RHI Magnesita India Ltd Auditor Reports

INDEPENDENT AUDITORS REPORT

To the Members of RHI Magnesita India Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying Standalone Financial Statements of RHI Magnesita India Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31, 2024, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended, and notes to the Standalone Financial Statements, including material accounting policy information and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, and total comprehensive income (comprising of loss and other comprehensive loss), changes in equity and its cash flows for the year then ended.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditors Responsibilities for the Audit of the Standalone Financial Statements" section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

4. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

(a) Revenue Recognition

(Refer Note 18 to the Standalone Financial Statements)

The Company recognises its revenue based on Ind AS 115

"Revenue from Contracts with Customers".

Management uses judgement in respect of matters such as identification of performance obligations, allocation of consideration to identified performance obligations and recognition of revenue over a period of time or at a point in time based on timing when control is transferred to the customer.

We considered this area as a key audit matter, as revenue is required to be recognised in accordance with the terms of the customer contracts, which involves significant management judgement as described above and thus there is an inherent risk of material misstatement.

How our audit addressed the key audit matter

Our testing of revenue transactions was designed to cover certain customer contracts on a sample basis. Our audit procedures included the following:

• Obtained an understanding and evaluated the design and tested the operating effectiveness of controls over revenue recognition.

• Assessed appropriateness of managements judgements in accounting for identified contracts such as:

o Identification of performance obligation and allocation of consideration to identified performance obligation;

o Evaluated the contract terms for assessment of the timing of transfer of control to the customer to assess whether revenue is recognised appropriately over a period of time or at a point in time (as the case may be) based on timing when control is transferred to customer;

o Tested whether the revenue recognition is in line with the terms of customer contracts and the transfer of control; and

o Evaluated adequacy of the presentation and disclosures.

Based on the above stated procedures, no significant exceptions were noted in revenue recognition including those relating to presentation and disclosures as required by Ind AS 115.

(b) Valuation of intangible assets and goodwill identified on acquisition of refractory business of Hi-Tech Chemicals Limited

(Refer Note 39 to the Standalone Financial Statements)

Pursuant to a Business Transfer Agreement (BTA) executed with Hi-Tech Chemicals Limited ("Hi-Tech"), the Company acquired the refractory business of Hi-Tech by way of a slump sale on a going concern basis on January 31, 2023 for an aggregate consideration of Rs.88,414.51

lacs. The acquisition was determined to be a business combination and accounted for in accordance with the acquisition method prescribed under Ind AS 103 Business Combinations. During the year, the Company has finalised the purchase price allocation and recognised the intangible assets and goodwill of Rs.21,103 lacs and Rs.31,091.69 lacs respectively as at the acquisition-date.

Significant management judgement is involved in the identification of identifiable assets, including those assets that meet the definition of, and recognition criteria for, intangible assets in accordance with Ind AS 38 Intangible Assets, and their valuation and determination of the resultant goodwill based on allocation of the purchase price on fair values of the identified assets and liabilities. The management engaged independent valuers ("managements experts") for carrying out the valuation.

We considered this area as a key audit matter, due to the significant management judgement required in identification and valuation of assets acquired and liabilities assumed, determining the key assumptions underlying such valuation such as the revenue growth rates, customer churn rates, EBITDA growth rates, capital expenditures, weighted average cost of capital and considering the changes in these assumptions can have a material impact on the valuation of goodwill and intangible assets.

How our audit addressed the key audit matter

Our audit procedures included the following:

• Obtained an understanding, evaluated the design and tested the operating effectiveness of controls over accounting for business combinations.

• Read the Business Transfer Agreement (BTA) and other documents related to acquisition through BTA in order to obtain an understanding of the transaction in accordance with Ind AS 103 Business Combinations and to verify the consideration paid for the aforesaid acquisition.

• Assessed the competence, capabilities, and objectivity of managements experts, perused the report issued by them and evaluated the appropriateness of the valuation model and underlying assumptions considered by them.

