RHI Magnesita India Ltd

Dear Members,

Your directors have great pleasure in presenting the 14^th Annual Report of RHI Magnesita India Limited ("the Company" or "RHIM" or "RHIM India") along with the Company's audited financial statements (standalone & consolidated) for the Financial Year ("FY") ended 31 March 2024 (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:

*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.

2. FINANCIAL PERFORMANCE

On Standalone basis, the revenue from operations has been increased from Rs.248,836.87 Lacs to Rs.282,409.45 Lacs during the current financial year 2023-24 registering the growth of 13.49% as compared to the previous FY 2022-23. Further, during the current financial year 2023-24, the profit/(loss) before tax (PBT) on revenue increased from Rs.(34,484.52) Lacs to Rs.3,441.42 Lacs. Further, the loss after tax on revenue decreased from Rs.(42,678.99) Lacs to Rs.(5,537.52) Lacs.

On Consolidated basis, the revenue from operations has been increased from Rs.272,626.65 Lacs to Rs.378,110.40 Lacs during the current financial year 2023-24 registering the growth approx. 38.69% as compared to the previous financial year. Further, during the current financial year 2023-24, the loss before tax on revenue decreased from Rs.(39,629.96) Lacs to Rs.(1,550.59) Lacs. Similarly, the loss after tax on revenue decreased from Rs.(46,565.22) Lacs to Rs.(10,010.94) Lacs.

Forward looking statement

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the Company describing the Company's objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events.

The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company assumes no responsibility to publicly amend, modify or revise forward looking statements, on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include changes in government regulations, tax laws, economic developments within the country and such other factors within India and globally.

The financial statements are prepared as per the IND AS guidelines and comply with the applicable Accounting Standards notified under Section 211(3C) of the Act read with the Companies (Accounting Standards) Rules, 2015. The management of RHIM India has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements, reflect in a true and fair manner, the state of affairs and profit for the year.

The following discussions on our financial condition and result of operations should be read together with our audited consolidated financial statements and the notes to these statements included in the annual report. Unless otherwise specified or the context otherwise requires, all references herein to "we", "us", "our", "the Company", "RHIM" are to RHI Magnesita India Limited

About the Company

RHIM India holds the position as a premier manufacturer and supplier of top-tier refractory products, systems, and solutions crucial for high-temperature processes surpassing 1,200?C across diverse industries such as steel, cement, nonferrous metals, and glass. Its offerings encompass Magnesia and Alumina-based bricks and mixes tailored for major industrial clients, alongside specialty refractory items like Isostatic products and Slide Gates. The Company prides itself on being the foremost refractory market leader in India and has established a robust global reputation for delivering superior- quality products.

The organizational structure of RHI Magnesita India Limited was established following the integration of three former 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. This integration aimed to synergize, simplify, and consolidate the strengths of these entities, enabling them to serve customers more efficiently as a unified entity. The merger positioned the Company as the largest manufacturer of refractory products in India, offering a comprehensive range of refractory solutions for the Indian market. This includes capabilities spanning from innovation, research, and development (R&D) to production, marketing, sales, installation, services, monitoring, and recycling of refractories.

RHIM's products and services are divided into two operational divisions, each catering to specific customer industries. The first division focuses on supplying products and services to the steel industry, known as the "Steel Division". The second division serves industries such as cement and lime, non-ferrous metals, chemicals, energy, glass, and others, referred to as the "Industrial Division".

Steel Division

In fiscal year 2024, the Steel Division constituted approximately 76% of RHIM's revenue from operations. RHIM provides an extensive array of refractory products under its Steel Division, allowing the Company to offer holistic solutions to fulfill the refractory needs of steel manufacturers. Refractory management service contracts represent a substantial segment of the Steel Division's revenue, contributing around 33% in fiscal year 2024.

Industrial Division

Demand for refractories in non-steel industries follows a longer replacement cycle, where customers in the cement and lime sectors typically conduct annual maintenance to replace rotary kiln refractories. On the other hand, customers in nonferrous metals and glass industries may only require refractory replacements for lined equipment every ten years. RHIM aimed to provide a diversified local market solution for this segment by acquiring the Indian refractory business of Dalmia Bharat Refractories Limited (DBRL), part of the Dalmia Bharat Group. This acquisition, detailed elsewhere in the report, provides RHIM with a well-diversified product and end-industry mix.

Tailored Customer Solutions

Historically, the Company has served its domestic and international customers primarily through its own facilities, supplemented by facilities within the broader RHI Magnesita Group for certain additional international customers. Its revenue streams encompass sales within India of products manufactured by the Company, sales outside India of its own products, sales within India of imported products from other entities within the global RHI Magnesita group, and services rendered to the larger RHI Magnesita Group. RHIM places a strong emphasis on research and development (R&D), supported by a state-of- the-art R&D center in Bhiwadi. This center leverages the global R&D expertise and experience of its parent company. Given the varying requirements and specifications across customer facilities, RHIM's R&D efforts are directed toward customizing products and services according to customer needs, with a continuous focus on innovation and improvement.

As of the current date, the Company possesses and manages eight production facilities in India, inclusive of its subsidiaries, with a combined refractory production capacity of approximately 525 KTPA. These modern manufacturing facilities are strategically situated in Bhiwadi (Rajasthan), Jamshedpur (Jharkhand), Visakhapatnam (Andhra Pradesh), Cuttack (Odisha), Rajgangpur (Odisha), Khambhalia (Gujarat), Dalmiapuram (Tamil Nadu) and Katni (Madhya Pradesh). Additionally, RHIM, via its subsidiary Intermetal Engineers (India) Private Limited, manages a plant in Mumbai dedicated to manufacturing metallurgical equipment.

