Electro Force India Ltd Management Discussions

1. INTRODUCTION:

Electro Force (India) Limited ("the Company") was originally incorporated as the Company on June 14, 2010, under the provisions of the Companies Act, 1956, bearing Corporate Identity Number L51909MH2010PLC204214, issued by the Assistant Registrar of Companies, Mumbai. Pursuant to a Special Resolution passed on April 15, 2023, the Company was converted into a public limited company. Consequently, the name was changed to Electro Force (India) Limited, and a fresh Certificate of Incorporation was issued on May 11, 2023, by the Registrar of Companies, Mumbai. The Company is now registered as a public limited entity under Corporate Identity Number L51909MH2010PLC204214.

The Company is an ISO 9001:2015 certified company engaged in the design and manufacture of electrical components, precision metal/plastic contact parts, and related assemblies. The Company operates primarily under a Business-to-Business (B2B) model, catering to industry clients by supplying high-grade precision-engineered products. Since its inception in 2010, the Company has served as a trusted supplier of precision metal electrical contact parts, connectors, and sub-assemblies used in electronics, lighting, switchgear, and allied industries across India.

The Companys manufacturing facility is located in Vasai, Maharashtra, and is equipped to deliver end-to-end product solutions, encompassing product design, precision manufacturing, quality testing, packaging, and logistics. Additionally, the Company also supplies products at intermediate manufacturing stages, depending on client requirements. Electro Force (India) Limited has consistently focused on providing integrated services, particularly to Indian manufacturers of electrical components.

Our core capabilities include precision metal stamping, assembly, and molding, executed with a strong emphasis on quality, accuracy, and responsiveness. The Companys management believes that its dedicated and qualified team of professionals is a key pillar of its success. What truly differentiates the Company from its competitors is not only its commitment to quality, but also its agility and customer-centric approach, enabling it to swiftly respond to evolving client requirements.

Over the past 14 years, the Company has built significant expertise in helping customers develop innovative designs, adopt advanced technologies, and optimize the use of materials and production processes. Leveraging this experience, the Company continues to refine and expand its product offerings, with the goal of delivering greater value and performance to its customers.

2. INDUSTRY STRUCTURE:

The Indian Electronics System Design and Manufacturing (ESDM) sector continues to emerge as one of the most dynamic and rapidly expanding industries within the Indian economy. The sector has witnessed robust growth over the past few years and is gaining significant global traction due to its substantial domestic consumption base and competitive manufacturing landscape.

India is now widely recognized as a key global destination for electronics manufacturing, owing to a favorable policy environment, a large talent pool, and competitive cost structures. The shift in global electronics supply chains, coupled with increasing localization trends, has encouraged multinational corporations to establish and scale up their manufacturing capabilities in India. This growing interest is not only aimed at serving the domestic market but also at leveraging India as an export hub for global markets.

The ESDM sector encompasses a wide array of products and services, including electronic hardware components and systems used across IT, telecommunications, consumer electronics, aerospace, defence, renewable energy (solar photovoltaics), nano-electronics, and medical electronics. The sector also includes design-related services such as product design, chip design, Very Large-Scale Integration (VLSI), PCB design, and embedded system development.

Indias position as the second-largest mobile phone manufacturer globally, coupled with increasing internet penetration and smartphone adoption, has fueled the demand for electronic products across both urban and rural segments. The Government of India has also identified electronics manufacturing as a key sector under flagship initiatives like Make in India, Digital India, and Startup India. These programs aim to strengthen the domestic manufacturing ecosystem and reduce dependency on imports.

The governments ambitious target of achieving US$ 1 trillion in digital economy value by 2025 places the ESDM sector at the core of national economic planning. Policy support such as the Production Linked Incentive (PLI) schemes, investments in Electronics Manufacturing Clusters (EMC 2.0), and increased support for innovation and R&D have already begun to stimulate significant interest and investment in the sector.

In this evolving environment, characterized by technological advancements, global realignments, and heightened competition, companies operating in the ESDM space are focusing on scaling operations, improving asset efficiency, enhancing profitability, and accelerating innovation. The emphasis is increasingly on building resilient supply chains, delivering value- added services, and integrating next-generation technologies to meet the dynamic needs of the market.

3. INVESTMENTS/ DEVELOPMENTS:

During the year under review, the Company continued to focus on broadening its industry footprint by expanding its client base across multiple sectors and verticals. This strategic approach is aimed at strengthening our market presence and enhancing long-term business sustainability.

The Company is actively investing in the development and diversification of its product portfolio, with an emphasis on catering to a wider range of industry-specific applications. Product development initiatives have been undertaken to deepen engagement with existing clients while also exploring new sectoral opportunities. These efforts are aligned with our vision to offer customized, high-quality solutions that address evolving customer needs.

In line with our diversification strategy, we have also initiated focused efforts in the development of material handling instruments and accessories for luggage bags. This move is intended to create new revenue streams and expand into adjacent industry segments, enabling the Company to tap into high-growth markets and reduce dependence on a limited set of product categories.

