Directors Report of RHI Magnesita India Ltd.

Mar 31, 2023

Your directors have great pleasure in presenting the 13^th Integrated Annual Report of RHI Magnesita India Limited (“the Company” or “RHIM” or “RHIM India") along with the audited standalone & consolidated financial statements of the Company for the financial year (“FY”) ended 31 March 2023 (herein after known as “period under review”).

1. FINANCIAL RESULTS

The highlights of the standalone and consolidated financial performance of the Company are as under:

(Amount in '' Lacs)
Particulars	Standalone		Consolidated
	2022-23	2021-22	2022-231	2021-22
Revenue from operations	248,836.87	199,493.59	272,626.65	199,937.33
Total expenditure before finance cost, depreciation and amortization	212,318.55	160,818.03	236,639.21	161,131.84
Operating Profit	36,518.32	38,675.56	35,987.44	38,805.49
Add: Other income	1,303.98	515.68	1,487.62	543.14
Profit before finance cost, depreciation, amortization, exceptional items and taxes	37,822.30	39,191.24	37,475.06	39,348.63
Less: Finance Costs	2,060.72	217.89	3,946.74	217.89
Profit before depreciation, amortization, exceptional items and taxes	35,761.58	38,973.35	33,528.32	39,130.74
Less: Depreciation and Amortization Expenses	4,177.88	3,363.48	7,090.06	3,382.52
Profit before exceptional items and tax	31,583.70	35,609.87	26,438.26	35,748.22
Less: Exceptional Item	(66,068.22)	-	(66,068.22)	-
(Loss)/Profit before taxes	(34,484.52)	35,609.87	(39,629.96)	35,748.22
Less: Total Tax Expense	8,194.47	8,817.55	6,935.26	8,847.78
(Loss)/Profit for the year (A)	(42,678.99)	26,792.32	(46,565.22)	26,900.44
Total other comprehensive (Loss) (B)	(41.05)	(100.60)	(19.26)	(101.36)
Total comprehensive (Loss)/Income for the year (C=A B)	(42,720.04)	26,691.72	(46,584.48)	26,799.08
Less: Share of Profit of Non-Controlling Interest	-	-	45.50	-
Total Comprehensive (Loss)/Income attributable to the Company/ the Company alongwith its subsidiaries	-	-	(46,629.98)	26,799.08
Retained Earnings: Balance brought forward from the previous year	84,485.19	62,298.05	84,620.90	62,326.40
Add: (Loss)/Profit for the year attributable to the Company/ the Company alongwith its subsidiaries	(42,678.99)	26,792.32	(46,610.54)	26,900.44
Add: Other Comprehensive (Loss)/Income attributable to the Company/ the Company alongwith its subsidiaries recognized in Retained Earnings	(41.05)	(100.60)	(19.44)	(101.36)
Less: Transaction costs (stamp duty) on issue of shares, net of tax	-	479.67	-	479.67
Balance which the Board have apportioned as under to:
Dividend on Ordinary Shares	4,024.91	4,024.91	4,024.91	4,024.91
Total Appropriations	4,024.91	4,024.91	4,024.91	4,024.91
Retained Earnings: Balance to be carried forward	37,740.24	84,485.19	33,966.01	84,620.90

2. FINANCIAL PERFORMANCE

On Standalone basis, the revenue from operations has been increased from '' 199,493.59 Lacs to '' 248,836.87 Lacs during the current financial year 2022-23 registering the growth of 24.73% as compared to the previous FY 2021-22. Further, during the current financial year 2022-23, the profit before tax (PBT) on revenue decreased from '' 35,609.87 Lacs to '' (34,484.52) Lacs. Similarly, the profit after tax (PAT) on revenue decreased from '' 26,792.32 Lacs to '' (42,678.99) Lacs.

On consolidated basis, the revenue from operations has been increased from '' 199,937.33 Lacs to '' 272,626.65 Lacs during the current financial year 2022-23 registering the growth approx. 36.35% as compared to the previous financial year. Further, during the current financial year 2022-23, the profit before tax (PBT) on revenue decreased from '' 35,748.22 Lacs to '' (39,629.96) Lacs. Similarly, the profit after tax (PAT) on revenue decreased from '' 26,900.44 Lacs to '' (46,565.22) Lacs.

During the year ended 31 March 2023, PBT has been declined primarily due to impairment loss of investment and goodwill amounting to '' 66,068.22 lacs. For more details, please refer note no. 28 of the standalone and consolidated financial statements of the Company.

3. MANAGEMENT DISCUSSION AND ANALYSIS

RHI Magnesita India is the leading manufacturer and supplier of high-grade refractory products, systems and solutions which are critical for high-temperature processes exceeding 1,200°C in a wide range of industries, including steel, cement, nonferrous metals and glass. This includes Magnesia and Alumina based bricks and mixes for large industrial customers as well as specialty refractory products like Isostatic products and Slide Gates. The Company takes pride in its position as the market leader for refractories in India and has gained a strong reputation globally for its high-quality products.

RHI Magnesita India Limited organization structure was established as a result of the integration of three erstwhile Indian subsidiaries of the global RHI Magnesita group (RHI Magnesita N.V. and its subsidiaries) — RHI Clasil Private Limited, RHI India Private Limited and Orient Refractories Limited in 2021. The integration synergized, simplified and consolidated the strengths of the three companies to serve its customers more efficiently as one combined entity. As a result of the merger, the Company emerged as the largest manufacturer of refractory products in India - a “one-stop-solution” for all refractory products and solutions for the Indian market, with capabilities ranging from innovation and research and development (“R&D”) to production of refractories, product marketing and sales, installation, services, monitoring and recycling.

RHIM products and services are categorized into two operating divisions based on the customer industries they serve: a division for the supply of products and services to the steel industry (the “Steel Division”) and a division for the supply of products and services to the cement and lime, non-ferrous metals, chemicals, energy industries, glass and other industries (the “Industrial Division”).

Steel Division:

In fiscal 2023, the Steel Division accounted for about 88% of RHIM''s revenue from operations. RHIM offers a broad range

of refractory products within its Steel Division, enabling the Company to provide comprehensive solutions to meet the refractory requirements of steel manufacturers. Refractory management service contracts are a significant component of the Steel Division''s revenue, accounting for about 44% in fiscal 2023.

Industrial Division:

Demand for refractories in the non-steel industries operates on a longer replacement cycle, with cement and lime customers typically carrying out annual maintenance to replace rotary kiln refractories, while customers in the non-ferrous metals and glass industries may only need to replace refractory lined equipment every ten years. In order to reduce dependency on imports to serve this segment and to increase the Company''s revenue share in this segment, RHIM completed the acquisition of the Indian refractory business of Dalmia Bharat Refractories Limited (“DBRL”), housing refractories business of Dalmia Bharat Group recently (details given elsewhere in this report) which has a well-diversified product and end-industry mix.

The Company has historically catered to its customers in and outside India through its own facilities, with certain additional customers outside India catered to through facilities operated by the larger RHI Magnesita Group. The revenue streams comprise (i) sales in India of products made by the Company, (ii) sales outside India of products made by the Company, (iii) sales in India of imported products made by other entities of the global RHI Magnesita group, and (iv) services provided by the Company to the larger RHI Magnesita Group. RHIM has a strong focus on R&D with a world-class R&D centre operational in Bhiwadi which benefits from the global R&D and technical expertise and experience of its parent company. As the customers'' requirements and specifications can vary across their facilities, the RHIM R&D is focused on customization of products and services as per customer need, with ongoing innovation and refinement.

As on date, the Company owned and operated 9 (nine) production facilities in India (including its subsidiaries), with an aggregate refractory production capacity of 537 KTPA (approx). These advanced manufacturing facilities are strategically located in Bhiwadi (Rajasthan), Visakhapatnam (Andhra Pradesh), Rajgangpur (Odisha), Khambhalia (Gujarat), Dalmiapuram (Tamil Nadu), Jamshedpur (Jharkhand), Bhilai (Chhattisgarh), Katni (Madhya Pradesh) and Cuttack (Odisha). Additionally, RHIM through its subsidiary Intermetal Engineers (India) Private Limited, operates a plant in Mumbai that manufactures metallurgical equipment.

The Company is committed to sustainable manufacturing practices, aligning with the global RHI Magnesita group''s approach. With a focus on reducing the environmental impact of its operations, the global RHI Magnesita group strives for net-zero emissions, invests in new technologies, increases recycling, improves energy efficiency, switches to greener fuels, and utilizes green electricity. RHIM aims to leverage the Group''s investments in these areas and further develop processes that reduce CO2 emissions in refractory production.

Strengths

RHIM demonstrates several key strengths that establish the

Company as a trusted leader in the refractory industry and position

it to seize opportunities in the rapidly growing Indian market:

a. Trusted brand and strong operational platform postmerger: RHIM benefits from the esteemed brand reputation, industry relationships, and technical expertise of the global RHI Magnesita group, the global leader in refractories with a remarkable 189-year track record and a presence in over 125 countries. Leveraging the resources of the global RHI Magnesita group, RHIM has established a robust operational platform that enables efficient and effective service delivery to customers.

b. Leading player in the fast-growing Indian refractory market: Following the integration of three Indian subsidiaries of the global RHI Magnesita group, and subsequent acquisition of two leading refractory companies in India recently, RHIM has solidified its position as a leading manufacturer and supplier of high-grade refractory products and solutions in India. With an expanded manufacturing capacity and a diverse customer base spanning industries such as steel, cement and lime, non-ferrous metals, and glass, RHIM is well-positioned to capitalize on the substantial growth opportunities within the Indian refractory market.

c. Comprehensive portfolio of products and heat management solutions: RHIM''s business model sets it apart with a wide range of refractory products and services catering to major customer industries in India. Unlike competitors who specialize in specific product ranges or customer segments, RHIM offers a comprehensive “one-stop-solution" for refractory products and solutions. The Company''s capabilities extend from innovation and Research and Development (R&D) to raw material recycling, production, marketing, installation, and monitoring. This comprehensive portfolio enables RHIM to capture various touchpoints in the refractory value chain and foster longterm customer relationships.

d. Strong R&D capabilities: R&D is a key focus for RHIM as it strives to develop optimized and tailored products and solutions to meet the diverse requirements of its customers. Leveraging the global R&D expertise and technical experience of the global RHI Magnesita group, RHIM''s R&D activities are primarily conducted at its dedicated center in Bhiwadi, Rajasthan. These efforts encompass the customization of refractory products and the exploration of innovative technologies. Through ongoing R&D initiatives, RHIM aims to enhance customer satisfaction, drive product quality improvements, and maintain a competitive edge in the market.

e. Extensive manufacturing capacity with a focus on sustainability: The 9 (nine) refractory manufacturing facilities strategically placed across the key steel and cement producing markets in India, RHIM now has the widest refractory production footprint in the country.

The facilities boast state-of-the-art machinery and employ modern automation technologies to ensure the production of high-quality refractories. The Company also demonstrates its commitment to sustainable manufacturing practices, aligning with the global RHI Magnesita group''s vision of achieving net-zero emissions. By investing in new technologies, increasing recycling efforts, improving energy efficiency, and adopting environmentally friendly practices, RHIM aims to reduce its environmental impact while maintaining operational excellence.

In conclusion, RHIM''s strengths in brand reputation, operational platform, market positioning, product portfolio, R&D capabilities, and manufacturing capacity solidify its position as a trusted leader in the refractory industry. With a strong foothold in the fast-growing Indian market and a commitment to innovation and sustainability.

Strategic Initiatives

a. Deriving synergies from the Acquisitions: RHIM aims to leverage the acquisitions of Indian refractory business of DBRL and the refractory business of Hi-Tech Chemicals (details given elsewhere in this report) to create longterm value for its stakeholders. By combining the acquired businesses'' local expertise with the support of the global RHI Magnesita group, RHIM seeks to optimize manufacturing operations, reduce import-related expenses, and expand its product range. Cross-selling and upselling opportunities will be pursued to enhance market share in both domestic and export markets.

b. Expanding and upgrading manufacturing capacities:

The Company plans to improve its local manufacturing capabilities to efficiently meet the growing demand from existing and new customers. This involves achieving operations excellence, productivity and performance improvement of the manufacturing capacities at existing facilities and newly acquired plants. Automation initiatives are underway to improve efficiency, and facility-specific upgrades will be implemented based on ongoing assessments. The goal is to streamline production processes and align manufacturing practices with those of the global RHI Magnesita group.

c. Leveraging existing R&D capabilities: RHIM India will continue to focus on Research and Development to customize products and meet customer requirements effectively. The Company will continue to leverage the R&D capabilities of the global RHI Magnesita group to facilitate technology transfers and develop high-grade products in India. With growing demand from the Steel customers for green steel production, RHIM would increase its attention towards increasing its share of production and sale of recycling as well as develop more carbon efficient products locally.

d. Growing the solutions contract business: The Company aims to expand its solutions contract business, focusing on increasing the proportion of revenue derived from services.

The Company plans to provide a comprehensive range of refractory products and services as a “one-stop-solution" to various industries. Through targeted marketing and business development activities, RHIM aims to deepen collaboration between the technical marketing team and the sales team to showcase the full range of capabilities to potential customers for transitioning to full line solution contracts.

e. New business development: With the recent acquisitions, opportunities in some of the less leveraged industry segments have opened up. This includes Iron Making and Direct Reduced Iron (DRI). A dedicated sales and technical experts'' team is being built from the existing resources to focus on developing the Company''s business in these promising segments.

By implementing these strategic initiatives, RHIM intends to strengthen its position as a leading player in the Indian refractory market, seize growth opportunities, and deliver long-term value to its stakeholders.

Opportunities & Threats

RHI Magnesita India possesses several compelling opportunities for growth:

a. Strong global presence: The Company holds a prominent position in its sector both domestically and globally, establishing a robust global presence that enhances its competitive advantage.

b. Diversified product portfolio: RHIM India, particularly after the integration of the Indian refractory business of DBRL and the refractory business of Hi-Tech Chemicals, boasts a diverse range of products, enabling it to cater effectively to a wide array of end applications. This versatility enhances the company''s ability to meet the specific needs of various industries.

c. Favourable domestic industry growth: Overall the user industries in the domestic market, such as steel and cement, are experiencing substantial growth. This positive trend creates a conducive environment for RHIM to capitalize on the increasing demand for refractory products, positioning the Company for expanded market share and enhanced profitability.

d. Synergies from inorganic expansion: The Company has pursued inorganic expansion initiatives, which are anticipated to yield synergistic benefits. By leveraging strategic acquisitions and partnerships, RHIM can drive overall growth and unlock new business development opportunities.

The Company faces certain significant threats that require careful consideration:

a. Competition from global players: The Company operates in a highly competitive market and faces competition from other established global refractory players. Maintaining market share and profitability may be challenging in the face of aggressive competition, requiring the Company to continuously innovate and differentiate itself.

b. Integration Challenges with Recent Acquisitions: The

successful integration of recent acquisitions is crucial for RHIM India''s growth and operational efficiency. Any difficulties in integrating these acquisitions could impede the realization of synergies and potentially hinder overall performance.

c. Unfavourable macroeconomic and policy changes:

The business environment is subject to macroeconomic fluctuations and changes in policies that can impact the refractory industry. Unforeseen economic downturns, shifts in government regulations, or geopolitical instability could pose risks and disrupt business operations.

d. Volatility in raw material prices: RHIM relies on raw materials like magnesite and alumina, the prices of which can be volatile. Fluctuations in raw material prices can impact the Company''s cost structure, profitability, and pricing competitiveness.

RHIM proactively monitors and strategizes to mitigate risks and maintain a competitive edge in the refractory market.

End User Industry: Overview and Outlook

Refractory products play a critical role in modern industrial high-temperature manufacturing processes, enabling equipment and fixtures such as steel ladles and furnaces, cement rotary kilns, copper converters, and glass furnaces to withstand extreme thermal, mechanical, and chemical stress, ensuring efficient and reliable operations.

Though, refractory products manufactured by RHIM find primary application in high-temperature manufacturing processes within industries such as iron and steel, non-ferrous metals, cement, glass, petrochemicals, energy etc., the demand for refractories is very closely linked to the production of steel and cement.

About 8-10 kg of refractories is used to manufacture one tonne of steel and nearly 0.3-0.6 kg is used for producing one tonne of cement.

In India, refractory consumption in the steel and cement industries has increased with consistent and robust growth in production due to the Make-in-India initiative. Also, the government''s support for products through Atmanirbhar Bharat has boosted production across various industries. Demand for refractories from Steel industry constitutes 70% during the FY 2022-23 as per a CRISIL research. Steel industry is going to remain the key user, with its share increasing 1-2% in fiscal

Steel Industry Overview Global Steel Industry

2028 over fiscal 2022. The share of refractories across end-use industries will not move very differently in fiscal 2028 over fiscals 2022-23. Since steel production will grow at a robust pace in both the domestic and international markets, more refractories will be needed.

The global steel market reached a value of US$ 907 billion in calendar year (“CY”) 2022. The market is predicted to reach a value of US$ 1,077 billion (Source: IMARC) by CY 2028, exhibiting a growth rate (CAGR) of 2.8% during 2023-28. The world crude steel production reached 1,885 million tonnes (mt) in CY 2022 (Source: World Steel).

China remained world''s largest crude steel producer (1,018 mt) followed by India (125.3 mt), Japan (89.2 mt) and the US (80.5 mt), based on rankings released by the World Steel Association in CY 2022. Per capita finished steel consumption in CY 2022 was 221.8 kg for world and 645.8 kg for China. China has been a leader in this industry for quite a long time now, but India has the potential to emerge as a leading global leader with the right strategy and action plan.

Indian steel industry

India is currently the world''s second largest producer of crude steel. The country produced 125.3 million tonnes of crude steel in CY 2022 as against 118.2 million tonnes the previous year. This was mainly fueled by demand from the manufacturing and construction sectors. The government''s support through the Production Linked Incentive (“PLI”) scheme, which has a budget of US$ 847 million, is encouraging planned capacity expansion and the construction of specialty steel capacity. Capacity for domestic crude steel expanded from 142.24 million tonnes per annum (MTPA) in 2018 to 157.58 MTPA in 2022. CRISIL MI&A Research expects net capacity addition of 57-60 MT in next 5-6 years, owing to healthy profitability and debt reduction in the past two fiscals. The share of large players is expected to rise to 67% in fiscal year 2028 from 62% in fiscal year 2022, driven by increased capex on healthy profitability and strong revenue. Ramp-up of acquired assets will also help expand capacities. Production of total finished steel stood at 118.71 MT showing a growth of 6.0% over the year. India was a net exporter of total finished steel. The financial year saw a rally in prices because of higher exports. To improve domestic supply and correct prices, the government imposed an export duty of 15% on steel products in May 2022. Resultantly, exports fell ~50% on-year over April-November 2022. In addition to lower prices, high raw material prices put pressure on margins. In mid-November 2022, the government rolled back the duty.

Multiple factors like the government''s PLI scheme, the ongoing consolidation of the steel industry, implementation of the PM Gati Shakti Yojna. PM Awas Yojana, emergence of the EV market in automobile segment, and the larger infrastructure push by the government through National Infrastructure Pipeline etc. would propel the steel industry growth. The crude steel production is estimated to grow at a CAGR of 6-6.5%.

Indian Cement Industry Overview

In the medium term, capex towards key infrastructure projects such as construction of the remaining stretch of the 25,000 KM (approx.) under the Bharatmala Pariyojana, the government''s target to double the existing metro length, increase the number of airports from 140 to 220 by 2025, and implementation of five river-linking projects will drive healthy cement demand growth in the infrastructure segment. Hence, infrastructure and rural housing (given continued concretization of kutcha houses) will be the key growth drivers.

CRISIL MI&A Research expects cement production to clock a CAGR of 6-7% over fiscal years 2023-28 against a CAGR of 5-6% from over fiscal years 2018-22. Therefore, with the incitement of government''s vision to make India a $5 trillion economy in the next 5 years, the spending on better infrastructure will require more cement production. Furthermore, demand from urban and rural housing, additional capacity plans by large players, PLI implementation, and other schemes will support the increase of cement production in India.

Refractory Industry Overview Global Refractory Industry

The global refractory industry is estimated to have been worth US$ 22-23 billion in 2022. Significant investment has been made in the construction of residential and commercial structures because of increasing urbanization and industrialization, particularly in emerging economies such as China and India. Expansion of the automotive sector in emerging countries has been aided by that country''s increasing need for transport and ongoing road and rail construction. The iron, steel and cement sectors has also grown as a result. With increase in construction activities, demand for the glass industry increased, which eventually had driven the demand for the refractory industry.

Globally, the refractories market size is likely to attain a CAGR of 3.4% by value and is projected to reach US$ 27.4 billion by the end of 2025. Some of the key driving factors for refractories and a boost for refractory product suppliers lie mainly in the evergrowing demand from the iron and steel industry.

Indian Refractory Industry

As per previous market trends, the demand growth for refractories fluctuated from fiscal years 2018-22. Demand for refractories grew at 19% on-year in fiscal year 2020 to approximately 1.4

million tonnes. However, the domestic demand for refractories declined during the pandemic due to difficulty in imports of finished products and challenges in procurement of raw materials. At present, India''s total refractory market is estimated at Rs. 15,000 crore in fiscal year 2022 as per market estimates. Demand for the domestic refractory industry is at approximately 1.5 million tonnes, with a growth rate of approximately 15% on-year in fiscal year 2022. This is due to an increase in the imports of refractories and greater consumption of indigenous production by end-use industries. The sudden hike in the demand growth rate clearly indicates that the industry has overcome the COVID-19 pandemic-era challenges and that businesses have returned to pre-COVID-19 performance.

As per CRISIL research, Indian refractory industry demand to grow at 5.5-6% CAGR in the medium term from fiscal years 2022-28. The increased production of end-use industries of refractories will positively impact demand. Refractories'' demand is estimated to reach approximately 2.1 million tonnes in fiscal year 2028. The growth in demand will be backed by India''s vision of becoming a US$ 5 trillion economy by fiscal year 2027-28 and a US$ 7 trillion economy by 2030. This is boosting the infrastructure, building and construction and automotive industries, which are the key consumers of the end users of

refractories. These industries have started increasing capacities and production to cope with demand as elaborated above.

Outlook

As evident from the above, the refractory industry is poised to grow well over the foreseeable future, on the back of various end sectors such as steel, cement and glass, among others. Factors such as the government''s vision to reach a US$ 7 trillion economy by fiscal year 2030 along with 300 million tonnes of steel production by 2030 and Atmanirbhar Bharat initiatives, are spurring economic and infrastructure development in India. This bodes well for demand for refractory products.

To cater to the expected rise in demand, RHIM is complementing its organic growth with inorganic growth initiatives. The recent acquisitions by the Company not only expand the Company''s production capacity but also diversify its product portfolio, thereby enabling it to cater to more end applications.

The Indian refractory business of DBRL which was transferred to RHI Magnesita India Refractories Limited (formerly known as Dalmia OCL Limited), operates with a well-established production footprint in west and south India, positioning the Company strategically to serve these regions effectively. With a strong industrial product offering, it enhances the go-to-market portfolio by providing comprehensive solutions across all segments and industries. The Company anticipates synergistic benefits from cross-selling opportunities, allowing it to leverage its well-established product offerings to drive revenue growth. Moreover, RHI Magnesita India Refractories Limited aims to optimize its cost structure by leveraging fixed cost optimization, resource bundling, and economies of scale, resulting in an improved cost baseline and enhanced profitability.

The acquisition of the refractory business of Hi-Tech Chemicals enables RHIM to augment its flow control production capacities in India, incorporating market-standard low-pressure technologies. This strategic move not only expands RHIM''s product offerings but also creates significant synergies through cross-selling opportunities. Additionally, RHIM expects to achieve cost synergies by optimizing production processes in collaboration with the Bhiwadi plant.

As the synergies from two recently acquired business start contributing to the overall growth and performance of RHIM, the Company will leverage their operational strengths, expand product portfolios, and capitalize on cross-selling opportunities to achieve economies of scale and drive profitability.

By capitalizing on its strong global presence, diversified product portfolio, localization of imported products, favourable domestic industry growth, and anticipated synergies from inorganic expansion, RHI Magnesita India Limited is well-positioned to continue to grow and strengthen its position as the driving force of the Indian refractory industry.

. DIVIDEND

Based on the Company''s performance and other non-financial factors, your directors are pleased to recommend final dividend of '' 2.50/- (250%) per equity share having face value of

'' 1.00/- each for the FY 2022-23. The payment of final dividend is subject to the approval of the members at their ensuing Annual General Meeting (''AGM''). The recommended dividend shall be paid to those shareholders whose name would appear in the Register of Members as on the record date (i.e., 14 September 2023). The dividend distribution will result in cash outgo of on '' 5,162.53/- Lacs.

