Notes to Accounts of Vesuvius India Ltd.

Dec 31, 2023

(c) I ncludes amount paid for freehold land at Visakhapatnam acquired from Andhra Pradesh Industrial Infrastructure Corporation Limited (“APIIC”) for which agreement to sale has been executed. Construction on this plot has not yet been approved by Visakhapatnam Urban Development Authority since the land is in the Buffer Zone. Management is in discussion with the APIIC from time to time for the amicable resolution of the said matter.

(d) The Company has certain board approved ongoing capital projects which are delayed from the approved timeline for completion or budget. The key reasons for delay include delayed finalization of vendors, inflations etc. The Company has adequate controls for monitoring the status of capital projects on a periodic basis, such as management review at different levels and reporting to the Board.

The management has reviewed and has sufficient reasons to believe that there is no indication of impairment with respect to such delayed projects.

(iv) The total cash outflow for leases for the year ended December 31, 2023 was Rs 78 (December 31, 2022: Nil).

(v) The Company does not have any leases of low value assets.

(vi) Extension and termination options

Extension options are not available in the contract. Termination option is with the lessor who can avail the same in case of any breach in terms and conditions by giving a 6 months'' notice.

(vii) Title deeds of the leasehold land as disclosed above, are held in the name of the Company except 40,083 sq. meters of land at Kolkata for which the validity of lease agreements have expired as of date. However, the Company has been declared successful bidder and received an offer from the relevant government agency on July 20, 2023 to renew the lease. The Company has communicated its acceptance of the offer on August 14, 2023 and has thereon made necessary payment as per the offer letter. The Management is in the process of finalisation of the Lease Agreement and its registration.

(viii) There are no residual value guarantees in relation to any lease contracts.

(i) The Company has not revalued its intangible assets during the current year and the previous year.

(ii) Aggregate amount of amortisation has been included under “Depreciation and Amortisation expense” in the Statement of Profit and Loss (Refer Note 34).

(i) During the year an amount of Rs 147 [December 31, 2022: Rs 49] have been recognised as expense/ (income) in respect of provision for slow moving and obsolete raw material items in the Statement of Profit and Loss.

(ii) During the year an amount of Rs (7) [December 31, 2022: Rs 5] have been recognised as expense/ (income) in respect of provision for slow moving and obsolete Work-in-progress, Finished Goods and Stock-in-trade items in the Statement of Profit and Loss.

(i) There are no outstanding receivables due from directors or other officers of the Company or by firms or private companies in which any director is a partner or director or member.

(ii) Refer Note 42 for information about credit risk and market risk on receivables.

Shares held in abeyance

I n compliance with the provisions of Section 126 of the Companies Act, 2013, offer of rights shares of 3,920 equity shares from the rights issue made in the year 1997 have been held in abeyance.

(c) Terms/ rights attached to equity shares

The Company has a single class of equity shares with par value of Rs 10/- per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shareholders are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company. Equity shares held by Investor Education and Protection Fund do not have voting rights.

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

37 Contingent liabilities and commitments

(to the extent not provided for)

(a) Contingent liabilities:

(i) Claims against the Company not acknowledged as debts:

Sl. No.		Estimated financial impact
	Description	As at December 31, 2023	As at December 31, 2022	Uncertainties
a.	Sales tax/ Value added tax	3,427	3,505	Demand received from appropriate authorities in relation to Sales tax/ VAT assessment and non submission of statutory forms.
b.	Excise duty, Custom duty and Service tax matters	227	227	Demands received from appropriate authorities in relation to Excise Duty, Custom Duty and Service Tax matters.

(ii) In respect of above, it is not practicable for the Company to estimate the timings of the cash outflows if any, in respect of the above contingent liabilities pending resolution of the respective proceedings. The Company does not expect any reimbursement in respect of the above contingent liabilities.

(iii) A counter claim was filed against the Company before the Hon''ble High Court at Calcutta by a customer for claims aggregating to Rs 749 as on December 31, 2022 regarding certain disputes relating to goods supplied by the Company in prior years. The suit has been dismissed by the Hon''ble High Court during the current year.

(b) Commitments

	As at December 31, 2023	As at December 31, 2022
Estimated amount of contracts remaining to be executed on capital account and not provided for [net of advances as at December 31,2023: Rs 1,864 (December 31,2022: Rs 475)]	9,811	3,252

39 Segment Reporting

The Company is engaged in the business of manufacturing, trading and sale of a range of refractories and is having its manufacturing facilities located in India. The performance of the Company is assessed and reviewed by the Chief Operating Decision Maker (''CODM'') as a single operating segment and accordingly manufacture, trading, sale of refractories and sale of services in relation to refractory goods is the only operating segment.

Revenues of approximately Rs 93,809 (Previous year- Rs 74,509) are derived from three external customers (December 31, 2022- three external customers), who contributed to more than 10% of the total revenue individually, in the current year.

(iii) Key Management Personnel

Mr. Biswadip Gupta - Chairman and Independent Director

Mr. Nitin Jain - Managing Director

Mr. Sudipto Sarkar - Independent Director

Mr. Patrick Andre - Director

Ms. Nayantara Palchoudhuri - Independent Director Mr. Henry James Knowles - Director Mr. Thiago Da Costa Avelar- Director

Mr. Pascal Herve Martin Marie Genest (from February 24, 2022)

(iv) Terms and conditions of transactions with related parties

Transactions related to dividend were on the same terms and conditions that applied to other shareholders. The sale to and purchases from related parties are made in the ordinary course of business and based on the price lists in force and terms that would be available to third parties. Outstanding balances at the year end are unsecured and interest free and settlement occurs in cash. No provision are held against receivables from related parties.

41 Fair value measurements

The fair values of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent with those used in the previous year.

The following method and assumption are used to estimate the fair values:

The management assessed that fair values of trade receivables, cash and cash equivalents, other bank balances, other financial assets, trade payables, and other financial liabilities (current), approximate to their carrying amounts due to the short-term maturities of these instruments.

(i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each of the level follows as below :-

Categorisation of fair value into level 1, 2 and 3:

Level 1 [Quoted prices in an active market]:

This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. None of the financial instruments of the Company falls under this category.

Level 2 [Fair values determined using valuation techniques with observable inputs]:

The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using inputs other than quoted prices and valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. None of the financial instrument of the company falls under this category.

Level 3 [Fair values determined using valuation techniques with significant unobservable inputs]:

This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

(a) The current financial assets and liabilities are stated at amortised cost in the financial statements which is approximately equal to their fair value mainly due to their short term in nature. Further, management assessed that the carrying amount of certain loan to employees (non current) and security deposits (non current) approximates to their fair values as the difference between the carrying amount and fair value is not expected to be significant.

(b) Management uses its best judgment in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates are not necessarily indicative of all the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of the financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each year end.

(c) The Company''s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. There have been no transfers between Level 1, Level 2 and Level 3 from December 31, 2022 to December 31, 2023.

Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

42 Financial Risk Management

The Company''s financial assets primarily consists of trade receivables and other receivables, loans, security deposits and cash and bank balances etc., whereas financial liabilities includes lease liabilities, trade payables, liabilities for capital and other expenditure and other financial liabilities. The Company''s business activities exposes it to variety of risks such as market risk (fluctuations in foreign currency exchange rates, interest rates), liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company seeks to minimise potential adverse effects of these risks by managing through a structured process laid down by its Board of Directors. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, and investment of excess liquidity.

(A) Credit risk

Credit risk refers to risk of financial loss to the Company if customers or counterparties fail to meet their contractual obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, loans receivables, security deposit, cash and cash equivalents and term deposits with banks. None of the financial instruments of the Company results in concentration risk.

Credit risk management

Customer credit risk is managed by the Company through its established policies and procedures which involve evaluation of credit profile of individual customers and regular monitoring of important developments viz. payment history, regulatory changes, industry outlook etc. Outstanding receivables are regularly monitored and an impairment analysis is performed at each reporting date on an individual basis for each major customer, whereas for small customers impairment is assessed collectively for homogeneous groups.

The Company manages credit risk for cash and cash equivalents by placing the deposits with approved counterparties with high credit ratings.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk other than for cash and cash equivalents and other bank balances was Rs 33,280 as at December 31, 2023 (December 31, 2022 : Rs 22,103), being the total of the carrying amount of financial assets.

Impairment losses on financial assets

None of the Company''s cash equivalents, including time deposits with banks, are past due or impaired. The Company has used expected credit loss model for trade receivables to assess impairment loss or reversal thereof. A summary of movement in allowances for expected credit losses from the beginning to end of the year is provided as under:

The Company uses a provision matrix to determine impairment loss on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At regular intervals, the historically observed default rates are updated and changes in forward-looking estimates are analysed.

(B) Liquidity risk

Liquidity risk implies that the Company may not be able to meet its obligations associated with its financial liabilities. The Company manages its liquidity risk on the basis of business plans that ensures funds required for financing business operations and meeting financial liabilities are available in a timely manner at optimal costs. The Management regularly monitors rolling forecasts of the Company''s liquidity position to ensure it has sufficient cash on an ongoing basis to meet operational fund requirements. Surplus cash generated, over and above operational fund requirement is invested in bank deposits to optimise cash returns while ensuring adequate liquidity for the Company.

The table below provides details regarding the contractual maturities of financial liabilities including estimated interest payments, if any as at December 31, 2023 and December 31, 2022:

(C) Market risk

Market risk is the risk that the fair value of future cash flow of financial instruments may fluctuate because of changes in market conditions. Market risk broadly comprises two types of risks namely currency risk and interest rate risk. The above risks may affect the Company''s income and expenses. The Company''s exposure to and management of these risks are explained below:

(i) Foreign currency risk

The Company undertakes transactions (e.g. sale of goods and purchases on raw materials or capital goods) denominated in foreign currencies and thus is exposed to exchange rate fluctuations. The Company evaluates its exchange rate exposure arising from foreign currency transactions and manages the same based upon approved risk management policies which includes managing bank accounts in foreign currency and converting these foreign currency into functional currency when exchange rates are favourable.

(ii) Interest rate risk

The Company does not have any variable interest bearing financial liabilities as at the end of the reporting period. The Company''s interest earning financial assets are primarily term deposits with banks which are fixed rate interest bearing instruments and accordingly the Company is not significantly exposed to interest rate risk.

43 Capital management

(a) Risk Management

The Company''s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company, safeguarding business continuity and support the growth of the company.

The Company''s objectives when managing capital are to:

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

• Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets.

The Company determines the amount of capital required on the basis of annual business plan and taking into consideration any long term strategic investment and expansion plans. The funding needs are met through equity and cash generated from operations. The company is not exposed to any externally imposed capital requirement.

45 Share Based Payments

Vesuvius Pic. (Ultimate Holding Company) grants stock awards to certain employees of the Company under its stock incentive plan, which entitle the holder to receive equity instruments of the Ultimate Holding Company. These stocks will vest on the second anniversary of the date of grant, unless business conditions justify deferring it, and provided that the employee is still actively employed by a Vesuvius company. The vested shares are exercisable for a period of 10 years beginning with the Grant Date. The plan is regarded as equity settled as per Ind AS 102- Share Based Payment.

The movement of the stock award is as follows: Opening balance - 49,291 (Previous year : 4640), Granted during the year - 48,804 (Previous year : 46,407), Dividend Shares during the year - 674 (Previous year : 104), Exercised during the year - 10,449 (Previous year : 1860), forfeited during the year - NIL (Previous year : NIL), Closing balance - 88,320 (Previous year : 49,291). The employees are not required to make any payment hence Average exercise price per share award is NIL (Previous year : NIL).

Weighted average remaining contractual life of award outstanding at end of the period is 290 days (Previous year : 421 days).

The fair value at grant date of award granted during the year were GBP 4.05 per award (Previous year : GBP 5.38 and GBP 5.47 per award), determined using the closing midmarket price on the day preceding the date of grant. Total expenses arising from share based payment transactions recognised in profit or loss as part of employee benefit expense is Rs 198 Lakhs (Previous year : Rs 143 Lakhs).

46 Employee benefit obligations

(i) Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident and Pension Fund, and Employee State Insurance (''ESI'') which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are recognised in the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident and Pension Fund and ESI for the year aggregates to Rs 793 (Previous year : Rs 681).

(ii) Defined benefit plans Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15/21/26 days salary (as applicable, depending upon the number of years served by the employee) payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to gratuity funds established as insurance companies. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

The amounts recognised in the balance sheet and the movements in the net defined benefit obligation over the year are as follows:

Assumptions regarding future mortality for gratuity is set based on actuarial advice in accordance with published statistics and experience. These assumptions translate into an average life expectancy in years for a person retiring at age 60.

The estimates of future salary increase considered in actuarial valuation taken into account factors like inflation, seniority promotion and other relevant factors, such as demand and supply in the employment market.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied while calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Risk exposure

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:

(a) Investment risk:

The plan liabilities are calculated using a discount rate set with references to government bond yields (discount rate); if plan assets under perform compared to the government bonds discount rate, this will create or increase a deficit.

(b) Interest risk:

A decrease in the bond interest rate (discount rate) will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investment.

(c) Life expectancy:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

(d) Salary growth risk:

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.

