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Directors Report of Esab India Ltd.

Mar 31, 2023

Your Directors'' take pleasure in presenting the Thirty Sixth Annual Report together with the audited accounts of the Company for the financial year ended 31 March 2023.

1. FINANCIAL SUMMARY / HIGHLIGHTS

(Rs. in Lakhs)
Particulars	2022-23	2021-22
Total Revenue	1,09,860	90,098
Profit before Interest expense
and Depreciation	19,448	12,518
Provision for Depreciation	(1,188)	(1,133)
Finance cost	(31)	(29)
Profit before exceptional and
prior period items and tax	18,229	11,356
Exceptional items	-	-
Profit before Tax from
continuing Operations	18,229	11,356
Provision for Tax	(4,661)	(2,925)
Net Profit After Tax	13,568	8,431

The financials of the Company for the year under review as also the financial statements of the previous year are prepared under IND AS.

2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There were no reportable events subsequent to the date of the financial statements.

3. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There has been no material change in the nature of business during the period under review.

4. DIVIDEND

The shareholders at the Annual General Meeting held on 11^th August 2022 had approved a Final Dividend of $ 20/-per equity share of $ 10/- each (200%) for the financial year 2021-22 resulting in a cash outflow of about $ 30.79 crores and the same was paid on 26 August 2022.

During the Financial Year 2022-23, the Board of Directors had approved two Interim Dividends as detailed below.

i) First interim dividend of $ 30/- per equity share of $ 10/- each (300%) at its meeting held on 11^th November 2022 resulting in a cash outflow of about $ 46.18 crores, which was paid on 9^th December 2022; and

ii) Second interim dividend of $ 28/- per equity share of $ 10/- each (280%) at its meeting held on 10^th February 2023 resulting in a total cash outflow of about $ 43.10 crores, which was paid on 10^th March 2023.

In addition to the above two interim dividends for the financial year 2022-23, the Board has proposed a final dividend of $ 20/- per equity share of $ 10/- each (200%) for the financial year 2022-23, which is subject to approval of the shareholders at the ensuing Annual General Meeting to be held on 10^th August 2023.

5. IND AS STANDARDS

Your Company had adopted IND AS in pursuance of Section 133 of the Companies Act, 2013 and in compliance with the Companies (Indian Accounting Standard) Rules, 2015. The financials for the current financial year ended 31^st March 2023 and the comparative figures for the last financial year ended 31^st March 2022 have been prepared and published based on such IND AS standards.

The quarterly results are also published by the Company based on IND AS. These have been published in newspapers and also made available in the Company''s website https:// esabindia.com/in/ind_en/investor-relationship/paper-advertisements/ and the website of the stock exchanges where the shares of the Company are listed.

6. TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

seven years from the date of transfer of unpaid / unclaimed dividend to Unpaid Dividend account. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the Members for seven consecutive years or more shall also be transferred to the dematerialized account created by the IEPF authority.

The Company had sent individual notices and also advertised in the newspapers seeking action from the Members who have not claimed their dividends for seven consecutive years or more. Accordingly, the Company had transferred the unpaid or unclaimed dividends and corresponding shares pertaining to Final Dividend 2014-15 on 11^th October 2022 and 13^th October 2022 respectively.

Members/claimants whose shares, unclaimed dividend, have been transferred to the IEPF Demat Account of the Fund, as the case may be, may claim the shares or apply for refund by making an application to the IEPF Authority in Form IEPF-5 (available on https: www.iepf.gov.in) along with requisite fee as prescribed by IEPF Authority from time to time. The Member / Claimant can file only one consolidated claim in a financial year as per the IEPF Rules. Due dates for transfer of Unclaimed Dividend to IEPF are provided elsewhere in the notice calling the Annual General Meeting.

Details of shares / shareholders in respect of which dividends have not been claimed, are provided on our website at https:/ /esabindia.com/in/ind_en/investor-relationship/statement-of-unclaimed-dividends/. The shareholders are encouraged to verify their records and claim their dividends of all the preceding seven years, if not claimed.

7. BOARD MEETINGS

The Board of Directors met 5 times during the financial year 2022-23. The Meetings were held on 27 May, 12 August, 11 November of 2022, 10 February and 23 March 2023.

8. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company has six members.

Mr. Kevin Johnson is the nominee of ESAB Holdings Limited and a non-retiring Director in terms of the Articles of Association and Chairman of the Board.

Mr. Rohit Gambhir is the Managing Director of the Company. He was initially appointed for a period of five years with effect from 1^st November 2013. He was then subsequently reappointed for a further term of 5 years from 1^st November 2018 till 31^st October 2023. The Board of Directors at their meeting held on 23^rd March 2023, has approved and recommended re-appointment of Mr. Rohit Gambhir as Managing Director for a further period of five years from 1^stNovember 2023 to 31^st October 2028 for the approval of the shareholders.

The details as required under Regulation 36 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding re-appointment of Mr. Rohit Gambhir are published as part of the Notice convening the Annual General Meeting.

One of our Independent Directors, Late Sabitha Rao, passed away on 31^st December 2022. The Board at its meeting held on 10^th February 2023, had paid homage to late Sabitha Rao, by observing One Minute Silence (OMS). The Company has also intimated about the sudden demise of late Sabitha Rao to the Stock Exchanges.

The Board of Directors at its meeting held on 23^rd March 2023 has appointed Ms. Cauvery Dharmaraj (DIN: 02917088) as an Additional Director in the capacity of Independent Director of the Company for a period of five years from 23^rd March 2023 to 22^nd March 2028. The Company has obtained approval of the shareholders through Postal Ballot on 3^rd May 2023, for appointment of Ms. Cauvery Dharmaraj as Independent Director for a period of five years from 23^rd March 2023 to 22^nd March 2028.

Pursuant to appointment of Ms. Cauvery Dharmaraj as Independent Director on the Board on 23^rd March 2023, the composition of the Board comprise of the following members as on the date of this report.

S. No	Name of the Director	Designation
1	Kevin Johnson	Chairman
2	Rohit Gambhir	Managing Director
3	K Vaidyanathan	Independent Director
4	Vikram Tandon	Independent Director
5	Sudhir Chand	Independent Director
6	Cauvery Dharmaraj	Independent Director

Key Managerial Personnel

In compliance with Section 203 of the Companies Act, 2013, Mr Rohit Gambhir, Managing Director, Mr. B. Mohan, Vice-President Finance & Chief Financial Officer, and Mr. G Balaji, Company Secretary have been designated as the Key Managerial Personnel of the Company.

Mr. B Mohan was appointed as Chief Financial Officer of the Company effective from 1^st February 2005 and Mr. G Balaji was appointed as Company Secretary effective from 25^th March 2022.

9. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS As required under Section 149 (6) and (7) of the Companies Act, 2013 all the Independent Directors on the Board of the Company have individually issued the stipulated annual declaration confirming that they meet all the criteria of independence as stipulated under the Act. Further, the Independent Directors have completed their KYC confirmation on the MCA website and have also uploaded their profile in the Indian Institute of Corporate Affairs before the stipulated

date. All the Directors except Ms. Cauvery Dharmaraj, Independent Director, are exempted from undergoing the mandatory online tests based on their quantum and areas of experience. Ms. Cauvery Dharmaraj shall clear the online proficiency self-assessment test in accordance with the Sub rule 4 of Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014.

10.COMMITTEES OF THE COMPANYA. AUDIT COMMITTEE

The Company''s Audit Committee consists of three Independent Directors and one Non-executive Director. Mr. K Vaidyanathan, is the Chairman of the said Committee. Mr. Vikram Tandon, Mr. Sudhir Chand and Mr. Kevin Johnson are the other members of the Committee.

The said Committee met 4 times during the financial year 2022-23, on 27^th May, 12^th August, 11^th November 2022 and 10^th February 2023. The constitution and the terms of reference of the Committee are in line with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

There were no occasions during the year where the Board of Directors did not accept the recommendations of the Audit Committee.

B. NOMINATION AND REMUNERATION COMMITTEE

The Company''s Nomination and Remuneration Committee consists of three Independent Directors and one Non-Executive Director. Mr. K Vaidyanathan is the Chairman of the said Committee. Mr. Sudhir Chand, Independent Director, Mr. Kevin Johnson, Chairman of the Board and Ms. Cauvery Dharmaraj, Independent Director (with effect from 23^rd March 2023) are the other members of the Nomination and Remuneration Committee.

This Committee met once during the financial year 2022-23 on 23^rd March of 2023.

This Committee lays down the policy on remuneration stating therein the attributes required for the Managing Director, Independent Directors and Key Managerial Personnel. The said policy also states the modus operandi for determining the remuneration of the KMP''s and senior management. The remuneration policy of the Company can be viewed on the Company''s website https://esabindia.com/in/ind_en/ investor-relationship/policies/remuneration-policy/

The said committee is constituted in compliance with Section 178 (4) of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

C. STAKEHOLDERS RELATIONSHIP COMMITTEE

The Company''s Stakeholders Relationship Committee consists of two Independent Directors, one Non-executive Director and the Managing Director. Mr. Vikram Tandon is the Chairman of the Committee, Mr Sudhir Chand, Independent Director, Mr. Kevin Johnson, Chairman of the Board and Mr. Rohit Gambhir, Managing Director are the Members of the Committee.

The Committee met four times during the year on 27^th May, 12^th August, 11^th November of 2022 and on 10^th February 2023.

The composition of the said Committee and the matters being placed before the Committee are in compliance with Section 178(5) of the Companies Act 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

D. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Company''s Corporate Social Responsibility Committee consists of one Independent Director, one Non-executive Director and the Managing Director. Ms. Cauvery Dharmaraj was co-opted to the said Committee as the Chairperson with effect from 23^rd March 2023 after the sudden demise of Late Sabitha Rao who was the Chairperson of the Committee. Mr. Kevin Johnson, Chairman of the Board, Mr. Rohit Gambhir, Managing Director are the other members of the said Committee.

The Committee met twice during the financial year 2022-23 on 27^th May 2022 and on 10^th February 2023.

The Committee lays down the Policy on Corporate Social Responsibility stating therein the strategy, objectives, funding & allocation for the CSR projects, implementation, strategy and steps involved in achieving the CSR objectives. The Policy on Corporate Social Responsibility was revised by the Board of Directors at their meeting held on 10^th February 2023. The budget allocation for CSR Projects for the year 2022-23 can be viewed on the Company''s website https:// esabindia.com/in/ind_en/investor-relationship/policies/ policy-on-corporate-social-responsibility-revised-on-10th-february-2023/

The formation of the Committee and its terms of reference are in line with the requirements of Section 135 (1) of the Companies Act, 2013. The CSR Report which is attached as annexure to this report is in compliance with the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

E. RISK MANAGEMENT COMMITTEE

The Company has a Risk Management Committee as stipulated by the Companies Act, 2013 and Regulation 21 of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015. The Company''s Risk Management Committee consists of Mr. Kevin Johnson, Chairman of the Board, Mr. Rohit Gambhir, Managing Director, Mr. Sudhir Chand, Independent Director and Mr. B Mohan, Vice President Finance & Chief Financial Officer of the Company. A Risk Management Committee is mandatory for the Company since it is part of the Top 500 Companies in terms of market capitalization.

As per Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the meetings of the risk management committee shall be conducted in such a manner that on a continuous basis not more than one hundred and eighty days shall elapse between any two consecutive meetings. Accordingly, the said Committee met twice during the financial year on 28^th July 2022 and on 20^thJanuary 2023.

The said Committee lays down the Policy on Risk Management. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and mitigating those risks which are material in nature and are associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management.

The Risk Management Policy of the Company can be viewed on the Company''s website https://esabindia.com/in/ind_en/ investor-relationship/policies/risk-management-policy/

11.VIGIL MECHANISM

The Company has set up a whistleblower policy which can be viewed on the Company''s website https://esabindia.com/ in/ind_en/investor-relationship/policies/whistle-blowing-policy/ In terms of the said policy the Directors and employees are given direct access to the Chairman of the Audit Committee to report on alleged wrong doings. The said policy has been made available at the Offices / Plants of the Company at conspicuous places to enable the employees to report concerns, if any, directly to the Chairman of the Board and to the Chairman of the Audit Committee. Employees who join the Company newly are apprised of the availability of the said policy as a part of their induction schedule.

Based on an internal review, the Company had updated the whistle blower policy, and this was approved by the Board of Directors at its meeting held on 10^th February 2022. The same can be viewed from the website of the Company viz. https:// esabindia.com/in/ind_en/investor-relationship/policies/whistle-blowing-policy/.

The above complies with the requirements of Section 177 (9) & (10) of the Companies Act, 2013 and in terms of Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company did not

receive any complaints under the whistle blower policy during the year under review.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief, and according to the information and explanations obtained by them, your Directors make the following statements as per the requirements of Section 134 (5) of the Companies Act, 2013.

1. In the preparation of the annual accounts for the financial year ended 31^st March 2023 the applicable accounting standards have been followed.

2. The Directors have selected such accounting policies listed in Note 2.2 to the Notes to the Financial Statements and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year as on 31^st March 2023 and of the Profit of the Company for that year;

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Directors have prepared the annual accounts for the year ended 31^st March 2023 on a going concern basis;

5. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. There were no instances of fraud reported by the auditors of the Company under sub- section 12 of Section 143 of the Companies Act, 2013.

14. MANAGEMENT DISCUSSION AND ANALYSISA. ECONOMIC & BUSINESS ENVIRONMENT

Amidst global uncertainties driven by economic and geopolitical factors, expectations were of moderate growth with concerns on Inflation adding to the weak sentiments. Despite some degree of resilience, India was expected to grow at a much slower pace despite base effect and unwinding in the economy post-covid.

A sustained and global increase in Interest rates to counter inflation did dampen the growth prospects for the year and posed challenges in the working capital cycle.

Volatilities in some of the commodities and minerals were quite strong and this demanded a high level of flexibility and agility in supply chain and sales functions.

Aided by new products, improved product mix and some softening in input costs, your Company went on to achieve strong growth in Revenues and Profits.

B. OUTLOOK, OPPORTUNITIES AND THREATS

We continue to see short term resilience and a steady trend during the ongoing financial year.

Macro-economic factors including global headwinds are likely to pose risks on the prospects for the ongoing financial year. Financing costs, volatilities in energy costs and input costs, inflation, geopolitical developments remain key factors with strong potential impact on the performance metrics of the Company.

The Company continues to look for opportunities in growing the addressable markets through new products and rationalization of products in current portfolio. Service revenue streams continue to grow and we see opportunities to grow revenues from recharges on global services provided out of India.

The Company recognizes threats in the macro-economic environment, potential shifts in technology and potential downsides on working capital and margins in the event of continuing measures to contain inflation with monetary policy changes.

15. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Management evaluates the Company''s internal controls periodically considering local and global trends as also specific business-related developments. Independent Internal Auditors are engaged by the Company to test efficacy of controls in terms of design and operating effectiveness and to work with independent internal auditors to test these and identify areas for improvement. As the Company is a Subsidiary of a US listed entity, it is subjected to reviews applicable for Subsidiaries of US headquartered entities. The Company continues to list and evaluate key controls and process to an extent leveraging on the work done as part of its global reporting requirements. Key findings and actions taken to implement or remediate the same are reviewed by the Audit Committee periodically at its meetings. The scope and coverage of internal audits are aligned to have coverage in terms of key controls and locations. The endeavor is to align to the requirements of Internal Control on Financial Reporting (ICFR) framework

while leveraging on work done as part of global reporting requirements. Management testing through independent audit teams followed by external testing were done during the year.

The scope of work of Internal Auditors includes review of controls on accounting, operational controls, financial reporting, statutory and other compliances, and operational areas in addition to reviews relating to efficiency and economy in operations.

Our continuing efforts on the above lines are expected to ensure compliance with the requirements of Internal Controls on Financial Reporting.

16.FINANCIAL PERFORMANCE OF THE COMPANYA. INCOME AND EXPENDITURE

The Company''s revenue from contract with customers grew by 21.7 %. The growth was driven by gain in market share as well as through continuing introductions of new products in welding consumables and equipment.

The Company saw steady trends on its activities and revenues from services to related party entities.

Other income increased by about 66.67% primarily on account of indirect tax related refunds and asset disposal gains offset partly by lower interest income and absence of foreign exchange gains in 2022-23.

Materials costs as a percentage to sales was comparable to previous year despite price increases.

Overheads including employee costs were higher by 9.75% over the previous year. The increase was driven by the growth in revenues and partly due to the base effect of2021-22 which was affected partly by lockdowns. Inflationary impact was felt on overheads in addition to payroll costs.

The Company has continued to provide for Depreciation at useful lives based on a technical evaluation of useful life of assets.

Profit before tax was higher by 60.52% over the previous year with the impact of higher contributions from revenue growth.

B. BALANCE SHEET

Shareholders'' funds were at $ 260.27 Crores at the end of the year as against $ 244.22 Crores at the end of the previous year. The Company had paid dividends of $ 120.07 Crores during the financial year.

Disruptions in supply chain were witnessed during most part of the year driven by geo-political developments and consequential increases in costs and lead times. Higher interest rates led to additional stress on collection cycles. As in the past, working capital continued to be an area of intense focus through the year. Accounts Receivable and Inventory were better in terms of days sales as compared to the preceding financial year.

Capital Expenditure including capital work in progress was at $ 31.91 Crores as against $ 11.14 Crores in the preceding year. Capital expenditure was primarily on Buildings for Global R&D, refurbishments on existing lines, productivity improvements, marginal capacity enhancements, and upgrading IT systems.

Cash and equivalents were at $ 33.44 Crores at the end of the year as against $ 21.20 Crores at the end of the previous year. Investments in short term and debt funds were at $ 0.15 Crore as against $ 31.01 Crores at the end of the previous year, the reduction being driven by dividend payments during the year. The Company is well positioned to ride through short term volatilities in working capital by virtue of its debt free position and cash flows.

17. SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY

The Company does not have any subsidiary, joint venture, or associate company.

18. HOLDING COMPANY

With effect from 4^th April 2022, ESAB Corporation, Delaware, USA, is the ultimate parent company of ESAB India Limited.

19. ANNUAL RETURN

Pursuant to sub-section (3) of Section 92 of the Companies Act 2013, your Company has placed a copy of the annual return for the financial year 2022-23 on its website and it can be viewed from the company''s website viz. https:// esabindia.com/in/ind_en/investor-relationship/annual-returns/.

20. STATUTORY AUDITORS

M/s. S R Batliboi & Associates, LLP, Chennai (Firm Regn No.101049W / E300004) was re-appointed for a period of four years by the shareholders at the Annual General Meeting held on 28^th August 2020 as the Statutory Auditors of the Company in compliance with Section 139 (1) of the Companies Act, 2013. The details of remuneration of the statutory auditors with break-up of fee paid to S R Batliboi & Associates and its network firms as required by the provisions of amended SEBI (LODR) Regulations for the financial year 2022-23 is given as part of the Corporate Governance Report.

Their remuneration is fixed in line with the recommendations of the audit committee and as duly approved by the Board of Directors.

The Statutory Auditors have issued a clean report on the financials of the Company and have not issued any qualifications for the financial year ended 31^st March 2023. Members may please take note of the changes in the

requirements with respect to the report of the Auditors including specific references to key audit matters.

21. SECRETARIAL AUDIT

In terms of Section 204 (1) of the Companies Act, 2013, the Company has appointed M/s. V Mahesh & Associates, Chennai to do the secretarial audit of the Company for the financial year 1^st April 2022 to 31^st March 2023. Their appointment was informed to the Registrar of Companies, Chennai vide SRN F05957014 form MGT-14 dated 13^thJune 2022.

M/s. V Mahesh & Associates have now completed their secretarial audit and have issued their certificate dated 17^thMay 2023 as per the prescribed format in MR-3 to the shareholders of the Company, which is annexed to this Report as Annexure-2.

They have two observations in their report.

i) The Composition of CSR Committee as required under Section 135 of the Companies Act 2013, could not be maintained between 31^st December 2022 and 22^nd March 2023 due to the untimely & sudden demise of Ms. Sabitha Rao, Independent Director & Chairperson of CSR Committee. During the intervening period, it was observed that a CSR Committee Meeting was held on 10^th February 2023 to review CSR activities and the same was ratified by the Board in its Board Meeting held on the same day. Subsequently, the CSR Committee has been reconstituted as required under Section 135 of the Companies Act, 2013 consequent to the appointment of Ms. Cauvery Dharmaraj on 23^rd March 2023;

In response to the above observation, the Board explained that the lack of composition of CSR Committee from 31^stDecember 2022 to 22^nd March 2023 was unexpected due to sudden demise of Sabitha Rao, past member of CSR Committee and a meeting of CSR Committee was held during the said intervening period. The Company has remediated this by appointing Ms. Cauvery Dharmaraj as Independent Director and Chairperson of the CSR Committee.

ii) During the Audit Period, it was observed that the Company has submitted the disclosures of Related Party Transactions to Stock Exchanges as required under Regulation 23(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 however the same could not be maintained in legible format in the website of the Company due to technical snags & glitches. On being informed, the same has been corrected and maintained in the website without any technical snags.

In response to the above observation, the Company has taken immediate steps to upload the legible copy of the RPT on the website of the Company and the same has been complied with.

Barring the above, the Secretarial Auditors have confirmed that the Company has proper board processes and a compliance mechanism in place. They have also affirmed that the Company has complied with the relevant statutes, rules and regulations and secretarial standards, as applicable.

22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO

The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in the Annexure - 1 and forms part of this Report.

23. DETAILS RELATING TO DEPOSITS

The Company has not accepted any deposits during the period under review as envisaged under Section 73, 74 & 76 of the Companies Act, 2013. There have been additional filing requirements introduced with respect to liabilities not in the nature of deposits. The necessary form DPT 3 has been filed for the financial year 2021-22 on 6^th June 2022 vide SRN No. F04564613.

24. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, there have been no significant and material orders passed by any regulators / courts / tribunals that could impact the going concern status and the company''s operations in future.

