LETTER OF OFFERAugust 19, 2006

OCL India Limited

ISSUE OF 63,63,960 EQUITY SHARES OF RS. 2/- EACH FOR CASH AT A PREMIUM OF RS. 118 (ISSUE PRICE OFRS. 120) PER EQUITY SHARE ON RIGHTS BASIS TO THE ELIGIBLE EQUITY SHAREHOLDERS OF THE COMPANYIN THE RATIO OF 1 EQUITY SHARE FOR EVERY 6 EQUITY SHARES HELD ON THE BASIS OF BOOK CLOSUREDATES (SEPTEMBER 5 TO SEPTEMBER 9, 2006 (BOTH DAYS INCLUSIVE) AGGREGATING TO RS. 7636.75 LACS

ISSUE PRICE: Rs. 120 PER EQUITY SHARE OF FACE VALUE OF Rs. 2/-Issue Price is 60 times of face value of the Equity Shares

GENERAL RISKS

Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in the Issue unlessthey can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking aninvestment decision in the Issue. For taking an investment decision, investors must rely on their own examination of the Issuer and theIssue including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of India(SEBI) nor does SEBI guarantee the accuracy or adequacy of the Letter of Offer.Investors are advised to refer to the section titled ‘Risk Factors’ starting on page v of the Letter of Offer before making aninvestment decision in the Issue.efer to “Risk Factors” on page vi of the Letter of Offer before making an investment in thisIssue.

ISSUER’S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that the Letter of Offer contains all informationwith regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in the Letter of Offeris true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressedherein are honestly held and that there are no other facts, the omission of which makes the Letter of Offer as a whole or any suchinformation or the expression of any such opinions or intentions misleading in any material respect.

LISTING

The existing Equity Shares of the Company are listed on the National Stock Exchange of India Limited (NSE Limited), Bombay StockExchange Limited (the Designated Stock Exchange) (BSE Limited) and Bhubaneswar Stock Exchange. Our application for getting theEquity Shares voluntarily delisted from Bhubaneswar Stock Exchange is pending. The Equity Shares being offered in terms of theLetter of Offer will be listed at NSE Limited and BSE Limited. We have received in- principle approvals from BSE Limited and NSELimited vide their letters dated May 4, 2006 and May 12, 2006 respectively for listing of the Equity Shares arising from the Issue.

C M Y K

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

UTI Bank LimitedCentral Office: 111, Maker Towers F, Cuffe Parade,Mumbai 400 005Tel: + 91 22 6707 4407 (Extn 1725)Fax: + 91 22 22162467Email: utibmbd@utibank.co.in, Website: wwww.utibank.comContact Person: Mr. Rohit Shrivastava

C B Management Services (Private) LimitedP-22, Bondel RoadKolkata 700 019Tel: +91 33 2280 6692-94/2280 2486Fax: +91 33 2287 0263Email: cbmsl1@cal2.vsnl.net.inContact Person: Mr. S. Ghosh

C M Y K

ISSUE PROGRAMME

ISSUE OPENS ON LAST DATE FOR REQUEST FORSPLIT APPLICATION FORMS

ISSUE CLOSES ON

(The Company was originally incorporated as Orissa Cement Limited on October 11, 1949 under the Indian Companies Act, 1913 with the Registrar of JointStock Companies, Orissa at Cuttack. The Company obtained the certificate of commencement of business w.e.f. February 10, 1950. Name of the Company

was changed to OCL India Limited w.e.f. January 15, 1996)

Registered Office: AT/P.O. Rajgangpur 770 017, District Sundergarh, Orissa, IndiaTelephone: + 91 6624 221212/220121; Fax: + 91 6624 220 933

Corporate Office: 11th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110 001Telephone: + 91 11 2332 1212; Fax: + 91 11 2373 1333

E-mail: rgoria@ocl.in, Website: www.ocl.in, Compliance Officer: Mr. Rakesh Malhotra

SEPTEMBER 25, 2006 OCTOBER 9, 2006 OCTOBER 27, 2006

FOR PRIVATE CIRCULATION TO EQUITY SHAREHOLDERS OF THE COMPANY ONLY

TABLE OF CONTENTS

Chapters Page No.

Definitions and Abbreviations ..................................................................................................................................... i

Risk Factors .................................................................................................................................................................. vi

Summary of Our Business and Financial Data .......................................................................................................... 1

General Information ..................................................................................................................................................... 6

Capital Structure .......................................................................................................................................................... 10

Objects of the Issue ...................................................................................................................................................... 16

Basis for Issue Price .................................................................................................................................................... 20

Statement of Tax Benefits ............................................................................................................................................ 23

Industry Overview ........................................................................................................................................................ 29

Our Business ................................................................................................................................................................ 37

Our History and Corporate Structure .......................................................................................................................... 51

Our Management ......................................................................................................................................................... 59

Our Promoters .............................................................................................................................................................. 69

Our Subsidiaries & Group Companies ....................................................................................................................... 73

Related Party Transactions .......................................................................................................................................... 87

Regulation and Policies ............................................................................................................................................... 89

Dividend Policy ............................................................................................................................................................. 92

Our Audited Financial Statements .............................................................................................................................. 93

Management’s Discussion and Analysis of Financial Condition and Results of Operations ................................. 132

Statutory and Other Information .................................................................................................................................. 137

Stock Market Data ........................................................................................................................................................ 144

Government Approvals/Licensing Arrangement ....................................................................................................... 146

Outstanding Litigation .................................................................................................................................................. 154

Material Developments ............................................................................................................................................... 180

Terms of the Issue ........................................................................................................................................................ 181

Material Contracts and Documents for Inspections .................................................................................................. 198

Declaration ................................................................................................................................................................... 200

i

DEFINITION AND ABBREVIATIONS

Conventional/General Terms

Terms Description

Beneficiary Account The demat account of the successful allottee to whom the shares are allocated

Companies Act/Act The Companies Act, 1956, as amended from time to time

Depository A depository registered with SEBI under the SEBI (Depositories and Participants)Regulations, 1996, as amended from time to time

Depositories Act Depositories Act, 1996, as amended from time to time

Depository Participant A depository participant as defined under the Depositories Act

FEMA Foreign Exchange Management Act, 1999, as amended from time to time, andthe regulations framed thereunder

FII Foreign Institutional Investors (as defined under the Securities and ExchangeBoard of India (Foreign Institutional Investors) Regulations, 1995) registered withSEBI under applicable laws in India

FY / Fiscal / Financial Year Period of twelve months ending March 31 unless otherwise stated

Indian GAAP Generally accepted accounting principles in India

Non Residents All Applicants who are not NRIs or FIIs and are not persons resident in India

Non-Resident Indians Non-Resident Indian, as defined under Foreign Exchange Management (Transferor Issue of Security by a Person Resident Outside India) Regulations, 2000, asamended from time to time

OCB/Overseas Corporate Body A company, partnership, society or other corporate body owned directly orindirectly to the extent of at least 60% by NRIs including overseas trusts, in whichnot less than 60% of beneficial interest is irrevocably held by NRIs directly orindirectly as defined under FEMA (Transfer or Issue of Security by a PersonResident Outside India) Regulations, 2000

SCRR Securities Contracts (Regulation) Rules, 1957, as amended from time to time

SEBI The Securities and Exchange Board of India constituted under the SEBI Act, 1992

SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time totime

SEBI (DIP) Guidelines SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by SEBI onJanuary 27, 2000, as amended, including instructions and clarifications issuedby SEBI from time to time

Takeover Code The Securities and Exchange Board of India (Substantial Acquistion of Sharesand Takeovers) Regulations, 1997

Issue Related Terms

Terms Description

Abridged Letter of Offer Abridged Letter of Offer made in terms of section IV of chapter VI of SEBI (DIP)Guidelines, which is circulated to Eligible Equity Shareholders together withcomposite application form

Allotment Issue of Equity Shares pursuant to the Issue to the successful Applicants

OCL INDIA LIMITED

ii

Terms Description

Allottee The successful Bidder to whom the Equity Shares are being/have been allotted

Banker(s) to the Issue UTI Bank Limited

Book Closure Dates September 5 to September 9, 2006 (both days inclusive) decided by thecommittee of Directors of our Company in consultation with the Designated StockExchange for deciding the eligibility of Equity Shareholders of our Company forthe Issue

Designated Stock Exchange Bombay Stock Exchange Limited

Draft Letter of Offer Draft Letter of Offer dated March 14, 2006 as filed with SEBI for its comments

Eligible Equity Shareholders Equity Shareholders of our Company, whose name stands registered on ourCompany’s register of members:

� As beneficial owners as at the end of business hours on September 4, 2006as per the list to be furnished by NSDL and CDSL in respect of Equity Sharesheld in electronic form; and

� As members in the register of members of our Company after giving effect tovalid share transfers in physical form lodged with our Company on or beforeSeptember 4, 2006

First Applicant The Applicant whose name appears first in the Composite Application Form

Issue/ Issue Size Issue of 63,63,960 Equity Shares of Rs. 2/- each for cash at a premium of Rs.118 (Issue Price of Rs. 120) per Equity Share on Rights basis to the EligibleEquity Shareholders of the Company in the ratio of one Equity Share for everysix Equity Sharesaggregating to Rs. 7636.75 lacs

Issue Period The period between the Issue Opening Date and the Issue Closing Date inclusiveof both days and during which applicants can submit their composite applicationforms

Issue Price Rs. 120 per Equity Share, i.e., Rs. 2 plus a premium of Rs. 118 per Equity Share

Issuer/Company OCL India Limited

Lead Manager Lead Manager to the Issue, in this case being UTI Bank Limited

Letter of Offer Letter of Offer dated August 19, 2006 filed with the Stock Exchanges before theopening of the Issue. All references to Letter of Offer also include references tothe Abridged Letter of Offer

Registrar/Registrar to the Issue Registrar to the Issue, in this case being C B Management Services (Private)Limited

Rights Entitlement The number of Equity Shares that an Equity Shareholder is entitled to under theLetter of Offer in proportion to his/ her/ its existing shareholding in the Company

iii

Company/Industry Related Terms

Terms Description

Articles/Articles of Association Articles of Association of OCL India Limited

Auditors The statutory auditors of the Company viz. V. Sankar Aiyar & Company, CharteredAccountants

Board/ Board of Director Board of Directors of OCL India Limited

Dalmia Agencies Dalmia Agencies Private Limited

Dalmia Cement Dalmia Cement (Bharat) Limited

Dapel Investments Dapel Investments Private Limited

Director(s) Director(s) of OCL India Limited unless otherwise specified

Equity Shares Ordinary Shares of the Company of face value of Rs. 2/- each. Earlier the ordinaryshare were of face value of Rs. 10/- each. In an EGM held on June 25, 2005 subdivision of Equity Shares was approved resulting in each Equity Share of Rs.10/- each being subdivided into 5 Equity Share of Rs. 2/- each

Equity Shareholders Persons holding Equity Shares of the Company unless otherwise specified inthe context thereof

Europa Commercial Europa Commercial & Trades Limited

Grandeur Travels Grandeur Travels & Tours Private Limited

Hari Machines Hari Machines Limited

Himalayan Natural Himalayan Natural Products Limited

Kabirdas Investments Kabirdas Investments Limited

Kashmissa Industries Kashmissa Industries Limited

Konark Minerals Konark Minerals Limited

Memorandum / Memorandum The Memorandum of Association of OCL India Limitedof Association

OCL India The Issuer, i.e., OCL India Limited

OCL Iron and Steel OCL Iron and Steel Limited

OCL Global OCL Global Limited

Preference Shares Shares of the Company of face value of Rs. 100/- each

Promoter Group The Promoters, the immediate relatives of the Promoters and such entities/partnership firms as prescribed under Explanation II to Clause 6.8.3.2 of the SEBIDIP Guidelines

Promoters Individuals: Mr. Mridu Hari Dalmia, Mr. Raghu Hari Dalmia, Mr. Yadu Hari Dalmia,Mr. Gaurav Dalmia, Mrs. Abha Dalmia, Mrs. Padma Dalmia and Mrs. Usha DeviJhunjhunwala Hindu Undivided Family: M/s. Gautam Dalmia; and Trusts: MriduHari Dalmia Parivar Trust and Sumana Trust

Rama Investment Rama Investment Company Private Limited

Registered Office of the Company Registered Office: AT/PO: Rajgangpur, District: Sundargarh, Orissa 770 017, India.

Registrar of Companies or RoC Registrar of Companies Orissa at Cuttak

Rights Issue Committee Committee of the Board of Directors of OCL India Limited uthorized to takedecisions on matters related to or incidental to the Issue

Satya Miners Satya Miners & Transporters Limited

Swank Services Swank Services Private Limited

“we” or “us” and “our” Unless the context otherwise require, refers to OCL India Limited

OCL INDIA LIMITED

iv

Abbreviation of General Terms

Abbreviation Full Form

AGM Annual General Meeting of the shareholders of the Company

AS Accounting Standards as issued by the Institute of Chartered Accountants of India

BSE Limited Bombay Stock Exchange Limited

CAF Composite Application Form

CAGR Compounded Annual Growth Rate

CDSL Central Depository Services (India) Limited

EBDIT Earnings before Depreciation, Interest and Tax

EBIT Earnings before Interest and Tax

EGM/ EOGM Extraordinary General Meeting

EPS Earnings Per Equity Share

EU European Union

FCNR Account Foreign Currency Non Resident Account

FDI Foreign Direct Investment

FIPB Foreign Investment Promotion Board

FOB Free on Board

FY Financial Year

GoI Government of India

HUF Hindu Undivided Family

I.T. Act The Income Tax Act, 1961

KVA Kilo Volt Ampere

KW Kilo Watt

KWh Kilo Watt Hour

LC Letter of Credit

LoI Letter of Intent

MnTPA Million Tons per Annum

NAV Net Asset Value

NRE Account Non Resident External Account

NRI Non Resident Indians

NRO Account Non Resident Ordinary Account

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

P/E Ratio Price/Earnings Ratio

PAN Permanent Account Number

v

Abbreviation Full Form

PAT Profit after Tax

PBT Profit before Tax

R & D Research and Development

RBI Reserve Bank of India

ROE Return on Equity

RONW Return on Net Worth

Rs. Indian Rupees

SEBI Securities and Exchange Board of India

TAN Tax Deduction Account Number

TRS Transaction Registration Slip

TTM Trailing Twelve Months

USA United States of America

USD / US$ United States Dollar

UTI Bank UTI Bank Limited

VRS Voluntary Retirement Scheme

w.e.f. With effect from

YOY Year on Year

In the Letter of Offer, all references to “Rs.” refer to Rupees, the lawful currency of India, “USD” or “US$” refer to the UnitedStates Dollar, the lawful currency of the United States of America.

All references to the singular also refer to the plural and one gender also refer to any other gender, wherever applicable.

The words lac” means “one hundred thousand” and the word “million” means “ten lac” and the word “crore” means “tenmillion” or “one hundred lacs”.

In the Letter of Offer, any discrepancies in any table between total and the sums of the amount listed are due to roundingoff.

OCL INDIA LIMITED

vi

RISK FACTORS

An investment in equity shares involves a high degree of risk. You should carefully consider all of the informationin the Letter of Offer, including the risks and uncertainties described below, before making an investment in ourEquity Shares. If any of the following risks actually occur, our business, financial condition and results of operationscould suffer, the trading price of our Equity Shares could decline, and you may lose all or part of your investment.

Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial orother implication of any of the risks mentioned herein under:

Internal Risk Factors

Our business is mainly concentrated in Orissa any change in the prevailing market conditions may adverselyaffect our operations

Cement accounts for more than 50% of our total turnover and contributes to approximately 75% of our profits beforeinterest and tax. The main market for our cement division is Orissa though we also sell in other states. The quantitysold in other states is not very substantial as we sell nearly 65% of our production in Orissa. If the market forcement in Orissa were to slow down it would affect our operations significantly.

Our business is dependent upon our ability to mine sufficient limestone for our operations

We meet most of our requirements for limestone, the key raw material for cement production, from Lanjiberna quarriesfor our cement operations, which is located about 10 kms away from our plant. Some of the our quarries on freeholdland. We are required to obtain the grant of a lease from the State Government of Orissa in order to mine thelimestone deposits. Our mining leases were initially granted for terms of 20 years and in accordance with the Minesand Minerals (Regulation and Development) Act, 1957, as amended and the Mineral Concession Rules, 1960, asamended. These mining leases are renewable for additional terms of 20 years at a time subject to certain conditions.Mining rights are subject to compliance with certain conditions, and the Government of India and State Governmentshave the power to take action with respect to mining rights, including imposing fines or restrictions, revoking themining rights or changing the amount of royalty payable for mining the quarries. We currently pay a royalty of Rs.45 per ton and welfare cess of Rs 1 per ton of limestone despatched from our quarries There can be no assurancethat mining royalties will not be increased in the future. Although we believe that our mining rights are sufficient tomeet current and projected production levels, if our mining rights are revoked or not renewed upon expiration, orsignificant restrictions on the usage of the rights are imposed or applicable environmental standards are substantiallyincreased, our ability to operate our plants adjacent to the affected mining sites could be disrupted until alternativelimestone sources are located, which could materially and adversely affect our financial condition and results ofoperations.

There are numerous uncertainties inherent in estimating quantities of reserves, including many factors beyond ourcontrol. In general, estimates of reserves by independent consultants or the Company, including estimates of reservesset forth elsewhere in the Letter of Offer, are based upon a number of variable factors and assumptions, such asgeological and geophysical characteristics of the reserves, historical production performance from the properties,the quality and quantity of technical and economic data, extensive engineering judgments, the assumed effects ofregulation by Government of India agencies and future operating costs. All such estimates involve uncertainties,and classifications of reserves are only attempts to define the degree of likelihood that the reserves will result inrevenue for the Company. For those reasons, estimates of the economically recoverable reserves attributable toany particular group of properties and classification of such reserves based on risk of recovery, prepared by differentengineers or by the same engineers at different times, may vary substantially. In addition, such estimates can beand will be subsequently revised as additional pertinent data becomes available prompting revision. Actual reservesmay vary significantly from such estimates. To the extent actual reserves is significantly less than our estimates,our financial conditions and results of operations are likely to be materially and adversely impacted. While these

vii

estimates are based on detailed studies conducted by independent experts, there can be no assurance that theseestimates would not be materially different from estimates prepared by other experts in accordance with differentinternationally recognized codes.

We are dependent upon the continued supply of coal, petcoke and other raw materials and fuel, the supplyand costs of which can be subject to significant variation due to factors outside our control

We currently rely on a number of domestic suppliers to provide certain raw materials, including gypsum and additivessuch as clay, hard morrum etc. for our cement. We are dependent for coal supplies on coal linkage system/specialagreement with collieries and any change in the policy of Government may adversely affect our coal supplies. Ifwe are unable to obtain adequate supplies of raw materials or fuel in a timely manner or on acceptable commercialterms, or if there are significant increases in the cost of these supplies, our business and results of operationsmay be materially and adversely affected. Our increased power requirement on account of expansion/modernizationetc is dependant on State Government’s policy on distribution of power in the state and we are also exposed to therisk of revision of power tariff.

Our operations are subject to manufacturing risks and may be disrupted by a failure in our facilities

Our manufacturing operations could be disrupted for reasons beyond our control. These disruptions may includeextreme weather conditions, fire, natural catastrophes or raw material supply disruptions. Our facilities are alsosubject to operating risks, such as the breakdown or failure of equipment, power supply or processes, performancebelow expected levels of output or efficiency, obsolescence, labour disputes, natural disasters, industrial accidentsand the need to comply with the directives of relevant government authorities. In addition, there is a risk thatproduction difficulties such as capacity constraints, mechanical and systems failures, construction/upgrade delaysor delays in the delivery of machinery may occur, causing suspension of production and reduced output. Anysignificant manufacturing disruption could adversely affect our ability to make and sell products, which could havea material adverse effect on our business, financial condition and results of operations. We are also required tocarry out planned shutdowns of our plants for maintenance. We also shut down plants for capacity expansion andequipment upgrades. In addition, due to the nature of our business and despite compliance with requisite safetyrequirements and standards, our operations are subject to operating risks associated with cement manufacturing.These hazards include storage tank leaks and ruptures, explosions, discharges or releases of hazardous substances,manual handling, exposure to dust and the operation of mobile equipment and manufacturing machinery. We alsoengage in mining operations for limestone and are subject to risks associated with mining, including fires, explosionsand other accidents at the mine site and disruption in lime stone transport system. These operating risks maycause personal injury and property damage and could result in the imposition of civil and criminal penalties. Theoccurrence of any of these events could have a material adverse effect on the productivity and profitability of aparticular manufacturing facility and on our business, financial condition and results of operations. An inability toutilize our manufacturing capacities to optimum levels or streamline our production planning and procurementprocesses will adversely impact our results of operations.

Our results of operations could be adversely affected by strikes, work stoppages or increased wage demandsby our employees or our inability to attract and retain skilled personnel

As of June 30, 2006, we had 1689 full-time employees, of which 108 employees were employed at our corporateand marketing offices and 1581 employees were employed at our manufacturing facilities at Rajgangpur in all thethree manufacturing divisions viz. Cement, Refractories and Sponge Iron. Most of our workmen are represented bylabour unions. While we consider our current labour relations to be good, there can be no assurance that we will notexperience future disruptions to our operations due to disputes or other problems with our work force, which mayadversely affect our business and results of operations. As of June 30, 2006, approximately 3353 contract labourerswere working at our manufacturing facilities. The number of contract labourers varies from time to time based onthe nature and extent of work contracted to independent contractors. We enter into contracts with independent

OCL INDIA LIMITED

viii

contractors primarily for packing, as well as cleaning and other specified assignments. All contract labourers engagedat our facilities are assured minimum wages that are fixed by the respective state governments. Any upward revisionof wages required by such state governments to be paid to such contract labourers, or offer of permanent employmentor the unavailability of the required number of contract labourers, may adversely affect our business and results ofour operations. Our ability to meet future business challenges depends on our ability to attract and recruit talentedand skilled personnel.

The objects of the Issue for which funds are being raised have not been not appraised by any bank, financialinstitution or an independent organisation

The requirement of funds as stated in the section titled ‘Objects of the Issue’ on page 16 of the Letter of Offer isbased on the internal management estimates and has not been appraised independently by any bank, financialinstitution or any independent organisation. The deployment of funds is entirely at the discretion of our Board ofDirectors. All the figures included under the ‘Objects of the Issue’ are based on our own estimates.

We have not placed orders for the plant and machinery, equipments etc. for the planned outflow for theProject

The net proceed of the Issue is proposed to part fund the Project. We are yet to start making orders for procuringthe plant and machinery etc. Any delay in placing orders or procurement of plant and machinery etc. may delayimplementation of the Project. Such delays may also lead to increase in prices of these equipments further affectingour cost estimates of the Project.

We have not identified alternate sources of financing for the cost of the Project

Cost of the Project is estimated at Rs. 11,988 lacs to be funded by a mix of net proceeds from the Issue andinternal accurals. We have not identified alternate sources of financing for the cost of the Project. Any delay onour part to raise money through the Issue will delay the implementation of the Project. Further, the Issue proceedsare to be deployed at the sole discretion of the Company and is not subject to monitoring by any independentagency.

Threat of cheap imports of Refractory products from China

Of late, due to the reduction of import duty on finished products and high duty on raw materials, Europeanmanufacturers and some of the Indian manufacturers have shifted their base to China and exporting mainly bricksmade out of fused magnesia to Indian steel units and achieving good performance.

Though this is presently applicable for bricks based on fused magnesia, it may be extended to other products likefireclay and high alumina bricks for coke ovens, blast furnace and also silica refractories for non-recovery cokeoven batteries.

Risk arising out of limited number of Iron Ore Mine Owners

The supply and price of Iron Ore which is the raw material used in the manufacture of sponge iron is under thecontrol of limited number of iron ore mine owners and their strength has increased due to the non-issuance of freshmining leases by the Governmentt for the past few years. This puts these suppliers in an advantageous positionover us since they can get better terms for the supply of iron ore.

Our operations are subject to a degree of risk and could expose us to material liabilities, loss in revenuesand increased expenses

Our operations are subject to various risks associated with the production of cement, refractories and sponge iron.These hazards can cause injury and loss of life, severe damage to and destruction of property and equipment, andenvironmental damage, and may result in the suspension of operations and the imposition of civil and criminalliabilities. Employees, members of the public or government authorities may bring claims against us arising out of

ix

our production processes. Any liability incurred as a result of such events has the potential to materially impactour business, financial condition and results of operations. Such events may also adversely affect public perceptionabout our business and the perception of our suppliers, customers and employees, leading to an adverse effect onour business. Our business operations have the potential to cause personal injury and loss of life, damage to ordestruction of property, plant and equipment and damage to the environment, and are subject to risks such as fire,theft, flood, earthquakes and terrorism. Although we implement safety measures to reduce the risk of theseoccurrences, we cannot eliminate these risks completely. We maintain insurance coverage in such amounts andagainst such risks, which we believe are in accordance with industry practice. However, such insurance may notbe adequate to cover all losses or liabilities that may arise from our operations, and we may, in the future, not beable to maintain insurance of the types or at levels, which we deem necessary or adequate, or at rates, which weconsider reasonable. We do maintain insurance coverage in respect of product liability in respect of certain exportsonly. Accordingly, any material product liability claim or prolonged interruption to our business may have a materialadverse effect on our business, financial condition and results of operations. We may also incur liability claims inexcess of our insurance coverage or that are subject to substantial deductibles, or we may incur uninsured liabilitycosts. In addition, insurance proceeds may not be adequate to completely cover the substantial liabilities, lostrevenues or increased expenses that we may incur. Moreover, any claims made under our policies will likely causeour premiums to increase, and we may not be able to maintain adequate insurance coverage levels in the future.

If we are not able to renew or maintain our statutory and regulatory permits and approvals required to operateour business, it may have a material adverse effect on our business

We require certain statutory and regulatory permits, licenses and approvals to operate our business. In the future,we will be required to renew such permits, licenses and approvals, and obtain new permits, licenses and approvalsfor any proposed operations. While we believe that we will be able to renew or obtain such permits, licenses andapprovals as and when required, there can be no assurance that the relevant authorities will issue any of suchpermits or approvals in the time-frame anticipated by us or at all. Failure by us to renew, maintain or obtain therequired permits or approvals may result in the interruption of our operations and may have a material adverseeffect on our business, financial condition and results of operations.

Few of these approvals have already expired. Renewal applications have been filed with the appropriate authorities.Non-renewal or delay in renewal of these approvals may subject us to action by the respective government authorityand may further result in the interruption of our operations and may have a material adverse effect on our business.

Dependency on foreign colaborator for technology and know how

Technical Collaboration Agreement dated August 19, 1997 with M/s Plibrico SA Luxembourg for a period of 10years, for receiving various services from Plibrico, including (i) manufacture (ii) use, (iii) sell, (iv) and applicationexpires. Though access to improvements in technology achieved by Plibrico would come to an end on the expiryof the agreement, OCL has been advised that as per terms of this agreement, there is no fetter on OCL continuingto manufacture refractory products by using the knowledge already acquired by it on payment of lump sum in termsof the contract. After the expiry of the agreement, OCL cannot hold out that the said refractory products weremanufactured under licence from Plibrico. This could affect the sales of our refractory products adversely.

We have certain contingent liabilities, which may adversely affect our financial condition

For the FY 2005-06, contingent liabilities not provided for appearing in our financial statements aggregated Rs.1,135lacs. These included liabilities on account of claims against the Company not acknowledged as debt amounting toRs. 1,117 lacs.

In the event that any of these contingent liabilities materialize, our financial condition may be adversely affected.For details of contingent liabilities for last five financial years, kindly refer to ‘Annexure G’ in the section titled‘Financial Statements’on page 93 of the Letter of Offer.

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x

Some of our subsidiaries and group companies have incurred losses in past

Our Subsidiaries have incurred losses in the past, as per the details given below:

(Rs. in lacs)

Name of our Subsidiaries Net Profit / (Loss)

FY 2006 FY 2005 FY 2004

Kashmissa Industries Limited (0.07) (0.26) (20.15)

Orissa Iron and Steel Limited1 (4) N.A. N.A

Hari Fertilizer Limited2 N.A. (5) 2

1. Incorporated on February 20, 2006

2. Ceased to be a subsidiary w.e.f. September 30, 2005

For further details, kindly refer to the section titled ‘Our Subsidiaries and Group Companies’ begining on page 73 ofthe Letter of Offer.

Mr.Y.H.Dalmia a Promoter of our Company is also the promoter of Dalmia Cement (Bharat) Limited

Mr.Y.H.Dalmiya a Promoter of our Company is also the promoter of Dalmia Cement (Bharat) Limited, both thecompanies are into similar operations and this could lead to a conflict of interest.

One of our Directors is a partner in a law firm that is currently advising the Company on certain legalproceedings under arrangements other than for the reimbursement of expenses incurred or normalremuneration or benefits

One of our directors, Mr. Pradip (Pinto) Khaitan who is also the chairman, is a partner in M/s Khaitan & Company,a law firm, which has been appointed by the Company to take care of legal matters of the Company. In addition,Mr. Pradip (Pinto) Khaitan will be an interested party in any future arrangements that the Company may enter intowith such law firm.

Members of our Promoter group will continue to retain majority control in the Company after the Issue,which will enable them to influence the outcome of matters submitted to shareholders for approval; theremay be conflicts of interest with certain Promoter group companies

Upon completion of the Issue, members of the Promoter group will beneficially own atleast 61.16% of our post-Issue equity share capital. As a result, the Promoter group will have the ability to control our business includingmatters relating to any sale of all or substantially all of our assets, the timing and distribution of dividends and theelection or termination of appointment of our officers and directors. This control could delay, defer or prevent achange in control of the Company, impede a merger, consolidation, takeover or other business combination involvingthe Company, or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain controlof the Company even if it is in the Company’s best interest. In addition, for so long as the Promoter group continuesto exercise significant control over the Company, they may influence the material policies of the Company in amanner that could conflict with the interests of our other shareholders. The Promoter group may have interests thatare adverse to the interests of our other shareholders and may take positions with which we or our other shareholdersdo not agree.

There were some discrepancies in the shareholding pattern reports/returns that we have filed with the StockExchanges

There were discrepancies in the returns of shareholding pattern that we had filed with the Stock Exchanges. Thesediscrepancies pertained to clubbing mistakes of persons holding over 1% of paid up capital in the Company and

xi

discrepancy in reporting made under the listing agreement and under the Takeover Code regarding the total holdingof Promoters for the quarter ending March 31, 2001. For the quarter ending March 31, 2001, whereas the returnfiled by our Company under the Takeover Code showed total holding of the Promoters at 55.30%, the return filedfor the same period under listing agreement showed the total holding of the Promoters at 41.95%. The clubbingmistakes of persons holding over 1% of paid up capital in the Company pertained to clubbing of holdings of individualPromoter(s) with that of HUF, of which he was the karta and of trust, of which he was a member.

Though we have filed revised returns with the Bombay Stock Exchange and Natioanl Stock Exchange rectifyingthe error, penalties/fines may be imposed on us for such erroneous reporting under the relevant law.

There are a number of outstanding litigations

We are party to a number of pending litigations. We have also filed few cases against various parties. No assurancecan be given as to whether these matters will be settled in favour of or against our Company and / or these entities.Nor can any assurance be given that no further liability will arise out of these claims.

A summary of the said pending litigation and proceedings is as follows:

1. Cases/proceedings/appeals against our Company:

(Rs. in lacs)

S. No. Type of Cases No. of Cases Amount Involved

1 Pending in High Courts 22 20.04

2 Consumer dispute 1 Not ascertainable

3 Industrial dispute 5 8.75

4 Civil 3 0.97

5 Motor accident claim 1 5.00

6 Sales Tax 18 457.40

Total 51 492.16

2. Cases/proceedings/appeals filed by our Company:

(Rs. in lacs)

S. No. Type of Cases No. of Cases Amount Involved

1 Pending in High Courts 40 283.65

2 Provident Fund 1 91.31

3 Employees State Insurance 8 25.58

4 Arbitration 1 981.29

Total 51 1381.83

3. Cases/proceedings/appeals by and against Mr. Pradip (Pinto) Khaitan, our Director:

(Rs. in lacs)

S. No. Type of Cases No. of Cases Amount Involved

1 Default cases 1 Not ascertainable

2 Criminal complaints 4 Not ascertainable

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4. Cases/proceedings/appeals by and against our Group Companies:

Against Dalmia Cement (Bharat) Limited

(Rs. in lacs)

S. No. Type of Cases No. of Cases Amount Involved

1 Civil matters 5 120.16

2 Concerning statutory matters 25 777.64

Total 30 898.28

By Dalmia Cement (Bharat) Limited(Rs. in lacs)

S. No. Type of Cases No. of Cases Amount Involved

1 Civil 95 2110.87

2 Criminal cases 44 663.93

Total 139 2774.80

Against Hari Machines Limited(Rs. in lacs)

S. No. Type of Cases No. of Cases Amount Involved

1 Sales 1 45.16

2 ESIC and SECL. 1 10.85

Total 2 56.01

Against Dalmia Agencies Private Limited(Rs. in lacs)

S. No. Type of Cases No. of Cases Amount Involved

1 Excise 1 7.03

2 Income Tax 1 1.71

3 Sales Tax 1 0.97

Total 3 9.71

For full details of pending litigation, kindly refer to section titled ‘Outstanding Litigation’ on page 155 of the Letter ofOffer.

EXTERNAL RISK FACTORS

Our business and results of operations are dependent on economic conditions in India

Due to the significant impact of transportation costs on our overall costs, cement manufacturing and sale in Indiais largely regional in nature. Our production facilities are located in the State of Orissa, and we sell most of ourcement to customers in Orissa. Economic conditions and the level of growth in Orissa therefore have a directimpact on our business and results of operations, including the level of demand and the prices for our products andthe availability and prices of transport and raw materials.

The level of general economic activity in Orissa and, more specifically, the strength of the Orissa housing andconstruction sectors, have a direct impact on demand for our cement. The level of economic activity is influenced

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by a number of factors, including national and international economic activity, political and regulatory policy, andclimate conditions such as monsoons and drought. There can be no assurance that such growth will continue atthe same pace or at all, or that levels of cement consumption in Orissa and the states that we primarily supply towill not decrease. If the pace of growth of the Indian economy slows or turns negative, our business, financialcondition and results of operations would be materially and adversely affected.

The performance of the refractory and sponge units are dependent on the performance of the steel industry whichin turn linked to the performance of the domestic and international economic conditions. There can be assurancethat the growth being witnessed today will not slow down or even stop.

The Indian cement industry is cyclical and is affected by a number of factors beyond our control

The Indian cement industry is cyclical in nature. In recent years, cement prices and profitability of cementmanufacturers have fluctuated significantly in India, depending upon overall supply and demand. A number of factorsinfluence supply and demand for cement, including production overcapacity, general economic conditions, in particularactivity levels in certain key sectors such as housing and construction, our competitors’ actions and local, stateand central government policies, which in turn affect the prices and margins we and other Indian cement manufacturerscan realize.

Excess cement production capacity in the market has been one of the major factors influencing cyclicality in theIndian cement market. Such excess capacity in cement production has in the past had a direct impact on the priceat which we can sell our cement and the margins we realize. The long lead-time required to add or expand capacityin the cement industry has also led to supply/demand imbalances. The long lead-time makes it more difficult forIndian cement companies to time the commencement of new production facilities at a time when demand out-balances supply.

According to CMA estimates, as at March 31, 2006, total installed capacity in India was 157.1 MnTPA while demandfor the year ended March 31, 2006 was 121 million tons (excluding exports of 4 million tons of cement and 6million tons of clinker). There can be no assurance that excess production capacity will not continue or deterioratein the north Indian cement market. To the extent it does, our business and results of operations may be materiallyand adversely impacted.

Governmental actions and changes in policy could adversely affect our business

The Government of India and the government of each state of India (each a “State Government”) have broad powersto affect the Indian economy and our business in numerous ways. In the past, the Government of India and theState Governments have used these powers to influence, directly and indirectly, the Indian cement industry orother industries on which the cement industry is dependent. Examples of such measures include:

� Imposing import restrictions and customs duties on imports;

� Granting tax concessions for setting up new manufacturing plants;

� Allocating Government of India and State Government funding for public infrastructure programs in north India;and

� Providing preferential coal prices to cement manufacturers.

Some of these measures, the effect of which helps local cement producers, are currently being employed by theGovernment of India and/or State Governments. However, there can be no assurance that such policies will continuein the future. For example, the Government of India has announced its commitment to reducing import restrictionsfurther and to a phased reduction of customs tariffs.

Any change in existing Government of India and/or State Government policies or new policies providing or withdrawingsupport to the Indian industry or otherwise affecting the economy of eastern India, including the construction industry,

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could adversely affect the supply/demand balance and competition in markets in which we operate and negativelyaffect our cost structure. There can be no assurance that we would be able to pass on such increase in costs toour customers through an increase in our prices.

Taxes and other levies imposed by the Government of India or other State Governments, as well as otherfinancial policies and regulations, may have a material adverse effect on our business, financial conditionand results of operations

Taxes and other levies imposed by the Government of India or State Governments that affect our industry includecustoms duties, excise duties, sales tax, income tax and other taxes, duties or surcharges introduced on a permanentor temporary basis from time to time. The central and state tax scheme in India is extensive and subject to changefrom time to time. Any adverse changes in any of the taxes levied by the central or state governments may adverselyaffect our competitive position and profitability.

Under existing regulations, we are currently required to pay to the relevant State Governments or the Governmentof India a royalty on the extraction of limestone, excise duty on cement, sales tax (or value added tax, where ithas been implemented), duties on power tariffs, sales tax on stores and spares, packaging and other raw materialsand import duty on coal. There can be no assurance that the current levels of these taxes, duties and royalties willnot increase in the future, or that State Governments will not introduce additional levies, each of which may resultin increased operating costs and lower sales realizations. To the extent additional levies are imposed, there can beno assurance that we would be able to pass such cost increases on to our customers.

Our operations are subject to environmental, labour and other regulations

Our cement operations are subject to various Indian national and State environmental laws and regulations relatingto the control of pollution in the various locations in India where we operate. In particular, the discharge or emissionof chemicals, dust or other pollutants into the air, soil or water that exceed permitted levels and cause damage toothers may give rise to liabilities to the Government of India and State Governments and third parties, and mayresult in our incurring costs to remedy such discharge or emissions, such as from the use of coal. There can be noassurance that compliance with such environmental laws and regulations will not result in a curtailment of productionor a material increase in the costs of production or otherwise have a material adverse effect on our financial conditionand results of operations. Environmental laws and regulations in India have been increasing in stringency and it ispossible that they will become significantly more stringent in the future. Stricter laws and regulations, or stricterinterpretation of the existing laws and regulations may impose new liabilities on us or result in the need for additionalinvestment in pollution control equipment, either of which could affect our business, financial condition or prospects.

We are also subject to laws and regulations governing relationships with employees, in such areas as minimumwage and maximum working hours, overtime, working conditions, hiring and terminating of employees, contractlabour and work permits. Furthermore, the success of our strategy to modernize and optimize our existing operations,open newly-constructed plants or acquire new plants is contingent upon, among other things, receipt of all requiredlicenses, permits and authorizations, including local land use permits, building and zoning permits and environmentalpermits. Changes or concessions required by regulatory authorities could also involve significant costs and delayor prevent completion of the construction or opening of a plant or could result in the loss of an existing license.

Environmental regulation imposes additional costs and may affect the results of our operations

While we believe that our facilities are in compliance in all material respects with applicable environmental lawsand regulations, additional costs and liabilities related to compliance with these laws and regulations are an inherentpart of our business. We, like other cement producers and mine operators, are subject to various central, state andlocal environmental, health and safety laws and regulations concerning issues such as damage caused by mining,air emissions, wastewater discharges, solid and hazardous waste handling and disposal, and the investigation andremediation of contamination. These laws and regulations are increasingly becoming stringent and may in the futurecreate substantial environmental compliance or remediation liabilities and costs. For example, our operations produce

xv

certain waste products, which must be properly disposed of under applicable environmental laws. Further, there arecertain additional regulations applicable to mines, such as our limestone quarries. These laws can impose liabilityfor non-compliance with health and safety regulations or clean up liability on generators of hazardous waste andother substances that are disposed of either on or off-site, regardless of fault or the legality of the disposal activities.Other laws may require us to investigate and remedial contamination at our properties, including contamination thatwas caused in whole or in part by previous owners of our properties. While we intend to comply with applicableenvironmental legislation and regulatory requirements, it is possible that such compliance may prove restrictiveand onerous.

In addition to potential clean up liability, we may become subject to monetary fines and penalties for violation ofapplicable laws, regulations or administrative orders. This may result in the closure or temporary suspension orimpose adverse restrictions on our operations. We may also, in the future, become involved in proceedings withvarious regulatory authorities that may require us to pay fines, comply with more rigorous standards or otherrequirements or incur capital and operating expenses for environmental compliance.

We are subject to risks arising from currency exchange rate fluctuations, which could adversely affect ourbusiness, financial condition and results of operations

Changes in currency exchange rates influence our results of operations. Refractory division depends upon 38% ofrequirement from import out of the total raw material requirement during the year 2004-05 and 37% during 2005-06up to December 2005. The Materials like Magnesite and fused Alumina Group are required to be imported formanufacturing of the refractory product.

We import small quantities of coal, packing material and stores and spares for our operations and our future capitalexpenditures, including any imported equipment and machinery, may be denominated in currencies other than Indianrupees. We also export our refractory products for a substantial amount.

Any decline in the value of the rupee against such other currencies could increase the rupee cost of purchasingsuch equipment. The exchange rate between the rupee and the U.S. dollar has changed substantially in recentyears and may continue to fluctuate significantly in the future. This exchange rate uncertainty may lead to reductionin our revenues and thus affect our operations adversely.

We are subject to risks arising from interest rate fluctuations, which could adversely affect our business,financial condition and results of operations

Changes in interest rates could significantly affect our financial condition and results of our operations. As of March31, 2006, 30,873 lacs of our borrowings were at floating rates of interest. If the interest rates for our existing orfuture borrowings increase significantly, our cost of servicing such debt will increase. This may adversely impactour results of operations, planned capital expenditures and cash flows.

Any further issuance of Equity Shares by us or sales of our Equity Shares by our significant shareholdersmay adversely affect the trading price of the Equity Shares

Any future issuance of our Equity Shares by us could dilute your shareholding. Any such future issuance of ourEquity Shares or sales of our Equity Shares by any significant shareholder, including our promoters, may alsoadversely affect the trading price of our Equity Shares, and could impact our ability to raise capital through anoffering of our securities. In addition, any perception by investors that such issuances or sales might occur couldalso affect the trading price of our Equity Shares.

Terrorist attacks or war or conflicts involving India or other countries could adversely affect businesssentiment and the financial markets and adversely affect our business

South Asia has, from time to time, experienced instances of civil unrest and hostilities amongst Asian countries.Military activity or terrorist attacks in the future could influence the Indian economy by disrupting communicationsand making travel and transportation more difficult. Such political tensions could create a greater perception that

OCL INDIA LIMITED

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investments in Indian companies involve a higher degree of risk. This, in turn, could have a material adverse effect,on the market for securities of Indian companies, including our shares and on the market for our products.

You will not receive the Equity Shares you purchase in the Issue until several days after you pay for them,which will subject you to market risk

The Equity Shares you purchase in the Issue will not be credited to your demat account with depository participants/share certificates will not be dispatched to you until approximately 35 days from the Issue Closing Date. You canstart trading your Equity Shares only after receipt of listing and trading approvals in respect of these Equity Shareswhich will require additional time. Since our Equity Shares are already listed on the Stock Exchanges, you will besubject to market risk from the date you pay for the Equity Shares to the date they are listed. Further, there canbe no assurance that the Equity Shares allocated to you will be credited to your demat account/shares certificateswill be dispatched to you, or that trading in the Equity Shares will commence, within the time periods specifiedabove.

The price of our Equity Shares may be volatile, or an active trading market for our Equity Shares may notdevelop

The trading price of our Equity Shares may fluctuate due to a variety of factors, including our results of operationsand the performance of our business, competitive conditions, general economic, political and social factors, volatilityin the Indian and global securities markets, growth of business and leisure travel, the performance of the Indianand global economy and significant developments in India’s fiscal regime. There can be no assurance that anactive trading market for our Equity Shares will develop or be sustained, or that the price at which our EquityShares are initially offered will correspond to the prices at which they will trade in the market subsequent to thisIssue.

Notes to Risk Factors:

� Issue of 63,63,960 Equity Shares of Rs./- each for cash at a premium of Rs. 118 (Issue Price of Rs. 120) perEquity Share on rights basis to the Eligible Equity Shareholders of the Company in the ratio of 1 Equity Sharefor every 6 Equity Shares held on the basis of Book Closure Dates (September 5 to September 9, 2006 (bothdays inclusive) aggregating to Rs. 7636.75 lacs.

� The book value per Equity Share as on March 31, 2006 was Rs. 57.94. The net worth of the Company as onMarch 31, 2006 was Rs. 22,124 lacs.

� Our Promoters hold 61.16% of paid-up share capital of our Company. The average cost of acquisition perEquity Share to our Promoter is Rs 63.05. For cost of acquistion individual Promoter wise, kindly refer to thesection titled ‘Our Promoters’ on 69 of the Letter of Offer.

� For related party transactions, kindly refer to page 87 of the Letter of Offer.

� Except as disclosed in the sections titled “Our Management” and “Our Promoters” beginning on pages 59 and69 of the Letter of Offer, none of our Promoters, Directors or key managerial personnel have any interest,other than reimbursement of expenses incurred or normal remuneration or benefits.

� For details of transactions in Equity Shares of the Company by our Promoters during last six months kindlyrefer to page 14 of the Letter of Offer.

� Investors are advised to refer to the section titled ‘Basis for Issue Price’ on page 20 of the Letter of Offerbefore making an investment in the Issue.

Investors are free to contact or the Compliance Officer or the Registrar to the Issue for any complaints,information or clarifications pertaining to the Issue. For contact details of the Registrar to the Issue and theCompliance Officer, please refer to the cover page of the Letter of Offer.

1

SUMMARY OF OUR BUSINESS

Our Company is into the business of manufacture of cement, refractories and sponge iron. Our cement factory was startedwith an objective of setting up a superior grade cement manufacturing facility at Rajgangpur in Orissa at the request ofthe Government of Orissa for use in the construction of Hirakud Dam, now we are a company with annual turnoverexceeding Rs. 500 crores. We have experience of over five decades in the manufacture of cement and refractories.Sponge iron division of the Company is relatively new and we are into this segment of the business since 2002. We sellcement mainly in Eastern India under the brand ‘Konark’. Our Company is the largest manufacturer and seller of greycement in the State of Orissa and one of the most prominent players in the Eastern India. Over the period of time ‘Konark’has been able to establish itself as premium quality grey cement. Our cements are certified under ISO 9001(Version2000). Our refractories manufacturing capacity is approximately 80,000 metric tonnes per annum. In the year 1994, weobtained ISO 9001 certification for our entire range of refractories works, the first ever company to do so in India. Goingahead, besides continuously adding to the capacities of cement, refractories and sponge iron, we intend to venture intosteel manufacturing. We have already entered in to a memorandum of understanding with the Government of Orissa forsetting up a 0.25 MnTPA of steel plant and 14 MW capacity power plant.

Competitive Strengths

Experience of our Company and Promoters

We have experience of over five decades in the manufacture of cement and refractories. Over the years, on one side wehave kept on increasing our manufacturing capacities in both cement and refractories and on the other side we havealso continuously improvised our manufacturing process aimed to achieve higher level of operational efficiency. Now, weare a company with interests in cement, refractories, sponge iron and steel with turnover exceeding Rs. 650 crores. Wehave a stable and experienced middle and senior level management team with significant experience in the industry.

The Dalmia Group, our Promoters is a business conglomerate with consolidated revenues of US$ 90 million withinterests in cement, industrial ceramics, real estate, information technology, investments, engineering and trading. Overthe period of time, our Promoters have gained significant expertise of establishing and running large manufacturingplants of cement, refractories etc., which is one of our core competitive strengths.

Quality of products and strong brand name

We sell cement under the brand ‘Konark’, which has over the period of time has been able to establish itself as apremium quality grey cement. We believe that ‘Konark’ is a very strong brand name for superior grade grey cement in theEastern India, more particularly in the state of Orissa. Brand name plays a critical role for the retail purchasers of cementin India. We believe that our brand name and reputation of consistently supplying high quality products provide us witha definitive advantage over our competitors.

Proximity and access to large reserves of high quality limestone

We have captive mines for limestones, the major raw material for manufacture of cement. Our limestone reserves are ofhigh quality. The extractable limestones in our mines are sufficient to meet our requirement for a reasonably long lengthof time for both our existing as well as the capacities proposed to be added. Further, the proximity of limestone mineswith our cement manufacturing facilities adds to our advantage resulting because of lower transportation costs.

Extensive marketing and distribution network

We have a wide distribution network for grey cement in Eastern India. Our distribution network for grey cement productsconsists of number of feeder depots serviced by several regional sales offices in Orissa, West Bengal, Jharkhand andBihar. In addition, we have more than 1450 stockists that store and distribute our cement. We also have a team of salespromoters and handling agents. We believe that the extent of this network, and our relationships with our dealers,

OCL INDIA LIMITED

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enables us to market and distribute our cement efficiently.

Our Strategy

Our Corporate Vision is ‘To serve customers, shareholders and society at large through the pursuit of businessexcellence’. We, on one hand intend to further strengthen our position as one of the leading players in the cement andrefractories industry and at the same time want to diversify into steel manufacturing. In order to meet this objective, ourbusiness strategy is focused on the following:

Increase production capacity

Our strategy has been to manufacture more and more cement with the same capacity of clinker. We have been able tomanufacture higher quantities of cement with a given quantity of clinker because of our strategy to focus on blendedvarieties of cement. For the FY 2006, we had produced 8.26 lac metric tonnes of clinker against which the cementmanufactured by us was 15.83 lac metric tonnes. We further intend to increase our grinding capacities, which will add toour cement manufacturing capacity.

Continuous expansion of the distribution network and focus on brand promotion

In order to improve our market share, we intend to continue to focus on the expansion of our distribution network and thepromotion of our brands. We continuously seek to add additional authorized dealers and retailers to our network, andstrengthen our relationships with the existing dealers and retailers that carry our products. In order to enhance ourrelationships with dealers, we undertake programs to provide training and advice on marketing and sales techniques andtechnical applications of cement products.

Captive Power Plant

We have installed a captive Power Plant of 14 MW capacity w.e.f. May 13, 2006, which would partly run on waste heatavailable at the Sponge Iron Plant and partly coal based. The captive power plant is expected to decrease the cost ofpower substantially. Cost of power is a major head of expenditure for cement industry. Having a captive power plant willgive us ad edge over our competitors.

Focus on the Eastern India

Our target market has been Eastern India for our cement business. Since our manufacturing facility for cement businessis based in Orissa we save on account of transportation cost, which is major head of expenditure. The addition incapacity, which we are looking for, will also be based in and around our existing business. Our strategy to continue tofocus in the Eastern India will give us ad edge over our competitors.

3

Statement of Restated Profit and Loss

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

INCOME

1. Sales and Self Consumption

i. Sales 69340 56366 44928 36357 30678

ii. Self Consumption 743 634 457 278 301

Total (i+ii) 70083 57000 45385 36635 30979

Less: Excise Duty 10371 8399 6992 5389 4834

Total (1) 59712 48601 38393 31246 26145

2. Other Receipts 1093 586 522 413 430

3. Increase/Decrease in Inventory

i. Opening Stock 3500 4175 3633 3180 2907

ii. Closing Stock 3979 3500 4175 3633 3180

Total (ii – i ) 479 (675) 542 453 273

Total Income (1+2+3) 61284 48512 39457 32112 26848

EXPENDITURE

1. Raw Material Consumed 21871 18305 13994 10463 8839

2. Purchases 694 1518 289 32 9

3. Salaries, Wages & Benefits to Employees 2456 2295 2636 2876 2781

4. Power and Fuel 8695 7019 6385 5724 4519

5. Interest & Other Financial Charges

i. Interest on Term Loan & Deposits 1460 895 806 582 639

ii. Others 906 669 600 477 395

Less: Interest Received 1031 268 735 287 160

Total (5) 1335 1296 671 772 874

6. Depreciation 2704 2214 1968 1411 1259

7. Other Expenses 17972 12206 10015 8422 7889

Total Expenditure (1+2+3+4+5+6+7) 55727 44853 35958 29700 26170

Net Profit/ (Loss) Before Tax 5557 3659 3499 2412 678

Less: Provision for Tax - Current 475 300 650 222 60

Less: Fringe Benefit Tax 60

Less: Provision for Tax - Deferred 1310 743 588 357 221

MAT Credit available for set off (67)

Provision for tax relating to earlier years written back 201 277

Net Profit/ Loss for the Year as per auditedstatement of accounts 3779 2817 2261 1833 674

SUMMARY OF FINANCIAL DATA

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(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Adjustment on account of changes inAccounting Policies -

a. Payment under VRS earlier treated as deferred

revenue, being charged to Profit & Loss A/c 430 37 (467)

b. Method of depreciation on Plant and

Machinery of Sponge Iron

Plant changed from SLM to WDV 57 (57)

c. Adjustment towards tax provisions (35) 35

Adjusted Profit after tax 3779 2817 2748 1778 242

Add: Profit/ Loss Brought Forward 3561 3835 2557 1396 2165

Profit available for appropriation 7340 6652 5305 3174 2407

Appropriations

Transfer to General Reserve 2500 2500 800 450 940

Transfer to Debenture Redemption Reserve 250 250

Transfer to Reserve for Bad & Doubtful Debts

Proposed Dividend 382 297 594 148 71

Interim Dividend

Tax on Dividend 53 44 76 19

Adjusted Profit carried to Balance Sheet 4155 3561 3835 2557 1396

Notes:

1. There are no other adjustments resulting from audit qualifications, material amounts relating to adjustments forprevious year and changes in accounting policies;

2. Other receipts for the year-ended 31.03.2006 includes Rs.270 lacs being Profit on sale of shares of Hari FertilizersLimited, an erstwhile subsidiary Company. (Since then ceased to be a subsidiary company)

3. The provision for current tax for the year ended 31.03.2006, 31.03.2005 and 31.03.2002 has been made as perSection 115JB of the Income Tax Act, 1961

5

Statement of Restated Assets and Liabilities

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

A. Fixed Assets

i) Gross Block 62532 50916 43984 41146 34275Less: Accumulated Depreciation 26664 23855 21959 20177 18809Net Block 35868 27061 22025 20969 15466Less: Revaluation Reserve 400 423 448 488 520Net Block after adjustment for 35468 26638 21577 20481 14946evaluation reserve

ii) Capital work in progress 10667 9760 2971 814 1216

Total 46135 36398 24548 21295 16162

B. Investments 63 65 65 41 78

C. Current Assets, Loans & Advances Inventories 11822 10151 10057 7690 7638Sundry Debtors 8918 8675 8079 7239 6638Cash & Bank Balances 3429 1479 1371 1698 614Other Current Assets 573 94 1 16 103Loans & Advances 9223 6958 3480 2328 1708

Total 33965 27357 22988 18971 16701

D. Liabilities & Provisions Secured Loans 33873 24657 12612 11919 7823Unsecured Loans 7964 8998 7367 5013 4307Current Liabilities 9212 7480 7749 5949 5781Provisions 750 732 1118 432 105Deferred Tax Balance 6240 4929 4186 3598 3241

Total 58039 46796 33032 26911 21257

E. Net Worth (A+B+C-D) 22124 17024 14569 13396 11684Net Worth Represented By

F. Share Capital 764 594 594 712 712G. Reserves & Surplus

Capital Reserve 60 55 55 55 55Share Premium Account 2333 717 717 1657 1657Revaluation Reserve 400 423 448 488 520General Reserve 14000 11500 9000 8200 7500Capital Redemption Reserve 125 125 125 6 6Reserve for Bad & Doubtful Debts 187 222 243 209 108Profit & Loss A/c 4155 3561 3835 2557 1396Investment Allowance Reserve 250Debenture Redemption Reserve 500 250 Less: Revaluation Reserve 400 423 448 488 520Reserves (Net of Revaluation Reserves) 21360 16430 13975 12684 10972

Total (F+G) 22124 17024 14569 13396 11684

H. Miscellaneous Expenditure to the extentnot written off

I. Net Worth (F+G-H) 22124 17024 14569 13396 11684

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OCL India LimitedRegistered with Registrar of Companies, Orissa, Chalchitra Bhavan,

2nd Floor, Buxi Bazar, Cuttack 753 001Registration No. 15-00185 of 1949-50 dated October 11, 1949 CIN: U26942OR1949PLC00185

GENERAL INFORMATIONDear Shareholder(s),

Pursuant to the resolutions passed by the Board of Directors of the Company at its meetings held on October 29, 2005it has been decided to make a Rights Issue of the Equity Shares as per following details:

Issue of 63,63,960 Equity Shares of Rs. 2/- each for cash at a premium of Rs. 118 (Issue Price of Rs. 120) per EquityShare on Rights basis to the Eligible Equity Shareholders of the Company in the ratio of 1 Equity Share for every 6Equity Shares held on the basis of Book Closure Dates, September 5 to September 9, 2006 (both days inclusive)aggregating to Rs. 7636.75 lacs

GENERAL INFORMATION

The Company was originally incorporated as Orissa Cement Limited on October 11, 1949 under the Indian CompaniesAct, 1913 with the Registrar of Joint Stock Companies, Orissa at Cuttack. The Company obtained the certificate ofcommencement of business on February 10, 1950. Name of our Company was changed to OCL India Limited w.e.f.January 15, 1996.

Registered Office Corporate Office

AT/PO: Rajgangpur, 11th Floor, Narain Manzil,District: Sundargarh, 23, Barakhamba Road,Orissa 770 017, India. New Delhi 110 001Telephone: + 91 6624 221212/220121 Telephone: + 91 11 2332 1212Fax: + 91 6624 220 933 Fax: + 91 11 2373 1333E-mail: ocl_general@ocl.in E-mail: rgoria@ocl.inWebsite: www.ocl.in Website: www.ocl.in

Our Board of Directors

Our Company is managed by a Board of Directors comprising of eight directors. Mr. Pradip (Pinto) Khaitan is theChairman of our Company. The day to day affairs of the Company is managed by Mr. Ved Prakash Sood, the Whole TimeDirector. Our Board of Directors currently comprises of the following:

S. No. Name of the Directors Designation

1 Mr. Pradip (Pinto) Khaitan Chairman2 Mr. Vishnu Dayal Jhunjhunwala Director3 Mr. Yadu Hari Dalmia Director4 Dr. Sheo Raj Jain Director (Independent)5 Mr. Dhramendra Nath Davar Director (Independent)6 Mr. Harsh Vardhan Lodha Director (Independent)7 Dr. Ramesh C Vaish Director (Independent)8 Mr. Ved Prakash Sood Whole Time Director

For brief profile of our Chairman and Whole Time Director and other Directors kindly refer to the section titled ‘OurManagement’ on page 59 of the Letter of Offer.

7

Issue Schedule

The subscription will open upon the commencement of the banking hours and will close upon the close of banking hourson the dates mentioned below:

Issue Opening Date September 25, 2006

Last date for receiving requests for split forms October 9, 2006

Issue Closing Date October 27, 2006

Note: Investors may contact the Registrar to the Issue or the Compliance Officer in case of any Pre-Issue/ Post-Issuerelated problems such as non-receipt of Letter of Offer/ Letter of Allotment/ share certificates/ refund orders/ etc. Forcontact details of the Registrar to the Issue and the Compliance Officer, kindly refer to the following contact details:

Lead Manager to the Issue Registrars to the Issue

UTI Bank Limited C B Management Services (Private) LimitedCentral Office: 111, Maker Towers F, P-22, Bondel RoadCuffe Parade, Colaba Kolkata 700 019Mumbai 400 005 Telephone: +91 33 2280 6692-94/ 2280 2486Telephone: + 91 22 6707 4407 (Extn 1725) Fax: +91 33 2287 0263Fax: + 91 22 22162467 Email: cbmsl1@cal2.vsnl.net.inEmail: utibmbd@utibank.co.in Contact Person: Mr. S. GhoshWebsite: wwww.utibank.comContact Person: Mr. Rohit Shrivastava

Auditors of the Company Legal Advisor to the Issue

V. Sankar Aiyar & Company Corporate ProfessionalsChartered Accountants Solicitors & Advisors,Satyam Cinema Complex 7/9 Sarvpriya Vihar,Flat No. 202-203, New Delhi 110 016Ranjit Nagar Commercial Complex, Telephone: + 91 11 2696 6100/ 2696 7100New Delhi 110 008 Fax: + 91 11 2696 7100Telephone: + 91 11 2570 2074/2691 Email: sushil@indiacp.comFax: + 91 11 2570 5010 Website: wwww.corporateprofessionals.comEmail: vsnad@dell3.vsnl.net.in Contact Person: Mr. Girish NarangContact Person: Mr. V. Rethinam

Company Secretary Compliance Officer

Ms. Rachana Goria Mr. Rakesh Malhotra11th Floor, Narain Manzil, Executive Director (Finance)23, Barakhamba Road, 11th Floor, Narain Manzil,New Delhi 110 001 23, Barakhamba Road,Telephone: + 91 11 2332 1212 New Delhi 110 001Fax: + 91 11 2373 1333 Telephone: + 91 11 2332 1212E-mail: rgoria@ocl.in Fax: + 91 11 2373 1333Website: www.ocl.in E-mail: rmalhotra@ocl.in

Website: www.ocl.in

Investors can contact the abovementioned compliance officer or the Registrar to the Issue in case of any Issuerelated queries such as non-receipt of letters of allotment/ share certificates / refund orders, etc.

OCL INDIA LIMITED

8

Banker to the Issue

UTI Bank LimitedAshoka Estate Building, 1st Building,24, Barakhamba Road,New Delhi 110 001Tel: + 91 11 4151 5445-8Fax: + 91 11 2335 2747Email: anurag.gupta@utibank.co.inWebsite: www.utibank.comContact Person: Mr. Anurag Gupta

Bankers to the Company

State Bank of India United Bank of IndiaCommercial Branch, Overseas (Kolkata) Branch,Rourkela, Bisra Chowk, 15C, Hemanta Basu Sarani,District Sundargarh, Kolkata 700 001Orissa 769 001 Tel: + 91 33 22430068 / 0071,Tel: + 91 661 250 1757 / 1827 Fax: + 91 33 2248 5552Fax: + 91 661 510 341 Email:bmove@united.co.inEmail: sa.09678@sbi.co.in Website: www.unitedbankofindia.comWebsite: www.statebankofindia.com Contact Person: Mr. S. ChatterjeeContact Person: Mr. T C Pradhan

Punjab National Bank UCO BankLarge Corporate Branch Subash Chowk, Rajgangpur,A-9, Connaught Place, District Sundargarh, Orissa 770 017New Delhi 110 001 Tel: + 91 6624 20740 / 222740Tel: + 91 11 233 27368 / 15661 Fax: + 91 6624 220740Fax: + 91 11 2371 2518 Email: rkl_ucobankr@sancharnet.inEmail: lcbdelhi@gmail.com www.ucobank.comWebsite: www.pnbindia.com Contact Person: Mr. K. P. MishraContact Person: Mr. S. P. Singh

UTI Bank LimitedStatesman House, 13th Floor,148,Barakhamba Road,New Delhi 110 001Tel: + 91 11 2331 1153 / 34Fax: + 91 11 5152 1953Email: akshaya.panda@utibank.co.inWebsite: www.utibank.comContact Person: Mr. Akshaya Kumar Panda

Inter-se allocation of responsibilities among Lead Managers

As there is only one Lead Manager inter-se allocation of responsibilities is not applicable.

Credit Rating

This being an Issue of Equity Shares, no credit rating is required. For details of the ratings received / reaffirmed by theCompany for other securities/ instruments in the last 3 years kindly refer to the section titled ‘Our History and CorporateStructure’ on page 51 of the Letter of Offer.

9

Trustees

As the Issue is of Equity Shares, the appointment of Trustees is not required.

Monitoring Agency

As the Issue size shall be less then Rs. 500 crores monitoring agency is not required to be appointed to monitor theutilization of funds.

Grading of the Issue

We have not opted for the grading of the Issue from any independent agency.

Minimum Subscription

If we do not receive the minimum subscription of 90% of the Issue, the entire subscription shall be refunded to theapplicants within forty-two days from the date of closure of the Issue. If there is a delay in the refund of subscription bymore than 8 days after the Company becomes liable to repay the subscription amount, (i.e. forty two days after closureof the Issue), we shall pay interest for the delayed period, at prescribed rates in sub-section (2) and (2 A) of Section 73of the Companies Act.

The Rights Issue will become undersubscribed after considering the number of Equity Shares applied as per entitlementplus additional Equity Shares.

Underwriting

The Issue is not being underwritten.

OCL INDIA LIMITED

10

CAPITAL STRUCTURE

Share capital of our Company as on the date of filing of the Letter of Offer is set forth below:

(Rs. in lacs, except share data)

Share Capital Face Value Aggregate Value

(A) Authorized Share Capital

7,00,00,000 Equity Shares of Rs.2/- each 1400.00

1,00,000 Preference Shares of Rs. 100 each 100.00

(B) Issued Capital before the Issue

4,49,15,345 Equity Shares of Rs.2/- each 898.31

(C) Subscribed & Paid up Share Capital

3,81,83,760 Equity Shares of Rs.2/- each 763.67

(D) Present Issue offered to Existing Shareholders

63,63,960 Equity Shares of Rs.2/- each 127.27

(E) Paid up Equity Capital after the Issue

4,45,47,720 Equity Shares of Rs. 2/- each 890.95

(F) Securities Premium Account

Before the Issue 2,333.00

After the Issue 9842.47

a. Difference of 67,31,585 Equity Shares between the issued and paid up share capital is on account of:

i. 62,34,865 Equity Shares extinguished pursuant to the buy back scheme more particularly described in pointno. (d) below;

ii. 84,665 Equity Shares forfeited due to non-payment of call money;

iii. 4,12,055 Equity Shares due to non-exercise of conversion option by the holders of detachable warrrant

b. The details of increase and change in authorized share capital of our Company since the date of incorporation tillfilling of the Letter of Offer with SEBI is as follows:

(Rs. in lacs, except face value)

Date of change Nature of increase/ Number of Face Value Authorized

change Equity Shares Share Capital

May 16, 1987 Increase 30,00,000 Rs. 10/- 800.00

September 8, 1994 Increase 70,00,000 Rs. 10/- 1500.00

June 25, 2005 Subdivision 7,00,00,000 Rs. 2/- 1500.00

c. At an AGM held on June 25, 2005 sub division of Equity Shares was approved resulting in each Equity Share ofRs.10/- each being subdivided into 5 Equity Share of Rs. 2/- each and consequently the authorized share capitalof our Company was altered from Rs. 1500 lacs consisting of 1,40,00,000 Equity Shares of Rs. 10/- each and1,00,000 Preference Shares of Rs. 100/- each to Rs. 1500 lacs consisting of 7,00,00,000 Equity Shares of Rs. 2/-each and 1,00,000 Preference Shares of Rs.100/- each.

