Danlaw Technologies India Ltd Management Discussions

Overview

The financial statements have been prepared in compliance with accounting standards IND AS. Our
Management accepts full responsibility for the integrity of these financial statements.

Market Scenario and Trends

As many of our savvy investors are aware, in September 2021, Indias Union Cabinet approved the
Production-Linked Incentive (PLI) Scheme for the automobile and auto components sector, with a budget
of ^25,938 crore (US$3.02 billion). This initiative was designed to address cost barriers and stimulate the
domestic production of Advanced Automotive Technology (AAT) products. The Auto PLI Scheme continues
to play a pivotal role in attracting fresh investments into Indias electronics manufacturing sector while
fostering job creation and technological advancement.

While navigatingthe PLI framework has presented some challenges, the Indian government has remained
responsive-considering key revisions to improve implementation and expand its effectiveness. We view
these efforts as a clear signal of Indias long-term commitment to becoming a global manufacturing
powerhouse. These developments are particularly beneficial to companies like Danlaw, as we continue to
capitalize on the accelerating global transition toward electric vehicles and other advanced automotive
technologies.

Looking ahead, Indias broader electronics manufacturing landscape is on a robust growth trajectory—not
only for automotive electronics but also for consumer and medical electronics. Strategic government
initiatives such as the Make in India, PLI for Large-Scale Electronics, and the India Semiconductor Mission
are creating a supportive ecosystem for sustainable, high-volume production across multiple verticals.
With rising global demand for smart consumer devices and critical healthcare electronics, India is fast
emerging as a global hub for high-quality, cost-competitive electronics manufacturing.

In light of global geopolitical uncertainties and continued supply chain disruptions, companies worldwide
are actively seeking to diversify their manufacturing bases. India is increasingly viewed as a reliable and
scalable alternative to traditional electronics manufacturing centers such as China. Through its stable
regulatory environment and forward-looking policies, India is poised to become a preferred destination
for electronics manufacturing across sectors.

Your company continues to invest in its manufacturing business unit to support capacity expansion in
response to surging demand—particularly in vehicle electrification and connected infrastructure.
Danlaws Goa facility is scaling up its assembly and logistics capabilities to help meet both domestic and
global market requirements, while positioning your company for long-term competitiveness.

Aligned with the "Make in India" vision, we are also deepening our engineering and R&D efforts across
automotive, consumer, and medical electronics domains. Our focus on the development of innovative
electronic systems for electric vehicles, smart consumer products, and medical devices allows us to
address a diverse range of OEM and Tier-1 requirements—from two-wheelers and buses to personal
health monitoring systems and loT-enabled devices.

Your Company is actively involved with the ITS India Forum, where we have been actively focused on the
development and implementation of connected vehicle technologies for Intelligent Transportation
Systems (ITS) in India. As a member of ITS India Forum, Danlaw Technologies focuses on the ongoing

design, development and manufacturing of connected transportation hardware, software and IT solutions
aimed at enhancing safety, efficiency, cost-effectiveness and sustainability of transportation systems in
India.

As member of the Forum, Danlaw has successfully participated in the CV2X Green Corridor, with other
collaborators to establish a deeper understanding of the potential impact of advanced communication
networks in vehicles for traffic management and road safety. Danlaw Technologies involvement with ITS
India Forum represents your companys strategic move to align with the growing focus on driving
innovation and adoption of cutting-edge technologies throughout Indias transportation ecosystem.

Your company remains deeply committed to supporting Indias goal of becoming a global electronics
manufacturing and design hub. Through this strategic alignment, we aim to continue building your
companys leadership position across the rapidly advancing EV, consumer, and medical electronics
landscapes.

Opportunities

Your company remains focused on its efforts to identify and engage in critical market opportunities that
are driven by market and government initiatives for vehicle electrification and safety critical infrastructure
and applications. Ourteam remains committed to proactive planning and investment in meetingthe ever-
increasing demand for engineering and manufacturing of electronics. These efforts are aimed at meeting
the expanding needs of mobility and road user safety, to maximize your companys growth and
competitiveness both domestically and globally.

