S J S Enterprises Ltd Management Discussions

GLOBAL ECONOMY

In 2024, the global economy faces both challenges and opportunities due to economic conditions, geopolitical events, and policy changes. According to the International Monetary Funds (IMF) World Economic Outlook, the global GDP growth rate is 3.3%. Advanced economies are expanding more slowly, while emerging markets, especially in Asia, are growing at a relatively faster pace.

Geopolitical tensions, including the ongoing Russia-Ukraine conflict, supply chain disruptions, and trade disputes between major economies like the U.S. and China, continue to affect global economic stability. Additionally, climate policies and regulatory changes are shaping investment decisions across industries.

The US economy, supported by a healthy labour market and lower inflation, achieved a real GDP growth of 2.8% in 2024. The Eurozone is increase by 0.9%, with Germany contracting slightly. Investments in technology and infrastructure are expected to drive 4.3% growth in emerging markets. Chinas growth rate is expected to be 5.0%, boosted by government measures and a stable real estate market.

Global inflation is improving, estimated at 5.7% in 2024, down from 6.7% in 2023. Advanced economies are likely to achieve this target sooner than emerging markets and developing economies, where the decline may be more gradual.

OUTLOOK

The global economy is expected to grow at a steady pace, with GDP projected to dip to 2.8% in 2025 and 3.0% in 2026, supported by strong performance in the U.S. and major emerging markets.

Advanced economies are likely to maintain stable growth, with forecasts of 1.4% in 2025 and 1.5% in 2026. In the U.S., growth is expected fall at 1.8% in 2025 before slowing to 1.7% in 2026, reflecting changes in the labour market and a drop in consumer spending. The Eurozone is set to recover from its 2023 slowdown, with growth projected at 0.8% in 2025 and improving to 1.2% in 2026, driven by higher household spending and easing inflation.

Global inflation is expected to decline to 4.3% in 2025 and 3.6% in 2026, though some regions may still struggle with stagnation due to persistent inflation. Advanced economies are likely to reach central bank targets sooner, but monetary policy will remain mixed—some central banks will keep tight measures in place, while others may ease policies to support growth.

The shift to cleaner energy presents both opportunities and challenges. Resource-dependent economies may face difficulties in adapting to this transition, while the increasing frequency of extreme weather events threatens agricultural production and overall economic stability.

(Source: World Economic Outlook, IMF)

INDIAN ECONOMY

Indias economy continues to demonstrate perseverance and consistent growth, cementing its place as one of the fastest- growing major economies. According to the Second Advanced Estimate (SAE) data from the National Statistical Office (NSO), the real Gross Domestic Product (GDP) is projected to grow by 6.5% for FY 2024-25, following an impressive 9.2% growth as per the First Revised Estimates from the prior financial year. This continuous momentum is due to the countrys solid economic fundamentals, policy backing, expanding services sector, and domestic demand, which reinforces confidence in Indias long-term growth prospects.

The governments strategic reforms, significant investments in both physical and digital infrastructure, and initiatives like Make in India and the Production-Linked Incentive (PLI) plan have all contributed to the countrys growth trajectory and self-reliance.

The services sector is projected to maintain strong growth at 7.2%, fuelled by healthy activity across financial, real estate, professional services, public administration, defence, and other service segments.

Indias economic position continues to improve, now ranking as the fifth-largest economy in the world by nominal Gross Domestic Product (GDP) and the third-largest when measured by purchasing power parity (PPP). The nation has set ambitious goals to achieve a $5 trillion economy by FY 2027-28 and a $30 trillion economy by 2047. These objectives are to be realised through significant investments in infrastructure, ongoing reforms, and the widespread integration of technology. The capital investment budget for 2025-26 reflects this commitment, increasing to Rs. 11.21 Lacs Crs, which accounts for 3.1% of GDP.

OUTLOOK

India is estimated to expand at 6.2% in FY 2025-26. India is expected to become the worlds third-largest economy by 2030, propelled by infrastructure investment, private capital expenditure, and financial services expansion. Ongoing improvements promote long-term growth.

Indias bullish outlook is supported by a demographic dividend, increased capital investment, aggressive policies, and robust consumer demand. Improved rural consumption, fuelled by lower inflation, reinforces this trend. Investment and consumption are boosted by the governments focus on capital spending, budgetary discipline, and improving business/consumer confidence.

Initiatives such as Make in India 2.0, ease of doing business reforms, and the PLI plan seek to boost infrastructure, manufacturing, and exports, establishing India as a global manufacturing centre.