The Company believes that these investments in innovation, market expansion, and diversification will contribute meaningfully to future growth and value creation, while also reinforcing its position as a trusted and adaptable player in the electrical components and engineering solutions space.

4. OPPORTUNITIES AND THREATS:

The Company operates in a dynamic environment with several competitive strengths, while continuously exploring new avenues for growth and addressing potential risks. A structured framework is in place to identify, evaluate, and mitigate key business risks, ensuring sustainability and long-term value creation.

Strengths

• Experienced and Competent Management Team with deep industry knowledge and strategic foresight.

• Commitment to High Product Quality and Customer Service, resulting in strong customer loyalty and repeat business.

• In-house R&D Capabilities, well-equipped tool room, and a robust culture of continuous product innovation and development.

• Diverse Product Portfolio, enabling the Company to cater to the varied requirements of clients across sectors.

Opportunities

• Presence in a vast and growing industrial ecosystem in India, offering significant potential for market expansion.

• Access to cost-effective and skilled human resources, enhancing operational efficiency.

• Benefit from the Governments proactive reforms and initiatives promoting domestic manufacturing under schemes like Make in India.

• Entry into the material handling instruments segment, which is expected to be a key growth driver and potential game-changer in the coming years.

Threats

• Market Volatility and Competitive Pressures, which may impact pricing and margins.

• Customer Concentration Risk, where a significant portion of revenue may depend on a few key clients.

• Supply Chain Disruptions, including dependency on timely availability of raw materials and logistics challenges.

• Rapid Technological Changes, which require constant innovation and adaptation to stay competitive.

The Company has established well-defined risk management procedures, and regular updates on key risks and mitigation measures are presented to the Board of Directors. This framework ensures that potential risks are systematically assessed and addressed to safeguard the Companys assets, operations, and reputation.

5. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE.

The Companys manufacturing operations are carried out from its production unit located in Vasai, Maharashtra, strategically situated on National Highway - 8, the key arterial route connecting Mumbai and Gujarat. This strategic location offers seamless logistical connectivity and easy accessibility to a wide range of transporters, enabling smooth and cost-effective movement of goods.

The region is an established industrial hub with a concentration of manufacturing units across various sectors, ensuring the availability of skilled and unskilled labor throughout the year. The factory premises, spread over 10,000 square feet (on lease basis), is housed in a reinforced cement concrete (RCC) structure with a high ceiling height of over 14 feet, which is ideal for installing tall industrial machinery and enabling the efficient movement of heavy materials using chain pulley systems and other handling equipment.

Additional infrastructure advantages include a dedicated compound area suitable for the parking of heavy vehicles, and uninterrupted power supply from Maharashtra State Electricity Distribution Company Limited, which ensures consistent and reliable production operations.

The Company manufactures a diverse range of high-precision products within the electrical components segment, catering to various applications in the electrical and electronics industries. The product portfolio includes:

• Stamping Components

• Components for Electrical MCBs (Miniature Circuit Breakers)

• Components for 63A Manual Changeover Switches

• Components for MCCBs and RCBs (Molded Case Circuit Breakers and Residual Current Breakers)

• Components for Brushless DC Motors

• Components for Electrical Motor Starters

• Components for Electrical Control Gears

• Plastic Components for Electrical Applications

Each of these product lines is tailored to serve specific functional requirements across different customer applications and sectors, enabling the Company to address a wide variety of market needs and support customers through value-engineered solutions.

The Company continues to invest in enhancing manufacturing capabilities, diversifying product offerings, and improving operational efficiencies to maintain its competitive edge and ensure consistent performance across its product segments.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has established a robust and effective internal control system, which is commensurate with the size, scale, and complexity of its operations. These controls are designed to ensure the orderly and efficient conduct of business, adherence to statutory and regulatory requirements, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and the timely preparation of reliable financial information.

The internal control framework encompasses well-defined policies, procedures, and authorization guidelines, which are regularly reviewed and updated to align with changing business and compliance requirements. The Company also maintains standard operating procedures (SOPs) across departments to ensure consistency and accountability in day-to-day operations.

The effectiveness of these controls is continuously monitored through:

• Self-audits and internal assessments

• Periodic reviews by the internal audit team

• Independent evaluations by statutory auditors

Findings from internal audits are presented to the Audit Committee of the Board, along with the managements responses and action plans for any corrective measures. This ensures transparency, accountability, and timely resolution of any control-related issues.

The Company remains committed to further strengthening its internal control mechanisms by leveraging technology and automation, enhancing risk management practices, and fostering a culture of compliance and ethical conduct across the organization.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Share Capital:

The authorized share capital of the company as on 31^st March, 2026 was Rs. 26,00,00,000/- divided into 2,60,00,000 Equity Shares of Rs.10/- each.

The paid-up Equity Share Capital of the company as on 31^st March, 2026 was Rs. 23,40,00,010/- divided into 2,34,00,001 Equity Shares of Rs.10/- each.

