Foseco India Ltd — Annual Report 2021

Feb 10, 2021

February 10, 2021

BSE Limited	National Stock Exchange of India Limited
Listing Department,	Listing Department,
Phiroze Jeejeebhoy Towers,	Exchange Plaza, 5th Floor,
Dalal Street,	Plot No. C/1, G Block,
Mumbai 400 001	Bandra Kurla Complex,
	Bandra (East), Mumbai-400051

Dear Sirs,

Sub: 1. Audited Financial Results for the quarter and year ended 31 December 2020 2. Recommendation of the Final Dividend

Ref: BSE Scrip Code: 500150, NSE Symbol: FOSECOIND, ISIN: INE519A01011

We write to advice that the Board of Directors of the Company, at its Meeting held today i.e., February 10, 2021, have approved the following:

• 1. Audited Financial Results of the Company for the quarter and year ended 31 December 2020: Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015, ("Listing Regulations") [SEBI (LODR)], we are submitting herewith the following documents:
  • a) The Audited Financial Results of the Company for the quarter and year ended 31 December 2020; and
  • b) The Statutory Auditor's Report on the Financial Results.

In compliance with Regulation 33(3)(d) of the SEBI (LODR), as amended from time to time, the Board of Directors had declared that the Statutory Auditors of the Company, Price Waterhouse Chartered Accountants LLP (Firm Registration no. 012754N / N500016) have issued an Audit Report with unmodified opinion on the Audited Financial Results of the Company for the year ended 31 December 2020.

1. Recommendation of the Final Dividend: The Board of Directors has recommended payment of a final dividend of Rs. 10/- per equity share (100%) on a paid-up equity share of Rs. 10/ each, for the financial year ended 31 December 2020, subject to approval of the Shareholders' at the forthcoming Annual General Meeting of the Company.

The Meeting of the Board of Directors commenced at 1530 hours and concluded at 2045 hours.

You are requested to take the above information on record.

Yours faithfully, For Foseco India Limited

Mahendra Kumar Dutia Controller of Accounts and Company Secretary

Enclosing: as above

r

Foseco India Limited

Registered Office: Gat Nos. 922 & 923, Sanaswadi, Taluka Shirur, District Pune - 412208 Tele: +91 2137 668100, Fax: +91 2137 668160 Website: www.fosecoindia.com, E-mail ID: investor.grievance@vesuvius.com Corporate Identity Number: L24294PN1958PLC011052

Statomont of financials rosults for tho quarter and year ended 31 December 2020

					(All fiAures in Rupees Lakhs)
No.	Sr. Particulars	Current3 months ended	Preceding3 months ended	Corresponding3 months endedIn the previous-�-	CurrentAccounting YearEnded	PreviousAccounting YearEnded
		31-Dec-2020	30-Sep-2020	31-Dec-2019	31-Dec-2020	31-Dec-2019
		Unaudited		Unaudited
		f Refer note-2I	Unaudited	I Refer note-2I	Audited	Audited
1	Income from Operations
					25,115.04
	aRevenue from Operations	8,226.87	6,894.88	7,332.32		32,252.39
	bOther Income	180.04	89.43	236.20	620.92	781.26
	Total Income from Operations (a to b)	8,406.91	6,984.31	7,568.52	25,735.96	33,033.65
2	Expenses
	aCost of materials consumed	4,458.65	3,612.44	4,594.95	13,029.39	17,975.93
	bPurchase of Stock in Trade	221.48	121.14	108.37	555.35	523.36
	Changes in Inventories of Finished Goods, Work-in-ProgressCand Stock-in-Trade	4.30	65.63	(557.95)	529.82	(489.40)
	dEmployee benefit expense	884.07	890.98	694.13	3,518.68	3,413.44
	Finance costC		0.05		0.07	0.13
	fDepreciation and amortisation expense	143.59	157.68	113.80	591.06	419.70
	Other expensesg	1,717.72	1,445.62	1,621.25	5,402.74	6,227.71
	Total Exponsos (a tog)	7,429.81	6,293.54	6,574.55	23,627.11	28,070.87
3	Profit before tax	977.10	690.77	993.97	2,108.85	4,962.78
4	Tax Expense
	Current Tax (net)	332.71	98.00	263.20	641.30	1,362.03
	Deferred Tax charge/ (credit)	(75.07)	84.73	88.79	(76.13)	147.46
	Total Tax Expense	257.64	182.73	351.99	565.17	1,509.49
5	Net Profit for the Period / Yoar	719.46	508.04	641.98	1,543.68	3,453.29
6	Other comprehensive Income, net of income tax
	a Items that will not be reclassified to profit or loss
	i Remeasurement of defined employee benefit plans	(41.37)	(26.04)	(89.27)	(119.49)	(110.96)
	ii Tax relating to remeasurement of defined benefit plan	10.42	6.55	22.37	30.07	27.93
	Total other comprehensive income, net of tax	(30.95)	(19.49)	(66.90)	(89.42)	(83.03)
7	Total comprehensive income for the period/ year (5 +/- 6)	688.51	488.55	575.08	1,454.26	3,370.26
8	Paid up Equity Share Capital (Face Value Rs. 10/- per share)	638.65	638.65	638.65	638.65	638.65
9	Earnings per equity share (not annualised)
	Basic and diluted earnings per share (In INR)	11.27	7.95	10.05	24.17	54.07
	10 Reserves excluding Revaluation Reserve as per AuditedBalance Sheet of December 31, 2020 and December 31, 2019				17,626.06	16,500.18

