Foseco India Ltd

Dear Members of Foseco India Limited,

Your Directors have pleasure in presenting the 67^th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the financial year ended 31 December 2023.

Summary of Financial Performance

(All Figures in Rs. Lakh)

Business Operations/Performance of the Company

The year was marked with your Company reporting its highest ever annual turnover of Rs. 47,740.90 lakhs and a Profit Before Tax of Rs. 9,515.36 lakhs. The Company witnessed significant growth, highlighted by increased revenue, improved profitability, and effective total trade working capital management. This growth was primarily fuelled by robust demand in the domestic market. Despite facing challenges such as high raw material costs and occasional price spikes, Foseco India demonstrated expertise in assisting customers in navigating through these obstacles by offering tailored solutions and improving productivity. As a result, we successfully recovered rising costs from the market by delivering exceptional value. Moreover, our disciplined approach to collections led to a reduction in trade receivables days, further enhancing our financial stability.

Share Capital

As on 31 December 2023, the paid-up share capital of the Company stood at Rs. 638,64,590/-, consisting of 63,86,459 equity shares of face value of Rs. 10 fully paid-up. Out of the above, the Promoters held 47,88,845 equity shares comprising 74.98% of the equity share capital of the Company. There was neither any change in the share capital of the Company nor was there any change in the shareholding of the Promoter of the Company during the year.

Amount Transfer to Reserves

Your Directors do not propose to transfer any amount to the reserves.

Dividend

Your Directors are pleased to recommend for approval of the Members, a Final Dividend of Rs. 25/- per share (i.e., 250%), on a paid-up equity share of Rs. 10/- each for the financial year ended 31 December 2023 (against the total dividend of Rs. 40 per share i.e., 400% in the previous year). The final dividend is subject to approval of members at the ensuing AGM and shall be further subject to deduction of income tax at source. The final dividend, if approved by the members, would be paid to those members whose name appear in the Register of Members as on the Record Date mentioned in the Notice convening the AGM.

The dividend recommended is in accordance with the Company's Dividend Distribution Policy. The policy includes the parameters as set out in Regulation 43A(2) of the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations 2015 (“SEBI Listing Regulations”). The policy is available on the Company's website and can be accessed at https://fosecoindia.com/Policies.aspx.

The total dividend that will be paid out will aggregate to Rs. 1,596.61 Lakhs for the financial year ended 31 December 2023, as compared to Rs. 2,554.58 Lakhs paid for the financial year ended 31 December 2022.

Subsidiaries

Your Company does not have any subsidiary / subsidiaries within the meaning of Section 2 of the Companies Act, 2013. Therefore, a statement under the provisions of Section 129(3) of the Act, containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is not attached as the same is not applicable in the case of your Company.

Directors and Key Managerial Personnel

The composition of the Board of Directors of the Company is in accordance with the provisions of Section 149 of the Companies Act 2013 and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Executive Director, Non-Executive Directors and Independent Directors. The complete list of Directors of the Company has been provided as part of the Corporate Governance Report.

Re-appointment of Independent Director for the second term

Ms. Anita Belani (DIN: 01532511) was appointed as an Independent Director of the Company at the 63rd AGM held on 10 September 2020 for a term of 5 consecutive years commencing from 21 June 2019 and ending on 20 June 2024. Pursuant to the provisions of Section 149 of the Act read with relevant rules made thereunder, an Independent Director can hold the office for a term of up to 5 consecutive years on the Board of a company, but is eligible for re-appointment for another term of up to 5 years, on passing of a special resolution by the company, based on the report of evaluation of performance. No independent director can hold office for more than two consecutive terms. The Nomination and Remuneration Committee of the Company (“NRC”), inter-alia, on the basis of performance evaluation of Ms. Anita Belani and taking into account the knowledge, requisite experience, expertise and contribution made by her during her tenure had recommended to the Board that the continued association of Ms. Anita Belani as an Independent Director would be beneficial to the Company.

Based on NRC recommendation and consent letter received from Anita Belani, the Board at its Meeting held on February 23, 2024 has approved the re-appointment of Ms. Anita

Belani as an Independent Director for a second term of 5 consecutive years from 21 June 2024 to 20 June 2029, subject to the approval of the Members of the Company by means of a Special Resolution at the ensuing Annual General Meeting. She will not be liable to retire by rotation. The Company had also received a declaration from Ms. Anita Belani confirming that she fulfils the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the schedules and rules issued thereunder as well as Regulation 16 of the SEBI Listing Regulations. Further, Ms. Belani is independent to the management of the Company. The Board of Directors recommend her re-appointment as an Independent Director.