25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company had not lent any loan to any related party as envisaged under Section 186 of the Companies Act, 2013 during the year under review.

The investments are made in debt funds and liquid funds. The Company has earned an income of around $ 98.12 Lakhs from investment in mutual funds for the period 1 April 2022 to 31 March 2023. The Company has not given any guarantees other than bank guarantees in the normal course of business to meet its contractual obligations.

26. RISK MANAGEMENT POLICY

In compliance with the requirements of Section 134(3)(n) of the Companies Act, 2013 and as required under Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has constituted a Risk Management Committee consisting of Mr. Kevin Johnson, as the Chairman, Mr. Rohit Gambhir, Managing Director, Mr. Sudhir Chand, Independent Director and Mr. B Mohan, Chief Financial Officer as the Members of the Committee. The said Committee lays down the procedures to identify risks and the mitigation procedures and adopted a policy in this regard. The Board of Directors defines the roles and responsibilities of the Committee.

The said committee updates the Board of Directors on a periodical basis on the material risks faced by the Company and the measures taken by the Company to mitigate the said risks. The Committee analyzed various risks including those arising from COVID 19, cyber security aspects and remote access control and other different controls necessary to be established with executives working from home. They suggested the actions to be taken to mitigate these risks which went a long way in the Company successfully managing all the risks. The Ministry of Home Affairs (MHA) had also during the pandemic had issued various guidelines for the plants to follow and the Company had complied with all these MHA guidelines to ensure that all the risks associated with the COVID 19 pandemic were adequately being addressed.

27. CORPORATE SOCIAL RESPONSIBILITY

As required under Section 134 (3) (o) read with Section 135 (1) of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee. The Committee had Ms. Sabitha Rao as the Chairperson of the said committee. She passed away on 31^st December 2022. After her demise, the Company has appointed Ms. Cauvery Dharmaraj, as the Chairperson with effect from 23^rd March 2023. Her appointment was also approved by the shareholders of the Company via Postal Ballot on 3^rd May 2023. Mr. Kevin Johnson, Chairman of the Board and Mr. Rohit Gambhir, Managing Director are the other members of the said Committee.

The Committee formulated a policy on CSR and the Board of Directors approved the same. The policy as required under Section 135 (4) (a) of the Companies Act, 2013 has been uploaded on the Company''s website https://esabindia.com/ in/ind_en/investor-relationship/policies/policy-on-corporate-social-responsibility-revised-on-10th-february-2023/.

As part of CSR initiatives, the Company has been involved in promoting and educating safe welding practices including usage of all personal protective equipment during the process of welding to ensure total safety of the welders, especially at smaller towns through deployment of duly trained resources. The Company had also tied up with certain vocational institutions for educating the welders in Tier II and Tier III cities on welding through deployment of personnel.

During the year under review, the Company had the eligible 2% spend of $ 1,92,95,000/- in addition to the carried forward unspent amount of $ 68,21,675/- aggregating to $ 2,61,16,675/-. The Board approved various CSR projects with the total CSR liability of $ 2,61,16,675/- during the financial year 2022-23.

During the financial year 2022-23, the Company had budgeted an amount of $ 1,32,01,925/- towards "safe welding practices - ongoing project 2020-21" and against which the Company had spent an amount $ 1,10,61,456/-leaving an unspent amount of $ 21,40,469/-. This unspent amount of $ 21,40,469/- was transferred to a separate bank account titled CSR Unspent account 2022-23 on 28^th April 2023.

During the financial year 2022-23, the Company had also spent excess amount of $ 4,76,082/- in respect of certain CSR projects.

As against the total budget of $ 2,61,16,675/-, the Company had spent an amount of $ 2,44,52,288/- leaving a balance of $ 16,64,387/- which includes an excess spent of $ 4,76,082/-.

The unspent amount of $ 21,40,469/- which was transferred to a separate bank account titled CSR Unspent account 2022-23 will be spent during the financial year 2023-24.

The Company''s policy on CSR envisages expenditure in areas falling within the purview of Schedule VII of the Companies Act, 2013. The annual report on CSR activities is enclosed by way of Annexure - 3 to this report.

28. RELATED PARTY TRANSACTIONS

As required under Section 188 of the Companies Act, 2013 and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company places before the audit committee the list of related parties from whom they buy raw materials or finished goods, to whom the Company extends services or exports goods. The details of the basis of pricing and the margins on such transactions are also tabled. The Audit Committee accords its omnibus approval for such related party transactions on an annual basis. The updates on the transactions with the related parties are placed before the audit committee on a quarterly basis. The details are also placed before the Board of Directors for its information.

As required under Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has formulated a policy on related party transactions and the same was approved by the Audit Committee and the Board of Directors. The said policy has been uploaded on the company''s website https:// esabindia.com/in/ind_en/investor-relationship/policies/policy-on-related-party-transaction/

All the transactions with the related parties entered into during the period under review have been in the ordinary course of business and at arms'' length basis. There have been no

material related party transactions entered into during this period.

The details of related party transactions pursuant to Clause (h) of sub-section (3) of Section 134 of the Act, is enclosed in form no. AOC 2 as Annexure - 4.

29. FORMAL ANNUAL EVALUATION

As required under Section 134 (3) (p) of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had already approved the evaluation criteria for evaluating the performance of the Board of Directors, its committees and the performance of Independent Directors.

Accordingly, as required under Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors at their separate meeting held on 23^rdMarch 2023 evaluated the performance of the nonindependent Directors and the Board as a whole. They also reviewed the performance of the Chairman of the Company and also assessed the quality, quantity, and timeliness of flow of information between the Company Management and the Board that was necessary for the Board to effectively and reasonably perform their duties.

Also as required under Regulation 17 (10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board assessed the performance of the Independent Directors as per the criteria laid down and has recommended their continuation on the Board of the Company at its meeting held on 25^th May 2023.

As required under the said regulations, the Board of Directors assessed the performance of the individual directors on the Board based on parameters such as, relevant experience and skills, ability, and willingness to speak up, focus on shareholder value creation, high governance standards, knowledge of business, processes and procedures followed, openness of discussion / integrity, relationship with management, impact on key management decisions etc. The Members of the Committees of Audit, Nomination & Remuneration, Stakeholders Relationship, Corporate Social Responsibility, and Risk Management Committee, were also assessed on the above parameters and also in the context of the committee''s effectiveness vis-a-vis the Act and the listing regulations.

for a period of five years from 2020-21. Ms. Cauvery''s profile is updated in the Independent Directors data bank with effect from 13^th March 2023. All the Independent Directors possess the necessary experience and expertise and are exempted from taking up the online assessment test of the Ministry except Ms. Cauvery Dharmaraj who will undertake the online proficiency selfassessment test as per Sub rule 4 of Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014.

30. COST AUDITOR

As required under Section 148 of the Companies Act, 2013 the Board of Directors at its meeting held on 25^th May 2023 has appointed M/s. Geeyes & Co., Cost Accountants within the meaning of Cost & Works Accountants Act, 1959 and holding a valid certificate of practice No.000044 as the Cost Auditor for conducting the Cost Audit for the financial year 2023-24. The Audit Committee recommended the appointment subject to the compliance of the requirements stipulated in the relevant notifications issued by Ministry of Corporate Affairs.

The Company has received a letter dated 8^th May 2023 from the Cost Auditor stating that the appointment, if made, will be within the limit prescribed under the Act.

The relevant Form CRA 2 for appointment of Cost auditor for the financial year 2022-23 was filed with the Registrar of Companies on 10^th June 2022 vide SRN F05493135.

The cost audit report issued by the Cost Auditor for the financial year ended 31 March 2022 was filed with the Registrar of Companies vide form CRA - 4 dated 9 September 2022 vide SRN F24293169.

31. RATIO OF REMUNERATION TO EACH DIRECTOR

As required under Section 197 (12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of ratio of remuneration of each Director to the median employee remuneration are as given below:

A. Executive Director

Ratio of remuneration paid to Mr. Rohit Gambhir, Managing Director vs. the median employee is 26:1 (26:1 for the year ended 31 March 2022).

B. The percentage increase in remuneration of CFO and CS in the financial year 2022-23 was 8.1 % and 8.1% respectively.

C. The percentage increase in the median remuneration of employees in the financial year 2022-23 was 7.8%.

D. The number of eligible permanent employees in the rolls of the Company as on 31 March 2023 is 554 (557 as on 31 March 2022).

E. Average percentile increase made in salaries of employees other than KMP in comparison to the percentile increase in the remuneration of KMP and the justification thereof.

The average percentile increases in salaries of employees other than KMP proposed was 8.24% while that of KMPs was 8.10%.

As at the end of March 2023 the Company had 829 employees as against 822 at the end of 31 March 2022. The Company believes in providing a working environment that is focused on the customers, teamwork, continuous improvement, innovation and a competitive environment where employees strive to improve value for shareholders.

The Board of Directors would like to affirm that the remuneration paid to the Executive and Non-executive Directors and the Key Managerial Personnel is in line with the Remuneration Policy of the Company.

In terms of Section 136(1) of the Companies Act, 2013 the Annual report excluding the aforesaid annexure is now being sent. The annexure is available for inspection at the Registered Office of the Company and any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

32. FINANCE

The Company''s relationship with its Bankers viz. AXIS Bank Ltd. and HDFC Bank Ltd. continued to be cordial during the year. The Company would like to thank its Bankers for their support.

33. ENVIRONMENT, HEALTH AND SAFETY

on EHS initiatives and works closely with them on initiatives and actions concerning EHS. During the year under review, the Company''s Plants at Ambattur and Nagpur won global recognition for EHS initiatives.

Cautionary Statement

Certain statements in this Directors'' Report may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied in this Report.

34. LISTING WITH STOCK EXCHANGES

The Company''s equity shares are listed with a) BSE Limited and b) National Stock Exchange of India Limited. The annual fees for both the exchanges have been paid promptly for the year 2023-24. Pursuant to the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company had executed fresh listing agreements with BSE Limited and National Stock Exchange of India Limited on 9th November 2015.

The Company had 18,401 shareholders as at the end of the year 31^st March 2023. 99.19% of the shares are held in dematerialized form.

The Company is part of the Top 500 Companies by way of Market capitalization. The Company has adopted a dividend policy, formed a Risk Management Committee and have also prepared a Business Responsibility and Sustainability Report for the year under review. The dividend distribution policy is available in the Company''s website link https:// esabindia.com/in/ind_en/investor-relationship/policies/ dividend-distribution-policy/

As required under Regulation 39 (4) Read with Schedule VI of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the details of the shares issued by the Company consequent to amalgamation of erstwhile Maharashtra Weldaids Limited with the Company in 1994, the details of the physical shares which remains unclaimed and transferred to the Unclaimed Suspense Account and the reconciliation of the shares claimed by shareholders during the year 2022-23 and the shares

outstanding in the suspense account as on 31^st March, 2023 is given below:

Sl. No.	Details	No. of shareholders	No. of equity shares
1.	Aggregate number of shareholders and the outstanding shares lying in the unclaimed suspense account at the beginning of the year i.e. as on 1.4.2022	43	3,010
2.	Number of shareholders who approached the Company during the year	2	200
3.	Number of shareholders to whom shares were transferred from the Unclaimed Suspense Account during the year	2	200
4.	Number of shares transferred to Investor Education and Protection Fund	2	150
5.	Aggregate number of shareholders and the outstanding shares lying in the unclaimed Suspense Account at the end of the year i.e. 31.3.2023	39	2,660

39 shareholders holding 2,660 equity shares constituting about 0.017% of shares have not made their claim from the Company on the shares outstanding in the Unclaimed Suspense Account of ESAB India Limited. The voting rights for these shares shall remain frozen until these are claimed by the rightful owners.

35. CORPORATE GOVERNANCE

In terms of Chapter IV Regulation 15 Read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a Corporate Governance Report is made part of this Annual report.

A certificate from the Secretarial Auditors of the Company regarding compliance of the conditions stipulated for Corporate Governance as required under Clause E of Schedule V read with Regulation 34 (3) of the SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015 is attached to this report.

The declaration by the Managing Director addressed to the Members of the Company pursuant to Clause D of Schedule V Read with Regulation 34 (3) Chapter IV of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding adherence to the Code of Conduct by the Members of the Board and by the Members of the Senior Management Personnel of the Company is also attached to this Report.

36. POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE ACT

The Company has also adopted the mandatory policy on Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Employees have been sensitized on the provisions of this enactment and the Company has also constituted an Internal Complaints Committee with effect from 30th October 2013 to deal with complaints, if any, under the said Act. The Committee also has an independent external NGO representative as one of its members. The Committee meets as and when requirement arises. The Company believes in providing safe working place for the Women in the Company and adequate protection are given for them to carry out their duties without fear or favour. All the employees of the Company as a part of induction are sensitized about the provisions of the said Act.

As required under Section 21 of Chapter VIII of the said Act, the Committee has submitted its annual report in the prescribed format to the designated authority within the stipulated period.

37. SECRETARIAL STANDARDS

As on 31^st March 2023 all the applicable Secretarial Standards which have been notified have been complied with by the Company.

A certificate of compliances issued by the Secretarial Auditor M/s. V Mahesh & Associates dated 17^th May 2023 is enclosed as Annexure - 2 and forms part of this Report.

38. ISSUE OF SHARES

The Company during the year under review has not issued any SWEAT equity shares or shares with differential rights or under Employee stock option scheme nor did it buy back any of its shares.

39. ACKNOWLEDGEMENTS

Your Directors'' place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers and shareholders.

Your Board would like to place on record, its sincere appreciation to the employees for having played a very significant part in the Company''s operations till date and more so in a difficult year that we went through.

For and on behalf of the Board of Directors Kevin Johnson

Chennai Chairman

25 May, 2023

Mar 31, 2022

Your Directors take pleasure in presenting the Thirty Fifth Annual Report together with the audited accounts of the Company for the financial year ended 31 March 2022.

1. FINANCIAL SUMMARY / HIGHLIGHTS

(? in Lakhs)
Particulars	2021-22	2020-21
Total Revenue	90,098	69,234
Profit before Interest expense
and Depreciation	12,518	9,265
Provision for Depreciation	(1,133)	(1,171)
Finance cost	(29)	(41)
Profit before exceptional and
prior period items and tax	11,356	8,053
Exceptional items	-	-
Profit before Tax from
continuing Operations	11,356	8,053
Provision for Tax	(2,925)	(2,124)
Net Profit After Tax	8,431	5,929

The financials of the Company for the year under review as also the financial statements of the previous year are prepared under IND AS.

2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

Colfax Corporation had incorporated a wholly owned subsidiary in the name of ESAB Corporation, Delaware, USA and made ESAB Corporation, Delaware as the holding company of ESAB Holdings Limited, UK and Exelvia Group India B.V., Netherlands. Further, Colfax Corporation had separated itself from ESAB Corporation, Delaware, USA by selling 90% of the equity shares held in ESAB Corporation, Delaware, USA to the general public shareholders of Colfax Corporation thereby reducing its equity stake in ESAB Corporation, Delaware, USA to 10% with effect from April 4, 2022. The same has been reflected in Note No.36 of the financial statements.

3. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There has been no material change in the nature of business during the period under review.

4. DIVIDEND

The shareholders at the Annual General Meeting held on 12^th August 2021 had approved a Final Dividend of $ 25/-per equity share of $ 10/- each (250%) for the financial year

2020-21 resulting in a cash outflow of about $ 38.48 crores and the same was paid on 27 August 2021.

During the year under review, the Board of Directors had approved two Interim Dividends viz. i) first interim dividend of $ 22/- per equity share of $ 10/- each (220%) at its meeting held on 10^th November 2021 resulting in a cash outflow of about $ 33.86 crores, which was paid on 9^th December 2021; and ii) second interim dividend of $ 18/- per equity share of $ 10/- each (180%) at its meeting held on 10^th February 2022 resulting in a total cash outflow of about $ 27.71 crores, which was paid on 11^th March 2022.

In addition to the above two interim dividends of FY 2021-22, the Board has proposed a final dividend of $ 20/- per equity share of $ 10/- each (200%) for the financial year 2021-22, which is subject to approval of the shareholders at the ensuing Annual General Meeting to be held on 11^th August 2022.

5. IND AS STANDARDS

Your Company had adopted IND AS in pursuance of Section 133 of the Companies Act, 2013 and in compliance with the Companies (Indian Accounting Standard) Rules, 2015. The financials for the current financial year ended 31^st March 2022 and the comparative figures for the last financial year ended 31^st March 2021 have been prepared and published based on such IND AS standards.

The quarterly results are also published by the Company based on IND AS. These have been published in newspapers and also made available in the Company''s website www.esabindia.com and the website of the stock exchanges where the shares of the Company are listed.

6. TRANSFERS TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013 ("the Act") read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("The Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government, after completion of seven years from the date of transfer of unpaid / unclaimed dividend to Unpaid Dividend account. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the Members for seven consecutive years or more shall also be transferred to the dematerialized account created by the IEPF authority.

Members / claimants whose shares, unclaimed dividend, have been transferred to the IEPF Demat Account of the Fund, as the case may be, may claim the shares or apply for refund by making an application to the IEPF Authority in Form IEPF-5 (available on https: www.iepf.gov.in) along with requisite fee as prescribed by IEPF Authority from time to time. The Member / Claimant can file only one consolidated claim in a financial year as per the IEPF Rules.

Due dates for transfer of Unclaimed Dividend to IEPF are provided elsewhere in the notice calling the Annual General Meeting.

Details of shares / shareholders in respect of which dividends have not been claimed, are provided on our website at www.esabindia.com. The shareholders are encouraged to verify their records and claim their dividends of all the preceding seven years, if not claimed.

7. BOARD MEETINGS

The Board of Directors met 6 times during the financial year

2021-22. The Meetings were held on 21 May, 12 August, 28 October, 10 November of 2021, 10 February and 25 March of 2022.

8. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company has six members.

Mr. Kevin Joseph Johnson is the nominee of ESAB Holdings Limited and a non-retiring Director in terms of the Articles of Association.

Mr. Rohit Gambhir is the Managing Director of the Company. He was appointed for a period of five years with effect from 1^st November 2013. He was subsequently re-appointed for

a term of 5 years with effect from 1^st November 2018 vide a postal ballot resolution of the shareholders dated 25^thSeptember 2018.

There are four Non-executive and Independent Directors on the Board of the Company.

In accordance with the provisions of Article 129 of the Company''s Articles of Association, Mr. Rohit Gambhir retires by rotation at the forthcoming Annual General Meeting and being eligible, has offered himself for re-appointment. The details as required under Regulation 36 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding Mr. Rohit Gambhir are published as part of the Notice convening the Annual General Meeting.

Key Managerial Personnel

In compliance with Section 203 of the Companies Act, Mr Rohit Gambhir, Managing Director, Mr. B. Mohan, Vice-President Finance & Chief Financial Officer, and Mr. S Venkatakrishnan, Company Secretary (until 25^th March 2022) and Mr. G Balaji, Company Secretary (from 26^th March 2022) have been designated as the Key Managerial Personnel of the Company.

Mr. B Mohan, Chief Financial Officer joined the Company on 1^st February 2005 and Mr. S. Venkatakrishnan, Company Secretary joined the Company on 10^th March 2006.

Mr. S Venkatakrishnan demitted his post as Company Secretary by the closing hours of the 25^th of March 2022 in view of his impending retirement at the end of May 2022. Mr. G. Balaji was appointed as Company Secretary to succeed Mr. S. Venkatakrishnan as Company Secretary and Compliance Officer effective the 26^th of March 2022. His appointment was approved by the Board of Directors at its meeting held on the 25^th of March 2022.

9. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

As required under Section 149 (6) and (7) of the Companies Act, 2013 all the Independent Directors on the Board of the Company have individually issued the stipulated annual declaration confirming that they meet all the criteria of independence as stipulated under the Act. Further, the Independent Directors have completed their KYC confirmation on the MCA website and have also uploaded their profile in the Indian Institute of Company Affairs before the stipulated date. All the Directors are exempted from undergoing the mandatory online tests based on their quantum and areas of experience.

10. COMMITTEES OF THE COMPANYA. AUDIT COMMITTEE

The Company''s Audit Committee consists of three Independent Directors and one Non-executive Director. Mr. K Vaidyanathan, is the Chairman of the said Committee.

Mr. Vikram Tandon, Mr. Sudhir Chand and Mr. Kevin J Johnson are the other members of the Committee.

The said Committee met 4 times during the financial year 2021-2022, on the 21^st May, 12^th August, 28^th October of 2021 and 10^th February 2022. The constitution and the terms of reference of the Committee are in line with the requirements of Section 177 of the Companies Act and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

There were no occasions during the year where the Board of Directors did not accept the recommendations of the Audit Committee.

B. NOMINATION AND REMUNERATION COMMITTEE

The Company''s Nomination and Remuneration Committee consists of three Independent Directors and one NonExecutive Director. Mr. K Vaidyanathan is the Chairman of the said Committee. Mr. Sudhir Chand, Independent Director, Ms. Sabitha Rao, Independent Director and Mr. Kevin J Johnson, Chairman of the Board are the other members of the Nomination and Remuneration Committee.

This Committee met once during the financial year 2021-22 on 25^th March of 2022.

The said committee is constituted in compliance with Section 178 (4) of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

C. STAKEHOLDERS RELATIONSHIP COMMITTEE

The Company''s Stakeholders Relationship Committee consists of two Independent Directors, one Non-executive Director and the Managing Director. Mr. Vikram Tandon is the Chairman of the Committee, Mr Sudhir Chand, Independent Director, Mr. Kevin J Johnson, Chairman of the Board and Mr Rohit Gambhir, Managing Director are the Members of the Committee.

The Committee met four times during the year on 21^st May, 12^th August, 28^th October of 2021 and on 10^th February 2022.

The composition of the said Committee and the matters being placed before the Committee are in compliance with Section 178(5) of the Companies Act, 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

D. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Company''s Corporate Social Responsibility Committee consists of one Independent Director, one Non-executive Director and the Managing Director. Ms. Sabitha Rao is the Chairperson of the said Committee and Mr. Kevin J Johnson, Chairman of the Board, Mr. Rohit Gambhir, Managing Director are the other members of the said Committee.

