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Notes to Accounts of Esab India Ltd.

Mar 31, 2023

No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member. For terms and conditions relating to receivables from related parties, refer Note 35. Trade receivables are non-interest bearing and are generally on terms of 0 to 120 days based on the type of the customer.

Contract Assets:

As at March 31,2023, the Company has contract assets of $ 63 (March 31,2022: 238) which is net off an allowance for expected credit losses of NIL (March 31, 2022: NIL). Revenues in excess of billing are classified as contract asset.

* Includes margin money deposits with the Company''s bankers having a carrying amount of $ 339 (March 31, 2022 -$ 500) which are subject to first charge to secure the Company''s bank guarantees.

Deposits are made for varying periods of between one day and twelve months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

The Company has been sanctioned working capital limits from banks during the year on the basis of security of current assets of the Company. The quarterly returns / statements (including revised returns) filed by the Company with such banks are in agreement with the books of accounts of the Company.

b) Terms / rights attached to equity shares

The Company has only one class of equity shares having par value of $ 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees.The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of reserves Securities Premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

Amalgamation reserve

A scheme of amalgamation of Maharashtra Weldaids Limited (MWL) with the Company, with effect from April 1, 1992, became effective on February 18, 1994. Accordingly, the results of MWL have been incorporated in the results of the Company in the financial year ended March 31, 1994. On amalgamation the assets, liabilities and reserves of MWL have been incorporated at that Company''s book values and the net difference between such values and the net consideration is accounted for as Amalgamation reserve.

General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

29. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

30. Significant accounting judgements, estimates and assumptions

The preparation of the Company''s Financial Statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgements

In the process of applying the Company''s accounting policies, management has not made any judgement, which has significant effect on the amounts recognised in the Financial Statements.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Provision for expected credit losses of trade receivables

The Company uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns. The provision matrix is initially based on the Company''s historical observed default rates. The Company will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

Allowances for slow / Non-moving Inventory and obsolescence:

An allowance for Inventory is recognised for cases where the realisable value is estimated to be lower than the inventory carrying value. The inventory allowance is estimated taking into account various factors, including prevailing sales prices of inventory item and losses associated with obsolete / slow-moving / redundant inventory items. The Company has, based on these assessments, made adequate provision in the books.

Deferred income taxes

The Company''s tax expense for the year is the sum of the total current and deferred tax charges. The calculation of the total tax expense necessarily involves a degree of estimation and judgement in respect of certain items. A deferred tax asset is recognised when it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Recognition, therefore involves judgement regarding the prudent forecasting of future taxable gains and profits of the business.

Defined benefit plans

The cost of the defined benefit plan and other post-employment benefits and the present value of the obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about defined benefit obligations are given in Note 32.

Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying values of assets and liabilities and their respective tax bases, and unutilized business loss and depreciation carry-forwards and tax credits. Such deferred tax assets and liabilities are computed separately for each taxable entity and for each taxable jurisdiction. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused tax losses, depreciation carryforwards and unused tax credits could be utilized.

A. Gratuity plan

The Company has a defined benefit gratuity plan for employees which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972 ("Act"). Under the Act, every employee who has completed five years or more of service is entitled to this Gratuity payment, on departure, of 15 days'' salary (last drawn salary) for each completed year of service subject to a maximum of $ 20 lakhs. The Company has established a trust to setup an employee group gratuity scheme for providing gratuity benefits to eligible employees as per the rules of the scheme. The gratuity scheme is funded with Life Insurance Corporation of India ("LIC") for the purpose of providing gratuity benefits to its employees. The Trust is administered by the Board of Trustees, which is responsible for the administration of the plan assets.

The weighted average duration of the defined benefit plan obligation at the end of the reporting year is 7.62 years (31 March 2022: 8.19 years).

B. Pension fund

The Company has a defined benefit pension plan for employees which requires contributions to be made to a separately administered fund. The pension benefits payable to the employees are based on the employee''s service and last drawn salary at the time of leaving. The employees do not contribute towards this plan and the full cost of providing these benefits are met by the Company. The Company has setup an income tax approved irrevocable trust fund to finance the plan liability. The Company has funded the defined benefit obligation with Life Insurance Corporation of India.

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet.

* The Company is contesting the demands and the Management, including its legal counsel, believe that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognised in the financial statements. ** The Company is contesting the demands and the Management, including its tax advisors, believe that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognised in the financial statements.The timing of the outflow in respect of the above are determinable only on receipt of judgements/decisions pending before various forums / authorities. The aforesaid amounts do not include any interest to the extent it has not been determined.

34. Leases

The Company has lease contracts for lease hold lands, lease hold premises and vehicles used in its operations. Leasehold lands generally have lease terms between 15 and 99 years, lease hold premises and motor vehicles have lease terms between 2 and 5 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets.

The Company also has leases of premises with lease terms of 12 months or less. The Company applies the ''short-term lease'' recognition exemptions for these leases.

The Company had total cash outflows for leases of $ 210 during the year ($ 181 in March 31, 2022). All the payments are fixed lease payments. There are no variable lease payments in the Company.

35. Related party transactions

(a) Name of related Parties and related party relationship Related Party where control exists

i) As at March 31 2023, ESAB Holdings Limited, UK and Exelvia Group India B.V., Netherlands, being the Principal Shareholders of ESAB India Limited (âCompanyâ) hold 37.31% and 36.41% of the paid up equity share capital of the Company respectively and ESAB Corporation was the ultimate holding company of ESAB India Limited as on the said date.

Colfax Corporation had incorporated a wholly owned subsidiary in the name of ESAB Corporation, Delaware, USA and made ESAB Corporation, Delaware as the holding company of ESAB Holdings Limited, UK and Exelvia Group India B.V., Netherlands. Further, Colfax Corporation had separated itself from ESAB Corporation, Delaware, USA by selling 90% of the equity shares held in ESAB Corporation, Delaware, USA to the general public shareholders of Colfax Corporation thereby reducing its equity stake in ESAB Corporation, Delaware, USA to 10% with effect from April 4, 2022.Subsequently, during the financial year 2022-23, Colfax Corporation has also sold the remaining 10% of equity stake in ESAB Corporation, Delaware.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2023, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2022: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

The fair values of the financial assets included in the level 1 categories above have been determined in accordance with generally accepted pricing models.

In determining fair value measurement, the impact of potential climate-related matters, including legislation, which may affect the fair value measurement of assets and liabilities in the financial statements has been considered. At present, the impact of climate-related matters is not material to the Company''s financial statements.

38. Major Financial risk management objectives

The Company is exposed to certain financial risks that could have significant influence on the Company''s business and operational/ financial performance. These include market risk (including commodity price risk, currency risk and interest rate risk), credit risk and liquidity risk.

The Management reviews and approves risk management framework and policies for managing these risks and monitor suitable mitigating actions taken by the management to minimise potential adverse effects and achieve greater predictability to earnings.

In line with the overall risk management framework and policies, the treasury function provides services to the business, monitors and manages through an analysis of the exposures by degree and magnitude of risks. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market risk is the risk or uncertainty arising from possible market price movements and their impact on the future performance of a business. The major components of market risk are commodity price risk, foreign currency exchange risk and interest rate risk.

Commodity Price Risk

The Company is exposed to commodity price risks primarily on Steel and Minerals. Price and supply disruptions arising from geopolitical and other developments could affect the Company''s financial assets, profitability and future cash flows. The Company reviews its commercial arrangements with suppliers and customers at periodic intervals to adapt to changes arising from commodity price and availability risks.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities like import of raw materials, components and capital goods from outside India, incurs few expenditure as well as make export sales to countries outside India.

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions. The Company has adopted a policy of dealing only with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults.

Trade receivables consist of a large number of customers, spread across India. Ongoing credit evaluation is performed on the financial condition of accounts receivable.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure is the total of the carrying amount of balances with banks, trade receivables and other financial assets.

The Company has provided for trade receivables amounting to $ 411 (March 31,2022 $ 561) as there was no reasonable expectations of recovery.

Credit risk from balances with banks and bank deposits are managed by the treasury department in accordance with the Company''s policy.

Liquidity risk

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The Company manages liquidity risk by maintaining sufficient cash and cash equivalents including bank deposits and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due. Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.

39. Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders. The primary objective of the Company''s capital management is to maximise the shareholder value.

42 Segment information

ESAB India Limited (''the Company'') operates in the segment of fabrication technology. This includes manufacturing and selling of welding, cutting and allied products and also provides engineering, support and consulting services.

As defined in Ind AS 108, the chief operating decision maker (CODM), evaluates the Company''s performance, allocate resources based on the analysis of the various performance indicator of the Company as a single unit. Therefore, there is no reportable segment for the Company as per the requirement of Ind AS 108 "Operating Segments".

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year (March 31,2022: Nil).

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

44. Impact of COVID

The Company has considered the possible effects that may result from COVID-19 in the preparation of these Financial Results including the recoverability of carrying amounts of financial and non-financial assets. ln developing the assumptions relating to the possible future uncertainties in the global economic conditions because of COVID-19, the Company has, at the date of approval of these Financial Results, used internal and external sources of information which are relevant and expects that the carrying amount of these assets will be recovered. The impact of COVID-19 on the Company''s financial statements may differ from that estimated as at the date of approval of these financial statements and the Company will continue to monitor any material changes to the future economic conditions.

45. Previous yearâs figures

Previous year''s figures have been regrouped and reclassified where necessary to conform to this yearâs classification.

Mar 31, 2022

No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member. For terms and conditions relating to receivables from related parties, refer Note 36. Trade receivables are non-interest bearing and are generally on terms of 0 to 120 days based on the type of the customer.

As at March 31,2022, the Company has contract assets of $ 238 (March 31,2021: NIL) which is net off an allowance for expected credit losses of NIL (March 31,2021: NIL). Revenues in excess of billing are classified as contract asset.

b) Terms / rights attached to equity shares

Nature and purpose of reserves Securities Premium

Amalgamation reserve

General reserve

30. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

31. Significant accounting judgements, estimates and assumptions

Judgements

In the process of applying the Company''s accounting policies, management has not made any judgement, which has significant effect on the amounts recognised in the Financial Statements.

Estimates and assumptions

Allowances for slow / Non-moving Inventory and obsolescence:

Deferred income taxes

Defined benefit plans

A. Gratuity plan

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet.

B. Pension fund

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet.

* The Company is contesting the demands and the Management, including its legal counsel, believe that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognised in the financial statements. ** The Company is contesting the demands and the Management, including its tax advisors, believe that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognised in the financial statements.The timing of the outflow in respect of the above are determinable only on receipt of judgements/decisions pending before various forums/authorities. The aforesaid amounts do not include any interest to the extent it has not been determined.

35. Leases

The Company also has leases of premises with lease terms of 12 months or less. The Company applies the âshort-term lease'' recognition exemptions for these leases.

36. Related party transactions

(a) Name of related Parties and related party relationship Related Party where control exists

i) As at March 31 2022, ESAB Holdings Limited, UK and Exelvia Group India B.V., Netherlands, being the Principal Shareholders of ESAB India Limited (âCompanyâ) hold 37.31% and 36.41% of the paid up equity share capital of the Company respectively and Colfax Corporation was the ultimate holding company of ESAB India Limited as on the said date.

Colfax Corporation had incorporated a wholly owned subsidiary in the name of ESAB Corporation, Delaware, USA and made ESAB Corporation, Delaware, USA as the holding company of ESAB Holdings Limited, UK and Exelvia Group India B.V., Netherlands. Further, Colfax Corporation had separated itself from ESAB Corporation, Delaware, USA by selling 90% of the equity shares held in ESAB Corporation, Delaware, USA to the general public shareholders of Colfax Corporation thereby reducing its equity stake in ESAB Corporation, Delaware, USA to 10% with effect from April 4, 2022.

ESAB Corporation, Delaware became the ultimate Parent Company of ESAB India Limited effective April 4, 2022.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2022, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31,2021: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

37. Fair values

The management considers that the carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their fair values.

39. Major Financial risk management objectives

Market Risk

Commodity Price Risk

Foreign Currency Risk

The Company imports raw materials, components and capital good from outside India, incurs few expenditure as well as make export sales to countries outside India. The Company is, therefore, exposed to foreign currency risk principally arising out of foreign currency movement against the Indian Currency.

Unhedged foreign currency

The carrying amounts in Indian Rupees of the Company''s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of dealing only with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults.

Trade receivables consist of a large number of customers, spread across India. Ongoing credit evaluation is performed on the financial condition of accounts receivable.

Exposure to credit risk

The Company has provided for trade receivables amounting to $ 561 (March 31,2021 $ 451) as there was no reasonable expectations of recovery.

Liquidity risk

Liquidity tables:

The following tables detail the Company''s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

40. Capital management

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

44. Impact of COVID

The Company has considered the possible effects that may result from COVID-19 in the preparation of these Financial Statements including the recoverability of carrying amounts of financial and non-financial assets. ln developing the assumptions relating to the possible future uncertainties in the global economic conditions because of COVID-19, the Company has, at the date of approval of these Financial Statements, used internal and external sources of information which are relevant and expects that the carrying amount of these assets will be recovered. The impact of COVID-19 on the Company''s financial statements may differ from that estimated as at the date of approval of these Financial Statements and the Company will continue to monitor any material changes to the future economic conditions.

45. Previous yearâs figures

Previous year''s figures have been regrouped and reclassified where necessary to conform to this yearâs classification.

Mar 31, 2018

1. Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard.

Ind AS 115 Revenue from Contracts with Customers

Ind AS 115 was notified on 28 March, 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under Ind AS. This new standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions of the Company.

Ind AS 115 is effective for the Company in the first quarter of the financial year ending March 31, 2019 using either one of two methods:

(i) retrospectively to each prior reporting period presented in accordance with Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors, with the option to elect certain practical expedients as defined within Ind AS 115 (the full retrospective method); or

(ii) retrospectively with the cumulative effect of initially applying Ind AS 115 recognized at the date of initial application (1 April 2018) and providing certain additional disclosures as defined in Ind AS 115 (the modified retrospective method).

The Company continues to evaluate the available transition methods and its contractual arrangements. The ultimate impact on revenue resulting from the application of Ind AS 115 will be subject to assessments that are dependent on many variables, including, but not limited to, the terms of the contractual arrangements and the mix of business. The Company''s considerations also include, but are not limited to, the comparability of its financial statements and the comparability within its industry from application of the new standard to its contractual arrangements.

The Company shall establish an implementation team to implement Ind AS 115 related to the recognition of revenue from contracts with customers and it continues to evaluate the changes to accounting system and processes, and additional disclosure requirements that may be necessary. A reliable estimate of the quantitative impact of Ind AS 115 on the financial statements will only be possible once the implementation project has been completed.

Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Leases

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, an appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.

These amendments are effective for annual periods beginning on or after 1 April, 2018. These amendments are not expected to have any impact on the Company.

b) Terms / rights attached to equity shares

The Company has only one class of equity shares having par value of $ 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2018, the amount of per share dividend recognized as distributions to equity shareholders was $ 1/- (March 31, 2017: $ 1/-; April 1, 2016: $ 1/-).

On amalgamation the assets, liabilities and reserves of MWL have been incorporated at that Company''s book values and the net difference between such values and the net consideration is accounted for as Amalgamation Reserve.

28. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

The following reflects the income and share data used in the basic and diluted EPS computations:

29. Capital management

30. Major Financial risk management objectives

Market Risk

Commodity Price Risk

The primary commodity price risks that the Company is exposed to includes steel price movement that could adversely affect the value of the Company''s financial assets or expected future cash flows. The Company primarily enters into monthly contracts and revisits the prices periodically.

Foreign Currency Risk Management

Foreign currency sensitivity analysis:

Movement in the functional currencies of the various operations of the Company against major foreign currencies may not impact the Company''s revenues from its operations. Any weakening of the functional currency may not impact the Company''s cost of imports and consequently may not significantly impact the cost of financing the Company''s capital expenditures.

Interest rate risk management

The Company is not exposed to interest rate risk because of absence of debt.

Credit risk management

Trade receivables consist of a large number of customers, spread across India. On-going credit evaluation is performed on the financial condition of accounts receivable.

Exposure to credit risk

The Company has provided for trade receivables amounting to $ 583 (March 31, 2017: $ 418, April 1, 2016: $ 380) as there was no reasonable expectations of recovery.

Liquidity risk management

Liquidity tables:

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet.

Changes in the defined benefit obligation and fair value of plan assets as at 31 March 2018:

The weighted average duration of the defined benefit plan obligation at the end of the reporting year is 8.63 years (31 March 2017: 9.08 years).

B. Pension fund

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet.

The tax rate used for the reconciliations above is the corporate tax rate of 34.608% (for the year 2017-18) and 34.608% (for the year 2016-17) payable by corporate entities in India on taxable profits under tax law in Indian jurisdiction.

Deferred tax balances

The following is the analysis of deferred tax assets/(liabilities) presented in the statement of financial position:

2. Significant accounting judgements, estimates and assumptions

Judgements

In the process of applying the Company''s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the Financial Statements.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF (Discounted Cash Flow) model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU (Cash Generating Unit) being tested. The recoverable amount is sensitive to the discount rate used for the DCF (Discounted Cash Flow) model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Deferred income taxes

Defined benefit plans

3. Commitment and contingencies

a. Leases

Operating Lease commitments - Company as a lessee

The Company has taken various residential and office premises under operating lease or leave & license agreements. These leases have a term of between 1 year and 3 years, and have no specific obligation for renewal. There are no restrictions placed upon the company by entering into these leases. The lease rentals incurred during the current year have been charged as an expense in the statement of profit and loss. The future lease rental payables as follows:

**The Company is contesting the demands and the Management, including its tax advisors, believe that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognised in the financial statements.

4. Segment Information

Based on internal reporting provided to the chief operating decision maker, Consumables and equipmentâs are two reportable segments for the Company. Consumables include Welding electrodes, Copper coated wires, Flux Cored Wires and Welding fluxes including related services. Equipment includes Welding machines and Cutting equipment. The above segments have been identified taking into account the organisation structure as well as differing risks and returns of these segments. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable.

5. Related party transactions

(a) Name of related Parties and related party relationship

Related Party where control exists

i) ESAB Holdings Limited, UK - Principal Shareholder - Holds 37.31% of the paid up equity share capital of the Company as at March 31, 2018. Colfax UK Holdings Limited, Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK, Holdings Limited indirectly holds 100% equity shares of ESAB Holdings Ltd (refer note 15).

ii) Exelvia Group India B.V., Netherlands - Holds 36.41% of the paid up equity share capital of the Company as at March 31, 2018. Colfax UK, Holding Limited, Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK Holdings Limited indirectly holds 100% equity shares of Exelvia Group India B.V., Netherlands (refer note 15).

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables except for corporate guarantee from Colfax Corporation, the Ultimate Holding Company for the loan granted to Howden Solyvent (India) Private Limited. For the year ended March 31, 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2017: Nil, April 01, 2016: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

6. FIRST-TIME ADOPTION OF IND AS

These financial statements, for the year ended March 31, 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2016, as amended. Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ended on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at April 1, 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 1, 2016 and the financial statements as at and for the year ended March 31, 2017.

Exemptions applied:

Ind AS 101 allows first-time adopters certain exemptions from the retrospective location of certain requirements under Ind AS. The Company has applied the following exemptions:

Deemed cost for property, plant and equipment and intangible assets

Since there is no change in the functional currency, the Company has elected to continue with the carrying value as at April 1, 2016 for all of its intangibles and property plant & equipment as recognised in its Previous GAAP financial as deemed cost at the transition date.

Mandatory exceptions Estimates

The estimates at April 1, 2016 and at March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 1, 2016 (i.e. the date of transition to Ind-AS) and as of March 31, 2017.

Effect of the Transition to Ind AS

Reconciliations of the Company''s balance sheets prepared under Indian GAAP and Ind AS as of April 1, 2016 and March 31, 2017 are also presented in Note 41 & 42. Reconciliations of the Company''s income statements for the year ended March 31, 2017 prepared in accordance with Indian GAAP and Ind AS in Note 43.

Foot notes to the reconciliation of equity as at April 1, 2016 and March 31, 2017 and profit or loss for the year ended March 31, 2017

A. Property, plant and equipmentâs and intangible assets

The Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognised as at April 1, 2016 (the transition date) measured as per the previous GAAP as its deemed cost as of the transition date. Accordingly, the gross block as at April 1, 2016 is net of accumulated depreciation/ amortisation and impairment of $ 12,129 (refer note 3). Further, in line with Ind AS 105, the Company has re-classified the Land at Khardah to Assets held for sale (refer note 14).

B. Security Deposits

Under Indian GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent. The prepaid rent is amortised over the period of the deposit.

C. Investments Carried at fair value through P& L

Under Indian GAAP, the Company accounted for investments in unquoted mutual funds as investment measured at the lower of cost or market value. Under Ind AS, the Company has measured such investments at fair value. The difference between fair value and Indian GAAP carrying amount has been recognized in retained earnings.

D. Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity. On the date of transition, the net impact on deferred tax liabilities is of $ 54 (April 1, 2016: $ 43).

E. Proposed Dividend

Under Indian GAAP, proposed dividends including DDT were recognised as a liability in the period to which they relate, irrespective of when they are declared till March 2016. From financial year ending on March 2017, dividend declared after the balance sheet is not considered as an adjusting event. Thus, the opening Ind AS balance sheet as on 1 April 2016 has a liability recognized. Under Ind AS, a proposed dividend is recognised as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.

In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability of $ 185 for the year ended on 31 March 2016 recorded for dividend has been derecognised against retained earnings on 1 April 2016.

F. Sale of goods

Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus sale of goods under Ind AS has increased by $ 4,370 (April 1, 2016 - $ 4,402) with a corresponding increase in other expense.

G. Other Comprehensive Income

Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is increased by $ 93 for the year 2016-17 and remeasurements gains / losses on defined benefit plans has been recognized in the OCI net of tax.

H. Under IND AS, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the trade receivables.

I. Under the previous GAAP, leases need to be straight-lined over the period of non-cancellable term. As per Ind AS 17, lease payments under an operating lease shall be recognised as an expense on a straight-line basis over the lease term unless either another systematic basis is more representative of the time pattern of the user''s benefit even if the payments to the lessors are not on that basis or the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases. Since the payments to the lessor does not vary because of any factors other than general inflation, the Company has recognised expense on a straight-line basis.

Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

7.PREVIOUS YEAR FIGURES

Previous year figures have been regrouped and reclassified where necessary to conform to this yearâs classification.

Mar 31, 2017

b) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2017, the amount of per share dividend recognized as distributions to equity shareholders was Rs.Nil (March 31, 2016 : Re.1/-).

As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

Note: * The Company has made adjustment / regrouping to the opening gross block and the accumulated depreciation. However, the same does not have impact on the Statement of Profit and Loss.

** Freehold land includes land held for sale. The Company has discontinued its operations of the Consumable plant at Khardah factory at Kolkatta during the year ended March 31, 2015. The Company has entered into a Memorandum of Understanding (''MOU'') with the prospective buyer on March 14, 2017 to sell the land at this premises. The WDV of the land as at March 31, 2017 amounts to Rs. 102. The Company has obtained advance for sale of the aforesaid land amounting to Rs. 250 (refer note 5).

(a) During the year, the Company has recognized impairment loss on assets identified as not in use. The losses have been recognized in the statement of profit and loss under "Other expense" amounting to Rs. 47.

1. Segment Information

The primary and secondary reportable segments are business segments and geographical segments respectively. These have been identified by the type of their respective products and services, their differing risks and returns, the Company''s organization structure and internal financial reporting systems.

Business Segments

Consumables : Welding electrodes, Copper coated wires, Flux Cored Wires and Welding fluxes including related services. Equipment : Welding machines and Cutting equipment.

* Consumable segment includes impairment loss on fixed assets of one of the Company''s plant at Khardah, Kolkata amounting to Rs. Nil (March 31, 2016 - Rs. 39).

* Equipment segment includes VSS paid to employees and one time settlement to contractors for one of the Company''s plant at Taratala, Kolkata amounting to Rs. 702 (March 31, 2016 - Nil). Also includes impairment of property plant and equipment amounting to Rs. 209 (March 31, 2016 - Nil)

Geographical segments

The Company caters mainly to the needs of Indian market and the export turnover being 4.79% (March 31, 2016 - 3.18%) of the total turnover of the Company, considered as not a reportable geographical segments.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relate to the enterprise as a whole, and not allocable to segments on a reasonable basis, have been included under the heading "other unallocated expenses".

2. Related Party Disclosure

Names of related parties and related party relationship

a) Parties where control exist

i) ESAB Holdings Limited, UK - Principal Shareholder - Holds 37.31% of the paid up equity share capital of the Company as at March 31, 2017. Colfax UK Holding Limited, Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK, Holdings Limited indirectly holds 100% equity shares of ESAB Holdings Ltd.

ii) Exelvia Group India B.V., Netherlands - Holds 36.41% of the paid up equity share capital of the Company as at March 31, 2017. Colfax UK, Holding Limited, Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK Holdings Limited indirectly holds 100% equity shares of Exelvia Group India B.V., Netherlands.

b) Related parties with whom transactions have taken place during the year: (Fellow Subsiadry)

Alcotec Wire Corporation, USA ESAB Polska Sp.Z.O.O., Poland

Cigweld (M) SDN BHD, Malaysia ESAB Vamberk Sro, Czech Republic

^Cig^{weld pt}y ^Ltd., ^Australia ESAB Welding Products, USA

^{ESAB AB Sweden} ESAB Welding Products (Jiangsu) Co Ltd-China ESAB Asia/Pacific Pte. Limited, Singapore

Howden Solyvent (India) Private Limited, India

ESAB Automation Cutting and Welding

Equipment (Wuxi) Co., Ltd., China ^{OZAS-ESAB Sp}.^Z.0.Â°., ^PÂ°^land

Esab Cutting Systems GmbH, Germany PT Esabindo Pratama, Indonesia

ESAB Europe GmbH, Switzerland PT Karya Yasantara Cakti, Indonesia

^{ESAB Holdin}g^{s Limited UK} PT Victor Teknologi, Indonesia

^{ESAB Middle East FZE, UAE} Thermal Dynamics OY, Finland

Esab North America, Global Cost Nam Florence,

Usa Victor (Ningbo) Cutting & Welding Equipment Trade &

Commerce Co., Ltd., China

ESAB SeAH CORP, Korea

Victor Technologies Asia SDN BHD, Malaysia

ESAB Seah Welding Products(Yantai) Co Ltd

China Victor Technologies International, Inc., USA

c) Key Management Personnel

Managing Director Mr. Rohit Gambhir

Vice President-Finance and

Chief Financial Officer Mr. B. Mohan

Company Secretary Mr. S. Venkatakrishnan

4. The Company has transactions with related parties. For the financial year ended March 31, 2016, the Company has obtained the Accountant''s Report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and has filed the same with the tax authorities. For the financial year ended March 31, 2017, Management confirms that it maintains documents as prescribed by the Income Tax Act, 1961 to prove that these transactions are at arm''s length and the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

5. Restructuring of operations at Taratala, Kolkata

During the current year, the Company undertook a restructuring exercise at Taratala, Kolkata involving optimizing its capacities which resulted in reduction of headcount through a voluntary separation scheme for workmen and one time settlement of some of the contractors. The aforesaid exercise has resulted in the exceptional items of Rs. 911 (March 31, 2016 - Rs. 30) during the year as follows:

a. A Voluntary Separation Scheme (''VSS'') was offered to the workmen of the Company at Taratala plant in Kolkata in the month of January 2017. 11 employees have accepted the VSS and a sum of Rs.159 (March 31, 2016 - Rs. 30) was expended during the current year.

b. Expenditure on one time settlement made to contractors Rs 543 (March 31, 2016 - Nil).

c. Impairment loss on property, plant and equipment at Taratala, Kolkata was made to the extent of Rs. 209 (March 31, 2016 - Nil).

6. Discontinuance of Khardah, Kolkata

The Board of Directors and Shareholders had approved discontinuance of manufacturing operations at its Consumables Plant at Khardah during earlier years. The Board had also approved voluntary separation schemes to the Company''s workmen at Khardah. Consequential expenditure on voluntary separation schemes amounting to Rs. Nil (March 31, 2016 - Rs. 284) and impairment of assets aggregating to Rs. Nil (March 31, 2016 - Rs. 39) have been reported under exceptional items

7. Prior year comparatives

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.

Mar 31, 2016

1. Segment Information

Business Segments

Consumables : Welding electrodes, Copper coated wires, Flux Cored Wires and Welding fluxes including related services. Equipment : Welding machines and Cutting equipment.

@Consumable segment includes impairment loss on fixed assets of one of the Company''s plant at Irungattukottai, Chennai amounting to Rs. Nil (March 31, 2015 - Rs.72).

* Consumable segment includes impairment loss on fixed assets of one of the Company''s plant at Khardah, Kolkata amounting to Rs. 39 (March 31, 2015 - Rs.512).

Geographical segments

The Company caters mainly to the needs of Indian market and the export turnover being 3.18 % (March 31, 2015 - 3.71 %) of the total turnover of the Company, there are no reportable geographical segments.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

2. Related Party Disclosure

Names of related parties and related party relationship

a) Parties where control exist

i) ESAB Holdings Limited, UK - Principal Shareholder - Holds 37.31 % of the paid up equity share capital of the Company as at March 31, 2016. Colfax UK Holding Limited, Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK, Holdings Limited indirectly holds 100% equity shares of ESAB Holdings Ltd.

ii) Exelvia Group India B.V., Netherlands - Holds 36.41 % of the paid up equity share capital of the Company as at March 31, 2016. Colfax UK, Holding Limited, Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK Holdings Limited indirectly holds 100% equity shares of Exelvia Group India B.V., Netherlands.

b) Related parties with whom transactions have taken place during the period / year: (Fellow Subsiadry)

ESAB Welding Products (Jiangsu) Co Limited, ESAB Middle East FZE, UAE

China

ESAB SeAH Corporation, Korea

ESAB Asia/Pacific Pte Limited, Singapore

ESAB Vamberk sro, Czech Republic

ESAB Cutting Systems GmbH, Germany

ESAB Africa Welding and Cutting (Proprietary) Limited, ESAB GmbH, Germany South Africa

ESAB Europe AG, Switzerland ESAB Welding & Cutting Product, USA

ESAB AB, Sweden ESAB Polska Sp.z.o.o, Poland

PT Karya Yasantara Cakti, Indonesia ESAB Equipment & Machinery Manufacturing

(Zhangjiagang) Co Limited

Alcotec Wire Corporation, USA

ESAB - Victor Technologies International

ESAB Automation Cutting and Welding

Equipment (Wuxi) Co.Ltd ESAB - Victor (Ningo) Cutting and Welding Equipment

ESAB Seah Welding Products (Yantai) Co Ltd, Howden Solyvent (India) Private Limited

China

c) Key Management Personnel

Managing Director Mr Rohit Gambhir

Vice President-Finance and

Chief Financial Officer Mr B Mohan

Company Secretary Mr S Venkatakrishnan

** The Company is contesting the demands and the Management, including its tax advisors, believe that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognized in the financial statements.

3. The Company has transactions with related parties. For the financial year ended March 31, 2015, the Company has obtained the Accountant''s Report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and has filed the same with the tax authorities. For the financial year ended March 31, 2016, Management confirms that it maintains documents as prescribed by the Income Tax Act, 1961 to prove that these transactions are at arm''s length and the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

4. Exceptional items

The Company had reviewed its manufacturing capacities across its Consumables Plant locations. Following that, the Board of Directors at its meeting held on 26 May, 2015 approved the discontinuance of operations of the Company''s plant at Khardah, Kolkata and moving of its manufacturing and related equipment as required to its other plant locations. The Board had also approved the sale, disposal or transfer of the balance (or remaining) moveable and immoveable assets pertaining to the plant at Khardah, Kolkata.

Exceptional items of Rs.353 (March 31, 2015 Rs.1,761) during the period is on account of the following :

a. A Voluntary Separation Scheme (''VSS'') was offered to all the workmen of the Company at Taratala plant and Khardah plant in Kolkata. 43 employees accepted the VSS and a sum of Rs.314 (March 31, 2015 - Rs.409) was expended during the current year.

b. Impairment loss on fixed assets aggregating to Rs.39 (March 31, 2015 - Rs.512).

c. Expenditure on one time settlement made to contractors Rs.Nil (March 31, 2015 - Rs.840).

5. Impairment loss on tangible and intangible assets

The impairment loss, in case of another factory at Khardah, Kolkata (consumable segment) is recognized on account of management''s decision to discontinue the same. The Company written-down these assets to the net realizable value (net selling price). The losses have been recognized in the statement of profit and loss under the head âexceptional itemsâ amounting to Rs. 39 (March 31, 2015 - Rs.512).

6. Prior year comparatives

The financials statement for the current year have been drawn up for a period of 12 months from April 2015 to March

2016 and hence are not comparable with the comparative information relating to the previous period as they are for a period of 15 months from January 2014 to March 2015. Prior year figures have been reclassified / regrouped wherever necessary to conform to current period''s presentation.

Mar 31, 2015

1. Company Overview

ESAB India Limited ("the Company") was incorporated on November 10,1987 and commenced its business operations in July 1988. The Company is engaged in the business of welding consumables i.e. welding electrodes, copper coated wires, flux cored wires and welding fluxes and of welding equipment i.e. welding machines and cutting equipment.

b) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the period ended March 31, 2015, the amount of per share dividend recognized as distributions to equity shareholders was Re. 1/-(December 31,2013: Re.1/-).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. Segment Information

The primary and secondary reportable segments are business segments and geographical segments respectively. These have been identified by the type of their respective products and services, their differing risks and returns, the Company's organisation structure and internal financial reporting systems.

Business Segments

Consumables : Welding electrodes, Copper coated wires, Flux cored wires and Welding fluxes including related services. Equipment : Welding machines and Cutting equipment

Geographical segments

The Company caters mainly to the needs of Indian market and the export turnover being 3.71 % (December 31,2013 - 3.67 %) of the total turnover of the Company, there are no reportable geographical segments.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relate to the enterprise as a whole, and not allocable to segments on a reasonable basis, have been included under the heading "other unallocated expenses".

3. Related Party Disclosure

Names of related parties and related party relationship a) Parties where control exist

i) ESAB Holdings Limited, UK - Principal Shareholder - Holds 37.31% of the paid up equity share capital of the Company as at March 31,2015. Colfax UK Holding Limited, Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK, Holdings Limited indirectly holds 100% equity shares of ESAB Holdings Ltd.

ii) Exelvia Group India B.V., Netherlands - Holds 36.41% of the paid up equity share capital of the Company as at March 31,2015. Colfax UK, Holding Limited, Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK Holdings Limited indirectly holds 100% equity shares of Exelvia Group India B.V., Netherlands.

4. Contingent liabilities and commitments (to the extent not provided for)

Particulars As at As at March 31, 2015 December 31, 2013

Contingent liabilities

Claims against the Company not acknowledged as debts* 824 824

Tax matters in dispute under appeal (excluding possible interest)** 2,913 2,610

Bank guarantees outstanding 1,060 480

Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 207 248

Estimated amount of contracts remaining to be executed on account of purchase of raw materials 126 152

Total 5,130 4,314

* The Company is contesting the demands and the Management, including its legal counsel, believe that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognised in the financial statements.

** The Company is contesting the demands and the Management, including its tax advisors, believe that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognised in the financial statements.

5 The Company has transactions with related parties. For the financial year ended March 31,2014, the Company has obtained the Accountant's Report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and has filed the same with the tax authorities. For the financial year ended March 31,2015, Management confirms that it maintains documents as prescribed by the Income Tax Act, 1961 to prove that these transactions are at arm's length and the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

6 Exceptional items

The Company has been reviewing its manufacturing capacities across its Consumables Plant locations. Following this, the Board of Directors at its meeting held on 26 May, 2015 approved the discontinuance of operations of the Company's plant at Khardah, Kolkata and moving of its manufacturing and related equipment as required to its other plant locations. The Board also approved the sale, disposal or transfer of the balance (or remaining) moveable and immoveable assets pertaining to the plant at Khardah, Kolkata subject to the approval of the shareholders at the forthcoming Annual General Meeting scheduled on August 7, 2015.

Exceptional items of Rs.1,761 (December 31,2013 Rs.Nil) during the period is on account of the following :

a. A Voluntary Separation Scheme ('VSS') was offered to all the workmen of the Company at Taratala plant and Khardah plant in Kolkata in the month of June 2014. 43 employees accepted the VSS and a sum of Rs. 409 (December 31,2013 - Nil) was expended during the current period.

b. Impairment loss on fixed assets aggregating to Rs.512 (December 31,2013 - Rs.Nil).

c. Expenditure on one time settlement made to contractors Rs.840 (December 31,2013 - Rs.Nil).

7 Impairment loss on tangible and intangible assets

(a) In case of one of the factories which manufactures flux cored wires (consumable segment), lower demand triggered this impairment loss. The recoverable amount was based on value in use and was determined at the level of the cash-generating unit. The cash-generating unit consisted of the flux cored wires manufacturing unit at Irungattukottai, Chennai. In determining value in use for the cash-generating unit, the cash flows were discounted at a appropriate rate on a pre-tax basis. The losses have been recognized in the statement of profit and loss under the head "other expenses" amounting to Rs. 72 (December 31,2013 - Rs. 45).

(b) The impairment loss, in case of another factory at Khardah, Kolkata (consumable segment) is recognized on account of management's decision to discontinue the same. The Company written-down these assets to the net realizable value (net selling price). The losses have been recognized in the statement of profit and loss under the head "exceptional items" amounting to Rs. 512 (December 31,2013 - Nil).

8 Prior year comparitives

The figures of the previous year were audited by a firm of Chartered accountants other than S.R. Batliboi & Associates LLP.

The financials statement for the current period have been drawn up for a period of 15 months from January 1,2014 to March 31,2015 and hence are not comparable with the comparitive information relating to the previous year as they are for a period of 12 months. Prior year figures have been reclassified / regrouped wherever necessary to conform to current period's presentation.

Dec 31, 2013

1. Company Overview

ESAB India Limited ("the Company") was incorporated on November 10,1987 and commenced its business operations in July 1988. The Company is engaged in the business of welding consumables i.e. welding electrodes, copper coated wires, flux cored wires and welding fluxes and of welding equipment i.e. welding machines and cutting equipments.

As a result of acquisition of Charter International plc. (''Charter'') in January 2012 by Colfax Corporation, ESAB Holdings Limited, UK and Exelvia Group India B.V. which were 100% subsidiaries of Charter became indirect subsidiaries of Colfax Corporation. Consequently, the Company became a subsidiary of Colfax in 2012. Pursuant to an offer made in 2012, Colfax''s ownership has increased from 56% to 74% in the Company.

2. Segment Information

The primary and secondary reportable segments are business segments and geographical segments respectively. These have been identified by the type of their respective products and services, their differing risks and returns, the Company''s organisation structure and internal financial reporting systems.

Business Segments

Consumables : Welding electrodes, Copper coated wires, Flux cored wires and Welding fluxes including related services.

Equipment : Welding machines and Cutting equipment

Geographical segments

The Company caters mainly to the needs of Indian market and the export turnover being 3.67% (December 31, 2012 - 2.52%) of the total turnover of the Company, there are no reportable geographical segments.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relate to the enterprise as a whole, and not allocable to segments on a reasonable basis, have been included under the heading" other common expenses".

3. Related Party Disclosure

a) Parties where control exist

i) ESAB Holdings Limited - Principal Shareholder - Holds 37.31% of the paid up equity share capital of the Company as at December 31, 2013. Colfax UK Holding Limited, Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK Holdings Limited indirectly holds 100% equity shares of ESAB Holdings Ltd.

ii) Exelvia Group India B.V. - Holds 36.41% of the paid up equity share capital of the Company as at December 31, 2013. Colfax UK Holding Limited, Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK Holdings Limited indirectly holds 100% equity shares of Exelvia Group India B.V.

c) Key Management Personnel

Managing Director - Mr Jiri Kula (up to October 31, 2013)

Executive Director & Chief Executive - Mr Rohit Gambhir (from November 1, 2013)

4. Contingent liabilities and commitments

(to the extent not provided for)

Particulars December 31, 2013 December 31, 2012

Contingent liabilities

Claims against the company not acknowledged as debts 824 824

Tax matters in dispute under appeal 2,610 2,610

Bank guarantees outstanding 480 394

Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 248 436

Total 4,162 4,264

5. Dues to micro and small suppliers

The management has identified the enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Such determination / identification has been done on the basis of information received and available with the Company and relied upon by the auditors. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at December 31, 2013 has been made in the financial statements based on information received and available with the Company.

6. The Company has transactions with related parties. For the financial year ended March 31, 2013 the Company has obtained the Accountant''s Report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and has filed the same with the tax authorities. For the year ended December 31, 2013 Management confirms that it maintains documents as prescribed by the Income Tax Act, 1961 to prove that these transactions are at arm''s length and the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

7. Prior year Comparative

Prior period figures have been reclassified / regrouped wherever necessary to confirm to current year''s presentation.

Dec 31, 2012

1. Company Overview

ESAB India Limited ("the Company") was incorporated on November 10,1987 and commenced its business operations in July 1988. The Company is engaged in the business of welding consumables i.e. welding electrodes, copper coated wires, flux cored wires and welding fluxes and of welding equipment i.e. welding machines and cutting equipments. Pursuant to an offer for acquiring the entire paid up share capital of Charter International pic. (Charter) made on September 12, 2011 and duly approved by the shareholders of Colfax Corporation, (Colfax) and the shareholders of Charter and confirmed by the Royal Court of Jersey vide its order dated January12, 2012, Charter has become an indirect subsidiary of Colfax Corporation, through Colfax UK Holdings Limited. As a result of this acquisition, ESAB Holdings Limited, UK and Exelvia Group India B.V which were 100% subsidiaries of Charter, have now become indirect subsidiaries of Colfax Corporation.

Since 37.31% and 36.41% of the Company''s shares are held by Esab Holdings Limited and Exelvia Group India B.V respectively, being the majority equity shareholders, which are indirect subsidiaries of Colfax Corporation, the Company, during the year, has become a subsidiary of Colfax Corporation. The remaining 26.28% shares are held by institutional investors and the public.

a) Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

Geographical segments

The Company caters mainly to the needs of Indian market and the export turnover being 2.52% (December 31, 2011 - 3.36%) of the total turnover of the Company, there are no reportable geographical segments.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relate to the enterprise as a whole, and not allocable to segments on a reasonable basis, have been included under the heading "other common expenses".

2. Related Party Disclosure

a) Parties where control exist

i) ESAB Holdings Limited - Principal Shareholder - Holds 37.31% of the paid up equity share capital of the Company as at December 31, 2012. Colfax UK Holding Limited, Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK, Holdings Limited indirectly holds 100% equity shares of ESAB Holdings Ltd.

ii) Exelvia Group India B.V. - Holds 36.41% of the paid up equity share capital of the Company as at December 31, 2012. Colfax UK, Holding Limited .Company incorporated under the laws of England and Wales, is an indirect wholly owned subsidiary of Colfax Corporation. Further, Colfax UK Holdings Limited indirectly holds 100% equity shares of Exelvia Group India, B.V.

c) Key Management Personnel

Managing Director - Mr.G.Hariharan (upto August 31, 2011)

Managing Director - Mr. Jiri Kula (from September 1, 2011)

3. Contingent liabilities and commitments

(to the extent not provided for)

Particulars December 31,2012 December 31, 2011

Contingent liabilities

Claims against the company not acknowledged as debts 824 824

Tax matters in dispute under appeal 2,610 2,610

Bank guarantees outstanding 394 350

Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 436 120

Total 4,264 3,904

4. Dues to micro and small suppliers

The management has identified the enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Such determination / identification has been done on the basis of information received and available with the Company and relied upon by the auditors. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at December 31, 2012 has been made in the financial statements based on information received and available with the Company.

5. The Company has international transactions with related parties. For the financial year ended March 31, 2012, the Company has obtained the Accountant''s Report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and has filed the same with the tax authorities. For the year ended December 31, 2012, Management confirms that it maintains documents as prescribed by the Income Tax Act, 1961 to prove that these international transactions are at arm''s length and the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

Dec 31, 2011

1. Background

Esab India Limited ("the Company") was incorporated on 10 November 1987 and commenced its business operations in July 1988. The Company is engaged in the business of welding consumables i.e. welding electrodes, copper coated wires, flux cored wires and welding fluxes and of welding equipment i.e. welding machines and cutting equipment. Pursuant to an offer for acquiring the entire paid up share capital of Charter International plc. (Charter) made on 12 September 2011 and duly approved by the shareholders of Colfax Corporation (Colfax) and the shareholders of Charter and confirmed by the Royal Court of Jersey vide its order dated 12 January, 2012, Charter has become an indirect subsidiary of Colfax Corporation, through Colfax UK Holding Ltd. As a result of this acquisition, ESAB Holdings Limited, UK and Exelvia Group India BV which were 100% subsidiaries of Charter, have now become indirect subsidiaries of Colfax Corporation.

Since 37.31% and 18.34% of the Company's shares are held by Esab Holdings Limited and Exelvia Group India BV respectively, being the majority equity shareholders, which are indirect subsidiaries of Colfax Corporation, the Company, subsequent to the balance sheet date, has become a subsidiary of Colfax Corporation. The remaining 44.35% shares are held by institutional investors and the public.

2. Operating lease

The Company has taken various residential and office premises under operating lease or leave & license agreements. These are cancellable; have a term of between 11 months and 3 years, and have no specific obligation for renewal. Lease payments are recognized as an expense in the profit and loss account on a straight line basis over the lease term.

3. Segmental Information

The primary and secondary reportable segments are business segments and geographical segments respectively. These have been identified by the type of their respective products and services, their differing risks and returns, the Company's organisation structure and internal financial reporting systems.

Geographical Segments

The Company caters mainly to the needs of Indian market. The export turnover is 3.36% (31 December 2010: 3.60%) of the total turnover of the Company and segment assets are 0.34% (31 December 2010: 0.55%) of the total assets.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relate to the enterprise as a whole, and not allocable to segments on a reasonable basis, have been included under the heading 'other common expenses'.

4. Related Party Disclosure

a) Parties where control exist

i) Esab Holdings Limited - Principal Shareholder - Holds 37.31% of the paid up equity share capital of the Company as at 31 December 2011. Colfax UK Holding Ltd., a subsidiary of Colfax Corporation, holds indirectly 100% equity shares of Esab Holdings.

Exelvia Group India BV - Holds 18.34 % of the paid up equity share capital of the Company as at 31 December 2011. Exelvia Group India BV is an investment company and is an indirect wholly-owned subsidiary of Colfax Corporation.

b) Colfax Corporation, USA - Related parties in Colfax Corporation, USA Group where significant influence exists :

ESAB Welding Products(Jiangsu)Co. Ltd., China ESAB Middle East LLC., Dubai

ESAB Asia Pacific Pte. Ltd., Singapore ESAB Middle East FZE., Dubai

ESAB Cutting Systems GmbH (Karben),Germany ESAB SEAH Corporation, Korea

ESAB Europe AG, Switzerland ESAB S.A. Industria E Comercio, Brazil

ESAB-ATAS GmbH, Germany ESAB Saldatura S.p.a., Italy

ESAB AB, Sweden OZAS ESAB Sp. Z.O.O., Polland

P.T. Karya Yasantara Cakti, Indonesia ESAB Vamberk s.r.o., Czech Republic

ESAB-Mor Kft, Hungary ESAB Africa Welding Cutting (PTY), South Africa

Alcotec Wire Corporation, USA ESAB Welding & Cutting Product, USA

Conorco Alambres y Soldaduras SA, Argentina Romar Positioning Eqp. Int. Pte Ltd., Singapore

ESAB GmbH Solingen, Belgium ESAB Cutting & Welding Automation (Shanghai) Co. Ltd.,China

ESAB KK, Japan

c) Key Management Personnel (KMP)

Managing Director - Mr.G.Hariharan (Upto 31 August 2011)

Managing Director - Mr. Jiri Kula (appointed on 1 September 2011 for a period of three years)

The Companies listed above have been identified on the basis of information available with the Company.

* Note : Rs. 3.251 million recoverable from a former Managing Director is fully provided for.

5. Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006, (MSMED) which came into force from 2 October 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 December 2011 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material.

6. Outstanding forward contracts

The Company does not use foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not use forward contracts for speculative purposes.

7. Scheme of Amalgamation of ESAB Engineering Services Limited with the Company under Section 391 and 394 of the Companies Act, 1956

A Scheme of Amalgamation ('the Scheme') of Transferor Company viz, ESAB Engineering Services Limited ('EESL') with ESAB India Limited ('the Company' or 'Transferee Company') was sanctioned by the Honorable High Court of Judicature at Madras vide their order dated 9 December 2010 issued on 29 December 2010. Pursuant to this Scheme, the assets and liabilities of the Transferor Companies were transferred to and vested in the transferee company with effect from 1 April 2010 (Appointed Date). The amalgamation has been accounted under the 'pooling of interests' method.

The salient features of the Scheme are as follows:

a. All the assets and liabilities recorded in the books of the Transferor Company shall stand transferred to and vested in the Transferee Company pursuant to the Scheme and shall be recorded by the Transferee Company at their book values as appearing in the books of the Transferor Company;

b. The Transferee Company shall record the Reserves of the Transferor Company in the same form and at the same values as they appear in the financial statements of the Transferor Company at the close of business of the day immediately preceding the Appointed Date. Balances in the Profit and Loss Account of the Transferor Company shall be similarly aggregated with the balances in Profit and Loss Account of the Transferee Company. Balances shown as Miscellaneous Expenditure (to the extent not written off or adjusted), if any, in the balance sheet of the Transferor Company shall be similarly aggregated with balances of the Transferee Company.

c. The excess of, or deficit in, the value of the assets over the value of the liabilities of the Transferor Company vested in the Transferee Company pursuant to this Scheme as recorded in the books of account of the Transferee Company shall, after adjusting the amounts recorded in terms of sub-clause (b) above, be adjusted in the Reserves in the books of the Transferee Company

d. Further, in case of any differences in accounting policy between the Companies, the impact of the same till the amalgamation will be quantified and adjusted in the Profit & Loss Account mentioned earlier to ensure that the financial statements of the Transferee Company reflect the financial position on the basis of consistent accounting policy.

e. To the extent that there are inter-company loans, deposits or balances as between the Transferor Company and the Transferee Company, the obligations in respect thereof shall come to an end and there shall be no liability in that behalf and corresponding effect shall be given in the books of accounts and records of the Transferee Company for the reduction of any assets or liabilities as the case may be and there would be no accrual of interest or any other charges in respect of any such inter-company loans, deposits or balances, with effect from the Appointed date.

f. The authorised share capital of the Transferor Company shall stand combined with the authorised share capital of the Transferee Company. Accordingly, the authorised share capital of the Company is Rs. 220,000 divided into 19,000,000 Equity Shares of Rs. 10/- (Rupees ten) each; and 3,000,000 unclassified shares of Rs.10/- (Rupees ten) each.

g. The shares of the Transferor Company held by the Transferee Company directly and/or through its nominee(s), constituting the entire paid up share capital of the Transferor Company will stand cancelled. No shares or consideration shall be issued / paid by the Transferee Company pursuant to the amalgamation of the Transferor Company, which is a wholly- owned subsidiary of the Transferee Company.

8. The Company has international transactions with related parties. For the financial year 31 March 2011, the Company had obtained the Accountant's Report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and had filed the same with the tax authorities. For the year ended 31 December 2011, the Company has maintained documents as prescribed by the Income-tax Act to prove that these international transactions are at arm's length and the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

9. Prior year figures have been reclassified / regrouped wherever necessary to conform to the current year's classification.

Dec 31, 2010

1. Background

Esab India Limited ("the Company") was incorporated on 10 November 1987 and commenced its business operations in July 1988. The Company is engaged in the business of welding consumables i.e. welding electrodes, copper coated wires, flux cored wires and welding fluxes and of welding equipment i.e. welding machines and cutting equipment.

37.31% and 18.34% of the Companys shares are held by Esab Holdings Limited and Exelvia Group India BV respectively, being the significant shareholders, which are indirect subsidiaries of Charter International pic. The remaining shares are held by institutional investors and the public. Accordingly the Company is subsidiary of Charter International pic.

2. The Company has taken various residential and office premises under operating lease or leave & license agreements. These are cancellable; have a term of between 11 months and 3 years, and have no specific obligation for renewal. Lease payments are recognized as an expense in the profit and loss account on a straight-line basis over the lease term.

3. Segmental Information

The primary and secondary reportable segments are business segments and geographical segments respectively. These have been identified by the type of their respective products and services, their differing risks and returns, the Companys organisation structure and internal financial reporting systems.

Geographical Segments

The Company caters mainly to the needs of Indian market. The export turnover is 3.60% (31 December 2009:1.51 %) of the total turnover of the Company and segment assets are 0.55% (31 December 2009: 0.58%) of the total assets.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relate to the enterprise as a whole, and not allocable to segments on a reasonable basis, have been included under the heading other common expenses.

4. Related Party Disclosure

a) Parties where Control exist

i) Esab Holdings Limited - Principal Shareholder - Holds 37.31 % of the paid up equity share capital of the Company as at 31 December 2010. Charter Overseas Holdings Limited, the holding company of Esab Holdings Limited is a subsidiary of Charter International pic.

Exelvia Group India BV - Holds 18.34 % of the paid up equity share capital of the Company as at 31 December 2010. Exelvia Group India BV is an investment company and is an indirect wholly-owned subsidiary of Charter International pic.

(b) Charter International pic Group - Related parties in the Charter International pic Group where significant influence exists :

Esab Welding Products(Jiangsu) Co. Ltd., China Esab Middle East LLC, Dubai

Esab Asia Pacific Pte. Ltd., Singapore Esab Middle East FZE., Dubai

Esab Cutting Systems GmBH (Karben),Germany Esab SeAH Corporation, Korea

OZAS-ESAB Sp. Z.o.o., Poland Esab S.A. Industria e Comercio, Brazil

Esab Cutting & Welding Automation (Shanghai) Ltd., Esab Saldatura S.p.a, Italy

Esab AB, Sweden Esab Sp. Z.o.o., Poland

P.T. Karya Yasantara Cakti, Indonesia Esab Vamberk s.r.o., Czech Republic

Esab-Mor Kft, Hungary Esab Group (UK) Ltd.

Alcotec Wire Corporation - USA Esab Welding & Cutting Product, USA

Conorco Alambres y Soldaduras SA, Argentina Romar Positioning Eqp. Int. Pte Ltd.

Esab GmBH Solingen, Belgium ESAB-ATAS GmBH

Esab Holdings Ltd., U.K. Esab Europe AG, Switzerland

Esab KK, Japan Esab Engineering Services Limited *

* Amalgamated with the Company with effect from 1 April 2010 (Refer note 25 of Schedule O)

c) Key Management Personnel

Managing Director - Mr G Hariharan (appointed on 1 September 2006 for a period of five years).

5. Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006, (MSMED) which came into force from 2 October 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 December 2010 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material.

6. Outstanding forward contracts

The Company does not use foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not use forward contracts for speculative purposes.

7. The Company has international transactions with related parties. For the financial year 31 March 2010, the Company had obtained the Accountants Report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and had filed the same with the tax authorities. For the year ended 31 December 2010, the Company has maintained documents as prescribed by the Income-tax Act to prove that these international transactions are at arms length and the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

8 On account of Scheme of arrangement and amalgamation with ESAB Engineering Services Limited in the current year previous year figures are not strictly comparable. Previous year figures have been regrouped and reclassified wherever necessary.

Dec 31, 2009

1. Background

Esab India Limited ("the Company") was incorporated on 10 November 1987 and commenced its business operations in July 1988. The Company is engaged in the business of welding consumables i.e. welding electrodes, copper coated wires, flux cored wires and welding fluxes and of welding equipment i.e. welding machines and cutting equipment. 37.31% and 18.34% of the Companys shares are held by Esab Holdings Limited and Exelvia Group India BV respectively, being the significant shareholders, which are indirect subsidiaries of Charter International pic. The remaining shares are held by institutional investors and the public. Accordingly the Company is subsidiary of Charter International pic.

2009 2008 Rs.OOO Rs.OOO

2. Contingent Liabilities

For Disputed Taxes and Duties 225,302 190,430

Claims Against the Company not acknowledged as debts 76,272 70,164

3. The Company has taken various residential and office premises under operating lease or leave & license agreements. These are cancellable; have a term of between 11 months and 3 years, and have no specific obligation for renewal. Lease payments are recognized as an expense in the profit and loss account on a straight line basis over the lease term.

4. Segmental Information

The Primary and secondary reportable segments are business segments and geographical segments respectively. These have been identified by the type of their respective products and services, their differing risks and returns, the Companys Organisation structure and internal financial reporting systems.

Geographical Segments

The Company caters mainly to the needs of Indian market. The export turnover is 1.51% (31 December 2008: 2.53%) of the total turnover of the Company and segment assets are 0.58% (31 December 2008: 1.50%) of the total assets.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relate to the enterprise as a whole, and not allocable to segments on a reasonable basis, have been included under the heading "other common expenses".

5. Related Party Disclosure

(a) Parties where Control exists

i) Esab Holdings Limited - Principal Shareholder - Holds 37.31 % of the paid up equity share capital of the Company as at 31 December 2009. Charter Overseas Holdings Limited, the holding company of Esab Holdings Limited is a subsidiary of Charter International pic,

ii) Exelvia Group India BV - Holds 18.34% of the paid up equity share capital of the Company as at 31 December 2009. Exelvia Group India BV is an investment company and is an indirect wholly-owned subsidiary of Charter International pic.

(b) Charter International pic Group - Related parties in the Charter International pic Group where significant influence exists :

Esab Engineering Services Limited, India

Esab Asia Pacific Pte. Ltd., Singapore

Esab Cutting Systems GmbH (Karben),Germany

OZAS-ESAB Sp. Z.o.o., Poland

Esab Cutting & Welding Automation (Shanghai) Ltd.

Esab AB, Sweden

P.T. Karya Yasantara Cakti, Indonesia

Esab-Mor Kft,Hungary

Alcotec Wire Corporation -USA

Conorco Alambres y Soldaduras SA, Argentina

Esab GmBH Solingen,Belgium

Esab Welding Products(Jiangsu)Co Ltd. China

Esab Middle East LLC, Dubai

Esab Middle East FZE., Dubai

Esab SeAH Corporation, Korea

Esab S.A. Industria e Comercio, Brazil

Esab Saldatura S.p.a, Italy

Esab Sp. Z.o.o., Poland

Esab Vamberk s.r.o., Czech Republic

Esab Group (UK) Ltd

Esab Welding & Cutting Product USA

Romar Positoning Eqp. Int. Pte Ltd.

Esab-ATAS GmBh

Esab KK, Japan ;

(c) Key Management Personnel

Managing Director - Mr.G.Hahharan (appointed on 1 September 2006 for a period of five years).

6. Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006, (MSMED) which came into force from 2 October 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. Accordingly, the disclosure in respect of the amonts payable to such enterprises as at 31 December 2009 has been made in the financials statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material.

7. Outstanding forward contracts

The Company does not use foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not use forward contracts for speculative purposes.

8. Prior year comparatives have been regrouped wherever necessary to conform to current years presentation.

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