Director retiring by rotation

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company,

Mr. Prasad Chavare (DIN: 08846863), Managing Director and Chief Executive Officer of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. He has submitted a declaration of his eligibility for appointment. The Board recommends his re-appointment. A brief resume and other relevant details of his re-appointment is provided in the Corporate Governance Report which forms part of this Annual Report.

Remuneration paid to the MD & CEO

Under the tenure of Mr. Prasad Chavare, the Company has achieved good results both in the form of revenues and profits. In recognition of good contribution to the growth of the Company, Mr. Chavare's remuneration for the period beginning 1st January 2024 and beyond till the conclusion of his present tenure, is subject to revision which may exceed Rs. 3,40,00,000/- per annum that the Members of the Company has approved at the 64^th Annual General Meeting of the Company held on 21 June 2021. Thus, the approval of the Members of the Company is sought to pay the remuneration to Mr. Prasad Chavare which is likely to exceed Rs. 3,40,00,000/- per annum for the remaining period of his tenure, subject to the limit prescribed under Sections 197, 198 and 203 of the Companies Act and the Rules read with Schedule V of the Companies Act 2013, including any amendment(s), modification(s), variation(s) or re-enactment(s) thereof. A Resolution to this effect is laid down in the Notice of the AGM of the Company.

Key Managerial Personnel

During the year under review, no changes have taken place in the position of the Key Managerial Personnel (KMP) of the Company.

Declaration of independence from Independent Directors

In terms of Section 149 of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations, the Company has received declarations from all the Independent Directors of the Company confirming that: a) they meet the criteria of independence prescribed under the Companies Act, 2013 and the SEBI

Listing Regulations; b) in terms of Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, they have registered themselves with the Independent Directors' database maintained by the Indian Institute of Corporate Affairs; c) in terms of Regulation 25(8) of the SEBI Listing Regulations, they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

In terms of Regulation 25(9) of the SEBI Listing Regulations, based on the declarations and confirmations received from the Independent Directors, the Board of Directors has ensured the veracity of the disclosures made under Regulation 25(8) of the SEBI Listing Regulations by the Independent Directors of the Company.

The Board of Directors hereby affirms that none of the Directors on the Board of the Company are debarred from holding the Office of Director by virtue of any order passed by SEBI or any other statutory authority and are therefore not disqualified to be appointed as the Directors. Further, pursuant to Regulation 34(3) and Schedule V, Para C, Clause 10(i) of the SEBI Listing Regulations, the practicing Company Secretary has issued a certificate to the Company to this effect which is annexed with this Report marked Annexure A. All the above appointments / re-appointments form part of the Notice of the Annual General Meeting. Profile of these Directors are given in the Report on Corporate Governance. During the year under review, no Non-Executive Director has had any pecuniary relationship or transactions with the Company.

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013, your Directors confirm that: a) in the preparation of the annual accounts, the applicable accounting standards have been followed with no material departures; b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the same period; c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) they have prepared the annual accounts on a going concern basis; e) they have laid down Internal Financial Controls in the Company that are adequate and are operating effectively; and f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that these are adequate and are operating effectively;

Number of Meetings of the Board

A total of four Board Meetings were held during the year 2023 on the following dates: 27 February 2023, 3 May 2023, 27 July 2023 and 10 November 2023. During the year, one meeting was held in physical mode and the other meetings were held virtually in audio-visual mode. The information on the meetings is given in the Report on Corporate Governance that forms part of this Annual Report. The intervening gap between any two meetings was within the period of 120 days prescribed by the Companies Act, 2013.

Performance Evaluation of the Directors

The Nomination and Remuneration Committee has laid down the criteria for performance evaluation by the Board of its own performance and that of the various Committees of the Board and the individual Directors including the Chairperson. The framework of performance evaluation of the Directors captures the following points:

• Key attributes of the Independent Directors that justify his / her extension / continuation on the Board of the Company;

• Participation of the Directors in the Board proceedings and his / her effectiveness; More details on this subject is provided in the Report on Corporate Governance.

