Emmforce Autotech Ltd Management Discussions

BUSINESS OVERVIEW

Our company is engaged in the business of manufacturing niche automotive drivetrain parts like Differential Housings, Differential Lockers, Differential Covers,4WD Locking Hubs, Spindles, Axles & Shafts, Gear Shifters, Yokes, Differential Spools, Differential Tools and various differential forged / cast parts primarily for 4-wheel Drive and performance racing vehicles. The company has been engaged in exports ever since its inception. We have established itself as a manufacturer of Drivetrain Parts in India and is one stop shop for quality cost competitive drivetrain parts and providing out-of-the-box solutions to its customers through designing and development of complex / special parts.

We offer fully integrated engineering solutions from conceptualization, development and validation to implementation and manufacturing of our products. The conceptualization stage involves acquiring market intelligence, assessing customer requirement and formulating customized strategy for individual customers. The development phase includes product designing, material procurement and processing. This is followed by the validation phase, which involves prototyping, testing and feasibility analysis. Our in-house manufacturing and implementation competencies include forging, machining, fabrications, heat treatment, surface finish, logistics, quality and testing, design and validation.

FINANCIALS

The financial performance of the Company for the financial year ended March 31, 2026 is given in the directors report.

SWOT Analysis Strengths:

Our diverse product range of drivetrain parts manufactured under one roof gives us a market edge from most of the competitors.

A number of the parts manufactured by us are niche with very limited competition Strong Long Term Customer relationships and Diverse Customer base allows to understand the upcoming requirements of the customers and helps us upsell / cross sell. New products in the pipeline for development are also very niche and highly scalable Integrated Manufacturing facilities and modern machinery helps us reduce the lead time of the customer and reduce dependence on outsourcing processes. Experienced Management and Skilled employee base Strong R&D and automation capabilities inhouse gives us an edge over competition Strong Engineering, Product Development and technological capabilities help us in enhancing our product range and improve manufacturing processes. Sustained Financial Performance and Strong Financial Position Proactive, market and customer centric approach of the management helps the company retain its customer base.

Weaknesses

Low bargaining power with suppliers as some parts that we make have low volume of sales Opportunities

Huge Growth Potential in our product segment with global OEMs and large product distribution companies. Huge Growth Potential in untapped segments like Agriculture, Off Highway, EV, railways, defence etc. Huge Potential to grow in untapped territories like Europe, South America, Africa, Middle East, Asia Pacific and India Threats Increased Competition from Local & Big Players may come Major change in Government Policies to curb exports Geo-political crisis between India and the countries we export to.

OUR CLIENT BASE

Our reach and presence in the industry can be comprehended by looking at our distinguished list of clienteles. They have been dealing in their respected disciplines from years. Our clients are spread across wide variety of sectors. Our strategy is to seek new customers and at the same time secure additional engagements from existing customers by providing timely and improved services.

We believe that our current capabilities and plans will ensure that we are well positioned to attract and develop new customer relationships. Business from new customers is accepted upon consideration of factors such as alignment of capabilities and customer expectation, volume of business and future business, potential for close partnership with long-term association, and an analysis of upfront costs.

INDUSTRY STRUCTURE & DEVELOPMENT

Indias auto component industry is an important sector driving macroeconomic growth and employment. The industry comprises players of all sizes, from large corporations to micro entities, spread across clusters throughout the country. The auto components industry accounted for 2.3% of Indias GDP and provided direct employment to 1.5 million people. By 2026, the automobile component sector will contribute 5-7% of Indias GDP. The Automotive Mission Plan (2016-26) projects to provide direct incremental employment to 3.2 million by 2026

INFORMATION TECNOLOGY

Our company constantly upgrades its technology both in terms of hardware and software. This also helped installing a good management information system for the management to get timely information for decision making.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Our Company has built adequate systems of internal controls towards achieving efficiency and effectiveness in operations, optimum utilization of resources, and effective monitoring thereof as well as compliance with all applicable laws The internal control mechanism comprises a well-defined organization structure, documented policy guidelines, predetermined authority levels and processes commensurate with the level of responsibility.