A more adaptive monetary policy is projected as inflation returns to goal by 2025. Infrastructure development and public policies will stimulate capital formation, while initiatives like Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) are going to improve rural demand.

(Source: PIB, MoSPI, Economic Survey)

INDUSTRY OVERVIEW

Indian Decorative Aesthetic Industry

The Indian decorative aesthetics industry has experienced substantial growth in FY 2024-25, driven by increased demand from the automotive and consumer appliance sectors. The automotive sector, encompassing both two-wheelers and passenger vehicles, significantly contributed to this growth. The passenger vehicle segment, in particular, witnessed a surge in demand for decorative aesthetics components, reflecting consumers inclination towards visually appealing and personalised vehicle features.

In the consumer appliances sector, manufacturers increasingly integrated advanced aesthetic elements into their products to cater to evolving consumer tastes. This shift led to a heightened demand for decorative aesthetics components, further promoting the industrys growth.

This growth is attributed to the rising focus on product aesthetics by original equipment manufacturers (OEMs) during the brand-building process. While the two-wheeler segment accounts for the largest share of the industry by volume, reflecting substantial demand for decorative aesthetics. The higher kit value per vehicle in the passenger vehicle segment suggests a significant contribution to the overall value of decorative aesthetics within the automotive industry.

The Indian decorative aesthetics industry is set for significant growth in FY 2025-26, with projections reaching Rs. 49.2 billion. This impressive expansion underscores the increasing importance of aesthetic components in enhancing product appeal and driving brand differentiation. As consumers place greater emphasis on design and visual allure in their purchasing decisions, companies within this sector are likely to benefit greatly from the rising demand for premium aesthetic products.

Additionally, vehicles are increasingly regarded as status symbols, leading consumers to invest in premium models that offer enhanced features and sophisticated aesthetics. This trend is particularly evident among young professionals who, upon entering the workforce, are choosing cars over two-wheelers, reflecting a shift in lifestyle preferences. Furthermore, individuals experiencing upward mobility are gradually moving from two-wheelers to personal vehicles, seeking not only functionality but also a sense of prestige and luxury.

The positive trajectory of the industry indicates ample opportunities for innovation and market expansion in the coming fiscal year. By embracing these trends, companies can position themselves at the forefront of a dynamic market landscape, nurturing a culture of creativity and excellence in the decorative aesthetics space.

Indian Two-wheeler Sector

The two-wheeler sector experienced significant positive momentum in FY 2024-25, recording sales of 19.6 Mn units, which represents a 9.1% increase compared to FY 202324. This recovery was primarily driven by enhanced rural demand and a renewed sense of consumer confidence. The scooter category notably spearheaded this expansion, benefiting from better connectivity in rural and semi-urban areas, alongside the introduction of contemporary models featuring advanced capabilities. It is also noted that electric vehicles (EVs) now constitute over 6% of the total twowheeler market in FY 2024-25.

Two-wheeler exports also demonstrated strong performance in FY 2024-25, growing by 21.4% year-on-year to a total of 4.2 Mn units. The expansion into new markets and the launch of new models were key contributors to this broader international presence. Furthermore, improved economic conditions in the African region and consistent demand from Latin American markets provided additional support for this export growth.

In the broader electric vehicle segment, national registrations reached 1.97 Mn units in FY 2024-25, an increase from 1.68 Mn units in FY 2023-24, indicating a growth rate of 16.9%.

Specifically, e-two-wheeler registrations saw a 21.2% rise in FY 2024-25 over the previous year, totalling 1.15 Mn units.

Government of Indias recent policy initiatives have also played a crucial role in accelerating electric vehicle adoption nationwide. These include the Electric Mobility Promotion Scheme (EMPS), operational from April 1st, 2024, to September, 2024, subsequently complemented by the PM E DRIVE and PM e-Sewa schemes. These measures, alongside the introduction of new EV models by numerous manufacturers, have provided significant impetus to the market.

(Sources: SIAM)

Indias two-wheeler industry is projected to experience steady growth in FY 2025-26 and beyond, driven by favourable macroeconomic conditions and increasing demand. Mid-to-high single-digit growth is anticipated for the two-wheeler sector in FY26, driven by supportive economic trends. Factors contributing to this outlook include easing inflation, lower interest rates, tax benefits, and a favourable monsoon season.

(Source: The Economic Times)

The electric two-wheeler (e2W) segment is expected to expand rapidly, with forecasts indicating a CAGR of 28.34% between FY2025 and FY2032. This growth is fuelled by rising environmental concerns, government incentives, and advancements in battery technology. The overall twowheeler market is also poised for significant expansion, projected to reach $33.20 billion by 2030, growing at a CAGR of 10.50%.

