Endurance Technologies Ltd Management Discussions

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Endurance Technologies Limited has, since its inception, built a strong reputation as a trusted global manufacturer of automotive components. With a diversified portfolio spanning aluminium die-casting, suspension, braking systems, transmission, and embedded-electronics, the Company serves a large market base. Its operations are anchored in delivering quality products and fostering customer trust, and positioning itself as a preferred partner across markets.

Endurance leverages its deep expertise in designing, developing and manufacturing of highly critical proprietary products to serve both Indian and international OEMs. Its five Department of Scientific and Industrial Research (DSIR) approved R&D centres support innovation and product development, reinforcing its position as a preferred supplier to its OEM customers. The Company also maintains a strong aftermarket presence across domestic and international markets.

The Company has strategically located manufacturing facilities in India and overseas, in close proximity to OEMs to ensure on- time delivery. These modern, scalable facilities are designed to adapt to the industry trends, producing advanced, high-quality products. The Companys R&D facilities are driving innovation and technology intensified products, which not only enhance its leadership position in the industry but also improve its capacity

to capitalise on emerging trends in advanced mobility solutions. Further, the Company has set up a state-of-the-art R&D facility in Waluj to cater to every automotive segment. significantly expanding its testing, design, engineering, and advanced R&D capabilities. This facility boasts an advanced laboratory and testing capabilities to meet the needs of emerging products such as smart mobility and sustainable product technologies for the future. It is poised to foster innovation, value engineering, and in-house development of future-ready suspension technologies.

Endurance consistently introduces new products to enhance cost efficiency, performance, durability and overall quality. These efforts are guided by a thorough analysis of market trends and evolving customer requirements. The Companys robust infrastructure, including advanced design tools, virtual validation, Computer-Aided Engineering (CAE) analysis and in-house testing facilities, supports continuous innovation and strengthens its product portfolio.

During the reported year, the Company introduced new products such as 4W driveshafts and dual channel ABS modulator. In addition, the Company used unique Adler motorcycle clutch technology to tailor its products to the needs of Indian markets. The Company developed a differentiated assist-and-slip clutch that combines performance, durability and affordability for mass market segments. The Company also obtained final approvals for the APTC EVO clutch system across multiple motorcycle models from 150cc-500cc.

• Endurance Overseas, the Companys wholly-owned subsidiary in Italy acquired 100% of stake in Ingenia Automation Srl, Italy.

• Endurance Overseas signed a Share Purchase Agreement to acquire a 60% share in Stoferle Automotive GmbH and Stoferle GmbH, both based in Germany, with a strategic intent to reach 100%. The acquisition of Stoferle entities and Ingenia enabled the Company to attain in-house machinebuilding and automation prowess.

• Expansion in Waluj/Patnagar for EV, petrol, and CNG motorcycle models of an Indian OEM.

• The Company signed an agreement with a Korean Company for 4-wheeler suspensions and strut manufacturing.

• The Company is expanding its capacity in Waluj (Maharashtra) and Kolar (Karnataka) to fulfil a large scooter front fork order for a Japanese OEM.

• The Company is installing its capacity in AURIC, Shendra, Chhatrapati Sambhajinagar for fourwheeler and non-auto machined aluminium castings.

• The Company is increasing its capacity for manufacturing 2W alloy wheels by setting up a plant in AURIC Bidkin, Chhatrapati Sambhajinagar.

• During the reported year, the Company increased its equity shareholding in subsidiary Maxwell, increasing it from 56% to 61.5%.

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As Indias largest aluminium die casting entity, the Company has strong presence in the die casting and machining business across 2-wheelers, 3-wheelers and 4-wheelers, supported by a diverse product portfolio and advanced manufacturing capabilities. The adoption of cutting-edge technologies and the use of in-house tools have further strengthened its position as a key market player. Endurance continues to enhance its technical expertise to effectively meet changing market demands.

In FY 2024-25, the Company secured new casting orders worth H 6.1 billion across two-wheeler, three-wheeler, and four-wheeler and non-automotive segments, including H 2.75 billion for the AURIC Shendra plant, with start of production (SOP) scheduled for September 2025. The Company leveraged its new European subsidiary, Ingenia, to drive automation at the Shendra plant. It also expanded capacity at Chakan by commissioning a fully automated machining line and upgrading four die casting cells

Endurance is a market leader in high-performance suspension systems for two-wheeler, three-wheeler and quadricycles in India. It designs, develops and manufactures both adjustable and non-adjustable damping force inverted front forks and monoshock absorbers for global markets. As backward integration, the Company has installed aluminium forging presses. The forging plant has also secured orders from reputed Indian and overseas customers.