Statement of Assets and Liabilities as at December 31, 2020

			(/\II fiauroo in Ruuooa Lekhs)
Particulars		CurrentAccounting YearEnded31-Dec-2020Audited	PreviousAccounting YearEnded31-Dec-2019Audited
A	ASSETS
1	Non-Current Assets
(a)	Property, plant and equipment	3,068.31	3,432.37
(b)	Capital work-in-progress	490.72	161.83
(c)	Intangible assets
(d)	Right of L1se assets	2.60
(e)	Financial Assets
	i. Loans	74.35	81.35
(f)	Deferred tax assets	261.73	185.60
(g)	Income tax assets (net)	524.62	295.50
(h)	Other non-current assets		94.48
	Total Non-Current Assets	4,422.33	4,261.13
2	Current assets
(a)	Inventories	1,250.93	1,939.95
(b)	Financial a��et:;
	i. Trade receivables	6,490.52	7,284.64
	ii. Cash and cash equivalents	13,630.02	11,107.60
	iii. Bank balances other than cash and cash equivalents	70.69	77.79
	iv. Loans	13.32	15.52
	v. Other financial assets	65.78	55.92
(c)	Income tax assets (net)		24.54
(d)	Other current assets	364.31	108.82
	Total Current Assets	21,886.57	20,614.78
	TOTAL ASSETS	26,307.90	24,866.91

	TOTAL EQUITY AND LIABILITIES	26,307.90	24,865.91
	Total Llabllltles	8,043.19	7,727.08
	Total Current Liabilities	7,985.17	7,646.28
(d)	Provisions	279.79	211.84
(c)	Currant tax liabilities		89.13
(b)	Other current liabilities	280.75	214.63
	iii.Other financial liabilities	742.91	711.38
	- Total outstanding dues of creditors other than microenterprises and small enterprises	6,681.65	6,418.22
	- Total outstanding dues of micro enterprises and smallenterprises	0.07	1.08
	i. Trade payables
(a)	Financial liabilities
2	Current Liabilities
	Total Non-Current Llabllltles	68.02	80.80
(b)	Provisions	33.86	51.84
	i. Other financial liabilities	24.16	28.96
(a)	Financial liabilities
1	Non-Current Liabilities
	LIABILITIES
	Total Equity	18,264.71	17,138.83
(b)	Other Equity	17,626.06	16,500.18
(a)	Equity share capital	638.65	638.65
	EQUITY
B	EQUITY AND LIABILITIES

Page 2 of 4

St11t11mont of Cii&h Flow as at Financial Yoar Ended Decemller 31, 2020

	(All fiQures in Rupees Lakhs)
Particulars	CurrentAccounting YearEnded31-Dec-2020	PreviousAccounting YearEnded31-Dec-2019
A. Cash flow from Operatln9 activities
Profit before tax	2,108.85	4,962.78
Adjustments for
Depreciation and Amortisation expense	591.06	419.70
Provision of Doubtful Debts	186.30	276.63
(Profit)/ Loss on sale/ disposal of property, plant and equipment	3.08	(8.92)
Finance Cost	0.07	0.13
Interest Income	(313.22)	(464.66)
Provision for doubtful debts written back	(88.53)	(201.77)
Unrealised exchange (gain) / loss (net)	0.99	(2.49)
Employee share based payment expense	26.65	35.71
Operating profit before working capital changes	2,515.25	5,017.11

