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Notes to Accounts of Foseco India Ltd.

Dec 31, 2014

A Terms / Rights attached to Equity Shares

The company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity share is entitled for one vote per share. Accordingly, all equity shares rank equally with regards to dividends and shares in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time.

On winding up of the Company, the holder''s of equity shares will be entitled to receive the residual assets of the company after distribution of all preferential amounts in proportion to the number of equity shares held.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

Note 1 : Company Background

Nature of Operations

The Company is engaged in the manufacture of products used in the metallurgical industry. The products are in the nature of additives and consumables that improve the physical properties and performance of castings. The manufacturing activities are at Sanaswadi and Puducherry.

Note 2 : Disclosure Notes

1. Disclosure of Related Parties / Related Party Transactions

a. Name of Related Party Where Control Exists

i Vesuvius plc., United Kingdom - Ultimate Parent Company

ii Vesuvius Holdings Limited, United Kingdom - Subsidary of Ultimate Parent Company

iii Foseco Holdings Limited, United Kingdom - Subsidary of Ultimate Parent Company

iv Foseco (U.K.) Limited., United Kingdom - Subsidary of Ultimate Parent Company

v Foseco Overseas Limited, United Kingdom - Immediate Holding Company

b. Names of Related Parties with whom transactions were carried out for the Financial Year ended 31 December 2014. i. Fellow Subsidiaries

1) Foseco (FS) Limited, United Kingdom

2) Foseco (Thailand) Limited

3) Foseco Foundry (China) Company Limited

4) Foseco Golden Gate Company Limited, Taiwan

5) Foseco Industrial e-Commercial Ltda., Brazil

6) Foseco International Limited, United Kingdom

7) Foseco Japan Limited

8) Foseco Korea Limited

9) Foseco Nederland B V.

10) Foseco Philippines Inc.

11) Foseco Pty Limited, Australia

12) PT Foseco Indonesia

13) Vesuvius Emirates (FZE), Dubai

14) Vesuvius Foundry Products (Suzhou) Company Limited, China

15) Vesuvius GmbH, Germany

16) Vesuvius Group SA, Belgium

17) Vesuvius Belgium N.V

18) Vesuvius Inc., USA

19) Vesuvius UK Limited

20) Vesuvius Foundry Technologies (Jiangsu) Company Limited, China

21) Vesuvius Istanbul Refrakter SA, Turkey

22) Vesuvius Italia S.p.A.

23) Vesuvius Malaysia Sdn. Bhd.

24) Vesuvius Poland Sp. Z.o.o.

25) Vesuvius France SA

26) Vesuvius India Limited

ii. Key Management Personnel Sanjay Mathur, Managing Director

c. Names of Related Parties with whom the Company neither had any Transactions nor had any outstanding Balances for the Financial Year ended 31 December 2014

1) Cookson Overseas Limited, United Kingdom

2) Cookson Financial Limited, United Kingdom

3) Vesuvius Group Limited, United Kingdom

3.1 Employee Benefit Plans

Gratuity: In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Scheme) covering certain categories of employees. The Gratuity Scheme provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to the fund managed by the Life Insurance Corporation of India (LIC), under this plan the settlement obligation remains with the Company although the Life Insurance Corporation of India, administers the plan and determines the contribution of premium required to be paid by the Company.

4 Segmental Reporting

The Company operates in a single business segment, metallurgical products and services, as defined by Accounting Standard 17. Secondary segmental reporting is identified on the basis of the geographical location of the customers. The Company has identified India and rest of the world for secondary segmental reporting.

Geographical sales are segregated based on the location of the customer who is invoiced or in relation to which the sale is otherwise recognised. Assets other than receivables used in the Company''s business or liabilities contracted have not been identified to any of the reportable segments, as these are used interchangeably between segments. All assets other than receivables are located in India. Similarly, capital expenditure is incurred towards fixed assets located in India.

