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ANNEXURE C

MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT

impressive International clientele ranges from Power Utilities, Oil and gas companies, Mining companies and EPC companies.

In the current year 38 % of Total Transformer sales came from exports which we are strategically focusing to increase upto 50%.

Going forward with a healthy order book position and good references across the globe, your company is confident of substantially increasing the share of International Business in the overall business of the Company. This growth will be fuelled through a healthy mix of regions and customers across all product segments without excessive dependence on any specific product or Market.

Coal Mine-Indonesia

This was a another difficult year for global coal markets, amidst a backdrop of collapsing energy prices, generally falling commodity prices, downward trend in economic growth and low demand from China and India; prices of coal was under great pressure.

Due to excellent logistic and low stripping ratio, we are able to sustain at this low price level. Production level of coal mines in Indonesia was lower on account of low water level in river and we are expecting production of Appx. 2.00 Million MT in coming year.

Renewable Energy

Power generation from 10.5 MW Wind and 5 MW Solar installations were satisfactory during the current year and the trend is expected to continue during the next financial year. These two initiatives have helped to reduce the carbon emissions thereby contributing to the ‘Green Cause’.

Opportunities and ThreatsThe Company foresees the market full of opportunity for its Businesses in the long term. This view has emerged after considering the expected increase in planned expenditure in power and distribution sector, expected further reduction in interest rate by banks and revival of long stuck projects. The Prime Minister’s “Make In India” program will also fuel Industrial growth in a time bound manner.Open and Transparent process of selecting/empanelling the Contractors for carrying out EPC works related to Tariff Based Competive Bidding by Central Utility (PGCIL) within India and by Exim Bank of India opening doors for work to be done under line of Credits for foreign countries are increasing the market overseas. Pro-active efforts of Ministry of External Affairs with its allies in Africa and Middle East are improving relations resulting Indian companies getting more business from these countries.

Internal Control System

The Company has in place effective systems for internal control ensuring accurate, reliable and speedy compilation of

Power Sector in India

The power sector in India has grown @ 5.6% during financial year 2015-16 as against 8.4% during financial year 2014-15. The capacity of Transmission system of 220kV and above voltage level in the country has reached at 3,43,000 ckm of Transmission line and 6,66,000 MVA of Transformation for Substation. At present, the peak demand of energy is153 Gigawatt against the installed capacity of 303 Gigawatt. The plans for thermal power generation during 11th and 12th Five Year Plans ( FYP) were stagnant due to Coalgate scam and resulting an inordinate delay in capacity expansion. India’s Macro economic scenario remained stagnant during FY 2015-16 with demand for capital goods waiting to recover.

Transformer Business

The Transformer business in India further witnessed a lot of margin pressure due to low demand and excess capacity in the industry. The significantly low rate of industrial growth has also contributed the low demand. Your company has therefore changed its strategy by way of stopping production of low value addition products of medium voltage transformers meant for state utilities and augmented its capacity to manufacture 500 MVA 400 kV transformers and increasing share of exports in Transformer Business. It has successfully supplied 9 Nos. of 500 MVA transformers to PGCIL in the current financial year. This change in product mix will help the Business to improve its margin level in future and to maintain better cash inflow. Currently, the company has number of orders from PGCIL of 500 MVA, 160 MVA and 50 MVA Power Transformers and from NTPC of 260 MVA Generator Transformers, apart from a number of export orders.

Project Business

Project Business of your Company continued its growth momemtum. Your company has successfully commissioned part of 800 kV HVDC Transmission Line from Tangla to Barbisa (Assam) in the most difficult weather condition, terrain and safety challenges. Further, the schemes of green energy corridor, North South HVDC scheme and power for all by 2019; bring ray of hope for this business in domestic market.

In order to harness your Company’s entry in African market, it has started bidding EHV Transmission Line and Substation of larger value. We are pleased to announce commencement of 2nd overseas project recently.