Defined benefit liability and employer contributions

Expected contributions to post-employment benefit plans for the year ending December 31, 2024 : Rs 256 (Previous year : Rs 225)

The weighted average duration of the defined benefit obligation (gratuity) is 10 years for December 31, 2023 (December 31, 2022 : 10 years). The expected maturity analysis of undiscounted gratuity is as follows:

(iii) Major categories of plan assets are as follows :

The defined benefit plans are funded with insurance companies of India. The Company does not have any liberty to manage the funds provided to insurance companies. Thus the composition of each major category of plan assets has not been disclosed.

Compensated absences

The Company provides benefits in the nature of compensated absences which can be accumulated. The compensated absences are other long term employee benefits plan. The plan is unfunded. Based on actuarial valuation, a provision is recognised in full for the projected obligation.

Based on past experience and in keeping with Company''s policy, the Company does not expect all employees to avail the full amount of accrued leave or require payment within the next 12 months and accordingly the total year end provision, as aforesaid is classified between current and non current based on actuarial valuation and non current considering estimates of availment of leave, separation of employees etc.

47 Provisions for taxation has been recognised with reference to profit for the year ended December 31,2023, in accordance with the provisions of Income-tax Act, 1961 and rules framed thereunder. The ultimate tax liability for the year 2023-24 will be determined on the basis of total taxable income for the nine months ended December 31, 2023 and 3 months ending March 31, 2024.

48 The management is of the opinion that its international transactions are at arm''s length under the provision of Section 92-92F of the Income-tax Act, 1961.

* The unspent amount of Rs 16 lakhs as on December 31, 2021 was subsequently paid to designated CSR fund in February, 2022. The shortfall was on account of restrictions in CSR projects due to various waves of COVID-19 pandemic.

** The Company has incurred expenditure towards rehabilitation centres, livelihood enhancement, donation to several trusts and societies engaged in welfare and development of society.

*** The Company does not propose to carry forward amount spent during the year aggregating to Rs 14 Lakhs (December 31,2022: Nil) beyond the statutory requirement.

50 The Company has no borrowings from banks and financial institutions on the basis of security of current assets. Hence, the requirement of furnishing quarterly returns or statements of current assets with banks and financial institutions do not arise.

51 Relationship with struck off companies

The following table depicts the details of balances outstanding in respect of transactions undertaken with the companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956:

(i) This change in ratio resulted from increase in earnings.

(ii) This change in ratio resulted primarily from increase in equity arising on account of increase in earnings.

(iii) This change in ratio resulted on account of recognition of lease liabilities during the year.

53 The Company has long-term contracts as at December 31, 2023 for which there were no material foreseeable losses.

The Company did not have any derivative contracts as at December 31, 2023.

54 The Company has not raised any fund on short term or long term basis from banks and financial institution, accordingly question of utilisation of same for the purpose other than for which the same is taken does not arise.

55 The Company has received whistle-blower complaints during the year. Based on management''s assessment, the impact of these are not material and hence has no bearing on Financial statements.

56 (a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other

sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

57 The company has not made any investment during the year. The Company has not granted secured/ unsecured loans/ advances in the nature of loans, or stood guarantee, or provided security to any Company/Firm/Limited Liability Partnership/ other party during the year other than unsecured loans to 47 employees. The aggregate amount during the year and balance outstanding at the balance sheet date with respect to such loans to parties (aforesaid employees) other than subsidiaries, joint ventures and associates are as per the table given below:

There are no loans and advances in the nature of loans granted to promoters, directors, KMPs, and the related parties (as defined under Companies Act, 2013) or other parties (including employees) either severely or jointly with any other person that are repayable on demand or without specifying any terms or period of repayment during the current or previous year. Loans granted to employees are unsecured in nature. In respect of these loans, the schedule of repayment of principal amount has been stipulated and the employees are repaying the principal amount as stipulated in a regular manner. The terms and conditions under which these loans were granted are not prejudicial to the interest of the Company.

58 The Company has done an assessment to identify Core Investment Company (CIC) [including CICs in the Group] as per the necessary guidelines of Reserve Bank of India [including Core Investment Companies (Reserve Bank) Directions, 2016]. The Company is not a CIC and no entities have been identified as CIC in the Group, of which Company is a part.

59 No proceedings have been initiated on or are pending against the company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) [formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)] and Rules made thereunder.

60 The Company do not have any subsidiary as at the balance sheet date, accordingly compliance with number of layers prescribed under the Companies Act read with Companies (Restriction on number of layers) Rules, 2017 does not arise.

61 The Company has not entered into any scheme of arrangement which has an accounting impact in the current or previous financial year.

62 The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

63 The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

64 There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

65 There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

66 The books of account and other relevant books and papers maintained in electronic mode by the Company are accessible in India, at all times, so as to be usable for subsequent reference. The back-up of the books of account and other books and papers of the company maintained in electronic mode are kept in servers physically located in India on a daily basis.

67 I n terms of provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company, on February 06, 2023, informed the BSE Limited and the National Stock Exchange of India Limited that there has been an incident involving unauthorised access to IT systems and networks that happened through an offshore affiliate. Immediately upon becoming aware of such unauthorised activity on networks, the Company initiated necessary steps to investigate and respond to the incident, including shutting down affected systems. The management''s assessment based on the investigation concluded which was carried out with the support of leading cyber security experts, indicate that there was no impact of the aforesaid incident on the financial statements of the Company for the year ended December 31, 2023. Further, on review of the data affected by the incident, we confirm that no material breaches or loss of relevant data or documents have also been identified.

Thus, the management does not expect any financial, legal and regulatory impact of the aforesaid incident on the aforesaid financial statements of the Company.

68 The Company is awaiting further clarification in respect of retrospective application of the Supreme Court Judgment in the case of “Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal” and the related circular issued by the Employees'' Provident Fund Organisation in this regard. In the assessment of the management, the aforesaid matter is not likely to have a significant impact and accordingly, no provision has been made in these Financial Statements.

---

Dec 31, 2022

(c) Terms/ rights attached to equity shares

The Company has a single class of equity shares with par value of Rs. 10/- per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shareholders are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company. Equity shares held by Investor Education and Protection Fund do not have voting rights.

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

(a) Capital reserve

Represents grants received in prior years against re-imbursement of stamp duty and cost of freehold land at Visakhapatnam.

(b) Securities premium

Securities premium is used to record the premium on issue of shares. The same is to be utilised in accordance with the provisions of Section 52 of the Companies Act, 2013.

(c) General reserve

Under the erstwhile Indian Companies Act, 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act, 2013, the requirement to mandatory transfer a specified percentage of the net profit to general reserve has been withdrawn though the Company may transfer such percentage of its profits for the financial year as it may consider appropriate. Declaration of dividend out of such reserve shall not be made except in accordance with rules prescribed in this behalf under the Act.

(d) Retained earnings

Retained earnings represents the profits that the Company has earned till date, less any transfer to general reserve, dividends or other distributions to shareholders etc.

(e) Dividends not recognised at the end of the reporting period

During the year 2022 the Company''s shareholders have declared dividend of Rs. 8.00 per share (2021 : Rs. 7.00 per share) which resulted in an outflow of Rs. 1,624 (2021 : Rs. 1,421) and accordingly has been accounted in the year of declaration by the shareholders.

The Board of directors of the Company has proposed a dividend of Rs. 8.25 per share which would result in an outflow of Rs. 1,674. This proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.

35 Contingent liabilities and commitments (to the extent not provided for) (a) Contingent liabilities: (i) Claims against the Company not acknowledged as debts:
	Estimated financial impact
Sl. ^ . . ,, Description No.	As at December 31,2022	As at December 31,2021	Uncertainties
a. Sales tax/ Value added tax	3,505	3,505	Demand received from appropriate authorities in relation to Sales tax/ VAT assessment and non submission of statutory forms.
b. Excise duty, Custom duty and Service tax matters	227	281	Demands received from appropriate authorities in relation to Excise Duty, Custom Duty and Service Tax matters.

(ii) A counter claim has been filed against the Company before the Hon''ble High Court at Calcutta by a customer for claims aggregating Rs.749 (December 31,2021: Rs. 749) regarding certain disputes relating to goods supplied by the Company in prior years.

(iii) The Company is awaiting further clarification in respect of retrospective application of the Supreme Court Judgment in the case of "Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular issued by the Employees'' Provident Fund Organisation in this regard. In the assessment of the management, the aforesaid matter is not likely to have a significant and material impact and accordingly, no provision has been made in these Financial Statements.

(b) Commitments
	As at	As at
	December 31,2022	December 31,2021
Estimated amount of contracts remaining to be executed on capital account and not provided for [net of advances]	3,252	1,797

37 The Company has assets (premises, equipments etc.) with a lease term of 12 months or less. The Company applies the ''short term lease'' recognition exemption for these lease. The Company also has certain leases of assets of low value. The Company applies ''low values lease'' recognition exemption for these leases.

38 Segment Reporting

The Company is engaged in the business of manufacturing, trading and sale of a range of refractories and is having its manufacturing facilities located in India. The performance of the Company is assessed and reviewed by the Chief Operating Decision Maker (''CODM'') as a single operating segment and accordingly manufacture, trading and sale of refractories is the only operating segment.

Accounting policy:

Segment information is prepared in conformity with the accounting policy adopted for preparing and presenting the financial statements of the Company as a whole. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

40 Fair value measurements

The fair values of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent with those used in the previous year.

The following method and assumption are used to estimate the fair values:

The management assessed that fair values of trade receivables, cash and cash equivalents, other bank balances, other financial assets, trade payables, and other financial liabilities (current), approximate to their carrying amounts due to the short-term maturities of these instruments.

Note

Short-term financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

Categorisation of fair value into level 1,2 and 3:

Level 1 [Quoted prices in an active market]:

This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 [Fair values determined using valuation techniques with observable inputs]:

The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3 [Fair values determined using valuation techniques with significant unobservable inputs]:

This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

There are no transfers between levels 1 and 2 during the year.

The loans and security deposits are fair valued and are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

The current financial assets and liabilities are stated at amortized cost in the financial statements which is approximately equal to their fair value mainly due to their short term in nature. Further, management assessed that the carrying amount of certain loan to employees (non current) and security deposits (non current) approximates to their fair values as the difference between the carrying amount and fair value is not expected to be significant.

Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

41 Financial Risk Management

The Company''s financial assets primarily consists of trade receivables and other receivables, loans, security deposits and cash and bank balances etc., whereas financial liabilities includes trade payables, liabilities for capital expenditure and other financial liabilities. The Company''s business activities exposes it to variety of risks such as fluctuations in foreign currency exchange rates, interest rates, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company seeks to minimise potential adverse effects of these risks by managing through a structured process laid down by its Board of Directors. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of non-derivative financial instruments, and investment of excess liquidity.

(A) Credit risk

Credit risk refers to risk of financial loss to the Company if customers or counterparties fail to meet their contractual obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, loans receivables and cash and cash equivalents.

Credit risk management

Customer credit risk is managed by the Company through its established policies and procedures which involve evaluation of credit profile of individual customers and regular monitoring of important developments viz. payment history, regulatory changes, industry outlook etc. Outstanding receivables are regularly monitored and an impairment analysis is performed at each reporting date on an individual basis for each major customer, whereas for small customers impairment is assessed collectively for homogeneous groups.

The Company manages credit risk for cash and cash equivalents by placing the deposits with approved counterparties with high credit ratings.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk other than for cash and cash equivalents and other bank balances was Rs. 22,103 as at December 31,2022 (December 31, 2021 : Rs. 17,705), being the total of the carrying amount of financial assets.

Impairment losses on financial assets

None of the Company''s cash equivalents, including time deposits with banks, are past due or impaired. The Company has used expected credit loss model for trade receivables to assess impairment loss or reversal thereof. A summary of movement in allowances for expected credit losses from the beginning to end of the year is provided as under:

The Company uses a provision matrix to determine impairment loss on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At regular intervals, the historically observed default rates are updated and changes in forward-looking estimates are analysed.

(B) Liquidity risk

Liquidity risk implies that the Company may not be able to meet its obligations associated with its financial liabilities. The Company manages its liquidity risk on the basis of business plans that ensures funds required for financing business operations and meeting financial liabilities are available in a timely manner at optimal costs. The Management regularly monitors rolling forecasts of the Company''s liquidity position to ensure it has sufficient cash on an ongoing basis to meet operational fund requirements. Surplus cash generated, over and above operational fund requirement is invested in bank deposits to optimise cash returns while ensuring adequate liquidity for the Company.

All the Company''s financial liabilities are due within one year from the balance sheet date and could be met by realisation of surplus funds deposited with banks.

(C) Market risk

Market risk is the risk that the fair value of future cash flow of financial instruments may fluctuate because of changes in market conditions. Market risk broadly comprises three types of risks namely currency risk, interest rate risk and price risk (for commodities). The above risks may affect the Company''s income and expenses. The Company''s exposure to and management of these risks are explained below:

(i) Foreign currency risk

The Company undertakes transactions (e.g. sale of goods and purchases on raw materials or capital goods) denominated in foreign currencies and thus is exposed to exchange rate fluctuations. The Company evaluates its exchange rate exposure arising from foreign currency transactions and manages the same based upon approved risk management policies which includes managing bank accounts in foreign currency and converting these foreign currency into functional currency when exchange rates are favourable.

A 10% appreciation/depreciation of the foreign currencies with respect to functional currency of the Company would result in an increase/decrease in the Company''s net profit before tax by approximately Rs. 540 (December 31,2021 : Rs. 37).

