with defined scope and supervision.

The internal control system & process are designed to ensure:

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

b. In compliance with applicable statutes, corporate policies and procedures.

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

d. The company maintains well-institutionalised information security management system based on internationally recognised standards and best practices and is continually improving its cybersecurity posture to safeguard from the emerging cyber threats to its business. Adherence to the statutory compliances at each of the locations is also ensured through a continuous monitoring mechanism.

e. The Company further identifies various business risks and lays down necessary procedures for mitigation of the same.

Processes in the Internal Audit function are further continuously strengthened for enhanced effectiveness and productivity including the deployment of best in class tools for analytics in the Audit domain which enhance the depth, coverage and sharpness of the internal audits.

The Internal audit reports are discussed with the business management team for the timely resolution of the identified control risks and efforts are made to have system driven controls through IT developments to the extent possible. Cyber risk management efforts are further enhanced by embedding global security governance roles in the centralised Group IT function and by effectively making use of innovative and new-age technology solutions to proactively detect and prevent sophisticated cyber threats. IT services and infrastructure is controlled and administered by independent group company Motherson Technology Services Limited (MTSL), certified against a reputed ISO/IEC 27001 international standard for information security management system. An additional independent assessment of cyber risk is also governed by Group IT function via: ITGC and Information Security audits.

The Audit Committee reviews the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations. 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 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.

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, 2025

Human Resource: Empowering Purpose, Advancing Sustainability

At Motherson Sumi Wiring India Limited (MSWIL), our people are not just employees they are the foundation of our success and the true ambassadors of our values.

Our Human Resource policies are deeply aligned with MSWILs overarching sustainability strategy. By embedding ethical practices, social responsibility, and environmental consciousness into our people processes, we ensure that our workforce actively contributes to the companys long-term sustainable goals.

Diversity and inclusion are core to our social sustainability agenda. We celebrate the uniqueness of every individual and believe that diverse perspectives are key to innovation and resilience. Our policies are designed to empower employees at every level, promote equal opportunities, and build a safe and collaborative workplace where everyone can thrive.

As we continue to grow and lead in the automotive wiring harness industry, the development, well-being, and empowerment of our people remain central to our purpose and progress.

Building a Culture of Trust, Inclusion, and Integrity

MSWILfosters a culture anchored in ethical conduct, transparency, and respect for human rights. Our Code of Conduct is not just a compliance requirement—it is the foundation of our corporate character. It is complemented by several policies including the Prevention of Harassment Policy, Human Rights Policy, Equal Opportunity Policy, and our robust Whistle-Blower Mechanism. These frameworks enable employees to speak up confidently and confidentially against actions that contradict our core values.

We recognize that embracing diversity in thought, identity, and background fosters innovation. Our commitment to inclusivity extends across genders, geographies, generations, and experiences. Through continuous sensitization, open-door platforms, and a bias-free environment, we reinforce our belief that diversity is not a metric—its a mindset.

Skilling for the Future: Learning and Development at the Core

We place a strong emphasis on building capabilities across levels to future-proof our organization. Our learning ecosystem offers a holistic 360-degree framework through classroom sessions, e-learning modules, on-the-job training, and cross-functional mentoring.

Our dedicated training programs cater to skill development at all stages of the employee lifecycle—from induction to leadership. The newly introduced web-based Learning Management System (LMS) has improved accessibility, tracking, and personalization

of learning journeys. Our Wiring Harness Skill Competition continues to serve as a beacon of excellence for associate-level skill development, fostering healthy competition and continuous improvement.

Technical and soft skills trainings are conducted both internally and externally. Employees are also nominated for specialized training in domains such as digital tools, quality management systems, and lean manufacturing. Our close engagement with group companies and technical partners supports a steady exchange of best practices, enriching the learning culture further.

Engaging Hearts and Minds

At MSWIL, employee engagement is more than a strategy—it is a commitment.

We believe people give their best when they feel inspired, empowered, and involved. With a workforce of over 50,000 spread across our facilities, we are dedicated to fostering a deep sense of belonging and purpose at every level of the organization.

To fuel a spirit of innovation, we host annual Innovation Awards, recognizing remarkable contributions in product and process excellence. Suggestion Schemes provide a platformfor employees to share ideas for improvement, while our ongoing Kaizen Drives reinforce the principle of continuous improvement. We ensure transparent and two-way communication through Synergy Sessions, plant town halls, and open forums, allowing leadership and shop-floor teams to engage directly and meaningfully.

Initiatives like Quality Circles, Kaizens, and Suggestion Schemes have been instrumental in building a culture of ownership, collaboration, and innovation—hallmarks of the MSWIL way of working.