International Business

International Business offers single point access to all its customers worldwide supplying Products and Solutions that meet various International Standards like IEC, ANSI, SIN, SANS.

Consistently meeting International quality standards, your Company has exported its Products and Solutions to countries in Middle East, Africa, Latin America and Asia Pacific. Its

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financial information, safeguarding the assets and interests of the Company and ensuring compliance with laws and regulations. The Company has an exhaustive budgetary control system and the management regularly reviews the actual performance. The Company has also put in place a well-defined organizational structure, clear authority levels and detailed internal guidelines for conducting the business transactions.

The CEO/CFO Certification is provided in the report to discuss the adequacy of our Internal Control System and procedures.

In accordance with provisions of Companies Act, 2013 and SEBI Listing Regulations, 2015 (LODR) the Audit Committee is required to evaluate the policy on Internal Financial Controls. The Management of the Company has determined that the Company’s internal financial control as of 31st March, 2016 were effective.

The Company has in place a mechanism to inform Board Members about the risk assessment and controls at periodical intervals. The Company has an independent Internal Auditor for periodically carrying out audit of the transactions of the Company in order to ensure that recording and reporting are adequate and proper. The Internal Auditors independently evaluate the adequacy of internal control to ensure that internal controls, check and balances in the system are adequate, proper and up-to-date. Remedial measures are suggested by them to mitigate the risk identified during the course of the audit assignments and action plans ensure implementation of such suggestions.

Risk and Concerns

The major risk factors affecting the Company are overcapacity in the transformer industry and liquidity issues due to stuck receivables in the Project business of the company.

The other risks your company faces are succession planning at senior and middle management level, risk in execution of projects, risk to safety of employee and community, risk of customer defaults in making payments, risk of invocation of Bank Guarantee, risk of commodity price fluctuation, foreign currency fluctuation risk, information technology risk, risk related to social/Civil unrest and act to terrorism affecting execution of any of its manufacturing activity and Projects.

As we operate in various global markets, we need to be extra careful on quality of work and safety of people. The regulatory compliances and safety requirements are to be aligned to the best in the world. Any small failures in adherenece to the same may affect your business adversely.

The committee reviews company’s risk management practices and activities on regular basis to create an enabling environment to mitigate all such risk.

Outlook

Given the capacity expansion plans of state-owned transmission companies, demand is expected for high voltage power Transformers and Transmission Lines. Further, the focus on non-conventional energy will lead to more wind and solar power generation fuelling the growth for transformers.

In addition to the domestic market, your Company has taken steps to foray into the global market to improve its margin and cash flow. While we remain more optimistic on business environment, we are internally adjusting our costs to a new world of continuous pricing pressure .

Financial performance with respect to operational performance

The comparative financial performance of your company vis a vis previous financial year has been poor on account of some technical problems in the new range of large transformer we made for the first time, major failure of critical testing equipment leading to lower capacity utilization in the transformer business resulting in lower sales and contribution.

The financial performance was further affected by the combined impact of pricing pressures in the market place, increases in input costs and delay in projects execution.

Human Resource

We at EMCO owe our success and achievements to our large Human Capital of reliable individuals, who work tirelessly around the clock to execute our Ideas into perfection and turn our vision of being a ‘Great Place to Work’ into reality, They are our real assets who transform Ideas to products, Plan to action and our vision to mission.

Some of the Key initiatives; highly appreciated by Stake Holders are:

a. We continued with our journey towards becoming a “ Great Place to Work” and participated in CII National HR Excellence Award 2015. We are extremely proud to share that your company has been conferred with “Strong Commitment to HR Excellence Award”. This Award stands testament to us focusing towards empowering emplyees and its constant endeavour to create a healthy work environment

b. We continued with our initatives towards Organisation Development and change management. Top management Team has been role modeling by activety participating in the change management Programs like MBTI (Leadership Development) which aims to provide a powerful framework for building better relationships, driving positive change, harnessing innovation and achieving excellence.

c. In this competitive edge, training remains a vital tool to ensure competitiveness of the EMCOites. We have been organizing regular behaviour and functional training which includes “Saturday Ki Pathshala”, training on Time Management, Leadership Development, Planning & Execution etc. Safety remains at the core and there have been regular training on Safety at the plant as well as Project sites.

d. EMCOite engagement is one more key theme and HR continued its endeavours to create a highly engaged workforce by organising various events such as Celebration of Women’s Day, Gudi Padwa, EMCO Connect, Happy HR Hours etc. Value Day continued to be key event and company honored EMCOites as Value Champion in the year 2015.

