Dalmia Refractories Ltd Directors Report

Dear Members,

Your Directors hereby present the Forty-Eighth Annual Report together with Audited Financial Statements and the highlights of the performance of Subsidiary Companies for the year ended March 31,2021.

Financial Results	Standalone		Consolidated
	FY 2020-21	FY 2019-20	FY 2020-21	FY 2019-20
REVENUE	218.76	290.58	394.68	450.10
Profit before Interest, Depreciation and Tax	19.02	32.79	36.57	49.70
Less: Interest and financial charges	3.03	2.64	9.29	8.42
Profit before Depreciation and Tax	15.99	30.15	27.28	41.28
Less: Depreciation	6.83	8.17	15.92	17.78
Profit Before Tax	9.16	21.98	11.36	23.50
Provision for current tax	3.58	6.90	6.66	10.62
Provision for deferred tax	(1.57)	(2.45)	(1.95)	(3.25)
Profit/(loss) after tax before share of profit in associates	7.14	17.53	6.65	16.14
Less: Share of minority interest	-	-	(0.21)	(1.67)
Profit/(loss) After Tax	7.14	17.53	6.86	17.80

Note: Previous year figures have been regrouped/ re-arranged wherever considered necessary.

State of the Companys Affairs

Fire within, the zeal and commitment to achieve highest levels of success and eagerness to rise beyond all expectations - these are characteristics that have helped Dalmia Refractories Limited maintain its leadership position for well over 40 years now. Dalmia Refractories is a pioneer in Alumino-Silicate Refractories having substantial market share in Alumina bricks used in manufacturing of cement.

During the Year ended March 31, 2021, the revenue

stood at 218.76 Cr as compared to 290.58 Cr in previous year. Our Net proft stood at 7.14 Cr as compared to 17.53 Cr during the previous year, on a standalone basis. The performance of the company during the year would have been better but for the outbreak of COVID-19 across the world.

On consolidated basis, the revenue stood at 394.68 Cr as compared to 450.10 Cr in previous year. Similarly, Net proft stood at 6.86 Cr as compared to 17.80 Cr during the previous year.

The company remains committed to its stakeholders and will continue to leverage its technology and manufacturing capabilities, expand its reach in international markets, pursue innovative technologies, invest in enhancing local high-quality refractory production and actively continue to pursue M&A opportunities both inside and outside of India.

The Company continues to be engaged in the business of manufacturing, distribution and service of refractory products and services during the financial year 2020-21.

Management Discussion and Analysis Report

The Management Discussion and Analysis of financial performance and results of operations of the Company, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBIListing Regulations") is provided in a separate section and forms an integral part of this Annual Report. It inter-alia gives detail of the overall industry structure, economic developments, performance and state of affairs of your Companys business, risk management systems and material developments during the financial year under review.

Impact of COVID-19 pandemic

Towards the end of financial year 2019-20 and during the period under review, the entire global economy has faced an unprecedented disruption, owing to the COVID- 19 pandemic. The COVID-19 outbreak has severely impacted the business of the company with shattered supply chains, halted production and deliveries to the Customers. The Plant facilities of company were closed due to nationwide lockdown announced by the Government of India. However, with the extra efforts put by the company to manage supply chains management effectively, the impact has been minimized.

Subsequently, the Company has resumed its operations in a gradual and phased manner with available workforce, in strict compliance with Standard Operating Protocols (SOPs) issued by the Union Government and State Government from time to time and with the requisite permissions from the authorities. The health and safety of

employees remained the main key focus for the Company. Dividend

Your Directors are pleased to recommend a dividend of 10% @ ? 1 per equity share of face value of ? 10/- each for the financial year 2020-21, payable to those shareholders whose names appear in the Register of Members as on the Book Closure / Record Date. The dividend payout is subject to approval of the members at the Annual General Meeting of the Company for the financial year ended on March 31, 2021.

Share Capital

During the period under review, the Issued, Subscribed and Paid up equity share capital of the Company was ? 3.15 crore constituting of 31,52,084 equity shares of ? 10/- each. There was no change in the capital structure of the Company.

Transfer to Reserves

The Company proposes to retain its entire earnings in the profit and loss account and proposes not to transfer any amount to the General Reserve.