In view of the changes made under the Income Tax Act, 1961 by the Finance Act, 2020, dividend paid or distributed by the Company shall be taxable in the hands of the shareholders. The Company shall, accordingly, make the payment of dividend after deduction of tax at source.

The dividend pay-out is in accordance with the Company''s dividend distribution policy and the policy is available on the weblink www.rhimagnesitaindia.com/investors/corporate-governance/policies

5. RESERVES

The Board of Directors has decided to retain the entire amount of profits in the statement of profit and loss. For complete details on movement in reserves and surplus during FY 2022-23, please refer the statement of changes in equity and note 9(b) of standalone financial statements for the period under review.

6. ACQUISITIONS AND TAKEOVERS

During the period under review, the Company has made the following acquisitions/takeovers:

A. Acquisition of the refractory business of Hi-Tech Chemicals Limited situated at Jamshedpur, Jharkhand

On 18 October 2022, the Board of Directors of the Company approved the acquisition of the refractory business of HiTech Chemicals Limited by way of a slump sale on a going concern basis for a cash consideration of '' 62,100 Lacs (approx.) through the Business Transfer Agreement (BTA) executed on 18 October 2022.

On 31 January 2023, the Company has completed the acquisition of the refractory business of Hi-Tech Chemicals Limited for a revised cash consideration of '' 87,937.65 Lacs. For more details, please refer note no. 40 of the financial statements.

The acquired business primarily engaged in manufacturing and suppling refractors, isostatically pressed ceramics, slide gate plates and other allied products and has manufacturing facility in Jamshedpur, Jharkhand.

B. Acquisition of Indian refractories business of Dalmia Bharat Refractories Limited

On 19 November 2022, the Company entered into a Share Swap Agreement (''SSA'') with Dalmia Bharat Refractories Limited (“DBRL”), housing refractories business of Dalmia Bharat Group, for acquiring 82,483,642 equity shares, each fully paid up, having a face value of '' 10/- each, representing 100% of the equity share capital of RHI Magnesita India Refractories Limited (formerly known as Dalmia OCL Limited) (“hereinafter referred as RHIM

(Amount in '' Lacs)
Sr. no.	Particulars	Intermetal	RHIM Refractories*	RHIM Seven*
1	Revenue from operation	533.61	20,738.13	2,835.60
2	Profit before tax/(loss)	239.80	(71,634.66)	347.87
3	Profit after tax/(loss)	178.86	(70,227.01)	259.94

Refractories”), at a consideration of '' 1,708 Crores (approx.) to be paid through issue of and in exchange for 27,000,000 fresh equity shares of '' 1/- each of RHI Magnesita India Limited at a premium of '' 631.5029/- i.e. @ '' 632.5029/- per share through preferential allotment alongwith net debt of '' 443 Crores (approx.) held by RHIM Refractories, subject to closing adjustments.

On 5 January 2023, the Company completed the acquisition of 100% shareholding in RHIM Refractories in terms of SSA. The Company has discharged the consideration by way of issuance and allotment of 27,000,000 fresh equity shares of the Company to DBRL at an issue price Rs. 632.5029 per share as per BTA in accordance with Securities and Exchange Board of India (Issue of Share Capital and Disclosure Requirements), Regulation, 2018 (“SEBI ICDR Regulations”). Further, these shares were recorded at a transaction price of Rs. 877.20 which was prevailing at an acquisition date (i.e. 5 January 2023) as per Indian Accounting Standards ( Ind AS) 103.

By virtue of above said SSA, DBRL has also transferred its 51% shareholding of RHI Magnesita Seven Refractories Limited (formerly known as Dalmia Seven Refractories Limited) (“hereinafter referred as RHIM Seven”) to RHIM Refractories. RHIM Seven was a joint venture between DBRL and Seven Refractories GmbH, Vienna.

On 24 July 2023, RHIM Refractories has acquired from Seven Refractories GmbH, Vienna balance 49% equity shares having face value of '' 10/- each of RHIM Seven for consideration amounting to '' 6,184.75 Lacs in terms of the provisions of Share Purchase Agreement dated 21 April 2023, including amendments thereof read with Share Transfer Agreement dated 17 July 2023.

RHIM Refractories owns (A) four plants situated at (a) Dalmiapuram, Tamil Nadu (b) Khambalia, Gujarat (c) Bhilai, Chhattisgarh and (d) Rajgangpur, Orissa and (B) three mines situated at (a) Bauxite mines at Pilidhar, Devbhumi, Dwarka, Gujarat, (b) Quartzite mines at

Chiraipani,Patrapalli, Raigarh, Chhattisgarh and (c) Quartzite mines at Bhikampali, Kapilapur via Panchagon, Jharsuguda, Odisha. As on date, RHIM Refractories is in the process of transferring abovesaid mines in its name. Further RHIM Seven has one plant situated at Katni, Madhya Pradesh.

7. DETAILS OF SUBSIDIARY COMPANIES

As on 31 March 2023, the Company has two subsidiaries i.e. Intermetal Engineers (India) Private Limited (“Intermetal”) and RHIM Refractories (together called as “subsidiaries”) and one step down subsidiary namely RHIM Seven.

RHIM Refractories became wholly owned subsidiary of the Company with effect from 5 January 2023. Post closure of FY ended 31 March 2023, RHIM Refractories has also become the material subsidiary in terms of the provisions of Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''), as may be applicable.

On 5 January 2023, RHIM Refractories holds 51% of paid-up share capital of RHIM Seven, consequently, RHIM Seven becomes the step-down subsidiary of the Company. Further after acquisition of balance 49% of paid-up share capital of RHIM Seven on 24 July 2023, RHIM Seven becomes 100% wholly owned subsidiary of RHIM Refractories.

The Company does not have any associate or joint venture within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”). During the period under review, there has been no material change in the nature of business of the subsidiaries.

The financial statements of the Company including consolidated financial statements along with relevant documents are available on the website of the Company i.e. https://www.rhimagnesitaindia. com/investors/financials-reports/subsidiary-annual-reports.

Financial Performance of Subsidiaries Company

The highlights of financial performance of the subsidiaries for FY 2022-23 are as follows:

* [from 5 January 2023 to 31 March 2023.]

In accordance with Section 129(3) of the Act, a statement containing salient features of financial statements of subsidiaries in Form No. AOC-1 is attached to this report as ANNEXURE-I.

8. SHARE CAPITAL STRUCTURE OF THE COMPANY

The share capital structure of the Company as on 31 March 2023, is given below:

Authorized Share Capital	'' 308,000,000.00/- constituting of 308,000,000 equity shares of '' 1/- each.
Issued, Subscribed and Paid-up Share Capital	'' 187,996,331.00/- constituting of 187,996,331 equity shares of '' 1/- each.

During the period under review, the members of the Company at their 1st Extra Ordinary General Meeting (“EGM”) held on 21 December 2022, approved the issuance of 27,000,000 equity shares having face value of '' 1/- each at an issue price of '' 632.5029/- each amounting to '' 1,708 Crores to DBRL on preferential basis for consideration other than cash. Subsequent to above, the Board of Directors at their meeting held on 5 January 2023 allotted abovesaid equity shares to DBRL. As per the Securities and Exchange Board of India (Issue of Share Capital and Disclosure Requirement) Regulation,2018 (“SEBI ICDR Regulations”) the said equity shares are subject to lock-in up to 31 August 2023.

Furthermore, post end of FY 2022-23, the share capital of the Company was changed in the following phases:

A. The members of the Company in their 2nd EGM held on 13 March 2023 approved the issuance of securities including equity shares having face value of '' 1/- each through qualified institutional placement for an amount not exceeding '' 1,500 Crores. Pursuant to the aforesaid approval of members of the Company, the Fund-Raising Committee of the Board at their meeting held on 6 April 2023 allotted 15,715,034 equity shares of '' 1/- each at an issue price of '' 572.70/- each to 57 qualified institutional buyers aggregating to '' 900 Crores (approx.) .

B. The members of the Company through postal ballot on 1 June 2023 has approved the issuance of 2,790,061 equity shares having face value of '' 1/- each at an issue price of '' 716.83/- each to Dutch US Holding B.V. one of the promoter of the Company on preferential basis for an aggregate amounting '' 200 Crores (approx.). Considering the approval of members of the Company, the Fund-Raising Committee of the Board at their meeting held on 21 June 2023, has allotted 2,790,061 equity shares of '' 1/- each at an issue price of '' 716.83/- each to Dutch US Holding B.V aggregating '' 200 Crores (approx.). As per the SEBI ICDR Regulations the said issued equity shares are subject to lock-in up to 31 March 2025, further prior shareholding of 79,877,771 equity shares of Dutch US Holding B.V. are also locked-in up to 31 December 2023.

Consequent to aforesaid allotments, the revised share capital structure of the Company as on date is follows:

Particulars Change in Share capital post end of FY 2022-23

Issued, Subscribed and Paid-up Share Capital as on 1 '' 187,996,331.00/- constituting of 187,996,331 equity shares of '' 1/- each.

April 2023

Add: Issue & allotment of shares on 6 April 2023 '' 15,715,034.00 /- constituting of 15,715,034 equity shares of '' 1/- each.

Add: Issue & allotment of shares on 21 June 2023 '' 2,790,061.00/- constituting of 2,790,061 equity shares of '' 1/- each.

Issued, Subscribed and Paid-up Share Capital as on '' 206,501,426.00/- constituting of 206,501,426 equity shares of '' 1/- each. date

9. CHANGE OF REGISTERED OFFICE OF THE COMPANY

With effect from 1 April 2022, the registered office of the Company has been shifted to Unit No.705, 7th Floor, Lodha Supremus, Kanjurmarg Village Road, Kanjurmarg (East), Mumbai-400042.

10. INCREASE OF BORROWING LIMIT AND POWER TO CREATE CHARGE ON THE ASSETS OF THE COMPANY

The members of the Company in their 2nd EGM held on 13 March 2023 have accorded their approval pursuant to Section 180 (1) (c) and 180 (1) (a) of the Companies Act, 2013, to increase the borrowing power of the Board and power to create charge on assets of the Company to secure the borrowing upto '' 5,000 Crores respectively.

11. PARTICULARS OF LOAN, GUARANTEE AND INVESTMENT

The members of the Company in their 1st EGM held on 21 December 2022 have accorded their approval as per Section 186 of the Companies Act, 2013 to increase the limits applicable for making investment / extending loan and giving guarantee or

providing security in connection with loans to persons / bodies corporate upto '' 2,500 Crores.

A. Loan & Guarantees:

During the period under review, no loans and advance has been given by the Company or provide security in respect of the loan to any firms/ companies in which directors of the Company are interested.

B. Investments:

On 5 January 2023, the Company had acquired 82,483,642 equity shares of RHIM Refractories having face value of '' 10/- each at an issue price of '' 207/- in terms of the SSA dated 19 November 2022.

Further, on 8 May 2023, the Company has subscribed 16,975,051 equity shares of RHIM Refractories having face value of '' 10/- each at an issue price of '' 207/- aggregating amounting to '' 351 Crores (approx.) on right basis.

Details of loans, guarantees and investments as per Section 186 of the Act, have been disclosed in the financial statements.

12. UTILISATION OF FUNDS

In view of acquisitions and takeover undertaken by the Company during the period under review, as discussed elsewhere in this report, the Company has raised the funds by

(A) Issue of shares through qualified institutional placement of '' 900 Crores (approx.)

The entire funds raised through qualified institutional placement has been utilized during the quarter ended 30 June 2023 for repayment/ prepayment in full or in part of certain outstanding borrowings availed by the Company, investment in one of its Subsidiary i.e. RHIM Refractories and general corporate purposes.

(B) Issue of shares through Preferential allotment of '' 200 Crores (approx.)

During the quarter ended 30 June 2023, no amount was utilized by the Company for the funds raised through preferential allotment as trading approval on the shares allotted under preferential allotment was received on 08 August 2023.

Post which the Company initiated the utilization of funds for the defined objects i.e. (a) Repayment / pre-payment, in full or in part, of certain outstanding borrowings availed by the Company (b) Investment into one of the subsidiaries, i.e. RHIM Refractories and (c) General corporate purposes

There has not been any deviation in the utilization of proceeds of qualified institutional placement and preferential issue from the objects as approved by the shareholders of the Company.

13. STATE OF COMPANY''S AFFAIRS

Details on the state of affairs of the Company has been covered under the Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of Listing Regulations.

14. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Board is ultimately responsible for maintaining effective corporate governance, which includes the company''s risk management approach, the Company''s system of internal controls, and the Company''s internal audit approach. The Board reviews the effectiveness of the system of internal financial, operational, and compliance controls, and the risk management framework. The Board examines whether the system of internal controls operates effectively throughout the year and will make recommendations when appropriate.

The Company has an adequate internal control system in place and also has reasonable assurance on authorizing, recording, and reporting transactions of its operations. The Company has a well-placed, proper, and adequate internal controls environment, commensurate with the size, scale, and complexities of its operations. The Company had already developed and implemented a framework for ensuring internal controls over financial reporting. This framework includes entity-level policies, processes, and operating-level standard operating procedures.

Internal control systems are an integral part of your Company''s corporate governance structure. These have been designed to provide reasonable assurance with regard to inter-alia

(a) recording and providing reliable financial and operational information;

(b) complying with the applicable statutes;

(c) safeguarding assets from unauthorized use;

(d) executing transactions with proper authorization and ensuring compliance with corporate policies;

(e) prevention and detection of frauds/errors and

(f) continuous updating of IT systems.

The Company''s management has assessed the effectiveness of the Company''s internal control over financial reporting as of 31 March 2023.

The Audit Committee reviewed the reports submitted by the Management, Internal Auditors, and Statutory Auditors. Based on their evaluation (as defined in Section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations), the Committee has concluded that, as of 31 March 2023, the Company''s internal financial controls were adequate and operating effectively.

15. HUMAN RESOURCES

For RHIM, employees are its most valuable asset and the Company is committed to the wellbeing and development of its employees. Your Company believes in enhancement of competencies of its employees. Employees are facilitated to participate in various training programs, equal emphasis is given on technical & soft skills. numerous opportunities have been created for the employees to develop.

During recent years, Company''s main focus of in-house trainings was on interpersonal skills, behavioral attributes, customer focused culture, lean implementation and 6''s at shop floor. The dedicated learning and development programmes enhance the right skill sets and relevant knowledge to employees to achieve operational and futuristic benefits. The Company endeavors to keep the employee''s motivation high by providing congenial & respectful work atmosphere and rewarding/remunerating effectively. 100% safety of our employees is one of the important operative targets for RHIM. Various initiatives have been launched to engage employees.

Celebrating festivals and achievements on various occasions is part of RHIM culture. Various activities and programs have been conducted within the organization to create fair and equitable work culture leading to cordial relations between the management and the employees of the Company.

16. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all contracts / arrangements / transactions entered by the Company with related parties were in ordinary course of business and on an arm''s length basis, the

Company has not entered into any contracts /arrangements / transactions with related parties which could be considered material in accordance with the Company''s policy on materiality of related party transactions.

The Board of Directors of the Company has approved the criteria for making the omnibus approval by the Audit Committee within the framework of the policy on related party transactions. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and proposed to be entered in the ordinary course of business and at arm''s length during the financial year. All related party transactions are placed before the Audit Committee for review and approval.

Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC - 2 is not applicable to your Company.

The Company has obtained approval of shareholders, by way of postal ballot for material related party transaction(s) with M/s. RHI Magnesita GmbH, for an amount of '' 100,000 Lacs, for the FY 2021-22 and onwards with yearly increase of 30% every year in the value of such transactions up to the FY 2025-26.

The policy on materiality of related party transactions and dealing with related party transactions can be accessed on the Company''s website at the link: www.rhimagnesitaindia.com/ investors/corporate-governance/policies

Members can also refer note 36 of the financial statements, which set out related party disclosures.

17. CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are carried out in terms of Section 135 read with Schedule VII of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time-to-time.

The Company during the FY 2021-22 voluntarily applied for adjudication of offence in respect of delay in spending the unspent CSR expenditure of '' 135.40 Lacs for the year ended 31 March 2021. A penalty was imposed by the Registrar of Companies, Maharashtra on the Company and its Key Managerial Personnels (KMPs) vide its order dated 31 March 2023 and the same was duly paid. The Company has no outstanding amount due in respect of CSR for any of the previous year including current FY 2022-23.

The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in ANNEXURE-II of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time.

For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which forms a part of this report. The CSR policy is also available on the Company''s website at the link: https://www.rhimagnesitaindia.com/ investors/corporate-governance/policies

18. RISK MANAGEMENT

The Company has an established risk management approach with the provisions of the Companies Act, 2013, and other applicable provisions with the objective of identifying, assessing, and controlling uncertainties and risks that could impact the delivery of RHIM''s strategy. The risk management approach combines top-down, bottom-up, and deep-dive risk assessments. The top-down risk assessment is performed by the management and reviewed by the Audit Committee, Risk Management Committee and the Board of Directors. The bottom-up risk assessment is based on each of the operational sites, which maintain ongoing risk management activity linked to the ISO risk management practices. Deep-dive risk assessments are performed for areas of emerging or prevailing risks, which, in 2022, included capex, plant operations, fraud management, and sustainability, including energy-related risks and opportunities.

Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment.

The risk assessment process includes five steps, which are consistently repeated throughout the year to ensure a continuous risk assessment.

Occupational Safety and Health are considered an integral part of our operations. All statutory legal regulations were compiled as per government norms. The workplace risk assessment of hazards is done after every six months and is reviewed after three months in all the operational plants and extended to the customer sites also. The safety audits were conducted at regular intervals by internal and external agencies. The stage 1 audit for all three standards (ISO 9001, 14001 & 45001) was successfully completed for the Visakhapatnam Unit. The employee involvement in reporting the unsafe conditions and near misses has been excellent. The Global key performance indicators (KPIs) of preventive rate have been successfully achieved. The participation of employees in 6S activities has tremendously changed the work culture and the award of the 6S trophy every month has increased the competitiveness in perfect maintenance of a safe workplace.

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Parmod Sagar (DIN: 06500871) was reappointed as Managing Director and Chief Executive Officer of the Company for a period of five years w.e.f. 4 March 2023 to 3 March 2028. Proposal for reappointment of Mr. Parmod Sagar along with revision in his remuneration was placed before the members post receipt of necessary recommendation from Nomination and Remuneration Committee and Board of Directors in their meeting held on 10 August 2022 and the same was approved by the members in their Annual General Meeting dated 26 September 2022.

Ms. Vijaya Gupta took over as Chief Financial Officer, with effect from 27 May 2022 in place of Mr. Sanjeev Bhardwaj, who has been assigned new roles and responsibilities within the organization. Ms. Vijaya Gupta is having thirty years of work experience and she is rank holder Chartered Accountant and has completed Special Management Program from IIM(C).

Ms. Ticiana Kobel (DIN: 09850411), w.e.f. 5 January 2023, was appointed as non-independent & non-executive additional director of the Company by the Board of Directors at their meeting held on 5 January 2023. In terms of Listing Regulations and Act, her appointment was regularized by the shareholders of the Company at their 2nd EGM held on 13 March 2023 and her office will be liable to retire by rotation.

In accordance with the provisions of the Act and Articles of Association of the Company, Mr. Erwin Jankovits (DIN: 07089589) retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. A resolution seeking shareholders'' approval for his re-appointment alongwith other required details forms part of the Notice of the AGM.

Mr. RVS Rudraraju (DIN: 00425640) tendered his resignation from Directorship of the Company with effect from closure of business hours on 13 February 2023. The Board accepted the resignation and put on record its sincere appreciation for the contributions made by Mr. RVS Rudraraju during his association with the Company as a Director.

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with rules framed thereunder and Regulation 16 of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

The Independent Directors have also submitted the declarations that they have registered their names in the independent directors'' data bank.

No Independent Director was appointed during the period under review.

During the period under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than receipt of sitting fees and reimbursement of expenses, if any.

Pursuant to the provisions of Section 203 of the Act, Mr.

Parmod Sagar, Managing Director and Chief Executive Officer, Mr. Sanjeev Bhardwaj, Chief Financial Officer (upto 27 May 2022), Ms. Vijaya Gupta (w.e.f. 27 May 2022) and Mr. Sanjay Kumar, Company Secretary were KMPs of the Company as on 31 March 2023.

During the year, Mr. RVS Rudraraju — Whole Time Director ceased to be the KMP of the Company with effect from 13 February 2023.

20. POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Company has devised the policy on remuneration and nomination for the selection, appointment and remuneration of the Directors and KMP and also remuneration of other employees who have the capacity and ability to lead the Company towards achieving sustainable development.

Salient features of the Company''s policy on remuneration and nomination are as under:

(A) Appointment of KMP and senior management is subject to the approval of the Nomination and Remuneration Committee and Board of Directors. Remuneration of KMP and senior management is decided by the Managing Director on the recommendation by the Whole Time Directors/Executive Directors concerned, where applicable, broadly based on the Remuneration Policy in respect of Whole Time Directors /Executive Directors. Total remuneration of KMP and senior management comprises of fixed based salary, perquisites, retirement benefit, motivation rewards, bonus and other non-monetary benefits.

(B) Non-Executive Directors are paid remuneration in the form of sitting fees for attending the Board Meetings and committee meetings as fixed by the Board of Directors from time to time subject to statutory provisions. While deciding the remuneration of Managing Director and Executive Directors, the Nomination and Remuneration Committee considers pay and employment conditions in the industry, merit and seniority of the person. The Committee encourage the balance between fixed and variable component in the remuneration which are based on the performance to achieve the Company''s target. The term of office and remuneration of whole time directors are subject to approval of the Board of Directors, shareholders and the limit laid down under the Companies Act,2013 from time to time.

The Nomination and Remuneration Policy of the Company is available on the Company''s website and can be accessed on the Company''s website at the link www.rhimagnesitaindia.com/ investors/corporate-governance/policies

21. DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, the work performed by the Internal Auditors, Statutory Auditors and Secretarial Auditors, including the Audit of Internal

Financial Controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the FY 2022-23.

Pursuant to Section 134(5) of the Act, the Directors confirm that:

a. in preparation of the annual accounts for the financial year ended 31 March 2023, the applicable Accounting Standards have been followed and there were no material departures;

b. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31 March 2023, and of the profit of the Company for that period;

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

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

22. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and Listing Regulations. The performance of the board was evaluated by the Board of Directors after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5 January 2017.

In a separate meeting of Independent Directors held on 13 February 2023 performance of Non-Independent Directors, the Board as a whole and Chairman of the Company was evaluated, taking into account the views of Executive Directors and NonExecutive Directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues

to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

At the Board Meeting that followed the meeting of the I ndependent Directors and meeting of Nomination and Remuneration Committee, the performance of the Board, its Committees, and individual directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

23. AUDITORS AND AUDIT REPORT

A. Statutory Auditors

At the 12th AGM of the Company held on 26 September 2022, M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016) were reappointed as Statutory Auditors to hold office for a period of 5 (five) consecutive years till the conclusion of 17th Annual General Meeting to be held in the year 2027.

The Auditor''s Report for the FY 2022-23 does not contain any qualification, reservation or adverse remark. The Auditor''s Report is enclosed with the Financial Statements in this Annual Report.

B. Secretarial Auditor

The Board has appointed M/s. Naresh Verma & Associates, Company Secretaries, to conduct Secretarial Audit for the FY 2022-23. The Secretarial Audit Report for the financial year ended 31 March 2023, is appended as ANNEXURE -III to this report.

The observations of the Secretarial Auditor in their report are self-explanatory and therefore, the Directors do not have any further comments to offer on the same.

Further, as required under Section 204 of the Act and rules thereunder, the Board has appointed M/s. Naresh Verma & Associates, Company Secretaries, to also conduct the Secretarial Audit for the FY 2023-24.

C. Cost Auditors

The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s. K. G. Goyal & Associates, Cost Accountants, (Firm Registration No.: 00024) as Cost Auditors to audit the cost accounts of the Company for the FY 2023-24. As required under the Act, a resolution seeking shareholders'' approval for the remuneration payable to the Cost Auditors forms part of the Notice convening the 13th AGM.

In accordance with the provisions of Section 148(1) of the Act, read with the Companies (Cost Records & Audit) Rules, 2014, the Company has maintained cost records.

The Cost Audit report for the FY 2021-22 was filed with the Ministry of Corporate Affairs on 6 September 2022.

D. Internal Auditors

The Board has appointed M/s. Chaturvedi & Partners as Internal Auditors for the FY 2022-23 under Section 138 of

the Companies Act, 2013 and they have completed the internal audit as per the scope defined by the Board. M/s. Chaturvedi & Partners was re-appointed as Internal Auditors of the Company for FY 2023-24.

E. Reporting of fraud by auditors

During the year under review, the Auditors of the Company have not reported any material fraud as specified under Section 143(12) of the Act to the Audit Committee.

