Exco Technologies : 2021 Annual Information form

EXCO TECHNOLOGIES LIMITED

2021 ANNUAL INFORMATION FORM

For the Fiscal Year Ended September 30, 2021

December 7, 2021

Throughout this document the annual report of the Company for the fiscal year ended September 30, 2021 including the financial statements and notes thereto and management's discussion and analysis will be referred to as 'Annual Report'. The financial statements of the Company and notes thereto appearing in the Annual Report will be referred to as 'Financial Statements'. Management's discussion and analysis appearing in the Annual Report will be referred to as 'MD&A'.

Table of Contents
FORWARD LOOKING STATEMENTS .....................................................................................................................	3
ORGANIZATION OF THE COMPANY .....................................................................................................................	3
THREE YEAR HISTORY OF THE COMPANY'S BUSINESS (2018-2020) ............................................................	5
ACQUISITION AND DIVESTITURES.......................................................................................................................	6
VISION, MISSION, VALUES, AND SUSTAINABILITY .........................................................................................	6
DESCRIPTION OF COMPANY ..................................................................................................................................	7
Human Resources......................................................................................................................................................	7
Tooling, Engineering, and Innovations and Intellectual Property.............................................................................	8
Facilities ....................................................................................................................................................................	8
Consolidated Sales ....................................................................................................................................................	9
CASTING AND EXTRUSION TECHNOLOGY SEGMENT.....................................................................................	9
Extrusion Technology .............................................................................................................................................	10
Casting Technology ................................................................................................................................................	11
Castool ....................................................................................................................................................................	13
AUTOMOTIVE SOLUTIONS ...................................................................................................................................	14
Polytech and Polydesign .........................................................................................................................................	15
AFX Industries ........................................................................................................................................................	16
Neocon ....................................................................................................................................................................	17
DESCRIPTION OF CAPITAL STRUCTURE ...........................................................................................................	18
Dividends ................................................................................................................................................................	18
Normal Course Issuer Bid .......................................................................................................................................	19
Market for Securities...............................................................................................................................................	19
Deferred Profit Sharing Plan ...................................................................................................................................	19
MATERIAL CONTRACTS........................................................................................................................................	20
DIRECTORS AND OFFICERS..................................................................................................................................	20
AUDIT COMMITTEE COMPOSITION AND QUALIFICATIONS ........................................................................	21
RISK FACTORS .........................................................................................................................................................	22
TRANSFER AGENT ..................................................................................................................................................	22
LEGAL PROCEEDINGS............................................................................................................................................	22
CONFLICT OF INTEREST........................................................................................................................................	22
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS...........................................	22
INTERESTS OF EXPERTS........................................................................................................................................	22
ADDITIONAL INFORMATION................................................................................................................................	22

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FORWARD LOOKING STATEMENTS

This document contains forward-looking information and forward-looking statements within the meaning of applicable securities laws. This information and statements relate to future events, plans and projections of our future performance, including in respect of projected growth, changing market conditions, improvements in productivity and future results and the assumptions underlying same. We use words such as "anticipate", "may", "will", "should", "expect", "believe", "estimate", "5-year target" and similar expressions to identify forward-looking information and statements especially with respect to growth, outlook and financial performance of the Company's business units, contribution of our start-up business units, contribution of awarded programs yet to be launched, margin performance, financial performance of acquisitions, liquidity, operating efficiencies, improvements in, expansion of and/or guidance or outlook as to future revenue, sales, production sales, margin, earnings, earnings per share, including the outlook for 2026. Such forward-looking information and statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe to be relevant and appropriate in the circumstances.

Readers are cautioned not to place undue reliance on forward-looking information and statements as there can be no assurance that the assumptions, plans, intentions or expectations upon which these statements are based will occur. These forward-looking statements are based on our plans, intentions or expectations which are based on, among other things, the impact of the global semiconductor shortage on automotive production volumes, the global economic recovery from the COVID-19 pandemic and containment of any future or similar outbreak of epidemic, pandemic, or contagious diseases that may emerge in the human population, which may have a material effect on how we and our customers operate our businesses and the duration and extent to which this will impact our future operating results, assumptions about the number of automobiles produced in North America and Europe, production mix between passenger cars and trucks, the number of extrusion dies required in North America and South America, the rate of economic growth in North America, Europe and emerging market countries, investment by OEMs in drivetrain architecture and other initiatives intended to reduce fuel consumption and/or the weight of automobiles in response to rising climate risks, raw material prices, supply disruptions, economic conditions, inflation, currency fluctuations, trade restrictions, our ability to integrate acquisitions, our ability to continue increasing market share, or launch of new programs and the rate at which our current and future greenfield operations in Mexico and Morocco achieve sustained profitability. These forward-looking statements include known and unknown risks, uncertainties, assumptions and other factors which may cause actual results or achievements to be materially different from those expressed or implied. Information concerning the risks, uncertainties and assumptions are described in the "Risks and Uncertainties" and "Outlook" sections of this Management's Discussion and Analysis in our 2021 Annual Report and in other reports and securities filings made by the Company. More information, including Exco's Annual Report, is available at www.sedar.com or from Exco.

While Exco believes that the expectations expressed by such forward-looking statements are reasonable, we cannot assure that they will be correct. In evaluating forward-looking information and statements, readers should carefully consider the various factors which could cause actual results or events to differ materially from those indicated in the forward-looking information and statements. Readers are cautioned that the foregoing list of important factors is not exhaustive. Furthermore, the Company will update its disclosure upon publication of each fiscal quarter's financial results and otherwise disclaims any obligations to update publicly or otherwise revise any such factors or any of the forward-looking information or statements contained herein to reflect subsequent information, events or developments, changes in risk factors or otherwise.