The Company maintains a strong commitment to sustainable manufacturing practices, in line with the approach of the global RHI Magnesita group. Aligned with efforts to minimize its environmental footprint, the group focuses on achieving net- zero emissions, investing in innovative technologies, enhancing recycling initiatives, improving energy efficiency, transitioning to sustainable fuels, and utilizing renewable electricity sources. RHIM intends to capitalize on the Group's investments in these areas and enhance its own processes to reduce CO₂ emissions in refractory production.

Strengths:

RHIM exhibits several core strengths that solidify its position as a reputable leader in the refractory industry and enable it to capitalize on opportunities within the swiftly expanding Indian market:

A. Brand Trust and Operational Excellence Post-Merger:

RHIM benefits from the esteemed brand reputation, industry relationships, and technical expertise of the global RHI Magnesita group, which boasts 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 Position in the Indian Refractory Market:

Following the integration of three Indian subsidiaries of the global RHI Magnesita group and the recent acquisition of two leading refractory companies in India, RHIM India has solidified its position as a premier 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 Product Portfolio and Heat Management Solutions:

RHIM distinguishes itself with a wide range of refractory products and services catering to major customer industries in India. Unlike competitors specializing 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 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 long-term customer relationships.

D. Strong Focus on R&D:

R&D is a pivotal focus for RHIM as it endeavors to develop optimized and tailored products and solutions to meet diverse customer requirements. Leveraging the global R&D expertise and technical experience of the global RHI Magnesita group, RHIM's R&D activities primarily occur 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 Sustainable Practices:

RHIM's eight refractory manufacturing facilities strategically located across key steel and cement producing markets in India represent the widest refractory production footprint in the country. These facilities feature 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, RHIM is poised for continued success and growth.

Strategic Initiatives:

A. Synergies from Acquisitions: RHIM aims to capitalize on the acquisitions of the Indian refractory business of DBRL and the refractory business of Hi-Tech Chemicals to create enduring value for its stakeholders. By integrating the acquired businesses' local expertise with the support of the global RHI Magnesita group, RHIM seeks to optimize manufacturing operations, reduce import-related costs, and broaden its product portfolio. The Company will pursue cross-selling and upselling opportunities to enhance market share in domestic and export markets.

B. Expansion and Upgrading of Manufacturing Capacities:

RHIM plans to enhance its local manufacturing capabilities to efficiently meet the growing demand from existing and new customers. This involves achieving operational excellence, productivity improvement, and performance enhancement 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 objective is to streamline production processes and align manufacturing practices with those of the global RHI Magnesita group.

C. Utilization of Existing R&D Capabilities: RHIM will continue to prioritize Research and Development to customize products and meet customer requirements effectively. The Company will leverage the R&D capabilities of the global RHI Magnesita group to facilitate technology transfers and develop high-quality products in India. With increasing demand from steel customers for green steel production, RHIM will focus on increasing its share of production and sale of recycling while developing more carbon-efficient products locally.

D. Expansion of Solutions Contract Business:

The Company aims to grow its solutions contract business by increasing the proportion of revenue derived from services. RHIM plans to offer 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 have emerged in less leveraged industry segments such as Iron Making and Direct Reduced Iron (DRI). RHIM is building a dedicated sales and technical experts' team from existing resources to focus on developing the Company's business in these promising segments.

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

Opportunities & Threats:

RHIM presents several compelling growth opportunities:

A. Strong Global Presence:

The Company has established a prominent position in its sector both domestically and globally, solidifying a robust global presence that bolsters its competitive advantage.

B. Diversified Product Portfolio: RHIM, especially following the integration of the Indian refractory business of DBRL and the refractory business of Hi-Tech Chemicals, possesses a diverse range of products, enabling effective catering to a wide range of end applications. This versatility enhances the Company's capability to address the specific needs of various industries.

C. Favorable Domestic Industry Growth:

The domestic market's user industries, such as steel and cement, are experiencing significant growth overall. This favorable trend creates an enabling environment for RHIM to capitalize on the rising demand for refractory products, positioning the Company for increased market share and improved profitability.

D. Synergies from Inorganic Expansion:

The Company has pursued initiatives in inorganic expansion, expected to yield synergistic benefits. By leveraging strategic acquisitions and partnerships, RHIM can drive overall growth and unlock new business development opportunities.

RHIM faces several significant threats that warrant careful consideration:

A. Competition from Commodity Traders:

The Company operates within a highly competitive market and contends with established global refractory players. Maintaining market share and profitability may pose challenges amid aggressive competition, necessitating continuous innovation and differentiation.

B. Integration Challenges with Recent Acquisitions:

Successful integration of recent acquisitions is pivotal for RHIM's growth and operational efficiency. We are in the process of integrating our processes and systems, which could impact our ability to operate seamlessly and will require a training curve across the organization. Additionally, global supply chain challenges, such as fluctuating freight prices, may affect our performance and hinder the realization of synergies.

C. Unfavorable Macroeconomic and Policy Changes:

The business environment is susceptible to macroeconomic fluctuations and policy changes that can affect the refractory industry. Unexpected economic downturns, shifts in government regulations, or geopolitical instability could present risks and disrupt business operations.

