Esab India Ltd

Your Directors' take pleasure in presenting the Thirty Seventh Annual Report together with the audited accounts of the Company for the financial year ended 31^st March 2024.

1. FINANCIAL SUMMARY / HIGHLIGHTS

(Rs in Lakhs)

The financials of the Company for the year under review as also the financial statements of the previous year are prepared under IND AS.

2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There were no reportable events subsequent to the date of the financial statements.

3. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There has been no material change in the nature of business during the period under review.

4. DIVIDEND

The shareholders at the Annual General Meeting held on 10^th August 2023 had approved a Final Dividend of

$ 20/- per equity share of $ 10/- each (200%) for the financial year 2022-23 resulting in a cash outflow of about

$ 30.79 crores and the same was paid on 25^th August 2023.

During the Financial Year 2023-24, the Board of Directors approved two Interim Dividends as detailed below.

i) First interim dividend of $ 32/- per equity share of

$ 10/- each (320%) at its meeting held on 10^th November 2023 resulting in a cash outflow of about $ 49.26 crores, which was paid on 8^th December 2023; and

ii) Second interim dividend of $ 24/- per equity share of

$ 10/- each (240%) at its meeting held on 27^th March 2024 resulting in a total cash outflow of about $ 36.94 crores, which was paid on 24^th April 2024.

In addition to the above two interim dividends for the financial year 2023-24, the Board has proposed a final dividend of $ 30/- per equity share of $ 10/- each (300%) for the financial year 2023-24, which is subject to approval of the shareholders at the ensuing Annual General Meeting to be held on 8^th August 2024.

5. IND AS STANDARDS

Your Company had adopted IND AS in pursuance of Section 133 of the Companies Act, 2013 and in compliance with the Companies (Indian Accounting Standard) Rules, 2015. The financials for the current financial year ended 31^st March 2024 and the comparative figures for the last financial year ended 31^st March 2023 have been prepared and published based on such IND AS standards.

The quarterly results are also published by the Company based on IND AS. These have been published in newspapers and also made available in the Company's website https://esabindia.com/in/ind_en/investor-relationship/paper-advertisements/ and the website of the stock exchanges where the shares of the Company are listed.

6. TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013 ("the Act") read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("The Rules"), all unpaid / unclaimed dividends are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government, after completion of seven years from the date of transfer of unpaid / unclaimed dividend to Unpaid Dividend account. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the Members for seven consecutive years or more shall also be transferred to the dematerialized account created by the IEPF authority.

The Company had sent individual notices and also advertised in the newspapers seeking action from the Members who have not claimed their dividends for seven consecutive years or more. Accordingly, the Company had transferred the unpaid or unclaimed dividends and corresponding shares pertaining to Final Dividend 2015-16 on 4^th October 2023 and 10^th October 2023 respectively.

Members / claimants whose shares, unclaimed dividend, have been transferred to the IEPF Demat Account of the Fund, as the case may be, may claim the shares or apply for refund by making an application to the IEPF Authority in Form IEPF-5 (available on www.iepf.gov.in) along with requisite fee as prescribed by IEPF Authority from time to time.

The Member / Claimant can file only one consolidated claim in a financial year as per the IEPF Rules. Due dates for transfer of Unclaimed Dividend to IEPF are provided elsewhere in the notice calling the Annual General Meeting.

Details of shares / shareholders in respect of which dividends have not been claimed, are provided on our website at https:/ /esabindia.com/in/ind_en/investor-relationship/statement-of-unclaimed-dividends/. The shareholders are encouraged to verify their records and claim their dividends of all the preceding seven years, if not claimed.

7. BOARD MEETINGS

The Board of Directors met 6 times during the financial year 2023-24. The Meetings were held on 25^th May, 20^th June, 10^th August, 10^th November of 2023, 8^th February and 27^th March 2024.

8. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company has six members.

Mr. Kevin Johnson is the nominee of ESAB Holdings Limited and a non-retiring Director in terms of the Articles of Association and Chairman of the Board.

Mr. Rohit Gambhir is the Managing Director of the Company. He was initially appointed for a period of five years with effect from 1^st November 2013 and thereafter for a second term of five years until 31^st October 2023. The Board of Directors at their meeting held on 23^rd March 2023, had approved and recommended re-appointment of Mr. Rohit Gambhir as Managing Director for a further period of five years from 1^st November 2023 to 31^st October 2028 and the same was approved by the shareholders at the Annual General Meeting held on 10^th August 2023.