• Tested the fair value of the acquired identifiable intangible assets, with the assistance of auditors valuation experts, which involved:

o evaluation of the prospective financial information used in the valuation models, testing the completeness and accuracy of underlying data and evaluation of the valuation methodology.

o evaluation of the key assumptions, by comparing the same to current industry, market, economic trends and historical results.

o performance of sensitivity analysis to evaluate the impact of changes in key assumptions to the valuation of the acquired identifiable intangible assets.

• Verified the arithmetical accuracy of the managements computation of goodwill.

• Assessed the appropriateness of the disclosures in the Standalone Financial Statements in accordance with Ind AS 103.

Based on the above stated procedures, no significant exceptions were noted in valuation of intangible assets and resulting goodwill identified on the acquisition.

(c) Assessment of carrying value of equity investments in subsidiaries

(Refer Note 5(a) and 27 to the Standalone Financial Statements)

The Company has equity investments in subsidiaries carried at cost less accumulated impairment losses of Rs.186,490.66 lacs. During the year, the Company has recognised an impairment loss of Rs.30,936 lacs.

The Company reviews the carrying values of these investments at every balance sheet date and where there is an indication of impairment, the carrying value is assessed for impairment in accordance with Ind AS 36 Impairment of Assets, and an impairment provision is recognised, where applicable. The management has determined each of the subsidiaries as a separate cash generating unit ("CGU") for the purpose of impairment assessment, and with the involvement of independent valuation experts ("managements experts"), the recoverable value of the CGUs has been determined.

The assessment of carrying value of investments has been considered a key audit matter as the determination of recoverable value of the investments involves significant management judgement and estimates such as future expected level of operations and related forecast of cash flows, market conditions, discount rate, growth rate, terminal growth rate etc.

How our audit addressed the key audit matter

Our audit procedures included the following:

• Obtained an understanding and evaluated the design and tested the operating effectiveness of controls over the impairment assessment.

• Assessed whether the Companys determination of CGUs was consistent with our knowledge of the Companys operations.

• Assessed the competence, capabilities and objectivity of managements experts and perused the report issued by them.

• Involved our valuation experts to assist in

o assessing the appropriateness of the valuation model including the independent assessment of the underlying assumptions relating to discount rate, terminal growth rate etc.

o evaluation of the cash flow forecasts (with underlying economic growth rate) by comparing them to the approved budgets and our understanding of the internal and external factors.

• Verified the mathematical accuracy of the computations involved in the valuation model.

• Assessed the sensitivity analysis and evaluated whether any reasonably foreseeable change in assumptions could lead to impairment or material change in fair valuation.

• Discussed the key assumptions and sensitivities with those charged with governance.

• Evaluated the adequacy of the disclosures made in the Standalone Financial Statements.

Based on the above procedures performed, we did not identify any significant exceptions in the managements assessment in relation to the carrying value of equity investments in subsidiaries as per Ind AS 36 Impairment of Assets.

Other Information

5. The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the Standalone Financial Statements and our auditors report thereon. The Annual Report is expected to be made available to us after the date of this auditors report.

Our opinion on the Standalone Financial Statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the Annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.

Responsibilities of management and those charged with governance for the Standalone Financial Statements

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

7. In preparing the Standalone Financial Statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors responsibilities for the audit of the Standalone Financial Statements

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

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

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

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

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

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

• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

10. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

12. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter

should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

13. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

14. As required by Section 143(3) of the Act, we report that:

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

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except that the backup of books of account and other books and papers maintained in electronic mode has not been maintained on a daily basis on servers physically located in India and the matters stated in paragraph 14(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).

(c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March 31, 2024, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024, from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our remarks in paragraph 14(b) above on reporting under Section 143(3)(b) and paragraph 14(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).