During the reported year, the Company won orders for suspension worth H 2,351 million, including inverted front forks for two major two-wheeler OEMs, and a global 2W OEM featuring tension and rebound adjustment. The Company entered a technical assistance agreement with a leading Korean suspension manufacturer to develop four-wheeler shock absorbers and struts. It also completed plant audits with major Indian and global OEMs for light commercial vehicles (LCVs) and medium commercial vehicles (MCVs). Significant sales growth was achieved at the Narsapura plant in Karnataka, with an 80% projected year-on-year increase driven by new orders from major two-wheeler OEMs, supported by capacity additions and de-bottlenecking efforts. Furthermore, in the non-auto space, the Company is developing solar dampers for a Spanish client.

Endurance maintains a dominant market position in high- performance braking systems for two-wheeler and threewheeler, known for delivering reliable, customer-specific solutions. It was the first in India to design and manufacture brake systems with split-type calipers as well as integral calipers and fixed-type calipers.

The Companys braking systems showed a positive growth, which was supported by ongoing efforts to improve capabilities. In FY 2024-25, the Company secured H 2,366 million in new orders from major two-wheeler OEMs, expanding brake offerings for 100 cc to 990 cc two-wheeler platforms, including dual-channel ABS orders. The Company is constructing a new building at the E-71 brakes plant in Chh. Sambhajinagar, for two-wheeler disc brakes, reinforcing its market leadership. Cost competitiveness improved through in-house production of ABS valves and steel braided hoses, with plans to manufacture printed circuit boards at Waluj. Additionally, the Company initiated development of advanced braking systems for a major four-wheeler OEM and expanded premium brake offerings for high-performance two-wheeler.

Endurance is a well-known player in transmission systems for two-wheeler and three-wheeler, with strong expertise in design, development and manufacturing. For motorcycles, the Company produces cork based and paper based clutches and also offers the latest assist-and-slip Adler technlogy clutches. For threewheeler, the Company produces clutches and driveshafts, the later being also offered for four-wheeler end use.

The Company won new clutch orders from major two-wheeler OEMs in FY 2024-25, increasing annual clutch assembly sales by 1 million units. The driveshaft business expanded with orders from three 3 three-wheeler OEMs and a leading four-wheeler OEM, reaching full capacity utilisation at Waluj and initiating plans for capacity augmentation in FY 2025-26. Additionally, the Company also localised assist and slip clutch technology from a European subsidiary for Indian OEMs to enhance market share, value-add and increase profitability.

Endurance has expanded its presence in the electric two-wheeler and three-wheeler and four-wheeler business segments.

In FY 2024-25, the Company secured EV orders worth H 4,390 million, contributing to a cumulative EV order book of H 10,200 million, with 37% of FY 2024-25 orders dedicated to EV applications. The performance of the EV and hybrid segment remained strong throughout the reported year, supported by robust profitability and integration of advanced technologies.

The Companys aftermarket operations play a strategically vital role, fostering customer trust and promoting long-term brand engagement.

Aftermarket sales witnessed a growth of 9.9%, increasing from H 4,609 million in FY 2023-24 to H 5,063 million in FY 2024-25, contributing 6% to the domestic income. During FY 2024-25, the Company expanded its penetration to 213 districts with 442 distributors in India, and extended its international footprint to 39 countries.

During the year under review, Endurance embarked on a special project in consultation with a top global consultancy firm. Through this collaboration, Endurance aims to increase market penetration, launch new products, strengthen merchandising, boost exports, and grow its four-wheeler product segment, all in pursuit of achieving targeted growth within the next two years.

Endurance acquired a 51% share in Maxwell Energy Systems Private Limited in FY 2022-23, subsequently increasing it to 61.5% till FY 2024-25.This subsidiary is present in advanced electronics, particularly in the battery management system for

low voltage/high voltage EVs in the two-wheeler, three-wheeler and tractor segments. During the year under review, Maxwell received orders valued at an estimated H 0.6 billion. Further to this, during the reported year, the loss was H 168 million. Maxwell generated a total income of H 0.70 billion, reflecting a year-on- year growth of 10.9%.

In FY 2024-25, the Companys international subsidiaries growth was directed by outstanding business leadership, robust financial management and prudent investments. These subsidiaries achieved strong growth in sales, profitability and order intake.