In compliance with Section 203 of the Companies Act, 2013, Mr. Rohit Gambhir, Managing Director, Mr. B. Mohan, Director & Chief Financial Officer, and Mr. G Balaji, Company Secretary have been designated as the Key Managerial Personnel of the Company.

Mr. B Mohan was appointed as Chief Financial Officer of the Company effective from 1^st February 2005 and subsequently appointed as Director effective from 20^th June 2023. Mr. G. Balaji was appointed as Company Secretary effective from 25^th March 2022.

9. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

As required under Section 149 (6) and (7) of the Companies Act, 2013 all the Independent Directors on the Board of the Company have individually issued the annual declarations confirming that they meet all the criteria of independence as stipulated under the Act. Further, the Independent Directors have completed their KYC confirmation on the MCA website and have also uploaded their profile in the Indian Institute of Corporate Affairs before the stipulated date. All the Directors except Ms. Cauvery Dharmaraj, Independent Director, are exempted from undergoing the mandatory online tests based on their quantum and areas of experience. Ms. Cauvery Dharmaraj shall undertake the online proficiency self-assessment test in accordance with the Sub rule 4 of Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014.

During the year under review the Board of Directors at their meeting held on 20^th June 2023 appointed Mr. B Mohan as Director for a period of five years with effect from 20^th June 2023. The same was approved by the shareholders at the Annual General Meeting held on 10^th August 2023.

In accordance with the provisions of Article 129 of the Company's Articles of Association, Mr. B Mohan retires by rotation at the forthcoming Annual General Meeting and being eligible, offered himself for re-appointment.

During the year under review, Mr. Sudhir Chand, Independent Director has resigned from the Directorship of the Company due to his personal reasons with effect from 1^st June 2023.

The composition of the Board of Directors consists of the following members as on the date of this report.

10.COMMITTEES OF THE COMPANY A. AUDIT COMMITTEE

The Company's Audit Committee consists of two Independent Directors and one Non-Executive Director. Mr. K Vaidyanathan, is the Chairman of the said Committee. Mr. Vikram Tandon and Mr. Kevin Johnson are the other members of the Committee.

The said Committee met 4 times during the financial year 2023-24, on 25^th May, 10^th August, 10^th November 2023 and 8^th February 2024. The constitution and the terms of reference of the Committee are in line with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

There were no occasions during the year where the Board of Directors did not accept the recommendations of the Audit Committee.

B. NOMINATION AND REMUNERATION

COMMITTEE

The Company's Nomination and Remuneration Committee consists of two Independent Directors and one Non-Executive Director. Mr. K Vaidyanathan is the Chairman of the said Committee. Ms. Cauvery Dharmaraj, Independent Director and Mr. Kevin Johnson, Chairman of the Board are the other members of the Nomination and Remuneration Committee.

This Committee met twice during the financial year 2023-24 on 20^th June 2023 and 27^th March 2024.

This Committee lays down the policy on remuneration stating therein the attributes required for the Managing Director, Independent Directors and Key Managerial Personnel. The said policy also states the modus operandi for determining the remuneration of the KMP's and senior management. The remuneration policy of the Company can be viewed on the Company's website https://esabindia.com/in/ind_en/ investor-relationship/policies/remuneration-policy/

The said committee is constituted in compliance with Section 178 (4) of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

C. STAKEHOLDERS RELATIONSHIP

COMMITTEE

During the year under review, consequent to the resignation of Mr. Sudhir Chand as member of the Board who was also a member of the Stakeholders Relationship Committee, the said committee has been reconstituted by inducting Mr. K Vaidyanathan, Independent Director as an additional member of the Committee with effect from 20^th June 2023.

The Company's Stakeholders Relationship Committee consists of two Independent Directors, one Non-executive Director and the Managing Director. Mr. Vikram Tandon is the Chairman of the Committee, Mr. K Vaidyanathan, Independent Director, Mr. Kevin Johnson, Chairman of the Board and Mr. Rohit Gambhir, Managing Director are the Members of the Committee.

The Committee met four times during the year on 25^th May, 10^th August, 10^th November of 2023 and on 8^th February 2024.