Composition of the Audit Committee

The Audit Committee comprises Mr. Amitabha Mukhopadhyay as its Chairperson, Mr. Ravi Moti Kirpalani and Ms. Anita Belani, all of whom are Independent Directors and Mr. Mark Russell Collis as a Non-Executive, Non-Independent Member. More details on the Committee are given in the Report on Corporate Governance.

Auditors and Auditors' Report

Statutory Auditors

Price Waterhouse Chartered Accountants LLP (Firm registration no. - 012754N / N500016), Chartered

Accountants, were re-appointed as the Statutory Auditors of the Company at the 65^th AGM held on 11 May 2022, to hold office for the second term of five years from the conclusion of 65^th AGM until the conclusion of the 70^th AGM to be held in the year 2027. As required under the SEBI Listing Regulations, the Statutory Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Auditors' Report

The observations of the Statutory Auditors on the annual financial statement for the year ended 31 December 2023 including the relevant notes to the financial statement are self-explanatory and therefore do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark or disclaimer. The Auditors' Report has been issued with unmodified opinion on the annual financial results of the Company.

Report on Frauds, if any

During the year under review, no incidence of any fraud has occurred against the Company by its officers or employees. Neither the Audit Committee nor the Board of the Company has received any report involving any fraud from the Statutory Auditors of the Company. As such, there is nothing to report by the Board, as required under Section 134 (3) (ca) of the Companies Act, 2013.

Cost Auditors

Joshi Apte & Associates, Cost Accountants, were appointed as the Cost Auditors of the Company to examine the Cost Records and submit the Cost Audit Report. The Company has maintained the required cost accounting records as per the Companies (Cost Records and Audit) Rules, 2014 and is in compliance therewith. The Cost Audit Report in Form CRA-4 relating to the year ended 31 December 2022 has already been filed with the Ministry of Corporate Affairs.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, Rajesh Karunakaran & Co., Practicing Company Secretary (FCS 7441; CP No. 6581), Pune, was appointed to conduct a secretarial audit of the Company's Secretarial and related records for the year ended 31 December 2023. The Practicing Company Secretary has submitted the Secretarial Audit Report which is annexed as Annexure B to this Report. The same does not contain any qualification, reservation, adverse remark or disclaimer.

In addition to the above, a Report on Secretarial Compliance has been submitted by Rajesh Karunakaran & Co. There are no observations, reservations, qualifications, adverse remark or disclaimer in the said Report. The Secretarial Compliance Report is annexed as Annexure C to this Report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the financial year under review, as stipulated under the SEBI Listing Regulations, is presented in a separate section forming part of the Annual Report.

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the Securities and Exchange Board of India (“SEBI”). The Company has implemented several best governance practices. The Report on Corporate Governance as stipulated under the SEBI Listing Regulations forms part of the Annual Report. Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached to the Report on Corporate Governance. The disclosure requirement laid down in Schedule V, Section II under Clause IV of the Companies Act, 2013 (“the Act”) are covered in the Report of Corporate Governance under the title ‘Remuneration Policy'.

Business Responsibility and Sustainability Report

In accordance with the SEBI Listing Regulations, the Business Responsibility and Sustainability Report (BRSR) describing the initiatives taken by the Company from an environmental, social and governance perspective is presented in a separate section forming part of the Annual Report. Further, the Report is also available on the Company's website at https://www.fosecoindia.com/ DownloadFiles/BRSR2022-23.pdf

Corporate Social Responsibility (CSR)

The Board of your Company has constituted a CSR Committee. As on 31 December 2023, the Committee comprises four Directors. A brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year have been laid down in the CSR Report which is set out in Annexure D of this Report. The CSR Policy is available on the website of the Company at https://fosecoindia.com/Policies.aspx.

Risk Management

The Board regularly monitors and reviews the risk management strategy of the Company and ensures the effectiveness of its implementation. Your Directors take all necessary steps towards mitigation of any elements of risk, which in their opinion, can impact the Company's survival. All the identified risks are managed through review of business parameters by the Management, and the Board of Directors are informed of the risks and concerns. The Company has a structured Risk Management Framework, designed to identify, assess and mitigate risks appropriately. During the year, two meetings of the Risk Management Committee were held. The Committee has been entrusted with the responsibility to assist the Board in: a) overseeing and approving the Company's enterprise wide risk management framework; and b) ensuring that all material Strategic and Commercial including Cybersecurity, Safety and Operations, Compliance, Control and Financial risks have been identified and assessed and adequate risk mitigations are in place, to address these risks.