5 Provision for Tax

The Company''s Management is of the opinion that its international transactions with associated enterprises are at ''arm''s length'' and that the Company is in compliance with the transfer pricing legislation. Further, the Company is in the process of updating its documentation in respect of international transactions with Associated Enterprises as required under section 92E of the Income Tax Act, 1961. The Company''s Management believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and the provision for tax as at and for the year ended 31 December 2014


Dec 31, 2013

Note 1 : Company Background

Nature of Operations

The Company is engaged in the manufacture of products used in the metallurgical industry. The products are in the nature of additives and consumables that improve the physical properties and performance of castings. The manufacturing activities are at Sanaswadi and Puducherry.

Note 2 : Disclosure

Notes 1. Disclosure of Related Parties / Related Party Transactions

a. Name of Related Party Where Control Exists

i Vesuvius plc., United Kingdom - Ultimate Parent Company

ii Vesuvius Holdings Limited #, United Kingdom - Subsidary of Ultimate Parent Company

iii Foseco Holdings Limited, United Kingdom - Subsidary of Ultimate Parent Company

iv Foseco (U.K.) Limited., United Kingdom - Subsidary of Ultimate Parent Company

v Foseco Overseas Limited, United Kingdom - Immediate Holding Company

# Formerly known as Cookson Group plc

b. Names of Related Parties with whom transactions were carried out for the Financial Year ended 31 December 2013.

i. Fellow Subsidiaries of Holding Company

1) Foseco (FS) Limited, United Kingdom

2) Foseco (Thailand) Limited

3) Foseco Foundry (China) Company Limited

4) Foseco Golden Gate Company Limited, Taiwan

5) Foseco Industrial e-Commercial, Ltda., Brazil

6) Foseco International Limited, United Kingdom

7) Foseco Japan Limited

8) Foseco Korea Limited

9) Foseco Nederland BV.

10) Foseco Philippines Inc.

11) Foseco Pty Limited, Australia

12) Foseco S.A.S. Technical Sales Office, France

13) PT Foseco Indonesia

14) Vesuvius Emirates (FZE), Dubai

15) Vesuvius Foundry Products (Suzhou) Company Limited, China

16) Vesuvius GmbH

17) Vesuvius Group SA, Belgium

18) Vesuvius Inc., USA

19) Vesuvius UK Limited

20) Vesuvius Istanbul Refrakter SA, Turkey

21) Vesuvius Italia S.p.A.

22) Vesuvius Malaysia Sdn. Bhd.

23) Vesuvius Poland Sp. Z.o.o.

24) Vesuvius India Limited

ii. Key Management Personnel Sanjay Mathur, Managing Director

c. Names of Related Parties with whom the Company neither had any Transactions nor had any outstanding Balances for the Financial Year ended 31 December 2013

1) Cookson Overseas Limited, United Kingdom

2) Cookson Financial Limited, United Kingdom

3) Vesuvius Group Limited, United Kingdom

3. Employee Benefit Plans

Gratuity: In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Scheme) covering certain categories of employees. The Gratuity Scheme provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to the fund managed by the Life Insurance Corporation of India (LIC), under this plan the settlement obligation remains with the Company although the Life Insurance Corporation of India, administers the plan and determines the contribution of premium required to be paid by the Company.

4. Segmental Reporting

The Company operates in a single business segment, metallurgical products and services, as defined by Accounting Standard 17. Secondary segmental reporting is identified on the basis of the geographical location of the customers. The Company has identified India and rest of the world for secondary segmental reporting.

Geographical sales are segregated based on the location of the customer who is invoiced or in relation to which the sale is otherwise recognised. Assets other than receivables used in the Company''s business or liabilities contracted have not been identified to any of the reportable segments, as these are used interchangeably between segments. All assets other than receivables are located in India. Similarly, capital expenditure is incurred towards fixed assets located in India.