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d. Our Company has bought back the Equity Shares in two tranches in the FY 2001-02 and FY 2003-04 as per theterms and conditions of the letter of offer issued by the Company in accordance with the SEBI (Buy-back ofSecurities) Regulations, 1998. In the first tranche in the FY 2001-02, 63265 Equity Shares of Rs. 10/- each atmarket rate and in the second tranche in the FY 2003-04, 11,83,708 Equity Shares of Rs. 10/- each at a price ofRs.80/- per Equity Share were bought back by the Company.

e. Pursuant to the conversion of detachable warrants issued with the Zero Coupon Convertible Debentures (ZCCDs)on rights basis in FY 1996, 85,03,290 Equity Shares of face value of Rs. 2/- each was issued to the holders ofdetachable warrants at a premium of Rs. 19/- per Equity Share (issue price Rs. 21/- per share of Rs.2 each/- beingthe proportionate amount on account of subdivision of Equity shares of Rs.10/- each) as the terms of the letter ofoffer issued for ZCCD.

Pre and Post Issue Shareholding pattern of the Company

Category No. of Equity Percentage No. of PercentageShares currently Equity Shares

held (Post Allotment)

Promoters Holding

Indian Promoters 23353410 61.16 27245645 61.16

Foreign Promoters Nil Nil Nil Nil

Persons acting in Concert Nil Nil Nil Nil

Sub Total [A] 23353410 61.16 27245645 61.16

Institutional Investors

Mutual Funds 2967162 7.77 3461689 7.77

Banks, FIs, Insurance Cos etc. 3116 0.61 271969 0.61

FIIs 4500 0.01 5250 00.01

Sub Total [B] 3204778 8.39 3738908 8.39

Others

Private Corporate Bodies 3949888 10.34 4608203 10.34

Indian Public 7438708 19.48 8678493 19.48

NRI/OCBs 205713 0.54 239998 0.54

Any Other 31263 0.09 36473 0.09

Sub Total [C] 1162557213 30.45 9813563167 30.45

GRAND TOTAL [A+B+C] 38183760 100 44547720 100

Note: Post-Issue shareholding pattern is on the assumption that each of the categories will apply in the Issue up totheir full entitlement.

OCL INDIA LIMITED

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Pre Issue Shareholding of our Promoters (As on June 30, 2006)

S. No. Name(s) No. of Shares % Holding

1 Mr. M.H. Dalmia 2,017,980 5.28%2 Mridu Hari Dalmia Parivar Trust 7,086,085 18.56%3 Mrs. Abha Dalmia 1,682,230 4.41%4 Mr. Gaurav Dalmia 50,000 0.13%5 Mr. Y.H. Dalmia 9,987,680 26.16%6 Mr. R.H. Dalmia 1,808,115 4.74%7 Mrs. Padma Dalmia 558,820 1.46%8 Gautam Dalmia (HUF) 94,750 0.25%9 Sumana Trust 17,750 0.05%10 Mrs. Usha Devi Jhunjhunwala 50,000 0.13%

Total 23,353,410 61.16%

Notes to Capital Structure:1. Share Capital History of our Company

Date of Number of Face Issue Nature of Cumulative CumulativeAllotment shares Value Price Issue & paid up shareand Date Allotted (Rs.) (Rs.) Consideration reason for share premiumwhen made allotment capital (Rs.) (Rs.)fully paid-up

03.01.1950 3,040 10/- 10/- Cash at par Subscription 30,400 Nilto MoA

03.01.1950 5,04,000 10/- 10/- Cash at par First Issue 50,70,400 Nil01.06.1950 1,610 10/- 10/- Cash at par Right Issue 50,86,500 Nil16.03.1951 70,000 10/- 10/- Cash at par Right Issue 57,86,500 Nil24.12.1952 1,00,000 10/- 10/- Cash at par Right Issue 67,86,500 Nil21.12.1956 3,21,350 10/- 10/- Cash at par Right Issue 1,00,00,000 Nil14.11.1958 4,99,950 10/- 10/- Cash at par Right Issue 1,49,99,500 Nil02.12.1958 50 10/- 10/- Cash at par Right Issue 1,50,00,000 Nil26.12.1959 7,50,000 10/- 10/- Cash at par Right Issue 2,25,00,000 Nil28.01.1967 4,46,176 10/- 10/- Nil Bonus Issue 2,69,61,760 Nil16.03.1967 1,504 10/- 10/- Nil Bonus Issue 2,69,76,800 Nil25.05.1967 2,320 10/- 10/- Nil Bonus Issue 27000000 Nil23.09.1987 26,07,877 10/- 10/- Nil Bonus Issue 5,30,78,770 Nil14.12.1987 91,359 10/- 10/- Nil Bonus Issue 5,39,92,360 Nil14.05.1988 764 10/- 10/- Nil Bonus Issue 5,40,00,000 Nil01.01.1997 18,00,000 10/- 105/- Cash at Right Issue 7,20,00,000

premium

10.08.2005 85,03,290 2/- 21/- Conversion of As per notewarrant

Note:

a) Due to stock split 5 ordinary shares of 2/- each were allotted to the holder of 1 ordinary share of Rs. 10/-. Similary holderof warrants who excercised their rights to subscribe to the share of Rs. 10/- each were allotted ordinary shares of Rs. 2/- each in same proportion. Consequently the distinctive numbers were renumbered from 1 to 89830690.

b) Out of 18,00,000 warrants 16,931 warrants were forfeited and 82,411 warrants lapsed due to non exercise of right.thus85,03,290 shares of Rs. 2/- each were allotted i.e. 17,00,658 X 5

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The present Issue being a Rights Issue is exempt from the requirement of promoters’ contribution and lock-inthereof in terms of clause 4.10.1(c) of SEBI DIP Guidelines. Further, presently no Equity Shares of the Companyare under lock-in.

2. The Equity Shareholders do not hold any warrant, option or convertible loan or any debenture, which would entitlethem to acquire further Equity Shares.

3. As on the date of filing the Letter of Offer with SEBI, there are no outstanding financial instruments or any otherright, which would entitle the Promoters or shareholders or any other person any option to receive equity sharesafter the Issue. The Company does not have any outstanding ESOP.

Our Board has recently approved the issue of secured redeemable non-convertible debentures aggregating to Rs.50 crores on a private placement basis.

4. Top Ten shareholders of the Company:

a) Top ten shareholders as on the date of filing of the Letter of Offer

Name No. of Shares % of Pre-Issue Capital

Yadu Hari Dalmia 9987680 26.16%

Mridu Hari Dalmia Parivar Trust 7901495 20.69%

Mridu Hari Dalmia 2017980 5.28%

Prudential ICICI Trust Limited – Prudential ICICI 1731168 4.53%Infrastructure Fund

Abha Dalmia 1682230 4.41%

Raghu Hari Dalmia 992705 2.60%

Jai Kumar Jain 689062 1.80%

Yogalshree Tonics & Foods Private Limited 682500 1.79%

Shreevallabh Orthopaedic Instruments (P) Limited 682500 1.79%

Padma Dalmia 558820 1.46%

Total 26926140 70.52%

b) Top ten shareholders 10 days prior to the date of filing of the Letter of Offer

Name No. of Shares % of Pre-Issue Capital

Yadu Hari Dalmia 9987680 26.16%

Mridu Hari Dalmia Parivar Trust 7086085 18.56%

Mridu Hari Dalmia 2017980 5.28%

Raghu Hari Dalmia 1808115 4.74%

Prudential ICICI Trust Limited – Prudential ICICI 1731168 4.53%Infrastructure Fund

Abha Dalmia 1682230 4.41%

Jai Kumar Jain 689062 1.80%

Yogalshree Tonics & Foods Private Limited 682500 1.79%

Shreevallabh Orthopaedic Instruments (P) Limited 682500 1.79%

Padma Dalmia 558820 1.46%

Total 26926140 70.52%

OCL INDIA LIMITED

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c) Top ten shareholders as on June 30, 2004

Name No. of Shares % of Pre-Issue Capital

Raghu Hari Dalmia 1013475 17.07%

Padma Dalmia 994061 16.75%Mridu Hari Dalmia 600000 10.11%

Abha Dalmia 400000 6.74%

Mridu Hari Dalmia Parivar Trust 397834 6.70%

Sharmila Dalmia Parivar Trust 245000 4.13%

Mridu Hari Dalmia (H.U.F.) 225000 3.79%

Kanupriya Somani 223000 3.76%

Raghu Hari Dalmia (H.U.F.) 195000 3.28%

Sandeep Jhunjhunwala 88505 1.49%

Total 4381875 73.82%

5. Details of the equity shares of the company being purchased/sold by the promoters during last six months exceptfor the details herein under provided, our promoters have not purchased/sold any Equity Shares of the Companyduring last six months

Name of the Promoter Date of No. of Equity Purchase Sale ValueTransaction Shares Value (Rs. in lacs) (Rs. in lacs)

Mr. Raghu Hari Dalmia* 11.08.2006 8,15,410 — NilM/s. Mridhu Hari Privar Trust* 11.08.2006 8,15,410 Nil —M/s. M. H. Dalmia (HUF) 12.09.2005 11,25,000 — 126.56M/s. Devanshi Trust 12.09.2005 1,00,000 — 11.25M/s. Aryaman Hari Trust 12.09.2005 1,00,000 — 11.25M/s. Aanyapriya Trust 12.09.2005 1,00,000 — 11.25M/s. Kanupriya Trust 12.09.2005 1,11,500 — Gifted to

KanupriyaSomany

Ms. Kanupriya Somany 12.09.2005 1,11,500 Gift from Kanupriya —Trust

M/s. Mridu Hari Dalmia Parivar Trust 12.09.2005 14,25,000 160.31 —M/s. Sharmila Dalmia Pariwar Trust 12.09.2005 14,30,000 — Gifted to

Ms. SharmilaDalmia

Ms. Sharmila Dalmia 12.09.2005 14,30,000 Gift from SDPT —Mr. Gaurav Dalmia 19.09.2005 2,67,000 — Gifted to

Mridu HariDalmia

Parivar TrustMs. Sharmial Dalmia 19.09.2005 14,30,000 — - do -Ms. Kanupriya Somany 19.09.2005 13,36,500 — - do -M/s. Mridu Hari Dalmia Parivar Trust 19.09.2005 30,33,500 Gift from

Sh. Gaurav Dalmia,Ms. SharmilaDalmia and

Ms. KanupriyaSomany —

Mr. M. H. Dalmia 21.09.2005 18,51,310 — 2612.03

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Name of the Promoter Date of No. of Equity Purchase Sale ValueTransaction Shares Value (Rs. in lacs) (Rs. in lacs)

Mrs. Abha Dalmia 21.09.2005 7,00,000 — 978.32

Mr. R. H. Dalmia 21.09.2005 50,000 — 70.56

M/s. R. H. Dalmia (HUF) 21.09.2005 9.75,000 — 1368.49

M/s. Raghu Hari Dalmia Parivar Trust 21.09.2005 7,000 — 9.78

Kumari Vrinda Dalmia (minor) 21.09.2005 1,000 — 1.40

*Gift of Equity Shares from Mr. Raghu Hari Dalmia to M/s. Mridu Hari Dalmia Parivar Trust

6. The Company has not availed of any bridge loan against the proceeds of the Issue.

7. The Company, Promoters, Directors and Lead Manager to the Issue have not entered into any buy-back, standbyor similar arrangements for the Equity Shares being issued through the Letter of Offer.

8. There would be no further issue of capital whether by way of issue of bonus shares, preferential allotment, rightsissue or in any other manner during the period commencing from the filing of the Draft Letter of Offer with SEBIuntil the Equity Shares offered through the Letter of Offer have been listed.

9. Our Board has recently approved capital expenditure of Rs. 700 crores +/- 10% for increase in the cement capacityfrom existing 1.8 million tonne per annum to 3.8 million tonne per annum. To part fund this capital expenditure theCompany may issue further Equity Shares or instrumemnts convertible in Equity Shares at a future date. Except asabove, at present the Company does not have any intention or proposal to alter our capital structure for a periodof six months from date of opening of the Issue, by way of split/consolidation of the denomination of Equity Sharesor to make a further issue of Equity Shares (including issue of securities convertible into Equity Shares) whetherpreferential or otherwise except ESOPs if any or if we enter into acquisition or joint ventures or make investments,in which case we may consider raising additional capital to fund such activity or use equity shares as a currencyfor acquisition or participation in such joint ventures or investments.

10. We have not issued any Equity Shares out of revaluation reserve or for consideration other than cash except forbonus issues out of free reserves.

11. We have made following allotments of Equity Shares by way of Bonus Issue by capitalization of general reserves:

Date of Allotment Number of Equity Shares Face Value Nature of Allotment

January 28, 1967 4,50,000 10 Bonus in the ratio of 1:5

September 23, 1987 27,00,000 10 Bonus in the ratio of 1:1

12. The Promoters have confirmed and have undertaken, vide undertakings dated March 13, 2005 and July 17, 2006to subscribe in the Issue up to the full extent of their entitlement in the Issue.

13. At any given point of time there shall be only one denomination of Equity Shares of our Company, unless otherwisepermitted by law. The Company shall comply with such disclosures and accounting norms specified by SEBI fromtime to time.

14. Our Company had 9,532 Equity Shareholders as on the date of signing this Letter of Offer.

15. The terms of issue to Non-Resident Equity Shareholders/Applicants have been presented under the section ‘Termsof the Issue’ on page 182 of the Letter of Offer.

66. There are restrictive covenants in the agreements that we have entered into with certain banks for short-term loansand long-term borrowings. These restrictive covenants in many cases provides for borrowers covenants which arerestrictive in nature and require us to obtain their prior permission for alteration of the capital structure, change inbeneficial ownership of or control of the Company, entering into any merger/amalgamation, expenditure in newprojects, transfer/change in the key personnel, change in the constitutional documents etc. Further, in many caseslenders have right to appoint a nominee director on the Board of Directors of the Company upon an event ofdefault. Also, there are restrictive covenants regarding declaration and payment of dividend in cases of any subsistingdefault or out of accumulated reserves.

OCL INDIA LIMITED

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OBJECTS OF THE ISSUE

With a modest beginning in 1949 with an objective to manufacture superior grade cement in Orissa at the request of theGovernment of Orissa for use in the construction of Hirakud Dam, today we are a multi-divisional company with interestsin cement, refractories, sponge iron and steel. We started our operations in the 1952 by commissioning a wet processcement plant. With a view to grab the growing opportunities in the refractories segment, the Company decided todiversify into refractories in 1954. Over the years, we have kept on increasing our manufacturing capacities in bothcement and refractories and as on date we are the largest producer of cement in the state of Orissa. In the year 1994,we became the first company in India to obtain ISO 9001 certification for our entire range of refractories works. Goingahead, we also obtained ISO 9002 certification for our cement works in the year 1998.

With the growing demand of cement in the Eastern India, particularly of blended varities of cements, we intend toincrease the production capacity of our cement plant. We intend to add a vertical roller machine (VRM) to our alreadyexisting line of three VRMs in our cement plant at Rajgangpur. By installing another VRM, cement manufacturing capacityof the Company will increase from 1.8 MnTPA to 2.2 MnTPA.

The proceeds of the Issue after deducting Issue expenses are estimated at Rs. 7594.25 lacs and are intended to bedeployed as under:

1. To increase cement manufacturing capacity of the Company, which will enable us to produce increased volumes ofblended cement. We intend to add a VRM to our already existing line of three VRMs in our cement plant atRajgangpur; and

2. To meet the expenses of the Issue.

Requirement of Funds

We estimate the total requirement of funds for the Project as follows:

(Rs. in lacs)

Particulars Amount

Civil Structure & Foundation and other Installation 1386.00

Plant and Machinery (Imported) 3167.00

Plant and Machinery (Indigenous) 5700.00

Technical fee and Pre operative Expenses 660.00

Provision for Contingency 1075.00

Issue Related Expenses 42.5

TOTAL 12,030.50

Our assessment of requirement of fund is based on internal management estimates and has not been appraised by anybank or financial institution.

The objects clause of the Memorandum of Association of our Company enables us to undertake existing activities aswell as the activities for which the funds are being raised through the Issue.

Means of Finance

The entire requirement of the funds for the Project is proposed to be funded through the proceeds of the Issue andinternal accruals of the Company. In case of any shortfall in the means of finance or cost escalation in the Project, thesame shall be met by our Promoters from their own resources. Excess money, if any, will be utilized for general corporatepurpose including but not restricted to repayment of loans or towards working capital requirement.

17

(Rs. in lacs)

S. No. Sources of Finance Amount

1 Rights Issue of Equity Shares 7,636.75

2 Internal Accruals 4,393.75

TOTAL 12,030.50

Details of the Project / Use of Issue Proceeds

We intend to add to our production capacity (particularly the blended varities of cement) of our cement plant from thepresent level of 1.8 MnTPA to 2.2 MnTPA. We intend to achieve capacity addition by adding a VRM to our alreadyexisting line of three VRMs in our cement plant at Rajgangpur.

In the years 1997, 2002 and 2005 we had added three VRMs in our cement plant for manufacturing blended cements bygrinding fly ash and slag with the clinker. The VRM proposed to be added under the Project will the fourth in the row. Thecontract dated September 2, 2003 that we have entered into with M/s LOESCHE GmbH, Germany and LOESCHE IndiaPrivate Limited, India for procuring the third VRM (the Contract) provided a right in favour of our Company to place arepeat order on the same terms and conditions within 60 months from the date of the Contract. As per terms of theContract prices of the repeat order of imported supplies were to remain the same as earlier.

Description of Capital Expenditure

Civil Structure, Foundation & Other Installation

We have estimated the total cost to be incurred on civil structure, foundation and other installations at Rs. 1386 lacs, thedetails of which are as under:

(Rs. in lacs)

Particulars Amount

Bag Filter Building 760.00

Coal Mill 200.00

VRM Building 280.00

Backet Elevator Foundation and Structure 30.00

Bag Filter and Booster Fan Foundation and Structure 50.00

Cable Trench 30.00

Belt Conveyor Structure 36.00

Total 1386.00

Plant & Machinery (Imported)

We plan to add a VRM to the already existing line of three VRMs in our cement plant at Rajgangpur to increase thecement manufacturing capacity. In the years 1997, 2002 and 2005 we had added three VRMs in our cement plant formanufacturing blended cements by grinding fly ash and slag with the clinker. The VRM being added under the Project willthe fourth in the row. The contract dated September 2, 2003 that we have entered into with M/s LOESCHE GmbH,Germany for procuring the third VRM (the Contract) provided a right in favour of our Company to place a repeat order onthe same terms and conditions within 60 months from the date of the Contract. As per terms of the Contract prices of therepeat order of imported supplies were to remain the same as earlier.

We have already placed a LoI dated April 19, 2005 to M/s LOESCHE GmbH, Germany intimating them of our interest toprocure a VRM, subject to necessary internal clearances. Further, vide a letter dated April 20, 2005 we have placed onemore LoI for our interest in obtaining engineering plans, assembly drawings etc. for the installation of the VRM. Thefollowing table summarizes the details of the LoI placed:

OCL INDIA LIMITED

18

S. No. Particulars of Machine Units Amount Date of LoI Supplier(Rs. in lacs)

1 VRM (Model no. LM 56.3 + 1 2897.58 April 19, 2005 LOESCHE GmbH,3C/S (M-73) fly ash based GermanyPPC and slag grinding system

2 Other Equipments — 269.42 — —

TOTAL 3167.00

The prices of machineries are inculsive of tax & duties and erection, commissioning & testing charges but exclusive offreight charges, import duties and transit insurance.

Plant & Machinery (Indigenous)

The expenditure on indigenous plant and machinery to be procured for supprting the installation of VRM has beenestimated at Rs. 5700.00 lacs. Subject to availability at the appropriate time, we intend to source all these machines fromLoesche India Private Limited, India the supply of which is covered under the provisions of the Contract that we hadentered into with them while purchasing the similar machines while installing the 3rd VRM. The Contact gives us a rightto place a repeat order of these machines on the same terms and conditions

The following is the break up of the plant and machineries to be procured locally:

S. No. Particulars of Machine Amount(Rs. in lacs) Date of LoI Supplier

1 Equipments (including accessories 1581.01 April 19, 2005* Loesche India Privateand essential spare parts) for VRM Limited, India

2 Coal Mill with Auxilary including 856.18 - -Coal Mill Bag Filter

3 Ducts and Chutes 599.42 - -

4 Power Distribtion System 551.03 - -

5 Electrical and Instrumentation 259.11 - -

6 Bucket Elevator 169.58 - -

7 Emengy Saving Equiments 145.61 - -

8 Main Filter 320.04 - -

9 Belt Conveyor 116.48 - -

10 Fabrication, Erection and StoresConsumption 272.34 - -

11 Others 829.20 - -

TOTAL 5700.00

* LoI has been placed for a portion of the equiment valuing Rs. 12,31,36,000.

Technical Fee and Pre-Operative Expenses

Techinal fee of around Rs. 650 lacs is payable to LOESCHE GmbH, Germany and LOESCHE India Private Limited, NewDelhi for engineering services. We have already placed a LoI to LOESCHE GmbH for procuring engineering plans,assembly drawings and technical drawings etc. at a total cost of one million Euro. We have estimated around Rs. 10 lacsto be the cost of start up expenses and trail run.

Contingency

The total amount of Rs. 1075.00 lacs has been provided for contingencies, which is around 10 % of the capital expenditure.

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Availability of Utilities for the Project

Since the expansion of grinding capacity will be within the boundary of the existing cement plant, all the existing facilitiessuch as roads, site office, storage sheds, construction water and power supply can be readily utilized even for the Project.In addition, fly ash and slag, required for manufacturing blended cements are present in abundance in the state of Orissa.Also, we will not be required to add to our existing capacity of manufacturing clinker for adding to the production capacityof blended cements.

Status of Statutory Clearances for the Project

No major statutory clearances/government approvals are required for the Project, other than the approvals, which wehave already obtained for our existing business operations.

Schedule of Implementation

We expect the Project to start commercial production by March 2008. Details of schedule of implementation is as follows:

Activity Start Date Completion Date Status

Placing a letter of intent (LoI) for obtaining a VRM - - LoI Issued

Placing order for the VRM May 2006 - Pending

Setting up on the VRM - December 2007 Pending

Trail Run January 2008 - Pending

Commencement of Production - March 2008 Pending

Schedule of Fund Deployment

Proceeds of the Issue will be deployed in the Project over a period of two years. During FY 2007 we propose to spendRs. 2130.84 lacs, where as the balance amount is proposed to be spent during FY 2008.

Funds already Deployed in the Project

So far we have not deployed any fund in the Project.

Expenses of the Issue

The expenses for the Rights Issue are estimated to be around Rs. 42.5 lacs, i.e., at approximately 0.55 % of the IssueSize. The expenses for the Issue will include issue management and marketing fees payable to the Lead Manager Rs. 20lacs, Registrar’s fees of Rs. 0.50 lacs, Legal Advisor’s fees of Rs. 3 lacs, Auditor’s fees of Rs. 1 lac, printing anddistribution costs estimated at Rs. 8 lacs, advertisement cost estimated at Rs. 5 lacs, other expenses and contingenciesestimated at Rs. 5 lacs. The expenses for the Issue will be borne out of the proceeds of the Issue.

Interim Use of Proceeds

Pending use of funds as described above, we intend to invest the proceeds of the Issue in high quality interest bearingshort term / long term instruments including deposits with banks for the necessary duration. These investments would beauthorised by our Board or a duly authorised committee thereof. We may also use the same to fund our existing workingcapital requirement on a temporary basis.

Monitoring of Utilisation of Funds

We have not appointed any monitoring agency to monitor the utilization of proceeds of the Issue. Our Board will monitorthe utilization of the proceeds of the Issue. We will disclose the utilization of the proceeds of the Issue under a separatehead in our Balance Sheet for FY 2007 clearly specifying the purpose for which such proceeds have been utilized. Wewill also, in our Balance Sheet for FY 2007, provide details, if any, in relation to all such proceeds of the Issue that havenot been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue.

No part of the Issue proceeds will be paid by us as consideration to our Promoters, Directors, key management personnelor companies promoted by our Promoters except in the course of normal business.

OCL INDIA LIMITED

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BASIS FOR ISSUE PRICE

Investors should read the following summary with the Risk Factors included from page numbers vi to xvi and the detailsabout the Company and its financial statements included in the Letter of Offer to get a more informed view before makingthe investment decision. The face value of the Equity Shares is Rs. 2/- Equity Shares and Issue Price is 60 times of facevalue of the Equity Shares. The trading price of the Equity Shares of the Company could decline due to these risks andyou may lose all or part of your investments.

Qualitative Factors

Leading position in Orissa

We are one of the prominent players amongst the cement manufacturers in the Eastern Region and are the largestproducer of cement in the state of Orissa. There has been an upward trend in the demand for cement in the Easternregion and we believe that we are well positioned to take advantage of this growing demand. .

Proximity and access to large reserves of high quality limestone

We have access to large reserves of limestone to support our manufacturing operations, which we believe are sufficientto sustain our current and planned capacity for many years to come. This proximity to the sources of raw material givesus a competitive advantage over our competitiors.

Quality of products and strong brand name

We have built a strong reputation by consistently providing high quality products. Our brand ‘Konark’ is one of the mostwell-known and respected cement brands. Strong brand name enables us to command premium and also provides uswith a competitive advantage in ensuring that cement dealers carry our products.

Extensive marketing and distribution network

We have a wide distribution network for cement in Eastern India. We have 300 feeder depots and more than 1500 retailstores that stock our cement products. This enables us to market and distribute our cement widely and efficiently.

Experience and Technical Know-how

We have more than 55 years of experience in the Indian cement industry, which we believe provides us with the skills tomaximize production efficiency, expand production capacity and reduce costs. Further, we have a stable and experiencedmiddle and senior level management team, many of whom have been with the Company for over 20 years.

Developing cheaper and reliable captive source of power

Power cost accounted for 16% of our expenditures in FY 2006. We currently rely on power provided by the stateelectricity board and other sources such as diesel generator sets, which are relatively expensive sources of power andour average cost of power is higher than other plants of a similar size whose power needs are furnished by their owncaptive power plant. We are currently implementing a project that we anticipate will lead to a reduction in our powercosts.

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Quantitative Factors

1. Adjusted Earnings per Share (EPS)

Period Ended EPS Weight

FY 2004 9.11 1FY 2005 9.49 2FY 2006 10.76 3

Weighted Average 10.06

a. EPS has been calculated as per the following formula:(Adjusted Net Profit after tax attributable to equity shareholders)/(Weighted average number of equity sharesoutstanding during the year/ period)

b. EPS calculations have been done in accordance with the Accounting Standard 20 – “Earnings per share”issued by the Institute of Chartered Accountants of India.

2. Price Earning Ratio (P/E) of 11.15 in relation to the Issue Price of Rs. 120 Based on EPS as of March 31, 2006

3. Return on Net Worth (RoNW)

Period Ended RoNW Weight

FY 2004 18.86% 1FY 2005 16.55% 2FY 2006 17.08% 3

Weighted Average 17.2%

a. RoNW has been calculated as per the following formula:

(Adjusted Net Profit after tax)/(Net Worth excluding revaluation reserve and deferred revenue expenditure atthe end of the year/period)

4. Minimum Return on Total Net Worth after Issue needed to maintain Pre-Issue EPS of Rs. 10.76 is 16.11 %

5. Net Asset Value (NAV)

NAV as on March 31, 2006 57.94NAV after the Issue 66.81Issue Price 120.00

Period Ended NAV Weight

FY 2004 49.05 1FY 2005 57.36 2FY 2006 57.94 3

Weighted Average 56.27

a. NAV has been calculated as per the following formula: Net worth at the year end / Number of Equity Shares

6. Comparison with other listed companies

The Company is not comparable in absolute terms since it is into the business of cement, refractories and spongeiron manufacturing. The companies given below are comparable to us to some extent. Dalmia Cement, Ultratechand Shree Cement are cement companies whereas Vesuvius India Limited is a company engaged in the businessof manufacturing refractories

OCL INDIA LIMITED

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Particulars EPS (Rs.) P/E (times) RoNW (%)

OCL India Limited 9.1 19.7 17.8Dalmia Cement (Bharat) Limited 18.3 18.3 12.0Ultratech Cement Limited 13.3 51.4 0.3Shree Cement Limited 5.3 189.0 10.8Vesuvius India Limited 14.3 20.5 25.1

*Source for information is ‘Capital Market’ May 22-June4, 2006 issue. The figures for the Company have also beentaken from the same source and may not match with figures in “Financial Information” chapter on page 93 of theLetter of Offer.

*The EPS has been taken on TTM basis.

The Lead Manager believes that the Issue Price of Rs. 120 is justified in view of the above qualitative andquantitative parameters narrated above. See the section titled “Risk Factors” on page vi of the Letter of Offer andthe financials of the Company including important profitability and return ratios, as set out in the Auditors’ Reporton page 125 of the Letter of Offer to have a more informed view.

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STATEMENT OF TAX BENEFITS

The Board of DirectorsOCL India Limited11th Floor, Narain Manzil23, Barakhamba RoadNew Delhi 110 001

Benefits under the Income Tax Act, 1961

As per the existing provisions of the Income Tax Act, 1961 (the IT Act) and other laws as applicable for the time being inforce, the following tax benefits and deductions are and will, inter-alia be available to M/s OCL India Limited and itsshareholders.

A. To the Company

1. Dividend income (whether interim or final), in the hands of the company as distributed or paid by any otherCompany is completely exempt from tax in the hands of the Company, under section 10(34) of the IT Act.

2. Long-term capital gains would be subject to tax at the rate of 20% (plus applicable surcharge and education cess)as per the provisions of section 112(1)(b) of the IT Act. However, as per the proviso to Section 112(1), the longterm capital gains resulting on transfer of listed securities or units or zero coupon bonds, (not covered by section10(36) and 10(38)), would be subject to tax at the rate of @ 20% with indexation benefits or 10% without indexationbenefits (plus applicable surcharge and education cess) as per the option of the assessee.

3. Long term capital gain arising from transfer of an ‘eligible equity share’ in a Company Purchased on or after the 1stday of March, 2003 and before the 1st day of March, 2004 and held for a period of 12 months or more is exemptfrom tax under section 10(36) of the IT Act.

4. Long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchangeor from the sale of units of an equity oriented fund shall be exempt from Income Tax, if such sale takes place after1st of October 2004 and such sale is subject to Securities Transaction tax, as per the provisions of section 10(38)of the IT Act; Provided that long term capital gain shall be taken into account in computing the book profit andincome tax payable under Section 115JB of the Act.

5. Short Term capital gains arising from the transfer of Equity Shares in any company through a recognised stockexchange or from the sale of units of equity-oriented fund shall be subject to tax @ 10% provided such a transactionis entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax, as perthe provisions of section 111A of the IT Act.

6. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the IT Act, theCompany would be entitled to exemption from tax on gains arising from transfer of the long term capital asset (notcovered by section 10(36) and section 10 (38)) if such capital gain is invested in any of the long-term specifiedassets in the manner prescribed in the said section. Where the long-term specified asset is transferred or convertedinto money at any time within a period of three years from the date of its acquisition, the amount of capital gainsexempted earlier would become chargeable to tax as long term capital gains in the year in which the long-termspecified asset is transferred or converted into money.

B. To Resident Shareholders

1. Dividend (whether interim or final) declared, distributed or paid by the Company is completely exempt from tax inthe hands of the shareholders of the Company as per the provisions of section 10(34) of the IT Act.

2. Any income of minor children clubbed with the total income of the parent under section 64(1A) of the IT Act, will beexempt from tax to the extent of Rs. 1500/- per minor child under section 10(32) of the IT Act.

3. As per the provisions of Section 112(1)(a) of the IT Act, long-term capital gains would be subject to tax at the rateof 20% (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1), the long

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term capital gains resulting on transfer of listed securities or units or zero coupon bonds (not covered by sections10(36) and 10(38), would be subject to tax at the rate of @ 20% with indexation benefits or 10% without indexationbenefits (plus applicable surcharge and education cess) as per the option of the assessee.

4. Long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchangeor from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takesplace after 1st of October 2004 and the sale is subject to Securities Transaction tax, as per the provisions ofsection 10(38) of the IT Act.

5. Short Term capital gains arising from the transfer of Equity Shares in any company through a recognised stockexchange or from the sale of units of equity-oriented fund shall be subject to tax @ 10% provided such a transactionis entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax, as perthe provisions of section 111A of the IT Act.

6. As per the provisions of section 88E, where the business income of a resident includes profits and gains from saleof taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securities transactiontax paid on such transactions. However the amount of rebate shall be limited to the amount arrived at by applyingthe average rate of income tax on such business income.

7. In accordance with and subject to the conditions and to the extent specified in Section 10(36) of the IT Act, theshareholders would be entitled to exemption from long term capital gain tax on transfer of their ‘eligible EquityShare’ in the Company purchased during the period March 1, 2003 to February 29, 2004 (both days inclusive) andheld for a period of 12 months or more.

8. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the IT Act, theshareholders would be entitled to exemption from tax on long term capital gains arising on transfer of their sharesin the Company (not covered by sections 10(36) and 10(38)), if such capital gain is invested in any of the longterm specified assets in the manner prescribed in the said section. Where the long-term specified asset is transferredor converted into money at any time within a period of three years from the date of its acquisition, the amount ofcapital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which thelong-term specified asset is transferred or converted into money.

9. In case of a shareholder being an individual or a Hindu Undivided Family, in accordance with and subject to theconditions and to the extent specified in Section 54F of the IT Act, the shareholder would be entitled to exemptionfrom long term capital gains on the sale of shares in the Company (not covered by sections 10 (36) and 10 (38)),upon investment of net consideration in purchase /construction of a residential house. If part of net consideration isinvested within the prescribed period in a residential house, then such gains would not be chargeable to tax on aproportionate basis. Further, if the residential house in which the investment has been made is transferred within aperiod of three years from the date of its purchase or construction, the amount of capital gains shall be charged totax as long-term capital gains in the year in which such residential house is transferred.

C. To Non-Resident Indian Shareholders

1. Dividend (whether interim or final) declared, distributed or paid by the Company is completely exempt from tax inthe hands of the shareholders of the Company as per the provisions of section 10(34) of the IT Act.

2. Any income of minor children clubbed with the total income of the parent under Section 64(1A) of the IT Act will beexempt from tax to the extent of Rs. 1,500 per minor child per year in accordance with the provisions of section10(32) of the IT Act.

3. In the case of shareholder, being a non-resident Indian and subscribing to shares in convertible foreign exchange,in accordance with and subject to the conditions and to the extent specified in Section 115D read with Section115E of the IT Act, long term capital gains arising from the transfer of shares of an Indian company (not coveredby sections 10(36) and 10(38)), will be subject to tax at the rate of 10% as increased by a surcharge andeducation cess at an appropriate rate on the tax so computed, without any indexation benefit but with protectionagainst foreign exchange fluctuation.

4. In case of a shareholder being a non-resident Indian, and subscribing to the shares in convertible foreign exchangein accordance with and subject to the conditions and to the extent specified in Section 115F of the IT Act, the

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nonresident Indian shareholder would be entitled to exemption from long term capital gains (not covered bysections 10(36) and 10(38)) on the transfer of shares in the Company upon investment of net consideration inmodes as specified in sub-section (1) of Section 115F.

5. In accordance with the provisions of Section 115G of the IT Act, Non Resident Indians are not obliged to file areturn of income under Section 139(1) of the IT Act, if their only source of income is income from investments orlong term capital gains earned on transfer of such investments or both, provided tax has been deducted at sourcefrom such income as per the provisions of Chapter XVII-B of the IT Act.

6. In accordance with the provisions of Section 115H of the IT Act, when a Non Resident Indian become assessableas a resident in India, he may furnish a declaration in writing to the Assessing Officer along with his return ofincome for that year under Section 139 of the IT Act to the effect that the provisions of Chapter XII-A shall continueto apply to him in relation to such investment income derived from the specified assets for that year and subsequentassessment years until such assets are converted into money.

7. As per the provisions of section 115 I of the I.T. Act, a Non-Resident Indian may elect not to be governed by theprovisions of Chapter XII-A for any assessment year by furnishing his return of income for that year under Section139 of the IT Act, declaring therein that the provisions of Chapter XII-A shall not apply to him for that assessmentyear and accordingly his total income for that assessment year will be computed in accordance with the otherprovisions of the IT Act.

8. In accordance with and subject to the conditions and to the extent specified in Section 112(1) (c) (read withproviso) of the IT Act, tax on long term capital gains arising on sale on listed securities or units not covered bysections 10(36) and 10(38) will be, at the option of the concerned shareholder, 10% of capital gains (computedwithout indexation benefits) or 20% of capital gains (computed with indexation benefits) as increased by a surchargeand Education cess at an appropriate rate on the tax so computed in either case.

9. As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in anycompany through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall beexempt from Income Tax if such sale takes place after 1st of October, 2004 and such sale is subject to SecuritiesTransaction tax.

10. As per the provisions of section 111 A, Short Term capital gains arising from the transfer of Equity Shares in anycompany through a recognised stock exchange or from the sale of units of equity-oriented fund shall be subject totax @ 10% provided such a transaction is entered into after the 1st day of October, 2004 and the transaction issubject to Securities Transaction Tax.

11. As per the provisions of section 88E, where the business income of a assessee includes profits and gains fromsale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securitiestransaction tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived atby applying the average rate of income tax on such business income.

12. In accordance with and subject to the conditions and to the extent specified in Section 10(36) of the IT Act, theshareholders would be entitled to exemption from long term capital gain tax on transfer of their ‘eligible EquityShares’ in the Company purchased during the period March 1, 2003 to February 29, 2004 (both days inclusive)and held for a period of 12 months or more.

13. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the IT Act, theshareholders would be entitled to exemption from tax on long term capital gains (not covered by sections 10(36)and 10(38)) arising on transfer of their shares in the Company if such capital gain is invested in any of the longterm specified assets in the manner prescribed in the said section. Where the long-term specified asset is transferredor converted into money at any time within a period of three years from the date of its acquisition, the amount ofcapital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which thespecified asset is transferred or converted into money.

14. In case of a shareholder being an individual or a Hindu Undivided Family, in accordance with and subject to theconditions and to the extent specified in Section 54F of the IT Act, the shareholder would be entitled to exemptionfrom long term capital gains (not covered by sections 10(36) and 10(38)) on the sale of shares in the Companyupon investment of net consideration in purchase / construction of a residential house. If part of net consideration

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is invested within the prescribed period in a residential house, then such gains would not be chargeable to tax onproportionate basis. Further, if the residential house in which the investment has been made is transferred within aperiod of three years from the date of its purchase or construction, the amount of capital gains tax exemptedearlier, would become chargeable to tax as long term capital gains in the year in which such residential house istransferred.

15. As per the provisions of Section 90(2) of the IT Act, the provisions of the IT Act would prevail over the provisionsof the tax treaty to the extent they are more beneficial to the Non-Resident.

D. To Other Non-Residents

1. Dividend (whether interim or final) declared, distributed or paid by the Company is completely exempt from tax inthe hands of the shareholders of the Company, under section 10(34) of the IT Act.

2. Any income of minor children clubbed with the total income of the parent under Section 64(1A) of the IT Act will beexempt from tax to the extent of Rs.1500 per minor child per year, in accordance with the provisions of section10(32) of the IT Act.

3. In accordance with and subject to the conditions and to the extent specified in Section 112(1) (c) of the IT Act, taxon long term capital gains arising on sale on listed securities or units will be, at the option of the concernedshareholder, 10% of capital gains (computed without indexation benefits) or 20% of capital gains (computed withindexation benefits) as increased by a surcharge and education cess at an appropriate rate on the tax so computedin either case.

4. As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in anycompany through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall beexempt from Income Tax, if such sale takes place after 1st of October 2004 and such sale is subject to SecuritiesTransaction tax.

5. As per the provisions of section 111 A, Short Term capital gains arising from the transfer of Equity Shares in anycompany through a recognised stock exchange or from the sale of units of equity-oriented fund shall be subject totax @ 10%, provided such a transaction is entered into after the 1st day of October, 2004 and the transaction issubject to Securities Transaction Tax.

6. As per the provisions of section 88E, where the business income of an assessee includes profits and gains fromsale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securitiestransaction tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived atby applying the average rate of income tax on such business income.

7. In accordance with and subject to the conditions and to the extent specified in Section 10(36) of the IT Act, theshareholders would be entitled to exemption from long term capital gain tax on transfer of their ‘eligible EquityShare’ in the Company purchased during the period March 1, 2003 to February 29, 2004 (both days inclusive) andheld for a period of 12 months or more.

8. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the IT Act, theshareholders would be entitled to exemption from tax on gains arising on transfer of their shares in the Company(not covered by sections 10(36) and 10(38)) if such capital gain is invested in any of the long term specified assetin the manner prescribed in the said section. Where the long term specified asset is transferred or converted intomoney at any time within a period of three years from the date of its acquisition, the amount of capital gainsexempted earlier would become chargeable to tax as long term capital gains in the year in which the long-termspecified asset is transferred or converted into money.

9. In case of a shareholder being an individual or a Hindu Undivided Family, in accordance with and subject to theconditions and to the extent specified in Section 54F of the IT Act, the shareholder would be entitled to exemptionfrom long term capital gains (not covered by sections 10(36) and 10(38)) on the sale of shares in the Companyupon investment of net consideration in purchase/construction of a residential house. If part of net consideration isinvested within the prescribed period in a residential house, then such gains would not be chargeable to tax on aproportionate basis. Further, if the residential house in which the investment has been made is transferred within a

27

period of three years from the date of its purchase or construction, the amount of capital gains tax exempted earlierwould become chargeable to tax as long term capital gains in the year in which such residential house is transferred.

10. As per the provisions of Section 90(2) of the IT Act, the provisions of the IT Act would prevail over the provisionsof the tax treaty to the extent they are more beneficial to the Non Resident.

E. To Foreign Institutional Investors

1. In case of a shareholder being a Foreign Institutional Investor (FIIs), in accordance with and subject to the conditionsand to the extent specified in Section 115AD of the IT Act, tax on long term capital gain (not covered by sections10(36) and 10(38)) will be 10% and on short term capital gain will be 30% as increased by a surcharge andeducation cess at an appropriate rate on the tax so computed in either case. However short term capital gains onsale of Equity Shares of a company through a recognised stock exchange or a unit of an equity oriented fundeffected on or after 1st October 2004 and subject to Securities transaction tax shall be taxed @ 10% as per theprovisions of section 111A. It is to be noted that the benefits of Indexation and foreign currency fluctuation protectionas provided by Section 48 of the IT Act are not available to FIIs.

2. As per the provision of Section 90(2) of the IT Act, the provisions of the IT Act would prevail over the provisions ofthe tax treaty to the extent they are more beneficial to the Non Resident.

3. In accordance with and subject to the conditions and to the extent specified in Section 10(36) of the IT Act, theshareholders would be entitled to exemption from long term capital gain tax on transfer of their ‘eligible EquityShare’ in the Company purchased during the period March 1, 2003 to February 29, 2004 (both days inclusive) andheld for a period of 12 months or more.

4. Long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchangeor from the sale of units of an equity oriented fund shall be exempt from Income Tax, if such sale takes place after1st of October, 2004 and such sale is subject to Securities Transaction tax, as per the provisions of section 10(38)of the IT Act.

5. As per the provisions of section 88E, where the business income of an assessee includes profits and gains fromsale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securitiestransaction tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived atby applying the average rate of income tax on such business income.

6. In accordance with and subject to the conditions and to the extent specified in section 54EC of the IT Act, theshareholders would be entitled to exemption from tax on long term capital gains (not covered by sections 10 (36)and 10(38)) arising on transfer of their shares in the Company, if such capital gain is invested in any of the longterm specified assets in the manner prescribed in the said section. Where the long term specified assets istransferred or converted into money at any time within a period of three years from the date of its acquisition, theamount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the yearin which the long term specified asset is transferred or converted into money.

7. Under section 196D(2) of the IT Act, no deduction of tax at source will be made in respect of income by way ofcapital gains arising from the transfer of securities referred to in Section 115AD.

F. To Mutual Funds

In case of a shareholder being a Mutual fund, as per the provisions of Section 10 (23D) of the IT Act, any income ofMutual Funds registered under the Securities and Exchange Board of India Act, 1992 or Regulations made there under,Mutual Funds set up by public sector banks or public financial institutions and Mutual Funds authorised by the ReserveBank of India would be exempt from Income Tax, subject to the conditions as the Central Government may by notificationin the Official Gazette specify in this behalf.

G. To Venture Capital Companies/ Funds

In case of a shareholder being a Venture Capital Company / Fund, as per the provisions of Section 10(23FB) of the ITAct, any income of Venture Capital Companies / Funds registered with the Securities and Exchange Board of India, wouldexempt from Income Tax, subject to the conditions specified.

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Benefits under the Wealth Tax Act, 1957

As per the prevailing provisions of the above Act, no Wealth Tax shall be levied on value of shares of the Company.

Benefits under the Gift Tax Act

As no Gift tax is leviable in respect of gifts made on or after October 1, 1998, any gift of shares will not attract gift tax.

Notes:

1. All the above benefits are as per the current tax laws as amended by the Finance Act, 2006 and will be availableonly to the sole / first named holder in case the shares are held by joint holders.

2. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further subject toany benefits available under the double taxation avoidance agreements, if any, between India and the country inwhich the non-resident has fiscal domicile.

3. In view of the individual nature of tax consequences, each investor is advised to consult his / her own tax advisorwith respect to specific tax consequences of his / her participation in the scheme. The tax implications of aninvestment in the Equity Shares, particularly in view of the fact that certain recently enacted legislations, may nothave direct legal precedent or may have a different interpretation on the benefits which an investor can avail.

For V. Sankar aiyar & Co.Chartered Accountants

(V.Rethinam)PartnerMembership No. 10412

Date: June 5, 2006

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INDUSTRY

Information presented in this section has been extracted from publicly available documents and industry publications andhas not been prepared or independently verified by us or the BRLM, or any of our or its respective affiliates. Unlessotherwise indicated, information presented in this section has been extracted from publications of the Cement Manufacturers’Association (CMA), Indian Refractory Makers Association (IRMA) and Sponge Iron Manufacturers Association (SIMA).

Overview of Indian Grey Cement Industry

Global Overview

Global cement production was reported at 1.95 Billion tonnes during FY 2003, with China accounting for 41.61% of thetotal output. India was the second largest producer with 6.48% of the total output, followed by the United States at 4.75%.India’s share of global cement production has increased from 2.9% in 1990 to 6.48% in 2003. This increase is mainlyattributable to improved economic conditions and increased construction activity in India as compared to global economy.India is likely to further emerge as a major global player with its export expected to grow to 18 million tonnes by FY2011.

Indian Overview

Indian cement industry is highly clustered. Cement units are concentrated in close proximity to limestone deposits.Competition is also localized because the cost of transportation of cement to distant markets often results in the productbeing uncompetitive in those markets. Hence, cement units tend to be located close to both limestone deposits, as wellas the markets those units service. This is one of the key factors, which has resulted in the Indian market being moreregional and fragmented in nature.

Indian cement industry comprises of 53 cement producers, operating 130 cement plants with an operating capacity of157.1 MnTPA employing over 1,35,000 people. Over the years, the cement industry has made significant progressupgrading and assimilating the latest technology. At present, 96% of the total capacity in the industry is based on modern,environment-friendly and energy-efficient dry process technology, with only 4% of the capacity based on old wet andsemidry process technologies. Each million tonne of capacity is associated with a direct employment for almost 1000people.

Actual cement production in FY 2006 was 141.8 MnT, compared to 127.6 MnT in FY 2005, at a growth rate of 11.2%.Domestic cement consumption in FY 2006 was 135.6 MnT, representing a 10.2% increase over the previous yeardomestic consumption of 123.1 MnT. Despite this comparatively high growth rate enjoyed by the Indian cement industry,India’s per capita cement consumption of approximately 125 kgs per annum as at March 31, 2005.

The key players in the Indian cement industry and their share of installed capacity as of March 31, 2006 included ACC(11.8%), Ultratech Cement Limited (10.8%), Gujarat Ambuja (9.5%), Grasim Industries (9%), and India Cements (5.6%). InFY 1995, these companies together had 34% of the total capacity in the country. However, with increasing consolidationin the industry, their share of total capacity increased to 46.7% as of March 31, 2006. (Source: Cement ManufacturersAssociation)

Recent Consolidation of Grey Cement Industry

Currently, the cement industry in India continues to be highly fragmented compared to other cement producing countries.Although the share of cement capacity of the top five cement companies has increased to 47% in FY 2006 from 34% inFY 1995, there are still approximately 20 different cement companies in India which have less than 2.0 MnTPA of cementcapacity.

Multinational cement companies such as Lafarge, Holcim and Italcementi have, over a period of time, acquired substantialinterests in cement companies in India. In early 2005, Holcim acquired control of ACC, India’s largest cement producer. Atthe same time the larger Indian cement companies have acquired cement companies and/or plants to consolidate theirposition and benefit from economies of scale and better leverage in terms of pricing their products.

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Demand and Supply Trends

According to the Cement Manufacturers Association (CMA), from FY 2000 to FY 2005, the average installed capacity ofthe cement industry in India increased at a CAGR of 7.1%. During the same period, capacity utilization decreased from87% in FY 2000 to 79% in FY 2002 and has since then increased to 90% in FY 2006.

Indian Cement Capacity, Production, Capacity Utilization Domestic Consumption and Exports

(In million tonnes, except percentage data)

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006

Cement Capacity for the year 129.8 137 144.3 151.3 157.1Cement Production 102.4 111.4 11.5 127.6 141.8Capacity Utilization 79% 81% 81% 84% 90%Domestic Cement Consumption 99 107.59 113.9 123.1 135.6Cement Export 3.38 3.47 3.36 4.07 6.01Clinker Export 1.76 3.54 5.64 5.99 3.18

(Source: Cement Manufacturers Association)

The capacity of the industry is taken as the sum total of the installed capacity of the large players, and does not includethe total capacity of mini-cement players (i.e small producers with individual capacity of up to 300,000 tonnes), which hasbeen estimated at 11.1 MnTPA as of March 31, 2006. Capacities are monthly add-ups. Of the total capacity as of March31, 2005, approximately 5.1 MnTPA is not in operation.

Geographic Concentration of Indian Cement Manufacturers

The Indian cement market, on account of its regional nature, is separated into the key markets of Northern, Southern,Eastern, Central and Western India, for purposes of understanding regional dynamics. The states in India comprisingthese regions, as classified by CMA, are set forth below:

Region States and Union Territories

North Chandigarh, Delhi, Haryana, Himachal Pradesh, J&K, Punjab, Rajasthan, UttaranchalEast Assam, Meghalaya, Bihar, Jharkhand, Orissa, West Bengal, Chhattisgarh, Other North East statesSouth Andhra Pradesh, Tamil Nadu, Karnataka, KeralaWest Gujarat, MaharashtraCentral Uttar Pradesh, Madhya Pradesh

The following table highlights production, demand and capacity trends by region for the key markets in India during theperiods indicated:

Regional Capacity, Production and Capacity Utilization

(In million tonnes, except percentage data)

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006

Northern India Capacity(1) 23.4 25.2 26 27.4 28.9Production 21.9 24.1 25.2 26.7 29.7Capacity Utilization 94% 96% 97% 98% 103%

Eastern India Capacity(1) 20.6 21.3 22.4 22.8 23.4Production 16.7 16.7 16.7 18.7 20Capacity Utilization 81% 79% 74% 82% 86%

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(In million tonnes, except percentage data)

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006

Central India Capacity(1) 20.5 21 21.7 24.2 25Production 16.7 17.8 18.5 20.4 22.3Capacity Utilization 81% 85% 85% 84% 89%

Western India Capacity(1) 21.9 24.1 28 28.9 28.9Production 17.2 19.3 21 22.8 24.9Capacity Utilization 79% 80% 75% 79% 86%

Southern India Capacity(1) 43.4 45.3 46.3 48.1 50.9Production 29.9 33.4 36.1 39 44.9Capacity Utilization 69% 74% 78% 81% 88%

Total Capacity(1) 129.8 137 144.3 151.3 157.1Production 102.4 111.3 117.5 127.6 141.8Average Capacity Utilization 79% 81% 81% 84% 90%

Available capacity is the monthly add-up capacity

(Source: Cement Manufacturers Association)

There are imbalances in cement demand between the different regions in India. Northern region has been operating atclose to 100% capacity, which is in excess of operating rates in any other region. Adjusting for non-operational capacityof approximately 1.57 MnT in Northern India, effective capacity utilization will be higher at 103%.

Capacity, Production and Capacity Utilization of constituent states in Eastern Region

Eastern Region consists of Chhattisgarh, Jharkhand, West Bengal, Orissa, Bihar, Assam and Other North East states. Thefollowing table sets forth the installed capacity of cement, cement production and cement consumption of the constituentstates in the Eastern Region:

(In million tonnes)

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006

Chhattisgarh (Ranking 8)Capacity 10.65 (7.65) 10.32 (7.40) 10.22 (6.98) 10.67 10.82Production 8.63 (8.42) 7.13 (6.40) 7.30 (6.21) 8.33 8.64Cement Consumption 1.47 1.37 1.42 2.09 3.08

Jharkhand (Ranking 10)Capacity 3.47 (2.58) 3.57 (3.27) 4.57 (3.12) 4.57 4.66Production 3.01 (2.94) 3.64 (3.27) 3.59 (3.05) 3.78 4.16Cement Consumption 1.40 1.77 2.03 2.31 2.63

West Bengal (Ranking 13)Capacity 2.29 (2.32) 3.12 (2.23) 3.13 (2.14) 3.13 3.46Production 1.74 (1.70) 2.52 (2.26) 2.74 (2.34) 3.12 3.25Cement Consumption 5.94 5.63 5.78 6.22 6.59

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(In million tonnes)

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006

Orissa (Ranking 14)Capacity 2.76 (2.05) 2.85 (2.17) 3.04 (2.08) 3.04 3.04Production 2.43 (2.38) 2.61 (2.35) 2.48 (2.11) 2.92 3.31Cement Consumption 2.93 3.45 3.38 3.90 4.15

Bihar (Ranking 16) 1.00 (0.74) 1.00 (0.71) 1.00 (0.68) 1.00 1.00Capacity 0.63 (0.61) 0.56 (0.51) 0.34 (0.29) 0.37 0.46Production 3.28 3.20 3.13 3.80 4.36Cement Consumption

Assam and Other NorthEast States (Ranking 18 & 19)Capacity 0.40 (0.30) 0.40 (0.28) 0.40 (0.28) 0.40 0.40Production 0.24 (0.23) 0.25 (0.22) 0.22 (0.18) 0.21 0.23Cement Consumption 1.28 1.54 1.74 2.07 1.85Total Capacity in Eastern IndiaCapacity 20.58 (15.64) 21.26 (10.06) 22.38 (15.28) 22.81 157.15Production 16.68 (16.28) 16.7 (15.01) 16.67 (14.18) 18.73 141.81Cement Consumption 16.3 16.96 17.48 20.4 135.56

Figures in brackets are percentage to All India Total (Source: Cement Manufacturers Association)

Growth in Cement Industry

Cement consumption varies across regions because of the differences in per capita income and the level of industrialdevelopment in each state of the region. Demand in Eastern and Central region has been largely driven by the housingsector, whereas infrastructure, investments in industrial projects and the housing sector (in varying proportions) have hada more significant impact on demand in the Western, Northern and Southern regions.

Growth in Consumption

Region 5 Year CAGR 3 Year CAGR 1 Year Growth Growth for the(2000 - 05) (2002-05) (2004-05) period ended 2005-06

Northern India 7.5% 7.6% 6.1% 12%

Southern India 5.2% 8.2% 4.4% 18%

Eastern India 11.3% 7.8% 16.7% 11%

Western India 4.4% 5.8% 9.2% 5%

Central India 3.2% 8.3% 7.6% 1%

Total 6.0% 7.5% 8.1% 10%

(Source: Cement Manufacturers Association)

Eastern India is expected to demonstrate strong cement demand, driven by increased emphasis on infrastructure projectsincluding urban infrastructure and power projects and continued growth in housing sector.

Upswing in exports

Cement exports have been growing at a CAGR of 15.9% during FY 2000 to FY 2005, while clinker exports have grownat a CAGR of 38.2% during the same period. With an increase in export demand and realizations, coastal plants in India

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have been exporting their additional production, reducing supply pressure in the domestic market. India exports cementand clinker primarily to its neighboring countries and Africa and West Asia. In the near term, with high construction activityexpected in Afghanistan and Middle East, India’s proximity to these markets is also likely to lead to a growth in cementexports.

Recent Trends in Grey Cement Industry

Slowdown in the creation of fresh capacity

According to the CMA there was a significant increase in capacity during FY 2001 and FY 2002, which was drivenprimarily by the planned phase out of the Government’s sales tax incentives resulting in decline in capacity utilizationfrom 94% in FY 2000 to 79% in FY 2002. In 1999, state governments decided to withdraw the sales tax incentives thatwere extended to new manufacturing units and for expansion of existing capacity. However, projects that had alreadycommenced or were in the pipeline were exempted from this provision. This resulted in a rush among cement producersto set up capacity and avail of this benefit before it was phased out. However, new additional capacity decreased afterthe phase out of the sales tax incentives. With demand expected to grow faster than the increase in capacity, demandsupply imbalance is generally expected to narrow in the near term resulting in improved capacity utilization.

Increasing demand from housing and infrastructure

Over the last decade, growth in cement consumption in India has been driven primarily by private housing and commercialconstruction activities. With declining retail interest rates and incentives given to housing loans, residential construction isexpected to generate increased demand for cement products.

In addition to demand from housing, in recent Government budgets, the Government has indicated its commitment todeveloping infrastructure in the country and undertaking large projects involving construction of ports, airports, powerplants, and highways linking different parts of the country. Some of the key infrastructure projects, which have beenannounced and are underway include:

1. The Golden Quadrilateral Project: This project proposes to link the key metropolitan cities of Delhi-Mumbai-Chennai-Kolkata (approximately 5,800 kilometers); and

2. The East-West and North-South Road Corridors: This project envisages constructing roads that will traverse India(approximately 7,000 kilometers).

In addition, the Government has also announced plans to build roads (approximately 200,000 kilometers) linking everyvillage in the country with a population of over 1,000. The increased focus on infrastructure development, together withthe increasing demand for housing and commercial construction, are expected to drive growth of the cement industry.

Overview of Indian Refractories Industry

‘Refractory’ items are materials, which are hard to work with and are especially resistant to heat and pressure. Refractoriesare products used for high temperature insulation and erosion/corrosion and are made mainly from non-metallic minerals.They are so processed that they become resistant to the corrosive and erosive action of hot gases, liquids and solids athigh temperatures in various types of kilns and furnaces.

Refractory has its history in ‘Basalt’, which is a naturally occurring siliceous refractory product. It was formed many yearsback and is still being formed in lava flows from volcanic eruptions under the natural geological forces of heat andpressure. Modern refractory production is largely a replication of this process of forming naturally occurring, synthetic,non-metallic mineral oxides (and some non-oxides like carbides or nitrides) under the bonding conditions of high heatand pressure. With technological advancement, alternative-bonding techniques, such as with chemicals, cements, resins,etc. have also developed over the period of time.

Because refractory products are so resistant to heat, erosion and corrosion, they are typically used in any processinvolving heat and corrosion such as in kilns and furnaces. According to the main chemical component, i.e. fireclay, ormagnesia, or zirconia, etc. they are commonly known as alumino-silicate or acid refractories, basic refractories, andneutral refractory products.

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In physical characteristics, refractories typically have relatively high bulk density, high softening point and high crushingstrength. They are produced as standard bricks or as shapes or as granular or unshaped or monolithic products.

The principal applications of refractories are in iron and steel industries, cement, glass, non-ferrous metals, petro-chemicalsand fertilizer industry, chemicals, ceramics and even thermal power stations and incinerators.

In India, the history of manufacture of refractories dates back to the year 1874, when for the first time manufacture offireclay bricks started. In the year 1985, with the manufacture of Ceramic Fibres the Refractory industry achieved amilestone. Today in the organized sector there are about 60 refractories manufacturing companies registered with IndianRefractory Makers Association (IRMA). IRMA is the national organization for the refractory manufacturing companies inIndia, which was set up in 1958. IRMA provides a range of advisory and representational services to its members. It alsoextends information and data-bank services on refractories specifications etc. The major players in the India Refractoryindustry are ACC Refractories, OCL India, IFGL Refractories, Orient Abrasive, Vesuvius India, Refcem, Saurashtra CalcineBauxite & Allied Industries and Tata Refractories etc.

Refractory Production in India

The aggregate refractories production capacity in India isapproximately 15,00,000 metric tonnes per annum. Theactual annual production however is around 10,00,000metric tonnes. Steel Industry in India is the largest consumerof refractory products in India followed by cement and glassindustry. The industry wise consumption pattern of refractory

products in India has been shown in the chart:

The following table gives the data on production of refractories in India during last five financial years:

(Quantity in metric tonnes)

Refractory Production Capacity FY 2002 FY 2003 FY 2004 FY 2005

Fireclay Refractories 560000 169938 178143 198070 260946

High Alumina Refractories 410000 265267 271945 360671 361836

Silica Refractories 57500 19146 15250 31117 24523

Basic Refractories 336000 214082 214346 186816 195912

Special products 34220 21242 24452 28793 27923

Others 253800 89262 76126 86467 158893

TOTAL 1651520 778938 780263 891935 1030033

(Source: Indian Refractory Makers Association)

Export of Refractories from India

Many of the member units are exporting their products to different countries of the world, from Australia to South-eastAsia, South Asia, Middle East, Europe, USA and even to South America. Exports of refractories from India have grown atan average rate of 20% per annum over the last 6 years. Several of the units have received ISO 9000 accreditation andmany are registered as approved vendors with a number of well-known design, engineering and consultancy organizations.

Consumption pattern of Refractory products in India

Steel Industry74%

Ceramics3%

Glass Industry4%

Non-ferrousmetal3%

Others4%

Cement Industry12%

(Source: Indian Refractory Makers Association)

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The following table gives the data on export of refractories in India during five financial years ending March 31, 2005:

(Quantity in metric tonnes)

Export of Refractories FY 2002 FY 2003 FY 2004 FY 2005

Fireclay Refractories 2983 2239 12406 6749

High Alumina Refractories 5268 7953 12266 21942

Silica Refractories 3290 15149 6074 3156

Basic Refractories 7750 8306 11862 9418

Monolithics/Castables 1630 1872 5191 7513

Special products 5828 4933 14236 14750

Others 3589 6148 28545 17409

TOTAL 30339 46600 90580 80937

(Source: Indian Refractory Makers Association)

Import of refractories in India have been to the tune of approximately 168320 metric tonnes for the FY 2004-05 up byover 300% in comparison to FY 2002-03 when the import was approximately 57763 metric tonnes.

Future Outlook of Refractories Industry in India

Demand of refractories in the domestic industry (volume wise) was almost stagnant till FY 2001-02. Since then it hasgrown at a rate of over 6%. In FY 2006-07, the total requirement of refractories is expected to be 1072189 metric tonnes,out of which the domestic demand is expected to be approximately 1042189 metric tonnes (as against 698079 metrictones of domestic demand in FY 2001-02). In FY 2011-12, the total requirement of refractories is expected to be 1105911metric tonnes, out of which the domestic demand is expected to be approximately 1140911 metric tonnes. (Source:‘Demand Projection for Refractories over the next ten years in India’ by Technology Information, Forecasting andAssessment Council, New Delhi)

Overview of Indian Sponge Iron Industry

The global installed capacity for manufacture of sponge iron during FY 2004 as approximately 54.60 million metrictonnes. About 90% of world sponge iron production is gas based and 10% is coal based. Out of the total coal basedsponge iron capacities approximately 75% is produced in India, 16% in South Africa and balance 9% in countries likeBrazil, Egypt, Iran and. In India, coal based sponge iron has been an attractive investment destination because of hugeresources of non-coking coal and Iron ore, which are the vital inputs for producing sponge iron.

During 1990-91 the installed capacity of sponge iron in India was 12 lac tonnes. In 2004, the installed capacity increasedto 95 lac tonnes per annum, which further increased to 150 lac tonnes during the current financial year. Thisaccomplishment has put India on the world map of metaliks for the steel industry. It is estimated that the additionalcapacities of approximately 70 lac tonnes of sponge iron will be further added in the next five years.

During 2003-04 India had recorded production of 80.93 lac tonnes of sponge iron ranking as the largest producer ofsponge iron in the world and contributing approximately 15.5% share of the total world production. For the year 2004-05,India has achieved this distinction for the second consecutive term. In 2005-06, production of sponge iron in India wasexpected to be over 96 lac tonnes, way ahead of other countries. In the aftermath of de-licensing and priority allocationof natural gas and non-coking coal to DRI (Direct Reduction of Iron Ore) units, the production of sponge iron in Indiametamorphosed into a thriving and fast growing economic activity.

The Indian Government took initiative by setting up a demonstration sponge iron plant of capacity 30,000 tpy with theassistance of UNIDO/UNDP at Paloncha in Andhra Pradesh in 1980. Then came the first commercial plant of Orissa in1984 having the capacity of 1,00,000 tpy. Following this the Industry set up plants with large capacities. As a result, theproduction of DRI increased from 27.2 thousand tonnes in 1981-82 to 54.8 lac tonnes in 2000-01.

The Indian Sponge Iron Industry was a fledging industry in the eighties with a production level of less than 10 lac tonne.The nineties saw the DRI industry attain stature and importance in India. After crossing the 10 lac tonne mark in 1991-

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92, it showed consistent growth of production up to 1997-98/. However, the industry faced problems thereafter as isreflected in the table below.

(Quantity in lac tonnes)

Gas Based DRI Coal Based DRI Total DRI Production

Year Production Growth(percent) Production Growth(percent) Production Growth(percent)

1990-91 NA NA NA NA 8.60 NA

1991-92 NA NA NA NA 13.00 51.2

1992-93 8.97 NA 4.69 NA 13.66 5.08

1993-94 15.23 69.8 8.09 72.5 23.32 70.07

1994-95 21.89 43.7 12.21 50.9 34.10 46.2

1995-96 29.58 35.1 12.84 5.1 42.42 24.4

1996-97 33.34 12.7 16.87 31.4 50.21 18.3

1997-98 36.42 9.2 17.36 2.9 53.78 7.1

1998-99 34.48 -5.3 17.80 2.5 52.28 -2.8

1999-00 34.62 0.4 18.78 5.5 53.40 2.1

2000-01 34.62 0 20.19 7.5 54.81 2.6

(Source: Sponge Iron Manufacturers Association)

India produced 93.7 lac tonnes of sponge iron in 2004 against 76.6 lac tonnes for the year 2003. This shows over allindustry growth of 22.28%. Gas based segment grew by 11.47% whereas major growth of 34% is from fast expandingcoal based sponge iron. During 2004-05 the DRI production in India reached 4643107 lac tonnes for gas based DRIUnits and 5420188 lac tonnes for coal based DRI Units.