(Increase)/ Decrease in Trade Receivables	697.27	1,340.31
(Increase)/ Decrease in Inventories	689.02	157.87
(Increase)/ Decrease in Other financial assets	65.74	(44.42)
(Increase)/ Decrease in Other assets	(255.49)	(3.85)
Increase/ (Decrease) in Trade Payables	260.50	(111.61)
Increase/ (Decrease) in Other financial liabilities	0.65	(433.99)
Increase/ (Decrease) in Other liabilities	30.41	12.60
Increase/ (Decrease) in Provisions	(69.52)	(124.56)
Cash generated from operations	3,933.83	5,809.46
Income taxes paid (net of refunds)	(904.94)	(1,125.87)
Net cash generated from operating activities (a)	3,028.89	4,683.59

B. Cash flow from Investing activities

Proceeds from disposal of property, plant and1.48equipmentRedemption of bank deposits (with maturity morethan three months)Interest income253.92	(187.08)(890.09)
	460.30
	0.40
	14.66
Payments for property, plant and equipment(442.48)	(1,365.45)

C. Cash flow from Financing activities
Interest paid	(0.07)	(0.13)
Dividends paid	(319.32)	(1,596.62)
Tax on dividends		(328.23)
'Not cash used In financing activities (c)(319,39)(1,924.98)

11,107.60
9,239.08
1,868.52

Cash and cash equivalents comprise of :
Cash on hand	1.01	1.30
Balances with banks
- in current accounts	677.96	1,274.92
- in EEFC accounts	366.05	216.38
Deposit with maturity of less than three months	12,585.00	9,615.00
Total cash and cash equivalents	13,630.02	11,107.60

Note : The above Statement of Cash Flows has been prepared under the "Indirect Method" as set out in the Ind AS - 7 on Statement of Cash Flow.

NOTES:

• The results have been reviewed by the Audit Committee and approved by the Company's Board of Directors at their respective meetings held on February 10, 2021. The statutory auditors have carried out the audit for the year ended 31 December 2020 and have issued an unmodified opinion.
• 2 Figures of the quarter ended 31 December 2020 and 31 December 2019 are the balancing figures between audited figures in respect of the relevant full financial year and the published year to date figures up to third quarter of relevant financial year.
• 3 The Cornpany has only one reportable segment, metallurgical products and services, in accordance with Ind AS 108 - "Operating Segments", notified pursuant to the Con1panies (Indian Accounting Standards) Rules, 2015.
• 4 The Board of Directors of the Company has recommended payment of a final dividend of Rs. 10/- (100%) on a paid-up equity share of Rs. 10/- each for the financial year ended 31 December 2020, subject to the Shareholders' approval at the forthcoming Annual General Meeting. This in addition to the interim dividend aggregatin to Rs. 5/- {50%} per share, brings the cumulative dividend for the financial year to Rs. 15/- (150%) per share.
• 5 The Company has considered the possible effects that may result from the COVID-19 pandemic in the preparation of the annual financial results including the recoverability of carrying amounts of financial and non-financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, Management has taken into account internal and external sources of information including economic forecasts and related information and expects that the carrying amounts of these assets are fair and reasonable. The impact of the pandemic might be different from that estimated as on the date of approval of this results.
• 6 The managerial remuneration paid to the former Managing Director of the Company during the year ended December 31, 2020, amounted to Rs. 508.66 lakhs including retirement benefits of Rs 234.59 lakhs, which exceeds the prescribed limit under Section 197 read with Schedule V to the Companies Act, 2013 by Rs. 256.30 lakhs, in view of "inadequacy of profit" computed under Section 198 of the Act. As per the provisions of the Companies Act, 2013 the excess remuneration paid will be subject to the approval of the shareholders by way of a special resolution at the ensuing Annual General Meeting, which is being sought.

