Foce India Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The watch industry is undergoing several important developments. One of the most notable is the surge in demand for smartwatches, which combine traditional timekeeping with digital features like health tracking, notifications, and connectivity. Moreover, the ongoing shift to online retail, accelerated by the COVID-19 pandemic, is likely to have a long-term impact on how watches are marketed and sold. More brands are investing in e-commerce platforms and digital marketing strategies to reach a wider, more diverse audience.

Technological innovations also continue to reshape the industry, with watchmakers experimenting with new materials such as ceramics, titanium, and carbon fiber. These materials not only offer durability but also allow for lighter, more comfortable watches. Additionally, while smartwatches dominate the digital space, there has been a renewed interest in traditional analog watches. Many consumers still value the craftsmanship and timeless appeal of mechanical timepieces. As a result, some luxury watchmakers are blending advanced technology with traditional designs to cater to both nostalgia and innovation.

In response to evolving consumer preferences, brands are increasingly exploring collaborations and limited-edition models. These exclusive releases often generate buzz, particularly in the luxury market, where collectors seek unique and rare timepieces. As the industry continues to adapt, watchmakers must innovate while staying true to their heritage to maintain relevance in an increasingly competitive market.

OPPORTUNITIES AND CHALLENGES

The Indian watch industry has strong growth potential which is substantiated by the following factors:

1. The macro-economic factors including growth outlook of Indian economy, inflation coming under control, governments boost for increasing demand and per capita income, Indian demography, urbanization, and increasing fashion spends of Indian population, are all assuring long term growth of the country. This will boost overall consumer demand and specifically demand for more discretionary goods including watches.

2. Traditional analogue watch segment has ample room to grow as majority of the Indian consumers still like to wear them compared with smart wearables.

3. New age digital sales channels such as e-commerce, online and omni channels are growing the overall watch market size exponentially.

4. With the innovative marketing and consumer engagement initiatives, smart wearables, watches and bands have been growing at an exponential pace and are expected to further

grow at a fast pace and will increase the overall size of watch market.

THREATS

• Execution risk

• Short term economic slowdown impacting investor sentiments and business activities

• Slowdown in global liquidity flows

• Increased intensity of competition from local and global players

RISKS AND CONCERNS

The financial market industry is mainly dependent on economic growth of country and financial market is also further affected by number of issues arising out of International policies of foreign government as well any change in international business environment. The industrial growth is very sensitive which is dependent on many factors which may be social, financial, economic or political and also natural climatic conditions in the country.

The Company has exposure to the following risks arising from financial instruments:

• Credit risk

• Liquidity risk

• Market risk

• Interest rate risk

• Legal & regulatory risk

• Economic and Political risks

OUTLOOK

"Foce India Limited", formerly known as Heighten Trading Company Private Limited has been at the forefront of Indian Horology Industry for the last three decades. Started as a small retail shop in 1980s in Mumbai, the company today manufactures and imports wrist watches under various brand names and has become one of the front runners in the midrange segment with distribution of many retail stores across the country with an imposing list clientele in corporate segment.

The Company expects to grow the sales of premium and luxury watches in the top Indian cities and also to establish physical stores in high-growth Indian cities. The Companys leadership and management team helps them make informed judgments on significant challenges and sustain business growth. Over the years, it has expanded its market presence, driving revenues and profitability consistently.

FINANCIAL PERFORMANCE OF THE COMPANY:

Particulars	Standalone		Consolidated
	Figures as at the end of current reporting period	Figures as at the end of previous reporting period	Figures as at the end of current reporting period	Figures as at the end of previous reporting period
Revenue from Operations	3,581.90	1,653.05	10,425.16	8,025.02
Other Income	5.26	0.37	39.25	12.63
(a)Total Revenue	3,587.16	1,653.42	10,464.42	8,037.65
Less : Administrative & Other Expenses
Purchase of Stock in Trade	3,502.55	1,333.11	8,477.27	4,749.12
Changes in inventories of finished goods, work-inprogress and stock-in-trade	(220.27)	121.30	(222.28)	1,039.66
Depreciation & Amortization	3.00	3.06	23.56	28.19
Employee Benefit Expenses	18.18	19.39	38.65	42.33
Finance Expenses	10.47	57.82	59.16	60.16
Other expenses	142.94	53.66	296.35	184.92
(b)Total Expense	3,456.86	1,588.34	8,672.72	6,104.39
(c)Profit / (Loss) before Tax (a-b)	130.30	65.08	1,791.70	1,933.25
Less: Tax Expense
Current Tax	32.68	16.41	352.51	344.55
Deferred Tax	0.12	(0.02)	(1.04)	(0.55)
Profit After Tax	97.50	48.69	1,440.23	1,589.25
Basic Earnings Per Share	1.99	1.00	29.43	32.48
Diluted Earnings Per Share	1.99	1.00	29.43	32.48