D. Volatility in Raw Material Prices & Supply chain disruption:

RHIM relies on raw materials such as magnesite and alumina, the prices of which can be volatile. Fluctuations in raw material prices can influence the Company's cost structure, profitability, and pricing competitiveness. The recent supply chain challenges was also evident of a threats due to Singapore blockade or red sea crisis have impacted our business in terms of lead time to bring the raw materials or finished goods on time but with increased costs. Despite RHIM has long term contracts with our sea freight providers, such disruptions along with geopolitical uncertainty brings challenges to have a smoother operations.

RHIM proactively monitors and strategizes to mitigate these risks and uphold a competitive advantage in the refractory market.

Global Steel Market Outlook

The global steel market stands at a pivotal juncture, having reached a valuation of US$ 942.3 billion in 2023, and is poised for substantial growth, with forecasts projecting a robust expansion to US$ 1,279 billion by 2032. This trajectory reflects a Compound Annual Growth Rate (CAGR) of 3.3% during the forecast period spanning from 2024 to 2032. Such anticipated growth is underpinned by a confluence of factors propelling demand and fostering innovation across diverse sectors, positioning steel as a cornerstone of industrial and economic development worldwide.

Market Growth and Size: The global steel market is experiencing steady growth, owing to its indispensable role in critical industries such as construction, automotive, and infrastructure development. The market's resilience amidst economic fluctuations underscores its enduring value and adaptability to evolving market dynamics.

Major Market Drivers: Key drivers fueling the market's growth include heightened construction activities across residential and commercial sectors globally, coupled with significant advancements in steel manufacturing technologies. These advancements are enhancing product quality, driving efficiency gains, and expanding the applicability of steel across a spectrum of end-user industries.

Key Market Trends: A notable trend shaping the market landscape is the increasing adoption of high-strength and lightweight steel variants, particularly evident in the automotive and aerospace sectors. This strategic shift is driven by imperatives for enhanced fuel efficiency, reduced emissions, and improved performance, aligning with stringent regulatory standards and consumer preferences.

Geographical Trends: Geographically, Asia Pacific remains a dominant force in the global steel market, propelled by extensive infrastructural developments and robust manufacturing activities. Concurrently, North America is emerging as a fastgrowing market, characterized by a heightened focus on recycling and sustainable steelmaking practices, reflecting regional shifts towards environmental stewardship and resource efficiency.

Competitive Landscape:

The competitive landscape of the global steel market is marked by significant investments in research and development to foster innovation, improve product quality, reduce production costs, and mitigate environmental impacts. Key market players are actively pursuing strategic initiatives to fortify their market positions and drive sustainable growth.

Challenges: The industry faces challenges stemming from volatile raw material prices, stringent environmental regulations, and the imperative for continuous technological advancements to mitigate carbon footprints. Navigating these challenges requires proactive strategies and agile responses from industry stakeholders.

Opportunities: Amidst challenges, opportunities abound for market players to innovate in recycling techniques, develop new materials, and expand into emerging markets. Strategic initiatives focused on sustainability, efficiency gains, and market diversification are instrumental in overcoming challenges and unlocking growth prospects.

Emerging trends underscore steel's integral role in shaping modern industries. The automotive sector, for instance, is witnessing a transformative shift towards electric and autonomous vehicles, driving demand for advanced steel solutions that offer strength, safety, and sustainability. Similarly, the defense industry's demand for high-performance steel alloys for military applications underscores the material's criticality in ensuring national security and technological superiority.

Technological advancements continue to redefine the steel market landscape. From digitalization and automation in manufacturing processes to the integration of artificial intelligence and data analytics, the industry is embracing innovation to optimize efficiency, reduce costs, and enhance product quality.

In conclusion, the global steel market's outlook remains positive and dynamic, characterized by steady growth, transformative trends, and strategic imperatives for sustainability and innovation. Continued investments in R&D, market diversification, and strategic partnerships are pivotal in navigating challenges, seizing opportunities, and sustaining the steel industry's enduring relevance in the global economy.

Indian Steel Market Outlook

The Indian steel industry continues to showcase resilience and growth potential, with an estimated market size of 135.81 million tons in 2024, projected to reach 209.93 million tons by 2029 at a CAGR of 6% to 9%. Despite challenges posed by the COVID-19 pandemic, the sector witnessed a strong recovery driven by the gradual reopening of end-user industries and government initiatives to curb the spread of the virus.

Key drivers bolstering the Indian steel market include robust policy support from the Indian Government, substantial investments in the sector, increasing urbanization, and heightened spending on construction and infrastructure projects. These factors are anticipated to fuel market expansion during the forecast period, reflecting a positive outlook for the industry.

However, the industry faces challenges such as low per capita steel consumption and high production costs, leading to decreased profit margins for manufacturers. Price fluctuations have also impacted importers, contributing to market volatility.

Despite these challenges, the industry is poised for growth with initiatives focusing on hydrogen-based steel manufacturing and the potential for increased trade and investment opportunities.

Foreign Direct Investment (FDI) has played a significant role in boosting investments in the steel industry, with policies allowing 100% FDI via the automatic route. Between April'2000 and September'2023, Indian metallurgical industries attracted FDI inflows of US$ 17.40 billion, reflecting investor confidence and opportunities for expansion.

India stands as the second-largest producer of crude steel globally, with notable achievements in steel production. For instance, in FY24, the production of crude steel and finished steel reached 94.01 million tons and 88.81 million tons, respectively. The Steel Authority of India Limited (SAIL) recorded its best- ever annual production, highlighting the industry's capacity and growth potential.