(ii) Interest rate risk

The Company does not have any interest bearing financial liabilities. The Company''s interest earning financial assets are primarily term deposits with banks which are fixed rate interest bearing instruments and accordingly the Company is not significantly exposed to interest rate risk.

42 Capital management

The Company''s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company.

The Company''s objectives when managing capital are to:

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

• Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets.

The Company determines the amount of capital required on the basis of annual business plan also taking into consideration any long term strategic investment and expansion plans. The funding needs are met through equity and cash generated from operations.

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

44 Share Based Payments

Vesuvius Plc. (Ultimate Holding Company) grants stock awards to certain employees of the Company under its stock incentive plan, which entitle the holder to receive equity instruments of the Ultimate Holding Company. These stocks will vest on the second anniversary of the date of grant, unless business conditions justify deferring it, and provided that the employee is still actively employed by a Vesuvius company. The vested shares are exercisable for a period of 10 years beginning with the Grant Date. The plan is regarded as equity settled as per Ind AS 102- Share Based Payment.

The movement of the stock award is as follows: Opening balance - 4,640, Granted during the year - 46,407, Dividend Shares during the year - 104, Exercised during the year - 1,860, forfeited during the year - NIL, Closing balance as at December 31, 2022 - 49,291. The employees are not required to make any payment hence Average exercise price per share award is NIL.

Weighted average remaining contractual life of award outstanding at end of the period is 421 days.

The fair value at grant date of award granted during the year were GBP 5.38 and GBP 5.47 per award, determined using the closing midmarket price on the day preceding the date of grant. Total expenses arising from share based payment transactions recognised in profit or loss as part of employee benefit expense is Rs. 143 Lakhs.

45 Employee benefit obligations (i) Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident and Pension Fund, and Employee State Insurance (''ESI'') which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are recognised in the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident and Pension Fund and ESI for the year aggregates to Rs. 681 (December 31,2021 : Rs. 602).

(ii) Defined benefit plans

Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to gratuity funds established as trusts or insurance companies. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied while calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period. The major categories of plan assets

The defined benefit plans are funded with insurance companies of India. The Company does not have any liberty to manage the funds provided to insurance companies. Thus the composition of each major category of plan assets has not been disclosed.

Risk exposure

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below: Investment risk:

The defined benefit plans are funded with insurance companies of India. The Company does not have any liberty to manage the funds provided to insurance companies.

Interest risk:

A decrease in the interest rate on plan assets will increase the plan liability.

Life expectancy:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.

Compensated absences

The Company provides benefits in the nature of compensated absences which can be accumulated. The compensated absences are other long term employee benefits plan. The plan is unfunded. Based on actuarial valuation, a provision is recognised in full for the projected obligation and are classified into current and non-current as identified by the actuary. Expenses recognised in the Statement of Profit and loss towards compensated absences includes re-measurement gains and losses.

46 Provisions for taxation has been recognised with reference to profit for the year ended December 31, 2022, in accordance with the provisions of Income-tax Act, 1961 and rules framed thereunder. The ultimate tax liability for the year 2022-23 will be determined on the basis of total taxable income for the nine months ended December 31,2022 and 3 months ending March 31,2023.

47 The management is of the opinion that its international transactions are at arm''s length under the provision of Section 92-92F of the Income-tax Act, 1961.

51 The Company has long-term contracts as at December 31,2022 for which there were no material foreseeable losses. The Company did not have any derivative contracts as at December 31,2022.

52 The Company has not raised any fund on short term or long term basis from banks and financial institution, accordingly question of utilisation of same for the purpose other than for which the same is taken does not arise.

53 The Company has received whistle-blower complaints during the year. Based on management''s assessment, the impact of these are not material and hence has no bearing on Financial statements.

55 (a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

56 There are no loans and advances in the nature of loans granted to promoters, directors, KMPs, and the related parties (as defined under Companies Act, 2013) or other parties (including employees) either severely or jointly with any other person that are repayable on demand or without specifying any terms or period of repayment during the current or previous year. Loans granted to employees are unsecured in nature. In respect of these loans, the schedule of repayment of principal amount has been stipulated and the employees are repaying the principal amount as stipulated in a regular manner. The terms and conditions under which these loans were granted are not prejudicial to the interest of the Company. There are no outstanding loans due from directors or other officers of the Company.

57 The Company has done an assessment to identify Core Investment Company (CIC) [including CICs in the Group] as per the necessary guidelines of Reserve Bank of India [including Core Investment Companies (Reserve Bank) Directions, 2016]. The Company is not a CIC and no entities have been identified as CIC in the Group, of which Company is a part.

58 The Company has not entered into any scheme of arrangement which has an accounting impact on current or pervious year.

59 No proceedings have been initiated on or are pending against the company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) [formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)] and Rules made thereunder.

60 The Company do not have any subsidiary as at the balance sheet date, accordingly compliance with section 2(89) of the Companies Act read with Companies (Restriction on number of layers) Rules, 2017 does not arise.

61 The Company has not entered into any scheme of arrangement which has an accounting impact in the current or previous financial year.

62 The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

63 The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

64 There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

65 In terms of provisions of Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company, on February 06, 2023, informed the BSE Limited and the National Stock Exchange of India Limited that there has been an incident involving unauthorised access to IT systems and networks that happened through an offshore affiliate. Immediately upon becoming aware of such unauthorised activity on networks, the Company initiated necessary steps to investigate and respond to the incident, including shutting down affected systems.

Based on management''s preliminary assessment with the support of leading cyber security experts, related to investigations and identification of the extent of the issue, including the impact, if any, on production and contract fulfilment, there were no assessed impact on the financial statements of the Company for the year ended December 31,2022. While the detailed investigation as regards the incident is yet to be concluded, the management does not expect any further financial , legal and regulatory impact of the aforesaid incident on the aforesaid financial statements of the Company.

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Dec 31, 2018

Note 1 Company overview

Vesuvius India Limited (“the Company”) is a public company domiciled and headquartered in India. It is incorporated under the Companies Act, 1956 and its shares are listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The Company is primarily engaged in the manufacturing and trading of refractory goods. The Company also provides services in relation to refractory goods. The Company has operations in India and caters to both domestic and international markets. The Company do not have a subsidiary, associates and joint ventures.

Note 1 .1 Approval for issue

These financial statements were approved for issue with a resolution of the Board of Directors on February 27, 2019.

(a) Terms/ rights attached to equity shares

The Company has a single class of equity shares with par value of Rs. 10/- per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company’s residual assets. The equity shareholders are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company. Equity shares held by Investor Education and Protection Fund do not have voting rights.

On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company remaining after distribution of all preferential amounts in proportion to the number of equity shares held

Note

(a) Capital reserve

Represents grants received in prior years against re-imbursement of stamp duty and cost of freehold land at Visakhapatnam.

(b) Securities premium

Securities premium is used to record the premium on issue of shares. The same is to be utilised in accordance with the provisions of Section 52 of the Companies Act, 2013.

(c) General reserve

Under the erstwhile Indian Companies Act, 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act, 2013, the requirement to mandatory transfer a specified percentage of the net profit to general reserve has been withdrawn though the Company may transfer such percentage of its profits for the financial year as it may consider appropriate. Declaration of dividend out of such reserve shall not be made except in accordance with rules prescribed in this behalf under the Act.

(d) Retained earnings

Retained earnings represents the profits that the Company has earned till date, less any transfer to general reserve, dividends or other distributions to shareholders etc.

(e) Dividends and taxes thereon

During the year 2018 the Company’s shareholders have declared dividend of Rs. 6.75 per share (2017 : Rs. 6.50 per share) which resulted in an outflow of Rs. 1652 (2017 : Rs. 1,588) including dividend distribution tax of Rs. 282 (2017: Rs. 269) and accordingly has been accounted in the year of declaration by the shareholders.

The Board of directors of the Company has proposed a dividend of Rs. 7 per share which would result in an outflow of Rs. 1,713 including dividend distribution tax of Rs. 292. Pending approval of the shareholders the same is not recognised in the financial statements.

2. Earnings per share (EPS)

Basic and diluted earning per share

The calculation of basic and diluted earnings per share for the year ended December 31, 2018 is based on the profit attributable to equity shareholders and weighted average number of equity shares outstanding.

3. Contingent liabilities and commitments

(to the extent not provided for)

(a) Contingent liabilities:

(i) Claims against the Company not acknowledged as debts:

(ii) A counter claim has been filed against the Company before the Hon’ble High Court at Calcutta by a customer for claims aggregating Rs. 749 (December 31, 2016: Rs.749, January 1, 2016 : Rs. 749) regarding certain disputes relating to goods supplied by the Company in prior years.

4. The Company has taken various premises under operating lease which are cancellable during the life of the contract at the option of both the parties. Minimum lease payment charged during the year to the Statement of Profit and Loss aggregated to Rs. 358 (2017 : Rs. 314).

5. Segment Reporting

The Company is engaged in the business of manufacturing, trading and sale of a range of refractories and is having its manufacturing facilities located in India. The performance of the Company is assessed and reviewed by the Chief Operating Decision Maker (‘CODM’) as a single operating segment and accordingly manufacture and sale of refractories is the only operating segment.

Accounting policy:

Segment information is prepared in conformity with the accounting policy adopted for preparing and presenting the financial statements of the Company as a whole.

Geographical Information

The Company is domiciled in India, however also sells its products outside India. The amount of its revenue from external customers broken down by the location of the customers is shown in table below:

6. Related Party Disclosures

A) List of Related parties and relationship

i) Enterprises having control over the Company :

Vesuvius plc, United Kingdom, Ultimate holding company, holding company of Vesuvius Holdings Limited, United Kingdom

Vesuvius Holdings Limited, United Kingdom, (formerly known as Cookson Group plc), holding company of Vesuvius Financial 1 Limited, United Kingdom

Vesuvius Financial 1 Limited, United Kingdom, (formerly known as Cookson Financial Limited), holding company of Vesuvius Group Limited, United Kingdom

Vesuvius Group Limited, United Kingdom, Immediate holding Company

ii) Fellow Subsidiaries (with whom transactions have taken place during the year ):

Name of the related parties

Avemis SAS, France

Foseco (Thailand) Limited, Thailand

Foseco India Limited, India

Foseco Industrial E Commercial Ltda, Brazil

Foseco Korea Limited, South Korea

Foseco Philippines Inc, Philippines

Foseco Pty Limited, Australia

Foseco SAS.

Flo-Con Systems Inc.

Pt. Foseco Indonesia, Indonesia

Sert Metal SAS , France

Vesuvius (Thailand) Co. Ltd, Thailand

Vesuvius Advanced Ceramics (China) Co. Ltd., China

Vesuvius Belgium N.V. Belgium

Vesuvius Corporation S.A. (Taiwan Branch), Switzerland

Vesuvius Corporation S.A., Switzerland

Vesuvius Crucible Company,USA

Vesuvius China Holdings Co. Limited, Hongkong

Vesuvius Emirates FZE, United Arab Emirates

Vesuvius Foundry Products (Suzhou) Co. Ltd., China

Vesuvius France S.A., France

Vesuvius GmbH, Germany

Vesuvius Group S.A., Belgium

Vesuvius Iberica Refractarios S.A., Spain

Vesuvius Istanbul Sanayi ve Ticaret AS, Turkey

Vesuvius Italia S.P.A., Italy

Vesuvius Japan Inc.

Vesuvius UK Limited, Taiwan

Vesuvius Malaysia SDN. BHD, Malaysia

Vesuvius Mexico S.A. de C.V., Mexico

Vesuvius Poland Spolka z.o.o, Poland

Vesuvius Ras Al Khaimah FZ-LLC , United Arab Emirates

Vesuvius Slavia A.S., Czech Republic Vesuvius South Africa (Pty) Limited, South Africa Vesuvius UK Limited, United Kingdom Vesuvius USA Corporation, USA

Wugang Vesuvius Advanced Ceramics (Wuhan) Co., Ltd, China

Wugang Wuhang - Vesuvius Advanced CCR

Yingkou Bayuquan Refractories Co., Ltd , China

Vesuvius Refratarios Ltda, Brasil

Process Metrix LLC

Vesuvius Scandinavia AB, Sweden

Vesuvius Refractory India Private Limited

Vesuvius Australia Pty Ltd.

Vesuvius Canada. Inc.

Vesuvius Inc. (Cleveland Foundry)

Vesuvius PLC.

Vesuvius-Foseco S.A.S. Technical Sales Office SIDERMES S.P.A, Italy

iii) Names of Principal Group Companies / fellow subsidiaries

(with which the Company neither have any transactions nor outstanding balances at current or previous year end)

Vesuvius Overseas Limited, United Kingdom (formerly, Cookson Overseas Limited, United Kingdom)

iv) Key Management Personnel

Mr. Biswadip Gupta - Chairman & Independent Director Mr. Subrata Roy - Managing Director (till December 31, 2018 )

Mr. Ritesh Dungarwal - Managing Director (from January 01, 2019)

Mr. Sudipto Sarkar - Independent Director Mr. Tanmay Ganguly - Director

Mr. Jan Roel van der Sluis - Director (from November 1, 2018)

Mr. Patrick Andre - Director

Miss Nayantara Palchoudhuri - Independent Director

(i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Note

Short-term financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

Categorisation of fair value into level 1, 2 and 3.

Level 1 [Quoted prices in an active market]:

This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 [Fair values determined using valuation techniques with observable inputs]:

The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3 [Fair values determined using valuation techniques with significant unobservable inputs]:

This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

There are no transfers between levels 1 and 2 during the year.