Consolidated Financial Statements

In accordance with the provisions of the Companies Act, 2013 read with the Indian Accounting Standards (lnd AS), the Consolidated Financial Statements of the Company and of all the subsidiaries for the financial year 2020-21 have been prepared in accordance with applicable accounting standards and form part of the Integrated Annual Report.

Subsidiaries, Associates and Joint Venture Companies

As on March 31, 2021, the Company has 3 subsidiaries out of which 1 is a joint venture Company. Dalmia GSB Refractories GmbH, wholly owned subsidiary of the Company situated in Germany is the material unlisted subsidiary of the Company in terms of the Listing Regulations as amended from time to time and the Companys Policy for determining material subsidiary. The said Policy may be accessed at the Companys website www.dalmiarefractories.com.

The details of the Subsidiaries are as under:

S. No. Name of the Subsidiary	Status	% age Holding
1. Dalmia Seven Refractories Limited	Joint Venture/ Subsidiary	51%
2. Dalmia GSB Refractories GmbH	Wholly Owned Subsidiary	100%
3. GSB Refractories India Private Limited	Step down Subsidiary	100%

A statement containing the salient features of the financial statements of the Companys subsidiaries, joint ventures and associate companies for the FY ended March 31, 2021 in Form AOC-1 is attached and marked

as Annexure - 1 and forms part of this report. The contribution of the Companys subsidiaries, joint ventures and associates companies to the overall performance of the Company during the financial year under review

could be referred from the financial highlights given above and the financial statements forming part of the Annual Report. The Financial Statements of the Company/its subsidiaries and the Consolidated Financial Statements of the Company, are placed on the Companys website www.dalmiarefractories.com.

During the said financial year, no company ceased to be a subsidiary of the Company and apart from those mentioned above, the Company does not have any other associate or joint venture Company. Further, there is no material change in the business of subsidiary companies and the Company has taken note of all the significant transactions and arrangements entered into by its subsidiaries.

Scheme of Arrangement and Amalgamation

The Board of Directors of Company in their meeting held on 14^th November, 2019 has approved a Scheme of Amalgamation and Arrangement amongst Dalmia Refractories Limited (DRL) and its subsidiary GSB Refractories India Private Limited (GSB India), Dalmia Bharat Refractories Limited (DBRL) (formerly known as Sri Dhandauthapani Mines and Minerals Limited) and Dalmia OCL Limited (DOCL) (formerly known as Dalmia OCL Private Limited/Ascension Commercio Private Limited) and their respective shareholders and creditors in terms of Sections 230 to 232 and all other applicable provisions of the Companies Act, 2013 (Scheme 2).

Subsequently, on 5^th April 2021, based on the recommendation of the Audit Committee, the Board of Directors of the Company approved modification of the aforesaid Scheme. The modification involved removal of the step with regard to transfer of refractory undertaking from DBRL to DOCL. As a result, the name of the Modified Scheme has changed to Scheme of Amalgamation of DRL and GSB India with DBRL and their respective shareholders and creditors (Scheme 2). Scheme 2 now involves amalgamation of the Company and its subsidiary GSB India with DBRL. The appointed date of the said Scheme 2 is 1^st April, 2020.

Pursuant to NCLT Orders dated 23^rd February, 2021 and Id" April, 2021, the Company has held its Shareholders and Creditors Meeting on 3^rd June, 2021 and 27‘" May, 2021 respectively to seek their respective approvals to the aforementioned Scheme of Amalgamation and both the Shareholders and the Creditors of the Company have approved the Scheme with requisite majority. Now, the Scheme is pending before the NCLT, Chennai for its approval.

The Board of Directors of Dalmia Cement (Bharat) Limited (DCBL) and DBRL in their respective meetings held on 14^th November, 2019, approved a Scheme of Arrangement amongst DCBL and DBRL and their

respective shareholders and creditors in terms of Sections 230 to 232 and all other applicable provisions of the Companies Act, 2013 (Scheme 1) for transfer and vesting of refractory undertaking of DCBL to DBRL, by way of slump exchange on a going concern basis. The appointed date of the said Scheme would be 1^stApril, 2019.

