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Directors Report of Foseco India Ltd.

Dec 31, 2014

Dear Members,

The Directors are pleased to present the Company''s 58th Annual Report and the audited accounts for the year ended 31 December 2014. This Directors'' Report has been prepared and presented in accordance with Section 217 of the Companies Act, 1956 in terms of the General Circular no. 08/2014 dated 4 April, 2014, as the Company''s Financial Year commenced prior to 1 April, 2014. However, reference has been made in this Report, to the Companies Act, 2013 to such matters which are same / similar to the Companies Act, 1956 and which are relevant to this Report.

1. PERFORMANCE REVIEW

The year 2014 saw India getting adversely impacted by the weakening global economic scenario. The Indian economic growth remained weak in Q1/2014 with GDP growing at 4.6%, similar to Q1/2013, in view of decision paralysis due to impending General Elections. Q2/2014 witnessed a surge in the feel good factor with the new Government in power, which reflected in higher GDP growth of 5.7%. The performance for the rest of the year was not aligned with the expectations and Q3/2014 GDP growth fell to 5.3%. The GDP growth was aided by improved performance of agriculture and services, whilst manufacturing and mining continued to report subdued performance as explained by the Index of Industrial Production. Inflation started easing during second half of the year on account of reducing demand and monetary control by RBI. The foundry industry segment was also affected by low demand and excess capacity which made it difficult to pass on the increase in input costs to the Original Equipment Manufacturers. Exchange rate remained stable for most part of the year losing around 3% in the second half of the year due to strengthening of the Dollar against all major currencies. Liquidity in money market and higher interest cost also affected the performance of Foundry Industry.

Your Directors would like to inform that despite weak market conditions during the year under review, your Company achieved a revenue of Rs. 28,678.25 Lacs, up 14.6% from Rs. 25,022.06 Lacs in 2013. Profit before Tax was Rs. 3,773.53 Lacs, up 39.1% from Rs. 2,713.53 Lacs in 2013 and the Profit after Tax was Rs. 2,459.01 Lacs, up 38% from Rs. 1,782.05 Lacs in 2013.

2. DIVIDEND & APPROPRIATIONS

Your Directors declared three Interim Dividends during the financial year ended 31 December, 2014, totalling Rs. 11/- per Equity Share (110%) on the Equity Share face value of Rs. 10/- each viz., 10% First Interim Dividend in April 2014, 40% Second Interim Dividend in July 2014 and 60% Third Interim Dividend in November 2014 aggregating to Rs. 702.52 Lacs (exclusive of tax on dividend).

Your Directors are pleased to recommend payment of a Final Dividend of Rs. 10/- per Equity Share (100%) of the face value of Rs. 10/- each aggregating to Rs. 638.65 Lacs (exclusive of tax on dividend) for your consideration.

The total of the Interim and Proposed Final Dividends for the financial year ended 31 December, 2014 is Rs. 21/- per Equity Share (210%).

An amount of Rs. 245.90 Lacs (previous year: Rs. 178.21 Lacs) has been credited to General Reserves during the year.

3. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section titled Report on Corporate Governance has been included in this Annual Report. Your Directors are pleased to report that as on 31 December 2014, your Company is fully compliant with the SEBI Guidelines on Corporate Governance.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, annexed to this Directors'' Report, provides a more detailed review of the operating performance.

5. SUBSIDIARIES

Your Company does not have any subsidiary / subsidiaries within the meaning of the Companies Act, 2013.

6. FIXED DEPOSITS

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

7. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed with no material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the same period;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls in the Company that are adequate and are operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that these are adequate and are operating effectively;

8. DIRECTORS

In accordance with Article 132 of the Articles of Association of your Company, Foseco Overseas Limited replaced their existing nominee Director Chris O''Shea with Merryl France Durrenbach, who was appointed a nominee Director of Foseco Overseas Limited, on 21 July, 2014.

Your Board looks forward to gain from the wide international experience she brings with her.

As Christopher Nail, Non-Executive Director of the Company was retiring from Vesuvius plc in December, 2014, the Board of Directors accepted his resignation as a Director of the Company with effect from 14 November, 2014.

David Hughes, Non-Executive Director of the Company nominated by Foseco Overseas Limited, has left the Vesuvius plc group of Companies. He has tendered his resignation from the Board of the Company with effect from 31 December, 2014. The Board at its Meeting held on 28 January, 2015 took note of the same.

Your Board wishes to place on record their appreciation of the valuable contributions made by Chris O''Shea, Christopher Nail and David Hughes in furthering the objectives of your Company.

A Resolution seeking approval of the Members for the appointment of Merryl France Durrenbach (DIN: 06920690), as a Director has been incorporated in the Notice of the forthcoming AGM.

Indira Parikh (DIN: 00143801), was appointed as an Additional Independent Director on the Board of the Company on 21 July, 2014. In accordance with the requirements of Section 149 and 152 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, her continuation as an Independent Director on the Board of the Company will have to be approved by the Members of the Company.

Pursuant to Section 149 and 152 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors have, at its Meeting held on 28 January, 2015, appointed the existing Independent Directors, Pradeep Mallick (DIN: 00061256) and Ajit Shah (DIN: 02396765) as Independent Directors for a term commencing from 27 March, 2015 and ending on the date of the Annual General Meeting to be held in the years 2018 and 2019 respectively, subject to the approval of the Members, since the Company policy requires that the Board Members retire at the Annual General Meeting following their 75th birthday, even if it falls before the end of their 5 years tenure.

The requisite Resolutions for the appointment of Indira Parikh, Pradeep Mallick and Ajit Shah as Independent Directors, are being proposed in the Notice of the ensuing Annual General Meeting for the approval of the Members.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed in Section 149(6) of the Companies Act, 2013.

