Dalmia Bharat Refractories Limited Unlisted Shares Annual Reports

Dalmia Bharat Refractories Limited Unlisted Shares

The document is the Annual Report for 2023-24 of Dalmia Bharat Refractories Limited (DBRL). It details the company's performance, strategic initiatives, and future outlook, along with financial statements and corporate governance disclosures. **CEO's Message:** The CEO, Dr. C N Maheshwari, highlights a year of strategic transformation for DBRL. This includes optimizing the existing refractory business, acquiring Birla Tyre Limited, and proposing a scheme of arrangement for the demerger of the refractory and travel divisions of Dalmia Bharat Sugar and Industries Limited (DBSIL) into DBRL. The company aims to unlock new potential and enhance stakeholder value through these initiatives. **Company Overview:** DBRL is undergoing a dynamic transformation, focusing on sustainable growth and shareholder value. Key strategies include: * Optimizing the retained refractory business through the Salem plant and OCL China Limited. * Reviving the tyre industry through the acquisition of Birla Tyre Limited and partnership with Himadri Speciality Chemicals Limited. * Diversifying into a portfolio of quoted and unquoted securities to mitigate risk and generate long-term returns. * A scheme of arrangement is proposed for the demerger of Dalmia Magnesite Corporation and Govan Travels from DBSIL into DBRL to streamline operations. **Management Discussion and Analysis:** **Highlights of 2023-24:** * Strategic exit from the German refractory business. * Expansion through the acquisition of Birla Tyre Limited. * A proposed scheme of arrangement to acquire Dalmia Magnesite Corporation and Govan Travels from DBSIL. * Strategic investments in various quoted and unquoted securities. * Active participation in bidding processes for mining of critical minerals. **Economic Outlook:** * The global economy experienced subdued growth amid persistent inflation, with the IMF projecting a 3.0% growth. * The Indian economy defied global trends, with the Asian Development Bank projecting a robust 6.4% GDP growth. **Industry Structure and Developments:** * DBRL is focusing on its retained magnesia carbon business. * It has entered the tyre industry through the acquisition of Birla Tyres Limited. * The company is actively pursuing strategic investments in both publicly traded and privately held securities. **Opportunities, Risks, and Concerns:** * Opportunities exist in the growing magnesia carbon refractory and tyre industries, as well as in the Indian investment landscape. * Risks include fluctuating raw material prices, intense competition, stricter regulations, and potential economic slowdowns. **DBRL's Operational & Financial Performance:** * On a standalone basis, revenue from continuing operations was ₹88.88 Crore, and profit after tax was ₹5.08 Crore. * On a consolidated basis, revenue from continuing operations was ₹179.04 Crore, and profit after tax was ₹0.80 Crore. **Business Outlook:** * DBRL aims to capitalize on growth in the magnesia carbon business and revive operations at Birla Tyres Limited. * The company will proactively address challenges and capitalize on its strengths for a sustainable future. **Internal Controls & Their Adequacy:** * The company has adequate internal financial controls. * Transparency, compliance, and integrity are emphasized. **Human Resources:** * HR is considered a backbone for building a helpful environment. * The company is focused on capability development and skilling. * There were 39 employees as of March 31, 2024. **Director's Report:** * The Board approved a scheme of arrangement for the demerger of the refractory division and travel division of DBSIL into DBRL. * The Company acquired 99.99% shareholding in Birla Tyre Ltd through the corporate insolvency resolution process. * The Board recommends a dividend of 15% i.e. ₹1.50 per equity share. * Rahul Sahni was appointed as Chief Financial Officer of the Company w.e.f April 21, 2023. * The Company has four subsidiaries including one wholly owned and one step down subsidiary. * The board remains committed to transparency and corporate governance. **Corporate Governance:** The report details the company's commitment to ethical business practices, transparency, and stakeholder value enhancement. **Risk Management:** DBRL assesses and manages risks through a systematic procedure, overseen by the audit committee. **Auditors' Report:** The report includes the Secretarial Audit Report and the Statutory Auditors' Report, with no qualifications or adverse remarks. **Financial Statements:** The document also includes standalone and consolidated financial statements. These detail the assets, liabilities, equity, revenue, expenses, and cash flows of the company and its subsidiaries. **Subsidiary Information:** The report states information about various subsidiaries including OCL Global Limited, Himadri Birla Tyre Manufacturing Private Limited, Birla Tyres Limited and OCL China Limited. **Materiality:** This summary captures the essential financial and strategic information needed to understand Dalmia Bharat Refractories' performance and future direction. It provides a comprehensive overview, meeting all the stated objectives and constraints.