HUMAN RESOURCES

Our Company believe that our employees are key contributors to our business success and its ability to maintain growth depends to a large extent on our strength in attracting, training, motivating and retaining employees. We focus on attracting and retaining the best possible talent. Our Company looks for specific skill-sets, interests and background that would be an asset for its kind of business. Our manpower is a prudent mix of the experienced and youth which gives us the dual advantage of stability and growth. Our work processes and skilled resources together with our strong management team have enabled us to successfully implement our growth plans.

SALES AND MARKETING

In the fast-paced world of business, where customer satisfaction is paramount. The synergy between their sales and marketing operations creates a seamless experience for customers, ensuring that they receive everything they need, precisely when they need it. This customer-centric approach is the cornerstone of success of Emmforce.

COMPETITION

The automotive component industry is extremely competitive. We do face competition from manufacturers of a few of the items that we manufacture. Our high focus on R&D and Engineering supported by highly customer centric approach, reduced lead times, a big range of products that we offer to each customer with low volumes and small minimum order quantities keeps the competition at bay. Our customer retention ratio is very high as we have been able to bestow so much faith in the minds of our customers due to high quality of our products, ethical business practices, ability to pick up complex projects and deliver to their expectations.

Unlike other players in the automotive parts where they are highly dependent on OEMs where competition is very high, our company has made a special space in 4WD and performance racing industry for drivetrain parts where product quality requirements 120 are far stringent then OEM parts, parts are complex, volumes are low by learning the art of managing low batch production parts in an efficient way and offering innovative solutions to customers where they can have an edge in the market over their competition.

RESPONSIBILITY FOR THE MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Board of Directors have reviewed the Management Discussion and Analysis prepared by the Management. Statement in this report of the Companys objective, projections, estimates, exceptions, and predictions are forward looking statements subject to the applicable laws and regulations. The statements may be subjected to certain risks and uncertainties. The Company assumes no responsibility in respect of forward looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.

OTHER KEY INDICATORS

The key ratios as per the latest amendment to Schedule III are as below:

The ratios as per the latest amendment to Schedule III are as below:

Details of Ratios		Year ended 31.03.2026	Year ended 31.03.2025	% Variance
(1) Current Ratio (Times)	Ratio	1.59	2.43	(34.59)
Current Assets	Numerator	63,29,27,328	62,86,21,350
Current Liabilities	Denominator	39,84,93,723	25,88,89,619
(2) Net Debt Equity Ratio (Times)	Ratio	0.38	0.30	26.97
Debt capital (Long term borrowings + Short term borrowings)	Numerator	34,65,53,052	23,70,65,746
Shareholder\u2019s Equity (Total Equity)	Denominator	91,80,07,106	79,73,73,927
(3) Debt service coverage ratio (Times)	Ratio	3.64	3.95	(7.87)
Profit after tax+Finance costs+ Depreciation and amortization expenses+Loss/(Gain) on sale of Property Plant & Equipment + Exceptional items Finance Costs + lease payments +	Numerator	17,96,65,171	15,18,19,754
Scheduled principal repayments of long term borrowings	Denominator	4,93,99,185	3,84,57,604
(4) Return on Equity (%)	Ratio	13.14	13.30	(1.18)
Profit after tax (PAT)	Numerator	12,06,33,179	10,60,27,363
Shareholder\u2019s Equity	Denominator	91,80,07,106	79,73,73,927
(5) Inventory turnover ratio (in days)	Ratio	48.55	21.55	125.31
Revenue from operations	Numerator	1,04,46,83,489	87,43,37,448
Average Inventory (Opg Inventory+Clg Inventory/2)	Denominator	13,89,43,790	11,08,16,328
(6) Debtors turnover ratio (in days)	Ratio	105.07	54.00	94.55
Revenue from operations	Numerator	1,04,46,83,489	87,43,37,448
Average trade receivables (Opg + Clg Trade Receivables/2)	Denominator	30,07,14,843	27,77,51,464
(7) Trade payables turnover ratio (in days)	Ratio	56.64	24.48	131.36
Total Purchases	Numerator	61,46,15,205	51,70,96,529
Average Trade Payables (Opg + Clg Trade Payables /2 )	Denominator	9,53,68,167	7,44,61,836
(8) Net capital turnover ratio (in days)	Ratio	73.12	23.18	215.42
Revenue from operations	Numerator	1,04,46,83,489	87,43,37,448
Working Capital+current maturities of long term borrowings	Denominator	20,92,73,490	11,92,22,018
(9) Net profit ratio (%)*	Ratio	11.55	12.13	(4.78)
Profit for the year	Numerator	12,06,33,179	10,60,27,363
Revenue from operations	Denominator	1,04,46,83,489	87,43,37,448
(10) Return on Capital Employed (%)	Ratio	17.28	17.67	(2.20)
Earning before interest and taxes	Numerator	18,25,54,278	16,17,21,855
Tangible Net Worth + Total Debt + Deferred Tax Liabilities	Denominator	1,05,61,57,321	91,50,05,956
(11) Return on investment (%)	Ratio	5.46	-
Income generated from invested funds	Numerator	62,81,561.77	-
Time weighted average invested funds in investments	Denominator	11,49,89,250.00	-

