Dalmia Refractories Ltd Auditor Reports

Information Other than the Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report (but does not include the nancial statements and our auditors report thereon), which is expected to be made available to us after that date.

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

In connection with our audit of the nancial statements, our responsibility is to read the other information identi ed above and, in doing so, consider whether the other information is materially inconsistent with the nancial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the other information identi ed above, if we conclude that there is a material misstatement therein we are required to communicate the matter to those charged with governance.

Responsibilities of Management and those charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone nancial statements that give a true and fair view of the nancial position, nancial performance, changes in equity and cash ows of the Company in accordance with the accounting principles generally accepted in India, including the accounting Standards speci ed under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone nancial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys nancial reporting process.

Auditors Responsibilities for the Audit of Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to in uence the economic decisions of users taken on the basis of these standalone nancial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is suf cient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal nancial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal nancial controls with reference to the standalone nancial statements in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signi cant doubt on the ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the standalone nancial statements, including the disclosures, and whether the standalone nancial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signi cant audit ndings, including any signi cant de ciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most signi cance in the audit of the standalone nancial statements for the year ended 31 March 2021 and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest bene ts of such communication.

Other Matter

We draw your attention to the Note no. 45 to the Standalone Financial Statements, regarding “Scheme of Amalgamation and Arrangement” amongst the Companies (i.e. Dalmia Refractories Limited, GSB Refractories India Private Limited, Dalmia Bharat Refractories Limited) and their respective shareholders and creditors wherein Dalmia Refractories Limited will be amalgamated with Dalmia Bharat Refractories Limited on a going concern basis. The appointed date is

1 April 2020. Pending approval of the above scheme by the various regulatory authorities and other Compliances, the Standalone Financial Statements of the

Company for the year ended 31 March, 2021 have been prepared on going concern basis. Our opinion is not modi ed in respect of above matter.

Report on other Legal and Regulatory Requirements

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, the Statement of Pro t and Loss (including other comprehensive income), the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone nancial statements comply with the Indian Accounting Standards speci ed under Section 133 of the Act;

(e) On the basis of the written representations received from the directors as on 31 March, 2021 taken on record by the Board of Directors, none of the directors is disquali ed as on 31 March, 2021 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal nancial controls with reference to nancial statement of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

(g) In our opinion, the managerial remuneration for the year ended 31 March, 2021 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act

(h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: (i) The Company has disclosed the impact of pending litigations on its nancial position in its standalone nancial statements. Refer Note 30 to the standalone nancial statements.

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements section of our report of even date)

(i) In respect of its property, plant and equipment: (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

(b) The property, plant and equipment are physically veri ed by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the property, plant and equipment has been physically veri ed by the management during the year and no material discrepancies were noticed on such veri cation.

(c) According to information and explanation given to us and on the basis of our examination of records of the Company, the title deeds of immovable properties are held in the name of the Company.

(ii) In respect of its inventories:-

As explained to us, inventories have been physically veri ed during the year by the management except goods in transit which have been veri ed with reference to con rmations and/or subsequent receipt of material. In our opinion the frequency of veri cation is reasonable. Discrepancies noticed on physical veri cation of the inventories between the physical inventories and book records were not material, having regard to the size of the operations of the Company and the same have been properly dealt with.

(iii) The Company has not granted any loans, secured or unsecured, to companies, rms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013. Therefore, provision paragraph 3 (iii) of the Order are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities.

(v) The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the Rules framed there under to the extent noti ed. During the year, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

(vi) Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as speci ed under Section

148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the records of the Company and information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income-tax, Goods and Services Tax, Duty of customs, Cess and other material statutory dues applicable to it to the appropriate authorities as applicable during the year. According to the information and explanation given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at 31 March, 2021 for a period of more than six months from the date they became payable.

*Net of amount paid

(viii) According to the records examined by us and information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to nancial institution and banks as at Balance Sheet date. The Company has not taken any loans or borrowing from government and has not issued any debentures during the year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and no term loans raised during the year. Therefore, provision of clause (ix) of paragraph 3 of the order is not applicable to the Company.

(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its of cers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

(xiii) The Company has entered into transactions with related parties in compliance with provisions Section 177 and 188 of the Act. The details of such related party transactions have been disclosed in the standalone nancial statements as required by the applicable accounting standards.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures. Therefore, the provisions of Clause 3 (xiv) of the Order are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the

Company has not entered into any non-cash transactions with its directors or persons connected with them. Therefore the provisions of clause 3 (xv) of the order are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Report on the Internal Financial Controls with reference to the aforesaid standalone nancial statements under Clause (i) of Sub- section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal nancial controls with reference to standalone nancial statements of DALMIA REFRACTORIES LIMITED (“the Company”) as of 31st March 2021 in conjunction with our audit of the standalone nancial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal nancial controls based on the internal control with reference to standalone nancial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal nancial controls that were operating effectively for ensuring the orderly and ef cient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable nancial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the internal nancial controls with reference to standalone nancial statements of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over

Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (“ ICAI”) and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal nancial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal nancial controls with reference to standalone nancial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal nancial controls system with reference to standalone nancial statements and their operating effectiveness. Our audit of internal nancial controls with reference to standalone nancial statements included obtaining an understanding of internal nancial controls with reference to standalone nancial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the nancial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is suf cient and appropriate to provide a basis for our audit opinion on the Companys internal nancial controls system with reference to standalone nancial statements.

Meaning of Internal Financial Controls with reference to nancial statements

A companys internal nancial control with reference to standalone nancial statements is a process designed to provide reasonable assurance regarding the reliability of nancial reporting and the preparation of nancial statements for external purposes in accordance with generally accepted accounting principles. A companys internal nancial control with reference to standalone nancial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly re ect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the standalone nancial statements.

Inherent Limitations of Internal Financial Controls with reference to nancial statements

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

Opinion