The sponge based industry looks forward to similar growth in next 5-10 years to meet the fast growing demand of qualitymetaliks by the steel industry in line with the national steel policy. The demand for sponge Iron is expected to increasein geometric progression because of difficult availability of steel melting scrap, limited reserves of coking coal, in additionto unprecedented price increase of these materials. Sponge iron has also found its use as a preferred source of qualitymetallic not only in EAF / IF but also in charge- mix of blast furnaces. With the projected rise in demand for steel thefuture of sponge iron industry seems bright and secure. Further, because of regular difficulties in availability of contractedquantities of natural gas, no fresh investments are being made in the gas-based sector. The Industry therefore, has toheavily depend on coal based sponge iron, at least for next 5 years.

SIMA (Sponge Iron Manufacturers Association) is an association of producers of sponge iron in India, which was set upin the year 1992. 53 producers of sponge iron are associated with SIMA. SIMA works towards promotion and protectionof the interests of the Indian sponge iron industry.

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OUR BUSINESS

We are into the business of manufacture of cement, refractories and sponge iron. The Cement factory was started with anobjective of setting up a superior grade cement manufacturing facility at Rajgangpur in Orissa at the request of theGovernment of Orissa for use in the construction of Hirakud Dam, now we are a company with annual turnover exceedingRs. 650 crores. We have experience of over five decades in the manufacture of cement and refractories. The sponge irondivision of the Company is relatively new and we are into this segment of the business since 2002. We sell cementmainly in Eastern India under the brand ‘Konark’. We are the largest manufacturer and seller of grey cement in the stateof Orissa and one of the most prominent players in the Eastern India. Over the period of time ‘Konark’ has been able toestablish itself as premium quality grey cement. Our cements are certified under ISO 9001(Version 2000). Our refractoriesmanufacturing capacity is approximately 80,000 metric tonnes per annum. In the year 1994, we obtained ISO 9001certification for our entire range of refractories works, the first ever company to do so in India. Going ahead, besidescontinuously adding to the capacities of cement, refractories and sponge iron, we intend to venture into steel manufacturing.We have already entered in to a memorandum of understanding with the Government of Orissa for setting up a 0.25MnTPA of steel plant and 14 MW capacity power plant.

Our Competitive Strengths

Experience of our Company and Promoters

We have experience of over five decades in the manufacture of cement and refractories. Over the years, on one side wehave kept on increasing our manufacturing capacities in both cement and refractories and on the other side we havealso continuously improvised our manufacturing process aimed to achieve higher level of operational efficiency. Now, weare a company with interests in cement, refractories, sponge iron and steel with turnover exceeding Rs. 650 crores. Wehave a stable and experienced middle and senior level management team with significant experience in the industry.

The Dalmia Group, our Promoters is a business conglomerate with consolidated revenues of US$ 90 million withinterests in cement, industrial ceramics, real estate, information technology, investments, engineering and trading. Overthe period of time, our Promoters have gained significant expertise of establishing and running large manufacturingplants of cement, refractories etc., which is one of our core competitive strengths.

Quality of products and strong brand name

We sell cement under the brand ‘Konark’, which has over the period of time has been able to establish itself as apremium quality grey cement. We believe that ‘Konark’ is a very strong brand name for superior grade grey cement in theEastern India, more particularly in the state of Orissa. Brand name plays a critical role for the retail purchasers of cementin India. We believe that our brand name and reputation of consistently supplying high quality products provide us witha definitive advantage over our competitors.

Proximity and access to large reserves of high quality limestone

We have captive mines for limestones, the major raw material for manufacture of cement. Our limestone reserves are ofhigh quality. The extractable limestones in our mines are sufficient to meet our requirement for a reasonably long lengthof time for both our existing as well as the capacities proposed to be added. Further, the proximity of limestone mineswith our cement manufacturing facilities adds to our advantage resulting because of lower transportation costs.

Extensive marketing and distribution network

We have a wide distribution network for grey cement in Eastern India. Our distribution network for grey cement productsconsists of number of feeder depots serviced by several regional sales offices in Orissa, West Bengal, Jharkhand andBihar. In addition, we have more than 1450 stockists that store and distribute our cement. We also have a team of salespromoters and handling agents. We believe that the extent of this network, and our relationships with our dealers,enables us to market and distribute our cement efficiently.

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Our Strategy

Our Corporate Vision is ‘To serve customers, shareholders and society at large through the pursuit of businessexcellence’. We, on one hand intend to further strengthen our position as one of the leading players in the cement andrefractories industry and at the same time want to diversify into steel manufacturing. In order to meet this objective, ourbusiness strategy is focused on the following:

Increase production capacity

Our strategy has been to manufacture more and more cement with the same capacity of clinker. We have been able tomanufacture higher quantities of cement with a given quantity of clinker because of our strategy to focus on blendedvarieties of cement. For the FY 2006, we had produced 8.26 lac metric tonnes of clinker against which the cementmanufactured by us was 15.83 lac metric tonnes. We further intend to increase our grinding capacities, which will add toour cement manufacturing capacity.

Continuous expansion of the distribution network and focus on brand promotion

In order to improve our market share, we intend to continue to focus on the expansion of our distribution network and thepromotion of our brands. We continuously seek to add additional authorized dealers and retailers to our network, andstrengthen our relationships with the existing dealers and retailers that carry our products. In order to enhance ourrelationships with dealers, we undertake programs to provide training and advice on marketing and sales techniques andtechnical applications of cement products.

Captive Power Plant

We have installed a captive Power Plant of 14 MW capacity w.e.f. May 13, 2006, which would partly run on waste heatavailable at the Sponge Iron Plant and partly coal based. The captive power plant is expected to decrease the cost ofpower substantially. Cost of power is a major head of expenditure for cement industry. Having a captive power plant willgive us ad edge over our competitors.

Focus on the Eastern India

Our target market has been Eastern India for our cement business. Since our manufacturing facility for cement businessis based in Orissa we save on account of transportation cost, which is major head of expenditure. The addition incapacity, which we are looking for, will also be based in and around our existing business. Our strategy to continue tofocus in the Eastern India will give us ad edge over our competitors.

Cement Manufacturing Process

The production process for cement consists of drying, grinding and mixing limestone and additives like clay and ironbearing material into a powder known as “raw meal”. The raw meal is then heated and burned in kiln with pre-heater andprecalciner and then cooled in an air cooling system to form a product, known as clinker. Clinker subsequently groundwith gypsum to form Ordinary Portland Cement (“OPC”). Portland Slag Cement is manufactured by intimately mixing OPCand separately ground granulated slag Other blended cement manufactured by us is fly ash based Portland PozzolanaCement (PPC) which is manufactured by grinding clinker, gypsum and fly ash together . Blending of clinker with othermaterials helps impart key characteristics to cement, which eventually govern its end use.

We believe that the business environment in Eastern India for grey cement is favorable for cement manufacturers. As perCMA data, during fiscal 2005, grey cement plants in the state of Orissa operated at 96 % capacity utilization as comparedto an average of 84 % on an all-India basis. As per CMA data, the capacity utilization of our Company for FY 2005 hasbeen over 100 %. With limited capacity expansion in cement expected in the next few years, cement manufacturingfacilities in India are expected to operate at high levels of capacity utilization.

There are two general processes for producing clinker and cement in India: a dry purpose and a wet process.

The basic differences between these processes are the form in which the raw meal is fed into the kiln, and the amountof energy consumed in each of the processes. In the dry process, the raw meal is fed into the kiln in the form of a drypowder resulting in energy saving, whereas in the wet process the raw meal is fed into the kiln in the form of slurry. Thereis also a semi-dry process, which consumes more energy than the dry process but lesser than the wet process.

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Mining

Crushing

Raw Meal

Blending & Storage

Pre-Heating/Pre-Calciner &Clinkerization

Clinker Storage

Cement Grinding

Cement Storage

Packing

Market

Grinding

Purchased Power / Generated Power

Gypsum

Fly Ash / Slag

Other Raw Material,Bauxite, Iron Ore andRedmud

Fuel (Coal & Oil)

Purchased Power

The basic steps involved in the production process are set out below:

Dry process

In dry process production, limestone is crushed to a uniform and usable size, blended with certain additives (such as ironore and bauxite) and discharged on a vertical roller mill, where the raw materials are ground to fine powder. Anelectrostatic precipitator deduts the raw mill gases and collects the raw meal for a series of further stages of blending.The homogenized raw meal thus extracted is fed to the top of a preheater by airlift pumps/elevators. In the preheaters thematerial is heated to 750°C. Subsequently, the raw meal undergoes a process of calcination in a precalcinator (in whichthe carbonates present are reduced to oxides) and is then fed to the kiln. The remaining calcination and clinkerizationreactions are completed in the kiln where the temperature is raised to between 1,450°C and 1,500°C. The clinker formedis cooled and conveyed to the clinker storage from where it is extracted and transported to the cement mills for producingcement. For producing OPC, clinker and gypsum are used and for producing Portland Pozzolana Cement (“PPC”), clinker,gypsum and fly ash are used. In the production of Portland Blast Furnace Stag Cement (“PSC”), granulated blast furnaceslag from steel plants is added to clinker.

Wet process

The wet process differs mainly in the preparation of raw meal, where water is added to raw materials to produce slurry.The chemical composition is corrected and the slurry is then pumped to the kiln where evaporation of moisture, preheating,calcination and sintering reaction takes place. The clinker is cooled and transported as in the case of other plants withsuitable conveyors to cement mills for grinding. The wet process is more energy intensive, and thus becomes expensivewhen power and energy prices are high.

Other raw Material,Bauxite, Iron Ore andRedmud

OCL INDIA LIMITED

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Special cement clinker

The basic process outlined above can be modified slightly in order to make cements with special characteristics. In caseof Sulphate Resisting Portland cement clinker, the raw mix is designed so as to produce clinker with reduced C3Acontent. Similarly in Oil Well Cement Clinker, the raw mix is modified to produce clinker with lower C3A and higher C3Scontent.

Cement varieties

Three basic varieties of Ordinary Portland cement (33,43and 53 grade) and other two types of blended cement likePortland slag cement and Portland pozzolana cement (Fly ash based) are sold in the market.

The basic difference among these cements is the percentage of clinker, gypsum and blending material such as granulatedblast furnace slag and fly ash used. Since the grinding process is the most expensive part of the cement manufacturingprocess, blending of cement effectively raises the production without requiring any additional clinker but it requiresinvestments for extra grinding and packing capacity.

The different varieties of cement are manufactured or sold in India conforming to the requirements of Bureau of Indianstandards as per the quality control Order, 1955 issued under Ministry of Industry (Department of Industrial Policy andPromotion) Notification No .641(E) dated 19th July 1995.

For a discussion on the principal types of cements and their uses, Please see the section titled “Our Business” on page37 of the Letter of Offer.

Types of Grey cement

Different types of grey cement produced by us consists of Ordinary Portland cement (43 and 53 grade), OPC 53S gradeHigh strength Ordinary Portland Cement used for the manufacture of Railway Sleepers, Portland slag cement, PortlandPozzolana cement (Fly ash Based), Sulphate Resisting Portland Cement and Oil Well Cement (Class – G) Type HSR/MSR.

There are also other varieties of cement which we do not manufacture are Rapid Hardening Portland cement, HydrophobicPortland Cement, Low Heat Portland Cement, Super Sulphated cement, Masonry Cement etc.

Ordinary Portland cement

OPC is manufactured by grinding Portland cement clinker and gypsum so as to produce a cement capable of complyingto the requirements of the relevant specification laid down by Bureau of Indian specification .OPC 33grade, 43grade and53grade cement are designated on the basis of their characteristics 28days Compressive strength.

Detail of Cement Plants and Grinding Units in Orissa

(Quantity in million tonnes)

S. No. Name of Cement Company/Plant Location Annual Installed Capacity

1 OCL India Limited Rajgangpur 1.80

2 Bargarh Cement Limited Bargarh 0.96

3 Ultra Tech Cement Limited Jharsuguda 0.80

Total 3.56

(Source: Cement Manufacturers Association)

Types of Grey Cement

53-grade OPC (IS: 12269-1987): 53-grade OPC is high strength cement. According to the BIS requirements, 53-gradeOPC must have a 28-day compressive strength of no less than 53 MPa. For certain specialized products, such as pre-stressed concrete and certain pre-cast concrete items requiring high strength, 53-grade OPC is considered useful as it

41

can produce high-grade concrete at lower cement content levels. We produce 53-grade OPC by exposing the clinker tothe grinding process for longer period of time, which results in a higher density and stronger cement. As the grindingprocess requires a significant amount of power, finer grinding for the 53-grade OPC requires more power and is thereforepriced higher compared to lower grades of OPC.

53-grade OPC can be used for the following applications:

1. Pre-cast concrete items such as paving blocks, tiles and building blocks;

2. Pre-stressed concrete components; and

3. Runways, concrete roads and bridges.

43-grade OPC (IS-8112:1989): According to the BIS requirements, 43-grade OPC must have a 28-day compressivestrength of no less than 43 MPa. 43-grade OPC is commonly used in the following applications:

1. General civil engineering construction work;

2. Pre-cast items such as blocks, tiles and pipes;

3. Asbestos products such as sheets and pipes; and

4. Non-structural works such as plastering and flooring.

Portland Slag cement

Portland slag cement is obtained by mixing Portland cement clinker, gypsum and granulated slag in suitable proportionand grinding the mixture to get a thorough and intimate mix between the constituents .It may also be manufactured byseparately grinding Portland cement clinker, gypsum and granulated slag and then mixing them intimately. The resultantproduct is a cement which has physical properties similar to those of ordinary Portland cement In addition it has low heatof hydration and is relatively better resistant to soil and water containing excessive amounts of sulphates of alkali metals,alumina and iron, as well as to acidic water and can there fore be used for Marine works with advantage.

The manufacture of Portland slag cement has been developed primarily to utilize blast furnace slag, a by-product fromBlast furnaces. The development of manufacture of this type of cement will considerably increase the total output ofcement production in the country and will in addition provide a profitable use for an otherwise by-product.

The slag constituent in Portland slag cement shall be not less than 25% and not more than 70%.

We mainly manufacture this product by using the method of Intermixing.

Portland Pozzolana Cement

We also manufacture PPC (IS: 1489 (Part-1) – 1991) under the brand name of Konark. PPC is also known as blendedcement or silicate cement, and this blended cement has become increasingly popular in the market in recent years. Flyash based PPC can be manufactured by adding 15 to 35% fly ash material that is a by-product of thermal power plants.In the manufacture of PPC, a portion of the clinker is replaced with fly ash. This enables the cement manufacturer toproduce a higher quantity of cement per ton of clinker. As a result, the cement manufacturer can increase its productioncapacity by making a limited investment in grinding capacity without a corresponding investment in earlier stage productionequipment such as kilns. Further, the only cost incurred for fly ash is transportation cost from the thermal power plantsthat generate it to the cement manufacturing site, as fly ash is currently available free of cost. The use of fly ash thereforesignificantly reduces the overall cost of production of cement.

The advantage of PPC is its low heat of hydration and corresponding resistance to exposure to various environmentalchemicals such as salt water. It is particularly suitable for marine and hydraulic construction and other mass concretestructures. This cement has durability that is equivalent to OPC and can be used most of the applications where OPC isused.

As PPC is generally sold at a comparable price to OPC and the cost of production of PPC is comparatively lower, PPC’smargins per ton are generally higher compared to OPC.

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Raw Materials

The principal raw materials for cement production are limestone, gypsum, granulated blast furnace slag and fly ash.

Limestone

Limestone is the basic raw material for producing cement. The manufacture of each ton of clinker requires approximately1.44 tons of limestone. We currently operate one limestone quarry at Lanjiberna situated in relative proximity to our plant.

We are required to obtain a lease from the Orissa state government in order to mine the limestone deposits. Theseleases were initially granted for a term of 20 years. Pursuant to current provisions of Mines and Minerals (Developmentand Regulation) Act, 1957, and Mineral Concession Rules, 1960, as amended, such leases may be renewed for a termof up to 20 years at a time. The lease expires in the year 2010. We currently pay a royalty of Rs.45 per ton of limestoneextracted.

As we have access to high quality limestone, we generally do not need to purchase additional high quality limestone orother additives, referred to as “sweeteners,” from external sources.

Gypsum

Another principal raw material used in the manufacture of cement is gypsum, which acts as a retarding agent to controlthe setting time for cement. It is added to clinker at the grinding stage in quantities that vary from approximately 3 to 4 %for grey cement, depending on the requirements of the final product as well as the quality of the gypsum.

We source Mineral Gypsum from Jaisalmir of the State of Rajasthan and chemical (by product) gypsum from Vizag,Haldia. We believe we have an adequate supply of gypsum available to us to meet our existing and planned needs.

Fly ash

Fly ash, which is used in the manufacture of PPC, is a by-product of the coal burning process at thermal power plants.Some of the fly ash we use is obtained from various thermal power plants nearby.. Fly ash is currently available withoutcharge from a number of nearby thermal power plants, and we presently have arrangements to access all of our fly ashrequirements. However, we incur the cost of transportation when transporting the fly ash to our plants.

Others

Additives like clay, hard morrum, shalestone, are also required for clinkerisation in small quantities, all of which areavailable from local suppliers.

Refractories Manufacturing

Type of Refractories

We manufacture many varieties of Refractories. These are silica, firebricks, high alumina, basic burnt, magnesia Carbonbricks, slide plates, Alumina graphite Refractories for continuous casting precast blocks, castables and monolithics ofvarious quality. The total capacity including all the Refractories is around 80000 mt per annum.

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Precast Slide Plate ConcastBasic Silica FireBrick

Castable

Incoming Raw Material

Crushing Grinding Seperation

Batching & Mixing

Curing

Crushing &remixing

Pressing/HandmouldingVibrocasting

Drying

Loading

Firing

Tempering

Cutting

Machining

Washing &Drying

Final Drying

DrillingTarImpregnation

Tempering Chipping Casting

Surface DryingFinishing Drying

Stack Yard

Quality Assurance

Packaging & Dispatch

TarImpregnationTarImpregnation

The process of manufacturing is given in flow sheet below:

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Manufacturing Process for Basic, Silica and Fire Brick

Crushing and grinding of assured raw material is done by Jaw Crusher for reducing the lump size fit to feed to ImpactMill for reducing the size further. Free iron is separated by magnetic separation. Vibrating screen is used to separate thesizes by sieving the material to size; Coarse, Middle and Oversize for return to Impact Mill. Microfine is generated bygrinding in Ball Mill, Delicon Mill with air separation. Different fractions are fed to the hopper as per sizes. For batching,by the help of travelling balance desired quantity is weighed from different hoppers for batch making. Batch materials arefed to mixers for mixing with binder and additives. After mixing, batch material is pressed in mould to sizes by pressingin different types of presses of varying capacity. Pressing material is pushed to dryer on channel trolley for removingadded moisture at temperature 80-120°C for normal material and 120-170°C for Magnesia carbon quality for developingstrength. Dried bricks are checked to separate defective bricks. Thereafter bricks are loaded on Loading Car (for Basicand Fire Brick products) at pre fixed loading patterns for different geometry bricks. For silica, dried bricks are loaded inChamber Kiln in different benches. Bricks are fired as per scheduled temperature profile. Fired bricks from kiln as well asdried Magnesia carbon brick are checked for sizes, physical defect and good bricks are kept in lots. Lot samples arecollected and tested for different properties for Quality assurance. Method of packing is sometimes loose packing withstraw for inland bulk customer and sometimes in Crate packing for inland and overseas customer with stretch wrapping.

For Concast products

After batching and mixing the mix is cured for a pre-fixed span at a pre-determined temperature and humidity. The curedgreen mix is mixed once again for achieving homogeneity. Thereafter mould is filled with green mix and pressed in ColdIsostatic Press at a pre-fixed pressure. The product is de-moulded and cured in ambient air. Thereafter dried as perschedule. Dried product is loaded in stainless steel can and fired in reducing atmosphere as per the firing schedule.Cutting of product is done, if necessary. Physical checking is done. Machining is done to meet the customer’s dimension.Subsequently, the products is washed and dried again. Product is coated with desired chemicals and again put to firing.This process is varies from product to product. Different packing methods are adopted for different product dimensions.

For Castable & Precast

After batching & mixing, the process stops for castable products. Material is packed and dispatched. For precast, the drymaterial mixed previously is now mixed with water/ liquid additives for pre-fixed time. The wet mix is added into theprecast moulds and vibration process is adopted for casting the shapes. The precast shapes are cured at pre-fixedtemperature and time. Cured precast shapes are checked for physical defects, quality assured and dispatched.

Sponge Iron Manufacturing

Sponge Iron production-using coal involves reducing iron ore (lump ore or pellets) with a carbonaceous material such ascoal. This reduction process is carried out in a Rotary Kiln at a pre-determined temperature. The input raw materials (viz.,iron ore, coal and limestone in the required calibrated sizes) are fed into the rotary kiln that is inclined and rotates at apre- determined range of speeds. The material (iron ore reduced to iron) discharged is then cooled and magneticallyseparated. Sponge Iron is taken to a storage bin for dispatch. The char, which is not magnetic and contains a certainamount of carbon can be recycled if found suitable or alternatively sold as fuel for applications such as in brickmanufacturing. A simplified diagrammatic representation of the process is shown below.

W A T E RB O I L E R

W

R E D U C T I O NK I L N

C O L L E R

S T A C KI . D . F A N

E S PA B C

O R E C O A L

S E P A R A -T I O N

P R O C E S S F L O W S H E E TS P O N G E I R O N

D R I

D R I

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MoU with Government of Orissa for establishment of a Steel Plant

We have entered into a memorandum of understanding dated November 27, 2004 with the Government of Orissa (GoO)for setting up a 0.25 MnTPA of steel plant and 14 MW capacity power plant at Lamloi in Rajgangpur in Orissa with anestimated investment of about Rs. 204.21 crores.

The following are the salient features of the MoU:

1. Government of Orissa has agreed to hand over approximately 180 acres of land required for the purpose of settingup the steel plant and associated facilities free from all encumbrances;

2. Government of Orissa will recommend to the GoI for allotment of suitable coal blocks for captive coal mining for theproject;

3. Government of Orissa will assist the Company in making a firm arrangement with Orissa mining Corporation (OMC)and other private players in the state of Orissa to meet substantial requirement of iron ore. GoO will further explorethe possibility of evolving a long term arrangement with OMC for development of iron ore areas; assign appropriatepriority in recommending application for iron ore mines.

4. Government of Orissa will permit the Company to withdraw water to the tune of 1000 cum/day to meet the projectand housing related water requirement;

5. Government of Orissa will assist the Company in obtaining a no objection from the state pollution control boardand will further assist the Company during environment impact assessment; and

6. Sale of all products shall be affected in the State of Orissa (including inter-State sales). Except that the finishedproducts may be exported out of India.

As per the term of the MoU, the plant is to start commercial production within five years from the date of the MoU. Foraccomplishing the above said objective our Company has had started works in this direction. The financial closure for theproject has already been achieved.

(Rs. in lacs)

S. No. Project proposal Name of the Bank; Amount of Amount of Total Actual Total Estimatedfor which Bank Sanction letter Bank Loan Promoters’ Project cost/ project costloan has been reference No. & date Sanctioned share Estimated as per MOUsanctioned project cost dated

as per bank 27.11.05estimate

1 100 TPD Sponge Iron UTI Bank, New Delhi 600 136 736 -Kiln No. I (Sanction letter

No. UTIB/ NDL/ CR/02-03/ 756 Dated3.8.2002

2 100 TPD Sponge Iron SBI, Rourkela 550 - 415Kiln No. II&Sponge Iron (Sanction letterKiln ESPs. No.Cr/6/584 & &

dt.13.01.03) & UTIBank, New Delhi(Sanction letter No.UTIB/DEL/CR/03-04/ 400 - 8201012 dt.26.09.03)Sub-Total 950 285 1235 -

3 100 TPD Sponge Iron SBI, Rourkela 500 49 549 -Kiln No. III (Sanction letter No.

Cr/07/454 dt.01.10.03

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(Rs. in lacs)

S. No. Project proposal Name of the Bank; Amount of Amount of Total Actual Total Estimatedfor which Bank Sanction letter Bank Loan Promoters’ Project cost/ project costloan has been reference No. & date Sanctioned share Estimated as per MOUsanctioned project cost dated

as per bank 27.11.05estimate

4 100 TPD Sponge Iron UTI Bank, New Delhi 540 165 705 -Kiln No. IV (Sanction letter No.U

TIB/DEL/CR/04-05/1115 dt. 18.10.04

5 DRI Plant’s Coal UTI Bank (Sanction 200 50 250 -Vibrating Feeder cum letter No. UTBI/DEL/diverter RMD/AP/05-06/151

Dt. 22.8.2005 forRs.65 Crores againstestimated investmentof Rs.99 Crores)

6 200TPD x 2 Sponge UTI Bank (Sanction 3022 1581 4603 -Iron Kilns letter No. UTBI/DEL/

RMD/AP/05-06/152Dt. 22.8.2005 forRs.65 Crores againstestimated investmentof Rs.99 Crores)

Sub-Total of DRI Portion 5812 2266 8078 7350

7 14 MW Captive Power SBI, Rourkela 3700 1273 4973 -Plant (Sanction letter

No. Cr/09/56 dated11.05.2005

8 1st set of Induction UTI Bank (Sanction 1400 450 1850 -Furnace and Concast letter No. UTBI/DEL/facilities RMD/AP/05-06/151

Dt. 22.8.2005 forRs.65 Crores againstestimated investmentof Rs.99 Crores)

9 2nd set of Induction UTI Bank (Sanction 1161 607 1768 -Furnace and Concast letter No. UTBI/DEL/facilities RMD/AP/05-06/152

Dt. 22.8.2005 forRs.65 Crores againstestimated investmentof Rs.99 Crores)

10 3rd set of Induction UTI Bank (Sanction 1160 607 1767 -Furnace and Concast letter No. UTBI/DEL/facilities RMD/AP/05-06/152

Dt. 22.8.2005 forRs.65 Crores againstestimated investmentof Rs.99 Crores)

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(Rs. in lacs)

S. No. Project proposal Name of the Bank; Amount of Amount of Total Actual Total Estimatedfor which Bank Sanction letter Bank Loan Promoters’ Project cost/ project costloan has been reference No. & date Sanctioned share Estimated as per MOUsanctioned project cost dated

as per bank 27.11.05estimate

11 Mini Blast Furnace UTI Bank (Sanction 1157 605 1762 -letter No. UTBI/DEL/RMD/AP/05-06/152Dt. 22.8.2005 forRs.65 Crores againstestimated investmentof Rs.99 Crores)

Sub-Total of Steel 8578 3542 12120 13071Plant Portion

12 Mines development - 1000 1000 -

GRAND TOTAL OFMOU STEEL 14390 6808 21198 20421PROJECT

Intimation of our Company’s Identification as one of the joint allocatees of Captive Coal Block

Ministry of Coal, GoI has vide its letter no. 13016/33/2005-CA-I dated February 2, 2006 has intimated that our Companyhas been identified as one of the joint allocatees for a captive coal block of Radhikapur (West) in MCL area in the Stateof Orissa having an estimated extractible reserve of 210 MT. The share of our Company works out approximately to 31MnTPA of extractable reserves, which is meant for captive use in the manufacture of sponge iron, captive power generationand cement clinker manufacture.

In the opinion of the Management, this might have a favourable impact on the cost of production of said productsmanufactured by the company. However, precise value of such cost advantage cannot be ascertained at this juncture asit is dependant on various contingent factors. Moreover, such benefit is expected to start accruing to the company onlyafter the said coal mine is brought under active mining operation, which might take 4 to 5 years’ time.

Environmental Regulation and Practice

Under the Environment (Protection) Act of 1986, as amended and relevant state enactments, in order to set up a cementplant, various environmental clearances have to be obtained from the central and state governments. Until January 1994,obtaining an environmental clearance from the central government was only an administrative requirement intended forextremely large projects undertaken by the government or public sector undertakings. However, the environment impactassessment notification issued by the Ministry of Environment and Forests, GoI in January 1994 (as amended in May1994) made environmental impact assessments mandatory for 29 different identified activities and industries, includingthe cement industry. This notification includes detailed procedures for obtaining environmental clearance and for publicinvolvement and also sets schedules for decision-making.

Once an industry has been set up, it is required to meet the standards for emissions, effluents and noise levels prescribedunder the Environment (Protection) Rules framed under the Environment (Protection) Act of 1986, as amended. Moststates have State Pollution Control Boards (“SPCB”), which have a significant role to play in enforcing environmentalmanagement, and pollution control as required under different laws. The Central Pollution Control Board and SPCB areresponsible for enforcing legal action against polluters.

The Orissa State Pollution Control Board (OSPCB) is responsible for environmental management at the state level, withemphasis on air and water quality. The OSPCB is responsible for enforcing and monitoring all activities within the state

OCL INDIA LIMITED

48

of Orissa and for issuing no-objection certificates for industrial development under the Water (Prevention and Control ofPollution) Act of 1974, as amended, the Cess Act of 1977, as amended and the Air (Prevention and Control of Pollution)Act of 1981, as amended.

Environmental clearance is not required at the time of renewal of a mining lease if there is no increase in the originallysanctioned lease area and/or production. The applicant should, however, seek prior environmental clearance from theGovernment of India for expanding production and/or mining lease area irrespective of the quantum of increase in sizeof area/production/or investment involved.

Our plants are all located in Orissa. All the required environmental clearances have been obtained for our currentoperations.

Research and Development

Our principal research and development activities focus on increasing the productivity and cost efficiency of our operations,particularly with respect to the efficient use of power. In recent years, we have focused our research and developmentactivities on reducing the KWh of power per ton of cement, and the reduction of heat consumption per ton of clinker. Inaddition, we are currently conducting research on the optimal coal mix in our manufacturing facilities and maximizing thebenefits of converting our kilns to petcoke as a source of fuel.

In addition to these activities, our Nimbahera manufacturing facility was chosen by the World Bank and the DanishInternational Development Agency as one of the four training centres in India to serve as the “Regional Training Centre”for Northern India.

Technical Collaboration

Starting with initial technical know how from Dr. C. Otto and Co, Germany, OCL subsequently entered into a collaborationwith General Refractories of USA for expansion of its factory and enlarging of the products range. OCL entered intocollaboration for refractory technology with T.Y.K Corporation of Japan for manufacture of magnesia carbon bricks, newgeneration castables, precast blocks, continuous casting refractories, alumina silicon carbide carbon and alumina magnesiacarbon refractories. Recently the company has entered in to a tie up with Pilibrico Gmbh, Luxembourg for manufacture ofgas purging refractories.

Research & Development

Apart from having our own research and development activities, we have promoted Dalmia Institute of Scientific andIndustrial Research (DISIR). We regularly engage services of DISIR in carrying out application oriented specific researchprojects in the fields of cement refractories manufacturing.

The strong R&D base and large pool of highly experienced scientists and engineers have enabled us to progressivelyabsorb changing and advance technologies and continuously improve upon the technologies for optimum results andultimate satisfaction of the customers.

Quality

We are highly focused on quality. We have adopted Total Quality Management with Eicher Consultancy Services Limitedas the main consultants. We were the first manufacturer of refractories in India to get ISO 9001 certification in the year1994 for the silica products. Later on, we received ISO 9001 certification to cover refractory bricks and monolithics ofbasic, silica, firebrick & high alumina quality including magnesia carbon, slide gate, castables, precast, & concast refractories.Our cement division obtained ISO 9002 certificate in 1998 and ISO 9001 (2000 Version) in the year 2004.

Awards and Recognitions

We are the first Indian refractory manufacturer to secure the ISO 9001 certification for all our refractory products. Therefractory division of our Company has earned special export awards for outstanding export performance for consecutivethree years from 1994 to 1996. In 1991, we received the National Quality Award for outstanding achievement in thepursuit of total quality by the Institute of Directors, New Delhi.

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Employees

As of June 30, 2006, we had 1689 full-time employees, of which 108 employees were employed at our corporate andmarketing offices, and 1581 employees were employed at our manufacturing Units. We have never experienced anymaterial losses or significant work stoppages as a result of disputes with our employees. We consider our current labourrelations to be cordial.

Workers Union and Wage Settlement Agreement

We have two recognised workers unions, one for the workers of our cement, refractories and sponge iron manufacturingfacilities called the Utkal Shramik Sangh and the other for the workers of Lanjiberna limestone mines called the LanjibernaShramik Sangh. These unions are affiliated to INTUC.. Periodically, our Company enters into wage settlement agreementswith these unions.

A wage settlement agreement dated December 31, 2003 was entered into between our Company and Utkal ShramikSangh, which is valid for a period of five years ending December 31, 2008. Deputy Labour Commissioner, Rourkela hadacted as the Conciliation Officer in the said wage settlement agreement.

We have also entered into a wage settlement agreement dated March 3, 2004 with Lanjiberna Shramik Sangh, which isvalid for a period of five years ending December 31, 2008. Assistant Labour Commissioner Central, Rourkela had actedas the Conciliation Officer in the said wage settlement agreement.

Insurance

All our plants and machinery and buildings are insured against standard fire and special peril policy (covering fire,lighting, explosion, implosion, aircraft damage, riot, strike, malicious and terrorist damage, impact by any rail/road vehicleor animal subsidence, landslide, bursting and/or overflowing of Water tanks etc., missile testing operations, bush fire,leakage from automatic sprinkler installations). We have also taken all risk transit policy for all incoming stores materialsand selective raw materials, product liability insurance for product liability on export of refractories, all risk erection policyfor erection of upcoming power plant and Steel Melt Shop with Induction Furnace. We have not obtained any policy forloss of business profits. All insurance polices are tariff policies excepting Transit and Product Liability policies. The rates,terms, conditions and scope of coverage tariff policies are determined by the Insurance Regulatory & DevelopmentAuthority. We have not taken any key man insurance policy. However, we have obtained group personal accident policywith medical extention w.e.f. July 1, 2006 for providing against accident to employees and mediguard policy for providingfor medical coverage of our executives who are not covered under E.S.I. scheme. Total present coverage under all ourpolicies is approximately Rs. 83,170 lacs. Our present policies for of all our manufacturing facilities are valid until June30, 2007. We believe that our insurance arrangements are consistent with industry standards for cement manufacturers inIndia. Our insurance cover is reviewed on a yearly basis.

In the past, instances such as fires in Concast plant, Diesel Generation concast plant, sets etc. have take place givingrise to certain claims that we have made with our insurers. As on June 30, 2006, claims to the tune of approximately Rs.350 lacs are pending with the insurance companies.

Patents and Trade Marks

We have registered trademark for ‘Konark’, the brand name for our grey cement together with it’s logo. The registration ofthis trademark has been renewed for a period of ten years from December 16, 2004. We also have a registeredtrademark named ‘Rath’, one of the brands of grey cement, which we were selling earlier. Renewal of this trademarkregistration has also been done for a period of seven years from December 22, 2001.

We have obtained patent of an invention for process for the manufacture of refractory gunning material. This patent hasbeen granted for period of 14 years from March 23, 1992. We have no other material intellectual property.

Corporate Social Responsibility

We are a conscious and active corporate citizen. On an on-going basis we undertake community development programs.We have spent over seventy lacs rupees during last four and a half years on peripheral development activities. Amongother things, we have constructed three school buildings, installed several tube wells, constructed irrigation wells, treatedseveral villagers, renovated government hospital building and have constructed several bio-gas plants.

OCL INDIA LIMITED

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Immovable Property

We own and have also occupied several immovable properties on lease. Our registered office is located at Rajgangpurin the state of Orissa. All the manufacturing facilities for production of cement, refractories and sponge iron are also atRajgangpur. The area covering approximately 525 acres in Rajgangpur consisting of the factory and office premises,residential colony and other colony area have been declared to an industrial township by Government of Orissa. Thecorporate office of the Company is at New Delhi. Set forth below is a brief summary of our office properties andmanufacturing facilities:

Property Address Property Rights Area(In acres)

Offices

Registered Office & Rajgangpur, Sundargarh, Orissa Leasehold 389.84ColonyBhubaneswar Sales F/31A, West Bargarh, Bhubaneswar. Leasehold 0.24Office

Corporate Office 11th Floor, Narain Manzil, 23, Barkhamba Road, Leasehold 6,708New Delhi Sq. Ft.

Manufacturing Facilities

Cement Rajgangpur, Sundargarh, Orissa Village Pahal, Leasehold 55.6

Bhubaneswar Freehold 61.22

Refractories Rajgangpur, Sundargarh, Orissa Leasehold 79.50

Sponge Iron Rajgangpur, Sundargarh, Orissa Freehold 84.61

Mines

Lanjiberna Lanjiberna Limestone mines, District Sundargarh, Leasehold 2208

Chiraipani /Kripsara OrissaChiraipaniQuartz mines, Kripsara Fire claymines Freehold 12.64

Occupational lease

Cement/Refractory With Government of Orissa at Rajgangpur, 65.84Sundargarh, Orissa

Cement/Refractory Village Bihabund, Kukuda Leasehold 21.605

Others

Village Agarpara, West Bengal Freehold 6.625

Villages Biswali and Mania in the district of Freehold 89.34Cuttack, Orissa

Township

We have a township consisting of two colonies, East Colony and West Colony, having approximately 600 quarters. Thetownship also has bungalows for the whole time director and executive directors. The township is equipped with all themodern facilities such as community welfare center, market complex, medical center, recreational club, stadium, temple,parks etc. The township provides hundred percent accommodations to the employees of the Company.

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OUR HISTORY AND CORPORATE STRUCTURE

Syt. Jaidayalji Dalmia, an industrialist of farsighted vision had decided to set up a cement plant in Rajgangpur in Orissaat the request of the Government of Orissa to manufacture superior grade cement for use in the construction of HirakudDam. This had lead to incorporation of our Company as Orissa Cement Limited on October 11, 1949 under the IndianCompanies Act, 1913. The Company obtained certificate of commencement of business on February 10, 1950. Name ofthe Company was changed to OCL India Limited w.e.f. January 15, 1996. Name of the Company was changed primarilyto reflect the diversified activities being undertaken by the Company.

The Company started its operations in the year 1952 by commissioning a wet process cement plant. With a view to grabthe growing opportunities in the refractories segment, the Company decided to diversify into refractories also. For a briefspell, the Company had also ventured into the manufacture of a wide range of cement-allied products. The Companywas also the first manufacturer of pre-stressed concrete railway sleepers. Over the years, we have kept on increasing ourmanufacturing capacities in both cement and refractories. That apart, we have also continuously improvised ourmanufacturing process aimed to achieve higher level of operational efficiency and reduce environmental hazards. In theyear 1994, we became the first company in India to obtain ISO 9001 certification for our entire range of refractoriesworks. Going ahead, we also obtained ISO 9002 certification for our cement works in the year 1998.

The Equity Shares of the Company are listed on the NSE Limited, BSE Limited and Bhubaneswar Stock Exchange. TheEquity Shares of the Company were also listed on Delhi Stock Exchange and Calcutta Stock Exchange. As the EquityShares of our shares were mainly traded on NSE Limited and BSE Limited and virtually negligible trading was takingplace at Calcutta Stock Exchnage, Bhuabeswar Stock Exchange and Delhi Stock Exchange, we had applied to thesethree stock exchanges for getting our Equity Shares voluntarily delisted. Pursuant to our application, we have beendelisted from Delhi Stock Exchange and Calcutta Stock Exchange w.e.f. July 12, 2004 and April 25, 2005 respectively.However, our application for delisting from Bhubaneswar Stock Exchange is pending.

Key Events in the History of the Company

Year Events

1949 Established as Orissa Cement Limited

1951 Commissioning of first 500 tpd wet process cement plant

1954 Diversified into refractories

1956 Commissioning of Firebricks Plant

1957 Commissioning of 2nd 600 tpd wet process cement plant

1958 Commissioning of Silica Plant

1959 Commissioning of Burnt Basic Brick Plant

1962 Manufacture of Chemically Bonded Basic Bricks

1963 Manufacture of Coke Oven Silica

1972 Expansion of Silica Plant

1986 Manufacture of MGC Brick and Slide Plate

1988 Modernisation of cement plant-conversion from wet to dry process

1992 Commissioning of Concast, Castable and Precast Plant

Export of Silica Bricks

1994 ISO 9001 Certification Refractory works

1997 Further Expansion of Silica Plant Installation of vertical roller mill for cement and slag grinding

1998 ISO 9002 Certification of Cement Works

1999 Manufacture if Directional Purging Element

2000 Modernisation of Concast Plant

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Year Events

2001 Modernisation of Castable & Precast Plant

2002 Expansion & Modernisation of Concast Plant

Installation of 2nd Vertical roller mill for cement and slag, and fly ash based PPC grinding

2002 Set up Sponge Iron Plant with initial capacity of 30,000 MT

2002 Increased the capacity of Sponge Iron Plant to 60,000 MT

2003 Obtained API Monogram for manufacturing Oil Well Cement

2003 Increased the capacity of Sponge Iron Plant to 90,000 MT

2004 ISO 9001-2000 version of Cement works

Substantial expansion and modernization of clinkering capacity

2004 Increased the capacity of Sponge Iron Plant to 1,20,000 MT

2005 Installation of 3rd Vertical roller mill for cement and slag grinding

2005 Capacity enhancement of Slide Gate Refractories and Castable & Precast Plant

Manufacture of High Alumina Cement and Augmentation of Mould Manufacturing Plant

2006 Installation of 14 MW captive power plant Steel billets plant with installed capacity of 0.85 lakh MT p.a.commissioned

Objects Clause

The objects of the Company as contained in the Memorandum of Association are:

1. To produce, manufacture, refine, prepare, import, export, purchase, sell and generally to deal in all kinds of cement(ordinary, white, coloured, Portland, alumina, blast furnace, silica, etc, etc.), cement products of any description(pipes, poles, asbestos sheets, blocks, tiles, garden-wares, etc. etc.), lime, limestone and/ or by-products thereof,and in connection therewith to take on lease or acquire, erect, construct, establish operate and maintain cementfactories, quarries and collieries workshops and other works.

2. To produce, manufacture, treat, purchase, sell or otherwise deal with;

(a) Bricks, Tiles, Pipes, Pottery, Earthenware, sanitary-ware, China and Terracotta, Refractories and Ceramic-wareof all kinds.

(b) Colours, Paints, Varnishes, etc.

(c) Caustic Soda, Chlorine and other allied products.

(d) Sulphuric Acid, Sulphates, Alums and other allied Products.

(e) Grinding of Oil-seeds, Refining of Oil, Manufacture of Soap, etc.

(f) Midget electrodes, carbon rods of all kinds, electrodes of all kinds, batteries, battery cells, bulbs, wires, cables,dynamos, motors, fans, stoves and all other electrical goods, radios, transistors, all kinds of electronic goods,materials, products and equipment including all kinds of Television, computers, computer hardware, computersoftware, computer peripherals, integrated and hybrid circuits, printed circuits, all kinds of films tapes, disks etc.pertaining to designing and simulation including Computer Aided Designing, Computer Aided Engineering,Computer Aided Manufacturing, architectural and product designs, garment and carpet styling, factory simulation,medical imaging, image processing and mapping, motion films, digital magnetic video films, short anddocumentary films, advertisement and publicity films, special effects films, TV films computer animation films,cell animation films, manual animation films, laser produced films, video games, TV serials, transparencies,bromides, video software, audio tapes and disks, video tapes and disks compact disks, laser disks, taperecorders and players, disk recorders and players prerecorded tapes and disks of all kinds audio and visualcommunications equipment, audio equipment, video equipment, projectors, microprocessors, all or any partsrequired for any of the above.

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(g) All kinds of calcium carbonate, all chemicals, basic, intermediary or otherwise all varieties of Alkalis acids,drugs, fungicides an pesticides, fertilizers and petrochemicals of all kinds, pharmaceutical, Medicinal andchemical preparations;

(h) All kinds and classes of paper. Board and pulp, cutlery, knives, scissors, razors and blades;

(i) Sugar, sugar products, confectionery, dry and preserved fruits, juices, vegetables, bread, flour, biscuits, bakingmaterials, processed foods, vegetable oils, containers of all kinds and description;

(j) All kinds of cotton, silk, artificial silk, woolen, linen, jute, hemp, synthetic fibres and yarn, textiles or otherarticles made of any one or more of these;

(k) Rubber, natural and synthetic, leather, imitation leather, leather cloth, plastic, oil cloth, linoleum, hospital sheetingsand all other articles of any description made from or prepared with rubber, leather or plastic;

(l) Abrassives in all forms, alumina, aluminium and all derivatives there from;

(m) Ships, boats, barges, tugs and all other vehicles of water transport of all kinds and description.

2A. To process, convert, treat, manipulate or manufacture all kinds of food stuffs, oil seeds, vegetables, vegetableproducts, fruits, grass, timber, bamboo, straw, cotton, jute, rubber, sugarcane, tea, coffee, coconuts, cashew nuts,tobacco and other articles that are the produce of land or soil and to sell, purchase and deal in the same asPrincipals or Agents.

2B. To carry on business as dealers in, and producers of dairy, farms, and garden produce of all kinds, and inparticular milk, cream, butter, ghee, cheese, poultry and eggs, fruits and vegetables.

2C. To carry on the business of iron founders, steel founders, non-ferrous metal founders, mechanical engineers,structural engineers, electrical engineers, manufactures of cast iron and steel pipes, manufacturers of grindingmedias, manufactures of agricultural implements, other machineries, airconditioners, refrigerators, consumer anddomestic appliances, tool makers, metal workers boiler makers, mill wright machinists, iron and steel converters.

2D. To carry on the business of builders, contractors, promoters of all types of construction including Roads, bridges,towers, factory buildings, residential flats, dwelling houses, hotels, restaurants, shops, officers, and for that purpose,organise, incorporate and manage co-operative societies.

2E. To deal in purchase, sale, exchange and/or transfer of securities, shares, debentures and all other forms ofinvestments either for ready or on forward transactions and to carry on all kinds of investment business.

2F. To carry on the business of the letting on hire, hire purchase or easy payment system of appliances, fittings,machines, equipments, vehicles, furniture wireless and television receivers and other apparatus and all otherthings of whatsoever nature of description capable of inclusion in this class of business.

2G. To carry on the business of producers, creators, directors, buyers, sellers, suppliers, exporters, importers, hirers,contractors, stockists, distributors, repairers, consultants and dealers of and in all kinds of descriptions of:

(a) electronic components, devices, systems, appliances and testing equipments;

(b) photocopiers, fax machines, data processing machines, accounting and business machines, transformer;

(c) sound production and recording including recording of analogue and digital sound dialogues and music;

(d) all kind of publishing and printing including desk top publishing, offsets printing, laser printing of brochures,pamphlets, magazines, periodicals, books maps, newspapers, annual reports, tourist and other literature;

(e) equipments for all kinds of advertisement, publicity and campaigning;

(f) conductors, semiconductors, resistors capacitors, inductors, coils, connectors, display devices;

(g) transistors, diodes, photo transistors, photo diodes, silicon transistors and related items, and equipment utilizingsuch devices;

(h) telephone of telegraph equipment, studio equipment, sound equipment and amplifying equipment etc.;

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3. To carry on any business relating to the mining and working of minerals, the production and working of metals, andthe production, manufacture, and preparation of any other materials which may be usefully or conveniently combinedwith the engineering or manufacturing business of the Company, or any contracts undertaken by the Company, andeither for the purpose only of such contracts or as an independent business.

3 A. To carry on the business of manufacture, purchase , sale , or, otherwise deal in all varieties of sponge iron, pigiron, Cast iron, re-rolling products , alloy steels, special steels and any other kinds and grades of iron or steelor any by-products thereof including fabrication and machining thereof.

4. To construct, improve, maintain, develop, work, manage, carry out or control any roads, ways tramways, railwaysbranches or sidings, bridges reservoirs, water courses, wharves, manufactories, ware houses, electric works, shops,stores and other, works and conveniences which may seem calculated directly or indirectly to advance to Company’sinterests, and to contribute to, subsidise or otherwise assist or take part in the construction, improvement,maintenance, working, management, Carrying out or control thereof.

5. To buy, sell, import, export, manipulate, prepare for market, and deal in merchandise of all kinds, and generally tocarry on business as merchants, importers and exporters and to buy, sell and deal in property of all kinds.

6. To carry on the business of contractors, clearing and forwarding agents, general carriers of passengers and goodsbonded car-man, and common car-man.

7. To carry on the business of insurance agents of all types of insurance work for any insurance company.

8. (a) To undertake, transact and execute all kinds of agency business and render all kinds of services technical,managerial or otherwise including all kinds of computer software services and services of designing andsimulation, computer aided designing, computer aided engineering computer aided engineering computeraided manufacturing, architectural and product designing, garment and carpet styling, factory simulation, medicalimaging, image, processing, mapping of all kinds, sound production and recording of all kinds includingrecording of analogue and digital sound dialogues and music, rendering services of all kind computer aided orotherwise of publishing and printing including Desk Top Publishing, Offset printing, laser printing, making forothers all kinds of films including motion films, digital and magnetic and video films, short and documentaryfilms, advertisement and publicity films, special effects films, TV films, computer animation films, cell animationfilms, manual animation films, laser produced films, making for others transparencies bromides and videosoftware etc. making for other all kinds of advertisement, Publicity and campaigns with electronic equipmentcomputer software or otherwise.

(b) To act as Advisers, Consultants or Manager and to render advice assistance guidance, in any capacitywhatsoever, to any person, Firm or Company, on all aspects of business, organisation and industry and toadvise upon the means and methods for extending, developing all types of business and Industry and allsystems or processes relating to production, storage, distribution, marketing and sale of goods and/ or relatingto rendering or services.

9. To receive money, securities and valuables of all kinds on deposit or safe custody on any terms.

10. To borrow, raise or secure the payment of money in such manner as the Company shall think fit, and in particularby the issue of debentures, or debenture stock, perpetual or otherwise, charged upon all or any of the Company’sproperty, both present and future, including its uncalled capital, and to purchase, redeem, or pay off any suchsecurities.

11. To lend money, securities or other property, either with or without security, to such persons or companies and onsuch terms as may seem expedient, and in particular to customers and others having dealings with the Company,and to guarantee the performance of contracts by any such persons or companies.

12. To draw, make, accept, endorse, discount, execute, and issue promissory notes, bills of exchange, bills of lading,warrants, debentures and other negotiable or transferable instruments.

13. To invest and deal with the moneys of the Company in such manner as may, from time to time, be determined bythe directors.

14. To purchase or otherwise acquire, issue, re-issue, sell, place, and deal in shares, stocks, bonds, debentures andsecurities of all kinds.

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15. To take or, otherwise acquire, and hold shares in any other company having objects altogether or in part similar tothose of this Company or other wise, or carrying on any business capable of being conducted so as directly orindirectly to benefit this company.

16. To apply for, purchase, or otherwise acquire any patents, brevets invention, licences concessions and the likeconferring any exclusive or limited right to use, or any secret or other information as to any invention which mayseem capable of being used for any of the purposes of the Company, or the acquisition of which may seemcalculated directly or indirectly to benefit the Company, and to use, exercise, develop, or grant licenses in respectof, or otherwise turn to account the property rights or information so acquired.

17. To acquire and undertake the whole or any part of the business, property and liabilities of any person or companycarrying on any business which the Company is authorised to carry on, or possessed of property suitable for thepurposes of this Company.

18. To construct, maintain, and alter any buildings or works, necessary or convenient for the purposes of the Company.

19. Generally to purchase, take on lease or in exchange, hire or otherwise acquire any real and personal property,and rights or privileges which the company may think necessary or convenient for the purposes of its business andin particular any land, buildings, easements, machinery, plant, and stock-in-trade.

20. To sell, improve, manage, develop, exchange, lease, mortgage, enfranchise, dispose of, turn to account, or otherwisedeal with, all or any part of the property and rights of the company.

21. To enter into contracts of indemnity and to indemnify any party or become sureties against any debts, obligationsor liabilities.

22. To enter into any contract or agreement of guarantee.

23. To guarantee or become sureties for the performance of any agreement or contract of any party or parties or for thedischarge of any duty or obligation of any party or parties or the payment of money by any party or parties.

24. To enter into partnership or into any arrangement for sharing profits, union of interests, co-operation, joint adventure,reciprocal concession, or otherwise, with any person or company carrying on or engaged in or about to carry on orengage in any business or transaction which this Company is authorised to carry on or engage in, or any businessor transaction capable of being conducted so as directly of indirectly to benefit this Company. And to lend moneyto guarantee the contracts, or otherwise assist, any such person or company, and to sell, hold, re-issue, with orwithout guarantee, or otherwise deal with the same.

25. To enter into any arrangements with any Governments or authorities, supreme, municipal, local, or otherwise, thatmay seem conducive to the Company’s objects, or any of them, and to obtain from any such Government orauthority, any rights, privileges and concessions which the Company may think desirable to obtain, and to carryout, exercise and comply with any such arrangements, rights, privileges and concessions.

26. To remunerate any person or company for services rendered, or to be rendered, in placing or assisting to place orguaranteeing the place of any or the shares in the Company’s capital, or any debenture stock or other securitiesof the Company or in or about the formation or promotion of the Company or the conduct of its business.

27. To establish and support or aid in the establishment and support of associations, institutions, funds, trusts, andconveniences calculated to benefit employees or ex-employees of the Company or its predecessors in business orthe dependants or connections of such persons, and to grant pensions and allowances, and to make paymenttowards insurance and to subscribe or guarantee money for charitable or benevolent objects or for any exhibition,or for any public, general or useful object.

28. To make donations to such persons and in such cases, and either of cash or other assets, as the Directors maythink directly or indirectly conducive to any of the company’s objects otherwise considered expedient.

29. To undertake and execute any Trust, the undertaking of which may seem desirable to the Directors, to make orreceive gifts of any kind, cash or otherwise, for any purpose whatsoever.

30. To promote any company or companies for the purpose of acquiring all or any of the property, rights and liabilitiesof this Company, or for any other purpose, which may seem directly or indirectly calculated to benefit this Company.

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31. To form, constitute, and promote companies, syndicates, associations, and undertaking of all kinds.

32. To carry on and undertake any business transaction or operation commonly carried on or undertaken by promotersof companies, financiers, concessionaries, contractors for public and other works, capitalists, merchants, traders,and to carry on any other business which may seem to the company capable of being conveniently carried on inconnection with the objects, or calculated, directly or indirectly, to enhance the value of, or render profitable, any ofthe Company’s property or rights.

33. To carry on any other business, whether manufacturing or otherwise, which may seem to the Company capable ofbeing conveniently carried on in connection with the above or calculated directly or indirectly to enhance the valueof or render profitable any of the Company’s property or rights.

34. To promote the establishment, carrying on, and development of trades and businesses or all kinds within anyterritories in which the Company is interested, and to subsidise, grant special rights to, or otherwise assists,support, protect, or encourage all persons and companies engaged or proposing to engage therein.

35. To adopt such means of making known the products of the Company as may seem expedient, and in particular byadvertising in the press, by purchase and exhibition of works of art of interest, by publication of books andperiodicals, and by granting prizes, rewards and donations.

36. To sell or dispose of the undertaking of the Company or any part thereof and all or any of the property of theCompany for cash or for stock, for shares or securities of any other company or for such other consideration as theDirectors may think fit.

37. To obtain any provisional order or Act of legislature for enabling the Company to carry any of its objects into effect,or for effecting any modification of the Company’s constitution, or for any other purpose which may seem expedient,and to oppose any proceedings or applications which may seem calculated, directly or indirectly, to prejudice theCompany’s interest.

38. To procure the Company to be registered or recognised in any foreign country or place.

39. To do all or any of the above things in any part of the world and as principals, agents, contractors, trustees orotherwise, and by or through trustees, agents, or otherwise, and either alone or in conjunction with others.

40. To do all such other things as are incidental or conducive to the attainment of the above objects

Changes in our Memorandum of Association

The following are the amendments made in the Memorandum of Association of our Company:

S. No. Date of change Brief Particulars of Change

1 30.10.1973 Inserted Clause 2(g) to (m) which deals with production, manufacture, treating,purchasing, selling of various products

Inserted Clause 2B to 2 F which deals with production, manufacture, treating,purchasing, selling of various products

Amended Clause 8(b) & clause 29, which permits the Company to act as Advisers,Consultants or Manager and to render advice assistance guidance, in any capacitywhatsoever

2 16.05.1987 Authorised capital of the company has been increased from 5 to 8 crores* by creationof 30,00,000 Ordinary shares Rs.10/- each

3 21.09.1989 Inserted Clause 2(f) which deals with production, manufacture, treat, purchase, sell orotherwise deal with Midget electrodes, carbon rods of all kinds, electrodes of allkinds etc

Inserted Clause 2G and amended clause 8 (a) which deals with production,manufacture, treating, purchasing, selling of various products and undertaking,transacting and executing all kinds of agency business

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S. No. Date of change Brief Particulars of Change

4 08.09.1994 Authorised capital of the Company has been further increased from 8 to 15 crores bycreation of 70,00,000 Ordinary shares Rs.10/- each

5 29.09.1997 Inserted Clause 2A which deals with production, manufacture, treating, purchasing,selling of various products

6 21.12.2001 Insertion of new clause No.3A to carry on the business of manufacture, purchase,sale or otherwise deal in all verities of Sponge iron, Pig iron, Cast iron, Alloy steel,Special steel etc.,

7 25.06.2005 Each ordinary share** of Rs. 10 each has been sub divided into 5 ordinary shares ofRs.2 each. Consequently 1,40,00,000 ordinary shares of Rs. 10/- each forming part ofthe authorised capital have been sub-divided into 7,00,00,000 ordinary shares ofRs. 2/- each

Pervious Credit Ratings

Rating Date Security Type Amount Credit Rating Remarks(Rs. in crores) Rating Agency

20. 09. 2004* Commercial Paper 70.00 A1+ ICRA The Rating indicates high creditquality and the rated instrumentcarries lowest credit risk

30.11.2004 Non Convertible 30.00 AA- CARE The Rating indicates highDebentures quality by all standards and

classifed as high investmentgrade.

09.12.2005** Non Convertible 25.00 LAA- ICRA The Rating indicates high creditDebentures quality and the rated instrument

carries low credit risk

* Vide a letter dated July 19, 2006 ICRA has reaffirmed the ‘A1+’ rating, which is valid till October 20, 2006.

** Vide a letter dated May 1, 2006 ICRA has enhanced the amount from Rs. 25 Crores to Rs. 50 Crores.

Other than the above credit ratings, the Company has not sought any credit rating from any rating agency during pastthree years.

Our Subsidiaries

We have three wholly owned subsidiaries, viz, Konark Minerals Limited, Kashmissa Industries Limited and OCL Iron andSteel Limited. For details regarding our wholly owned subsidiaries, kindly refer to the section titled ‘Our Subsidaries &Group Companies’ on page 73 of the Letter of Offer.

We were also having one more wholly owned subsidiary, Hari Fertilizers Limited (Hari Fertilizers). Hari Fertilizers hasceased to be a subsidiary of our Company w.e.f. September 30, 2005. Hari Fertilizers was incorporated to de-mergeOCL’s Ammonium Chloride and Soda Ash business. However, before such de-merger, the plant was closed and thebusiness of Ammonium Chloride and Soda Ash was finally discontinued in 1989. As there was no intention to revive thesame, the equity shares of Hari Fertilizers were sold during the current FY 2005-06.

Shareholders Agreement

Our Company does not have any shareholders agreements.

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Other Agreements

1. Collaboration Agreement for Technical Assistance with Plimmer Technology International Limited, Scotland:

Our Company has entered into a Collaboration Agreement (the Agreement) with Plimmer Technology InternationalLimited (PTIL) for the period of 7 years from the first date of commencement of royalty payment, i.e., from October1, 2000 to September 30, 2007.

Pursuant to the Agreement we have made payments of £ 75,000 for the services rendered by PTIL. In addition tothe above, we are also liable to pay royalty at a rate not exceeding 3% calculated on the net ex-factory sale price,exclusive of excise duties minus cost of the standard bought out components and the landed cost of importedcomponent irrespective of the source of procurement inclusive of ocean freight, insurance, customs duties etc.Royalty is calculated semi-annually at the end of each successive six month’s period and paid in respect of eachsuccessive period within sixty days from the expiration of that period.

2. Licence Agreement with Plibrico S.A., Luxembourg for Manufacturing of Porous Plugs

Plibrico S.A. (Pilbrico) is engaged in the production and sale of monolithic refractories and special shapes and isowner of know-how relating to monolithic refractories for construction of porous plugs used in the treatment ofliquid metals and know how related to the construction of these porous plugs.

Our Company has entered into an agreement (the Agreement) with Plibrico for seven years starting October 1, 2000.Under the Agreement Plibrico approves our Company, subject to the terms and conditions of the Agreement, to theexclusive right and license, without the right to sub-license, for manufacture, use, sell and application of their licensedproducts in the territory of India and all countries in Asia and Middle East except Japan, China, Malyasia, Indonasia,Egypt, Singapore, Vietnam.

As per terms of the Agreement, we have paid know-how fees of USD 150,000 in three installments to Plibrico. We arealso required to pay from the beginning of commercial production, a running royalty of 15 % on added value of thelicenced products after deduction of taxes, duties, packing charges etc. dispatched by the Company during the period ofthe Agreement. However, this royalty will be subject to 5 % maximum on sale price ex works. As per the AgreementPlibrico is not liable for any problems, which may arise due to third party complainants concerning the production and/orusage and/or sale of the licenced products by our Company with respect to any industrial rights of the third parties.

In addition to the Agreement our Company has entered into a Supplementary Agreement with Plibrico to amend theAgreement dated March 27, 1997 in terms of the letters dated May 6, 1997 and July 31, 1997 of GoI.

Pursuant to the Supplimantary Agreement both the parties have confirmed that from the date of execution of the Agreement,the terms and conditions of GoI, as appearing in the letter no. 40 (97)/283(97)/PAB dated May 6, 1997 and letter no.40(97)/283(97)/PAB dated July 31, 1997 issued by GoI forms part of the Supplimantary Agreement and clauses of theAgreement which differ/ vary with the said terms and conditions, which were deemed to have been amended and/orsubstituted pursuant to the said terms and conditions and, it is deemed that the said terms and conditions of GoI on saidsubstitution and/or amendment, were originally part of the Agreement.

Strategic and Financial Partners

Our Company does not have any Strategic and Financial Partners.

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OUR MANAGEMENT

Board of Directors

Under our Articles of Association we cannot have lesser than 5 directors and more than 15 directors. Presently, we haveeight directors. The day to day affairs of the Company is looked after by Mr. Ved Prakash Sood, the Whole Time Directorunder the overall supervision and control of the Board of Directors. He is assisted by a team of professionals in the fieldsof engineering, marketing, finance and management. Other members of the Board are renowned personalities andhaving significant expertise in their field and have been actively contributing through their valuable advice and support.Our Board meets with requirements of corporate governance as it consists of seven non-executive Directors (includingthe Chairman) out of total eight Directors as on date. Further, our four directors are independent.

The following table sets forth details regarding our Board of Directors:

Name, Designation, Father’s Name, Age Date of Appointment Other DirectorshipsAddress and Occupation and Tenure

Mr. Pradip (Pinto) Khaitan 64 25.09.2004 1. Suzlon Energy LimitedChairman Liable to retire by 2. Visa Steel LimitedS/o Late Mr. B. P. Khaitan rotation 3. Woodlands Medical Centre LimitedM/s. Khaitan & Company 4. CESC LimitedEmerald House,1-B, 5. Electrosteel Castings LimitedOld Post OfficeStreet, 6. Graphite India LimitedKolkatta 700 001 7. Hindustan Motors LimitedAdvocate 8. Pilani Investments & Industries

Corporation Limited9. Dalmia Cement (Bharat) Limited10. India Glycols Limited11. Lanco Industries Limited12. South Asian Petrochem Limited

Mr. Vishnu Dayal Jhunjhunwala 82 25.06.2005 1. Marathwada Refactories LimitedDirector Liable to retire byS/o Late Dwarkadas Jhunjhunwala rotationVishnupuri,1/13/1B, Civil Lines,Faizdabad 224 001Industrialist

Mr.Yadu Hari Dalmia 58 25.06.2005 1. Mayuka Investment LimitedDirector Liable to retire by 2. Puneet Trading & InvestmentS/o Late Jaidayal Dalmia rotation Company Private Limited18, Golf Links, 3. Rama Investment Company PrivateArchbishop Makarios Marg, LimitedNew Delhi 110 003Industrialist

Mr. Harsh Vardhan Lodha 38 25.09.2004 1. Punjab Produce Holdings LimitedDirector (Independent) Liable to retire by 2. Mazbat Properties Private LimitedS/o Mr. R.S.Lodha rotation 3. Mazbat Investments Private8, National Tower, Limited13, Loudon Street, 4. East India Investment CompanyKolkatta 700 017 Private LimitedChartered Accountant 5. Punjab Produce & Trading

Company Private Limited6. Gwalior Webbing Company Private

Limited

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Name, Designation, Father’s Name, Age Date of Appointment Other DirectorshipsAddress and Occupation and Tenure

7. Boroda Agents & Trading CompanyPrivate Limited

8. Alfred Herbert (I) Limited9. Sicpa India Limited10. Birla Corporation Limited11. Fenner India Limited12. Universal Cables Limited13. Hindustan Gum & Chemicals

Limited14. Optic Fibre Goa Limited15. Swiss India Financial Services16. Vindhya Telelinks Limited

Alternate directorships held in17. City Consultants Limited18. Elco Consultants Limited19. Harsh Chemicals Limited20. Advance Business Services

Limited21. Manoraj Investment Limited22. Central Business Services Limited

Dr. Ramesh C Vaish 64 25.06.2005 1. Ansal Properties & InfrastructureDirector (Independent) Liable to retire by LimitedS/o Late S Vaish169, rotation 2. Daurala Organics LimitedGolf Links, 3. Express Newspaper LimitedNew Delhi 110 003 4. Goetze (India )LimitedChartered Accountant 5. Jaiprakash Associates Limited

6. Jaiprakash Hydro Power Limited7. Jaypee Karcham Hydro Corporation

Limited8. Mayar India Limited9. M Corp Global Limited10. Omax Autos Limited11. Bharat Consultants (Private) Limited

Mr. Dhramendra Nath Davar 71 25.06.2005 1. Sandhar Infosystems LimitedDirector (Independent) Liable to retire by 2. SLD Auto LimitedS/o Late Daryalal Davar rotation 3. Jaiprakash Power Venture LimitedB-5/82, Safdurjung Enclave 4. Jaiprakash Associates LimitedNew Delhi 110 229 5. Heg LimitedRetired Banker 6. Sandhar Technologies Limited

7. S.P.Wahi Technology &Management Consultants PrivateLimited

8. Sandhar Auto Components Limited9. Rajasthan Spinning & Weaving

Mills Limited10. Maral Overseas Limited11. Jaiprakash Hydro Power Limited12. Adayar Gate Hotel Limited13. Indo Continental Hotel & Resort

Limited

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Name, Designation, Father’s Name, Age Date of Appointment Other DirectorshipsAddress and Occupation and Tenure

14. Sandhar Steady Stream ToolingPrivate Limited

15. Ansal Properties & IndustriesLimited

16. Hero Honda Finlease Limited

Dr. Sheo Raj Jain 71 16.09.2003 1. Neelachal Ispat Nigam LimitedDirector (Independent) Liable to retire by 2. Consteel India Private. LimitedS/o Late Mr. Maniklal Jain rotationN15/1, DLF Qutab Enclave,Phase-II, Guragaon 122 002Advisor

Mr.Ved Prakash Sood 65 01.04.2003 1. Konark Minerals LimitedWhole Time Director Five Years 2. Kashmissa Industries LimitedS/o Late Tulsi Ram SoodOCL India Limited,Rajgangpur 770 017,District: Orissa Service

Brief Profile of our Directors

Mr. Pradip (Pinto) Khaitan, aged 64 years, is the Chairman of our Company for last twenty years. Mr. Khaitan is arenowned lawyer and is a senior partner in M/s Khaitan & Company, Kolkata He has varied and rich experience ofseveral years in commercial and corporate laws, tax laws, arbitration, foreign collaboration, merger and acquisitions andrestructuring and demergers besides sharp acumen in other business activities. He is a Director on the Board of severalrenowned and reputed companies and also a Trustee of reputed educational and charitable institutions.