(Sources: Mobility Outlook, Markets and Data, GlobeNewswire)

Indian Passenger Vehicles Sector Overview and Outlook

The Indian passenger vehicle (PV) industry has witnessed a modest growth of 3.3% in FY 2024-25. This is largely due to subdued demand in the market, which had led manufacturers to offer rising discounts to attract buyers.

The SUV segment continues to lead the passenger vehicle market, driven by consumer demand for larger vehicles and new model introductions. While currently smaller, the electric vehicle (EV) segment is experiencing rapid growth. EV sales have increased dramatically, from approximately 2,000 units in FY 2018-19 to 90,000 in FY 2023-24 - a 45-fold increase in just five years. This expansion is supported by government incentives, a growing range of EV models, and increasing consumer awareness.

Passenger vehicle sales in FY 2025-26 are projected to grow in low single digits, primarily influenced by a high base effect from the previous year. Demand is expected to be driven largely by the popularity of sport-utility vehicles (SUVs) and the introduction of new electric vehicle (EV) models.

However, sales of entry-level cars are likely to remain sluggish due to ongoing affordability concerns among consumers. According to projections shared by automakers at an industry meeting hosted by the Society of Indian Automobile Manufacturers (SIAM), sales of cars, SUVs and vans may increase by 1% to 4% in FY 2025-26.

While the recent repo rate cut by the central bank and income tax reliefs in the budget are anticipated to encourage middle-class consumer spending, challenges regarding affordability at the entry level continue to pose obstacles for potential buyers. As the automotive industry navigates these dynamics, it will be essential for manufacturers to address consumer concerns and adapt their strategies accordingly.

Overall, the current dynamics in the automotive sector emphasise the need for manufacturers to adapt to changing consumer preferences and market conditions. As the industry navigates these challenges, it will be crucial for companies to innovate and respond effectively to maintain their competitive edge.

(Source: Economic Times, Marklines)

Indian Consumer Durables Sector

The Indian consumer durables sector is in a phase of steady development and expansion. Industry forecasts suggest the market could approach Rs. 5 Lacs Crs by FY 2029-30. This expansion is driven by increasing disposable incomes, a growing middle class, and a shift towards premium, feature- rich products. The governments recent budgetary measures, including tax relief for the middle class, are expected to further stimulate consumer spending, thereby boosting demand for consumer durables.

(Source: Economic Times)

Consumers are increasingly choosing premium products across various categories, including electronics and home appliances. This trend towards premiumisation sees customers investing in high-end, feature-rich items. Government initiatives, such as tax cuts, are expected to boost consumer spending and positively impact the consumer durables sector, with analysts predicting increased demand for mass-market items like home appliances and smartphones.

Looking ahead to FY 2025-26, the Indian consumer durables market is expected to continue its upward trajectory, driven by sustained economic growth, rising disposable incomes, and ongoing government support. The sector is anticipated to benefit from increased domestic manufacturing, which is expected to enhance competitiveness and meet the growing demand for both premium and mass-market products.

The Indian consumer durables sector is growing, supported by favourable economic policies, a shift towards premium products, and a burgeoning middle class. While challenges such as income disparity and inflationary pressures persist, the sectors fundamentals remain strong, positioning it for continued expansion in the coming years.

GROWTH DRIVERS

Growing Demand for Aesthetically Pleasing Products:

Several factors contribute to the growth of the decorative aesthetics market. Rapid urbanisation and a growing middle class are driving demand for branded appliances and visually appealing products. The Indian decorative aesthetics market is projected to expand, fuelled by rising consumer aspirations. The Indian consumer durables market is projected to grow by 11-12% in FY 2024-25, following a 13% growth in the previous fiscal year, reflecting increased penetration in both urban and rural areas.

(Source: ETBFSI)

The increasing adoption of advanced decorative aesthetics, notably in two-wheelers, passenger vehicles, and consumer durables, is evident. Optical plastics/ cover glass, presently confined to higher-end variants, are anticipated to see wider use as touch navigation becomes standard in mid-to-top- tier models. Furthermore, the application of chrome-plated parts has broadened from interior door handles to exterior trims, including front grilles, boot lid liners, and fog lamp covers, reflecting manufacturers response to consumer preferences. This growing incorporation of such components is set to substantially increase revenues for suppliers of aesthetic products.