The composition of the said Committee and the matters being placed before the Committee are in compliance with Section 178(5) of the Companies Act, 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

D. CORPORATE SOCIAL RESPONSIBILITY

COMMITTEE

The Company's Corporate Social Responsibility Committee consists of one Independent Director, one Non-Executive Director and the Managing Director. Ms. Cauvery Dharmaraj, Independent Director, is the Chairperson of the Committee. Mr. Kevin Johnson, Chairman of the Board, Mr. Rohit Gambhir, Managing Director are the other members of the said Committee.

The Committee met twice during the financial year 2023-24 on 25^th May 2023 and on 8^th February 2024.

The Committee lays down the Policy on Corporate Social Responsibility stating therein the strategy, objectives, funding & allocation for the CSR projects, implementation, strategy and steps involved in achieving the CSR objectives. The Policy on Corporate Social Responsibility can be viewed on the Company's website https://esabindia.com/in/ind_en/ investor-relationship/policies/policy-on-corporate-social-responsibility-revised-on-10th-february-2023/.

The budget allocation for CSR Projects for the year 2023-24 can be viewed on the company's website https:// esabindia.com/in/ind_en/investor-relationship/policies/csr-anual-action-plans/

The formation of the Committee and its terms of reference are in line with the requirements of Section 135 (1) of the Companies Act, 2013. The CSR Report for the financial year 2023-24 is attached as an annexure to this report, complies with the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

E. RISK MANAGEMENT COMMITTEE

The Company has a Risk Management Committee as stipulated by the Companies Act, 2013 and Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company's Risk Management Committee consists of Mr. Kevin Johnson, Chairman of the Board, Mr. Rohit Gambhir, Managing

Director, Mr. Vikram Tandon, Independent Director and Mr. B Mohan, Director & CFO of the Company. A Risk Management Committee is mandatory for the Company since it is part of the Top 1000 Companies in terms of market capitalization.

As per Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the meetings of the risk management committee shall be conducted in such a manner that on a continuous basis not more than one hundred and eighty days shall elapse between any two consecutive meetings. Accordingly, the said Committee met twice during the financial year on 14^th July 2023 and on 5^th January 2024.

The said Committee lays down the Policy on Risk Management. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and mitigating those risks which are material in nature and are associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management.

The Risk Management Policy of the Company can be viewed on the Company's website https://esabindia.com/in/ind_en/ investor-relationship/policies/risk-management-policy/.

11.VIGIL MECHANISM

The Company has set up a whistleblower policy which can be viewed on the Company's website https://esabindia.com/ in/ind_en/investor-relationship/policies/whistle-blowing-policy/. In terms of the said policy the Directors and employees are given direct access to the Chairman of the Audit Committee to report on alleged wrongdoings. The said policy has been made available at the Offices / Plants of the Company at conspicuous places to enable the employees to report concerns, if any, directly to the Chairman of the Board and to the Chairman of the Audit Committee. Employees who join the Company newly are apprised of the availability of the said policy as a part of their induction schedule.

The above complies with the requirements of Section 177 (9) & (10) of the Companies Act, 2013 and in terms of Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company did not receive any complaints under the whistle blower policy during the year under review.

12. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief, and according to the information and explanations obtained by them, your Directors make the following statements as per the requirements of Section 134 (5) of the Companies Act, 2013.

1. In the preparation of the annual accounts for the financial year ended 31^st March 2024 the applicable accounting standards have been followed.

2. The Directors have selected such accounting policies listed in Note 2.2 to the Notes to the Financial Statements and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year as on 31^st March 2024 and of the Profit of the Company for that year.

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the annual accounts for the financial year ended 31^st March 2024 on a going concern basis.

5. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. There were no instances of fraud reported by the auditors of the Company under sub-section 12 of Section 143 of the Companies Act, 2013.

14. MANAGEMENT DISCUSSION AND ANALYSIS

A. ECONOMIC & BUSINESS ENVIRONMENT

The year under review continued to witness high levels of global volatilities driven by geopolitical events, climate change, technology driven disruptions and supply chain risks. Inflationary challenges and job creation concerns continued to pose challenges for Governments and central banks around the world.

The overall situation augured well for industrial consumers given the relatively subdued trends in metal prices through most part of the financial year.

Despite some favourability towards the end of the financial year, the capital expenditure cycle remained anaemic.

Continuing focus on productivity and product portfolio with a better product mix helped your Company achieve growth in sales and profitability.