(g) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

(h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements — Refer Note 32 to the Standalone Financial Statements.

ii. The Company has long-term contracts for which there were no material foreseeable losses. The Company has made provision as at March 31, 2024, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.

iv. (a) The management has represented that, to the best of its knowledge and belief, other than as disclosed in Note 42(vii)(a) to the Standalone Financial Statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries {Refer Note 42(vii)(b) to the Standalone Financial Statements}; and

(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v. The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act.

vi. Based on our examination, the Company has used accounting software for maintaining its books of account, which has a feature of recording audit trail (edit log) facility and that has operated throughout the year for all relevant transactions recorded in the software, except that the audit log is not maintained in case of modification by certain users with specific access and for direct data changes at the database level. During the course of performing our procedures, except for the aforesaid instances where our commenting on whether the audit trail feature was tampered with does not arise, we did not notice any instance of the audit trail feature being tampered with.

15. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

For Price Waterhouse Chartered Accountants LLP
	Firm Registration Number: 012754N/N500016
	Abhishek Rara
	Partner
Place: Gurugram	Membership Number: 077779
Date: May 29, 2024	UDIN: 24077779BKEHVG9966

Annexure A to Independent Auditors Report

Referred to in paragraph 14(g) of the Independent Auditors Report of even date to the members of RHI Magnesita India limited on the Standalone Financial Statements for the year ended March 31, 2024

Report on the Internal Financial Controls with reference to Financial Statements under clause (i) of sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financial statements of RHI Magnesita India limited ("the Company") as of March 31, 2024 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

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

Auditors Responsibility

3. Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls with reference to financial statements

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

Inherent Limitations of Internal Financial Controls with reference to financial statements

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

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2024, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

	For Price Waterhouse
	Chartered Accountants LLP
	Firm Registration Number: 012754N/N500016
	Abhishek Rara
	Partner
Place: Gurugram	Membership Number: 077779
Date: May 29, 2024	UDIN: 24077779BKEHVG9966

Annexure B to Independent Auditors Report

Referred to in paragraph 13 of the Independent Auditors Report of even date to the members of RHI Magnesita India Limited on the Standalone Financial Statements for the year ended March 31, 2024

In terms of the information and explanations sought by us and furnished by the Company, and the books of account and records examined by us during the course of our audit, and to the best of our knowledge and belief, we report that:

i. (a) (A) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of Property, Plant and Equipment.

(B) The Company is maintaining proper records showing full particulars of Intangible Assets.

(b) The Property, Plant and Equipment are physically verified by the Management according to a phased programme designed to cover all the items over a period of 2 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the Property, Plant and Equipment has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Note 43 to the Standalone Financial Statements, are held in the name of the Company, except for the following:

Description of property	Gross carrying value ( Rs. in lacs)	Held in the name of	Whether promoter, director or their relative or employee	Period held - indicate range, where appropriate	Reason for not being held in the name of the Company
Land with respect to Vishakhapatnam manufacturing unit	79.79	Arsha Ceramics Private Limited (previous name of RHI Clasil Private Limited i.e. erstwhile fellow subsidiary)	No	Since December 2005	Stamp duty is under assessment with Revenue Department of the Andhra Pradesh. Title deed will be transferred
Land with respect to Vishakhapatnam manufacturing unit	41.03	Clasil Refractories Private Limited (previous name of RHI Clasil Private Limited i.e. erstwhile fellow subsidiary)	No	Since December 2006	in the name of the Company once stamp duty is deposited after assessment is completed.
Land with respect to Vishakhapatnam manufacturing unit	626.53	RHI Clasil Limited (previous name of RHI Clasil Private Limited i.e. erstwhile fellow subsidiary)	No	Since September 2007	Stamp duty is under assessment with Revenue Department of Andhra Pradesh. Title deed will be transferred
Building of Vishakhapatnam unit	2,931.70	RHI Clasil Private Limited (i.e. erstwhile fellow subsidiary)	No	Since March 2007	in the name of the Company once stamp duty is deposited after assessment is completed.
Building of Cuttack manufacturing unit	2,054.28	Orient Refractories Limited	No	Since September 2019	Title deed registered in name of Orient Refractories Limited are
Land at Vishakhapatnam	1,268.39	Orient Refractories Limited	No	Since February 2020	in the process for change consequent to change of name of the Company to RHI Magnesita India
Land with respect to Cuttack manufacturing unit	1,833.96	Orient Refractories Limited	No	Since September 2019	Limited
Building with respect to guest house in Jamshedpur	139.75	Hi-Tech Chemicals Limited	No	Since January 2023	The Company is in the process for change of name in title deed pursuant to business acquisition from Hi-Tech Chemicals Limited.