The Committee met once during the financial year 2021-22 on 21^st May 2021.

2022-23 can be viewed on the Company''s website www.esabindia.com

E. RISK MANAGEMENT COMMITTEE

The Company has a Risk Management Committee as stipulated by the Companies Act, 2013 and Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company''s Risk Management Committee consists of Mr. Kevin J Johnson, Chairman of the Board, Mr. Rohit Gambhir, Managing Director, Mr. Sudhir Chand, Independent Director and Mr. B Mohan, Vice President Finance & Chief Financial Officer of the Company. A Risk Management Committee is mandatory for the Company since it is part of the Top 1,000 Companies in terms of market capitalization.

The said Committee met twice during the financial year on 12^th August 2021 and 10^th February 2022. As per Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the meetings of the risk management committee shall be conducted in such a manner that on a continuous basis not more than one hundred and eighty days shall elapse between any two consecutive meetings. The first meeting of the Risk Management Committee of the Company was held on 12^thAugust 2021 and the second was on 10^th February 2022. By oversight, the Company had exceeded the prescribed timegap between the two meetings by two days.

The said Committee lays down the Policy on Risk Management. The main objective of this policy is to ensure sustainable business growth with stability and to promote a

pro-active approach in reporting, evaluating and mitigating those risks which are material in nature and are associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management.

The Risk Management Policy of the Company can be viewed on the Company''s website www.esabindia.com

11 .VIGIL MECHANISM

The Company has set up a whistleblower policy which can be viewed on the Company''s website www.esabindia.com. In terms of the said policy the Directors and employees are given direct access to the Chairman of the Audit Committee to report on alleged wrongdoings. The said policy has been made available at the Offices / Plants of the Company at conspicuous places to enable the employees to report concerns, if any, directly to the Chairman of the Board and to the Chairman of the Audit Committee. Employees who join the Company newly are apprised of the availability of the said policy as a part of their induction schedule.

Based on an internal review, the Company had updated the whistle blower policy and this was approved by the Board of Directors at its meeting held on 10^th February 2022. The same can be viewed from the website of the company viz. www.esabindia.com.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

1. In the preparation of the annual accounts for the financial year ended 31^st March 2022 the applicable accounting standards have been followed;

2. The Directors have selected such accounting policies listed in Note 2.2 to the Notes to the Financial Statements and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year on 31^st March 2022 and of the Profit of the Company for that year;

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for

safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Directors have prepared the annual accounts for the year ended 31^st March 2022 on a going concern basis;

5. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. There were no instances of fraud reported by the auditors of the Company under sub-section 12 of Section 143 of the Companies Act, 2013.

14. MANAGEMENT DISCUSSION AND ANALYSIS

A. ECONOMIC & BUSINESS ENVIRONMENT

The financial year commenced with strong expectations of economic growth after the massive disruptions witnessed in the previous year due to impact of Covid. The impact of Covid continued to be felt during the initial part of the financial year. Global developments led to supply chain interruptions through the year with longer lead times and higher costs on imports. Strong inflationary trends were witnessed even in locally sourced raw materials driven by a surge in Steel prices throughout the year. The Company continued to focus on product mix and cost reductions to sustain growth and profitability. Capital goods segment witnessed some revival in activity over the previous years. New product launches continued to show encouraging results. The Company witnessed reasonably stable market conditions despite the volatilities to achieve growth in sales and profits.

B. OUTLOOK, OPPORTUNITIES AND THREATS

The calendar year 2022 started on an encouraging note only to run into more turbulence with the developments arising from the conflict in Europe. Supply chain disruptions have since become a key operational challenge apart from further doses of inflation in commodity prices. A weaker rupee, higher interest rates and extreme challenges on inflation globally are key concerns for the ongoing financial year. Despite inherent resilience, the impact of global developments are bound to affect demand and profitability during the rest of the year. Opportunities exist in product categories where our new product launches can help gain market share and in terms of improvements in productivity and costs. A sustained period of global turbulence and squeeze on liquidity are immediate threats.

15. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Management evaluates the Company''s internal controls from time to time and also works with independent internal auditors to test these and identify areas for improvement. Additionally, the Company is subjected to reviews applicable for Subsidiaries of US headquartered entities. The Company continues to list and evaluate key controls and process to an extent leveraging on the work done as part of its global reporting requirements. Key findings and actions taken to implement or remediate the same are reviewed by the Audit Committee periodically at its meetings. The scope and coverage of internal audits are aligned to have coverage in terms of key controls and locations. The endeavor is to align to the requirements of Internal Control on Financial Reporting (ICFR) framework while leveraging on work done as part of global reporting requirements. Management testing through independent audit teams followed by external testing were done during the year.

The scope of work of Internal Auditors includes review of controls on accounting, financial reporting, statutory and other compliances and operational areas in addition to reviews relating to efficiency and economy in operations. In the context of higher levels of work from home during the year, controls in Information Technology were a priority area as well during the Financial Year.

Our efforts on the above lines are expected to ensure compliance with the requirements of Internal Controls on Financial Reporting.

16. FINANCIAL PERFORMANCE OF THE COMPANYA. INCOME AND EXPENDITURE

The Company''s revenue from contract with customers grew by 31.1%. The growth was seen across all key product categories.

New product offerings and enhancements were areas of continuing focus as the Company pursued growth and market share. The Company saw good growth in income from services to related party entities which grew by 71% over the previous year.

Other income fell by about 26.8% driven by lower income from mutual funds mirroring the overall reduction in interest rates.

Finance income was lower due to higher dividend payouts resulting in lower disposable cash through the year.

Materials costs as a percentage to sales was comparable to previous year despite price increases.

Overheads including employee costs were higher by 31.6% over the previous year. The increase was driven by the growth in revenues and also the base effect of 2020-21 which witnessed multiple lockdowns. The increase was also due to

impact of wage inflation and general inflation in overheads lines.

The Company has continued to provide for Depreciation at useful lives based on a technical evaluation of useful life of assets.

Profit before tax was higher by 41% over the previous year with the impact of higher contributions from revenue growth.

B. BALANCE SHEET

Shareholders'' funds were at $ 244.22 Crores at the end of the year as against $ 259.22 Crores at the end of the previous year. The Company had paid dividends of $ 100.05 Crores during the financial year.

Working capital and cash were key focus areas for Industry in general and this continued to be monitored closely to manage customer service levels without compromising on quality and turns on receivables and inventory. This resulted in the Company being able to manage working capital and cash flows at a consistently good level in relation to industry standards despite instability in supply chain

Capital Expenditure net of movements in capital work in progress was at $ 11.14 Crores as against $ 11.24 Crores in the preceding year. Capital expenditure was primarily on refurbishments on existing lines, productivity improvements, marginal capacity enhancements and upgrading IT systems.

Cash and equivalents were at $ 21.20 Crores at the end of the year as against $ 18.57 Crores at the end of the previous year. Investments in short term and debt funds were at $ 31.01 Crores as against $ 41.09 Crores at the end of the previous year. The Company is well positioned to ride through short term volatilities in working capital by virtue of its debt free position and cash flows.

17. SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY

The Company does not have any subsidiary, joint venture, or associate company.

18. HOLDING COMPANY

As on 31^st March 2022, Colfax Corporation, was the ultimate parent company of ESAB India Limited and subsequently, Colfax Corporation had offloaded its indirect equity control in ESAB India Limited in favour of ESAB Corporation, Delaware, USA. With effect from 4^th April 2022 ESAB Corporation, Delaware, USA, is the ultimate parent company of ESAB India Limited.

19. ANNUAL RETURN

Pursuant to subsection (3) of section 92 of the Companies Act 2013, your Company has placed a copy of the annual return for the financial year 2021-22 on its website and it

can be viewed from the company''s website viz. www.esabindia.com.

20. STATUTORY AUDITORS

M/s. S R Batliboi & Associates, LLP, Chennai (Firm Regn No.101049W / E300004) was re-appointed for a period of four years by the shareholders at the Annual General Meeting held on 28^th August 2020 as the Statutory Auditors of the Company in compliance with Section 139 (1). The details of remuneration of the statutory auditors with breakup of fee paid to S R Batliboi & Associates and its network firms as required by the provisions of amended SEBI (LODR) Regulations for the financial year 2021-22 is given as part of the Corporate Governance Report.

Their remuneration is fixed in line with the recommendations of the audit committee and as duly approved by the Board of Directors.

The Statutory Auditors have issued a clean report on the financials of the Company and have not issued any qualifications for the financial year ended 31 March 2022. Members may please take note of the changes in the requirements with respect to the report of the Auditors including specific references to key audit matters.

21. SECRETARIAL AUDIT

In terms of Section 204 (1) of the Companies Act, 2013, the Company has appointed M/s. V Mahesh & Associates, Chennai to do the secretarial audit of the Company for the financial year 1^st April 2021 to 31^st March 2022. Their appointment was informed to the Registrar of Companies, Chennai vide SRN T19974682 form MGT-14 dated 25^thMay 2021.

M/s. V Mahesh & Associates have now completed their secretarial audit and have issued their certificate dated 19^thMay 2022 as per the prescribed format in MR-3 to the shareholders of the Company, which is annexed to this Report as Annexure-2.

They have no adverse observations in their report except for the time gap exceeded by two days between two consecutive meetings of Risk Management Committee. They have confirmed that the Company has proper board processes and a compliance mechanism in place. They have also affirmed that the Company has complied with the relevant statutes, rules and regulations and secretarial standards, as applicable.

In response to the observation made by the Secretarial Auditor, the Board explained that by oversight, the time gap between two consecutive meetings of the risk management committee held during the financial year 2021-22 was exceeded by two days than the permitted limit prescribed by SEBI (LODR) Regulations.

22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO

The information required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in the Annexure-1 and forms part of this Report.

23. DETAILS RELATING TO DEPOSITS

24. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company had made a loan of $ 30 Crores to M/s. EWAC Alloys Limited, related party and a fellow subsidiary on an arm''s length basis at a rate not exceeding 9% per annum (Floater rate) as per Section 186 and 188 of the Companies Act, 2013. The repayment schedule was extended from 30 September 2021 to 31 March 2022. M/s. EWAC Alloys Limited has completely repaid the Inter Company Loan as on 31 March 2022.

The Board of Directors from time to time has authorized the Company to invest the surplus funds of the Company in deposits with Bank and investments in debt funds, liquid funds and fixed maturity plans with mutual funds for a tenor not exceeding 100 days. The investments are made in debt funds and liquid funds. The Company has earned an income of around $ 77 Lakhs from investment in mutual funds for the period 1 April 2021 to 31 March 2022. The Company has not given any guarantees other than bank guarantees in the normal course of business to meet its contractual obligations.

26. RISK MANAGEMENT POLICY

and Mr. B Mohan, Chief Financial Officer as the Members of the Committee. The said Committee lays down the procedures to identify risks and the mitigation procedures and adopted a policy in this regard. The Board of Directors defines the roles and responsibilities of the Committee.

The said committee updates the Board of Directors on a periodical basis on the material risks faced by the Company and the measures taken by the Company to mitigate the said risks. The Committee analyzed various risks including those arising from COVID-19, cyber security aspects and remote access control and other different controls necessary to be established with executives working from home. They suggested the actions to be taken to mitigate these risks which went a long way in the Company successfully managing all the risks. The Ministry of Home Affairs (MHA) had also during the pandemic had issued various guidelines for the plants to follow and the Company had complied with all these MHA guidelines to ensure that all the risks associated with the COVID-19 pandemic were adequately being addressed.

27. CORPORATE SOCIAL RESPONSIBILITY

As required under Section 134 (3) (o) read with Section 135 (1) of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee. The Committee has Ms. Sabitha Rao, as the Chairperson, Mr. Kevin J Johnson, Chairman of the Board and Mr. Rohit Gambhir, Managing Director are the members of the said Committee.

During the year under review, the Company had the eligible 2% spend of Rs.172.90 lakhs in addition to the carried forward unspent amount of $ 21.65 lakhs aggregating to $ 194.55 lakhs. Out of CSR eligible spend of $ 194.55 lakhs, the company had pursued its CSR Ongoing Project 2020-21 with a budget amount of $ 154.55 lakhs and Other than Ongoing Project with a budget amount of $ 40 lakhs. This was approved by the CSR Committee and the Board of Directors in their meetings held on 21^st May 2021.

In relation to Ongoing Project 2020-21, the Company could spend $ 86.33 lakhs leaving an unspent amount of

$ 68.22 lakhs which was transferred to a separate bank account titled CSR Unspent A/c. 2021-22.

In relation to Other than Ongoing Project of 2021-22, the Company was not able to spend the earmarked amount of $ 40 lakhs and this unspent amount of $ 40 lakhs was also transferred to the CSR Unspent A/c. 2021-22.

28. RELATED PARTY TRANSACTIONS

The details of related party transactions pursuant to Clause (h) of sub-section (3) of Section 134 of the Act, is enclosed in form no. AOC-2 as Annexure - 4.

29. FORMAL ANNUAL EVALUATION

Accordingly, as required under Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the

Independent Directors at their separate meetings held on 10^thFebruary 2022 and 25^th March 2022 evaluated the performance of the non-independent Directors and the Board as a whole. They also reviewed the performance of the Chairman of the Company and also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that was necessary for the Board to effectively and reasonably perform their duties.

As required under the said regulations, the Board of Directors assessed the performance of the individual directors on the Board based on parameters such as, relevant experience and skills, ability and willingness to speak up, focus on shareholder value creation, high governance standards, knowledge of business, processes and procedures followed, openness of discussion / integrity, relationship with management, impact on key management decisions etc. The Members of the Committees of Audit, Nomination & remuneration, Stakeholders relationship, Corporate social responsibility and Risk management committee, were also assessed on the above parameters and also in the context of the committee''s effectiveness vis-a-vis the Act and the listing regulations.

The Independent Directors fulfilled the independence criteria as specified under the above regulations and the Companies Act, 2013. The Board was satisfied with the evaluation results which reflected the overall engagement and the effectiveness of the Board and its committees. The Independent Directors also updated their current profiles by paying up the relevant fees in the website of the Indian Institute of Corporate Affairs on Independent Directors for a period of five years from 2020-21. Since all the four Independent Directors possess the necessary experience and the expertise, they are exempted from taking up the online assessment test of the Ministry.

30. COST AUDITOR

As required under Section 148 of the Companies Act, 2013 the Board of Directors at its meeting held on 27^th May 2022 has appointed M/s. Geeyes & Co., Cost Accountants within the meaning of Cost & Works Accountants Act and holding a valid certificate of practice No.000044 as the Cost Auditor for conducting the Cost Audit for the financial year 2022-23. The Audit Committee recommended the appointment subject to the compliance of the requirements stipulated in the relevant notifications issued by Ministry of Corporate Affairs.

The Company has received a letter dated 12^th May 2022 from the Cost Auditor stating that the appointment, if made, will be within the limit prescribed under the Act.

The relevant Form CRA 2 for appointment of Cost auditor for the financial year 2021-22 was filed with the Registrar of Companies on 25^th May 2021 vide SRN T19980705.

The cost audit report issued by the Cost Auditor for the financial year ended 31 March 2021 was filed with the Registrar of Companies vide form CRA - 4 dated 9 September 2021 vide SRN T41667874.

31. RATIO OF REMUNERATION TO EACH DIRECTOR

As required under Section 197 (12) and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of ratio of remuneration to each Director to the median employee remuneration are as given below:

A. Executive Director

Ratio of remuneration paid to Mr. Rohit Gambhir, Managing Director vs the median employee is 26:1 (25.8:1 for the year ended 31 March 2021).

B. The percentage increase in remuneration of CFO and CS in the financial year 2021-22 was 7.7% and 8.00% respectively.

C. The percentage increase in the median remuneration of employees in the financial year 2021-22 was (0.74%)

D. The number of eligible permanent employees in the rolls of the Company as on 31 March 2022 is 557 (545 as on 31 March 2021).

E. Average percentile increase made in salaries of employees other than KMP in comparison to the percentile increase in the remuneration of KMP and the justification thereof.

The average percentile increases in salaries of employees other than KMP proposed was 0.35 % while that of KMPs was Nil %.

The reduced percentage is due to the shift in the Increment cycle from January to December has shifted to April to March. Hence, in effect there were no increments in the financial year 2021-2022. The negligible increase in percentages other than the KMP is due to the CTC of the new hires till 30^th September 2021.

As at the end of March 2022 the Company had 822 employees as against 808 at the end of 31 March 2021. The Company believes in providing a working environment that is focused on the customers, teamwork, continuous improvement, innovation and a competitive environment where employees strive to improve value for shareholders.

As required under the provisions of Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, the name and other particulars of the employee is set out in the Annexure- 5 to this Report. Further, as required under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 rule 5 sub-rule (2), the names of Top 10 employees in terms of the remuneration drawn is given in Annexure - 5.

Details of employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as a statement and given in Annexure - 5.

In terms of Section 136(1) of the Act, 2013 the Annual report, excluding the aforesaid annexure is now being sent. The annexure is available for inspection at the Registered Office of the Company and any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

32. FINANCE

The Company''s relationships with its Bankers viz. AXIS Bank Ltd. and HDFC Bank Ltd. continued to be cordial during the year. The Company would like to thank its Bankers for their support.

33. ENVIRONMENT, HEALTH AND SAFETY

The Company continued its commitment to industrial safety and environment protection and all its factories have obtained its ISO 14001 and OHSAS 18001 certification. Periodical audits are done by external and internal agencies to assess the continued levels of EHS efficiency of each of these plants and the OHSAS certification given is renewed after every such audit. The Company is also networked with the Group on EHS initiatives and works closely with them on initiatives and actions concerning EHS. During the year under review, the Company''s Plants at Ambattur and Nagpur won global recognition for EHS initiatives.

Cautionary Statement

34. LISTING WITH STOCK EXCHANGES

The Company''s equity shares are listed with a) BSE Limited and b) National Stock Exchange of India Limited. The annual

fees for both the exchanges have been paid promptly for the year 2021-22. Pursuant to the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company had executed fresh listing agreements with BSE Limited and National Stock Exchange of India Limited on 9^thNovember 2015.

The Company had 14,844 shareholders as at the end of the year 31^st March 2022. 99.07% of the shares are held in dematerialized form.

The Company is part of the Top 500 Companies by way of Market capitalization. The Company has adopted a dividend policy, formed a risk management committee and have also prepared a Business Responsibility Report for the year under review.

Sl. No.	Details	No. of shareholders	No. of equity shares
1.	Aggregate number of shareholders and the outstanding shares lying in the unclaimed suspense account at the beginning of the year i.e. as on 1.4.2021	44	3,060
2.	Number of Shareholders who approached the Company during the year	NIL	NIL
3.	Number of shareholders to whom shares were transferred from the unclaimed suspense account during the year	NIL	NIL
4.	No. of shares transferred to Investor Education and Protection Fund	1	50
5.	Aggregate Number of shareholders and the outstanding shares lying in the unclaimed Suspense Account at the end of the year i.e. 31.3.2022	43	3,010

43 shareholders holding 3,010 equity shares constituting about 0.02% of shares have not made their claim from the Company on the shares outstanding in the Unclaimed Suspense Account of ESAB India Limited. The voting rights for these shares shall remain frozen until these are claimed by the rightful owners.

35. CORPORATE GOVERNANCE

A certificate from the Statutory Auditors of the Company regarding compliance of the conditions stipulated for Corporate Governance as required under Clause E of Schedule V read with Regulation 34 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report.

36. POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE ACT

for the Women in the Company and adequate protection are given for them to carry out their duties without fear or favour. All the employees of the Company as a part of induction are sensitized about the provisions of the said Act.

As required under Section 21 of Chapter VIII of the said Act, the Committee has submitted its annual report in the prescribed format to the designated authority within the stipulated period.

37. SECRETARIAL STANDARDS

As on 31^st March 2022 all the applicable Secretarial Standards which have been notified have been complied with by the Company.

A certificate of compliances issued by the Secretarial Auditor M/s. V Mahesh & Associates dated 19^th May 2022 is enclosed as Annexure - 2 and forms part of this Report.

38. ISSUE OF SHARES

The Company during the year under review has not issued any SWEAT equity shares or shares with differential rights or under Employee stock option scheme nor did it buy back any of its shares.

39. ACKNOWLEDGEMENTS

Your Directors'' place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers and shareholders.

For and on behalf of the Board of Directors Kevin J Johnson

Chennai Chairman

27 May, 2022

Mar 31, 2018

The Directors take pleasure in presenting the Thirty First Annual Report together with the audited accounts of the Company for the financial year ended 31 March, 2018.

1. FINANCIAL SUMMARY / HIGHLIGHTS

(Rs, in Lakhs)

Particulars	2017-18	2016-17
Income	55,558	52,342
Profit before Interest and Depreciation	6,483	5,741
Finance Charges	22	36
Gross Profit	6,461	5,705
Provision for Depreciation	(1,009)	(1,027)
Profit before exceptional and prior period items and tax	5,452	4,678
Exceptional items	188	911
Profit before Tax from continuing operations	5,264	3,767
Provision for Tax	(1,549)	(1,081)
Net Profit After Tax	3,715	2,686

The financials of the Company are required to be prepared under IND AS, a new set of Accounting Standards. The financials for the previous financial year have also been restated in line with the requirements of IND AS. Accordingly, the figures may not be comparable with the financials prepared under the then prevailing accounting standards.

2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There were no events to report that has happened subsequent to the date of the financial statements.

3. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There has been no material change in the nature of business during the period under review.

4. DIVIDEND

The Board of Directors has recommended a dividend of Rs, 1/- per equity share of Rs, 10/- each ( 10%) at its meeting held on 30 May, 2018 resulting in an estimated outflow of about Rs, 185.57 lakhs (Inclusive of dividend distribution tax) for approval of the shareholders at the Annual General Meeting. The proposed dividend takes into consideration current and anticipated future resource requirements of the business.

