Dear Members,

The Directors have pleasure in submitting their sixty seventh report on the audited financial statements of the Company for the financial year ended March 31, 2017.

FINANCIAL HIGHLIGHTS

(Rs. Crore)

Previous financial year figures have been restated as per IND AS.

OPERATIONS AND BUSINESS PERFORMANCE

The Company is the world’s lowest carbon-intensive cement producers and one of the lowest power consumers per tonne of cement produced in line with a growing use of non-fossil fuels and alternative cementitious products.

The Company’s performance during financial year 2016-17 is a showcase of how cement companies that have invested in the right strategy can grow across industry cycles. The Company has focused on improving all the efficiency parameters which in turn has helped to improve the margins. The result is that we have been successful in increasing our net revenue for the financial year 2016-17 by 7.72% which is Rs.3,231.62 Crore as compared to Rs.2,999.91 Crore in financial year 2015-16 and the profit before tax for financial year 2016-17 has increased by 74.95% which is Rs.530.39 Crore as compared to Rs.303.16 Crore in financial year 2015-16.

Please refer to the chapter on Management Discussion and Analysis for a detailed analysis of the performance of the Company during the financial year 2016-17.

The Company continues to be in the business of manufacturing cement and refractories during the financial year 2016-17. There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

TRANSFER TO RESERVES

The Company proposes to retain the entire earnings for the future growth of its business and not to transfer any amount to the general reserve.

DIVIDEND

Your Directors have recommended a dividend of? 5/- (250%) per equity share of face value of Rs.2/- each for the current financial year ended on March 31, 2017, as against dividend of Rs.4/- (200%) per equity share paid during the immediately preceding year, having considered various financial and non-financial factors prevailed during the year, in terms of the Dividend Distribution Policy of the Company.

The dividend distribution would result in a cash outgo of Rs.34.24 Crore (including tax on dividend of Rs.5.79 Crore) compared to Rs.27.39 Crore (including tax on dividend of Rs.4.63 Crore) paid as interim dividend during financial year 2015-16.

CREDIT RATING

During the financial year 2016-17, ICRA has reaffirmed rating for long term and short term facilities of the Company at AA and A1 , respectively, signifying the sound financial management and the ability to meet financial obligations. ICRA has assigned the rating after taking into account inter-alia the cash assertive and operationally efficient cement operations, the strong market position, healthy growth and strong profitability of the Company.

BOARD OF DIRECTORS, ITS COMMITTEES AND THEIR MEETINGS

During the financial year 2016-17, five Board meetings were held. Reference is invited to the Corporate Governance Report, which forms part of this Report, for the details of Board of Directors, its committees and their meetings.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri Gautam Dalmia, Director of the Company, would retire by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. He has given declaration to the effect that he is qualified to be re-appointed as Director of the Company.

The Key Managerial Personnel, namely, Shri Puneet Yadu Dalmia, Managing Director, Shri Mahendra Singhi, Chief Executive Officer and Whole Time Director, Shri H. L. Agarwal, Senior Executive Director (Finance) and Chief Financial Officer and Smt. Rachna Goria, General Manager (Legal) & Company Secretary continue to hold their respective offices during the current financial year.

The Independent Directors, namely, Shri Pradip Kumar Khaitan, Shri D. N. Davar, Shri V. P. Sood and Smt. Sudha Pillai, have given their respective declaration of independence. They have also held a separate meeting wherein they have inter-alia reviewed the performance of Non-Independent Directors, Chairman and Board as a whole.

The Board members are provided with necessary documents, updates and policies to enable them familiarise with the Company’s procedures and practices. Periodic presentations on industry, business segments, legal updates and related responsibilities of Directors, are made at the Board meetings of the Company. The details of familiarisation programs for Independent Directors of the Company can be accessed at http://www.oclindialtd.in/board_of_ directors.php

The Nomination and Remuneration Policy of the Company on Director’s appointment and remuneration is attached as Annexure -I and forms part of this Report.

The formal annual evaluation of performance of Board, its Committees and individual Directors was made in accordance with criteria for performance evaluation of Board, its Committees and Directors (including Independent Directors), as approved by Nomination and Remuneration Committee and the Board of Directors, and the SEBI Guidance Note on Board evaluation.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors state that:

a) In the preparation of the Annual Accounts for the financial year ended March 31, 2017, the applicable accounting standards have been followed and there are no material departures from the same;

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as on March 31, 2017 and of the profit of the Company for the year ended on that date;

c) The Directors 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) The Directors have prepared the annual accounts of the Company on a going concern basis;

e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

PARTICULARS OF REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES

The particulars of remuneration of Directors/key managerial personnel/ employees and other required details are attached as Annexure - II and forms part of this Report.

Further, a statement showing the names and other particulars of the employees drawing remuneration in excess of the prescribed limits are attached as Annexure - IIA and forms part of this Report.