B. OUTLOOK, OPPORTUNITIES AND THREATS

We continue to encounter short term turbulences while the medium to long term prospects continue to be relatively stable.

Key drivers for the ongoing financial year would be commodity prices, our product portfolio, fuel and energy costs, geopolitical stability and currency related developments.

The Company continues to pursue and capitalize on opportunities in growing the addressable markets through launch of new products and rationalization of products in current portfolio. Service revenue streams continue to witness opportunities given the cost competitiveness and talent pool availability in India.

Leveraging on global presence and relationships together with the ability, driven by organizational experience and strength of Balance Sheet, to ride through difficult trade cycles are opportunities.

Pricing pressures, liquidity challenges and supply chain driven issues on working capital together with global factors are seen as key risks apart from cyber security and technology driven risks.

15. INTERNAL CONTROL SYSTEMS AND THEIR

ADEQUACY

Internal controls are evaluated by the Management on an ongoing basis drawing on inputs from global framework, learnings from previous years and the emerging landscape on technology and regulatory framework. Independent Internal Auditors are engaged by the Company to test efficacy of controls in terms of design and operating effectiveness. We continue to work with internal auditors and domain experts to test these and identify areas for improvement. As a Subsidiary of a US listed entity, it is subjected to additional reviews applicable to such entities. Key findings and actions taken to implement or remediate the same are reviewed by the Audit Committee periodically at its meetings. The scope and coverage of internal audits are aligned to have coverage in terms of key controls and locations. The endeavor is to align to the requirements of Internal Control on Financial Reporting (ICFR) framework while leveraging on work done as part of global reporting requirements. Management testing through independent audit teams followed by external testing were done during the year.

The scope of work of Internal Auditors includes review of controls on accounting, operational controls, financial reporting, statutory and other compliances and operational areas in addition to reviews relating to efficiency and economy in operations.

The Company continues to focus on compliance with the requirements of Internal Controls on Financial Reporting.

16.FINANCIAL PERFORMANCE OF THE COMPANY

A. INCOME AND EXPENDITURE

Revenue from Contract with customers grew by 13.98%. The growth was driven by growth in volumes across all product categories despite softness in selling prices in view of deflationary conditions in Metal prices for part of the year. New products continued to grow in key markets.

Continuing traction in support services including R&D services to related parties helped grow service revenues over the previous year.

Other income decreased by about 16.79% primarily on account of non-recurring items in the previous year on VAT refunds offset partly by Foreign exchange gains in the current year.

Material costs as a percentage to sales were favorable as compared to the preceding primarily driven by lower commodity prices and product mix.

Overheads including employee costs were higher by 17.5% over the previous year.

The increase was driven by inflation and growth in volumes. Payroll costs were also driven by growth in service revenue streams where we had growth in headcounts during the year.

The Company has continued to provide for Depreciation at useful lives based on a technical evaluation of useful life of assets.

Profit before tax was higher by 20.66% over the previous year with the impact of higher contributions from revenue growth.

B. BALANCE SHEET

Shareholders' funds were at $ 306.06 Crores at the end of the year as against $ 260.27 Crores at the end of the previous year. The Company had paid dividends of $ 116.99 Crores during the financial year.

The Company ended the financial year with growth in profits and profitability as also stable levels of working capital with strong cash flows. The business environment saw challenges in supply chain driven by availability and transit time challenges due to geo political developments. Liquidity challenges and changing legislative landscape had an adverse impact on overall working capital needs.

Capital Expenditure including capital work in progress was at

$ 28.18 Crores as against $ 31.91 Crores in the preceding year. Capital expenditure was primarily on Buildings for Global R&D, refurbishments on existing lines, productivity improvements, marginal capacity enhancements, and upgrading IT systems.

Cash and Cash equivalents were at $ 87.78 Crores at the end of the year as against $ 56.45 Crores at the end of the previous year. All business requirements were funded by internal cash generation and the Company continued to remain debt free.

17. SUBSIDIARY / JOINT VENTURE / ASSOCIATE

COMPANY

The Company does not have any subsidiary, joint venture, or associate company.

18.HOLDING COMPANY

ESAB Corporation, Delaware, USA, is the ultimate parent company of ESAB India Limited. ESAB Corporation holds 73.72% of equity shares of your Company through ESAB Holdings Limited, UK and Exelvia Group India B V, Netherlands.

