Syrma SGS Technology Ltd Management Discussions

Economic Review Global Economy 1

The global economy continues to demonstrate resilience, maintaining stable growth despite ongoing challenges. The GDP growth rate in CY 2024 is at 3.3%. Advanced economies such as the US, the Euro area recorded a growth rate of 1.8% in the reporting year. In contrast, Emerging Markets and Developing Economies expanded by 4.3%. India, reflecting sustained recovery and a positive revision within the Emerging Market and Developing Economies, continues to perform well. Although the growth rate is slightly lower than in previous years, this trend underlines the strength and flexibility of the global economy in an evolving environment.

Global inflation is easing, having declined from 6.6% in CY 2023 to 5.7% in CY 2024. Improved supply chain conditions, lower energy prices and steady wage growth support this positive trend. As inflation becomes more manageable, central banks are expected to gradually reduce interest rates, thereby supporting broader economic activity. In CY 2024, the inflation rate in the United States declined to 3%, down from 4.1% in CY 2023. 2 Several factors have contributed to this decline, including strong monetary policies, easing labour market pressures and the continued impact of lower energy prices, trade volumes are still below long-term averages due to supply chain disruptions and new trade tariffs by the U.S. The electronics manufacturing sector, which depends heavily on cross-border sourcing and production, may face higher input costs and delays. But, continued global demand and improving trade flows show a supportive backdrop for the sectors growth.

Outlook

The global economy is expected to maintain its steady pace, with GDP growth projected at 2.8% in CY 2025 and 3.0% in CY 2026. Advanced economies are expected to expand their economy by 1.4%, while the Euro area, the United Kingdom and Japan are likely to witness improved economic activity. Economy growth in the United States is expected to remain healthy at 1.8% in CY 2025, supported by previous gains and a steady easing of fiscal policies. Emerging markets and developing economies, on the other hand expected to grow by 3.7% in other regions such as Latin America and the Middle East are also forecast to experience better growth.

Global trade is evolving in response to shifting geopolitical dynamics, encouraging countries and businesses to explore new, more resilient strategies. While international events have altered trade flows, which present an opportunity for businesses to strengthen ties within trusted regions and tap into emerging local markets. The growing focus on domestic support and industrial development by governments is helping shape innovative trade patterns. This environment encourages companies to diversify their supply networks and adapt to a more regionally connected world. By embracing these shifts, businesses can build more stable, flexible operations and uncover new avenues for growth and collaboration.

Indian Economy 3

The Indian economy remains steady on its growth path, registering a GDP growth rate of 6.5% in FY25. It is progressing steadily, supported by strong macroeconomic fundamentals. Over the years, it has undergone several structural reforms aligned with these fundamentals, helping it secures the position of the fifth-largest economy in the world. These reforms have enabled India to emerge as the fastest-growing economy among

Indias GDP growth has been further supported by discretionary spending, with the country continuing to perform strongly across various macroeconomic indicators, such as demand for technology, financial attractiveness, human capital, consumption trends and resource availability.

The union government has been building infrastructure at an exceptional pace, with a strong focus on public sector capital investment. This improvement in both physical and digital infrastructure over the last ten years has been tangible and transformative. Indias Electronics sector has also shown dynamism, with domestic production of electronic goods continuing to improve.

Outlook

India emergence as the world fourth largest economy stands as a testament to its resilience and socio-economic progress. The government of India has set an ambitious target of achieving USD 300 billion in domestic electronics manufacturing by 2025-26. 4 The Indian economy is placing greater emphasis on specialised and complex manufacturing industries.

To support this vision, several targeted policies and schemes have been introduced to incentivise growth in the electronics manufacturing sector. Notably, programs such as the Phased Manufacturing Programme (PMP) and the Production Linked Incentive (PLI) scheme are encouraging the transition towards higher value-added products.

Industry Overview

Global Electronics Manufacturing Services (EMS) Industry 5

The global electronic manufacturing services (EMS) market was valued at USD 577.32 billion in CY 2024. The Asia- Pacific region held the largest market share of the global EMS market, accounting for 36%, or USD 207.84 billion, during the same period.