Short-term financial assets and liabilities are stated at carrying value which is approximately equal to their fair value. The loans and security deposits are fair valued and are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

7. Financial Risk Management

The Company’s financial assets primarily consists of trade receivables and other receivables, loans, security deposits and cash and bank balances etc., whereas financial liabilities includes trade payables, liabilities for capital expenditure and other financial liabilities. The Company’s business activities exposes it to variety of risks such as fluctuations in foreign currency exchange rates, interest rates, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company seeks to minimise potential adverse effects of these risks by managing through a structured process laid down by its Board of Directors. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of non-derivative financial instruments, and investment of excess liquidity.

(A) Credit risk

Credit risk refers to risk of financial loss to the Company if customers or counterparties fail to meet their contractual obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, loans receivables and cash and cash equivalents.

Credit risk management

Customer credit risk is managed by the Company through its established policies and procedures which involve evaluation of credit profile of individual customers and regular monitoring of important developments viz. payment history, regulatory changes, industry outlook etc. Outstanding receivables are regularly monitored and an impairment analysis is performed at each reporting date on an individual basis for each major customer, whereas for small customers impairment is assessed collectively for homogeneous groups.

The Company manages credit risk for cash and cash equivalents by placing the deposits with approved counterparties with high credit ratings.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk other than for cash and cash equivalents and other bank balances was Rs. 18,772 as at December 31, 2018 (December 31,2017 : Rs. 22,520), being the total of the carrying amount of financial assets.

Impairment losses on financial assets

None of the Company’s cash equivalents, including time deposits with banks, are past due or impaired. The Company has used expected credit loss model for trade receivables to assess impairment loss or reversal thereof. A summary of movement in allowances for expected credit losses from the beginning to end of the year is provided as under:

(B) Liquidity risk

Liquidity risk implies that the Company may not be able to meet its obligations associated with its financial liabilities. The Company manages its liquidity risk on the basis of business plans that ensures funds required for financing business operations and meeting financial liabilities are available in a timely manner at optimal costs. The Management regularly monitors rolling forecasts of the Company’s liquidity position to ensure it has sufficient cash on an ongoing basis to meet operational fund requirements. Surplus cash generated, over and above operational fund requirement is invested in bank deposits to optimise cash returns while ensuring adequate liquidity for the Company.

All the Company’s financial liabilities are due within one year from the balance sheet date and could be met by realisation of surplus funds deposited with banks.

(C) Market risk

Market risk is the risk that the fair value of future cash flow of financial instruments may fluctuate because of changes in market conditions. Market risk broadly comprises three types of risks namely currency risk, interest rate risk and price risk (for commodities). The above risks may affect the Company’s income and expenses. The Company’s exposure to and management of these risks are explained below:

(i) Foreign currency risk

The Company undertakes transactions (e.g. sale of goods and purchases on raw materials or capital goods) denominated in foreign currencies and thus is exposed to exchange rate fluctuations. The Company evaluates its exchange rate exposure arising from foreign currency transactions and manages the same based upon approved risk management policies which includes managing bank accounts in foreign currency and converting these foreign currency into functional currency when exchange rates are favourable.

Exposure to foreign currency risk

The carrying amounts of foreign currency denominated financial assets and liabilities at the end of the reporting periods are as under:

A 10% appreciation/depreciation of the foreign currencies with respect to functional currency of the Company would result in an increase/decrease in the Company’s net profit before tax by approximately Rs. 205 (2017 : Rs. 312).

(ii) Interest rate risk

The Company does not have any interest bearing financial liabilities. The Company’s interest earning financial assets are primariliy term deposits with banks which are fixed rate interest bearing instruments and accordingly the Company is not significantly exposed to interest rate risk.

8. Capital management

The Company’s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company.

The Company determines the amount of capital required on the basis of annual business plan also taking into consideration any long term strategic investment and expansion plans. The funding needs are met through equity and cash generated from operations.

9. Income tax expense

This note provides an analysis of the Company’s income tax expense, show amounts that are recognised directly in equity and how the tax expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation to the Company’s tax positions.

10. Employee benefit obligations

(i) Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident and Pension Fund, and Employee State Insurance (‘ESI’) which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are recognised in the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident and Pension Fund and ESI for the year aggregates to Rs. 449 (2017 : Rs. 431).

ii) Defined benefit plans Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to gratuity funds established as trusts or insurance companies. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

The amounts recognised in the balance sheet and the movements in the net defined benefit obligation over the year are as follows:

Assumptions regarding future mortality for gratuity and medical are set, based on actuarial advice in accordance with published statistics and experience. These assumptions translate into an average life expectancy in years for a person retiring at age 60.

Sensitivity analysis

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied while calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

The major categories of plan assets

The defined benefit plans are funded with insurance companies of India. The Company does not have any liberty to manage the funds provided to insurance companies. Thus the composition of each major category of plan assets has not been disclosed.

Risk exposure

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:

Investment risk:

The defined benefit plans are funded with insurance companies of India. The Company does not have any liberty to manage the funds provided to insurance companies.

Interest risk:

A decrease in the interest rate on plan assets will increase the plan liability.

Life expectancy:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.

Defined benefit liability and employer contributions

Expected contributions to post-employment benefit plans for the year ending December 31, 2018 :

The weighted average duration of the defined benefit obligation (gratuity) is 10 years for December 31, 2018. The expected maturity analysis of undiscounted gratuity is as follows:

Compensated absences

The Company provides benefits in the nature of compensated absences which can be accumulated. The compensated absences are other long term employee benefits plan. The plan is unfunded. Based on actuarial valuation, a provision is recognised in full for the projected obligation and are classified into current and non-current as identified by the actuary. Expenses recognised in the Statement of Profit and loss towards compensated absences includes remeasurement gains and losses.

11. Provisions for taxation has been recognised with reference to profit for the year ended December 31, 2018, in accordance with the provisions of Income-tax Act, 1961 and rules framed thereunder. The ultimate tax liability for the year 2018-19 will be determined on the basis of total taxable income for the year ending March 31, 2019.

12. The management is of the opinion that its international transactions are at arm’s length under the provision of Section 92-92F of the Income-tax Act, 1961.

13 Exceptional items

Exceptional item represents cost of Voluntary Separation Scheme as part of the restructuring activity initiated by the Company.

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Dec 31, 2017

1 Company overview

Vesuvius India Limited (“the Company”) is a public company domiciled and headquartered in India. It is incorporated under the Companies Act, 1956 and its shares are listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The Company is primarily engaged in the manufacturing and trading of refractory goods. The Company also provides services in relation to refractory goods. The Company has operations in India and caters to both domestic and international markets

(a) Terms/ rights attached to equity shares

The Company has a single class of equity shares with par value of Rs. 10/- per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company’s residual assets. The equity shareholders are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company. Equity shares held by Investor Education and Protection Fund do not have voting rights.

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

Note

(a) Capital reserve

Represents grants received in prior years against re-imbursement of stamp duty and cost of freehold land at Visakhapatnam.

(b) Securities premium account

Securities premium account is used to record the premium on issue of shares. The same is utilised in accordance with the provisions of Section 52 of the Companies Act, 2013.

(c) General reserve

Under the erstwhile Indian Companies Act, 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act, 2013, the requirement to mandatory transfer a specified percentage of the net profit to general reserve has been withdrawn though the Company may transfer such percentage of its profits for the financial year as it may consider appropriate. Declaration of dividend out of such reserve shall not be made except in accordance with rules prescribed in this behalf under the Act.

(d) Retained earnings

Retained earnings represents the profits that the Company has earned till date, less any transfer to general reserve, dividends or other distributions to shareholders etc.

(e) Dividends and taxes thereon

During the year 2017 the Company’s shareholders have declared dividend of Rs. 6.50 per share (2016: Rs. 6.25 per share) which resulted in an outflow of Rs. 1,588 (2016: Rs. 1,526) including dividend distribution tax of Rs. 269 (2016: Rs. 258) and accordingly has been accounted in the year of declaration by the shareholders.

The Board of directors of the Company has proposed a dividend of Rs.6.75 per share which would result in an outflow of Rs. 1,370 including dividend distribution tax of Rs. 279. Pending approval of the shareholders the same is not recognised in the financial statements.

2. Earnings per share (EPS)

Basic and diluted earning per share

The calculation of basic and diluted earnings per share for the year ended December 31, 2017 is based on the profit attributable to equity shareholders and weighted average number of equity shares outstanding.

3. The Company has taken various premises under operating lease which are cancellable during the life of the contract at the option of both the parties. Minimum lease payment charged during the year to the Statement of Profit and Loss aggregated to Rs. 314 (2016: Rs. 278).

4. Segment Reporting

The Company is engaged in the business of manufacturing, trading and sale of a range of refractories and is having its manufacturing facilities located in India. The performance of the Company is assessed and reviewed by the Chief Operating Decision Maker (‘CODM’) as a single operating segment and accordingly manufacture and sale of refractories is the only operating segment.

Geographical Information

The Company is domiciled in India, however also sells its products outside India. The amount of its revenue from external customers broken down by the location of the customers is shown in table below:

Accounting policy:

Segment information is prepared in conformity with the accounting policy adopted for preparing and presenting the financial statements of the Company as a whole.

5. Related Party Disclosures

A) List of Related parties and relationship

i) Enterprises having control over the Company :

Vesuvius plc, United Kingdom, Ultimate holding company, holding company of Vesuvius Holdings Limited, United Kingdom

Vesuvius Holdings Limited, United Kingdom, (formerly known as Cookson Group plc), holding company of Vesuvius Financial Limited, United Kingdom

Vesuvius Financial 1 Limited, United Kingdom, (formerly known as Cookson Financial Limited), holding company of Vesuvius Group Limited, United Kingdom

Vesuvius Group Limited, United Kingdom, Immediate holding Company

ii) Fellow Subsidiaries (with whom transactions have taken place during the year and previous year):

Name of the related parties

Avemis SAS, France

Foseco (Thailand) Limited, Thailand

Foseco India Limited, India

Foseco Industrial E Commercial Ltda, Brazil

Foseco Korea Limited, South Korea

Foseco Philippines Inc, Philippines

Foseco Pty Limited, Australia

Pt. Foseco Indonesia, Indonesia

Sert Metal SAS , France

Vesuvius (Thailand) Co. Ltd, Thailand

Vesuvius Advanced Ceramics (China) Co. Ltd., China

Vesuvius Belgium N.V. Belgium

Vesuvius Corporation S.A. (Taiwan Branch), Switzerland

Vesuvius Corporation S.A., Switzerland

Vesuvius Crucible Company,USA

Vesuvius China Holdings Co. Limited, Hongkong

Vesuvius Emirates FZE, United Arab Emirates

Vesuvius Foundry Products (Suzhou) Co. Ltd., China

Vesuvius France S.A., France

Vesuvius GmbH, Germany

Vesuvius Group S.A., Belgium

Vesuvius Iberica Refractarios S.A., Spain

Vesuvius Istanbul Sanayi ve Ticaret AS, Turkey

Vesuvius Italia S.P.A., Italy

Vesuvius Malaysia SDN. BHD, Malaysia

Vesuvius Mexico S.A. de C.V., Mexico

Vesuvius Poland Spolka z.o.o, Poland

Vesuvius Ras Al Khaimah FZ-LLC , United Arab Emirates

Vesuvius Slavia A.S., Czech Republic

Vesuvius South Africa (Pty) Limited, South Africa

Vesuvius UK Limited, United Kingdom

Vesuvius USA Corporation, USA

Wugang Vesuvius Advanced Ceramics (Wuhan) Co., Ltd, China

Yingkou Bayuquan Refractories Co., Ltd , China

Vesuvius Refratarios Ltda, Brasil

Process Metrix LLC

Vesuvius Scandinavia AB, Sweden

Vesuvius Refractory India Private Limited

SIDERMES S.P.A, Italy

iii) Names of Principal Group Companies / fellow subsidiaries

(with which the Company neither have any transactions nor outstanding balances at current or previous year end)

Vesuvius Overseas Limited, United Kingdom (formerly, Cookson Overseas Limited, United Kingdom)

iv) Key Management Personnel

Mr. Biswadip Gupta - Chairman

Mr. Subrata Roy - Managing Director

Mr. Sudipto Sarkar - Director

Mr. Tanmay Ganguly - Director

Mr. Francois Waneq - Director

Mr. Patrick Andre - Director

Ms. Nayantara Palchoudhuri - Director

(i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Categorisation of fair value into level 1, 2 and 3.

Level 1 [Quoted prices in an active market]:

This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 [Fair values determined using valuation techniques with observable inputs]:

The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3 [Fair values determined using valuation techniques with significant unobservable inputs:

This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

There are no transfers between levels 1 and 2 during the year.

Short-term financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

The fair values for loans and security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

6. Financial Risk Management

The Company’s financial assets primarily consists of trade receivables and other receivables, loans, security deposits and cash and bank balances etc., whereas financial liabilities includes trade payables, liabilities for capital expenditure and other financial liabilities. The Company’s business activities exposes it to variety of risks such as fluctuations in foreign currency exchange rates, interest rates, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company seeks to minimise potential adverse effects of these risks by managing through a structured process laid down by its Board of Directors. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of non-derivative financial instruments, and investment of excess liquidity.

