Elin Electronics Ltd

DRIVING EXCELLENCE WITH PURPOSEFUL INITIATIVES

As we wrap up a transformative year in our journey, I take the opportunity to extend my deepest gratitude to all our stakeholders who supported and believed in Elin Electronics. Your confidence in our vision and commitment in our progress motivate us to challenge our abilities and go all out for sustained success.

It is with great pride and enthusiasm that I present to you the Annual Report for 2023-24. This past year remains a period of optimism in our journey as we adeptly navigated a dynamic and ever-evolving market landscape with strategic foresight and un_inching commitment. Fuelled by our focus on constant innovation, perseverance, operational excellence, and customer satisfaction, we achieved major milestones across our core business domains. Additionally, our sound financial performance, robust product pipeline, and strategic alliances fortified our position, setting a solid foundation for sustained growth and value creation.

Re_ecting on the transformative journey of Elin Electronics, it is evident that we are on a path to scale greater heights and excel across all facets of our business. Through our relentless drive to expand capacities, diversify our product portfolio, accomplish operational excellence, build a high-performance team, and optimise capital allocation, we remain dedicated to building on this momentum. Driven by our constant thrust on innovation, we continue to evolve stronger, staying committed to delivering exceptional value to our customers, employees, and shareholders.

In India, the EMS industry is poised for unprecedented growth, expected to achieve a staggering CAGR of 32% over the next five years, significantly outpacing the growth rate of the global EMS market and reaching USD 80 Billion by 2026. This upward growth trajectory is fuelled by an amalgamation of strategic shifts and market trends: Original Equipment Manufacturers (OEMs) are increasingly outsourcing, the China plus one strategy is gaining traction, and India's domestic electronics ecosystem is steadily _ourishing. Moreover, segments like the mobile, consumer electronics, and appliances are projected to surge rapidly with a CAGR of 31.5% over the next five years, unlocking significant opportunities for both strategic and financial investors. Additionally, the EMS industry continues to be stimulated by the growing demand for consumer electronics, the rising adoption of smart devices, and the burgeoning telecom sector. Moreover, pivotal Government initiatives, including the ‘Make in India' campaign and the Production Linked Incentive (PLI) scheme further catalysed the industry's growth. Offering the dual benefits of financial incentives and a conducive environment for manufacturing, these initiatives go a long way in strengthening the domestic EMS industry. Additionally, the global pivot away from reliance on single-source manufacturing, particularly from China, positioned India as a viable alternative. With its skilled workforce, competitive labour costs, and enhanced infrastructure, India has emerged as a favourable destination for EMS providers.

As the global landscape evolves, India's EMS industry is riding a wave of outstanding growth, supported by the proliferation of Internet of Things (IoT) devices, advancements in automotive electronics, and the rapid rollout of 5G technology. Companies are investing heavily in research and development to spearhead innovation and adapt to rapid technological progress. Furthermore, buoyed by the strategic partnerships with multinational corporations and leveraging sound backward integration capabilities, Indian EMS companies are on a strong footing to elevate their value propositions, enhance operational efficiencies, and maintain excellence in quality and service. This compelling growth trajectory is set to firmly establish India as a formidable contender in the global EMS market, shaping the industry's future with strong presence.

At Elin Electronics, our EBITDA for the year under review stood at 496 Million, down from 674 Million in 2022-23. This decline in EBITDA reflects the impact of negative operating leverage, driven by a marginal fall in revenue and rising costs. Moreover, our full year PAT stood at _ 139 Million compared to 268 Million in 2022-23.

We revised our depreciation on plant and machinery from a single shift to a double shift rate, leading to an impact of 18.7 Million. Moreover, we reassessed the useful lives of moulds from 15 years to 10 years, resulting in an impact of 8.3 Million. Cumulatively, the total one-time impact for 2023-24 stood at 27 Million. Despite these adjustments, our liquidity position remains robust, with net cash and equivalents totalling to 823 Million as of March 2024. Our working capital cycle as of March 2024 was recorded at 68 days, slightly extended as compared to 66 days in the previous fiscal.

At Elin Electronics, we recognise that our employees are the crucial driving force behind our sustained success. Enhancing their competitive edge and keeping them at the leading edge of industry's evolving necessities are central to our ethos; and to achieve these objectives, we embrace a strategic and holistic approach to learning and development. Throughout the past year, we implemented a series of innovative programmes focused on skill, enhancement, employee engagement, diversity and inclusion. Through our meticulously designed talent development initiatives, we effectively identify and cultivate high-potential employees, preparing them for future leadership roles within the organisation. Furthermore, our innovative role change programme plays a crucial part in optimising workforce allocation and subsequently augmenting overall productivity. Additionally, leveraging our rigorous assessment development programme, we nurture internal talent and guide their progression to the next level. Deploying this focused approach, we continue to foster a culture of holistic growth and advancement, while ensuring that our team is continuously challenged and motivated to excel. Despite the challenges posed by the current macroeconomic environment for consumer durables and FMEG, we acknowledge the need for addressing company-specific issues. To drive this internal transformation, we decided to inculcate more professionalism within our Company by bringing onboard best-in-class talent. In April 2024, we proudly inducted Mr. Praveen Tandon as our CEO, an esteemed professional with a sound experience of 30 years. His domain of work encompasses a diverse set of expertise in procurement, operations, and business development across leading companies, including Dixon Technologies, IFB, LG Electronics, and Honda. Moreover, Additionally, we are poised to enhance our team by onboarding skilled professionals for key roles in the coming months. While this initiative will involve an immediate impact on costs, we firmly believe that building a strong professional team is foundational for our future growth and success.

In alignment with our government's commitment to environmental sustainability, we are excited to announce our partnership for solar energy. Starting in the second quarter of FY 2024-25, we will begin receiving solar energy. This transition not only underscores our dedication to green energy but also provides us with significant financial benefits.

Our vision is to forge a powerhouse organisation by attracting top-tier talent, boosting operational efficiencies, and enhancing employee productivity. We are dedicated to optimising costs and maximising capacity utilisation, with a sharp focus on return on capital employed. We strive to diligently manage both CAPEX and working capital to fuel our growth endeavours. Additionally, we envision to build a lean and well-staffed organisation that will strategically position us to seize the growth opportunities ahead. As we wrap up a transformative year in our journey, I take the opportunity to extend my deepest gratitude to all our stakeholders who supported and believed in Elin Electronics. Your confidence in our vision and commitment in our progress motivate us to challenge our abilities and go all out for sustained success. To our shareholders, customers, employees, and partners, your invaluable contributions are the foundation of our journey towards greater growth. It is through your enduring support that we are able to pursue our mission of uplifting underserved communities and fostering financial inclusion, while converging organisational growth and community development with purposeful interventions. Thank you for being an integral part of our journey.