Looking ahead, the industry anticipates significant growth driven by post-COVID-19 economic recovery plans, investments in key sectors like infrastructure, transportation, and affordable housing. The government's focus on increasing steel capacity and promoting specialty steel production through schemes like the Production-Linked Incentive (PLI) scheme is expected to stimulate investment and create additional capacity.

India's abundant iron ore reserves, easy availability of low- cost manpower, and ongoing industry consolidation further strengthen its position in the global steel market. Continued government support, strategic investments, and technological advancements are pivotal in shaping the Indian steel industry's trajectory, paving the way for sustainable growth and competitiveness on the global stage.

Indian Cement Market Outlook

The Indian cement industry stands as a cornerstone of the nation's infrastructure and construction sectors, ranking as the world's second-largest cement producer. With an installed capacity of 570 million metric tonnes per annum (MTPA) and a production of 298 MTPA, the industry plays a pivotal role in driving economic growth and development across various sectors.

In FY24, India's cement production is projected to grow by 7-8%, fueled by investments in infrastructure and mass residential projects. The industry has witnessed substantial capacity expansion, with installed capacity growing by 61% from 353 MT in FY12 to 570 MT in FY23, reflecting a robust trajectory of growth and development.

Private players dominate the Indian cement market, accounting for 98% of the total capacity, with the top 20 companies contributing around 70% of the total production. The industry is characterized by large plants, with 210 large cement plants boasting a cumulative installed capacity of over 410 MT, complemented by over 350 mini cement plants with an estimated production capacity of nearly 11.10 MT.

Geographically, the concentration of cement production is significant in South and West India, particularly in states like Andhra Pradesh, Rajasthan, and Tamil Nadu, where 77 out of the total 210 large cement plants are situated.

Market projections indicate a positive outlook for the Indian cement sector, with Crisil Ratings forecasting the addition of approximately 80 MT capacity by FY24, the highest in a decade. This growth is attributed to increased spending on housing and infrastructure activities, coupled with initiatives like the National Infrastructure Pipeline (NIP), which introduces projects worth Rs.102 lac crore for the next five years.

Government initiatives such as the 'PM Gati Shakti - National Master Plan (NMP)' for multimodal connectivity and substantial investments in infrastructure, including roads, railways, and ports, are expected to drive cement demand in the coming years. The industry's focus on green practices and sustainability, coupled with technological advancements, positions Indian cement manufacturers among the world's greenest and most efficient producers.

Opportunities in sectors like housing, dedicated freight corridors, ports, and other infrastructure projects are key drivers of growth, attracting investments and fostering innovation within the industry. The ongoing expansion plans of major players like UltraTech Cement, Adani Group, and Shree Cement further underscore the industry's dynamism and potential for continued expansion and development.

In conclusion, the Indian cement industry remains poised for sustainable growth, supported by robust demand from infrastructure and real estate sectors, government initiatives, and a commitment to environmental sustainability and technological advancement.

Global Refractory Market Outlook

The global refractories market is poised for significant growth, projected to reach around USD 51.46 billion by 2033, expanding from USD 32.98 billion in 2023 at a steady CAGR of 4.60% during the forecast period from 2023 to 2033.

The Asia-Pacific region, with a refractories market size of USD 20.26 billion in 2023, is projected to reach USD 43.56 billion by 2033, registering a CAGR of 8.00% from 2024 to 2033. The region's growth is fueled by ambitious goals in coal-power capacity, particularly in China under its 14^th Five-Year Plan (2021-2025). A healthy steel, cement, and manufacturing sectors, coupled with significant infrastructure development and a construction boom, are key drivers for growing demand for refractory materials in high-temperature processes and insulation applications.

The subdued demand for refractories observed in North America and Europe during 2023 persisted throughout the first half of 2024, with no catalyst visible to alter the trend for the remainder of the year. These main drivers for the development in these markets were high inflation, monetary tightening, and energy price volatility as well as geopolitical challenges in Europe. Stringent environmental regulations and sustainability objectives have driven the adoption of more advanced and sustainable refractory materials. These materials contribute to energy efficiency improvements and are further supported by ongoing infrastructure projects and a resurgence in manufacturing activities in these geographies.

Despite the macroeconomic weakness affecting many western nations and developed economies, the structural drivers of the refractory market remain intact and we are confident that refractories will participate in any form of long term GDP growth. Refractory products play a crucial role across industries providing thermal insulation and protection from corrosion and are therefore critical in the manufacturing process of iron, steel, glass and cement, as well as petrochemical and non-ferrous metals sectors like copper. Innovation to solve mankind's biggest challenges, for example the global energy transition, will drive long term growth and development in the refractories industry.

Indian Refractory Market Outlook

India's aggressive domestic manufacturing and infrastructure development targets have catalyzed the growth of the refractory industry, driven by increasing global demand for Indian steel. The government's emphasis on manufacturing and infrastructure is propelling the refractory sector forward. Refractories are indispensable for high-temperature processes across various sectors such as steel, cement, glass, non-ferrous metals, and petrochemicals. They play a crucial role in ensuring the efficiency and quality of products in these industries.

Initiatives like Atmanirbhar Bharat underline the importance of self-reliance, although the refractory industry still heavily relies on raw material imports. Post-Covid, India has emerged as a major sourcing hub for refractory products. The industry's growth trajectory suggests a potential shift from global to Indian raw materials, enhancing domestic manufacturing and strengthening India's position as a global manufacturing powerhouse.