As required under Clause 49 of the Listing Agreement with the Stock Exchanges, the information on the particulars of the Directors proposed for appointment has been given in the Notice of the Annual General Meeting.

9. AUDITORS

In view of the internal process of re-alignment at the Statutory Auditors'' firms, B S R & Associates LLP, (Firm registration number: 116231W/ W100024), Chartered Accountants, Pune replaces B S R and Co., (ICAI Firm Registration Number: 128510W) as the Statutory Auditors of the Company.

The Statutory Auditors of the Company, B S R & Associates LLP (ICAI Firm Registration Number: 116231W / W-100024), Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from B S R & Associates LLP to the effect that their appointment, if made, will be as per the requirements laid down under Section 139 and 141 of the Companies Act, 2013 read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014. The Statutory Auditors have expressed its intention to hold office from the conclusion of the 58th Annual General Meeting of the Company, upto the conclusion of the 60th Annual General Meeting to be held in the year 2017, pursuant to the provisions of the said sections, subject to approval of the Members and thereafter, ratification of the appointment at every Annual General Meeting.

Accordingly, a resolution is being submitted to the Members for the appointment of B S R & Associates LLP, and to allow the Board to fix their remuneration for the current year.

10. AUDITOR''S REPORT

The observations of the Statutory Auditors in their report, read with the relevant notes to the financial statement in Note no.28 are self explanatory.

11. COST AUDITORS

Joshi Apte & Associates, Cost Accountants are the Cost Auditors of the Company. The Cost Records of the Company are examined by them.

The Company has maintained the required cost accounting records as per the Cost Accounting Records (Chemical Industries) Rules 2004 and the Company is in compliance therewith.

12. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, Grishma Khandwala, Practicing Company Secretary (ACS 6515; C P No. 1500), Mumbai, has been appointed to conduct a secretarial audit of the Company''s Secretarial and related records for the year ended 31 December, 2014. The Practicing Company Secretary has submitted her Report on the secretarial audit conducted by her which is annexed to this Board''s Report.

The Board has noted that Form No. MGT-14 for filing of Resolution relating to the Quarterly Financial Results as required by Section 179 of the Companies Act, 2013 and Rule 8 of the (Companies Meetings of Board and its Powers) Rules, 2014 have not been filed. Steps are being taken to file the same at the earliest.

13. POLICIES OF THE COMPANY

Your Company has posted the following documents on its website www.fosecoindia.com at FosecoIndia/View/policies.aspx link:

1. Code of Conduct and Ethics

2. Whistle Blower Policy

3. Related Party Transaction Policy

4. Familiarisation Programme for the benefit of the Independent Directors

14. CONSERVATION OF ENERGY

Continued efforts are made throughout the Company to effect improvements to production processes resulting in reduced energy consumption.

15. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION

Your Company continues to place significant importance on Research and Development as the primary means of continuously advancing its product technology. A sum of Rs. 98.21 Lacs (previous year Rs. 88.86 Lacs) was spent during the year towards Research & Development. Technology transfer into the Company from its overseas affiliates is by three main routes:

1. The information exchanged during periods of secondment when the Company''s technical and marketing personnel spend extended periods working at the facilities of its overseas affiliates undergoing training in new technologies.

2. The Company''s marketing and technology personnel travelling overseas to meet Foundry Division colleagues and customers in order to identify and bring back best practices.

3. Visits to the Company by technology experts from various parts of the Foundry Division.

There is a continuous flow of technology into the Company from the parent, Foseco International Limited, in the form of technology upgrades and new products.

16. IMPORTS / EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. IMPORTS

Imports of raw materials during the year amounted to Rs.2434.26 Lacs (previous year Rs. 1,787.21 Lacs) and capital goods & spares of Rs.25.79 Lacs (previous year Rs. 35.72 Lacs).

B. EXPORTS

Exports were mainly to Middle East, ASEAN and China. Exports during the year increased to Rs.1,285.57 Lacs from Rs. 1,045.54 Lacs in the previous year.

C. EARNINGS AND OUTGO

Details are provided under Point 5.1 to 5.4 of Note 28 of "Notes to Financial Statements" for the year ended 31 December 2014.

17. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Board of your Company have constituted a CSR Committee. As on 31 December 2014, the Committee comprises three Directors. Your Company has developed a CSR Policy which is carried in this Annual Report. Additionally, the CSR Policy has been uploaded on the website of the Company at www.fosecoindia.com at FosecoIndia/View/policies.aspx link.

18. PERFORMANCE EVALUATION OF THE DIRECTORS ETC.

The Nomination and Remuneration Committee has laid down the criteria for performance evaluation of the individual Directors and the Board. The framework of performance evaluation of the Independent Directors captures the following points:

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

B) Participation of the Directors in the Board proceedings and his / her effectiveness;

The evaluation was carried out by means of the replies given / observations made by all the Independent Directors on the set of questions developed by them which brought out the key attributes of the Directors, quality of interactions among them and its effectiveness.

19. INTEGRATED MANAGEMENT SYSTEM POLICY

The Company has adopted an Integrated Management System comprising quality, health, safety and environmental management system in accordance with ISO and OHSAS Standards and in line with the Maharashtra Factories Act, 1948 read with Rule 73-L (5)d of the Maharashtra Factories Rules 1963.

20. STATUTORY DISCLOSURES

Information as per Section 217 (2-A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and under Section 217(1)(e) of the said Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, forms part of this Report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Details regarding technology absorption, conservation of energy and foreign exchange earnings and outgo required under section 217(1)(e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are included as Annexure A, B and C to the Directors'' Report.

A Cash Flow Statement for the year ended 31 December 2014 is attached to the Balance Sheet.