Further details on the Risk Management activities including the implementation of risk management policy, key risks identified, and their mitigations are covered in Corporate Governance Report, which forms part of the Annual Report.

Public Deposits

The Company has not accepted any deposits from the public and accordingly no amount was outstanding as on the date of the Balance Sheet.

Extract of the Annual Return

As required under Section 92(3) read with Section 134(3) (a) of the Companies Act 2013, the Annual Return in Form No. MGT 7 as at the financial year ended 31 December 2022, has been uploaded on the website of the Company at http://fosecoindia.com/View/AnnualReturn.aspx.

Particulars of Loans, Investments, Guarantees and Securities

Your Company has neither advanced any loans, nor made any investments or given any guarantees and / or provided any securities to anybody, whether directly or indirectly, within the meaning of Section 185 & 186 of the Companies Act 2013. In addition thereto, the Company has not extended any loans and advances in the nature of loans to firms/companies in which directors are interested.

Fund raising by issuance of debt securities, if any

Pursuant to SEBI Circular No. SEBI/HO/DDRS/CIR/P/2018/144 dated 26 November 2018, the Directors confirm that your Company is not identified as a “Large Corporate” during the year ended 31 December 2023 as per the framework provided in the said Circular. Moreover, your Company has not raised any fund by issuance of debt securities.

Particulars of Contracts or Arrangements with Related Parties

Under the Companies Act 2013, all contracts / arrangements / transactions entered into by the Company during the financial year ended 31 December 2023 with related parties were on an arm's length basis and were in the ordinary course of business. Moreover, none of the transaction were material in nature, and therefore, Members' approval was not required to be obtained, in accordance with the Policy of the Company on materiality of related party transactions. Thus, provisions of Sections 134(3)(h) and 188(1) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 are not applicable to the Company and therefore, Form No. AOC-2 has not been attached. In compliance with the requirements laid down in the SEBI Listing Regulations, all related party transactions were placed for approval before the Independent Directors who are Members of the Audit Committee. Prior omnibus approval of the Independent Directors who are Members of the Audit Committee had been obtained for transactions which were foreseeable and of repetitive nature. All transactions entered into with the related parties are presented to the Audit Committee by way of a statement giving details of all transactions.

The Policy on materiality of Related Party Transactions and dealing with Related Parties as approved by the Board of Directors has been uploaded on the Company's website at https://fosecoindia.com/Policies.aspx. Your Directors draw attention of the Members to Note 29 attached to the financial statement which sets out related party disclosures.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

Information under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure E to this Report.

Particulars of Employees and Related Disclosures

Disclosure pertaining to remuneration of Directors and KMPs as required 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 is given in Annexure F forming part of this Report. However, as per the provisions of Section 136 of the Companies Act 2013, the report and the financial statements are being sent to the Members and others entitled thereto after excluding the disclosure on particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Rules. The disclosure is available for inspection by the Members at the Registered Office of your Company during business hours on all working days of the Company up to the date of the ensuing AGM. Any Member interested in obtaining a copy thereof, may write an email to the Company at investor.grievance@vesuvius.com.

Policy on Directors' Appointment and Remuneration

The policy of the Company with respect to the appointment and remuneration of Directors, Key Managerial Personnel and Senior Managerial Personnel, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided in Section 178(3) of the Companies Act 2013, adopted by the

Board is covered in the Report on Corporate Governance which forms part of this Annual Report.

Vigil Mechanism / Whistle Blower Policy

The Company has established a vigil mechanism (which incorporates a whistle blower policy) for Directors, employees and business associates, to report their genuine concerns. The details of the same are provided in the Report on Corporate Governance forming part of this Annual Report. The Policy is also available on the Company's website at https://fosecoindia.com/Policies.aspx.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Your Company has in place a Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Committee (IC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year under review, your Directors have not received any complaint of sexual harassment from the IC. Moreover, there were neither any complaint pending at the beginning of the year nor were there any complaints that remained pending as at the end of the year.

Material Changes and Commitments, if any, post Balance Sheet Date

No material changes and commitments have occurred between the end of the financial year of the Company to which the financial statement relates and the date of this report, which may affect the financial position of the Company.