Endurance Overseas SpA (EoSpA) is the Companys wholly- owned subsidiary in Italy, established as a Special Purpose Vehicle for strategic overseas investments. The Company now holds 100% of EoSpAs share capital, following the buy-back of a 5% stake previously held by Endurance GmbH, another wholly-owned subsidiary of the Company based in Germany, for € 8.5 million. This transaction streamlined the Groups control

structure. EoSpA is engaged in providing management support services to other European Group entities, centralising critical functions for strategic efficiency. During FY 2024-25, Endurance Overseas transitioned from a Srl to a SpA legal structure.

In FY 2024-25, EoSpA reported a total income of € 12.3 million, compared to € 8.5 million in the previous year. Profit after tax witnessed an increase to € 12.6 million from € 8.3 million. This was driven by higher dividends from Italian subsidiaries (€ 13 million compared to € 9 million in FY 2024). EoSpa inked the acquisition of 60% stake in Stoferle Automotive GmbH and Stoferle GmbH.

Endurance GmbH (EGmbH) is a wholly owned German subsidiary that manufactures high- pressure die-casting and machining components. The subsidiary serves major automotive OEMs in Germany.

In FY 2024-25, EGmbH reported a 9.6% increase in total income to € 60.6 million, compared to € 55.3 million in the previous year. Profit after tax improved to € 2.0 million from € 0.7 million. The performance was fuelled by the gain on disposal of investments offset by lower incomes on sale of tooling, higher energy cost (due to fixed term agreements) and the provision of redundancy costs (for € 0.4 million) for the implementation of a reorganisation and recovery plan.

Endurance SpA (ESpA), a step-down operating subsidiary in Italy, specialises in high-pressure die-casting and machining components for the automotive sector, encompassing engine, gearbox, transmission parts and assembled metallic components made from aluminium alloys, cast iron and steel.

In FY 2024-25, ESpA reported an increase of 26.6% in total income to € 202.4 million, up from € 159.9 million in FY 2023-24. Profit after tax increased by 40.8% to € 14.2 million, compared to € 10.1 million in the previous year. A profit margin of 7.0% (up from 6.3%) was achieved. This improvement was propelled by volume augmentation of high-value parts. Energy prices remained elevated compared to pre-2021 levels (with electricity at 170% and gas 210% above historical costs), savings from operational solar panels installed in the prior year contributed to cost efficiencies. Additionally, ESpA also benefitted from tax allowances due to higher depreciation on technologically advanced machinery.

During the year, ESpA secured new orders worth € 20 million (in terms of yearly turnover at regime) from various car manufacturers, primarily for powertrain components with start of production expected in FY 2025-26.

Endurance Engineering Srl (EEsrl), based in Italy, is a step-down operating subsidiary that manufactures plastic components for automotive and other applications.

During FY 2024-25, EEsrls total income decreased by 19.9% to € 10.0 million from € 12.5 million in the previous year, primarily due to the phasing out of a key customer. This was not fully offset by new customer relationships. Profit after tax remained stable at €0.8 million, supported by production reorganisation efforts that maintained profitability despite lower sales.

Endurance Castings SpA (ECSpA) is a step-down operating subsidiary in Italy, specialising in high-pressure die-casting and machining components.

In FY 2024-25, ECSpA reported a 14.6% increase in total income to € 46.9 million, from both captive and non-captive customers, as compared to € 40.9 million in the previous year. Profit after tax increased to € 1.9 million from € 0.7 million. This was primarily due to higher turnover driven by captive sales to ESpA. ECSpA secured new orders from non-captive customers worth € 3.9

million (in terms of yearly turnover at regime), with start of production primarily in FY 2024-25.

Endurance Two Wheelers SpA (E2WSpA), a step-down operating subsidiary in Italy, was formed through the merger of Frenotecnica Srl and New Fren Srl into Endurance Adler SpA, to consolidate our European two-wheeler operations. Endurance Adler SpA was subsequently renamed Endurance Two Wheelers SpA, effective 1^st January, 2025.

E2WSpA specialises in manufacturing clutches, brake systems, metal-rubber components, brake pads, discs, centrifugal clutches and brake shoes for two-wheeler vehicles in the OEM, aftermarket and replacement markets. The merger also led to consolidated operations, with the former Frenotecnica manufacturing plant relocated to the restructured Endurance Adler premises.

In FY 2024-25, E2WSpA reported a total income of € 16.9 million and a profit after tax of € 0.6 million. Compared to a total income of € 9.9 million for the previous year and a profit after tax of € 0.4 million as standalone Company and a total income of € 19.6 million and a profit after tax of € 0.9 million, in terms of proforma data of the combined companies, for the previous year.