7 Previous period / year figures have been regrouped/rearranged wherever considered necessary.

Date: 10th February 2021 Place: Pune

For Fti/ LIMITED

Or. Ujjal Bhattacharjee Director DIN 08083932

Independent auditor's report To the Members of Fuseco India Lunited Report on the audit of the financial statements

Opinion

• t. We have audited the accompanying financial statements of Fosceo India Limited ("the Company"), which comprise the balance sheet as at December 31, 2020, and the statement of Profit and Loss ((including Other Comprehensive Income), statement of changes in equity and statement of eash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
• In our opinion and to the best of our information and according to the explanations given to $2-1$ us, the aforesaid financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at December 31, 2020, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.

Basis for opinion

1. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

1. We draw your attention to Note 29 (d) to the Financial Statements, which describes the remuneration amounting to Rs. 508.66 lakhs paid to the former Managing Director which exceeds the limits prescribed under section 197 read with Schedule V to the Act by Rs. 256.30 lakhs and accordingly, is subject to the approval of the shareholders by way of a special resolution in the ensuing annual general meeting. Our opinion is not modified in respect of this matter.

Mindue Chartered

Price Waterhouse Chartered Accountants LLP, 7th Floor, Tower A - Wing 1, Business Yerwada, Pune - 411 006 T: +91 (20) 41004444, F: +91 (20) 41006161

lered office and Haad office. Sucheta Bhawan, 11A Vishnu Digambar Marg, New Delhi 110 002

unhouse (e Partnership Firm) converted into Price Waterhouse Chartered Av3 from July 25, 2014, Post its conversion to Price Waterhouse Chartered Acc : LLPIN AAC-5001) ly Partnership with LLP identity no: LLPIN AAUIn number is 012754N/N500016 (ICAI registrat

Foseco India LimitedIndependent Auditors' ReportTo the Members of Foseco India Limited Page 2 of 6

Key audit matters

1. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter

How our audit addressed the keyaudit matter

Revenue recognitionRefer Note 1 (d) and 17 to the FinancialStatements.The Company recognises revenue inaccordance with Ind AS 115 "Revenue fromContracts with Customers".Revenue from the sale of products isrecognized when control of products beingsold is transferred to customer and there is nounfulfilled obligation and it is measured atfair value of the consideration received orreceivable, after deduction of any discountsand taxes or duties collected on behalf of thegovernment such as goods and services taxetc.We have considered revenue recognition as akey audit matter since there is a risk ofmaterial misstatement; and additionaldisclosures are required to be made inaccordance with the applicable accountingstandards.

Our testing of revenue transactions wasdesigned to cover certaincustomercontracts. Our audit procedures includedthe following:· Understanding, evaluating the design andtesting the operating effectiveness ofcontrols over revenue recognition processincluding contract monitoring, billings andapprovals;Evaluating the contract terms for$\bullet$assessment of the timing of transfer ofcontrol to the customer to assess whetherrevenue is recognised appropriately;• Testing whether the revenue recognition isin line with the terms of customer contracts;Assessing whether fair value$\bullet$ .$\alpha$ fconsideration received, or receivable hasbeen determined appropriately in terms ofthe customer contract, reviewing customercorrespondence and verifying pre and postyear end cut-off had been appropriatelyapplied;Testing ofjournal entriesforunusual/irregularrevenue transactions;and· Evaluating adequacy of the presentationand disclosuresBased on the above stated procedures, nosignificant exceptions were noted inrevenue recognition including thoserelating to presentation and disclosures.

FosC(·o lmliu Limited tndcp"ndcnl \uclitor<:' llrport _ . . To the ,1cmbt'r" ufroM'C:O lnd1,I J.tmllcd Page 3 of 6

Other Information

1. The C{)mpany's Bonrd of Directors is responsil� lc for the othC'r _ information. T � e o � her infor111ation comprises the informaliou incluclcd m the Bool'd of Directors report, nt ocs not include the financial statements and our auditor's report Llwrcon.

Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read theolher ii1formation and, in doing so, consider whether the other infor� natio!1 is mntet: ially inconsistent with the financial statements or our knowledge obtained m the audit or otherwise appears to be materially misstated. If, based on the work we have pcrfonn� d, we conclude that there is a mflterial misstatement of this other information, we arc required to report that fact.