24. EXPORT HOUSE STATUS

The Company enjoys the status of “One Star Export House”.

25. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business of your Company during the year under review.

26. DISCLOSURES

A. Vigil Mechanism /Whistle Blower Policy

Pursuant to the provisions of Section 177(9) of the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations and in accordance with the requirements of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors had approved the Policy on Vigil Mechanism/Whistle Blower and the same has been hosted on the website of the Company. Over the years, the Company has established a reputation for doing business with integrity and displays zero tolerance for any form of unethical behaviour. The mechanism under the Policy has been appropriately communicated within and outside the organisation. This Policy inter-alia provides direct access to the Chairperson of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee.

The Company reached out to employees through physical/virtual sessions with an aim of creating greater awareness on this subject. During the year under review, the Company has received 5 (five) complaints under the said mechanism, the details of which is tabulated below:

Number of complaints received during the year	Number of complaints resolved during the year	Number of complaints remaining unresolved/ undergoing investigation as on 31 March 2023
5	4	1

The Whistle Blower Policy of the Company has been displayed on the Company''s website at the link: www.rhimagnesitaindia.com/ investors/corporate-governance/policies

B. Audit Committee

The composition of the Audit Committee has been given in Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

C. Number of Board Meeting

The Board of Directors of the Company met Eight (8) times in the year, the details of which are provided in the Corporate Governance Report.

D. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

The particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo, as required to be disclosed under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 are provided in ANNEXURE - IV.

E. Annual Return

The Annual Return for the FY 2022-23 is available on Company''s website at https://www.rhimagnesitaindia. com/investors/financials-reports/annual-returns

F. Particulars of employees and related disclosures

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as ANNEXURE - V.

G. Corporate Governance Report

The Company has been practicing the principles of good corporate governance over the years. A separate section on corporate governance and a certificate from the Practicing Company Secretary regarding compliance with the conditions of corporate governance as stipulated under the Listing Regulations forms part of this Annual Report. The Managing Director & CEO and the Chief Financial Officer of the Company have certified to the Board on financial statements and other matters in accordance with Regulation 17 (8) of the Listing Regulations pertaining to CEO/CFO certification for the financial year ended 31 March 2023. Report on Corporate Governance is annexed herewith as ANNEXURE - VI to this report.

H. Business Responsibility and Sustainability Report

In accordance with the Listing Regulations, the Business

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Issue of shares (including sweat equity shares) and Employee Stock Option Scheme of the Company under any scheme.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern and Company''s operation in future

- Details of difference between amount of valuation done at the time of one time settlement and the valuation done while taking loan from banks or financial institutions alongwith the reasons thereof.

- No application has been made or no proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the year or at the end of FY 2022-23.

27. CAUTIONARY STATEMENTS

Certain statements in the “Management Discussion and Analysis” describing the Company''s views about the industry, expectations/ predictions, objectives etc., may be forward looking within the meaning of applicable laws and regulations.

Actual results may differ materially from those expressed in the Statement. Company''s operations may inter-alia affect with the supply and demand stipulations, input prices and their availability, changes in Government regulations, taxes, exchange fluctuations and other factors such as Industrial relations and economic developments etc. Investors should bear the above in mind.

28. ACKNOWLEDGEMENTS AND APPRECIATION

Your Directors place on record their deep appreciation to the customers, shareholders, suppliers, bankers, business partners/ associates, Central & State Governments and Governments of various countries where we have our operations for their consistent support and encouragement to the Company. I am sure you will join our Directors in conveying our sincere appreciation to all employees of the Company and its subsidiaries for their hard work and commitment. Their dedication and competence have ensured that the Company continues to be a significant and leading player in the refractory industry.

On behalf of the Board of Directors

Dr. Vijay Sharma

Chairman

Gurugram, 10 August 2023 (DIN:00880113)

Responsibility and Sustainability Report (BRSR) forms a part of this Annual Report as ANNEXURE - VII describing the initiatives undertaken by the Company from an environmental, social and governance perspective during the year under review.

I. Transfer of amounts to Investor Education and Protection Fund

Details regarding transfer of amount & shares to IEPF has been given in Corporate Governance Report.

J. Obligation of the Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition, and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the Rules made thereunder. All women associated (permanent, temporary, contractual and trainees) as well as any women visiting the Company''s office premises or women service providers are covered under this Policy.

During the year, the Internal Complaints Committee of the Company constituted under the POSH Act has received One (1) complaint, which was after investigation resolved and as on 31 March 2023 no complaint was pending or unresolved. Further, the Company reached out on rotation basis to all the employees through awareness sessions for creating greater awareness with respect to the Company''s Policy on Sexual Harassment at workplace. During the year under review, a video-based training on POSH awareness was rolled out to all the employees to create greater awareness on this subject.

The policy may be accessed on the Company''s website at the link: www.rhimagnesitaindia.com/investors/corporate-governance/policies

K. Compliance with the Institute of Company Secretaries of India (“ICSI") Secretarial Standards

The relevant Secretarial Standards issued by the ICSI related to the Board Meetings and General Meeting have been complied with by the Company.

L. No disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review:

- Details relating to deposit and unclaimed deposits or interest thereon.

1

The Company consolidated its financial statements with RHI Magnesita India Refractories Limited (formerly known as Dalmia OCL Limited) and RHI Magnesita Seven Refractories Limited (formerly known as Dalmia Seven Refractories Limited) for the first time. The financial information of these companies has been considered in the consolidated financial statements with effect from 5 January 2023 (“date of acquisition") to 31 March 2023 while financial information of Intermetal Engineers (India) Private Limited has been considered for the entire financial year.

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Mar 31, 2022

Your Directors'' present the 12^th Annual Report of RHI Magnesita India Limited (formerly known as Orient Refractories Limited) (“the Company” or “RHIM”) along with the Company''s audited standalone & consolidated financial statements for the financial year (“FY”) ended 31 March 2022.

1. FINANCIAL RESULTS

(Amount in '' Lacs)
Particulars	Standalone		Consolidated
	2021-22	2020-21	2021-22	2020-21
Gross revenue from operations	199,070.53	136,641.31	199,514.27	137,037.86
Total expenditure before finance cost and depreciation	160,818.03	115,864.22	161,131.84	116,184.50
Operating Profit	38,252.50	20,777.09	38,382.43	20,853.36
Add: Other income	938.74	1,203.56	966.20	1,232.39
Profit before finance cost, depreciation, exceptional items and taxes	39,191.24	21,980.65	39,348.63	22,085.75
Less: Finance costs	217.89	648.31	217.89	648.31
Profit before depreciation, exceptional items and taxes	38,973.35	21,332.34	39,130.74	21,437.44
Less: Depreciation	3,363.48	2,961.33	3,382.52	2,979.48
Profit/(Loss) before exceptional items & tax	35,609.87	18,371.01	35,748.22	18,457.96
Add/(Less): Exceptional Items	-	-	-	-
Profit before taxes	35,609.87	18,371.01	35,748.22	18,457.96
Less: Tax Expense	8,817.55	4,775.55	8,847.78	4,795.63
Profit/(Loss) after taxes (A)	26,792.32	13,595.46	26,900.44	13,662.33
Total other comprehensive income (B)	(100.60)	7.26	(101.36)	7.26
Total comprehensive income for the period (C=A B)	26,691.72	13,602.72	26,799.08	13,669.59
Retained Earnings: Balance brought forward from the	62,298.05	52,116.49	62,326.40	52,077.97
previous year
Add: Profit for the period	26,792.32	13,595.46	26,900.44	13,662.33
Add: Other Comprehensive Income recognised in Retained Earnings	(100.60)	7.26	(101.36)	7.26
Less: Transaction costs (stamp duty) on issue of shares, net of tax	479.67	-	479.67	-
Balance Which the Directors have apportioned as under to:
Dividend on Ordinary Shares	4,024.91	3,421.16	4,024.91	3,421.16
Total Appropriations	4,024.91	3,421.16	4,024.91	3,421.16
Retained Earnings: Balance to be carried forward	84,485.19	62,298.05	84,620.90	62,326.40

2. FINANCIAL PERFORMANCE/ STATE OF COMPANY AFFAIRS

Standalone Revenue from operation has been increased from '' 136,641.31 Lacs in previous year to '' 199,070.53 Lacs in current year. Profit after tax (PAT) on revenue increased from '' 13,595.46 Lacs to '' 26,792.32 Lacs. In current year the PAT was 13.46% which is higher as compared to 9.95% previous year.

3. RESERVES

The Board of Directors has decided to retain the entire amount of profits in the statement of profit and loss. For complete details on movement in reserves and surplus during FY 2021-22, please refer the statement of changes in equity and note 9 (b) of standalone financial statements.

4. AMALGAMATION OF RHI INDIA PRIVATE LIMITED AND RHI CLASIL PRIVATE LIMITED WITH AND INTO THE COMPANY

On 31 July 2018 the Board of Directors of the Company and its fellow subsidiaries i.e. RHI India Private Limited (the ''RHI India'') and RHI Clasil Private Limited (the ''RHI Clasil'') (hereinafter referred as ''erstwhile fellow subsidiaries''), had granted inprinciple approval to the scheme of amalgamation of RHI India and RHI Clasil with and into the Company with the proposed appointed date as 1 January 2019 or such other date as may be fixed by the Tribunal (''the Scheme'').

The Hon''ble National Company Law Tribunal, Mumbai Bench, Mumbai (''NCLT'') vide its order dated 5 May 2021 has approved the Scheme with an appointed date of 31 July 2018.

5. CHANGE IN SHARE CAPITAL OF THE COMPANY

Pursuant to the Scheme becoming effective, the authorised share capital of the Company has been increased from '' 1,205 Lacs to '' 3,080 Lacs and on 25 June 2021, 40,857,131 equity shares of Re. 1/- each fully paid up have been issued and allotted to the shareholders of the erstwhile fellow subsidiaries and the same were got listed on BSE Limited and National Stock Exchange of India Limited on 26 November 2021.

After the aforesaid allotment, paid up share capital of the Company has been increased from '' 1,201.39 Lacs to '' 1,609.96 Lacs.

6. CHANGE OF NAME OF THE COMPANY

In terms of scheme of amalgamation, the Board of Directors at their meeting held on 11 June 2021 approved to change name of the Company from Orient Refractories Limited to RHI Magnesita India Limited. The Registrar of Companies, Mumbai, Maharashtra gave its approval and issued new certificate of incorporation on 2 July 2021.

The shares of the Company have commenced trading on BSE Limited and National Stock Exchange of India Limited with the new name “RHI Magnesita India Limited” with scrip code “RHIM” with effect from 22 July 2021.

7. CHANGE OF REGISTERED OFFICE OF THE COMPANY

With effect from 1 April 2022, the registered office of the Company has been shifted to Unit No.705, 7th Floor, Lodha Supremus, Kanjurmarg Village Road, Kanjurmarg (East), Mumbai-400042.

8. MANAGEMENT DISCUSSION AND ANALYSIS

RHI Magnesita India Limited (“Company or “RHIM”) is in the business of manufacturing and marketing special, basic and non- basic refractory products, systems and services to the steel industry in India and Globally. The Company is market leader for refractories in India and has many global customers for its international quality products. The Company produces nearly 1,40,000 tons of refractory per annum including customized products. Other than this RHIM imports significant value of

refractory products which are used for full line service contracts in steel industries.

The refractory products are mainly used in high temperature manufacturing processes in iron and steel industry, metal smelters, cement, glass industry and for other industrial products. Demand for refractory is primarily dependent on the consumption of steel, which accounts for about 75% of the total value of sales and the remaining is used for glass, cement, nonferrous, petrochemicals etc.

Products of RHIM are manufactured at its state-of-the-art manufacturing facility at Bhiwadi, in Rajasthan; Tangi (Cuttack) in Orissa and Vishakhapatnam in Andhra Pradesh. The Company has ongoing programs for improving efficiency of its manufacturing processes, raw material optimization, inventory management systems, stringent quality control, supply-chain integration, digitization & automation, energy efficiency and CO2 emission reduction measures to produce and efficiently supply world class refractory products in sustainable manner to maximise customer value creation. While the Company continuously improve its operational deliveries, best in class safety measures and processes have been put in place and improved upon at the factories and all working sites.

The products of the Company are of global standards in quality and highly cost competitive, which makes it attractive for the customers worldwide. In November''2021, the Group opened a new world-class R&D Centre in India to facilitate a greater understanding of local markets and enable more unified technological know exchange with the Global R&D network of the parent company. Focus areas will be local raw material development, solutions support for customer performance improvement projects and supporting local manufacturing in the three plants.

Impact of COVID-19 on Steel Sector:

In May''2021, COVID-19 second wave has affected most part of the India and cases went up to 4,00,000 plus in May''2021 end. In the first quarter of financial year (“FY”) 2021-22, steel production was affected due to manpower issues as well as restriction imposed by the Government on mobility of vehicles. Later on, from second quarter of FY 2021-22 there was down trend in Covid-19 cases, and the business recovered thereafter. The situation improved in October''2021-November''2021, there was some respite in cases and cases came down significantly. There was upswing in demand for the Steel makers in the subsequent quarters post-COVID19 primarily led by surge in demand in the export markets and revival of domestic infrastructure sector, while it continued to face the pressure of higher input costs.

Global Steel industry

World steel demand grew by 2.7% in Calendar Year (“CY”) 2021 to reach 1,833 million (“mn”) tonnes due to pent-up demand driven by heavy financial stimulus announced in several countries post the first wave of Covid-19 pandemic. All the leading steel producers i.e., India (19% year-on-year growth), USA (21%), Japan (9%) and South Korea (13.5%) witnessed strong growth in steel demand in CY 2021 except China.

Chinese steel demand declined by 5.4% in CY 2021 to 952 mn tonnes due to sharp de-growth in second half as the real estate market weakened due to tough government measures on developers'' financing. Chinese steel demand is expected to be muted in CY 2022 due to limitations caused by environmental issues, pandemic, and carbon footprint concerns. World Steel Association (WSA) expects Chinese steel demand to remain flattish in CY 2022.

The global steel industry underwent structural changes in FY 2021-22 due to the COVID-19 pandemic followed by geopolitical tensions and inflationary economic environment limiting steel demand growth and changing supply demand dynamics across steel markets. Steel demand rebounded in first quarter of FY 2020-21 post infusion of heavy financial stimulus by several economies supported by massive vaccination drives conducted across the world. Indian steel sector saw a relatively strong rebound fueled by diversion of steel production to exports especially to Europe. However, second wave of pandemic led to further disruptions of supply chain. Surge in sea freight cost led to inflationary environment across the World. In May''2021, China revoked VAT rebate on exports of 146 steel products along with lifting of import duties on steel making raw materials to limit steel exports and divert production for domestic consumption. There were several instances when China announced production cuts to control pollution and to manage carbons emission targets. All this created opportunity for steel companies in emerging market to increase exports.

Impact of Russia-Ukraine war on global steel trade

Russia and Ukraine exported 31mn tonnes and 15mn tonnes of finished steel respectively in CY 2021(~10% of global steel trade) with major pie of exports flowing to European countries (~15mntonnes) followed by Turkey, Middle East, USA, etc. The impact of Russia-Ukraine war is huge on European Union (EU) countries due to their close trade relations and dependency for energy requirements from Russia. This has delayed the recovery of manufacturing sector in EU which was already impacted by semiconductor shortage in turn also affecting the automobile industry. Therefore, steel demand in EU countries is expected to de-grow by 1.3% (WSA forecast) in CY 2022. EU''s trade sanction on Russia has further created a global supply deficit which has led to new avenues of exports for developing economies like India. Cost of raw materials like iron ore and coking coal also surged to all-time highs due to short supply and trade disruptions. As a result, steel prices have exponentially risen by at least 60% across geographies as compared to pre-war prices. World steel demand is expected to grow by a mere 0.4% in CY 2022 to 1,840 mn tonnes (WSA forecast).

India Steel Industry performance in FY 2021-22

India''s crude steel production grew 18% yoy to 120.10 mn tonnes in FY 2021-22. Although, large amount of industrial oxygen had to be diverted for medical care of Covid patients which in turn impacted steel production in first quarter of FY 2021-22, production levels recovered exponentially from second quarter of FY 2021-22 due to robust demand in domestic markets and increase in steel exports. Finished steel production also grew by 19% yoy to 113.30 mn tonnes in FY 2021-22. Finished steel consumption grew 11.2% yoy to 113.25 mn tonnes driven by robust demand from manufacturing and construction sector led by massive spending on infrastructure projects. Flat finished steel grew by 11% yoy to 57.10 mn tonnes and finished long steel grew by 12% yoy to 48.70 mn tonnes in FY 2021-22.

HRC and rebar prices surged by at least 70% yoy on the back of heavy raw material cost inflation and short supply in domestic market. The cost of coking coal (HCC Australia) surged five-fold to US $ 670/tonne in March''2022 vs. US $130/tonne in same period last year due to supply side issues created by ban on coals exports from Russia, weather issues in Australia, strong demand from Asian countries and continuity of China''s ban on coking coal imports from Australia. Similarly iron ore cost also surged sharply due to global supply chain disruptions.

India''s finished steel exports grew 25% yoy to all-time high of 13.5 mn tonnes in FY 2021-22 on the back of global supply deficit created by Russia-Ukraine war and decline in Chinese exports. India''s steel exports in March have seen a shift to countries like Turkey, UAE and US which were heavily dependent on CIS nations like Russia & Ukraine in past. India''s finished steel imports remained flat at 4.70 mn tonnes in FY 2021-22.

Steel Sector Update

India''s crude steel production has continued strong momentum due to tailwinds of heavy financial stimulus announced by government in India for infrastructure development including massive spending for programs like the National infrastructure pipeline (NIP), Production linked incentive schemes, vehicle scrappage policy and expanding water pipelines, incentives for housing, etc. India turning net exporter of steel due to robust global demand has further supported steel production in India. Steel production for Year to Date (April-October FY 2021-22) period has risen by 25% yoy to 66.90 mn tonnes vs 53.50 mn tonnes last year (April-October FY 2020-21). Finished Steel demand for the same period (April-October FY 2021-22) has risen by 25% yoy to 57.40 mn tonnes after a drop of 5% in FY 2020-21. The shortage of semiconductor for automobiles has recently led to slowdown in steel demand. However, revised outlook for automobile production released by Original Equipment Manufacturer''s (OEM''s) in November''2021 signals gradual recovery.

India''s steel exports have found solid traction in global markets and have risen 24% yoy during April - October FY 2021-22 to 8.80 mn tonnes as compared to 7.10 mn in FY 2020-21 (same period). This started with diversion of production to exports due to tepid domestic demand during the pandemic but has now structurally improved due to the void created by China and Russia. China in its revised policy to curb pollution and to reduce carbon emissions has imposed production curbs in several provinces. China has also cut its export rebates on finished steel and duties on imports of semi-finished steel as it plans to reduce production of crude steel. This is one of the reasons for correction in global steel prices, also spilling over on Indian steel prices. As a result, global steel prices have now corrected from the peak of US $ 1,100/ton to US $800/ton as of November''2021. India HRC prices (ex-Mumbai, 2.5-8.0 mm) even after marginal correction are 35% yoy higher at Rs.

68,800/ton (November''2021). Similarly, rebar prices are 25% higher yoy basis at Rs. 59,000/ton after recent correction.

Another reason for correction of prices is the easing of raw material cost, both iron ore and coking coal. Iron ore prices have now eased with increased supply and lower demand from China due to production curbs. From the peak of US $ 200/ton, global iron ore prices have now stabilized at US$100/ton — CNF China as of November''2021. Similarly, coking coal prices had risen to all-time highs of US$ 420/ton, CNF Australia due to weather related disruptions and heavy restocking demand. This has corrected to US$ 330/ton recently but is still 200% higher as compared to prices in November''2020.

Although prices are expected to cool down in medium term along with correction in raw material cost (mainly coking coal), steel production is expected to remain strong on the back of heavy infrastructure spending and recovery in demand from automobiles. WSA expects Indian steel demand to grow by ~17% in CY 2021 followed by ~7% in CY 2022.

Indian Economy and steel sector outlook

However, India''s GDP is relatively shielded from this impact and is expected to grow by 8.2% in CY 2022 (8.9% in CY 2021). This is on the back of significant increase in financial stimulus led spending on infrastructure projects which is in turn driving domestic demand. Immense spending through the National Infrastructure pipeline Program, development of roads and highway network, Vande Bharat project for increasing train connectivity, housing projects through Pradhan Mantri Aawas Yojana, Jal Jeevan mission to increase drinking water penetration, PLI schemes to incentivize industrial expansion, etc. are some of the projects which will drive the economy in the medium term. Massive vaccination drives conducted in past is expected to reduce disruption from new wave of pandemic. Rising GST collections and exports are signs of rising manufacturing activity despite headwinds from inflation.

India''s domestic steel demand is expected to remain robust for at least next two years irrespective of price movement due to the massive spending announced by the central government on infrastructure projects along with recovery in the real estate markets. Revival of the automotive industry, due to improving availability of semiconductors would further drive steel demand. WSA expects India''s steel demand to rise 7.5% in CY 2022 (highest among all steel producers) followed by 6% in CY 2023.

Opportunities and Threat

The Indian steel industry has a good chance to seize the opportunity as the steel mills are gearing up for an increase in demand from overseas buyers as the pandemic has choked the supplies from China. National Steel Policy 2017 states that India''s objective is to increase the per Capita Steel Consumption from 60 Kg. to 160 Kg. by 2030-31, this in turn would have 300 tonne capacity.

Also, to achieve 5 trillion USD economy by fiscal year 2025, India needs to spend 1.4 trillion USD on infrastructure. The growing steel industry, along with the elevating infrastructure development, is augmenting the demand for refractory materials.

These materials exhibit higher-temperature resistance than conventional ones, thereby positively influencing the market growth. The widespread adoption of unshaped refractories for several construction applications is also inflating the global market. Additionally, the high prevalence of recycling refractory materials for steel production is also augmenting the market growth. The growing popularity of refractories in various sectors, such as aerospace, automotive, medical, and electrical, is anticipated to drive the market.

Indian steel sector faces huge tailwind of demand drivers due to massive spending by government on several infrastructure projects also supported by increased budget allocation in some of these schemes such as Jal Jeevan Mission for steel pipes. Projects like National Infrastructure Pipeline, housing projects, national highways and road projects etc. are other opportunities for massive steel consumption. The Automotive sector faced supply side issues for last 2 years due to semiconductor shortage which is now easing. The vehicle scrappage policy will also drive massive demand for commercial vehicles.

However, one of the largest threats to Indian steel industry is the imposition of 15% duties in May''2022 on exports of several steel products. This was a step taken to ease down the exponential surge in steel prices which were making several infrastructure projects unviable. The immediate impact of this has been the 53% fall in monthly finished steel exports in June'' 2022. As a result, Crude steel and finished steel production declined 2% month on month in June''2022. But the positive side of this is the 15% fall in steel prices and substantial reduction in raw material cost due to tepid demand from India. Another threat to India steel industry is the steep depreciation of the Indian Currency (INR) which has now made some imported raw materials expensive. While sea freight has seen some easing but remains elevated from pre-covid levels.

The disruptions created by the Russia-Ukraine war and the interest rate hike by the central government remain major concerns which can limit steel demand growth in the medium term. Although global semiconductor supply has improved, there remains substantial supply demand gap. Further, imposition of export duties by the Indian government has further dampened steel production but is expected to be a temporary phenomenon to ease the sky-high steel prices. Slowdown in Europe due to high energy prices and recessionary risk in USA due to steep tightening of the monetary policy can limit export led steel demand for India in medium term.

• The rise in energy surcharge which we are not able to pass on to all our customers as our competitors are not asking for any energy surcharge (all their supplies are from India and China and not from Europe) is a major concern which have reduced the margins.

• For sourcing of raw materials, the industry is highly dependent on China.

• In China, the key producer of magnesite is the Liaoning province. Production of magnesia there came under stress due to stricter environmental control, and the recent power cuts in the Liaoning province have aggravated the

problem. 97% fused magnesia and white fused alumina prices, which is main raw material of refractory products has increased significantly.

• Industry is operating on thin margins and high working capital due to its nature of business. Over the last few years, we are also facing serious issues of financial sustainability due to constantly rising costs on all fronts, thus reducing margins due to constant price pressure from customers. COVID-19 situation has made the industry even more vulnerable.

• There is an urgent need for all stakeholders, especially our customers to help us by compensating for such cost increases and support through working capital to avoid any adverse impact.

• In India the Government need to abolish the export duty on steel for the growth and capex infusion.