SHIFTING OF THE REGISTERED OFFICE

The registered office of the Company is being shifted from the State of Odisha to the State of Tamil Nadu under the Jurisdiction of the Registrar of Companies, Chennai.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

OCL Global Limited and Odisha Cement Limited are wholly owned subsidiaries of the Company and OCL China Limited is the step down subsidiary in which OCL Global Limited holds 90% shares. The Company is a joint venture partner in Radhikapur (West) Coal Mining Private Limited with Rungta Mines Limited and Ocean Ispat Limited having a stake of 7.029% in the share capital. In terms of the Company’s Policy on Material Subsidiary Companies, accessible on the Company’s website at http://www.oclindialtd.in/ postal_doc/MaterialSubPolicy. pdf, the Company does not have any material subsidiary.

A detailed report on the performance and financial position of each of Company’s subsidiaries and joint venture company for the financial year ended March 31, 2017 in Form AOC 1 is attached and marked as Annexure - III and forms parts of this Report. The annual reports of subsidiaries and joint venture company are not being published and any member desirous of obtaining a copy of the same may write to the registered office of the Company or download the same from the Company’s website www.oclindialtd.in. Any member desirous to inspect the same, may conduct inspection at the registered office of the Company during business hours.

SCHEMES OF ARRANGEMENT AND AMALGAMATION

Scheme 1:

The Scheme of Arrangement and Amalgamation amongst the Company, Dalmia Cement East Limited, Shri Rangam Securities & Holdings Limited, Dalmia Bharat Cements Holdings Limited and Odisha Cement Limited and their respective shareholders and creditors (“Scheme 1”), which was approved by the Board of Directors on March 28, 2016, has been approved by BSE Limited and National Stock Exchange of India Limited and both the stock exchanges have given their observation letter on July 12, 2016. The Scheme 1 has also been approved by the shareholders and secured creditors of the Company at their respective court convened meetings held on November 27, 2016. The Scheme has also been approved by minority shareholders through postal ballot process in terms of Securities and

Exchange Board of India circular dated November 30, 2015.

After coming into force of the provisions of the Companies Act, 2013 pertaining to compromises, arrangements and amalgamations and the Companies (Transfer of Pending Proceedings) Rules, 2016 with effect from December 15, 2016, the proceedings before the Jurisdictional High Courts have been / are being transferred to jurisdictional National Company Law Tribunal Bench(s) and are pending for their sanction.

Scheme 2:

Scheme of Arrangement and Amalgamation amongst Odisha Cement Limited, Dalmia Bharat Limited and Dalmia Cement (Bharat) Limited (“Scheme 2”) has been approved by the Board of Directors at its meeting held on November 05, 2016, as Scheme 2 involves its wholly owned subsidiary, i.e., Odisha Cement Limited and is inter-alia conditional upon the effectiveness of the Scheme 1, subject to approval of shareholders, creditors and other applicable regulatory authorities. Scheme 2 has been approved by the Stock Exchanges on May 05, 2017.

CONSOLIDATED FINANCIAL STATEMENTS

This annual report includes consolidated financial statements for the financial year 2016-17 which have been prepared based on audited financial statements of all subsidiaries including step down subsidiaries of the Companies.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report describing the initiatives taken by the Company from environment, social and governance perspective is attached hereto and forms part of this Report.

CORPORATE GOVERNANCE REPORT

Your Directors believe that corporate governance is an ethically driven business process that is committed to values aimed at enhancing the growth for the Company. Being a professionally run company, it is ensured that the corporate governance practices are driven by effective and strong Board oversight, timely disclosures, transparent accounting policies and high levels of integrity in decision making. The sound corporate governance practices are fundamental to the quest of our Company in delivering long terms value to all the stakeholders. The Company’s corporate governance practices have been detailed in the Corporate Governance Report and same is attached hereto together with the Auditors’ certificate thereon and forms part of this Report.

EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT-9 giving inter-alia details of shareholding pattern, indebtness, managerial remuneration is attached and marked as Annexure - IV and forms part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

Your Directors have constituted a Corporate Social Responsibility Committee responsible to identify, monitor and review corporate social responsibility activities of the Company and provide strategic direction for implementation of the Corporate Social Responsibility Policy of the Company. The Corporate Social Responsibility Policy may be accessed on the Company’s website www.oclindialtd.in. The prime objective of said Policy is to hasten social, economic and environmental progress of community at large.

Pursuant to the said Policy, the Company has made expenses aggregating to Rs.3.61 Crore towards corporate social responsibility activities during the financial year 2016-17 covering education, health & sanitation, skill development, rural infrastructure development, rural sports, environment conservation, etc. which is 2% of average net profits of the Company made during three immediately preceding financial years.

RELATED PARTY POLICY AND TRANSACTIONS

The Company has formulated a Related Party Transactions Policy and the same is posted on the Company’s website at http://www. oclindialtd.in/postal_doc/RelPartyPolicy.pdf .

The particulars of contracts or arrangements with the related parties in Form AOC 2 are attached as Annexure - VI and forms part of this Report.

RISK MANAGEMENT

Your Directors have constituted a Risk Management Committee which is mandated to review the risk management plan/process of your Company and to ensure that it has adequate risk management procedures, which are based upon business environment, operational controls and compliance procedures. The major risks are assessed through a systematic procedure of risk identification and classification. Risks are prioritized according to significance and likelihood. The purpose of risk management is not to eliminate the risks inherent to the business but to proactively address such risks. The Committee oversees the risk management process on an ongoing basis.