The rapid pace of innovations in electronics technologies is driving consistent demand for electronic and electrical products. This continuous technological evolution compels both customers and the business to upgrade or replace older devices with more advanced versions.

Outlook

The global EMS market is projected to grow from USD 617.90 billion in 2025 to around USD 1130.89 billion by 2034, reflecting strong momentum. This growth is mainly driven by the increasing trend of outsourcing production across various industries. Additionally, globalisation of electronics supply chains and growing demand from sectors such as IT & telecom, aerospace and automotive are bolstering EMS demand.

The Asia Pacific region is expected to remain at the forefront of this expansion. The regional EMS market is forecast to grow from USD 207.84 billion in 2024 to nearly USD 412.77 billion by 2034, at a CAGR of 7.10%. This growth is supported by strong manufacturing capabilities, the rising number of electronics companies in countries like China and India and increasing demand for consumer electronics and electric vehicles.

Key drivers of the global EMS industry Key Industry Drivers

Sectors like Automotive electronics on back of EV and charging infrastructure, Industrials, digitalization, Telecom on back of 5G infra, are fueling growth in the EMS market and remain core industry drivers.

Global expansion of Electronics Manufacturing and Industrial growth

The global expansion of electronics manufacturing is accelerating due to rapid technological advances, growing demand for IoT and smart devices. This surge is boosting industrial growth, strengthening supply chains, and positioning emerging economies like India and Vietnam as key manufacturing hubs.

The growing demand for electric motor controls, enhancing the efficiency of industrial motors and the need for increased integration at minimal costs to support the adoption of new technologies are driving demand for EMS in industry.

Industry 4.0 and Smart Technology

The advent of Industry 4.0 has significantly improved factory automation, data efficiency and productivity. These advances, along with developments in industrial IoT and artificial intelligence (AI), are expanding the EMS opportunity space.

Growing Export Business

Exports have emerged as a critical growth engine for Syrma SGS. The company has demonstrated a healthy CAGR in exports over the past three years and is targeting around 30% export growth in FY25, aiming to achieve H 1,100 crore in export revenues. The primary export segments are industrial and MedTech. The long-term vision is for exports to constitute one-third of the companys total revenue, indicating a sustained focus on international markets.

Strategic Shift in Business Mix

Syrma SGS is strategically working towards reducing the proportion of its revenue from the consumer sector while increasing its focus on other verticals like industrial, automotive and healthcare, which may offer better margin profiles and long-term stability. This rebalancing of the business mix is intended to improve overall profitability and sustainability.

Focus on ODM and Value-Added Services

The company is placing greater emphasis on ODM capabilities, particularly in the high-potential MedTech sector. The new design centre in Pune is a key part of this strategy. Syrma SGS is venturing into value-added services such as quality assurance and regulatory approvals within the MedTech domain, which can create additional revenue streams and enhance customer stickiness.

Customisation and Personalisation

Diverse consumer preferences are increasing the demand for personalised electronics. EMS companies are playing a critical role by offering flexible, customisable manufacturing solutions to meet these evolving needs.

Strong Sectoral Demand

Syrma SGS is benefiting from robust demand across several key sectors such as automotive, industrial, healthcare and RFID. This diversified sectoral presence positions the company well to capitalise on broader growth trends within the EMS landscape.

Strategic Capacity Expansion and Infrastructure Development

The company is actively investing in the expansion of its manufacturing and design capabilities. This includes the commissioning of a new manufacturing plant in Pune to meet rising production needs and the establishment of a dedicated design centre in Pune focused on Original Design Manufacturing (ODM) for the MedTech vertical.

Indian electronics manufacturing services (EMS) industry 6

The Indian EMS industry is valued at approximately USD 55.67 billion in 2025, with the projection to reach USD 100 billion by 2035, driven by the broader expansion of the electronics manufacturing sector. 7 India is increasingly being recognised as an emerging hub for manufacturing and operations by prominent global leaders and domestic companies alike. Indias well-established position in mobile phone assembly has solidified its status as a key global player in the contract manufacturing space, a core function of the EMS industry. The favourable macroeconomic environment, combined with continued investments in skill development, will further support the expansion of this sector.