5. IND AS STANDARDS

Your Company had adopted IND AS with effect from 1 April, 2017 pursuant to the notification dated February 15, 2015 under Section 133 of the Companies Act, 2013 issued by the Ministry of Corporate Affairs, notifying the Companies (Indian Accounting Standard) Rules, 2015. Your Company has published IND AS Financials for the year ended 31 March, 2018 along with comparable financials for the year ended 31 March, 2017 together with opening statement of Assets and Liabilities as on 1 April, 2016.

The quarterly results published by the Company during the financial year 2017-18 were also based on IND AS. These have been published in newspapers and also made available in the Company''s website www.esabindia.com and the website of the stock exchanges where the shares of the Company are listed.

6. TRANSFERS TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013 ("the Act") read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("The Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government, after completion of seven years. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the Members for seven consecutive years or more shall also be transferred to the dematerialized account created by the IEPF authority.

The Company had sent individual notices and also advertised in the newspapers seeking action from the Members who have not claimed their dividends for seven consecutive years or more. Accordingly, the Company has transferred such unpaid or unclaimed dividends and corresponding shares up to and including the Second Interim Dividend 2010.

Members/claimants whose shares, unclaimed dividends, have been transferred to the IEPF Demat Account of the Fund, as the case may be, may claim the shares or apply for refund by making an application to the IEPF Authority in Form IEPF-5 (available on http:www.iepf.gov.in) along with requisite fee as decided by IEPF Authority from time to time. The Member / Claimant can file only one consolidated claim in a Financial year as per the IEPF Rules.

The Company will be transferring the unclaimed amounts from Interim Dividend 2011 and also the corresponding shares on or before 26 August, 2018. Members are requested to ensure that they claim the dividends before they are transferred to the said fund. Due dates for transfer of Unclaimed Dividend to IEPF are provided elsewhere in the notice calling the Annual General Meeting.

Details of shares / shareholders in respect of which dividend has not been claimed, are provided on our website www.esabindia.com. Shareholders are encouraged to verify their records and claim their dividends of the preceding seven years, if not claimed.

7. BOARD MEETINGS

The Board of Directors met 5 times during the financial year 2017-18. The Meetings were held on 25 May, 3 August and

9 November of 2017 and on the 7 of February and 20 of March, 2018.

8. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company has six members.

Mr Daniel A Pryor is the nominee of ESAB Holdings Limited and a non-retiring Director in terms of the provisions of the Articles of Association.

Mr Rohit Gambhir is the Managing Director of the Company. He was appointed for a period of five years with effect from

1 November, 2013.

There are four Non-executive and Independent Directors on the Board of the Company.

In accordance with the provisions of Article 129 of the Company''s Articles of Association, Mr Rohit Gambhir retires

by rotation at the forthcoming Annual General Meeting and being eligible, has offered himself for re-appointment. The details as required under Regulation 36 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding Mr Rohit Gambhir are published as part of the Notice calling the Annual General Meeting.

Key Managerial Personnel

As stipulated under Section 203 of the Companies Act, Mr Rohit Gambhir, Managing Director, Mr B Mohan, Vice-President Finance & Chief Financial Officer and Mr S Venkatakrishnan, Company Secretary have been designated as the Key Managerial Personnel of the Company.

Mr B Mohan, Chief Financial Officer joined the Company on 1 February, 2005 and Mr S Venkatakrishnan, Company Secretary joined the Company on 10 March, 2006.

9. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

As required under Section 149 (7) of the Companies Act, 2013 all the Independent Directors on the Board of the Company have individually issued the stipulated annual declaration confirming that they meet all the criteria of independence as stipulated under the Act.

10.COMMITTEES OF THE COMPANY

A. AUDIT COMMITTEE

The Company''s Audit Committee consists of three Independent Directors and one Non-executive Director. Mr K Vaidyanathan, is the Chairman of the said Committee. Mr Vikram Tandon, Mr Sudhir Chand and Mr Daniel A Pryor are the other members of the said Committee. The said Committee met four times on 25 of May, 3 of August, 9 of November, 2017 and 7 of February, 2018. The constitution and the terms of reference of the Committee are in line with the requirements of Section 177 of the Companies Act.

There were no occasions during the year where the Board of Directors did not accept the recommendations of the Audit Committee.

B. NOMINATION AND REMUNERATION COMMITTEE

The Company''s Nomination and Remuneration Committee consists of three Independent Directors and one Non-Executive Director. Mr K Vaidyanathan is the Chairman of the said Committee, while Mr Sudhir Chand & Ms Sabitha Rao, Independent Directors and Mr Daniel A Pryor, Chairman of the Board are the other Members of the Committee.

The said Committee met twice during the financial year

2017-18 on the 25 of May, 2017 and the 20 of March, 2018.

The said Committee lays down the policy on remuneration stating therein the attributes required for the Managing Director, Independent Directors and Key Managerial Personnel. The said policy also states the modus operandi for determining the remuneration for the above referred personnel. The remuneration policy of the Company can be viewed on the Company''s website www.esabindia.com.

The above are in compliance with Section 178 (4) of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

C. STAKEHOLDERS RELATIONSHIP COMMITTEE The Company''s Stakeholders Relationship Committee consists of two Independent Directors, one Non-executive Director and the Managing Director. Mr Vikram Tandon is the Chairman of the Committee, Mr Sudhir Chand, Independent Director, Mr Daniel A Pryor, Chairman of the Board and Mr Rohit Gambhir, Managing Director are the other Members of the Committee.

The Committee met four times during the year on 25 May, 3 August, 9 November, 2017 and on 7 of February, 2018.

The Committee and the conduct of its business are in compliance with Section 178(5) of the Companies Act, 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

D. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Company''s Corporate Social Responsibility Committee consists of one Independent Director, one Non-executive Director and the Managing Director. Ms Sabitha Rao is the Chairperson of the said Committee. Mr Daniel A Pryor, Chairman of the Board and Mr Rohit Gambhir, Managing Director are the other Members of the said Committee. The Committee met twice during the financial year on the 25 of May and on the 9 of November, 2017.

The formation of the Committee and its terms of reference are in line with the requirements of Section 135 (1) of the Companies Act, 2013.

E. RISK MANAGEMENT COMMITTEE

The said Committee met twice on the 3 of August, 2017 and on the 7 February, 2018.

The said Committee lays down the Policy on Risk Management stating therein the objectives and purpose of the said policy. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving those risks which are material in nature and are associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on material risk related issues.

The Risk Management Policy of the Company can be viewed on the Company''s website www.esabindia.com.

11.VIGIL MECHANISM

The Company has set up a whistle-blower policy which can be viewed on the Company''s website www.esabindia.com. In terms of the said policy the Directors and employees are given direct access to the Chairman of the Audit Committee to report on alleged wrongdoings. The said policy has been made available at the Offices / Plants of the Company at conspicuous places to enable the employees to report concerns, if any, directly to the Chairman of the Board and to the Chairman of the Audit Committee. Employees who join the Company newly are apprised of the availability of the said policy as a part of their induction schedule.

The above is in compliance of Section 177 (9) & (10) of the Companies Act, 2013 and in terms of Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief, and according to the information and explanations obtained by them, your Directors make the following statement as per the requirements of Section 134 (5) of the Companies Act, 2013.

1. In the preparation of the annual accounts for the financial year ended 31 March, 2018 the applicable accounting standards have been followed;

2. The Directors have selected such accounting policies listed in Note 2.1 to the Notes to the Financial Statements and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year on 31 March, 2018 and of the Profit of the Company for that year;

3. The Directors have taken proper and sufficient care of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Directors have prepared the annual accounts for the year ended 31 March, 2018 on a going concern basis;

5. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMIC & BUSINESS ENVIRONMENT The financial year under review continued to be challenging and eventful in terms of the business environment. The Government introduced a significant change in terms of introduction of Goods and Services Tax. Despite teething troubles in the GST infrastructure, low level of preparedness in some segments and multiple changes in the procedural aspects of the law, this change is expected to help the organized sector with better compliance levels overall.

While the economy reportedly grew between 6.5-7% during the financial year, key indicators relevant to manufacturing segment including Index of Industrial Production (IIP) continued to indicate volatilities with anaemic growth for most of the financial year with some revival during the last quarter of the year.

Steel prices continued to increase during the year reportedly driven by increases in input costs. There were limited options in terms of alternate sourcing through imports in view of tariff barriers. Offsets through price increases on finished goods continued to be limited due to market conditions.

The Investment cycle in the economy was weak for most part of the year with no significant capacity additions in key customer segments the Company deals with.

OUTLOOK, OPPORTUNITIES AND THREATS

The last quarter of the financial year witnessed a few positives with growth in volumes in some segments. There are some references to mild recovery in the capital goods segment. A significantly weakening rupee with surge in fuel costs are likely to pose challenges in the current fiscal year. Steel price trends could have a strong impact on the prospects as it has been on a rising curve for a prolonged period of time.

We continue to see threats arising from excess capacities in the market and competition from Tier II players in the Industry.

14. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company''s internal controls are evaluated by Management and tested by our Auditors. Additionally, the Company is subjected to reviews applicable for Subsidiaries of US headquartered entities. The Company continues to list and evaluate key controls and process to an extent leveraging on the work done as part of its global reporting requirements. The Audit Committee reviews key findings and follow up actions at its meetings. The scope and coverage of internal audits are aligned to have coverage in terms of key controls and locations. The endeavor is to align to the requirements of Internal Control on Financial Reporting (ICFR) framework while leveraging on work done as part of global reporting requirements. Management testing through independent audit teams followed by external testing were done during the year.

Our efforts on the above lines are expected to ensure compliance with the requirements of Internal Controls on Financial Reporting.

15. FINANCIAL PERFORMANCE OF THE COMPANY

A. INCOME AND EXPENDITURE The Company''s revenue from Operations (Net) grew by about 13% despite the difficult backdrop with growth from traded items at about 28% during the year.

The Company enhanced its range of product offerings with the introduction of new products. The Company also had steady volumes in terms of exports to related party entities primarily in South East Asian markets.

Service income grew by 70% though on a small base, with increases in activity on R&D support, shared services and related activities undertaken for related party entities based outside of India. We continue to see some potential on this with the resultant foreign exchange earnings helping in offset exchange risks on imports.

Other income fell by 15% with the impact of lower interest rates on income from debt and liquid funds. Materials costs as a percentage to sales were comparable with the previous year after adjustment for Excise duty on Sales.

Overheads including employee costs were lower at 27% of Net Sales and Service Income as against 34% in the previous accounting period. The key variances were primarily on account of;

- Employee benefit expenses were higher by 15% on a comparable basis driven by recruitments primarily on global support functions, wage inflation and higher retirement benefits costs on funding due to reduction in interest rates.

- Higher costs on transportation outwards in line with changes in terms of trade and customer mix.

- Reduction in Excise duty on Sales with the introduction of GST effective July 1, 2017.

The Company has continued to provide for Depreciation at useful lives and rates aligned to the erstwhile Schedule XIV of the Companies Act, 1956 based on a technical evaluation of useful life of assets.

Profit from continuing businesses before exceptional items was higher by 17% over the previous year with the impact of sales growth and control on costs.

B. BALANCE SHEET

A crisis ridden banking sector together with short term GST transition driven disruptions to trade posed significant liquidity challenges for Industry during the year. Your Company continued to have a strong Balance Sheet despite the challenges and ended the year debt free and well positioned for headwinds and growth requirements.

Working capital was reviewed through the year and measures taken to monitor progress and corrective actions for any adverse variances.

The Company had lent a sum of INR 400 Million to a related party entity in India on terms which were benchmarked with market rates and arms'' length terms. Cash and Cash equivalents that were invested in debt and liquid funds grew about 12% after adjusting for the loan amount.

Capital Expenditure was about $ 1,690 lakhs as against $ 1,394 lakhs in the preceding year. The capital expenditure was primarily on productivity improvements, capacity enhancements and upgrading IT systems. As part of a global deal, your Company acquired the welding wires business from Sandvik Asia Private limited in the last quarter of FY 2017-18. No tangible assets are involved in this transaction for the Company.

Inventories were higher by about 16% in value terms in line with volumes growth. Inventory in terms of days to sales was comparable with the previous financial year.

Trade receivables were marginally higher due to change in customer mix.

16. SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY

The Company does not have any subsidiary, joint venture or an associate company.

17.HOLDING COMPANY

Colfax Corporation is a diversified industrial technology Company that provides air & gas handling and fabrication technology products and services. Colfax Corporation holds 73.72% of equity shares of your Company through ESAB Holdings Limited, UK and Exelvia Group India BV, Netherlands which are its indirect wholly-owned subsidiaries.

18. EXTRACT OF THE ANNUAL RETURN

The Extract of the Annual Return in form MGT - 9 of the Company made up as on the Financial Year ended 31 March,

2018 is attached by way of Annexure 1. This is also made available in the website of the Company www.esabindia.com. Those interested may visit our website and see the details of MGT - 9.

19. STATUTORY AUDITORS

M/s. S R Batliboi & Associates, LLP, Chennai (Firm Regn No.101049W / E300004) were appointed by the shareholders at the Annual General Meeting held on 7 August, 2015 as the Statutory Auditors of the Company for a period of five years in compliance with Section 139 (1). Their appointment as statutory auditor was informed to the Registrar of Companies through Form ADT-1 dated 14 August, 2015 vide SRN S39001086.

This is the fourth consecutive year out of the five years that they have been appointed. Their remuneration would be fixed in line with the recommendation of the audit committee and as duly approved by the Board of Directors.

M/s. S R Batliboi & Associates, LLP, Chartered Accountants, have vide their letter dated April 17, 2018 given their written consent to continue as the Statutory Auditors of the Company and have also issued a certificate that the appointment if made shall be in accordance with the conditions and that they satisfy the criteria provided under the relevant section and Chapter X of the Companies Act read with Companies (Audit and Auditors) Rules, 2014.

The Statutory Auditors have issued a clean report on the financials of the Company and have not issued any qualifications for the financial year ended 31 March, 2018.

20. SECRETARIAL AUDIT

In terms of Section 204 (1) of the Companies Act, 2013, the Company has appointed M/s. V Mahesh & Associates, Chennai to do the secretarial audit of the Company for the financial year 1 April, 2017 to 31 March, 2018. Their appointment was informed to the Registrar of Companies, Chennai vide SRN G46103248 form MGT-14 dated 15 June, 2017.

M/s. V Mahesh & Associates, have now completed their secretarial audit and have issued their certificate as per the prescribed format in MR-3 to the shareholders of the Company, which is annexed to this Report as Annexure - 2. They have no observations in their report and have confirmed that the Company has proper board processes and a compliance mechanism in place. They have also affirmed that the Company has complied with the relevant statutes, rules and regulations and secretarial standards, as applicable.

21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO

The information required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in the Annexure - 3 and forms part of this Report.

22. DETAILS RELATING TO DEPOSITS

The Company has not accepted any deposits during the period under review as envisaged under Section 73, 74 & 76 of the Companies Act, 2013.

23. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company had lent a sum of INR 400 Million to a related party entity viz. Howden Solyvent India Private Limited on terms which were benchmarked with market rates and on an arms'' length basis under Section 186 of the Companies Act, 2013 during the year under review.

The Board of Directors from time to time has authorized the Company to invest the surplus funds of the Company in deposits with Bank and investments in debt funds, liquid funds and fixed maturity plans with mutual funds for a tenor not exceeding 100 days. The investments are made in liquid and debt funds .The Company has earned an income of around Rs.688 lakhs for the period 1 April 2017 to 31 March, 2018 in the form of dividends and profit on redemption of investments. The Company has not given any guarantees other than bank guarantees in the normal course of business to meet contractual obligations.

25. RISK MANAGEMENT POLICY

In compliance with the requirements of Section 134 (n) of the Companies Act, 2013 and as required under Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has constituted a Risk Management Committee consisting of Mr Daniel A Pryor, as the Chairman and Mr Rohit Gambhir, Managing Director and Mr B Mohan, Chief Financial Officer as the Members of the Committee. The said Committee lays down the procedures to identify risks and the mitigation procedures and adopted a policy in this regard. The Board of Directors defines the roles and responsibilities of the Committee. The policy on Risk Management has been hosted in the Company''s website www.esabindia.com. The said committee updates the Board of Directors on a periodical basis on the material risks faced by the Company and the measures taken by the Company to mitigate the said risks.

26. CORPORATE SOCIAL RESPONSIBILITY

As required under Section 134 (o) read with Section 135 (1) of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee. The Committee has Ms Sabitha Rao, as the Chairperson, Mr Daniel A Pryor and Mr Rohit Gambhir as the Members of the said Committee.

The Company promotes education on safe welding practices especially in smaller towns through deployment of consultants to work with welders. The Company is also in talks with certain vocational training institutions where it could contribute by way of education on welding through deployment of personnel and also through contributions in the form of Equipment and/ or welding consumables.

The Company, has expended about $ 4.30 lakhs during the financial year towards its CSR initiatives.

27. RELATED PARTY TRANSACTIONS

All the transactions with the related parties entered into during the period under review have been in the ordinary course of business and at arms'' length basis. There have been no material related party transactions entered into during this period. However, the Company obtained an approval from the Shareholders through a postal ballot - ordinary resolution dated 23 March 2018 for the related party transaction with EWAC Alloys Limited, a fellow subsidiary. The details of related party transactions pursuant to Clause (h) of sub-section (3) of Section 134 of the Act, is enclosed in form no. AOC 2 as Annexure - 5.

28. FORMAL ANNUAL EVALUATION As required under Section 134 (p) of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had already approved the evaluation criteria for evaluating the performance of the Board of Directors, its committees and the performance of Independent Directors.

Accordingly, as required under Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors at their separate meeting held on 7 February, 2018 evaluated the performance of the nondependent Directors and the Board as a whole. They also reviewed the performance of the Chairman of the Company and also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that was necessary for the Board to effectively and reasonably perform their duties.

The Board of Directors assessed the performance of the individual directors on the Board based on parameters such as, relevant experience and skills, ability and willingness to

speak up, focus on shareholder value creation, high governance standards, knowledge of business, processes and procedures followed, openness of discussion / integrity, relationship with management, impact on key management decisions etc. The Members of the Committee of audit, nomination & remuneration, stakeholders relationship and corporate social responsibility committee were also assessed on the above parameters and also in the context of the committee''s effectiveness vis-a-vis the Act and the listing regulations.

29. COST AUDITOR

As required under Section 148 of the Companies Act, 2013 the Board of Directors at its meeting held on 30 May, 2018 have appointed M/s.Geeyes & Co., Cost Accountants within the meaning of Cost & Works Accountants Act, 1959 and holding a valid certificate of practice No.000044 as the Cost Auditor for conducting the Cost Audit for the financial year 2018-2019. The Audit Committee recommended the appointment subject to the compliance of the requirements stipulated in the relevant notifications issued by Ministry of Corporate Affairs.

The Company has received a letter dated April 18, 2018 from the Cost Auditor stating that the appointment, if made, will be within the limit prescribed under the Act.

The relevant Form CRA2 for appointment of Cost auditor for the financial year 2017-18 was filed with the Registrar of Companies on 12 June, 2017 vide SRN G45824513.

The cost audit report issued by the Cost Auditor for the financial year ended 31 March, 2017 was filed with the Registrar of Companies vide form CRA-4 dated 5 September, 2017 vide SRN G52072808.

30. RATIO OF REMUNERATION TO EACH DIRECTOR

A. Executive Director

Ratio of remuneration paid to Mr Rohit Gambhir, Managing Director vs the median employee is: 24:1 (23:1 for the year ended 31.3.2017).

Non-executive Independent Director Ratio of remuneration paid to Mr Vikram Tandon, Non-executive Independent Director vs the median employee is: 0.88:1 (0.77:1 for the year ended 31.3.2017)

Ratio of remuneration paid to Mr Sudhir Chand, Non-executive Independent Director vs the median employee is: 0.93:1 (0.83:1 for the year ended 31.3.2017)

Ratio of remuneration paid to Mr K Vaidyanathan, Non-executive Independent Director vs the median employee is: 0.99:1 (0.88:1 for the year ended 31.3.2017) Ratio of remuneration paid to Ms Sabitha Rao, Non-executive Independent Director vs the median employee is: 0.85:1 (0.78:1 for the year ended 31.3.2017)

B. The percentage increase in the median remuneration of employees in the financial year was 7.2%.

C. The number of non-unionised employees in the rolls of the Company as at 31 March, 2018 is 426 (371 as on 31 March, 2017).

D Average percentile increase made in salaries of employees other than KMP in comparison to the percentile increase in the remuneration of KMP and the justification thereof.

The average percentile increase in salaries of employees other than KMP is 7.9% while that of KMPs is 7.7%.

Justification thereof: Compensation revisions take into account performance metrics on sales, operating profits and working capital apart from specific elements attributable to various functions within the organization. Despite difficulties in the operating environment, we exceeded the budget in all the three metrics. Taking into account the consideration the rate of inflation, it was decided to consider an average increase of 7.5%. This increase also includes a higher percentage of increase that has been considered for junior / middle level employees who have been considered for promotion.

E. The key parameters for any variable component of remuneration availed by the Directors.

Variable Component to Mr Rohit Gambhir - This is linked to various parameters, financial and non-financial. Key elements include sales, operating profit, working capital, implementation of business systems.

Variable Component to Independent Directors - Is based on the roles and responsibilities and their contribution to the Company in their respective capacities. The Commission is individually determined based on their varying commitments of time and effort to the Board and to its committees.

Remuneration of Managerial Personnel) Rules, 2014 rule 5 sub-rule (2), the names of Top 10 employees in terms of the remuneration drawn is given in Annexure - 6.

As at the end of March, 2018 the Company had 734 employees as against 660 at the end of 31 March, 2017. The Company believes in providing a working environment that is focused on the customers, teamwork, continuous improvement, innovation and a competitive environment where employees strive to improve value for shareholders.

31. FINANCE

The Company''s relationships with its Bankers viz. AXIS Bank Ltd. and HDFC Bank Ltd. continued to be cordial during the year. The Company would like to thank its Bankers for their support.