Pending necessary regulatory approvals and other compliances, no effect of the above mentioned schemes has been considered in these financial statements.

Corporate Governance

Your Directors are committed to achieve the highest standards of ethics, transparency, corporate governance and continue to comply with the Code of Conduct framed for the Board and senior management under Regulation 17 of the SEBI Listing Regulations. The endeavour is to continue and move forward as a responsible and sustainable company in order to attract as well as retain talents, customers, suppliers, investors and to maintain fulfilling relationships with the communities

Your Companys corporate governance practices are driven by effective and strong Board oversight, timely disclosures, transparent accounting policies and high levels of integrity in decision making.

The Corporate Governance Report for the financial year 2020-21 as required under the Listing Regulations of the Company is attached hereto and forms part of this report. The requisite cerdficate(s) from the Statutory Auditor of the Company confirming compliance with the conditions of Corporate Governance and from Secretarial Auditor that none of the Directors of the Company has been debarred or disqualified from being appointed or continuing as Director of the Company by Securities and Exchange Board of India/Ministry of Corporate Affairs or any such authority is attached to the Corporate Governance Report.

Annual Return

In terms of the provisions of Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, the annual return of your Company for the financial year ended March 31, 2021 will be uploaded at the Companys website www.dalmiarefractories.com.

Corporate Social Responsibility Initiatives

The Company is fully aware of its social responsibilities and is providing time to time assistance through the local institutions to benefit the local residents of the nearby areas, where the Companys plants are located.

The Corporate Social Responsibility Policy adopted by the board of directors can be accessed at the Companys website www.dalmiarefractories.com.

The prime objective of the Corporate Social Responsibility policy of the Company is to hasten social, economic and environmental progress. We remain focused on generating systematic and sustainable improvement for local communities surrounding our plants and project sites.

Pursuant to the said Policy, the Company has spent ? 19.86 Lakhs towards corporate social responsibility activities during the financial year 2020-21. The said amount spent was equal to 2% of average net profits of the Company made during three immediately preceding financial years. The annual report on corporate social responsibility activities is attached and marked as Annexure - 2 and forms part of this Report.

Directors and Key Managerial Personnel

During the financial year under review, Mr. Deepak Thombre, Mr. Mahendra Kumar Doogar and Mr. Chandrasekaran Nagaratnam, being the Independent Directors have given their declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(l)(b) of the Listing Regulations.

The term of appointment Mr. Mahendra Kumar Doogar as Independent Director of the Company has expired on 31.03.2021, accordingly he has ceased to be an independent director of the Company effective 01.04.2021. The Board places on record its sincere appreciation for the valuable advice and guidance of Mr. Mahendra Kumar Doogar during his tenure as Director of the Company

During the period under review, keeping in view the performance of Mr. Deepak Thombre, as Independent Director on the Board and post receipt of necessary declarations in terms of the provisions of Companies Act, 2013 read with its rules made thereunder and listing regulations and upon recommendation of the Nomination and Remuneration Committee, the Board of Directors has re-appointed Mr. Deepak Thombre as an Independent Director of the Company for another term of 2 years w.e.f September 19, 2020 subject to the approval of the Shareholders at the forthcoming Annual General Meeting of the Company.

Pursuant to the provisions of Section 152(6) of the Companies Act, 2013, Ms. Leena Rawal, retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment. She has given a declaration in terms of Section 164(2) of the Companies Act, 2013 to the effect that she is not disqualified from being re-appointed as a Director of the Company.

Board of Directors, Committees and Meetings

The Board of Directors of the Company met four times during the financial year 2020-21, i.e., on June 16, 2020, August 21, 2020, November 11, 2020 and February 12, 2021. The time gap between two consecutive meetings of the Board did not exceed one hundred and twenty days during the financial year 2020-21.

The Board meetings were conducted through Video Conferencing in due compliance with and following the procedures prescribed in the Companies Act, 2013, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations") and applicable Secretarial Standards.

In terms of the provisions of Rule 8 of Schedule IV to the Companies Act, 2013 a separate meeting of the Independent Directors excluding all other Directors and Officials of the Company was also held on February 12, 2021. Reference is invited to the attached Corporate Governance Report for the details thereof.