Indias electronics system design & manufacturing Industry has emerged as a symbol of innovation and opportunity. A major driver of this growth is the Production-Linked Incentive (PLI) scheme, which aims to boost domestic manufacturing and exports of electronic products. Notably, over 90% of global semiconductor companies have established research & development centers in India. These R&D operations contribute approximately USD 2.5 billion in revenue and generate 600,000 jobs.

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by rapid technological advancements such as the rollout of 5G networks, the expansion of the Internet of Things (loT) and evolving businesses and consumer preferences with rising incomes.

The Indian government has set an ambitious target of achieving USD 300 billion in domestic electronics manufacturing by 2025-26, marking a significant leap from the current output. To realise this vision, India is shifting its strategy of import substitution to a broader Make in India for the World approach, focusing on competitiveness, scalability and export-oriented growth.

Specifically, Indias domestic demand for consumer electronics is expected to reach USD 21.18 billion by 2026, while the domestic electronics market is estimated to grow to USD 150-180 billion in the next 4-5 years. To meet the ambitious USD 300 billion manufacturing target, exports of electronics are projected to rise to USD 120 billion by 2025-26.

Looking ahead, India is well-positioned to become a major hub for electronics manufacturing. The long-term vision is to develop a USD 1 trillion+ electronics ecosystem over the next decade, anchored in mobile phones, IT hardware and consumer electronics.

Outlook 8

The electronics industry in India is on a promising trajectory, with the country aiming to become a USD1 trillion digital economy by CY2026. This anticipated growth is being driven

Exports

Companies in the EMS sector actively engage in exports to meet growing global demand. The Asia Pacific region held the largest market share in 2024, indicating that many EMS companies in this region are likely involved in substantial export activities.

India is strongly focused on becoming a major hub for electronics manufacturing and exports. The growth of mobile phone manufacturing in India, making it the second- largest mobile phone manufacturer globally, demonstrates a successful shift towards local production and enhanced export capabilities.

The import of finished smartphones into India has drastically declined as domestic manufacturing took off and the initiatives by the Indian government have simultaneously enhanced Indias export capabilities in this sector.

Government initiatives

To strengthen Indias position in global electronics production, the government has introduced several schemes and incentives targeting the electronics value chain.

Government Initiatives	Details
Electronics Component Manufacturing Scheme	Approved with a funding outlay of H22,919 crore, this scheme opens for applications in May 2025. It offers differentiated incentives turnover-linked, capital expenditure and hybrid to attract large investments, targeting H59,350 crore in investment and creation of nearly 91,600 direct jobs. 9
Increased Budget Allocations for PLI	Reflecting a strong policy thrust, the PLI budget for electronics and IT hardware has been raised significantly for FY 2025-26, increasing from H5,777 crore to H9,000 crore to accelerate domestic manufacturing capabilities. 10
Make in India and Electronics Manufacturing Clusters (EMC)	The Make in India initiative continues to drive EMS expansion by encouraging indigenous production, reducing reliance on imports, and facilitating job creation. Development of EMCs is supported to provide modern infrastructure and help manufacturers scale efficiently.
Skills Development Initiatives	Programs like Skill India and PMKVY are actively building a skilled workforce equipped to meet the evolving demands of the electronics manufacturing sector, ensuring sustained sectoral growth.

Company Overview

Syrma SGS Technology Limited is a leading player in Indias Electronics System Design and Manufacturing (ESDM) sector. The Company specialises in high-mix, flexible- volume product manufacturing with a focus on high-margin and high-growth segments. Its strategically diversified business model is supported by strong R&D capabilities and a growing export footprint.

Syrma SGS serves a diverse customer base across industries such as Automotive & EV, Consumer, Healthcare Medtech, Railways and IT. The Company is known for delivering tailored electronic solutions through advanced technology platforms.

Syrma SGS has a substantial manufacturing & R&D footprint with 17 state-of-the-art facilities across India, in addition to one international manufacturing & R&D plant in Germany. The Company is also planning further expansion through mega campuses to meet rising demand.