Employees are encouraged to ideate and present solutions for process improvement. Select ideas are evaluated by a panel and implemented at the shop floor, further enhancing operational efficiency.

Quality Circles embody the spirit of teamwork and passion for problem-solving, empowering employees to present their best work to the world. Our annual Quality Circle Convention is a platform for Quality Circles worldwide to showcase their ideas and improvement projects. This event reflects our commitment to continuous improvement and innovation.

As of FY25, MSWIL has successfully nurtured 475 Quality Circles, driving 1,677 improvement projects across various plants and functions. These initiatives actively engaged over 3,900 employees, fostering a sense of ownership, innovation, and crossfunctional learning. Theoutcomes of these efforts havecontributed significantly to process efficiency, quality enhancement, and employee morale—strengthening our commitment to operational excellence.

The winning teams also demonstrated excellent performance at customer Quality circle convention & ACMA QC Convention.

Sr.No.	UNIT	Quality Circle	Position
1	Pune Marunji	Utsav QC	Wins Trophy at Cll State-Level Quality Circle Competition
2	MSWIL Sanand	Junoon QC	Wins Gold at Suzuki Motor Gujarat QC Convention!
3	Sector-85	Shaurya QC	Regional Supplier NH Circle Competition North - Winner
4	Sector-85	Shaurya QC	All India Supplier NH Circle Competition - 2nd Runners up
5	Sector-85	Shaurya QC	Plaque of Appreciation
6	Sector-85	Smriti QC	DNIN Buisness Partners Quality Circle Competition 2024 - 2nd Position
7	Sector-84, DTA	IDEAL QC	MACE DIRECTORS TROPHY
8	Sector-84, DTA	IDEAL QC	MACE QC Gold Award
9	Sector-84, DTA	IDEAL QC	ACMA Quality Category Winner

With their remarkable diligence to make a difference, Quality Circle teams of MSWIL have been coming off with flying colours in the various internal and external competitions they participate in.

Organization always believed that happy people are a sign of steady growth and a healthily progressing organization. And at MSWIL, we strive to continue being one!

Environmental Responsibility

At Motherson Sumi Wiring India Limited (MSWIL), environmental stewardship is a core pillar of our sustainability strategy and business ethos. We are committed to minimising the environmental footprint of our operations while delivering high-quality, future- ready solutions to our customers. Guided by the principles of responsible manufacturing and continuous improvement, MSWIL actively pursues initiatives that reduce emissions, conserve resources, and support a circular economy.

MSWILoperatesinfullcompliancewithallapplicableenvironmental regulations and continuously strives to go beyond mere compliance by adopting progressive environmental practices. Our operations are certified under ISO 14001:2015, reinforcing our structured approach to managing environmental aspects, impacts, and legal obligations. These certifications complement our IATF 16949 accreditation, collectively underscoring our commitment to sustainability and quality.

We take a holistic view of our environmental impact—right from product design and material selection to energy consumption, waste management, and logistics. Our teams are actively engaging with environmentally conscious suppliers and exploring innovative solutions. Energy efficiency is a major focus area for MSWIL. We are steadily increasing our share of renewable energy sources—such as solar and wind—in our energy mix, while also transitioning to LED-based lighting systems across our facilities. In an effort to reduce transportation-related emissions, several MSWIL sites have adopted trucks powered by compressed natural

gas (CNG), offering a more eco-friendly alternative for product deliveries.

Tree plantation continues to be a visible expression of our environmental commitment. During World Environment Day and throughout the year, employees across our plants take part in sapling plantation drives and local biodiversity initiatives. In FY25, our teams observed Green Day across locations and conducted awareness campaigns to encourage eco-conscious behaviours both at work and in the wider community.

At MSWIL, environmental responsibility extends beyond compliance—it is embedded in our culture. Through innovation, collaboration, and employee engagement, we are taking meaningful steps toward building a greener and more sustainable future.

Health, Safety and Well-Being: Our Collective Responsibility

At MSWIL, safety is not a priority—it is a core value. From the first day of onboarding, every employee is educated on our stringent safety protocols. Through periodic safety drills, workshops, and risk assessments, we embed safety consciousness into everyday work life.

We conduct regular internal and third-party audits, and ensure implementation of effective preventive measures across all units. Specialized safety modules are provided for contract workers and vendor staff, with mandatory use of Personal Protective Equipment (PPE) and defined Work Instructions (WINs) forming the first line of defense against potential hazards.

Our annual National Safety Week campaign is observed with great participation. Activities include safety-themed competitions, awareness walks, role plays, and demonstrations. This year, we strengthened our commitment further by revising WINs, implementing enhanced EHS (Environment, Health, and Safety) protocols, and deploying digital tracking tools for incident reporting.