The government's initiatives to increase steel capacity and substantial investments in infrastructure development position the refractory sector at the forefront of India's manufacturing narrative. The sector supports high-temperature processes, contributing directly to India's manufacturing ambitions, fostering sustainable growth, and bolstering the nation's industrial competitiveness globally.

Despite promising prospects, the industry faces challenges such as volatile commodity prices, high dependency on raw material imports, and limited domestic sourcing due to geological and technological constraints. However, by leveraging favorable market conditions and addressing these challenges through strategic planning and innovation, the Indian refractory industry is poised for sustained growth.

This unprecedented growth potential underscores the critical role of refractories in steel and cement manufacturing, as well as in the production of other materials requiring high-temperature processes. Refractories are essential for lining furnaces and equipment, ensuring the smooth operation and efficiency of these industrial processes. In essence, the production of steel, cement, glass, aluminum, copper, and other metals and nonmetals would be impossible without refractory materials.

Snapshot of FY24 on consolidated basis

- The Total Revenue from Operations was Rs.3,78,110 Lacs as in FY24 as compared to Rs.2,72,627 Lacs for FY23, with a change of 39% driven by a strong increase in volume.

- The adjusted EBITDA* was Rs.57,825 Lacs as in FY24 as compared to Rs.43,877 Lacs for FY23, with a change of 32%.

- The operating cash flow is Rs.27,060 Lacs, the capital expenditure (CAPEX) is Rs.8,004 Lacs.

- The adjusted earnings earnings per share (EPS) is Rs.11.99 per share

- The proposed dividend per share is Rs.2.50 per share.

- The net debt to adjusted EBITDA ratio is 0.76.

'Adjusted EBITDA is profit before tax excluding depreciation, amortization, finance cost and one timer expenses of 12,134 Lacs. Adjusted EPS is computed after reducing impact of impairment loss of goodwill and one timer expenses.

Internal Control Systems & Adequacy

The Board evaluates the effectiveness of the internal financial, operational, and compliance controls, as well as the risk management framework. RHI Magnesita India adheres to corporate governance regulations, with the Board assessing the operational efficiency of internal controls throughout the year and making recommendations when appropriate. Regular discussions between the Board and the Audit & Compliance Committee have addressed improvements in the internal control systems, both implemented and planned.

These systems have been in place throughout 2023 and up to the date of this report and are based on the three lines of defense model, supported by an end-to-end process model and a delegation of authority's structure reflecting the responsibility for risk management and internal controls at all management levels.

The Company has a dedicated risk management approach and an internal control framework for its financial reporting process and the preparation of financial statements. These systems include policies and procedures to ensure that adequate accounting records are maintained, and transactions are recorded accurately and fairly, allowing for the preparation of financial statements in accordance with applicable accounting standards.

Human Resources

RHI Magnesita India Ltd. maintains robust people and culture policies aligned with its strategic objectives. The Company is committed to developing its employees, offering training programs to cultivate a diverse talent pool. By combining experienced and young professionals, RHIM drives growth and achieves its business goals. As on 31 March 2024, the Company had a workforce of 3,383 (permanent and contractual).

Outlook

India is the highest growth major market for refractories globally, with a forecast of 6-9% CAGR. RHI Magnesita India Limited is well-positioned to leverage on this opportunity for a sustainable and profitable growth in the coming years, backed by a comprehensive strategy focused on both organic and inorganic initiatives. The refractory industry is anticipated to witness substantial expansion, driven by key end-user industry such as steel, cement, and glass, among others, in line with India's economic and infrastructure development trajectory.

The government's ambitious targets, including reaching a US$ 7 trillion economy by fiscal year 2030 and achieving 300 million tonnes of steel production by 2030, coupled with initiatives like Atmanirbhar Bharat, provide a strong foundation for economic growth. These factors create a conducive environment for increased demand for refractory products aligning with RHIM's market leadership position and local-for- local manufacturing strategy under the 'Make in India' initiative.

RHIM's recent acquisitions, including the integration of the Indian refractory business of DBRL into RHI Magnesita India Refractories Limited and the acquisition of the refractory business of Hi-Tech Chemicals, have significantly expanded the Company's production capacity and diversified its product portfolio. These strategic moves enhance RHIM's ability to cater to a broader range of end applications and customer segments effectively.

The Company's operations in west and south India, supported by a well-established production footprint, strategically position RHIM to serve these regions efficiently. Leveraging a strong industrial product offering, RHIM aims to optimize its go-to-market portfolio by providing comprehensive solutions across all segments and industries. Cross-selling opportunities are expected to drive revenue growth as synergies from the acquisitions materialize.

RHIM is focused on optimizing its cost structure through initiatives such as fixed cost optimization, resource bundling, and leveraging economies of scale. These efforts are aimed at improving the cost baseline and enhancing profitability, reflecting the Company's commitment to operational excellence and efficiency.

Looking ahead, RHIM plans to capitalize on its strong global presence, diversified product portfolio, localization of imported products, and favorable domestic industry growth. Anticipated synergies from inorganic expansion, coupled with strategic partnerships and investments, position RHIM for sustained growth and profitability in the Indian refractory industry.

In conclusion, RHI Magnesita India Limited is well-positioned to continue its trajectory of growth, innovation, and market leadership, driving value creation for stakeholders and contributing significantly to India's refractory sector's development and success.

4. DIVIDEND

Based on the Company's performance and other non-financial factors, your directors are pleased to recommend final dividend of Rs.2.50/- (250%) per equity share having face value of Rs.1.00/- each for the FY 2023-24.