As on March 31, 2021, there are four Board level committees. The composition, terms of reference and other details of all Board Level Committees have been elaborated in the Corporate Governance Report annexed to this Report.

Nomination and Remuneration Policy

The Nomination and Remuneration Policy lays down the constitution and role of the Nomination and Remuneration Committee. The policy has been framed with the objective -

(a) to ensure that appointment of directors, key managerial personnel and senior managerial personnel and their removals are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015;

(b) to set out criteria for the evaluation of performance and remuneration of directors, key managerial personnel and senior managerial personnel;

(c) to adopt best practices to attract and retain talent by the Company; and

(d) to ensure diversity of the Board of the Company.

The policy specifies the manner of effective evaluation of performance of Board, its Committees and individual Directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and review its implementation and compliance. The Nomination and Remuneration policy of the Company can be accessed at the website of the Company at www.dalmiarefractories.com.

Performance Evaluation

During the financial year under review, the annual evaluation of the performance of the Board, its committees and individual Directors was carried by the Independent Directors, the Nomination and Remuneration Committee and the Board of Directors in compliance with the Companies Act, 2013 and SEBI LODR Regulations, as amended from time to time.

The performance of Non-Independent Directors, Board as a whole and the Chairman was evaluated in a separate meeting of Independent Directors. Similar evaluation was also carried out by the Nomination and Remuneration Committee and the Board. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated

An indicative criteria of evaluation was circulated to the Directors to facilitate such evaluation. Based on the feedback of the Directors and on due deliberations of the views and counter views, the evaluation was carried out in terms of the Nomination and Remuneration Policy and such indicative criterion.

Whistle Blower Policy and Vigil Mechanism

In Compliance with the provisions of section 177 of the Companies Act, 2013 and Regulation 22 of the Listing Regulations, the Company has in place the Whistle Blower Policy and Vigil Mechanism for Directors, employees and other stakeholders which provides a platform to them for raising their voice about any breach of code of conduct, financial irregularities, illegal or unethical practices, unethical behaviour, actual or suspected fraud, health, safety and environmental issues. Adequate safeguards are provided against victimization of stakeholders who use such mechanism and direct access to the Chairman of the Audit Committee in appropriate cases is provided.

The aforesaid policy may be accessed at the website of the Company at www.dalmiarefractories.com

Adequacy of Internal Financial Controls

The Company has adequate internal financial controls commensurate with the size of the Company and nature of its business which are reviewed periodically.

The internal auditors of the Company conduct regular internal audits as per approved plan and the Audit Committee reviews periodically the adequacy and effectiveness of internal control systems and takes steps for corrective measures whenever required.

The roles and responsibilities of all talents and functions have been clearly laid out through a number of detailed standard operating procedure and delegation of authority. The risks identified in the audits are

immediately accounted for in the processes and gets addressed through the Standard Operating Procedures.

Particulars of Loans, Guarantees and Investments

Your Company has given guarantees, provided security and made investments within the limits with the necessary approvals and in terms and accordance with the provisions of Section 186 of the Companies Act, 2013.

The particulars of such guarantees given, securities provided and investments made are provided in the Standalone Financial Statements at Note No. 5.

Related Party Policy and Transactions

The Company has formulated a Related Party Transactions Policy and the same can be accessed at the website of the Company www.dalmiarefractories.com. Prior omnibus approval was obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and at an arms length basis. All related party transactions are placed before the Audit Committee for review, ratification and approval.

All related party transactions entered during the financial year 2020-21 were in the ordinary course of the business and on an arms length basis. The Company has not entered into any arrangement/ transaction with related parties which could be considered material in accordance with the Companys Policy on Related Party Transactions. Hence, no disclosure is required to be made in Form AOC-2.

Risk Management

Your Company has formulated the Risk Management Policy that defines the adequate risk management process, which are based upon business environment, operational controls and compliance procedures. The major risks are assessed through a systematic procedure of risk identification and classification. Risks are prioritized according to significance and likelihood. The purpose of risk management is to proactively address risks.

There are no elements of risk which in the opinion of the Board may threaten the existence of the Company.