We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the financial statements

• 1. The Company's Doard of Directors is responsible for the matters stated in section 134(5) of the Art "rith respect to the pre para Lion of t}1ese financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selt!cliun and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give ;i true and fair view and are free from material misstatentent, whether due to fraud or error.
• 1. In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the financial statements

1. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an audi tor's report that includes our opinion. Reas�nable assurance is a high Ie�el of assurance, but 1s not � guarantee that � au�it con�ucted m accordance with SAs will always detect a matenal m1SStatcmcnt when 1t exists. MlSStatements can arise from fraud or are considered material if, individually or in the aggregate they could reaso influence the economic decisions of users taken on the 1 basis of these

Poseeco fashia Limited Independent Anditors' Report To the Members of Forece India 1 indeed Page & of 6

10 As part of an audit in accordance with SAs, we exercise professional judgment and momentain predocassal skepticion throughout the audit. We alare

• a) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform andit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from frand is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• b) Obtain an understanding of internal control relevant to the audit in order to design audit. procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonablene's of C) accounting estimates and related disclosures made by management-
• d) Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• e) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying Danselvous and events in a manner that achieves fair presentation.
• 1. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
• 1. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
• 13 From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rate citearmstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweight has public interest benefits of such communication.

1 tl!><•to lndia J.imitrd J111h•pl'11Clc-nt ,\uditor,.,' R<•port _ . J"o I lu· ,, ('n,lu•r, or l'osc-rn fnthn L11ntt<'d PcJge S of 6

Report cu, other ll·gttl nn<l rt·gul:itory \·cqnircment.s

• i..1. ., requirl'd hy lb<' Compani<'s (Auditor's Report) Order, 2016, issu<.'d by the Central t;o\•1•n1111flnt nf India in terms of sub-section (11) of section 143 of the Act ("the Order"), we �"� 111 the ,\nncxurl' Ba statement on the matters specified in paragr;1phs 3 and 4 of the Ordl'J, to the extent applicable.
• 1. A,,_ required by Section 14:i (3) of the Act, we report that:
  • a. We have sought and obtained all the information and explanations which to the best of om knowledge nnd belief were necessary for the purposes of our audit.
  • b. In our opinion, proper books of account as required by law have been kept by the Company so for as it appears from om examination of those books.
  • c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
  • d. In our opinion, the aforesaid lnd AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Acl.
  • e. On the basis of the written representations received from the directors as on December 31, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on December 311 2020 from being appointed as a director in terms of Section 164 (2) of the Act.
  • f. With respect to the adequaey uf the internal financial controls wilh referenee to financial statements of the Company and the opcmting effectiveness of such controls, refer to our separate Report in Annexure A.
  • g. With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
    • 1. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. Refer Note 31 (a) to the financial statements;
    • ii. The Company has long-term contracts as at December 31, 2020 for which there ·were no material foreseeable losses. The Company did not have any derivative contracts as at December 31, 2020.
    • iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
    • iv, The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended December 31, 2020.

Foseco India Limited Independent Auditors' Report To the Members of Foseco India Limited Page 6 of 6

10 As stated in the Note 29 (d) to the Financial Statements. the execss remuneration amounting to Rs. 250 30 lakhs paid to the former Managing Director is subject to the approval of the shareholders by way of a special resolution in the cusumg Annual General Meeting. (Also reter. Emphasis of Matter paragraph above).

For Price Waterhouse Chartered Accountants LLP Firm Registration Number: 012754N/ N500016

Place: Pune Date: February 10, 2021 Amit Borkar Partner-Membership Number: 109846 UDIN: 21109846AAAABF7248

Annexure A to Independent Auditors' Report

Referred to in paragraph 15(f) of the Independent Auditors' Report of even date to the members of Foseco India Limited on the financial statements for the year ended December 31, 2020 Page 1 of 2

Report on the Internal Emancial Controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of the Act

t. We have audited the internal financial controls with reference to financial statements of Foseeo India Limited ("the Company') as at December 31, 2020 in conjunction with our audit of the financial statements of the Company for the vear ended on that date

Management's Responsibility for Internal Financial Controls

a. The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounti and the timely preparation of reliable financial information, as required under the Act.

Auditors' Responsibility

• 1. Our responsibility is to express an opinion on the Company's internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, bothapplicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and t Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.
• 1. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of financial statements, whether due to fraud or error.
• 1. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

1. A company's internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financialcontrols with reference to financial statements includes those policies and procedures that (1) pertain to them assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the fina statements.