Outlook - Global and Indian Economy and Indian Steel Sector Outlook

Last quarter of CY 2021 again witnessed COVID-19 led disruptions which led to exponential surge in global inflation led by doubling of energy prices, wage pressure and rise in food prices. In CY 2022, tapering of monetary policy in several countries especially USA and slowdown of China''s real estate sector has led to downgrades in growth estimates for several economies. This was further disrupted by Russia-Ukraine war which had far reaching consequences on global commodity supply chain especially the energy supply to Europe which further added to Inflation. Several large economies started increasing interest rate to limit inflation which will impact GDP growth in CY 2022. World GDP output which grew by 6.1% in CY 2021 (source: International Monetary Fund - IMF) is now expected to halve to 3.6% each in CY 2022 and CY 2023 led by slowdown in GDP growth in China, EU, and USA. Russia''s GDP is expected to de-grow by 8.5% in CY 2022 due to trade ban by several countries.

The important developments in the steel sector during the month of April''2022 in FY 2022-23 are as following:

1. Ministry has initiated preparation of framework document for development of multi-modal connectivity, as envisaged under PM Gati Shakti National Master Plan to provide integrated and seamless connectivity for movement of much larger volumes of raw materials and finished products emanating from the enhanced production capacity of 500 MT for steel industry envisioned over Amrit Kaal i.e., by CY 2047.

2. A meeting with stakeholders of steel Industry was held in April''2022 under the Chairmanship of Hon''ble Minister of Steel to discuss the roadmap for achieving targets as per National Steel Policy (NSP), 2017, creating a globally competitive steel industry in India and achieving Government''s vision of Aatmanirbhar Bharat in specialty steel by taking advantage of Production Linked Incentives (PLI) Scheme for Specialty Steel launched by the Ministry. Stakeholders, including private steel sector companies, were urged to contribute towards the target of 500 million

tonnes (MT) of green and clean steel capacity in the country in the 25 years of the Amrit Kaal.

3. HSM met a high-level delegation from International Renewable Agency (IRENA) in New Delhi, on 27 April 2022 and discussed issues relating to use of renewable energy in Indian steel industry. Matters like, achievements of the world in the field of decarbonization, international cooperation for technology, need for technical and financial help for establishing pilot plant to develop green hydrogen for green DRI as well as carbon capturing, need for technology to make small industries energy efficient etc., were also discussed.

4. The month-wise production of both crude and finished steel as well as consumption of finished steel over the recent months indicates to an overall increasing trend with month-on-month fluctuations in production and consumption. Production of both crude and finished steel as well as consumption of finished steel was highest in April''2022 when compared to previous three years however, production and consumption of steel was lower than that in the previous month i.e., March''2022

Refractory Sector Update

Refectories business demand is at peak in India due to heavy financial stimulus for infrastructure projects - domestic and global is expected to keep demand for refractories robust soon. Historically, refractory companies have been steady revenue compounder with stable margins, net cash balance sheets and superior return ratios, a remarkable contrast to its customer steel sector, thereby largely obviating the severe cyclicity of commodity companies. We expect recycling and localization to support margins for refractory players.

• Demand drivers at peak for refractory industry: 75% of

the refractory demand is driven by steel and rebound in steel demand post pandemic is already evident with 25% growth in first half of FY 2021-22 in steel production. We expect this trend to continue due to robust government spending on schemes like National infrastructure projects, PLI scheme, Jal Jeevan Mission, housing schemes, etc. New steel capacity worth ~38mn tonnes in the next 4 years will also drive additional demand for refractories. Strong export demand for Indian steel due to production curbs by China will further accelerate refractory demand. Historically, revenue growth of refractory players has been ~1.5 times of growth in steel production and therefore we expect at least 12% Compound Annual Growth Rate revenue growth for refractory manufacturers over FY 2021-24.

• Refractory a consumable (does not face commoditylike volatility): Despite 75% of the demand for refractories being driven by steel and hence perceived as susceptible to commodity price risks, our long-term study of refractory companies concludes that its gross margins vary within a very narrow range, unlike a typical commodity company. Their revenue growth has seen continuous compounding unlike declines seen by metal companies. Refractory companies also have a commendable track record of net cash balance sheets over the last 5 years, superior and

stable return ratios compared to a commodity company, and consistent FCF generation. As a steady consumable business, it deserves a higher multiple than commodity companies.

• Localization and recycling to support margins (discourage imports): Recycled material which saves 30% of the cost. This will also reduce dependence on China. Advanced R&D expertise will further result in localization of several products like Magnesia bricks and pre-casts thereby discouraging imports and controlling cost. However, high sea freight and shortage of raw materials from China can pressurize costs in medium term, partially compensated by higher realizations. We expect export demand to improve on recovery in steel production in EU and US.

Update and Benefits of the new structure

The scheme of amalgamation between the Company and its erstwhile fellow subsidiaries i.e., RHI India Private Limited and RHI Clasil Private Limited is approved by Hon''ble National Company Law Tribunal, Mumbai Bench vide its order dated 5 May 2021 with appointed date of 31 July 2018.

As a result of substantial restructuring and consolidation in the India steel industry, demand for higher performance and better-quality solutions has increased — a development which corresponds well to our strengths as a Group and enables us to take advantage of this position, whilst also working to further strengthen our position in the market in terms of cost competitive refractory solutions.

As a combined group in India, RHIM''s business here will be in a strong position to benefit from this consolidation based on the breath of the combined organization as well as its long-standing relationships with the market-leading customers. All the merged Companies are into same and allied business activities.

The new organization structure came out as one strong entity to seize growth opportunities and enhance the shareholders'' value. It helps in simplification of the corporate structure and consolidation of Indian business. One strong entity enhances the business and operational synergies, shareholders value and utilization of resources due to pooling of management expertise, technologies, and other resource of the companies. This also creates a larger asset base and facilitation of access to better financial resources by optimizing cash flow which contributes to overall growth prospects of the combined company. For the customers the new entity provides single window for all refractory solution under one umbrella though establishing comprehensive refractory product portfolio. There is also an ongoing exercise to optimize the production footprint in India through maximizing the operational and supply chain excellence. The merger enhances the shareholder value pursuant to economies of scale and business efficiencies.

Leading innovation and technology in flow control and lining products:

Flow control:

• Slide gate: Our market share in the slide gate has increased owing to orders from steel majors in existing operations

and other green field expansion projects. Moreover, the Company is converting most of the old generation slide gate systems to the new generation S gates with the help of group Company which provides higher safety standards, higher refractory lifetime and lower cost of operation.

• Ladle Purging: There is a significant market share improvement in purge plugs also, the Company has introduced Hybrid plugs with significant performance improvement at various alloy steel makers. Moreover, a new manufacturing facility is being added at Bhiwadi for production of Purge plug aiming for the regional market.

• Tundish & ISO: — Apart from being the market leader in the long segment — we have forayed into the slab segment also — recently could achieve world record of successfully casting 10,000 tons through a single tundish for a slab caster, moreover various new technologies like Mono Tube Changers, Tundish slide gate mechanism, Nozzle Changers for billet casters are also being introduced in various customers.

To enter the niche market of thin slab casters, we have got trial permissions for our tailor-made products and soon we shall a be producing all refractories for thin slab casters from our Bhiwadi plant by end of the year 2022.

Digitalization

Other technological offerings: Tundish, Various sensors for continuous casting, Robotics for Slide gate application etc. are also presented to various customers.

Products/ services for steel quality improvement: Various new products like Purgebeam, Magfilter etc. aiming at significant quality improvement is also introduced successfully in various customers. New products are designed with the help of flow simulation studies which enables the customer to visualize the flow of molten steel in mould and tundish.

For brief details on key financial ratios, kindly refer financial statements.

9. DIVIDEND

Based on the Company''s performance, your directors are pleased to recommend final dividend of '' 2.50 (250%) per equity share on 160,996,331 equity shares of Re. 1.00 each for the FY 2021-22. This payment of final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting (''AGM''). The recommended dividend shall be paid to those shareholders whose name would appear in the Register of Members as on the record date (i.e., 15 September 2022).

In view of the changes made under the Income Tax Act, 1961 by the Finance Act, 2020, dividend paid or distributed by the Company shall be taxable in the hands of the shareholders. The Company shall, accordingly, make the payment of dividend after deduction of tax at source.

The dividend pay-out is in accordance with the Company''s dividend distribution policy and the policy is available on the weblink www.rhimagnesitaindia.com/investors/corporate-governance/policies

10. SUBSIDIARY COMPANY

The Company has one subsidiary i.e. Intermetal Engineers (India) Private Limited (“Intermetal”) as on 31 March 2022. There are no associates or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”). During the period under review, there has been no material change in the nature of business of the Intermetal.

The financial statements of the Company including consolidated financial statements along with relevant documents are available on the website of the Company https://www.rhimagnesitaindia. com/investors

During the period under review, there has been no change (creation or cessation) in any of the subsidiary, associate or joint venture of the Company.

Financial Performance of Subsidiary Company

During FY ended 31 March 2022, revenue from operations of Intermetal has been increased from '' 401.19 Lacs in previous year to '' 455.98 Lacs in current year. Profit After Tax has been increased from '' 66.87 Lacs in previous year to '' 101.26 Lacs in current year.

In accordance with Section 129(3) of the Act, a statement containing salient features of financial statements of Intermetal in Form No. AOC-1 is attached to this report as Annexure-I.

11. MATERIAL CHANGES AND COMMITMENTS

No material change or commitment affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and date of this report, except as disclosed elsewhere in this report.

12. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate internal control system in place, and also has reasonable assurance on authorizing, recording and reporting transactions of its operations. The Company has a well-placed, proper and adequate internal controls environment, commensurate with its size, scale and complexities of its operations. The Company had already developed and implemented a framework for ensuring internal controls over financial reporting. This framework includes entity level policies, processes and operating level standard operating procedures.

Internal control systems are an integral part of your Company''s corporate governance structure. These have been designed to provide reasonable assurance with regard to inter-alia (a) recording and providing reliable financial and operational information; (b) complying with the applicable statutes; (c) safeguarding assets from unauthorized use; (d) executing transactions with proper authorization and ensuring compliance with corporate policies; (e) prevention and detection of frauds / errors and (f) continuous updating of IT systems.

The Company''s management has assessed the effectiveness of the Company''s internal control over financial reporting as of 31 March 2022.

The Audit Committee reviewed the reports submitted by the Management, Internal Auditors and Statutory Auditors. Based on their evaluation (as defined in section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), the Committee has concluded that, as of 31 March 2022, the Company''s internal financial controls were adequate and operating effectively.

13. HUMAN RESOURCES

For RHIM, employees are its most valuable asset and the Company is committed to the wellbeing and development of its employees. Your Company believes in enhancement of competencies of its employees. Employees are facilitated to participate in various training programs, equal emphasis is given on technical & soft skills. numerous opportunities have been created for the employees to develop.

During recent years, Company''s main focus of in-house trainings was on interpersonal skills, behavioral attributes, customer focused culture, lean implementation and 6''s at shop floor. The dedicated learning and development programmes enhance the right skill sets and relevant knowledge to employees to achieve operational and futuristic benefits. The Company endeavors to keep the employee''s motivation high by providing congenial & respectful work atmosphere and rewarding/remunerating effectively. 100% safety of our employees is one of the important operative targets for RHIM. Various initiatives have been launched to engage employees.

Celebrating festivals and achievements on various occasions is part of RHIM culture. Various activities and programs have been conducted within the organization to create fair and equitable work culture leading to cordial relations between the management and the employees of the Company.

14. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all contracts / arrangements / transactions entered by the Company with related parties were in ordinary course of business and on an arm''s length basis, the Company has not entered into any contracts /arrangements / transactions with related parties which could be considered material in accordance with the Company''s policy on materiality of related party transactions.

The Board of Directors of the Company has approved the criteria for making the omnibus approval by the Audit Committee within the framework of the policy on related party transactions. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and proposed to be entered in the ordinary course of business and at arm''s length during the financial year. All related party transactions are placed before the Audit Committee for review and approval.

Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC - 2 is not applicable to your Company.

The Company has obtained approval of shareholders, by way of postal ballot for material related party transaction(s) with

M/s. RHI Magnesita GmbH, for an amount of '' 100,000 Lacs (Rupees One thousand crore), for the FY 2021-22 and onwards with yearly increase of 30% every year in the value of such transactions up to the FY 2025-26.

The policy on materiality of related party transactions and dealing with related party transactions can be accessed on the Company''s website at the link: www.rhimagnesitaindia.com/ investors/corporate-governance/policies

Members can also refer note 36 of the financial statements, which set out related party disclosures.

15. CORPORATE SOCIAL RESPONSIBILITY

The brief outline of the Company''s Corporate Social Responsibility (CSR) Policy as adopted by the Board and its initiatives on CSR activities during the year under review are set out in Annexure II of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee including composition, please refer to the Corporate Governance Report, which is a part of this report. The CSR policy is available on www.rhimagnesitaindia.com/investors/corporate-governance/ policies

Your Company was required to transfer unspent CSR amount of '' 135.40 Lacs as on 31 March 2021 to any of the funds prescribed under Schedule VII of the Act within 6 months from the end of the financial year i.e. on or before 30 September 2021. An amount of '' 32 Lacs was deposited by the Company within prescribed timelines while due to deteriorating global pandemic of COVID-19 in the initial period of F.Y 2021-22, the Company was not able to transfer rest of the unspent money i.e. '' 103.41 Lacs, which was later on deposited by the Company to Prime Minister''s Citizen Assistance and Relief in Emergency Situations Fund and subsequently filed an application for compounding of offence with the appropriate authorities.

16. RISK MANAGEMENT

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company has framed a Risk Management Policy to identify and access the key business risk areas and a risk mitigation process. The policy aims to ensure resilience for sustainable growth and sound corporate governance by having an identified process of risk identification and management in compliance with the provisions of the Companies Act, 2013 and other applicable provisions. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment.

Occupational Safety and Health are considered an integral part of our operations. All statutory legal regulations were compiled as per government norms. The workplace risk assessment of hazards is done after every six months and is reviewed after three months in all the operational plants and extended to the customer sites also. The safety audits were conducted at

regular intervals by internal and external agencies. The stage 1 audit for all three standards (ISO 9001, 14001 & 45001) were

successfully completed for the Visakhapatnam Unit. The employee involvement in reporting the unsafe conditions and near misses has been excellent. The Global key performance indicators (KPIs) of preventive rate has

been successfully achieved. The participation of employees in 6S activities has tremendously changed the work culture and the award of the 6S trophy every month has increased the competitiveness in perfect maintenance of a safe workplace. The Confederation of Indian Industry, Andhra Pradesh has awarded the Best Safety Practices of innovation for the year 2021.

Safety and Health related activities have been the prime focus on customer sites with the introduction of new SOPs and existing procedures reviewed. The safety and risk audits were put into regular practice. Safety training has been always the main continuous agenda. Safety awareness has been created at all customer sites by organizing various safety events during the 51st National Safety Week. Some of the customer sites have been rated as the best performing Vendor in the steel industries.

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Rudraraju Suryanarayana Raju Venkata (Mr. RVS Rudraraju) (DIN 00425640) was appointed as an additional and whole time director for a period of 5 years of the Company on 25 June 2021 and his appointment was regularized in the 11^th AGM of the Company held on 29 September 2021.

The Board of Directors, in its meeting held on 10 August 2022, has, on the recommendations of Nomination and Remuneration Committee, recommended the re-appointment and remuneration of Mr. Parmod Sagar (DIN: 06500871) as Managing Director and Chief Executive Officer for a period of 5 years w.e.f. 4 March 2023 to 3 March 2028, for shareholders'' approval in the ensuing AGM.

In accordance with the provisions of the Act and Articles of Association of the Company, Mr. Gustavo Lucio Goncalves Franco (DIN: 008754857) retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

A resolution seeking shareholders'' approval for re-appointment alongwith other required details forms part of the Notice.

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with rules framed thereunder and Regulation 16 of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

The Independent Directors have also submitted the declarations that they have registered their names in the independent directors'' data bank. Dr. Vijay Sharma and Mr. Nazim Sheikh, Independent Directors are exempt from passing the proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs. The name of Ms. Sonu Chadha as Independent Director was removed from the Independent Director data bank as she did not appear for her proficiency test, later on her name was restored for 1 year.

No independent director was appointed during the period under review.

During the period under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than receipt of sitting fees and reimbursement of expenses, if any.

Pursuant to the provisions of Section 203 of the Act, Mr. Parmod Sagar, Managing Director and Chief Executive Officer, Mr. RVS Rudraraju — Whole Time Director, Mr. Sanjeev Bhardwaj, Chief Financial Officer and Mr. Sanjay Kumar, Company Secretary were Key Managerial Personnel of the Company as on 31 March 2022.

During the year, Mr. RVS Rudraraju — Whole time Director was appointed as Key Managerial Personnel of the Company with effect from 25 June 2021.

Ms. Vijaya Gupta took over as Chief Financial Officer, with effect from 27 May 2022 in place of Mr. Sanjeev Bhardwaj, who has been assigned new roles and responsibilities within the Organization. Ms. Vijaya Gupta is having thirty years of work experience and she is rank holder Chartered Accountant and has completed Special Management Program from IIM(C).

18. POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Company has devised the policy on remuneration and nomination for the selection, appointment and remuneration of the Directors and Key Managerial Personnel (KMP) and also remuneration of other employees who have the capacity and ability to lead the Company towards achieving sustainable development.

Salient features of the Company''s policy on remuneration and nomination are as under:

(i) Appointment of KMP and senior management is subject to the approval of the Nomination and Remuneration Committee and Board of Directors. Remuneration of KMP and senior management is decided by the Managing Director on the recommendation by the Whole Time Directors/ Executive Directors concerned, where applicable, broadly based on the Remuneration Policy in respect of Whole Time Directors /Executive Directors. Total remuneration of KMP and senior management comprises of fixed based salary, perquisites, retirement benefit, motivation rewards, bonus and other non-monetary benefits.

(ii) Non-Executive Directors are paid remuneration in the form of sitting fees for attending the Board Meetings and committee meetings as fixed by the Board of Directors from time to time subject to statutory provisions. While deciding the remuneration of Managing Director and Executive Directors, the Nomination and Remuneration Committee considers pay and employment conditions in the industry, merit and seniority of the person. The Committee encourage the balance between fixed and variable component in the remuneration which are based on the performance to achieve the Company''s target. The term of office and remuneration of whole time directors are subject to approval of the Board of Directors, shareholders and the limit laid down under the Companies Act,2013 from time to time.

The Nomination and Remuneration Policy of the Company is available on the Company''s website and can be accessed on the Company''s website at the link www. rhimagnesitaindia.com/investors/corporate-governance/ policies

19. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there is no material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively,

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

20. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and Listing Regulations. The performance of the board was evaluated by the Board of Directors after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the Board after seeking inputs from the committee members on

the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5 January 2017.

In a separate meeting of independent directors held on 10 February 2022 performance of non-independent directors, the Board as a whole and Chairman of the Company was evaluated, taking into account the views of executive directors and nonexecutive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

At the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the Board, its Committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.

21. AUDITORS

i. Statutory Auditors

M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016) (“PW”) were appointed as statutory auditors of the Company at the 7^th AGM held on 25 September 2017 for a period of 5 years for auditing the accounts of the Company from the conclusion of 7^th AGM till the conclusion of 12^th AGM of the Company for the year 2022.

The Board of Directors of the Company on the recommendation of the Audit Committee, had recommended the re-appointment of M/s. PW as the Statutory Auditors of the Company, by the members at the 12^th AGM of the Company for another term of five years.

Accordingly, pursuant to Section 139 of the Companies Act,2013, an ordinary resolution, proposing appointment of M/s. PW, as the Statutory Auditors of the Company for another term of five years i.e. from the conclusion of 12^th AGM till the conclusion of 17^th AGM of the Company to be held in the year 2027, forms part of the Notice of the 12^th AGM of the Company.

The Company has received their written consent and a certificate that they satisfy the criteria provided under Section 141 of the Companies Act,2013 and that the re-appointment, if made, shall be in accordance with the applicable provisions of the Act and rules framed thereunder.

ii. Internal Auditors

The Board has appointed M/s. Chaturvedi & Partners as Internal Auditors for the FY 2021-22 under Section 138

of the Companies Act, 2013 and they have completed the internal audit as per the scope defined by the Board. M/s. Chaturvedi & Partners was re-appointed as Internal Auditors of the Company for FY 2022-23.

iii. Secretarial Auditor

The Company has appointed M/s. Naresh Verma & Associates, Company Secretaries in Practice, to conduct Secretarial Audit for the FY 2021-22 as required by Section 204 of the Companies Act, 2013 and rules made thereunder. The Company provided all assistance and facilities to the secretarial auditors for conducting their audit. The Secretarial Audit Report for the FY 2021-22 is annexed herewith marked as Annexure - III.

M/s. Naresh Verma & Associates was re-appointed as Secretarial Auditors of the Company for FY 2022-23.

The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder. The Secretarial Auditors have confirmed that they are not disqualified to be appointed as the Secretarial Auditors of the Company for FY 2022-23.

iv. Cost Auditor

Pursuant to Section 148 of the Companies Act,2013 read with rules thereunder, your Company is required to maintain cost records and said records are required to be audited by a Cost Accountant in practice. In this connection, the Board of Directors of the Company has on the recommendation of the Audit Committee, appointed M/s. K. G. Goyal & Associates as the Cost Auditors of the Company for FY 2022-23.

In accordance with the provisions of Section 148(3) of the Companies Act,2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the cost auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the members of the Company. Accordingly, appropriate resolution forms part of the notice convening the AGM.

M/s. K. G. Goyal & Associates have vast experience in the field of cost audit and have conducted the audit of the cost records of the Company for the past several years under the provisions of the erstwhile Companies Act, 1956.

The due date of filing the cost audit report for the year ended 31 March 2021 was 30 September 2021 and the same had been filed on 14 August 2021. Cost Audit Report for the year ended 31 March 2022 will also be filed within statutory time limit.

22. AUDITOR''S QUALIFICATION AND MANAGEMENT REPLY THEREON

The observations and comments given by the statutory and secretarial auditors in their report read together with notes to Accounts for the year ended 31 March 2022 are specified herein below alongwith further comments and explanation by Board of Directors under Section 134 of the Act.

There is no qualification or observation in the reports of the Statutory Auditor. Observations of Secretarial Auditors'' alongwith management representations are given here in below:

(i) The unspent CSR expenditure of '' 135.40 Lacs for the year ended 31 March 2021 was transferred by the Company to the funds prescribed under Schedule VII of the Companies Act 2013 after the due date and an application for compounding of offence in this regard has been filed by the company with the appropriate authorities.

Management Response:

Details given in Corporate Social Responsibility section of this report.

(ii) The expenditure made by the Company towards CSR activities during the year ended 31 March 2022 was less than the prescribed amount by '' 187.68 Lacs and as reported by the company the same has been duly transferred by the Company to the funds prescribed under Schedule VII of the Companies Act 2013 within the due date.

Management Response:

As stated in the observation itself, the CSR funds that remained unspent during the year ended 31 March 2022 were deposited with the funds prescribed by the Government of India within the prescribed period.. Further details given in Annexure II of this report.

(iii) The Company filed the Form FC-GPR with the Reserve Bank of India in connection with allotment of 33,124,694 fully paid equity shares of Re. 1 /- each to non-residents on 25 June 2021 pursuant to Composite Scheme of Amalgamation approved by Hon''ble National Company Law Tribunal, Mumbai Bench vide its order dated 5 May 2021 within the due date, however the same was rejected for want of some documents. The said form FC-GPR has now been registered by the RBI with submission of late fees.

Management Response:

The Form FC-GPR was filed by the Company with the Reserve Bank of India (RBI) within the prescribed time. The said form was rejected for want of certain documents of the Transferor Companies. Later, on resubmission of said form, RBI registered the same after imposing late submission fee.

(iv) The name of Ms. Sonu Chadha as Independent Director was removed from the Independent Director data bank as she did not appear for her proficiency test. The name was later restored for 1 year.

Management Response:

Your Independent Director — Ms. Sonu Chadha, due to her pre-occupancy, could not appear for the self-proficiency test as introduced by the Government of India and her name was temporarily removed from the Independent Director Databank. The Company has received a declaration from Ms. Chadha stating that her name has been restored in the data bank for 1 year.

There are no frauds reported in the reports of the auditors as mentioned under sub-section (12) of Section 143 of the Act.

23. EXPORT HOUSE STATUS

The Company enjoys the status of “One Star Export House”.

24. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business of your Company during the year under review.

25. DISCLOSURES

i. Vigil Mechanism /Whistle Blower Policy

The Company has adopted a whistle blower policy establishing vigil mechanism for directors and employees to report their concerns about unethical behavior, actual or suspected fraud or any violation of Company''s code of conduct.