In FY24, Syrma SGS acquired a 51% stake in Syrma Johari MedTech Limited, formerly known as Johari Digital Healthcare Limited, strengthening its presence in the fastgrowing MedTech segment.

The Company is recognised for its globally competitive ESDM capabilities, strong financial performance, R&D capabilities, a large customer base and industry-leading position in RFID products. It is widely regarded as one of the fastest-growing Indian EDSM companies and continues to build momentum towards becoming a global electronics manufacturing leader.

Strengths

?€? The Company has demonstrated exceptional financial performance, achieving a prominent revenue growth of 44% in FY25.

?€? The Company has owned R&D facilities for over three decades. This enables them to create and innovate to cater to evolving market needs.

?€? The Company places strong emphasis on innovation, technology and differentiated product offerings.

?€? To enhance its market reach and operational efficiency, the Company actively nurtures longterm partnerships and strategic collaborations.

Growth Strategies

?€? The Company is strategically expanding its manufacturing footprint, including the commissioning of a large integrated electronics manufacturing facility in Pune.

?€? Recognising that exports yield higher margins, the Company has set a long-term target to increase export contributions to over 25%, with an aspirational goal of reaching 30% of overall revenue.

?€? The Company is actively exploring inorganic growth opportunities to gain access to technology, fill product gaps and acquire regulatory approvals rather than merely expanding EMS volumes.

?€? The Company is exploring potential entry into the OSAT (outsourced Semiconductor Assembly and Test) business as a potential future growth avenue.

?€? The Company is actively focusing on new- age products and industries across sectors like Electric mobility, 5G devices, smart utility metering and railway modernisation.

Product Portfolio

Printed Circuit Board Assemblies (PCBA)

PCBA is central to the Companys manufacturing operations. It involves the assembly of electronic components onto a printed circuit Board (PCB), forming the core of functional electronic devices.

Syrma SGSs newly launched Pune facility is expected to enhance PCBA production capacity. The PCBA serves a wide range of verticals including automotive, consumer electronics, industrials, health care, railways and IT.

Radio Frequency Identification (RFID)

Syrma SGS is a key player in the RFID space, particularly within the consumer vertical for applications such as FASTag. The Company manufacturers various RFID tags - active, passive and semi-passive, equipped with ICs, antennas and inlays to meet diverse application needs.

Electromagnetic and electromechanical parts

The Company designs and manufactures a range of electromagnetic components such as chokes, coils, inductors, magnetic filters and transformers, along with high-volume assemblies. Furthermore, the Company offers comprehensive turnkey manufacturing support through specialised sheet metal fabrication services.

Company Performance

The company delivered a strong performance marked by strong revenue growth and improved profitability across key business verticals. Total revenue for the year reached H38,361 million, representing a 19% year-on-year increase, driven by expansion in both domestic and export markets. Operating EBITDA rose sharply by 48% to H3,238 million, with the margin improving to 8.6%, while profit after tax surged by 48% to H1,845 million, reflecting a PAT margin of 4.8%. The company successfully onboarded over 20 new customers, expanded its manufacturing footprint with the commissioning of the Pune Mega Facility, and strengthened its R&D capabilities with new centers in Germany and Pune. Strategic investments in automotive, industrial, healthcare and railway electronics, combined with operational efficiencies and a focus on high-growth segments, have positioned for sustained growth and enhanced shareholder value.