Mr. Vishnu Dayal Jhunjhunwala, aged 82 years, is a director on our Board. He is an industrialist having experience ofmore than four decades in running, managing and operating various industries.

Mr. Yadu Hari Dalmia, aged 58 years is an eminent industrialist having rich and varied experience of over thirty-twoyears. He is a member of the Dalmia industrial family. Dalmia Group is a business conglomerate with interests in cement,industrial ceramics, real estate, information technology, investments, engineering and trading. Mr. Y. H. Dalmia is thePresident of Dalmia Cement (Bharat) Limited heading the cement division, finance and taxation of that company. He hasbeen associated with various industry organizations. He was the President of Cement Manufacturers Association for theyear ending 1999-2000. He was also the Chairman of National Council for Cement and Building Materials. Administrationand Finance Committee during 1996-98 and Chairman of the Board of Governors of NCB during 1999 and 2000. Mr.Yadu Hari Dalmia holds a bachelors degree in commerce from Delhi University and is a fellow member of the Institute ofChartered Accountants of India.

Mr. Harsh Vardhan Lodha, aged 36 years, is an independent director on our Board. He is a chartered accountant and apartner of Lodha & Company, an accounting and consulting firm with its offices in Kolkatta, Mumbai, New Delhi, Chennaiand Hyderabad . Mr. Lodha is also a member of the main committee of FICCI, the Apex Chamber of Commerce in thecountry. He has served as Chairman of its corporate laws and governance committee and co-chairman of its capitalmarkets and taxation sub committees. He is also served as a member of the accounting standards board set up by theInstitute of Chartered Accountants of India and alternate member of the national advisory committee on accountingstandards set up by Government of India. He is a Director on the Board of several well known and reputed companies.

Mr. Dhramendra Nath Davar, aged 71 years, an eminent professional, formerly Chairman of IFCI Limited and presentlyon the Board of number of reputed companies has vast, varied and wide experience and expertise in Finance, Banking,Corporate Laws and commercial activities. He is also a Director on the Board of few reputed training institutions and non-governmental (social) organizations. He had been a part time consultant to the World Bank, United Nations IndustrialDevelopment Organization for several years.

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Dr. Ramesh C Vaish, aged 64 years, an eminent Chartered Accountant, is an independent director on our Board. He isvastly experienced with expertise on all corporate matters including accountancy, taxation and international taxation/lawswith over 35 years of experience. He is on the Board of several reputed companies.

Dr. Sheo Raj Jain, aged 71 years, a Mechanical Engineer from Pilani Institute, is an independent director on our Board.He is the former chairman of Steel Authority of India Limited (SAIL). SAIL is the India’s largest steel producing company.He was also chairman of Coal India Limited and Heavy Engineering Corporation Limited Prior to this, he was ManagingDirector of Bhillai Steel Plant. He has variety of experience in the business arena with speciality in steel and heavyindustry.

Mr. Ved Prakash Sood, aged 65 years, is the Whole Time director of our Company. He joined the Company in 1963 andhas worked in various capacities including as heading the cement and refractory division. Mr. Sood holds a mastersdegree in social work from University of Delhi.

Details of Borrowing Powers of Directors

Our Articles of Association authorise our Board, to borrow moneys and secure the payment thereof. Our shareholders atthe AGM held on June 25, 2005 authorised the Board to borrow by way of loan (term loans/working capital facilities/external commercial borrowings and securities (debentures) from financial institutions/ banks etc.

The Board of Directors of the Company is authorized to borrow such sums of money which, together with the moneysalready borrowed by the Company (apart from temporary loans obtained from the Company’s bankers in ordinary courseof business) at any time is not in excess of the aggregate of the paid up capital and free reserves of the Company bymore than Rs. 400 crores.

Remuneration paid to Directors

In an AGM held on September 16, 2003 our shareholders have approved the appointment of Mr. Ved Prakash Sood asthe Whole Time Director of our Company on the following terms and conditions:

The appointment of Mr. Ved Prakash Sood as the Whole Time Director is valid for a period of five years ending March 31,2008. The appointment has been made at remuneration as detailed hereunder:

� Salary of Rs. 8,58,900 per annum;

� Perquisites valued at Rs. 3,09,452 per annum; and

� Contribution to PF and other Funds valued at Rs. 2,16,270 per annum

The Break up of the Perquisite value is as under:

Medical Reimbursement Rs. 48,741

Leave Travel Allowance Rs. 65,000

Perquisite value of car Rs. 21,600

Medical insurance Rs. 8,500

House perquisite & Water Charges Rs. 1,65,611

Rs. 3,09,452

As per the terms and conditions, the agreement may be terminated by either party by giving three months notice. If theagreement is terminated by the Company, there is an option to pay three months salary in lieu of the notice.

We also pay commission @ 1% of yearly net profits to our other directors subject to the ceiling of one percent of theannual profits. We pay sitting fees of Rs. 5,000/- per meeting to our directors (other than the Whole Time Member) forattending meetings of the Board and Rs. 3,000/- per meeting for attending meetings of committees of the Board. Thesitting fee is paid in addition to reimbursement of out of pocket expenses.

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Shareholding of the Directors in our Company

The following table provides details of shareholding of the Directors in OCL India Limited as on June 30, 2006:

Name of Director Number of Equity Shares % Shareholding

Mr. Ved Prakash Sood 51847 0.136

Mr. Yadu Hari Dalmia 9987680 26.16

Changes in Our Board of Directors during last 3 years

The changes in the Board of Directors of our Company during last three years are as under:

Name of Director Date of change Reasons for change

Mr. Ved Prakash Sood April 1, 2003 Appointment as Whole Time Director

Mr. Mohan Lal Chand March 1, 2004 Resignation

Mr. R. C. Vaish January 21, 2005 Appointment as a director

Mr. Shyam Sunder Bhartia March 18, 2005 Resignation

Mr. Y. H. Dalmia May 17, 2005 Appointment as a director

Interest of Directors (Other than Promoter directors)

Except as stated in the section titled ‘Related Party Transactions’ on page 87 of the Letter of Offer, and to the extent ofshareholding in the Company as stated above, the Directors do not have any other interest in the business. Our Directorsmay be deemed to be interested to the extent of their compensation as mentioned above. Our Directors may also beregarded as interested in the Equity Shares, if any, held by or that may be subscribed by and allotted to the companies,firms and trusts, in which they are interested as directors, members, partners or trustees. All Directors may be deemed tobe interested in the contracts, agreements/arrangements entered into or to be entered into by us with any company inwhich they hold directorships or any partnership firm in which they are partners. Except as detailed hereinunder, ourCompany has not entered into any contract, agreements or arrangements in preceding two years from the date of theLetter of Offer in which the directors are interested directly or indirectly and no payments have been made to them inrespect of these contracts, agreements or arrangements or are proposed to be made to them.

Name of the Director Name of the Party Number & date of Principal terms of thethe contract/order Contract/orders

Mr. P K Khaitan M/s Khaitan & Co, Appointment letter Appointment as consultantsNew Delhi No. ND:228/05 dated for legal and other matters at

12th August 12, 2002 a remuneration of Rs. 9,000/-p.m for 3 years w.e.f April 1,2002. The appointment hasbeen renewed for a further termof 3 years w.e.f. April 1, 2005on the same terms andconditions.

The Articles of Association provide that the Directors and officers shall be indemnified by the Company against loss indefending any proceeding brought against Directors and officers in their capacity as such, if the indemnified Director orofficer receives judgment in his favour or is acquitted in such proceeding.

Compensation paid to the Directors during FY 2006

The following table sets forth details of the payments made to the Directors of the Company for a period starting April 1.2005 and ending March 31, 2006:

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(Amount in INR)

Name of the Director Sitting Fees Salaries and Commission TotalPerquisites

Mr. Pradip (Pinto) Khaitan 15,000 — 4,00,000 4,15,000

Mr. Vishnu Dayal Jhunjhunwala 38,000 — 2,00,000 2,38,000

Mr. Yadu Hari Dalmia 20,000 — 1,74,795 1,94,795

Mr. Harsh Vardhan Lodha 16,000 — 3,00,000 3,16,000

Dr. D. N. Dawar 32,000 — 3,00,000 3,32,000

Dr. Ramesh C Vaish 19,000 — 2,00,000 2,19,000

Dr. Sheo Raj Jain 39,000 — 2,00,000 2,39,000

Mr. Ved Prakash Sood — 13,84,831 — 13,84,931

Mr. Y. H. Dalmia was appointed as a director of the Company w.e.f. May 17, 2005.

Corporate Governance

The Company stands committed to good corporate governance practices. We have set up internal policies to ensure bestpractices in corporate governance. Our corporate governance philosophy is dedicated to the attainment of the highestlevels of accountability and transparency in dealings with our stakeholders. Our corporate governance policies lay emphasison communication, both internal and external and reporting.

The Company has complied with SEBI Guidelines in respect of corporate governance specially with respect to broadbasing of the Board, constitution of committees of the Board such as Audit Committee, Shareholders/Investor GrievanceCommittee etc.

The Board has eight Directors, of which four are independent directors in accordance with the requirements of Clause 49of the listing agreement of the Stock Exchanges. The Chairman of the Board is a non-executive Director. Committees ofthe Board have been constituted in order to look into the matters in respect of audit, compensation of executive directors,shareholders/Investors Grievance Redressal, details of which are as follows:

Audit Sub Committee

The Audit Sub Committee was constituted on July 31, 2000. The Committee currently consists of three directors Mr. HarshVardhan Lodha, Mr V.D. Jhunhunwala and Dr. S.R. Jain. Out of the three members, Mr. Harsh Vardhan Lodha and Dr S.R.Jain are independent directors. Mr. Harsh Vardhan Lodha, chairman of the Audit Sub Committee is a chartered accountant.

The Audit Sub Committee of the Company meets at least four times a year. One meeting is held before finalisation ofannual accounts and one in each quarter. During the FY 2006 the Audit Sub Committee met on May 17, 2005, July 20,2005, October 29, 2005 and January 23, 2006. During the current financial year also the Audit Sub Committee met onMay 15, 2006 and July 17, 2006.

The role and terms of reference of the Audit Sub committee was decided by the Board of Directors keeping in view therequirements of clause 49 of the listing agreement and provisions of the Act. The Committee reviews the Annual accountsand quarterly results of the Company before submission to Board of Directors with reference to accounting policies,disclosure of related party transactions, qualification in the audit report and the matters required to be included in theDirectors Responsibility Statement. In addition to the above, the Audit Sub Committee will be required to review thefollowing:

1. Management discussion and analysis of financial condition and results of operations;

2. Statement of significant related party transactions:

a) A statement in summary form of transactions with related parties in the ordinary course of business shall beplaced periodically before the audit committee;

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b) Details of material individual transactions with related parties, which are not in the normal course of business,shall be placed before the audit committee; and

c) Details of material individual transactions with related parties or others, which are not on an arm’s lengthbasis, should be placed before the audit committee, together with Management’s justification for the same.

3. Management letters / letters of internal control weaknesses issued by the statutory auditors;

4. Internal audit reports relating to internal control weaknesses; and

5. The appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review by theAudit Sub Committee.

Shareholder/Investors Grievance Committee

The Committee was constituted with effect from October 30, 2001 to look into the redressal of shareholder and investorcomplaints. This committee consists of four Directors, Mr. D. N. Davar, Mr. V.D.Jhunjhunwala, Dr. S.R.Jain, Mr. V.P.Sood. Mr.D. N. Davar, an independent Diretor on our Board is the chairman of the Committee.

The last meeting of the Committee was held on May 17, 2005 to review the investor complaints and further meetingswere not warranted as there were no genuine investor complaints. NSE Limited has issued a letter dated April 20, 2005that there are no complaints pending against OCL India Limited as on the date of the issuance of the letter.

Remuneration Committee

Constitution of remuneration committee is an optional requirement under the listing agreement. We have not constitutedany Remuneration Committee. Our Board fixes the remuneration of the Whole time Directors.

Organizational Structure

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Key Managerial Personnel

The key managerial personnel of the Company are as follows:

Mridu Hari Dalmia, aged 64 years is a Promoter and the President & CEO of our Company. He has been associated withour Company since 1970. He is a member of the Dalmia industrial family with substantial business interests mostly inIndia, UK and USA. Dalmia Group is a business conglomerate with interests in cement, industrial ceramics, real estate,information technology, investments, engineering and trading. He has been associated with various industry organizationsin the past. He is a member of the Managing Committee of the Associated Chambers of Commerce and Industry He wasthe President of Indian Refractories Manufacturers Association and of Cement Manufacturers Association. He was alsothe President of National Council for Cement and Building Materials during 1986-89 and a member of the ManagingCommittee of the FICCI during 1987-89. Mr. M. H. Dalmia holds a bachelors degree in chemical engineering fromJadavpur University, Kolkata and was awarded a gold medal in 1961 for best engineering student. His remuneration forthe current financial year is Rs. 82.17 lacs excluding benefits such as leave travel concession, medical expenses andreimbursement of car expenses.

Raghu Hari Dalmia, aged 56 years is the President of our Company. He has been associated with our Company asPresident for over two and half a decades. He is a member of the Dalmia industrial family with substantial businessinterests mostly in India, UK and USA. Dalmia Group is a business conglomerate with interests in cement, industrialceramics, real estate, information technology, investments, engineering and trading. He is also the director of variousother group companies like, Hari Machines Limited, Debikay Systems Limited etc. He has been associated with variousindustry organizations. He has been the President of Indian Refractories Makers Association and is presently an activemember of the same. He was the chairman of the Environment Committee PHD Chamber of Commerce Mr. R. H. Dalmiaholds a bachelors degree in technology from IIT, New Delhi. His remuneration for the current financial year is Rs. 74.07lacs excluding benefits such as leave travel concession, medical expenses and reimbursement of car expenses.

Gaurav Dalmia, aged 40 years is the Joint President of our Company. He has been associated with our Company asJoint President for around one and half decades. He is a member of the Dalmia industrial family with substantialbusiness interests mostly in India, UK and USA. Dalmia Group is a business conglomerate with interests in cement,industrial ceramics, real estate, information technology, investments, engineering and trading. He had started ‘First Capital’a private equity investment firm. He had also co-founded ‘Infinity’, India’s first angel investment fund with a corpus of $ 35million. He is a member of the General Partner of Gujarat Venture Finance Limited, a specific venture capital firm, co-sponsored by CDS/Actis, a private equity firm. Mr. Gaurav Dalmia was selected as the Global Leader for Tomorrow for theyear 2000 by the World Economic Forum.. Mr. Gaurav Dalmia holds a bachelors degree in computer science form SalfordUniversity, UK and has completed his MBA with Beta Gamma Sigma honors (top 5% class) from Columbia University,USA. .His remuneration for the current financial year is Rs. 25.47 lacs excluding benefits such as leave travel concession,medical expenses and reimbursement of car expenses.

Ved Prakash Sood, aged 65 years, is the Whole Time director of our Company. He joined the Company in 1963 and hasworked in various capacities including as heading the cement and refractory division. Mr. Sood holds a masters degreein social work from University of Delhi. His remuneration for the current financial year is Rs. 13.84 lacs excluding benefitssuch as leave travel concession, medical expenses and reimbursement of car expenses.

R. P. Shroff, aged 71 years is the Senior Executive Director (Accounts & Taxation) of our Company. He has been with ourCompany since 1960 and has worked in various capacities. He has rich experience of more than 46 years. Mr. Shroffholds a bachelors degree in commerce from Rajputana University and is also a fellow member of the Institute ofChartered Accountants of India. His remuneration for the current financial year is Rs. 15.63 lacs excluding benefits suchas leave travel concession, medical expenses and reimbursement of car expenses.

C. P. Sharma, aged 73 years is the Senior Executive Director (Special Duties) of our Company. He has been with theCompany for over four decades and has worked in various capacities. He holds a masters degree in businessadministration (specialization in personnel management) from Faculty of Management Studies, University of Delhi. Healso holds diplomas in Company Law & Labour Law from Indian Law Institute (Deemed University), New Delhi. Hisremuneration for the current financial year is Rs. 6.10 lacs excluding benefits such as leave travel concession, medicalexpenses and reimbursement of car expenses.

Rakesh Malhothra, aged 45 years is the Executive Director (Finance) & the Chief Financial Officer of our Company. Hehas been with our Company since March 2000. Before joining our Company he was with Ansal Group for fifteen years.

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Mr. Malhotra started his career with DCM Limited as a management trainee and continued with them for four years.Thereafter, he worked with Samtel Group for two years before joining Ansals. Mr. Malhotra holds a bachelors degree incommerce from Meerut University and is also a member of the Institute of Chartered Accountants of India. His remunerationfor the current financial year is Rs. 15.43 lacs excluding benefits such as leave travel concession, medical expenses andreimbursement of car expenses.

Dr. S.C. Ahluwalia, aged 65 years is Executive Director (Operations) of our Company. He has been with our Companysince 1996. Dr. Ahluwalia holds a bachelors degree and masters degree in science from Punjab University. He is a Ph.D. in Chemistry. He has authored more than 300 research publications, sponsored and R&D project reports. Hisremuneration for the current financial year is Rs. 8.33 lacs excluding benefits such as leave travel concession, medicalexpenses and reimbursement of car expenses.

H. Bhattacharya, aged 64 years is the Executive Director (Cement) of our Company. He has with our Company sinceJanuary 1983 and has rich experience of over four decades. Prior to joining our Company he was working in Hari YantraUdyog. He holds a Bachelor of Mechanical Engineering from Jadavpur University and Member of Institute of Engineers.His remuneration for the current financial year is Rs. 9.45 lacs excluding benefits such as leave travel concession,medical expenses and reimbursement of car expenses.

S. Pasupathy, aged 58 years is the Executive Director (Commercial) of our Company. He has been with our Companysince January 1995 and has rich experience of over three decades. Prior to joining our Company he was working inAgchem Biosynthesis Inc. in Canada. Mr. Pasupathy holds a bachelors degree in commerce and is also an associatemember of the Institute of Chartered Accountants of India. His remuneration for the current financial year is Rs. 10.97 lacsexcluding benefits such as leave travel concession, medical expenses and reimbursement of car expenses. He is also amember and associate of the Association of Secretaries & Managers in 1980 and Associate Member of the All IndiaManagement Association in 1981.

S K Choudhuri, aged 70 years is the Executive Director (Refractory) of our Company. He has been with our Company forover two and a half decades. Mr. Choudhary holds a bachelors degree in science from Koltata University and has donea diploma in ceramics from Bengal Ceramic Institute, Kolkata. His remuneration for the current financial year is Rs. 7.40lacs excluding benefits such as leave travel concession, medical expenses and reimbursement of car expenses.

Shareholding of Key Managerial Personnel

The shareholding of the key managerial employees of the Company as on the date of the Letter of Offer is as givenbelow:

Name of Key Managerial Personnel No. of Equity Shares % Shareholding

Mr. M.H. Dalmia 2017980 5.28

Mr. R.H. Dalmia 992705 2.60

Mr. Gaurav Dalmia 50000 0.13

Mr. R.P. Shroff 60000 0.16

Mr. Rakesh Malhotra 115 0.00

Mr. V.P. Sood 51847 0.14

Mr. H. Bhattacharya 15000 0.04

Mr. S. Pasupathy 55000 0.14

Mr. S.K. Chowdhury 38850 0.10

Mr. C.P. Sharma 2000 0.005

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Changes in Key Managerial Personnel in Last One Year

There have been no changes in the key managerial personnel of our Company in last one year except that Mr. S. K.Aggarwal, Executive Director (Taxation and Internal Audit) has resigned from our Company w.e.f. July 31, 2006.

Bonus or Profit Sharing Plan for the Key Managerial Personnel

We have a system of performance linked bonus or a profit sharing scheme for our key managerial personnel. The bonusis paid at the discretion of the management. We also pay bonus to our other employees as per the provisions of thePayment of Bonus Act.

Employee Stock Option Scheme

The Company does not have any employee stock option scheme as on date.

Non Salary Related Payment or Benefit to Key Managerial Personnel of the Company

There has been no other payment or benefit to the employees/key managerial personnel of the Company.

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OUR PROMOTERS

Currently our Promoters are Mr. Mridu Hari Dalmia, Mr. Raghu Hari Dalmia, Mr. Yadu Hari Dalmia, Mr. Gaurav Dalmia, Mrs.Abha Dalmia, Mrs. Padma Dalmia, Mrs. Usha Devi Jhunjhunwala, M/s. Gautam Dalmia (HUF), Mridu Hari Dalmia ParivarTrust and Sumana Trust. The brief profile of our Promoters are as follows:

Mridu Hari Dalmia, aged 64 years is the President & CEO of our Company. He has beenassociated with our Company since 1970. He is a member of the Dalmia industrial familywith substantial business interests mostly in India, UK and USA. Dalmia Group is a businessconglomerate with interests in cement, industrial ceramics, real estate, information technology,investments, engineering and trading. He has been associated with various industryorganizations in the past. He is a member of the Managing Committee of the AssociatedChambers of Commerce and Industry. He was the President of Indian RefractoriesManufacturers Association and of Cement Manufacturers Association He was also thePresident of National Council for Cement and Building Materials during 1986-89 and amember of the Managing Committee of the FICCI during 1987-89. Mr. M. H. Dalmia holds abachelors degree in chemical engineering from Jadavpur University, Kolkata. He wasawarded a gold medal in 1961 for best engineering student. His voter identity card numberis DL/01/002/222133 and driving licence is P02091998101288.

Raghu Hari Dalmia, aged 56 years is the President of our Company. He has been associatedwith our Company as President for over two and half a decades. He is a member of theDalmia industrial family with substantial business interests mostly in India, UK and USA.Dalmia Group is a business conglomerate with interests in cement, industrial ceramics, realestate, information technology, investments, engineering and trading. He is also the directorof various other group companies like, Hari Machines Limited, Debikay Systems Limited etc.He has been associated with various industry organizations. He has been the President ofIndian Refractories Makers Association and is presently and an active member of the same.He was the chairman of the Environment Committee of PHD Chamber of Commerce. Mr. R.H. Dalmia holds a bachelors degree in technology from IIT, New Delhi. His voter identitycard number is DL/01/002/231011 and driving licence is P02051999106541.

Yadu Hari Dalmia, aged 58 years is an eminent industrialist having rich and variedexperience of over thirty-two years. He is a member of the Dalmia industrial family. DalmiaGroup is a business conglomerate with interests in cement, industrial ceramics, real estate,information technology, investments, engineering and trading. Mr. Y. H. Dalmia is the Presidentof Dalmia Cement (Bharat) Limited heading the cement division, finance and taxation ofthat company. He has been associated with various industry organizations. He was thePresident of Cement Manufacturers Association for the year ending 1999-2000. He wasalso the Chairman of National Council for Cement and Building Materials Administrationand Finance Committee during 1996-98 and Chairman of the Board of Governors of NCBduring 1999 and 2000. Mr. Yadu Hari Dalmia holds a bachelors degree in commerce fromDelhi University and is a fellow member of the Institute of Chartered Accountants of India.His voter identity card number is DL/01/002/231091 and driving licence is P02072004133700.

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Gaurav Dalmia, aged 40 years is the Joint President of our Company. He has beenassociated with our Company as Joint President for around one and half decades. He is amember of the Dalmia industrial family with substantial business interests mostly in India,UK and USA. Dalmia Group is a business conglomerate with interests in cement, industrialceramics, real estate, information technology, investments, engineering and trading. He hadstarted ‘First Capital’ a private equity investment firm. He had also co-founded ‘Infinity’,India’s first angel investment fund with a corpus of $ 35 million. He is a member of theGeneral Partner of Gujarat Venture Finance Limited, a specific venture capital firm, co-sponsored by CDS/Actis, a private equity firm. Mr. Gaurav Dalmia was selected as theGlobal Leader for Tomorrow for the year 2000 by the World Economic Forum. Mr. GauravDalmia holds a bachelors degree in computer science form Salford University, UK and hascompleted his MBA with Beta Gamma Sigma honors (top 5% class) from Columbia University,USA. His driving licence is P02102005137927.

Abha Dalmia, aged 60 years is the wife of Mr. Mridu Hari Dalmia. She holds a bachelorsdegree in Arts from Kolkata University. Her voter identity card number is DL/01/002/222134.

Padma Dalmia, aged 53 years is the wife of Mr. Raghu Hari Dalmia. She holds a bachelorsdegree in Home Science from Mumbai University. Her voter identity card number is DL/01/002/231166.

Usha Devi Jhunjhunwala, aged 62 years is the wife of Mr. Giridhari Lal Jhunjhunwala. Sheholds a degree in Prabhakar in Hindi from Punjab University. Her driving licence is MH01-2004-13468.

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M/s Gautam Dalmia (HUF)

M/s Gautam Dalmia is a hindu undivided family recognized under the Indian Law. Mr. Gautam Dalmia is the karta of theHUF and is authorized to take all decisions in relation to the assets and properties of the HUF.

Mridu Hari Dalmia Parivar Trust

Mridu Hari Dalmia Parivar Trust was formed pursuant to Trust deed dated May 28, 1999 and is unregistered. The trusteesof the trust are Mr. M.H.Dalmia, Mrs. Abha Dalmia, Mr. Y.H.Dalmia, Mr. Parag Dalmia, Mr. Gaurav Dalmia, Mr. GautamDalmia and Mr. Puneet Dalmia and the trust was set up for the benefit of the beneficiaries of the trust. The beneficiariesof the Trust are Mr. Mridu Hari Dalmia, Mrs. Abha Dalmia, Mr. Gaurav Dalmia, Mrs. Sharmila Dalmia, Mrs. KanupriyaSomany, Ms. Devanshi Dalmia, Mr. Aryaman Hari Dalmia, Ms. Aanyapriya Dalmia and the spouses and children ofpersons named above.

Sumana Trust

Sumana Trust was formed pursuant to the trust deed dated November 17, 2000 and supplemental deed dated November,29th 2004 and is unregistered. The trustees of the trust are Mr. J.H.Dalmia, Mrs. Kavita Dalmia, Mr. Gautam Dalmia andMrs. Anupama Dalmia and the trust was set up for the benefit of the beneficiaries. The beneficiary of the Trust is Ms.Sumana Dalmia.

We confirm that the permanent account number, bank account number and passport number of our individual Promoterswill be submitted to the NSE Limited and BSE Limited at the time of filing the Letter of offer with them.

Common Pursuits

The Promoters are related to each other in the following manner: Mr. Mridu Hari Dalmia, Mr. Raghu Hari Dalmia and Mr.Yadu Hari Dalmia are sons of late Mr.Jaidayal Dalmia, Mrs. Abha Dalmia and Mrs. Padma Dalmia are wives of Mr. MriduHari Dalmia and Mr. Raghu Hari Dalmia respectively. Mr. Gaurav Dalmia is the son of Mr. Mridu Hari Dalmia. Mrs. UshaDevi Jhunjhunwala is the wife of. Mr. G.P. Jhunjhunwala a relative of our Prompters. Mr. Gautam Dalmia, a relative of ourPromoters is the karta of M/s. Gautam Dalmia (HUF). Except as above there is no other relation between our Promoters,Directors and Key Managerial Personnel.

Our Group Companies have main objects similar to that of our Company. To that extent there may be a potential conflictof interests in the companies of the Group. With the exception of Dalmia Cement (Bharat) Limited there are no commonpursuits in the business of our Company and our group/associate companies.

Shareholding of Promoters

S. No. Name(s) No. of Shares % Holding Average Cost pershare (Rs.)

1 Mr. M.H. Dalmia 2,017,980 5.28% 21.19

2 Mridu Hari Dalmia Parivar Trust 7,901,495 20.69% 13.27

3 Mrs. Abha Dalmia 1,682,230 4.41% 16.21

4 Mr. Gaurav Dalmia 50,000 0.13% 21.00

5 Mr. Y.H. Dalmia 9,987,680 26.16% 126.18

6 Mr. R.H. Dalmia 992,705 2.60% 21.11

7 Mrs. Padma Dalmia 558,820 1.46% 21.15

8 Gautam Dalmia (HUF) 94,750 0.25% 10.07

9 Sumana Trust 17,750 0.05% 8.58

10 Mrs. Usha Devi Jhunjhunwala 50,000 0.13% 49.64

Total 23,353,410 61.16

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Interest of the Promoters

Our Promoters have no interest other than reimbursement of expenses incurred at actuals, remuneration or benefitsextended to them for the positions held by them in the Company and their shareholding in the Company. The Promotersmay be deemed to be interested to the extent of investment in Equity Shares of the Company held by them, theirrelatives or friends and returns thereon. For details of shareholding of our Promoters and Promoter Group, kindly refer tothe section titled ‘Capital Structure’ on page 10 of the Letter of Offer.

The Promoters are not interested in any loan or advance given by the Company, neither are they beneficiary of any suchloans or advances.

Our Promoters have promoted companies and they may be deemed to be interested in these companies.

Payment or benefit to our Promoters

Our Company pays remuneration to Mr. Mridu Hari Dalmia, Mr. Raghu Hari Dalmia, Mr. Gaurav Dalmia, Mrs. Abha Dalmiaand Mrs. Padma Dalmia for the positions held by them in the Company. For details of these payments kindly refer to thesection titled ‘Related Party Transactions’ on page 87 of the Letter of Offer.

Companies with which the Promoter has disassociated itself in the last three years

Our Promoters have not disassociated themselves with any form of business venture during last three years. However,Hari Fertilizers Limited (Hari Fertilizers), an erstwhile wholly owned subsidiary of our Company has ceased to be oursubsidiary w.e.f. September 30, 2005. For details regarding this disassociation of our Company with Hari Fertilizers kindlyrefer to the section titled ‘Our History and Corporate Structure’ on page 51 of the Letter of Offer.

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OUR SUBSIDIARIES & GROUP COMPANIES

Subsidiary Companies

We have three wholly owned subsidiaries, viz, Korank Minerals Limited, Kashmissa Industries Limited and OCL Iron andSteel Limited.

Konark Minerals Limited

Konark Minerals Limited (Konark Minerals) was incorporated December 28, 1976 and obtained the certificate ofcommencement of business on January 19, 1977. The main object of konark Minerals is to manufacture, process andotherwise acquire buy, sell or otherwise dispose of and deal in all types, qualities and descriptions of ores, metal andminerals substances.

Board of Directors of Konark Minerals

The following table sets forth current details regarding the directors of konark Minerals:

Name of Directors Designation

Mr. V.P.Sood DirectorMr. Mayadhar Mishra DirectorMr. S.Pasupathy Director

Financial Summary of Konark Minerals

(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 27 19 2 39 84

PAT 2 2 0 4 8

Equity Capital 3 3 5 5 5

Reserves & Surplus 12 14 14 18 26

EPS (Rs.) 3.84 4.3 0.33 7.57 16.38

Net Worth 14 17 19 23 31

Book Value per share (Rs.) 56.60 66.60 38.86 46.43 62.82

Kashmissa Industries Limited

Kashmissa Industries Limited (Kashmissa Industries) was incorporated March 19, 1981 and obtained the certificate ofcommencement of business on July 18, 1981. The main object of Kashmissa Industries is to purchase, sell, import,export and deal in bauxite, kalonite, magnesite, iron ore, cpal etc.

Board of Directors of Kashmissa Industries

The following table sets forth current details regarding the directors of Kashmissa Industries:

Name of Directors Designation

Mr. Rakesh Malhotra Director

Mr. R. P. Shroff Director

Mr. V. P. Sood Director

OCL INDIA LIMITED

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Financial Summary of Kashmissa Industries

For the Financial Years 2001, 2002, 2003, 2004 and 2005 no business activity was carried on by Konark Minerals.Hence, the Statement of Profit & Loss for these years has not been prepared.

OCL Iron and Steel Limited

Our Company has incorporated a new wholly owned subsidiary Company by name ‘OCL Iron and Steel Limited’ (OCLIron and Steel). OCL Iron and Steel has been incorporated on February 20, 2006 with the main object of carrying on thebusiness of manufacture of Steel, sponge iron etc. The authorised share capital of OCL Iron and Steel is Rs.5 croresconsisting of 5,00,00,000 equity shares of Re.1/- each and subscribed capital of Rs.5,00,000 consisting of 5,00,000 equityshares of Re.1/- each. Registered office of the said subsidiary is also situated at Rajgangpur, District Sundargarh 770017, Orissa.

Board of Directors of OCL Iron and Steel

The following table sets forth current details regarding the directors of OCL Iron and Steel:

Name of Directors Designation

Mr. R.H.Dalmia Director

Mr. S.Pasupathy Director

Mr. Sabyasachi Misra Director

We were also having one more wholly owned subsidiary, Hari Fertilizers Limited, which has ceased to be a subsidiary ofour Company w.e.f. September 30, 2005.

Joint Venture Company

We have 50% interest in OCL Global Limited, a Joint Venture Company, incorporated on January 17, 2006 in Mauritiusfor the purposes of trading of various refractory products.

The Company’s share of each of assets, liabilities, income and expenditure in the joint venture for the year-ended31.03.2006 is as under:

(Rs. in lacs)

Particulars FY 2006

Current Assets, Loans and Advances

Balance with Banks 22

Liabilities

Sundry Creditors 1

Income 0

Expenses 1

(As the joint venture company was incorporated during 2005-06, previous year figures are not applicable)

Group Companies

There are total 58 companies forming part of the Group, comprising of 21 listed and 37 unlisted companies. None of ourgroup companies are sick or under winding up.

Top Five Listed Companies

Out of 21 listed companies that we have in the Group, excpting Dalmia Cement (Bharat) Limited shares of none of thecompanies are actively traded in the stock exchanges where they are listed. Therefore, excepting Dalmia Cement (Bharat)Limited, we have choosed companies based on their turnover.

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Dalmia Cement (Bharat) Limited

Dalmia Cement (Bharat) Limited (Dalmia Cement) was incorporated under the Companies Act, 1913, on November 1,1951 to take over the Indian assets including the cement plant at Dalmiapuram at Tamil Nadu of Dalmia Cement Limited,which was promoted by late Mr. Jaidayal Dalmia in 1939. The present promoters of the Company are Mr. J. H. Dalmia andMr. Y. H. Dalmia.

At the time of takeover from Dalmia Cement Limited in 1951, Dalmia Cement had two kilns, one of 250 MT capacity ofsemi-dry single pass based process and other of 503 MT capacity on wet-dry process. A third kiln of 508 MT capacity onwet-dry process operation was thereafter commissioned. A fourth kiln, a vertical shaft kiln of 200 MT capacity wasinstalled in the year 1981. In 1987, as part of the modernisation programme, two of the kilns based on wet process of508 TPH capacity were replaced by a dry process kiln of 1500 TPD. The crushing and grinding capacity was alsoaugmented by installation of crushing mill of 400 TPH and raw grinding mill of 150 TPH capacity. During 1997-98, DalmiaCement took up an expansion of the capacity by installing vertical roller mill and new grinding department. As aconsequence, the total installed capacity increased to 1.034 MnTPA. The unit was awarded the ISO 9002 certification onNovember 16, 1999. Dalmia Cement is in the process of expanding its cement plant by undertaking a brown field projectand the total cement capacity with this expansion will be 3.5 million t.p.a.

To augment the captive power resources of the cement unit, Dalmia Cement set up a wind farm with a capacity of 16.525MW at Muppandal, Kanyakumari, Tamil Nadu, in various phases since 1993. Presently, it has 53 wind electric generators.

Dalmia Cement acquired the Magnesite Corporation of India Limited in 1958. In 1964, The Magnesite Corporation ofIndia Limited was amalgamated with Dalmia Cement, bringing in its fold the manufacture of dead burnt magnesite. Theplant had a capacity of 72,000 tonnes per annum. In 1998, Dalmia Cement installed a magnesia carbon bricks plant witha capacity of 7500 tonnes per annum.

In 1970, Dalmia Cement started its travel division under the name and style of Govan Travels. It is a fully accredited IATAapproved travel agency with offices at Delhi, Bangalore, Mumbai, Chennai, Cochin and Bangalore.

In 1990, Dalmia Cement set up an electronics unit in Keonics City, Bangalore to manufacture Multi Layer Ceramic ChipCapacitors with technical know how from Palomar Systems and Machines of USA. Dalmia Cement also established aChip Resistor unit at the same site with technical know- how from Pacific InfoTech Corporation, USA. The unit has beenaccredited with the ISO 9002 certification on January 20, 2000.

M/s Vivek Ganna Limited, which possessed a license for manufacture of sugar was amalgamated with Dalmia Cement asper the orders of the High Courts of Calcutta and Madras. In December 1994, Dalmia Cement has set up a 2500 tonnescane crushing capacity per day at Ramgarh in Sitapur district of Uttar Pradesh under the name and style of ‘RamgarhChini Mills’. During FY 2000, Dalmia Cement expanded the capacity of its sugar plant to 5000 tonnes crushing capacityper day.

Shareholding Pattern of Dalmia Cement as on March 31, 2006

Category Number of Equity Shares % of Total

Promoter’s Holding

India Promoters 17341780 45.33

Foreign Promoters 0 0.00

Persons Acting in Concert 18390 0.05

Sub Total [A] 17360170 45.38

Institutional Investors

Mutual Funds and UTI 72500 0.19

Banks, FIs, Insurance Companies etc. 1989081 5.20

FIIs 997338 2.61

Sub Total [B] 3058919 8.00

OCL INDIA LIMITED

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Others

Private Bodies Corporate 5175963 13.53Indian Public 9788776 25.59

NRIs 2574761 6.73

Any Other 299516 0.78

Sub Total [C] 17839016 46.63

Grand Total [A+B+C] 38258105 100.00

Board of Directors of Dalmia Cement as on September 30, 2005

Under the Articles of Association of Dalmia Cement, the company can not have fewer than 3 directors or more than 15directors. The following table sets forth current details regarding the directors of Dalmia Cement:

Name of Directors Designation

Mr. P. K. Khaitan Chairman

Mr. N. Khaitan Director

Mr. J. S. Baijal Director

Mr. M. Raghupathy Director

Mr. N. Gopalaswamy Whole-time Director

Mr. M. H. Dalmia Director

Financial Summary of Dalmia Cement(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 42712.92 42880.92 47097.71 46541.02 54313.43PAT 2828.15 2546.1 1818.79 2329.45 3392.89Equity Capital 765.16 765.16 765.16 765.16 765.16Reserves & Surplus 24261.52 20566.06 22052.90 23930.92 25748.74EPS (Rs.) 37.64 33.28 26.00 33.16 40.34Net Worth 24839.42 21223.00 22788.88 24681.49 26513.90Book Value per share (Rs.) 324.63 277.37 297.83 322.57 346.51

Stock Market Data

Dalmia Cement is listed on NSE Limited, BSE Limited, Madras and Calcutta stock exchanges. The face value of theequity shares of Dalmia Cement was reduced from Rs.10/- per share to Rs.2/- per share pursuant to the resolutionpassed by the shareholders of the Company in the meeting held on October 17, 2005. The highest and lowest tradedprice during last six months is Rs. 255/- (Face Value Rs.2/- each) and Rs. 135.25 (Face Value Rs.2/- each) respectively.The closing market price of the shares as on March 17, 2006 is Rs. 251.95 and the market capitalization as on that dayis Rs. 526.98 crores. The following are the quotes for the shares for last six months at BSE Limited and NSE Limited:

Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)

BSE Limited NSE Limited

February 2006 255.00 225.00 254.70 245.10March 2006 274.50 246.20 274.40 246.00April 2006 399.45 262.00 395.80 263.00May 2006 415.00 285.00 414.80 290.00June 2006 356.00 222.25 355.95 224.00July 2006 292.50 232.00 289.40 230.10

Source: Websites of BSE Limited and NSE Limited

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Hari Machines Limited

Hari Machines Limited (Hari Machines) was incorporated on July 13, 1948 and fresh certificate of incorporation wasissued on March 19, 1987 due to change of name to Hari Machines Limited from Cement Distributors Limited. HariMachines is into the business of manufacturing of refractory and ceramic machinery / steel plant equipments.

Shareholding Pattern of Hari Machines

Cayegory Number of Equity Shares % of Total

Promoters

Mr. Mridu Hari Dalmia 34,500 17.25

Mr. Raghu Hari Dalmia 35,000 17.50

Sub Total [A] 69,500 34.75

Promoter Group

Mrs. Abha Dalmia & Mr. Mridu Hari Dalmia 38,975 19.48

Mrs. Padma Dalmia & Mr. Raghu Hari Dalmia 38,475 19.23

Sub Total [B] 77,450 38.71OthersOriental Insurance Co Ltd 4,140 2.07

Individual 48,910 24.46

Sub Total [C] 53,050 26.54

Total [A+B+C] 2,00,000 100

Board of Directors of Hari Machines as on September 30, 2005

Under the Articles of Association of Hari Machines, the company can not have fewer than 2 directors or more than 11directors. The following table sets forth current details regarding the directors of Hari Machines:

Name of Directors Designation

Mr. M.H. Dalmia Director

Mr. R.H. Dalmia Director

Mr. M.L. Dujari Director

Mr. Mayadhar Mishra Director

Mr. Sunil Kant Choudhari Director

Mr. P.K. Swani Nominee of O.S.F.C

Financial Summary of Hari Machines

(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 1248.83 1416.65 3312.72 5421.73 13363.24

PAT -36.08 5.52 213.32 418.70 891.21

Equity Capital 20.00 20.00 20.00 20.00 20.00

Reserves & Surplus 291.08 292.14 505.46 924.77 1815.99

EPS (Rs.) -18.04 2.76 106.65 209.35 445.61

Net Worth 311.08 312.14 525.46 944.77 1835.99

Book Value per share (Rs.) 135.00 139.00 262.00 473.00 927.00

OCL INDIA LIMITED

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Stock Market Data

The company is listed on Cacutta Stock Exchange. However, the shares of Hari Machines are not actively traded on theexchange and therefore the market price data cannot be provided.

Kabirdas Investments Limited

Kabirdas Investments Limited (Kabirdas Investments) was incorporated on December 27, 1974. Kabirdas Investments isa non-banking finance company. The Promoters of Kabirdas Investments are Mr. M. H. Dalmia and Mr. R. H. Dalmia.Kabirdas Investments is engaged in investment and financing activities as per its main objects, which include carrying onbusiness of an investment Company, to aquire shares and other securities, etc.

Shareholding Pattern of Kabirdas Investments

Cayegory Number of Equity Shares % of Total

Promoters

Mr. M. H. Dalmia 4,83,505 12.22

Mr. R. H. Dalmia 5,11,455 12.92

Sub Total [A] 9,94,960 25.14

Promoter Group

Mrs. Abha Dalmia 4,49,739 11.37

Mrs. Padma Dalmia 4,21,790 10.66

Dalmia Agencies Private Limited 2,66,760 6.74

Dapel Investments Private Limited 3,01,100 7.61

Madhukar Investments Limited 80,000 2.02

Konark Investments Limited 10,952 0.28

Dalmia Group Udyog Limited 1,00,000 2.53

Sunflower Merticntiles Limited 1,20,000 3.03

Satya Miners & Transporters Limited 1,00,000 2.53

Epic Merticantiles Limited 1,20,000 3.03

Sub Total [B] 19,70,341 49.79

Others

Mr. Sushil N. Shah 79,600 2.01

Mr. Ashok Ruia 75,600 1.91

Others (Less than 1%) 8,36,669 21.14

Sub Total [C] 9,91,869 25.07

Total [A+B+C] 39,57,170 100.00

Board of Directors of Kabirdas Investments as on September 30, 2005

Under the Articles of Association of Kabirdas Investments, the company can not have fewer than 3 directors or more than11 directors. The following table sets forth current details regarding the directors of Kabirdas Investments:

Name of Directors Designation

Mrs. Abha Dalmia Director

Mr. R.H. Dalmia Director

Mr. R.P.Shroff Director

Mr. R.K. Agrawal Director

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Financial Summary of Kabirdas Investments

(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 17.9 75.74 91.78 41.04 41.98

PAT 15.22 64.12 71.78 27.4 15.52

Equity Capital 10 39.57 39.57 39.57 39.57

Reserves & Surplus 120.13 483.45 557.93 584.29 598.20

EPS (Rs.) 15.22 1.62 1.81 0.69 0.39

Net Worth 130.13 523.02 597.5 623.86 637.77

Book Value per share (Rs.) 130.13 13.22 15.1 15.76 16.12

Stock Market Data

The company is listed on Delhi and Kolkata stock exchanges. However, the shares of Kabirdas Investments are notactively traded on the exchange and therefore the market price data cannot be provided.

Satya Miners & Transporters Limited

Satya Miners & Transporters Limited (Satya Miners) was incorporated on December 12, 1975. Satya Miners is a non-banking finance company. Main objects of Satya Miners are NBFC, investments, hire purchase, acquiring of mining lease,etc.

Shareholding Pattern of Satya Miners

Cayegory Number of Equity Shares % of Total

Promoters

Padma Dalmia 9,600 4.80

Hinalayan Natural Products Limited 41,000 20.50

Eik River Ceramics Limited 40,000 20.00

Epic Mercantiles Limited 40,000 20.00

Sub Total [A] 1,30,600 65.30

Promoter Group

Sub Total [B] Nil Nil

Others 69,400 34.70

Sub Total [C] 69,400 34.70

Total [A+B+C] 2,00,000 100.00

Board of Directors of Satya Miners as on September 30, 2005

Under the Articles of Association of Satya Miners, the company can not have fewer than 3 directors or more than 11directors. The following table sets forth current details regarding the directors of Satya Miners:

Name of Directors Designation

Mr. S. N. L Jalan Director

Mr. Anurag Saraf Director

Mr. M. L. Dujari Director

OCL INDIA LIMITED

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Financial Summary of Satya Miners

(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 31.73 103.84 22.73 32.36 17.64

PAT 6.87 11.25 7.27 26.75 10.00

Equity Capital 20.00 20.00 20.00 20.00 20.00

Reserves & Surplus 153.77 164.79 172.06 198.81 208.81

EPS (Rs.) 3.44 5.51 3.64 13.37 5.00

Net Worth 173.77 184.79 192.06 218.81 228.81

Book Value per share (Rs.) 868.85 923.95 960.30 1094.05 1144.05

Stock Market Data

The company is listed on Kolkata stock exchange. However, the shares of Satya Miners are not actively traded on theexchange and therefore the market price data cannot be provided.

Europa Commercial & Trades Limited

Europa Commercial & Trades Limited (Europa Commercial) was incorporated on May 21, 1983. Europa Commercial is anon-banking finance company. Main Objects of Europa Commercial are NBFC, Investments, Buy, Sell, Import, Export etc.and Europa Commercial operates in Kolkata.

Shareholding Pattern of Europa Commercial

Cayegory Number of Equity Shares % of Total

Promoters

Mr. M.H. Dalmia 42,500 17.35

Mr. Gaurav Dalmia 32,000 13.06

Dalmia Group Udyog Ltd 35,000 14.29

National Synthetics Limited 60,000 24.49

Sunflower Mercantiles Limited 50,000 20.40

Sub Total [A] 2,19,500 89.59

Promoter Group

Sub Total [B] Nil Nil

Others 25,500 10.41

Sub Total [C] 25,500 10.41

Total [A+B+C] 2,45,000 100

Board of Directors of Europa Commercial as on September 30, 2005

Under the Articles of Association of Europa Commercial, the company cannot have fewer than 3 directors or more than12 directors. The following table sets forth current details regarding the directors of Europa Commercial:

Name of Directors Designation

Mr. R. K. Goenka Director

Mr. Sitaram Saraf Director

Mr. Shan Lal Gupta Director

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Financial Summary of Europa Commercial

(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 28.45 7.44 5.10 14.15 6.50

PAT 22.14 3.08 1.19 10.41 2.73

Equity Capital 24.50 24.50 24.50 24.50 24.50

Reserves & Surplus 76.56 79.64 80.84 91.25 93.98

EPS (Rs.) 9.04 1.26 0.48 4.25 1.12

Net Worth 101.06 104.14 105.34 115.75 118.48

Book Value per share (Rs.) 41.25 42.51 42.99 47.24 48.36

Stock Market Data

The company is listed on Kolkata stock exchange. However, the shares of Europa Commercial are not actively traded onthe exchange and therefore the market price data cannot be provided.

Unlisted Companies

Out of 37 unlisted companies that we have in the Group, majority of them are merely invetment companies. Hereinunderwe have disclosed the details of six unlisted companies based on their turnover.

Himalayan Natural Products Limited

Himalayan Natural Products Limited (Himalayan Natural) was incorporated on January 31, 1983. Himalayan Natural ispresently engaged in investment activites. Its promoter is Mr.R. H. Dalmia. Its main object include purchase, sell, import,export various products.

Shareholding Pattern of Himalayan Natural

Cayegory Number of Equity Shares % of Total

Promoters

Mr. R.H. Dalmia 19,825 49.56

Mrs. Padma Dalmia 19,825 49.56

Others Less than 1% 350 0.88

Total 40,000 100.00

Board of Directors of Himalayan Natural as on September 30, 2005

Under the Articles of Association of Himalayan Natural, the company can not have fewer than 3 directors or more than12 directors. The following table sets forth current details regarding the directors of Himalayan Natural:

Name of Directors Designation

Mr. R.H. Dalmia Director

Mr. Anurag Saraf Director

Mr. S.L. Singhania Director

OCL INDIA LIMITED

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Financial Summary of Himalayan Natural

(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 569.60 116.73 47.44 46.46 43.61

PAT 11.72 7.12 -28.78 -22.67 41.96

Equity Capital 0.05 4.00 4.00 4.00 4.00

Reserves & Surplus 117.16 96.22 70.83 48.18 90.14

EPS (Rs.) 2604.69 17.80 -71.96 -56.67 104.90

Net Worth 117.21 100.22 74.83 52.18 94.14

Book Value per share (Rs.) 26046.67 250.55 187.09 130.45 235.36

Dapel Investments Private Limited

Dapel Investments Private Limited (Dapel Investments) was incorporated on December 18, 1974. Dapel Investments isinto the business of rentals and other services including investments.

Shareholding Pattern of Dapel Investments

Shareholders Number of Equity Shares % of Total

Mr. M.H. Dalmia 17,500 17.50Mridu Hari Dalmia Parivar Trust 17,500 17.50Mrs. Abha Dalmia 15,000 15.00Mr. R.H. Dalmia 19,500 19.50R.H Dalmia (HUF) 11,000 11.00Mrs. Padma Dalmia 19,500 19.50

Total 1,00,000 100.00

Board of Directors of Dapel Investments as on September 30, 2005

Under the Articles of Association of Dapel Investments, the company can not have fewer than 2 directors or more than 7directors. The following table sets forth current details regarding the directors of Dapel Investments:

Name of Directors Designation

Mr. R.H. Dalmia Director

Mr. M.L. Dujari Director

Mr. R.K. Agrawal Director

Financial Summary of Dapel Investments

(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 78.66 94.64 70.58 76.12 39.19PAT 6.78 16.75 -6.07 11.21 -2.06Equity Capital 1.00 1.00 1.00 1.00 1.00Reserves & Surplus 39.57 23.06 17.29 30.56 28.72EPS (Rs.) 6.78 16.75 -6.07 11.21 -2.06Net Worth 40.37 24.06 18.29 31.56 29.72Book Value per share (Rs.) 40.37 24.06 18.29 31.56 29.72

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Grandeur Travels & Tours Private Limited

Grandeur Travels & Tours Private Limited (Grandeur Travels) was incorporated on 04.04.1989. Grandeur Travels is into thebusiness of tours and travels related services. Its promoter is Mr. M.H. Dalmia. Its main object includes providing tour andtravel related services. It is an IATA accredited travel agent company.

Shareholding Pattern of Grandeur Travels

Shareholders Number of Equity Shares % of Total

Mr. M.H. Dalmia 47,500 19.00

Mridu Hari Dalmia Parivar Trust 47,500 19.00

Mrs. Abha Dalmia 47,500 19.00

Mr. Gaurav Dalmia 33,750 13.50

Sharmila Dalmia Parivar Trust 33,750 13.50

National Synthetics Limited 40,000 16.00

Total 2,50,000 100.00

Board of Directors of Grandeur Travels as on September 30, 2005

Under the Articles of Association of Grandeur Travels, the company can not have fewer than 2 directors or more than 7directors. The following table sets forth current details regarding the directors of Grandeur Travels:

Name of Directors Designation

Mrs. Abha Dalmia Director

Mr. R.H. Dalmia Director

Ms. Sharmila Dalmia Director

Ms. Kanupriya Dalmia Director

Mr. R. K. Agrawal Director

Financial Summary of Grandeur Travels

(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 78.99 120.86 95.88 26.06 25.66

PAT 4.41 9.54 5.42 -1.63 0.73

Equity Capital 25 25 25 25 25

Reserves & Surplus — — 1.72 0.08 0.81

EPS (Rs.) 1.76 3.81 2.17 -0.65 0.29

Net Worth 10.49 20.03 26.72 25.08 25.81

Book Value per share (Rs.) 4.20 8.01 10.69 10.03 10.32

Swank Services Private Limited

Swank Services Private Limited (Swank Services) was incorporated on November 18, 1972. Swank Services is into thebusiness of mining. Main objects are NBFC, Investments, Services, Buy, Sell, Import and Export, etc. and it operates inKolkata

OCL INDIA LIMITED

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Shareholding Pattern of Swank Services

Shareholders Number of Equity Shares % of Total

Mr. M. H. Dalmia 180 16.98Mrs. Abha Dalmia 175 16.51

Sharmila Dalmia Parivar Trust 175 16.51Mr. R. H. Dalmia 180 16.98Mrs. Padma Dalmia 175 16.51

Staya Miners & Transporters Limited 175 16.51

Total 1060 100.00

Board of Directors of Swank Services as on September 30, 2005

Under the Articles of Association of Swank Services, the company can not have fewer than 2 directors or more than 9directors. The following table sets forth current details regarding the directors of Swank Services:

Name of Directors Designation

Mr. Anurag Saraf DirectorMr. S. S. Agarwal DirectorMr. M. M. Goyenka Director

Mr. B. B. Singh Director

Financial Summary of Swank Services

(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 1.69 8.10 10.84 15.15 13.98PAT -0.47 2.20 -0.44 -3.80 2.19Equity Capital 1.06 1.06 1.06 1.06 1.06Reserves & Surplus 103.43 105.66 105.22 101.43 103.63EPS -44.8 208.04 -41.5 -358.54 207.16Net Worth 104.52 106.72 106.28 102.49 104.69Book Value per share (Rs.) 9860.38 10067.92 10026.41 9668.87 9876.41

Rama Investment Company Private Limited

Rama Investment Company Private Limited (Rama Investment) was incorporated on 05.08.1972. Rama Investment is aninvestment company. Its promoters are Mr. J.H. Dalmia and Mr. Y.H. Dalmia, who control the company with other familymembers and companies as per shareholding pattern given below. Rama Investment is a registered Non- BankingFinancial Company with Reserve Bank of India and is engaged in investment and financing activites as per its mainobjects.

Shareholding Pattern of Rama Investment

Shareholders Number of Equity Shares % of Total

Mr. J.H. Dalmia 180 7.20Mr. Y.H. Dalmia 360 14.40Ms. Kavita Dalmia 280 11.20Mr. Gautam Dalmia 680 27.20Mr. Puneet Dalmia 200 8.00Km. Shrutipriya Dalmia 200 8.00Others 600 24.00

Total 2500 100.00

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Board of Directors of Rama Investment as on September 30, 2005

Under the Articles of Association of Rama Investment, the company can not have fewer than 2 directors or more than 7directors. The following table sets forth current details regarding the directors of Rama Investment:

Name of Directors Designation

Mr. J.H. Dalmia Director

Mr. Y.H. Dalmia Director

Mr. Gautam Dalmia Director

Mr. Puneet Dalmia Director

Financial Summary of Rama Investment

(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 9.22 10.12 12.17 10.53 10.18PAT 8.99 5.32 10.59 9.74 9.45Equity Capital 2.50 2.50 2.50 2.50 2.50Reserves & Surplus 67.39 72.73 74.07 83.82 96.32EPS (Rs.) 359.56 212.77 423.75 389.77 398.16Net Worth 69.89 75.23 76.57 86.32 98.82Book Value per share (Rs.) 2795.79 3009.30 3062.80 3452.67 3952.92

Dalmia Agencies Private Limited

Dalmia Agencies Private Limited (Dalmia Agencies) was incorporated on August 31, 1948. Dalmia Agencies is into thebusiness of mining. Its promoters are Mr. M.H. Dalmia and Mr. R.H. Dalmia. Its main objects include operating mines andseveral others including investments in real estate etc.

Shareholding Pattern of Dalmia Agencies

Shareholders Number of Equity Shares % of Total

Mr. M.H. Dalmia 33,200 33.20

Mrs. Abha Dalmia 16,400 16.40

Mr. R.H. Dalmia 33,500 33.50

Mrs. Padma Dalmia 16,400 16.40

Others Less than 1% 500 0.50

Total 1,00,000 100.00

Board of Directors of Dalmia Agencies as on September 30, 2005

Under the Articles of Association of Dalmia Agencies, the company can not have fewer than 2 directors or more than 11directors. The following table sets forth current details regarding the directors of Dalmia Agencies:

Name of Directors Designation

Mr. R.H. Dalmia Director

Mr. Gaurav Dalmia Director

Mr. Nikhil Churiwal Director

Mr. R.K. Agrawal Director

Mr. V. Muralidharan Director

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Financial Summary of Dalmia Agencies

(Rs. in lacs)

Year 2000-01 2001-02 2002-03 2003-04 2004-05

Sales & Other Income 56.32 100.57 14.43 27.42 4.26

PAT 6.13 88.76 9.81 21.26 -2.88

Equity Capital 0.14 1.00 1.00 1.00 1.00

Reserves & Surplus 179.62 163.69 173.51 190.32 187.44

EPS (Rs.) 44.52 88.76 9.81 21.26 -2.88

Net Worth 179.76 164.69 174.51 191.32 188.44

Book Value per share (Rs.) 1304.95 164.69 174.51 191.32 188.44

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RELATED PARTY TRANSACTIONS

Related Party Disclosures as per Accounting Standard (AS-18) issued by the Institute of Chartered Accountants of India(ICAI)

A. Related parties and their relationship

1. Subsidiary Companies: Konark Minerals Limited, Kashmissa Industries Limited, Hari Fertilizers Limited (Ceased tobe a subsidiary Company as on 30.09.2005) and Orissa Iron and Steel Limited

2. Key management personnel: Mr. M H Dalmia, Mr. R H Dalmia, Mr. Y H Dalmia (Non Executive Director), Mr. M. L.Chand (Wholetime director upto 29.02.2004), Mr. V P Sood (Wholetime director).

Relatives: Mr. Gaurav Dalmia, Mr. A.H. Dalmia, Mrs. Abha Dalmia, Mrs. Padma Dalmia, Mrs. Shripriya DalmiaThirani, Km. Anuradha Dalmia, Mrs. Sharmila Dalmia, Mrs. Mohini Sood

3. Associate concern (Joint Venture): OCL Global Limited

4. Enterprises over which key management personnel are able to exercise significant influence: Hari Machines Limited,Himalayan Natural Products Limited, National Synthetics Limited, Dalmia Agencies Private Limited, VishakhaInvestment Limited, Dalmia Shiksha Pratisthan, Dalmia Bharat Seva Trust, Satya Miners And Transporters Limited,Dalmia Group Udyog Limited, Kabirdas Investments Limited, First Capital India Limited, Konark Investments Limited,Marathwada Refractories Limited, Debikay Systems Limited, Dapel Investments Private Limited, Dalmia Institute ofScientific & Industrial Research, Dalton International Limited, Madhukar Investments Limited, Swank Services PrivateLimited, Grandeur Travels & Tours (P) Limited, Parsvnath Landmark Developers (P) Limited, Landmark KoyelaEnergy Resources (P) Limited, Colonisers (P) Limited, Ansal LAndmark Township (P) Limited, Jiva Design PrivateLimited, Europa Commercial & Trades Limited, Sunflower Mercantiles Limited, Epic Mercantiles Limited, Eik RiversCeramics Limited, Lions Commercial Company Limited and Dalmia Cement (Bharat) Limited

B. Transactions with above in ordinary course of business:

(Rs. in lacs)

Particular FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

1. Transactions with parties referred in (1) above:a) Amount for purchase and sale of goods and 55 85 59 - 18

fixed assetsb) Inter Corporate deposit received and repaid 26 19 43 17 10c) Purchase of Shares 5 - - - -d) Interest Expense 2 2 4 1 1e) Amount for service rendered and received 0 - - - -f) Amount receivable at the year end 1 1 21 1 1g) Amount payable at the year end 0 - 4 - -

2. Transactions with parties referred in (2) above:a) Remuneration 2,12 2,21 4,15 2,16 1,65b) Purchase of fixed assets - - - 2 2c) Sale of Shares - - 23 - -d) Rent 20 - - - -e) Amount for service rendered and received 2 - - - -f) Security Deposit received and repaid 13 - 9 - -g) Amount receivable at the year end 6 1 - - -h) Amount payable at the year end - - 2,29 - -

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Particular FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

3. Transactions with parties referred in (3) above:

a) Investment in Shares 22 - - - -

4. Transactions with parties referred in (4) above:

a) Amount for purchase and sale of goods and 5,26 4,83 8,21 5,36 2,15fixed assets

b) Amount for service rendered and received 11,92 3,96 3,73 2,61 1,27

c) Inter corporate deposit received and repaid 20,67 20,27 1,559 1,081 1,016

d) Inter corporate deposit given and received back 17,05 17,70 30 - -

e) Interest expense 122 1,25 1,01 71 57

f) Interest income 622 1,18 1 - -

g) Advance given for developed plots of land - 983 24,03 6,03 - -real estate operations

h) Purchase of shares - - 23 - -

i) Contribution to a research institute and donations - 4 1,79 - -

j) Amount of security deposit received / paid 13 - 83 - -

k) Amount receivable at the year end 53,50 18,76 1,68 62 29

l) Amount payable at the year end 9,24 77 29 28 7

m) Guarantee given 21,00 21,00 - - -

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REGULATION AND POLICIES

Ministry of Commerce and Industry

The Ministry of Commerce and Industry, Government of India, oversees the activities of the cement industry through theDepartment of Industrial Development.

Licensing Policy

Under the New Industrial Policy dated July 24, 1991, all industrial undertakings are exempt from licensing except forcertain industries such as distillation and brewing of alcoholic drinks, cigars and cigarettes of tobacco and manufacturedtobacco substitutes, all types of electronic aerospace and defense equipment, industrial explosives including detonatingfuses, safety fuses, gun powder, nitrocellulose and matches and hazardous chemicals and those reserved for the smallscale sector. An industrial undertaking, which is exempt from licensing is required to file an Industrial EntrepreneursMemorandum (“IEM”) with the Secretariat for Industrial Assistance, Department of Industrial Policy and Promotion, Ministryof Commerce and Industry, Government of India, and no further approvals are required.

Cement has been exempted from industrial licensing pursuant to Notification Number 477(E) dated July 25, 1991 issuedunder the Industries (Development and Regulation) Act, 1951. Consequently, the Company does not require an industriallicense.

FDI in Cement Sector

Foreign investment in Indian securities is regulated through the industrial policy of Government of India and FEMA. Whilethe industrial policy prescribes the limits and the conditions subject to which foreign investment can be made in differentsectors of the Indian economy, FEMA regulates the precise manner in which such investment may be made. Under theindustrial policy, unless specifically restricted, foreign investment is freely permitted in all sectors of Indian economy up toany extent and without any prior approvals, but the foreign investor is required to follow certain prescribed procedures formaking such investment. The government bodies responsible for granting foreign investment approvals are the FIPB andthe RBI.

At present, investments in companies manufacturing cement fall under the automatic approval route for FDI/NRI investmentup to 100%.

Investment by Foreign Institutional Investors

Foreign Institutional Investors (“FIIs”) including institutions such as pension funds, investment trusts, asset managementcompanies, nominee companies and incorporated, institutional portfolio managers can invest in all the securities tradedon the primary and secondary markets in India. FIIs are required to obtain a certificate from SEBI and a generalpermission from the RBI to engage in transactions regulated under FEMA. FIIs must also comply with the provisions ofthe SEBI (Foreign Institutional Investors) Regulations, 1995, as amended from time to time. The initial registration andRBI’s general permission under A.P. (DIR Series) Circular No.16 dated October 4, 2004, together enable the registered FIIto buy (subject to the ownership restrictions discussed below) and sell freely securities issued by Indian companies, torealise capital gains or investments made through the initial amount invested in India, to subscribe or renounce rightsissues for shares, to appoint a domestic custodian for custody of investments held and to repatriate the capital, capitalgains, dividends, income received by way of interest and any compensation received towards sale or renunciation ofrights issues of shares.

Ownership restrictions of FIIs

Under the portfolio investment scheme, the overall issue of equity shares to FIIs on a repatriation basis should notexceed 24% of post-issue paid-up capital of the company. However, the limit of 24% can be raised up to the permittedsectoral cap for that company after approval of the board of directors and shareholders of the company. The offer ofequity shares to a single FII should not exceed 10% of the post-issue paid-up capital of the Company. In respect of an

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FII investing in equity shares of a company on behalf of its sub-accounts, the investment on behalf of each sub-accountshall not exceed 10% of the total issued capital of that company.

Laws and Regulations relating to the Cement Industry

The applicable cement laws and regulations include the following:

Cement Control (Amendment) Order, 1989

Pursuant to Notification No.1-5/89-Cem, dated March 1, 1989 (S.O. No. 168(E)), the Cement Control Order, 1967 (the“1967 Order”) was amended, resulting in removal of the Government’s control over price and distribution of cement. Theamended 1967 Order, also known as the Cement Control (Amendment) Order, 1989, provides for maintenance of booksrelating to production, removal, sale and transfer of cement (excluding white cement) by the producer and furnishing ofreturns or such other information as may be specified by the Central Government. The Cement Control (Amendment)Order, 55 1989 also provides for the maintenance of a Cement Regulation Account by the Development Commissionerfor the cement industry. The amount credited in this account is to be used, inter alia, for reimbursing the producer towardsequalizing freight or concession in the matter of export price.