The policy on vigil mechanism and whistle blower policy may be accessed on the Company''s website at the link: www.rhimagnesitaindia.com/investors/corporate-

governance/policies

ii. Audit Committee

The composition of the Audit Committee has been given in Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

iii. Number of Board Meeting

The Board of Directors of the Company met five (5) times in the year, the details of which are provided in the corporate governance report.

iv. Particulars of Loans given, Investment made, Guarantees given and Securities provided

The particulars of loans, guarantees and investments as per Section 186 of the Act, have been disclosed in the financial statements.

v. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

The particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo, as required to be disclosed under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 are provided in Annexure - IV.

vi. Annual Return

The Annual Return for the FY 2021-22 is available on Company''s website at www.rhimagnesitaindia.com/ annualreturns

vii. Particulars of employees and related disclosures

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure - V.

viii. Corporate Governance Report

Report on Corporate Governance is annexed herewith as Annexure - VI to this report.

ix. Business Responsibility Reporting

The Company''s ethical and responsible behaviour complements its corporate culture. Being a public listed company, the Company recognises that its accountability is not limited only to its shareholders from a financial perspective but also to the larger society in which it operates. During the year, consequent to the requirements of reporting of its business responsibility initiatives becoming mandatory under the Listing Regulations, the Company formulated a consolidated policy on business responsibility which lays down the broad principles guiding the Company in delivering its various responsibilities to its stakeholders. The policy is intended to ensure that the Company adopts responsible business practices in the interest of the social set up and the environment so that it contributes beyond financial and operational performance.

A copy of the policy is available at www.rhimagnesitaindia. com/investors/corporate-governance/policies and the Business Responsibility Report for FY 2021-22 in terms of Regulation 34 of the Listing Regulations is annexed to this report as Annexure - VII.

x. Transfer of amounts to Investor Education and Protection Fund

Details regarding transfer of amount & shares to IEPF has been given in Corporate Governance Report.

xi. Sexual Harassment of Women at Workplace (Prevention, Prohibition &Redressal) Act,2013

The Company has formulated and implemented a policy of prevention of sexual harassment at the workplace with mechanism of lodging/redressal complaints. During the year under review, there were no complaints reported to the Board. The policy may be accessed on the Company''s website at the link: www.rhimagnesitaindia.com/investors/ corporate-governance/policies

xii. Compliance with the Institute of Company Secretaries of India (“ICSI”) Secretarial Standards

The relevant Secretarial Standards issued by the ICSI related to the Board Meetings and General Meeting have been complied with by the Company.

xiii. No disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review:

- Details relating to deposit and unclaimed deposits or interest thereon.

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Issue of shares (including sweat equity shares) and Employee Stock Option Scheme of the Company under any scheme.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern and Company''s operation in future

- Details of difference between amount of valuation done at the time of one time settlement and the valuation done while taking loan from banks or financial institutions alongwith the reasons thereof.

- No application has been made or no proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the year or at the end of FY 2021-22.

26. CAUTIONARY STATEMENTS

Certain statements in the “Management Discussion and Analysis” describing the Company''s views about the industry, expectations/ predictions, objectives etc., may be forward looking within the meaning of applicable laws and regulations.

Actual results may differ materially from those expressed in the Statement. Company''s operations may inter-alia affect with the supply and demand stipulations, input prices and their availability, changes in Government regulations, taxes, exchange fluctuations and other factors such as Industrial relations and economic developments etc. Investors should bear the above in mind.

27. ACKNOWLEDGEMENTS AND APPRECIATION

Your Directors place on record their deep appreciation to the customers, shareholders, suppliers, bankers, business partners/ associates, Central & State Governments and Governments of various countries where we have our operations for their consistent support and encouragement to the Company. I am sure you will join our Directors in conveying our sincere appreciation to all employees of the Company and its subsidiary for their hard work and commitment. Their dedication and competence have ensured that the Company continues to be a significant and leading player in the refractory industry.

On behalf of the Board of Directors

Dr. Vijay Sharma

Chairman

Gurugram, 10 August 2022 (DIN:00880113)

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Mar 31, 2019

Dear Shareholders,

The directors are pleased to present the 9th Annual Report of Orient Refractories Limited (the “Company”) along with the audited financial statements for the financial year ended 31 March 2019.

1. FINANCIAL RESULTS

(Amount in Rs. Lacs)

Particulars	2018-19	2017-18
Gross revenue from operations	74,794.70	63,722.73
Total expenditure before finance cost and depreciation	61,996.63	51,017.74
Operating Profit	12,798.07	12,704.99
Add: Other income	1,817.29	1,062.23
Profit before finance cost, depreciation, exceptional items and taxes	14,615.36	13,767.22
Less: Finance costs	-	-
Profit before depreciation, exceptional items and taxes	14,615.36	13,767.22
Less: Depreciation	863.12	682.69
Profit/(Loss) before exceptional items & tax	13,752.24	13,084.53
Add/(Less): Exceptional Items	-	-
Profit before taxes	13,752.24	13,084.53
Less: Tax Expense	4,769.58	4,501.21
(A) Profit/(Loss) after taxes	8,982.66	8,583.32
(B) Total other comprehensive income	(19.51)	(14.43)
(C) Total comprehensive income for the period [ A B ]	8,963.15	8,568.89
Retained Earnings: Balance brought forward from the previous year	31,079.84	26,125.87
Add: Profit for the period	8,982.66	8,583.32
Add: Other Comprehensive Income recognised in Retained Earnings	(19.51)	(14.43)
Balance Which the Directors have apportioned as under to:	40,042.99	34,694.76
(i) Dividend on Ordinary Shares	3,003.48	3,003.48
(ii) Tax on dividends	617.37	611.44
Total Appropriations	3,620.85	3,614.92
Retained Earnings: Balance to be carried forward	36,422.14	31,079.84

2. COMPANY PERFORMANCE AND OPERATIONS

The Company demonstrated strong double digit growth during financial year 2018-19. The revenue (excluding GST) stood at Rs. 74,794.70 lacs as compared to Rs.62,678.77 lacs in 2017-18, registering a growth of 19.33%.

The Company ended the year with a 5.07% increase in profit before tax as compared to the previous year. Profit before tax for the year 2018-19 stood at Rs.13,748.28 lacs.

As per the list of Top 1000 companies (based on Market capitalization as on 31 March 2019) available on NSE website, your Company is now one of the top 500 companies (based on Market capitalization as on 31 March 2019) and is required to comply with various additional regulations stated in SEBI (LODR) Regulations, 2015. The Company has already initiated steps to comply with such new regulations.

3. MANAGEMENT DISCUSSION AND ANALYSIS

COMPANY OVERVIEW

Orient Refractories Limited (ORL) is in the business of manufacturing and marketing special refractory products, systems and services to the steel industry in India and Globally. ORL is market leader for special refractories in India and has many global customers for its international quality products. ORL produces nearly 50,000 tons of refractory per annum including customized products and system solutions.

The refractory products are mainly used in high temperature manufacturing processes in iron and steel industry, metal smelters, cement, glass industry and for other industrial products. Demand for refractory is primarily dependent on the consumption of steel, which accounts for about 75% of the total value and the remaining is used for glass, cement, non-ferrous, petrochemicals etc.

Products of ORL are manufactured at its state-of-the-art manufacturing facility at Bhiwadi in Rajasthan. The Company has ongoing programs for improving efficiency and effectiveness of its manufacturing processes, raw material cost, energy conservation, control over working capital and to produce special refractories at low cost so as to add maximum value to the customers. Energy efficient installations have been made at the factory. Best in class safety measures and processes have been put in place and improved upon at the factory and all working sites.

The products of ORL are of Global standards in quality and highly cost competitive, which makes it attractive for the customers worldwide.

In the year 2016, the parent company of ORL, RHI AG reached at an agreement with controlling shareholding of another global refractory company, M/S Magnesita GP & Rohne and became the largest refractory company in the world. The combined Company, called RHI Magnesita, is serving ORL customers by offering more comprehensive range of products and services.

ABOUT PARENT COMPANY RHI MAGNESITA N.V

RHI Magnesita is the leading global supplier of high-grade refractory products, systems and solutions which are indispensable for industrial high-temperature processes exceeding 1,200°C in a wide range of industries, including steel, cement, non-ferrous metals and glass. With a vertically integrated value chain, from raw materials to refractory products and full performance-based solutions, RHI Magnesita serves customers in nearly all countries around the world.

The Company has a high level of geographic diversification with more than 14,000 employees in 35 main production sites and more than 70 sales offices around the world. RHI Magnesita intends to leverage its global leadership in terms of revenue, scale, product portfolio and diversified geographic presence to target strategically those countries and regions benefitting from more dynamic economic growth prospects.

Its shares have a premium listing on the London Stock Exchange (symbol: RHIM) and are a constituent of the FTSE 250 index.

CONSOLIDATING AND STRENGTHENING THROUGH MERGER OF RHI INDIA PVT. LTD, RHI CLASIL PVT. LTD INTO ORIENT REFRACTORIES LIMITED

In 2018, RHI Magnesita group commenced the reorganization of its Indian operations by merging its two other Indian subsidiaries - RHI Clasil Pvt. Ltd. and RHI India Pvt. Ltd., with Orient Refractories Ltd., thereby enhancing the business and operational synergies via pooling of management expertise, technologies and other resources between the businesses.

The combined business, which is underpinned by the expertise and experience of its global, market-leading parent company - RHI Magnesita - will create a larger asset base in India, and importantly will provide customers with one single refractory solutions platform offering the industry’s most comprehensive product portfolio, including, among others, Magnesia and Alumina based bricks and mixes for large industrial clients as well as specialty refractory products, with proven supply and sales capabilities.

INDUSTRY OVERVIEW

Global Steel Industry :

In 2018, despite concerns about trade protectionism, global steel production grew by 4.6% to a new peak of 1.81 billion tonnes. In 2018, China accounted for 52% of global steel production East Asia 11%, EU28 9%, NAFTA 7%, India 6%, CIS 5% and the rest of the world 9%. Production in 2018 increased by 1.0% in East Asia, decreased 0.3% in EU28, and increased 4.1% in North America, 4.9% in India, 0.3% in CIS and 5.7% in the rest of the world. In Q1CY19, China’s steel production grew to 231.1 Mt vs. 210.2 mn MT, USA’s steel production stood at 30.7 Mt vs. 29.5 Mt and there was slight slow down seen across Europe.

Indian Steel Industry :

In Q4 FY19, Domestic Steel production was flat at 27.4 Mt compared to the same period in 2018. Indian Steel consumption has grown by 5.7% YoY and reached 92.1 MT in 2018 (as per World Steel Association). Amongst the consumption driven sectors, automotive and consumer durables have clocked ~16% and ~22% growth respectively in 2018. However, automotive sector is witnessing softer demand conditions since Oct-Nov 2018. Going by the recent trend, and a strong base effect, growth is expected to slow down in the first half of 2019. However, revival is expected in the 2nd half of the year with pre-buying before BS-VI implementation and improvement in consumption growth. The Indian Steel Association has forecasted India’s steel demand to grow by 7.1% in calendar year 2019 and by 7.2% in calendar year 2020. Investment driven sectors such as Construction, Capital Goods & Railways are likely to maintain the healthy growth momentum driven by infrastructure programs such as Bharatmala, Sagarmala, Railway track electrification, dedicated freight corridors, metro rails, etc. In the wake of stressed steel assets getting acquired through NCLT by stronger players and brownfield expansions being announced by large steel players; there could be an additional capacity of about 20-30 mn tons over the next 2 years. As per the steel industry report India has become the second largest producer of steel surpassing Japan and is well placed to achieve the Indian Steel Ministry’s target of erecting steel capacity of 300 million tons per annum by the end of 2030.

Global Refractory Industry :

Global Refractories Market is currently around $39.2 billion and it is estimated to grow at a CAGR of 5.2% and reach a size of $48.6 billion by 2023. Asian market is poised to grow faster than the rest of the world as steel production heats up in the Asian pacific countries.

Indian refractory Industry :

Indian refractory industry is around Rs 9,000 crores, which is 3% of the global refractory market. Indian market is expected to grow at 5-6%. Indian refractory makers are currently reeling from high raw material prices which are expected to see some kind of reduction in FY19. Prices for graphite have declined over the last 6 months, while bauxite, aluminum and magnesia prices continue to remain firm. The refractory industry is looking for alternate minerals and trying to increase the use of recycled materials.

ORIENT REFRACTORIES AND BENFEITS OF THE NEW STRUCTURE

Year 2018 has seen the Indian steel market becoming the second largest in the world, further reinforcing the necessity RHI Magnesita continued emphasis on this geography. The Indian Steel Ministry has set a 300MT per annum steel capacity target by the end of 2030 which bodes well for the future of this industry. The Indian steel industry is undergoing consolidation, which is expected to build up its strength but also to provide a higher market share for industry leaders. As a result of substantial restructuring and consolidation in the India steel industry, demand for higher performance and better quality solutions has increased - a development which corresponds well to our strengths as a Group and enables us to take advantage of this position, whilst also working to further strengthen our position in the market in terms of cost competitive refractory solutions.

As a combined group in India, RHI Magnesita’s business here will be in a strong position to benefit from this consolidation on the basis of the breath of the combined organization as well as its long-standing relationships with the market-leading customers.

The new organization structure will form one strong entity to seize growth opportunities and enhance the shareholders’ value. It will help in simplification of the corporate structure and consolidation of Indian business. One strong entity will enhance the business and operational synergies, shareholders value and utilization of resources due to pooling of management expertise, technologies and other resource of the companies. This will also create a larger asset base and facilitation of access to better financial resources. For the customers the new entity will provide single window for all refractory solution under one umbrella. There is also an ongoing exercise to optimize the production foot print in India through maximizing the operational and supply chain excellence.

CHALLENGES & OPPORTUNITIES

Challenges:

The year 2018 was good for India with the GDP growth of over 7%. However, certain factors negative factors slowed down the industrial growth and made for a more competitive domestic market. Below are the factors that resulted in challenging times for the industries in terms of growth and margins-

1. Bad debts in banking system and non-performing assets led to low investments and low capitalization in Indian Industry, there were no Greenfield projects in 2018 for steel manufacturing.

2. Managing currency risk is a big concern to keep the margins intact. Rupee depreciated against dollar in second half of the year resulting in reduced margins and impacted Q3/Q4 results of the Company.

3. While steel output prices turned soft, inputs continue to be costlier for domestic production. There are likely to be pressure on the margins in future.

4. Trade tensions between the countries have lead to slow geographical growth, new markets has to be explored for capacity utilization.

5. Crude oil prices are increasing continuously having an impact on prices.

6. There is slowdown in demand due to trade tension between major steel producing countries, currency volatility and normalization of monetary policy in EU & US.

7. Capacity cut across the industries to safeguard the environment, especially China, has created scarcity of raw material.

Opportunities :

India became the second largest steel producer in the world surpassing Japan, after a decade of solid growth. An ambitious government program aims to reach 300 kton of steel production by 2030 and triple the output of 2016. The per capita steel consumption is likely to increase from 63 kg to 160 kg. India’s steel production and demand is expected to increase by 5% and 7.3% respectively in 2019 backed by growth in investment in infrastructure and construction projects, complemented by strong automotive demand. At present Indian steel industry is running at 78% utilization rate ( current capacity 130 kton per annum). The demand outlook for next 3-5 years looks set to mirror the GDP growth at 7 % led by robust demand from infrastructure and construction sectors, supported by revival in industrial capex. After 2019 general elections, it is expected that the Government of India will take some more measures in upcoming fiscal budget to boost the overall sentiments.

ORL is fully focused on taking advantage of the expected increase in steel production as the parent Company RHI Magnesita has started integration of three legal entities in India for pooling the resources for market expansion, product expansion using expertise of the parent company and is also exploring the possibilities of geographical expansion. ORL expects the ongoing consolidation efforts to conclude by mid of 2019 and pave ways for strong growth of the combined entity by better leveraging the growth potential of the Steel Industry. India steel market is growing at ~5% and ORL India business grew by 9-10 % in terms of volume and 19 % in terms of sales value as compared to FY 17-18 and is expected to further boost up.

Further, India’s economy grew at faster pace than most major nations in 2018 and this year it is poised to overtake UK to become the world’s fifth biggest economy. ORL India is taking active part in this journey.

The expansion plans of the larger Steel industries to increase the capacity of steel production are on track and schedule is to complete the projects very fast. Steel Industry in India is going under consolidation primarily due to ongoing Insolvency and Bankruptcy Code. This is expected to result in revival of steel industry and higher market share for market leaders, like Tata Steel, JSW Steel etc. and potential entry for new MNC players in India like Arcelor Mittal. Consolidation of legal entities with ORL in India will have increase the strength of its foot print in coming time.

FUTURE OUTLOOK

Trade tensions, volatile currency movement and uneven global growth are increasing uncertainty for sustainability of the increase in global steel usage. In this unpredictable environment, India growth path remains steadfast backed by Indian Government spending on Infrastructure, roads, rails, transmission and housing.

CAPACITY EXPANSION

In view of increase in demand, the existing capacity of isotopic products of 9,300 tons per annum was increased to 11,700 tons per annum in 2018. The expansion project was completed in record one year time. The addition serves to address the bottle necks in production capacity by building an additional ISO production line in existing factory at Bhiwadi. The other project includes installation of hydraulic press for slide gate refractory, which is expected to be completed in third quarter of FY 2019-20.

ENVIRONMENTAL SUSTANIBAILITY

The company is committed towards clean environment and has stopped use of Pat Coke and shifted to cleaner fuel (PNG) at Bhiwadi plant. The plan is to gradually convert all oil fired Klins to gas fired Klins.

4. EXPORT HOUSE STATUS

Your Company enjoys the status of “One Star Export House”.

5. DIVIDEND

The board recommended a dividend of 2.50 per equity share on 120,139,200 equity shares of Re. 1.00 each for the year ended 31 March 2019 (previous year Rs. 2.50 per equity share). The dividend on equity share is subject to the approval of the shareholders at the Annual General Meeting (‘AGM’) scheduled to be held on 23 July 2019. The dividend will be paid by 22 August 2019.

The register of members and share transfer books will remain closed from Tuesday, 2 July 2019 to Tuesday, 9 July 2019 (both days inclusive) for the purpose of AGM and payment of the dividend for the financial year ended 31 March 2019.

6. SHARE CAPITAL

The paid up equity share capital as on 31 March, 2019 was Rs. 1,201.39 lacs. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

7. RESERVES

The board of directors has decided to retain the entire amount of profits in the profit and loss account.

8. ACQUISION OF INTERMETAL ENGINEERING INDIA PRIVATE LIMITED

The board of directors on 30 April 2019 approved the acquisition of the entire paid-up equity share capital of “Intermetal Engineers India Private Limited” (IEIPL) [CIN: U28920MH1988PTC047421] a company comprising of 1,597 equity shares of Rs.100/- each to make it a wholly owned subsidiary of the Company. On 18 May 2019 the Company completed the process of acquisition of IEIPL. The Company has paid for 1,597 equity shares of IEIPL @ Rs.63,244/- per equity share of Rs. 100/- each.

Dr. Vijay Sharma, Director and Mr. Parmod Sagar, Managing Director & CEO of the Company have joined the board of IEIPL as nominee directors of Orient Refractories Limited w.e.f. 18 May 2019.

IEIPL was incorporated on 20 May 1988 for marketing and manufacturing of steel plant equipment (viz., slide gate system for flow control of liquid steel, oxygen lancing and CCM assemblies such as mould jacket assembly, dummy bar assembly) specially used during the flow of liquid steel for continuous casting, ingot casting which are exported to various countries and caters to about 300 to 400 regular steel plant customers in India.

IEIPL having revenues of Rs.546 lacs and total asset size of Rs.848 lacs as per the audited balance sheet as on 31 March 2018.

Turnover of last 3 years are as follows : 31 March 2018: Rs. 417.35 lacs; 31 March 2017: Rs. 466.49 lacs & 31 March 2016: Rs. 541.82 lacs.

The acquisition was not fall within related party transaction and none of the promoter / promoter group/ group companies have any interest in IEIPL.

9. UPDATE ON AMALGAMATION OF RHI INDIA PRIVATE LIMITED AND RHI CLASIL PRIVATE LIMITED WITH AND INTO THE COMPANY

The board of directors of the Company, at its meeting held on 31 July, 2018, had granted its in-principle approval to the scheme of amalgamation of RHI India Private Limited (RHI India) and RHI Clasil Private Limited (RHI Clasil) (together, the Merging Entities) with and into the Company subject to approval of the shareholders and creditors of the three companies, the stock exchanges, the Securities and Exchange Board of India (SEBI), the National Company Law Tribunal and other regulatory authorities.

In this regard, the board of directors had approved the share exchange ratio i.e. for every 100 equity shares of face value of Rs. 10 each of RHI India, issue of 7,044 equity shares of face value of Re. 1 each of the Company and for every 1,000 equity shares of face value of Rs. 10 each of RHI Clasil, issue of 908 equity shares of face value of Re. 1 each of the Company.

Subsequently, the Company had filed an application with the stock exchanges for obtaining their approval under Regulation 37 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which approval was granted by the stock exchanges vide their letters dated 12 October 2018. Pursuant to these approvals, the Company, along with the merging entities, had approached the National Company Law Tribunal, Mumbai bench (the NCLT), by way of joint company scheme application no. 1556 of 2018, seeking directions for convening the meetings of their respective shareholders and creditors. The NCLT, vide its order dated 29 March 2019 (Order), issued directions to the Company and the merging entities to hold the meetings of their respective shareholders and creditors on 17 May 2019.

The Company completed dispatch and publication of notices (along with the relevant annexures) of the meetings in accordance with the directions of the NCLT. In their respective meetings, held pursuant to the NCLT Order, the shareholders and the unsecured creditors of the Company approved the proposed scheme of amalgamation with requisite majority. The Company, along with the Merging Entities, has filed a joint company scheme petition with the NCLT on [27 May 2019] for sanction of the scheme of amalgamation and the same is now pending with the Hon’ble NCLT.

10. MATERIAL CHANGES AND COMMITMENTS

In terms of Section 134 (3) (l) of the Companies Act, 2013, no material changes and commitments affecting the financial position of your Company have occurred between the end of the financial year of the Company to which the financial statements relate and on the date of this report, except as disclosed elsewhere in this report.

11. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate internal control systems in place, and also has reasonable assurance on authorizing, recording and reporting transactions of its operations. The Company has a well-placed, proper and adequate internal controls environment, commensurate with its size, scale and complexities of its operations. The Company had already developed and implemented a framework for ensuring internal controls over financial reporting. This framework includes entity level policies, processes and operating level standard operating procedures. Internal control systems are an integral part of your Company’s corporate governance structure. These have been designed to provide reasonable assurance with regard to inter-alia (a) recording and providing reliable financial and operational information; (b) complying with the applicable statutes; (c) safeguarding assets from unauthorized use; (d) executing transactions with proper authorization, and ensuring compliance with corporate policies; (e) Prevention and detection of frauds / errors and (f) Continuous updating of IT systems. The Company’s management has assessed the effectiveness of the Company’s internal control over financial reporting as of 31 March 2019.

The audit committee reviewed the reports submitted by the management, internal auditors and statutory auditors. Based on their evaluation (as defined in section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations, 2015), the Company’s audit committee has concluded that, as of 31 March 2019, the Company’s internal financial controls were adequate and operating effectively.

12. HUMAN RESOURCES

Employees being prime force, the Company give equal emphasis on employees’ development and their engagement. Our people are the most important resource we have. The Company believes in enhancing the competencies of employees to create a high performing and innovative organization. Employees are facilitated to participate in training programs in house and at outside institutes. Equal emphasis is given on technical & soft skills. We are creating numerous opportunities for our employees to develop including international development paths and special initiatives for the future management of our company. Last year our main focus of in-house trainings was on interpersonal skills, behavioral attributes, customer focused culture, lean implementation and 5’s at shop floor. The Company endeavors to keep the employees motivation high level by providing congenial & respectful work atmosphere and rewarding/remunerating effectively. 100% safety of our employees is one of the important operative targets for ORL. Various initiatives have been launched to engage employees. Communicating and reaching out to employees at all levels is being done by using various mass media techniques. Celebrating festivals and achievements on various occasions is part of ORL culture. There are cordial relations between the management and the employees of the Company.

13. SUBSIDIARY COMPANY

Intermetal Engineers India Private Limited became 100% wholly owned subsidiary of the Company w.e.f. 18 May 2019.

14. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) and 134(5) of the Companies Act, 2013, your Directors to the best of their knowledge confirm that:

- That in the preparation of the annual accounts for the year ended 31 March 2019, the applicable accounting standards have been followed and there are no material departures from the same;

- The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2019 and of the Profit of the Company for that period;

- The directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the directors have prepared the annual accounts of the Company on a “going concern” basis;

- the directors have laid down internal financial controls to be followed by the Company and the such internal financial controls are adequate and are operating effectively and

- the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that systems are adequate and operating effectively.

15. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts /arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and on an arm’s length basis. During the year, the Company has not entered into any contracts /arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC - 2 is not applicable to your Company.

The policy on materiality of related party transactions and dealing with related party transactions are approved by the Board and can be accessed on the Company’s website at the link: http://www.orientrefractories.com/policies.htm. Members can refer note no. 30 to the financial statements which set out related party disclosures.

The board of directors of the Company has approved the criteria for making the omnibus approval by the audit committee within the overall framework of the policy on related party transactions. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and proposed to be entered in the ordinary course of business and at arm’s length during the financial year. All related party transactions are placed before the Audit Committee for review and approval.

16. CORPORATE SOCIAL RESPONSIBILITY

The board of directors of the Company has approved a corporate social responsibility (CSR) policy based on the recommendation of the CSR Committee. The board has formed a committee on CSR in accordance with Companies Act, 2013. The composition of the same has been given in corporate governance report. The CSR policy of the Company is available on the Company’s website and can be accessed on the Company’s website at the link: http://www. orientrefractories.com/policies.htm.

In the year 2018-19, the Company was required to spend Rs. 217.07 towards CSR activities, however the Company spent Rs. 158.55 lacs towards the CSR activities.

The amount of Rs. 58.52 lacs remained unspent, due to delay in identifying the skill development projects in India. It was earlier decided to held skill development projects in collaboration of Austrian Development Agency, the project was however later on scrapped resulting in unspent amount in CSR as compared to budget. The board on the recommendation of the CSR Committee, has decided not to carry forward the unspent amount.

The initiatives undertaken by the Company on CSR activities during the year is set out in Annexure - I.

17. RISK MANAGEMENT

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company risk management framework. The Company has framed a risk management policy to identify and access the key business risk areas and a risk mitigation process. The policy aims to ensure resilience for sustainable growth and sound corporate governance by having an identified process of risk identification and management in compliance with the provisions of the Companies Act, 2013. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment.

The risk management committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. There are no risks, which in the opinion of the board threaten the existence of the Company.

18. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Reinhold Steiner and Ms. Verena Buzzi resigned from the board effective 1 April 2019. The board places on record their deep appreciation for the contribution during their tenure.

Ms. Jacqueline Michelle Knox was appointed as an additional director on 23 April 2019 and she will be retiring at the ensuing annual general meeting of the Company unless re-appointed. The board proposes to appoint her as director of the Company, liable to retire by rotation.

Mr. Erwin Jankovits retires by rotation and being eligible has offered himself for re-appointment. Your board recommends his re-appointment.

Dr. Vijay Sharma (DIN-0880113) was appointed as an independent director on the board of the Company w.e.f. 12 November 2014 for a period of 5 years. He holds office as an independent director of the Company up to 11 November 2019. The nomination and remuneration committee of the board of directors, on the basis of the report of performance evaluation of independent director, has recommended re-appointment of Dr. Vijay Sharma as an independent director for a second term of 5 (five) consecutive years on the board of the Company. Your Board recommends his re-appointment.

In compliance of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, notified on 9 May 2018, approval of the shareholders by way of a special resolution is required for continuation of directorship of Mr. Rama Shanker Bajoria who had attained the age of 75 years on 17 May 2018.

Brief profile of the Directors being appointment/re-appointed as required under Regulations 36(3) of Listing Regulations, 2015 and Secretarial Standard on General Meetings are provided in the notice for the forthcoming AGM of the Company.

The Company has received declaration from all independent directors of the Company confirming that they meet with the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 confirming that they meet the criteria of independence as prescribed thereunder as well as Regulation 16(1)(b) of the Listing Regulations, 2015.

The Company has complied with the requirements of corporate governance as stipulated under the Listing Regulations, 2015 and accordingly, the report on corporate governance forming part of this annual report.

On the basis of market capitalization as on 31 March 2019 your company is now one of the top 500 listed entities and in terms of the provision of SEBI (LODR), 2015 is required to have minimum 6 directors including a women non-executive independent director on its board. The Company is taking necessary steps to comply with the same. The Company will also take required steps to reconstitute its various committees, if required.

19. KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are- Mr. Parmod Sagar, Managing Director & CEO, Mr. Sanjeev Bhardwaj, Chief Financial Officer and Mr. Sanjay Kumar, Company Secretary. During the year, there has been no change in the Key Managerial Personnel.

20. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Company has devised the nomination and remuneration policy for the selection, appointment and remuneration of the directors and key managerial personnel and also remuneration of other employees who have the capacity and ability to lead the Company towards achieving sustainable development. The nomination and remuneration policy of the Company is available on the Company’s website and can be accessed on the Company’s website at the link: http://www. orientrefractories.com/policies.htm

The criteria for appointment and remuneration of directors is as under:

(a) Criteria for appointment of managing directors / whole time director / director:

The nomination and remuneration committee shall identify persons of integrity who possess relevant expertise and experience particularly in refractory industry, leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board.

(b) Criteria for appointment of independent director:

The independent director shall be of high integrity with relevant expertise and experience so as to have as diverse board with directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management.

21. PERFORMANCE EVALUATION

The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to applicable provisions of the Act and the corporate governance requirements as prescribed by Listing Regulations, 2015.

The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The nomination and remuneration committee had evaluated the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

Performance evaluation of independent directors was carried out by the entire board, excluding the independent director being evaluated. A meeting of the independent directors, with Dr. Vijay Sharma as the Chairman, was held on 17 May 2018, to review the performance of the non-independent directors, the Board as a whole and the Chairman on the parameters of effectiveness and to assess the quality, quantity and timeliness of the flow of information between the Management and the Board. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees, and individual directors was also discussed.

22. AUDITORS

Statutory auditor

M/s. Price Waterhouse, Chartered Accountants, LLP (Firm Registration No. 012754N/N500016) were appointed as Statutory Auditors of the Company at the 7 AGM held on 25 September 2017 for a period of 5 years for auditing the accounts of the Company from the conclusion of 7 AGM till the conclusion of 12 AGM of the Company to be held in year 2021-2022.

Internal auditor

The board has appointed M/s. Chaturvedi & Partners as an internal auditors for the financial year 2018-19 under Section 138 of the Companies Act, 2013 and they have completed the internal audit as per the scope defined by the audit committee.

Secretarial auditor

The Company has appointed M/s. Naresh Verma & Associates, Company Secretaries in Practice, to conduct secretarial audit for the financial year 2018-19 as required by Section 204 of the Companies Act, 2013 and rules made thereunder. The Company provided all assistance and facilities to the secretarial auditors for conducting their audit. The secretarial audit report for the financial year ended 31 March 2019 is annexed herewith marked as Annexure - II.

Cost auditor

As per Section 148 of the Companies Act, 2013, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. In this connection, the board of directors of the Company has on the recommendation of the audit committee, approved the appointment of M/s. K. G. Goyal & Associates as the cost auditors of the Company for the year ending 31 March 2020.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the cost auditors as recommended by the audit committee and approved by the board has to be ratified by the members of the Company. Accordingly, appropriate resolution forms part of the notice convening the AGM. The board seeks your support in approving the proposed remuneration of Rs. 50,000 plus out-ofpocket expenses and taxes payable to the Cost Auditors for the financial year ending 31 March 2019.

M/s. K. G. Goyal & Associates have vast experience in the field of cost audit and have conducted the audit of the cost records of the Company for the past several years under the provisions of the erstwhile Companies Act, 1956.

The Cost Audit Report for the year ended 31 March 2019 will be filled within statutory time limit.

23. AUDITOR’S QUALIFICATION AND MANAGEMENT REPLY THEREON

There are no qualifications in the reports of the statutory auditor and secretarial auditors’ except one adverse observation by secretarial auditor’s regarding short fall in corporate social responsibility expenditure., which is explained in point no. 16 pertaining to CSR disclosure stated in this report. The remaining remarks of the secretarial auditors are self-explanatory, and no further explanation thereof is required. There are no frauds reported in the reports of the auditors as mentioned under sub-section (12) of Section 143 of the Act.

24. INDUSTRIAL RELATIONS

The industrial relations with staff and workers during the year under review continue to be cordial.

25. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business of your Company during the year under review.

26. DISCLOSURES

i. Vigil mechanism /whistle blower policy

The Vigil mechanism of the Company which also incorporate a whistle blower policy in the terms of SEBI (Listing Obligations and Disclosure Requirements), 2015 deals with instances of fraud and mismanagement, if any. The policy on vigil mechanism and whistle blower policy may be accessed on the Company’s website at the link: http:// www.orientrefractories.com/policies.htm

ii. Audit committee

The audit committee comprised of two independent non-executive directors viz. Dr. Vijay Sharma (Chairman) & Mr.R. S. Bajoria and one non-executive director viz. Mr. Erwin Jankovits. All the recommendations made by the audit committee were accepted by the board.

iii. Number of board meeting

The board of directors of the Company met four times in the year, the details of which are provided in the corporate governance report.

iv. Particulars of loans given, investment made, guarantees given and securities provided

The Company has not given any loans, guarantee or investments covered under the provisions of Section 186 of the Companies Act, 2013.

v. Conservation of energy, technology absorption and foreign exchange earnings and outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 are provided in Annexure - III.

vi. Extract of annual return

Extract of annual return of the Company is annexed herewith marked as Annexure - IV.

vii. Particulars of employees and related disclosures

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure - V.

viii. Corporate governance report

Report on corporate governance is annexed herewith as Annexure - VI to this report.

ix. Business responsibility reporting

The Company’s ethical and responsible behaviour complements its corporate culture. Being a public listed company, the Company recognises that its accountability is not limited only to its shareholders from a financial perspective but also to the larger society in which it operates. During the year, consequent to the requirements of reporting of its business responsibility initiatives becoming mandatory under the Listing Regulations, the Company formulated a consolidated policy on business responsibility which lays down the broad principles guiding the Company in delivering its various responsibilities to its stakeholders. The policy is intended to ensure that the Company adopts responsible business practices in the interest of the social set up and the environment so that it contributes beyond financial and operational performance.

A copy of the policy is available at https://www.orientrefractories.com/policies.htm and the business responsibility report for the year ended 31 March 2019 in terms of Regulation 34 of the Listing Regulations is annexed to this report as Annexure - VII.

x. Transfer of amounts to Investor Education and Protection Fund

The Company did not have any fund lying unpaid or unclaimed for a period of seven years. Therefore there was no fund which was required to be transferred to Investor Education and Protection Fund (IEPF). Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last Annual General Meeting (i.e. 10 September 2018), with the Ministry of Corporate Affairs.

xi. Listing with stock exchanges

The Company confirms that it has paid the annual listing fees for the year 2019-20 to NSE and BSE where the Company’s shares are listed.

xii. Sexual Harassment of Women at Workplace (Prevention, Prohibition &Redressal) Act,2013

The Company has formulated and implemented a policy of prevention of sexual harassment at the workplace with mechanism of loading/redressal complaints. During the year under review, there were no complaints reported to the Board. The policy may be accessed on the Company’s website at the link: http://www.orientrefractories.com/policies. htm

xiii. Compliance with the Institute of Company Secretaries of India (“ICSI”) Secretarial Standards

The relevant Secretarial Standards issued by the ICSI related to the Board Meetings and General Meeting have been complied with by the Company.

xiv. No disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review:

- Details relating to deposit and unclaimed deposits or interest thereon.

- Issue of equity shares with differential rights as to dividend or voting.

- Issue of shares (including sweat equity shares) and Employee Stock Option Scheme of the Company under any scheme.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern and Company’s operation in future.

27. CAUTIONARY STATEMENTS

Certain statements in the “Management Discussion and Analysis” describing the Company’s views about the Industry, expectations/ predictions, objectives etc., may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the Statement. Company’s operations may inter-alia affect with the supply and demand stipulations, input prices and their availability, changes in Government regulations, taxes, exchange fluctuations and other factors such as Industrial relations and economic developments etc. Investors should bear the above in mind.

28. ACKNOWLEDGEMENT

The board of directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review.

The boards of directors also wish to place on record its deep sense of appreciation for the committed services by the Company’s executives, staff and workers.

Last but not least, your Directors wish to place on record their warm appreciation to you for your continuous support and encouragement.

For and on behalf of the Board of Directors

Dr. Vijay Sharma

Place : Gurugram Chairman

Date : 28 May 2019 (DIN: 00880113)

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Mar 31, 2018

Dear Shareholders,

The Directors are pleased to present the 8th Annual Report of Orient Refractories Limited (the “Company”) along with the audited financial statements for the financial year ended 31 March, 2018.

1. FINANCIAL RESULTS

(Amount in Rs. Lacs)

Particulars	2017-18	2016-17
Gross revenue from operations	63,559.30	55,620.32
Total expenditure before finance cost and depreciation	50,854.31	45,284.23
Operating Profit	12,704.99	10,336.09
Add: Other income	1,062.23	826.28
Profit before finance cost, depreciation, exceptional items and taxes	13,767.22	11,162.37
Less: Finance costs	0.00	0.00
Profit before depreciation, exceptional items and taxes	13,767.22	11,162.37
Less: Depreciation	682.69	630.74
Profit/(Loss) before exceptional items & tax	13,084.53	10,531.63
Add/(Less): Exceptional Items	0.00	0.00
Profit before taxes	13,084.53	10,531.63
Less: Tax Expense	4,501.21	3,640.74
(A) Profit/(Loss) after taxes	8,583.32	6,890.89
(B) Total other comprehensive income	(14.43)	(29.08)
(C) Total comprehensive income for the period [ A B ]	8,568.89	6,861.81
Retained Earnings: Balance brought forward from the previous year	26,125.87	21,360.71
Add: Profit for the period	8,583.32	6,890.89
Add: Other Comprehensive Income recognised in Retained Earnings	(14.43)	(29.08)
Balance Which the Directors have apportioned as under to:	34,694.76	28,222.52
(i) Dividend on Ordinary Shares	3,003.48	1,742.02
(ii) Tax on dividends	611.44	354.63
Total Appropriations	3,614.92	2,096.65
Retained Earnings: Balance to be carried forward	31,079.84	26,125.87

Footnote:

The Company has adopted Indian Accounting Standard (‘Ind AS’) with effect from 1 April, 2017 and accordingly these financial results along with the comparatives have been prepared in accordance with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules issued thereunder and the other accounting principles generally accepted in India.

2. COMPANY PERFORMANCE AND OPERATIONS

The Company has shown significant growth during the year 2017-18. The revenue during the year was Rs. 62,678.77 lacs (net of excise duty) as compared to Rs. 51,938.77 lacs (net of excise duty) in 2016-17, growth of 20.67%. Profit before tax increased by 24.24% as compared to previous year 2016-17.Profit before tax is Rs. 13,084.53 lacs in current year (Previous year Rs. 10,531.63 lacs).

3. EXPANSION OF PRODUCTION CAPACITY

The Company, to meet growing demand of refractory worldwide, through its internal fund expanded its existing production capacity of isostatic products from 9,300 tons per year to 11,700 tons per year at Bhiwadi. The new plant has capacity to produce 2,400 tons per year, which can be enhanced to 4,800 tons per year in second phase. The plant was successfully commissioned on 17 May, 2018 and the commercial production was started from June’2018. The actual project cost was Rs. 1,760 lacs.

4. EXPORT HOUSE STATUS

Your Company enjoys the status of “One Star Export House”.

5. DIVIDEND

The Board recommended a dividend of Rs. 2.50 per equity share on 12,01,39,200 equity shares of Re. 1.00 each for the year ended 31 March, 2018 (previous year Rs. 2.50 per equity share). The dividend on equity share is subject to the approval of the shareholders at the Annual General Meeting (‘AGM’) scheduled to be held on 10 September, 2018. The dividend will be paid by 30 September, 2018.

The Register of Members and Share Transfer Books will remain closed from Tuesday, 28 August, 2018 to Tuesday, 4 September, 2018 (both days inclusive) forthe purpose of AGM and payment ofthe dividend forthe financial year ended 31 March, 2018.

6. SHARE CAPITAL

The paid up equity share capital as on 31 March, 2018 was Rs. 1,201.39 lacs. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

7. RESERVES

The Board of Directors has decided to retain the entire amount of profits in the profit and loss account.

8. MATERIAL CHANGES AND COMMITMENTS

In terms of Section 134(3)(l) of the Companies Act, 2013, no material changes and commitments affecting the financial position of your Company have occurred between the end of the financial year of the Company to which the financial statements relate and on the date of this report.

9. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate internal control systems in place, and also has reasonable assurance on authorizing, recording and reporting transactions of its operations. The Company has a well-placed, proper and adequate internal controls environment, commensurate with its size, scale and complexities of its operations. The Company had already developed and implemented a framework for ensuring internal controls over financial reporting. This framework includes entity level policies, processes and operating level standard operating procedures. Internal control systems are an integral part of your Company’s corporate governance structure. These have been designed to provide reasonable assurance with regard to inter-alia (a) recording and providing reliable financial and operational information; (b) complying with the applicable statutes; (c) safeguarding assets from unauthorized use; (d) executing transactions with proper authorization, and ensuring compliance with corporate policies; (e) Prevention and detection of frauds / errors and (f) Continuous updating of IT systems. The Company’s management has assessed the effectiveness of the Company’s internal control over financial reporting as of 31 March, 2018.

The Audit Committee reviewed the reports submitted by the Management, Internal Auditors and Statutory Auditors. Based on their evaluation (as defined in section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations, 2015), the Company’s Audit Committee has concluded that, as of 31 March, 2018, the Company’s internal financial controls were adequate and operating effectively.

10. HUMAN RESOURCES

Employees being prime force, the Company give equal emphasis on employees’ development and their engagement. Our people are the most important resource we have. The Company believes in enhancing the competencies of employees to create a high performing and innovative organization. Employees are facilitated to participate in training programs in house and at outside institutes. Equal emphasis is given on technical & soft skills. We are creating numerous opportunities for our employees to develop including international development paths and special initiatives for the future management of our company. Last year our main focus of in-house trainings was on interpersonal skills, behavioural attributes, customer focused culture, lean implementation and 5’s at shop floor. The Company endeavours to keep the employees motivation high level by providing congenial & respectful work atmosphere and rewarding/remunerating effectively. 100% safety of our employees is one of the important operative targets for ORL. Various initiatives have been launched to engage employees. Communicating and reaching out to employees at all levels is being done by using various mass media techniques. Celebrating festivals and achievements on various occasions is part of ORL culture. There are cordial relations between the Management and the employees of the Company.

11. SUBSIDIARY COMPANY

The Company does not have any subsidiary.

12. MERGER OF RHI AG & MAGNESITA REFRATARIOS S.A.

RHI Ag (ultimate holding company) entered into a share purchase agreement with a group of shareholders controlling Magnesita Refratarios S.A., a corporation incorporated under the laws of Brazil, (“Magnesita”) pursuant to which RHI, Ag agreed to purchase 50% plus one share of the issued and outstanding share capital of Magnesita (the “Acquisition of Control”). The merger of Magnesita Refratarios S.A. and RHI Ag was implemented in two steps of internal reorganization.

As a first step of reorganization substantially all of RHI’s assets, rights and permits, obligations and legal relations were transferred to RHI Feuerfest GmbH through universal succession by way of a de-merger for absorption. This means that all legal relations with RHI Ag were transferred to RHI Feuerfest GmbH through universal succession as of the date of legal effectiveness of the demerger on 17 October, 2017.

RHI Feuerfest GmbH is responsible for operative business. RPT limit approved by members of the Company also transferred to RHI Feuerfest GmbH.

As a second step RHI Ag was merged with the Dutch Legal Entity, i.e. RHI Magnesita N.V., by way of a cross-border merger, whereby all assets, rights and permits, obligations and legal relations of RHI Ag remaining after the de-merger were transferred to RHI Magnesita N.V. through universal succession by way of a merger by absorption. After merger with RHI Magnesita N.V., RHI Ag ceased to exist as a legal entity. The merger and the completion of the acquisition of control occurred in October’ 2017.

13. AMALGAMATION OF RHI INDIA PRIVATE LIMITED AND RHI CLASIL PRIVATE LIMITED WITH AND INTO THE COMPANY

The Board of Directors of the Company at its meeting held on 31 July, 2018 granted its in-principle approval to the scheme of amalgamation of RHI India Private Limited (RHI India) and RHI Clasil Private Limited (RHI Clasil) (together, the Merging Entities) with and into the Company subject to approval of the shareholders and creditors of the three companies, the Stock Exchanges, the Securities and Exchange Board of India, the National Company Law Tribunal and other regulatory authorities. In this regard, the Board of Directors has approved the share exchange ratio i.e. for every 100 equity shares of face value of Rs. 10 each of RHI India, issue of 7,044 equity shares of face value of Re. 1 each of the Company and for every 1,000 equity shares of face value of Rs. 10 each of RHI Clasil, issue of 908 equity shares of face value of Re. 1 each of the Company.

The Board of Directors is of the opinion that the transaction is aligned with the Company’s best interests and would entail various benefits, including: (a) simplification of the corporate structure and consolidation of the India businesses of the RHI Magnesita N.V. (the ultimate holding company) group; (b) establishing a comprehensive refractory product portfolio; (c) realizing business efficiencies, inter alia, through optimum utilization of resources due to pooling of management, expertise, technologies and other resources of the companies; (d) improved allocation of capital and optimisation of cash flows contributing to the overall growth prospects of the combined entity; (e) creation of a larger asset base and facilitation of access to better financial resources and (f) enhanced shareholder value pursuant to economies of scale and business efficiencies.

The Company and the merging entities are involved in similar business activities, while the Company has carved a niche in the refractory products market, RHI Clasil manufactures and markets other refractories and allied products and RHI India is predominantly engaged in trading and marketing of refractories and allied products. Accordingly, the integration of the businesses of the Company and the merging entities would further augment the Company’s leadership position in the Indian refractories market, with presence at all levels of the value chain, including manufacture, marketing and trading of refractories and allied products. The transaction is expected to enhance the Company’s long-term growth prospects and competitiveness, thereby benefitting all the stakeholders of the Company, particularly its shareholders and employees.

RHI India and RHI Clasil are related parties of the Company. This envisaged transaction constitutes a related party transaction as all the three companies are part of the RHI Magnesita N.V. group of companies. For the parent company RHI Magnesita N.V., the global leading supplier of refractory products, systems and services, the merger of the Indian organisations is an important step towards executing the strategic pillar “Markets”, which focuses on achieving worldwide presence with strong local organisations and solid market positions in all major markets. The envisaged amalgamation is a key measure to build one strong local organisation in India through consolidating and streamlining the local structures. This will enable RHI Magnesita N.V. to seize growth opportunities in the strategically important growth market India even more effectively and efficiently in the future.

14. POSTAL BALLOT

The Company had conducted postal ballot through notice dated 15 March, 2018 for (a) Amendment in the Memorandum of Association of the Company and (b) Shifting of registered office of the Company. The Company declared the result dated 26 April, 2018 and both the resolutions were approved by the shareholders of the Company. The result of voting is provided in the Corporate Governance Report.

15. CHANGE OF REGISTERED OFFICE OF THE COMPANY

The Regional Director, Northern Region, was pleased to pass an order dated 30 July, 2018 approving shifting of the registered office of the Company from National Capital Territory of Delhi to the State of Maharashtra. Accordingly the registered office of the Company will be shifted to Mumbai. With effect from 1 August, 2018, the address of new registered office is C-604, Neelkanth Business Park, Opposite Railway Station, Vidhyavihar (West), Mumbai, Maharashtra - 400 086.

16. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) and 134(5) of the Companies Act, 2013, your Directors to the best of their knowledge confirm that:

i. that in the preparation of the annual accounts for the year ended 31 March, 2018, the applicable accounting standards have been followed and there are no material departures from the same;

ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March, 2018 and of the Profit of the Company for that period;

iii. the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors have prepared the annual accounts of the Company on a “going concern” basis;

v. the Directors have laid down internal financial controls to be followed by the Company and the such internal financial controls are adequate and are operating effectively and

vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that systems are adequate and operating effectively.

17. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts /arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and on an arm’s length basis. During the year, the Company has not entered into any contracts /arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC - 2 is not applicable to your Company.

The policy on materiality of related party transactions and dealing with related party transactions are approved by the Board and can be accessed on the Company’s website at the link: http://www.orientrefractories.com/policies.htm. Members can refer Note no. 30 to the financial statements which set out related party disclosures.

The Board of Directors of the Company has approved the criteria for making the omnibus approval by the Audit Committee within the overall framework of the policy on related party transactions. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and proposed to be entered in the ordinary course of business and at arm’s length during the financial year. All related party transactions are placed before the Audit Committee for review and approval.

18. CORPORATE SOCIAL RESPONSIBILITY

The Board of Directors of the Company has approved a Corporate Social Responsibility (CSR) Policy based on the recommendation of the CSR Committee. The Board has formed a committee on CSR in accordance with Companies Act, 2013. The composition of the same has been given in Corporate Governance Report. The CSR policy of the Company is available on the Company’s website and can be accessed on the Company’s website at the link: http://www. orientrefractories.com/policies.htm.