5. Provision for Tax

The Company''s Management is of the opinion that its international transactions with associated enterprises are at ''arm''s length'' and that the Company is in compliance with the transfer pricing legislation. Further, the Company is in the process of updating its documentation in respect of international transactions with Associated Enterprises as required under section 92E of the Income Tax Act, 1961. The Company''s Management believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and the provision for tax as at and for the year ended 31 December 2013.


Dec 31, 2012

A Terms / Rights attached to Equity Shares

The company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity share is entitled for one vote per share. Accordingly, all equity shares rank equally with regards to dividends and shares in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time.

On winding up of the Company, the holder''s of equity shares will be entitled to receive the residual assets of the company after distribution of all preferential amounts in proportion to the number of equity shares held.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

Note 1 : Company Background

Nature of Operation

The Company is engaged in the manufacture of products used in the metallurgical industry. The products are in the nature of additives and consumables that improve the physical properties and performance of castings. The manufacturing activities are at Sanaswadi and Puducherry.

Note 2 : Disclosure Notes

1. Disclosure of Related Parties / Related Party Transactions

a. Name of Related Party Where Control Exists

i Cookson Group pic, United Kingdom - Ultimate Parent Company

ii Foseco Holdings Limited, United Kingdom - Subsidary of Ultimate Parent Company

iii Foseco (U.K.) Limited., United Kingdom - Subsidary of Ultimate Parent Company

iv Foseco Overseas Limited, United Kingdom - Immediate Holding Company

b. Names of Related Parties with whom transactions were carried out for the Financial Year ended 31 December 2012.

i. Fellow Subsidiaries of Holding Company

1) Foseco International Limited, United Kingdom

2) Foseco (Thailand) Limited

3) Foseco Foundry (China) Company Limited

4) Foseco Korea Limited

5) Foseco Golden Gate Company Limited, Taiwan

6) Foseco Industrial e-Commercial Ltda., Brazil

7) Foseco Japan Limited

8) Foseco (FS) Limited, United Kingdom

9) Foseco Nederland BV.

10) Foseco Pty Limited, Australia

11) PT Foseco Indonesia

12) Vesuvius Poland Sp.z.o.o

13) Vesuvius UK Limited , United Kingdom

14) Vesuvius USA

15) Vesuvius GmbH, Germany

16) Vesuvius Malaysia Sdn. Bhd.

17) Vesuvius Group SA, Belgium

18) Vesuvius Emirates (FZE), Dubai

19) Vesuvius India Limited

20) Cookson India Private Limited

21) Cookson Group pic, United Kingdom

ii. Key Management Personnel

Sanjay Mathur, Managing Director

c. Names of Related Parties with whom the Company neither had any Transactions nor had any outstanding Balances for the Financial Year ended 31 December 2012

1) Cookson Overseas Limited, United Kingdom

2) Cookson Financial Limited, United Kingdom

3) Vesuvius Group Limited, United Kingdom

3.1 Employee Benefit Plans

Gratuity: In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Scheme) covering certain categories of employees. The Gratuity Scheme provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to the fund managed by the Life Insurance Corporation of India (LIC), under this plan the settlement obligation remains with the Company although the Life Insurance Corporation of India, administers the plan and determines the contribution of premium required to be paid by the Company.

The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards. The estimates of future salary increase, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

4 Segmental Reporting

The Company operates in a single business segment, metallurgical products and services, as defined by Accounting Standard 17. Secondary segmental reporting is identified on the basis of the geographical location of the customers. The Company has identified India and rest of the world for secondary segmental reporting.

Geographical sales are segregated based on the location of the customer who is invoiced or in relation to which the sale is otherwise recognised. Assets other than receivables used in the Company''s business or liabilities contracted have not been identified to any of the reportable segments, as these are used interchangeably between segments. All assets other than receivables are located in India. Similarly, capital expenditure is incurred towards fixed assets located in India.

5 Provision for Tax

The Company''s Management is of the opinion that its international transactions with associated enterprises are at ''arm''s length'' and that the Company is in compliance with the transfer pricing legislation. Further, the Company is in the process of updating its documentation in respect of international transactions with Associated Enterprises as required under section 92E of the Income Tax Act, 1961. The Company''s Management believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and the provision for tax as at and for the year ended 31 December 2012.