Electric Vehicles (EVs):

In the rapidly advancing Electric Vehicle (EV) market of India, your company continues to identify
significant opportunities to not only contribute to the countrys sustainable transportation goals but also
to achieve substantial growth. The Indian governments "Make in India" initiative is significantly boosting
the demand for the local manufacturing of electric vehicle (EV) electronics. By encouraging domestic
production, the initiative reduces reliance on imports, lowers costs, and fosters innovation in EV
technology. This is accelerating the adoption of electric vehicles across the country, both in public
transportation and among private consumers. The increased availability and affordability of domestically
produced vehicle electronics are making electric vehicles more accessible, thus driving their penetration
and supporting Indias transition to a cleaner, more sustainable transportation system.

Your company remains committed to supporting The Indian governments role in driving the growth in
the EV market. To this end, Danlaw continues to remain apprised of government regulations, incentives,
and policies that are driving advancements in vehicle electronics. As these incentives and regulations
continue to roll out across a wide range of Smart City initiatives, your company remains strategically
aligned with government initiatives, as we continue to tailor our development and manufacturing
capabilities to meet the unique needs of the Indian transportation and mobility market.

Mobility Safety:

Over the course of the past year, we have witnessed the fact that mobility safety in urban areas of India
is undergoing a significant transformation, driven by advancements in telematics and connected vehicle

technologies. As cities grow more congested and the number of vehicles on the road increases, ensuring
the safety of all road users—drivers, passengers, cyclists, and pedestrians—has become a critical priority.
Our company is uniquely positioned in the telematics and V2X markets, offering cutting-edge solutions
that leverage real-time data to enhance road safety. By integrating advanced connected vehicle
technology and systems into vehicles and infrastructure, we are enabling smarter, safer urban mobility
that anticipates and mitigates risks before they escalate into accidents.

A key component of our technology is Vehicle-to-Everything (V2X) communication, which facilitates the
real-time exchange of information between vehicles, infrastructure, and vulnerable road users. This
interconnected ecosystem allows for instantaneous communication about road conditions, traffic signals,
pedestrian movements, and potential hazards. Our V2X technology is being considered for use in several
smart city initiatives across India, where it is playing a crucial role in reducing collision risks, managing
traffic flow, and improving the overall safety and efficiency of urban transportation networks. By enabling
vehicles to "talk" to each other and their surroundings, we are helping to create a safer environment for
all commuters.

One of the notable examples of this technology in action is its integration into the smart city projects in
India. Here, our V2X solutions are being used to optimize traffic signal timings, manage congestion during
peak hours, and provide real-time alerts to drivers about potential dangers, such as sudden braking or
obstacles on the road. These initiatives are not only reducing the likelihood of accidents but also
enhancing the overall commuter experience by minimizing delays and ensuring smoother, safer journeys
for everyone. As India continues to urbanize, our company remains at the forefront of driving innovation
in mobility safety, contributing to the development of smarter, safer cities.

Telematics:

Our company is dedicated to leveraging its extensive experience in telematics to implement cutting-edge
connected vehicle solutions that encompass hardware, firmware, and cloud-based IT systems. These
systems enable the real-time transmission of crucial vehicle data, position information, and onboard
sensor data. By capturing and transmitting this data, we provide actionable insights that can be used to
monitor and improve vehicle usage, driver behavior, and evaluate road conditions.

The real-time data we collect and transmit from our Telematics Control Units (TCUs) and connected
vehicle products, have and continue to provide significant benefits for driver safety and the protection of
vulnerable road users. Our systems have been developed to generate instant alerts related to potential
hazards, such as sudden changes in road conditions, nearby pedestrians, or erratic driving behavior. By
providing drivers with these timely warnings, we help prevent accidents before they occur, contributing
to safer roads for everyone. Moreover, the data on driver behavior, such as braking patterns, acceleration
habits, and adherence to speed limits, allows fortargeted interventions to promote safer driving practices,
which is particularly valuable forfleet management and insurance purposes.

In addition to improving safety, our telematics solutions enable better vehicle care and maintenance.
Through the continuous monitoring of critical vehicle diagnostic information-such as engine health, fuel
efficiency, battery status, and tire pressure—our systems can predict when maintenance is needed,
reducing the likelihood of unexpected breakdowns. This proactive approach not only extends the life of
the vehicle but also optimizes its performance, ensuring that it operates at peak efficiency. For commercial
fleets, this translates into reduced downtime and lower maintenance costs, while for individual vehicle
owners, it offers peace of mind and a better overall ownership experience.