(d) The Company has chosen cost model for its Property, Plant and Equipment (including Right-of-use-assets) and intangible assets. Consequently, the question of our commenting on whether the revaluation is based on the valuation by a Registered Valuer, or specifying the amount of change, if the change is 10% or more in the aggregate of the net carrying value of each class of Property, Plant and Equipment (including Right- of-use-assets) or intangible assets does not arise.

(e) Based on the information and explanations furnished to us, no proceedings have been initiated on or are pending against the Company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)) and Rules made thereunder, and therefore the question of our commenting on whether the Company has appropriately disclosed the details in its Standalone Financial Statements does not arise.

ii. (a) The physical verification of inventory excluding stocks with third parties has been conducted at reasonable intervals by the Management during the year and, in our opinion, the coverage and procedure of such verification by Management is appropriate. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not 10% or more in aggregate for each class of inventory and have been appropriately dealt with in the books of account.

(b) During the year, the Company has been sanctioned working capital limits in excess of Rs.5 crores, in aggregate, from banks on the basis of security of current assets. The Company has filed quarterly returns or statements with such banks, which are not in agreement with the unaudited books of account as set out below. {Also, refer note 42 (ii) to the Standalone Financial Statements}.

Name of the Bank	Aggregate working capital limits sanctioned (Rs. in lacs)	Nature of Current Asset offered as Security (Rs. in lacs)	Nature of current asset underlying quarterly return/ statement	Quarter ended	Amount disclosed as per quarterly return/ statement (Rs. in lacs)	Amount as per books of account (Rs. in lacs)	Difference (Rs. in lacs)	Reasons for difference
			Inventory	December 2023	73,080.00	73,080.20	0.20	Rounding off difference because return has been filed in crores and financials have been prepared in Lacs
			Trade receivables	December 2023	43,748.00	57,140.96	13,392.96	Trade receivables from related parties and Allowance for doubtful debts have not been considered in the return
HDFC Bank Limited	2,500	Fixed Deposits valued at Rs.1,000	Trade payables	December 2023	57,524.00	57,523.96	(0.04)	Rounding off difference because return has been filed in crores and financials have been prepared in Lacs
			Inventory	March 2024	62,000.00	61,943.15	(56.85)	Return is filed considering numbers as per provisional Financial Statements
			Trade receivables	March 2024	54,700.00	70,140.98	15,440.98	Return is filed considering numbers as per provisional Financial Statements
			Trade payables	March 2024	45,200.00	49,477.90	(4,277.90)	Return is filed considering numbers as per provisional Financial Statements

For the first two quarters, the Company has taken waiver from the bank to file the quarterly returns/statement.

iii. (a) During the year, the Company has made investment in one company and the Company has not granted any secured/ unsecured loans/advances in nature of loans, or stood guarantee, or provided security to any parties. Therefore, the reporting under clause 3(iii)(c), (iii)(d), (iii)(e) and (iii)(f) of the Order are not applicable to the Company.

(b) In respect of the aforesaid investment, the terms and conditions under which such investment were made are not prejudicial to the Companys interest.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 186 of the Companies Act, 2013 in respect of the investments made by it. The Company has not granted any loans or provided any guarantees or security to the parties covered under Sections 185 and 186 of the Companies Act, 2013.

v. The Company has not accepted any deposits or amounts which are deemed to be deposits referred in Sections 73, 74, 75 and 76 of the Act and the Rules framed there under.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) In our opinion, except for the dues in respect of Stamp Duty, the Company is generally regular in depositing undisputed statutory dues in respect of professional tax though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including goods and services tax and provident fund, employees state insurance, income tax, duty of customs, labour welfare fund and other material statutory dues, as applicable with the appropriate authorities.