(A) Credit risk

Credit risk refers to risk of financial loss to the Company if customers or counterparties fail to meet their contractual obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, loans receivables and cash and cash equivalents.

Credit risk management

Customer credit risk is managed by the Company through its established policies and procedures which involve evaluation of credit profile of individual customers and regular monitoring of important developments viz. payment history, regulatory changes, industry outlook etc. Outstanding receivables are regularly monitored and an impairment analysis is performed at each reporting date on an individual basis for each major customer, whereas for small customers impairment is assessed collectively for homogeneous groups.

The Company manages credit risk for cash and cash equivalents by placing the deposits with approved counterparties with high credit ratings.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs. 22,520 as at December 31, 2017, Rs. 27,169 as at December 31, 2016, being the total of the carrying amount of trade receivables and other financial assets.

Impairment losses on financial assets

None of the Company’s cash equivalents, including time deposits with banks, are past due or impaired. The Company has used expected credit loss model for trade receivables to assess impairment loss or reversal thereof. A summary of movement in allowances for expected credit losses from the beginning to end of the year is provided as under:

(B) Liquidity risk

Liquidity risk implies that the Company may not be able to meet its obligations associated with its financial liabilities. The Company manages its liquidity risk on the basis of business plans that ensures funds required for financing business operations and meeting financial liabilities are available in a timely manner at optimal costs. The Management regularly monitors rolling forecasts of the Company’s liquidity position to ensure it has sufficient cash on an ongoing basis to meet operational fund requirements. Surplus cash generated, over and above operational fund requirement is invested in bank deposits to optimise cash returns while ensuring adequate liquidity for the Company.

All the Company’s financial liabilities are due within one year from the balance sheet date and could be met by realisation of surplus funds deposited with banks.

(C) Market risk

Market risk is the risk that the fair value of future cash flow of financial instruments may fluctuate because of changes in market conditions. Market risk broadly comprises three types of risks namely currency risk, interest rate risk and price risk (for commodities). The above risks may affect the Company’s income and expenses. The Company’s exposure to and management of these risks are explained below:

(i) Foreign currency risk

The Company undertakes transactions (e.g. sale of goods and purchases on raw materials or capital goods) denominated in foreign currencies and thus is exposed to exchange rate fluctuations. The Company evaluates its exchange rate exposure arising from foreign currency transactions and manages the same based upon approved risk management policies which includes managing bank accounts in foreign currency and converting these foreign currency into functional currency when exchange rates are favourable.

Exposure to foreign currency risk

The carrying amounts of foreign currency denominated financial assets and liabilities at the end of the reporting periods are as under:

A 1% appreciation/depreciation of the foreign currencies with respect to functional currency of the Company would result in an increase/decrease in the Company’s net profit before tax by approximately Rs. 31 for the year ended December 31, 2017 (December 31, 2016: Rs. 21).

(ii) Interest rate risk

The Company do not have any interest bearing financial liabilities. The Company’s interest earning financial assets are primariliy term deposits with banks which are fixed rate interest bearing investments and accordingly the Company is not significantly exposed to interest rate risk.

7. Capital management

The Company’s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company.

The Company determines the amount of capital required on the basis of annual business plan also taking into consideration any long term strategic investment and expansion plans. The funding needs are met through equity and cash generated from operations.

8. Income tax expense

This note provides an analysis of the Company’s income tax expense, show amounts that are recognised directly in equity and how the tax expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation to the Company’s tax positions.

9. Employee benefit obligations

(i) Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident and Pension Fund, and Employee State Insurance (‘ESI’) which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are recognised in the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident and Pension Fund and ESI for the year aggregates to Rs. 431 (2016: Rs. 389).

(ii) Defined benefit plans Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to gratuity funds established as trusts or insurance companies. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied while calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

The major categories of plan assets

The defined benefit plans are funded with insurance companies of India. The Company does not have any liberty to manage the funds provided to insurance companies. Thus the composition of each major category of plan assets has not been disclosed.

Risk exposure

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:

Investment risk:

The defined benefit plans are funded with insurance companies of India. The Company does not have any liberty to manage the funds provided to insurance companies.

Interest risk:

A decrease in the interest rate on plan assets will increase the plan liability.

Life expectancy:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.

Defined benefit liability and employer contributions

Expected contributions to post-employment benefit plans for the year ending December 31, 2018 :

The weighted average duration of the defined benefit obligation (gratuity) is 10.2 years (December 31, 2016 - 10.59 years, January 1, 2016 - 10.98 years). The expected maturity analysis of undiscounted gratuity is as follows:

Compensated absences

The Company provides benefits in the nature of compensated absences which can be accumulated. The compensated absences are other long term employee benefits plan. The plan is unfunded. Based on actuarial valuation, a provision is recognised in full for the projected obligation and are classified into current and non-current as identified by the actuary. Expenses recognised in the Statement of Profit and loss towards compensated absences includes re-measurement gains and losses.

10. Transition to Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 1, have been applied in preparing the financial statements for the year ended December 31, 2017, the comparative information presented in these financial statements for the year ended December 31, 2016 and in the preparation of an opening Ind AS Balance Sheet as at January 1, 2016 (the Company’s date of transition). In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A.1 Ind AS optional exemptions

A.1.1 Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

A.2 Ind AS mandatory exceptions

A.2.1 Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1 January, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Impairment of financial assets based on expected credit loss model.

A.2.2 Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the fact and circumstances that exists at the date of transition to Ind AS. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing on the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets on the basis of the fact and circumstances that exists at the date of transition to Ind AS. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Note

The following explains the material adjustments made while transition from previous accounting standards to Ind AS

1 As per Ind AS 109, the Company is required to apply expected credit loss model for recognising the allowance for doubtful debts. As a result, the allowance for doubtful debts has increased and consequently, total equity as December 31, 2016, January 1, 2016 has decreased due to the same.

2 Under the previous GAAP, dividends proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events and accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is declared by the shareholders in the general meeting.

3 Under Ind AS, remeasurements gains or losses (i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability) are recognised in other comprehensive income instead of profit and loss. Under the previous GAAP, these remeasurements were forming part of the profit and loss for the year and accordingly profit for the year ended December 31, 2016 has decreased.

11. Provisions for taxation has been recognised with reference to profit for the year ended December 31, 2017, in accordance with the provisions of Income-tax Act, 1961 and rules framed thereunder. The ultimate tax liability for the year 2017-18 will be determined on the basis of total taxable income for the year ending March 31, 2018.

12. The management is of the opinion that its international transactions are at arm’s length under the provision of Section 92-92F of the Income-tax Act, 1961.

13. The Company has receivables from certain customers against whom insolvency proceedings have been initiated during the year under the Insolvency and Bankruptcy Code, 2016 aggregating to Rs.1,978 (previous years: Nil). Considering the relationship with the said customers, criticality of the Company’s products sold and amount collected from them, the management believes that the said receivables are good and carrying amount of the same is appropriate.

14 Exceptional items

Exceptional item represents cost of Voluntary Separation Scheme as part of the restructuring activity initiated by the Company.

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Dec 31, 2016

Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares with par value of Rs. 10/- per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder, are in proportion to its share of the paid-up equity capital of the Company.

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

1. Earnings per share (EPS)

Basic and diluted earnings per share

The calculation of basic diluted earnings per share for the year ended December 31, 2016 is based on the profit attributable to equity shareholders of Rs 8,711 (previous year Rs 7,359), and weighted average number of equity shares outstanding of 20,296,080 (previous year 20,296,080).

2. Segment Reporting

3. Segments have been identified in line with the Accounting Standard 17 - Segment Reporting, taking into account the nature of products and services, the different risks and returns, the organizational structure and the internal financial reporting system. The Company is engaged in the business of manufacturing, trading and sale of refractoriness. It has manufacturing location in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organization and management structure and its system of internal financial reporting, business segment has been identified as the primary segment. The Company has only one business segment.

4. Secondary Segment - In accordance with According Standard - 17, geographical segments have been considered as secondary reportable segment.

5. Related Party Disclosures as per Accounting Standard 18 A) List of Related parties and relationship

6. Enterprises having control over the Company with which no transactions have taken place during the year:

Vesuvius plc, United Kingdom - Ultimate holding company - holding company of Vesuvius Holdings Limited, United Kingdom

Vesuvius Financial Limited, United Kingdom (formerly known as Cookson Financial Limited) - holding company of Vesuvius Group Limited, United Kingdom.

7. Enterprises having control over the Company with which transaction has taken place during the year and previous year:

Vesuvius Holdings Limited, United Kingdom (formerly known as Cookson Group plc) - holding company of Vesuvius Financial Limited, United Kingdom

Vesuvius Group Limited, United Kingdom, Immediate holding Company

8. Fellow Subsidiaries (with whom transactions have taken place during the year and previous year):

Name of the related parties

Avemis SAS, France

Foseco (Thailand) Limited, Thailand

Foseco India Limited, India

Foseco Industrial E Commercial Ltda, Brazil

Foseco Korea Limited, South Korea

Foseco Philippines Inc, Philippines

Foseco Pty Limited, Australia

PT. Foseco Indonesia, Indonesia

Sert-Metal SAS, France

Vesuvius (Thailand) Co. Ltd, Thailand

Vesuvius Advanced Ceramics (China) Co. Ltd., China

Vesuvius Belgium N.V., Belgium

Vesuvius Corporation S. A. (Taiwan Branch) Switzerland

Vesuvius Corporation S. A., Switzerland

Vesuvius Crucible Company, USA

Vesuvius China Holdings Co. Limited, Hongkong

Vesuvius Emirates FZE, United Arab Emirates

Vesuvius Foundry Products (Suzhou) Co. Ltd., China

Vesuvius France S.A., France

Vesuvius GmbH, Germany

Vesuvius Group S. A., Belgium

Vesuvius Iberica Refractarios S.A., Spain

Vesuvius Istanbul Sanayi ve Ticaret AS, Turkey

Vesuvius Italia S.P.A., Italy

Vesuvius Malaysia SDN. BHD, Malaysia

Vesuvius Mexico S.A. de C.V., Mexico

Vesuvius Poland Spolka z.o.o, Poland

Vesuvius Ras AI Khaimah FZ-LLC, United Arab Emirates

Vesuvius Slavia, A.S., Czech Republic

Vesuvius South Africa (Pty) Limited, South Africa

Vesuvius UK Limited, United Kingdom

Vesuvius USA Corporation, USA

Wugang Vesuvius Advanced Ceramics (Wuhan) Co. Ltd., China Yingkou Bayuquan Refractoriness Co. Ltd., China Vesuvius Refratarios Ltda, Brasil SIDERMES S. P. A. Italy

9. Names of Principal Group Companies / fellow subsidiaries

(with which the Company neither have any transactions nor outstanding balances at current or previous year end)

Vesuvius Overseas Limited, United Kingdom (formerly, Cookson Overseas Limited, United Kingdom)

10. Key Management Personnel

Mr. Subrata Roy - Managing Director

11.. Employee Benefits : Post employment benefit plans Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident and Pension Fund, which is a defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognized as an expense towards contribution to Provident and Pension Fund for the year aggregated to Rs. 389 (Previous Year Rs. 335). Defined benefit plans

The Company operates two long term post-employment benefit plans that provide gratuity and compensated absences. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive 15 days salary for each year of completed service at the time of retirement/exit. Other long term benefit entitles an employee to utilize the accrued compensated absences in the future service period or to encash the accrued compensated absences standing to their credit as per Company''s on the date of their retirement/exit. Gratuity scheme is funded by the plan assets.

12. Net Assets/(Liabilities) recognized in Balance Sheet

The following table summarizes the position of assets and obligations relating to the two plans.

The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Discount rate is based on the prevailing market yield of Indian Government securities as at the yearend for the estimated term of the obligation.

Assumption regarding future mortality are based on published statistics and mortality tables. The calculation of the defined benefit obligation is sensitive to the mortality assumptions.

13. Basis used to determine the Expected Rate of return on Plan Assets :

The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The return is based exclusively on historical returns, without adjustments.

14. Provision for taxation has been recognized with reference to profit for the year ended December 31, 2016 in accordance with the provision of the Income Tax Act, 1961 and rules framed there under. The ultimate tax liability for the Assessment Year 2017-2018 will be determined on the basis of total taxable income for the year ending on March 31, 2017.

15. The management is of the opinion that its international transactions are at arm''s length under the provisions of Section 92-92F of the Income Tax Act, 1961.

16. According to Schedule II of the Companies Act, 2013, the management based on an internal evaluation had reassessed the remaining estimated useful life of fixed assets, with effect from January 1, 2015. Accordingly, the useful life of certain assets required a change from the previous estimates. As a consequence of this change, the depreciation charge during the previous year ended December 31, 2015 was higher by Rs. 183. Further, based on transitional provision as provided in note 7 (b) of Schedule II of the Companies Act, 2013, depreciation charge of Rs 68 (net of deferred tax Rs 35) had been adjusted with opening Surplus (Balance in Statement of Profit and Loss) as at January 1, 2015 appearing in note "Reserve and Surplus".

17. Corporate social responsibility expenses ("CSR"):

As per Section 135 of the Companies Act, 2013, a CSR committee had been formed by the Company. The funds are utilized on the activities which are specified in Schedule VII of the Act. The utilization is done by way of contribution towards various activities.

18 Average net profit as prescribed under section 135 of the Companies Act, 2013 : Rs. 202 (previous year Rs. 181 Lakhs)

Total expenditure incurred by the Company on CSR activities during the previous year ended December 31, 2015was Rs. 10.

