SEZ Division : Survey No. 141, Paiki of Mouje Village Mundra Taluka Mundra. Mundra SEZ, District Kutch, Gujrat - 370421

Plants: Plot 3 & 4 Dharuhera Industrial Estate, Phase - 1

Dharuhera - 123106, Distt. Rewari, (Haryana)

Registered Office : "DUNCAN HOUSE" 31, Netaji Subhas Road Kolkata - 700 001 CIN: L24297\NB1978PLC031539

Dear Sirs,

Sub: Annual Report of the Company for the year ended March 31, 2021

Pursuant to Regulations 30 and 34 of the SESI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and further to our earlier letter regarding, inter alia, convening of the 41st Annual General Meeting ("AGM") of the Company on Tuesday, the August 03, 2021 through Video Conferencing ("VC") I Other Audio Visual Means ("OAVM") facility, please find enclosed the Annual Report of the Company for the financial year ended March 31, 2021, being sent by email to those Members whose email addresses are registered with the Company I Company's Registrar and Share Transfer Agent ("RTA") I Depository Participant(s) ("Depository"). The requirements of sending physical copy of the Notice of the 41 st AGM and the Annual Report to the Members of the Company have been dispensed with vide MCA Circulars and SESI Circulars.

Members of the Company holding shares in physical form who have not registered their email addresses with the Company can obtain the Notice of the 41 st AGM, Annual Report and/or login details for joining the 41 st AGM through VC/OAVM facility including e-voting, by sending scanned copy of the signed request letter mentioning Name, Folio Number and Complete Address, self attested scanned copy of the PAN Card and self attested scanned copy of any document (such as Aadhar Card, Driving License, Voter Identity Card, Passport) in support of the address of the Members registered with Company by email to the Company's RTA's email id, viz. kolkata@linkintime.co.in or Company's email id, viz. investorfeedback@occlindia.com. Members holding shares in demat form can update their email address with their Depository Participant.

In terms of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management & Administration) Rules, 2014 (as amended), the Company has fixed July 27, 2021 as the cut-off date to determine the eligibility of the members to cast their vote by remote e-voting and e-Voting during the 41st AGM scheduled to be held on August 03, 2021 through VC/OAVM Facility.

Request you to kindly take the same on record.

Thanking you,

Yours truly, For Oriental Carbon & Chemicals Limited

P~arMaity Company Secretary & GM Legal Encl: As above

The Manager National Stock Exchange of India Limited Exchange Plaza, Sandra Kurla Complex Sandra (E) Mumbai - 400 051 Scrip Symbol: OCCL

The Manager SSE Limited Department of Corporate Services Floor 25, P. J. Towers, Dalal Street Mumbai - 400 001 Scrip Code: 506579

July 09, 2021

DIAMOND SULF, 14th Floor, Tower-B, World Trade Tower. Plot No. C-1, Sector-16. Noida - 201301. UP Phone: 91-120-2446850 Website: www.oc:c:hndia.com

® ORIENTAL CARBON & CHEMICALS LIMITED

Oriental Carbon & Chemicals Limited

UR VISI

ContentsCorporate overview

2 Corporate Snapshot

10 Financial Highlights

14 Managing Director’s Overview

18 Joint Managing Director’s Overview

26 Shareholder value creation report

28 OCCL’s ESG commitment

34 Integrated value creation report

42 OCCL’s Excellence driver

47 Management Discussion & Analysis

Statutory section

56 AGM Notice

65 Directors’ Report

84 Corporate Governance Report

106 Business Responsibility Report

Financial section

114 Standalone financial statements

171 Consolidated financial statements

Forward-looking statementIn this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements - written and oral - that we periodically make, contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

principal messages of this Annual Report4

OCCL delivered one of its best annual performances despite challenges related to market demand and resource inflation in FY 20-21.

The Company is building on this performance through strategic initiatives directed at enhancing competitiveness across market cycles.

The Company is deepening its ESG commitment to reinforce its personality as a responsible forward-looking player.

The Company will complete phase one of its major capex cycle related to the Dharuhera expansion by October 2021with the objective to maximise revenues and stakeholder value.

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How we have grown over the years

1978 � Incorporated

as Dharuhera Chemicals Ltd to manufacture sulphuric acid

� Commenced sulphuric acid production

1984Merged with Oriental Carbon Ltd. to form Oriental Carbon & Chemicals Ltd.

1994Commenced insoluble sulphur production

1998Introduced high stability grades

2000Divested the carbon black business

2001Developed the AS grade

2002Established a modern R&D department

2003Developed the high dispersion grade

2005Established a second line at Dharuhera

2012Commissioned the second phase of the Mundra plant; acquired 50% equity shares of Schrader Duncan Ltd.