6 Prior Period Comparative

Certain comparative figures have been regrouped / re-classified to conform to the requirements of the Revised Schedule VI of the Companies Act, 1956.


Dec 31, 2011

1 micro and Small enterprises

The Company has circulated letters to all its suppliers requesting them to confirm whether they are covered under the Micro, Small and Medium Enterprises Development Act, 2006 ('MSMED'). Certain suppliers have provided the necessary confirmation along with the evidence of being Micro or Small enterprises. As on 31st December 2011, the dues payable to Micro and Small Enterprises is Rs. 7.54 (Previous Year Rs. 16.24) and interest accrued and unpaid thereon Rs. 0.19 (Previous Year Rs. 0.28).

2 contingent liabilities

(Amount in Rs. Lacs)

Particulars 2011 2010

i. Counter guarantees given to banks in respect of 40.88 49.68 guarantee given by them

ii. Income tax demands in respect of which the 897.92 558.38 Company is in appeal

iii. Central Excise Demands in respect of which the 7.69 - Company is in Appeal

3 excise Duty included in closing Stock

In accordance with ASI 14 (Revised) on 'Disclosure of Revenue from Sales Transactions' issued by Institute of Chartered Accountants of India, excise duty on sales amounting to Rs. 2,254.05 Lacs ( Previous Year Rs. 1,633.28 Lacs) has been reduced from sales in profit & loss account and excise duty on increase in stock amounting to Rs. 9.29 Lacs (Previous year decrease Rs. 15.77 Lacs for decrease in stock) has been adjusted in Schedule 13 of the financial statements.

4 Deferred tax asset / (liability)

Deferred Tax Asset / (Liability) due to timing differences are in respect of:

5 leasehold Rights

The leasehold land at the closed Chinchwad site is proposed for disposal by its owners Greaves Limited. The Company has agreed to surrender its 99 year lease (ending in 2060) in exchange for a 50% share of the sale proceeds. A tripartite memorandum of understanding has been entered into between Greaves Ltd., the Company and the proposed buyer. Pending execution of the agreement, Rs. 16.75 Lacs has been received by the Company as earnest money deposit.

As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the Director's is not ascertainable and, therefore, not included above.

6. employee benefit plans

Gratuity: In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Scheme) covering certain categories of employees. The Gratuity Scheme provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to the fund managed by the Life Insurance Corporation of India (LIC), under this plan the settlement obligation remains with the Company although the Life Insurance Corporation of India, administers the plan and determines the contribution of premium required to be paid by the Company.

The Company has invested the plan assets with the Life Insurance Corporation of India. Expected rate of return on the plan asset has been determined scientifically considering the current and expected plan asset allocation, historical rate of return earned by the Company, current market trend and the expected return on the plan assets.

ii) Defined contribution plan:-

The Company has recognised the following amounts which are defined contribution plans in the Profit and Loss Account.

7 Segmental Reporting

The Company operates in a single business segment, metallurgical products and services, as defined by Accounting Standard 17. Secondary segmental reporting is identified on the basis of the geographical location of the customers. The Company has identified India and rest of the world for secondary segmental reporting.

Geographical sales are segregated based on the location of the customer who is invoiced or in relation to which the sale is otherwise recognised. Assets other than receivables used in the Company's business or liabilities contracted have not been identified to any of the reportable segments, as these are used interchangeably between segments. All assets other than receivables are located in India. Similarly, capital expenditure is incurred towards fixed assets located in India.

8 provision for tax

Fiscal year for the Company being year ending 31 March 2012, the ultimate tax liability will be determined on the basis of the results for the period from 01 April 2011 to 31 March 2012.