WHISTLE BLOWER POLICY AND VIGIL MECHANISM

The Company has in place the Whistle Blower Mechanism for Directors, employees and other stakeholders to report concerns inter alia about breach of code of conduct, financial irregularities, health, safety, environmental issues. Adequate safeguards are provided against victimisation of stakeholders and direct access to the Chairman of the Audit Committee in appropriate cases is provided. The Whistle Blower Mechanism is posted on the Company’s website www.oclindialtd.in.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION & REDRESSAL) ACT, 2013

Your Company is committed to create a workplace, at all of its working locations, that, all the times, is free from harassment and discrimination, where co-workers are respected, and provided an appropriate environment so as to encourage good performance and conduct.

The Company has in place Charter against sexual harassment of women at workplace in compliance with Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. During the year, one complaint was received and disposed off.

LOANS, GUARANTEES, SECURITY AND INVESTMENTS

Particulars of loans and guarantees given, securities provided and investments made are provided in the Standalone Financial Statements at note nos. 10, 11 and 42.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal control systems commensurate with the size of its operations. The Company has requisite policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The internal control systems are subjected to regular reviews, self assessments and audits and based on such reviews, we believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in Annexure - VII and the same forms part of this Report.

AUDITORS

Statutory Auditor

M/s. V. Sankar Aiyer & Co., Chartered Accountants (Firm Registration No. - 109208W), the Auditors of your Company shall hold office till the conclusion of the ensuing Annual General Meeting and they shall not be eligible for re- appointment due to expiry of the maximum permissible tenure as the Auditors of your Company in terms of the Companies Act, 2013. Your Board places on record its in deep appreciation for the valuable contributions of the Auditors during their long association since inception of your Company and wishes them success in future.

Based on the recommendation of the Audit Committee, your Board has, at its meeting held on May 10, 2017, appointed M/s S. S. Kothari Mehta & Co., Chartered Accountants (Firm Registration No.000756N) as the Auditors of the Company in place of the retiring auditors M/s V. Sankar Aiyer & Co., Chartered Accountants to hold office from the conclusion of the ensuing 67th Annual General Meeting until conclusion of the 72nd Annual General Meeting of your Company to be held in the year 2022, subject to approval of the members of the Company at the ensuing Annual General Meeting and ratification by the members of the Company every year thereafter.

M/s S. S. Kothari Mehta & Co., Chartered Accountants have confirmed their eligibility to be appointed as Auditors of the Company. They have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Cost Auditor

M/s R. J. Goel & Co., Cost Accountants, having consented to act as Cost Auditors and having given certificate that their re-appointment would be within the prescribed limits and that they are not subject to disqualifications and are an independent firm of Cost Accountants and are at arms’ length relationship with the Company, have been appointed by the Board of Directors as Cost Auditors of the Company for the financial year 2017-18.

Secretarial Auditor and their report

The Board of Directors has appointed Vikas Gera & Associates as Secretarial Auditors of the Company for the financial year 2017-18.

COMMENTS ON AUDITORS OBSERVATIONS

The notes on financial statements referred to in the Auditors’ Report are self-explanatory and do not call for any comments and explanation. During the year under review, the Statutory Auditors have not reported any matter under Section 143 (12) of the Act.

There is no qualification, reservation or adverse remark or disclaimer made by Statutory Auditors/Secretarial Auditors in their respective reports.

The Auditors, in Annexure A to their report, have mentioned that payment(s) of income tax for last year of Rs.83.19 Crore and advance income tax instalments for current year estimated by the Company at Rs.56.24 Crore were outstanding. The said tax payments are not envisaged in the event of approval of the Scheme of Arrangement and Amalgamation pending before the National Company Law Tribunal

PUBLIC DEPOSITS

No public deposits are accepted by the Company after March 31, 2015.

ORDERS PASSED BY REGULATORS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

SAFETY, HEALTH AND ENVIRONMENT

Safety and health of employees and clean environment is the core value of the Company. The world class EHS Management System has already been implemented at all the operations. The endeavour of the Company is to continue safe and healthy environment at all its plants. Towards this end, regular training programmes are being conducted for all levels of employees. Safety, health and environment audit is conducted by external auditors on annual basis.

Towards greener environment, the Company and employees have made it a habit to plant more and more trees.

INDUSTRIAL RELATIONS

Industrial relations during the year under review were peaceful and cordial.

ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation of the support provided by the Company’s bankers and financial institutions.

The Directors acknowledge the dedication and commitments of the employees at all levels and also take this opportunity to thank all the valued customers who have appreciated the Company’s products and have patronised them.

Your Directors convey their grateful thanks to the Government Authorities (Central & States), shareholders, distributors and dealers for their continued assistance, co-operation and patronage.

For & on Behalf of the Board of Directors

Puneet Yadu Dalmia Mahendra Singhi

Managing Director CEO and Whole Time Director

DIN: 00022633 DIN: 00243835

Place: New Delhi

Date: May 10, 2017