Cement Cess Rules, 1993

The Cement Cess Rules, 1993, impose a cess on the manufacture of cement. The Cement Cess Rules provide formonthly returns to be filed by the producer with the appropriate authority and the amount due every month to bedeposited by the 15th of the subsequent month. The proceeds of the cess are to be utilized for research and developmentin cement manufacturing and persons engaged in cement industry.

Cement (Quality Control) Order, 2003

The Cement (Quality Control) Order, 2003, has been framed under the Bureau of Indian Standards Act, 1986, asamended, and prohibits sale, manufacture and distribution of cement which does not meet the quality requirementsspecified by the Bureau of Indian Standards or does not bear the standard mark, and requires a manufacturer of cementto make an application to the Bureau of Indian Standards for obtaining a license for use of the standard mark.

Environmental and Labour Laws and Regulations

The environmental and labour laws and regulations that may be applicable to the Company include the following:

� Contract Labour (Regulation and Abolition) Act, 1970

� Industries (Development and Regulation) Act, 1951

� Factories Act, 1948

� The Indian Boilers Act, 1923 and the Indian Boiler Regulations, 1950

� Explosives Act, 1884

� Gas Cylinder Rules, 1981

� Employees’ State Insurance Act, 1948

� Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

� Payment of Gratuity Act, 1972

� Payment of Bonus Act, 1965

� Payment of Wages Act, 1936

� Industrial Disputes Act, 1947 and Industrial Disputes (Central) Rules, 1957

� Shops and Commercial Establishments Act

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� Environment Protection Act, 1986, and Rules, 1986

� Water (Prevention and Control of Pollution) Act, 1974, and Rules, 1975

� Water (Prevention and Control of Pollution) Cess Act, 1977 and Rules of 1978

� Air (Prevention and Control of Pollution) Act, 1981, and Rules, 1982

� Trade Union Act, 1926

� Hazardous Waste (Management and Handling) Rules, 1989

� Workmen’s Compensation Act, 1923

Other Laws and Regulations

Certain other laws and regulations that may be applicable to the Company include the following:

� Fiscal Laws and Regulations including the I.T. Act, Central Excise Act, 1944, the Customs Tariff Act, 1975, and theCentral Sales Tax Act, 1956

� Standards of Weights and Measures Act, 1956

�· Electricity Act, 2003

� The Bihar and Orissa Public Safety (Orissa Repeal) Act, 1938

� The Orissa Compulsory Labour Act, 1948

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DIVIDEND POLICY

Dividends, other than interim dividends, will be declared at the annual general meeting of the shareholders based on therecommendation of the Board of Directors. The Board may, at its discretion, recommend dividend to be paid to themembers of the Company. The factors that may be considered by the Board before making any recommendations for thedividend, include but are not limited to profits earned during the financial year, liquidity of the Company, obligationstowards repayment of debt including maintaining debt service reserves, future expansion plans and capital requirements,applicable taxes including tax on dividend, as well as exemptions under tax laws available to various categories ofinvestors from time to time. The Board may also, from time to time, pay to the members interim dividend, as appears tothe Board to be justified by the profits of the Company.

Some of the agreements that we have entered into with our lenders require us not to declare dividend except out ofprofits relating to the year for which dividend is to be declared after making all due and necessary provisions. We cannotdeclare dividend in case of any default in repayment obligation to our lenders.

The following table provides the details of dividends paid by the Company on Equity Shares during last five years:

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Number of Equity Shares 3,81,83,760 59,36,094 59,53,027 71,36,735 71,36,735

Rate of Dividend 50% 50% 100% 25% 10%

Amount of Dividend 381.84 297 594 148 72

Note: The Equity Shares of face value of Rs. 10/- each were subdivided into Equity Shares of Rs. 2/- each w.e.f. August9, 2005.

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FINANCIAL INFORMATION

AUDITORS’ REPORT

The Board of DirectorsOCL India Limited11th Floor, Narain Manzil,23, Barakhamba Road,New Delhi 100 001

Dear Sirs,

A. Financial Statements

1. We have examined the books of accounts of OCL India Limited for the five financial years ended on March 31,2006 being the last date up to which the accounts of the Company have been made up and audited by us.

2. In accordance with the requirement of:

(i) Paragraph B (1) of Part-II of Schedule-II to the Companies Act, 1956 (the Act);

(ii) The Securities and Exchange Board of India (SEBI) (Disclosure and Investors Protection) Guidelines,2000;

(iii) Instruction dated October 31, 2005 received from the Company, requesting us to carry out work relating tothe Offer Document / Information Memorendum being issued by the Company in connection with theRights Issue of Equity Shares by the Company (referred to as the Issue).

We report that:

a) The Profit and Loss of OCL India Limited for the five financial years ended March 31, 2006, which weredrawn-up in accordance with the provisions of the Companies Act, 1956 are as set out in Part I enclosed;

b) The Assets and Liabilities of OCL India Limited as at March 31, 2006 and for each of the four financialyears ended March 31, 2005 are as set out in Part II enclosed;

c) The aforesaid Statements of Profit & Loss and Statements of Assets and Liabilities:

i) read together with Significant Accounting Policies and Significant Changes in Accounting Policies asset out in Part-III, Notes on Accounts as set out in Part IV and Notes on Adjustments arising out ofqualification in Auditors Report, if any, (being nil) have been drawn, after giving effect to adjustmentsand regrouping as and where, in our opinion, considered appropriate and,

ii) have been prepared by the Company in accordance with the provisions of the Companies Act, 1956and the SEBI (DIP) Guidelines and amendments made thereto.

3. OCL India Limited has three subsidiaries i.e., Konark Minerals Limited, Kashmissa Industries Limited, OrissaIron and Steel Limited. (Hari Fertilizers Limited ceased to be subsidiary w.e.f. September 30,2005), havingshareholding of 100% in each of these companies.

The statements of Profit & Loss & Assets and Liabilities of two of the subsidiary companies for each of the fivefinancial years ended on March 31, 2006 or the relevant period / years, as the case may be, in respect of thetwo subsidiaries read together with the Significant Accounting Policies, Changes in Accounting Policies, MaterialNotes are as set out in Part V.

The Consolidated statements of Profit & Loss, Assets and Liabilities and Cashflows for each of the fivefinancial years ended on March 31, 2006 (Audited) read together with notes are set out in Part VI.

We further report that in respect of the five financial years ended March 31, 2006, the amount of dividend paidto the shareholders by OCL India Limited and the dividend paid by the subsidiaries is given in Part VII.

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B. Other Financial Information

We have examined the following financial information relating to OCL India Limited, proposed to be included in theOffer Document / Information Memorendum as approved by you and annexed to this report.

(i) Summary of accounting ratios based on the adjusted profit relating to earnings per share, cash earnings pershare, net asset value and return on net worth enclosed, as Annexure A;

(ii) Capitalisation Statement as at March 31, 2006, enclosed as Annexure B;

(iii) Deferred tax balance as on March 31, 2006, enclosed as Annexure C;

(iv) Cash Flow Statement for the five financial years ended 31st March, 2006, enclosed as Annexure D;

(v) Details of outstanding unsecured loans as at March 31, 2006, enclosed as Annexure E;

(vi) Details of principal terms of loans and assets charged as security as at March 31, 2006, enclosed as AnnexureF;

(vii) Details of Contingent Liabilities as on March 31, 2006, enclosed as Annexure G;

(viii)Details of other receipts enclosed, as Annexure-H;

(ix) Statement of Tax shelter for the six years ended March 31, 2006, enclosed a Annexure I;

(x) Statement of market value of investments for each of the five financial year ended on March 31,2006, enclosedas Annexure J

In our opinion, the financial statement of the Company as stated in this report as mentioned in the paragraph (A) and (B)above, read with the significant accounting policies and notes to the accounts, have been prepared in accordance withPart II of Schedule II of the Act and the SEBI Guidelines.

This report is intended solely for your information and for inclusion in the offer document in connection with the specificrights issue of equity shares and is not to be used, referred to or distributed for any other purpose without our priorwritten consent.

For V. Sankar Aiyar & Company,Chartered Accountants

(V Rethinam)PartnerMembership No.10412

Place: New DelhiDate: June 5, 2006

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Part I – Statement of Restated Profit and Loss

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

INCOME

1. Sales and Self Consumption

i. Sales 69340 56366 44928 36357 30678

ii. Self Consumption 743 634 457 278 301

Total (i+ii) 70083 57000 45385 36635 30979

Less: Excise Duty 10371 8399 6992 5389 4834

Total (1) 59712 48601 38393 31246 26145

2. Other Receipts 1093 586 522 413 430

3. Increase/Decrease in Inventory

i. Opening Stock 3500 4175 3633 3180 2907

ii. Closing Stock 3979 3500 4175 3633 3180

Total (ii – i ) 479 (675) 542 453 273

Total Income (1+2+3) 61284 48512 39457 32112 26848

EXPENDITURE

1. Raw Material Consumed 21871 18305 13994 10463 8839

2. Purchases 694 1518 289 32 9

3. Salaries, Wages & Benefits to Employees 2456 2295 2636 2876 2781

4. Power and Fuel 8695 7019 6385 5724 4519

5. Interest & Other Financial Charges

i. Interest on Term Loan & Deposits 1460 895 806 582 639

ii. Others 906 669 600 477 395

Less: Interest Received 1031 268 735 287 160

Total (5) 1335 1296 671 772 874

6. Depreciation 2704 2214 1968 1411 1259

7. Other Expenses 17972 12206 10015 8422 7889

Total Expenditure (1+2+3+4+5+6+7) 55727 44853 35958 29700 26170

Net Profit/ (Loss) Before Tax 5557 3659 3499 2412 678

Less: Provision for Tax - Current 475 300 650 222 60

Less: Fringe Benefit Tax 60

Less: Provision for Tax - Deferred 1310 743 588 357 221

MAT Credit available for set off (67)

Provision for tax relating to earlier years written back 201 277

Net Profit/ Loss for the Year as per auditedstatement of accounts 3779 2817 2261 1833 674

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(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Adjustment on account of changes inAccounting Policies -

a. Payment under VRS earlier treated as deferred

revenue, being charged to Profit & Loss A/c 430 37 (467)

b. Method of depreciation on Plant and

Machinery of Sponge Iron

Plant changed from SLM to WDV 57 (57)

c. Adjustment towards tax provisions (35) 35

Adjusted Profit after tax 3779 2817 2748 1778 242

Add: Profit/ Loss Brought Forward 3561 3835 2557 1396 2165

Profit available for appropriation 7340 6652 5305 3174 2407

Appropriations

Transfer to General Reserve 2500 2500 800 450 940

Transfer to Debenture Redemption Reserve 250 250

Transfer to Reserve for Bad & Doubtful Debts

Proposed Dividend 382 297 594 148 71

Interim Dividend

Tax on Dividend 53 44 76 19

Adjusted Profit carried to Balance Sheet 4155 3561 3835 2557 1396

Notes:

1. There are no other adjustments resulting from audit qualifications, material amounts relating to adjustments forprevious year and changes in accounting policies;

2. Other receipts for the year-ended 31.03.2006 includes Rs.270 lacs being Profit on sale of shares of Hari FertilizersLimited, an erstwhile subsidiary Company. (Since then ceased to be a subsidiary company)

3. The provision for current tax for the year ended 31.03.2006, 31.03.2005 and 31.03.2002 has been made as perSection 115JB of the Income Tax Act, 1961

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Part II – Statement of Restated Assets and Liabilities

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

A. Fixed Assets

i) Gross Block 62532 50916 43984 41146 34275

Less: Accumulated Depreciation 26664 23855 21959 20177 18809

Net Block 35868 27061 22025 20969 15466

Less: Revaluation Reserve 400 423 448 488 520

Net Block after adjustment for revaluation reserve 35468 26638 21577 20481 14946

ii) Capital work in progress 10667 9760 2971 814 1216

Total 46135 36398 24548 21295 16162

B. Investments 63 65 65 41 78

C. Current Assets, Loans & Advances Inventories 11822 10151 10057 7690 7638Sundry Debtors 8918 8675 8079 7239 6638Cash & Bank Balances 3429 1479 1371 1698 614Other Current Assets 573 94 1 16 103Loans & Advances 9223 6958 3480 2328 1708

Total 33965 27357 22988 18971 16701

D. Liabilities & Provisions

Secured Loans 33873 24657 12612 11919 7823

Unsecured Loans 7964 8998 7367 5013 4307

Current Liabilities 9212 7480 7749 5949 5781

Provisions 750 732 1118 432 105

Deferred Tax Balance 6240 4929 4186 3598 3241

Total 58039 46796 33032 26911 21257

E. Net Worth (A+B+C-D) 22124 17024 14569 13396 11684

Net Worth Represented By

F. Share Capital 764 594 594 712 712

G. Reserves & Surplus Capital Reserve 60 55 55 55 55Share Premium Account 2333 717 717 1657 1657Revaluation Reserve 400 423 448 488 520General Reserve 14000 11500 9000 8200 7500Capital Redemption Reserve 125 125 125 6 6Reserve for Bad & Doubtful Debts 187 222 243 209 108Profit & Loss A/c 4155 3561 3835 2557 1396Investment Allowance Reserve 250Debenture Redemption Reserve 500 250 Less: Revaluation Reserve 400 423 448 488 520Reserves (Net of Revaluation Reserves) 21360 16430 13975 12684 10972

Total (F+G) 22124 17024 14569 13396 11684

H. Miscellaneous Expenditure to the extent not written off

I. Net Worth (F+G-H) 22124 17024 14569 13396 11684

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Part III: A. Significant Accounting Policies (As on March 31, 2006)

1. Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which arerevalued), on a going concern basis and in accordance with applicable accounting standards.

2. Fixed Assets

Land, buildings, plant and machinery relating to cement and refractory works acquired/installed up to December31, 1981 were revalued as at December 31, 1985. All other fixed assets are shown at cost (net of cenvat).Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisitionof assets are capitalised.

3. Depreciation

Depreciation on plant and machinery added in cement and refractory works after December 31, 1981 is providedon straight line method and depreciation on all other assets including sponge iron works is provided on reducingbalance method. Rates of depreciation adopted are as specified in Schedule XIV to the Companies Act. Depreciationon additions is calculated pro-rata from the month of addition. Depreciation is not provided on deletion of assets asit has no effect on the results of the year. Depreciation on amount added on revaluation of assets is transferredfrom revaluation reserve.

4. Impairment

Impairment losses, if any, are recognized in accordance with the Accounting Standard-28, issued by the Institute ofChartered Accountants of India (ICAI).

5. Investment

Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management,such a decline is considered permanent.

6. Inventories

Stocks of finished and partly finished products are valued at lower of cost or net realizable value and for thispurpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. RawMaterials, other inputs, stores and spares are valued at cost (net of cenvat) or after providing for obsolescence.Cost is determined on FIFO / weighted average basis. Stock of iron ore fines has been valued at raw material costor net realizable value whichever is less.

7. Sales

Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operatingefficiency of products, where applicable, is accounted for upon crystallization.

8. Treatment of Employee Benefits

The Company makes regular contributions to duly constituted funds set up for provident fund, family pension,gratuity and Superannuation, which are charged to revenue. Contribution to gratuity fund and provision for leaveencashment are made on the basis of actuarial valuation.

9. Research and Development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capitalexpenditure, when incurred is added to the cost of fixed assets.

10. Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction/realization.Current assets/liabilities are restated at rates prevailing at the year-end and resultant exchange differences arerecognized in the Profit and Loss Account. In the case of acquisition of fixed assets, the differences are adjustedto the cost of such assets as required by Schedule VI to the Companies Act.

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11. Deferred Tax

In accordance with Accounting Standard-22 ‘Taxes on Income’ issued by the Institute of Chartered Accountants ofIndia (ICAI) deferred tax is recognised, subject to consideration of prudence, being the difference between accountingand taxable income that originate in one year and are capable of reversal in subsequent year.

Paet III: B. Significant changes in accounting policies between April 1, 2001 and March 31, 2006

2001-02

Payments under voluntary retirement scheme has been treated as deferred revenue expenditure and amortisedequally over a period of two years and followed in the FY 2002-03.

2003-04

The Company has changed the method of providing depreciation on plant and machinery of sponge iron worksfrom straight-line method to reducing balance method. As a result (a) depreciation for the year is higher by Rs. 204lacs and (b) arrear depreciation of Rs. 57 lacs for earlier year has been provided in compliance with accountingstandard (AS-6) issued by ICAI. Consequently, the profit for the year is lower by Rs. 262 lacs

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Part IV: Significant Notes on Accounts

(Rs. in lacs)

S. No. Particulars FY 2006 FY 2005

1 Claims against the Company not acknowledged as debts 1117 878

2 Other monies for which the Company is contingently liable 18 16

3 In the income tax assessment certain deductions are subject matter of

appeals

The amount of Tax and interest involved exceeds the provision by 144 —

4 Guarantee given to bank for term loan facility and non fund based facility,

on behalf a body corporate relating to real estate operations 2100 2100

5 Estimated amount of contracts remaining to be executed on capital account

and not provided for 969 4834

6 Remuneration to Whole-time directors

� Salary and allowances 10 9

� Contribution to provident fund and other funds 1 2

� Perquisites 3 3

7. The Order of Competent Authority, rejecting application for exemption under Section 20 of Urban Land (Ceiling andRegulation) Act, 1976 (the Act) and final statement under Section 9 of the Act, in respect of land at Agarparacosting Rs.4 lakhs has been challenged by filing a writ petition before the Calcutta High Court, which is pending.The Company has entered into an agreement for the sale of the above land subject to the purchaser obtaining noobjection certificate from the competent authority.

8. Conveyance deed in respect of immovable properties costing Rs.3 lacs is pending execution in favour of theCompany

9. The additions to fixed assets and capital work in progress includes borrowing cost Rs.451 lacs capitalised duringthe period (previous year Rs. 342 lacs)

10. In accordance with Accounting Standard (AS-11) issued by ICAI, net loss of Rs. 11 lacs (previous year Rs. 9 lacs)due to exchange difference arising on foreign currency transactions has been considered in the Profit and LossAccount

11. As per Delhi High Court Order dated March 11, 2004 disposing off the company’s writ challenging the fixation ofretention price for cement, the Company has repaid Rs. 396 lacs, the amount provisionally received/ retained inthe years 1981 and 1982. The Court has further directed (a) the matter be decided by the Tariff Commission/Committee and (b) the question of payment of interest shall be decided after the decision of the said Commission/Committee. The matter is pending before Tariff Commission.

12. The Supreme Court of India during April 1996 upheld the validity of Jute Packaging Materials (Compulsory use inPacking Commodities) Act, 1987. The Company has been legally advised that the Act is applicable to it only witheffect from October 1996. Under the Act, the cement manufacturers are required to use jute packaging material forsupply or distribution up to 50% of their total production. The Calcutta High Court has granted stay against theshow cause notice received by the Company from the Jute Commissioner. The Union of India, through the jutecommissioner has filed petition for transfer of all writ petitions along with order proceedings pending before variousHigh Courts for hearing and disposal on merit by Supreme Court. While the Company may be liable for non-compliance up to an amount equal to double the cost of the jute packaging material, which it should have used,the liability, if any, in this regard is not ascertainable at this stage. However, the Government has not notified thecompulsory packing of cement in jute packaging materials for the period effective from 1st July, 1997

13. The uncashed dividend of Rs.26 lacs (previous year Rs. 23 lacs) and deposits (including interest) of Rs. 17 lacs(previous year Rs. 21 lacs), shown under current liabilities do not include any amount due and outstanding to becredited to the ‘Investor Education and Protection Fund’

101

14. Segmental Disclosure (as on March 31, 2006)

(Rs. in lacs)

Particulars Cement Refractory Sponge Power Real Others Unallowable TotalIron Estate

Operations

Segment Revenue

External 38,348 20,990 10,001 - - 69,339

(3,01,12) (1,59,62) (93,78) (9,14) - (5,63,66)

Inter-Segment 114 135 - 249

(23) (1,66) - - - (1,89)

Segment Result

Profit (Loss) before Tax andInterest 5,168 2,209 650 -62 -10,73 6,892

(42,57) (12,60) (14,90) -(8,04) (12,48) (49,55)Less: Interest (Net) 1,335 1,335

(12,96) (12,96)Profit before Taxation 5,557

(36,59)Provision for Taxation-Current 475 475

(3,00) (3,00)� Fringe Benefit 60 60

(0) (0)� Deferred 1310 1310

(7,43) (7,43)� MAT credit available for -67 -67

set off - -Provision of earlier years nolonger required - -

(2,01) (2,01)Profit after Taxation 3779

(2817)Other InformationSegment Assets 3,98,81 1,96,86 127,56 54,91 24,44 0 3,04 8,05,62

(3,73,94) (1,61,72) (53,02) (5,96) (43,54) (1,09) (3,17) (6,42,44)Segment Liabilities 57,26 20,59 10,63 2,57 0 4,89,34 5,80,39

(51,90) (16,24) (4,87) (41) (34) (394,21) (4,67,97)Capital expenditure includingcapital-work-in-progress 30,24 19,63 29,24 46,24 125,35

(1,18,29) (9,60) (8,31) (5,90) (1,42,10)Depreciation 18,59 4,75 4,43 27,77

(13,79) (4,45) (4,43) (22,67)Non cash expenses other thandepreciation� Provision for leave

encashment - - - - - - - -(7) (11) (0) (18)

OCL INDIA LIMITED

102

Notes:

a) As per practice consistently followed, inter segment transfers for capital jobs recognized at cost and for other jobsat estimated realizable value.

b) Business segment is considered as primary segment and there is only one geographical segment.

c) Figures in bracket are for the year-ended 31.03.2005

15. Related Party Disclosures as per Accounting Standard (AS-18) issued by the Institute of Chartered Accountantsof India

a. Related parties and their relationship

1. Subsidiary Companies: Konark Minerals Limited, Kashmissa Industries Limited, Hari Fertilizers Limited(Ceased to be a subsidiary Company as on 30.09.2005) and Orissa Iron and Steel Limited

2. Key management personnel: Mr. M H Dalmia, Mr. R H Dalmia, Mr. Y H Dalmia (Non Executive Director),Mr. M. L. Chand (Wholetime director upto 29.02.2004), Mr. V P Sood (Wholetime director).

Relatives: Mr. Gaurav Dalmia, Mr. A.H. Dalmia, Mrs. Abha Dalmia, Mrs. Padma Dalmia, Mrs. ShripriyaDalmia Thirani, Km. Anuradha Dalmia, Mrs. Sharmila Dalmia, Mrs. Mohini Sood

3. Associate concern (Joint Venture): OCL Global Limited

4. Enterprises over which key management personnel are able to exercise significant influence: Hari MachinesLimited, Himalayan Natural Products Limited, National Synthetics Limited, Dalmia Agencies Private Limited,Vishakha Investment Limited, Dalmia Shiksha Pratisthan, Dalmia Bharat Seva Trust, Satya Miners AndTransporters Limited, Dalmia Group Udyog Limited, Kabirdas Investments Limited, First Capital India Limited,Konark Investments Limited, Marathwada Refractories Limited, Debikay Systems Limited, Dapel InvestmentsPrivate Limited, Dalmia Institute of Scientific & Industrial Research, Dalton International Limited, MadhukarInvestments Limited, Swank Services Private Limited, Grandeur Travels & Tours (P) Limited, ParsvnathLandmark Developers (P) Limited, Landmark Koyela Energy Resources (P) Limited, Colonisers (P) Limited,Ansal LAndmark Township (P) Limited, Jiva Design Private Limited, Europa Commercial & Trades Limited,Sunflower Mercantiles Limited, Epic Mercantiles Limited, Eik Rivers Ceramics Limited, Lions CommercialCompany Limited and Dalmia Cement (Bharat) Limited

b. Transactions with above in ordinary course of business:

(Rs. in lacs)

Particular FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

1. Transactions with parties referred in (1) above:a) Amount for purchase and sale of goods and

fixed assets 55 85 59 - 18b) Inter Corporate deposit received and repaid 26 19 43 17 10c) Purchase of Shares 5 - - - -d) Interest Expense 2 2 4 1 1e) Amount for service rendered and received 0 - - - -f) Amount receivable at the year end 1 1 21 1 1g) Amount payable at the year end 0 - 4 - -

2. Transactions with parties referred in (2) above:a) Remuneration 2,12 2,21 4,15 2,16 1,65b) Purchase of fixed assets - - - 2 2c) Sale of Shares - - 23 - -

d) Rent 20 - - - -

103

Particular FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

e) Amount for service rendered and received 2 - - - -

f) Security Deposit received and repaid 13 - 9 - -

g) Amount receivable at the year end 6 1 - - -

h) Amount payable at the year end - - 2,29 - -

3. Transactions with parties referred in (3) above:

a) Investment in Shares 22 - - - -

4. Transactions with parties referred in (4) above:

a) Amount for purchase and sale of goods andfixed assets 5,26 4,83 8,21 5,36 2,15

b) Amount for service rendered and received 11,92 3,96 3,73 2,61 1,27

c) Inter corporate deposit received and repaid 20,67 20,27 1,559 1,081 1,016

d) Inter corporate deposit given and received back 17,05 17,70 30 - -

e) Interest expense 122 1,25 1,01 71 57

f) Interest income 622 1,18 1 - -

g) Advance given for developed plots ofland - real estate operations 983 24,03 6,03 - -

h) Purchase of shares - - 23 - -

i) Contribution to a research institute anddonations - 4 1,79 - -

j) Amount of security deposit received / paid 13 - 83 - -

k) Amount receivable at the year end 53,50 18,76 1,68 62 29

l) Amount payable at the year end 9,24 77 29 28 7

m) Guarantee given 21,00 21,00 - - -

16. The Company has 50% interest in OCL Global Limited, a Joint Venture Company, incorporated in Mauritius. TheCompany’s share of each of assets, liabilities, income and expenditure sin the joint venture for the year-ended31.03.2006 (as the joint venture company was incorporated during 2005-06, previous year figures are not applicable)is as under:

(Rs. in lacs)

Particulars FY 2006Current Assets, Loans and AdvancesBalance with Banks 22LiabilitiesSundry Creditors 1Income 0Expenses 1

OCL INDIA LIMITED

104

17. Earning per Equity Share (EPS) as per Accounting Standard 20

Particular FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Restated Profit after tax 37,79 28,17 27,48 17,78 2,42

Weighted average number ofEquity Shares of Rs. 2/- eachas on 31.03.2006

Basic 3,51,31,894 2,96,90,212 3,01,58,630 3,55,75,395 3,57,91,895Diluted - 3,60,90,210 3,24,08,630 3,78,25,395 3,80,41,895

EPS (Rs.)Basic 10.76 9.49 9.11 5.00 0.68Diluted - 7.81 8.48 4.70 0.64

(The existing Equity Shares of Rs. 10 each were sub-divided into 5 Equity Shares of Rs. 2 each w.e.f. 09.08.2005.Consequently weighted average number of Equity Shares for earlier periods, have been adjusted for share split forcomputing EPS in accordance with Accounting Standard-20 issued by ICAI)

18. The wagons given on lease to railways under ‘Own Your Own Wagon Scheme’ were prior to 01.04.2001 andtherefore AS - 19 on leases is not applicable.

19. Sales include following turnover of goods traded in by the Company:

(Rs. in lacs)

Particular FY 2006 FY 2005 FY 2004 FY 2003 FY 2002Refractory 694 676 94 31 7Sponge Iron Fines - 914 - - -

20. Statement of Sundry Debtors as on March 31, 2006 (Considered good)

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Exceeding Six Months 941 890 819 978 1,050

Other Debts 7,977 7,785 7,260 6,261 5,588

Total 8,918 8,675 8,079 7,239 6,638

Note: No Promoter /Promoter Group/Directors are beneficiaries of these outstanding balances.

21. Statement of Loans and Advances as on March 31, 2006

(Rs. in lacs)

Particulars Amount

Exceeding Six Months 6,328Others 2,895

Total 9,223

22. Statement of Foreign Exchange Earnings/ Expenditure

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Total Foreign Exchange Used 4,304 6,146 3,187 3,241 2,214

Total Foreign Exchange Earned 2,561 1,661 1,362 575 1,005

105

23. Statement of Remuneration paid to Whole Time Director

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Salary and Allowances 9.67 8.59 42.68 8.17 7.48

Contribution to Provident fund andother funds 1.12 2.16 3.55 2.11 1.98

Perquisities 3.06 3.10 4.76 2.23 2.23

Total 13.85 13.85 50.99 12.51 11.69

OCL INDIA LIMITED

106

PART V: Details of subsidiaries of OCL India Limited

1. Konark Minerals Limited

Statement of Profit and Loss

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

I) INCOME

i. Sales 48 81 37 0 17

ii. Other Receipts 6 3 2 2 2

TOTAL 54 84 39 2 19

II) EXPENDITURE

i. Salaries, Wages & Benefits to employees 1 1 1 - 0

ii. Payment to Contractors 33 56 26 0 12

iii Depreciation 1 2 1 - -

iv Other Expenses 9 12 5 1 3

TOTAL 44 71 33 1 15

Profit/ (Loss) for the Year 10 13 6 1 3

Less: Provision for Tax – Current 3 7 2 0 0

Less: Provision for Tax – Fringe Benefit Tax 0

Less: Provision for Tax – Deferred 0 (2) 0 0 1

Net Profit/ Loss for the Year 7 8 4 0 2

Add: Excess Provision of Tax written back - - - - -

Add: Profit/ Loss Brought Forward 15 8 4 4 3

Profit available for appropriation 22 16 8 4 6

Appropriations

Transfer to General Reserve 1 1 0 - 0

Proposed Dividend - - - - 1

Balance Carried to Balance Sheet 21 15 8 4 4

107

Statement of Assets and Liabilities

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

A. Fixed Assets

Gross Block 7 7 7 1 1

Less: Accumulated Depreciation 4 3 1 - -

Net Block 3 4 6 1 1

B. Current Assets, Loans & Advances

Inventories 206 206 200 - -

Sundry Debtors 0 0 8 - -

Cash & Bank Balances 47 42 25 19 19

Other Current Assets 0 0 0 0 -

Loans & Advances 2 2 2 0 0

Total 255 250 235 19 19

C. Liabilities & Provisions

Current Liabilities 222 225 218 1 2

Provisions 0 0 - 0 2

Total 222 225 218 1 4

D. Deferred Tax Balance 2 2 0 0 1

E. Net Worth (A+B-C+D) 38 31 23 19 17

Net Worth Represented By

F. Share Capital 5 5 5 5 3

G. Reserves & Surplus

General Reserve 12 11 10 10 10

Capital Redemption Reserve - - - - 0

Profit & Loss A/c 21 15 8 4 4

Total 33 26 18 14 14

H. Net Worth (F+G) 38 31 23 19 17

OCL INDIA LIMITED

108

Significant Accounting Policies

1. Accounting Convention: The financial statements are prepared under historical cost convention on going concernbasis and in accordance with applicable accounting standards.

2. Fixed Assets: All fixed assets are shown at cost.

3. Depreciation

a. Depreciation is provided on written down value method. Rates of depreciation adopted are as specified inSchedule XIV of the Companies Act.

b. Depreciation on additions is calculated on monthly pro-rata from the month of addition.

4. Sales: Sales are net of sales tax & entry tax.

5. Inventory: Stock in Trade are being valued at cost or realisable value whichever is less.

6. Interest on Post Office Savings Bank Accounts are accounted for when received.

7. Deferred Tax: In accordance with Accounting Standard-22 ‘Taxes on income’, deferred tax is recognised, subject toconsideration of prudence, being the difference between accounting and taxable income that orginate in one yearand are capable of reversal in subsequent year.

Notes to Accounts

(Rs. in lacs)

Particulars FY 2006 FY 2005

1. Claims against the Company not acknowledge as debt 17,749 17,749

2. Other Receipts includes Rs.88,800/- towards vehicle hiring charges

(Previous Year - 88,800 )

3. Stock in trade includes land worth Rs.20572495 (Valued at cost)

4. Computation of commission payable to Directors

Net Profit before tax as per Profit and Loss Account 9,88,069 12,88,727

Add: Directors Commission 7,500 7,500

Net Profit for Calculating Directors Commission 9,95,569 12,96,227

Directors Commission @3% on above 29,867 38,887

Commission restricted to Rs.2,500/- per Director 7,500 7,500

5. Remuneration to Auditors and Expenses

Auditors

Audit Fees including service tax thereon 7,300 7,163

Expense Reimbursement 300 200

In other Capacities

Tax Audit 3,367 3,306

For Certification of Statements

6. Related Party Disclosure as per Accounting Standard-18

A) Related parties and their relationship

1) Holding Company :OCL India Limited

2) Key management personnel: Mr. V P Sood, Mr. Mayadhar Mishra andMr. S. Pasupathy

109

(Rs. in lacs)

Particulars FY 2006 FY 2005

B) Transactions with above in ordinary course business

1) Transactions with parties referred in (1) above

a) Sale of goods 48,19,148 80,69,995

b) Services received 33,060 32,730

c) Intercorporate deposits 26,00,000 18,00,000

d) Interest Received 1,74,335 1,53,025

e) Vehicle Hire Charges received 88,800 88,800

C) Closing Balance of Related Parties

Payable

Security Deposit with OCL India Limited 4,16,800 5,15,200

Receivable

For Hire Charges of Vehicle 7,400 7,400

7. Earning per share (EPS) as per Accounting Standard - 20

Particulars FY 2005-06 FY 2004-05

Profit after current and deferred tax 6,20,334 8,19,139

Weighted average number of equity share of Rs.10/- each as on 31.03.2006 50,000 50,000

EPS (Rs.) (Basic) 12.41 16.38

8. Computation of Deferred Tax

Particulars Opening as on Adjusted during Arose during the Balance as on01.04.05 the year year 31.03.06

Asset Liability Asset Liability Asset Liability Asset Liability

Royalty 10,81,833 4,39,698 3,77,385 4,39,698 5,16,344 6,21,950 12,20,792 6,21,950

Depreciation 23,609 52,888 44,798 68,407 52,888

Total 11,05,442 492,586 3,77,385 4,39,698 5,61,142 6,21,950 12,89,199 6,74,838

Net asset 6,12,856 6,14,361

Deferred Tax @ 36.59% 2,24,259 @ 33.66% 2,06,794

9. Particulars FY 2005-06 FY 2004-05

Production (MT) 8,168 13,678

Sales (MT) 8,168 13.678

10. Previous year figures have been regrouped where necessary to correspond with current year figures.

2. Kashmissa Industries Limited

Statement of Profit and Loss

For the Financial Years 2001-2002, 2002-03, 2003-04, 2004-05 and 2005-06, no business activity was carried on by theCompany. Hence, the Statements of Profit & Loss for these years have not been prepared.

OCL INDIA LIMITED

110

Statement of Assets and Liabilities

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

A. Fixed Assets

Gross Block - - - - -

Less: Accumulated Depreciation - - - - -

Net Block - - - - -

B. Investments 5 5 5 5 85

C. Current Assets, Loans & Advances

Inventories - - - - -

Sundry Debtors - - - - -

Cash & Bank Balances 0 0 1 1 0

Loans & Advances - - 0 0 0

Total 0 0 1 1 1

D. Liabilities & Provisions

Current Liabilities 1 - 1 1 1

Provisions - - - - -

Total 1 - 1 1 1

E. Net Worth (A+B+C-D) 4 5 5 5 85

Net Worth Represented By

F. Share Capital 25 25 25 25 25

Share Application Money - - - - 80

Total 25 25 25 25 105

G. Reserves & Surplus

Profit & Loss A/c (21) (20) (20) - -

Total (21) (20) (20) - -

Total (F+G) 4 5 5 25 105

H. Miscellaneous Expenditure to the - - - 20 20extent not written off

I. Net Worth (F+G-H) 4 5 5 5 85

Notes forming part of the Balance Sheet

1. The company has not done any business during the year 2005-06. However, the accounts have been prepared onthe concept of going concern and in accordance with the applicable Accounting Standards.

2. Investments intended to be held for long term are stated at cost. Cost includes acquisition charges such asbrokerage, fees and duties.

3. The deferred tax asset is not considered as a prudent measure in terms of Accounting Standard (AS-22) Accountingfor Taxes on Income.

4. Particulars FY 2005-06 FY 2004-05

Arrears of Dividend on Preference Shares (Rs.) 2,350 2,256

111

5. Related Party disclosure as per Accounting Standard (AS-18) issued by the ICAI

Holding Company - OCL India Limited

Nature of Transactions FY 2005-06 FY 2004-05

Amount payable at year end (Rs.) 87,769 87,769

6. Earning per share (EPS) as per Accounting Standard - 20

Particulars FY 2005-06 FY 2004-05

Profit / (Loss) (Rs.) -6,791 -26,222

No. of equity shares of Rs. 10/- each as on 31.03.2006 2,49,915 2,49,915

EPS (Rs.) (Basic and Dilutaed) -0.03 -0.10

7. Previous years figures have been regrouped/rearranged wherever necessary to correspondence with current yearsfigures.

3. Orissa Iron and Steel Limited

Orissa Iron and Steel Limited was incorporated on February 20, 2006, hence the Statement of Profit and Loss andStatement of Assets and Liabilities for the FY 2005-06 alone is avaliable.

Statement of Profit and Loss

(Rs. in lacs)

Particulars FY 2006

I) INCOME

i. Sales -

ii. Other Receipt -

TOTAL -

II) EXPENDITURE

Other Expenditure

i) Rates and Taxes 4

ii) Printing ans Stationery 0

iii) Audit Fees 0

iv) Bank Charges -

TOTAL 4

Profit/ (Loss) for the Year (4)

Less: Provision for Tax -

Less: Provision for Deferred Tax 0

Net Profit/ Loss for the Year (4)

Add : Provision for tax relating to earlier years written back 0

Add: Profit/ Loss Brought Forward -

Balance Carried to Balance Sheet (4)

OCL INDIA LIMITED

112

STATEMENT OF ASSETS AND LIABILITIES

(Rs. in lacs)

Particulars FY 2006

A. Fixed Assets

Gross Block -

Less: Accumulated Depreciation -

Net Block -

B. Current Assets, Loans & Advances

Sundry Debtors 0

Cash & Bank Balances 1

Loans and Advances -

Total 1

C. Liabilities & Provisions

Current Liabilities 0

Provisions -

Total 0

D Deferred Tax Asset 0

E. Net Worth (A+B+D-C) 1

Net Worth Represented By

F. Share Capital 5

G. Reserves & Surplus

Profit & Loss A/c (4)

Total (4)

Total (E+F) 1

H. Miscellaneous Expenditure to the extent not written off -

I. Net Worth (F+G-H) 1

Significant Accounting Policies and Notes forming part of the Balance Sheet and Profit & Loss Account

A. Accounting Policies

Basis of Accounting

The Financial statements are prepared under historical cost convention on a going concern basis and in accordance withapplicable accounting standards.

B. Deferred Tax

In accordance with Accounting Standard-22 ‘Taxes on Income’, deferred tax is rocognised, subject to consideration ofprudence, being the difference between accounting and taxable income that originate in one year and are capable ofreversal in subsequent years.

C. Notes to the Accounts

1. Since the Company was incorporated on 22.02.2006 so previous year figures are not applicable.

2. Contingent liability of the Company is : Nil

3. Related Party Disclosure

OCL India Limited: Holding Company

113

Subscription to the ahre capital: Rs. 5,00,000/-

D. Computation of Deferred Tax

Particulars Opening as on Arose during Balance as on01.04.05 the year 31.03.06

Asset Liability Asset Liability Asset Liability

Incorporation Expnses - - 25,000 - 25,000 -

Net asset - - 25,000 - 25,000 -

Deferred Tax @ 33.66% 8,415

4. Hari Fertilizers Limited

Hari Fertilizers Limited has ceased to be a subsidiary of OCL India Limited w.e.f. September 30, 2005. For the FY 2001-2002, no business activity was carried on by Hari Fertilizers Limited, hence the Statement of Profit and Loss for that yearwas not been prepared.

Statement of Profit and Losss

(Rs. in lacs)

Particulars FY 2005 FY 2004 FY 2003

I) INCOME

i. Storage charged received # 5 - -

ii. Fruits and Matured Trees 1 - -

iii. Interest Received 1 3 0

iv. Other Income 0 - -

TOTAL 7 3 0

II) EXPENDITURE

i. Salary Wages and Benefits 6 - -

ii. Electricity Consumed 1 - -

iii. Professional & service Charges 0 1 -

iv. Preliminary Expenses written off - 0 -

v. Depreciation 2 0 -

vi. Other Expenses 4 0 0

TOTAL 13 1 0

Profit/ (Loss) for the Year (5) 2 0

Less: Provision for Tax - 1 0

Net Profit/ Loss for the Year (5) 1 0

Add: Provision for tax relating to earlier years written back 0 - -

Add: Profit/ Loss Brought Forward 1 (0) (0)

Balance Carried to Balance Sheet (4) 1 (0)

# Tax deducted at source Rs. 0.51 lacs

OCL INDIA LIMITED

114

Statement of Assets and Liabilities

(Rs. in lacs)

Particulars FY 2005 FY 2004 FY 2003 FY 2002

A. Fixed Assets

Gross Block 30 30 - -

Less: Accumulated Depreciation 2 0 - -

Net Block 28 30 - -

B. Current Assets, Loans & Advances

Sundry Debtors 0 - - -

Cash & Bank Balances 2 31 5 -

Loans and Advances 1 1 0 -

Total 3 32 5 -

C. Liabilities & Provisions

Current Liabilities 6 30 0 0

Provisions - 1 0 -

Total 6 31 0 0

D. Net Worth (A+B-C) 26 31 5 (0)

Net Worth Represented By

E. Share Capital 30 30 5 0

F. Reserves & Surplus

Profit & Loss A/c (4) 1 (0) (0)

Total (4) 1 (0) (0)

Total (E+F) 26 31 5 (0)

G. Miscellaneous Expenditure to the extent not written off - - 0 0

H. Net Worth (E+F-G) 26 31 5 (0)

Significant Accounting Policies and Notes forming part of the Balance Sheet and Profit & Loss Account as on31.03.2005

A. Accounting Policies

Basis of Accounting

The accounts are prepared under the historical cost convention and in accordance with the applicable AccountingStandards. For recognition of Income and expenses, mercantile system of accounting is followed.

Fixed Asset

Fixed Assets are shown at cost.

Depreciation

Depreciation on assets other than Land is provided on written down value method at the rates specified in the ScheduleXIV to the Companies Act, 1956.

115

Employees Benefits

Provision for gratuity to employees is made as per the provisions of the Payment of Gratuity Act, 1972.

B. Notes to the Accounts

a) Company had acquired Land and other Immovable assets costing Rs.27,28,749.87 from its holding Company inthe year 2003-04. Conveyance deed, duly executed, in respect of above is pending with registration authorities forregistration.

b) As the liability for gratuity to employees under Payment of Gratuity Act, 1972 and leave encashment as on31.03.2005 is NIL, accordingly no provision is required to be made in respect of the above.

c) Deferred Tax asset has not been recognised as a measure of prudence in terms of Accounting Standard (AS-22)Accounting of Taxes on Income.

d.) Auditor’s Remuneration FY 2003-04 FY 2004-05

Audit Fees (Rs.) 1,620 2,755

e) Information pursuant to the provisions of paragraphs 3C, 4C and 4D of part II of Schedule VI of the Companies Act:- NIL

f) Related Party disclosure as per Accounting Standard (AS-18) issued by the ICAI

Holding Company - OCL India Limited

Nature of Transactions FY 2003-04 FY 2004-05

a) ICD given and received (Rs.) 29,40,000 1,00,000

b) Interest received (Rs.) 2,65,532 2,260

c) Purchase and sale of Goods & Fixed Assets (Rs.) 20,03,325 Nil

d) Amount payable at year end (Rs.) 20,03,325 1,39,745

g) Earning Per Share (EPS) as per Accounting Standard-20 issued by the Institute of Chartered Accountants of India.

Particulars FY 2003-04 FY 2004-05

Profit/(-) Loss (Rs.) 2,15,918 -5,21,202

No.of equity shares of Rs.10/- each as on 31.03.05 3,00,000 3,00,000

EPS (Rs.) - Basic and diluted 0.72 -1.74

h) Previous year’s figures have been regrouped/rearranged wherever necessary.

OCL INDIA LIMITED

116

Part VI – A: Statement of Consolidated Statement of Profit and Loss

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Income

1. Sales and Self Consumption

i. Sales 69340 56366 44965 36357 30695

ii. Self Consumption 743 634 457 278 301

Total (i+ii) 70083 57000 45422 36635 30996

Less: Excise Duty 10371 8399 6992 5389 4834

Total (1) 59712 48601 38430 31246 26162

2. Other Receipts 1100 592 522 412 429

3. Increase/Decrease in Inventory

i. Opening Stock 3500 4175 3633 3180 2907

ii. Closing Stock 3979 3500 4175 3633 3180

Total (ii – i ) 479 (675) 542 453 273

Total Income (1+2+3) 61291 48518 39494 32111 26864

Expenditure

1. Raw Material Consumed 21823 18224 13994 10462 8839

2. Purchases 694 1518 289 32 9

3. Salaries, Wages & Benefits to Employees 2457 2302 2638 2876 2781

4. Power and Fuel 8695 7020 6385 5725 4519

5. Interest & Other Financial Charges

i. Interest on Term Loan & Deposits 1460 895 807 580 639

ii. Others 904 667 600 477 393

Less: Interest Received 1032 268 740 287 160

Total (5) 1332 1294 667 770 872

6. Depreciation 2706 2218 1969 1411 1259

7. Other Expenses 18017 12276 10046 8423 7912

Total Expenditure (1+2+3+4+5+6+7) 55724 44852 35988 29699 26191

Net Profit/ (Loss) Before Tax 5567 3666 3506 2412 673

Less: Provision for Tax - Current 479 306 653 222 60

Less: Fringe Benefit Tax 60 -

Less: Provision for Tax - Deferred 1310 741 588 358 223

MAT credit available for set off (67)

Provision for tax relating to earlier - (201) (277)years written back

Net Profit/ Loss for the Year as per audited 3785 2820 2265 1832 667statement of accounts

117

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Adjustment on account of changes in

Accounting Policies -

a. Payment under VRS earlier treated asdeferred revenue, being

charged to Profit & Loss A/c 430 37 (467)

b. Method of depreciation on Plant andMachinery of Sponge Iron

Plant changed from SLM to WDV 57 (57)

c. Adjustment towards tax provisions (35) 35

Adjusted balance of Profit after tax 3785 2820 2752 1777 235

Add: Profit/ Loss Brought Forward 3552 3823 2541 1381 2157

Add:Loss of Subsidiary of earlier year

reversed on sale

Profit available for appropriation 7337 6643 5293 3158 2392

Appropriations

Transfer to General Reserve 2501 2501 800 450 940

Transfer to Debenture Redemption Reserve 250 250

Transfer to Reserve for Bad & Doubtful Debts

Proposed Dividend 382 297 594 148 71

Interim Dividend

Tax on Dividend 53 43 76 19

Adjusted balance of Profit carried to

Balance Sheet 4151 3552 3823 2541 1381

Notes:

1. Fully owned subsidiaries of OCL India Limited, namely Konark Minerals Limited, Kashmissa Industries Limited,Orissa Iron and Steel Lid. and Hari Fertilizers Limited have been consolidated in these accounts except that in thecase of Hari Fertilizers Limited, it has since ceaed to be a subsidiary on 30.09.2005 and hence for the year ended31st March , 2006 its accounts are not included.

2. Other receipts for the year ended 31st March , 2006 includes Rs.270 lacs being Profit on sale of shares of HariFertilizers Limited.

3. There are no other adjustments resuting from audit qualifications, material amounts relating to adjustments forprevious year and changes in accounting policies.

OCL INDIA LIMITED

118

Part VI – B: Statement of Consolidated Statement of Assets and Liabilities(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

A. Fixed Assets i) Gross Block 62539 50953 44021 41147 34275 Less: Accumulated Depreciation 26668 23860 21960 20177 18809 Net Block 35871 27093 22061 20970 15466 Less: Revaluation Reserve 400 423 448 488 520 Net Block after adjustment for 35471 26670 21613 20482 14946

revaluation reserve ii) Capital work in progress 10667 9761 2971 814 1216 Total 46138 36431 24584 21296 16162B. Investments 11 11 11 11 136C. Current Assets, Loans & Advances Inventories 12025 10355 10256 7690 7638 Sundry Debtors 8918 8675 8079 7239 6638 Cash & Bank Balances 3500 1523 1427 1723 633 Other Current Assets 573 94 2 16 104 Loans & Advances 9220 6954 3455 2327 1707 Total 34236 27601 23219 18995 16720D. Liabilities & Provisions Secured Loans 33873 24657 12612 11919 7823 Unsecured Loans 7964 8998 7367 5013 4307 Current Liabilities 9431 7705 7964 5950 5784 Provisions 750 732 1119 432 104 Deferred Tax Balance 6238 4927 4186 3598 3241 Total 58256 47019 33248 26912 21259E. Net Worth (A+B+C-D) 22129 17024 14566 13390 11759 Net Worth Represented By F. Share Capital 764 594 594 712 712 Share application money - 80G. Reserves & Surplus Capital Reserve 60 55 55 55 55 Share Premium Account 2333 717 717 1657 1657 Revaluation Reserve 400 423 448 488 520 General Reserve 14012 11511 9010 8210 7510 Capital Redemption Reserve 125 125 125 6 6 Reserve for Bad & Doubtful Debts 187 222 243 209 108 Profit & Loss A/c 4151 3552 3823 2541 1381 Stock Reserve (3) (2) (1) Investment Allowance Reserve(Utilised) - 250 Debenture Redemption Reserve 500 250 Less: Revaluation Reserve 400 423 448 488 520 Reserves (Net of Revaluation Reserves) 21365 16430 13972 12678 10967 Total (F+G) 22129 17024 14566 13390 11759H. Miscellaneous Expenditure to the extent

not written off

I. Net Worth (F+G-H) 22129 17024 14566 13390 11759

119

Notes to Consolidated Accounts

1. Significant Accounting Policies and Notes to Consolidated Accounts

A) Principles of Consolidation

(i) The Consolidated Financial Statements have been prepared in accordance with the Accounting Standard21 (AS-21) - “Consolidated Financial Statements” and Accounting Standard 27 (AS-27) - “FinancialReporting of Interests in Joint Ventures”, issued by the Institute of Chartered Accountants of India.

(ii) The Consolidated Financial Statements relate to OCL India Limited (the Company) and its wholly ownedsubsidiary companies and interest in joint venture. The Subsidiary companies, all incorporated in India,considered in the Consolidated Financial Statements are:

� Konark Minerals Limited (KML)

� Kashmissa Industries Limited

� Hari Fertilizers Limited (Ceased to be a subsidiary w. e. f. 30.09.2005)

� OCL Iron & Steel Limited (OSL)

Interests (50%) in joint venture incorporated in Mauritius considered in Consolidated Financial Statements:OCL Global Limited (OGL)

(iii) The Consolidated Financial Statements have been prepared on the following basis:

� The Financial Statements of the Company and its subsidiary companies have been combined on aline-by-line basis by adding together the book values of like items of assets, liabilities, income andexpenses, after eliminating intra-group balances and intra-group transactions in accordance withAccounting Standard (AS-21) - “Consolidated Financial Statements” issued by the Institute of CharteredAccountants of India.

� The difference between the Cost of Investments in the subsidiaries, over the net assets at the time ofacquisition of shares in the subsidiaries is recognised in the Consolidated Financial Statements asGoodwill or Capital Reserve as the case may be.

� The difference between the proceeds from disposal of investments in a subsidiary company and thecarrying amount of its assets less liabilities as of the date of disposal is recognised in the ConsolidatedProfit and Loss Account as the profit or loss on disposal of investment in subsidiary.

� In case of foreign joint venture, all assets and liabilities are translated at exchange rate prevailing atthe end of the year and revenue items are consolidated at the average rate prevailing during the year.

� The Consolidated Financial Statements have been prepared using uniform accounting policies for liketransactions and other events in similar circumstances and are presented to the extent possible, in thesame manner as the Company’s separate Financial Statements.

· The Financial Statements of the subsidiary companies and joint venture company are drawn up toMarch 31, 2006.

OCL INDIA LIMITED

120

Other Significant Accounting Policies

1. There are set out in the notes to accounts under “Significant Accounting Policies” of the Financial Statement of theCompany, KML, Kabirdas Investments and OSL.

Particulars Cement Refractory Sponge Power Real Others Unallowable TotalIron Estate

Operations

Segment Revenue

External 38,348 20,990 10,000 - - 69,339

(3,01,12) (1,59,62) (93,78) (9,13) - (5,63,66)

Inter-Segment 114 135 - 249

(23) (1,66) - - - (1,89)

Segment Result

Profit (Loss) before 5,168 2,209 650 -62 -10,73 6,892

Tax and Interest (42,57) (12,60) (14,90) -(8,04) (12,48) (49,55)

Less: Interest (Net) 1,335 1,335

(12,96) (12,96)

Profit before Taxation 5,557

(36,59)

Provision for 478 478

Taxation-Current (3,06) (3,06)

� Fringe Benefit 60 60

(0) (0)

� Deferred 1310 1310

(7,41) (7,41)

� MAT credit available -67 -67

for set off - -

Provision of earlier - -years no longer required (2,00) (2,00)

Profit after Taxation 3785

(2819)

Other Information

Segment Assets 3,98,81 1,96,86 127,56 54,90 24,44 0 5,26 8,07,84

(3,73,94) (1,61,72) (53,02) (5,96) (43,54) (1,09) (3,17) (6,42,44)

Segment Liabilities 57,26 20,59 10,63 2,57 0 4,91,50 5,82,55

(51,90) (16,24) (4,87) (41) (34) (396,43) (4,70,19)

Capital expenditure 30,24 19,63 29,24 46,24 125,35including capital- (1,18,29) (9,60) (8,31) (5,90) (1,42,10)work-in-progress

Depreciation 18,59 4,75 4,43 27,77

(13,79) (4,45) (4,43) (22,67)

Non cash expensesother than depreciation

� Provision for leave - - - - - - - -encashment (7) (11) (0) (18)

121

2. Related Party Disclosures as per Accounting Standard (AS-18) issued by the Institute of Chartered Accountantsof India

a. Related parties and their relationship1. Key management personnel: Mr. M H Dalmia, Mr. R H Dalmia, Mr. M. L. Chand (Wholetime Director up to

29.02.2004), Mr. Y H Dalmia (Non Executive Director), and Mr. V P Sood (Wholetime director).

Relatives: Mr. Gaurav Dalmia, Mr. A.H. Dalmia, Mr. Y H Dalmia, Mrs. Abha Dalmia, Mrs. Padma Dalmia, Mrs.Sharmila Dalmia, Mrs. Mohini Sood, Mrs. Kanupriya Somany

2. Enterprises over which key management personnel are able to exercise significant influence: Hari MachinesLimited, Himalayan Natural Products Limited, National Synthetics Limited, Dalmia Agencies Private Limited,Vishakha Investment Limited, Dalmia Shiksha Pratisthan, Dalmia Bharat Seva Trust, Satya Miners andTransporters Limited, Dalmia Group Udyog Limited, Kabirdas Investments Limited, First Capital India Limited,Konark Investments Limited, Marathwada Refractories Limited, Debikay Systems Limited, Dapel InvestmentsPrivate Limited, Dalmia Institute of Scientific & Industrial Research, Dalton International Limited, MadhukarInvestments Limited, Swank Services Private Limited, Grandeur Travels & Tours (P) Limited, Parsvnath LandmarkDevelopers (P) Limited, Landmark Koyela Energy Resources (P) Limited, Colonisers (P) Limited, Ansal LAndmarkTownship (P) Limited, Jiva Design Private Limited, Europa Commercial & Trades Limited, Sunflower MercantilesLimited, Epic Mercantiles Limited, Eik Rivers Ceramics Limited, Lions Commercial Company Limited, ArtechInfosystems (P) Limited, Agrico Limited, Dalmia Cement (Bharat) Limited, Astir Properties Private Limited andShri Natraj Ceramic and Chemicals Limited

b. Transactions with above in ordinary course of business:

(Rs. in lacs)Particular FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

1. Transactions with parties referred in (1) above:a) Remuneration 2,12 2,21 4,15 2,16 1,65b) Purchase of fixed assets - - - 2 2c) Sale of Shares - - 23 - -d) Rent 20 - - - -e) Amount for service rendered and received 2 - - - -f) Security Deposit received and repaid 13 - 9 - -g) Amount receivable at the year end 6 1 - - -h) Amount payable at the year end - - 2,29 - -

2. Transactions with parties referred in (2) above:a) Amount for purchase and sale of goods 5,26 4,83 8,21 5,36 2,15

and fixed assetsb) Amount for service rendered and received 11,92 3,96 3,73 2,61 1,27c) Inter corporate deposit received and repaid 20,67 20,27 1,559 1,081 1,016d) Inter corporate deposit given and received 17,05 17,70 30 - -

backe) Interest expense 122 1,25 1,01 71 57f) Interest income 622 1,18 1 - -g) Advance given for developed plots of 983 24,03 6,03 - -

land - real estate operationsh) Purchase of shares - - 23 - -i) Contribution to a research institute and - 4 1,79 - -

donationsj) Amount of security deposit received / paid 13 - 83 - -k) Amount receivable at the year end 53,50 18,76 1,68 62 29l) Amount payable at the year end 9,24 77 29 28 7m) Guarantee given 21,00 21,00 - - -

OCL INDIA LIMITED

122

3. Earning per Equity Share (EPS) as per Accounting Standard 20

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Restated Profits after tax 37,85 26,19 22,65 18,32 3,90

Weighted average number ofEquity Shares of Rs. 2/- eachas on 31.03.2006

Basic 3,51,31,894 2,96,90,212 3,01,58,630 3,55,75,395 3,57,91,895

Diluted - 3,60,90,210 3,24,08,630 3,78,25,395 3,80,41,895

EPS (Rs.)

Basic 10.77 8.82 7.51 5.15 1.09

Diluted - 7.26 6.99 4.84 1.03

(The existing Equity Shares of Rs. 10 each were sub-divided into 5 Equity Shares of Rs. 2 each w.e.f. 09.08.2005.Consequently weighted average number of Equity Shares for earlier periods, have been adjusted for share split forcomputing EPS in accordance with Accounting Standard-20 issued by ICAI)

4. Other notes are as set out in the notes to the accounts of the Company, Konark Minerals Limited, KashmissaIndustries Limited and OCL Iron & Steel Limited

5. Previous year figures have been regrouped where necessary to correspond with current year figures.

6. Statement of Sundry Debtors as on March 31, 2006 (Considered good)

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Exceeding Six Months 941 890 819 978 1,050

Other Debts 7,977 7,785 7,260 6,261 5,588

Total 8,918 8,675 8,079 7,239 6,638

Note: No Promoter /Promoter Group/Directors are beneficieries of these outstanding balances.

7. Statement of Loans and Advances as on March 31, 2006

(Rs. in lacs)

Particulars Amount

Exceeding Six Months 6,325

Others 2,895

Total 9,219

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Part VI – C: Statement of Consolidated Cash Flow

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

A. Cash Flow from Operating Activities

Net profit before Taxes 5,566 3,666 3,506 2,412 673

(As per audited Statements of Accounts)

Adjustment for:

Depreciation 2,809 2,295 2,024 1,465 1,321

Stock Reserve (1) (1) (1) - -

Translation Reserve - - - - -

Deferred Revenue Expenditure - - 430 37 (467)

Preliminary expenses - - - - -

Other Expenses - - - - -

Interest (Net) 1,332 1,294 667 770 872

Investment Written Off - - - - -

Dividend on Investment (2) (1) (3) (1) (6)

Profit on sale of Investments (276) - - - -

Profit (Loss) on sale/write off of Fixed Assets 82 150 88 1

Operating profit before working capital changes 9428 7335 6773 4771 2394

Adjustments for Working Capital changes

Inventories (1,670) (99) (2,566) (52) (739)

Trade and other payables 1,570 (446) 1,640 102 847

Trade and other Receivables (1,100) (2,767) (1,904) (697) -

Cash generated from Operations 8,228 4,023 3,943 4,124 2,502

Tax Paid / Refund Received (Net) (615) (181) (483) 7 17

Net Cash from Operating Activities 7613 3842 3460 4131 2519

B. Cash Flow from Investing Activities

Purchase of Fixed Assets (12,610) (14,275) (5,543) (6,332) (1,841)

Sale/write off of Fixed Assets 95 51 138 6 59

Sale/Purchase of Investment (Net) 277 - - 125 (5)

Dividend on Investments 2 1 3 1 5

Increase in Loans Given (1,702) (1,235) 372 (721) 67

Net Cash generated / (-) used in (13938) (15458) (5030) (6921) (1715)Investing Activities

C. Cash Flow from Financing Activities

Arrear of Share Capital including Sharepremium received 1,786 - 8 - -

Share Application Money - - - (80) 80

Shares bought back - - (947) - (36)

Capital Investment Subsidy Received 5 - - - -

Increase in Capital Reserve - - - - -

OCL INDIA LIMITED

124

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Secured Loans 9,216 12,045 693 4,095 (709)

Unsecured Loans (1,034) 1,632 2,354 706 415

Dividend Paid (297) (594) (148) (71) -

Taxes on Dividend Paid (42) (78) (19) - -

Interest (Net) (1,332) (1,293) (667) (770) (872)

Net Cash from Financing Activities 8302 11712 1274 3880 (1122)

Net changes in Cash and Cash equivalents 1977 96 (296) 1090 (318)

Net Increase / (-) Decrease in Cash andCash equivalents

Balance at the end of the year/period 3500 1523 1427 1723 633

Balance at the beginning of the year/period 1523 1427 1723 633 951

1977 96 (296) 1090 (318)

125

Part VII: Statement of Dividend declared by the Company and its Subsidiaries

Holding Company: OCL India Limited

Year / Period Ended FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Number of Equity Shares 3,81,83,760 59,36,094 59,53,027 71,36,735 71,36,735

Rate of Dividend 50% 50% 100% 25% 10%

Amount of Dividend (Rs. in Lakhs) 381.84 297 594 148 72

Note: The Equity Share of Rs.10 each was sub divided into 5 Equity Shares of Rs. 2 each w.e.f. 09.08.2005

Subsidiaries

a. Konark Minerals Limited

Year Ended FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Number of Equity Shares 50,000 50,000 50,000 50,000 49,910

Rate of Dividend Nil Nil Nil Nil 50%

Amount of Dividend (Rs. in lakhs) Nil Nil Nil Nil 1.25

b. Kashmissa Industries Limited

Year Ended FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Number of Equity Shares 249,915 249,915 249,915 249,915 249,915

Rate of Dividend Nil Nil Nil Nil Nil

Amount of Dividend (Rs. in lakhs) Nil Nil Nil Nil Nil

c. Hari Fertilizers Limited (Ceased to be a subsidiary w.e.f. September 30, 2005)

Year Ended FY 2005 FY 2004 FY 2003 FY 2002

Number of Equity Shares 3,00,000 3,00,000 50,010 10

Rate of Dividend Nil Nil Nil Nil

Amount of Dividend (Rs. in lakhs) Nil Nil Nil Nil

d. Orissa Iron and Steel limited (Incorporated on 20.02.2006)

Year Ended FY 2006

Number of Equity Shares 5,00,000

Rate of Dividend Nil

Amount of Dividend (Rs. in lakhs) Nil

Annexure ‘A’: Key Accounting Ratios

For the Year ended FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Earnings Per Share (EPS) (Rs.) (Basic) 10.76 9.49 9.11 5.00 0.68

Cash Earnings Per Share (CEPS) (Rs.) 18.75 17.2 15.82 9.12 4.37

Net Asset Value Per Share (Rs.) 57.94 57.36 49.05 37.66 32.84

Return on Networth (%) 17.08% 16.55% 18.86% 13.27% 2.07%

OCL INDIA LIMITED

126

Definitions of Key Ratios

Earnings Per Share Profit After Tax/Weighted Number of Equity Shares

Cash Earnings Per Share (Profit After Tax + Depreciation)/Weighted Number of Equity Shares

Net Asset Value Per Share Networth at year end/ Number of Equity Shares

Return on Networth (%) Net Profit/ Net Worth

Note:

The Equity Share of Rs.10 each was sub-divided into 5 Equity Shares of Rs. 2 each w.e.f. August 9, 2005. Consequentlynumber of Equity Shares for earlier years have been adjusted for share split for computing EPS, CEPS and Net Assetsvalue per Equity Share.

Annexure ‘B’: Capitalisation Statement as at March 31, 2006

(Rs. in lacs)

Particulars Pre-Issue as on Post-IssueMarch 31, 2006

Loan FundsLong Term 24,186 24,186Short Term 17,651 17,651

Total Debt [A] 41,837 41,837Shareholders’ Funds Share Capital 764 890.95

Reserves and Surplus 21,760 29,269.47Total Equity [B] 22,524 30,160.42Long Term Debt/ Equity Ratio [A/B] 1.89 1.39

Annexure ‘C’: Deferred Tax Balance

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002Liabilities

Depreciation 6448.08 5254.15 4785.27 4215.96 3858.67Assets

Voluntary Retirement Expenses 59.45 179.5 364.11 383.4 241.01Expenses allowable in computing Taxable income on payment basis 43.94 44.9 146.58 172.44 39.68

Unabsorbed Depreciation - - - - 241.36Others 105.16 100.54 88.37 61.91 95.59

208.55 324.94 599.06 617.75 617.64

Net liability 6239.53 4929.21 4186.21 3598.21 3241.03

127

Annexure ‘E‘: Details of outstanding Unsecured Loans, considered good

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Fixed Deposits (in terms of the Scheme 993 1111 1139 1223 1274under theCompanies (Acceptance ofDeposit) Rules, 1975Short Term Loans from Bank 2502

Commercial Papers (Short Term Loans) 3800 3500 4000 1000Sales Tax Deferment Loan – Interest Free 1170 1885 2228 2790 3033Other/Miscellaneous (at short notice – 2001currently at about 8.25% p.a.)

Total 7964 8998 7367 5013 4307

Note: No Promoter /Promoter Group/Directors are beneficieries of unsecured loans.