19. ANNUAL RETURN

Pursuant to subsection (3) of Section 92 of the Companies Act 2013, your Company has placed a copy of the annual return for the financial year 2023-24 on its website and it can be viewed from the company's website viz. https:// esabindia.com/in/ind_en/investor-relationship/annual-returns/.

20. STATUTORY AUDITORS

M/s. S R Batliboi & Associates, LLP, Chennai (Firm Regn No.101049W / E300004) was re-appointed for a period of four years by the shareholders at the Annual General Meeting held on 28^th August 2020 as the Statutory Auditors of the Company in compliance with Section 139 (1) of the Companies Act, 2013. The details of remuneration of the statutory auditors with break-up of fee paid to S R Batliboi & Associates and its network firms as required by the provisions of amended SEBI (LODR) Regulations for the financial year 2023-24 is given as part of the Corporate Governance Report.

Their remuneration is fixed in line with the recommendations of the Audit Committee and as duly approved by the Board of Directors.

The Statutory Auditors have issued a clean report on the financials of the Company and have not issued any qualifications for the financial year ended 31^st March 2024. Members may please take note of the changes in the requirements with respect to the report of the Auditors including specific references to key audit matters.

At the conclusion of the 37^th Annual General Meeting of the Company, M/s. S R Batliboi & Associates, LLP, would be completing their two terms of ten years period as Statutory Auditors of the Company.

In place of M/s. S R Batliboi & Associates, LLP, the Company propose to appoint M/s. Deloitte Haskins & Sells, as Statutory Auditors of the Company for a period of 5 years commencing from the conclusion of the 37^th Annual General Meeting till the conclusion of the 42^nd Annual General Meeting.

The proposal for appointment of M/s. Deloitte Haskins & Sells, is duly reviewed and recommended by the Audit Committee and Board of Directors at their meetings held on 23^rd May 2024. The same has been proposed for approval of the shareholders in the 37^th AGM.

21. SECRETARIAL AUDIT

In terms of Section 204 (1) of the Companies Act, 2013, the Company has appointed M/s. V Mahesh & Associates, Chennai to do the secretarial audit of the Company for the financial year 1st April 2023 to 31^st March 2024. Their appointment was informed to the Registrar of Companies, Chennai vide SRN AA2714751 in form MGT-14 dated 2^nd June 2023.

M/s. V Mahesh & Associates have now completed their secretarial audit and have issued their certificate dated 13^th May 2024 as per the prescribed format in MR-3 to the shareholders of the Company, which is annexed to this Report as Annexure - 2.

The Secretarial Auditors have no observations and have confirmed that the Company has proper board processes and a compliance mechanism in place. They have also affirmed that the Company has complied with the relevant statutes, rules and regulations and secretarial standards, as applicable.

22. CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION AND FOREIGN EXCHANGE OUTGO

The information required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in Annexure - 1 and forms part of this Report.

23. DETAILS RELATING TO DEPOSITS

The Company has not accepted any deposits during the period under review as envisaged under Section 73, 74 & 76 of the Companies Act, 2013. There have been additional filing requirements introduced with respect to liabilities not in the nature of deposits. The necessary form DPT 3 has been filed for the financial year 2022-23 on 5^th July 2023 vide SRN No. AA3300767.

24. SIGNIFICANT & MATERIAL ORDERS PASSED

BY THE REGULATORS

During the year under review, there have been no significant and material orders passed by any regulators / courts / tribunals that could impact the going concern status and the company's operations in future.

25. PARTICULARS OF LOANS, GUARANTEES OR

INVESTMENTS

The Company had not lent any loan to any related party as envisaged under Section 186 of the Companies Act, 2013 during the year under review.

The Board of Directors from time to time has authorized the Company to invest the surplus funds of the Company in deposits with Bank and investments in debt funds, liquid funds and fixed maturity plans with mutual funds for a tenure not exceeding 100 days.

The investments are made in debt funds and liquid funds. The Company has earned an income of around $ 62.45 Lakhs from investment in mutual funds for the period 1^st April 2023 to 31^st March 2024. The Company has not given any guarantees other than bank guarantees in the normal course of business to meet its contractual obligations.