ORGANIZATION OF THE COMPANY

Exco Technologies Limited ("Exco" or the "Company") was formed by articles of amalgamation dated July 28, 1986 under the Business Corporations Act (Ontario) amalgamating Exco Holdings Inc. and two other holding companies with Extrusion Machine Co. Limited ("Extrusion") and Qualitool Inc. Extrusion was founded by H.H. Robbins, the father of the current Executive Chairman of the Company, and has carried on business since 1952 under the trade name Exco. Exco carries on business through 15 operating entities as indicated on the following organization chart.

The Company's registered and principal office is at 130 Spy Court, 2nd Floor, Markham, Ontario, L3R 5H6.

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Exco is a global designer, developer and manufacturer of dies, moulds, components and assemblies, and consumable equipment for the die-cast, extrusion and automotive industries. Through its 16 strategic locations, Exco employs approximately 4,900 people and services a diverse and broad customer base. Each operation constitutes an autonomous profit centre within the Company but draws upon Exco's pool of expertise and technology. The Company reports in two business segments.

The Casting and Extrusion segment designs, develops and manufactures die-casting and extrusion tooling and consumable parts for both aluminum die-casting and aluminum extrusion machines. Operations are based in North America, South America, Thailand and Morocco and serve automotive and industrial markets around the world. Exco is a leader in most of its markets which principally consist of North America for die-cast tooling, North and South America for extrusion tooling and globally for consumable tooling parts and related equipment. Across its markets, Exco is focused on further entrenching itself by reducing lead times and manufacturing costs through design and process enhancements. Major capital projects have been implemented in recent years to increase capacity, reduce lead times, further improve quality and reduce costs. In the machine consumables market, Exco is leveraging its long tradition as a reliable, high-quality supplier of consumable components for the injection system of die-cast machines and aluminum extrusion presses by evaluating, coordinating and ultimately maximizing customers' overall equipment performance and longevity.

The Automotive Solutions segment designs, develops and manufactures automotive interior trim components and assemblies primarily for passenger and light truck vehicles. The Polytech and Polydesign businesses manufacture synthetic net and other cargo restraint products, injection-moulded components, shift/ brake boots, related interior trim components and assemblies. Polydesign is also a manufacturer and/or finisher of injection moulded interior trim and instrument panel components, sun visors, seat covers, head rests and other cut and sew products. Neocon is a supplier of soft plastic trunk trays, rigid plastic trunk organizer systems, floor mats and bumper covers. AFX Industries is a tier 2 supplier of leather and leather-like interior trim components to the North American automotive market. AFX also supplies die cut leather sets for seating and many other interior trim applications as well as injection-moulded,hand-sewn,machine-sewn and hand-wrapped interior trim components of all sorts. Automotive Solutions manufacturing facilities are located in Canada, the United States, Mexico, and Morocco supplying the automotive markets in North America, Europe and to a lesser extent, Asia.

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Exco Technologies Limited

(Ontario)

		CASTING AND EXTRUSION TECHNOLOGIES				AUTOMOTIVE SOLUTIONS
CASTING TECHNOLOGIES			EXTRUSION TECHNOLOGIES			Polytech (2) (Michigan,
				Castool (1)				Extrusion Canada (1)			Texas, Mexico)
		Exco Engineering					Polydesign Systems (3)
		(Ontario)				(Ontario)			(Morocco)
		(1) (Ontario)			Extrusion Michigan (2)
		Exco Engineering	Castool 180 (3)					Neocon (1)
		USA (2)	(Thailand)				(Michigan)			(Nova Scotia)
		Ohio
		Excoeng Mexico (2)	Castool 90 (3)			Extrusion Texas (2)			AFX Industries (2)
		(Mexico)						(Texas)			(Michigan, Mexico)
		(Morocco)

Extrusion Colombia (3)

(Colombia)

Extrusion Brazil (3)

(Brazil)

Extrusion Mexico (2)

(Mexico)

1. Division of Exco Technologies Limited.
2. Indirect wholly-owned subsidiary of Exco Technologies Limited. The Company also indirectly wholly-owns, where applicable, all non-voting securities.
3. Wholly-ownedsubsidiary of Exco Technologies Limited.

THREE YEAR HISTORY OF THE COMPANY'S BUSINESS (2019-2021)

Fiscal 2021

• Completed construction of Castool 90 in Morocco. Castool 90 will be a full service operating facility to service the European market from Morocco's free trade zone. Official opening ceremony for Castool 90 was held November 16, 2021.
• Castool Heat treatment - Situated within our existing Newmarket facility, management expects production will begin in the Spring of 2022. This facility gives us the ability to process regular and oversized components, ensure faster delivery to our customers, increase quality control, mitigate risks of relying on a third-party supplier for an essential process and the energy efficient equipment reduces the Company's carbon dioxide footprint.
• Castool Mexico - This greenfield facility was approved in fiscal 2021 and will begin construction in fiscal 2022. This facility will be operational in fiscal 2023 and will increase manufacturing capacity and will better penetrate the market in Mexico.
• Large Mould - During the year, the Large Mould group added a fourth additive machine and ordered significant machinery to further modernize our operations and enhance efficiency across the group. Also positions us to capture growth in the very large die-cast segment. Installation of this equipment began in fiscal 2021 and will continue throughout fiscal 2022.
• Extrusion group Heat Treatment - During fiscal 2021, management evaluated the Extrusion group's heat treatment capabilities and approved three projects: adding Heat treatment in Mexico, increasing capacity in

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