(Source: Equityedge)

Increased Consumer Spending Power: Rising disposable incomes are also influencing consumer spending, with a shift towards premium decorative products. Indias per capita income is forecast to increase by 7.2% in FY 202425, compared to 6.8% in FY 2023-24. Government initiatives to boost the rural economy have further increased spending power in these regions, contributing 12% of decorative aesthetics market growth as rural consumers increasingly choose branded, higher-value products. Additionally, the recent budget for 2025-26 has raised the tax-free income limit to Rs. 12.75 Lacs, factoring in a standard deduction of Rs. 75,000. This change is expected to further increase disposable income for many consumers, thereby enhancing their purchasing power. As a result, the combination of rising incomes and favourable tax policies is likely to drive greater demand for premium decorative products across both urban and rural markets.

Technological Advancements and Innovation: The decorative aesthetics industry is rapidly adopting advanced technologies such as-digital dials, touch-based navigation systems, IMD/IML parts and cover glass. These innovations offer opportunities for companies like SJS Enterprises to innovate and expand their portfolios as OEMs and consumer appliance companies seek differentiation.

Expansion of the Electric Vehicle Market: In 2024, electric vehicle (EV) sales in India reached a record high of 1.95 Mn units in 2024, which is an increase of over 27% compared to the 1.53 Mn units sold in 2023. This means that EVs made up 3.6% of all vehicle sales in the country, according to data from the Ministry of Road Transport and Highways. This indicates that despite the notable increase in volumes, the proportion of EVs within the overall vehicle market remains modest. Therefore, it is anticipated that achieving a substantial market share for electric vehicles will take several more years.

Throughout the year, the EV market consistently sold more than 100,000 units each month. Uttar Pradesh led the country in EV sales, with a total of 368,718 vehicles sold. Following Uttar Pradesh, Maharashtra had 241,930 EVs sold, and Karnataka recorded 178,867 sales. Overall, India now has more than 5.39 Mn registered EVs on the road.

(Source: Mercomindia)

Supportive Government Policies: Government support for EVs and domestic manufacturing remains strong. Funding under the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) in India Phase II scheme has increased to Rs. 11,500 Crs in FY 2024-25 from Rs. 10,000 Crs in FY 2023-24, with Rs. 5,311 Crs allocated for electric two-wheeler subsidies. The Production Linked Incentive (PLI) scheme and the "Make in India" initiative are also encouraging domestic manufacturing, with an estimated investment of Rs. 42,500 Crs, aiming to create 1.4 Lacs jobs over five years.

(Source: Press Information Bureau (PIB) Business News)

"China Plus One" Strategy and Export Opportunities:

Finally, the "China Plus One" strategy is benefiting India as global OEMs seek manufacturing diversification. Major players are investing in India, which is expected to boost decorative aesthetics exports in the coming years.

BUSINESS OVERVIEW

Established in 1987, SJS has over 38 years of expertise in industrial graphics printing and manufacturing aesthetic components. The company operates state-of-the-art manufacturing facilities in Bengaluru, Pune, and Gurugram, India, covering over 400,000 sq. ft. of production space. SJS has successfully expanded its global footprint by supplying products to leading OEMs across Europe, North America, Latin America, and the ASEAN countries.

As a partner, co-creator, and supplier of choice to several leading OEMs in the automotive and consumer durables industry, SJS has built strong relationships that foster collaboration and innovation. The company prides itself on being innovation-driven, with robust in-house design and R&D capabilities that enable it to develop cutting-edge solutions tailored to meet the evolving needs of its clients.

By leveraging its advanced manufacturing facilities and commitment to quality, SJS continues to deliver exceptional products and services to its global clientele, reinforcing its position as a leader in the decorative aesthetics market.

SJS Enterprises Limited is a key participant in Indias decorative aesthetics industry, offering comprehensive "design-to-delivery" solutions primarily for the automotive and consumer appliance sectors. The companys diverse product portfolio includes decals, body graphics, 2D and 3D appliques and dials, 3D lux badges, domes, overlays, aluminium badges, in-mould label or decoration parts (IML/ IMD), lens mask assemblies, optical plastics and chrome plated and painted injection-moulded plastic parts.

In 2021, SJS enhanced its product offerings and market reach by acquiring SJS Decoplast, a move that added capabilities in chrome-plated and painted parts to its portfolio.

The companys commitment to quality is underscored by its IATF 16949 certification, reflecting its focus on stringent quality control and on-time delivery. SJS has established long-standing relationships with prominent names in the automotive and appliance industries, a testament to its reliability and excellence.