Financial Highlights			(Amount in Million)
Particulars	FY 2025	FY 2024	[^YoY change (%)
Total Revenue (in millions)	38,361	32,124	19
EBITDA (in millions)	3,727	2,606	43
PAT (in millions)	1,845	1,243	48
Total Debt (in millions)	6,112	5,763	6

Key financial ratios

Particulars	FY 2025	FY 2024	Change (%)	Reasons Details of significant changes (i.e. change of 25% or more as compared to the immediately previous Financial Year) in key financial ratios
EBITDA Margin (Ex Other Income %)	8.6	6.9	1.6	NA
EBITDA Margin (%)	9.7	8.1	1.6	NA
PBT Margin (%)	6.2	5.2	1	NA
PAT Margin (%)	4.8	3.9	0.9	NA
Net Debt to EBITDA (LTM)	0.8	0.8	-	NA
Debt to Equity	0.3	0.3	-	NA
ROCE (%)	12.4	9.9	2.6	Better capacity utilization and increased margin
ROCE (%Adj. of IPO Money and Goodwill)	16.0	15.2	0.2
NWC Days	69	70	(1)	NA

Research and development

The Company has consistently prioritised R&D as a core pillar of its operations, leveraging over three decades of expertise to drive innovation across verticals. The Company maintains a strong, geographically diverse R&D ecosystem with four dedicated facilities located in Gurgaon, Pune, Chennai and Germany. This robust infrastructure is being further augmented by a state-of-the-art hardware engineering lab under development at the Companys new STES office in Bengaluru. This advanced lab is intended to further enhance their ability to innovate. Anchored in its strategic philosophy of "Design in India to Make in India," the Company employs over 150 professionals as of March 1, 2025, in Engineering, Design & Development roles.

The Companys MedTech business, operating under Syrma Johari MedTech Limited, experienced a temporary slowdown due to delays in customer engagement and product development. However, Syrma SGS has recalibrated its MedTech strategy to be more outbound and customer-centric, focusing on designing new products for future production rather than solely executing existing businesses. To support this transformation, the Company has established a dedicated MedTech Design Centre in Pune, which will accelerate innovation in healthcare electronics. These initiatives are expected to enable a strong rebound in this segment in the coming years

Syrma SGS is actively working on securing new product approvals for the railway segment, which are necessary from the Research Designs & Standards Organisation (RDSO).

This indicates ongoing R&D and adaptation of products to meet specific railway industry standards.

ESG initiatives

Syrma SGS remains deeply committed to Environmental, Social and Governance principles, embedding sustainability, inclusivity and accountability into the core of its operations.

Environmental Stewardship

The Company has continued its efforts to integrate environmentally conscious practices into business operations. Tree plantation drives, particularly on World Environment Day and during the inauguration of new facilities, are conducted to enrich green cover, reduce the carbon footprint and build community engagement. These efforts reflect the Companys commitment to a cleaner and healthier planet, with sustainability positioned as a longterm strategic imperative.

Furthermore, the Company is actively pursuing greater domestic sourcing and supply chain streamlining to minimise environmental impact from transportation and logistics. A significant focus is also placed on reducing dependency on imports from China, thereby creating a more localised and resilient supply ecosystem that also aligns with national sustainability goals.

Social Responsibility

People remain at the heart of Surma SGSs philosophy. The Company promotes a work culture built on mutual respect, care and employee wellbeing, supporting its large

workforce across manufacturing and support facilities. Our

social initiatives include:

?€? Regular committee meetings to address employee concerns and enhance workplace communication.

?€? Health check-up camps to ensure the well-being of employees and their families.

?€? Monthly employee connects programs through Welfare Officers at satellite units.

?€? Personal outreach by Welfare Officers through hospital and home visits during times of need.

of Syrmas sales and marketing strategy. By providing adaptable and scalable EMS solutions, Syrma enables businesses to concentrate on their core competencies, such as creativity and branding, while it manages effective production and product introductions.

To enhance its outreach and gain a deeper understanding of customer needs, the Company employs market research, CRM software and digital marketing. By staying current and offering solutions that align with future market trends, Syrma aims to become a leader in new and emerging fields of electronics manufacturing, including the smartphone and consumer electronics markets.

Quality control and services

The company has emphasised Operational Excellence as a key aspect of its public relations, highlighting the continuous improvements in processes to drive efficiency and quality. This focus on process enhancement is further supported by initiatives undertaken to streamline and improve the processes on the process excellence side. Syrma SGS lists post-sale lifecycle support as one of their end-to-end capabilities, indicating a provision of services beyond the initial sale. The significance of service and product quality is also implicitly underscored by the mention of customer acceptance of their services, products and price structures as a factor that could affect the companys results.