Annexure ‘D’: Statement of Cash Flow(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

A. Cash Flow from Operating Activities Net profit before Taxes(As per audited 5557 3659 3499 2412 678Statements of Accounts)Adjustment for Depreciation 2808 2291 2024 1465 1321

Deferred Revenue Expenditure 430 36 (467)Interest (Net) 1334 1296 671 772 874Investment Written Off 0

Dividend on Investment (2) (1) (3) (2) (5)Profit on sale of Investments (273) Profit / Loss on sale/write off of Fixed Assets (Net) 0 82 150 88 (6)

Operating profit before working capital changes 9425 7326 6770 4772 2395

Adjustments for Working Capital changes Inventories (1670) (94) (2367) (52) (739)Trade and other payables 1574 (450) 1629 103 925Trade and other Receivables (1100) (2751) (2130) (697) (2)Cash generated from Operations 8229 4031 3903 4125 2579Tax Paid / Refund Received (Net) (610) (175) (481) 8 17

Net Cash from Operating Activities 7619 3856 3422 4133 2596

B. Cash Flow from Investing Activities Purchase of Fixed Assets (12610) (14275) (5507) (6332) (1841)Sale/write off of Fixed Assets 67 51 138 6 59Sale/Purchase of Investment (Net) 275 (25) 38 (5)Dividend on Investments 2 1 3 2 5Increase in Loans Given (1702) (1235) 372 (721) 67

Net Cash generated / (-) used in Investing (13968) (15458) (5019) (7008) (1715)Activities

OCL INDIA LIMITED

128

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

C. Cash Flow from Financing Activities

Arrears of Share Capital including Share 1786 0 8 0 0premium received

Shares bought back (947) (36)

Capital Investment Subsidy Received 5

Secured Loans 9216 12045 693 4095 (709)

Unsecured Loans (1034) 1632 2354 706 415

Dividend Paid (297) (594) (148) (71)

Taxes on Dividend Paid (42) (78) (19)

Interest (Net) (1335) (1296) (671) (772) (874)

Net Cash from Financing Activities 8299 11710 1270 3959 (1204)

Net changes in Cash and Cash equivalents 1950 109 (328) 1084 (322)

Net Increase / (-)Decrease in Cash andCash equivalents

Balance at the end of the year/period 3429 1479 1371 1698 614

Balance at the beginning of the year/period 1479 1371 1698 614 936

1950 109 (328) 1084 (322)

Annexure ‘F’: Statement of Secured Loans as on March 31, 2006

(Rs. in lacs)

S. No. Description of Loan Sanctioned Amount FY FY FY FY FY Assets Charged as SecurityAmount Outstnading 2007 2008 2009 2010 2011

(Repayment Schedule)

1 UTI Bank Limited 5,000 3438 1250 1250 938 0 0 Exclusive charge on movablefixed assets acquired out of loanand second charge on Land andbuilding of cement division andcharge on fixed assets of secondcement vertical roller mill.

2 UTI Bank Limited 600 187 150 37 0 0 0 Hypothecation of all immovableand movable assets of spongeiron division

3 UTI Bank Limited 400 200 133 67 0 0 0 Exclusive first charge equipmentsacquired out of the loan and firstpari-passu charge on land ofsponge iron division

4 UTI Bank Limited 540 450 180 180 90 0 0 Exclusive charge on the movablefixed assets of Sponge IronDivision (Kiln-4).

5 UTI Bank Limited 1600 1600 100 400 400 400 300 Exclusive first charge on fixedAssets of Steel/Sponge irondivision funded out of the loan

129

Annexure ‘F’: Statement of Secured Loans as on March 31, 2006

(Rs. in lacs)

S. No. Description of Loan Sanctioned Amount FY FY FY FY FY Assets Charged as SecurityAmount Outstnading 2007 2008 2009 2010 2011

(Repayment Schedule)

6 State Bank of India 3800 2850 760 760 760 570 0 Secured by Hypothecation ofsecond cement vertical roller milland first charge on the land onwhich said plant is situated andsecond charge on cementdivision of the company

7 State Bank of India 500 325 100 100 100 25 0 Hypothecation of plant andmachinery and other fixed assetsof Kiln-III of sponge iron divisionand pari-passu charge on theland on which the sponge ironplant is situated

8 State Bank of India 550 275 110 110 55 0 0 Hypothecation of plant andmachinery and other fixed assetsof Second sponge iron unit andfirst pari-passu charge on theland on which the sponge ironplant is situated

9 State Bank of India 7979 7631 1589 1589 1589 1394 1200 1st charge over the Plant andMachinery of CVRM-III plant ofthe Company and EM over thelanded properties over whichCVRM Plant is located on pari-passu basis with UTI BankLimited

10 State Bank of India 1200 700 225 300 300 300 75 Exclusive 1st charge on Plant andMachinery of the Concast Plantof Refractory Division andequitable mortgage over thelanded properties on which theplant is located

11 State Bank of India 3800 3800 713 950 950 950 237 Exclusive 1st charge on Plant andMachinery of the Captive PowerPlant and equitable mortgageover the landed properties overwhich Captive Power Plant islocated on pari-passu basis withUTI Bank Limited

12 UTI Bank Limited 3000 3000 0 0 1000 1000 1000 Secured by equitable mortgage(Debentures) of immovable properties of

Refractory Division of theCompany and hypothecation ofmovable assets of this divisionsave and except the prior chargein favour of banks overinventories and book debts tosecure working capital limits

OCL INDIA LIMITED

130

(Rs. in lacs)

S. No. Description of Loan Sanctioned Amount FY FY FY FY FY Assets Charged as SecurityAmount Outstnading 2007 2008 2009 2010 2011

(Repayment Schedule)

B. Working Capital Loans 11900 9687 — — — — — Secured by hypothecation of rawfrom Banks materials, finished and partly

finished goods, consumablestores and book debts of theCompany. These facilities arefurther secured by second chargeover the fixed assets of theCement Unit of the Company

Total 33,873

Annexure ‘G’: Contingent Liabilities

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Claims against companies not 1117 878 705 679 537acknowledged as debts

Others 18 16 14 42 35

Total 1135 894 719 721 572

Annexure ‘H’: Details of Other Income

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002 Remarks

Dividend Receipts 2 1 3 2 5 Recurring

Lease Rent from Railways on Wagons 84 89 89 87 86 Recurring

Excess Provision written back 91 74 55 57 72 Recurring

Profit on Sale of Investments 273 - - - - Non-recurring

Miscellaneous Income 643 422 375 267 267 Recurring

Total 1093 586 522 413 430

131

Annexure ‘I’: Statement of Tax Shelter

(Rs. in lacs)

Particulars FY 2006* FY 2005 FY 2004 FY 2003 FY 2002

Profit before tax 5557 3659 3499 2412 678

Tax Rates 33.66% 36.59% 35.88% 36.75% 35.70%

Tax at Notional Rates 1870 1339 1255 886 242

Adjustments

Difference between Tax and Book depreciation 3627 2261 1589 972 (7)

Reversal of deferred tax assets including 357 757 126 414 (155)

VRS Payment

Set Offs against brought forward:

- Unabsorbed Depreciation - - - 527 914

- Long Term Capital Loss 273 - - - (20)

Others 112 (103) (28) (105) (54)

Total Adjustments 4369 2914 1687 1808 678

Tax savings on above 1470 1066 605 664 242

Tax after adjustments 400 273 650 222 -

- MAT 475 287 268 190 60

Current Tax - higher of above two 475 287 650 222 60

* Return of Income Tax has not been filed. Tax liabilities for FY 2006 are estimates.

Annexure ‘J’: Market Value of Investments

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003 FY 2002

Quoted Investments 4 4 5 5 5

Unquoted Investments 59 61 60 36 73

Total 63 65 65 41 78

Market Value of Quoted Investments 138 80 67 39 41

OCL INDIA LIMITED

132

MANAGEMENT DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION ANDRESULTS OF THE OPERATIONS

You should read the following discussion and analysis of the Companies financial condition and results of operations together with theCompanies financial statements included in this report. You should also read the section titled “Risk Factors” beginning on page vi,which discusses a number of factors and contingencies that could impact the Companies financial condition and results of operations.The following discussion relates to the Company on a standalone basis and is based on our restated financial statements, which havebeen prepared in accordance with Indian GAAP and the RBI guidelines.

The Companies fiscal year ends on March 31 of each year so all references to a particular fiscal year are to the twelve months endedMarch 31 of that year.

Overview

Our Company is into the business of manufacture of cement, refractories and sponge iron. Our cement factory was startedwith an objective of setting up a superior grade cement manufacturing facility at Rajgangpur in Orissa at the request ofthe Government of Orissa for use in the construction of Hirakud Dam, now we are a company with annual turnoverexceeding Rs. 650 crores. We have experience of over five decades in the manufacture of cement and refractories.Sponge iron division of the Company is relatively new and we are into this segment of the business since 2002. We sellcement mainly in Eastern India under the brand ‘Konark’. Our Company is the largest manufacturer and seller of greycement in the State of Orissa and one of the most prominent players in the Eastern India. Over the period of time‘Konark’ has been able to establish itself as premium quality grey cement. Our cements are certified under ISO 9001(Version2000). Our refractories manufacturing capacity is approximately 80,000 metric tonnes per annum. In the year 1994, weobtained ISO 9001 certification for our entire range of refractories works, the first ever company to do so in India. Goingahead, besides continuously adding to the capacities of cement, refractories and sponge iron, we intend to venture intosteel manufacturing. We have already entered in to a memorandum of understanding with the Government of Orissa forsetting up a 0.25 MnTPA of steel plant and 14 MW capacity power plant.

Significant developments subsequent to the last financial year

In our opinion there are no significant developments that have taken place from the date of the last financial statementsdisclosed in the Letter of Offer that have an adverse material impact on our operation or financial conditions.

Sector Outlook - Cement

There was no major announcement for the cement sector in the Union Budget 2006-07. Thus, cement industry isexpected to continue to grow at 8% to 9% in the medium to long term. Government’s initiatives on the infrastructure andhousing sector fronts would continue to remain the key drivers. With no major capacity expansion in the pipeline in thecountry, the demand supply equation is expected to continue to remain favourable for cement manufacturers and this willhelp in the improvement of prices. Customs duty on cement reduced from 15% to 12.5% in line with the reduction inpeak customs duty.

Factors affecting operations

The factors that may affect our business operations are:

� Availability of raw materials and the Company’s ability to mine these raw materials;

� Access to cheap source of power;

� Ability of the Company to continue to maintain the plants;

� Ability of the Company to continue to retain skilled personnel;

� Ability of the Company to successfully implement the upcoming steel plant.

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Abridged Statement of Profit & Loss

(Rs. in lacs)

Particulars FY 2006 FY 2005 FY 2004 FY 2003

INCOME

Net Sales 59712 48601 38393 31246

Other Receipts 1093 586 522 413

Net Change in Inventory 479 -675 542 453

Total Income 61284 48512 39457 32112

EXPENDITURE

Raw Material Consumed 21871 18305 13994 10463

Purchases 694 1518 289 32

Salaries, Wages & Benefits to Employees 2456 2295 2636 2876

Power and Fuel 8695 7019 6385 5724

Other Expenses 17972 12206 10015 8422

EBDIT 9596 7169 6138 4595

Depreciation 2704 2214 1968 1411

EBIT 6892 4955 4170 3184

Net Interest 1335 1296 671 772

Total Expenditure 55727 44853 35958 29700

Net Profit/ (Loss) Before Tax 5557 3659 3499 2412

Less: Provision for Tax - Current 475 300 650 222

Less: Fringe Benefit Tax 60 0 0 0

Less: Provision for Tax - Deferred 1310 743 588 357

Provision for tax relating to earlier years /written back - 201 0 0

Net Profit/ Loss for the Year as per audited statement 3779 2817 2261 1833

of accounts

Adjustments & Appropriations 376 744 1574 724

Adjusted balance of Profit carried to Balance Sheet 4155 3561 3835 2557

Segment wise Revenue

(Rs. in lacs)

Particulars FY 2006 FY2005 FY2004 FY2003

Cement 38348 30112 26392 25086

Refractory 20990 15962 13234 10046

Sponge Iron 10001 9378 5302 1225

Mercandise Export - 914 - -

Other Reciept 1093 586 522 413

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Segment wise Revenue as a percentage of Total Sales

Particulars FY 2006 FY 2005 FY 2004 FY 2003

Cement 55% 53% 58% 68%

Refractory 30% 28% 29% 27%

Sponge Iron 14% 16% 12% 3%

Merchandise Export - 2% - -

Other Receipts 1% 1% 1% 1%

Profit Increase over the previous year

Particulars FY 2006 FY 2005 FY 2004 FY 2003

EBDITA 33.85% 16.80% 33.58% 63.46%

EBIT 39.09% 18.82% 30.97% 105.15%

PBT 51.87% 4.57% 45.07% 255.75%

PAT 34.15% 24.59% 23.35% 171.96%

REVIEW OF RESULTS OF OPERATIONS

Year ended March 31, 2006 compared with the year ended March 31, 2005

Revenue and Operating Margins

The net sales have increased by 23% from Rs. 48,601 lacs to Rs. 59,712 lacs. The revenue from cement increased by27% from Rs. 30,112 lacs to Rs. 38,348 lacs, refractory by 31% from Rs. 15,962 lacs to 20,990 lacs and Sponge Iron by7% from Rs. 9,378 lacs to 10,001 lacs. During the year the capacity of Cement Division has increased from 1.45 MT to1.8 MT per annum. The increased revenue and better profit margin were mainly due to incrase in demand for refractoryin the domestic and export market. The revenue for the year ended March 31, 2006 comprise of cement 55%, refractory30% and sponge iron 14% as compared to revenue in last year – cement 58%, refractory 29% and sponge iron 16%.

Raw Material Consumption and other Manufacturing Expenditure

Raw materials consumed (including purchases) increased by 14% mainly due to increase in purduction, increase in costof raw material and change of product mix. The increase in power and fuel is 24%, depreciation 22% and otherexpenses by 47%. The increase in other expenses is mainly due to replacement of non-recurring spares/stores in plantand machinery and relining of kilns in refractory division. The increase in interest paid is 51%. The interest income in thisyear is higher by 198% on account of interest on refund of Cess, income tax and on ICD given. As a percentage of totalexpenditure, raw material consumed has reduced from 41% to 40%, salary and wage to employees have reduced from5% to 4%. Power and fuel reduced from 16% to 15% and other expenses from 27% to 23%, depreciation remainedconstant at 5%.

Profit Margin

EBDIT has increased by 34%, EBIT has increased by 39%, PBT has increased by 52% and PAT has increased by 34%.The operating results show increased profit margins in all the segments of the business of the Company.

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Year ended March 31, 2005 compared with the year ended March 31, 2004

Revenue and Operating Margins

The net sales has increased by 27% from Rs. 38393 lacs to Rs. 48601 lacs.. The revenue from cement increased by 14%from Rs. 26392 lacs to Rs. 30112 lacs, refractory by 21% from Rs.13234 lacs to Rs.15962 lacs and Sponge Iron by 77%from Rs. 5302 lacs to Rs. 9378 lacs. During the year the capacity of Sponge Iron has increased from 0.90 lacs to 1.20lacs tonnes per annum. The increased revenue and better profit margin were mainly due to increase in demand forrefectories in domestic sales and export market. During this year, the Company incurred a loss of Rs.804 lacss onmerchandise exports. Thereafter, the Company has ceased to undertake this export activity. The revenue for the yearended 31st March 2005 comprises of Cement 53%, refractory 28%, Sponge Iron 16% as compared to revenue in lastyear – Cement 58%, refractory 29% and Sponge Iron 12%.

Raw Material Consumption and other Manufacturing Expenditure

Raw material consumed (including purchases) increased by 39% mainly due to increase in production, increase in costof raw material and change of product mix.. The increase in power and fuel is 10%, depreciation 12.50% and otherexpenses by 22%. The increase in other expenses is mainly due to substantial repair and maintenance in refractorydivision. The increase in interest paid is about 11%. The interest income in this year is lower, as in the last year intereston Income Tax refunds (amounting to Rs.578 lacss) was received. Consequently, the net interest paid appears higher by93% as compared to last year. As a percentage of total expenditure, raw material consumed has increased from 39% to41%, salary and wages to employees have reduced from 7% to 5% ( due to VRS in the last year). Power and fuelreduced from 18% to 16% and other expenses from 28% to 27%, depreciation remained constant at 5%.

Profit Margin

EBDIT has increased by 17%, EBIT has increased by 19%, PBT has increased by 5% and PAT has increased by 25%.This shows that while increase in EBIT and PBT is lower over the previous year, PAT margins have marginaly increased.

Year ended March 31, 2004 compared with the year ended March 31, 2003

Revenue from operations

The net sales has increased by 23% from Rs. 31246 lacs to Rs. 38393 lacs. The revenue from cement has increased by5% from Rs. 25086 lacs to Rs. 26392 lacs, refractory by 32% from Rs. 10046 lacs to Rs. 13234 lacs and Sponge Ironby 333% from Rs. 1225 lacs to Rs. 5302 lacs.. During this year the capacity of Sponge Iron unit was increased from Rs.0.60 lacs to 0.90 lacs tonne per annum, which accounts for the substantial increase in the revenue from sponge iron. Theincreased revenue and better profit margin were mainly due to substantial increase in revenue and margins in refractoryand sponge iron divisions. The revenue for the year ended 31st March 2004 comprises of cement 58%, refractory 29%,Sponge Iron 12% as compared to revenue in last year - Cement 68%, Refractory 27% and Sponge Iron 3%.

Raw Material Consumption and other Manufacturing Expenditure

Raw material consumed (including purchase) increased by 36% mainly due to increase in production, increase in cost ofraw material and change of product mix. The production of sponge iron has gone up from 21,519 tonnes to 68,832tonnes and turnover has increased by 333%, reflecting the increased operations of Sponge Iron. The increase in powerand fuel is 12% depreciation 40% and ‘other expenses’ by 19 %. Amount paid under voluntary retirement scheme (VRS)and treated as deferred revenue expenditure last year amounting to Rs. 424 lacs has been written off in this year andincluded under the head Salaries and Wages. The increase in other expenses is mainly due to repair and maintenanceof buildings, irrecoverable balances written off and contribution to research institutes etc. The increase in interest paid isabout 33% due to increased borrowings for capital expenditure/expansion of manufacturing units. In this year interestreceived includes interest on income tax refunds amounting to Rs. 578 lacss and consequently there is decrease in netinterest paid by 13%. As a percentage of total expenditure, raw material consumed has increased from 35% to 39%,salary and wages to employees has reduced from 10% to 7% (due to higher amount of VRS in the last year), Power andfuel reduced from 19% to 18%, ‘other expenses’ remained at 28%, depreciation at 5% and net interest revised from 3%to 2%.

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Profit

EBDIT has increased by 34%, EBIT has increased by 31%, PBT has increased by 45% & PAT has increased by 23%.The operating results show buoyancy and increased profit margins in all the segments of the business of the Company.

Other Disclosures

Unusual or Infrequent Events or Transactions

There are no unusual or infrequent events or transactions, which has had significant impact on the operations ofthe Company.

Future changes in relationship between costs and revenues, in case of events such as future increase in labour ormaterial costs or prices that will cause a material change are known

Nil

The extent to which material increases in net sales or revenue is due to increased sales volume, introduction ofnew products or services or increased sales prices

The growth in revenues is in line with the normal growth in the industry.

Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue,or income from continuing operations

No known trends and uncertainties are envisaged from continuing operations.

Significant economic changes that materially affected or are likely to affect income from continuing operations

Inability on our part to pass on any increase in VAT, sales tax and customs duty to end users on account of competitivepressures may have adverse impact on our business.

Status of any publicly announced new products or business segment

Our Company has not publicly announced any new products or segments.

The extent to which the business is seasonal

Our Company’s business is not seasonal.

Any significant dependence on a single or few suppliers or customers

We are not significantly dependent on any single or few suppliers or customers.

Competitive conditions

Cement accounts for over 50% of our revenues. We sell cement that we manufacture mainly in the Eastern India underthe brand name ‘Konark’. Over the period of time ‘Konark’ cement has been able to establish itself as premium qualitygrey cement. ‘Konark’ is a strong brand name for superior grade grey cement in the Eastern India, more particularly inthe state of Orissa. The other promonent manufacturers of cement in the Eastern India are Ultratech Cement and BargarhCement. Chattisgarh is also a cluster of cement manufacturers and grinding units. We face competiton from other cementmanufacturers and grinding units based in these areas.

Refractories accounts for around 30% of our revenues. We sell our products of refractories both in the domestic andinternational market. We face competiton both from the local manufacturers of refrcatories as well as manufacturersbased in China.

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STATUTORY AND OTHER INFORMATION

Authority for the Issue

The Rights Issue has been authorized by the Board of Directors at its meeting held on October 29, 2005. The Committeeof Directors authorized by the Board of Directors of the Company to decide on various matters related to the Rights Issuehas in its meting held on August 19, 2006 determined the Rights Issue price at Rs. 120 per Equity Share.

Prohibition by SEBI

Our Company, our Directors, our Promoters, other companies/entities promoted by our Promoters and companies/entitieswith which our Directors are associated as directors, have not been prohibited from accessing or operating in the capitalmarkets or restrained from buying, selling or dealing in securities under any order or direction passed by SEBI. OurCompany, our Directors, our Promoters, other companies/entities promoted by our Promoters have not been detained aswilful defaulters by RBI or Government authorities and there are no violation of securities laws committed by them in thepast or pending against them.

Eligibility for the Issue

OCL India Limited is an existing listed company. This being a Rights Issue, we are exempt from the eligibility normsunder clause 2.4.1 (iv) of SEBI (DIP) Guidelines.

Disclaimer Clause

AS REQUIRED, A COPY OF THE LETTER OF OFFER HAS BEEN SUBMITTED TO THE SECURITIES AND EXCHANGEBOARD OF INDIA (SEBI). IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF LETTER OF OFFER TOSEBI SHOULD NOT, IN ANY WAY BE DEEMED/ CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVEDBY SEBI. SEBI DOES NOT TAKE ANY RESPOSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEMEOR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THESTATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. THE LEAD MANAGER, UTI BANKLIMITED HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE GENERALLY ADEQUATEAND ARE IN CONFORMITY WITH SEBI GUIDELINES FOR DISCLOSURE AND INVESTOR PROTECTION IN FORCEFOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FORMAKING INVESTMENT IN THE ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUERCOMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALLRELEVANT INFORMATION IN THE OFFER DOCUMENT, THE LEAD MANAGER ARE EXPECTED TO EXERCISE DUEDILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALFAND TOWARDS THIS PURPOSE, THE LEAD MANAGER, UTI BANK LIMITED, HAVE FURNISHED TO SEBI A DUEDILIGENCE CERTIFICATE DATED MARCH 20, 2006 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS)REGULATIONS, 1992, WHICH READS AS FOLLOWS:

“1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIALDISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC. AND OTHER MATERIALS IN CONNECTIONWITH THE FINALISATION OF THE LETTER OF OFFER PERTAINING TO THE ISSUE.

2. ON THE BASIS OF SUCH EXAMINATION AND DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHEROFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTSOF THE ISSUE, PRICE JUSTIFICATION AND OTHER PAPERS FURNISHED BY THE COMPANY.

WE CONFIRM THAT:

(A) THE LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS ANDPAPERS RELEVANT TO THE ISSUE;

(B) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE ISSUE AS ALSO THE GUIDELINES, INSTRUCTIONS,ETC. ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALFHAVE BEEN DULY COMPLIED WITH; AND

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(C) THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THEINVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE ISSUE.

WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE LETTER OF OFFERARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATIONS ARE VALID.

WHEN UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE NET WORTH OF THE UNDERWRITERSTO FULFIL THEIR UNDERWRITING COMMITMENTS.

THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIESUNDER SECTION 63 AND SECTION 68 OF THE ACT OR FROM THE REQUIREMENT OF OBTAINING SUCHSTATUTORY AND OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE ISSUE. SEBI FURTHERRESERVES THE RIGHT TO TAKE UP AT ANY POINT OF TIME, WITH THE LEAD MANAGER, ANY IRREGULARITIESOR LAPSES IN THE LETTER OF OFFER.

General Disclaimer

The Company and the Lead Manager accepts no responsibility for statements made otherwise than in the Letter of Offeror in any advertisement or other material issued by the Company or by any other persons at the instance of theCompany and anyone placing reliance on any other source of information would be doing so at his own risk.

The Lead Manager and the Company shall make all information available to the Equity Shareholders and no selective oradditional information would be available for a section of the Equity Shareholders in any manner whatsoever including atpresentations, in research or sales reports, etc. after filing of the Letter of Offer with SEBI. The Lead Manager and theCompany shall update the Letter of Offer and keep the public informed of any material changes till the listing and tradingcommences.

Disclaimer in respect of Jurisdiction

The Letter of Offer has been prepared under the provisions of Indian Laws and the applicable rules and regulationshereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in New Delhionly.

The Draft Letter of Offer has been filed with SEBI, Mittal Court, ‘A’ Wing, Nariman Point, Mumbai 400 021 for itsobservations. The Letter of Offer shall be filed with the Designated Stock Exchange as per the provisions of the Act.

Designated Stock Exchange

The Designated Stock Exchange for the purpose of the Issue will be Bombay Stock Exchange Limited.

Disclaimer Clause of the National Stock Exchange of India Limited

As required, a copy of the Letter of Offer has been submitted to National Stock Exchange of India Limited (hereinafterreferred to as NSE Limited). NSE Limited has given vide its letter dated May 12, 2006 permission to the Issuer to use theExchange’s name in the Letter of Offer as one of the stock exchanges on which the Company’s securities are proposedto be listed. The Exchange has scrutinized the Letter of Offer for its limited internal purpose of deciding on the matter ofgranting the aforesaid permission to the Issuer. It is to be distinctly understood that the aforesaid permission given byNSE Limited does not warrant that the Letter of Offer has been cleared or approved by NSE Limited; nor does it in anymanner warrant, certify or endorse the correctness or completeness of any of the contents of the Letter of Offer nor doesit warrant that the Issuer’s securities will be listed or will continue to be listed on NSE Limited nor does it take anyresponsibility for the financial or other soundness of the Company, its promoters, its management or any scheme orproject of the Issuer.

Disclaimer Clause of Bombay Stock Exchange Limited

Bombay Stock Exchange Limited (hereinafter referred to as BSE Limited) has vide its letter dated May 4, 2006 givenpermission to the Company to use the BSE’s name in the Letter of Offer as one of the stock exchanges on which thisCompany’s securities are proposed to be listed. The BSE Limited has scrutinized the Letter of Offer for its limited internal

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purpose of deciding on the matter of granting the aforesaid permission to this Company. BSE Limited does not in anymanner:

a) warrant, certify or endorse the correctness or completeness of any of the contents of the Letter of Offer; or

b) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or

c) take any responsibility for the financial or other soundness of this Company, its promoters, its management or anyscheme or project of the Company;

and it should not for any reason be deemed or construed that the Letter of Offer has been cleared or approved by theBSE Limited. Every person who desires to apply for or otherwise acquires any securities of the Company may do sopursuant to independent inquiry, investigation and analysis and shall not have any claim against BSE Limited whatsoeverby reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

Undertaking from the Promoters and Directors

The Company accepts full responsibility for the accuracy of the information given in the Letter of Offer and confirms thatto the best of their knowledge and belief, there are no other facts, their omission of which make any statement in theLetter of Offer misleading and they further confirm that they have made all reasonable inquiries to ascertain such facts.The Company further declares that the Stock Exchanges to which an application for official quotation is proposed to bemade do not take any responsibility for the financial soundness of the Issue or for the price at which the Equity Sharesare offered or for the correctness of the statement made or opinions expressed in the Letter of Offer. The Promoters/Directors declare and confirm that no information/material likely to have a bearing on the decision of investors in respectof the Equity Shares offered in terms of the Letter of Offer has been suppressed, withheld and/or incorporated in themanner that would amount to misstatement, misrepresentation and in the event of its transpiring at any point of time tillallotment/refund, as the case may be, that any information/material has been suppressed /withheld and/or amounts to amisstatement/ misrepresentation, the Promoters/Directors undertake to refund the entire application monies to all thesubscribers within 7 days thereafter without prejudice to the provisions of Section 63 of the Companies Act.

Filing

The Letter of Offer was filed with SEBI, Mittal Court, Nariman Point, Mumbai 400 021. The Letter of Offer has been filedwith the Stock Exchanges. All the legal requirements applicable till the date of filing the Letter of Offer with the StockExchanges has been complied with.

Dematerialised Dealing

The Company has agreements with National Securities Depository Limited (NSDL) and Central Depository Services(India) Limited (CDSL) and its Equity Shares bear the ISIN No. INE290B01025.

Listing

The existing Equity Shares of the Company are listed on the NSE Limited, BSE Limited and Bhubaneswar StockExchange. The Equity Shares of the Company were also listed on Delhi Stock Exchange and Kolkata Stock Exchange.As the Equity Shares of our Company were mainly traded on NSE Limited and BSE Limited and virtually negligibletrading was taking place at Kolkata Stock Exchnage, Bhuabeswar Stock Exchange and Delhi Stock Exchange, we hadapplied to these three stock exchanges for getting our Equity Shares voluntarily delisted. Pursuant to our application, wehave been delisted from Delhi Stock Exchange and Kolkata Stock Exchange w.e.f. July 12, 2004 and April 25, 2005respectively. However, our application for delisting from Bhubaneswar Stock Exchange is pending.

The Company has made applications to BSE Limited and NSE Limited for permission to deal in and for an officialquotation in respect of the Equity Shares being offered in terms of the Letter of Offer. The Company has received inprinciple approval from BSE Limited and NSE Limited vide letters dated May 4, 2006 and May 12, 2006 respectively.

If the permission to deal in and for an official quotation of the securities is not granted by NSE Limited or BSE Limitedwithin six weeks from the Issue Closing Date, the Company shall forthwith repay, without interest, all monies received

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from applicants in pursuance of the Letter of Offer. If such money is not paid within eight days after the Companybecomes liable to repay it, then the Company and every Director of the Company who is an officer in default shall, onand from expiry of eight days, be jointly and severally liable to repay the money with interest at the rate of 15% perannum as prescribed under the Section 73 of the Act.

Consents

The written consents of Promoters, Directors, Complaince Officer, Company Secretary, Auditors, Legal Advisors, LeadManager, Registrar to the Issue, Bankers to the Company and Banker to the Issue to act in their respective capacities,have been obtained and such consents have not been withdrawn up to the time of delivery of the Letter of Offer forregistration.

The Auditors of the Company have given their written consent for the inclusion of their Report in the form and content asappearing in the Letter of Offer and such consents and reports have not been withdrawn up to the time of filing of theLetter of Offer with the Stock Exchanges.

To the best of our knowledge there are no other consents required for making the Issue. However, should the need arise,necessary consents shall be obtained by us.

Fees Payable to the Lead Manager to the Issue

The fees payable to the Lead Manager to the Issue are set out in the Memorandum of Understanding entered into by theCompany with UTI Bank Limited, copy of which is available for inspection at the Registered Office of the Company.

Fees Payable to the Registrars to the Issue

The fee payable to the Registrars to the Issue is as set out in the relevant documents, copies of which are kept open forinspection at the Registered Office of the Company.

Impersonation

As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of subsection (1) ofSection 68A of the Companies Act, 1956 which is reproduced below:

“Any person who makes in a fictitious name an application to a Company for acquiring, or subscribing for, any EquityShares therein, or otherwise induces a Company to allot, or register any transfer of Equity Shares therein to him, or anyother person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years”

Expert Opinion

Save and except the ‘Statement of Tax Benefits’ and ‘Report of the Auditor’ disclosed on page 23 and 93 respectively ofthe Letter of Offer, the Company has not obtained any expert opinions.

Underwriting

The Issue is not underwritten. If the Company does not receive the minimum subscription of 90% of the Issue, the entiresubscription shall be refunded to the applicants within forty-two days from the date of closure of the Issue. If there is adelay in the refund of subscription by more than 8 days after the Company becomes liable to repay the subscriptionamount, (i.e. forty two days after closure of the Issue), the Company will pay interest for the delayed period, at prescribedrates in sub-section (2) and (2 A) of Section 73 of the Act. The Rights Issue will become undersubscribed after consideringthe number of Equity Shares applied as per entitlement plus additional Equity Shares.

Expenses of the Issue

The expenses for the Rights Issue are estimated to be around Rs. 42.50 lacs, i.e., at approximately 0.55 % of the IssueSize. The expenses for the Issue will include issue management and marketing fees payable to the Lead Manager Rs.20 lacs, Registrar’s fees of Rs. 0.50 lacs, Legal Advisor’s fees of Rs. 3 lacs, Auditor’s fees of Rs. 1 lac, printing anddistribution costs estimated at Rs. 8 lacs, advertisement cost estimated at Rs. 5 lacs, other expenses and contingenciesestimated at Rs. 5 lacs. The expenses for the Issue will be borne out of the proceeds of the Issue.

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Previous Public or Rights Issues

We have not made any public or rights Issues during last five years. The following is the details of other Issues made bythe Company:

Previous Issue of Shares Otherwise than for Cash

We have made following allotments of Equity Shares for consideration other than cash:

Date of Allotment Number of Equity Shares Face Value Nature of Allotment

January 28, 1967 4,50,000 10 Bonus in the ratio of 1:5

September 23, 1987 27,00,000 10 Bonus in the ratio of 1:1

Particulars in Regard to the Company and Other Listed Companies under the Same Management within the meaning ofSection 370(1)(B) of the Companies Act, 1956, which made any Capital Issue during last three years

There are no listed companies under the same management within the meaning of section 370 (1)(B) of the CompaniesAct that made any capital issue during the last three years.

Outstanding Bonds/ Debentures

In January 2005 our Company had issued 30 (thirty) 7.75% Secured Redeemable Non Convertible Debentures (NCDs)of face value of Rs. 1 crore each totaling to Rs. 30 crores. These NCDs have tenure of 5 years and are to be redeemedat par in three equal installments at the end of 3rd, 4th and 5th year. The NCDs are listed at the whole debtmarket segmentof BSE Limited.

Except as above there are no outstanding debentures or bonds or redeemable preference shares or any other instrumentsissued by the issuer company outstanding as on the date of the Letter of Offer. Further, our Board in it’s meeting held onJuly 17, 2006 has approved the issue of secured redeemable non-convertible debentures aggregating to Rs. 50 croreson a private placement basis.

Stock Market Data for our Equity Shares

For stock market data of our Company refer to the section titled ‘Stock Market Data’ on page 144 of the Letter of Offer.

Mechanism evolved for Redressal of Investor Grievances

Investor’s grievances will be settled expeditiously and satisfactorily by our Company. The agreement between the Companyand the Registrar to the Issue will provide for retention of records with the Registrar to the Issue for a period of at leastone year from the last date of dispatch of letters of allotment, refund orders, demat credit, to enable the investors toapproach the Registrar to the Issue for redressal of their grievances.

All grievances relating to the Issue may be addressed to the Registrar to the Issue giving full details including name,address of the applicant, number of Equity Shares applied for, amount paid on application and the bank branch orcollection center where the application was submitted.

Investors may contact the Compliance Officer in case of any Pre-Issue or Post-Issue related complaints such as non-receipt of allotment advice, refund orders, demat credit, etc.

Shareholders/Investor Grievance Committee

The Shareholders/Investor Grievance Committee consists of four Directors with Mr. D N Davar as its Chairman and Mr. VD Jhunjhunwala, Mr. V.P.Sood and Dr. S R Jain as its members.

Disposal of Investor Grievances

We estimate that the average time required by us or the Registrar to the Issue for the redressal of routine investorgrievances shall be seven working days from the date of receipt of the complaint. In case of non-routine complaints and

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where external agencies are involved, we or the Registrar to the Issue will strive to redress these complaints as expeditiouslyas possible.

Confirmations of Stock Exchanges

The Company has been issued a letter dated April 20, 2005 from the Investor Grievance Cell of NSE Limited that as ondate of issue of the said letter, there were no investor complaints pending redressal from the Company.

Status of Investor Grievances

Particulars FY 2006 FY 2005 FY 2004

Investor grievances outstanding at beginning of the year Nil Nil Nil

Received during the year 5 3 12

Resolved during the year 4 3 12

Investor grievances outstanding at end of the year 1 Nil Nil

Mechanism evolved for Redressal of Investor Grievances at Dalmia Cements, our listed Group Company

To redress the drievances of shareholders of the Company, the BOD has constituted a Shareholders Committee, whichlooks into the grievances of shareholders in consultation the Regiatrar and Share Transfer Agent of the Company.Further the power of transfer of shares/debentures has been delegated to the Senior officials of the company for speedydisposal of the transfer work.

Changes in the Auditors during the last Three Years and Reasons thereof

There have been no changes in the auditors of the Company during past three years.

Capitalization of Reserves or Profits

We have not capitalized our reserves or profits during the last five years. However, we have twice capitalized ourreserves, details of which are given as under:

Date of Allotment Number of Equity Shares Face Value Nature of Allotment

January 28, 1967 4,50,000 10 Bonus in the ratio of 1:5

September 23, 1987 27,00,000 10 Bonus in the ratio of 1:1

Revaluation of Assets during the last Five Years

We have not revalued the assets during the last five years. However, assets of the Company were revalued in the pastand there was a credit balance of Rs. 400.32 lacs in the Revaluation Account as on March 31, 2006. The following tablesets forth details of the assets revalued in past:

(Rs. in lacs)

S. No. Financial Year/Date Details of Amount Amount StandingFixed Assets Added on as onRevalued Revaluation March 31, 2006

1 1985 (Assets acquired up to 31.12.1981) Land 134 131.65

2 1985 (Assets acquired up to 31.12.1981) Building 1329 243.60

3 1985 (Assets acquired up to 31.12.1981) Plant & Machinery 2487 25.07

TOTAL 3950 400.32

143

IMPORTANT

� The Issue is pursuant to the resolution passed by the Board of Directors at its meeting held on October 29, 2005authorizing the Issue.

� The Issue is applicable to Eligible Equity Shareholders of our Company, whose name stands registered on ourCompany’s register of members:

1. As beneficial owners as at the end of business hours on September 4, 2006 as per the list to be furnished byNSDL and CDSL in respect of Equity Shares held in electronic form; and

2. As members in the register of members of our Company after giving effect to valid share transfers in physicalform lodged with our Company on or before September 4, 2006

� Your attention is drawn to the section on “Risk Factors” appearing on Page vi of the Letter of Offer.

� Please ensure that you have received the CAF along with the Letter of Offer.

� Please read the Letter of Offer and the instructions contained herein and in the CAF carefully before filling in theCAFs. The instructions contained in the CAF are an integral part of the Letter of Offer and must be carefullyfollowed. An application is liable to be rejected for any non-compliance of the Letter of Offer or the CAF.

� All enquiries in connection with the Letter of Offer or CAFs should be addressed to the Registrar to the Issue,quoting the Registered Folio number/ DP and Client ID number and the CAF numbers as mentioned in the CAFs.

� The Lead Manager and the Company will make all information available to the Equity Shareholders and noselective or additional information would be available for a section of the Equity Shareholders in any mannerwhatsoever including at presentations, in research or sales reports etc. after filing of the Letter of Offer with SEBI.

� The Lead Manager and the Company shall update the Letter of Offer and keep the public informed of any materialchanges till the listing and trading commences.

� All the legal requirements as applicable till the filing of the Letter of Offer with the Stock Exchanges have beencomplied with.

All the Eligible Equity Shareholders have been sent the Abridged Letter of Offer. However, the Letter of Offer shallbe made available on receipt of specific request from any Eligible Equity Shareholder. Such request for the Letterof Offer must be sent to the compliance officer or the Registrar to the Issue before closure of the Issue.

OCL INDIA LIMITED

144

STOCK MARKET DATA

The existing Equity Shares of the Company are listed on the NSE Limited, BSE Limited and Bhubaneswar StockExchange. The Equity Shares of the Company were also listed on Delhi Stock Exchange and Kolkata Stock Exchange.As the Equity Shares of our Company were mainly traded on NSE Limited and BSE Limited and virtually negligibletrading was taking place at Kolkata Stock Exchnage, Bhuabeswar Stock Exchange and Delhi Stock Exchange, we hadapplied to these three stock exchanges for getting our Equity Shares voluntarily delisted. Pursuant to our application, wehave been delisted from Delhi Stock Exchange and Kolkata Stock Exchange w.e.f. July 12, 2004 and April 25, 2005respectively. However, our application for delisting from Bhubaneswar Stock Exchange is pending.

The following is the movement in the share price of Equity Shares of the Company at the NSE Limited:

FY High Low Average

Date Trading Price Volume Date Trading Price Volume Price

2004 Dec 23rd 472.05 2225 Nov 2nd 332 2328 277.25

2005 Apr 25th 730 606068 Nov 2nd 121.2 20674 425.6

2006 May 2nd 214 77480 June 9th 115 22694 164.5

(Source: NSE Website)

W.e.f. June 25, 2005 Equity Share of Rs.10/- each were subdivided into 5 Equity Shares of Rs. 2/- each

The following is the movement in the share price of Equity Shares of the Company at BSE Limited:

FY High Low Average

Date Trading Price Volume Date Trading Price Volume Price(Rs.)

2004 Oct 11th 464.95 2881 Jan 23rd 192.95 2406 328.95

2005 Apr 25th 700 3088 Nov 1st 120 4080 410

2006 May 2nd 220 61957 June 9th 110.05 11889 165.03

(Source: BSE Website)

W.e.f. June 25, 2005 Equity Share of Rs.10/- each were subdivided into 5 Equity Shares of Rs. 2/- each

The closing market price of the Equity Shares of the Company on BSE Limited on the day immediately preceding the dayon which the Board approved the Issue (i.e. October 28, 2005) was Rs. 127 per Equity Share. (Source: BSE Website)

Monthly high and low prices of Equity Shares of our Company for the preceding six months and volume of transactionson the respective dates of high and low on the NSE Limited is as follows:

Period High Low

Trading Price Date Volume Trading Price Date Volume

February 2006 151 1st 12625 135.10 28th 13024

March 2006 162 2nd 47617 140 27th 100596

April 2006 207 10th 253263 149 3rd 81258

May 2006 214 2nd 77480 130 22nd 14409

June 2006 170 1st 10807 115 9th 22694

July 2006 162.7 27th 9662 134 24th 9936

(Source: NSE Website)

145

Monthly high and low prices of Equity Shares of our Company for the preceding six months and volume of transactionson the respective dates of high and low on BSE Limited is as follows:

Period High Low

Trading Price Date Volume Trading Price Date Volume

February 2006 151 1st 5584 136.25 28th 10487

March 2006 161.80 2nd 33671 140.90 27th 48633

April 2006 208.35 10th 189878 148.95 3rd 74038

May 2006 220 2nd 61957 135 22nd 11460

June 2006 159.95 1st 5369 110.05 9th 11889

July 2006 165 27th 15933 133.3 24th 4514

(Source: BSE Website)

OCL INDIA LIMITED

146

GOVERNMENT APPROVALS AND LICENCING ARRANGEMENTS

In view of the approvals listed below, we can undertake the Issue and our current business activities and no furthermaterial approvals are required from any Government authority or the RBI to continue such activities. We have receivedthe following Government approvals that are material to our business:

General Compliances

S. No. Issuing Authority Registration No./ Nature of Issued on / Validity RemarksLicence No. Registration w. e.f. Period

1 RoC Cuttack 15-00185 Certificate of 11.10.1949 - Fresh certificate ofIncorporation incorporation consequentOriginal registration upon name change fromnumber given to Company Orissa cement Limited towas 10 - 1949-50 which OCL India Limited waswas changed on new issued to Company onnumber pattern followed 15.01.1996by the Department ofCompany Affairs

2 RoC Cuttack - Certificate of commence- 10.02.1950 - -ment of business

3 Income Tax Department AAACO1354J PAN 22.02.1999 - -

4 Income Tax Department BBNO00013G TAN 19.06.2002 - -

5 Commercial Tax Officer 21122000024 TIN 01.04.2005 - -

6 Central Sales Tax RL-II-C-I/ R.L.C.2 Registration under 01.07.1957 - -Department (CENTRAL) section 7(1) /7(2) of

Central Sales Tax Act

7 Orissa Sales Tax R L 297 Registration under Orissa 20.05.1952 2005-06 -Department Sales Tax Act

8 Orissa Entry Tax RL-II-14 ET Registration under Orissa 07.12.1999 2005-06 As per provision underDepartment Entry Tax Act OET Act, in the RC under

OST, Sales tax Officer hasendorsed as “RL-II-14 ET”on 7/12/1999 for OrissaEntry Tax Act, 1999 (OETAct, 1999). No separateRC has been issued underOET Act

9 Jt. Director General of 2388000050 Certificate of Importer- 29.03.1988 - -Foreign Trade Office Exporter Code (original) fresh

certificate issuedon 30.10.2000

10 Chemicals and Allied CAPEXIL:ER:REG: Registration under Export 19.04.2006 31.03.2007 -Products Export CERAMICS:LM-113 promotion councilPromotion Council(CAPEXIL)

11 Federation of Indian FIEO: 65/2004-05 Registration under Export 05.05.2005 31.03.07 -Export Organisation promotion council.(FIEO)

147

S. No. Issuing Authority Registration No./ Nature of Issued on / Validity RemarksLicence No. Registration w. e.f. Period

12 State Electricity Board - Agreement with Western 01.04.2005 31.03.10 This agreement is for thefor the use of electricity Electricity Supply Company period of 5 yearsBoard (WESCO) of Orissa Limited for supply

of electricity energy to thepremises of Company atRajgangpur.

13 Orissa State Pollution 590 Registration under 13.01.2006 12.01.2008 -Control Board Hazardous Waste

(Management and Handling)Rules, 1989

14 Orissa State Pollution 4274 Registration under Air 03.03.2006 31.03.2006 Renewal application madeControl Board (Prevention & Control of on 14.03.2006

Pollution) Act, 1974 u/s 21to operate an industrialplant to discharge theemissions arising out of thepremises

15 Orissa State Pollution 4276 Registration under Water 03.03.2006 31.03.2006 Renewal application madeControl Board (Prevention & Control of on 14.03.2006

Pollution) Act, 1974 u/s25 & 26 of the Act fordischarge of effluentsarising out of the premises

Cement Manufacturing Division

S. No. Issuing Authority Registration No./ Nature of Registration ssued on / Validity RemarksLicence No. Iw.e.f period

1 Bureau of Indian IS/ISO 9001:2000– Licence for the quality 15.04.2004 14.04.2007 -Standard QSC/L 003662.2 management systems

certification

2 Bureau of Indian ISS NO 8229-1986 Quality Control Licences 16.04.2006 30.09.2007 -Standard For Oil Well Cement

3 Bureau of Indian ISS NO 8112-1989 Quality Control Licences 1.10.2005 30.09.2006 -Standard For ordinary port land

Cement

4 Bureau of Indian ISS NO 12330- Quality Control Licences 1.10.2005 30.09.2006 -Standard 1988 For Sulphate resisting

Portland Cement

5 Bureau of Indian ISS NO 1489 Quality Control Licences 1.10.2005 30.09.2006 -Standard (Pt-1) -1991 For Portland Pozzolana

Cement fly ash based

6 Bureau of Indian ISS NO 455 -1989 Quality Control Licences 1.10.2005 30.09.2006 -Standard For Portland slag cement

7 Bureau of Indian ISS NO 12269 - Quality Control Licences 16.10.2005 15.10.2006 -Standard 1987 For Portland slag cement

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148

S. No. Issuing Authority Registration No./ Nature of Registration ssued on / Validity RemarksLicence No. Iw.e.f period

8 Secretariat of Industrial 714/SIA/IMO/2004 Industrial Entrepreneur 01.03.2004 - -Assistance, Ministry of Memorandum forCommerce & Industry manufacture of Portland

cement, aluminous cement,slag cement and similarhydraulic cements

9 Secretariat of Industrial 819/SIA/IMO/2003 Industrial Entrepreneur 27.03.2003 - -Assistance, Ministry of Memorandum forCommerce & Industry manufacture of Portland

cement, aluminous cement,slag cement and similarhydraulic cements

10 Secretariat of Industrial 133/SIA/IMO/2004 Industrial Entrepreneur 13.01.2004 - -Assistance, Ministry of Memorandum forCommerce & Industry manufacture of clinkers

11 Director of Factories & SG:19 Licence to work a factory 03.03.2004 31.12.2005 Issue of renewal certificateBoilers Orissa for employing not more is under process

than 2000 persons on anyone day during the year andusing motive power notexceeding 67903.88 KWsubject to the provisionsof the Factories Act 1948and rules made thereunder

12 The Directorate of OR-475 The certificate for 06.06.2005 05.06.2006 Issue of renewal certificateFactories & Boilers, registration of Waste Heat is under processBhubaneshwar, Orissa. Boiler

13 Regional Provident OR/8 Registration under 29.11.1954 -Funds Commissioner, Employees Provident FundsRourkela and Miscellaneous

Provisions Act, 1952

14 Employees’ State 44-1167-46 Registration under 30.01.1960 -Insurance Corporation Employees’ State Insurance

Act, 1948

15 Central Excise & AAACO1354JX Central Excise Registration 31.12.2001 - -Customs Department MOO1 certificate under rule 9 of

Central Excise Rules 2001

16 Contract Labour 14/87 Registration under Contract 21.07.1987 - -(Regulation & Abolition) labour (Regulation &Act, 1970 Abolition) Act, 1970

17 State Pollution Control Ind/IV/HW- 86 Registration under 27.05.2005 26.05.2007 -Board (79) 16477 Environment (Protection)

Act 1986 for collection andstorage of hazardouswastes

149

S. No. Issuing Authority Registration No./ Nature of Registration issued on / Validity RemarksLicence No. w.e.f period

18 State Pollution Control 37024 Registration under Air 31.12.2005 31.03.2006 Application for renewal wasBoard (Prevention & Control of submitted on 20.02.2006

Pollution) Act, 1974 u/s 21to operate an industrialplant to discharge theemissions arising out ofthe out of the premises

19 State Pollution Control 37026 Registration under Water 31.12.2005 31.03.2006 Application for renewal wasBoard (Prevention & Control of submitted on 20.02.2006

Pollution) Act, 1974 u/s 25& 26 of the Act fordischarge of effluentsarising out of the premises

20 Registrar of 210481 Trademark of Cement 8.08.2004 07.08.2014 -Trademarks (class 19) for building &

Roads (under the brandname Konark)

21 Registrar of 414560 All types of cement 16.12.2004 15.12.2014 -Trademarks (class 19) (under the brand

name Konark)

22 Registrar of 370063 Trademark of Cement 23.12.1980 22.12.2008 -Trademarks under the Brand name

“Rath”

23 Central Excise AAACO 1354 Service Tax Registration - - -Department (Service ST 03 ‘The Certificate mentionedTax Department) relates to category of

service “Goods TransportAgency” where OCL(CEMENT) is registeredas an assessee forpayment of Service Tax onGoods Transport servicesreceived by them.’The aboveregistration has been takenin terms of Rule 4 of ServiceTax Rules, 1994. ‘There is novalidity period specified in theservice tax rules for the Service Tax Registrationcertificates issued by theExcise Department.

OCL INDIA LIMITED

150

Refractory Works

S. No. Issuing Authority Registration No./ Nature of Registration issued on / Validity RemarksLicence No. w.e.f period

1 Bureau of Indian IS/ISO 9001:2000 – Licence for the quality - 21.09.2006 The Company Has BeenStandard ANSI/ASQC Q management systems Certified Since 1994

9001:2000 – certification For Refractory041004268

2 Director of Factories SG:7 Licence to work a factory 24.01.2006 31.12.2006& Boilers Orissa for employing not more

than 3000 persons on anyone day during the year andusing motive power notexceeding 16129.56 KWsubject to the provisions ofthe Factories Act 1948 andrules made thereunder

3 The Directorate of OR-146 Provisional order Under 15.09.2005 14.09.2006 -Factories and boilers, section 9 of Indian BoilersBhubaneshwar, Orissa Act, 1923.

4 The Directorate of OR-147 Provisional order Under 26.11.2005 25.11.2006 -Factories & Boilers, section 9 of Indian BoilersBhubaneshwar, Orissa. Act, 1923.

5 The Directorate of OR-148 Certificate to operate a 04.08.2005 03.08.2006 -Factories & Boilers, boiler Under section 7/8 ofBhubaneshwar, Orissa. Indian Boilers Act, 1923.

6 The Directorate of OR-198 Provisional order Under 10.01.2006 09.01.2007 -Factories & Boilers, section 9 of Indian BoilersBhubaneshwar, Orissa. Act, 1923.

7 The Directorate of OR-522 Certificate to operate a 13.04.2006 12.04.2007 -Factories & Boilers, boiler Under section 7/8 ofBhubaneshwar, Orissa. Indian Boilers Act, 1923.

8 The Directorate of OR-552 Provisional order Under 10.01.2006 09.01.2007 -Factories & Boilers, section 9 of Indian BoilersBhubaneshwar, Orissa. Act, 1923.

9 The Directorate of OR-553 Provisional order Under 19.07.2005 18.07.2006Factories & Boilers, section 9 of Indian BoilersBhubaneshwar, Orissa. Act, 1923

10 The Directorate of OR-598 Certificate to operate a 12.06.2006 11.12.2006 -Factories & Boilers, boiler Under section 7/8 ofBhubaneshwar, Orissa. Indian Boilers Act, 1923.

11 Regional Provident OR/107 Registration under 29.03.1988 -Funds Commissioner, Employees Provident FundsRourkela and Miscellaneous Provisions

Act, 1952

12 Employees’ State 44-1281-43 Registration under 30.01.1960 -Insurance Corporation Employees’ State Insurance

Act, 1948

151

S. No. Issuing Authority Registration No./ Nature of Registration issued on / Validity RemarksLicence No. w.e.f period

13 Central Excise & AAACO1354JXMOO2 Central Excise Registration 31.12.2001 - -Customs Department certificate under rule 9 of

Central Excise Rules 2001

14 Customs Department 04/2000 Registration under Customs 18.03.2002 - -(Import of Goods atConcessional Rate of Dutyfor Manufacture of ExcisableGoods) Rules 1996

15 Contract Labour 2 Licences and Registration 09.02.1998 31.12.2006 Last amended on(Regulation & Abolition) Contract labour (Regulation 19.11.2005Act, 1970 & Abolition) Act, 1970

16 State Pollution Control Ind/IV/HW-61(29) Environment (protection) 28.08.2000 27.08.2005 Renewal application madeBoard 16282 Act 1986 for collection and on 14.4.2005 and the same

storage of hazardous wastes is pendingfor collection and storage ofhazardous wastes

17 State Pollution Control 22970 Air (Prevention & Control of 03.02.2006 26.05.2007Board Pollution) Act, 1974 u/s 21

to operate an industrial plantto discharge the emissionsarising out of the premises

18 State Pollution Control 22968 Water (Prevention & Control 03.02.2006 31.03.2006 Renewal application madeBoard of Pollution) Act, 1974 u/s on 20.02.2006

25 & 26 of the Act fordischarge of effluents arisingout of the premises

19 Controller of Patents 176056 Patent for the process of 23.03.1992 23.03.2006 Validity period of patentsmanufacturing refractory extended to 20 yearsgunning material instead of 14 years

20 Central Excise AAACO 1354JST Service Tax Registration - - -Department (Service 004 ‘The Certificate mentionedTax Department) relates to category of

service “Goods TransportAgency” where OCL(REFACTORY) is registeredas an assessee forpayment of Service Taxon Goods Transport servicesreceived by them. ‘The aboveregistration has been taken interms of Rule 4 of ServiceTax Rules, 1994. ‘There is novalidity period specified in theservice tax rules for the ServiceTax Registration certificatesissued by the ExciseDepartment

OCL INDIA LIMITED

152

S. No. Issuing Authority Registration No./ Nature of Registration issued on / Validity RemarksLicence No. w.e.f period

21 Central Excise AAACO 1354 Service Tax Registration - - -Department (Service JST001 ‘The Certificate mentionedTax Department) relates to category of service

“Commissioning & InstallationService”

22 Central Excise AAACO 1354JST Service Tax Registration - - -Department (Service 002 ‘The Certificate mentionedTax Department) relates to category of service

“Management Consultant”

Sponge Iron Works

S. No. Issuing Authority Registration No./ Nature of Registration ssued on / Validity RemarksLicence No. w.e.f period

1 Secretariat of Industrial 1768/SIA/IMO/2005 Industrial Entrepreneur 11.04.2005 - -Assistance, Ministry of Memorandum for manufactureCommerce & Industry of steel billet

2 Secretariat of Industrial 900/SIA/IMO/2004 Industrial Entrepreneur 18.03.2004 - -Assistance, Ministry of Memorandum for manufactureCommerce & Industry of electricity

3 Secretariat of Industrial 134/SIA/IMO/2004 Industrial Entrepreneur 13.01.2004 - -Assistance, Ministry of Memorandum for manufactureCommerce & Industry of electricity

4 Secretariat of Industrial 132/SIA/IMO/2004 Industrial Entrepreneur 13.01.2004 - -Assistance, Ministry of Memorandum for manufactureCommerce & Industry of direct reduced iron and

other spongy ferrous products

5 Secretariat of Industrial 2936/SIA/IMO/2002 Industrial Entrepreneur 10.12.2002 - -Assistance, Ministry of Memorandum for manufactureCommerce & Industry of sponge iron lumps/ pellets

6 Secretariat of Industrial 2814/SIA/IMO/2001 Industrial Entrepreneur 13.12.2001 - -Assistance, Ministry of Memorandum for manufactureCommerce & Industry of sponge iron lumps/ pellets

7 Secretariat of Industrial 2097/SIA/IMO/2002 Industrial Entrepreneur 04.09.2002 - -Assistance, Ministry of Memorandum for manufactureCommerce & Industry of crushed and size iron ore

8 Director of Factories & SG:481 Licence to work a factory for 01.01.2006 31.12.2006Boilers Orissa employing not more than 491

persons on any one dayduring the year and usingmotive power not exceeding4642.98 KW subject to theprovisions of the FactoriesAct 1948 and rules madethereunder

9 Employees’ State OR/REV/44-5006/ Registration under Employees’ 17.03.2003 - -Insurance Corporation 52/2689 State Insurance Act, 1948

153

S. No. Issuing Authority Registration No./ Nature of Registration ssued on / Validity RemarksLicence No. w.e.f period

10 Central Excise & AAACO1354JXM Central Excise Registration 31.12.2001 - -Customs Department OO3 certificate under rule 9 of

Central Excise Rules 2001

11 Regional Provident II/1281/03/OR/RL/ Registration under 03.06.2003 - -Funds Commissioner, 788D/2741 Employees Provident FundsRourkela and Miscellaneous Provisions

Act, 1952

12 State Pollution Control 25400 Air (Prevention & Control 20.08.2005 31.03.2006 Renewal application madeBoard of Pollution) Act, 1974 u/s on 14.03.2006

21 to operate an industrialplant to discharge theemissions arising out of theout of the premises

13 State Pollution Control 25402 Water (Prevention & Control 20.08.2005 31.03.2006 Renewal application madeBoard of Pollution) Act, 1974 u/s 25 on 14.03.2006

& 26 of the Act for dischargeof effluents arising out of thepremises

14 Central Excise AAACO1354JST005 Service Tax Registration - - Sub-rule (7) of Rule 4Department (Service ‘The Certificate mentioned provides that everyTax Department) relates to category of registered assessee, who

service “Goods Transport ceases to provide theAgency” where OCL (SIW) taxable service for which heis registered as an is registered, shall surrenderassessee for payment of his registration certificateService Tax on Goods immediatelySince OCL hasTransport services received not surrendered the certifi-by them. ‘The above cate of registration, it isregistration has been taken valid on datein terms of Rule 4 of ServiceTax Rules, 1994. ‘There is no validity period specified in the service tax rules for the Service Tax Registrationcertificates issued by theExcise Department

Approvals regarding the upcoming Steel Plant

Our Company has signed an MOU with Government of Orissa to set up facilities for manufacture of .25MnTPA of finishedvalue added steel in the District Sundergarh, Orissa with an estimated investment of Rs.204 Crores. Approvals of the saidplant are pending.

OCL INDIA LIMITED

154

OUTSTANDING LITIGATION

Except as described below, there are no outstanding litigation, suits or criminal or civil prosecutions, proceedings or taxliabilities against our Company, our Directors, our Promoters or group companies and there are no defaults, non paymentof statutory dues, over dues to banks/ financial institutions, defaults against banks/ financial institutions, defaults in duespayable to holders of any debentures, bonds or fixed deposits, issued by our Company.

SUPREME COURT CASE

SLP (CIVIL) NO.5113/2003

Filed by the Company challenging the final order passed by Hon’ble High Court of Orissa dismissing the writ petitionbearing OJC No. 14424 / 1999 (OCL Vs. State of Orissa and others) declaring that the State legislature has power andauthority to extend operation of the Orissa Entry Tax Act, 1999 through out the state including an industrial township.

The case is pending.

HIGH COURT CASES

A) Cases filed against the Company

1. Ms. Brundabati Goudani Vs Orissa Cement Limited, Rajgangpur [F. A. NO. 92/1992]

The Company purchased 2.77 acres of land from Ms. Brundabati Goudani by a registered sale deed dated27.06.1983 and paid Rs.22,160/- towards cost of the land. She filed suit No.125/1987 before the Sub Judge,Sundargarh contending that she sold only one acre and the sale deed was executed fraudulently for 2.77 acres.On 05.05.1990 Sub Judge, Sundargarh observed that no fraud or misrepresentation has been exercised by theCompany and declared the Sale Deed as valid.

Aggrieved by the order of the Sub Judge, Ms. Brundabati Goudani filed an appeal in the High Court of Orissaagainst State of Orissa and Others challenging the said order. The Hon’ble Orissa High Court passed an orderinjuncting the Company from making any construction or to change the nature of the suit land during the pendencyof the appeal. The case is pending.

2. Pravash Chandra Chakra Vs. Labour Commissioner, Orissa and others [OJC NO. 7381/1994]

Mr. Pravash Chandra Chakra (ex- Mechanist, Refractory Works) was superannuated with effect from 10.11.1994 onattaining the age of 55 years in terms of the standing orders of the Company. As per tripartite settlement dated21.11.1990 the retirement age of employees was increased to 58 years. However this benefit was not given to him,as the standing order was not amended. He challenged the order of superannuation by filing this case. The caseis pending. The maximum liability in this case may be Rs.1,56,254/-.

3. Sundargarh Industrial Mazdoor Union Vs. Union of India and others [OJC NO.2215/1996]

Filed by Sundargarh Industrial Mazdoor Union (SIMU) against Union of India and Others for quashing “TheEmployees Provident Funds and Miscellaneous Provisions (Amendment Ordinance) 1995 making the Company asone of the Opposite Parties. The Union contends that the Family Pension scheme framed through the ordinance isnot only arbitrary and unconstitutional but is highly detrimental to the employees. The case is pending.

4. Workman of OCL Vs. Union of India [OJC NO. 7741/1997]

Jute Packaging Materials (Compulsory use in packing commodities) Act, 1987 requires the Cement manufacturersto use jute packaging materials for supply and distribution up to 50% of their production. Sundargarh IndustrialMazdoor Union (SIMU) challenged the notification dated 15.03.1995 regarding compulsory use of 50% of jute bagsas use of jute bags is hazardous to the health of workmen. The Company has been made one of the OppositeParties. Stay has been granted by the Hon’ble High Court of Orissa. The case is pending.

155

5. GM (Claims), South Eastern Railway Vs. OCL and another [MA N0.436/1998]

Filed by South Eastern Railway against the Company and NEF Railway challenging the order dated 21.04.1998passed by the Railway Claims Tribunal in favour of the Company in case OA No. 55/1993. The case relates to aclaim of Rs.23,139/- as compensation for damages to the consignment of cement despatched by the Company toNew Guwahati goods shed. The case is pending.

6. GM (Claims), South Eastern Railway Vs. OCL and another [M A N0.437/1998]

Filed by South Eastern Railway against the Company and NEF Railway challenging the order dated 21.04.1998passed by the Railway Claims Tribunal in favour of the Company in case OA No. 75/1994. The case relates to aclaim of Rs.14,007/- as compensation for damages to the consignment of cement despatched by the Company toNew Guwahati goods shed. The case is pending.

7. GM (Claims), South Eastern Railway Vs. OCL and another [MA N0.438/1998]

Filed by South Eastern Railway against the Company and NEF Railway challenging the order dated 21.04.1998passed by the Railway Claims Tribunal in favour of the Company in case OA No. 40/1995. The case relates to aclaim of Rs.1,02,479/- as compensation for damages to the consignment of cement despatched by the Company toNew Guwahati goods shed. The case is pending.

8. Jema Behera Vs. Regional PF Commissioner, Rourkela and OCL [OJC NO.10055/1998]

Mr. Suresh Chandra Behera, an employee of the Company died on 20.11.1996. During his life time contributionswere made by both the employer and the employee to the Provident Fund and Family Pension Fund. As the legalheirs were not paid pension as per Employees Pension scheme, 1995, Ms. Jema Behera wife of Late SureshChandra Behera filed writ against Regional Provident Fund Commissioner, Rourkela making the Company as oneof the Opposite Parties. The case is pending.

9. Purna Chandra Das Vs. Union of India and others [OJC NO. 12034/1998]

Demanding reinstatement in service after acquittal from the criminal case, Mr. Purna Chandra Das raised anindustrial dispute which was referred by the Government to the Presiding Officer, Industrial Tribunal, Rourkela foradjudication. The said case was registered as Industrial Dispute Case No. 12/1997. As Mr. Das was not satisfiedwith the reference of the case, filed this case in Orissa High Court for changing the reference and obtained stay ofthe proceedings in Tribunal. The case is pending.

10. Utkal Shramik Sangh Vs. Union of India and others [OJC NO. 12170/1999]

Filed by Utkal Shramik Sangh(USS) seeking direction from the Hon’ble High Court of Orissa to State Governmentof Orissa to issue notification U/s 10(1) of “ The Contract Labour (R&A) Act,1970 pursuant to the recommendationsmade by the State Advisory Board. The notification dated 28.04.2000 has already been published, hence the writbecomes infructous. The case is pending

11. Sundargarh Industrial Mazdoor Sangh Vs. State of Orissa and others [OJC NO. 10854/2000]

Filed by Sundargarh Industrial Mazdoor Union (SIMU) challenging the notification dated 28.04.2000 issued by theState Government of Orissa for not abolishing contract labour system in all the jobs recommended by the StateLabour Advisory Board. The case is pending

12. Mr. Jagdish Chandra Das Vs Orissa Cement Limited [OJCN0.4797/2000]

The Company appointed Mr. Jagdish Chandra Das as Apprentice Electrician on 12.05.1987 and he was givenextension from time to time as an Apprentice Trainee. On 02.04.1990, he was given appointment on temporarybasis for a period of one year only subject to the condition that he has to obtain B- Class Lineman’s Licence withinsix months. He failed to obtain the Licence within the time period, therefore Company terminated his services. Heraised an Industrial Dispute before the Presiding Officer, Labour Court, Sambalpur vide No. 50/1993, challenginghis termination. On 30.12.1999 the Presiding Officer, Labour Court, Sambalpur passed the award, stating that thetermination of Mr. Jagdish Chandra Das was legal and justified and he is not entitled to get any relief.

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Aggrieved by the said order, Mr. Jagdish Chandra Das filed an Application under Article 226 of the Constitution ofIndia vide No. OJC 4797/2000 in the High Court of Orissa, challenging the award of the Presiding Officer, LabourCourt, Sambalpur. The case is pending.

13. Gopal Pareek Vs OCL India Limited [OJC NO.12234/2001]

The Company appointed Mr. Gopal Pareek through appointment letter dated 16.08.1995 as a trainee EngineeringAssistant. On 03.01.1996, he entered into a Service agreement with the Company. On completion of term ofservice contract, the Company terminated his services by giving notice as per the terms of the agreement. Aggrievedby the aforesaid order of the Company Mr. Gopal Pareek challenged the termination of his services by filing anapplication under Articles 226/227 of the Constitution of India vide No. OJC 12234/2001 in the High Court ofOrissa. Mr. Gopal Pareek died in an accident and further follow up of the case is unlikely by his Legal representatives.The case is pending. The maximum liability may be Rs. 3,72,920/-.