In the year 2017-18, the Company was required to spend Rs. 212.23 lacs (including unspent amount of Rs. 30.13 lacs for the financial year 2016-17) towards CSR activities, however the Company spent Rs. 184.06 lacs towards the CSR activities.

During the year the Company has kept the provision for spending fund on skill development programme as recommended by CSR Committee, but due to delay in project the programme could not be started. However, the Company spent more than the prescribed amount for this year towards CSR activities. The initiatives undertaken by the Company on CSR activities during the year is set out in Annexure - I.

19. RISK MANAGEMENT

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company risk management framework. The Company has framed a Risk Management Policy to identify and access the key business risk areas and a risk mitigation process. The policy aims to ensure resilience for sustainable growth and sound corporate governance by having an identified process of risk identification and management in compliance with the provisions of the Companies Act, 2013. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s Activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment.

The Risk Management Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. There are no risks, which in the opinion of the Board threaten the existence of the Company.

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Ms. Barbara Potisk Eibensteiner resigned as the member of the Board effective 8 August, 2017. The Board places on record their deep appreciation for the contribution during her tenure.

The shareholders of the Company in their 7th Annual General Meeting hold on 25 September, 2017 appointed

- Ms. Buzzi as director of the Company and

- Mr. Parmod Sagar, as Managing Director and Chief Executive Office of the Company for a fresh term of 5 years effective from 4 March, 2018.

In accordance with provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Parmod Sagar, Whole Time Director, designated as Managing Director & CEO of the Company, retires by rotation at the ensuing AGM and being eligible seeks re-appointment. The Board recommends his re-appointment.

Brief profile of the Director being re-appointed as required under Regulations 36(3) of Listing Regulations, 2015 and Secretarial Standard on General Meetings are provided in the notice for the forthcoming AGM of the Company.

The Company has received declaration from all Independent Directors of the Company confirming that they meet with the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 confirming that they meet the criteria of independence as prescribed thereunder as well as Regulation 16(1)(b) of the Listing Regulations, 2015.

The Company has complied with the requirements of corporate governance as stipulated under the Listing Regulations, 2015 and accordingly, the Report on Corporate Governance forming part of this Annual Report.

21. KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are- Mr. Parmod Sagar, Managing Director & CEO, Mr. Sanjeev Bhardwaj, Chief Financial Officer and Mr. Sanjay Kumar, Company Secretary. During the year, there has been no change in the Key Managerial Personnel.

22. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Company has devised the Nomination and Remuneration Policy for the selection, appointment and remuneration of the Directors and Key Managerial personnel and also remuneration of other employees who have the capacity and ability to lead the Company towards achieving sustainable development. The Nomination and Remuneration Policy of the Company is available on the Company’s website and can be accessed on the Company’s website at the link: http://www. orientrefractories.com/policies.htm

The Criteria for appointment and remuneration of Directors is as under:

(a) Criteria for Appointment of Managing Directors / Whole Time Director / Director:

The Nomination and Remuneration Committee shall identify persons of integrity who possess relevant expertise and experience particularly in refractory industry, leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board.

(b) Criteria for Appointment of Independent Director:

The Independent Director shall be of high integrity with relevant expertise and experience so as to have as diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management.

23. PERFORMANCE EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to applicable provisions of the Act and the corporate governance requirements as prescribed by Listing Regulations, 2015.

The performance of the board was evaluated by the board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The Nomination and Remuneration Committee had evaluated the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

Performance evaluation of independent directors was carried out by the entire board, excluding the independent director being evaluated. A meeting of the independent directors, with Dr. Vijay Sharma as the Chairman, was held on 30 May, 2017, to review the performance of the non-independent directors, the Board as a whole and the Chairman on the parameters of effectiveness and to assess the quality, quantity and timeliness of the flow of information between the Management and the Board. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees, and individual directors was also discussed.

24. AUDITORS

Statutory Auditor

M/s. Price Waterhouse, Chartered Accountants, LLP (Firm Registration No. 012754N/N500016) were appointed as Statutory Auditors of the Company at the 7 AGM held on 25 September, 2017 for a period of 5 years for auditing the accounts of the Company from the conclusion of 7 AGM till the conclusion of 12 AGM of the Company (from financial year 2017-18 to financial year 2021-22), subject to ratification of their appointment at every annual general meeting in terms of the provisions of Companies Act, 2013. However as per the amended provisions of the Companies Act, 2017 notified on 7 May, 2018 Company is not required to ratify the appointment of auditors at every annual general meeting, therefore, it is not proposed to ratify the appointment of auditors at the ensuing AGM.

Internal Auditor

The Board has appointed M/s. Chaturvedi & Partners as an Internal Auditors for the financial year 2017-18 under Section 138 of the Companies Act, 2013 and they have completed the Internal Audit as per the scope as defined by the Audit Committee.

Secretarial Auditor

The Company has appointed M/s. Naresh Verma & Associates, Company Secretaries in Practice, to conduct Secretarial Audit for the financial year 2017-18 as required by Section 204 of the Companies Act, 2013 and rules made thereunder. The Company provided all assistance and facilities to the Secretarial Auditors for conducting their audit. The Secretarial Audit Report for the financial year ended 31 March, 2018 is annexed herewith marked as Annexure - II.

Cost Auditor

As per Section 148 of the Companies Act, 2013, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. In this connection, the Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/s. K. G. Goyal & Associates as the cost auditors of the Company for the year ending 31 March, 2019.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the members of the Company. Accordingly, appropriate resolution forms part of the Notice convening the AGM. The Board seeks your support in approving the proposed remuneration of Rs. 50,000 plus out-ofpocket expenses and taxes payable to the Cost Auditors for the Financial Year ending 31 March, 2019.

M/s. K. G. Goyal & Associates have vast experience in the field of cost audit and have conducted the audit of the cost records of the Company for the past several years under the provisions of the erstwhile Companies Act, 1956.

The Cost Audit Report for the year ended 31 March, 2018 will be filled within statutory time limit.

25. AUDITOR’S QUALIFICATION

There are no qualifications in the reports of the Statutory Auditor and Secretarial Auditor except one observation by Secretarial Auditor’s regarding short fall in Corporate Social Responsibility expenditure, which is explained elsewhere in this report. There are no frauds reported in the reports of the Auditors as mentioned under sub-section (12) of Section 143 of the Act.

26. INDUSTRIAL RELATIONS

The industrial relations with staff and workers during the year under review continue to be cordial.

27. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business of your Company during the year under review.

28. DISCLOSURES

i. Vigil Mechanism /Whistle Blower Policy

The Vigil Mechanism of the Company which also incorporate a whistle blower policy in the terms of SEBI (Listing Obligations and Disclosure Requirements), 2015 deals with instances of fraud and mismanagement, if any. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company’s website at the link: http:// www.orientrefractories.com/policies.htm

ii. Audit Committee

The Audit Committee comprised of two independent non-executive directors viz. Dr. Vijay Sharma (Chairman) & Mr. R. S. Bajoria and one non-executive director viz. Mr. Erwin Jankovits. All the recommendations made by the Audit Committee were accepted by the Board.

iii. Number of Board Meeting

The Board of Directors of the Company met five times in the year, the details of which are provided in the Corporate Governance Report.

iv. Particulars of loans given, investment made, guarantees given and securities provided

The Company has not given any loans, guarantee or investments covered under the provisions of Section 186 of the Companies Act, 2013.

v. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 are provided in Annexure - III.

vi. Extract of Annual Return

Extract of annual return of the Company is annexed herewith as Annexure - IV to this report.

vii. Particulars of Employees and related disclosures

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure - V.

vii. Corporate Governance Report

Report on Corporate Governance is annexed herewith as Annexure - VI to this report.

viii. Transfer of amounts to Investor Education and Protection Fund

The Company did not have any fund lying unpaid or unclaimed for a period of seven years. Therefore there was no fund which was required to be transferred to Investor Education and Protection Fund (IEPF). Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last Annual General Meeting (i.e. 25 September, 2017), with the Ministry of Corporate Affairs.

ix. Listing with Stock Exchanges:

The Company confirms that it has paid the annual listing fees for the year 2018-19 to NSE and BSE where the Company’s shares are listed.

x. Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company has formulated and implemented a policy of prevention of sexual harassment at the workplace with mechanism of loading/redressal complaints. During the year under review, there were no complaints reported to the Board. The Policy may be accessed on the Company’s website at the link: http://www.orientrefractories.com/policies. htm

xi. Compliance with the Institute of Company Secretaries of India (“ICSI”) Secretarial Standards

The relevant Secretarial Standards issued by the ICSI related to the Board Meetings and General Meeting have been complied with by the Company.

xii. No disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review

a. Details relating to deposit and unclaimed deposits or interest thereon.

b. Issue of equity shares with differential rights as to dividend or voting.

c. Issue of shares (including sweat equity shares) and Employee Stock Option Scheme of the Company under any scheme.

d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern and Company’s operation in future.

29. CAUTIONARY STATEMENTS

Certain statements in the “Director’s Report & Management Discussion and Analysis” describing the Company’s views about the Industry, expectations/ predictions, objectives etc., may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the Statement. Company’s operations may inter-alia affect with the supply and demand stipulations, input prices and their availability, changes in Government regulations, taxes, exchange fluctuations and other factors such as Industrial relations and economic developments etc. Investors should bear the above in mind.

30. ACKNOWLEDGEMENT

The Board of Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review.

The Boards of Directors also wish to place on record its deep sense of appreciation for the committed services by the Company’s executives, staff and workers.

Last but not least, your Directors wish to place on record their warm appreciation to you for your continuous support and encouragement.

For and on behalf of the Board of Directors

Dr. Vijay Sharma

Place : Gurugram Chairman

Date : 31 July, 2018 (DIN: 00880113)

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Mar 31, 2017

To

The Members of

ORIENT REFRACTORIES LIMITED

The Directors hereby present their Seventh Annual Report on the business and operations of the Company and the financial statements for the year ended 31 March, 2017.

1. FINANCIAL RESULTS

(Rs. in Lacs)

Particulars	2016-17	2015-16
Net Sales & Income	52,765.05	46,426.22
Profit before Depreciation, Interest and Tax	11,124.12	9,056.46
Less: Depreciation	636.66	590.62
Interest	0.30	0.20
Profit before income tax	10,487.16	8,465.64
Less: Net Tax Expense	3,625.35	2,883.80
Net profit for the year	6,861.81	5,581.84
Add: Balance brought forward from the Previous Year	10,926.50	7,441.31
Amount available for appropriation	17,788.31	13,023.15
Appropriation:
Final Dividend on Equity Shares	-	1,742.02
Corporate Dividend Tax	-	354.63
Balance carried forward to Balance Sheet	17,788.31	10,926.50

Footnotes:

a. Figures have been rounded off to Rs. lacs.

b. Previous year''s figures have been regrouped/ restated wherever necessary to conform to the classification of the current year.

c. The Board recommended a dividend of Rs. 2.50 per equity on 120,139,200 equity shares of Re. 1.00 each for the year ended 31 March, 2017 subject to the approval of the shareholders at the Annual General Meeting.

2. COMPANY PERFORMANCE AND OPERATIONS

Indian Steel Industry continues to witness challenges as currently they are financially stressed, though the overall performance has been better due to good realization and year to year growth of 5.4% in steel output. Despite financially stressed market, the Company has shown significant increase in Sales and Profit during the year. The revenue during the year was Rs. 52,765.05 lacs as compared to Rs. 46,426.22 lacs in 2015-16, growth of 13.65%. Profit before tax increased by 23.92% as compared to previous year 2015-16.Profit before tax is Rs. 10,487.16 lacs in current year (Previous year Rs. 8,465.64 lacs).

3. DIVIDEND

The Board recommended a dividend of Rs. 2.50 per equity share on 120,139,200 equity shares of Re. 1.00 each for the year ended 31 March, 2017 (Previous year Rs. 1.45 per equity share). The dividend on equity share is subject to the approval of the shareholders at the Annual General Meeting (''AGM'') scheduled to be held on 25 September, 2017. The dividend will be paid by 30 September, 2017.

The Register of Members and Share Transfer Books will remain closed from Tuesday, 12 September, 2017 to Tuesday, 19 September, 2017 (both days inclusive) for the purpose of AGM and payment of the dividend for the financial year ended 31 March, 2017.

4. TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire amount of profits in the profit and loss account.

5. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as required by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations'') is incorporated elsewhere in this report by reference and forms an integral part of this report. (Annexure-A)

6. SHARE CAPITAL

The paid up Equity Share Capital as on 31 March, 2017 was Rs. 1,201.39 lacs. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

7. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of the report.

8. EXPANSION PLANNING

The Company produces Isostatic Pressed Products (ISO, flow control) in its plant at Bhiwadi, India.The current production capacity for ISO products at Bhiwadi plant is 9,300 tons per annum. Considering the growth of steel industry in India and increasing demand in export market there is a forecast of market demand of 10,000 tons in 2018 and 11,700 tons in 2019 onwards. The management decided to increase the existing capacity of ISO to 11,700 tons per annum, the addition serves to address a bottle neck in production capacity by building an additional ISO production line in existing plant at Bhiwadi. The estimated time for completion of project is second quarter of 2018, with an estimated cost of Rs.1,727 lacs.

9. SUBSIDIARY COMPANY

The Company does not have any subsidiary.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans, guarantee or investments covered under the provisions of Section-186 of the Companies Act, 2013.

11. FIXED DEPOSITS

The Company has not accepted any public deposits during the financial period under review.

12. RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on arm''s length basis, in the ordinary course of business and in compliance with the applicable provisions of the Act and the Listing Regulations. In terms of Listing Regulations there was materially significant Related Party Transactions made by the Company during the year which had prior approval of the shareholder of the Company. The shareholders of the Company through postal ballot modified and ratified the limit for material Related Party Transaction with RHI, Ag up to a maximum amount of Rs. 9,000 lacs for the year 2016-17.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company''s website.

Details of the transactions with Related Parties are provided in the accompanying financial statements. There were no transactions during the year which would require to be reported in Form AOC-2.

13. HUMAN RESOURCES

The Company treats its “human resources” as one of its most important assets. The Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. The Company thrust is on the promotion of talent internally through job rotation and job enlargement.

The Company''s health and safety policy commits to provide a healthy and safe work environment to all employees. The Company''s initiative creates a culture of fitness in the organization by helping to build a fraternity of health and fitness conscious employees. The Company''s performance driven culture helps and motivates employees to excel in their respective areas and progress within the organization.

In order to prevent accidents, hazard perception is improved at training courses and special attention is paid to the contribution of employees to avoiding danger.

14. RISK MANAGEMENT

The Company has in place a Risk Management Policy, pursuant to Section 134 of the Act. The Company has a Risk Management Committee as a measure of good governance which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company''s enterprise vide risk management framework and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The Company manages monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company''s management systems, organizational structures, processes, standards, code of conduct and behaviors together form the ORL Management System that governs how the Company conducts the business and manages associated risks. The Committee reviews the key risks, mitigation plans and progress of the risk management process at periodic intervals. The policy is available on the website of the Company.

15. INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has in place an adequate system of internal controls. It has documented policies and procedures covering all financial and operating functions and processes. These have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, protecting assets from unauthorized use or losses and compliance with regulations. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

16. INTERNAL AUDIT

The Company continues to engage M/s. Chaturvedi & Partners, Chartered Accountants as its Internal Auditor. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors'' findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

17. POSTAL BALLOT

The Company had conducted postal ballot through notice dated 19 April, 2017 for (i) modification and ratification of limit for Material Related Party Transaction with RHI, Ag up to a maximum amount of Rs. 9,000 lacs for the year 2016-17 and (ii) Approval of Material Related Party Transactions limit with RHI, Ag for the year 2017-18,2018-19 and so on. The Company declared the result dated 27 May, 2017 and both the resolutions were approved by the shareholders of the Company. The result of the shareholders vote is given below:

Category	No. of Shares Held	Total Votes Polled		Votes cast in favour		Votes cast against
		No. of Votes	%	No. of Votes	%	No. of Votes	%
Resolution No. 1	To modify and ratify limit for material related party transaction with RHI, Ag for the year 2016-17.
Promoters*	83,637,771	83,637,771	100.000	-	-	-	-
Institutions	12,669,488	9,363,546	73.91	9,363,546	100.00	-	-
Retail Shareholders	23,831,941	2,526,933	10.60	2,522,422	99.82	4,511	0.18
Total	120,139,200	95,528,250	79.52	11,885,968	12.44	4,511	0.01
Resolution No. 2	Approval of Material Related Party Transaction with RHI, Ag.
Promoters*	83,637,771	83,637,771	100.00	-	0.000	-	-
Institutions	12,669,488	9,363,546	73.91	9,363,546	100.00	-	-
Retail Shareholders	23,831,941	2,518,279	10.57	2,513,718	99.82	4,561	0.19
Total	120,139,200	95,519,596	79.51	11,877,264	12.43	4,561	0.01

[*The votes casted by Promoter Holding Company were treated as invalid, as being interested in the resolution, the Promoter Holding Company was not entitled to vote in respect of the resolution.]

18. DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment/Re-appointment

On the recommendations of the Nomination and Remuneration Committee, the Board appointed

- Ms. Verena Buzzi as an Additional (Non-Executive) Director of the Company effective 8 August, 2017. Ms. Buzzi brings a wealth of experience to the Board with her extensive experience in the field of finance and controlling.

- Mr. Parmod Sagar, Managing Director was appointed on 4 March, 2013 for a period of 5 years. He is going to be retired on 3 March, 2018. The Board appointed him as Managing Director and Chief Executive Office of the Company for a fresh term of 5 years effective from 4 March, 2018.

As per the provisions of the Companies Act, 2013 Mr. Erwin Jankovits will retire by rotation at the ensuing AGM and being eligible, seek re-appointment.

The resolution(s) for confirming the above appointment/re-appointments will come before you at the ensuing AGM scheduled to be held on 25 September, 2017. We seek your support and hope you will enthusiastically vote in confirming the above appointment/re-appointments to the Board.

The profile and particulars of experience, attributes and skills that qualify all of the above Directors for the Board membership is disclosed in the Notice convening the AGM.

Cessation

Ms. Barbara Potisk Eibensteiner resigned as the member of the Board effective 8 August, 2017. The Board places on record their deep appreciation for the contribution during her tenure.

Independent Directors'' Declaration

The Company has received the necessary declaration from each Independent Director in accordance with Section 149(7) of the Companies Act, 2013, that they meets the criteria of independence as laid out in Section 149(6) of the Companies Act, 2013 and the Listing Regulations.

Governance Guidelines

The Company has adopted Governance Guidelines on Board Effectiveness. The Governance Guidelines cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Director term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Director Remuneration, Subsidiary oversight, Code of Conduct, Board Effectiveness Review and Mandates of Board Committees.

Procedure for Nomination and Appointment of Directors

The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.

The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director''s appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the CVs of potential candidates'' vis-a-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

Criteria for Determining Qualifications, Positive Attributes and Independence of a Director

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations.

In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal and communication skills and soundness of judgment. Independent Directors are also expected to abide by the ''Code for Independent Directors'' as outlined in Schedule IV to the Act.

Independence

In accordance with the above criteria, a Director will be considered as an ''Independent Director'' if he/she meets with the criteria for ''Independent Director'' as laid down in the Act and Regulation 16 (1) (b) of the Listing Regulations.

Qualifications

A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill domain mix of the Board.

Training of Independent Directors

Every new Independent Director of the Board familiarized with the strategy, operations and functions of the Company, the Executive Directors / Senior Managerial Personnel make presentations to the inductees about the Company''s strategy, operations, product and service offerings, markets, organization structure, finance, human resources, technology, quality, facilities and risk management.

Further, at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining his role, function, duties and responsibilities as a director. The letter of appointments is available on the website of the Company, http://www.orientrefractories.com/corporate_announcements.htm

Annual Evaluation of Board Performance and Performance of its Committees and of Directors

Pursuant to the applicable provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees. The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.

The Board''s functioning was evaluated on various aspects, including inter-alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.

Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors, who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.

The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.

Key Managerial Personnel

Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are -Mr. Parmod Sagar, Managing Director, Mr. Sanjeev Bhardwaj, Chief Financial Officer and Mr. Sanjay Kumar, Company Secretary. During the year, there has been no change in the Key Managerial Personnel.

19. REMUNERATION POLICY

The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and the Listing Regulations. The policy is available on the web site of the Company.

20. BOARD AND COMMITTEE MEETINGS

Four Board Meetings were convened and held during the year.

The Board has constituted an Audit Committee with Dr. Vijay Sharma as Chairman and Mr. R. S. Bajoria and

Mr. Erwin Jankovits as members. There have been no instances during the year when recommendations of the Audit Committee were not accepted by the Board. Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the attached Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations.

21. DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2016-17.

Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively,

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

22. CORPORATE SOCIAL RESPONSIBILITY

At ORL, Corporate Social Responsibility (CSR) strategy focuses on people, society and environment. In Orient we prioritize issues which are more important to our business and stakeholders and area where we can make the greater impact. As responsible citizen ORL is working in the vicinity of its manufacturing unit and surroundings and support initiatives that improve health, environment, education and overall living condition of the society.

The Corporate Social Responsibility Committee headed by Dr. Vijay Sharma as Chairman, with Mr. R. S. Bajoria,

Mr. Erwin Jankovits and Mr. Parmod Sagar as members.

The Company has adopted a CSR Policy in compliance with the provisions of the Act. In health care domain the Company has organized health check-up camps to offer curative services and conducted awareness programmes on health issue. The Company has incurred running expenses of Ambulance to provide health support to the society. Water and sanitation facilities were also provided under CSR activities at various places. The Company has contributed to Swatch Bharat Kosh to promote the clean environment and green initiatives and also contributed to Clean Ganga Fund for cleanliness of water and manage drinking water. The Company has donated water purifiers to safe drinking water to schools in rural area. To conserve water and manage & dispose water, the Company has contributed to Chief Minister Fund of Rajasthan under Mukhya Mantri Jal Swalamban Abhiyan. To promote the education facility, the Company has renovated school building and toilets in surrounding areas, further provided necessary infrastructure & reading materials to girl hostel to promote girl child education.

The gross amount required to be spent by the Company (including unspent amount Rs. 21.08 lacs related to previous year ended 31 March, 2016) during the year ended 31 March,2017 was Rs. 181.58 lacs, however the Company spent Rs. 151.45 lacs towards the CSR projects as stated above (as per Schedule VII of the Act) during the financial year 2016-17. The Company is in process to start new project for skill development in the local vicinity, where the unspent amount of Rs. 30.13 lacs pertaining to previous year will be spent along with the CSR contribution for the year 2017-18 as per the Companies Act, 2013. The Annual Report on CSR activities is attached and forms an integral part of this report. (Annexure B)

23. AUDITORS Statutory Auditors

At the 4th AGM of the Company held on 26 September, 2014 M/s. Deloitte Haskins & Sells, (DHS) Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office from the conclusion of the 4thAGM till the conclusion of the 9thAGM to be held in the year 2019, subject to ratification of their appointment at every subsequent AGM. DHS shows their unwillingness to continue as statutory auditors of the Company from conclusion of the ensuing 7th AGM.

The Board in their meeting held on 8th August 2017, based on recommendation of Audit Committee, has recommended the appointment of M/s. Price Water House, Chartered Accountants LLP as statutory auditors of the Company in the forthcoming Annual General Meeting. The Company has received a letter from PWC, Chartered Accountants LLP, to the effect that their appointment, if made, would be in accordance with the conditions prescribed under Section 139 (2) of the Companies Act, 2013 and they are not disqualified for such appointment within the meaning of Section 141 of the said Act. The members are requested to appoint M/s. Price Water House, Chartered Accountants LLP, as statutory auditors of the Company as set out at Item No. 4 of the Notice of the forthcoming Annual General Meeting.

DHS, Chartered Accountants, are the auditors of the Company and will hold office until the conclusion of the ensuing AGM. On your behalf and on our own behalf we place on record our sincere appreciation for the services rendered by DHS during its association with the Company.

Cost Auditors

As per Section 148 of the Companies Act, 2013 (‘Act''), the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. In this connection, the Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/s. K. G. Goyal & Associates as the cost auditors of the Company for the year ending 31 March, 2018.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the members of the Company. Accordingly, appropriate resolution forms part of the Notice convening the AGM. The Board seeks your support in approving the proposed remuneration of Rs. 50,000 plus out-of-pocket expenses payable to the Cost Auditors for the Financial Year ending 31 March, 2018.

M/s. K. G. Goyal & Associates have vast experience in the field of cost audit and have conducted the audit of the cost records of the Company for the past several years under the provisions of the erstwhile Companies Act, 1956.