21. EMPLOYEE RELATIONS

Employee relations throughout the Company were harmonious. The Board wishes to place on record its sincere appreciation of the devoted efforts of all employees in advancing the Company''s vision and strategy to deliver good performance.

22. INTERNAL CONTROL SYSTEMS

The Company''s internal control systems are audited by P. G. Bhagwat, Chartered Accountants. The Internal Auditor independently evaluates the adequacy of internal controls and reviews major transactions. The Internal Auditor reports directly to the Audit Committee to ensure complete independence.

23. ACKNOWLEDGMENTS

Your Directors thank Customers, Vendors and all the Foseco Stakeholders for their continued support to your Company''s performance and growth. The Directors also wish to place on record their sincere appreciation of the commitment and enthusiasm of all employees for their significant role in the Company''s growth till date.

For and on behalf of the Board of Directors Place: Pune Pradeep Mallick Date: 28 January 2015 Chairman


Dec 31, 2013

The Directors are pleased to present the Company''s 57th Annual Report and the audited accounts for the year ended 31 December 2013.

1. PERFORMANCE REVIEW

The year 2013 saw India getting adversely impacted by the weakening global economy. The rate of GDP growth fell to sub 5 per cent by the end of the year, the lowest in a decade. The inflation remained persistently high and the exchange rate fluctuated sharply creating a highly challenging industrial scenario in the country. The IIP (Index of Industrial Production) contracted cumulatively 0.1% for the April - December 2013 period signalling that the slowdown of the economy was well entrenched. The foundry industry segment in which your Company operates faced challenges of excess capacity, high input costs due adverse exchange rates and exorbitant power and fuel costs. Higher interest cost crippled the liquidity in the Foundry Industry apart from affecting the sales growth. Southern India, having the largest clusters of foundries, suffered from acute power shortage for most part of the year, thereby causing loss of production at these units.

During the year under review, your Company achieved a lower gross turnover of Rs. 25022.06 Lacs against Rs. 27277.38 Lacs achieved in the previous financial year. Profit Before Tax fell to Rs. 2713.53 Lacs (previous year: Rs. 3225.87 Lacs) and Profit After Tax dropped to Rs. 1782.05 Lacs (previous year: Rs. 2181.50 Lacs).

The Management Discussion and Analysis Report annexed provides a more detailed review of the operating performance.

2. DIVIDEND & APPROPRIATIONS

An amount of Rs. 178.21 Lacs (previous year: Rs. 218.15 Lacs) has been credited to General Reserves during the year.

For the year ended 31st December, 2013, your Directors have recommended payment of a final dividend of 155% on paid-up equity share capital (i.e., Rs. 15.50 per share), which includes a special one-time dividend of 125% on paid- up equity share capital (i.e., Rs. 12.50 per share), which, if approved by the Members, will be paid to the:

Equity Shareholders whose names appear in the Register of Members on 22nd April, 2014 and Beneficial owners whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited.

The Board had declared 15% first interim dividend in April 2013, 30% second interim dividend in August 2013 and 45% third interim dividend in October 2013 on the paid-up equity share capital of the Company and this has been paid to registered holders of equity shares. The total of the interim and proposed final dividends is 245% (inclusive of special one-time dividend of 125%) of paid-up equity share capital.

3. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION

Your Company continues to place significant importance on Research and Development as the primary means of continuously advancing its product technology. A sum of Rs.88.86 Lacs (previous year Rs. 76.87 Lacs) was spent during the year towards Research & Development. Technology transfer into the Company from its overseas affiliates is by three main routes:

1. The information exchanged during periods of secondment when the Company''s technical and marketing personnel spend extended periods working in the facilities of its overseas affiliates undergoing training in new technologies.

2. The Company''s marketing and technology personnel travelling overseas to meet Foundry Division colleagues and customers in order to identify and bring back best practices.

3. Visits to the Company by technology experts from overseas affiliates of the Foundry Division.

4. CONSERVATION OF ENERGY

Continued efforts were made throughout the Company to effect improvements to production processes resulting in reduced energy consumption.

5. INTEGRATED MANAGEMENT SYSTEM POLICY

The Company has adopted an Integrated Management System comprising quality management system, environmental management system and occupational health & safety management system in accordance with ISO and OHSAS Standards in line with Rule 73-L (5) d of the Maharashtra Factories Rules 1963, under the Maharashtra Factories Act, 1948.

6. IMPORTS / EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. IMPORTS

Imports of raw materials during the year amounted to Rs.1787.21 Lacs (previous year: Rs. 1947.11 Lacs) and capital goods & spares of Rs. 35.72 Lacs (previous year: Rs. 32.38 Lacs).

B. EXPORTS

Exports were mainly to Middle East, ASEAN and China. Exports during the year decreased marginally to Rs.1045.54 Lacs from Rs. 1093.67 Lacs in the previous year.

C. EARNINGS AND OUTGO

Details are provided under Point 5.1 to 5.3 of Note 28 of "Notes to Financial Statements" for the year ended 31st December 2013.

7. EMPLOYEE RELATIONS

Employee relations throughout the Company were harmonious. The Board wishes to place on record its sincere appreciation of the devoted efforts of all employees in advancing the Company''s vision and strategy to deliver good performance.

8. STATUTORY DISCLOSURES

Information as per Section 217 (2-A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and under Section 217(1)(e) of the said Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, forms part of this Report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Details regarding technology absorption, conservation of energy and foreign exchange earnings and outgo required under section 217(1)(e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are included as Annexure A, B and C to the Director''s Report.

A Cash Flow Statement for the year ended 31st December 2013 is attached to the Balance Sheet.

9. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section titled Report on Corporate Governance has been included in this Annual Report. Your Directors are pleased to report that your Company is fully compliant as on 31st December 2013 with the SEBI Guidelines on Corporate Governance.

10. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act 1956, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed with no material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable, prudent and in the best interest of the Company''s business so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the same period;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis.

11. DIRECTORS

Ajit Shah was appointed as an Additional Director on the Board of the Company with effect from 17th October, 2013. As an Additional Director, Ajit Shah holds office up to the date of the ensuing Annual General Meeting and being eligible, offers himself for appointment as Director. The Company has received notice from a Member under Section 257 of the Companies Act, 1956 along with a deposit of Rs. 500/-, in respect of Ajit Shah, proposing his appointment as a Director of the Company.

Pradeep Mallick retires by rotation as Director at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

A brief resume and other detail of the Directors seeking appointment / re-appointment at the ensuing Annual General Meeting as required under Clause 49(IV)(G) of the Listing Agreement are provided in the Notice of the Annual General Meeting and forms part of this Annual Report.

During the year under review, Mukund Chitale resigned from the Board of the Company. Your Directors wishes to place on record their appreciation of the valuable contribution made by him during his tenure.

12. AUDITORS

The Statutory Auditors of the Company, B S R and Co, Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a certificate from them to the effect that their appointment, if made, would be within the prescribed limits of Section 224 (1-B) of the Companies Act, 1956.

Accordingly a resolution is being submitted to the Members for the re-appointment of B S R and Co., and to allow the Board of Directors to fix their remuneration for the current year.

13. COST AUDITORS

Joshi Apte & Associates, Cost Accountants are the Cost Auditors of the Company. The Cost Records of the Company are examined by them.

The Company has maintained the required cost accounting records as per the Cost Accounting Records (Chemical Industries) Rules 2004 and the Company is in compliance therewith.

14. INTERNAL CONTROL SYSTEMS

The Company''s internal control systems are audited by P. G. Bhagwat, Chartered Accountants. The Internal Auditor independently evaluates the adequacy of internal controls and reviews major transactions. The Internal Auditor reports directly to the Audit Committee to ensure complete independence.

15. AUDITORS'' REPORT

The observations of the Statutory Auditors in their report, read with the relevant notes to the financial statement in Note 28 are self-explanatory.

16. ACKNOWLEDGMENTS

Your Directors thank Customers, Vendors and all the Foseco Stakeholders for their continued support to your Company''s performance and growth. The Directors also wish to place on record their sincere appreciation of the commitment and enthusiasm of all employees for their significant role in the Company''s growth till date.

On behalf of the Board of Directors

Place: Pune Pradeep Mallick

Date: 21 January 2014 Chairman


Dec 31, 2012

The Directors are pleased to present the Company''s 56th Annual Report and the audited accounts for the year ended 31 December 2012.

1. PERFORMANCE REVIEW

The year 2012 saw India getting adversely impacted by the weakening global economic scenario. The rate of GDP growth fell to nearly 5 per cent by the end of the year. The inflation remained persistently high and the exchange rate fluctuated sharply creating a highly challenging industrial scenario in the country. The IIP (Index of Industrial Production) contracted in six out of twelve months of the year. The foundry industry segment in which your Company operates faced challenges of high input and finance costs and tight liquidity. Southern India, having the largest clusters of foundries, suffered from acute power shortage for most part of the year, thereby causing loss of production at these units.

Your Directors would like to inform that your Company recorded good results in 2012 against the adverse economic and industrial scenario. It reported a record gross turnover of Rs. 27277.38 Lacs, Profit Before Tax of Rs. 3225.87 Lacs and Profit After Tax of Rs. 2181.50 Lacs.

The Management Discussion and Analysis Report annexed provide a more detailed review of the operating performance.

2. DIVIDEND & APPROPRIATIONS

An amount of Rs 218.15 Lacs has been credited to General Reserves during the year.

Your Directors have recommended payment of a final dividend of 70% on paid-up equity share capital for the year ended 31 December 2012, which, if approved by the members, will be paid to the:

Equity shareholders whose names appear in the register of members on 23 March 2013 and Beneficial owners whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited.

The Board had declared 10% first interim dividend in April 2012, 40% second interim dividend in July 2012 and 20% third interim dividend in October 2012 on the paid-up equity share capital of the Company and this has been paid to registered holders of equity shares. The total of the interim and proposed final dividends is 140% of paid-up equity share capital.

3. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION

Your Company continues to place significant importance on Research and Development as the primary means of continuously advancing its product technology. A sum of Rs. 76.87 Lacs was spent during the year towards Research & Development. Technology transfer into the Company from its overseas affiliates is by three main routes:

1. The information exchanged during periods of secondment when the Company''s technical and marketing personnel spend extended periods working in the facilities of its overseas affiliates undergoing training in new technologies.

2. The Company''s marketing and technology personnel traveling overseas to meet Foundry Division colleagues and customers in order to identify and bring back best practices.

3. Visits to the Company by technology experts from various parts of the Foundry Division.

4. CONSERVATION OF ENERGY

Continued efforts were applied throughout the Company to effect improvements to production processes resulting in reduced energy consumption.

5. INTEGRATED MANAGEMENT SYSTEM POLICY

The Company has adopted an integrated management system comprising of quality management system, environmental management system and occupational health & safety management system in accordance with ISO and OHSAS Standards in line with Rule 73-L (5)d of the Maharashtra Factories Rules 1963, made under the Maharashtra Factories Act, 1948.

6. IMPORTS / EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. IMPORTS

Imports of raw materials during the year amounted to Rs.1947.11 Lacs (previous year Rs. 1,564.93 Lacs) and capital goods & spares of Rs.32.38 Lacs (previous year Rs. 113.31 Lacs).