32. ENVIRONMENT, HEALTH AND SAFETY

The Company continued its commitment to industrial safety and environment protection and all its factories have obtained its OHSAS 18001 certification. Periodical audits are done by external and internal agencies to assess the continued levels of EHS efficiency of each of these plants and the OHSAS certification given is renewed after every such audit. The Company is also networked with the Group on EHS initiatives and works closely with them on initiatives and actions concerning EHS.

Cautionary Statement

33. LISTING WITH STOCK EXCHANGES

The Company''s equity shares are listed with a) BSE Limited and b) National Stock Exchange of India Limited. The annual fee for both the exchanges have been paid promptly for the year 2017-2018. Pursuant to the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company had executed fresh listing agreements with BSE Limited and National Stock Exchange of India Limited on 9 November, 2015.

The Company had 11,556 shareholders as at the end of the year 31 March, 2018. 98.60% of the shares are held in dematerialized form.

As required under Regulation 39 (4) Read with Schedule VI of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the details of the shares issued by the Company consequent to amalgamation of erstwhile Maharashtra Weld aids Limited with the Company in 1994,

the details of the physical shares which remains unclaimed and transferred to the Unclaimed Suspense Account and the reconciliation of the shares claimed by shareholders during the year 2017-2018 and the shares outstanding in the suspense account as on 31.3.2018 is given below: 66 Shareholders holding 4,710 equity shares constituting about 0.03% of shares have not made their claim from the Company on the shares outstanding in the Unclaimed Suspense Account of ESAB India Limited. The voting rights for these shares shall remain frozen until these are claimed by the rightful owners.

34. CORPORATE GOVERNANCE

Sl. No.	Details	No. of shareholders	No. of equity shares
1.	Aggregate number of shareholders and the outstanding shares lying in the unclaimed suspense account at the beginning of the year i.e. as on 1.4.2017	126	9,465
2.	Number of Shareholders who approached the Company during the year	1	50
3.	Number of shareholders to whom shares were transferred from the unclaimed suspense account during the year	1	50
4.	No. of shares transferred to Investor Education and Protection Fund	60	4,705
5.	Aggregate Number of shareholders and the outstanding shares lying in the unclaimed Suspense Account at the end of the year i.e. 31.3.2018	66	4,710

35. POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE ACT

The Company has also adopted the mandatory policy on Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Employees have been sensitized on the provisions of this enactment and the Company has also constituted an internal complaints committee with effect from 30 October, 2013 to deal with complaints, if any, under the said Act. The Committee meets as and when requirement arises. The Company believes in providing safe working place for the Women in the Company and adequate protection are given for them to carry out their duties without fear or favour. There were no complaints received during the year to report under the said statute. As required under
Section 21 of Chapter VIII of the said Act, the Committee has submitted its annual report in the prescribed format to the designated authority within the stipulated period.

36. SECRETARIAL STANDARDS

As on 31 March, 2018 all the applicable Secretarial Standards which have been notified have been complied with by the Company.

A certificate of compliances issued by the Secretarial Auditor M/s. V Mahesh & Associates dated 20 April, 2018 is enclosed as Annexure - 2 and forms part of this Report.

37. ISSUE OF SHARES

The Company during the year under review has not issued any SWEAT equity shares or shares with differential rights or under Employee stock option scheme nor did it buy back any of its shares.

38. ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers and shareholders.

Your Board would like to place on record, its sincere appreciation to the employees for having played a very significant part in the Company''s operations till date.

For and on behalf of the Board of Directors

Daniel A Pryor

Chairman

30 May, 2018

Mar 31, 2017

The Directors take pleasure in presenting the Thirtieth Annual Report together with the audited accounts of the Company for the financial year ended 31 March, 2017.

Directorsâ Report to Shareholders

1. FINANCIAL SUMMARY / HIGHLIGHTS

(Rs, in Lakhs)

Particulars	2016-17	2015-16
Income	48,657	45,895
Profit before Interest and Depreciation	5,575	5,415
Finance Charges	-	-
Gross Profit	5,575	5,415
Provision for Depreciation	(1,027)	(952)
Profit before exceptional and prior period items and tax	4,548	4,463
Exceptional items	(911)	(353)
Profit before Tax	3,637	4,110
Provision for Tax	(1,037)	(1,276)
Net Profit After Tax	2,600	2,834

2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There were no events to report that has happened subsequent to the date of financial statements.

3. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There has been no material change in the nature of business during the period under review.

4. DIVIDEND

The Board of Directors has recommended a dividend of Rs, 1/- per equity share of Rs, 10/- each (10%) at its meeting held on 25 May, 2017 resulting in an estimated outflow of about Rs, 185.27 lakhs (Inclusive of dividend distribution tax) for approval of the shareholders at the Annual General Meeting. The proposed dividend takes into consideration current and anticipated future resource requirements of the business.

5. BOARD MEETINGS

The Board of Directors met 4 times during the financial year 2016-17. The Meetings were held on 19 May, 3 August and the 3 November of 2016 and on the 9 of February, 2017.

6. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company has six members.

Mr Daniel A Pryor is the nominee of ESAB Holdings Limited and a non-retiring Director in terms of the provisions of the Articles of Association.

Mr Rohit Gambhir is the Managing Director of the Company. He was appointed for a period of five years with effect from

1 November, 2013.

There are four Non-executive and Independent Directors on the Board of the Company.

In accordance with the provisions of Article 129 of the Company''s Articles of Association, Mr Rohit Gambhir retires by rotation at the forthcoming Annual General Meeting and being eligible, has offered himself for re-appointment. The details as required under Regulation 36 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding Mr Rohit Gambhir are published as part of the Notice calling the Annual General Meeting.

Key Managerial Personnel

Mr B Mohan, Chief Financial Officer joined the Company on 1 February, 2005 and Mr S Venkatakrishnan, Company Secretary joined the Company on 10 March, 2006.

7. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

8. COMMITTEES OF THE COMPANY

A. AUDIT COMMITTEE

2016 and on 9 February, 2017. The constitution and the terms of reference of the Committee are in line with the requirements of Section 177 of the Companies Act.

There were no occasions during the year where the Board of Directors did not accept the recommendations of the Audit Committee.

B. NOMINATION AND REMUNERATION COMMITTEE

The Company''s Nomination and Remuneration Committee consists of three Independent Directors and one Non-Executive Director. Mr K Vaidyanathan, is the Chairman of the said Committee while Mr Sudhir Chand & Ms Sabitha Rao, Independent Directors and Mr Daniel A Pryor, Chairman of the Board are the other Members of the Committee.

The said Committee met once during the financial year

2016-17 on 19 May, 2016.

The above are in compliance with Section 178 (4) of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Committee met four times during the year on 19 May, 3 August, 3 November, 2016 and on 9 February, 2017.

D. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Committee met twice during the financial year on 19 May and 3 November, 2016.

The formation of the Committee and its terms of reference are in line with the requirements of Section 135 (1) of the Companies Act, 2013.

E. RISK MANAGEMENT COMMITTEE

The said Committee met twice on 3 August, 2016 and 9 February, 2017.

The Risk Management Policy of the Company can be viewed on the Company''s website www.esabindia.com.

9. VIGIL MECHANISM

The above is in compliance of Section 177 (9) & (10) of the Companies Act, 2013 and in terms of Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

10. DIRECTORS'' RESPONSIBILITY STATEMENT

1. In the preparation of the annual accounts for the financial year ended 31 March, 2017 the applicable accounting standards have been followed;

4. The Directors have prepared the annual accounts for the year ended 31 March, 2017 on a going concern basis;

5. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

11. MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMIC & BUSINESS ENVIRONMENT The financial year under review witnessed a slew of initiatives from the Government with varying ranges of present and potential impact. There appeared to be legislative intent in addressing multiple issues notably on financial sector reforms, digitization and policy push on infrastructure. The short term adverse impact on some of these initiatives affected business for a part of the financial year and we expect to have some more short term volatilities in the current fiscal year. This is specifically in the context of the proposed Goods and Services Tax. The longer term impact of these initiatives on digitization, demonetization and GST are expected to be positives for players in the organized sector including your Company. However, there are expected short term disruptions, compliance risks and multiple change management issues to address on the supply chain, IT and other business elements.

In the specific context of segments addressed by your Company, the indicators continued to reflect a continuing phase of low to often negative core manufacturing growth. The Investment cycle is reportedly yet to revive and steel consumption growth for relevant segments addressed by the Company continued to languish at low levels.

Key end customer segments for Welding products were affected to various degrees by the above elements.

Input costs on Steel hardened in the face of reported cost increases on ore and coking coal. Pass through in terms of pricing changes was limited given the market conditions and the consequent squeeze on margins had to be addressed through productivity gains and cost reductions.

The Company enhanced its range of product offerings with the introduction of new products. The Company made a small beginning in terms of exports to South East Asian countries on a range of consumables that were hitherto sourced from another ESAB location outside India.

The Company discontinued manufacturing operations at its Khardah Plant and successfully completed the transfer of manufacture of products mainly to its Ambattur Plant. Some of the products relating to Wires are now being supplied out of the Company''s Plant at Kalmeshwar, Nagpur.

The Company undertook a restructuring exercise at Taratala involving right sizing of headcount through a voluntary separation scheme for workmen and one time settlement of some of the contractors. This is expected to help us stay cost competitive in a difficult market.

The Company continued to make good progress on its support service activities out of India in the areas of R&D, shared services and operational support for other subsidiaries of Colfax around the world. We have had encouraging response from the concerned end customers in the Colfax group. We continue to focus on this to grow employment opportunities in India and to optimize on costs apart from bringing in foreign exchange earnings.

We continue to explore avenues to drive down costs and improve productivity through internal and global benchmarking of performance metrics.

OUTLOOK, OPPORTUNITIES AND THREATS

Despite mixed signals within various segments, the overall outlook appears to be moderately better for the current fiscal year. We expect to see the benefits of some of the reforms which tend to benefit the organized sector of the economy. We also expect to see some change management issues in the economy in the transition phase of GST when it is implemented. We also expect to see some benefits from the restructuring projects undertaken over the last 2 years to accrue in terms of costs and productivity.

RISKS AND CONCERNS

Acute price pressures on some of our key product segments, continuing volatility in Steel prices, Exchange rate volatilities with an upside bias on the Rupee and the eventual levels of Monsoon are some of the external elements to deal with. We also continue to see threats arising from excess capacities in the market and competition from the unorganized segment.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company''s internal controls are continuously evaluated by Management and tested by our Auditors. Additionally, the Company is subjected to reviews applicable for Subsidiaries of US headquartered entities. The Company continues to list and evaluate key controls and process to an extent leveraging on the work done as part of its global reporting requirements. The Audit Committee reviews key findings and follow up actions at its meetings. The scope and coverage of internal audits are aligned to have coverage in terms of key controls and locations. The endeavor is to align to the requirements of Internal Control on Financial Reporting (ICFR) framework while leveraging on work done as part of global reporting requirements. Management testing through independent audit teams followed by external testing were done during the year.

Our efforts on the above lines are expected to ensure compliance with the requirements of Internal Controls on Financial Reporting.

FINANCIAL PERFORMANCE OF THE COMPANY INCOME AND EXPENDITURE

Revenue from operations grew by about 5% over the previous year. Consumables business grew by 3.9% while Equipment grew by 6.3%. The growth was driven by volume growth in Electrodes, Cored Wires, Gas Equipment and Automation businesses. Overall Equipment business continued to be affected by a continuing slowdown in the capital expenditure cycle.

Other income grew by 60.6% driven by higher investment income, exchange gains and profits on disposal of fixed assets primarily relating to Assets following the closure of the Khardah Plant. Cash surpluses were deployed in debt and liquid funds through the year.

Materials costs as a percentage to sales were higher at 65% as against 64% in the previous year. This was due to higher Steel costs and growth in traded items sales with relatively lesser margins.

Overheads including employee costs were higher at 28.3% of Net Sales and Service Income as against 27.7% in the previous accounting period. The increases were primarily on account of;

- Employee benefit expenses were higher by 12.4% on a comparable basis driven by recruitments primarily on global support functions, wage inflation and higher retirement benefits costs on funding due to reduction in interest rates.

- Higher costs on transportation outwards in line with changes in terms of trade and customer mix.

- Increases in sales promotion expenses for furthering sales and channel growth.

Depreciation was higher by 7.9% as compared to 2015-16 due impact of additions during the year. The Company has continued to provide for Depreciation at rates aligned to the erstwhile Schedule XIV of the Companies Act, 1956 based on a technical evaluation of useful life of assets.

BALANCE SHEET

Market conditions on liquidity continued to be tight throughout the year with a pronounced short term impact arising from demonetization during the year. Additionally, there were transition issues arising from product transfers and plant closure related activities.

The Company continued to monitor closely all key elements of working capital and capital expenditure. This resulted in a healthy cash conversion with a healthy growth of 19.8% in cash and current investments from the end of the previous financial year.

Capital Expenditure was about $. 1,491 lakhs as against $.1,053 lakhs in the previous year. The capital expenditure was primarily on productivity improvements, capacity enhancements and upgrading IT systems.

Inventories were higher by about 7.5% in value terms due to seasonal elements including product transfers and restructuring as also due to increases in forecast based inventory levels at the end of March, 2017. Measured in days to sales, it went up marginally from 48.6 days at the end of 2015-16 to 50.1 days.

Trade receivables were relatively stable at 38.2 days to sales as compared to 37.7 days at the end of the previous financial year.

Current liabilities were higher by 25.8% after negotiated improvements in payment terms with vendors.

SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY

The Company does not have any subsidiary, joint venture or an associate company.

HOLDING COMPANY

Colfax Corporation is a Delaware, USA based industrial group with existing global business interests in gas and fluid handling and fabrication technology products and services. Colfax Corporation holds 73.72% of equity shares of your Company through ESAB Holdings Limited, UK and Exelvia Group India BV, Netherlands which are its indirect wholly-owned subsidiaries.

12. EXTRACT OF THE ANNUAL RETURN

The Extract of the Annual Return in form MGT-9 of the Company made up as on the Financial Year ended 31 March, 2017 is attached by way of Annexure - 1 to this report.

13. STATUTORY AUDITORS

Further as envisaged in Section 139 and 142 of the Companies Act, 2013, their appointment is subject to ratification by the shareholders of the Company at the

Annual General Meeting. This being the third consecutive year out of the five years that they have been appointed the subject is being placed before the shareholders at the Annual General Meeting on 3 August, 2017.

M/s. S R Batliboi & Associates, LLP, Chartered Accountants, have vide their letter dated April 10, 2017 given their written consent to continue as the Statutory Auditors of the Company and have also issued a certificate that the appointment if made shall be in accordance with the conditions and that they satisfy the criteria provided under the relevant section and Chapter X of the Companies Act read with Companies (Audit and Auditors) Rules, 2014.

The Statutory Auditors have issued a clean report on the financials of the Company and have not issued any qualifications for the financial year ended 31 March, 2017.

14. SECRETARIAL AUDIT

In terms of Section 204 (1) of the Companies Act, 2013, the Company has appointed M/s. V Mahesh & Associates, Chennai to do the secretarial audit of the Company for the financial year 1 April, 2016 to 31 March, 2017. The said firm had vide their letter dated 24 March, 2016 issued their consent to do the secretarial audit for the Company for the staid period. Their appointment was informed to the Registrar of Companies, Chennai vide form MGT-14 dated 30 May, 2016 vide SRN G04321774.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO

The information required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in the Annexure - 3 and forms part of this Report.

16. DETAILS RELATING TO DEPOSITS

The Company has not accepted any deposits during the period under review as envisaged under Section 73, 74 & 76 of the Companies Act, 2013.

17. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not made any loans to any third party as envisaged under Section 186 of the Companies Act, 2013 during the year under review.

2017 in the form of dividends and profit on redemption of investments. The Company has not given any guarantees other than bank guarantees in the normal course of business to meet contractual obligations.

19. RISK MANAGEMENT POLICY

In order to comply with the requirements of Section 134 (n) of the Companies Act, 2013 and as required under Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has constituted a Risk Management Committee consisting of Mr Daniel A Pryor, as the Chairman and Mr Rohit Gambhir, Managing Director and Mr B Mohan, Chief Financial Officer as the Members of the Committee. The said Committee lays down the procedures to identify risks and the mitigation procedures and adopted a policy in this regard. The Board of Directors defines the roles and responsibilities of the Committee. The policy on Risk Management has been hosted in the Company''s website www.esabindia.com. The said committee updates the Board of Directors on a periodical basis on the material risks faced by the Company and the measures taken by the Company to mitigate the said risks.

20. CORPORATE SOCIAL RESPONSIBILITY

The Company promotes education on safe welding practices especially in smaller towns through deployment of consultants to work with welders. The Company is also in the process of identifying vocational institutions where it could contribute by way of education on welding through deployment of personnel and also through contributions in the form of Equipment and / or welding consumables.

In addition to ongoing initiatives for promoting safe welding practices, the Company is concentrating on providing employment enhancing vocation / skill development training and promoting livelihood enhancement projects as an identified area. Towards this end, the Company is currently working on identifying vocational centers / beneficiaries of these projects, understanding their needs, short listing the partnering agencies and the implementing NGOs having the necessary expertise in this field. The Company is evaluating plans to scale up the identified CSR activities in a structured and controlled manner to ensure maximum advantage to the relevant communities.

The Company, has expended about $.8.22 lakhs during the financial year towards its CSR initiatives.

21. RELATED PARTY TRANSACTIONS

As required under Section 188 of the Companies Act, 2013 and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company places before the audit committee the list of related parties from whom they buy raw materials or finished goods, to whom the Company extends services or exports goods. The details of the basis of pricing and the margins on such transactions are also tabled. The Audit Committee accords its omnibus approval for such related party transactions on an annual basis. The updates on the transactions with the related parties are placed before the audit committee on a quarterly basis. The details are also placed before the Board of Directors for its information.

All the transactions with the related parties entered into during the period under review have been in the ordinary course of business and at arms'' length basis. There have been no material related party transactions entered into during this period which required the approval of the shareholders by way of special resolution. The details of related party transactions pursuant to Clause (h) of sub-section (3) of Section 134 of the Act, is enclosed in form no. AOC 2 as Annexure - 5.

22. FORMAL ANNUAL EVALUATION

As required under Section 134 (p) of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had already approved the evaluation criteria for evaluating the performance of the Board of Directors, its committees and the performance of Independent Directors.

Accordingly, as required under Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors at their separate meeting held on 9 February, 2017 evaluated the performance of the non-independent Directors and the Board as a whole. They also reviewed the performance of the Chairman of the Company and also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that was necessary for the Board to effectively and reasonably perform their duties.

Also as required under Regulation 17 (10) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board assessed the performance of the Independent Directors as per the criteria laid down and has recommended their continuation on the Board of the Company at its meeting.

The Board of Directors assessed the performance of the individual directors on the Board, based on parameters such as, relevant experience and skills, ability and willingness to speak up, focus on shareholder value creation, high governance standards, knowledge of business, processes and procedures followed, openness of discussion / integrity, relationship with Management, impact on key management decisions etc. The Members of the Committee of Audit, Nomination & remuneration, Stakeholders relationship and Corporate social responsibility committee were also assessed on the above parameters and also in the context of the committee''s effectiveness vis-a-vis the Act and the listing regulations.

23. COST AUDITOR

As required under Section 148 of the Companies Act, 2013 the Board of Directors at its meeting held on 25 May, 2017 have appointed M/s.Geeyes & Co., Cost Accountants within the meaning of Cost & Works Accountants Act and holding a valid certificate of practice No.000044 as the Cost Auditor for conducting the Cost Audit for the financial year

2017-2018. The Audit Committee recommended the appointment subject to the compliance of the requirements stipulated in the relevant notifications issued by Ministry of Corporate Affairs.

The Company has received a letter from the Cost Auditor stating that the appointment, if made, will be within the limit prescribed under the Act.

The relevant Form CRA-2 for appointment of Cost Auditor for the financial year 2015-16 was filed with the Registrar of Companies on 6 June, 2016 vide SRN G04764023.

The cost audit report issued by the Cost Auditor for the financial year ended 31 March, 2016 was filed with the Registrar of Companies vide form CRA-4 dated 2 September, 2016 vide SRN G10496263.

24. RATIO OF REMUNERATION TO EACH DIRECTOR

A. Executive Director

Ratio of remuneration paid to Mr Rohit Gambhir, Managing Director vs the median employee is 23 : 1 (22 : 1 for the year ended 31.3.2016).

Non-executive Independent Director Ratio of remuneration paid to Mr Vikram Tandon, Non-executive Independent Director vs the median employee is 0.77 : 1 (0.58 : 1 for the year ended 31.3.2016).

Ratio of remuneration paid to Mr Sudhir Chand, Non-executive Independent Director vs the median employee is 0.83 : 1 (0.66 : 1 for the year ended 31.3.2016).

Ratio of remuneration paid to Mr K Vaidyanathan, Nonexecutive Independent Director vs the median employee is 0.88 : 1 (0.70 : 1 for the year ended 31.3.2016).

Ratio of remuneration paid to Ms Sabitha Rao, Nonexecutive Independent Director vs the median employee is 0.78 : 1 (0.62 : 1 for the year ended 31.3.2016).

B. The percentage increase in the median remuneration of employees in the financial year was 7%.

C. The number of non-unionized employees in the rolls of the Company as at 31 March, 2017 is 371 (344 as on 31 March, 2016).

D Average percentile increase made in salaries of employees other than KMP in comparison to the percentile increase in the remuneration of KMP and the justification thereof.

The average percentile increase in salaries of employees other than KMP is 8.5% while that of KMPs is 8.6%.

Justification thereof: Compensation revisions take into account performance metrics on sales, operating profits and working capital apart from specific elements attributable to various functions within the organization. Despite difficulties in the operating environment, the Company''s performance against the above metrics were close to or marginally above budgeted levels. The revisions also need to be reviewed in the light of short and medium term forecasts and budgets on profitability and working capital elements apart from qualitative objectives including safety, quality and leadership parameters. Taking into account all the above elements, we chose to consider an overall average increase of 6.6% to sustain the morale and motivation levels.