Veicoli Srl (Veicoli) is Endurances Italian step-down subsidiary engaged in providing fleet management services through its application platform. During FY 2024-25, Veicoli recorded a total income of € 2.2 million, compared to € 1.3 million of the previous year. Profit after tax doubled to € 0.4 million from € 0.2 million. The Company continued to prioritise customer acquisition and portfolio expansion.

Ingenia Automation Srl (Ingenia), the new step-down operating subsidiary in Italy, specialises in industrial automation. Acquired in May 2024 by Endurance Overseas SpA for € 3.0 million (€ 2.2 million paid, with € 0.8 million deferred to 2026 and 2027). The purchase price will be subject to an increase up to maximum € 0.6 million in case of achievement of certain defined commercial targets. Ingenia collaborates closely with other group companies to enhance the Groups automation expertise.

In FY 2024-25, since its acquisition, Ingenia contributed € 8.6 million in total income from captive and non-captive transactions and a profit after tax of € 0.2 million.

Stoferle GmbH and Stoferle Automotive GmbH, acquired on 2^nd April, 2025, are newly integrated step-down subsidiaries based in Germany. They specialise in highly automated machining of complex aluminium die castings for automotive engine and transmission components, as well as the production of CNC machines for captive use.

The Companys Central Quality Department maintains the highest standards to ensure product consistency and excellence across all operations. Its state-of-the-art manufacturing facilities are equipped with advanced technologies, enabling the delivery of high-quality, cost-effective products that meet customer expectations. By leveraging digital tools, enhancing sourcing strategies and continuously improving quality systems, the Company ensures reliable performance and operational efficiency.

A strong focus on Quality, Cost, Delivery, Development and Management (QCDDM) continues to be vital in sustaining its leadership in the market. Product VAVE was undertaken to improve the quality of product offerings and also reduce the part weight, especially for die casting components. Additionally, new technologies and process automations are implemented to enhance product quality and productivity.

Endurance is committed to minimising its environmental impact by adopting best-in-class sustainability practices. Some of the activities included ecological restoration, renewable energy adoption and water conservation. Additionally, dense forest creation to establishing solar energy infrastructure, enhancing water retention capacity and sustainable agricultural practices were undertaken during the reported year. Further, the Company is also working on a net zero target in collaboration with CII, aligned with SBTi guidelines.

Human resources are critical to the Companys long-term growth. The Companys HR initiatives aim to attract and retain a highly skilled and motivated workers by offering a positive and safe work environment. Moreover, the Company supports continuous development through relevant tools and upskilling opportunities, ensuring its employees skills and knowledge stay aligned with evolving industry standards.

Developing future leaders from within the organisation is a key strategic priority for Endurance. The Companys evolving learning and development framework focuses on strengthening internal capabilities and preparing employees for future leadership roles.

• Finding high-potential individuals within the Company, assisting them in redefining their potential, and improving their managerial and leadership abilities.

• By introducing the Endurance Youth Leadership programme (EYLP), staff members are exposed to different fields and are motivated to develop their skills.

• Employees talents and behavioural competencies were enhanced by the managerial effectiveness programme, which helped them become more capable managers and leaders.

The Company fosters a high-performance culture built on its core CITTI values. These values guide everyday decisions and behaviours, shaping a positive employee experience and reinforcing the Companys reputation as a globally trusted brand. To strengthen engagement and loyalty, Endurance adopts sustainable practices each year based on the feedback received from its annual employee engagement survey.

Endurance seeks to promote a culture that values balance and prioritises employee well-being. The organisation believes that taking time off is crucial for maintaining both physical and mental health and actively encourages practices that help employees to stay motivated.

• Encouraging regular leaves to support both physical and mental well-being

• Opportunities for family interaction where family members of the employee can visit the plants

• Providing a hotline number for staff members to help them overcome obstacles

The Company believes in building and sustaining a high- performance culture, anchored in CITTI values.

Diversity is a strategic priority for Endurance, developing a sustainable competitive advantage through a diverse workplace. During the reported year, the Company celebrated Womens Day and Diversity Week, fostering an environment where every individual feels valued and respected.

The Company announced a Voluntary Separation Scheme ("VSS") for all its eligible permanent workmen at its plant located at L-6/3 (LPDC), MIDC Industrial Area, Waluj, Dist. Chh. Sambhajinagar, Maharashtra, to right-size the plant in line with the production volumes, on 10^th February, 2025. 57 employees opted for the

VSS, leading to one-time outgo of H 106.35 million. Separation compensation was paid to the said employees on 17^th April, 2025.