The extent of the arrears of statutory dues outstanding as at March 31, 2024, for a period of more than six months from the date they became payable are as follows:

Name of the statute	Nature of dues	Amount (Rs. in lacs)	Period to which the amount relates	Due date*	Date of Remarks, if Payment any
Registration Act, 1908	Stamp Duty	800	2021-22	May 05, 2021	Not applicable -

*The Stamp Duty is payable on transfer of immovable property to the name of the Company from its erstwhile fellow subsidiary i.e. RHI Clasil Private Limited per the scheme of amalgamation approved by the Honble National Company Law Tribunal (NCLT) vide its Order dated May 05, 2021.

(b) The particulars of statutory dues referred to in sub-clause (a) as at March 31, 2024 which have not been deposited on account of a dispute, are as follows:

Name of the statute	Nature of dues	Amount (Rs. in lacs)	Amount paid under protest (Rs. in lacs)	Period to which the amount relates	Forum where the dispute is pending
Finance Act, 1994	Service Tax	143.39	3.09	January 2013 to February 2015	Goods and Services Tax Appellate Tribunal
Finance Act, 1994	Service Tax	147.64	-	December 2012 to January 2015	High Court
Customs Act, 1962	Duty of Customs	0.86	-	April 2016 to June 2017	Commissioner of Customs (Appeals)
Foreign Trade Policy (FTP 2004-2009 & FTP 2009-2014) and Customs Act, 1962	Duty of Customs	257.27		April 2013 to August 2016	Directorate of Revenue Intelligence
Foreign Trade Policy (FTP 2004-2009 & FTP 2009-2014) and Customs Act, 1962	Duty of Customs	33.74	33.74	November 2019 to March 2020	Commissioner of Customs (Appeals)
Central Excise Act, 1944	Duty of Excise	38.53	1.11	April 2016 to March 2017	Commissioner (Appeals)
Central Sales Tax, 1956	Sales Tax	3.12	0.22	April 2016 to March 2017	Deputy commissioner Appeals
Goods and Services Tax Act, 2017	Goods and Services Tax	230.97	-	July 2017 to March 2020	Assistant Commissioner of Central Tax
Goods and Services Tax Act, 2017	Goods and Services Tax	5.91	0.38	April 2021 to March 2022	GST Appellate Authority
Goods and Services Tax Act, 2017	Goods and Services Tax	19.63	0.86	July 2017 to March 2018	GST Appellate Authority
Goods and Services Tax Act, 2017	Goods and Services Tax	768.08	34.72	July 2017 to March 2018	GST Appellate Authority
Goods and Services Tax Act, 2017	Goods and Services Tax	194.21	-	April 2018 to March 2019	Additional Commissioner of State Tax
Goods and Services Tax Act, 2017	Goods and Services Tax	3.61	0.08	July 2017 to March 2018	GST Appellate Authority
Goods and Services Tax Act, 2017	Goods and Services Tax	6.64	0.31	July 2017 to March 2018	GST Appellate Authority
Goods and Services Tax Act, 2017	Goods and Services Tax	407.26	-	April 2018 to March 2019	Assistant Commissioner of State Tax
Goods and Services Tax Act, 2017	Goods and Services Tax	0.85	-	April 2018 to March 2019	State Tax Officer
Goods and Services Tax Act, 2017	Goods and Services Tax	257.32	-	April 2018 to March 2019	Commercial Tax Officer
Income Tax Act, 1961	Income Tax	18.63	-	April 2012 to March 2013	Income tax Appellate Tribunal
Income Tax Act, 1961	Income Tax	54.74	-	April 2016 to March 2017	Commissioner of Income Tax (Appeals)
Income Tax Act, 1961	Income Tax	209.20	41.84	April 2017 to March 2018	Commissioner of Income Tax (Appeals)
Income Tax Act, 1961	Income Tax	35.42	-	April 2019 to March 2020	Commissioner of Income-tax (Appeals)
Income Tax Act, 1961	Income Tax	2,467.28	-	April 2020 to March 2021	Assistant Director of Income Tax
Income Tax Act, 1961	Income Tax	140.25	-	April 2021 to March 2022	Assessing Officer

viii. There are no transactions previously unrecorded in the books of account that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

ix.(a) The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest to any lender during the year.