Inherent Limitations of Internal Financial Controls with reference to financial statements

1. Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls wi financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures muy deteriorate.

Amiestine Alo Independent Auditors' Report

Referred to in patinal uph (5th of the Independent Auditors' Report of even date to the members of Foseco India United on the financial statements for the year ended December 31, 2020 Page 2 of 3

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system withreference to financial statements and such internal financial controls with reference to financial statements w ğ. operating effectively as at fascember 41, 2020, based on the internal control over financial reporting criteria a trabletied by the Company considering the examinal components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of huha

For Prite Waterhouse Chartered Accountants LLP $\mathbf{F}\mathbf{f}\mathbf{r}\mathbf{m}$ Registration Numbers 012754N/N500016

Borkon

Amit Borkar Partner Membership Number: 109486 UDIN AI 100846AAAAB1-7248

Place Pune Date February 10, 2021

Annexure B to Independent Auditors' Report

Referred to in paragraph 14 of the Independent Auditors' Report of even date to the members of Foseco India Limited on the financial statements as of and for the year ended December 31, 9090

• (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
  • (b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.
  • (c) The title deeds of immovable properties, as disclosed in Note 3(a) Property, plant and equipment to the financial statements, are held in the name of the Company.
• The physical verification of inventory excluding stocks with third partics have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have ū. substantially been contirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been uppropriately dealt with in the books of accounts.
• The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the iii. provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
• The Company has not granted any loans or made any investments, or provided any guarantees or security to iv. the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.
• The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
• Pursuant to the rules made by the Central Government of India, the Company is required to maintain costrecords as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the vi. same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
• According to the information and explanations given to us and the records of the Company examined by us, $vii. (a)$ in our opinion, the Company is regular indepositing the undisputed statutory dues, including provident fund, employces' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax and other material statutory dues, as applicable, with the appropriate authorities.

Further, for the month of March and April 2020, the Company has paid Goods and Service Tax and filed return in Form GSTR 3B and Form GSTR 1 after the due date but within the timelines allowed by CentralBoard of Indirect Taxes and Customs under the Notification No. 85/2020 - CT dated April 03, 2020 on fulfilment of conditions specified therein.

According to the information and explanations given to us and the records of the Company examined by us, $(b)$ the particulars of dues of sales tax and value added tax as at December 31, 2020 which have not been deposited on account of a dispute, are as follows:

statute	Name of the Nature of dues	Amount(Rs. in lakhs)	Period to which theamount relates	Forumwherethedispute is pending
ValueAddedTax Act	Value Added Tax	6.34	$2015 - 16$	Joint Commissioner ofSales Tax
TheCentralSales Tax Act	Sales Tax	3.28	$2015 - 16$	Joint Commissioner ofSales Tax

• As the Company does not have any loans or borrowings from any financial institution or bank or Government, viii. nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the Company.
• The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the ix.
  • During the course of our examination of the books and records of the Company, carried out in accordancewith the generally accepted auditing practices in India, and according to the information and explainationsgiven to u

Annexure B to Independent Auditors' Report

Referred to in paragraph 14 of the Independent Auditors' Report of even date to the members of Foseco India Limited on the financial statements as of and for the year ended December 31, $2020$

Page 2 of 2

Except for managerial remuneration amounting to Rs. 256.30 lakhs paid to the former numaging director, the xi. managerial remuneration paid by the Company is in accordance with the requisite approvals as mandated bythe provisions of Section 197 read with Schedule V to the Act. The Company propuses to obtain approval ofthe shareho remuneration paid. (Also refer to paragraph 4 and 16 in the main audit report).

• As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company. xii.
• xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have licent disclosed in the dinamalid statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 199 of the Act.
• xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
• The Company has not entered fato any non cash transactions with its directors or persons connected with $XY$ . him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Computat,
• xvi. The Company is not required to be registered under Section 45-1A of the Reserve Bank of India Act, 1934, Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For Price Waterhouse Chartered Accounts LLP Firm Registration Number: 012754N/N500016

Place: Pune Date: February 10, 2021

Amit Borkar Partner Membership Number: 109846 UDIN: 21109846AAABF7248