The EHS and sustainability-first culture of the Company, consistently prioritises human lives, environment, health, safety and sustainability at the forefront of its decisions. The Company enforces zero tolerance for unsafe acts and noncompliances, facilitated by its strong management policy. The EHS team oversees all material changes, expansions and greenfield/brownfield projects, ensuring compliance with safety management. The Company focuses on developing contractors in hazard identification, risk assessment, training and emergency readiness. During the reported year, Yoga Day, Sports Day and de-addiction camps were conducted to promote employee well-being and physical fitness. Moreover, the Company also launched Endurance Health Benefit Plan in collaboration with a leading health-tech platform to support employee well-being.

CSR is a strategic priority for Endurance. The Company is committed to reducing inequity—transforming communities, inspiring children, and empowering individuals to achieve their full potential. Through its efforts, the Company is able to support individuals and communities in gaining independent and realise their full potential. The Company implements a holistic approach towards community development to address complex issues by driving initiatives across education, health and sanitation, livelihood generation and environmental stewardship. This enables it to deliver a lasting impact in the communities. Endurance comprehends the requirements of the community, centres the initiatives based on the needs of the community and gets the support from the stakeholders to ensure the sustainability of the initiatives. Endurance is determined to equip individuals with the right skills, tools and resources to enable them to thrive and create a sustainable change in their communities for future generations.

Every child deserves to reach her or his full potential. However, gender inequalities in communities hinder this reality. The Company envisions a society where all children are encouraged to be aspirational and not made to feel guilty for chasing their dreams. The Company undertakes a wide range of initiatives to enable children achieve their potential. Endurance enables access to schools by renovating schools with libraries and computer labs, providing bicycles, initiates e-learning to enhance effectiveness by training teachers and inspiring children with interactive workshops on life skills and child rights.

Health is a basic human right. Recognising this, Endurance is driving health and hygiene initiatives in villages around Chhatrapati Sambhajinagar. These initiatives encompass the installation of RO plants to ensure access to clean drinking water. Further, the Company is renovating government hospitals to augment access for communities, building toilets, organising health check-ups and surgeries, providing rehab to alcoholics and conducting yoga sessions. Endurance is focused on improving womens health, particularly addressing stigmatised facets of menstrual health and family planning. These efforts have a positive ripple effect, transforming families and communities.

Endurance is committed to empowering individuals, especially women, to fulfil their dreams. The Company works with women in villages to comprehend their interests, develop their skills, provide them with loans to start their businesses and guide them through their journey. ECOVE, a vocational training centre, works with individuals from remand homes, orphans and individuals who fail to recognise their own value. The Company equips them with skills to enable them to achieve financial independence and start understanding and capitalising on their special abilities. Over 200 candidates have graduated from this centre with degrees in tailoring, computer science, machine maintenance, die-casting, electrical and retail.

Safeguarding the environment is a crucial aspect of community development. Endurance believes in investing in renewable sources of energy, prioritising solar energy generation and promoting rainwater harvesting. The Company has installed solar power generation units and solar streetlights in 3 villages and initiated several rainwater harvesting projects. In addition, the Company has de-silted ponds, deepened waterways and created reservoirs. To improve access to clean drinking water, the Company has laid pipelines to supply water to underserved villages. Endurance believes in sustainable farming and continues to train farmers in hydro-phonics and drip irrigation, while providing mangers saving over 40% fodder. The Company has developed several dense forests as part of its sustainability initiatives. During the year under review, the Company had planted over 2.20 lakh native saplings across 22.5 acres in three villages, featuring 63 local species to regenerate biodiversity and create green community assets.

Internal Control Systems and their adequacy: The Company has adequate internal financial control systems and details of the same are mentioned in the Boards Report.

Endurance is strategically positioning itself for future growth through global acquisitions, capacity expansion and technological advancement. It plans to cater to the four-wheeler market and is actively exploring partnership opportunities to offer products such as suspension and braking systems for four-wheelers. It aims to increase market penetration despite its strong presence in 2W/3W

components. Additionally, the establishment of a new manufacturing plant in Maharashtra is expected to boost the production of lithium-ion battery packs for electric mobility and energy storage systems in the coming years.

The Companys risk management policy outlines a structured framework to identify, assess and mitigate risks that could impact business growth. The policy is tailored to the nature of the Companys operations and includes strategies to address potential threats. The Board oversees the risk management process, regularly reviews risk assessments and evaluates reports from internal auditors on risk management and internal controls.

This document contains some statements about expected future events, financial and operating results of Endurance Technologies Limited, which are forward-looking. By nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions and other forward-looking statements may not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements.