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Notes to Accounts of Esab India Ltd.

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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