AXISCADES Technologies Ltd

DEAR SHAREHOLDERS,

I am privileged to address you as the Chairman of AXISCADES. As we reflect on our achievements and outline strategies for future growth,

I am filled with optimism on the future trajectory of AXISCADES. Our focus on business performance, coupled with governance, leadership, environmental, social, and governance (ESG) principles continues to drive our progress.

GOVERNANCE AND LEADERSHIP

At AXISCADES, we recognise that strong governance is the bedrock of sustainable growth. Our Board of Directors, comprising a blend of experienced professionals and industry veterans, provides the strategic direction and oversight necessary to navigate the complexities of our business environment. We are committed to upholding the highest standards of corporate governance, ensuring transparency, accountability, and integrity in all our operations.

Our leadership team has been instrumental in steering the company through various challenges. Their ability to adapt, innovate, and lead has been crucial in maintaining our competitive edge. We have continued to invest significantly in talent development, fostering a culture of continuous learning and leadership at all levels of the organisation, ensuring a strong pipeline of future leaders.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) COMMITMENT

AXISCADES is deeply committed to integrating ESG principles into its business strategy. This commitment is not just an ethical imperative, but also a driver of long-term value creation. Our ESG initiatives, built upon key pillars, guide our efforts to minimize our environmental footprint, enhance social impact, and strengthen governance frameworks. For example, our ISO

14001 certification for Environmental

Management Systems underscores our dedication to efficient water use, waste management, and energy consumption optimization, ensuring compliance with legal requirements and reflecting our proactive approach to environmental stewardship.

On the social front, we strongly emphasise fostering an inclusive and equitable workplace. Our commitment to diversity, equity, and inclusion is reflected in our hiring practices, employee engagement initiatives, and continuous efforts to create an environment where all employees can thrive. Additionally, we prioritise our employees' well-being, health, and safety through comprehensive health programs, Employee Assistance Programs (EAP) for mental health support, and educational webinars on health-related topics. From a governance perspective, we uphold the highest standards of corporate governance with an Enterprise Risk Management Framework encompassing continuous risk monitoring and timely mitigation measures. Our information systems and cybersecurity infrastructure, validated by industry-recognized certifications, further bolster our resilience, ensuring data protection and system availability.

We are also committed to enhancing our Business Responsibility and Sustainability Reporting (BRSR) and continually improving our ESG disclosures.

PERFORMANCE AND INDUSTRY CONTEXT

AXISCADES operates in the Engineering Research and

Development (ER&D) sector, a critical component of the global industrial landscape. ER&D companies like ours are pivotal in driving innovation, enhancing productivity, and creating value across industries. We cater to various sectors, including aerospace, defence, automotive, heavy engineering, energy, and healthcare, providing cutting-edge engineering solutions that address complex challenges.

The past year has been a testament to our resilience and adaptability. Despite global economic uncertainties, we have delivered robust financial performancedriven by our strong order book, strategic partnerships, and relentless focus on operational excellence. Our revenue growth,profitability,andcashflow generation have been commendable, reflecting our ability to leverage market opportunities and execute effectively.

Our aerospace and defence segment continuestocontribute to our growth. We have deepened our engagement with global OEMs, expanded our service offerings, and enhanced our value proposition. The automotive sector, too, has shown promising trends, with increasing demand for advanced engineering solutions driven by the shift towards electric and autonomous vehicles.

The past year also saw us raising additional capital with participation from Institutional Investors, which will enhance the quality of our balance sheet as well as capital table.

In the energy sector, we have made notable progress in providing engineering services for renewable energy projects, aligning with global trends towards sustainability.

FUTURE OUTLOOK

As we look ahead, we remain focused on leveraging our core strengths to capitalise on emerging opportunities. The global aerospace and defence industry is experiencing growth and transformation, with commercial and defence segments witnessing increased demand. The commercial sector is recovering robustly post-pandemic, with air travel expected to exceed pre-pandemic levels by 2024-2025. Geopolitical instability drives defence budgets higher as nations prioritise preparedness and modernise their military capabilities. Technological advancements in AI, machine learning, additive manufacturing, and digital twin technology are reshaping production methods, increasing efficiency, and enabling data-driven decision-making.