With a professional management team possessing extensive industry experience, SJS is well-positioned to continue its growth trajectory. The companys strategic focus on innovation, quality, and customer satisfaction reinforces its vision to be a global leader in decorative aesthetics solutions. (Source: Economic Times, SJS India)

PERFORMANCE REVIEW 2024-25 Financial Performance

Particulars	FY 2024-25	FY 2023-24
Debtors Turnover	4.5	5.0
Interest Coverage Ratio	28.1	14.2
Current Ratio	2.8	2.0
Debt Equity Ratio	0.1	0.2
EBITDA Margin (%)	26.4%	25.2%
Net Profit Margin (%)	15.6%	13.6%
Return on Net Worth (RoNW) (%)	17.2%	15.2%
Return on Capital Employed (ROCE)	25.7%	20.4%

Operational Performance

• SJS delivered 21.1% Y-o-Y growth in revenue to Rs. 7,604.9 Mn on the back of strong performance in passenger vehicle and consumer segment. EBITDA grew 27.1% to Rs. 2,032 Mn with a margin of 26.4%, and margin expansions by 129 bps. PAT stood at Rs. 1,188.3 Mn, witnessing a Y-o-Y growth of 39.2% and margin improved by 203 bps to 15.6%.

• Domestic sales grew 21.4% YoY to Rs. 7,037.0 Mn, driven by 28.4% YoY growth in PV business and 18.8% YoY growth in consumer business.

• Exports grew 17.6% YoY to Rs. 567.9 Mn, contributing 7.5% to total consolidated revenue.

• The Company has strong cash flow generation which has positively impacted the consolidated ROCE, which stands at 25.7% and ROE at 17.2%

• Company declared a final dividend payout of 25% of face value

• Addition of new customers in the automobile segment like Stellantis, FCA, TI India and Hero MotoCorp (April 2025).

• Added customers in Consumer business like Dixon Technologies and Whirlpool (North America)

• Continued expanding business and growing mega accounts by winning new orders from TVS Motors, Bajaj Auto, Honda Motorcycle and Scooters India, Ather, Royal Enfield, Mahindra & Mahindra, Maruti Suzuki, Whirlpool, IFB, Hyundai, Atomberg, Marelli, Continental, Visteon, Samsung, Foxconn, Stellantis and Ola among others.

• On the strategic front, capacity expansion initiatives are progressing well, with the SJS Decoplast facility on track for commissioning in H1FY26 and work in progress for optical cover glass & display facility at Hosur. The Company will also incur capex at SJS (Bangalore) to expand capacity - to cater significant new business opportunity

Risk Management

Risk	Description	Mitigation
Macro-economic Risk	Geopolitical factors, such as economic downturn, inflation, and supply chain disruption, provide possible obstacles and risks for the company. These factors may affect client demand, end-user industries, export markets, and the companys growth.	To limit the risks associated with unfavourable macroeconomic events in any given territory, the Company consistently tries to generate sales from a wide customer base and geographic areas. It has a diversified base of customers and plant locations. Furthermore, the domestic market will continue to present significant business prospects for the Company.
Competition Risk	The company is up against intense competition from both established and unorganised industry rivals. Its market share and profitability could drop if it is unable to provide high-quality, innovative items.	The Company has established a strong brand identity through its diverse product portfolio and technical capabilities. The company can manage over 12,2000 SKUs and ensure timely delivery of high-quality products. This provides the Company with a competitive advantage in the market. With the Companys design to delivery model, and R&D capabilities, it has successfully entered sophisticated product categories and technologies with high entry barriers and few competitors.
Operational Risk	The business and financial success of the company may be impacted by delays in the creation of new products or failures in R&D or production processes.	Many equipment and machinery at SJS is fungible, which aid in avoiding delays in any orders. The Company maintains health and safety measures at its sites to ensure efficient operations. Additionally, its varied portfolio and longterm client connections help limit the danger of customer concentration. The Companys New Product Development (NPD) team innovates premium goods aligned with emerging trends, using advanced tools to create products that quickly gain clients attention and generate new orders.
Customer Risk	The loss of key customers due to unforeseen events could negatively impact the Companys reputation and revenue growth.	The Companys broad product portfolio, combined with superior quality and design, allows it to meet diverse customer needs. Long-standing relationships with key customers, some spanning nearly two decades, demonstrate the Companys established global presence. Furthermore, SJS actively mitigates customer concentration risk by expanding into new markets, targeting various end segments, and acquiring new customers. On a consolidated basis, no single customer accounts for more than 15% of total revenue, reducing this risk.
-(f)- Technology Risk	The companys failure to adapt to new technological developments may affect revenue and profit margins.	The Company prioritises investment in advanced technologies and processes to maintain a leading-edge product portfolio. As one of a select few Indian aesthetics product manufacturers, the Company offers sophisticated technologies, including capacitive overlays, optical plastics, IML/IMDs (WPI acquisition) and lens mask assembly. Furthermore, the Company has a three-year Technical Service Agreement with Walter Pack, Spain, to deepen its understanding of the nuances and advancements in IMD and IML technology. The NPD team of over 90 members collaborates with the Technology Committee to identify emerging trends and customer needs, driving next- generation technology product development.
Currency Risk	The Company faces foreign exchange risk due to importing raw materials and exporting finished goods. Adverse exchange rate movements could reduce revenue or increase input costs, impacting profit margins.	The Companys import and export mix helps to provide a natural hedge against currency fluctuations. Due to global economic uncertainty, no hedging arrangements were entered into during the year.
Crude Risk	Fluctuations in crude oil prices, driven by geopolitical tensions, macroeconomic events, and high inflation, could affect the Companys margins.	Long-standing supplier relationships ensure a consistent supply of raw materials at competitive prices, with alternative suppliers available to mitigate price fluctuations. The Company negotiates price adjustments with customers as needed to offset crude oil price increases. While some raw material cost increases can be passed on to customers after a brief delay, healthy margins on SJS and WPI products typically allow the Company to absorb minor input cost rises without significantly impacting profitability. Additionally, value analysis/value engineering (VA/VE), energy conservation, and waste reduction initiatives help maintain profitability amid rising input costs.
Talent Risk	A shortage of skilled workers or difficulty retaining key employees could affect the Companys operations.	The Companys HR policy focuses on attracting and retaining top talent. Regular skills development, training, and employee engagement programmes aim to improve morale and productivity. An attractive Employee Stock Option Plan (ESOP) is also in place to incentivise high-performing employees and encourage long-term retention.