14. Ms. Berronica Belung & Others Vs OCL India Limited [OJCNO.4473/2002]

Ms. Beronica Bilung and eight others of Lanjiberna Quarry, employees of Contractor M/s Bhagawati Miners, filedthe writ Application under Article 226 & 227 of the Constitution of India in the High Court of Orissa, praying theHon’ble High Court for a direction to the Company to settle their statutory dues and eligible amount as per VRScheme. The contractor paid them as per VR scheme but they are disputing the basis adopted for payment Thewrit is not maintainable since the Company and the Contractor are not a State within the meaning of Article 12 ofConstitution of India. The case is pending for further proceedings.

15. Ms. Jamini Kujur & Others Vs OCL India Limited [OJC NO. 4474/2002]

Ms. Jamini Kujur and five others of Lanjiberna Quarry, employees of Contractor M/s Vaishnoo Minerals, filed thewrit Application under Article 226 & 227 of the Constitution of India vide OJC No. 4474 of 2002 in the High Courtof Orissa, praying the Hon’ble High Court for a direction to the Company to settle their statutory dues and eligibleamount as per VR Scheme. The contractor paid them as per VR scheme but they are disputing the basis adoptedfor payment. The writ is not maintainable since the Company and the Contractor are not a State within themeaning of Article 12 of Constitution of India. The case is pending for further proceedings.

16. Ms. Norm Binz & Others Vs OCL India Limited [OJC N0.4475/2002]

Ms. Norm Binz and three others of Lanjiberna Quarry employees of Contractor M/s Swastic Traders filed the writApplication under Article 226 & 227 of the Constitution of India vide OJC No. 4475 of 2002 in the High Court ofOrissa, praying the Hon’ble High Court for a direction to the Company to settle their statutory dues and eligibleamount as per VR Scheme. The contractor paid them as per VR scheme but they are disputing the basis adoptedfor payment The writ is not maintainable since the Company and the Contractor are not a State within the meaningof Article 12 of Constitution of India. The case is pending for further proceedings.

17. Ms. Agneh Ekka & another Vs OCL India Limited [OJC N0.4476/2002]

Ms. Agnesh Ekka and another of Lanjiberna Quarry employees of Contractor M/s Pashupati Enterprises filed thewrit Application under Article 226 & 227 of the Constitution of India vide OJC No. 4476 of 2002 in the High Courtof Orissa, praying the Hon’ble High Court for a direction to the Company to settle their statutory dues and eligibleamount as per VR Scheme. The contractor paid them as per VR scheme but they are disputing the basis adoptedfor payment The writ is not maintainable since the Company and the Contractor are not a State within the meaningof Article 12 of Constitution of India. The case is pending for further proceedings.

18. Bellary Steels Limited Vs. OCL India Limited [CRP NO. 159/2002]

The Company supplied refractory bricks to M/s Bellary steels Limited, Bellary (Karnataka). As the party failed to paythe outstanding dues, The Company filed a Money Suit No. 35/1999 in the Court of Civil Judge, Senior Division,Sundargarh for realisation Rs.12,11,822/-. M/s Bellary Steels appeared in the Court and challenged the jurisdictionof the Court to try the suit. But the Learned Civil Judge, Senior Division, as preliminary issue considered the matterof jurisdiction and rejected the contention of the Defendant and directed filing of written statement vide order dated16.08.2002. Aggrieved with the said order M/s Bellary Steels Limited filed this case in the Hon’ble High Court ofOrissa. Argument from both the sides on the case is over. Judgment is reserved.

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19. United Insurance Company Limited Vs. Mangal Ekka and others [MISC. APPEAL NO.330/2000]

Mr. Mangal Ekka driver of Contractor M/s Sadique Ahamed met with an accident and sustained injuries. He filed aclaim for Rs.1,00,000/- under the Workman’s Compensation Act bearing No. WC Case - 6/1997 impleading theContractor, the Company and the United India Insurance Company Limited. The WC Commissioner by his orderdated 29.03.2000 decided that the compensation payable was Rs.57,696/- and not Rs.1,00,000/- as claimed by theworkman. He directed the Insurance Company to deposit compensation amount of Rs.57,696/-. Aggrieved with theorder United India Insurance Company file this appeal in Orissa High Court. The case is pending. The maximumliability in this case may be Rs.57,696/-.

20. Jairam Sahoo Vs. Presiding Officer, Labour Court, Sambalpur and Others [OJC NO.15583/2001]

Mr. Jairam Sahoo raised an Industrial dispute, which was registered as I D Case No. 48/1996, challenging hisdismissal order and the Labour Court awarded lumpsum amount of Rs.1,50,000/- to Mr. Jairam Sahoo ex-PipeFitter (Refractory Works) towards final settlement instead of ordering re-instatement. The Company paid the saidawarded sum to the workman. However he filed a writ petition even after receiving the awarded sum from theCompany for quashing the award passed by the Presiding Officer, Labour Court, Sambalpur. The case is pending.

21. Union of India represented through G M (Claims), N F Railway Vs. OCL and other [F A O NO.84/2005]

North Frontier Railway filed the Appleal against the order dated 28.05.2004 of Railway Claims Tribunal, Bhubaneswarin OA No.66/1994 and 67/1994 directing refund of Rs. 66,230/- alongwith 6% interest from the date of filing of theclaim to the Company. The claims were filed by the Company for claiming refund of excess freight chargescollected at the destination station on the bais of circular dated 14.06.1991 which was not in existence at the timeof booking of the consignment.

22. M/s Shiva Cement Limited Vs. State of Orissa and others [W P (C) NO.80/2006)

Filed by M/s Shiva Cement Limited challenging the action of the DRDA, Balasore in terminating the agreement forsupply of cement @Rs.141/- per bag and awarding the same contract to the Company @ Rs.158.50 per bag.

B) Cases filed by the Company

1. OCL India Limited Vs State of Orissa & Others [OJC NO. 2480/1989]

Filed by the Company against State of Orissa & Others Challenging the order dated 18th/19th October 1983 of theTehsildar, Rajgangpur charging water rates under the provisions of Orissa Irrigation Act, 1959 by notice datedFebruary 12, 1988 of Rs. 2,39,538/- for the years 1980-81 to 1987-88.

The contention of the Company is that the Tahsildar is not vested with the power under the Irrigation Act, to levywater rate as the water drawn by the Company was from a natural source and not from any irrigated source andpraying for the interim injunction to restrain the effect of the aforesaid order and notice.

The Orissa High Court passed an interim order “No coercive measures be taken for realisation of water chargesuntil further orders” which was made absolute on 16.10.1989.

The case is pending for further proceedings.

2. OCL India Limited Vs State of West Bengal & Others [A P NO.1878/1991]

Filed by the Company in Calcutta High Court against State of West Bengal and others, challenging the order of theCompetent Authority, rejecting the Company’s application for exemption under Section 20 of the Urban Land(Ceiling and Regulation) Act, 1976 and final statement under Section 9 of the said Act in respect of Agarpara land.The Company sought for a direction to the Competent Authority to withdraw/ revoke/ recall/cancel the purportedfinal settlement under Section 9 of the Urban Land (Ceiling and Regulation) Act, 1976 and also to grant injunctionto restrain the Competent Authority from giving effect to/taking steps in terms of its final settlement for vesting ofland. The cost of the land involved in the matter is Rs.3.58 lacs.

The case is pending.

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3. OCL Vs. Union of India and others [OJC NO. 4696/1993]

The Company challenged the notification dated 17.03.1993 prohibiting the employment of contract labour inlimestone and dolomite mines in the activities covering raising of and transportation of limestone including loadingand unloading from mine site to factory. The Hon’ble High Court of Orissa by its order dated 02.08.1993 grantedstay until further orders.

The case is pending.

4. OCL India Limited Vs Union of India & Others [OJC NO. 8106/1995]

Filed by the Company against Union of India and Others challenging the validity of Bonus (Amendment Act) 1995which gave retrospective effect from 01.04.1993 to amendment relating to eligibility criteria for earning bonus i.eraising of limit of monthly salary from Rs. 2,500/- per month to Rs. 3,500/- per month. Also challenged the salarylimit for computation of bonus, which was enhanced from Rs 1600/ per month to Rs 2500/- per month. TheCompany has obtained stay. The maximum liability on this account may be Rs. 21.92 lacs. The case is pending.

5. OCL Vs. Union of India and others [OJC NO. 9371/1995]

The Company’s consignments were sent from O C Siding, Rajgangpur to Dimapur, New Bongaigaon, Silchar, NewGuwahati via longer route without the instruction of the Company. In the process Railways collected excess freight.The Company filed a writ against Union of India and Others for refund of Rs.1,33,85,384/- being the excess freightcollected by Railways on the basis of longer route used for delivery of the consignment instead of the shortestroute to destination.. The Company’s contention is that Railway Board is not authorised to issue General Order No.1 of 1990 for rationalisation of longer route as such power is vested with Central Government only. The case ispending.

6. OCL Vs. Union of India and others [OJC NO. 8767/ 1996]

The Company challenged the notification dated 04.07.1996 prohibiting the employment of contract labour inlimestone and dolomite mines in the activities covering raising and transportation of limestone including loadingand unloading within mine site. The Hon’ble High Court of Orissa by its order dated 09.09.1996 granted stay untilfurther orders.

7. OCL Vs. State of Orissa and Others [OJC NO. 12894/1997 ]

The Company executed a lease deed with State Government of Orissa for grant of mining lease for Limestone andDolomite. The Company paid under protest Rs.15.55 lacs towards stamp duty and registration fee of Rs.7.41 lacs.The said stamp duty was collected on the basis of estimated royalty on limestone and dolomite expected to beraised by the Company. The Company contends that the stamp duty should have been calculated on the basis ofannual dead rent in terms on Section 9(A)(2) of Indian Stamp Act read with IIIrd schedule to Mines and Minerals(Regulation & Development) Act, 1957 and not on the basis of estimated royalty. As such the Company filed thiscase against State of Orissa & Others claiming refund of excess stamp duty of Rs.15.50 lacs and registrationcharges of Rs. 7.38 lacs total amounting to Rs.22.88 lacs paid on execution of mining lease for Lanjiberna LimeStone area. The case is pending.

8. OCL India Limited Vs State of Orissa & Others [OJC NO.10599/1998]

Filed by the Company against State of Orissa and others seeking stay of demand raised by Regional TransportOfficer for payment of Rs 16,36,240 as road tax on 11 dumpers having capacity of 35 tonne. The Company reliedupon the Supreme Court judgement, which clearly states that the dumpers are not “Motor Vehicles” within themeaning of Section 2 (28) of The Motor Vehicles Act, 1988 and Section 22 (b) of the Orissa Motor VehiclesTaxation Act, 1975. The Hon’ble High Court of Orissa granted stay subject to payment of 50% of the tax demanded.The Company paid Rs.23 lacs till 31st March 2001 being 50% of the tax demanded. Subsequently on demandfrom the Regional Transport Officer, Sundargarh, the balance 50% was also paid under protest. As the Companyhas been paying for each quarter the full amount of tax under protest, the Company has no liability. On thecontrary refund may arise, if the case is decided in favour of the Company. The Case is pending.

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9. OCL Vs. Union of India and Others [OJC No. 2863/1999]

Filed by the Company against Union of India and Others challenging the notification No. S.O. 1255(E) dated30.12.1988 issued by Govt. of India increasing the coal prices and a premium of 10% on coal supplies by some ofthe collieries of Coal India Limited. Collieries are supplying different grades of coal. On the basis of quality coal isgraded and prices are accordingly fixed. However SECL has been charging 10% premium on it’s different gradesof coal in comparison to same grades of coal supplied by other collieries. The Company contended that thepremium of 10% charged by selected coal fields like ECL on the basis of A,B,C and D grade coal is ultra vires theConstitution and hit by Article 14 of the Constitution. The Company demanded refund of Rs.36 lacs premiumcollected for the period from 01.01.1989 to 31.03.1993.

The case is pending

10. OCL India Limited Vs Union of India & Others [OJC No 8891/2000]

Filed by the Company challenging the Notification No. 35/99-CE dated 17.03.1999 i.e. levy and collection of Antidumping duty on Fused Magnesia imported from PR China at Vizag port on the basis of the CEGAT order videdated 19.01.2000, which clearly states that anti dumping duty can not be imposed. On 27.03.2000 the DesignatedAuthority filed Civil Appeal No. 3267-3268 of 2000 in the Hon’ble Supreme Court of India inter-alia challenging theorder of the CEGAT. Supreme Court by passing two orders vide dated 12.05.2000 and 31.07.2000 stayed therefund arising out of the order of the CEGAT but has not stayed the judgement of the CEGAT. Therefore, theHon’ble High court of Orissa by its order dated 14.09.2000 directed Custom officials not to collect anti-dumpingduty until further orders. Pursuant to the directions of the Supreme Court the Designated Authority in its finalfindings, on review, has recommended for discontinuance of the anti dumping duty imposed on imports of fusedmagnesia and retrospective withdrawal of anti dumping duty on fused magnesia with effect from 01.10.1999 andCircular No. MF(DR) 75/2003-Cus dated 28.08.2003 to that effect has been issued.

The case is pending for disposal by the Orissa High Court.

11. OCL India Limited Vs Union of India & Others [OJC NO.9487/2000]

Filed by the Company challenging levy and collection of Anti dumping duty on Fused Magnesia imported from PRChina at Calcutta port on the basis of the Tribunal order in favour of IRMA. The Court by its order dated 26.09.2000directed Custom officials not to collect anti-dumping duty until further orders. Pursuant to the directions of theSupreme Court the Designated Authority in its final findings, on review, has recommended for discontinuance ofthe anti dumping duty imposed on imports of fused magnesia and retrospective withdrawal of anti dumping duty onfused magnesia with effect from 01.10.1999 1999 and Circular No. MF (DR) 75/2003-Cus dated 28.08.2003 to thateffect has been issued.

The case is pending for disposal by the Orissa High Court.

12. OCL India Limited Vs Union of India & Others [OJC NO.12041/2000]

Filed by the Company challenging levy and collection of Anti dumping duty on. Fused Magnesia imported ‘from PRChina at Paradip port on the basis of the Tribunal order in favour of IRMA. The Court by its order dated24.11.2000directed Custom officials not to collect anti-dumping duty until further orders. Pursuant to the directionsof the Supreme Court the Designated Authority in its final findings, on review, has recommended for discontinuanceof the anti dumping duty imposed on imports of fused magnesia and retrospective withdrawal of anti dumping dutyon fused magnesia with effect from 01.10.1999 and Circular No. MF(DR) 75/2003-Cus dated 28.08.2003 to thateffect has been issued.

The case is pending for disposal by the Orissa High Court.

13. OCL Vs. State of Orissa [WP (C) NO. 4273/2002]

Mr. Rabi Narayan Behera, Sr. Clerk, Share and Law Department raised an industrial dispute challenging thetermination of his service on the ground of disobedience. The said case was registered as ID Case No. 6/2001 inthe Labour Court, Sambalpur. State Govt. on request of Mr. Behera transferred the said case to Labour Court,Bhubaneswar without giving an opportunity of hearing to the Company. The Company filed writ in Orissa HighCourt challenging the order of Government of Orissa transferring the ID Case from Labour Court, Sambalpur to

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Labour Court, Bhubaneswar. Stay is granted by Orissa High court. During the pendency of the said writ Mr. Beheraentered into a settlement with the Company in Form -K and received Rs.1,50,000/- towards full and final settlementof his claim. In view of this development the Company filed withdrawal petition in the High Court for withdrawal ofthe writ. The ID case in the Labour Court will accordingly be disposed off in terms of the settlement.

The case is pending

14. OCL India Limited Vs The Jute Commissioner, Kolkata [WP(W)NO.14732/2002]

As per the Jute Packaging Materials (Compulsory use in packaging commodities) Act, 1997 Cement manufacturersare required to use jute packaging materials for supply or distribution upto 50% of their total production. Showcause notice dated 20.08.2002 was issued by the Jute Commissioner, Calcutta alleging violation of two ordersdated March15, 1995 and June 30, 1997. By the said notice, the Company was required to show cause as to whypenal action should not be taken against it for violation of the said orders.

The Company filed a writ Petition in Calcutta High Court challenging the said show cause notice and stay wasgranted by the Court against the show cause notice. The Union of India through Jute Commissioner filed petitionfor transfer of all writ petitions alongwith other proceedings pending before various High Courts for hearing anddisposal on merit by the Supreme Court. While the Company may be liable for non-compliance upto an amountequal to double the cost of the jute packaging material, which ought to have been used, liability, if any, in thisregard is not ascertainable.

The case is pending in Calcutta High Court.

15. OCL Vs. Presiding Officer, Industrial Tribunal, Rourkela and others [WP (C) NO.521/2003]

Utkal Shramik Sangh a registered union raised an Industrial Dispute for regularisation of Abdul Sabur Khan and18 others. The said case was registered as ID Case No. 27/2001 in the Industrial Tribunal, Rourkela. The Hon’bleTribunal passed an award ignoring the additional documents filed by the Company as evidence. When the awardwas pending for publication, the Company filed a writ for staying the publication of the award. The High Courtstayed the publication of the award till disposal of the case. Subsequently the Company entered into amicablesettlement in Form -K with the workmen and paid the agreed compensation amount. The Company is taking stepsto file withdrawal of the writ.

The case is pending

16. JPN Thakur and others Vs. Gopal Pareek [CRIMINAL MISC. CASE NO. 699/2003]

Mr. Gopal Pareek an ex-employee of the Company filed a false FIR alleging misbehavior, physical assault S/o ML Chand, P L Pareek and J P N Thakur all are employees of the Company. The Police submitted a final report tothe Judicial Magistrate First Class (JMFC) holding that the FIR was false. On the basis of police final report thelearned JMFC closed the case. Aggrieved with the order Mr. Gopal Pareek filed a protest petition with the JMFCwhich was registered as a complaint case bearing 1(C)CC No.23/2002. The Company filed petition in Orissa HighCourt under Section 482 of Criminal Procedure Code for quashing the order dated 30.07.2002 of JMFC, Rajgangpurin the High Court of Orissa. Hon’ble High Court stayed further proceedings in 1(C)CC No.23/2002 pending beforethe JMFC, Rajgangpur.

The case is pending

17. OCL Vs. Laxmi Dhar Roul [R S A NO. 530/2003]

Mr. Laxmi Dhar Roul, a former employee of the Company un-authorisedly constructed a house on the landacquired by the Company for clay extraction. The Company filed a civil suit in the Court of Civil Judge, SeniorDivision, Sundargarh for declaration of right, title, interest and for recovery of possession 0.02 acres of the Companyland encroached by Mr. Roul. The learned Civil Judge, Sr. Division passed the order in favour of the Company.The said order was challenged by Mr. Roul by filing a Title Appeal No.10/1997 in the Court of District Judge,Sundargarh which set aside the order of lower court by judgment dated 07.08.2003. The Company challenged thesaid judgment by this Second Appeal.

The case is pending.

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18. OCL India Limited Vs State of Orissa & Others [WP(C ) NO. 1131/2004]

Mr. Gayadhar Sahoo, Mason was dismissed from services on the grounds of disobedience, misbehavior andabsence from duty. He raised an industrial dispute and was registered with the Labour Court, Sambalpur asIndustrial Dispute Case No. 1/2003. Vide order dated 01.01.2004 the said case has been transferred from theregistry of Labour Court, Sambalpur to the Registry of Industrial Tribunal, Rourkela for adjudication.

Being aggrieved by the said order, the Company filed the writ Application under Article 226 and 227 of theConstitution of India in the Hon’ble High Court of Orissa. The Hon’ble Court vide order dated 09.02.2004 stayedthe proceedings of the ID case No.1/2003.

The case is pending for further proceedings.

19. OCL Vs. Duryodhan Behera [RSA NO. 85/2004]

Mr. Duryodhan Behera, a former employee of the Company un-authorisedly constructed a small hut on the landacquired by the Company for clay extraction. The Company filed a civil suit in the Court of Civil Judge, SeniorDivision, Sundargarh for declaration of right, title, interest and for recovery of possession of area admeasuring17'.6" X 12'.6" of the Company’s land encroached by Mr. Behera. The learned Civil Judge, Sr. Division passed theorder in favour of the Company. The said order was challenged by Mr. Behera by filing a Title Appeal No.4/1994in the Court of District Judge, Sundargarh which set aside the order of lower court by judgment dated 18.12.2003.The Company challenged the said judgment.

The case is pending.

20. OCL India Limited Vs The Cess Appellate Committee and another [WP (C) NO. 9168/2004]

The Assessing Authority of State Pollution Control Board, Orissa by it’s order dated 12.09.2000 assessed the watercess for the period from September -1999 till July-2000 as Rs. Rs.1,81,349/- which includes Rs.1,78,764/- towardscess on water merely pumped out from the bottom of the mines pit to the surface area. The Company haspreferred an appeal before the Cess Appellate Committee against the assessment order cum demand notice dated12.09.2000, which was outrightly rejected by the Appellate Authority on the ground that the appeal was timebarred. Against this order Company filed the writ petition in the High Court of Orissa challenging the assessment-cum- demand notice dated 12.09.2000 for Rs. 1,81,349/- passed by Orissa Pollution Control Board and orderdated 15.04.2004 passed by the Cess Appellate Committee of State Pollution Control Board, Orissa. The main’contention of the Company is that mine drainage water pumped out by the Company from mines pit to minessurface does not amount to consumption/pollution and hence not liable for Cess. The matter is pending for furtherproceedings.

21. OCL India Limited Vs The Regional Director, Employees State Insurance Corporation and another

[FAO NO. 53/2005]

The Company disputed payment of contribution on overtime wages, cycle allowance, LTA etc. The Companyreceived demand notice dated 27.06.1995 to pay a sum of Rs.2,06,883/- on account of non- payment of contributionon account of “overtime” allowance for the period 01.02.1993 to 31.01.1994. Company filed Misc. case undersection 75 of the Employees State insurance Act, 1948 in the Court of District Judge, Puri. Ld. District Judge waspleased to stay the demand notice vide its order dated 27.01.2000. Subsequently the case was transferred to theLd. District Judge, Khurda, Bhubaneswar and renumbered as Misc. Case No. 267 of 2001. Pursuant to interimorder of the Dist. Judge, Khurda the Company deposited the ESI contribution on overtime time wages leavingcontribution on cycle allowance and LTA. On 24.12.2004 the Ld. District Judge, Khurda, Bhubaneswar was pleasedto dispose the matter by directing the Company to deposit the ESI contribution on Cycle allowance alongwithinterest on the contribution from due date. Aggrieved by this order the Company filed this Appeal and Hon’ble HighCourt by its order dated 11.02.2005 stayed the order of the lower Court till 29.04.2005. On 29.04.2005 Orissa HighCourt again stayed the matter till further order. The case is pending for further orders. The Company may be liableto pay interest @ 12% PA on Rs.2,06,883/- from 28.02.1990 being the date of demand till date of payment of ESIcontribution.

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22. OCL India Limited Vs The Regional Director, Employees State Insurance Corporation and another

[FAO NO. 54/2005]

Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -Cum- ESI Court,Khurda at Bhubaneswar in ESI Misc. Case No. 241/2001 directing payment of interest from the date of demand ofESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lowerCourt till 29.04.2005. On 29.04.2005 Orissa High Court again stayed the matter till further order. The Company maybe liable to pay interest @ 12% PA on Rs.72,185/- from 28.02.1990 being the date of demand till date of date ofpayment of ESI contribution.

23. OCL India Limited Vs The Regional Director, Employees State Insurance Corporation and another

[FAO NO. 55/2005]

Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -Cum- ESI Court,Khurda at Bhubaneswar in ESI Misc:’ Case No. 242/2001 directing payment of interest from the date of demand ofESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lowerCourt till 29.04.2005. On 29.04.2005 Orissa High Court again stayed the matter till further order. The Companymay be liable to pay interest @ 12% PA on Rs.60,728/- from 28.02.1990 being the date of demand till date of dateof payment of ESI contribution.

24. OCL India Limited Vs The Regional Director, Employees State Insurance Corporation and another

[FAO NO. 56/2005]

Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -Cum- ESI Court,Khurda at Bhubaneswar in ESI Misc. Case No. 243/2001, directing payment of interest from the date of demand ofESI contribution on overtime wages. High Court by it’s order dated. 11.02.2005 has stayed the order of the lowerCourt till 29.04.2005. On 29.04.2005 Orissa High Court again stayed the matter till further order. The Companymay be liable to pay interest @ 12% PA on Rs.2,11,631/- from 25.09.1991 being the date of demand till date ofdate of payment of ESI contribution.

25. OCL India Limited Vs The Regional Director, Employees State Insurance Corporation and another

[FAO NO. 57/2005]

Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -Cum- ESI Court,Khurda at Bhubaneswar in ESI Misc. Case No. 246/2001 directing payment of interest from the date of demand ofESI contribution on overtime wages. High Court by its order dated 11.02.2005 has stayed the order of the lowerCourt till 29.04.2005. On 29.04.2005 Orissa High Court again stayed the matter till further order. The Companymay be liable to pay interest @ 12% PA on Rs.1,60,734/- from 10.06.1991 being the date of demand till date ofdate of payment of ESI contribution.

26. OCL India Limited Vs The Regional Director, Employees State Insurance Corporation and another

[FAO NO. 58/2005]

Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -Cum- ESI Court,Khurda at Bhubaneswar in ESI Misc. Case No. 252/2001directing payment of interest from the date of demand ofESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lowerCourt till 29.04.2005. On 29.04.2005 Orissa High Court again stayed the matter till further order. The Companymay be liable to pay interest @ 12% PA on Rs.1,21,495/- from 26.06.1992 being the date of demand till date ofdate of payment of ESI contribution.

27. OCL India Limited Vs The Regional Director, Employees State Insurance Corporation and another

[FAO NO. 59/2005]

Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -Cum- ESI Court,Khurda at Bhubaneswar in ESI Misc. Case No.261/2001 directing payment of interest from the date of demand ofESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lower

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Court till 29.04.2005. On 29.04.2005 Orissa High Court again stayed the matter till further order. The Company maybe liable to pay interest @ 12% PA on Rs.1,79,962/- from 21.03.1994 being the date of demand till date of date ofpayment of ESI contribution.

28. OCL India Limited Vs The Regional Director, Employees State Insurance Corporation and another

[FAO NO. 60/2005]

Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -Cum- ESI Court,Khurda at Bhubaneswar in ESI Misc. Case No.261/2001 directing payment of interest from the date of demand ofESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lowerCourt till 29.04.2005. On 29.04.2005 Orissa High Court again stayed the matter till further order. The Companymay be liable to pay interest @ 12% PA on Rs.1,79,962/- from 21.03.1994 being the date of demand till date ofdate of payment of ESI contribution.

29. OCL India Limited Vs The Regional Director, Employees State Insurance Corporation and another

[FAO NO. 61/2005]

Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -Cum- ESI Court,Khurda at Bhubaneswar in ESI Misc. Case No. 251/2001directing payment of interest from the date of demand ofESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lowerCourt till 29.04.2005. On 29.04.2005 Orissa High Court again stayed the matter till further order. The Companymay be liable to pay interest @ 12% PA on Rs.2,07,911/- from 26.07.1992 being the date of demand till date ofdate of payment of ESI contribution.

30. OCL India Limited Vs The Regional Director, Employees State Insurance Corporation and another

[FAO NO. 62/2005]

Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -Cum- ESI Court,Khurda at Bhubaneswar in ESI Misc. Case No. 262/2001directing payment of interest from the date of demand ofESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lowerCourt till 29.04.2005. On 29.04.2005 Orissa High Court again stayed the matter till further order. The Companymay be liable to pay interest @ 12% PA on Rs.3,77,261/- from 02.11.1993 being the date of demand till date ofdate of payment of ESI contribution.

31. OCL India Limited Vs State of Orissa & Others [WP (C) N0.4778/2005]

Filed by the Company challenging the demand notice No.434 dated 23.03.2005 for Rs.4,17,172/- and demandnotice No. 435 dated 24.03.2005 for Rs.5,95,100/- both issued by the Regional Transport Officer(RTO), Sundargarhdemanding payment of road tax and penalty in respect of seven pay loaders and one pick and carry Hydrauliccrane operated in the factory premises of the Company. The Company in it’s reply to the RTO contended that thesaid pay loaders and pick and carry Hydraulic crane are not motor vehicles within the meaning of under Section2(28) of The Motor Vehicles Act, 1988. Hon’ble Orissa High Court by its order dated 10.05.2005 restrained theRTO, Sundargarh for giving any further effect to the demand notice till further orders.

32. OCL India Limited Vs Union of India & Others [WP(C) NO 7529/2005]

Filed by the Company challenging the letter dated 25.04.2005 issued by the Chief Sales Manager, MCL directingthe Company to lift coal for it’s Refractory unit by E-auction or to pay the average E-auction price of particulargrade of coal in violation of the terms and conditions of the agreement dated 07.01.2004 entered into between theCompany and Mahanadi Coalfields Limited. By interim order dated 21.06.2005 Hon’ble Orissa High Court directedMCL to supply coal as per agreement but at enhanced price. The differential amount shall be kept in a separateinterest bearing account till disposal of the case.

The case is pending.

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33. OCL Vs. State of Orissa and others [WP (C) NO.9471/2005]

Filed by the Company challenging the constitutional validity of The Orissa Rural Infrastructure And Socio-EconomicDevelopment Act, 2004 (ORISED Act). The Hon’ble Orissa High Court by it’s order dated 12.09.2005 directed theAuthorities not to take coercive action to recover the tax and the mining companies to collect tax in cash or thoughbank guarantee.

The Hon’ble High Court of Orissa struk down the validity of the act by it’s order dated 05.12.2005.

34. OCL Vs. Mahanadi Coal Fields Limited and others [WP (C) NO. 10551/2005]

Filed by the Company challenging the memo No. MCL/SBP/S&M/E-auction/2005/769 dated 04.08.2005 and noticeNo. MCL/SBP/GM(S&M)/ Pricing/2005 dated 08.08.2005 of MCL seeking to realise the ORISED tax on basic coalvalue including crushing and sizing charges. The Hon’ble Orissa High Court by it’s order dated 12.09.2005 directedthe Authorities not to take coercive action to recover the tax and the mining companies to collect tax in cash orthough bank guarantee.

The Hon’ble High Court of Orissa struk down the validity of the act by it’s order dated 05.12.2005.

35. OCL Vs. Union of India and others [W P (C) NO. 3266/2006]

The Chief Goods Supervisor, OC Siding, Rajgangpur, S E Railway, levied overloading punitive charges forRs.7,25,070/- alleging overloading of iron ore loaded from Barsuan and Nuamundi station and consigned to OCSiding, Rajgangpur (S E Railway). The action of the Company was based on the Special rate circular bearing Sl.No. 79(G)2005 dated 11.05.2005 which revised the permissible capaciry of BOXN wagos, with effect from 15.05.2005.This circular permits carrying capacity of CC+8 tonnes in place of CC+4 tonnes in respect of specified materialslike iron ore in designated routes. The Railways action is based on the withdrawal of the said circular withretstropective effect i.e. with effecrt from 15.05.2005. The Company challenged the levy on the ground that withdrawalof the previous circular dated 11.05.2005 with retrospective effect is illegal. The Hon’ble Orissa High Court by it’sorder dated 08.03.2006 stayed the said demand till the next date.

36. OCL Vs. Union of India and others [W P (C) NO. 4214/2006]

The Chief Goods Supervisor, OC Siding, Rajgangpur, S E Railway, levied overloading punitive charges forRs.9,67,613/- alleging overloading of coal despatched from Akaltara and consigned to OC Siding, Rajgangpur. TheCompany filed writ petition challenging the levy on the ground that weigment of the wagons is incorrect due tofaulty weighbridge of the Railways. The Hon’ble Orissa High Court by it’s order dated 31.03.2006 stayed the saiddemand till the next date.

37. OCL Vs. Union of India and others [W P (C) NO.6628/2006]

The Company was alotted a coal block for captive mining of coal jointly with M/s Rungta Mines(leader) and M/sOcean Ispat Ltd. The Ministry of coal and mines indicated three options. The leader of the joint allottees opted forOption III. It is clarified by the Ministry of Coal that the draft agreement proposed under Option III is only modelform and the same can be altered/modified by mutual agreemnt.The Company intimated it’s preference to work thecoal mine through a joint venture company to ensure equal represeantation to the joint allottees in activities of theventure and sharing of the coal raised in proportion of their coal entitlement stands interse. In the event the Ministydirects to adopt Option III, a draft has been sugested with modification to Option III. However the Governmentrefused to accept the proposal and directed the parties that Radhikapur coal block shall be worked only by theleader M/s Rungta Mines and joint allottees shall surrender their right to the leader. The Company filed a writchallenging the said letter dated 25.04.2006 which ignored the proposal of the joint alottees. Orissa High Court byits’ order dated 18.05.2006 directed the Minstry of Coal not to take any decision prejudicial to the interest of theCompany in respect of the coal block in question unless all of them agree to sign the draft agreement as proposedby the Government.

38. OCL Vs. State of Chhatishgarh and others [W P NO.2632/2006]

Filed by the Company challenging legality and validity of Chhatishgarh (Adhosanrachna Vikas avam Paryavaran)Upkar Adhiniyam,2005 and Rules made thereunder. The aforesaid Act provides for levy of cess ion land for raisingfunds to implement infrastructure development projects and environment projects. The Hon’ble Chhatisgarh High

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Court by it’s order dated 07.06.2006 held that the cess that may be recovered under the impugned enactment shallbe subject to the final result of the writ petition and directed listing of the case for final hearing in second week ofJuly.

39. OCL Vs. State of Chhatishgarh and other [W P NO.2633/2006]

South Eastern Coal Fields Limited supplied 11093 MT of coal from the mines of SECL, Corba Raigarh during theperiod 04.04.2006 to 05.05.2006.and demanded cess under Chhatishgarh (Adhosanrachna Vikas avam Paryavaran)Upkar Adhiniyam,2005 and Rules made thereunder. The Company filed writ petition for staying the said demand.The Hon’ble Chhatisgarh High Court by it’s order dated 07.06.2006 held that the cess that may be recoveredunder the impugned enactment shall be subject to the final result of the writ petition and directed listing of the casefor final hearing in second week of July.

40. OCL Vs. State of Orissa and others [W P (C) NO. 8683/2006]

An industrial dispute arose between the workmen and it’s contractor M/s Rattan Enterprises with regard to entitlementof wages at higher rate. The State Government while referring the dispute wrongly impleaded the Company as aparty to the dispute and the said reference was registered as Industrial Dispute case No. 16 of 2005 in IndustrialTribunal, Rourkela. The Company challenged the said illegal reference dated 26.11.2005 of Government of Orissa,Labour and Employment Department on the ground that the dispute is between the workmen and the Contractorand is contrary to the Section 12(5) read with Section 10(1)(d) of the Industrial Disputea Act, 1947.

PROVIDENT FUND CASES

OCL Vs. Asst. P.F Commissioner, Rourkela [ATA NO.390(8)2002]

Filed by the Company challenging the order dated 31st July 2002 of Assistant Provident Fund Commissioner, SubRegional Office, Rourkela demanding PF contribution on Special Allowance and Additional Special Allowance paid to allworkmen amounting to Rs.89,03,046/- for the wage period from 01.01.2000 to 31.12.2001 and interest ofRs.16,33,441/-.

The contention of the Company is that Section 2(b) of the Provident Fund Act specifically excludes certain allowanceslike house rent allowance, overtime allowance, any other similar allowance from the purview of the basic wages. Theelement of special allowance falls within the exclusion clause. The Hon’ble Tribunal by it’s order dated 27.07.2005directed the Company to deposit 25% of the determined amount within two weeks for admission of the case for hearing.Accordingly the Company deposited Rs.14,05,944/-. The next date of hearing is fixed on 18.08.2006.

EMPLOYEES’ STATE INSURANCE CASES

1. OCL India Limited VS E S I Corporation [ESI Misc. No. 342/2004]

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views ofvarious High Courts on the issue. The Company contended that the decision of Hon’ble Orissa High Court in thecase of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtimewages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of DistrictJudge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Courtfinally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Limited Vs.Employees State Insurance Corporation Limited (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1167-46-19-11893 issued on24/26.05.2005 imposing damages totaling to Rs.1,59,969/- under Section 85(B) of the ESI Act, 1948 for delayedpayment of ESI contribution on over time wages for periods from 01.01.1990 to 31.01.1991.

The Company challenged the said demand notice and the Hon’ble District Judge, Bhubaneswar granted stay videorder dated 21.07.2005.

2. OCL India Limited VS E S I Corporation [ESI Misc. No. 343/2004]

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views ofvarious High Courts on the issue. The Company contended that the decision of Hon’ble Orissa High Court in thecase of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtime

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wages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of DistrictJudge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Courtfinally held that overtime wages form part of the wages in the case of Indian

Drug & Chemicals Limited Vs. Employees State Insurance Corporation Limited (ESIC) reported in 1997 (II) LLJ-700.Regional Director, Employees’ State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1167-46-20-11896 issued on 24/26.05.2005 imposing damages totaling to Rs.1,51,035/- under Section 85(B) ofthe ESI Act, 1948 for delayed payment of ESI contribution on over time wages for periods from 01.02.1991 to31.01.1993.

The Company challenged the said demand notice and the Hon’ble District Judge, Bhubaneswar granted stay videorder dated 21.07.2005.

3. OCL India Limited VS E S I Corporation [ESI Misc. No. 344/2004]

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views ofvarious High Courts on the issue. The Company contended that the decision of Hon’ble Orissa High Court in thecase of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtimewages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of DistrictJudge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Courtfinally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Limited Vs.Employees State Insurance Corporation Limited (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1167-46-18-11890 issued on24/26.05.2005 imposing damages totaling to Rs.60,728/- under Section 85(B) of the ESI Act, 1948 for delayedpayment of ESI contribution on over time wages for periods from 01.02.1989 to 31.12.1989.

The Company challenged the said demand notice and the Hon’ble District Judge, Bhubaneswar granted stay videorder dated 21.07.2005.

4. OCL India Limited Vs Employees’ State Insurance Corporation [ESI Misc. No. 179/2004]

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views ofvarious High Courts on the issue. The Company contended that the decision of Hon’ble Orissa High Court in thecase of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtimewages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of DistrictJudge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Courtfinally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Limited Vs.Employees State Insurance Corporation Limited (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-9-5258 issued on09.11.2003 imposing damages totaling to Rs.10,52,468/- under Section 85(B) of the ESI Act, 1948 for delayedpayment of ESI contribution on over time wages for periods from 16.02.1994 to 15.05.1996.

The Company challenged the said order and the Hon’ble District Judge, Bhubaneswar granted stay vide orderdated 15.04.2004.

5. OCL India Limited Vs Employees’ State Insurance Corporation [ESI Misc. No. 418/2004]

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views ofvarious High Courts on the issue. The Company contended that the decision of Hon’ble Orissa High Court in thecase of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtimewages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of DistrictJudge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Courtfinally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Limited Vs.Employees State Insurance Corporation Limited (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-2-18671 issued on09.08.2004 imposing damages totaling to Rs.32,333/- under Section 85(B) of the ESI Act, 1948 for delayed paymentof ESI contribution on over time wages for periods from 16.01.1991 to 15.12.1992.

The Company challenged the said demand notice and the Hon’ble District Judge, Bhubaneswar granted stay videorder dated 06.10.2004.

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6. OCL India Limited Vs Employees’ State Insurance Corporation [ESI Misc. No. 416/2004]

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views ofvarious High Courts on the issue. The Company contended that the decision of Hon’ble Orissa High Court in thecase of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtimewages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of DistrictJudge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Courtfinally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Limited Vs.Employees State Insurance Corporation Limited (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-1-18674 issued on09.08.2004 imposing damages totaling to Rs.1,95,579/- under Section 85(B) of the ESI Act, 1948 for delayedpayment of ESI contribution on over time wages for periods from 16.12.1989 to 15.01.1991.

The Company challenged the said demand notice and the Hon’ble District Judge, Bhubaneswar granted stay videorder dated 06.10.2004.

7. OCL India Limited Vs Employees’ State Insurance Corporation [ESI Misc. No. 417/2004]

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views ofvarious High Courts on the issue. The Company contended that the decision of Hon’ble Orissa High Court in thecase of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtimewages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of DistrictJudge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Courtfinally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Limited Vs.Employees State Insurance Corporation Limited (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-3-18668 issued on09.08.2004 imposing damages totaling to Rs.72,182/- under Section 85(B) of the ESI Act, 1948 for delayed paymentof ESI contribution on over time wages for periods from 16.01.1989 to 15.12.1989.

The Company challenged the said demand notice and the Hon’ble District Judge, Bhubaneswar granted stay videorder dated 06.10.2004.

8. OCL India Limited Vs Employees’ State Insurance Corporation [ESI Misc. No. 260/2004]

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views ofvarious High Courts on the issue. The Company contended that the decision of Hon’ble Orissa High Court in thecase of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtimewages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of DistrictJudge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Courtfinally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Limited Vs.Employees State Insurance Corporation Limited (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’State Insurance Corporation, Bhubaneswar started a certificate case bearing No. 44/Y/11/15/44-1281-RR dated29.04.2004 for realisation of interest totaling to Rs.8,33,901/- under Section 45 of the ESI Act, 1948 for delayedpayment of ESI contribution on over time wages for periods from 16.02.1994 to 15.05.1996.

The Company challenged the said certificate proceeding and the Hon’ble District Judge, Bhubaneswar grantedstay vide order dated 10.06.2004.

CONSUMER CASES

Ms. Susani Kawa vs. Asst. PF Commissioner and OCL [Consumer Dispute No. 201/1998]

Filed by Ms. Susani Kawa wife of Late Simon Kawa and Mr. Libnus Kawa son of Late Simon Kawa against The RegionalPF Commissioner, Bhubaneswar, Asst. PF Commissioner, Rourkela and OCL India Limited praying for release of providentfund dues accumulated in the account of Late Simon Kawa maintained with Asst. PF Commissioner, Rourkela. TheCompany deposited it’s share of PF contribution as well as employee’s contribution with the PF authorities. The Companyhas no liability towards payment of the PF dues to the legal heirs of Late Simon Kawa.

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INDUSTRIAL DISPUTE CASES

1. MR. P C Das Vs. OCL [Case No. 12/1997]

Demanding reinstatement in service after acquittal from the criminal case Mr. Purna Chandra Das raised anindustrial dispute, which was referred by the Government to the Presiding Officer, Industrial Tribunal, Rourkela foradjudication. The said case was registered as Industrial Dispute Case No. 12/1997. Mr. Das was not satisfied withthe reference of the case and filed a writ bearing OJC No.12034/1998 in Orissa High Court for changing thereference and further proceedings in Tribunal are stayed.

2. Mr. P K Mohapatra Vs. OCL [Case No. 21/1997]

Challenged the order of dismissal. He was dismissed for disobeying the order of his superiors. Subsequently onthe petition of Mr. Mohapatra Govt. transfer this case from Sambalpur to Bhubaneswar and the said transfer waschallenged by the Company and proceedings are stayed. Subsequently on the request of Mr. Mohapatra, thematter was settled out of court by entering into an agreement in Form-K. In view of the settlement, the writ filed bythe Company was withdrawn and Labour Court, Bhubaneswar was approached for passing a no dispute award.The case is pending.

3. Mr. Gokuldas Vs OCL [Case No. 72/2002]

Dispute regarding date of birth. The date of birth is recorded as 35 years on the date of joining and superannuatedon that basis. Subsequently on the petition of Mr. Das Government transfer this case from Sambalpur to Rourkelaand the reference was also changed. The said transfer and change in reference were challenged by the Companyin Orissa High Court and proceedings are stayed. Thereafter Orissa High Court disposed of the case directing theGovernment to again transfer the case to Sambalpur and the hearing will be on the old reference. The ID case,which is pending at Rourkela has been transferred to Labour Court Sambalpur for adjudication. The maximumliability in this case may be Rs. 4,24,593/-.

4. Mr. Gayadhar Sahoo Vs OCL [Case No. 1/2003]

Mr. Gayadhar Sahoo, Mason was dismissed from services on the grounds of disobedicnce, misbehaviour andabsence from duty. He raised an Industrial Dispute and was registered with thw Labour Court, Sambalpur asIndustrial Dispute Case No. 1/2003. Vide order dated 01.01.2004 the said case has been transferred from theregistry of Labour Court, Sambalpur to the Registry of Industrial Tribunal, Rourkela for adjudication. Being aggrivedby the said order dated 01.01.2004, the Company filed the writ application WP (C ) No. 1131/2004 under Article226 and 227 of the Constitution of India in the Hon’ble High Court of Orissa. The Hon’ble High Court vide orderdated 09.02.2004 stayed the proceedings of the case No. 1/2003 pending before the Industrial Tribunal, Rourkela.The case is pending for further proceedings. The maximum liability in this case may be Rs. 3,00,827/-.

5. Mr. R. N. Behera Vs OCL [Case No. 6/2001]

Mr. Rabi Narayan Behera, Sr. Clerk, Share and Law Department raised an Industrial Dispute challenging thetermination of his service on the ground of disobedience. The said case was registered as ID case No. 6/2001 inthe Labour Court, Sambalpur. State Government on request of Mr. Behera transferred the said case to LabourCourt, Bhubaneswar without givig an opportunity of hearig to the Company. The Company filed writ in Orissa HighCourt challenging the order of Government of Orissa transferring the ID case from Labour Court, Sambalpur toLabour Court, Bhubaneswar. Stay is granted by Orissa High Court. During the pendency of the said writ Mr.Behera entered into a settlement with the Company in Form-K and received Rs. 1,50,000/- towards full and finalsettlement of his claim. In view of this development the Company filed withdrawal petition in the High Court forwithdrawal of the writ. The ID case in the Labour Court will accordingly be disposed off in terms of the settlement.

The case is pending.

CIVIL CASES

1. M/s IFGL Refractories Limited Vs OCL India Limited [Civil Suit No. 139 of 2004]

IFGL filed Civil suit in the Court of Civil Judge, Senior Division, Rourkela claiming damages of Rs.5,00,000/- fromMr. Basak and Rs.50,000/- from the Company as Mr. Basak committed breach of secrecy agreement entered into

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between the IFGL and Mr. Basak. Misc. Case No.51/2005 was also filed by IFGL praying for injunction against Mr.Basak to restrain him from divulging and disclosing any technical know how and secrecy which he has acquiredfrom IFGL and also to restrain the Company from procuring and using the technical know how and trade secrecyfrom Mr. Basak.

The Company filed its objection opposing the grant of injunction on the ground that the Company is not a party tothe Secrecy agreement and not liable for damages. Miscellenous case has been disposed off in favour of thedefendants. Suit hearing is in progress with next date of hearing is July 31, 2007.

2. Pareswar Ganda & Others Vs. M/s OCL India Limited [Civil Suit No. 43 of 2005]

Plaintiff is the owner of the plot bearing No. 1560 out of Khata No. 135, in the Badgudhiali village, Rajgangpur,District Sundergarh. Defendant Company has established its Sponge Iron unit adjacent to the Plot of the Plaintiff.On 20th November, 2004 the Defendant Company dug the foundation over the Company’s land and started raisinga boundary wall. The Plaintiff alleges that the Company is constructing the Boundary wall in his land. Beingaggrieved by the act of the Defendant Company the Plaintiff filed a civil suit in the court of Civil Judge (SeniorDivision) for declaration of right, title and eviction with injunction to restrain the Defendant Company from construction.The Construction of the boundary wall was completed before the summon of the case was served on the Companyas such the prayer for injunction becomes infructuous.

The case has been fixed for hearing on 22.07.2006.

3. Mr. Ishar Alloy Steels Limited Vs M/s OCL India Limited [CIVIL SUIT NO. 20B of 1991]

Mr. Ishar Alloy Steels Limited (Plaintiff No.1) placed an order vide Purchase Order No. 35, dated 07.02.1989 to M/s S.K. Tulsayan Trading Company Private Limited (Defendant No.1) amounting to Rs.1,25,645.92 for supply ofmagnetic bricks. Defendant No. 1 to fulfill the supply of magnetic bricks forwarded the order to the M/s OCL IndiaLimited (Defendant No.2). Defendant No. 2 delivered the goods to Orissa Goods Carriers (Defendant no. 3) beingthe public carrier for delivering the consignment of the aforesaid goods to the Plaintiff No. 1.On 14.06.1989 thePlaintiff No.1 received the delivery of the goods by endorsing the remark on the receipt that “Consignment wasreceived in wet condition”. The Driver of the carrier alleged that the magnetic bricks were packed in wet grasshence the delivery was affected in wet condition. Plaintiff No.1 intimated this fact to the Defendant No. 1 & 2.Defendant No.2 denying the allegation of Plaintiff No.1 and submitted that they have supplied the goods toDefendant No. 3 in their perfect condition and the goods were damaged in transit. However, the estimated value ofloss is Rs.97,286/- as per the report of the surveyor. To claim the amount of Rs.97,286/-, Plaintiff No. 1 filed thesuit against all the Defendants under order 7 rule 1-2 of Civil Procedure Code, in the court of District Judge,Indore.

The next date of hearing is not notified by the Court.

ARBITRATION PROCEEDINGS

1. OCL and Neelachal Ispat Nigam Limited

Company has entered into an agreement on 12.05.1998 with Neelachal Ispat Nigam Limited (formerly Konark MetCoke Limited which merged into the present Respondent by virtue of the order of the Hon’ble High Court of Orissaunder section 394(2) of the Companies Act, 1956) for supply of 14081 MTs of different types of silica refractorybricks and 1250 MTs of mortar for a total price of Rs. 31.26 Crores.

As per the agreement the Claimant was required to manufacture the goods in accordance with the specification ofthe order and offer the same for inspection to the Respondent. After satisfying, with the quality of goods RespondentCompany issued a certificate and dispatch clearance to the Claimant Company. Thereafter, The Claimant Companydelivered the goods to the Respondent Company.

The Claimant Company manufactured the goods in accordance with the specification of the order of the Respondentand the same was offered to the Respondent for inspection and test and issuance of dispatch clearance but theRespondent did not issue the dispatch clearance with in a reasonable period and thus prevented the Claimantfrom dispatching the goods by adhering to the time schedule.

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Being aggrieved with the act of the Respondent Company, The Claimant Company has filed the claim before theArbitral Tribunal and claimed damages of Rs. 128741119 on account of loss sustained by them for such delay indispatch of goods manufactured and consequent delay in payment of the price thereof.

The Respondent Company has also raised three counter claims totaling Rs. 98129843 against the ClaimantCompany.

The hearing has already been concluded. Award is awaited.

MOTOR ACCIDENT CLAIM CASES

1. Lubhabati Choudhury and three others vs. Awtar Singh & Others [CASE No. 27/2004 & 28/2004]

The Company’s tanker OR-16A-9825 met with an accident on 03.12.2003 in which Mr. Purna Chandra Choudhuryresident of Sundargarh died. His legal heirs lodged a claim for payment of Rs.5,00,000/- and Rs.50,000/- underSection 166 and 140 of the Motor Vehicles Act in the Court of Motor Accident Claims Tribunal-1, Sundargarh . Thevehicle is insured with The Oriental Insurance Company, as such the liability will be on the insurance Company.The case is pending.

2. Haripriya Puran and four others vs. Ramesh lakra & others [CASE No. 184/2004 & 185/2004]

The Company’s truck No. OR-09C-7062, which was carrying cement met with an accident on 21.03.2004 and inwhich Mr. Chaitanya Puran died. His legal heirs lodged a claim for payment of Rs.50,000/- and Rs.20,00,000/-under Section 166 and 140 of the Motor Vehicles Act in the Court of Motor Accident Claims Tribunal, Rourkela.The vehicle is insured with The Oriental Insurance Company, as such the liability will be on the insurance Company.The Tribunal while disposing of the case directed the Oriental Insurance company to pay Rs.50,000/- ascompensation to the petetioners.

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SALES TAX CASES

Details of Sales Tax Litigations against the Company

OCL INDIALIMITED Detials of contingent liability with respect to cases pending before sales tax / entry tax various authority

RAJGANGPUR

Sl. Type of Title of the Name of the Brief facts and Next Copy of Copy ofNo. Litigation case Authority / current status date of the last interim

Judge hearing order order(Currentstatus i.e.case pendingbefore)

Total Amount involved(Rs. in lacs)

Amount Amountpaid outstand-

ing

Cement Refrac-tory

SpongeIron

Total

Sales Tax(2nd Appeal)1st appealhas beendisposed offand against1st Appealorder wefiled 2nd appealw h e r e e v e rrelief notallowed.

1 2003-04 - OST Orissa Sales TaxTribunal

Contravention of Form IV forself consumption of Refractory,N o n - s u b m i s s i o n / d e f e c t i v edeclaration forms, conse-quential surcharge etc.

Nointimation /noticereceived

1st AppealOrder

D e m a n dretained in1st Appeal iscovered bya m o u n tpaid.

1.07 1.15 0.78 3.00 3.00(refundof excesstax appliedfor)

2 Sales Tax (2nd

A p p e a l ) 1 s t

appeal hasb e e ndisposed ofand against 1st

Appeal orderwe filed 2nd

a p p e a lw h e r e e v e rrelief notallowed

2003-04 - CST Orissa Sales TaxTribunal

Non-submission declarationforms-C /H/EI, surcharge isconsidered as rate of sales taxunder State law and leviedon sales under CST to notcovered by ‘C” Forms andStock tranfer of Sponge Ironto consignment Agentsdisallowed and treated asinte-state sale.

Nointimation /noticereceived

1st AppealOrder

D e m a n dretained in1st Appealis coveredby amountpaid.

0.87 57.05 57.92 57.92

3 Sales Tax (2ndAppeal)

1995-96 - OST Orissa Sales TaxTribunal

Quantity discount on cement,Notional value of duty freeadvance license on DBM bySAIL treated as turnover,Interest on monthly availmentof deferment, Contraventionof Form IV, Sale of Rejectedboulder treated as mineraland taxed at S.T. rate ofmineral, non-submission ofForms, consequentialsurcharge.

Nointimation/noticereceived

1st AppealOrder

Stay Order 39.17 34.26 73.43 20.00 53.43

4 Sales Tax (2ndAppeal)

1995-96 - CST Orissa Sales TaxTribunal

Freight Separately chargedtreated as sale price, Exportto TYK Japan treated as CSTsale, penal interest on monthlyavailment of deferment,surcharge is considered as rateof sales tax under State lawand levied on sales under CSTto not covered by ‘C” Forms.

Nointimation/noticereceived

1st AppealOrder

Stay Order 48.82 44.37 - 93.19 40.00 53.19

5 Sales Tax (2ndAppeal)

1997-98 - OST Orissa Sales TaxTribunal

Quantity discount on cement,Penal Interest on monthlyavailment of deferment,Contravention of Form IV,Declaration treated asdefective, consequentialsurcharge

Nointimation/noticereceived

1st AppealOrder

Stay Order 58.43 1.58 - 60.01 40.00 20.01

OCL INDIA LIMITED

172

SALES TAX CASES

Details of Sales Tax Litigations against the Company

OCL INDIALIMITED Detials of contingent liability with respect to cases pending before sales tax / entry tax various authority

RAJGANGPUR

Sl. Type of Title of the Name of the Brief facts and Next Copy of Copy ofNo. Litigation case Authority / current status date of the last interim

Judge hearing order order(Currentstatus i.e.case pendingbefore)

Total Amount involved(Rs. in lacs)

Amount Amountpaid outstand-

ing

Cement Refrac-tory

SpongeIron

6Sales Tax(2nd Appeal)

1998-99 - OST Orissa Sales TaxTribunal

Quantity discount on cement,Contravention of Form IV,Non-submission / defectivedeclaration forms,consequential surcharge.

Nointimation/noticereceived

1st AppealOrder

Stay Order 26.54 2.46 - 29.00 15.00 14.00

7Sales Tax(2nd Appeal)

1999-2000 -OST

Orissa Sales TaxTribunal

Quantity discount on cement,Contravention of Form IV, Non-submission / defectivedeclaration forms,consequential surcharge.

Nointimation/noticereceived

1st AppealOrder

S t a yOrder

50.32 1.04 - 51.36 15.00 36.36

8 Sales Tax(2nd Appeal)

1982-83 - CST Orissa Sales TaxTribunal

High Court has directed theTribunal to allow deduction offreight in case the same isseparately charged.

Nointimation/noticereceived

1stA p p e a lOrder

Stay Order 1.40 1.23 - 2.63 2.63

9Sales Tax(2nd Appeal)

2000-2001 -OST

Orissa Sales TaxTribunal

Quantity discount on cement,Contravention of Form IV, Non-submission declaration forms,sale of scrap taxed at higherrate of 12%, consequentialsurcharge.

Nointimation/noticereceived

1st AppealOrder

Stay Order 87.33 3.51 - 90.84 52.00 38.84

10 Sales Tax(2nd Appeal)

2002-03 -CST

Orissa Sales TaxTribunal

Non -subm iss i on /de fec t i vedeclaration forms-C/F/H/EI,surcharge is considered as rateof sales tax under State lawand levied on sales under CSTto not covered by ‘C” Formsand Stock tranfer of SpongeIron disallowed and treated asinte-state sale.

Nointimation/noticereceived

1st AppealOrder

Stay Order 2.90 0.56 10.04 13.50 12.50 1.00

11 Entry Tax (2nd

A p p e a l ) 1 s t

appeal hasbeen disposedof and against1st Appealorder we filed2nd appealw h e r e e v e rrelief notallowed

2003-04- ET Orissa Sales TaxTribunal

Disallowances of ET paid/suffered goods as purchasedfrom unregistered dealers ofOrissa Form E-15 w.r.t. SIW,etc.

Nointimation/noticereceived

1st AppealOrder

D e m a n dretained in1st Appealis coveredby amountpaid

0.79 - 1.05 1.84 1.84(refund

of excesstax

appliedfor)

12 Entry Tax (2ndAppeal)

1 9 9 9 - 2 0 0 0(Dec 99 to Mar2000)

Orissa Sales TaxTribunal

Quantity discount, sale ofcement to non-dealers likeB.D.Os, disallowances of ETpaid/suffered goods aspurchased from unregistereddealers of Orissa, etc.

Nointimation/noticereceived

2ndAppealOrder

S t a yOrder

4.04 0.19 4.23 - 3.50 0.73

Total

173

13 Entry Tax(2nd Appeal)

2000-01 Orissa Sales TaxTribunal

Quantity discount, sale ofcement to non-dealers likeB.D.Os, disallowances of ETpaid/suffered goods aspurchased from unregistereddealers of Orissa, etc.

Nointimation/noticereceived

2ndAppeal Order

Stay Order 7.57 - - 7.57 5.50 2.07

14 Entry Tax(2nd Appeal)

2001-02 Orissa Sales TaxTribunal

Quantity discount special cashdiscount, disallowances of ETpaid/suffered goods aspurchased from unregistereddealers of Orissa, etc.

Nointimation/noticereceived

2ndAppeal Order

Stay Order 2.47 - - 2.47 1.80

15 Entry Tax(2nd Appeal)

2002-03 Orissa Sales TaxTribunal

Quantity discount special cashdiscount, disallowances of ETpaid/suffered goods aspurchased from unregistereddealers of Orissa,Enhancement of turnover ofSponge Iron, Non-submissionof Form E-15 w.r.t. SIW, etc.

Nointimation/noticereceived

2ndAppeal Order

Stay Order 1.41 - 2.02 3.43 3.35 0.08

0.67

16Sales Tax(1st Appeal)

2004-05 - OST A s s t .Commissioner ofSales Tax,S u n d a r g a r hRange, Rourkela

Quantity discount and Specialcash Discount on cement,Enhancement of turnover ofSponge Iron on basis ofcalculation of iron oreconsumption at 1.65 Mt. permt of sponge iron instead ofaccepting actual consumption,Contravention of Form IV forself consumption ofRefractory, Non-submissiondeclaration forms/certificateetc and consequentialsurcharge etc.

Date isfixed on31.07.2006

AssessmentOrder

Stay Order (13.89) 1.35 29.19 16.65 6.00 10.65

17 Sales Tax(1st Appeal)

2004-05 - CST A s s t .Commissioner ofSales Tax,S u n d a r g a r hRange, Rourkela

Non-submiss ion /de fec t i vedeclaration forms-C/F/H/EI,surcharge is considered as rateof sales tax under State lawand levied on sales under CSTto not covered by ‘C” Formsand Stock tranfer of SpongeIron to Raipur Depot andconsignment Agentsdisallowed and treated as inte-state sale.

Date isfixed on31.07.2006

AssessmentOrder

Stay Order 69.30 23.51 260.06 352.87 145.00 207.87

TOTAL 411.47 116.08 360.19 887.74 430.34 457.40

SALES TAX CASES

Details of Sales Tax Litigations against the Company

OCL INDIALIMITED Detials of contingent liability with respect to cases pending before sales tax / entry tax various authority

RAJGANGPUR

Sl. Type of Title of the Name of the Brief facts and Next Copy of Copy ofNo. Litigation case Authority / current status date of the last interim

Judge hearing order order(Currentstatus i.e.case pendingbefore)

Amount Amountpaid outstand-

ing

Total Amount involved(Rs. in lacs)

Cement Refrac-tory

SpongeIron

Total

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174

Outstanding Litigations by & against the Directors

As per the certificates given by the directors of the company there are no litigations pending against them except Mr.Pradip (Pinto) Khaitan, details of same is herein below:

SI. No. PartiesInvolved Brief Summary of Case Date of Institution Current Status ofCase

Date ofResolution(if applicable)

Court /Tribunal Amount involved(INR)

Penalty Imposed (ifany)

Default Cases

1Mcleod Russel (India)Limited and itsDirectors

Show Cause Notice dated 17/1012002 bearing no.18/338/2003- 2004/ECAICALLALS- H/00031AM 92issued by the Joint Director General of Foreign TradeGovernment of India, Ministry of Commerce, Officeof the Joint Director General of Foreign Trade, underSection 11 of the Foreign Trade (Development &Regulation) Act, 1992

October 17,2002 The Companyhas submittedall the necessarydocuments andis awaiting theresponse of theJoint DirectorG e n e r a lofForeign Trade.

Not AscertainedNot Applicable Not Applicable Not Applicable

Litigation

2CESC Limited anditsofficials and Directors

Complaint Case no. 264 of 2000 for allegedoffence under Section 406, 420, 465, 467 and 468read with 120B of the IPC’ against the Companyand itsDirectors / officials was filed by Bengal IspatUdyog (Mr. Suresh Agarwal) before the Court ofthe Ld. Add!. Chief Judicial Magistrate, Alipore.

2000 All thep r o c e e d i n g shave beenstayed by theHigh Court atCalcutta inC r i m i n a lRevision No.3159 of 2000.

Not Applicable Before the courtof the Ld. Addl.Chief JudicialM a g i s t r a t eAlipore.

Not Ascertained Not Applicable

3 CESC Limited andits officials andDirectors

Complaint Case no. 4979 of 2000 for allegedoffence under Section 406, 420, 465, 467 and 468read with 120B of the IPC against the Companyand its Directors/officials was filed by ContinentalSteel Star(Mr. Suresh Agarwal) before the .Court of the Ld.7thMetropolitan Magistrate, Kolkata.

2000 All thep r o c e e d i n g shave beenstayed by theHigh Court atCalcutta inC r i m i n a lRevision No.254 of 2001.

Not Applicable Before the Courtof the LdM e t r o p o l i t a nM a g i s t r a t e ,Kolkata

Not ascertained Not Applicable

4The OfficialsandDirectorsof CESCLimited

CRR No. 2226 of 2005;Before the Hon’ble HighCourtat Calcutta.Bengal Metal Industries -vs- Mr.R.P. Goenka & OthersThe Criminal Revision hasbeen filed againt the order dated July 19, 2005passed by the Ld Chief Metropolitan Magistrate,Howrah in Case No. 775C of2005 whereby theLd.Magistrate dismissed theComplaint Petition

2005 The CriminalRevision isbeing contestedby CESC

NotApplicable Hon’ble HighCourt at Calcutta

Not Ascertained Not Applicable

5The Officials andDirectors of CESCLimited

CRR No. 2284 of 2005 Before the Hon’ble HighCourt at CalcuttaBengal Metal Industries -vs- Mr.P. Goenka and Others

2005 The CriminalRevision isbeing contestedby CESC.

Not Applicable Hon’ble HighCourt at Calcutta

Not Ascertained Not Applicable

175

DETAILS OF LITIGATIONS AGAINST THE GROUP COMPANY

DALMIA CEMENT (BHARAT) LIMITED

CRIMINAL LITIGATION

a) There are 30 criminal cases filed under section 138 of the Negotiable Instruments Act, 1881 (regarding dishonourof cheques) for which the aggregate amount under litigation is Rs. 313.74 lacs.

b) Criminal complaint no. 61 of 1997 dated February 5, 1997 under section 138 of the Negotiable Instrument Act,1881 filed against M/s. Western Paques (India) Limited. The principal amount involved is Rs. 75 lacs. The case ispending before the Metropolitan Magistrate, New Delhi, has been adjourned sine die as the accused is nottraceable. No other proceedings can be initiated against M/s. Western Paques (India) Limited since the it is underwinding up and the Company has filed a claim for Rs. 2.39 crores with the Official Liquidator of M/s. WesternPaques (India) Limited.

c) Criminal complaint no. 62 of 1997 dated February 5, 1997 under section 138 of the Negotiable Instrument Act,1881 filed against M/s. ROM Industries Limited. The principal amount involved is Rs. 50 lacs. The case is pendingbefore the Metropolitan Magistrate, New Delhi. No other proceedings can be initiated against M/s. ROM IndustriesLimited as the proceedings are pending before the BIFR for its rehabilitation. Meanwhile the Company has receivedamounts aggregating to Rs. 26.30 lacs from the aforesaid party.

d) Criminal case pending before the High Court of Madras, under Section 138 of the Negotiable Instruments Act,1881 (regarding dishonour of cheques) against Mr. Sangupani Timber Depot, a cement stockist involving anamount of 47.52 lacs.

e) Criminal complaint no. 1046/1 of 1996 dated October 8, 1996 under section 138 of the Negotiable Instrument Act,1881 filed against M/s. Jauss Polymers Limited. The principal amount involved is Rs. 25 lacs. The case is pendingbefore the Metropolitan Magistrate, New Delhi. The Company has received the entire amount from the aforesaidparty.

f) Criminal Complaint dated December 29, 2000, filed before the Court of Additional Chief Metropolitan Magistrate atBombay, against Ispat Profiles (India) Limited under section 138 of the Negotiable Instruments Act, 1881, fordishonouring six cheques amounting to Rs. 14.97 lacs.

g) There are 4 criminal cases filed under various provisions of the Indian Penal Code, 1860 against employees/ex-employees.

h) There are 5 cases relating to encroachment of the company’s premises at Salem, pending before various court’sat Salem.