19. No contribution has been made to any related party as per Accounting Standard (AS) 18, Related Party Disclosures.

20. The Company has taken various premises under operating lease which are cancelable during the life of the contract at the option of both the parties. Minimum lease payment charged during the year to the Statement of Profit and Loss aggregated to Rs. 278 (previous year Rs. 280).

21. Previous year''s figures have been regrouped and/or rearranged wherever considered necessary to conform to current year''s presentation.

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Dec 31, 2015

Note - Shares held in abeyance :

In compliance with the provisions of Section 126 of the Companies Act, 2013, offer of Rights Shares of 3,920 Equity Shares out of the Rights Issue made in the year 1997 have been held in abeyance.

Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares with par value of Rs. 10/- per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company's residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder, other than on show of hands, are in proportion to its share of the paid-up equity capital of the Company.

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

* Subsidiary of Vesuvius pic. U.K. - the ultimate holding company.

# The companies, namely Vesuvius pic U.K., Vesuvius Holding Limited (formerly, Cookson Group pic) and Vesuvius Financial Limited (formerly, Cookson Financial Limited), all incorporated in the United Kingdom, do not hold any shares of Vesuvius India Limited directly but are holding company of Vesuvius India Limited through a chain of subsidiary holdings.

Note:

The Company has claimed deduction for cost of Tooling purchased during the relevant assessment years for the purpose of ascertaining income tax liabilty for the period till assessment year 2013-2014.

The Income tax department had disallowed the Company's claim for deduction and had allowed deduction on the basis of actual tooling's consumed. The Income Tax Appellate Tribunal (ITAT) vide its order dated December 16, 2003 has directed the department to allow expenses based on actual quantity consumed The Company has disputed such decision on the contention that the entire purchase is issued to the production process and hence should be treated as consumption and has made an application to the Hon'ble High Court at Calcutta seeking further clarifications of the ITAT order. The relevant orders from the income tax departments giving effect of ITAT order is yet to be received by the Company.

During the previous year ended 31 December 2014, the Company, for the purpose of income tax computation, has claimed deduction for depreciation on tooling on the basis of rates given in the Income fax Act from the Assessment Year 2007-08 onwards. Accordingly, adjustment for income tax liability aggregating to Rs. 364 lakhs, arising on account of the aforesaid change in the method of deduction claimed, had been accounted for in the books of account in the books of account in the previous year ended 31 December 2014.

The amount of interest/penalty, if any, that could be demanded by the Income tax department on account of the aforesaid adjustment cannot be currently ascertained and hence no provision has been made in the books of account for the same.

(ii) A counter claim has been filed against the Company before the Hon'ble High Court at Calcutta by a customer for claims aggregating Rs 749 (previous year Rs 749) regarding certain disputes relating to goods supplied by the Company in prior years.

1. Segment Reporting

i) Segments have been identified in line with the Accounting Standard 17 - Segment Reporting, taking into account the nature of products and services, the different risks and returns, the organizational structure and the internal financial reporting system. The Company is engaged in the business of manufacturing, trading and sale of refractoriness. It has manufacturing location in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organization and management structure and its system of internal financial reporting, business segment has been identified as the primary segment. The Company has only one business segment.

ii) Secondary Segment - In accordance with AS - 17, geographic segments have been considered as secondary reportable segment.

Accounting policy : Segment information is prepared in conformity with the accounting policy adopted for preparing and presenting the financial statements of the Company as a whole.

Assets and additions to tangible and intangible fixed assets by geographical area : The following table shows the carrying amount of segment assets and capital expenditure during the year by geographical area in which the assets are located:

Sales by market: The following table shows the distribution of the Company's sales and service income by geographical market, regardless of where the goods were produced:

2. Related Party Disclosures as per Accounting Standard 18

A) List of Related parties and relationship

i) Enterprises having control over the Company with which no transactions have taken place during the year:

Vesuvius pic, United Kingdom - Ultimate holding company - holding company of Vesuvius Holdings Limited, United Kingdom Vesuvius Holdings Limited, United Kingdom (formerly known as Cookson Group pic) - holding company of Cookson Financial Limited, United Kingdom.

Vesuvius Financial Limited, United Kingdom (formerly known as Cookson Financial Limited) - holding company of Vesuvius Group Limited, United Kingdom.

ii) Enterprises having control over the Company with which transaction has taken place during the year and previous year:

Vesuvius Group Limited, United Kingdom - Immediate holding company.

iii) Fellow Subsidiaries (with whom transactions have taken place during the year and previous year): Name of the related parties

Avemis SAS, France

BMI Refractory Services Inc. Thailand

Foseco (Thailand) Limited, Thailand

Foseco India Limited, India

Foseco Industrial e Commercial Ltda, Brazil

Foseco Korea Limited, South Korea

Foseco Philippines Inc, Philippines

Foseco Pty Limited, Australia

PT Foseco Indonesia, Indonesia

Sert-Metal SAS, France

Vesuvius (Thailand) Co. Ltd, Thailand

Vesuvius Advanced Ceramics (China) Co. Ltd., China

Vesuvius Belgium N.V, Belgium

Vesuvius Canada Inc., Canada

Vesuvius Corporation S. A., Switzerland

Vesuvius Crucible Company, USA

Vesuvius Emirates FZE, United Arab Emirates

Vesuvius Foundry Products (Suzhou) Co. Ltd., China

Vesuvius France S.A., France

Vesuvius GmbH, Germany

Vesuvius Groups. A., Belgium

Vesuvius Iberica Refractories S.A., Spain

Vesuvius Istanbul Sanayive Ticaret AS, Turkey

Vesuvius Italia S.P.A., Italy

Vesuvius Malaysia SDN. BHD, Malaysia

Vesuvius Mexico S.A. de C.V, Mexico

Vesuvius Mid-East Limited, Egypt

Vesuvius Poland Spolka Z.o.o, Poland

Vesuvius Ras Al Khaimah FZ-LLC, United Arab Emirates

Vesuvius Refratarios Ltda, Brazil

Vesuvius Slavia,A.S., Czech Republic

Vesuvius South Africa (Pty) Limited, South Africa

Vesuvius UK Limited, United Kingdom

Vesuvius USA Corporation, USA

Vesuvius Zyarock Ceramics (Suzhou) Co. Ltd., China

Wugang Vesuvius Advanced Ceramics (Wuhan) Co. Ltd., China

Yingkou Bayuquan Refractoriness Co. Ltd., China iv) Names of Principal Group Companies / fellow subsidiaries (with which the Company neither have any transactions nor outstanding balances at current or previous year end)

Vesuvius Overseas Limited, United Kingdom (formerly, Cookson Overseas Limited, United Kingdom) v) Key Management Personnel

Mr. Subrata Roy - Managing Director, with effect from January 1, 2015

Mr. Tanmay Kumar Ganguly - Managing Director till December 31, 2014

3. Employee Benefits : Post employment benefit plans Defined contribution plans The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident and Pension Fund, which is a defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognized as an expense towards contribution to Provident and Pension Fund for the year aggregated to Rs. 335 (Previous Year Rs. 312).

Defined benefit plans

The Company operates two long term post-employment defined benefit plans that provide gratuity and compensated absences. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive 15 days salary for each year of completed service at the time of retirement/exit. Other long term benefits entitles the retired/exit employees to encash the accumulated leave standing to their credit on the date of their retirement. Gratuity scheme is funded by the plan assets.

The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Discount rate is based on the prevailing market yield of Indian Government securities as at the yearend for the estimated term of the obligation Assumption regarding future mortality are based on published statistics and mortality tables. The calculation of the defined benefit obligation is sensitive to the mortality assumptions.

x) Basis used to determine the Expected Rate of return on Plan Assets :

The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The return is based exclusively on historical returns, without adjustments.

4. Provision for taxation has been recognized with reference to profit for the year ended December 31, 2015 in accordance with the provision of the Income Tax Act, 1961 and rules framed there under. The ultimate tax liability for the Assessment Year 2016-2017 will be determined on the basis of total taxable income for the year ended on March 31, 2016.

5. The management is of the opinion that its international transactions are at arm's length under the provisions of Section 92-92F of the Income Tax Act, 1961.

6. in the previous year ended December 31, 2014, a severe cyclonic storm 'Hudhud' hit India's eastern coast resulting in damages to certain assets in the Company's factories situated in Visakhapatnam. As per the best estimate of the management, insurance claim receivable aggregating to Rs. 153 had been recognized as receivable from the insurance company and adjusted against carrying cost of such assets and an amount of Rs. 23 had been provided against such damages in the previous year.

In the current year, the Company has received certain on account payments from the insurance company against the above claim and Rs. 99 is still receivable as at the year end. The management believes that the balance amount is receivable from the insurance company. Adjustments, if any, arising out of final settlement of the claim, will be made upon such settlement.

7. According to Schedule II of the Companies Act, 2013, the management based on an internal evaluation have reassessed the remaining estimated useful life of fixed assets, with effect from January 1, 2015. Accordingly, the useful life of certain assets required a change from the previous estimates. As a consequence of this change, the depreciation charge during the year ended December 31, 2015 is higher by Rs. 183. Further, based on transitional provision as provided in note 7 (b) of Schedule II of the Companies Act, 2013, depreciation amount of Rs 68 (net of deferred tax Rs 35) has been adjusted with opening Surplus (Balance in Statement of Profit and Loss) appearing in note "Reserve and Surplus". Accordingly, current year deferred tax credit, in the Statement of Profit and Loss, of Rs 294 is after above adjustment of Rs 35.

8. Corporate social responsibility expenses ("CSR") :

As per Section 135 of the Companies Act, 2013, a CSR committee has been formed by the Company. The funds are utilized on the activities which are specified in Schedule VII of the Act. The utilization is done by way of contribution towards various activities.

(a) Gross amount as per the limits of Section 135 of the Companies Act, 2013: Rs. 181

(c) No contribution has been made to any related party as per Accounting Standard (AS) 18, Related Party Disclosures.

9. The Company has taken various premises under operating lease which are cancelable during the life of the contract at the option of both the parties. Minimum lease payment charged during the year to the Statement of Profit and Loss aggregated to Rs. 280 (previous year Rs. 195).

10. Previous year's figures have been regrouped and/or rearranged wherever considered necessary to confirm to current year's presentation.

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Dec 31, 2014

The notes referred to above form an integral part of the financial statements

1. Unpaid dividend accounts are not available for use by the Company.

2. The above cash flow statement has been prepared under the ''Indirect Method'' as set out in the Accounting Standard on Cash Flow Statement (AS 3) notified by Companies (Accounting Standards) Rules, 2006.

3. Previous year''s figures have been regrouped and/or rearranged wherever considered necessary to conform to current year''s presentation.

The notes referred to above form an integral part of the financial statements

1. Company overview

Vesuvius India Limited ("the Company") is a public company domiciled and headquartered in India. It is incorporated under the Companies Act, 1956 and its shares are listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The Company is primarily engaged in the manufacturing and trading of refractory goods. The Company also provided services in relation to refractory goods. The Company has operations in India and caters to both domestic and international markets.

Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares with par value of Rs. 10/- per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder, other than on show of hands, are in proportion to its share of the paid-up equity capital of the Company.

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

2. Contingent liabilities and commitments

(to the extent not provided for)

(a) Contingent liabilities :

(i) Claims against the Company not acknowledged as debts.

Description Estimated financial Uncertainties impact As at As at 31.12.2014 31.12.2013

a. Sales Tax/Value 4,841 712 Demand recived from approprite authorities in relation to sales tax vat assessment and non submission of statutory forms.

b. Income Tax 930 362 Demands received from matters appropriate authorities in relation to Income Tax including transfer pricing assessments. Also refer note below.

d. Excise Duty, 396 353 Demand recived from and customs duty approprite authorities and service in relatiom to excise duty Tax matters customs duty and Service Tax matters.



Note:

The Company has claimed deduction for cost of Tooling purchased during the relevant assessment years for the purpose of ascertaining income tax liabilty for the period till assessment year 2013-2014.

The Income tax department had disallowed the Company''s claim for deduction and has allowed deduction on the basis of actual toolings consumed. The Income Tax Appellate Tribunal (ITAT) vide order dated December 16, 2003 has directed the department to allow expenses based on actual quantity consumed. The Company has disputed such decision on the contention that the entire purchase is issued to the production process and hence should be treated as consumption and has made an application to the Hon''ble High Court at Calcutta seeking further^clarifications of the ITAT order. The relevant orders from the income tax departments giving effect of ITAT order is yet to be received by the Company.

During the current year, the Company, for the purpose of income tax computation, has claimed deduction for depreciation on tooling on the basis of rates given in the Income Tax Act from the Assessment Year 2007-08 onwards. Accordingly, adjustment for income tax liability aggregating to Rs. 364 lakhs, arising on account of the aforesaid change in the method of deduction claimed, has been accounted for in the books of account.

The amount of interest/penalty, if any, that could be demanded by the Income tax department on account of the aforesaid adjustment cannot be currently ascertained and hence no provision has been made in the books of account for the same.

3. Segment Reporting

i) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS 17) notified by Companies (Accounting Standard) Rules, 2006, taking into account the nature of products and services, the different risks and returns, the organisational structure and the internal financial reporting system. The Company is engaged in the business of manufacturing, trading and sale of refractories. It has manufacturing location in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organisation and management structure and its system of internal financial reporting, business segment has been identified as the primary segment. The Company has only one business segment.

ii) Secondary Segment - In accordance with AS - 17, geographic segments have been considered as secondary reportable segment.