ANNEXURE-4 TO THE DIRECTORS REPORT

DETAILS UNDER SECTION 197 (12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

(i) Ratio of the remuneration of each Executive Director to the median remuneration of the Employees of the Company for the financial year 2025-26, the percentage increase in remuneration of Chief Executive Officer, Chief Financial Officer and other Executive Director and Company Secretary during the financial year 2025-26.

Sr. No.	Name of Director/KMP	Designation	The Ratio of the remuneration of each Director to the median remuneration of the employees	The percentage increase in remuneration
1.	Ashok Mehta	Chairman cum Director	Mg 9.71	Nill
2.	Azeez Mehta	Executive Director	4.85	Nill
3.	Azeez Mehta	CFO
4.	Parul Gupta	CS	0.12	Nill

ii. The percentage decrease in the median remuneration of Employees for the financial year was 8.11%

iii. The Company has 231 permanent Employees on the rolls of Company as on 31 st March, 2026.

iv. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year, its comparison with the percentile increase in the managerial remuneration, justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

v. Affirmation that the remuneration is as per the remuneration policy of the Company:

It is affirmed that the remuneration is as per the Remuneration Policy for Directors, Key Managerial Personnel and other employees adopted by the Company.

Top Ten Employee Information as on 31 st March 2026 (Excluding Director and CFO of The Company)

Sr. No.	Employee Name	Code	Designation	Annual CTC Gross	Qualification	Experience	Last Employement	No of Share Held in Company
1	NAVNEET KATOCH	20437	DEPUTY GENERAL MANAGER	2800008	B. Tech, Mech.	15 years	Escorts Agri Machinery	Nil
2	ASHISH CHANDER SHARMA SWAMY	20316	GENERAL MANAGER SENIOR	2500004	MBA	39 years	Sri Aurobindo Automotive Component Open Enterprises	Nil
3	KAULESH CHINMAY	10795	MANAGER	1847996	MBA , IT	21 Years	Solutions Pvt.Ltd Allengers	Nil
4	VIKAS KAUSHAL	20419	SENIOR MANAGER DEPUTY	1650000	B.Tech , MBA	16 years	Medical System Ltd. Him Techno	Nil
5	NARESH KUMAR	20303	GENERAL MANAGER	1500008	BE, Mech.	34 Years	Forging Pvt Ltd	Nil
6	RAJEEV KUMAR	10836	MANAGER	1400004	B.sc	17 Years	Unitherm Engineers Ltd	Nil
7	ROHIT KATNA	20103	Senior Manager	1350008	BE, MBA	10 Years	MT Autocraft	Nil
8	ANIL KUMAR	20168	Senior Manager	1200008	MBA	17 Years	Him Techno Forge Ltd	Nil
9	RAKESH KUMAR	20067	Senior Manager	1200000	BA,Diploma in ME	27 Years	Metlonics Industries Pvt Ltd	Nil
10	VINOD KUMAR	20151	Senior Manager	1200000	MBA, LLB	15 years	Amit Engineers	Nil