The Cost Audit Report for the year ended 31 March, 2017 will be filled within statutory time limit.

Secretarial Auditors

Section 204 of the Companies Act, 2013 inter-alia requires every listed company to annex with its Board’s report, a Secretarial Audit Report given by a Company Secretary in practice, in the prescribed form.

The Board appointed M/s. Naresh Verma & Associates, practicing Company Secretaries as Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2016-17 and their report is annexed and forms an integral part of this report (Annexure C).

The observation by Secretarial Auditor''s regarding short fall in Corporate Social Responsibility expenditure and breach in the thresh limit of material related part transaction are explained elsewhere in this report. The Board has also appointed M/s. Naresh Verma & Associates as Secretarial Auditor to conduct Secretarial Audit of the Company for Financial Year 2017-18.

24. Extract of the Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 as per provisions of the Companies Act, 2013 and Rules thereto are annexed and form an integral part of this report. (Annexure D).

25. PARTICULARS OF EMPLOYEES AND REMUNERATION

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules forms part of the report (Annexure E). None of the employees listed in the said Annexure is related to any Director of the Company and all employees are on permanent pay roll of the Company.

26. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

27. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

28. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on Conservation of energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is attached and form an integral part of this report. (Annexure F)

29. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

The Company did not have any fund lying unpaid or unclaimed for a period of seven years. Therefore there was no fund which was required to be transferred to Investor Education and Protection Fund (IEPF). Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last Annual General Meeting (i.e. 26 September, 2016), with the Ministry of Corporate Affairs.

30. LISTING WITH STOCK EXCHANGES

The Company confirms that it has paid the annual listing fees for the year 2017-18 to NSE and BSE where the Company''s shares are listed.

31. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has Zero tolerance towards any action on the part of any employee, which may fall under the ambit of ''Sexual Harassment'' at workplace, and is fully committed to uphold and maintain the dignity of every woman employee working in the Company. There was no complaint reported during the Financial Year under the said Act.

32. DISCLOSURE REQUIREMENTS

As per the Listing Regulations Corporate Governance Report with Auditors'' Certificate thereon and Management Discussion and Analysis Report are attached, which form part of this report.

- Policy on dealing with Related Parties is available on the website of the Company.

(URL: http://www.orientrefractories.com/policies.htm).

- Policy on Corporate Social Responsibility is available on the website of the Company.

(URL: http://www.orientrefractories.com/policies.htm).

- Policy on Remuneration and Nomination of Directors, Key Managerial Personals and Other Employees of the Company is available on the website of the Company. (URL: http://www.orientrefractories.com/policies.htm).

- Policy for Evaluation of the Performance of the Board of Directors is available on the website of the Company.

(URL: http://www.orientrefractories.com/policies.htm).

- Code of Conduct for Board Members, Independent Directors, Senior Management Personnel and Other Employees of the Company is available on the website of the Company. (URL:http://www.orientrefractories.com/code_of_conduct.htm)

- Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders is available on the website of the Company. (URL: http://www.orientrefractories.com/policies.htm).

33. ACKNOWLEDGEMENT

Your Directors wish to thank all the employees of the Company for their dedicated service during the year. They would also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from bankers, business partners and other stakeholders.

On behalf of the Board of Directors

Dr. Vijay Sharma

New Delhi Chairman

8 August, 2017 (DIN: 00880113)

---

Mar 31, 2014

Dear Members,

The directors have pleasure in presenting the fourth annual report of your Company along with the audited financial statements for the financial year ended 31 March, 2014.

FINANCIAL RESULTS ( Rs. in Lacs)

PARTICULARS 2013-2014 2012-2013

Net Sales & Income 40,760.54 36,189.13

Profit before Depreciation, Interest and Tax 8,328.55 6,654.88

Less: Depreciation 362.58 379.21

Interest 7.49 131.41

Profit before Income Tax 7,958.48 6,144.26

Less :Income Tax 2,673.84 2,005.24

Net Profit for the year 5,284.64 4,139.02

Add: Balance brought forward from the Previous Year 1,899.49 666.04

Amount available for appropriation 7,184.13 4,805.06

Appropriation:

General Reserve 600.00 1,500.00

Final Dividend on Equity Shares 1,501.74 1,201.39

Corporate Dividend Tax 255.22 204.18

Balance carried forward to balance sheet 4,827.17 1,899.49

OPERATIONS REVIEW

Despite the combination of slow growth in the service and industrial sector, downfall of rupee, high inflation your Company has performed well and continues to grow by more than 10% in successive two years.

During the year under review your Company has achieved net revenue of Rs. 40,760.54 Lacs (Previous Year Rs. 36,189.13 Lacs) which is 12.63% more than the Previous Year. Profit before tax for the financial year 2013-14 was Rs. 7,958.48 Lacs (Previous Year Rs. 6,144.26 Lacs).The profit for the year 2013-14 has increased by 29.53% as compared to 2012-13.

FUTURE OUTLOOK

Introduction of new government implies positive prospects for the future. Government aims for sustained growth of 7-8 percent in the next 3-4 years, and focusing to revive growth in manufacturing and infrastructure sectors. Your Directors are hopeful to sustain the same growth and profitability during the financial year 2014-15.

During first quarter of 2014-15 the profit before tax is Rs. 1,934.81 Lacs which is approx. 5.00 % more than the profit before tax ( Rs. 1,848.11 Lacs) of quarter ending on June 30, 2013.

Your Directors are hopeful that the turnover and profitability of the Company will increase in the current financial year.

DIVIDEND

Based on the Company''s performance, your Directors are pleased to recommend a final dividend of Rs.1.25 per share (i.e. 125%) for the financial year 2013-14 on the capital of 120,139,200 equity shares of Rs.1.00 each. The final dividend on the equity shares, if approved by the members would involve a cash outflow including dividend distribution tax of Rs. 1,756.96 Lacs (Previous Year Rs. 1,405.57 Lacs).

CHANGE OF REGISTERED OFFICE

The Board of Directors at their meeting held on 28 May, 2014, approved the change of Registered Office of the Company to 804- A,Chiranjiv Tower, 43, Nehru Place, New Delhi-110019 from the earlier office at 1307,Chiranjiv Tower,43,Nehru Place, New Delhi- 110019, with effect from 1 June, 2014.

STATUTORY AUDITORS

Pursuant to provisions of Section 224 of the Companies Act, 1956, M/s Deloitte Haskins & Sells, Chartered Accountants, Gurgaon, Haryana (Firm Registration No. 015125N) were the statutory auditors of the Company who hold office up to the conclusion of the forthcoming Annual General Meeting.

As per Section 139 (2) of the Companies Act, 2013 they are eligible for re-appointment for a term of maximum five consecutive years (i.e. from financial year 2014-15 to 2018-19). The Company has received a letter from M/s Deloitte Haskins & Sells, Chartered Accountants, Gurgaon, Haryana to the effect that their re-appointment, if made, would be in accordance with the conditions prescribed under Section 139 (2) of the Companies Act, 2013 and they are not disqualified for such reappointment within the meaning of Section 141 of the said Act.

AUDITORS'' REPORT

The Auditors Report read with notes to the financial statements is self-explanatory and does not call for any further explanation by the Board.

COST AUDIT

Pursuant to the directive from the Ministry of Corporate Affairs regarding appointment of Cost Auditor, M/s K G Goyal & Associates, Cost Accountants, Jaipur, Rajasthan (Firm Registration No. 000024) have been appointed as the Cost Auditor of the Company for refractories products for the financial year 2014-15. The Cost Audit report relating to the above products will be filed within the stipulated period of 180 days from the close of the financial year.

The Section 148 (3) of Companies Act, 2013 requires that the remuneration of Cost Auditors shall require the ratification of Members and accordingly the appropriate resolution has been included in the notice convening the 4thAnnual General Meeting.

Your Directors recommend the approval of resolution for fixation of remuneration of Cost Auditors for the financial year 2014-15.

INTERNAL AUDIT

Your Company has appointed M/s. Chaturvedi & Partners, Chartered Accountant, New Delhi as Internal Auditors of the Company for financial year 2014-15.

FIXED DEPOSIT

During the year your Company has not accepted any fixed deposits from the public.

DIRECTORS

Ms. Barbara Potisk Eibensteiner (DIN-06505772) and Mr S C Sarin (DIN-03641706) shall be liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

In due compliance with the provisions of Section 149 of the Companies Act, 2013, it is proposed to appoint Mr R S Bajoria (DIN- 00033727) as Independent Director on the Board of the Company, who will hold office for a term of one (1) year i.e. from the conclusion of the ensuing Annual General Meeting to the conclusion of next Annual General Meeting and shall not be liable to retire by rotation.

The appropriate resolutions for appointment/ reappointment of Directors are placed for the approval of shareholders. Your Directors recommend their appointment/re-appointment at the ensuing Annual General Meeting in the overall interest of the Company.

LISTING

The equity shares of the Company are listed at Bombay Stock Exchange Limited(BSE) and National Stock Exchange of India Ltd. (NSE). The Company has paid the listing fee for the year 2014-2015 to BSE and NSE.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 ("Act"), the Directors hereby confirm that:

a. in the preparation of the annual accounts for the year 2013-14, the applicable accounting standards have been followed and there are no material departures;

b. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year;

c. they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities,

d. they have prepared the Annual Accounts on a going concern basis.

CODE OF CONDUCT

Your Company has laid down a code of conduct for the Directors and senior management personnel as specified. The code was adopted in the board meeting held on 18 October, 2011. It is available on the website of the Company www.orientrefractories.com. A declaration by the Managing Director regarding annual affirmation of compliance of the code by all concerned is annexed to the report on corporate governance.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required under Section 217 (1) (e) of the Companies Act,1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, is given in Annexure-A and forms part of this report.

PARTICULARS OF EMPLOYEES

Particular of remuneration paid to the employees as required to be disclosed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are set out in Annexure- B attached hereto and form part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

Notes on Management Discussion and Analysis of the Company have been given in Annexure-C and forms part of this report.

CORPORATE GOVERNANCE

A separate section on Corporate Governance is attached to this report as Annexure-D. A certificate from the Practicing Company Secretary regarding compliance of the conditions of corporate governance as stipulated under clause 49 of the listing agreements with stock exchanges is enclosed as Annexure-E. A certificate from the Managing Director that all board members and senior management personnel have affirmed compliance with the Code of Conduct for the year ended 31 March, 2014 is attached as Annexure-F . CEO/CFO certificate is enclosed as Annexure-G.

ACKNOWLEDGEMENTS

Your Directors sincerely appreciate the dedication and efforts of the employees at all levels of the organisation in contributing to the success of the Company. The Directors are also thankful to the investors of the Company for their confidence in the Company. They also gratefully acknowledge the continued support received from the customers, business associates, various government agencies, financial institutions and the banks.

Regd. office: For and on behalf of the Board

804-A,Chiranjiv Tower,

43,Nehru Place New Delhi 110019

CIN: L28113DL2010PLC210819

30 July, 2014 K K Thirani

New Delhi Chairman

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Mar 31, 2013

Dear Members

The directors have pleasure in presenting the third annual report of your Company along with the audited financial statements for the financial year ended March 31, 2013.

FINANCIAL RESULTS

(Rs. In Lacs) PARTICULARS 2012-2013 2011-2012

Net Sales & Income 36,189.13 30,472.37

Profit before depreciation, interest and tax 6,654.88 5,224.68

Less: Depreciation 379.21 296.59

Interest 131.41 344.42

Profit before Income Tax 6,144.26 4,583.67

Less: Income Tax 2,005.24 1,502.74

Net Profit for the year 4,139.02 3,080.93

Add: Balance brought forward from the previous year 666.04 -9.32

Amount available for appropriation 4,805.06 3,071.61

Appropriation:

General Reserve 1500.00 1,000.00

Final Dividend on Equity Shares 1,201.39 0.00

Interim Dividend on Equity Shares 0.00 1,201.39

Corporate dividend tax 204.18 204.18

Balance carried forward to balance sheet 1,899.49 666.04

OPERATIONS REVIEW

During the year under review your Company has achieved the net sales of Rs. 36,189.13 Lacs (previous year Rs. 30,472.37 Lacs) which is 18.76 % more than the previous year. Profit before tax for the financial year 2012-13 was Rs. 6,144.26 Lacs (16.98% of Net sales) as compared to Rs. 4,583.67 Lacs in 2011-12 (15.04% of Net Sales).

FUTURE OUTLOOK

During the financial year 2013-14, in spite of slowdown in industry growth, high inflation, fall of rupee, etc, your Company has done a net sales of Rs. 9,698.98 Lacs in first quarter ended on June 30, 2013, an increase of 5.43% over first quarter (Net Sales Rs. 9,172.55 Lacs) of corresponding previous year 2012-13. During first quarter of 2013-14 the profit before tax is Rs. 1,848.11 Lacs which is 27 % more than the profit before tax (Rs. 1,353.36 Lacs) of quarter ending on June 30, 2012.

Your directors are hopeful that the turnover and profitability of the Company will increase in the current financial year.

DIVIDEND

Based on the Company''s performance, your directors are pleased to recommend a final dividend of Rs. 1.00 per share (i.e. 100%) for the financial year 2012-13 on the capital of 120,139,200 equity shares of Rs. 1.00 each. The final dividend on the equity shares, if approved by the members would involve a cash outflow including dividend distribution tax of Rs. 1,405.57 Lacs (previous year final dividend Rs.0.00 and interim dividend Rs.1,405.57 Lacs).

CHANGE OF MANAGEMENT AND CONTROL

There has been a change in management and shareholding control in the Company. During the year, pursuance to share purchase agreement vide dated January 15, 2013 entered by M/s Dutch US Holding B.V. Netherlands with Mr S G Rajgarhia and other ex-promoters of the Company, and also post offer made to shareholders of the Company under Securities and Exchange Board of India (Substantial Acquisition of Shares & Takeover) Regulations. M/s Dutch US Holding B.V. acquired 52,401,579 (43.62%) equity shares on March 04, 2013 from the ex-promoters and thus acquired control over the Company and immediately thereafter, change in management took place. M/s Dutch US Holding B.V. also acquired 31,236,192 (26.00%) equity shares under above said open offer. As on date total equity holding of M/s Dutch US Holding B.V. is 83,637,771 (69.62%).

M/s. Dutch US Holding B.V. is a private limited liability Company, having registered office at Velperweg 81, 6824 HH Arnhem, Netherlands. The said Company is an investment holding Company. M/s. Dutch US Holding B.V. is a wholly-owned subsidiary of M/s. Veitscher Vertriebsgesellschaft m.b.H., which is a wholly owned subsidiary of M/s. RHI AG having registered office at Wienerbergstrasse 9, 1100 Vienna, Austria and is part of the M/s. RHI group. M/s. Dutch US Holding B.V. is also promoted by M/s. RHI AG.

Ms Barbara Potisk-Eibensteiner, Dr Giorgio Cappelli (resigned on July 24, 2013) and Mr Michael John Williams were appointed as additional directors of the Company under the category of promoter director and also Mr Parmod Sagar, Senior Vice President of the Company was appointed as an additional director as well as Managing Director of the Company.

Mr S G Rajgarhia resigned from position of Managing Director and appointed as Vice Chairman of the Company. Mr S C Sarin was re-designated as Technical Advisor of the Company. Mr K K Thirani was elected as Chairman of the Company.

FIXED DEPOSIT

During the year your Company has not accepted any fixed deposits from the public.

AUDITORS

The existing auditors M/s. S.R. Batliboi & Co. LLP Chartered Accountants retires at the ensuing Annual General Meeting. They are not offering themselves for re-oppointment. It is proposed to appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, as statutory auditors of the Company in place of the retiring auditors. M/s. Deloitte Haskins & Sells, Chartered Accountants have confirmed that their appointment, if made, shall be within the limits laid down in Section 224(1B) of the Companies Act, 1956.

AUDITORS'' REPORT

The Auditors Report read with notes to the financial statements is self-explanatory and does not call for any further explanation by the Board.

COST AUDITORS

M/s K G Goyal & Associates has been appointed as Cost Auditors u/s 233(1B) of Companies Act 1956 for the year 2012-13 for Refractory products of the Company. The Audit is under progress and the cost audit report will be filed within prescribed time limits.

DIRECTORS

Mr S G Rajgarhia and Mr K K Thirani having been longer in the office, retire by rotation at the ensuing annual general meeting and being eligible offer themselves for re-appointment. A brief resume of the appointees are given in the notice to the annual general meeting.

During the year Ms. Barbara Potisk-Eibensteiner, Mr. Michael John Williams, Mr. Parmod Sagar and Mr. Reinhold Steiner were appointed as additional directors of the Company and holds office up to ensuing annual general meeting. Notice under Section 257 of the Companies Act, 1956 has been received from members, proposing their candidature as directors.

Mr S G Rajgarhia resigned from office of Managing Director and appointed as Vice Chairman of the Company. Mr S C Sarin was re-designated as Technical Advisor of the Company. Remuneration of both the directors were also revised.

Mr. Parmod Sagar was appointed as Managing Director w.e.f. March 04, 2013 by the board of directors of the Company.

Your directors recommend their appointment/re-appointment at the ensuing Annual General Meeting in the overall interest of the Company.

During the year Mr R K Rajgarhia and Mr P P Khanna resigned from the Board on March 02, 2013 Dr. Giorgio Cappelli also resigned from the Board on July 24, 2013. The Directors places on record their sincere appreciation and gratitude for contributions made by them during their tenure on the Board.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 ("Act"), the directors hereby confirm that:

(i) in the preparation of the annual accounts for the year 2012-13, the applicable accounting standards have been followed and there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

CODE OF CONDUCT

Your Company has laid down a code of conduct for the directors and senior management personnel as specified. The code was adopted in the board meeting held on October 18, 2011. It is available on the website of the Company www.orientrefractories.com. A declaration by the Managing Director regarding annual affirmation of compliance of the code by all concerned is annexed to the report on corporate governance.

CREDIT RATING OF BANK BORROWINGS

The Company has A (Single A Plus) rating on its long term borrowings by Credit Analysis & Research Ltd. (CARE). This rating indicates adequate safety and carries low credit risk.

For short term borrowings A1 (A One Plus) have been assigned by CARE. This rating indicates very high degree of safety and carries lowest credit risk.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, is given in Annexure-A and forms part of this report.

PARTICULARS OF EMPLOYEES

Particular of remuneration paid to the employees as required to be disclosed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are set out in Annexure- B attached hereto and form part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

Notes on Management Discussion and Analysis of the Company have been given in Annexure-C and forms part of this report.

CORPORATE GOVERNANCE

A separate section on Corporate Governance is attached to this report as Annexure-D. A certificate from the Practicing Company Secretary regarding compliance of the conditions of corporate governance as stipulated under clause 49 of the listing agreements with stock exchanges is enclosed as Annexure-E. A certificate from the Managing Director that all board members and senior management personnel have affirmed compliance with the Code of Conduct for the year ended March 31,2013 is attached as Annexure-F .CEO/CFO certificate is enclosed as Annexure-G.

ACKNOWLEDGEMENTS

Your Directors sincerely appreciate the dedication and efforts of the employees at all levels of the organisation in contributing to the success of the Company. The Directors are also thankful to the investors of the Company for their confidence in the Company. They also gratefully acknowledge the continued support received from the customers, business associates, various government agencies, financial institutions and the banks.

For and on behalf of the Board

New Delhi K K Thirani

July 24, 2013 Chairman

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Mar 31, 2012

The directors have pleasure in presenting the second annual report of your Company along with the audited financial statements for the financial year ended March 31, 2012.

OPERATIONS REVIEW AND FUTURE OUTLOOK

Your Company was incorporated on November 26, 2010. The Hon'ble High Court of Delhi, vide its order dated September 19, 2011 sanctioned a Scheme of Demerger ("the Scheme") between Orient Abrasives Limited ("OAL") and Orient Refractories Limited ("the Company"), pursuant to which the refractory division of OAL was demerged and transferred to the Company with effect from commencement of business on April 1, 2011 i.e. Appointed Date under the Scheme. The Scheme became effective from October 31, 2011.

The financial results for the year ended March 31, 2012 are for the business transferred to the Company, after giving effect to the Scheme of Demerger and accordingly, are not strictly comparable with the previous corresponding period and hence not given here.

During the year under review your Company has achieved a gross turnover of Rs.30,041.61 Lacs including export income of Rs. 4,612.16 Lacs. The gross profit and net profit for the year under review are Rs.4,583.67 Lacs and Rs.3,080.93 Lacs respectively.

Your directors are hopeful that the turnover and profitability of the Company will increase in the current financial year.

DIVIDEND

Your Company has already paid an interim dividend of Rs.1.00 per share (i.e. 100%) on May 10, 2012. The board of directors does not propose any final dividend this year and the interim dividend already paid be treated as final dividend.

CAPITAL STRUCTURE PAID-UP CAPITAL

In accordance with the Scheme of Demerger 119,639,200 equity shares of Rs.1.00 each fully paid up were issued and allotted to the shareholders of OAL on November 15, 2011, as per the entitlement ration of 1:1, i.e. each shareholder of OAL whose name appeared in the register of members of the OAL on the record date i.e. November 14, 2011, received one fully paid equity share of face value of Rs. 1.00 each in the Company.

The paid-up capital as at March 31, 2012 stands at Rs. 1,201.39 Lacs comprising of 120,139,200 equity shares of Rs. 1.00 each fully paid up.

LISTING OF EQUITY SHARES

The equity shares of your Company were listed and admitted for trading on Bombay Stock Exchange (BSE) w.e.f. March 09, 2012 and National Stock Exchange of India Limited (NSE) w.e.f. March 12, 2012.

FIXED DEPOSIT

During the year your Company has not accepted any fixed deposits from the public.

AUDITORS

M/s. S.R. Batliboi & Co., Chartered Accountants, who are the statutory auditors of the Company, hold office, in accordance with the provisions of the Act up to the conclusion of the forthcoming annual general meeting and offer themselves for re-appointment. They have confirmed that their re-appointment, if made, shall be within the limits laid down in Section 224(1 B) of the Companies Act, 1956.

AUDITORS' REPORT

The Auditors' Report read with notes to the financial statements is self-explanatory and does not call for any further explanation by the board.

COST AUDITORS

M/s. K G Goyal & Associates, Cost Accountants have been appointed as Cost Auditor of the Company for the financial year 2012-13.

DIRECTORS

Mr R S Bajoria and Mr A K Jain having been longer in the office, retire by rotation at the ensuing annual general meeting and being eligible offer themselves for re-appointment. A brief resume of the appointees is given in the notice to the annual general meeting.

During the year Mr. P P Khanna was appointed as additional director of your Company and holds office upto ensuing annual general meeting. Notice under Section 257 of the Companies Act, 1956 has been received from a member, proposing the candidature of Mr. P P Khanna as director.

Your directors recommend their appointment/re-appointment at the ensuing annual general meeting in the overall interest of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 ("Act"), the directors hereby confirm that:

(i) in the preparation of the annual accounts for the year 2011-12, the applicable accounting standards have been followed and there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

CODE OF CONDUCT

Your Company has laid down a code of conduct for the directors and senior management personnel as specified. The code was adopted in the board meeting held on October 18, 2011. It is available on the website of the Company www.orientrefractories.com. A declaration by the managing director regarding annual affirmation of compliance of the code by all concerned is annexed to the report on corporate governance.

CREDIT RATING OF BANK BORROWINGS

The Company has A (Single A Plus) rating on its long term borrowings by Credit Analysis & Research Ltd. (CARE) .This rating indicates adequate safety and carries low credit risk.

For short term borrowings A1 (A One Plus) have been assigned by CARE. This rating indicates very high degree of safety and carries lowest credit risk.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, is given in Annexure-A and forms part of this report.

PARTICULARS OF EMPLOYEES

Particular of remuneration paid to the employees as required to be disclosed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are set out in Annexure- B attached hereto and form part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

Notes on Management Discussion and Analysis of the Company have been given in Annexure-C and forms part of this report.

CORPORATE GOVERNANCE

A separate section on corporate governance is attached to this report as Annexure-D. A certificate from the Practicing Company Secretary regarding compliance of the conditions of corporate governance as stipulated under clause 49 of the listing agreements with stock exchanges is enclosed as Annexure-E. A certificate from the managing director that all board members and senior management personnel have affirmed compliance with the code of conduct for the year ended March 31,2012 is attached as Annexure-F .CEO/CFO certificate is enclosed as Annexure-G.

ACKNOWLEDGEMENTS

Your Directors sincerely appreciate the dedication and efforts of the employees at all levels of the organisation in contributing to the success of the Company. The directors are also thankful to the investors of the Company for their confidence in the Company. They also gratefully acknowledge the continued support received from the customers, business associates, various government agencies, financial institutions and the banks.

For and on behalf of the Board

New Delhi R K Rajgarhia

August 11,2012 Chairman