The Company's Management is of the opinion that its international transactions with associated enterprises are at 'arm's length' and that the Company is in compliance with the transfer pricing legislation. Further, the Company is in the process of updating its documentation in respect of international transactions with associated enterprises as required under section 92E of the Income Tax Act, 1961. The Company's Management believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and the provision for tax as at and for the year ended 31 December 2011.


Dec 31, 2009

1. Micro and Small Enterprises

The Company has circulated letters to all its suppliers requesting them to confirm whether they are covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED). Certain suppliers have provided the necessary confirmation along with the evidence of being Micro or Small Enterprises. As on 31st December 2009, the dues payable to Micro and Small Enterprises is Rs. 12.67 Lacs (Previous Year Rs. 2.08 Lacs) and interest accured and unpaid thereon Rs. 0.15 Lacs (Previous Year Rs. 0.01 Lacs).

However, in view of the Management, the impact of interest, if any, that may be payable in accordance with theprovisions of this Act is not expected to be significant.

(Amount in Rs. Lacs)

2. Contingent Liabilities

Particulars 2009 2008

i. Counter guarantees given to banks in respect of guarantee given by them 2.78 10.55

ii.Income tax demand in respect of which the Company is in appeal 454.36 391.25

3. Excise Duty included in Closing Stock

In accordance with AS114 (Revised) on Disclosure of Revenue from Sales Transactions issued by Institute of Chartered Accountants of India, excise duty on sales amounting to Rs. 847.68 Lacs ( Previous Year Rs.1,950.34 Lacs) has been reduced from sales in profit & loss account and excise duty on decrease in stock amounting to Rs. 6.13 Lacs (Previous year Rs. 33.61 Lacs for decrease in stock) has been adjusted in Schedule 13 of the financial statements.

4. Leasehold Rights

The leasehold land at the closed Chinchwad site is proposed for disposal by its owners Greaves Limited. The Company has agreed to surrender its 99 year lease (ending in 2060) in exchange for a 50% share of the sale proceeds. A tripartite memorandum of understanding has been entered into between Greaves Ltd., the Company and the proposed buyer. Pending execution of the agreement, Rs. 16.75 Lacs has been received by the Company as earnest money deposit.

5 Employee Benefit Plans

Gratuity: In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Scheme) covering certain categories of employees. The Gratuity Scheme provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to the fund managed by the Life Insurance Corporation of India (LIC), under this plan the settlement obligation remains with the Company although the Life Insurance Corporation of India, administers the plan and determines the contribution of premium required to be paid by the Company.

6 Segmental Reporting

The Company operates in a single business segment, metallurgical products and services, as defined by Accounting Standard 17. Secondary segmental reporting is identified on the basis of the geographical location of the customers. The Company has identified India and rest of the world for secondary segmental reporting.

Geographical sales are segregated based on the location of the customer who is invoiced or in relation to which the sale is otherwise recognised. Assets other than receivables used in the Companys business or liabilities contracted have not been identified to any of the reportable segments, as these are used interchangeably between segments. All assets other than receivables are located in India. Similarly, capital expenditure is incurred towards fixed assets located in India.

7. Company Secretary

The Company is in the process of appointing a full time Company Secretary as required by the provisions of Section 383A of the Companies Act, 1956. In the absence of a Whole-time Company Secretary, these financial statements have not been authenticated by a Whole-time Company Secretary as required under Section 215 of the Companies Act, 1956.

8. Provision for Tax

Fiscal year for the Company being year ending 31 March 2010, the ultimate tax liability will be determined on the basis of the results for the period from 01 April 2009 to 31 March 2010.

The Companys Management is of the opinion that its international transactions with associated enterprises are at arms length and that the Company is in compliance with the transfer pricing legislation. Further, the Company is in the process of updating its documentation in respect of international transactions with associated enterprises as required under section 92E of the Income Tax Act, 1961. The Companys Management believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and the provision for tax as at and for the year ended 31 December 2009.

9. Previous Year Comparatives

Previous years figures have been regrouped where necessary to conform to current years classification.

 
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