Auditors & Auditors Report

Secretarial Auditors

In terms of section 204 of the Companies Act, 2013 and in accordance with the provisions of regulation 24A of the SEBI Listing Regulation, as amended from time to time, Mr. N.C. Khanna, Practicing Company Secretary was appointed as the Secretarial Auditor of the company, to conduct the Secretarial Audit for

the financial year 2020-21. The Secretarial Audit Report for the financial year ended March 31, 2021 in prescribed Form MR-3 is annexed as Annexure-3 of this Report.

There is no qualification, reservation or adverse remark in the Secretarial Audit Report.

Statutory A uditors

M/s. Chaturvedi & Shah LLP, Chartered Accountants were appointed as the Statutory Auditors of the Company at the Annual General Meeting held on 24^th August, 2017 to hold office as such till the conclusion of Annual General Meeting of the Company for the year 2021-22.

The Company has received a certificate from them to the effect that they are eligible to continue as the Statutory Auditors of the Company and that they comply with the limits prescribed under the Companies Act, 2013 read with relevant rules. They have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Reports submitted by the Statutory Auditor on the Standalone and Consolidated financial statements of the Company are self-explanatory and do not contain any qualification, reservation, adverse remark or disclaimer.

The Auditor has not reported any matter under Section 143(12) of the Act during the year under review.

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

The Statement reflecting the particulars relating to conservation of energy, technology absorption and foreign exchange earning and outgo is attached to the Report as Annexure-4.

Particulars of Remuneration of Directors, Key Managerial Personnel and Employees

The particulars of remuneration of Directors and Key Managerial Personnel and other particulars in terms of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure-5 of the Report.

A statement sharing the names and other particulars of the employees in terms of the provisions of Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in Annexure-5A.

Employees Stock Option Scheme

During the year, 33,000 stock options were vested into eligible employees in terms of the Dalmia Refractories

Limited - Employee Stock Option Plan 2018 (DRL ESOP Plan 2018). No stock option has been exercised during the year.

There is no change in the ESOP plan during the financial year under review. The ESOP plan is in compliance with the SEBI Regulations.

As required under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, the applicable disclosures as on March 31, 2021 are available on the Companys website at www.dalmiarefractories.com.

A certificate from the Statutory Auditor on the implementation of your Companys Employees Stock Option Scheme will be placed at the ensuing Annual General Meeting for inspection by the Members.

Public Deposits

The Company has not accepted any deposits from the public till date.

Industrial Relations

The industrial relations during the year under review remained harmonious and cordial.

Disclosures

No significant or material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

The Company has complied with all the applicable Secretarial Standards (SS) issued by the Institute of Company Secretaries of India from time to time and approved by the Central Government.

The Company is required to maintain cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and such records are duly being maintained.

Disclosure Under the Sexual Harassment of Women at Workplace (prevention, Prohibition and Redressal) Act, 2013

Your Company is committed to ensuring that all are treated with dignity and respect. The Human Resource department in collaboration with other functions, ensure protection against sexual harassment of women at workplace and for the prevention and redressal of complaint in this regard.

In line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, an Anti-Sexual Harassment Policy has been put in place and Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. During the

financial year 2020-21, no complaint has been received by ICC.

Material Changes and Commitments

Apart from disclosures made in the report, no other material changes and commitments have occurred, after the close of the year till the date of this report, which affect the financial position of the Company.

Directors Responsibility Statement:

In terms of the provisions of Section 134(5) of the Companies Act, 2013, your Directors declare that:

i) in the preparation of the Annual Accounts for the financial year ended March 31, 2021, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii) the Directors had selected such accounting policies and applied them consistently and made judgements 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 and loss of the Company for that period;

iii) the Directors had 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 frauds and other irregularities;

iv) the Directors had prepared the annual accounts on a going concern basis.

v) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgment

The Directors also take this opportunity to place on record their sincere thanks and appreciation for assistance and continued support to the Company from its Bankers, State and Central Government agencies, employees and other stakeholders of the Company.

For and on behalf of the Board of Directors
ofDalmia Refractories Limited
	Deepak Thombre
Place: Pune	Chairman
Dated: 11th August 2021	DIN: 02421599