E. The key parameters for any variable component of remuneration availed by the Directors.

Variable Component to Independent Directors - This is based on the roles and responsibilities and their contribution to the Company in their respective capacities. The Commission is individually determined based on their varying commitments of time and effort to the Board and to its Committees.

As required under the provisions of Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, the name and other particulars of the employee is set out in the Annexure - 6 to this Report. Further, as required under Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014 rule 5 sub-rule (2), the names of Top 10 employees in terms of the remuneration drawn is given in Annexure - 6.

As at the end of March, 2017 the Company had 660 employees as against 622 at the end of 31 March, 2016. The Company believes in providing a working environment that is focused on the customers, teamwork, continuous improvement, innovation and a competitive environment where employees strive to improve value for shareholders.

25. FINANCE

The Company''s relationships with its Bankers viz. AXIS Bank Ltd. and HDFC Bank Ltd. continued to be cordial during the year. The Company would like to thank its Bankers for their support.

26. ENVIRONMENT, HEALTH AND SAFETY

Cautionary Statement

27. LISTING WITH STOCK EXCHANGES

The Company''s equity shares are listed with a) BSE Limited and b) National Stock Exchange of India Limited. The annual fee for both the exchanges have been paid promptly for the year 2016-2017. Pursuant to the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had executed fresh listing agreements with BSE Limited and National Stock Exchange of India Limited on 9 November, 2015.

The Company had 9,472 shareholders as at the end of the year 31 March, 2017. 98.28% of the shares are held in dematerialized form.

As required under Regulation 39 (4) read with Schedule VI of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the details of the shares issued by the Company consequent to amalgamation of erstwhile Maharashtra Weld aids Limited with the Company in 1994, the details of the physical shares which remains unclaimed and transferred to the Unclaimed Suspense Account and the reconciliation of the shares claimed by shareholders during the year 2016-2017 and the shares outstanding in the suspense account as on 31.3.2017 is given below:

Sl. No.	Details	No. of shareholders	No. of equity shares
1.	Aggregate number of shareholders and the outstanding shares lying in the unclaimed suspense account at the beginning of the year i.e. as on 1.4.2016	127	9,515
2.	Number of Shareholders who approached the Company during the year	1	50
3.	Number of shareholders to whom shares were transferred from the unclaimed suspense account during the year	1	50
4.	Aggregate Number of shareholders and the outstanding shares lying in the unclaimed Suspense Account at the end of the year i.e. 31.3.2017	126	9,465

126 Shareholders holding 9,465 equity shares constituting about 0.06% of shares have not made their claim from the Company on the shares outstanding in the Unclaimed Suspense Account of ESAB India Limited. The voting rights for these shares shall remain frozen until these are claimed by the rightful owners.

28. CORPORATE GOVERNANCE In terms of Chapter IV Regulation 15 read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a Corporate Governance Report is made part of this Annual report.

The declaration by the Managing Director addressed to the Members of the Company pursuant to Clause D of Schedule V read with Regulation 34 (3) Chapter IV of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding adherence to the Code of

Conduct by the Members of the Board and by the Members of the Senior Management Personnel of the Company is also attached to this Report.

29. POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE ACT

The Company has also adopted the mandatory policy on Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Employees have been sensitized on the provisions of this enactment and the Company has also constituted an internal complaints committee with effect from 30 October, 2013 to deal with complaints, if any, under the said Act. The Committee meets as and when requirement arises. The Company believes in providing safe working place for the Women in the Company and adequate protection are given for them to carry out their duties without fear or favour. There were no complaints received during the year to report under the said statute. As required under Section 21 of Chapter VIII of the said Act, the Committee has submitted its annual report in the prescribed format to the designated authority within the stipulated period.

30. SECRETARIAL STANDARDS

As on 31 March, 2017 the Secretarial Standard 1 & 2 on Board Meetings and General Meetings have been notified and the Company has complied with the requirements of the said Secretarial Standards.

A certificate of compliances issued by the Secretarial Auditor M/s. V Mahesh & Associates dated 15 May, 2017 is enclosed as Annexure - 2 and forms part of this Report.

31. ISSUE OF SHARES

The Company during the year under review has not issued any SWEAT equity shares or shares with differential rights or under Employee stock option scheme nor did it buy back any of its shares.

32. ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers and shareholders.

Your Board would like to place on record, its sincere appreciation to the employees for having played a very significant part in the Company''s operations till date.

For and on behalf of the Board of Directors

Daniel A Pryor

Chairman

25 May, 2017

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the Twenty Eighth Annual Report together with the audited accounts of the Company for the 15 months period ended 31 March, 2015.

1. FINANCIAL SUMMARY / HIGHLIGHTS

(Rs. in Lakhs)

Particulars 2014-15* 2013

Income 56,331 44,264

Profit before Interest and Depreciation 6,197 5,871

Finance Charges - -

Gross Profit 6,197 5,871

Provision for Depreciation (1,375) (1,123)

Profit before exceptional and prior period items and tax 4,822 4,748

Exceptional items (1,761) -

Profit before Tax 3,061 4,748

Provision for Tax (697) (1,436)

Net Profit After Tax 2,364 3,312

Balance Profit brought forward 19,666 16,865

Balance available for appropriations 22,030 20,177

Proposed Dividend on Equity Shares (154) (154)

Tax on Proposed Dividend (32) (26)

Transfer to General Reserve (237) (331)

Surplus carried to Balance Sheet 21,607 19,666

* In order to comply with the requirement of Section 2(41) of the Companies Act, 2013, the financial year of the Company was changed from calendar year basis to April - March pattern. Hence the results for the current year are drawn up for a 15 months period and not strictly comparable.

2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

The Company has been reviewing its industrial footprint and manufacturing capacities by product groups based on current and expected demand. Based on this, it has been proposed to shift certain operations from our Khardah

Factory to our other manufacturing facilities. The Board of Directors has approved the proposal at its meeting held on 26 May, 2015. The Company has given effect to the requisite adjustments arising out of this decision under 'Exceptional items' in the Income statement for 2014-15. The charge on this account represents expenditure on impairment of assets, compensation to employees covered by a voluntary separation scheme and one time settlement costs payable to sub-contractors.

3. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There has been no material change in the nature of business during the period under review.

4. DIVIDEND

The Board of Directors has recommended a dividend of Re. 1/- per equity share of Rs.10/- each (10%) at its meeting held on 26 May, 2015 resulting in an estimated outflow of about Rs.186 Lakhs (Inclusive of dividend distribution tax) for approval of the shareholders at the Annual General Meeting. The proposed dividend takes into consideration a prolonged period of adverse market conditions and the consequent need to conserve resources for current and future business requirements.

5. BOARD MEETINGS

The Board of Directors met 5 times during this period of 15 months from 1 January, 2014 to 31 March, 2015. The Directors met on 19th February, 25th April, 31st July, 6th November, 2014 and 29th January, 2015.

6. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company at present has six members.

Mr Daniel A Pryor is the nominee of ESAB Holdings Limited and a non-retiring Director in terms of the provisions of the Articles of Association.

Mr Rohit Gambhir, is the Managing Director of the Company. He was appointed for a period of five years with effect from 1 November, 2013 as Executive Director and Chief Executive. He was re-designated as the Managing Director with effect from 1 November, 2014.

There are four Non-executive and Independent Directors on the Board of the Company.

In accordance with the provisions of Article 129 of the Company's Articles of Association, Mr Rohit Gambhir, retires by rotation at the forthcoming Annual General Meeting and being eligible, has offered himself for re-appointment. The details as required under Clause 49 of the Listing Agreement regarding Mr Rohit Gambhir are published as part of the Notice calling the Annual General Meeting.

Re-designation

Mr Rohit Gambhir, who was appointed as Executive Director & Chief Executive effective 1 November, 2013 was re-designated the Managing Director of the Company with effect from 1 November, 2014. Form DIR-12 was filed with the Registrar of Companies on 02.12.2014 vide SRN C35113976 and Form MR-1 was filed on 02.12.2014 vide SRN C35112846.

Resignations

Mr Suresh N Talwar, Non-executive Independent Director of the Company resigned from the Board of the Company with effect from 1 August, 2014 after an association spanning over 26 years on the Board. Mr Talwar has stated in his resignation letter that he is resigning from the Board to comply with the stipulation of Clause 49 of the listing agreement which does not permit more than 7 directorships in listed Companies. Form DIR-12 recording this change, was filed with the Registrar of Companies on 04.08.2014 vide SRN C14335277.

Mr Pradeep Mallick, Non-executive Independent Director of the Company resigned from the Board of the Company with effect from 23 January, 2015 after an association of over 11 years on the Board. In his letter of resignation Mr Pradeep Mallick has stated that he is resigning from the Board to pursue his personal goals. Form DIR-12 was filed with the Registrar of Companies on 10.02.2015 vide SRN C42671198

ESAB Holdings Limited vide its letter dated 29 January, 2015 withdrew the nomination of Mr Kenneth D Konopa from the Board of the Company with effect from the close of business hours on 29 January, 2015. Mr Kenneth D Konopa had joined the Board of the Company on 11.02.2013. Form DIR- 12 was filed with the Registrar of Companies on 16.02.2015 vide SRN C43273267.

The Board of Directors would like to place on record its appreciation to all the above Directors, for their individual contributions while they were on the Board and its Committees.

Appointments

Ms. Sabitha Rao joined the Board with effect from 31 July, 2014 as an Independent Director. She brings with her rich and varied experience in business consulting with specialization in HR and Finance. With her induction, the Company is also compliant with the requirements of Section 149 (1) (b) of the Companies Act, 2013 and Clause 49 (II) (A) (1) of the Listing Agreement entered into with the Stock

Exchanges, Form DIR-12 was filed with the Registrar of Companies on 4.8.2014 vide SRN C14335277.

In order to comply with the requirement of Section 149 (4) & (5) of the Companies Act, 2013, the Board of Directors recommended the appointment of the four Independent Directors on the Board as Independent Directors under the provisions of the Companies Act, for a period of five years with effect from 29 January, 2015, subject to the approval of the shareholders. The approval of the shareholders was obtained by Postal Ballot and the results of the said postal ballot were announced to the stock exchanges and published in the leading newspapers (the details of the said results are published elsewhere in the Corporate Governance Report forming part of this Directors' Report). The terms of appointment for these Independent Directors were issued by way of a letter duly signed by the Chairman of the Board. The above referred terms & conditions of the letter are available for viewing on the website of the Company viz. www.esabindia.com

Key Managerial Personnel

To comply with the requirement of Section 203 of the Companies Act, Mr Rohit Gambhir, Managing Director, Mr. B.Mohan, Vice President Finance & Chief Financial Officer and Mr S Venkatakrishnan, Company Secretary have been re-designated as the Key Managerial Personnel of the Company.

Mr B Mohan, Chief Financial Officer joined the Company on 1 February, 2005 and Mr S Venkatakrishnan, Company Secretary joined the Company on 10 March, 2006. Form DIR-12 relating to their re-designation as Key Managerial Personnel, was filed with the Registrar of Companies on 3.12.2014 vide SRN C35205897 and Form MR-1 relating to their individual consent, was filed on 3.12.2014 vide SRN C35222546.

7. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

As required under Section 149 (7) all the Independent Directors on the Board of the Company have issued their annual declaration stating that they meet all the criteria of independence as required under the Act.

8. COMMITTEES OF THE COMPANY

A. AUDIT COMMITTEE

In compliance with Section 177 of the Companies Act, 2013 and Clause 49 (III) of the Listing Agreement, an Audit Committee consisting of three Independent Directors and one Non-executive Director has been constituted. Mr K Vaidyanathan, is the Chairman of the said Committee with Mr. Vikram Tandon, Mr. Sudhir Chand and Mr. Daniel A Pryor being the other members of the said Committee. The said Committee met on 19th February, 25th April, 31st July, 6th November, 2014 and 29th January, 2015.

Mr Pradeep Mallick resigned from the Board of the Company with effect from 23rd January, 2015 and consequently ceased to be a Member of the Audit Committee from that date.

There were no occasions during the year where the Board of Directors did not accept the recommendations of the Audit Committee.

B. NOMINATION AND REMUNERATION COMMITTEE

In compliance with Section 178 (4) and Clause 49 (IV) of the Listing Agreement, the Company has constituted a Nomination & Remuneration Committee consisting of three Independent Directors and one Non-Executive Director. Mr. K Vaidyanathan, is the Chairman of the said Committee with Mr. Sudhir Chand & Ms. Sabitha Rao, Independent Directors and Mr. Daniel A Pryor, Chairman of the Board as Members of the Committee.

Mr. Suresh Talwar resigned from the Board of the Company with effect from 1 August, 2014 and consequently ceased to be a Member of the Nomination and Remuneration Committee from that date.

Ms. Sabitha Rao joined the Board with effect from 31st July, 2014 and was co-opted into the said Committee with effect from that date.

The said Committee met on 25th April, 31st July, 6th November, 2014 and 29th January, 2015.

The said Committee laid down the Policy on Remuneration stating therein the positive attributes required for the Managing Director, Independent Directors and Key Managerial Personnel. The said policy also states the modus operandi for determining the remuneration to the above said personnel. The Policy on remuneration of the Company can be viewed on the Company's website www.esabindia.com

C. STAKEHOLDERS RELATIONSHIP COMMITTEE

In compliance with Section 178 (5) of the Companies Act, 2013 the Company has a Stakeholders Relationship Committee consisting of two Independent Directors, one Non-executive Director and the Managing Director. Mr Vikram Tandon is the Chairman of the Committee, Mr Sudhir Chand, Independent Director, Mr Daniel A Pryor, Chairman of the Board and Mr Rohit Gambhir, Managing Director are the Members of the said Committee.

Mr Rohit Gambhir was co-opted into this Committee with effect from 31st July, 2014 as a Member.

The said Committee met on 19th February, 25th April, 31st July, 6th November, 2014 and 29th January, 2015.

D. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

In compliance with Section 135 (1) of the Companies Act, 2013 the Company has constituted a Corporate Social Responsibility Committee consisting of one Independent Director, one Non-executive Director and the Managing Director. Ms Sabitha Rao is the Chairperson of the said Committee, Mr Daniel A Pryor, Chairman of the Board and Mr Rohit Gambhir, Managing Director are the Members of the said Committee.

The said Committee was newly constituted under the Act with effect from 31 July, 2014.

The Committee met twice on 30th September, 2014 and 29th January, 2015.

The Committee has laid down the Policy on Corporate Social Responsibility stating therein the strategy, objectives, funding & allocation for the CSR projects, implementation, strategy and steps involved in achieving the CSR objectives. The Policy on Corporate Social Responsibility of the Company can be viewed on the Company's website www.esabindia.com

E. RISK MANAGEMENT COMMITTEE

In Compliance with the requirement of Clause 49 of the Companies Act, 2013, the Company has also constituted a Risk Management Committee consisting of Mr Daniel A Pryor, Chairman of the Board, Mr Rohit Gambhir, Managing Director and Mr B Mohan, Vice President Finance & Chief Financial Officer of the Company.

The said Committee was newly constituted during the year on 6th November, 2014 and they met once on 29th January, 2015.

The said Committee laid down the Policy on Risk Management stating therein the objectives and purpose of the said policy. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving those risks which are material in nature and are associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on material risk related issues.

The Risk Management Policy of the Company can be viewed on the Company's website www.esabindia.com

9. VIGIL MECHANISM

In compliance of Section 177 (9) & (10) of the Companies Act, 2013 and in terms of Clause 49 (VIII) (H) (2) of the Listing Agreement, the Company has set up a whistleblower policy which can be viewed on the Company's website www.esabindia.com. In terms of the said policy the Directors and employees are given direct access to the Chairman of the Audit Committee to report on alleged wrongdoings.

10. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief, and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134 (5) of the Companies Act, 2013.

1. In the preparation of the annual accounts for the financial year ended 31 March, 2015 the applicable accounting standards have been followed;

2. The Directors have selected such accounting policies listed in Note 2 to the Notes to the Financial Statements and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year on 31 March, 2015 and of the Profit of the Company for that year;

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Directors have prepared the annual accounts for the year ended 31 March, 2015 on a going concern basis;

5. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

6. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY

The Company does not have any subsidiary, joint venture or an associate company.

HOLDING COMPANY

Colfax Corporation is a Delaware, USA based industrial group with existing global business interests in gas and fluid handling and fabrication technology products and services. Colfax Corporation holds over 73.72% of equity shares of your Company through ESAB Holdings Limited, UK and Exelvia Group India BV, Netherlands which are its 100% subsidiaries.

12. EXTRACT OF THE ANNUAL RETURN

The Extract of the Annual Return of the Company made up as at the end of the Financial Year i.e. 31 March, 2015 is attached by way of Annexure -1 to this report.

13. STATUTORY AUDITORS

M/s. S R Batliboi & Associates, LLP, Chennai (Firm Regn No.101049W) were appointed by the shareholders at the Annual General Meeting held on 25 April, 2014 as the statutory auditors of the Company to hold office until the conclusion of this Annual General Meeting.

As required under Section 139 (1) of the Companies Act, 2013, M/s. S R Batliboi & Associates, LLP, Chennai are now being appointed as statutory auditors of the Company to hold office for a term of five years from the end of this Annual General Meeting till the conclusion of the Annual General Meeting to be held in the year 2020.

M/s. S R Batliboi & Associates, LLP, Chartered Accountants, retire as Auditors of the Company at the forthcoming Annual General Meeting and have vide their letter dated 8 April, 2015 given their written consent to being appointed as the statutory auditors of the Company and have also issued a certificate that the appointment if made shall be in accordance with the conditions and that they satisfy the criteria provided under the relevant Section and Chapter X of the Companies Act read with Companies (Audit and Auditors) Rules, 2014.

The Directors recommend that M/s S.R.Batliboi & Associates LLP, Chennai, be appointed as the Company's Auditors to hold office until the conclusion of the Annual General Meeting to be held in the year 2020.

The statutory auditors have issued a clean report on the financials of the Company and have not issued any qualifications for the period 1 January, 2014 to 31 March, 2015.

14. SECRETARIAL AUDIT

In terms of Section 204 (1) of the Companies Act, 2013, the Company has appointed M/s. V Mahesh & Associates, Chennai to do the secretarial audit of the Company for the period 1 January, 2014 to 31 March, 2015. The said firm has vide letter dated 31 December, 2014 issued their consent to do the secretarial audit for the Company for the said period. Their appointment was informed to the Registrar of Companies, Chennai vide form MGT-14 dated 10.02.2015 vide SRN C42738104.

M/s. V Mahesh & Associates, have now completed their secretarial audit and have issued their certificate as per the prescribed format in MR-3 to the shareholders of the Company, which is annexed to this Report as Annexure - 2. They have no observations in their report and have confirmed that the Company has proper board processes, a compliance mechanism in place and has also complied with the relevant statutes, rules and regulations applicable to the Company. They have also confirmed that the Company has complied with the necessary secretarial standards, as applicable.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO

The information required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in the Annexure - 3 and forms part of this Report.

16. DETAILS RELATING TO DEPOSITS

The Company has not accepted any deposits during the period under review as envisaged under Section 73, 74 & 76 of the Companies Act, 2013.

17. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, there have been no significant and material orders passed by any regulators / courts / tribunals that could impact the going concern status and the company's operations in future.

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not during the said period under review, made any loans to any third party as envisaged under Section 186 of the Companies Act, 2013.

The Board of Directors from time to time have authorized the Company to invest the surplus of the Company in deposits with Banks and the investments in fixed maturity plans with mutual funds for a tenor not exceeding 100 days and have authorized the personnel of the Company in this regard. The investments are made in liquid and debt funds with no lock in period. The Company has earned an income of around Rs.8.74 crores for the period 1 January, 2014 to 31 March, 2015 in the form of dividends and profit on redemption of investments. The Company has not given any guarantees other than bank guarantees in the normal course of business to meet contractual obligations.

19. RISK MANAGEMENT POLICY

As required under Section 134 (n) of the Companies Act, 2013 and as required under Clause 49 (VI) of the Listing Agreement, the Company has constituted a Risk Management Committee consisting of Mr. Daniel A Pryor, as the Chairman and Mr Rohit Gambhir, Managing Director and Mr B Mohan, Chief Financial Officer as the Members of the Committee. The said committee has laid down the procedures to identify the risks and the minimization procedures. The Board at its meeting held on 29 January, 2015 have approved the said policy on Risk Management. The Board of Directors defined the roles and responsibilities of the said Committee. The policy on Risk Management has been hosted in the Company's website www.esabindia.com. The said committee on a periodical basis updates the Board of Directors on the material risks faced by the Company and the measures taken by the Company to mitigate the said risks.

20. CORPORATE SOCIAL RESPONSIBILITY

As required under Section 134 (o) read with Section 135 (1) of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee on 31 July, 2014. The Committee has Ms. Sabitha Rao, as the Chairperson, Mr Daniel A Pryor and Mr Rohit Gambhir as the Members of the said Committee.

The said Committee formulated and recommended to the Board for approval a policy on Corporate Social Responsibility. The Board of Directors at its meeting held on 6 November, 2014 approved the policy on Corporate Social Responsibility. The said policy as required under Section 135 (4) (a) has been uploaded in the Company's website www.esabindia.com.

The Company's policy on CSR envisages expenditure in areas falling within the purview of Schedule VII of the Companies Act, 2013. The annual report on CSR activities is enclosed by way of Annexure - 4 to this report. The policy on CSR was adopted on 6 November, 2014 after formation of the Committee. Since the time available for implementation of the CSR activities was very limited and it is of utmost importance that the amounts are defrayed on deserving and genuine projects, the Company has expended about Rs.19.13 Lakhs during the financial year. The Company is in the process of identifying more projects on which CSR spends could be effected.