B. EXPORTS

Exports were mainly to Middle East, ASEAN and China. Exports during the year increased to Rs. 1093.67 Lacs from Rs. 869.65 Lacs in the previous year.

C. EARNINGS AND OUTGO

Details are provided under Point 6.1 to 6.4 of Note 28 of "Notes to Financial Statement" for the year ended 31st December 2012.

7. EMPLOYEE RELATIONS

Employee relations throughout the Company were harmonious. The Board wishes to place on record its sincere appreciation of the devoted efforts of all employees in advancing the Company''s vision and strategy to deliver good performance.

8. STATUTORY DISCLOSURES

Information as per Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and under Section 217(1 )(e) of the said Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, forms part of this report. However, as per provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, the report and accounts are being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Details regarding technology absorption, conservation of energy and foreign exchange earnings and outgo required under section 217(1 )(e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are included as Annexure A, B and C to the Director''s Report.

A Cash Flow Statement for the year ended 31st December 2012 is attached to the Balance Sheet.

9. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, a separate section titled Report on Corporate Governance has been included in this Annual Report. Your Directors are pleased to report that your Company is fully compliant as on 31st December 2012 with the SEBI Guidelines on Corporate Governance.

10. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act 1956, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed with no material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable, prudent and in the best interest of the Company''s business so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the same period;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis.

11. DIRECTORS

In accordance with Article 132 of the Articles of Association of your Company, Foseco Overseas Limited is entitled to nominate directors who shall be permanent non-retiring Director on the Board of your Company, such that the total number of Directors shall not exceed one-third of the total number of Directors on the Board of Directors. Foseco Overseas Limited can also replace its director in place of the existing director.

Your company has received a letter dated 16 January 2013 from Foseco Overseas Limited expressing its intention to replace their existing permanent non-retiring nominee director, Francois Wanecq with Christopher O'' Shea. In accordance therewith the Board of your Company at its meeting held on 21st January, 2013 appointed Chris O'' Shea as a permanent non-retiring nominee director in place of Francois Wanecq. Your Board wishes to place on record their appreciation of the valuable contribution made by Francois Wanecq in furthering the objective of your company.

Christopher O'' Shea is a British National and serves as a Finance Director of Vesuvius pic. He joined Cookson pic. (Group Company of Vesuvius pic.) on 11 October 2012. Prior to joining Cookson, Christopher held a number of senior finance roles at BG Group, latterly serving as Chief Financial Officer for the group''s businesses in Africa, the Middle East and Asia. From 1998 to 2005 Christopher worked in the UK, the US and Nigeria for Royal Dutch Shell in a variety of roles, including Chief Financial Officer for Shell''s offshore exploration and production business in Nigeria. Christopher is a Chartered Accountant with an MBA from Duke University, and has also worked for Ernst & Young.

Your Board is glad to welcome Christopher O'' Shea on the Board of the Company and looks forward to gain from the wide ranging experience he brings with him.

Resolution seeking approval of the members for the appointment of Christopher O'' Shea as a permanent non-retiring Director have been incorporated in the Notice of the forthcoming AGM.

12. RE-APPOINTMENT AND REMUNERATION OF THE MANAGING DIRECTOR

Sanjay Mathur was re-appointed as Managing Director for a period of three years from 1 April 2010 to 31 March 2013 in the Shareholders Meeting held on 21 April 2010.

Your Board recommends the re-appointment of Sanjay Mathur for a further period of three years from 1 April 2013 to 31 March 2016 and fix his remuneration. A resolution in this regard have been incorporated in the Notice of the forth coming AGM .

13. AUDITORS

The Statutory Auditors of the Company, B S R and Co, Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a certificate from them to the effect that their appointment, if made, would be within the prescribed limits of Section 224 (1-B) of the Companies Act, 1956.

Accordingly a resolution is being submitted to the members for the re-appointment of B S R and Co., and to allow the Board to fix their remuneration for the current year.

14. COST AUDITORS

Joshi Apte & Associates, Cost Accountants were appointed as Cost Auditors for the year under review to audit the cost records maintained by the Company in respect of its resin products pursuant to the notification issued by the Central Government bringing the above products under the purview of Cost Accounting Records (Chemical Industries) Rules 2004.

The Cost Auditor has issued a certificate for the year 2012 stating that the Company has maintained the required cost accounting records as per the Cost Accounting Records (Chemical Industries) Rules 2004 and the Company is in compliance therewith.

15. INTERNAL CONTROL SYSTEMS

The Company''s internal control systems are audited by P.G.Bhagwat & Co., Chartered Accountants. The Internal Auditors independently evaluates the adequacy of internal controls and review major transactions. The Internal Auditors report directly to the Audit Committee to ensure complete independence.

16. AUDITORS'' REPORT

The observations of the Statutory Auditors in its report, read with the relevant notes to the financial statement in Note no.28 are self-explanatory and do not require further explanation.

17. ACKNOWLEDGMENTS

Your Directors thank Customers, Vendors and all the Foseco Stakeholders for their continued support to your Company''s performance and growth. The Directors also wish to place on record their sincere appreciation of the commitment and enthusiasm of all employees for their significant role in the Company''s growth till date.

On behalf of the Board of Directors

Place: Pune Pradeep Mallick

Date: 21 January 2013 Chairman


Dec 31, 2011

1. PERFORMANCE REVIEW

The buoyant growth in the Indian economy during 2010 continued for the first few months of the year under review. This growth was, however, dampened during the second half due to hyperinflation and high interest cost, weakening the economic sentiment and causing a drop in the index of Industrial Production (IIP). Weak global cues also appeared to slow down the pace of the Indian economy in the last few months of the year. The foundry industry segment in which your Company operates, correspondingly recorded growth in production levels in the first half, but faced challenges of higher input costs and liquidity, coupled with high cost of funds during the rest of the year.