The dividend payout is subject to approval of members 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., 5 September 2024). The dividend distribution will result in cash outgo of Rs.5,162.54/- 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 https://www.rhimagnesitaindia.com/uploads/ pdf/208pdctfile_policyondividenddistribution.pdf

5. RESERVES

For details on movement in reserves and surplus during FY 2023-24, please refer the statement of changes in equity and note no. 8(b) of standalone financial statements for the period under review.

6. SUBSIDIARY COMPANY, ASSOCIATE & JOINT VENTURE

As on 31 March 2024, the Company has two subsidiaries i.e. Intermetal Engineers (India) Private Limited ("Intermetal") and RHI Magnesita India Refractories Limited ("RHIM Refractories") (together called as "subsidiaries") and one step down subsidiary namely RHI Magnesita Seven Refractories Limited ("RHIM Seven").

RHIM Refractories was earlier holding 51% of paid-up share capital of RHIM Seven, and on 24 July 2023, it acquired remaining 49% of paid-up share capital of RHIM Seven, consequently, RHIM Seven became the wholly owned subsidiary Company of RHIM Refractories.

RHIM Refractories is material subsidiary of the Company in terms of provisions of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), as may be applicable.

The Board of Directors of RHIM Refractories and RHIM Seven in their respective board meetings held on 8 February 2024 have approved the scheme of merger of RHIM Seven with RHIM Refractories under the provisions of Section 233 of the Companies Act and the rules made thereunder. The aforesaid merger is in process.

The Board of Directors of RHIM Refractories in its board meeting held on 8 February 2024 has approved the proposal to permanently close its manufacturing facility/ unit of RHIM Refractories located at 1174/1 & 1174/2, Joratarai Industrial Area P.O. Mangata Dist.- Rajnandgaon, Chattisgarh- 491441. All the operations at the aforesaid plant have been ceased and a notice abstract to such effect that the plant has closed has been affixed on the notice board of the Plant as on 31 May 2024.

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 or the Company.

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/quarterly- financial-results and separate Annual Report including audited financial statements in respect of subsidiaries, are available on the Company's website at 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 2023-24 are as follows:

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.

7. SHARE CAPITAL STRUCTURE OF THE COMPANY

The share capital structure of the Company as on 31 March 2024, is given below:

During the period under review, the share capital of the

Company was changed in the following phases:

A. The members of the Company in their 2^nd Extra Ordinary General Meeting ("EGM") held on 13 March 2023 approved issuance of securities including equity shares having face value of Rs.1/- (Rupee One) each through qualified institutional placement for an amount not exceeding Rs.1,500 Crore (Rupees Fifteen hundred crore). 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 (One crore fifty seven lac fifteen thousand thirty four) equity shares of Rs.1/- (Rupee One) each at an issue price of Rs.572.70/- (Rupees Five hundred seventy two and seventy paisa) each against the share applications received from Fifty seven (57) qualified institutional buyers aggregating to Rs.900 Crore (approx.) (Rupees Nine hundred crore).

B. The members of the Company through postal ballot on 1 June 2023 approved the issuance of 2,790,061 (Twenty seven lac ninety thousand sixty one) equity shares having face value of Rs.1/- (One) each at an issue price of Rs.716.83/- (Rupees Seven hundred sixteen and Paise Eighty three) each to Dutch US Holding B.V. one of the promoter of the Company on preferential basis for an aggregate amounting Rs.200 Crore (approx.) (Rupees Two hundred crore). Pursuant to 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 (Twenty seven lac ninety thousand sixty one) equity shares of Rs.1/- (One) each at an issue price of Rs.716.83/- (Rupees Seven hundred sixteen and eighty three paise) each to Dutch US Holding B.V aggregating Rs.200 Crore (approx.) (Rupees Two hundred crore). Pursuant to 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 (Seven crore ninety eight lac seventy seven thousand seven hundred seventy one) equity shares of Dutch US Holding B.V. were also locked-in up to 31 December 2023 and the same has been released now.

8. PARTICULARS OF LOAN, GUARANTEE AND INVESTMENT

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

The Company has subscribed 16,975,051 (One crore sixty nine lac seventy five thousand fifty one) equity shares of RHIM Refractories, material wholly owned subsidiary company having face value of Rs.10/- (Rupees Ten) each offered through right issue at an issue price of Rs.207/- (Rupees Two hundred seven) aggregating amounting to Rs.351 Crore (approx.) (Rupees Three hundred fifty one crore). The shares were allotted to the Company on 8 May 2023.

The Company further subscribed 5,072,464 (Fifty lac seventy two thousand four hundred sixty four) equity shares of RHIM Refractories, material wholly owned subsidiary company having face value of Rs.10/- (Rupees Ten) each at an issue price of Rs.207/- (Rupees Two hundred seven) aggregating amounting to Rs.105 Crore (approx.) (Rupees One hundred five crore) on right basis and the shares were allotted to the Company on 11 August 2023.

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

9. UTILISATION OF FUNDS

During the period under review, the Company has raised and utilized the funds in the manner stated herein below:

A. Issue of shares through qualified institutional placement of J 900 Crore (approx.)

The entire funds raised through qualified institutional placement has been utilized during the financial year ended 31 March 2024 for the purpose of repayment / pre-payment, in full or in part, of certain outstanding borrowings availed by the Company, investment into one of its subsidiaries, RHIMIRL, for repayment or prepayment, in full or in part, of certain borrowings availed by RHIMIRL and general corporate purposes, as may be permissible under applicable laws) as per the objects stated in notice of Extra-ordinary General Meeting dated 13 February 2023.