21. RELATED PARTY TRANSACTIONS

As required under Section 188 of the Companies Act, 2013 and Clause 49 (VII) & (VIII) of the Listing Agreement the company places before the audit committee the list of related parties from whom they buy raw materials or finished goods, to whom the Company extends services or exports goods. The details of the basis of pricing and the margins on such transactions are also tabled. The audit committee accords its omnibus approval for such related party transactions on an annual basis. The updates on the transactions with the related parties are placed before the audit committee on a quarterly basis. The details are also placed before the Board of Directors for its information.

As required under Clause 49 of the listing agreement the Company has formulated a policy on related party transactions and the same was approved by the Audit Committee and the Board of Directors. The said policy has been uploaded in the company's website www.esabindia.com.

All the transactions with the related parties entered into during the period under review have been in the ordinary course of business and at arms' length basis. There have been no material related party transactions entered into during this period which required the approval of the shareholders by way of special resolution. The details of related party transactions pursuant to Clause (h) of sub- section (3) of Section 134 of the Act, is enclosed in form no. AOC 2 as Annexure - 5.

22. FORMAL ANNUAL EVALUATION

As required under Section 134 (p) of the Companies Act, 2013 and Clause 49 (2) (B) (5) of the listing agreement the Board of Directors at its meeting held on 6 November, 2014 approved the evaluation criteria for evaluating the performance of the Board of Directors, its Committees and the performance of Independent Directors.

Accordingly, as required under Schedule IV of the Companies Act, 2013 and Clause 49 (II) (B) (6), of the listing agreement the Independent Directors at their separate meeting held on 29 January, 2015 evaluated the performance of the non-independent Directors and the Board as a whole. They also reviewed the performance of the Chairman of the Company and also assessed the quality, quantity and timelines of flow of information between the Company Management and the Board that was necessary for the Board to effectively and reasonably perform their duties.

Also as required under Clause 49 of the Listing Agreement, the Board assessed the performance of the Independent Directors as per the criteria laid down and have recommended their continuation on the Board of the Company at its meeting held on the 26th of May 2015.

The Board of Directors assessed the performance of the individual Directors on the Board based on parameters such as, relevant experience and skills, ability and willingness to speak up, focus on shareholder value creation, governance standards, knowledge of business, processes and procedures followed, openness of discussion / integrity, relationship with management, impact on key management decisions etc. The Members of the Committee of audit, nomination & remuneration and stakeholders relationship were also assessed on the above parameters and also in the context of the Committee's effectiveness vis-a-vis the Act and the listing requirements.

23. COST AUDITOR

As required under Section 148 of the Companies Act, 2013 the Board of Directors at its meeting held on 26 May, 2015 have appointed M/s. Geeyes & Co., Cost Accountants within the meaning of Cost & Works Accountants Act and holding a valid certificate of practice No.000044 as the Cost Auditor for conducting the Cost Audit for the financial year 2015-2016. The Audit Committee recommended the appointment subject to the compliance of the requirements stipulated in the relevant notifications issued by Ministry of Corporate Affairs.

The Company has received a letter from the Cost Auditor stating that the appointment, if made, will be within the limit prescribed under the Act.

The relevant Form 23 C for appointment of Cost auditor for the financial year 2014-15 was filed with the Registrar of Companies on 26.02.2014 vide SRN S29411832.

The Cost Audit Report issued by the Cost Auditor for the year ended 31 December, 2013 was filed with the Registrar of Companies vide form I XBRL dated 24.06.2014 SRN S30375265.

24. RATIO OF REMUNERATION TO EACH DIRECTOR

As required under Section 197 (12) and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the details of ratio of remuneration to each Director to the median employee remuneration are as given below :

A. Executive Director

Ratio of remuneration paid to Mr Rohit Gambhir, Managing Director vs the median employee is : 17 : 1.

Non-executive Independent Director Ratio of remuneration paid to Mr Vikram Tandon, Non- executive Independent Director vs the median employee is : 0.88 : 1

Ratio of remuneration paid to Mr Sudhir Chand, Non- executive Independent Director vs the median employee is : 0.91 : 1

Ratio of remuneration paid to Mr K Vaidyanathan, Non- executive Independent Director vs the median employee is : 0.98 : 1

Ratio of remuneration paid to Ms Sabitha Rao, Non- executive Independent Director vs the median employee is : 0.11 : 1

B. The percentage increase in the median remuneration of employees in the financial year was 9%.

C. The number of permanent employees in the rolls of the Company as at 31 March, 2015 is 355 (347 as on 31 December, 2013).

D. The average percentage increase in remuneration of employees to that of the increase in performance of the Company = 9% : 2%

E. Comparison of the remuneration to Key Managerial Personnel against the performance of the Company during the period 1 January, 2014 to 31 March, 2015.

F Variations in the market capitalization of the Company and the PE Ratio.

Market Capitalisation as on 31.12.2013 - Rs.710.23 Crores.

Market Capitalisation as on 31.03.2015 - Rs.1063.65 Crores

PE Ratio as on 31.12.2013 - 21.44

PE Ratio as on 31.03.2015 - 45.98

The Company made a public offer of Equity Shares at par (Rs.10 per Share) in the year 1989.

G. Average percentile increase made in salaries of employees other than KMP in comparison to the percentile increase in the remuneration of KMP and the justification thereof;

The average percentile increase in salaries of employees other than KMP is 9% while that of KMPs is 11.5%.

Justification thereof : The increase for Rohit Gambhir was considered at 15% in November, 2014 when he was designated as Managing Director. In respect of employees other than KMP an average increase of 9% was considered. Even within this, average of 9% was considered for employees below the level of Manager and about 7% for Managers and above - range varying between 3% and 13% based on performance. The overall increase of 9% also includes an average increase of about 13.7% that was considered for those employees who were promoted to the next higher grade based on performance.

H. The key parameters for any variable component of remuneration availed by the Directors.

Variable Component to Mr Rohit Gambhir - This is linked to various parameters, financial and non-financial. Key elements include sales, operating profit, working capital, implementation of business systems.

Variable Component to Independent Directors - Is based on the roles and responsibilities and their contribution to the Company in their respective capacities. The Commission is individually determined based on their varying commitments of time and effort to the Board and to its committees.

I. The ratio of remuneration of highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year: NIL

The Board of Directors would like to affirm that the remuneration paid to the Executive and Non-executive Directors and the Key Managerial Personnel is line with the Remuneration Policy of the Company.

As required under the provisions Section 203 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment of Remuneration of Managerial Personnel) Rules, 2014 as amended, the name and other particulars of the employee is set out in the Annexure - 6 to this Report.

As at the end of March, 2015 the Company had 587 employees as against 644 at the end of December, 2013. The Company believes in providing a working environment that is focused on the customers, teamwork, continuous improvement, innovation and a competitive environment where employees strive to improve value for shareholders.

25. FINANCE

The Company's relationships with its Bankers viz. AXIS Bank Ltd. and HDFC Bank Ltd. continued to be cordial during the year. The Company would like to thank its Bankers for their support.

26. ENVIRONMENT, HEALTH AND SAFETY

The Company continued its commitment to industrial safety and environment protection and all its five factories have obtained its OHSAS 18001 certification. Periodical audits are done by external and internal agencies to assess the continued levels of EHS efficiency of each of these plants and the OHSAS certification given is renewed after every such audit. The Company is also networked with the Group on EHS initiatives and works closely with them on initiatives and actions concerning EHS.

27. LISTING WITH STOCK EXCHANGES

The Company's equity shares are listed with (a) Bombay Stock Exchange Limited and (b) National Stock Exchange of India Limited. The annual fee for both the exchanges have been paid promptly for the year 2015-2016.

The Company had 9,908 shareholders as at the end of the year 31 March, 2015. 98.03% of shares are held in dematerialized form.

As required under Clause 5A (II) (h) of the listing agreement the details of the shares issued by the Company consequent to amalgamation of erstwhile Maharashtra Weldaids Limited with the Company in 1994, the details of the physical shares which remains unclaimed and transferred to the Unclaimed Suspense Account and the reconciliation of the shares claimed by shareholders during the year 2014-2015 and the shares outstanding in the suspense account as on 31.3.2015 is given below :

131 Shareholders holding 9,715 equity shares constituting about 0.06% of shares have not made their claim from the Company on the shares outstanding in the Unclaimed Suspense Account of ESAB India Limited. The voting rights for these shares shall remain frozen until these are claimed by the rightful owners.

28. CORPORATE GOVERNANCE In terms of Clause 49 of the Listing Agreement with the stock exchanges a Corporate Governance Report is made part of this Annual report.

A certificate from the Statutory Auditors of the Company regarding compliance of the conditions stipulated for Corporate Governance under clause 49 of the Listing Agreement is attached to this report.

The Company has also adopted the mandatory policy on Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Employees have been sensitized on the provisions of this enactment and the Company has also constituted an internal complaints committee with effect from 30 October, 2013 to deal with complaints if any, under the said Act. There were no complaints received during the year to report.

The declaration by the Managing Director addressed to the members of the Company pursuant to Clause 49 of the Listing Agreement regarding adherence to the Code of Conduct by the Members of the Board and by the Members of the Senior Management Personnel of the Company is also attached to this Report.

29. SECRETARIAL STANDARDS

As on 31 March, 2015 the Secretarial Standard 1 & 2 on Board Meetings and General Meetings have been notified and the Company has complied with the requirements of the said Secretarial Standard.

A certificate of compliances issued by the Secretarial Auditor M/s. V Mahesh & Associates dated 9 May, 2015 is enclosed as Annexure - 2 and forms part of this Report.

30. ISSUE OF SHARES

The Company during the year under review has not issued any SWEAT equity shares or shares with differential rights or under Employee stock option scheme nor did it buy back any of its shares.

31. ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers and shareholders.

Your Board would like to place on record, its sincere appreciation to the employees for having played a very significant part in the Company's operations till date.

For and on behalf of the Board of Directors

Daniel A Pryor

Chairman

Chennai, 26 May 2015

Dec 31, 2013

The Directors take pleasure in presenting the Twenty Seventh Annual Report together with the audited accounts of the Company for the year ended 31 December 2013.

FINANCIAL RESULTS

(Rs. in Lakhs)

Particulars 2013 2012

Sales and other income 44,264 50,866

Earnings before tax and depreciation 5,871 6,598

Depreciation (1,123) (1,182)

Profit before taxation 4,748 5,416

Taxation (1,436) (1,639)

Profit for the year 3,312 3,777

DIVIDEND

The Board of Directors has recommended a dividend of Re.1 per equity share of Rs.10 each (10%) at its meeting held on 19 February, 2014 resulting in an estimated outflow of Rs. 180 Lakhs (dividend and tax thereon) for approval of the shareholders at the Annual General Meeting. The proposed dividend takes into consideration a prolonged period of adverse market conditions and the consequent need to conserve resources for current and future business requirements.

MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMIC & BUSINESS ENVIRONMENT

The year 2013 has been a difficult one for most of the segments in the economy as the Country continued to experience low growth and high inflation. A host of local and international factors led to low levels of business sentiment and slowdown across virtually all our customer segments.

Industrial production continued to contract through the year under the impact of high interest rates, low investments and a significantly weakened currency. GDP growth estimates went through a series of downward revisions and the impact was particularly adverse in the

Manufacturing segment that is key to your Company''s prospects. Several projects were delayed or shelved due to a combination of financial and policy bottlenecks.

Some of the recent policy announcements encouraging Foreign Investments in India and clearances for long pending projects present a ray of hope but prospects of revival hinge on timely execution of the pronouncements and policies. A reportedly good monsoon is also expected to help boost flagging demand. Reduction in the fiscal deficit and a stable currency with reasonable interest rates are also key to revival prospects. The immediate future continues to be fraught with uncertainties and Industry looks to some stability in the second half of the year.

On issues specific to our Industry and your Company, the effect of slowdown across all Steel consuming segments had an adverse effect on volumes and margins. A significant reduction in infrastructure projects affected our Equipments business in particular with a cascading impact on Consumables. Input and conversion cost increases were not fully compensated by selling prices in an increasingly competitive and tough market. Liquidity conditions were very tight with persistent hardening of interest rates. This necessitated higher credit cycles with trade. The above elements together with an increasingly challenging product mix kept margins under huge pressure throughout the year.

Given the above backdrop, your Company focused strongly on product mix including new launches, product rationalization, productivity improvement measures and a tight control on costs to compensate for flat or declining volumes across product groups.

Business priorities and the Organization were reviewed continuously to look for optimizing costs and benefits. The Company maintained its position as a preferred partner in welding and cutting solutions. The Company is well positioned as a leaner organization with a strong Balance Sheet to endure a difficult phase and to capitalize on any opportunities when the trade cycle improves.

HOLDING COMPANY

Colfax Corporation is a Delaware, USA based industrial group with existing global business interests in gas and fluid handling and fabrication technology products and services. Colfax Corporation holds over 73.72% of equity shares of your Company through ESAB Holdings Limited, UK and Exelvia Group India B.V., Netherlands which are its 100% subsidiaries.

MANAGEMENT

Your Company went through significant organizational changes in its efforts towards right sizing and ensuring functional focus. Jiri Kula stepped down from his role as Managing Director effective 31.10.2013. During his two years of association with your Company in a particularly difficult phase, Jiri was instrumental in creating a strong focus on productivity, quality and costs. Rohit Gambhir was inducted as Additional Director effective 1.11.2013 and has been designated as Executive Director and Chief Executive. He brings with him rich and varied experience in sales, marketing and business management roles.

The Company initiated multiple actions for reductions in cost through rationalization of resources and capacities. The Company could avoid a substantial erosion in margins largely through cost and productivity related improvements.

FINANCIAL STATEMENTS

INCOME AND EXPENDITURE

Net Sales ( Including Service Income) was down by over 13% over 2012. This was across all product groups and segments. Relatively better performances in the R&M business and Exports that were aided by a weakening Rupee, helped in softening the impact of declines in all other product groups.

Other income was higher by about 38% due to increase in income from mutual funds. Cash generation through tight management of working capital was a key positive in a difficult year and cash surpluses were deployed in debt and liquid funds.

Materials costs as a percentage to sales improved from 65.5% to 64.1% due to a combination of enriched product mix and supply chain initiatives.

Cost reduction initiatives including a tight control on discretionary spends resulted in overheads including employee costs being lower by over 11% from 2012 levels.

Expenditure on Consumption of Stores and Spares as also Repairs to Plant and Machinery were lower by 13.6% and 17.5% respectively from 2012 due to initiatives taken at Plants on Maintenance and cost reductions.

Excise duty on Finished Goods were lower by Rs.665 Lakhs in line with reductions in Inventory of manufactured items.

Rates and Taxes fell by Rs.106 Lakhs with a reduction in provisioning requirements for indirect tax matters as compared to 2012.

Transportation and Freight expenses fell by Rs.355 Lakhs through improved recoveries.

Depreciation was lower by 5% as compared to 2012 with Net Fixed Assets at the same levels as in 2012.

BALANCE SHEET

The focus on fundamentals and efficiencies resulted in a stronger Balance Sheet with improved working capital, healthy cash flows and a prudent deployment of resources on capital expenditure.

Capital Expenditure was about Rs.1,176 Lakhs and projects with productivity enhancements and Quality improvements were prioritized to conserve resources.

Current Investments and Cash grew by 16% over 2012 due to internal accruals and improved working capital.

Inventories were lower by about 9% in value terms due to the effect of lower volumes and reduction plans put in place through the year.

Trade receivables were higher by about 19% due to emerging trade requirements driven by tight liquidity conditions.

COST AUDITORS

The Board of Directors at its meeting held on 19 February 2014 have appointed M/s. Geeyes & Co., Cost Accountant within the meaning of Cost & Works Accountants Act and holding a valid certificate of practice No.00044 as the Cost Auditor for conducting the Cost Audit for the financial year 2014. The Audit Committee of Directors recommended the appointment subject to the compliance of the requirements stipulated in the relevant notifications issued by Ministry of Corporate Affairs.

The Company has received a letter from the Cost Auditor stating that the appointment, if made, will be within the prescribed limit under Section 224(1B) of the Act.

OUTLOOK, OPPORTUNITIES AND THREATS

There has been no significant change in the economic environment in the current quarter and most of the concerns highlighted in the earlier paragraphs continue to exist. It is expected that macro-economic elements and the business sentiments could stabilize towards the second half of the year. Multiple and inter woven elements driving economic indicators present strong challenges to any forecasting model.

Our new product offerings and work currently in progress on development of more products are expected to help sustain our leadership position. The long term prospects are still considered positive despite the uncertainties around the short term outlook. We are well placed as an organization to address growth in opportunities as and when any economic revival happens.

Governmental push on infrastructure, emerging focus on Tier II and Tier III cities and also the spin off effects of a good monsoon present opportunities though the eventual impact could take time.

Global developments including exchange rates, oil prices and FII inflows can aggravate the situation. Competitors with international standing continue to focus heavily on the Indian market and this can pose challenges on pricing and margins. Competition from hitherto smaller and unorganized players is a threat to address.

INTERNAL CONTROLS

Internal controls are continuously evaluated by Management and by the Internal Auditors. Findings from internal audits are reviewed regularly by the Management and by the Audit Committee and corrective actions and controls put in place wherever necessary. The Company is also subjected to reviews and audits as part of listing requirements in the USA of its holding company. These reviews help supplement the Company''s efforts in strengthening internal controls.

The reviews by Internal Auditors are scheduled and cover the various manufacturing and office locations. The scope of their work includes review of controls on accounting, statutory and other compliances and operational areas in addition to reviews relating to efficiency and economy in operations.

RELATED PARTIES

Note 32 to the Financial Statements sets out the nature of transactions with Related Parties. Transactions with Related Parties are carried out at arm''s length. The details of such transactions are placed before the Audit Committee.

FINANCE

The Company''s relationships with its Bankers viz. AXIS Bank Ltd. and HDFC Bank Ltd. continued to be cordial during the year. The Company would like to thank its Bankers for their support.

ENVIRONMENT, HEALTH AND SAFETY

The Company continued its commitment to industrial safety and environment protection and all its five factories have obtained its OHSAS 18001 certification. Periodical audits are done by external and internal agencies to assess the continued levels of EHS efficiency of each of these plants and the OHSAS certification given is renewed after every such audit. The Company is also networked with the Group on EHS initiatives and works closely with them on initiatives and actions concerning EHS.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief, and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956.

1. In the preparation of the annual accounts for the year ended 31 December 2013 the applicable accounting standards have been followed;

2. The accounting policies listed in Note 2 to the Notes to the Financial Statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year on 31 December 2013 and of the profit of the Company for that year;

3. Proper and sufficient care has been taken 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;

4. The annual accounts for the year ended 31 December 2013 have been prepared on a going concern basis.

CAUTIONARY STATEMENT

Certain statements in this Directors'' Report may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied in this Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in the Annexure and forms part of this Report.

DIRECTORS

In accordance with the provisions of Article 130 of the Company''s Articles of Association, Mr K Vaidyanathan and Mr P Mallick, retire by rotation at the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment. The details as required under Clause 49 of the Listing Agreement regarding the above said Directors are published as part of the Notice calling the Annual General Meeting.

Mr Daniel Alexis Pryor and Mr Kenneth D Konopa continue to be nominee and non-retiring Directors of ESAB Holdings Ltd, the Holding Company, in terms of the provisions of the Articles of Association.

Mr Jiri Kula, who was appointed as the Managing Director of the Company for a period of three years from 1 September, 2011 demitted his office with effect from 31 October, 2013 due to family reasons and had to return back to his country.

Mr Rohit Gambhir, who joined the Company on 18 March, 2013 was appointed as Executive Director & Chief Executive with effect from 1 November, 2013 by the Board of Directors. The subject of appointment of Mr Rohit Gambhir as a Director liable to retire by rotation and his appointment as Executive Director & Chief Executive for a period of five years with effect from 1 November, 2013 and the terms and conditions of appointment are placed for the approval of the shareholders at the Annual General Meeting.

The Board would like to place on record, its appreciation for the contributions of Mr Jiri Kula, Managing Director during his tenure of Directorship.

AUDITORS

M/s. B S R & Co. LLP, Chartered Accountants, retire as Auditors of the Company at the forthcoming Annual General Meeting and have vide their letter dated 14 February 2014 not offered themselves for reappointment pursuant to Section 224 (2)(b) of the Companies Act, 1956.

The Company proposes to appoint M/s S.R.Batliboi & Associates LLP, Chennai as Auditors to hold Office from the conclusion of the forthcoming Annual General Meeting. The Company has received confirmation that their appointment, if made, will be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

The Directors recommend that M/s S.R.Batliboi & Associates LLP, Chennai, be appointed as the Company''s Auditors to hold office until the conclusion of the next Annual General Meeting.

PERSONNEL

At the end of December 2013 the Company had 644 employees as against 683 at the end of 2012. The Company believes in providing a working environment that is stakeholder focused and challenging in terms of objectives.

As required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the name and other particulars of the employee is set out in the Annexure to this Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Act, the Directors'' Report excluding the said Annexure is being sent to all the shareholders of the Company. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Section 58A of the Act for the year ended 31 December, 2013.

CORPORATE GOVERNANCE

In terms of Clause 49 of the Listing Agreement with the stock exchanges a Corporate Governance Report is made part of this Annual Report. The Company has not adopted the voluntary corporate governance guidelines 2009 issued by the Ministry of Corporate Affairs. However, the Company on its own volition has adopted most of the guidelines issued by the Ministry and has been transparent in its dealings with the shareholders in particular and stake holders in general.

In compliance with Section 292A of the Companies Act, 1956 and with the Listing Agreement, an Audit Committee consisting of four Independent Directors and one Non- executive Director has been constituted. The Company also has an Investors'' Grievance Committee consisting of two Independent Directors and one Non-executive Director. The Company has also during the year constituted a Nomination & Remuneration Committee consisting of three Independent Directors.

The Company has also adopted the mandatory policy on Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Employees have been sensitized on the provisions of this enactment and the Company has also constituted an internal complaints committee with effect from 30 October, 2013 to deal with complaints if any, under the said Act. There were no complaints received during the year to report.