Your Directors are pleased to report that notwithstanding these challenges, your Company recorded excel- lent results in 2011, far exceeding the economic and industrial rate of growth. It reported a record gross turn- over of Rs. 252.53 crores, Profit Before Tax of Rs. 3743 crores and Profit After Tax of Rs. 25.28 crores.

The Management Discussion and Analysis Report annexed provides a more detailed review of the operating performance.

2. DIVIDEND & APPROPRIATIONS

An amount of Rs 2.53 crores has been credited to General Reserves during the year.

Your Directors have recommended payment of a final dividend of 70% on equity capital for the year ended 31 December 2011, which, if approved by the members, will be paid to the:

- Equity shareholders whose names appear in the register of members on 23 March 2012 and

- Beneficial owners whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited.

The Board had declared 20% first interim dividend in April 2011, 40% second interim dividend in July 2011 and 50% third interim dividend in October 2011 on the equity capital of the Company and this has been paid to registered holders of equity shares. The total of the interim and proposed final dividends is 180% of equity capital.

3. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION

Your Company continues to place significant importance on Research and Development as the primary means of continuously advancing its product technology. A sum of Rs. 62.74 Lacs was spent during the year. Technology transfer into the Company from its overseas affiliates is by three main routes:

1. The information exchanged during periods of secondment when the Company's technical and marketing personnel spend extended periods working in the facilities of its overseas affiliates undergoing training in new technologies.

2. The Company's marketing and technology personnel traveling overseas to meet Foundry Division colleagues and customers in order to identify and bring back best practices.

3. Visits to the Company by technology experts from various parts of the Foundry Division.

4. CONSERVATION OF ENERGY

Continued efforts were applied throughout the Company to effect improvements to production processes resulting in reduced energy consumption.

5. HEALTH, SAFETY AND THE ENVIRONMENT

The Company's Health, Safety and Environment policy ensures a firm commitment to health, safety and environmental management by making it an integral part of the Company's business strategy, in line with Rule 73-L (5) d of the Maharashtra Factories Rules 1963, Rule made under the Maharashtra Factories Act, 1948.

6. IMPORTS / EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. IMPORTS

Imports of raw materials during the year amounted to Rs. 1,564.93 Lacs (previous year Rs. 1,919.37 Lacs) and capital goods of Rs. 113.31 Lacs (previous year Rs. 43.12 Lacs).

B. EXPORTS

Exports were mainly to Middle East, ASEAN and China. Exports during the year increased to Rs.869.65 Lacs from Rs. 576.75 Lacs in the previous year.

C. EARNINGS AND OUTGO

Details are provided in notes 12.3, 12.4, 12.5 and 12.7 of Schedule 19 forming part of the Profit & Loss Account for the year ended 31st December 2 011.

7. EMPLOYEE RELATIONS

Employee relations throughout the Company were harmonious. The Board wishes to place on record its sincere appreciation of the devoted efforts of all employees in advancing the Company's vision and strategy to deliver good performance.

8. STATUTORY DISCLOSURES

Information as per Section 217 (2-A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and under Section 217(1)(e) of the said Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, forms part of this report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and accounts are being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Details regarding technology absorption, conservation of energy and foreign exchange earnings and outgo required under section 217(1)(e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are included as Annexure A, B and C to the Director's Report.

A Cash Flow Statement for the year 2011 is attached to the Balance Sheet.

9. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, a separate section titled Report on Corporate Governance has been included in this Annual Report. Your Directors are pleased to report that your Company is fully compliant as on 31st December 2011 with the SEBI Guidelines on Corporate Governance.

10. SECRETARIAL COMPLIANCE

During the year the Company appointed a practicing Company Secretary to conduct an audit of secretarial compliance under section 383A of the Companies Act 1956. Though not a mandatory requirement, in its pur- suit of achieving the highest standards of Corporate Governance, the Company believes such an audit to be of benefit.

The scope of the audit was to review compliance under the following:

1. Companies Act, 1956.

2. Listing Agreement executed with the Stock Exchanges.

3. Corporate Governance requirements of Clause 49 of the Listing Agreement.

Your Directors are pleased to state that the audit con- firmed that the Company is in compliance with the Companies Act, 1956, Stock Exchange and SEBI regulations.

11. COMPLIANCE - OTHER MATTERS

The Board of Directors also requested the practicing Company Secretary to conduct an audit of compliance with the legislation listed below as part of its drive towards the highest standards of corporate governance.

1. Disclosure requirements of the Listing Agreements with Stock Exchanges.

2. Dividend transfer/payments/remittance to nonresident shareholders with RBI permission.

3. Transfer of unpaid dividend to the Investor Education and Protection Fund.

4. SEBI (Prohibition of Insider Trading) Regulations, 1992.

5. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

6. SEBI (RTI and STA) Regulations, 1993.

7. Foreign Exchange Management Act, 1999.

8. Disclosures under Section 299 and 274 (1)(g) by Directors under the Companies Act, 1956.

9. Issue of certificates of shares/transmission thereof as per requirements of the Companies Act, 1956.

10. Necessary approvals of Directors/shareholders and other authorities as per requirement of the Companies Act, 1956.

Your Directors are pleased to confirm that the Company is in compliance with the requirements under the above laws and the Compliance Report issued by the practicing Company Secretary dated 16th January 2012.

12. DIRECTORS' RESPONSIBILITY STATEMENT

Whilst preparing the annual accounts, the Company has adhered to the following practices:

a) the annual accounts are prepared under the historical cost convention and on an accrual basis and are in compliance with the accounting standards referred to in Section 211 (3C) and other require- ments of the Companies Act, 1956;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable, prudent and in the best interest of the Company's business so as to give a true and fair view of the state of affairs of the Company as at 31 December 2011 and of the profit of the Company for the same period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis.