26. RISK MANAGEMENT POLICY

In compliance with the requirements of Section 134 (3) (n) of the Companies Act, 2013 and under Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has constituted a Risk Management Committee consisting of Mr. Kevin Johnson, as the Chairman, Mr. Rohit Gambhir, Managing Director, Mr. Vikram Tandon, Independent Director and Mr. B Mohan, Director & CFO as the Members of the Committee. The said Committee lays down the procedures to identify risks and the mitigation procedures and adopted a policy in this regard. The Board of Directors defines the roles and responsibilities of the Committee.

The said committee updates the Board of Directors on a periodical basis on the material risks faced by the Company and the measures taken by the Company to mitigate the said risks. The Committee analyzed various risks including ESG risk and those arising from cyber security aspects, remote access control and other different controls necessary to be established with executives working from home. They suggested the actions to be taken to mitigate these risks which went a long way in the Company successfully managing all the risks.

27. CORPORATE SOCIAL RESPONSIBILITY

As required under Section 134 (3) (o) read with Section 135 (1) of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee. The Committee has Ms. Cauvery Dharmaraj as the Chairperson of the said committee. She was appointed by the Board of Directors on 23^rd March 2023 and her appointment also approved by the shareholders of the Company via Postal Ballot on 3^rd May 2023. Mr. Kevin Johnson, Chairman of the Board and Mr. Rohit Gambhir,

Managing Director are the other members of the said Committee.

The Committee formulated a policy on CSR and the Board of Directors approved the same. The policy as required under Section 135 (4) (a) of the Companies Act, 2013 has been uploaded on the Company's website https:// esabindia.com/in/ind_en/investor-relationship/policies/ policy-on-corporate-social-responsibility-revised-on-10th-february-2023/

As part of CSR initiatives, the Company has been involved in promoting and educating safe welding practices including usage of all personal protective equipment during the process of welding to ensure total safety of the welders, especially at smaller towns through deployment of duly trained resources. The Company had also tied up with certain vocational institutions for educating the welders in Tier II and Tier III cities on welding through deployment of personnel.

During the year under review, the Company had the eligible 2% spend of $ 2,51,11,000/- in addition to the carried forward unspent amount of $ 21,40,469/- aggregating to

$ 2,72,51,469/-. The Board approved various CSR projects with the total CSR liability of $ 2,72,51,469/- during the financial year 2023-24.

During the financial year 2023-24, the Company had budgeted an amount of $ 2,72,51,469/- against which the Company had spent an amount of $ 2,76,40,039/- leaving an excess spent of $ 3,88,569/-.

During the financial year 2023-24, the Company has spent an excess amount of $ 8,76,556/- against one ongoing project 2023-24 and an unspent amount of $ 4,87,987 against two other ongoing projects. The unspent amount of $ 4,87,987/- has been transferred to a separate unspent CSR account on 26^th April 2024.

The amount excess spent during the financial year 2023-24 and 2022-23 i.e., $ 8,76,556 and 4,76,082/-respectively will be carried forward and will be offset against the CSR liability of FY 2024-25.

The Company's policy on CSR envisages expenditure in areas falling within the purview of Schedule VII of the Companies Act, 2013. The annual report on CSR activities is enclosed by way of Annexure - 3 to this report.

28. RELATED PARTY TRANSACTIONS

As required under Section 188 of the Companies Act, 2013 and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company places before the audit committee the list of related parties from whom they buy raw materials or finished goods, to whom the Company extends services or exports goods.

The details of the basis of pricing and the margins on such transactions are also tabled. The Audit Committee accords its omnibus approval for such related party transactions on an annual basis. The updates on the transactions with the related parties are placed before the audit committee on a quarterly basis. The details are also placed before the Board of Directors for its information.

As required under Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has formulated a policy on related party transactions and the same was approved by the Audit Committee and the Board of Directors. The said policy has been uploaded on the company's website https:// esabindia.com/in/ind_en/investor-relationship/policies/policy-on-related-party-transaction/.

All the transactions with the related parties entered into during the period under review have been in the ordinary course of business and at arms' length basis. There have been no material related party transactions entered into during this period.

The details of related party transactions pursuant to Clause (h) of sub-section (3) of Section 134 of the Act, is enclosed in form no. AOC 2 as Annexure - 4.

29. FORMAL ANNUAL EVALUATION

As required under Section 134 (3) (p) of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had already approved the evaluation criteria for evaluating the performance of the Board of Directors, its committees and the performance of Independent Directors.