Raw materials and suppliers

The Company has established a geographically diversified supply chain, engaging with over 150 vendors across more than 20 countries. This vendor network enables the Company to ensure the timely availability of raw materials, maintain quality standards and reduce supply-side disruptions.

A key strategic priority is the streamlining of domestic sourcing and manufacturing, aligning with the Government of Indias Make in India initiative and the Companys own efforts to improve supply chain efficiency to reduce lead times.

In parallel, the Company is pursuing a deliberate strategy to reduce its dependency on China for critical raw materials and components. This initiative is designed to enhance supply chain resilience and potentially mitigate geopolitical risks.

For Printed Circuit Boards (PCBS), which remain a significant input in its manufacturing process, Syrma SGS outsources from a diverse base of external vendors, selecting suppliers based on a comprehensive evaluation of cost, capability and quality. Typically, the company maintains relationships with around a dozen PCB vendors per category to ensure flexibility and competitive pricing.

Sales and marketing

Supporting international retail expansion, satisfying the rising demand for customised electronics and capitalising on Indias expanding consumer market are the main objectives

Health, safety and environment

Syrma SGS Technologys production facilities have been officially recommended for the Occupational Health and Safety Assessment Series (OHSAS) 18000 certification. This is a significant development in occupational health and safety management systems. OHSAS 18000 was an international standard for occupational health and safety management systems, which has since been superseded by ISO 45001. The Company is working to establish and maintain a framework for managing and improving its occupational health and safety performance.

IT and Digitalisation

The Company emphasises Engineering & Technology Services, offering End-to-end Physical Digital Design and Engineering Services, indicating a core capability in the digital domain. Furthermore, the Company provides RFID and Iot-powered digital transformation solutions for businesses, under their RFID Tags & Inlays service. This highlights its active role in enabling digitalisation for clients.

The company also highlights advancements in technology and product offerings to address evolving market needs. For example, its RFID-based asset tracking solutions are optimising inventory management, while its involvement in the rise of ADAS (Advanced Driver Assistance Systems) reflects its presence in technologically advanced areas. The Companys focus on smart metering within the industrial segment further showcases its engagement with digital technologies.

Key Trends in Indias Electronics Manufacturing Services sector are driving industry momentum. To streamline and improve the processes, the Company is increasingly leveraging IT and digital tools to enhance efficiency. Syrma SGS is also actively involved in the IT manufacturing sector, participating in the governments PLI scheme to boost domestic production.

The company gained significant visibility when MSI selected Syrma SGS to manufacture laptops under the "Make in India" initiative. Additionally, the company has been featured in Dataquest and Financial Express, where it shared insights on its business journey and Indias growth as a global hub for PC and laptop manufacturing.

Syrma SGS is also enhancing internal operations through digitalisation efforts, including a redesigned intranet, a new website, a QR system for visitor management and security and the introduction of a new HRMS tool (HONO). The company supports research at IIT and is expanding its presence in the telecom and IT sectors with new products such as Telecom-PCB-Assemblies, GPON-Jio, memory modules and motherboards. It is also contributing to railway modernisation through its offerings in signalling and equipment, with continued growth supported by its focus on telecom and networking products.

Human Resources

The Company views its human resources as a strategic partner in driving growth and competitiveness. As the EMS industry continues to evolve rapidly due to technological advancements and rising demand, the human resources department focuses on building a robust talent ecosystem, encompassing both internal and external talent acquisition. Skill enhancement programs and cross-functional exposure help employees remain resilient in this fast-paced industry.

In addition, the Company offers formal training, tutoring and mentoring that enable the employees to continuously evolve with emerging industry trends and technologies. To maintain technical excellence and agility, the Company fosters a culture that values learning at every level. These efforts ensure that the workforce remains future-ready.