13. DIRECTORS

Independent Director Mr. Pradeep Mallick was appointed as additional Director on the Board with effect from 21st October 2011 and assumed office as member of Audit Committee, SIGC, Nomination & Remuneration Committee from 20th January 2012.

Mr. Christopher Nail, was appointed as additional Foseco Director on the Board with effect from 20th Jan 2012 and assumed office as member of SIGC and Remuneration Committee from 20th January 2012.

Information on the details of Directors seeking appointment as required under Clause 49 of the Listing Agreement has been given under the Notice to Shareholders.

14. AUDITORS

The Statutory Auditors of the Company, B S R and Co, Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received notification from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956.

Accordingly a resolution is being submitted to the members for the re-appointment of B S R and Co and to fix their remuneration for the current year.

15. COST AUDITORS

Joshi Apte & Associates, Cost Accountants were appointed as Cost Auditors for the year under review to audit the cost records maintained by the Company in respect of its resin products pursuant to the notification issued by the Central Government bringing the above products under the purview of Cost Accounting Records (Chemical Industries) Rules 2004.

The Cost Auditor has issued a certificate for the year 2011 stating that the Company has maintained the required cost accounting records as per the Cost Accounting Records (Chemical Industries) Rules 2004 and the Company is in compliance.

16. INTERNAL CONTROL SYSTEMS

The Company's internal control systems are audited by Natu & Pathak Chartered Accountants. The Internal Auditor independently evaluates the adequacy of internal controls and reviews major transactions. The Internal Auditor reports directly to the Audit Committee to ensure complete independence.

17. AUDITOR'S REPORT

The observations of the Statutory Auditor in its report, read with the relevant notes to accounts in Schedule 19 are self explanatory and do not require further explanation.

18. ACKNOWLEDGMENTS

Your Directors thank Customers, Vendors and all the Foseco Stakeholders for their continued support to your Company's performance and growth. The Directors also wish to place on record their sincere appreciation of the commitment and enthusiasm of all employees for their significant role in the Company's growth till date.

On behalf of the Board of Directors

Place: Pune Pradeep Mallick

Date: 20 January 2012 Chairman


Dec 31, 2009

The directors are pleased to present the Companys 53rd Annual Report and the audited accounts for the year ended 31 December 2009.

1. PERFORMANCE REVIEW

The year under review, was very challenging. The downturn, which started in end 2008, became more severe. The automotive, valves & heavy engineering sectors suffered, thereby adversely affecting the Companys performance. However, the Company recorded a good performance and posted a Profit Before Tax of Rs. 18.90 crores, Profit After Tax of Rs.12.50 crores on a gross annual turnover of Rs. 133.80 crores,

Members are requested to refer to the Management Discussion and Analysis Report annexed to this report for a more detailed review of the operating performance.

2. DIVIDEND & APPROPRIATIONS

An amount of Rs 1.25 crores has been credited to General Reserves.

Your directors have recommended payment of a final dividend of 70% on equity capital for the year ended 31 December 2009, which, if approved by the members at the forthcoming annual general meeting, will be paid out of the current years profit to:

- those equity shareholders whose names appear in the register of members on 7 April 2010, and

- those whose names as beneficial owners are furnished by National Securities Depository Limited and Central Depository Services (India) Limited.

The directors have declared interim dividends of 10% each on the equity capital of the company in July and October 2009 respectively which has been paid to registered holders of equity shares. The total of the interim and proposed final dividends is 90%.

3. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION

The company continues to place significant importance on research and development as the primary means of continuously advancing its product technology. A sum of Rs. 47.28 Lacs was spent during the year. Technology transfer into the company from its overseas affiliates is by three main routes:

1. The information exchanged during periods of secondment when the companys technical and marketing personnel spend extended periods working in the facilities of its overseas affiliates undergoing training in new technologies.

2. The companys marketing and technology personnel traveling overseas to meet Foundry Division colleagues and customers in order to identify and bring back best practices.

3. Visits to the company of technology experts from various parts of the Foundry Division.

4. CONSERVATION OF ENERGY

Continued efforts were applied throughout the company to effect improvements to production processes resulting in reduced energy consumption.

5. HEALTH, SAFETY AND THE ENVIRONMENT

The companys health, safety and environmental policy ensures a firm commitment to health, safety and environmental management by making it an integral part of the Companys business strategy, in line with Rule 73-L (5) d of the Maharashtra Factories Rules 1963, Rule made under the Maharashtra Factories Act, 1948.

The policy requires the company to maintain a safe and healthy working environment and to work towards minimising the environmental impact of all process and practices including the control of dust, airborne emissions, process residues and the prevention of pollution. Both the locations of the Company - Sanaswadi, Pune and Puducherry, are accredited to the international ISO14001:2004, environmental management ISO9001:2008, quality standards and OHSAS 18001:2007.

8, IMPORTS / EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. IMPORTS

Imports of raw materials during the year amounted to Rs. 1,279.13 Lacs (previous year Rs. 1,588.46 Lacs) and capital goods of Rs. 34.28 Lacs (previous year Rs. 0.70 Lacs)

B. EXPORTS

Exports were mainly to the Middle East, ASEAN and China. Exports during the year dropped to Rs. 287.73 Lacs from Rs. 476.20 Lacs in the previous year.

C. EXPORT PLANS

The Company continues to act as a regional manufacturing base for affiliate companies in Asia and the Middle East.