B. Issue of shares through preferential allotment of J 200 Crore (approx.)

The entire funds raised through preferential allotment has been utilized during the financial year ended 31 March 2024 for repayment / prepayment, in full or in part, of certain outstanding borrowings availed by the Company and interest thereupon. Investment into one of the Subsidiaries, i.e. RHIMIRL and General Corporate Purpose as per the objects stated in Postal Ballot Notice dated 29 April 2023.

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

10. STATEMENT ON 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.

11. 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.

These systems have been in place throughout the year and up to the date of this report. They are based on the three lines of the defense model, supported by an end-to-end process model and a delegation of authority's structure reflecting the responsibility for risk management and internal controls at all management levels.

The Company's internal control framework is designed to enable the application of the Company's risk appetite. This typically seeks to avoid or mitigate risks rather than to eliminate the risks associated with the accomplishment of the Company's strategic objectives. It provides reasonable but not absolute assurance against material misstatement or loss.

The Company has in place a specific risk management approach and an internal control framework in relation to its financial reporting process and the process of preparing the financial statements. These systems include policies and procedures to ensure that adequate accounting records are maintained, and transactions are recorded accurately and fairly to permit the preparation of financial statements in accordance with the applicable accounting standards.

The Board considers the Company's risk management and internal control system are appropriate and effective to give reasonable, but not absolute, assurance against material misstatement or loss. Improvements on the internal control systems implemented and planned have been discussed regularly between the Board and Audit & Compliance Committee.

Internal control systems are an integral part of your Company's corporate governance structure. These have been designed to provide reasonable assurance regarding 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 2024.

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 2024, the Company's internal financial controls were adequate and operating effectively.

12. HUMAN RESOURCES

RHI Magnesita India Ltd. upholds strong people and culture policies that align with its strategic goals. The Company is dedicated to employee development, offering training programs that foster a diverse talent pool. By blending experienced professionals with emerging talent, RHIM drives growth and achieves its business objectives.

RHIM is committed to fostering a learning environment, providing both technical and behavioral training based on need assessments. The organization also implements recognition programs to inspire and engage employees. A notable initiative is the Culture Champion program, which reinforces organizational values and fosters a sense of belonging among employees.

Diversity is a key focus for RHIM, which diligently works towards its diversity targets through intentional hiring practices, equal opportunity creation, and various learning programs for people managers. The Company utilizes a robust, automated performance management system, ensuring that all employees have clear goals to help them meet their targets. Each year, the People & Culture team sets increasingly ambitious goals, aiming to deliver a seamless employee experience that motivates and supports individual growth.

13. 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 Rs.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: https://www.rhimagnesitaindia. com /uploads/pdf/218pdctfile_policyforrelatedpartytransactions. pdf. Members can also refer note 35 and 36 of the standalone financial statements and consolidated financial statements respectively, which set out related party disclosures.

14. 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 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/uploads/ pdf/215pdctfile_policyforcorporatesocialresponsibility.pdf

15. RISK MANAGEMENT

Our risk management approach helps the Board and Management to understand the risks associated with the adopted strategy, periodically assess if the strategy is aligned with our risk appetite and understand how the chosen strategy could affect the Company's risk profile, specifically the types and amount of risk to which the Company is potentially exposed.

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 risk management practices. Deep-dive risk assessments are performed for areas of emerging or prevailing risks, which, in the year, 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 Health-Safety and Environment 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 once in a year and is reviewed after six months in all the operational plants and extended to the major suppliers and customer sites also. The safety and environmental audits are being conducted at regular intervals by internal and external agencies. The surveillance audit of Integrated Management System (IMS, ISO 9001, 14001 & 45001) for plants located at Visakhapatnam, Bhiwadi and Cuttack were successfully completed and stage-2 audit for plant located at Jamshedpur, and also for plants of subsidiaries company located at Khambhalia, Katni, Dalmiapuram and Rajgangpur is in process. The employees 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. This year we are in process to implement Energy Management system (ISO 50001) in all our Eight sites which will be a significant step towards Environmental sustainability.

16. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Act and Articles of Association of the Company, Mr. Gustavo Lucio Goncalves Franco (DIN: 08754857) retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. A resolution seeking shareholders' approval for his re-appointment along with other required details forms part of the Notice of the AGM.

The Board of Directors, at its meeting held on 14 August 2024, based on recommendation of Nomination and Remuneration Committee ("NRC"), appointed Mr. Kamal Sarda (DIN:03151258), as an Additional Independent Director, not liable to retire by rotation, of the Company. Mr. Sarda shall hold office of Additional Independent Director up to date of ensuing AGM. However, the Company has also received requisite notice, in writing from a member of the Company, proposing his candidature for the said appointment. Accordingly, Board of Directors, based upon the recommendation of the NRC, had recommended the appointment to shareholders for their approval for a period of 5 years w.e.f. 14 August 2024, not liable to retire by rotation, in the ensuing AGM.

The NRC and the Board at their respective meetings have assessed his candidature and are of view that Mr. Kamal Sarda possesses necessary competencies and skill identified by the Board of Directors for effective managing its business.

The Company has received declarations from all Independent Directors of the Company that they meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Act and under Regulations 16 and 25 of Listing Regulations and there has been no change in the circumstances affecting their status as independent directors of the Company. The Company has also received a declaration from all the independent directors that they have registered their names in the independent director data bank and pass/ exempt requisite proficiency test conducted by Ministry of Corporate Affairs.