HUMAN RESOURCE

SJS Enterprises continues to place employees at the centre of its operations, recognising their critical role in driving the Companys success. Training and skill enhancement remained a priority, with employees participating in programmes focused on screen printing, injection moulding, and operational excellence.

Key HR Initiatives for FY 2024-25

• Talent Development & Skill Enhancement: To ensure our workforce possesses the most up-to-date skills and knowledge, we have provided specialised training to a total of 103 individuals.

Trainings	Number of Individuals
New Product Development (NPD)	22 (14 from Stellantis, 8 from TUV)
International Material Data System (IMDS):	2
Security Operations Centre (SOC) Management	2
Automotive Industry Action Group (AIAG) & Verband der Automobilindustrie (VDA) Design Failure Mode and Effects Analysis (DFMEA) by TUV SUD	19
Supervisory Skill Development	37
International Automotive Task Force (IATF) Core Tools	19
Geometric Dimensioning and Tolerancing (GD&T) by CMIT	2
Total	103

• Employee Well-being & Work-Life Balance: To enhance employee well-being, we strengthened our Employee Assistance Program (EAP) and conducted workshops on stress management and work-life balance for 250 employees. We also offered master body health checkups for employees families and organised blood donation drives at Lions Hospital. In a commitment to sustainability and community engagement, we successfully implemented the tree plantation initiative, promoting a healthier environment for our employees and their families.

• Employee Wellness Programme: We have implemented a comprehensive Employee Wellness Programme focused on weight reduction to promote healthier lifestyles among our staff. This initiative includes personalised fitness plans, nutritional guidance, and regular health assessments to support employees in achieving their weight loss goals

• Diversity, Equity & Inclusion (DEI): In our efforts to promote diversity, equity, and inclusion, we increased the number of women employees from 235 in FY 202324 to 275 in FY 2024-25. This growth reflects our commitment to creating a more inclusive workplace where diverse perspectives are valued and encouraged.

• Employee Engagement & Recognition: During our Kaizen Habba and Quality Month celebrations, we received over 277 Kaizens (employee suggestions) from our team. We implemented most of these suggestions to enhance productivity and improve business operations, demonstrating our commitment to employee engagement and recognition of their contributions.

• Digital HR Transformation: We leveraged technology to streamline HR operations through automation. By utilising tools such as ZOHO, COSEC, ESS, and REYLON Softech, we improved various HR activities. Additionally, we implemented advanced technologies for digital access to the cafeteria and smart door accessibility, enhancing the overall employee experience.

• Internal Mobility & Career Growth: In recent organisational changes, the NPD BU head has taken on the role of decal department head, while decal heads have assumed the NPD head role. The Deputy Manager of Production has transitioned to the Deputy Manager of QC role. At SJS, we cultivate a culture of growth and development, providing our employees with opportunities to advance their careers. During FY 202425, numerous individuals across various levels were recognised for their contributions and potential through promotions, demonstrating the pathways available for professional advancement within the organisation.