DETAILS OF SIGNIFICANT KEY FINANCIAL RATIOS:

Ratios	2024-25	2023-24
Debtors Turnover	3.74	3.64
Inventory Turnover	19.97	12.72
Interest Coverage Ratio	13.45	2.13
Current Ratio	1.67	2.33
Debt Equity Ratio	10.60	4.98
Return on Equity	2.86	1.37
Net Profit	2.72	2.95

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company maintains adequate and effective Internal Control Systems commensurate with its size and complexity. It believes that these systems provide, among other things, a reasonable assurance that transactions are executed with management authorization. It also ensures that they are recorded in all material respect to permit preparation of financial statements in conformity with established accounting principles. An independent Internal Audit function is an important element of Companys Internal Control System. This is supplemented through an extensive internal audit programme and periodic review by the management and the Audit Committee of Board.

ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires the conduct of all operations in such manner so as to ensure safety of all concerned, compliance of statutory requirements for environment protection and conservation of natural resources to the extent possible.

RISK MANAGEMENT

Risk is an integral part of the business process. To enhance the risk management process, the company has mapped the risks. Risk arising in achieving business objectives are identified and prioritized. Risk mitigation plans are established and executed as and when need arises. Periodical reviews are carried out to assess the risk levels.

HUMAN RESOURCES

Human resources development, in all its aspect like training in safety and social values is under constant focus of the management. Relations between management and the employees at all levels remained healthy and cordial throughout the year. The management

and employees are dedicated to achieve the corporate objective and the targets set before the Company.

CAUTIONARY STATEMENT

Statements in this report on Management Discussion and Analysis, describing the Companys objectives, projections, estimates, expectations, or predictions may be forward looking, considering the applicable laws and regulations. These statements are based on certain assumptions and expectation of future events. Actual results could, however, differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include finished goods prices, raw materials costs and availability, global and domestic demand supply conditions, fluctuations in exchange rates, changes in Government regulations and tax structure, economic developments within India. The Company assumes no responsibility in respect of the forward-looking statements herein, which may undergo changes in future based on subsequent developments, information, or events.

Annexure- 2

Form No. MR-3 Secretarial Audit Report

(For the Financial year ended 31^st March, 2025)

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members,

Foce India Limited

4 Kingston Shastri, Nagar lokhandwala Complex,

Andheri West Mumbai-400053

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices of Foce India Limited (CIN: L33100MH2001PLC130385)

(hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period ended on 31^st March, 2025, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by The Company for the period ended on 31^st March, 2025 according to the provisions of (to the extent applicable to the company):

a) The Companies Act, 2013 (the Act) and the Rules made thereunder as amended;

b) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the Rules made thereunder;

c) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

d) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; Not Applicable

e) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act) to the extent applicable to the Company:-

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)Regulations, 2011;

b. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

c. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

d. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)Regulations, 2009 and 2018- Not applicable

e. The Securities and Exchange Board of India Employee Stock Option Scheme and Employee Stock Purchase Scheme) Regulations, 1999 - Not applicable;

f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client- Not applicable

g. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 - Not applicable;

h. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and Not Applicable;

i. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998- Not applicable

f) The Secretarial Standards issued by the Institute of Company Secretaries of India.

The compliance by the Company of the applicable financials laws, like Direct and Indirect Tax laws, has not been reviewed in this audit since the same have been subject to review by Statutory Auditors and other designated professionals.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, Listing Agreements etc mentioned above.

I further report that, the Board of Directors of the Company is duly constituted with proper balance of Executive Director, Non-Executive Directors and Independent Directors. There were no changes in the composition of the Board of Directors during the period under review.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were generally sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

The Company has duly complied with the requirements of Structured Digital Database under Regulations 3(5) & 3(6) of SEBI (Prohibition of Insider Trading), Regulations, 2015 during the financial year under review.

As per the minutes of the meetings duly recorded and signed by the Chairman the decisions of the Board were unanimous and no dissenting views have been recorded.

The Company did not enter into any material transaction with any related party that required approval of the shareholders under the provisions of the Applicable Laws. There is policy placed on companys website regarding the transaction with related parties.

As on 31^st March, 2025 there are no pending investors complaints.