In the opinion of the Board, the Independent Directors of the Company are the persons of integrity, expertise and fulfill the conditions as per the applicable laws and are independent of the management of the Company.

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.

The Company recognizes and embraces the importance of a diverse board in its success. Your Company believes that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help to retain its competitive advantage. The brief resumes, justification wherever is applicable, and other details relating to the directors who are proposed to be appointed/ reappointed, as required to be disclosed as per the provisions of the SEBI Listing Regulations/ Secretarial Standard are given in the Annexure to the Notice of the 14^th AGM.

Pursuant to the provisions of Section 203 of the Act, Mr. Parmod Sagar, Managing Director and Chief Executive Officer, Ms. Vijaya Gupta, Chief Financial Officer and Mr. Sanjay Kumar, Company Secretary were KMPs of the Company as on 31 March 2024.

Ms. Vijaya Gupta, Chief Financial Officer & Key Managerial Personnel has resigned from her position effective 30 April 2024. In her stead, Mr. Azim Syed has been appointed as Chief Financial Officer & Key Managerial Personnel w.e.f. 01 May 2024.

Tenure of Dr. Vijay Sharma, Chairman and Independent Director is going to expire on 11 November 2024. Upon completion of his tenure, position of the Chairman would be vacant. Therefore, based on recommendation of NRC, the Board of Directors of the Company in their meeting held on 14 August 2024 appointed Mr. Parmod Sagar, Managing Director & CEO as Chairman of the Company. With effect from 12 November 2024, designation of Mr. Parmod Sagar would be Chairman, Managing Director & CEO.

17. 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 KMPs and 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 KMPs and senior management personnels are subject to the approval of the Nomination and Remuneration Committee and Board of Directors. Remuneration of KMPs and senior management personnels are 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 KMPs and senior management personnels 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: https:// www.rhimagnesitaindia.com /uploads/pdf/219pdctfile_ remunerationandnominationpolicy.pdf

18. 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 2023-24.

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 2024, the applicable Accounting Standards have been followed and there was no material departures.

B. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as on 31 March 2024, 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.

19. 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 2024 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 Non-Executive 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.

20. 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 17^th AGM to be held in the year 2027. The Auditor's Report for the FY 2023-24 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 2023-24. The Secretarial Audit Report for the financial year ended 31 March 2024, is appended as ANNEXURE - III to this report.

The Secretarial Audit Report does not contain any qualification, reservation and adverse remarks and the comments given by the Secretarial Auditors in their report are self-explanatory and hence, do not call for any further explanations or comments under Section 204(3) of the Act.

Further, as required under Section 204 of the Act and rules thereunder, the Board has appointed M/s. Naresh Verma & Associates, Company Secretaries, as the Secretarial Auditors for another term to conduct the Secretarial Audit for the FY 2024-25.

As per the requirements of the Listing Regulations, Secretarial Auditors of the unlisted material subsidiary of the Company have undertaken secretarial audit of such subsidiary for financial year ended 31 March 2024. The Secretarial Audit Reports of such unlisted material subsidiary viz. RHI Magnesita India Refractories Limited is appended as Annexure IV and available on Company's website at: https://www.rhimagnesitaindia.com/investors/ financials-reports/subsidiary-annual-reports

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.: 000024) as Cost Auditors to audit the cost accounts of the Company for the FY 2024-25. 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 14^th 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 2022-23 was filed with the Ministry of Corporate Affairs on 20 September 2023.

D. Internal Auditors

The Board has appointed M/s. Chaturvedi & Partners as Internal Auditors for the FY 2023-24 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 2024-25.

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.

21. EXPORT HOUSE STATUS

The Company enjoys the status of "Three Star Export House" for a period of 1 October 2023 to 31 March 2028.

22. 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.

23. 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 six (6) complaints under the said mechanism, the details of which is tabulated below:

The Whistle Blower Policy of the Company has been displayed on the Company's website at the link: https:// www.rhimagnesitaindia.com/uploads/pdf/221pdctfile_ whistleblowerpolicy.pdf

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 five (5) 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 - V.

E. Annual Return

The Annual Return for the FY 2023-24 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 - VI.

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 2024. Report on Corporate Governance is annexed herewith as ANNEXURE - VII to this report.

H. Business Responsibility and Sustainability Report

In accordance with the Listing Regulations, the Business Responsibility and Sustainability Report (BRSR) forms a part of this Annual Report as ANNEXURE - VIII 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 (IEPF)

Details regarding transfer of amounts 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 policy for sexual harassment in the workplace. It has implemented a prevention, prohibition, and redressal policy aligned with the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 (POSH Act) including rules made thereunder. This policy covers all women associated with the Company, including permanent, temporary, contractual, and trainee employees, as well as visitors and service providers.

During the year under review, the Internal Committee received one (1) complaint pertains to sexual harassment. As of 31 March 2024, no complaints remain pending or unresolved. Additionally, the Company conducted awareness sessions for employees to enhance understanding of its Sexual Harassment Policy.

The policy may be accessed on the Company's website at the link: https://www.rhimagnesitaindia.com/ uploads/ pdf /210pdctfile_preventionofsexualharassment(posh) ofwomenatworkplace.pdf

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.

- 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 along with 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 2023-24.

- Companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year.

- The Company does not fall under the category of large corporate, as defined by SEBI vide its circular SEBI/ HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172 dated 19 October 2023, as such no disclosure is required in this regard.

24. 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. Rs.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.