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Environment and Safety

In the journey of continual improvement and make your Company safe and healthy place to work, following initiatives were taken:

1. EMCO bagged “ Safety Best practices Award of appreciation” was jointly organized by National safety Council and directorate of Industrial Safety and Health Maharashtra State.

2. On behalf of EMCO Ltd, we had submitted the technical paper on topic - ”Protection Measures for operational safety of Industrial Transformers“ with brief coverage on Do’s and Dont’s covering transformer safety, Recommended maintenance measures to enhance safety in reference context to Indian Electricity Rules, 1956.

3. EMCO had celebrated 45th National Safety Week across its all location and sites with standardised agenda. This include live safety demonstration, health check up, PPE exhibition, Yoga camp, Practical demos on fall arrester at Project sites and various safety competitions for employees motivation etc.

4. World Environment day was celebrated at Thane location and also cascaded in all respective locations on 5th of June “World Environment Day “and also arranged awareness session on Environment. Exhibition arranged for the Eco friendly product. Objective was to create green strategy approach across the organisation, demonstrate its commitment to environment protection and encourage involvement of employees.

CSR - Initiatives towards Corporate Social Responsibility

Your Company has taken various initiatives towards the Corporate Social Responsibility through its extended arm EMCO Foundation. EMCO Foundation (EF) has been established to promote sustainability and welfare of humanity with a vision “To transform lives through sustainable development involving stakeholders.” Since inception EF has transformed more than 75,498 lives through initiatives in Education (Akshar), Environment (Ankur and Roshni) and Healthcare (Jeevan).

Education (AKSHAR):

With faith that education can change lives, EF has designed its umbrella program “Akshar” through three pronged approaches for under privileged school going children.

Firstly, through “Shiksha” project an initiative of creating interest among under privileged slum children of age group 6-14 years for education and motivating parents to enroll them for mainstream education. This year 200 Children received basic education of English in Thane slums. So far our foundation reached out to 12870 children in various slums of Thane.

Secondly flagship program “Parivartan” - a soft skill development initiative to transform lives of 5813 students of 8th, 9th 10th Std. Health awareness and career guidance has given them a suitable direction toward better & successful life. So far this project benefited 34877 students in transforming their lives.

Lastly under “Yashasvi” project which supports 70 needy students of Municipal schools and Trust run school with scholarship support for continuing their education up to graduation. So far supported 508 students who are doing well in their post SSC education.

Environment (ANKUR):

Under our ‘‘Ankur’’ project 200 trees have been planted and spread the awareness among EMCOites on preservation and promotion of good environment by planting trees and use ECO friendly product in day to day life. So far 2460 trees have been planted.

Healthcare (JEEVAN):

Like earlier years, the blood donation camps were organized under project Jeevan. EMCOites participated enthusiastically and contributed in the noble cause of saving someone’s life. Through the camps organised at various locations and 114 units of bloods were collected. So far we have collected 1662 units of bloods which were given to reputed blood banks in the area. We also participated in epilepsy camp held in Jalgaon and benefited 193 lives.

Forward Looking Statements

Certain statements in the Management’s Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events.

The Company cannot guarantee that those assumptions and expectations are accurate or will be realized. Actual results could differ from those expressed or implied. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

On behalf of the Board of Directors For EMCO Limited Sd/-Mumbai Rajesh S. JainMay 30, 2016 Chairman (DIN: 00005829)