Agreement(s) binding the Company

As required under Regulation 30A of Listing Regulations, the Company has to report that it has not been informed by any shareholders, promoters, promoter group entities, related parties, directors, KMPs or employees of the Company, who are purported to be parties to any agreements specified in Clause 5A of Paragraph A of Part A of Schedule III of the SEBI Listing Regulations, of having entered into any agreement or have signed any agreement to enter into such agreement to which the Company is not a party as at the end of the financial year. The Company further reports that there are no such agreement of the nature mentioned above that subsists on the date of coming into effect of the SEBI (LODR) (Second Amendment) Regulations, 2023.

Cyber Security Incident Update

During the year under review, the Company had faced a cyber security incident. We have to report that the Company has assessed the said incident assisted by leading cyber security experts. Based on the findings of the cyber security experts, it was concluded that all the systems of the Company across various functions had worked normally, with no assessed impact on the operations or financial performance of the Company. On review of data affected by the incident, the management had confirmed that no material breaches or loss of relevant data or documents have been identified.

Adequacy of Internal Financial Controls (IFC)

The Company has an Internal Financial Control System, commensurate with the size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The internal controls are designed in a manner that facilitates achievement of three-pronged objectives viz., i) support the achievement of the Company's business objectives, ii) mitigate risks to acceptable level, and iii) support sound decision making and good governance.

The adequacy and effectiveness of the internal financial controls are demonstrated by following the procedures as set out below: -i. The internal controls have been designed to provide reasonable assurance with regard to recording and producing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance with corporate policies. The Company has a well-defined delegation of power with authority limits for approving revenue as-well-as expenditure. Processes for formulating and reviewing annual and long-term business plans have been laid down. ii. The Audit Committee periodically deliberates on the operations of the Company with the Members of the Management. It also sought the views of Price Waterhouse Chartered Accountants LLP, who are the Statutory Auditors, on the internal financial control systems. The extensive audit on the internal financial control systems was done by P G Bhagwat, Chartered Accountants. iii. The Company has appointed P G Bhagwat, Chartered Accountants, as Internal Auditors of the Company. The Audit Committee in consultation with the Internal Auditors formulates the audit plan, scope, functioning and methodology, which are reviewed every year, in a manner that they cover all areas of operation. The Internal Audit covers inter alia, monitoring and evaluating the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations and adequacy of insurance coverage of all assets. Periodical Internal Audit Reports are submitted to the Audit Committee, to ensure complete independence, which are then extensively deliberated at every Audit Committee Meeting in the presence of the Internal and External Auditors. Based on the review by the Audit Committee, process owners undertake corrective actions in their respective areas and consider suggestions for improvement. The Internal Auditors have expressed that the internal control system in the Company is robust and effective. iv. The Board has also put in place requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems are adequate and operating effectively. v. The Company's financial records are maintained on the ERP System which is effective and adequate in line with the size of its operations.

Secretarial Standards of the Institute of Company Secretaries of India (ICSI)

The Company has complied with the requirements prescribed under the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).

Policies of the Company

Your Company has posted the following documents on its website at https://fosecoindia.com/Policies.aspx .

• Code of Conduct;

• Familiarisation Programme for the benefit of the Independent Directors;

• Archival Policy;

• Policy for Determination of Material Events or Information;

• Policy for Preservation of Documents;

• Dividend Distribution Policy.

General

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters during the year under review:

• Details relating to deposits covered under Chapter V of the Act.

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• There has been no change in the nature of business of the Company.

• There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

• There was no instance of onetime settlement with any Bank or Financial Institution.

• Issue of shares (including sweat equity shares) to employees of the Company under any scheme

• No significant or material orders were passed by the Regulators or Courts or Tribunals which would impact the going concern status and Company's operations in future.

Cautionary Statement

Statements in the Annual Report, including those which relate to Management Discussion and Analysis describing the Company's objectives, projections, estimates and expectations, may constitute ‘forward looking statements' within the meaning of applicable laws and regulations. Although the expectations are based on reasonable assumptions, the actual results might differ.

Acknowledgements

The Board of Directors would like to place on record their sincere appreciation to its customers, vendors, dealers, suppliers, investors, business associates, bankers, Government Authorities for their continued support during the year. The Directors deeply appreciates the contribution made by employees at all levels for their hard work, solidarity, co-operation and support.

For and on behalf of the Board of Directors