• Talent Development & Continuous Learning:

Employees had access to various digital learning platforms, allowing them to upskill at their own pace and stay competitive in a rapidly evolving business landscape. Training topics included 4M change management, 5S & Kaizen, supplier audits, IT training, fire and safety training, on-the-job training, and certifications awareness training.

• Strengthening Employee Engagement: To cultivate a sense of community, we organised fun events during lunch breaks in the cafeteria, with around 80 to 100 employees actively participating in these activities every day. This initiative has helped strengthen employee engagement and build camaraderie among team members.

• Robust Health & Safety Policies: We prioritised health and safety by supplying safety shoes to all employees to prevent accidents and providing Electrostatic Discharge (ESD) coats for the dials and decals section. Additionally, we conducted health check-ups for family members, ensuring the well-being of our employees and their loved ones.

Learning and Development Dash Board

	Total Training Hours in FY 2024-25
Category	Total	Safety	Skill Development	Leadership Training
Staff	11,764	1,714	6,699	3,351
Workers	12,554	4,742	6,663	1,149

Some additional initiatives such as the Stellantis V2022 Training, Leadership Development Programme, and Lean Manufacturing workshops contributed to workforce development. Also, 5 employees were enrolled at Jyothy Institute of Technology to pursue higher education. The Company also implemented 44 Kaizen initiatives, leading to a 19% increase in production efficiency for Dials and 3D Lux product lines in FY2024-25.

Performance-linked initiatives, including the "Pay for Quality" scheme, reinforced a results-driven approach by rewarding employees for achieving quality benchmarks and reduction of quality rejection . Employee health and safety remained a priority, Employee Wellness Program (weight reduction) with rewards is ensured for the year 2024-25, around 200+ employees registered for the same, and with structured training on hazard identification on electrical panelroom, ETP, compressor area, DG Area, Ink ware house, accident prevention, firefighting, and risk management. The

Company continues to strengthen workplace engagement and operational efficiency, ensuring a skilled and motivated workforce. In FY 2024-25, SJS Enterprises Ltd. welcomed 34 new employees.

Further details on employee engagement and well-being are covered in the "Social - People" section.

ENVIRONMENT, HEALTH AND SAFETY (EHS)

SJS prioritises environmental responsibility, workplace safety, and sustainable growth. SJS is proud to state that ACMA awarded SJS with "Progressive" - Certificate of Merit for Excellence in Manufacturing and Excellence in ESG. Such nationwide recognition motivates the Company to follow strict legal compliance and continuously monitor environmental and safety performance through its Integrated Management Systems (ISO 14001:2015 & ISO 45001:2018) and energy performance through ISO 50001:2018.

Hyundai awarded SQ Certification to Exotech for quality and manufacturing systems compliance to their requirements. SJS also passed an audit from Certified EHS auditors of our esteemed customers HMSI, an audit of ISI 14489 covering the scope of OSH & Chemical hazard. The Company conducts regular audits by certified auditors to uphold high standards.

Environmental Initiatives

SJS actively reduces its environmental impact by adopting eco-friendly practices, conserving resources, and cutting its carbon footprint. Its policies focus on climate action, biodiversity conservation, and improving energy and water efficiency. To mark World Environment Day, 500 trees were planted near the SJS plant in the month of Sept 2024. Additionally another 200 trees were planted during month of January 2025

Key sustainability efforts include:

• Solar Energy: Installation of solar panels at factories to harness renewable power.

• Water Conservation: Sewage treatment plant (STP) to recycle and minimise water wastage.

• Reduced Diesel Use: Transitioning to cleaner energy sources to lower fuel consumption.

The LEED Gold-certified Bengaluru facility, recognised by the US Green Building Council, showcases SJSs sustainability drive. It operates effluent treatment units to recycle wastewater and generates ~2 MW of solar power, significantly reducing diesel reliance. With ~85% of its energy sourced from renewables, efforts are underway to expand clean energy use at other facilities. SJS has also initiated the ISO 50001:2018 Energy Management System (EMS) certification and trained 17 employees as Energy Internal Auditors, ensuring focus on energy efficiency, completing the certification by April 2024.

Employee Welfare and Safety

SJS is committed to a safe and inclusive workplace while supporting community well-being. It organised the EHS Leadership Excellence Programme and conducted awareness training across all departments.

Additional safety and skills training:

• First Aid Training: Conducted by St. John Hospital, Bangalore, for 60 Emergency Response Team (ERT) members

• Hazard Identification and Risk Assessment (HIRA):

Strengthening workplace safety.