4. Information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures notified by the Companies (Accounting Standards) Rules, 2006.

A) List of Related parties and relationship

i) Enterprises having control over the Company with which no transactions have taken place during the year:

Vesuvius pic, United Kingdom - Ultimate holding company - holding company of Vesuvius Holdings Limited, United Kingdom Vesuvius Holdings Limited, United Kingdom (formerly known as Cookson Group pic) - holding company of Cookson Financial Limited, United Kingdom.

Cookson Financial Limited, United Kingdom - holding Company of Vesuvius Group Limited, United Kingdom.

ii) Enterprises having control over the Company with which transaction has taken place during the year and previous year:

Vesuvius Group Limited, United Kingdom - Immediate holding company.

iii) Fellow Subsidiaries (with whom transactions have taken place during the year and previous year): Name of the related parties

Vesuvius Groups. A.

Vesuvius GmbH

Vesuvius South Africa (Pty) Limited

Vesuvius UK Limited

Vesuvius Crucible Company

Vesuvius USA Corporation

Vesuvius Advanced Ceramics (Suzhou) Co. Ltd.

Wuhan Wugang Vesuvius Advanced Ceramics Co. Ltd.

Vesuvius Mexico S.A. de C.V

Vesuvius Malaysia Sdn Bhd

Vesuvius Corporation S.A.

Vesuvius (Thailand) Co., Ltd

Vesuvius Belgium N.V

Vesuvius Poland Sp. Zoo

Foseco Industrial e Commercial Ltda

Foseco (Thailand) Limited

PT Foseco Indonesia

Vesuvius Canada Inc

Vesuvius Refratarios Ltda

Vesuvius Slavia, a.s.

Vesuvius Mid-East Limited

Foseco Pty Limited

Foseco Korea Limited

Vesuvius France S.A.

Vesuvius Italia SPA

Vesuvius Zyarock Ceramics (Sozhou) Co. Ltd.

Vesuvius Emirates FZE

Vesuvius Istanbul Refrakter

Vesuvius Foundry Products (Suzhou) Co. Ltd.

SERT-Metal SAS

Yingkou Bayuquan Refractories Co. Ltd

Vesuvius Lberica Refractories S.A.

BMI Refractory Services Inc.

Avemis SAS

Feseco Philippines Inc

Foseco India Limited iv) Names of Principal Group Companies / fellow subsidiaries (with which the Company neither have any transactions nor outstanding balances at current or previous year end)

Cookson Overseas Limited, United Kingdom v) Key Management Personnel

Mr. Tanmay Kumar Ganguly - Managing Director upto December 31, 2014

Mr. Subrata Roy- Managing Director with effect from January 1, 2015

36. Employee Benefits : Post employment benefit plans Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident and Pension Fund, which is a defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident and Pension Fund for the year aggregated to Rs. 312 (Previous Year Rs. 282).

Defined benefit plans

The Company operates two post-employment defined benefit plans that provide gratuity and other long term benefits. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive 15 days salary for each year of completed service at the time of retirement/exit. Other long term benefits entitles the retired/exit employees to encash the accumulated leave standing to their credit on the date of their retirement. Gratuity scheme is funded by the plan assets.

x) Basis used to determine the Expected Rate of return on Plan Assets :

The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The return is based exclusively on historical returns, without adjustments.

5. Provision for taxation has been recognised with reference to profit for the year ended December 31, 2014 in accordance with the provision of the Income Tax Act, 1961 and rules framed there under. The ultimate tax liability for the Assessment Year 2015-2016 will be determined on the basis of total taxable income for the year ended on March 31, 2015.

6. The management is of the opinion that its international transactions are at arm''s length under the provisions of Section 92-92F of the Income Tax Act, 1961.

7. On 12 October 2014, a severe cyclonic storm ''Hudhud'' hit India''s eastern coast and certain damages have occured on the Company''s factories situated in Visakhapatnam. As per the best estimate of the management, insurance claim receivable aggregating to Rs. 153 lakhs have been recognised as receivable from the insurance company and adjusted against carrying cost of such damages and an amount of Rs. 23 lakhs has been provided against such damages. Adjustments, if any, arising out of final settlement of the claim, will be made upon such settlement.

8. The Company has taken various premises under operating lease which are cancelable during the life of the contract at the option of both the parties. Minimum lease payment charged during the year to the Statement of Profit and Loss aggregated to Rs. 195 lakhs (previous year Rs. 198 lakhs).

9. Previous year''s figures have been regrouped and/or rearranged wherever considered neccessary to confirm to current year''s presentation.

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Dec 31, 2013

1. Company overview

Vesuvius India Limited is a public company domiciled and headquartered in India. It is incorporated under the Companies Act, 1956 and its shares are listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The Company is primarily engaged in the manufacturing and trading of refractory goods. The Company also provides services in relation to refractory goods. The Company has operations in India and caters to both domestic and international markets.

2. Segment Reporting

i) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS 17) notified by Companies (Accounting Standard) Rules, 2006 taking into account the nature of products and services, the different risks and returns, the organisational structure and the internal financial reporting system. The Company is engaged in the business of manufacturing, trading and sale of refractories. It has manufacturing location in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organisation and management structure and its system of internal financial reporting, business segment has been identified as the primary segment. The Company has only one business segment.

ii) Secondary Segment - In accordance with AS - 17, geographical segments have been considered as secondary reportable segment.

3. Information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures notified by the Companies (Accounting Standards) Rules, 2006

A) List of Related parties and relationship

i) Enterprises having control over the Company with which no transactions have taken place during the year:

Vesuvius plc, United Kingdom -Ultimate holding company from December 19, 2012 - holding company of Vesuvius Holdings Limited, United Kingdom Vesuvius Holdings Limited, United Kingdom- ultimate holding company upto December 19, 2012 (formerly known as Cookson Group plc) - holding company of Cookson Financial Limited, United Kingdom Cookson Financial Limited, United Kingdom -holding company of Vesuvius Group Limited, United Kingdom

ii) Enterprises having control over the Company with which transaction has taken place during the year and previous year:

Vesuvius Group Limited, United Kingdom - Immediate holding Company

iii) Fellow Subsidiaries (with whom transactions have taken place during the year and previous year): Name of the related parties

Vesuvius Group S. A.

Vesuvius Deutschland GmbH

Vesuvius South Africa (Pty) Limited

Vesuvius UK Limited

Vesuvius Crucible Company

Vesuvius USA Corporation

Vesuvius Advanced Ceramics (Suzhou) Co. Ltd.

Wuhan Wugang Vesuvius Advanced Ceramics Co. Ltd.

Vesuvius Mexico S.A. de C.V.

Vesuvius Malaysia SDN BHD

Vesuvius Corporation S. A.

Vesuvius Poland Sp.,z.o.o

Vesuvius (Thailand) Co. Ltd

Foseco (Thailand) Limited

Foseco India Limited

Vesuvius TK Refrakter Sanayi Ve Ticaret AS

Vesuvius Belgium N.V.

PT. Foseco Indonesia

Foseco Pty Limited

Foseco Industrial e Commercial Ltda

Vesuvius Slavia , a. s.

Vesuvius Emirates FZE

Vesuvius Istanbul Refrakter, Turkey

Vesuvius Corporation S. A. Taiwan Branch

Vesuvius Italia SPA

Vesuvius France S. A.

Vesuvius Zyarock Ceramics (Suzhou) Co. Ltd.

Vesuvius Foundry Products (Suzhou) Co. Ltd.

Vesuvius Iberica Refractarios S.A.

iv) Names of Principal Group Companies / fellow subsidiaries

(with which the Company neither have any transactions nor outstanding balances at current or previous year end)

Cookson Overseas Limited, United Kingdom

Cookson India Private Limited (upto December 19, 2012)

v) Key Management Personnel

Mr. Tanmay Kumar Ganguly - Managing Director

4 Employee benefits: Post employment benefit plans

Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident and Pension Fund, which is a defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident and Pension Fund for the year aggregated to Rs. 282 (Previous year: Rs. 260) Defined benefit plans

The Company operates two post-employment defined benefit plans that provide gratuity and other long term benefits. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive 15 days salary for each year of completed service at the time of retirement/exit. Other long term benefits entitles the retired/exit employees to encash the accumulated leave standing to their credit on the date of their retirement. Gratuity scheme is funded by the plan assets.

The estimates of future salary increases considered in actuarial valuation takes into account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Discount rate is based on the prevailing market yield of Indian Government securities as at the year end for the estimated term of the obligation.

Assumptions regarding future mortality are based on published statistics and mortality tables. The calculation of the defined benefit obligation is sensitive to the mortality assumptions.

x) Basis used to determine the Expected Rate of return on Plan Assets:

The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The return is based exclusively on historical returns, without adjustments.

5. Provision for taxation has been recognised with reference to profit for the year ended December 31, 2013 in accordance with the provision of the Income Tax Act, 1961 and rules framed there under. The ultimate tax liability for the Assessment Year 2014-2015 will be determined on the basis of total taxable income for the year ending on March 31, 2014.

6. The management is of the opinion that its international transactions are at arm''s length under the provision of Section 92-92F of the Income Tax Act, 1961.

7. The Company has taken various premises under operating lease which are cancelable during the life of the contract at the option of both the parties. Minimum lease payment charged during the year to the Statement of Profit and Loss aggregated to Rs. 198 (previous year Rs. 162).

8. Previous year''s figures have been regrouped and/or rearranged wherever considered necessary to conform to current year''s presentation.

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Dec 31, 2012

1. Company overview

Vesuvius India Limited is a public company domiciled and headquartered in India. It is incorporated under the Companies Act, 1956 and its shares are listed on the National Stock Exchange (NSE) and Bombay Sotck Exchange (BSE). The Company is primarily engaged in the manufacturing and trading of refractory goods. The Company also provided services in relation to refractory goods. The Company has operations in India and caters to both domestic and international markets.

Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares with par value of Rs. 10/- per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

* Subsidiary of Cookson Group plc, U.K. upto December 19, 2012 and Vesuvius plc, U. K. from December 19, 2012, the ultimate holding Company.

# The companies, namely Vesuvius plc, Cookson Group Limited (formerly, Cookson Group plc) and Cookson Financial Limited, all incorporated in the United Kingdom, do not hold my shares of Vesuvius India Limited directly butare holding companyofVesuvius India Limited through a chain ofsubsidiary holdings.

2. Earnings per share (EPS)

Basic and diluted earning per share

The calculation of basic earnings per share for the year ended December 31, 2012 was based on the profit attributable to equity shareholders of Rs 5,576 (previous year Rs 5,523), and weighted average number of equity shares outstanding of 20,296,080 (previous year 20,296,080).

3. Contingent liabilities and commitments

(to the extent not provided for)

(a) Contingent liabilities :

(i) Claims against the Company not acknowledged as debts.

Description Estimated financial impact Uncertainties As at As at December 31,2012 December 31,2011

a. Sales Tax 67 187 Demand raised by appropriate authorities in relation to sales tax assessment and non- submission of statutory forms.

b. Income Tax matters Refer note below

c. Other Income Tax matters 1,085 1,006 Demands received from appropriate authorities in relation to Income Tax assessments.

d. Excise Duty, Customs Duty 205 202 Demands received from appropriate authorities and Service Tax matters in relation to Excise Duty, Custom Duty and Service Tax matters.

Note : Cost of tooling purchased during the earlier years were fully expensed for the purpose of ascertaining income tax liability for that years. Vide order dated December 16, 2003, the Income Tax Appellate Tribunal (ITAT) directed the department to allow expenses based on quantity consumed. The Company has disputed such decision on the contention that the entire purchase is issued to the production process and hence should be treated as consumption. Relevant order from authorities giving effect of ITAT order is yet to be received. The Company has made an application to the Hon''ble High Court at Calcutta seeking further clarifications of the ITAT order. The Company has again claimed full deduction in respect of tooling received during the year for determining the taxable income for the assessment year 2009-2010 and thereafter. Contingent liability with respect to tooling is included in para (c) above, underthe head - ‘Other Income Tax matters''.

(ii) A counter claim has been filed against the Company before the Hon''ble High Court at Calcutta by a customer for claims aggregating Rs 749 (previous year Rs 749) regarding certain disputes relating to goods supplied by the Company in prior years.

4. Segment Reporting

i) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS 17) notified by Companies (Accounting Standard) Rules, 2006, taking into account the nature of products and services, the different risks and returns, the organisational structure and the internal financial reporting system. The Company is engaged in the business of manufacturing, trading and sale of refractories. It has manufacturing location in India only. Based on the dominant source and nature of risk and returns ofthe Company, its internal organisation and management structure and its system of internal financial reporting, business segment has been identified as the primary segment. The Company has only one business segment.

ii) Secondary Segment - In accordance with AS - 17, geographic segments have been considered as secondary reportable segment.

5. Information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures notified by the Companies (Accounting Standards) Rules, 2006.

A) List of Related parties and relationship

i) Enterprises having control over the Company with which no transactions have taken place during the year:

(a) Vesuvius plc, United Kingdom - Ultimate Holding Company from December 19, 2012.

(b) Cookson Group Limited (Formerly, Cookson Group plc - Ultimate Holding Company upto December 19, 2012), United Kingdom - Holding Company ofCookson Financial Limited, United Kingdom.