Our solutions are versatile and applicable to a wide range of Original Equipment Manufacturers (OEMs)
across various vehicle categories, including commercial vehicles, two-wheelers, electric vehicles (EVs), and
internal combustion engine (ICE) vehicles. By integrating our connected vehicle technology, OEMs can
enhance the safety, reliability, and efficiency of their vehicles, delivering greater value to their customers.
Whether its improving the safety features of a passenger car, optimizing the fuel efficiency of a
commercial truck, or extending the range of an electric scooter, our telematics solutions provide the data
and insights needed to drive continuous improvement across the transportation landscape in India.

As the Indian automotive industry evolves, our company remains at the forefront of innovation, helping
to shape a future where connected vehicles are the norm. By enabling real-time data capture, analysis,
and monitoring, we are driving advancements in vehicle safety, reliability, and efficiency. Our
commitment to delivering state-of-the-art telematics solutions positions us as a key partner for OEMs
looking to enhance their offerings and meet the growing demands of a connected world. As we continue
to expand our capabilities and partnerships, we are confident that our technology will play a pivotal role
in making Indias roads safer, its vehicles more efficient, and its transportation system more sustainable.

Electronics Manufacturing

Indias electronics manufacturing services industry is growing at a rapid rate. This growth is driven by
increasing interest in outsourcing in India by OEMs, coupled with expanding government incentives.
According to a recent analysis published by Ernst & Young³, "Why Indias electronics manufacturing
services (EMS) sector is growing," the shift from "plain vanilla contract manufacturing to ODM" is driven
by the evolving needs of OEMs and Tier-1 suppliers for product innovation, as well as de-risking geo-
political uncertainties associated with far-east contract manufacturing. Other factors such as the rising
cost of manufacturing in China, trade disputes, and the Indian governments efforts to attract foreign
investment in the electronics sector are leaning in favour on the Indian EMS sector.

With this said, India is quickly becoming a major player in the electronics manufacturing industry. Services
in this space consist of design, testing, manufacturing and distribution of electronic components and
assemblies for the OEMs that they serve. Given incentives offered by the Indian government, such as the
Production Linked Incentive (PLI) Scheme, many of the challenges associated with the high cost of capital
in India are being addressed by incentives on incremental sales of goods manufactured in India. Based on
the E&Y report, the EMS market in India is expected to reach 6708 CR ($80B USD), leveraging expanding
growth in the mobile and automotive electronics industries as key demand drivers.

Danlaw sees this growth as a significant opportunity, allowing your company to enable OEMs and Tier-1
suppliers with expanded capabilities to bring products to market swiftly and efficiently through its GOA
manufacturing facilities.

Threats, Risks and Concerns

The global automotive industry is navigating one of the most volatile and transformative periods in its
history. Electrification, regulatory realignment, and geopolitical uncertainty are simultaneously driving
innovation and exposing companies to structural and operational risk. Given the macroeconomic and
geopolitical risks affecting the automotive industry, your companys leadership is working to build and
execute a strategy that is focused on managing Danlaws exposure, while continuing to capitalize on
emerging global opportunities.

With this stated, please find some of the challenges that we are actively focused on:

1. Geopolitical Risk & Trade Fragmentation

2. Regulatory Divergence

3. Currency Volatility (USD-INR, EUR-INR)

4. Tariff &Trade Barriers

5. Consumer Demand Shifts

6. Operational and Supply Chain Risks

• Semiconductor supply remains unpredictable, despite easing in 2024. Advanced node
components (e.g., for ADAS and infotainment) remain constrained.

• Battery cell availability and pricing volatility (particularly for LFP, NMC chemistries) remain high
risk areas due to global lithium sourcing challenges.

• Logistics disruptions—e.g., Red Sea tensions, port congestion, airfreight cost spikes—can delay
program launches or increase unplanned costs.

The following represent some of the critical initiatives that your companys leadership team is actively
pursuing:

1. Diversify Strategic Partnerships

o Expand collaborations in India, ASEAN, and Eastern Europe to reduce reliance on China and
U.S. sourcing pipelines.

2. Increase Investment in Regional Manufacturing

o Prioritize investments in India and North America, where policy incentives and market growth
support domestic electronics and EV production.

3. Mitigate Financial Risk

o Establish stronger treasury controls around hedging, insurance, and working capital
optimization to weather FX and interest rate exposure.