The automotive industry also demonstrates robust growth, with significant increases in production across various regions. AI and generative AI are enabling digital twins becoming integral to manufacturing and engineering operations, enabling more intelligent data use, better product designs, and enhanced customer experiences. The transition to clean energy solutions is gaining momentum in the energy sector, with investments in carbon capture, hydrogen, and biofuels.

We also recognize the transformative potential of Industry 4.0 technologies, which integrate cyber-physical systems, the Internet of Things (IoT), and cloud computing into manufacturing and industrial processes. These advancements will drive operational efficiency, reduce costs, and enhance our ability to deliver customized solutions to our clients.

Furthermore, the growing importance of cybersecurity cannot be overstated. As we continue to expand our digital footprint, we are committed to investing in state-of-the-art cybersecurity measures to protect our assets, data, and client information from evolving threats. This will ensure our long-term resilience and the trust of our stakeholders.

We will continue prioritising innovation, investing in research and development to stay ahead of industry trends and deliver superior value to our clients. Our strategic initiatives, including expanding our global footprint, forging new partnerships, and enhancing our service portfolio, will drive our growth trajectory.

In conclusion, I sincerely thank you for your unwavering support and trust in AXISCADES. Our achievements are a testament to the collective efforts of our employees, partners, and stakeholders. As we embark on the next phase of our journey, I am confident that our commitment to operational excellence, governance, leadership and ESG principles will propel us towards greater heights.

Thank you for your continued faith in AXISCADES.

LETTER FROM CEO & MD

business model and the effectiveness of our strategic initiatives. The overall revenue growth was primarily driven by a 21% increase in our Engineering Services, led by strong performance in Aerospace, Automotive, and Energy verticals.

On the people front, we have made significant strides in improving employee journey. Our attrition rates decreased, a testament to our commitment to employee well-being and our continuous efforts to enhance employee engagement activities and better manage the employee experience.

STRATEGIC ACQUISITIONS

Our strategic acquisitions have been instrumental in our growth strategy, bringing in new and niche capabilities while expanding our market reach. The acquisition of EPCOGEN has significantly bolstered our in the energy sector. This strategic move has enhanced our presence in

DEAR STAKEHOLDERS,

I am pleased to report that fiscal year 2024 has been momentous year for AXISCADES Technologies Limited. Our company has demonstrated remarkable resilience and strong operational performance in key verticals despite global macroeconomic volatility and challenges in several industry verticals. We successfully concluded a qualified institutional made two acquisitions, acquired new logos, strengthened our strategic relationship with several OEMs and strategic customers, had several deal wins, retired high-cost debt and strengthened our balance sheet.

PERFORMANCE HIGHLIGHTS

In FY24, we surpassed the previous highest revenue of FY23 and set new benchmarks for successive years. We achieved a 17% increase in sales revenue, reaching INR 952 crores. Our EBITDA stood at INR 130 crores, and our PAT was INR 33 crores, marking a substantial turnaround from the previous fiscal year. The

60% reduction in net borrowings was another commendable achievement, which will significantly reduce our finance costs in the coming years.

Our Defence production revenues tripled, and our order pipeline thrived, reflecting the robustness of our the energy markets of the Middle East and North America and facilitated cross-selling opportunities among our established oil & gas clientele and industrial product customers. Integrating EPCOGEN's capabilities with AXISCADES is expected to fortify our position in complex project engineering and execution, paving the way for a promising future.

Additionally, our acquisition of add solution GmbH, a German company specialising in automotive design and development, has significantly boosted our expertise in Electrical Distribution Systems, software development, wiring systems component engineering, and

We see significant opportunities in the Defence sector, with production ramping up and a robust pipeline of orders. The increasing demand for radars, drones, and other advanced defence and electronic warfare systems underscores our strategic investments in this sector.

automation for global automotive OEMs. This acquisition has not only expanded our footprint in Europe, a key automotive hub but also enhanced our ability to drive innovation. The amalgamation of add solution GmbH creates cross-selling opportunities and positions AXISCADES as a comprehensive solutions provider, aligning with our vision of becoming a leading solutions provider to the automotive industry.

SECTOR PERFORMANCE

In the defence sector, production revenues have significantly increased owing to the design wins of prior years, enhancing the margin in this sector . After successful trials, we have also started delivery of the first-of-its-kind Man Portable Counter

Drone System to the Ministry of Defence. We continue to develop prototypes in radar, sonar and telemetry systems for prestigious defense programs, which will add to the future pipeline of orders.