D. EARNINGS AND OUTGO

Members are requested to refer to notes 12.3, 12.4, 12.5 and 12.7 of Schedule 19 forming part of the Profit & Loss Account for the year ended 31 December 2009.

7, EMPLOYEE RELATIONS

Employee relations throughout the Company were harmonious. The board wishes to place on record its sincere appreciation of the devoted efforts of all employees in advancing the Companys vision and strategy to deliver a good performance.

8. STATUTORY DISCLOSURES

Information as per Section 217 (2-A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, and under Section 217(1)(e) of the said Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, forms part of this report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and accounts are being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Compliance Officer at the Registered Office of the Company.

Details regarding technology absorption, conservation of energy and foreign exchange earnings and outgo required under section 217(1)(e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are included as annexure A, B and C to the Directors Report.

A Cash Flow Statement for the year 2009 is attached to the balance sheet.

9, CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with stock exchanges, a separate section titled Report on Corporate Governance has been included in this annual report.

10. SECRETARIAL COMPLIANCE CERTIFICATE

During the year the Company appointed a practicing Company Secretary to conduct an audit of secretarial compliance under section 383A of the Companies Act 1956. Though not a mandatory requirement, in its pursuit of achieving the highest standards of Corporate Governance, the Company believes such an audit to be of benefit.

The scope of the audit was to review compliance under the following:

1. Companies Act, 1956.

2. Listing Agreement executed with the Stock Exchanges.

3. Corporate Governance requirements of Clause 49 of the Listing Agreement.

Your directors are pleased to inform you that the audit confirmed that the Company is in compliance with the Companies Act, 1956, Stock Exchange and SEBI regulations except Clause 40A of the listing agreement which specifies minimum public holding of 25% in the total issued and subscribed capital of the Company. The Company is taking steps to become fully compliant with the provisions at the earliest. The Company continued to make efforts to identify and appoint qualified Company Secretary as required by the Companies Act, 1956. The secretarial compliance certificate issued after the audit is annexed to this report.

11. COMPLIANCE CERTIFICATE - OTHER MATTERS

The board of directors also requested the practicing company secretary to conduct an audit of compliance with the legislation listed below as part of its drive towards the highest standards of corporate governance.

1. Disclosure requirements of the Listing Agreements with Stock Exchanges.

2. Dividend transfer/payments/remittance to non-resident shareholders with RBI permission.

3. Transfer of unpaid dividend to the Investor Education and Protection Fund.

4. SEBI (Prohibition of Insider Trading) Regulations, 1992.

5. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

6. SEBI (RTI and STA) Regulations, 1993.

7. Foreign Exchange Management Act, 1999.

8. Disclosures under Section 299 and 274 (1)(g) by directors under the Companies Act, 1956.

9. Issue of certificates of shares/transmission thereof as per requirements of the Companies Act, 1956.

10. Necessary approvals of directors/shareholders and other authorities as per requirement of the Companies Act, 1956.

Your directors are pleased to confirm that the Company is in compliance with the requirements under the above laws and the Compliance Report issued by the practicing company secretary dated 19th January 2010 is annexed to this report.

12. DIRECTORS RESPONSIBILITY STATEMENT

Whilst preparing the annual accounts the Company has adhered to the following practices:

a) the annual accounts are prepared under the historical cost convention and on an accrual basis and are in compliance with the accounting standards referred to in Section 211 (3C) and other requirements of the Companies Act, 1956;

b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable, prudent and in the best interest of the companys business so as to give a true and fair view of the state of affairs of the company as at 31 December 2009 and of the profit of the Company for the same period;

c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors have prepared the annual accounts on a going concern basis.

13. DIRECTORS

The directors express deep regret to inform about the sad demise of Mr. P N Ghatalia, independent director and Audit Committee Chairman, on 13 Aug 2009. The Board places on record its appreciation for the valuable contribution of Mr. Ghatalia in the Companys growth during his tenure.

Mr. Mukund M Chitale was appointed as additional director on the Board with effect from 27th Oct 2009 and assumed office as Chairman of the Audit Committee from the said date.

Information on the details of directors seeking appointment as required under Clause 49 of the Listing Agreement has been given under Notice to Shareholders.

14. AUDITORS

The statutory auditor of the company, B S R and Co., Chartered Accountants, holds office until the conclusion of the forthcoming annual general meeting and is eligible for re-appointment. The Company has received notification from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956.

Accordingly a resolution is being submitted to the members for the re-appointment of B S R and Co. and to fix their remuneration for the current year.

15. COST AUDITORS

Dhananjay V Joshi & Associates, a firm of cost accountants was appointed as cost auditor for last year to audit the cost records maintained by the Company in respect of its resin products pursuant to the notification issued by the Central Government bringing the above products under the purview of Cost Accounting Records (Chemical Industries) Rules 2004.

The cost auditor has issued a certificate for the year 2009 stating that the company has maintained the required cost accounting records as per the Cost Accounting Records (Chemical Industries) Rules 2004 and the Company is in compliance.

16. INTERNAL CONTROL SYSTEMS

The companys internal control systems are audited by Natu & Pathak, Chartered Accountants. The internal auditor independently evaluates the adequacy of internal controls and reviews major transactions, and reports directly to the Audit Committee.

17. AUDITORS REPORT

The observations of the statutory auditor in its report, read with the relevant notes to accounts in Schedule 17 are self explanatory and do not require further explanation.

18. ACKNOWLEDGMENT

Your directors would like to express their grateful appreciation for the support and cooperation of all the Fosecos stakeholders. In particular, the directors wish to place on record their deep sense of appreciation for the commitment and enthusiasm of all employees and the support of the Companys customers and suppliers.

On behalf of the Board of Directors

Place : Pune R. A. Savoor

Dated : 20 January 2010 Chairman

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