The Company emphasises not only gender diversity but also broader inclusivity by offering opportunities to people from various backgrounds. It has implemented a range of employee-centric policies that go beyond basic health coverage to include mental wellness and physical safety, reflecting its commitment to holistic employee care and retention. To streamline administrative processes, the Company leverages digital platforms for human resource operations. Syrma SGS offers a wide range of programs and initiatives aimed at enhancing employee growth, well-being and engagement. These initiatives focus on talent development, recognition, leadership training and fostering a supportive work culture and include:

?€? FUTURE BETS Program

?€? GET Scheme

?€? Rewards & Recognition Programs

?€? People Initiatives

?€? Training Updates

?€? Excellence Centre

?€? CARE Behavioural Training Modules

?€? Employee Well-being Initiatives

Insurance Coverage

The Company renews its insurance policies annually, ensuring coverage for all its assets, including protection against risks such as accidents, fire and burglary for factory and office buildings. Specific hazard and burglary standards are strictly adhered to. In addition, the Company offers Mediclaim insurance to its employees and directors.

Risk Management

Name of the Risk		Description of the Risk	Mitigation Strategy
	Supply Chain Disruption	Disruptions in the supply of raw materials or electronic components due to geopolitical tensions, logistics issues, or supplier insolvency can delay the company deliverables.	The Company aims to diversify suppliers across regions to reduce dependency on any single source, build strong relationships with key suppliers through regular performance and compliance audits and implement strong contingency plans for logistics and sourcing to ensure uninterrupted operations.
i	Technological Obsolescence	The Companys rapid technological advancements may render existing products or manufacturing processes outdated, impacting competitiveness.	To mitigate this risk, the company invests in continuous research and development to drive innovation and maintain technological leadership. It closely monitors emerging technologies and competitor advancements to stay ahead of market trends. Additionally, the Company plans to regularly upgrade its manufacturing processes and product lines to ensure sustained competitiveness.

Name of the Risk Description of the Risk Mitigation Strategy

	Regulatory & Compliance Risks	Non-compliance with evolving domestic and international regulations such as environmental, safety, data privacy may lead to penalties or operational disruption.	It has established dedicated compliance teams to proactively monitor regulatory changes across key markets and ensure adherence to all applicable laws and standards. Regular audits of operations are conducted to identify and address compliance gaps, which will help to minimise legal and operational risks.
io5	Foreign Exchange Fluctuations	Volatility in currency exchange rates can affect profitability, especially given significant exports and global operations.	The company actively uses hedging instruments such as forward contracts and options to mitigate the impact of currency fluctuations on profitability. Also, it regularly reviews and adjusts its pricing strategies to account for exchange rate movements, ensuring financial stability in a volatile forex environment.
	Environmental & Sustainability Risk	Non-compliance with environmental standards or unsustainable practices can result in regulatory penalties.	It aims to implement robust environmental management systems to drive sustainability across its operations. It ensures strict compliance with local and international environmental standards while proactively investing in sustainable materials and processes to minimise ecological impact and support long-term growth.
/i	Political & Economic Instability	Due to changes in government policies, trade restrictions, or economic downturns in key markets may impact business operations.	It aims to diversify its market presence and sourcing locations to reduce overreliance on any single region. It closely monitors geopolitical developments to anticipate potential disruptions and proactively adapt its operations.

Internal Control Systems and their adequacy

The Company has an adequate internal control system in place, appropriate for its size, complexity and the nature of its operations. The framework ensures effective management of sales, acquisition of inventory and fixed assets, in compliance with both internal standards and regulatory requirements. It is periodically updated to reflect evolving business needs and regulatory changes.

Major manufacturing facilities, warehouses and centrally governed functions are covered under the internal audit plan, which is reviewed and approved annually by the audit committee.

Cautionary statement

The Management Discussion and Analysis (MDA) section often includes statements about future prospects. These statements, which address both known and unknown risks and uncertainties, can lead to significant differences between actual outcomes and the predictions made. The reports estimates rely on the Companys assumptions, which consider the most recent internal and external data. However, keep in mind that the underlying factors behind these assumptions can change over time, potentially affecting the estimates. Its essential to recognise that forward-looking statements apply only to the date they are made and reflect the Companys current intentions, beliefs, or assumptions. The Company is not obligated to revise or update these statements based on new information or future events.