• ISO 50001 Energy Management Training: Enhancing energy efficiency and having certified Energy auditors

• EOT & Forklift Certification: Ensuring safety compliance annually for high-risk tasks with FORM32 Certification

• Employee Well-being: Conducted comprehensive health check-ups for approximately 1,456 employees/ workers in FY 2024-25 to monitor their health and wellbeing.

• Employee Wellness Program (weight Reduction):

The Employee Wellness (Weight Reduction) Programme achieved significant participation in FY 2024-25, with over 200 employees involved.

CORPORATE SOCIAL RESPONSIBILITY

SJS is a socially responsible organisation focused on positively impacting the areas where it operates. The Companys major priority areas include education, healthcare, and sanitation facilities for under privileged, women empowerment and environmental protection. The goal is to improve the wellbeing of underserved populations and promote an inclusive future through relevant social welfare activities. During the course of FY 2024-25 the Company spent Rs. 21.9 Mn on initiatives related to corporate social responsibility.

SJS Enterprises proudly announced the establishment of the SJS Foundation this year. This dedicated entity will streamline and amplify the Companys philanthropic initiatives, allowing for strategic and sustained community engagement.

Furthermore, SJS actively champions womens Empowerment through a multifaceted program, providing valuable vocational training in tailoring, driving, computer classes, and beautician courses, thereby fostering economic independence and skill development.

Recognising the critical role of infrastructure in education, the Company undertook significant school renovation projects at the Utthiri and Kaggalipura government schools, creating more conducive learning environments. In addition, SJS extended crucial support for government schools by fulfilling essential basic requirements for children, including the provision of school bags, nali kali kits, shoes, desks, chairs, computers, and projectors, directly enhancing their educational experience.

For a detailed review, please refer to the ESG Section in this Annual Report on page 44.

INFORMATION TECHNOLOGY

Building on prior technology investments, SJS continues to prioritise initiatives that drive operational and cost efficiencies, enhance product quality, and support premiumisation. A well-defined IT roadmap, aligned with business objectives, guides these efforts.

In FY 2024-25, SJS Enterprises strategically concentrated on strengthening its operational efficiency and future growth. Significant investments were directed towards enhancing production capabilities through automation and robotics, leading to increased speed and consistency in meeting market demand. The Company also streamlined its supply chain by integrating customer order and material resource planning, resulting in improved forecasting, reduced stockouts, and optimised inventory. Furthermore, SJS initiated the scaling up of key technologies, including Industrial Internet of Things (IIoT) for comprehensive operational visibility, advanced Machine Vision for enhanced quality inspection, and automation of processes to drive overall productivity and financial transparency. Complementing these operational advancements, SJS made substantial investments in cybersecurity to safeguard critical data and processes, building customer trust. This helped in ensuring business continuity through strong security frameworks and incident response planning. In the previous year, we enhanced our technology capabilities to drive productivity and quality improvements. This included an Internet of Things (IoT) Proof of Concept (PoC), project for real-time production monitoring and issue resolution, enabling proactive improvements and preparing us for Industry 4.0.

For quality control, we implemented automated vision inspection for dials, which improved speed and defect detection, achieving 85% accuracy at the end of the line. Our ERP system was upgraded to Dynamics 365, improving our on-site capabilities and control over deployment and management. This also enables easier customisation, faster feature deployment, and quicker responses.

A Security Operations Centre (SOC) is integral to the Companys cybersecurity framework, providing continuous vulnerability monitoring, intrusion detection, and rapid deployment of countermeasures to protect data and operations. This 24/7 monitoring, using advanced tools and technologies, ensures compliance with industry standards and regulations, maintaining customer and partner trust and mitigating legal and financial risks.

For a detailed review, please refer to the chapter titled Social - Employees in this Annual Report on page 48.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Companys internal control framework addresses all key aspects of governance, compliance, audit, control, and reporting. This framework is designed to ensure regulatory compliance, prevent fraud and errors, safeguard and properly manage assets, and maintain accurate financial records.

Our internal audit team regularly reviews these controls, providing observations and recommendations to management, who then implement appropriate corrective actions to maintain the systems effectiveness.

CAUTIONARY STATEMENT

This Management Discussion and Analysis contains forwardlooking statements, including descriptions of the Companys objectives, projections, estimates, and expectations. These statements are based on informed judgments and estimates but are subject to risks and uncertainties that could affect future performance. There is no guarantee that past performance will continue, as future results are influenced by factors such as market conditions, macroeconomic trends, interest rate movements, competitive pressures, technological advancements, legislative changes, and other key variables impacting the Companys business and financial performance.