In the aerospace sector, we are positioned to achieve industry-leading growth rates, supported by substantial opportunities with OEMs in manufacturing processes and assembly lines. We have secured a large OEM deal worth $18 million, to be executed over the next three to five years.

The automotive sector achieved above-industry-average growth, driven by synergised capabilities and deepened relationships with our customer base across Europe and APAC. Our pivot to advanced solutions such as reusable components, CASE technologies and other new-age automotive solutions position us well for continued success. The acquisition of add solution will provide further impetus to make inroads into this sector.

The energy sector has seen a remarkable 79% growth, driven by growing relationships with our customers and the addition of EPCOGEN's capabilities.

STRATEGIC FOCUS AND FUTURE OUTLOOK

Our strategy leverages our diverse capabilities to drive long-term growth and value creation. We have strengthened our balance sheet by retiring high-cost debt and improving our financial health, allowing us to invest in new technologies, expand our R&D capabilities, and enhance our service offerings across the entire product life cycle.

We are committed to capitalising on this growth momentum and delivering stronger performances. Our digital and embedded services are also expected to grow at a healthy pace, driven by increasing global demand for innovative solutions.

DIGITAL INITIATIVES

The Engineering and R&D sector is set to lead global advancements, and AXISCADES is well-positioned to be at the forefront of this transformation. Our investments in IoT, AI, and analytics for intelligent manufacturing, combined with innovations in aerospace, automotive, heavy engineering and energy, highlight our commitment to industry-wide change and fostering a sustainable future. Our expertise in intelligent product engineering and manufacturing, CASE technologies, aerospace advancements, renewable energy, oil and gas, and embedded solutions showcases our dedication to revolutionising industries and creating a brighter, more efficient future

As part of our future outlook, our digital initiatives are set to strengthen the company's growth trajectory further. Our focus on agile development processes, enhanced digital infrastructure, and internal automation is poised to improve operational efficiency and product quality. Developing a machine vision-based quality inspection system for AOL validation and implementing

AR/VR/3Dcapabilitiesare steps towards modernising our capabilities. These initiatives are expected to drive efficiencies, reduce costs, and open new avenues for growth, particularly in sectors such as aerospace, automotive and heavy engineering.

FOCUS ON ESG

As we reflect on our journey and look forward to the future, I am pleased to highlight the significant strides AXISCADES has made in integrating Environmental, Social, and Governance (ESG) principles into our core strategies. ESG is a fundamental business model component, driving long-term growth and value for all stakeholders. Our initiatives to reduce our carbon footprint, enhance workplace diversity, and maintain high corporate governance standards

We anticipate production revenues growing steadily, with our R&D investments from prior years and expertise bearing fruit. Our Design Wins are providing valuable contributions to a range of advanced upcoming indigenous programs and enabling the nation's self-reliance. These projects will further boost our role as a key player in the Indian defence technology ecosystem.

demonstrate our commitment to sustainable practices. By embedding ESG principles into our operations, we ensure AXISCADES remains resilient and responsible.

CONCLUDING REMARKS

As I stated in my letter last year, we embarked on significant projects to enhance our capabilities and market presence. Our collaboration with key clients have strengthened, leading to increased revenues and extended contracts. Our partnerships in the industry and academia have progressed well, encouraging transformative research and solutions for the futuristic industry requirements.

Our acquisition of Mistral continues to enhance our embedded product engineering and defence capabilities. We have successfully integrated Mistral's skills into our operations, enabling us to penetrate new verticals and strengthen our market position. The new delivery centre in Broughton, United Kingdom, has positioned us to gain more market share from existing and new clients in the aerospace sector.

In the heavy engineering segment, we have launched new initiatives in digital and analytics, and we are optimistic about growth as we advance. Our strategic investments in the promising Automotive and Energy segments have built a strong foundation for future growth, which we expect to play a significant role in our revenue expansion moving forward.

I am confident that with our dedicated team, strong market position, and clear strategic direction, we will continue to achieve our ambitious goals and deliver exceptional value to our stakeholders. Our focus on engineering innovation across various sectors positions us well to lead global advancements and drive industry transformation.

Thank you for your continued support and confidence in our company.