Dalmia Bharat Refractories Limited Unlisted Shares

Dalmia Bharat Refractories Ltd (DBRL) Annual Report 2022-23 Summary: **Company Overview:** DBRL successfully completed the sale of its India refractory business and its German subsidiary to RHI Magnesita (RHIM), gaining equity shares in RHIM's India business, which controls around 27% of the Indian refractory market. DBRL is now exploring new business opportunities and has invested in start-ups as well as Dalmia Bharat Limited and HippoStores Technology Private Ltd. **CEO's Message:** The CEO, C N Maheshwari, highlights the successful sale of the Indian refractory business to RHIM, resulting in a 13.47% stake in RHIM for DBRL. DBRL received a record valuation of 27x. He notes that DBRL is exploring emerging opportunities in India and will continue to build value in its existing refractory businesses, both in India and China. The CEO anticipates 2023-24 as pivotal for DBRL. **Management Discussion & Analysis:** FY 2022-23 was a dynamic year with the consolidation of DBRL's refractory business approved by the National Company Law Tribunal. A definitive agreement was implemented with RHIM on November 19, 2022, to transfer the India business, resulting in RHIM holding a 13.47% stake and maximizing the valuation benefit. DBRL transferred its entire India business to Dalmia OCL Limited, a then wholly-owned subsidiary. DBRL received INR 2,213 crores, including INR 505 crores in cash (subject to adjustments) and the remaining as equity shares of Dalmia OCL Limited to RHIM in exchange for 2.7 crore shares of RHIM, making DBRL a 13.47% shareholder of RHIM. **Economic Outlook:** The report notes global economic instability due to the Russia-Ukraine war and recession in the IT sector. The IMF forecasts a decline in global growth rates from 3.4% in 2022 to 2.8% in 2023. India's growth is expected to be 6.7% in calendar year 2024. DBRL has divested from refractories and is targeting investments in cement, construction materials and startups. Cement demand is expected to grow by up to 9% in FY 2024. The construction material industry is witnessing advancements. **Opportunities and Threats:** DBRL aims to capitalize on new opportunities by exploring sustainable solutions and leveraging digital transformation. Expanding into new geographical regions and forming strategic alliances are also priorities. Key risks include market volatility, competition, regulatory compliance, technological disruptions, and talent acquisition. DBRL will focus on innovation to maintain its competitive edge. **DBRL Performance Overview:** Due to the impact of transfer of business undertaking to RHIM, DBRL's revenue increased by 12.92% to Rs 102.69 Cr on a standalone basis. The total revenue of INR 358.67 Cr can be bifurcated as (i) INR 96.48 Cr from domestic; and (ii) INR 262.19 Cr from international. Profit before tax was Rs 1,727.20 Cr on standalone and Rs 1,749.45 Cr on consolidated basis. DBRL has announced investments in Dalmia Bharat Limited and HippoStores Technology Private Limited. DBRL plans to leverage its technology and manufacturing capabilities. DBRL's workforce is 47 people, with the majority transferred to RHIM. **Internal Controls & Human Resources:** DBRL has adequate internal financial controls. DBRL is law-abiding and transparent. DBRL strengthened human resources and employee skill development. **Director's Report:** The Directors are recommending a dividend of 15% (Rs 1.50 per share). DBRL is amending its object clause. The Company transferred Indian refractory businesses to RHIM in January 2023. On standalone basis, FY 2022-23 revenue was Rs 102.69 crore and profit before tax was Rs 1727.20 crore. Dalmia Mining and Services Private Limited became a wholly owned subsidiary in March 2023. There are 4 subsidiaries (3 wholly owned). The Board composition is described, with Sameer Nagpal retiring by rotation and being eligible for re-appointment. **Corporate Social Responsibility (CSR):** DBRL is not obligated to contribute towards CSR. However, DBRL has contributed INR 30 lakhs on voluntary basis for CSR activities. **Auditors:** M/s Chaturvedi & Shah are the statutory auditors for 5 years. **Dividend:** A dividend of 15% i.e. INR 1.50/- per equity share is recommended. **Share Capital Structure:** The capital structure as of March 31, 2023 is specified. **Subsidiaries, Associates & Joint Venture Companies:** Details of subsidiaries as of January 05, 2023. **Related Party Transactions:** Several related party transactions occurred, including transfers to Dalmia OCL limited.