(b) On the basis of our audit procedures, we report that the Company has not been declared Wilful Defaulter by any bank or financial institution or government or any government authority.

(c) In our opinion, the term loans have been applied for the purposes for which they were obtained. (Also, refer Note 42(xii) to the Standalone Financial Statements).

(d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the Standalone Financial Statements of the Company, we report that no funds raised on short-term basis have been utilised for long-term purposes by the Company.

(e) On an overall examination of the Standalone Financial Statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries and the Company did not have any associates or joint ventures during the year.

(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries and the Company did not have any associates or joint ventures during the year.

x.(a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, the reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(b) The Company has made a preferential allotment during the year, in compliance with the requirements of Section 62 of the Act. The funds raised have been used for the purpose for which funds were raised. (Also, refer Note 46 to the Standalone Financial Statements).

xi. (a) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of material fraud by the Company or on the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

(b) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, a report under Section 143(12) of the Act, in Form ADT-4, as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 was not required to be filed with the Central Government. Accordingly, the reporting under clause 3(xi) (b) of the Order is not applicable to the Company.

(c) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, the Company has received whistle-blower complaints during the year, which have been considered by us for any bearing on our audit and reporting under this clause.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the reporting under clause 3(xii) of the Order is not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of related party transactions have been disclosed in the Standalone Financial Statements as required under Indian Accounting Standard 24 "Related Party Disclosures" specified under Section 133 of the Act.

xiv. (a) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(b) The reports of the Internal Auditor for the period under audit have been considered by us.

xv. In our opinion, the Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the reporting on compliance with the provisions of Section 192 of the Act under clause 3(xv) of the Order is not applicable to the Company.

xvi. (a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the reporting under clause 3(xvi)(a) of the Order is not applicable to the Company.

(b) The Company has not conducted non-banking financial/ housing finance activities during the year. Accordingly, the reporting under clause 3(xvi)(b) of the Order is not applicable to the Company.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, the reporting under clause 3(xvi)(c) of the Order is not applicable to the Company.

(d) Based on the information and explanations provided by the management of the Company, the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) does not have any CICs, which are part of the Group. We have not, however, separately evaluated whether the information provided by the management is accurate and complete. Accordingly, the reporting under clause 3(xvi)(d) of the Order is not applicable to the Company.

xvii. The Company has not incurred any cash losses in the financial year or in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year and accordingly the reporting under clause 3(xviii) of the Order is not applicable.

xix. On the basis of the financial ratios (Refer Note 44 to the Standalone Financial Statements), ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the Standalone Financial Statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date will get discharged by the Company as and when they fall due.

xx. (a) In respect of other than ongoing projects, as at balance sheet date, the Company does not have any amount remaining unspent under Section 135(5) of the Act. Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable.

(b) The Company has transferred the amount of Corporate Social Responsibility remaining unspent under sub-section (5) of Section 135 of the Act pursuant to ongoing project/ (s) to a special account in compliance with the provision of sub-section (6) of Section 135 of the Act. (Also, refer Note 26(b) to the Standalone Financial Statements).

xxi. The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of Standalone Financial Statements. Accordingly, no comment in respect of the said clause has been included in this report.

	For Price Waterhouse
	Chartered Accountants LLP
	Firm Registration Number: 012754N/N500016
	Abhishek Rara
	Partner
Place: Gurugram	Membership Number: 077779
Date: May 29, 2024	UDIN: 24077779BKEHVG9966