Reserves and Surplus:

The Reserve and Surplus of Company is Rs. 4,871.01 as on period ended on 31st March, 2026. Total Income:

The Company has earned total Income Rs. 2,137.72 Lakhs as on period ended on 31^st March, 2026.

8. REASONS FOR POOR PERFORMANCE:

The performance of the Company during the year under review was impacted primarily due to volatility in the prices of copper and other related raw materials, which adversely affected margins and overall profitability. Fluctuations in commodity prices, coupled with changing market conditions, resulted in increased cost pressures and affected the competitiveness of certain existing product segments. The Company has also been undertaking a strategic transition towards the development and introduction of new and technologically advanced products, which involves a gradual shift in focus from certain conventional product categories. During this transition phase, the Company may experience temporary challenges in terms of production, market penetration and operational efficiencies.

However, the management believes that this strategic shift will enable the Company to strengthen its product portfolio, cater to evolving customer requirements and capitalize on emerging market opportunities. With the introduction of newer products, adoption of advanced technologies and continued efforts towards improving operational efficiency, the Company expects improved business prospects and better performance in the coming years.

9. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

The Company continues to follow a well-defined human resource policy focused on building strong, capable, and committed teams. Employees are considered the most valuable asset of the organization, and the Company remains dedicated to fostering a performance-driven, inclusive, and growth-oriented work environment.

During the year under review, the Company maintained a sharp focus on employee engagement, development, and retention. Initiatives were undertaken to enhance skillsets, improve work culture, and ensure the well-being and motivation of employees. The Company emphasizes continuous learning and development to align individual performance with organizational goals.

The human resource strength of the Company is commensurate with its size, nature, and scale of operations. Industrial relations remained harmonious and cordial throughout the year, with no major disputes or disruptions reported.

The Company will continue to invest in employee development, capability building, and leadership training, while also ensuring compliance with applicable labor laws and regulations to maintain a productive and engaged workforce.

10. DETAILS OF KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFORE:

Ratios	As on March, 2026	As on March, 2025	Changes	Reasons
1 Current Ratio (Total current assets/Total current liabilities)	10.61	11.47	-7.55%	Due to decrease in Current Liabilities
2 Debt-Equity Ratio (Total Debt/Total Equity)	NA	NA	NA	NA
3 Debt Service Coverage Ratio (Profit Before Interest & Tax/Debt Service)	NA	NA	NA	NA
4 Inventory Turnover Ratio (Sale of Products/Average Inventory)	1.43	4.53	68.38%	Sales dropped sharply during the year as the major project was completed, but inventory levels remained high. Lower sales with higher inventory reduced this ratio significantly
5 Trade Receivables Turnover Ratio (Revenue from Operati on/ Average Trade Receivable)	0.91	4.20	78.24%	Sales fell during the year while the amount owned by customers remained largely uncollected keeping debtors high despite lower sales.
6 Trade Payables Turnover Ratio (Net Credit Purchases (Raw Material, Packing Material and Purchase Of Traded Goods)	3.88	13.12	70.42%	Purchases reduced significantly due to lower production activity.
/Average Trade Payable)				However, amounts payable to suppliers increased as payments were stretched during the year due to reduced cash generation from operations.
7 Net Capital Turnover Ratio (Revenue from Operations/W orking Capital (Total Current Assets Less Total Current Liabilities)	0.37	1.04	63.89%	Sales fell sharply but the funds blocked in the Trade receivable and intercorporate deposits kept working capital at a high level. Lower sales against the same working capital base resulted in this ratio.
8 Return on Equity (Profit for the Year/Total Equity)	0.88%	1.79%	50.97%	Profit reduced to Rs.63.33 lakhs during the year due to which Return on equity ratio reduced.
9 Net Profit Ratio (Profit for the Year/Revenue from Operations)	3.30%	2.44%	34.89%	Net profit ratio improved despite lower revenue because other income contributed disproportionately to profit relative to the lower revenue.
10 Return on Capital	1.31%	2.47%	47.05%	Profits declined as manufacturing
Employed (Profit before Tax and Finance Costs/Capital Employed (Net worth + Lease liability + Deferred tax Liability)				operations recorded an operating loss during the year. The Companys capital base remained largely unchanged. The overall profit reported is entirely on account of interest income earned on inter-corporate deposits, not from the core business.
11 Return on Investment (Income Generated from Invested funds/Average Invested Funds)	NA	NA	NA	NA

11. FORWARD-LOOKING STATEMENT:

This report contains forward-looking statements that reflect the Companys current expectations, assumptions, projections, and beliefs regarding future events and business performance. These statements are based on information currently available with the Company, as well as certain assumptions made by the management in light of their experience and perception of historical trends, current conditions, and expected future developments.

However, such forward-looking statements are inherently subject to risks, uncertainties, and other factors, many of which are beyond the control of the Company. These may include, but are not limited to, changes in general economic and business conditions, fluctuations in market demand and supply, changes in government policies and regulations, technological advancements, interest rate and exchange rate fluctuations, and other related factors.

As a result, the actual results, performance, or achievements of the Company may differ materially from those expressed or implied in such forward-looking statements. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required under applicable laws.