CIVIL LITIGATION

a) Recovery suit filed against M/s. Indian Seamless Steels & Alloys Limited, Pune, involving an amount of Rs. 116.01lacs. This amount is due to the Company on account of value of goods supplied and interest @ 20% p.a, hasbeen decreed in favour of the Company and the amount has been recovered through the Court. However, theparty has filed an appeal which is presently pending.

b) Winding up petition dated March 12, 2000, filed against M/s. Bellary Steels & Alloys Limited, Bellary before theHigh Court of Karnataka at Bangalore involving an amount of Rs. 34.97 lacs on account of unpaid value of goodsplus interest thereon. This petition has been admitted and the High Court has ordered the advertisement of thepetition in newspapers before passing appropriate orders for winding up. The Company has also filed a Civil Suitfor recovery of the same which is pending before the City Civil Judge, Bangalore.

c) There are 26 legal cases pertaining to various labour related matters, where the amounts under litigation aggregateto Rs. 33.84 lacs

d) The Company has filed a Civil Suit against M/s Marmagoa Steels Limited, in Goa for recovery of Rs. 9.12. Lacs

OCL INDIA LIMITED

176

together with interest @ 20% per annum in respect of sales and supplies made to them between the periodOctober, 1998 to June, 2000. The matter is pending as on date.

e) The Company was using 65.67 acres of land as a road from its Salem factory leading to the National Highway.This road was also used by the general public for transportation of men and materials. The State Governmentinitially proposed to give the said area on lease to the Company and demanded rental of about Rs. 26 lacs for theperiod from 1977 onwards. Being aggrieved by this demand the Company has filed a Writ Petition before theMadras High Court, which is pending. Against interim orders of the High Court the Company has furnished aCompany guarantee to the State Government for like amount.

f) Winding up petition dated February 9, 2000, filed against M/s. Bharat Refractories Limited before the High Court ofJudicature at Ranchi, involving an amount of Rs. 17.48 lacs. This amount is due to the Company on account ofvalue of goods supplied and interest @ 20% p.a. The case has been referred to BIFR.

g) Suits filed before the Railway Tribunal, etc. for claiming variance in distance of Western Coal fields and trainwagon load in respect of Eastern Coals fields involving an amount of Rs. 1.39 lacs.

h) Suit No. 996 of 1986 filed on March 31, 1986 before the Delhi High Court against M/s. Max Crona Consolidatedfor non-completion of repair work of the Ballabgarh factory roofs, for an amount of Rs. 6.16 lacs. M/s. Max CronaConsolidated has filed a counter claim in the said suit on April 10, 1987 with the Delhi High Court for an amountof Rs. 2.42 lacs. The case is now transferred to the District Court where it is presently pending.

i) The Company has received a decree dated July 7, 1999 from Additional Sub-Judge, Salem for recovery of anamount of Rs. 5.09 lacs in respect of the goods supplied, against M/s. Sansid Polbbro Chemicals (India) Limited,Pune. Since the party is situated at Pune, the decree for execution, which is pending.

j) Suits filed before the High Court, Kolkatta for claiming variance in distance of Western Coal fields and train wagonload in respect of Eastern Coals fields involving an amount of Rs. 0.55 lacs.

k) There are 14 legal cases pertaining to various labour related matters, where the amount is not ascertainable.

l) There are 4 separate legal cases filed against Hansalaya Properties before the Delhi High Court (i) suit fordamages of Rs. 9.26 lacs for late delivery of 11th and 12th floor of Hansalaya Building; (ii) suit for claiming title ofpremises in respect of 11th & 12th floors and the basement area of that building; (iii) demanding formation ofSociety and execution and Deed of Apartment under Apartment Ownership Act, 1986and (iv) suit filed for declarationand seeking right to install it’s own cooling tower. All these cases have now been transferred to the District Court.

m) There are 3 petitions filed before the Secretary, Cane Development & Sugar, regarding order for establishment/new cane purchase centre for the season 2003-04.

n) There are 6 cases filed before the Cane Commissioner and other authorities at Sitapur pertaining to reservation/de-reservation centres in respect of Ramgarh Chini Mills for weighing the sugarcane brought by cane growers.

o) There are 28 writ petitions filed before the Madras High Court against the orders of land acquisition issued by theState of Tamil Nadu in respect of lands in and around Vallajanagaram and other villages in the State of TamilNadu. These lands are mineral bearing and are required for mining operations by the Company. These petitionswere dismissed and the Company has preferred a Writ Appeal before the Madras High Court. The amounts are notascertainable and the Company is yet to receive the awards for land acquisition proceedings.

p) Two writ petitions filed on April 30, 1992, before the High Court of Madras one against rejection of the Company’sMining Lease application for the Vallajaanagaram area (an area of 714.14 acres), and against the order of theState Government dated August 25, 1986 and the other Writ Petition in respect of order for reservation of area inand around Vallaganagam Village in Tamil Nadu. This matter is pending in Madras High Court and the Companyis not mining in this area.

Note: Mining leases under litigation relate to areas where mining lease applications of the Company have beenrejected on the ground that these areas have been reserved by the State Government for State exploitation underRule 58 of the Mineral Concession Rules, 1960. Based on legal opinion obtained by the Company, the reservationsmade are no more valid after the deletion of Rule 58 of the Mineral Concessions Rules, 1960, without any savingsclause.

177

q) Mining lease for the Perianagalur area (an area of 172.99 acres) is under litigation and pending before MadrasHigh Court. The Company is, however, mining in this area under High Court Order of stay dated July 21, 1998.

Note: Mining leases under litigation relate to areas where mining lease applications of the Company have beenrejected on the ground that these areas have been reserved by the State Government for State exploitation underRule 58 of the Mineral Concession Rules, 1960. Based on legal opinion obtained by the Company, the reservationsmade are no more valid after the deletion of Rule 58 of the Mineral Concessions Rules, 1960, without any savingsclause.

r) Arbitration proceeding for damages before the International Chamber of Commerce between the Company and theclaimants – South India Corporation, Chennai and Rich Group International and/or Arko Trading Limited, Hongkong– the respondents, for non-supply of steam coal of Indonesian origin against the Company’s contract dated October28, 1999 with them has been completed in favour of the Company. As the respondents have gone into liquidation,the Company has filed necessary claims with the Official Liquidator.

s) The Tamil Nadu Government has raised demands aggregating to Rs. 18.51 crores towards short payment ofroyalty on the basis of quantity of cement produced. Writ Petition has been filed before the Madras High Court,which is pending.

t) The Tamil Nadu Government has raised demand for enhanced charges for drawal of water from the ColeroonRiver. The Company has filed a Writ Petition before the Madras High Court. The amount is not ascertainable.

STATUTORY LITIGATION

a) Tamil Nadu Electricity Board has levied an electricity generation tax on self-generated electricity by using FurnaceOil. The Company had filed Writ Petitions in the Madras High Court challenging the levy of such tax, on the basisof notifications issued in respect of certain industries using other Petroleum products, which has been decidedagainst the Company. The Company has filed Writ Appeals against the said order of the learned Single Judge.The demands had been made at 15% of the unit charges applicable from time to time. In the interim orders on theWrit Appeal filed by the Company, the Madras High Court has directed the Company to pay the said tax at theadmitted rate of 5.5% of the unit charges together with 50% of the disputed amount of the demand of the unitcharges. The aggregate liability for such disputed demand is Rs. 289.90 lacs, which has not been provided for inthe accounts. The Company has also challenged the levy and validity of the Tamil Nadu Electricity Act, 2003before the Madras High Court, which was dismissed. Against this order, the Company has preferred a Writ Appealbefore the Madras High Court, which is presently pending.

b) Claim for refund of excise duty on equalised freight for sale of cement pending before the Delhi High Court as aReference Petition amounting to Rs. 2.64 crores. Meanwhile the amount has been refunded to the Company.

c) Appeals pending before the STAT, Madurai, for use of Form XVII for purchase of lubricants and furnace oil andexplosives at concessional rates for FY 1996 amounting to Rs. 14.46 lacs, for FY 1997 amounting to Rs. 40.55lacs and for FY 1998 amounting to Rs. 3.64 lacs.

d) Case pending before the Deputy Commissioner Tax Officer, Lalgudi filed by the Sales Tax Department, TamilNadu, regarding determination of sales tax on packaging charges in the sale of cement for FY 1978 amounting toRs. 13 lacs, for FY 1979 amounting to Rs. 14.26 lacs and for FY 1980 amounting to Rs. 17.95 lacs.

e) 4 matters filed and pending before Commissioner (Appeals), Joint Commissioner and Assistant Commissioneragainst orders passed by Asst. Commissioner, Sitapur in Show Cause Notices issued by Excise Authoritiesdemanding payment of excise duty on Bagasse amounting to Rs. 67.78 lacs.

f) Appeals filed by the Sales Tax Department, Tamil Nadu is pending with the Sales Tax Appellate Tribunal/TNTST,against the order of AAC/STAT granting exemption of Purchase Tax on purchases of Explosives and Fire Bricksamounting to Rs. 4.22 lacs.

g) 3 matters relating to cenvat credit, one matter on baggase chain carrier and welding electrodes and 2 mattersrelating to cenvat credit on welding elctrodes amounting to 4.26 lacs. 2 matters relating to welding electrodespending before CESTAT.

OCL INDIA LIMITED

178

h) Under the Jute Packaging Materials (Compulsory use of Packaging Commodities) Act, 1987, 50% of the cementproduced should be supplied in jute bags. Failure to do so attracts a maximum fine equal to twice the cost of jutebags not used as required by the Act. The Company has not been using the jute bags. The Supreme Court hasupheld the constitutional validity of the above Act. As per the order, the percentages of using jute bags for packingthe various commodities will be prescribed by the Government of India. The Madras High Court has stayed the useof jute bags by the cement industry, in the writ petitions filed by the trade unions. Vide Notification dated December15, 1998, the Governments’ order prescribing percentages for use of jute bags in packing various commodities,cement has been excluded. The amount that may become payable by the Company as penalty in case it isultimately held that penalty is leviable for non-compliance of the Act is presently is not quantifiable.

i) Appeal pending with CESTAT, Chennai, regarding refund of service tax of Rs. 15.88 lacs on services availed fromgoods transport operators.

j) Special Leave Petition filed with the Supreme Court of India contesting payment of 100% royalty on new leases ofPatta Lands. The amount involved is Rs. 27.74 lacs.

k) Nine appeals against the disallowance of Modvat credit, involving an amount of Rs. 187.45 lacs were filed in theCESTAT, Chennai. The CESTAT has passed favourable orders. However, the CESTAT is to make a reference tothe High Court following the Orders of the Madras High Court on the appeal filed by the Commissioner of CentralExcise.

l) The ESI Corporation has raised a demand for payment of contribution with damages in respect of certain employeesengaged in the canteen, rest house and gardens at Salem. This demand has been contested by filing a suit in thelocal Court at Salem.

CIVIL LITIGATION AGAINST THE COMPANY

a) Labour disputes pending before the High Court of Madras, involving an amount of Rs. 8.16 lacs with respect toclaim for permanent employment by 4 contract workmen and also a dispute regarding retirement age of anemployee.

b) The State of Tamil Nadu while renewing Mining Leases of the Company directed payment of compensation for thesurface rights on the Government Lands on which the Mining Leases were to be renewed or granted in favour ofthe Company. Although the Company has succeeded in its Revision Petition before the Central Government, theState Government of Tamil Nadu has filed Writ Petitions before the Madras High Court challenging the said ordersof the Central Government. The compensation amount is yet to be determined.

c) Haryana Government vide order dated December 14, 1989 proposed to acquire vacant factory land admeasuring15.32 acres of Dalmia Electronics Corporation unit of the Company at Ballabhgarh. The Company has obtained aStay order from the Punjab and Haryana High Court restraining the State Government from dispossessing the land.In the meanwhile the Company has filed appropriate proceedings before the District Judge, Faridabad, forenhancement of the quantum of the award, which is still pending. Till date the award has not been disbursed.

d) Dalmia Cements had entered into a contract with M/s Bulk Trading for sale of 36,000 metric tons of South Africansteam coal delivery at Chennai port. The contract provided that M/s Bulk Trading to secure vessel to effect delivery.Bulk Tading was also to furnish complete particulars of the vessel nominated by them, which would be within therestrictions prevailing at the discharge port i.e. Chennai. Demmurrage was to be Dalmia Cement’s account. Vesselreached port however berthing could not as no berth was designed to handle the vessel which exceeded 633 ft asthe vessel was 699 ft. Delay resulted in demurrage of 7 days and Bulk Trading initiated arbitrations proceedingsunder ICC Rules at London. Sole Arbitrator conducted the proceedings and passed an award for USD 36, 584.74plus simple interest on the sum from 1.11.1999. Dalmia Cements was also asked to pay costs amounting to GBP14,484.70 plus USD 220,000 along with simple interest of 4% from the sate of Award till payment (Approximately45 lacs plus 4% interest). Dalmia Cements challenged the Award under section 34 of Arbitration and ConciliationAct, 1996 before the District Court, Trichy which is pending.

e) Dalmia Cements had entered into an agreement for access and services with Ariba India Private Limited to providesourcing of various commodities / items through e-sourcing using internet. Ariba to be paid fixed fee and variableperformance fee. 2 year contract w.e.f. December 2003 to December 2005. Ariba to be paid fixed fee of Rs. 3 lacs

179

for 1st month and Rs. 2 lac each for entire remaining contract period. Ariba provided certain services. DalmiaCements paid 19 lacs however, services not satisfactory further payents stopped. Ariba filed a summary suit forbalance fixed fee including variable performance fee amounting to Rs. 67 lacs with interest. Dalmia Cements hascontested the suit claiming arbitration. The Court has appointed retired Justice P. K. Bahri as sole arbitrator beforewhom the matter is pending.

Hari Machines Limited

As per the information provided by Hari Machines there is a diputed demand of Central & Sales Tax to the extent of Rs.45.16 lacs and other disputed liabilities to the extent of Rs. 10.85 lacs towards ESIC and SECL.

Dalmia Agencies Private Limited

As per the information provided by Dalmia Agencies there is a diputed demand of intrest on Central Excise to the extentof Rs. 7.03 lacs and there is one Income Tax Reference is pending in High Court involving a sum of Rs. 1.71 lacs for theassessment years 1974-75 & 1982-83. There is also a Sales Tax demand for 1996-97 amounting to Rs.0.97 lacspursuant to Tribunal’s order.

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180

MATERIAL DEVELOPMENTS

In the opinion of our Board of Directors, there have not arisen, since the date of the last financial statements disclosedin the Letter of Offer, any circumstances that materially or adversely affect or are likely to affect the profitability of theCompany or our ability to pay material liabilities within the next twelve months.

1. A captive power plant of 14 MW capacity has been commissioned w.e.f. May 13, 2006. The power plant will partlyrun on waste heat available at the sponge iron plant and partly coal based. The captive power plant is expectedto decrease the cost of power substantially.

2. Our Board in it’s meeting held on May 15, 2006 has approved capital expenditure of Rs. 700 crores +/- 10% forincrease in the cement capacity from existing 1.8 million tonne per annum to 3.8 million tonne per annum. To partfund this capital expenditure the Company may issue further Equity Shares or instrumemnts convertible in EquityShares at a future date.

3. Our Board in it’s meeting held on July 17, 2006 has approved the issue of secured redeemable non-convertibledebentures aggregating to Rs. 50 crores on a private placement basis.

The Company and the Lead Manager are obliged to update the Letter of Offer and keep the public informed of anymaterial changes till the listing and trading commencement of the Equity Shares being offered through the Issue.

181

TERMS OF THE ISSUE

The Equity Shares now being offered are subject to the provisions of the Companies Act and terms and conditions of theLetter of Offer, the CAF, Memorandum and Articles of Association of the Company, approvals from the Government ofIndia, FIPB and RBI, if applicable, guidelines issued by SEBI, guidelines, notifications and regulations for issue of capitaland for listing of securities issued by Government of India and/or other statutory authorities and bodies from time to time,listing agreements entered into by the Company with Stock Exchanges, rules and regulations framed under FEMA andterms and conditions as stipulated in the allotment advise or letter of allotment or Security Certificate and rules as maybe applicable and introduced from time to time.

Basis of the Issue

The Equity Shares are being offered for subscription for cash on rights basis (1 Equity Share for every 6 Equity Shares)to Eligible Equity Shareholders of our Company and your name stands registered on our Company’s register of members:

� As beneficial owners as at the end of business hours on September 4, 2006 as per the list to be furnished byNSDL and CDSL in respect of Equity Shares held in electronic form; and

� As members in the register of members of our Company after giving effect to valid share transfers in physical formlodged with our Company on or before September 4, 2006

The Company has in consultation with the Designated Stock Exchange has fixed the Book Closure Dates for determiningthe shareholders who are entitled to receive this offer for Equity shares on a rights basis.

Ranking of the Equity Shares

The Equity Shares shall be subject to the Memorandum and Articles of Association of the Company. The Equity Sharesallotted pursuant to this offer shall rank pari-passu in all respects with the existing Equity Shares of the Companyincluding in respect of dividends.

Principal Terms and Conditions of the Issue

Face value of Equity Shares

Each Equity Share shall have the face value of Rs.2 /- each.

Issue Price

Each Equity Share is of face value of Rs. 2 each and is being offered at a premium of Rs. 118 per Equity Share (IssuePrice of Rs. 120 per Equity Share).

Terms of payment

100% of the Issue Price per Equity Share shall be payable on application. Only one mode of payment per applicationshould be used. The payment must be either in cash or by cheque/demand draft drawn on any of the banks (includinga co-operative bank), which is situated at and is a member or a sub member of the Banker Clearing House located at thecentre indicated on the reverse of the CAF where the application is to be submitted.

A separate cheque/draft must accompany each CAF. Outstation/post-dated cheques or demand drafts and postal/moneyorders will not be accepted and applications accompanied by such demand drafts/cheques/money orders or postalorders will be rejected. The Registrar will not accept cash along with the CAF. Cash shall not be accepted at othercollection centres.

Rights Entitlement

As yourare an Eligible Equity Shareholder of our Company, whose name stands registered on our Company’s register ofmembers:

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� As beneficial owners as at the end of business hours on September 4, 2006 as per the list to be furnished byNSDL and CDSL in respect of Equity Shares held in electronic form; and

� As members in the register of members of our Company after giving effect to valid share transfers in physical formlodged with our Company on or before September 4, 2006

You are entitled to the offer under the Rights Issue. The number of Equity Shares to which you are entitled is shown inBlock I of Part A of the enclosed CAF.

Fractional Entitlement

If the shareholding of any of the Equity Shareholders is less than six or is not in multiples of six, then the fractionalentitlement of such holders of Equity Shares shall be ignored. Equity Shareholders whose fractional entitlements arebeing ignored would be given preferential allotment of one additional Equity Share each if they apply for additionalEquity Shares.

Those Equity Shareholders having holding of less than 6 Equity Shares and therefore are entitled to zero Equity Sharesunder the Rights Issue shall be dispatched a CAF with zero entitlement. Such Equity Shareholders are entitled to applyfor additional Equity Shares. However, they can not renunciate the same to third parties. CAF with zero entitlement shallbe non-negotiable/ non-renunciable.

Market lot

The Equity Shares of the Company are tradable only in dematerialized form. The market lot for the Equity Shares indematerialised mode is one. In case of physical certificates, the Company would issue one consolidated certificate for theEquity Shares allotted to one folio.

In respect of the Consolidated Certificate, the Company will upon receipt of a request from the Equity Shareholder, bereturning the share certificates issued for the entire holding, duly split as desired by the shareholders within a week’stime from the request of the Equity Shareholder. No fee would be charged by the Company for splitting the consolidatedcertificate.

Investors may please note that the Equity Shares of the Company can be traded on the Stock Exchanges only indematerialized form

Nomination Facility

In terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant can nominateany person by filling the relevant details in the CAF in the space provided for this purpose. The sole Equity Shareholderor first Equity Shareholder, along with other joint Equity Shareholders (being individual(s) may nominate any person(s)who, in the event of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to theEquity Shares. Person(s), being a nominee, becoming entitled to the Equity Shares by reason of the death of the originalEquity Shareholder(s), shall be entitled to the same rights to which he would be entitled if he/she were the registeredholder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also make a nomination toappoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the saidholder, during the minority of the nominee. A nomination shall stand rescinded upon the sale/disposal of the EquityShare by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. When twoor more persons hold the Equity Share(s), the nominee shall become entitled to receive the shares only on the demiseof all the holders. Fresh nominations can be made only in the prescribed form available on request at the RegisteredOffice of the Company or such other place at such addresses as may be notified by the Company. The applicant canmake the nomination by filling in the relevant portion in the CAF.

Only one nomination would be applicable for one folio. Hence, in case the shareholder(s) has (have) already registeredthe nomination with the Company, no further nomination need to be made for Equity Shares to be allotted in the Issueunder the same folio.

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In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate nominationfor the Equity Shares to be allotted in the Issue. Nominations registered with respective Depository Participant ofthe applicant would prevail. If the applicant requires to change the nomination, they are requested to inform theirrespective Depository Participant.

Minimum Subscription

If the Company does not receive the minimum subscription of 90% of the Issue, the entire subscription shall be refundedto the applicants within forty-two days from the date of closure of the Issue. If there is a delay in the refund of subscriptionby more than 8 days after the Company becomes liable to repay the subscription amount, (i.e. forty two days after closureof the Issue), the Company will pay interest for the delayed period, at prescribed rates in sub-section (2) and (2 A) ofSection 73 of the Act. The Rights Issue will become undersubscribed after considering the number of Equity Sharesapplied as per entitlement plus additional Equity Shares.

Arrangement for Odd Lot Equity Shares

The Company has not made any arrangements for the disposal of odd lot Equity Shares arising out of the Issue. TheCompany will issue certificates of denomination equal to the number of Equity Shares being allotted to the EquityShareholder.

Option to subscribe

The Equity Shareholders are given the option to receive the share certificates or hold securities in dematerialised formwith a depository.

Joint-Holders

Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the sameas joint-tenants with benefits of survivorship subject to provisions contained in the Articles of Association of the Company.

Offer to Non-Resident Equity Shareholders/ Applicants

As per regulation 6 of notification number FEMA/20/200-RB dated May 3, 2000, the RBI has given general permission toIndian companies to issue rights shares to non-residents shareholders including additional shares. Applications receivedfrom NRIs and non-residents for allotment of Equity Shares shall inter-alia be subject to the conditions imposed from timeto time by the RBI under the Foreign Exchange Management Act, 1999 (FEMA) in the matter of refund of applicationmoney, allotment of Equity Shares, issue of letter of allotment / share certificates, payment of dividend etc. The Board ofDirectors may at its absolute discretion, agree to such terms and conditions as may be stipulated by the RBI whileapproving the allotment of Equity Shares, payment of dividends etc. to the non-resident shareholders. The right sharespurchased by non-residets shall be subject to the same conditions including restrictions in regard to the repatriability asare applicable to the original shares against which right shares are being offered.

By virtue of circular number 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies (OCBs) havebeen derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign ExchangeManagement (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly,OCBs shall not be eligible to subscribe to the Equity Shares. The RBI has however clarified in its circular, A.P. (DIRSeries) Circular No. 44, dated December 8, 2003 that OCBs which are incorporated and are not under the adversenotice of the RBI are permitted to undertake fresh investments as incorporated non-resident entities. Thus, OCBs desiringto participate in the Issue must obtain prior approval from the RBI. On providing such approval to the Company at itsregistered office, the OCB shall receive the Letter of Offer and the CAF.

Letter of offer and CAF shall be dispatched to non-resident Equity Shareholders in India only.

Notices

All notices to the Equity Shareholder(s) required to be given by the Company shall be published in one English nationaldaily with wide circulation, one Hindi national daily with wide circulation, and one Oriya paper with wide circulation and/or, will be sent by ordinary post to the registered holders of the Equity Share(s) from time to time.

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Issue of Duplicate Equity Share Certificate

If any Equity Share Certificate(s) is/are mutilated or defaced or the pages for recording transfers of Equity Shares are fullyutilized, the Company against the surrender of such Certificate(s) may replace the same, provided that the same will bereplaced as aforesaid only if the Certificate numbers and the Distinctive numbers are legible.

If any Equity Share Certificate(s) is/are destroyed, stolen, lost or misplaced, then upon production of proof thereof to thesatisfaction of the Company and upon furnishing such indemnity/ surety and/or such other documents as the Companymay deem adequate, duplicate Equity Share Certificate(s) shall be issued.

Printing of Bank Particulars on refund orders

As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, theparticulars of the applicant’s bank account are mandatorily required to be given for printing on refund orders. Bankaccount particulars will be printed on the refund orders / refund warrants, which can then be deposited only in theaccount specified. The Company will in no way be responsible if any loss occurs through these instruments falling intoimproper hands either through forgery or fraud.

Option Available to the Equity Shareholders

The Composite Application Form clearly indicates the number of Equity Shares that the Equity Shareholder is entitled to.If the Equity Shareholder applies for an investment in Equity Shares, then he can:

� Apply for his entitlement in part

� Apply for his entitlement in part and renounce the other part

� Apply for his entitlement in full

� Apply for his entitlement in full and also apply for additional Equity Shares

� Renounce the entire entitlement (or part of entitlement).

Adiitional Equity Shares can be applied for provided you have applied for all the Equity Shares offered to you under theIssue without renouncing them in full or in part.

Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional EquityShares.

How to Apply

The prescribed colour of the CAF for various shareholder categories is as follows:

Category Colour of Composite Application Form

Residents, NRI applying on a non-repatriation basis CAF Printed with Black Ink

NRI, or FII applying on a repatriation basis CAF Printed with Black Ink with separate advise for NRIholders

The CAF consists of four parts

Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares

Part B: Form for renunciation

Part C: Form for application for renouncees

Part D: Form for request for split application forms

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Acceptance of the Rights Issue

You may accept the Offer and apply for Equity Shares offered, either in full or in part by filling Block III of Part “A” of theenclosed CAF and submit the same along with the application money payable to the “Banker to the Issue” on any of thebranches as mentioned on the reverse of the CAF before the close of the banking hours on or before the Issue ClosingDate or such extended time as may be specified by the Board thereof in this regard. Applicants at centers not coveredby the branches of collecting banks can send their CAF together with the cheque drawn on a local bank at Mumbai /demand draft payable at Kolkata (net of demand draft charges and postal charges) to the Registrar to the Issue byregistered post.

Renunciation

The Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part infavour of any other person or persons subject to the approval of the Board. Such renouncees can only be IndianNationals (including minor through their natural/legal guardian)/limited companies incorporated under and governed bythe Act, statutory corporations/institutions, trusts (registered under the Indian Trust Act), societies (registered under theSocieties Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorized under itsconstitution/bye laws to hold equity shares in a company and cannot be a partnership firm, foreign nationals or nomineesof any of them (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdictionwhere the offering in terms of the Letter of Offer could be illegal or require compliance with securities laws of suchjurisdiction or any other persons not approved by the Board.

Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident IndianShareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) issubject to the renouncer(s)/renouncee(s) obtaining the approval of the FIPB and/ or necessary permission of the RBIunder the FEMA and other applicable laws and such permissions should be attached to the CAF. Applications notaccompanied by the aforesaid approval are liable to be rejected.

By virtue of the circular number 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (OCBs)have been derecognized as an eligible class of investors and the RBI has subsequently issued (OCBs)) Regulations,2003. Accordingly, the Eligible Equity Shareholders of the Company who do not wish to subscribe to the Equity Sharesbeing offered but wish to renounce the same in favour of renounces shall not renounce the same (whether for considerationor otherwise) in favour of OCB(s).

Your attention is drawn to the fact that the Company shall not allot and/or register any Equity Shares in favor of:

� More than three persons including joint holders

� Partnership firm(s) or their nominee(s)

� Minors

� Hindu Undivided Family

� Any Trust or Society (unless the same is registered under the Societies Registration Act, 1860 or any otherapplicable Trust laws and is authorized under its Constitutions to hold Equity Shares of a Company)

The right of renunciation is subject to the express condition that the Board/ Committee of Directors shall be entitledin its absolute discretion to reject the request for allotment to renouncee(s) without assigning any reason thereof.

Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used,this will render the application invalid. Submission of the enclosed CAF to the Banker to the Issue at its collectingbranches specified on the reverse of the CAF with the Form of Renunciation (Part B of the CAF) duly filled in shall beconclusive evidence in favour of the Company of the person(s) applying for Equity Shares in Part C to receive allotmentof such Equity Shares. The renouncees applying for all the Equity Shares renounced in their favour may also apply foradditional Equity Shares. Part ‘A’ must not be used by the renouncee(s) as this will render the application invalid.Renouncee(s) will have no further right to renounce any shares in favour of any other person.

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Procedure for Renunciation

To renounce the whole offer in favour of one renouncee

If you wish to renounce this offer in whole, please complete Part B of the CAF. In case of joint holders, all joint holdersmust sign this part of the CAF in the same order as per the specimen signatures recorded with the Company. The personin whose favour renunciation has been made should complete and sign Part C of the CAF. In case of joint renouncees,all joint renounces must sign this part of the CAF.

To renounce in part/or renounce the whole to more than one person(s)

If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two ormore renouncees, the CAF must be first split by applying to the Registrars to the Issue.

Please indicate your requirement for Split Forms in the space provided for this purpose in Part D of the CAF and returnthe entire CAF to the Registrars to the Issue so as to reach them latest by the close of business hours on October 9,2006. On receipt of the required number of split forms from the Registrars, the procedure as mentioned in para (a) aboveshall have to be followed.

In case the signature of the Equity Shareholder(s), who has/have renounced the Equity Shares, does not match with thespecimen signature(s) as per the records of the Company, the application is liable to be rejected.

Change and/or introduction of additional holders

If you wish to apply for Equity Shares jointly with any other person, or persons, not more than three, who is/are notalready joint holders with you, it shall amount to renunciation and the procedure as stated above shall have to befollowed. Even a change in the sequence of the joint holders shall amount to renunciation and the procedure forrenunciation, as stated above shall have to be followed.

Renouncee(s)

The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part C of the Application Formand submit the entire Application Form to the Banker to the Issue on or before the Issue Closing Date along with theapplication money. However, any right of renunciation is subject to the express condition that the Board/Committee ofDirectors of the Company shall be entitled in its absolute discretion to reject the request for allotment from the renounceeswithout assigning any reasons therefor.

Please note that

(a) Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made.If used, this will render the application invalid.

(b) Only the person to whom the Letter of Offer has been addressed to and not the renouncee(s) shall be entitled torenounce and to apply for Split Application Forms. Forms once split cannot be split again.

(c) Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.

Additional Equity Shares

You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are entitled to,provided that you have applied for all the Equity Shares offered without renouncing them in whole or in part in favour ofany other person(s). Applications for additional Equity Shares shall be considered and allotment shall be made in themanner prescribed in the under the paragraph titled “Basis of Allotment” on page 193 of the Letter of Offer. The renounceesapplying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares.

In case of application for additional Equity Shares by non-resident Equity Shareholders, the allotment of additionalsecurities will be subject to the permission of the Reserve Bank of India.

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Where the number of additional Equity Shares applied for exceeds the number available for allotment, the allotmentwould be made on a fair and equitable basis in consultation with the Designated Stock Exchange.

You may exercise any of the following options with regard to the Equity Shares offered to you, using the enclosed CAF.

S. No. Options Available Actions Required

1 Accept your entitlement to all the Equity Fill in and sign ‘Part A’ of the CAFShares offered to you

2 Accept your entitlement to all the Equity Shares Fill in and sign ‘Part A’ of the CAF afteroffered to you and apply for additional Shares indicating in Block IV the number of

additional Equity Shares applied for

3 Accept only a part of your entitlement of the Equity Fill in and sign ‘Part A’ of the CAF MentionShares offered to you (without renouncing the balance) in column no. III the number of shares

applied for

4 Renounce all the Equity Shares offered to you to Fill in and sign ‘Part B’ of the CAF indicatingone person (Renouncee) (Joint Renouncees are the number of Equity Shares renounced andconsidered as one renouncee) (Joint renouncee hand over the entire CAF to the renouncee.cannot exceed more than three) without applying The renouncee must fill in and sign ‘Partfor any equity shares offered to you C’ of the CAF

5 Accept a part of the Equity Shares offered to you Fill in and sign ‘Part D’ of the CAF for Splitand then renounce the balance to one Renouncee Forms after indicating the required numberor renounce all the Equity Shares offered to you to of Split Application Forms and send themore than one renounce entire CAF to the Registrars to the Issue so

as to reach them on or before the last datefor receiving requests for Split Formsindicated in the CAF. On receipt of the SplitForms take action as indicated below:

i) For the Equity Shares, if any, which youwant to accept, fill in and sign ‘Part A’of one Split Composite ApplicationForm

ii) For the Equity Shares you want torenounce, fill in and sign ‘Part B’ in therequired number of Split CompositeApplication Forms indicating the numberof Equity Shares renounced to eachrenouncee

iii) Each of the renouncee should then fillin and sign ‘Part C’ of the respectiveSplit Composite Application Form forthe Equity Shares accepted by therenouncee

6 Accept a part of the Equity Shares offered to you Follow the procedures stated in (5) aboveand renounce the balance to more than one for obtaining the required number of Splitrenounce (Joint renounces are considered as one) Composite Application Forms and on

receipt of Split Composite Application Formsfollow the procedure as stated in (5) (ii) and(iii) above

7 Introduce a joint holder or change the sequence of This will be treated as a renunciation. Fill joint holders in and sign Part B and the renouncees must

fill in and sign Part C

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Applications for Equity Shares should be made only on the CAF, which are provided by the Company. The CAF shouldbe completed in all respects as explained under the head “INSTRUCTIONS” indicated on the reverse of the CAF beforesubmission to the Banker to the Issue at its collecting branches mentioned on the reverse of the CAF on or before theclosure of the subscription list. Non-resident shareholders/ Renouncee should forward their applications to Banker to theIssue as mentioned in the CAF for Non Resident Equity Shareholders. No part of the CAF should be detached under anycircumstances.

For Resident Indian Shareholders

Application should be made only on the enclosed CAF provided by the Company. The enclosed CAF should be completedin all respects, as explained in the instructions indicated in the CAF. Applications will not be accepted by the LeadManager or by the Registrar to the Issue or by the Company at any offices except in the case of postal applications asper instructions given in the Letter of Offer.

Payment should be made in cash (not more than Rs. 20,000) or by cheque/bank draft/ drawn on any bank (including acooperative bank) which is situated at and is a member or a sub-member of the banker clearing house located at thecentre where the CAF is submitted and which is participating in the clearing at the time of submission of the application.Outstation cheques/money orders/postal orders will not be accepted and CAFs accompanied by such cheques/moneyorders/postal orders are liable to be rejected.

For Non-Resident Shareholders

Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares shall, inter alia, besubject to the conditions as may be imposed from time to time by the Reserve Bank of India, in the matter of Refund ofapplication moneys, allotment of Equity Shares, issue of Letters of Allotment/ certificates/ payment of dividends etc.

All cheques/drafts submitted by non-residents should be drawn in favour of the Banker to the Issue and marked “OCLIndia Rights Issue-NR” payable at Kolkata and must be crossed “A/c Payee only” for the amount payable. The CAF dulycompleted together with the amount payable on application must be deposited with the Collecting Bank indicated on thereverse of the CAF before the close of banking hours on the Issue Closing Date. A separate cheque or bank draft mustaccompany each CAF.

Applicants may note that where payment is made by drafts purchased from NRE/ FCNR/ NRO accounts as the case maybe, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting theNRE/ FCNR/ NRO account should be enclosed with the CAF. Otherwise the application shall be considered incompleteand is liable to be rejected.

Application with repatriation benefits

(a) By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad (submittedalong with Foreign Inward Remittance Certificate); or

(b) By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained in Kolkata; or

(c) By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and payable at Kolkata;or

(d) FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.

Application without repatriation benefits

As far as non-residents holding shares on non-repatriation basis is concerned, in addition to the modes specified above,payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in Kolkata orRupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Kolkata. In such cases, theallotment of Equity Shares will be on non-repatriation basis.

Note:

� In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment inEquity Shares can be remitted outside India, subject to tax, as applicable according to Income Tax Act, 1961.

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� In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity Sharescannot be remitted outside India.

� The CAF duly completed together with the amount payable on application must be deposited with the CollectingBank indicated on the reverse of the CAF before the close of banking hours on the aforesaid Issue Closing Date.A separate cheque or bank draft must accompany each CAF.

� In case application received from Non-Residents, allotment, refunds and other distribution, if any, will be made inaccordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment,remittance and subject to necessary approvals.

Disposal of Application and Application Money

No acknowledgment will be issued for the application moneys received by the Company. However, the Banker to theIssue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom ofeach CAF.

In case an application is rejected in full, the whole of the application money received will be refunded. Wherever anapplication is rejected in part, the balance of application money, if any, after adjusting any money due on Equity Sharesallotted, will be refunded to the applicant within six weeks from the close of the Issue.

For applicants residing at places other than designated Bank Collecting branches

Applicants residing at places other than the cities where the bank collection centers have been opened should send theircompleted CAF by registered post to the Registrars to the Issue alongwith bank drafts net of demand draft and postalcharges payable at Kolkata in favour of “OCL India Rights Issue” crossed “A/c Payee only” so that the same arereceived on or before Closure of the Issue, i.e., October 27, 2006.

The Company will not be liable for any postal delays and applications received through mail after the closure of theIssue, are liable to be rejected and returned to the applicants. Applications by mail should not be sent in any othermanner except as mentioned above:

All application forms duly completed together with cash/cheque/demand draft for the application money must be submittedbefore the close of the Subscription List to the Banker to the Issue named herein or to any of its branches mentioned onthe reverse of the CAF. The CAF along with application money must not be sent to the Company or the Lead Managersto the Issue or the Registrars to the Issue except as mentioned above.

The applicants are requested to strictly adhere to these instructions. Failure to do so could result in the applicationsbeing liable to be rejected with the Company, the Lead Manager and the Registrar not having any liability to suchapplicants.

In case the original CAF is not received by the applicant or is misplaced by the applicant, the applicant may request theRegistrars to the Issue for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client IDNumber and their full name and address.

In case the original and duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicateCAF and the original CAF will be ignored.

Availability of Duplicate CAF

In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicateCAF on the request of the applicant who should furnish the registered folio number/ DP and Client ID no. and his / herfull name and address to the Registrar to the Issue. Please note that those who are making the application in theduplicate form should not utilise the original CAF for any purpose including renunciation, even if it is received/ foundsubsequently. If the applicant violates any of these requirements, he/ she shall face the risk of rejection of both theapplications as well as forfeiture of amounts remitted along with the applications.

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Applications under Power of Attorney

In case of applications made under a Power of Attorney or by limited companies or bodies corporate or registeredsocieties or mutual fund or trust, the relevant Power of Attorney or the relevant resolution or authority to make theapplication, as the case may be, together with a certified true copy thereof along with a copy of the Memorandum andArticles of Association and/or Bye-Laws must be attached to the CAF and the banks branch where the application hasbeen submitted at the time of making the application or lodged for scrutiny separately indicating the serial number of theCAF with the Registrars to the Issue after submission of the CAF to the Banker to the Issue or any of the designatedbranches as mentioned on the reverse of the CAF, failing which the applications are liable to be rejected. Such authorityshould reach the Registrar to the issue within 3 days from the date closure of the subscription list and such authorityreceived be thereafter, may not be considered. The original(s) will be returned to the applicant after retaining the certifiedcopy thereof.

Application on Plain Paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF maymake an application to subscribe to the Rights Issue on plain paper, along with an Account Payee Cheque drawn on alocal bank at Kolkata/ Demand Draft payable at Kolkata which should be drawn in favour of “OCL India Limited – RightsIssue” and send the same by registered post directly to the Registrar to the Issue. The envelope should be superscribed“OCL India Limited – Rights Issue”.

The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimenrecorded with the Company, must reach the office of the Registrar to the Issue before the Date of Closure of the Issueand should contain the following particulars:

� Name of Issuer

� Name and address of the Equity Shareholder including joint holders

� Registered Folio Number/ DP and Client ID no.

� Number of Equity Shares held t(o be decided on the basis of the Book Closure Dates)

� Number of Rights Equity Shares entitled

� Number of Rights Equity Shares applied for

� Number of additional Equity Shares applied for, if any

� Total number of Equity Shares applied for

� Total amount paid @ Rs. 120 per Equity Share

� Particulars of Cheque/ Draft

� Savings/ Current Account Number and name and address of the bank where the Equity Shareholder will bedepositing the refund order

� PAN/GIR number and Income Tax Circle/Ward/District where the application is for Equity Shares of a total value ofRs. 50,000/- or more for the applicant and for each applicant in case of joint names, and

� Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of theCompany

Payments in such cases, should be through a cheque/ demand draft payable at Mumbai be drawn in favour of theBanker to the Issue marked “A/c Payee” and marked “OCL India Rights Issue”.

Please note that those who are making the application otherwise than on original CAF shall not be entitled to renouncetheir Rights and should not utilize the original CAF for any purpose including renunciation even if it is receivedsubsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of both theapplications as well as forfeiture of amounts remitted along with the applications.

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Last Date of Application

The last date for submission of CAF is October 27, 2006. The Board/ Committee of Directors will have the right to extendthe said date for such period as it may determine from time to time but not exceeding sixty days from the date the Issueopens.

If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar on or before the closeof banking hours on the aforesaid last date or such date as may be extended by the Board/ Committee of Directors, theoffer contained in the Letter of Offer shall be deemed to have been declined and the Board/ Committee of Directors shallbe at liberty to dispose off the Equity Shares hereby offered, as provided under the heading “Basis of Allotment”.

Unique Identification Number – MAPIN

With effect from July 1, 2005, SEBI has decided to suspend all fresh registrations for obtaining Unique IdentificationNumber (MAPIN) and the requirement to quote MAPIN under MAPIN Regulations/Circulars vide its circular MAPIN/Circular-13/2005.

General Instructions for Applicants

a) Please read the instructions printed on the enclosed CAF carefully

b) Application should be made on the printed CAF, provided by the Company and should be completed in allrespects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ orwhich are not completed in conformity with the terms of the Letter of Offer are liable to be rejected and the moneypaid, if any, in respect thereof will be refunded without interest if refunded within stipulated period. The CAF mustbe filled in English and the names of all the applicants, details of occupation, address, and father’s / husband’sname must be filled in block letters

c) The CAF together with cheque /demand draft should be sent to the Banker to the Issue / Collecting Bank and notto the Company or Lead Manager to the Issue. Applicants residing at places other than cities where the branchesof the Banker to the Issue have been authorised by the Company for collecting applications, will have to makepayment by Demand Draft payable at Kolkata (net of demand draft charges and postal charges) and send theirapplication forms to the Registrar to the Issue by registered post. If any portion of the CAF is / are detached orseparated, such application is liable to be rejected.

d) Applications for a total value of Rs.50,000/- or more, i.e. where the total number of securities applied for multipliedby the Issue price, is Rs.50,000/- or more the applicant or in the case of application in joint names, each of theapplicants, should mention his/ her permanent account number allotted under the Income-Tax Act, 1961 or wherethe same has not been allotted, the GIR number and the Income-Tax Circle / Ward / District. In case where neitherthe permanent account number nor the GIR number has been allotted, the fact of non-allotment should be mentionedin the CAFs. Forms without this information will be considered incomplete and are liable to be rejected

e) Applicants are advised to provide information as to their savings/ current account number and the name of theBank with whom such account is held in the CAF to enable the Registrar to print the said details in the RefundOrders, if any, after the names of the payees. Application not containing such details is liable to be rejected

f) The payment against the application should not be effected in cash if the amount to be paid is Rs.20,000/- ormore. In case payment is effected in contravention of this, the application may be deemed invalid and the applicationmoney will be refunded and no interest will be paid thereon. Payment against the application if made in cash,subject to conditions as mentioned above, should be made only to the Banker to the Issue

g) Signatures should be either in English or Hindi or in any other language specified in the 8th Schedule of theConstitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a NotaryPublic or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must sign the CAF asper the specimen signature recorded with the Company

h) In case of an application under power of attorney or by a body corporate or by a society, a certified true copy ofthe relevant power of attorney or relevant resolution or authority to make investment and sign the application alongwith a copy of the Memorandum & Articles of Association and / or bye laws must be lodged with the Registrar to

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the Issue witnin three days of closure of the Issue giving reference of the serial number of the CAF. In case thesepapers are sent to any other entity besides the Registrar to the Issue or are sent after the date mentioned above,the application is liable to be rejected

i) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per thespecimen signature(s) recorded with the Company. Further, in case of joint applicants who are renouncees, thenumber of applicants should not exceed three. In case of joint applicants, reference, if any, will be made in the firstapplicant’s name and all communication will be addressed to the first applicant

j) Application(s) received from Non-Residents / NRIs, or persons of Indian origin residing abroad for allotment ofEquity Shares shall, interalia, be subject to conditions, as may be imposed from time to time by the RBI underFEMA in the matter of refund of application money, allotment of Equity Shares, subsequent issue and allotment ofEquity Shares, interest, export of Equity Share certificates, etc. In case a Non-Resident or NRI Equity Shareholderhas specific approval from the RBI, in connection with his shareholding, he should enclose a copy of suchapproval with the CAF

k) All communication in connection with application for the Equity Shares, including any change in address of theEquity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issuequoting the name of the first / sole applicant Equity Shareholder, folio numbers and CAF number. Please note thatany intimation for change of address of Equity Shareholders, after the date of allotment, should be sent to theRegistrar and Transfer Agents of the Company or Registrar to Issue (C B Management Services (Private) Limited)in the case of equity shares held in physical form and to the respective DP, in case of equity shares held indematerialised form

l) Split forms cannot be re-split

m) Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be entitled toobtain split forms

n) Applicants must write their CAF number at the back of the cheque / demand draft

o) Only one mode of payment per application should be used. The payment must be either in cash or by cheque /demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member ora sub member of the Banker Clearing House located at the centre indicated on the reverse of the CAF where theapplication is to be submitted

p) A separate cheque /draft must accompany each CAF. Outstation cheques or post-dated cheques and postal /money orders will not be accepted and applications accompanied by such cheques / demand drafts / moneyorders or postal orders will be rejected. The Registrar will not accept payment against application if made in cash.(For payment against application in cash please refer point (f) above)

q) No receipt will be issued for application money received. The Banker to the Issue / Collecting Bank will acknowledgereceipt of the same by stamping and returning the acknowledgement slip at the bottom of the CAF

r) An applicant which is a mutual fund can make a separate application in respect of each scheme of the fund andsuch applications shall not be treated as multiple applications. The application made by the asset managementcompany or custodians of a mutual fund shall clearly indicate the name of the concerned scheme for whichapplication is being made

Grounds For Technical Rejections

Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following:

� Amount paid does not tally with the amount payable for;

� Bank account details (for refund) are not given;

� Age of first applicant not given;

� PAN photocopy/ PAN Communication/ Form 60 / Form 61 declaration not given if Application is for Rs. 50,000 ormore;

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� In case of Application under power of attorney or by limited companies, corporate, trust, etc., relevant documentsare not submitted;

� If the signature of the existing shareholder does not match with the one given on the Application Form and forrenouncees if the signature does not match with the records available with their depositories;

� If the Applicant desires to have shares in electronic form, but the Application Form does not have the Applicant’sdepository account details;

� Application Forms are not submitted by the Applicants within the time prescribed as per the Application Form andthe Letter of Offer;

� Applications not duly signed by the sole/joint Applicants;

� Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to invest in theIssue;

� Applications accompanied by Stockinvest;

� In case no corresponding record is available with the Depositaries that matches three parameters, namely, nameof Applicants (including the order of names of joint holders), the Depositary Participant’s indentity (DP ID) and thebenefeciary’s indentity;

� Application by US persons;

� Applications by ineligible Non-residents (including on account of restriction or prohibition under applicable locallaws) and where last available address in India has not been provided

Payment by Stockinvest

In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the Stockinvest Scheme hasbeen withdrawan with immediate effect. Hence, payment through Stockinvest would not be accepted in the Issue.

Basis of Allotment

1. Subject to provisions contained in the Letter of Offer, the Articles of Association of the Company and approval ofthe Designated Stock Exchange, the Board will proceed to allot the Equity Shares in the following order of priority:

a) Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or in partand also to the renouncee(s) who has/ have applied for Equity Shares renounced in their favour, in full or inpart

b) If the shareholding of any of the Equity Shareholders is less than six or is not in multiples of six, then thefractional entitlement of such holders of Equity Shares shall be ignored. Equity Shareholders whose fractionalentitlements are being ignored would be given preferential allotment of one additional Equity Share each ifthey apply for additional Equity Shares

c) Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them as rightsand have also applied for additional Equity Shares. The allotment of such additional Equity Shares will bemade as far as possible on an equitable basis having due regard to the number of Equity Shares held bythem to be decided on the basis of the Book Closure Dates, provided there is an under-subscribed portionafter making full allotment in (a) and (b) above. The allotment of such Equity Shares will be at the solediscretion of the Board/Committee of Directors in consultation with the Designated Stock Exchange, as a partof the rights Issue and not preferential allotment.

d) Allotment to the renouncees who having applied for the Equity Shares renounced in their favour have alsoapplied for additional Equity Shares, provided there is an under-subscribed portion after making full allotmentin (a), (b) and (c) above. The allotment of such additional Equity Shares will be made on a proportionate basisat the sole discretion of the Board/ Committee of Directors but in consultation with the Designated StockExchange, as a part of the rights Issue and not preferential allotment

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e) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is surplusavailable after making full allotment under (a), (b), (c) and (d) above

2. The Company shall retain no over subscription

3. After taking into account allotment to be made under (a) and (b) above, if there is any unsubscribed portion, thesame shall be deemed to be ‘undersubscribed’ for the purpose of regulation 3(1)(b) of the SEBI (SubstantialAcquisition of Shares and Takeovers) Regulations, 1997 (the Takeover Code) which would be available for allocationunder (c), (d) and (e) above. The Promoters have undertaken to apply for additional Equity Shares, if the Issuedoes not receive subscription to the extent of 90% of the Issue size, after considering the above allotment. Thisacquisition of additional Equity Shares, if allotted to the Promoter shall be in terms of proviso to regulation 3(1)(b)(ii)of the Takeover Code and will be exempt from the applicability of regulation 11 and 12 of the Takeover Code. Thisdisclosure is made in terms of the requirement of regulation 3(1)(b) of the Takeover Code. Further, this acquisitionwill not result in change of control of management of the Company.

After such allotments as above and to the Promoters, including the application for rights/renunciation and additionalequity shares, any additional Equity Shares shall be disposed off by the Board or the committee of the Boardauthorized in this behalf by the Board of the Company, in such manner as they think most beneficial to theCompany and the decision of the Board or committee of the Board of the Company in this regard shall be final andbinding.

Allotment to the Promoters over and above their entitlement, out of the undersubscribed portion, shall be done incompliance with clause 40A of the Listing Agreement and other applicable laws prevailing at that time.

Allotment to promoters of any unsubscribed portion, over and above their entitlement shall be done in compliancewith Clause 40A of the Listing Agreement.

Allotment Letters / Refund Orders

The Company will issue and dispatch letters of allotment/ share certificates and/ or letters of regret along with refundorder/credit of refund amount payable or credit the allotted securities to the respective beneficiary accounts, if any withina period of six weeks from the date of closure of the Issue. If such money is not repaid within 8 days from the day theCompany becomes liable to pay it, the Company shall pay that money with interest at the rate of 15% per annum asstipulated under Section 73 of the Act.

The Company shall effect payment of refund amount by following mode:

1. In case of applicants residing at Ahmedabad, Bangalore, Bhubneshwar, Kolkata, Chandigarh, Chennai, Guwahati,Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna and Thiruvanthapuram – refunds shall be creditedthrough electronic transfer of funds by using ECS (Electronic Clearing Service), Direct Credit, RTGS (Real TimeGross Settlement) or NEFT (National Electronic Funds Transfer);

2. In case of applicants residing at places other than those specified in (a) above and where the value of refundorder is Rs. 1500/- or more, refund orders will be dispatched to the applicants by registered post/speed post; and

3. In case of applicants residing at places other than those specified in (a) above and where the value of refundorder is less than Rs. 1500/-, refund orders will be dispatched under certificate of posting.

Cheques or pay orders to be sent by registered post / speed post / under certificate of posting will be payable at par atall the centres where the applications were originally accepted and will be marked “A/c payee” and would be drawn inthe name of the sole/ first applicant. Adequate funds would be made available to the Registrar to the Issue for dispatchof the Letters of allotment/ security certificates / refund orders.

In case the Company issues Letters of Allotment, the corresponding share certificates will be kept ready within threemonths from the date of allotment thereof or such extended time as may be approved by the Company Law Board underSection 113 of the Act or other applicable provisions, if any. Allottees are requested to preserve such Letters of Allotment,which would be exchanged later for the share certificates.

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Allotment / Refund

Where an applicant has applied for additional shares and is allotted lesser number of equity shares than applied for, theexcess application money paid shall be refunded to the applicant.

The Company will issue and dispatch letters of allotment/ securities certificates and/ or letters of regret along with refundorder or credit the allotted securities to the respective beneficiary accounts, if any within a period of six weeks from theDate of Closure of the Offer. If such money is not repaid within 8 days from the day the Company becomes liable to payit, the Company shall pay that money with interest at the rate of 15% per annum as stipulated under Section 73 of theAct.

Equity Share certificates / Letters of Allotment or Letter(s) of Regret together with refund orders exceeding Rs 1,500/-, ifany, will be despatched by registered post/ speed post at the sole/first named applicant’s address within 42 days from thedate of the closing of the subscription list. Such cheques or pay orders will be payable at par at all the centres where theapplications were originally accepted and will be marked “A/c payee” and would be drawn in the name of the sole/ firstapplicant. Refund orders upto Rs 1,500/- will be despatched under the Certificate of Posting. Adequate funds will bemade available to the Registrars for the purpose.

In case of those shareholders who have opted to receive their Right Entitlement Shares in dematerialised form by usingelectronic credit under the depository system, an advice regarding the credit of the Equity Shares shall be given separately.

In case the Company issues Letters of allotment, the corresponding Security Certificates will be kept ready within threemonths from the date of allotment thereof or such extended time as may be approved by the Company Law Board underSection 113 of the Companies Act, 1956 or other applicable provisions, if any. Allottees are requested to preserve suchLetters of Allotment, which would be exchanged later for the Security Certificates.

As regards allotment/ refund to Non-Residents, the following further conditions shall apply

In case of Non-Residents, who remit their application monies from funds held in NRE/ FCNR accounts, refunds and/ orpayment of interest/ dividend and other disbursement, if any, shall be credited to such accounts, details of which shouldbe furnished in the CAF. Subject to the approval of the RBI, in case of non-residents, who remit their application moniesthrough Indian Rupee draft purchased from abroad, refund and/ or payment of dividend/ interest and any otherdisbursement, shall be credited to such accounts (details of which should be furnished in the CAF) and will be made netof bank charges/ commission in US Dollars, at the rate of exchange prevailing at such time. The Company will not beresponsible for any loss on account of exchange fluctuations for converting the Indian Rupee amount into US Dollars.The Equity Share certificate(s) will be sent by registered post / speed post at the Indian address of the non-residentapplicant.

Letters of Allotment / Equity Share Certificates

Letter(s) of Allotment/ Equity Share certificates or Letters of Regret alongwith refund orders will be dispatched to theregistered address of the first named applicant or respective beneficiary accounts will be credited within six weeks, fromthe date of closure of the subscription list. In case the Company issues Letters of Allotment, the relative Equity Sharecertificates will be dispatched within three months from the date of allotment. Allottees are requested to preserve suchLetters of allotment (if any) to be exchanged later for Equity Share certificates. Export of Letters of Allotment (if any)/Equity Share certificates to non-resident allottees will be subject to the approval of RBI.

For Non-Resident applicants, refunds, if any, will be made as under

Where applications are accompanied by NRE/ FCNR/ NRO cheques, refunds will be credited to NRE/ FCNR/ NROaccounts respectively, on which such cheques were drawn and details of which were provided in the CAF. Indian RupeeDrafts purchased abroad and payable at Kolkata, India, refunds will be made in convertible foreign exchange equivalentto Indian Rupees to be refunded. Indian Rupees will be converted into foreign exchange at the rate of exchange, whichis prevailing on the date of refund. The exchange rate risk on such refunds shall be borne by the concerned applicantand the Company shall not bear any part of the risk.

Equity Shares in Dematerialised Form

Applicants to the Equity Shares of the Company issued through this Rights Issue shall be allotted the securities indematerialised (electronic) form at the option of the applicant. The Company and C B Management Services (Private)Limited Registrar to the Company, have signed a tripartite agreement with CDSL on April 9, 2001 and with NSDL onApril 24, 2001, which enables the investors to hold and trade in securities in a dematerialised form, instead of holdingthe securities in the form of physical certificates.

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In this Rights Issue, the allottees who have opted for Equity Shares in dematerialised form will receive their EquityShares in the form of an electronic credit to their beneficiary account with a depository participant. Investor will have togive the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accuratelycontain this information, will be given the securities in physical form. No separate applications for securities in physicaland dematerialised form should be made. If such applications are made, the application for physical securities will betreated as multiple applications and is liable to be rejected. In case of partial allotment, allotment will be done in DEMAToption for the shares sought in DEMAT and balance, if any, will be allotted in physical shares.

Procedure for availing this facility for allotment of Equity Shares in this Issue in the electronic form is as under:

1. Open a Beneficiary Account with any Depository Participant (care should be taken that the Beneficiary Accountshould carry the name of the holder in the same manner as is exhibited in the records of the Company. In case ofjoint holding, the Beneficiary Account should be opened carrying the names of the holders in the same order aswith the Company). In case of Investors having various folios in the Company with different joint holders, theinvestors will have to open separate accounts for such holdings. Those Equity Shareholders who have alreadyopened such Beneficiary Account (s) need not adhere to this step.

2. For Equity Shareholders already holding Equity Shares of the Company in dematerialized form as on the end ofbusiness hours on September 4, 2006, the beneficial account number shall be printed on the CAF. For those whoopen accounts later or those who change their accounts and wish to receive their Rights Equity Shares by way ofcredit to such account, the necessary details of their beneficiary account should be filled in the space provided inthe CAF. It may be noted that the allotment of securities arising out of this Issue may be made in dematerializedform even if the original equity shares of the Company are not dematerialized. Nonetheless, it should be ensuredthat the Depository Account is in the name(s) of the Equity Shareholders and the names are in the same order asin the records of the Company.

3. Responsibility for correctness of applicant’s age and other details given in the CAF vis-à-vis those with the applicant’sDepository Participant would rest with the applicant. Applicants should ensure that the names of the applicants andthe order in which they appear in CAF should be same as registered with the applicant’s Depository Participant.

4. If incomplete / incorrect Beneficiary Account details are given in the CAF the applicant will get Equity Shares inphysical form.

5. The Rights Equity Shares allotted to investors opting for dematerialized form, would be directly credited to theBeneficiary Account as given in the CAF after verification. Allotment advice, Refund Order (if any) would be sentdirectly to the applicant by the Registrar to the Issue but the applicant’s Depository Participant will provide to himthe confirmation of the credit of the Rights Equity Shares to the applicant’s Depository Account.

6. Renouncees will also have to provide the necessary details about their Beneficiary Account for allotment of securitiesin this Issue. In case these details are incomplete or incorrect, the applicant will get the Equity Shares in physicalform.

Last Date for Submission of Composite Application Form

The last date for receipt of the CAF, by the Banker to the Issue and its Collecting Branches, together with the amountpayable, is on or before the close of banking hours, on October 27, 2006. If the CAF together with the amount payableis not received by the banker to the Issue at its Collection Branches on or before the close of banking hours on or beforeOctober 27, 2006, the offer contained in the Letter of Offer shall be deemed to have been declined, and the Board shallutilise this entitlement for allotting the Equity Shares as mentioned under the heading “Basis of Allotment”.

Undertakings by the Company

� The complaints received in respect of the captioned Rights Issue shall be attended to by the Company expeditiouslyand satisfactorily.

� All steps for completion of the necessary formalities for listing and commencement of trading at all stock exchangeswhere the shares are to be listed will be taken within seven working days of finalisation of basis of allotment.

� The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post / speed post /under certificate of posting shall be made available to the Registrar to the Issue by the Company.

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� The share certificates / refund orders to the non-resident Indians shall be dispatched within the specified time.

� No further issue of securities shall be made till the securities issued/ offered through the captioned Rights Issueare listed or till the application moneys are refunded on account of non-listing, under-subscription etc.

� The Company accepts full responsibility for the accuracy of information given in the Letter of Offer and confirmsthat to best of its knowledge and belief, there are no other facts the omission of which makes any statement madein the Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain suchfacts.

� All information shall be made available by the Lead Manager and the Issuer to the investors at large and noselective or additional information would be available for a section of the investors in any manner whatsoeverincluding at road shows, presentations, in research or sales reports etc.

Utilisation of Issue Proceeds

The Board of Directors declares that:

1. The funds received against this Issue will be transferred to a separate bank account other than the bank accountreferred to sub-section (3) of Section 73 of the Act;

2. Details of all moneys utilised out of the Issue shall be disclosed under an appropriate separate head in thebalance sheet of the Company indicating the purpose for which such moneys has been utilized; and

3. Details of all such unutilised moneys out of the Issue, if any, shall be disclosed under an appropriate separatehead in the balance sheet of the Company indicating the form in which such unutilised moneys have beeninvested.

The funds received against this Issue will be kept in a separate bank account and the Company will not have any accessto such funds unless it satisfies the Designated Stock Exchange with suitable documentary evidence that the minimumsubscription of 90% of the Issue has been received by the Company.

Important

Please read the Letter of Offer carefully before taking any action. The instructions contained in the accompanying CAFare an integral part of the conditions of the Letter of Offer and must be carefully followed; otherwise the application isliable to be rejected.

All inquiries in connection with the Letter of Offer or accompanying CAF and requests for Split Application Forms must beaddressed (quoting the Registered Folio Number/ DP and Client ID no., the CAF number and the name of the first EquityShareholder as mentioned on the CAF and superscribed “OCL India - Rights Issue” on the envelope) to the Registrar tothe Issue at the following address:

C B Management Services (Private) LimitedP – 22, Bondel RoadKolkata 700 019Ph : (033) 2280 6692/93/94/2486

1. It is to be specifically noted that this Issue of Equity Shares is subject to Risk Factors appearing on Page v of theLetter of Offer.

2. The Rights Issue will be kept open for 30 days unless extended, in which case it will be kept open for a maximumof 60 days.

All the Eligible Equity Shareholders have been sent the Abridged Letter of Offer. However, the Letter of Offer shallbe made available on receipt of specific request from any Eligible Equity Shareholder. Such request for the Letterof Offer must be sent to the compliance officer or the Registrar to the Issue before closure of the Issue.

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into in the ordinary course of business carried on by the Companyor contracts entered into more than two years before the date of the Letter of Offer) which are or may be deemed materialhave been entered or to be entered into by the Company. These contracts and also the documents for inspection referredto hereunder, may be inspected at the Registered Office of our Company, from 10.00 a.m. to 4.00 p.m. on working daysfrom the date of the Letter of Offer until the date of closure of the Issue.

MATERIAL CONTRACTS

1. Letter of Mandate dated October 31, 2005 from the Company appointing UTI Bank Limited as the Lead Manager tothe Issue and their acceptance thereto;

2. Memorandum of Understanding dated March 14, 2006 between the Company and the Lead Manager to the Issue;

3. Letter dated October 31, 2005 appointing M/s Corporate Professionals as the Legal Counsel to the Issue and theiracceptance thereto;

4. Memorandum of Understanding dated February 6, 2006 between the Company and the Registrar to the Issue.

5. Collection Agreement dated August 4, 2006 entered into between the Company, the Banker to the Issue, the LeadManager to the Issue and the Registrar to the Issue.

DOCUMENTS FOR INSPECTION

1. The Memorandum and Articles of Association of the Company, as amended from time to time;

2. Certificate of Incorporation of the Company dated October 11, 1949 and certificate for commencement of businessdated February 10, 1950;

3. Certificate of change of name dated January 15, 1996;

4. Resolution of the Board of Directors of the Company passed at its meeting held on October 29, 2005 authorizingthe Issue;

5. Resolution of the Board of Directors approving the Draft Letter of Offer on March 14, 2006 and the Letter of Offeron August 19, 2006.

6. The offer document issued by the Company for rights issue in 1997;

7. The report of V. Sankar Aiyar & Company, the Statutory Auditors, dated June 5, 2006 prepared as per IndianGAAP and mentioned in the Letter of Offer;

8. Consent dated January 12, 2006 from V. Sankar Aiyar & Company for inclusion of their names as the StatutoryAuditors and of their reports on accounts in the form and context in which they appear in the Letter of Offer;

9. The Tax Benefit Report dated June 5, 2006 from the Statutory Auditors;

10. Annual Report of the Company for last five financial years, viz, FY 2005, FY 2004, FY 2003, FY 2002 and FY2001;

11. Consent of the Promoters, the Directors, Lead Manager to the Issue, Legal Advisor to the Issue, Registrar to theIssue, Banker to the Issue, Bankers to the Company, the Compliance Officer, the Company Secretary in theirspecific capacities;

12. General Power of Attorney executed by Directors of the Company in favour of person(s) for signing and makingnecessary changes to the Letter of Offer;

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13. Due Diligence Certificate dated March 20, 2006 addressed to SEBI from UTI Bank Limited, SEBI observationLetter No. CFD/DIL/JAK/70602/2006 dated June 30, 2006, in-seriatim reply dated August 10, 2006 and freshDue Diligence Certificate dated September 12, 2006;

14. Tripartite Agreement between the Company, NSDL and C B Management Services (Private) Limited dated April24, 2001;

15. Tripartite Agreement between the Company, CDSL and C B Management Services (Private) Limited dated April9, 2001;

16. Application from the Company to NSDL and CDSL, respectively, to admit the shares offered in terms of theLetter of Offer into their depository system;

17. Letter of intent for subscribing to rights entitlement received from the Promoters;

18. In-principle listing approval letters dated May 4, 2006 and May 12, 2006 issued by BSE Limited and NSE Limitedrespectively.

Any of the contracts or documents mentioned in the Letter of Offer may be amended or modified at any time if sorequired in the interest of the Company or if required by the other parties, without reference to the shareholders subjectto compliance of the provisions contained in the Companies Act and other relevant statutes.

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DECLARATION BY THE COMPANY

All the relevant provisions of the Companies Act, 1956, and the guidelines issued by the Government of India or theguidelines issued by Securities and Exchange Board of India established under section 3 of the Securities and ExchangeBoard of India Act, 1992, as the case may be, have been complied with and no statement made in the Letter of Offer iscontrary to the provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or the rulesand regulations made there under or guidelines issued there under, as the case may be. We further certify that all thestatements in the Letter of Offer are true and correct.

SIGNED BY ALL THE DIRECTORS

Mr. Pradip (Pinto) Khaitan Chairman

Mr. Vishnu Dayal Jhunjhunwala* Director

Dr. Sheo Raj Jain Director (Independent)

Mr. Dhramendra Nath Davar Director (Independent)

Mr. Harsh Vardhan Lodha Director (Independent)

Dr. Ramesh C Vaish Director (Independent)

Mr. Yadu Hari Dalmiya Director

Mr. Ved Prakash Sood Whole Time Director

* Signed by Mr. Dhramendra Nath Davar as attorney holder

SIGNED BY THE HEAD OF FINANCE AND COMPLIANCE OFFICER

Mr. Rakesh Malhotra Executive Director (Finance)

Date : August 19, 2006

Place : New Delhi

Encl: Composite Application Form