Beyond physical safety, we also focus on emotional and mental well-being. Employees have access to professional counseling and wellness sessions to cope with stress and life transitions. During the year, we expanded our wellness initiatives to include workshops on mindfulness, nutrition, and lifestyle management.

Career Development and Recognition

We strongly believe that growth is a shared responsibility between the organization and the individual. At MSWIL, career development is aligned with performance, potential, and aspirations. We identify high-potential talent early and provide targeted development through stretch roles, rotational assignments, and exposure to strategic projects.

Performance Management at MSWIL is transparent and developmental. We follow a structured goal-setting and review process that links individual contributions to business outcomes. Continuous feedback and mid-year check-ins help align efforts with evolving priorities.

Fostering Family, Fun and Festivity

We take pride in being more than just a workplace. MSWIL is a vibrant community where achievements are celebrated, creativity is encouraged, and personal milestones are valued. Our engagement calendar is packed with activities like:

• Annual Cricket Tournament

• Painting and Rangoli Competitions

• Ouiz Contest

• Annual Day Celebrations

• Theme Based celebrations

These events serve as platforms for employees across units and locations to connect, collaborate, and celebrate the spirit of MSWIL. The Annual Day, in particular, is a unifying celebration that brings together thousands of employees, reflecting our family-like culture and shared pride.

People-Centric Governance

People practices at MSWIL are governed through structured processes, with oversight from the Human Resource Council and cross-functional committees. Our employee policies are reviewed periodically to remain aligned with emerging regulatory requirements and global benchmarks.

The senior management regularly interacts with employees through site visits, listening forums, and strategy briefings. Feedback gathered through these platforms is shared with the Board and used to inform decisions on people and policy matters.

MSWIL also conducts periodic human rights assessments of its operations and supply chain. All grievance redressal mechanisms are equipped to handle issues related to discrimination, harassment, and ethical concerns, with safeguards against retaliation.

Human Rights Due Diligence Process

At MSWIL, respect for human rights is deeply embedded in our culture. Guided by our core values and Code of Conduct, we remain unwavering in our commitment to ensuring dignity, fairness, and equality across all locations.

We conduct regular and comprehensive assessments of our facilities to ensure compliance with human rights standards. These are led by internal teams and supported by strong governance mechanisms. Senior leadership reviews the outcomes periodically, reinforcing accountability and continuous oversight.

Zero Tolerance to Child Labour We do not engage in or tolerate child labour in any form. Our HR systems are structured to prevent the recruitment of individuals below the legally permissible age. Additionally, stringent gate controls ensure that access to our premises is in full compliance with this policy.

No Forced or Involuntary Labour We are committed to fostering a respectful and ethical work environment. All forms of forced or involuntary labour are strictly prohibited. Employee wages are disbursed directly to individual bank accounts, reinforcing transparency and eliminating risks of coercion.

Safe and Respectful Workplaces MSWIL maintains a workplace free of harassment and intimidation. In line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, we have implemented a robust policy at all our locations. Internal Complaints Committees (ICCs) are in place to ensure swift and fair resolution of any concerns.

Promoting Inclusion, Preventing Discrimination We believe in the power of diversity and equal opportunity. Discrimination based on gender, caste, religion, ethnicity, or background has no place in our organization. Every individual is respected, valued, and given the opportunity to grow based on merit and contribution.

Ongoing Vigilance and Corrective Action In FY 2024-25, no major risks or violations were observed through our human rights assessments. Nonetheless, we remain alert and committed to proactive action. Regular audits, feedback mechanisms, and continuous monitoring help us identify potential gaps and address them effectively—well before they evolve into concerns.

Resilience through Change

As the nature of work and the workplace continues to evolve, MSWIL remains committed to agility and adaptability. We continue to invest in digital HR tools to automate and streamline talent processes—from onboarding to exit.

We also continue to assess and improve working conditions of value chain partners. Over the reporting period, corrective actions included improving PPE access, revising WINs, certifying suppliers for safety standards, and implementing management systems aligned with our sustainability goals.

Looking Ahead: The Path Forward

In FY26, we plan to scale up awareness on Product Carbon Footprinting (PCF) among design, sales, and procurement teams. We also aim to expand leadership development interventions, strengthen DEI (Diversity, Equity, and Inclusion) metrics, and continue our journey toward being a future-ready, human-centric organization.

As we move forward, our people will continue to be our biggest differentiator. We are proud of their contribution, their dedication, and their spirit of ownership.

At MSWIL, we dont just build products, we build the future .

OPPORTUNITIES AND FUTURE PROSPECTS

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 T urnover (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]
Return on equity (in times)	[Net profits after tax / Average total equity]
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