Accordingly, as required under Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors at their separate meeting held on and 27^th March 2024 evaluated the performance of the non-independent Directors and the Board as a whole. They also reviewed the performance of the Chairman of the Company and also assessed the quality, quantity, and timeliness of flow of information between the Company Management and the Board that was necessary for the Board to effectively and reasonably perform their duties.

Also as required under Regulation 17 (10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board assessed the performance of the Independent Directors as per the criteria laid down and has recommended their continuation on the Board of the Company at its meeting held on 23^rd May 2024.

As required under the said regulations, the Board of Directors assessed the performance of the individual directors on the

Board based on parameters such as, relevant experience and skills, ability, and willingness to speak up, focus on shareholder value creation, high governance standards, knowledge of business, processes and procedures followed, openness of discussion / integrity, relationship with management, impact on key management decisions etc. The Members of the Committees of Audit, Nomination

& Remuneration, Stakeholders Relationship, Corporate Social Responsibility and Risk Management Committee were also assessed on the above parameters and also in the context of the committee's effectiveness vis-a-vis the Act and the listing regulations.

The Independent Directors fulfilled the independence criteria as specified under the above regulations and the Companies Act, 2013. The Board was satisfied with the evaluation results which reflected the overall engagement and the effectiveness of the Board and its committees. The Independent Directors also updated their current profiles by paying up the relevant fees in the website of the Ministry of Corporate Affairs on Independent Directors for a period of five years. All the Independent Directors possess the necessary experience and expertise and are exempted from taking up the online assessment test of the Ministry except Ms. Cauvery Dharmaraj who will undertake the online proficiency self-assessment test as per Sub rule 4 of Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014.

30. COST AUDITOR

As required under Section 148 of the Companies Act, 2013 the Board of Directors at its meeting held on 23^rd May 2024 has appointed M/s. Geeyes & Co., Cost Accountants within the meaning of Cost & Works Accountants Act, 1959 and holding a valid certificate of practice No.000044 as the Cost Auditor for conducting the Cost Audit for the financial year 2024-25. The Audit Committee recommended the appointment subject to the compliance of the requirements stipulated in the relevant notifications issued by Ministry of Corporate Affairs.

The Company has received a letter dated 26^th April 2024 from the Cost Auditor stating that the appointment, if made, will be within the limit prescribed under the Act.

The relevant Form CRA 2 for appointment of Cost auditor for the financial year 2023-24 was filed with the Registrar of Companies on 7^th June 2023 vide SRN F61760047.

The cost audit report issued by the Cost Auditor for the financial year ended 31^st March 2023 was filed with the Registrar of Companies vide form CRA - 4 dated 5^th September 2023 vide SRN F63885370.

31. RATIO OF REMUNERATION TO EACH

DIRECTOR

As required under Section 197 (12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of ratio of remuneration of each Director to the median employee remuneration are as given below:

A. Executive Director

Ratio of remuneration paid to Mr. Rohit Gambhir, Managing Director vs. the median employee is 26:1 (26:1 for the year ended 31^st March 2023).

B. The percentage increase in remuneration of CFO and CS in the financial year 2023-24 was 9.7% and 9.7% respectively.

C. The percentage increase in the median remuneration of employees in the financial year 2023-24 was 8.5%.

D. The number of eligible permanent employees in the rolls of the Company as on 31^st March 2024 is 575 (554 as on 31^st March 2023).

E. Average percentile increase made in salaries of employees other than KMP in comparison to the percentile increase in the remuneration of KMP and the justification thereof.

The average percentile increases in salaries of employees other than KMP proposed was 9.84% while that of KMPs was 9.9%.

As at the end of March 2024 the Company had 867 employees as against 829 at the end of 31^st March 2023. The Company believes in providing a working environment that is focused on the customers, teamwork, continuous improvement, innovation and a competitive environment where employees strive to improve value for shareholders.

The Board of Directors would like to affirm that the remuneration paid to the Executive and Non-executive Directors and the Key Managerial Personnel is in line with the Remuneration Policy of the Company.

As required under the provisions of Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, the name and other particulars of the top ten employees in terms of remuneration drawn is set out in the Annexure - 5 to this Report.

In terms of Section 136(1) of the Companies Act, 2013 the Annual report excluding the aforesaid annexure is now being sent. The annexure is available for inspection at the Registered Office of the Company and any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

32. FINANCE

The Company's relationship with its Bankers viz. AXIS Bank Ltd., HDFC Bank Ltd. and J. P Morgan continued to be cordial during the year. The Company would like to thank its Bankers for their support.