(c) Cookson Financial Limited, United Kingdom-Holding Company ofVesuvius Group Limited, U.K.

ii) Enterprises having control over the Company with which transaction has taken place during the year and previous year :

Vesuvius Group Limited, United Kingdom - Immediate holding company.

iii) Fellow Subsidiaries (with whom transactions have taken place during the year and the previous year): Name of the related parties

Vesuvius Group S. A.

Vesuvius Deutschland GmbH Vesuvius South Africa (Pty) Limited Vesuvius UK Limited Vesuvius Crucible Company Vesuvius USA

Vesuvius Advanced Ceramics (Suzhou) Co. Ltd.

Wuhan Wugang Vesuvius Advanced Ceramics Co. Ltd.

Advent Processing Engineering Inc.

Vesuvius Mexico S.A. de C.V.

Vesuvius Malaysia SDN BHD Vesuvius Corporation S. A.

Vesuvius Poland Sp., z.o.o.

(Formerly Vesuvius Skawina Materialy Ogniotrwale Sp., z.o.o.)

Vesuvius (Thailand) Co., Ltd Foseco (Thailand) Limited Foseco India Limited

Vesuvius TK Refrakter Sanayi Ve Ticaret AS Vesuvius Belgium N.V.

PT. Foseco Indonesia

Foseco Pty Limited

Foseco Industrial e Commercial Ltda

Foseco Dokum Sanayi ve Ticaret Limited

Foseco International Ltd. (Middle East Office)

iv) Names of Principal Group Companies / fellow subsidiaries

(with which the Company neither have any transactions nor outstanding balances at current or previous year end)

Cookson Overseas Limited

Cookson India Private Limited (upto December 19, 2012)

v) Key Management Personnel

Mr Tanmay Kumar Ganguly - Managing Director

6. Employee Benefits : Post employment benefit plans Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund, which is a defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident Fund for the year aggregated to Rs 114 (Previous Year Rs 110).

Defined benefit plans

The Company operates two post-employment defined benefit plans that provide gratuity and other long term benefits. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive 15 days salary for each year of completed service at the time of retirement/exit. Other long term benefits entitles the retired employees to encash the accumulated leave standing to their credit on the date of their retirement/exit. Gratuity scheme is funded by the plan assets.

The estimates offuture salary increases, considered in actuarial valuation, take account ofinflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

x) Basis used to determine the Expected Rate of return on Plan Assets :

The expected long-term rate of return is based on the portfolio as a whole and not on the sum ofthe returns on individual asset categories. The return is based exclusively on historical returns, without adjustments.

7. Provision for taxation has been recognised with reference to profit for the year ended December 31, 2012 in accordancewith the provision ofthe Income Tax Act, 1961 and rulesframed there under. The ultimate tax liability for the Assessment Year 2013-2014 will be determined on the basis of total taxable income for the year ended on March 31,2013.

8. The management is of the opinion that its international transactions are at arm''s length under the provisions ofSection 92-92F ofthe Income Tax Act, 1961.

9. The Company has taken premises on operating lease. Minimum lease payment charged during the year to Statement of Profit and Loss aggregated to Rs 162 lakhs (previous year Rs 166 lakhs).

10. Previous year''s figures have been regrouped and/or rearranged wherever considered neccessary to confirm to current year''s presentation.

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Dec 31, 2011

Note: Cost of tooling purchased during the earlier years were fully expensed for the purpose of ascertaining income tax liability for that years. Vide order dated December 16, 2003, the Income Tax Appellate Tribunal (ITAT) directed the department to allow expenses based on quantity consumed. The Company has disputed such decision on the contention that the entire purchase is issued to the production process and hence should be treated as consumption. Relevant order from authorities giving effect of ITAT order is yet to be received. The Company has made an application to the Hon'ble High Court at Calcutta seeking further clarifications of the ITAT order. The Company has again claimed full deduction in respect of tooling received during the year for determining the taxable income for the assesment year 2009-2010 and thereafter. Contingent liability with respect to tooling is included in para

(A) above, 'other income tax matters'.

(i) A counter claim has been filed against the Company before the Hon'ble High Court at Calcutta by a customer for claims aggregating Rs. 74,921 (Previous Year 74,921) regarding certain disputes relating to goods supplied by the Company in prior years.

* Does not include liability for gratuity and leave encashment which are provided on actuarial basis for the Company as a whole

# Includes Performance Incentive of Rs 1,714 payable during 2012 (Previous year Rs 5,157 payable during 2011)

1. Segment Reporting

I) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS 17) notified by Companies (Accounting Standard) Rules, 2006 (as amended), taking into account the nature of products and services, the different risks and returns, the organisational structure and the internal financial reporting system. The Company is engaged in the business of manufacturing, trading and sale of refractories. It has manufacturing location in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organisation and management structure and its system of internal financial reporting, business segment has been identified as the primary segment. The Company has only one business segment.

2. Information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures notified by the Companies (Accounting Standards) Rules, 2006 (as amended).

A) List of Related parties and relationship

i) Enterprises having control over the Company

Cookson Group plc., United Kingdom, ultimate Holding Company

Cookson Financial Limited, United Kingdom, Holding Company of Vesuvius Group Limited, U.K.

Vesuvius Group Limited, United Kingdom - Holding Company

ii) Fellow Subsidiaries (with whom transactions have taken place during the year and the previous year)

Vesuvius Group S. A.

Vesuvius Deutschland GmbH

Vesuvius South Africa (Pty) Limited

Vesuvius UK Limited

Vesuvius Crucible Company

Vesuvius USA Vesuvius Italia SPA

Vesuvius Advanced Ceramics (Suzhou) Co. Ltd.

Wuhan Wugang Vesuvius Advanced Ceramics Co. Ltd.

Advent Processing Engineering Inc.

Vesuvius Mexico S.A. de C.V.

Vesuvius Becker & Piscantor Grobal meroder Schmelztiegelwerke GmbH

Vesuvius Malaysia SDN BHD

Vesuvius Corporation S. A.

Vesuvius France S. A.

Vesuvius Poland Sp., z.o.o. (Formerly Vesuvius Skawina Materialy Ogniotrwale Sp., z.o.o.)

Vesuvius USA Corporation FCAD

Vesuvius Ceska Republica, a.s

Cookson Plibrico Pty Limited

Yingkou Bayuquan Refractories Co., Ltd.

Vesuvius UK Limited, Korea Branch

Vesuvius Zyarock Ceramics (Suzhou) Co. Ltd.

Vesuvius (Thailand) Co., Ltd

Vesuvius Corporation S. A. Taiwan Branch

Vesuvius Foundry Products (Suzhou) Co. Ltd.

Foseco (Thailand) Limited Foseco India Limited

Vesuvius TK Refrakter Sanayi Ve Ticaret AS

Vesuvius Mid-East Limited

Vesuvius Belgium N.V.

Vesuvius Refratarios Ltda

PT. Foseco Indonesia

Foseco Pty Limited

Vesuvius Research, Pittsburgh

Foseco Ind us trial e Commercial Ltda

Foseco Dokum Sanayi ve Ticaret Limited

Foseco International Ltd. (Middle East Office)

Vesuvius Iberica Refractarios S.A.

Vesuvius Slavia, a.s.

Vesuvius Canada Inc

Foseco International Limited

iii) Names of Principal Group Companies / fellow subsidiaries

(with which the Company neither have any transactions nor outstanding balances)

Cookson Overseas Limited

Cookson India Private Limited

iv) Key Management Personnel

Mr Tanmay Kumar Ganguly - Managing Director

(ix) Basis used to determine the Expected Rate of return on Plan Assets:

The expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario. In order to protect capital and optimise returns within acceptable risk parameters, the plan assets are well diversified.

3. Provision for taxation has been recognised with reference to profit for the year ended December 31, 2011 in accordance with the provision of the Income Tax Act, 1961 and rules framed there under. The ultimate tax liability for the Assessment Year2012-2013 will be determined on the basis of total taxable income for the year ending on March 31, 2012.

4. The management is of the opinion that its international transactions are at arm's length under the provisions of Section 92-92F of the Income Tax Act, 1961.

5. The Company had a post retirement medical benefit scheme (PRMS) for certain categories of employees with an insurance company. Insurance Regulatory Development Authority had directed the Company that no new members would be added to this scheme for whom payment of insurance premium has not been due. As a result, the Company had, in the previous year written back amount provided there against in earlier years aggregating to Rs. 10,917.

6. Previous year's figures have been regrouped and/or rearranged wherever considered necessary to confirm to current year's presentation.

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Dec 31, 2009

1. In accordance with the announcement dated March 29, 2008 by the Institute of Chartered Accountants of India on accounting for derivatives, the Company has recognised loss Rs. NIL (Previous year 5,901) on fair valuation of foreign exchange expenses outstanding as at the year-end.

2. In terms of Finance Act, 2009 Fringe Benefit Tax (FBT) has been withdrawn with effect from April 1, 2009. As a result fringe benefit tax expense for the year represent fringe benefit tax expenses for the period from January 1, 2009 to March 31, 2009.

3 The Company has identified certain Micro and Small Enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owed dues that are outstanding for more than 45 days as at December 31, 2009. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of confirmations received from vendors, suppliers, etc in response to intimation in this regard sent by the Company to such parties.

The Principal amount remaining due and unpaid to supplier as at the end of the accounting year Rs. 2,613 (Previous Year Rs 1,940).

Interest paid / payable by the Company on the aforesaid principal has been waived by the concerned party.

4 Segment Reporting

I) Segments have been identified in line with the Accounting Standards on Segment Reporting (AS 17) prescribed by Companies (Accounting Standards) Rules, 2006, taking into account the nature of products and services, the different risks and returns, the organisational structure and the internal financial reporting system. The Company is engaged in the business of manufacturing, trading and sale of refractories. It has manufacturing location in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organisation and management structure and its system of internal financial reporting, business segment has been identified as the primary segment. The Company has only one business segment.

5 Information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures issued by the Companies (Accounting Standards) Rules, 2006.

A) List of Related parties and relationship

i) Enterprises having control over the Company

Cookson Group pic - ultimate Holding Company

Cookson Financial Limited, United Kingdom

Vesuvius Group Limited, United Kingdom - Holding Company

ii) Fellow Subsidiaries (with whom transactions have taken place during the year and the previous year) Vesuvius Group S. A. Vesuvius Deutschland GmbH Vesuvius South Africa (Pty) Limited Vesuvius UK Limited Vesuvius Crucible Company Vesuvius USA Vesuvius Italia SPA

Vesuvius Advanced Ceramics (Suzhou) Co. Ltd. Wuhan Wugang Vesuvius Advanced Ceramics Co. Ltd. Advent Processing Engineering Inc. Vesuvius Mexico S.A. de C.V.

Vesuvius Becker & Piscantor Grobalmeroder Schmelztiegelwerke GmbH Vesuvius Malaysia SDN BHD Vesuvius Corporation S. A. Vesuvius France S. A. Vesuvius USA- Patent & Legal

Vesuvius Poland Sp., z.o.o. (Formerly Vesuvius Skawina Materialy Ogniotrwale Sp., z.o.o.) Vesuvius USA Corporation FCAD Vesuvius Ceska Republica, a.s Cookson Plibrico Pty Limited Yingkou Bayuquan Refractories Co., Ltd. Vesuvius Japan Inc. Vesuvius UK Limited, Korea Branch Vesuvius Zyarock Ceramics (Suzhou) Co. Ltd. Vesuvius (Thailand) Co., Ltd Vesuvius Corporation S. A. Taiwan Branch Vesuvius Foundry Products (Suzhou) Co. Ltd. Foseco (Thailand) Limited Foseco India Limited

Vesuvius TK Refrakter Sanayi Ve Ticaret AS Vesuvius Mid-East Limited Vesuvius Belgium N.V. Vesuvius Refratarios Ltda Vesuvius Administration Pty Limited PT. Foseco Indonesia Foseco Pty Limited Vesuvius Research, Pittsburgh Foseco Industrial e Commercial Ltda Foseco DOkUm Sanayi ve Ticaret Limited Foseco International Ltd. (Middle East Office) Vesuvius Iberica Refractarios S.A. Vesuvius Slavia, a.s. Vesuvius Canada Inc Foseco International Limited

iii) Names of principle Group companies / fellow subsidiaries (with which the Company neither had any transactions nor outstanding balances): Cookson Overseas Limited.

iv) Key Management Personnel

Mr. Tanmay Kumar Ganguly - Managing Director

6. Provision for taxation has been recognised with reference to profit for the year ended December 31, 2009 in accordance with the provision of Income Tax Act, 1961 and rules framed thereunder. The ultimate tax liability for the Assessment Year 2010-2011 will be determined on the basis of total taxable income for the year ending on March 31, 2010.

7. The management is of the opinion that its international transactions are at arms length under the provisions of Section 92-92F of the Income Tax Act, 1961.

8. Expenditure in foreign currency is disclosed on accrual basis. Previous years expenditure, earlier on cash basis, would now accordingly be Travelling-Rs 16,914, Royalty-Rs 52,975, Freight-Rs 75,944, Technical Service Charges-Rs 4,743, Management Fees-Rs 36,059 and Product Development-Rs 2,117.

9. Previous years figures have been regrouped and/or rearranged wherever considered necessary to confirm to current years presentation.

Signatures to Schedules 1 to 13