A certificate from the Statutory Auditors of the Company regarding compliance of the conditions stipulated for Corporate Governance under Clause 49 of the Listing Agreement is attached to this report.

The declaration by the Executive Director & Chief Executive addressed to the members of the Company pursuant to Clause 49 of the Listing Agreement regarding adherence to the Code of Conduct by the Members of the Board and by the Members of the Senior Management Personnel of the Company is also attached to this Report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers and shareholders.

Your Board would like to place on record, its sincere appreciation to the employees for having played a very significant part in the Company''s operations till date.

For and on behalf of the Board of Directors

Daniel A Pryor

Chairman

Chennai, 19 February 2014

Dec 31, 2012

The Directors take pleasure in presenting the Twenty Sixth Annual Report together with the audited accounts of the Company for the year ended 31 December 2012.

FINANCIAL RESULTS

(Rs. Million)

Sales and other income 5,087 5,478

Earnings before tax and depreciation 660 824

Depreciation (118) (118)

Profit before taxation 542 706

Taxation (164) (232)

Profit for the year 378 474

DIVIDEND

The Board of Directors have recommended a dividend of Rs.7.50 per equity share of Rs.10/- each (75%) at its meeting held on 18 February, 2013 entailing an estimated outflow of Rs.134.1 Million (dividend and tax thereon) for approval of the shareholders at the Annual General Meeting. The proposed dividend takes into consideration the difficult prevailing market conditions for the company''s products and the need to invest in the business for the future.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in the Annexure and forms part of this Report.

DIRECTORS

In accordance with the provisions of Article 130 of the Company''s Articles of Association, Mr Vikram Tandon and Mr Sudhir Chand, retire by rotation at the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment. The details as required under Clause 49 of the Listing Agreement regarding the above said Directors are published as part of the Notice calling the Annual General Meeting.

ESAB Holdings Ltd, the Holding Company, in terms of the provisions of the Articles of Association has appointed Mr Daniel A Pryor as its Nominee and non-retiring Director with effect from 21 July 2012 and as Chairman of the Board of Directors with effect from 11 February 2013.

They have also appointed Mr Kenneth D Konopa as its Nominee and Non-retiring Director on the Board of the Company with effect from 11 February, 2013.

They have also withdrawn the nominations Mr. Brendan Colgan and Mr Nazmie Adams with effect from 9 May, 2012 and that of Mr David J Egan, with effect from 7 December, 2012 and consequently they cease to be Directors of the Company.

The Board would like to place on record, its appreciation for the contributions of the above Directors during their tenure of Directorships.

AUDITORS

M/s. B S R & Co., Chartered Accountants, retire as Auditors of the Company at the forthcoming Annual General Meeting and are eligible for reappointment.

The Company has received confirmation that their appointment, if made, will be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956.

The Directors recommend that B S R & Co., be appointed as the Company''s auditors to hold office until the conclusion of the next Annual General Meeting.

PERSONNEL

At the end of December 2012 the Company had 683 employees as against 830 at the end of 2011. The Company believes in providing a conducive and challenging work environment for nurturing potential, encouraging performance and retaining talents at all levels.

There are no employees covered under the disclosure requirements as required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. as amended.

CORPORATE GOVERNANCE

In terms of Clause 49 of the Listing Agreement with the stock exchanges a Corporate Governance Report is made part of this Annual report. The Company has not adopted the voluntary corporate governance guidelines 2009 issued by the Ministry of Corporate Affairs. However, the Company on its own volition has adopted most of the guidelines issued by the Ministry and has been transparent in its dealings with the shareholders in particular and stake holders in general.

In compliance with Section 292A of the Companies Act, 1956 and with the Listing Agreement, an Audit Committee consisting of four Independent Directors and one non- executive Director has been constituted. The Company also has an Investors'' Grievance Committee consisting of two Independent Directors and one non-executive Director.

A certificate from the Statutory Auditors of the Company regarding compliance of the conditions stipulated for Corporate Governance under clause 49 of the Listing Agreement is attached to this report.

The declaration by the Managing Director addressed to the members of the Company pursuant to Clause 49 of the Listing Agreement regarding adherence to the Code of Conduct by the Members of the Board and by the Members of the Senior Management Personnel of the Company is also attached to this Report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers and shareholders.

Your Board would like to place on record, its sincere appreciation to the employees for having played a very significant part in the Company''s operations till date.

For and on behalf of the Board of Directors

Daniel A Pryor

Chairman

Chennai, 18 February 2013

Dec 31, 2011

The Directors take pleasure in presenting the Twenty Fifth Annual Report together with the audited accounts of the Company for the year ended 31 December 2011.

FINANCIAL RESULTS

(Rs. Millions) Particulars 2011 2010 Sales and other income 5,478 5,145

Earnings before interest, tax and depreciation 834 996

Interest / Finance charges (10) (8) Depreciation (118) (106) Profit before taxation 706 882

Taxation (232) (292)

Profit for the year 474 590

DIVIDEND

The Board of Directors had declared an interim dividend of Rs.15/- per equity share of Rs.10/- each (150%) on the 21st of July 2011 entailing an outflow of Rs.268.4 Million. The Board of Directors has not recommended any final dividend for the year 2011.

MANAGEMENT DISCUSSION AND ANALYSIS ECONOMY & BUSINESS ENVIRONMENT

The year under review was challenging on many fronts. Inflationary pressures continued unabated during the year with adverse impact on our overheads. Fuel price hikes and a steep depreciation in the Indian Rupee added to input costs. Power outages and sporadic shortages in one of our key raw materials added to input and conversion costs that were not compensated by selling price increases in an increasingly competitive market. Liquidity conditions were very tight with persistent hardening of interest rates. Together with global economic developments, this affected inflows and investments into India, resulting in delayed and cancelled investments in manufacturing and infrastructure segments. This had an adverse impact on our businesses and more specifically on our Equipments business.

GDP growth and Steel consumption, two key indicators that have a bearing on the Industry's growth rates, were clearly below expectations. GDP growth during this period

was around 7% while Steel consumption relevant to our operating segments is estimated to have grown by less than 3% for the most part of 2011.

The year also witnessed the arrival of established International competitors set up operations in India and also the scaling up by those present already in India. With pricing pressures across all product ranges and an increasingly challenging product mix, margins remained under pressure throughout 2011.

From a sector wise point of view barring a small list of segments like pre fabricated buildings, gas and pipeline segments, mining equipments etc., all key segments like Power, Automobiles, Cement, Sugar and Infrastructure witnessed slackening of demand and soaring input costs.

Given the above backdrop, your Company recorded reasonable growth in Sales revenues which grew by 7% driven primarily on product mix related changes even as volumes dropped in key segments of consumables with the exception of solid wires which saw a very small growth during the year.

The Company maintained its market leadership position and is well positioned to achieve growth in terms of volumes and shares through better service levels and management of costs. The Company is proud to have been associated with projects of national interest and had also some breakthrough businesses in emerging segments.

HOLDING COMPANY

By virtue of a buy-out and consequent changes in shareholding pattern, your company is now a subsidiary of Colfax Corporation. Colfax is a Delaware, USA based industrial group with existing global business interests in gas and fluid handling and fabrication technology products and services, prior to acquisition of Charter International Plc, the erstwhile holding company.

MANAGEMENT

The Company recognized the need for operating efficiencies to control costs and drive growth and hence effected organizational changes to move towards a functional structure from a divisional structure to achieve greater focus on priority areas. Of particular importance were the changes on our Operations with enhanced focus on Manufacturing, Quality and Supply Chain.

Mr.G.Hariharan retired in August 2011 from his position as Managing Director on completion of his contractual term

after more than two decades of association with the Company. The Board would like to place on record its appreciation for the services rendered by Mr.G.Hariharan in various capacities till his retirement.

He has been replaced by Mr.Jiri Kula , who was appointed Managing Director, effective 1 September 2011. He brings with him rich experience in the Welding industry with operational experience in some of ESAB's major Plants.

The Company had also launched initiatives at its Plants on Maintenance, process controls and monitoring systems towards achieving operational excellence. In recognition of some of its initiatives, the Company won awards from the Quality Circle Forums in recognition of improvements at two of its Plants.

FINANCIAL STATEMENTS

The year saw a decline in profitability with lower growth in some parts of the business and marginal declines in a few other parts of the business. Margins declined with increase in input costs and overheads not compensated by selling price increases. The sales mix posed further challenges to our margins. The Company continued to maintain a good level of cash conversion and focused on efficiency and productivity improvements to partly compensate for lower margins.

INCOME AND EXPENDITURE INCOME

Net Sales (Including income on Engineering services) were up by about 7% in 2011 with a growth of 8.7% in Consumables. Equipments business was flat with a small growth of 3.4% reflecting the underlying trade cycle.

Income from Services increased by 43% reflecting the full year's impact of the merger of the erstwhile Subsidiary, Esab Engineering Services Limited, with your Company in April 2010. While there are opportunities to grow activities in this segment, project management, retention of skilled resources and moving up the value chain on service offerings remain key challenges.

Other income was lower by 17% over 2010. This was primarily on account of non recurring profits on sale of investments in 2010 and higher commission income during that year. Income from scrap increased with better realizations in 2011.

EXPENDITURE

Material costs as a percentage to sales increased from 63% to 64.5%. This was due to the combined effect of cost increases that were not sufficiently compensated by improvement in realizations and also due to the effect of a less profitable sales mix.

Salaries and wages were higher by 19.5% over 2010 due to the combined effect of organizational changes, payroll revisions and the full year's impact of integration of the erstwhile EESL business into Esab India Limited.

Contribution to funds fell by nearly 60% to Rs.16.1 Million largely due to lower provisioning requirements on retirement benefits under pension schemes and favourable changes in underlying discounting assumptions for actuarial valuations.

Consumption of stores and spares was about 44% higher due to higher requirement of spares on ageing equipment and also due to higher costs on spares with respect to our new wires plant at Nagpur.

Power and Fuel expenditure increased by about 21% due to higher tariffs, higher production volumes at Nagpur together with higher costs arising from use of Diesel Generators and bought out power.

Repairs and Maintenance expenditure was up by Rs.22 Million with focus on overhauling older equipment in our Consumables Plants and controlling capital expenditure. Some of this expenditure was also directed at process improvements and up gradation of warehousing facilities.

Transportation costs representing freight payable on sales was higher by about 6% and in line with growth in sales. The expenditure was contained at this level through negotiations and recoveries amidst significant increases in fuel costs through the year.

Increased travel requirements from business requirements resulted in higher spend on Travel and conveyance expenditure by 28% in 2011.

Commission and sales incentives declined to Rs.36 Million from Rs.77 Million in 2010 due to rationalization of trade schemes to control net margins.

Trademark fees were higher by Rs. 51 Million in 2011 reflecting the full year's impact of Agreements executed in August 2010.

External service charges represent expenditure on outsourced support services at our Plant and Office locations. These were higher due to business requirements during the year.

Interest and finance charges represent charges on banking facilities including collection management schemes and were marginally higher than in 2010. The increase was commensurate with the growth in volume of banking transactions.

Depreciation was higher by 11% in 2011 with the full year's impact of capitalization of 2010 and additions of 2011, largely at Nagpur.

BALANCE SHEET

The Company closed the year with a stronger Balance Sheet having funded all its operating requirements internally and continuing to focus on working capital and productivity of assets.

Net Fixed Assets were 2.6% lower at Rs.107 Million as compared to Rs.109 Million in 2010.

Capital expenditure for the year was Rs.92 million, which represents about a 60% reduction as compared to capital

expenditure of 2010. During the year, the key items capitalized were the Plant and Machinery items relating to the expansion at Nagpur and additional office space / canteen at Ambattur.

Investments relate to short term surpluses deployed in debt and liquid schemes of Mutual Funds at the end of the year.

Inventory in value terms was up by 19% over the previous year with growth in sales. This translates to 44 days of sales as against 40 days in the previous year. There were planned increases in safety stocks of many products to improve customer service levels.

Sundry Debtors were significantly lower at Rs.201 Million as against Rs.272 Million at the end of 2010. This represents an improvement to about 13 days to Gross sales as against 19 days in 2010.

On an aggregated basis, the Inventory and Receivables figures compare favourably with the previous year.

Cash and Bank balances were lower by Rs.113 Million with the impact of dividend payouts in 2011 and an increase in Net Working Capital.

Other Current Assets, Loans and Advances increased by Rs.55 million due to higher supplier advances at the end of the year on Steel and Rutiles.

OUTLOOK, OPPORTUNITIES AND THREATS

The outlook for 2012 appears more challenging with established players expanding in India and with difficult liquidity and economic conditions continuing to exert pressures on margins and working capital. Of primary concern are high levels of inflation and relatively depressed market sentiments. Competition from the lower end manufacturers also continues to be intense.

Prices of Steel and other metals have been displaying erratic trends with upward bias driven by power shortages and rising input costs.

We are focusing on productivity improvements, resourcing, quality, costs, indigenization of raw materials and components, range rationalization and enrichment of product mix to enhance our market shares and margins.

Margins are expected to remain under pressure even as we adapt to a rapidly changing environment.

INTERNAL CONTROLS

Internal controls are continuously evaluated by Management and by the Internal Auditors. Findings from internal audits are reviewed regularly by the Management and by the Audit Committee and corrective actions and controls put in place wherever necessary.

The reviews by Internal Auditors are scheduled and cover the various manufacturing and office locations. The scope of their work includes review of controls on accounting, statutory and other compliances and operational areas in

addition to reviews relating to efficiency and economy in operations.

RELATED PARTIES

Note 20 of Schedule O to the Financial Statements sets out the nature of transactions with related parties. Transactions with related parties are carried out at arm's length. The details of such transactions are placed before the Audit Committee.

FINANCE

The Company's relationships with its consortium and other bankers continued to be cordial during the year. The Company would like to thank its Bankers for their support.

CORPORATE SOCIAL RESPONSIBILITY

The Company supports community welfare initiatives. The company has continued with its financial help to institutions in and around its plant at Ambattur, Chennai and in other cities to take care of their upkeep and welfare of the lesser privileged citizens.

ENVIRONMENT, HEALTH AND SAFETY

The Company continued its commitment to industrial safety and environment protection and all its five factories have obtained its OHSAS 18001 certification. Periodical audits are done by external and internal agencies to assess the continued levels of EHS efficiency of each of these plants and the OHSAS certification given is renewed after every such audit. The Company is also networked with the ESAB group on EHS initiatives and works closely with the group on initiatives and actions concerning EHS.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief, and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956.

1. In the preparation of the annual accounts for the year ended 31 December 2011 the applicable accounting standards have been followed;

2. The accounting policies listed in Schedule O to the Notes to Accounts have been selected and applied consistently and judgements and estimates that are reasonable and prudent made so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year on 31 December 2011 and of the profit of the Company for that year;

3. Proper and sufficient care has been taken 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;

4. The annual accounts for the year ended 31 December 2011 have been prepared on a going concern basis.

CAUTIONARY STATEMENT

Certain statements in this Directors' Report may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied in this Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in the Annexure and forms part of this Report.

DIRECTORS

In accordance with the provisions of Article 130 of the Company's Articles of Association, Mr Pradeep Mallick and Mr Suresh N Talwar, retire by rotation at the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment. Mr.K.Vaidyanathan and Mr.Jiri Kula joined the Board as Additional Directors. In terms of Section 260 of the Companies Act, 1956, these Directors hold office up to the date of this Annual General Meeting. Mr.Brendan Colgan and Mr.Nazmie Adams were appointed as Nominee Directors by Esab Holdings Limited during the year.

Mr.K.Vaidyanathan and Mr.Jiri Kula, being eligible for re-appointment have offered themselves for being elected as Directors of the Company liable to retire by rotation. The details as required under Clause 49 of the Listing Agreement regarding the above said Directors are published as part of the Notice calling the Annual General Meeting.

Mr. Michael Foster resigned from the Board on the 27 June, 2011. Mr. Nawshir Mirza resigned from the Board with effect from the 1 July 2011. Mr. G Hariharan retired from the services of the Company on the 31 August 2011. Mr. James R Deeley resigned from the Board on the 20 October 2011.

The Board would like to place on record, their appreciation for the contributions of the above Directors during their tenure of Directorships.

AUDITORS

M/s. B S R & Co., Chartered Accountants, retire as Auditors of the Company at the forthcoming Annual General Meeting and are eligible for reappointment.

The Company has received confirmation that their appointment, if made, will be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

The Directors recommend that B S R & Co., be appointed as the Company's auditors to hold office until the conclusion of the next Annual General Meeting.

PERSONNEL

At the end of December 2011 the Company had 830 employees as against 812 at the end of 2010. The Company believes in providing a conducive and challenging work environment for nurturing potential, encouraging performance and retaining talents at all levels.

There are no employees covered under the disclosure requirements as required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended.

CORPORATE GOVERNANCE

In terms of Clause 49 of the Listing Agreement with the stock exchanges a Corporate Governance Report is made part of this Annual report. The Company has not adopted the voluntary corporate governance guidelines 2009 issued by the Ministry of Corporate Affairs. However, the company on its own volition has adopted most of the guidelines issued by the Ministry and has been transparent in its dealings with the shareholders in particular and stake holders in general.

In compliance with Section 292A of the Companies Act, 1956 and with the Listing Agreement, an Audit Committee consisting of four Independent Directors and one non-executive Director has been constituted. The Company also has an Investors' Grievance Committee consisting of two Independent Directors and one non-executive Director.

A certificate from the statutory auditors of the Company regarding compliance of the conditions stipulated for Corporate Governance under clause 49 of the Listing Agreement is attached to this report.

The declaration by the Managing Director addressed to the members of the Company pursuant to Clause 49 of the Listing Agreement regarding adherence to the Code of Conduct by the Members of the Board and by the Members of the Senior Management Personnel of the Company is also attached to this Report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers and shareholders.

Your Board would like to place on record, its sincere appreciation to the employees for having played a very significant part in the Company's operations till date.

For and on behalf of the Board of Directors

David Egan Jiri Kula

Chairman for the Meeting Managing Director

Chennai, 28 February 2012

Dec 31, 2009

The Directors take pleasure in presenting the Twenty Third Annual Report together with the audited accounts of the Company for the year ended 31 December 2009.

FINANCIAL RESULTS (Rs. Million)

Particulars 2009 2008

Sales and other income 4,293 4,321 Earnings before interest, tax and depreciation 1,094 1,001

Interest / Finance charges (8) (9)

Depreciation (77) (67)

Profit before taxation 1,009 925

Taxation (347) (313)

Profit for the year 662 612

DIVIDEND

The Board of Directors had declared an interim dividend on 9 December 2009 of 200% entailing a total outflow of Rs.360 million including dividend distribution tax. Your Board has not recommended any final dividend for the year.

SUBSIDIARY

The Company did not have any subsidiary during the year under review.

ENVIRONMENT, HEALTH AND SAFETY

The Company is committed to industrial safety and environment protection. In line with ESAB Global standards, the Company has adopted the Environmental, Health and Safety policy and has obtained its OHSAS 18001 certification for four of its five plants. Efforts are on to get the said certification for its Nagpur plant as well. Internal reviews and audits are undertaken to assess the levels of awareness and processes in place at the various operating locations of the Company.

DIRECTORSRESPONSIBILITY STATEMENT

To the best of their knowledge and belief, and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956.

1. In the preparation of the annual accounts for the year ended 31 December 2009 the applicable accounting standards have been followed;

2. The accounting policies listed in Schedule O to the Notes to Accounts have been selected and applied consistently and judgements and estimates that are reasonable and prudent made so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year on 31 December 2009 and of the profit of the Company for that year;

3. Proper and sufficient care has been taken 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;

4. The annual accounts for the year ended 31 December 2009 have been prepared on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in the Annexure and forms part of this Report.

DIRECTORS

In accordance with the provisions of Article 130 of the Companys Articles of Association, Mr G Hariharan and Mr Nawshir H Mirza, retire by rotation at the forthcoming Annual General Meeting and, being eligible, have offered themselves for re-appointment. The details as required under Clause 49 of the Listing Agreement regarding the above said Directors are published as part of the Notice calling the Annual General Meeting.

Mr Jon Templeman, resigned from the Board with effect from 8 May 2009. Mr Satish Lai Tandon, a non-executive Director passed away on 2 October, 2009. Your Board of Directors would like to place on record their appreciation for the valuable services rendered by both Mr Jon Templeman and Mr Satish Lai Tandon during their tenure of Directorship.

AUDITORS

B S R & Co., Chartered Accountants, retire as Auditors of the Company at the forthcoming Annual General Meeting and are eligible for reappointment. The Directors recommend that BSR & Co., be appointed as the Companys auditors to hold office until the conclusion of the next Annual General Meeting. The Company has received confirmation that their appointment, if made, will be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956.

PERSONNEL

At the end of December 2009 the Company had 745 employees as against 756 at the end of 2008. We are committed to providing a a conducive environment for high performance and to encourage talent at all levels.

As required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the name and other particulars of the employees are set out in the Annexure to the Directors Report.

CORPORATE GOVERNANCE

In terms of Clause 49 of the Listing Agreement with the stock exchanges a Corporate Governance Report is made part of this Annual Report.

In compliance of Section 292A of the Companies Act, 1956 and with the Listing Agreement, an Audit Committee consisting of two Independent Directors and one non-executive Director has been constituted. The Company also has an Investors Grievance Committee consisting of two Independent Directors and one non-executive Director.

A certificate from the statutory auditors of the Company regarding compliance of the conditions stipulated for Corporate

Governance under clause 49 of the Listing Agreement is attached to this report.

The declaration by the Managing Director addressed to the members of the Company pursuant to Clause 49 of the Listing Agreement regarding adherence to the Code of Conduct by the Members of the Board and by the Members of the Senior Management Personnel of the Company is also attached to this Report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers, the ESAB group, shareholders and the Bankers to the Company.

Your Board would like to place on record, its sincere appreciation to the employees for having played a very significant part in the Companys performance.

For and on behalf of the Board of Directors

M G Foster

Chennai, 2 March 2010 Chairman

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