33. ENVIRONMENT, HEALTH AND SAFETY

The Company continued its commitment to industrial safety and environment protection and all its factories have obtained its ISO 14001 and OHSAS 18001 certification. Periodical audits are done by external and internal agencies to assess the continued levels of EHS efficiency of each of these plants and the OHSAS certification given is renewed after every such audit. The Company is also networked with the Group on EHS initiatives and works closely with them on initiatives and actions concerning EHS. During the year under review, the Company's Plants at Ambattur and Nagpur won global recognition for EHS initiatives.

Certain statements in this Directors' Report may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied in this Report.

34. LISTING WITH STOCK EXCHANGES

The Company's equity shares are listed with a) BSE Limited and b) National Stock Exchange of India Limited. The annual fees for both the exchanges have been paid promptly for the year 2024-25. Pursuant to the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company had executed fresh listing agreements with BSE Limited and National Stock Exchange of India Limited on 9^th November 2015.

The Company had 19,038 shareholders as at the end of the year 31^st March 2024. 99.34% of the shares are held in dematerialized form.

The Company is part of the Top 1000 Companies by way of Market capitalization. The Company has adopted a dividend policy, formed a Risk Management Committee and have also prepared a Business Responsibility and Sustainability Report for the year under review. The dividend distribution policy is available in the Company's website https://esabindia.com/in/ ind_en/investor-relationship/policies/dividend-distribution-policy/.

As required under Regulation 39 (4) Read with Schedule VI of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the details of the shares issued by the Company consequent to amalgamation of erstwhile Maharashtra Weldaids Limited with the Company in 1994, the details of the physical shares which remains unclaimed and transferred to the Unclaimed Suspense Account and the reconciliation of the shares claimed by shareholders during the year 2023-24 and the shares outstanding in the suspense account as on 31^st March, 2024 is given below:

32 shareholders holding 2160 equity shares constituting about 0.014% of shares have not made their claim from the Company on the shares outstanding in the Unclaimed Suspense Account of ESAB India Limited. The voting rights for these shares shall remain frozen until these are claimed by the rightful owners.

35. CORPORATE GOVERNANCE

In terms of Chapter IV Regulation 15 Read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a Corporate Governance Report is made part of this Annual report.

A certificate from the Secretarial Auditors of the Company regarding compliance of the conditions stipulated for Corporate Governance as required under Clause E of Schedule V read with Regulation 34 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report.

The declaration by the Managing Director addressed to the Members of the Company pursuant to Clause D of Schedule V Read with Regulation 34 (3) Chapter IV of the SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015 regarding adherence to the Code of Conduct by the Members of the Board and by the Members of the Senior Management Personnel of the Company is also attached to this Report.

36. POLICY ON PREVENTION OF SEXUAL

HARASSMENT OF WOMEN AT WORKPLACE ACT

The Company has also adopted the mandatory policy on Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Employees have been sensitized on the provisions of this enactment and the Company has also reconstituted an Internal Complaints Committee with effect from 10^th August 2023 to deal with complaints, if any, under the said Act. The Committee also has an independent external NGO representative as one of its members. The Committee meets as and when requirement arises. The Company believes in providing safe working place for the Women in the Company and adequate protection are given for them to carry out their duties without fear or favour. All the employees of the Company as a part of induction are sensitized about the provisions of the said Act.

As required under Section 21 of Chapter VIII of the said Act, the Committee has submitted its annual report in the prescribed format to the designated authority within the stipulated period.

37. SECRETARIAL STANDARDS

As on 31^st March 2024 all the applicable Secretarial Standards which have been notified have been complied with by the Company.

A certificate of compliance issued by the Secretarial Auditor M/s. V Mahesh & Associates dated 13^th May 2024 is enclosed as Annexure - 2 and forms part of this Report.

38. ISSUE OF SHARES

The Company during the year under review has not issued any SWEAT equity shares or shares with differential rights or under Employee stock option scheme nor did it buy back any of its shares.

39. ACKNOWLEDGEMENTS

Your Directors' place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers and shareholders.

Your Board would like to place on record, its sincere appreciation to the employees for having played a very significant part in the Company's operations till date and more so in a difficult year that we went through.

For and on behalf of the Board of Directors