4. Embed Agility in Product Development

o Adopt a global product architecture strategy that allows for modular compliance and reduced
lead times across variant platforms.

5. Strengthen Scenario Planning

o Conduct quarterly stress-testing for key risks (FX, tariffs, logistics) and develop actionable
mitigation playbooks.

Conclusion:

The next 18-24 months are expected to be marked by continued volatility but high opportunity for
companies that can adapt quickly, localize effectively, and innovate consistently. Danlaw considers itself
to be a growth-focused supplier, and thus our leadership views this environment not just as a risk—but
as a moment to build long-term strategic differentiation. By managing these financial risks effectively,
we expect to maintain profitability and continue to invest in the development of innovative solutions that
meet the needs of our OEM customers in both domestically and abroad.

Performance and Business Outlook

Danlaw Technologies India Limited (DTIL) continues to strengthen its position as a premier provider of
automotive electronics design, development, and manufacturing solutions. With a focused strategy built
on innovation, strategic collaboration, and scalable manufacturing, the company is well-positioned to
capitalize on the rapid transformation of the global mobility and electronics manufacturing ecosystem.

Performance Highlights

Over the past year, DTIL has demonstrated resilient growth, driven by:

• Robust R&D Investment: The company continues to channel significant resources into advanced
R&D for EV systems, vehicle telematics, ADAS, and connected vehicle platforms. With strong in-
house engineering capabilities, DTIL is delivering next-generation solutions that meet the evolving
demands of both domestic and global OEMs.

• Expansion of Manufacturing Operations: The Goa-based manufacturing facility has expanded its
capacity in response to increased demand for localized production. The facility supports PCB
assembly, sub-system integration, and logistics for a growing range of automotive, industrial and
medical electronic products.

• Customer Base Growth: DTIL has secured key program wins with leading OEMs and Tier-1
suppliers in India, the US, and Europe, reflecting strong customer confidence in its quality and
technical expertise.

Strategic Focus Areas

1. R&D-Driven Innovation

o DTIL is investing in smart mobility, electrification, and functional safety technologies.

o Emphasis on in-vehicle networking, vehicle-to-everything (V2X), and cybersecurity

ensures alignment with future mobility standards.

o The companys R&D teams are actively working on IP development for advanced
connectivity, video telematics, proprietary ECU platforms and battery management
systems (BMS).

2. Strategic Partnerships

o DTIL is forging strategic alliances with semiconductor providers, system integrators, and
automotive OEMs to co-develop advanced electronics modules.

o Collaboration with academic and industry research institutes continues to enable early-
stage exploration of Al and ML applications in advanced dashcam technology, vehicle
diagnostics and predictive maintenance.

3. Make in India & Localization Strategy

o Strong alignment with Indias PLI schemes and the Make in India initiative is fueling
domestic growth.

o DTIL is scaling up local sourcing and expanding partnerships with India based electronics
vendors to enhance supply chain resilience and cost efficiency.

Business Outlook (2025 and beyond)

Looking ahead, DTIL is optimistic about continued growth opportunities in the following areas:

• Electric Vehicle Ecosystem: As EV adoption accelerates globally, the demand for locally designed
and manufactured electronics—such as inverters, BMS, and motor controllers—will continue to
rise. DHL is strategically positioned to capture a significant share ofthis market.

• Telematics and Connectivity Solutions: With increasing demand for fleet management, usage-
based insurance, and connected infotainment, DTILs telematics platforms and OTA (over-the-air)
update systems are gaining traction with both the commercial and passenger vehicle markets.

• Global Market Expansion: DTIL is actively exploring opportunities in North America, Europe and
Southeast Asia to expand its footprint, supported by its scalable product platforms and growing
reputation as a reliable Tier-1 electronics partner.

• Diversification into Adjacent Verticals: Leveraging its core capabilities, DTIL plans to extend its
design and development services into medical and consumer electronics, with a focus on sensor-
rich and embedded systems applications.

Conclusion:

DanlawTechnologies India Limited is strategically positioned for sustainable growth in the rapidly evolving
automotive electronics sector. By leveraging its strong R&D foundation, expanding its manufacturing
capabilities, and fostering strategic partnerships, DTIL is set to play a pivotal role in shaping the future of
smart and electric mobility—both in India and around the world.