Additional point:

During the year the company has increased the Authorized Share Capital of the Company from Rs. 5,52,00,000/- (Rupees Five Crore FiftyTwo Lakh Only) divided into 55,20,000 (Fifty-Five Lakh Twenty Thousand) equity shares of Rs. 10/- (Rupees Ten only) each to Rs. 12,00,00,000/- (Rupees Twelve Crore only) divided into 1,20,00,000 (One Crore Twenty Lakhs) equity shares of Rs. 10/- (Rupees Ten only) each by the creation of addition of Rs. 6,48,00,000/- (Rupees Six Crore Forty-Eight Lakh Only) divided in to 64,80,000 (Sixty-Four Lakh Eighty Thousand) Equity Shares of Rs. 10/- (Rupees Ten Only) each., by passing the ordinary resolution at the extra - ordinary general meeting held on Thursday, 30th day of January, 2025

I report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the Audit Period, the Company has not undertaken any specific events / actions that can have a bearing on the Companys compliance responsibility in pursuance of the above referred Laws, Rules, Regulations, Guidelines, Standards, etc.

Annexure A

To,

The Members,

Foce India Limited

4 Kingston Shastri, Nagar lokhandwala Complex,

Andheri West Mumbai-400053

My Report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the Company. My responsibility is to express an opinion on these secretarial records based on audit;

2. I have followed the audit practices and the processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for my opinion;

3. I have not verified the correctness and appropriateness of financial records and books of account of the Company;

4. Wherever required, I have obtained Management Representation about the compliance of Laws, Rules and Regulations and happening of events etc.;

5. The compliance of the provisions of corporate and other applicable Laws, Rules, Regulations, Standards etc. is the responsibility of management. My examination was limited to the verification of procedures on test basis;

6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

Annexure - 3

Form AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of Subsidiaries/ Associate Companies / Joint Ventures

Part "A": Subsidiaries

(Information in respect of each subsidiary to be presented with amount in Rs. In Lakhs)

1	S/N	1	2
2	Name of the Subsidiary	FO Industries Pvt Ltd	Foce Realty Solutions Pvt Ltd
3	The date since when subsidiary was acquired/ incorporated	06.04.2021	12.11.2021
4	Reporting Period for the subsidiary concerned, if different from the holding companys reprting period	Not Applicable	Not Applicable
5	Reporting Currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.	INR	INR
6	Share capital	50.00	151.00
7	Reserves & surplus	3,537.64	699.38
8	Total assets	6,170.30	9,422.88
9	Total Liabilities	2,582.66	8,572.50
10	Investments	63.25	20.11
11	Turnover	3,861.08	2,982.19
12	Profit/ loss before tax	1,001.36	660.04
13	Provision for taxation	173.90	144.77
14	Profit/ Loss after tax	827.46	515.28
15	Proposed Dividend	-	-
16	Extent of shareholding (in percentage)	100.00	100.00

Notes:

1. Names of subsidiaries which are yet to commence operations: None

2. Names of subsidiaries which have been liquidated or sold during the year.: None

Part "B": Associates and Joint Ventures

Statement pursuant to Section 129(3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

S/N	Name of associates/Joint Ventures
1	Latest audited Balance Sheet Date
2	Date on which the Associate or Joint Venture was associated or acquired
3	Shares of Associate/Joint Ventures held by the company on the year end
a	No. of Shares
b	Amount of Investment in Associates/Joint Venture	Not Applicable
c	Extend of Holding%
4	Description of how there is significant influence
5	Reason why the associate/joint venture is not consolidated
6	Net worth attributable to shareholding as per latest audited Balance Sheet
7	Profit/Loss for the year
a	Considered in Consolidation
b	Not Considered in Consolidation

Notes:

1. Names of asociates/Joint Ventures which are yet to commence operations: None

2. Names of associates/ Joint Ventures which have been liquidated or sold during the year.: None

Annexure - 4

PARTICULARS OF EMPLOYEES

The information required pursuant to section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given hereunder:

a) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year are given hereunder:

Since the Directors did not receive any remuneration except sitting fees for attending Board/ Committee meetings, the required details are not applicable.

b) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year are given hereunder:

Nil

c) The percentage of increase in the median remuneration of employees in the financial year:

Nil

d) The number of permanent employees on the role of company as on 31^st March, 2025:

8 (Eight), including Executive directors.

e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average percentage increase in salaries of employees other than managerial personnel during 2024-25	NIL
The percentage increase in the Managerial Remuneration	NIL

f) Affirmation that the remuneration is as per the remuneration policy of the company:

The Board of Directors of the Company affirms that the remuneration is as per the Remuneration Policy of the Company.