2016Initiated expansion of an additional 11,000 MTPA of insoluble sulphur capacity at Mundra

2017Commissioned insoluble sulphur capacity of 5,500 MTPA at Mundra

2018Commissioned the fourth line (5,500 MTPA) of insoluble sulphur capacity at Mundra

2019Kick started brownfield expansion of an additional 11,000 MTPA of Insoluble Sulphur capacity at Dharuhera in two phases

2007Introduced custom-made grades

2009Commenced construction of the Mundra plant

2011Commissioned the first phase of the Mundra plant (5,500 MTPA)

41st Integrated Annual Report 2020-21 I 005004 I Oriental Carbon & Chemicals Limited

5P’s have strengthened our business sustainability - People, Product, Process, Profit and Planet

Managing Director’s overview

comprising People, Product, Process, Profit and Planet – has raised the benchmarks for sustainability in our sector.

I am pleased to report that Oriental Carbon and Chemicals Limited (OCCL) invested in these priorities from the time it went into business. The Company has remained competitive across business cycles, growing through every downturn. The result is that our company has emerged as one of the most respected in the insoluble sulphur sector the world over.

Overview

In a VUCA (volatile, uncertain, complex and ambiguous) world as the one we are passing through, the only insurance is preparedness.

In our business of insoluble sulphur, where the goalpost is perpetually shifting and quality standards increasing, there is a premium on being consistently ahead of the sectorial curve.

During the last few years, a new priority - the 5P’s of sustainability

41st Integrated Annual Report 2020-21 I 015014 I Oriental Carbon & Chemicals Limited

At OCCL, we are opportunity-ready from capacity, cost and ESG perspectives. Our ongoing cost moderation exercise is translating into a visible improvement

Joint Managing Director’s operational review

Performance overview

OCCL reported its second-best annual performance ever. The Company reported H344,68 Lakh in revenues and a 5% increase in profit after tax. This profitable growth in a year, when the Company’s operations were presentable in only three quarters, continues to validate the Company’s competitiveness in the most challenging end of the prevailing business cycle.

There were creditable features of the Company’s performance during the year under review. Even as sales tonnage remained around the same level as in the

previous year, the Company generated a higher profit as a result of the Company maximizing capacity utilisation, covering fixed costs and other expenses. The fact that this profit growth was derived without increasing sales realisations represented an index of the Company’s commitment to enhance the customer’s price-value proposition.

Overcoming challenges

The Company’s handsome performance might imply that business conditions were favourable. Nothing would be further from the truth.

41st Integrated Annual Report 2020-21 I 019018 I Oriental Carbon & Chemicals Limited

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How we intend to enhance shareholder value across the foreseeable future

Focus

At OCCL, we recognise that we are in business to enhance value for all our stakeholders.

We believe that we are in business to generate consistently better returns than what investors would be able to generate from investments in alternative companies or asset classes.

In view of this, we shoulder an over-riding responsibility to invest in prudent strategy leading to any-market competitiveness, sustainable performance and an improved perception in the minds of our stakeholders leading to a superior valuation.

Strategic overview

At OCCL, we believe that at the heart of our competitiveness lies a simple approach: generate more from less.

This need to maximise resource productivity is not just limited to material efficiency; it extends to the need to maximise returns from a given funds pool.

Over the years, we attempted to maximise RoCE through a combination of the following strategies:

� Increase output leading to higher revenues, better coverage of fixed costs and stronger customer service leading to their retention and repeat business

� Cost moderation leading to increased surplus available for reinvestment, strengthening our virtuous cycle

� Research-driven value-addition leading to higher margins, stronger surplus and better perception among our stakeholders

� Better working capital management leading to superior cash flows, lower debt and higher margins

� Relatively low debt and low debt cost, strengthening margins and rightsizing the Balance Sheet

� Investment in down cycles at a low cost and in quick implementation tenures, strengthening the Company’s preparedness for a full-fledged recovery

Value-enhancing initiatives

Capacity expansion

Wider market presence

Human resource management

Research focus

ESG initiatives

Cost moderation

41st Integrated Annual Report 2020-21 I 023022 I Oriental Carbon & Chemicals Limited

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•• Iii Cost moderation

At OCCL, we recognise that the most sustainable companies across the long-term are those possessing the lowest cost structure. This structure reinforces the capability of companies to survive different market cycles, making them the last persons standing and among the first to be off the blocks during sectorial recovery.

At OCCL, we embarked on the exercise to moderate fixed costs in October 2019, well before the outbreak of the pandemic. This proactive approach was influenced by a sharp increase in insoluble sulphur manufacturing capacity the world over; the

Company recognised that this overcapacity would translate into a decline in realisations that would place a premium on the ability to remain competitive even during the worst end of the sectorial cycle.

The Company embarked on a zero-based budgeting of every major expenditure head. It examined every process to identify waste and redundancy; it questioned every practice with the objective to do it better, faster and cheaper.

The cost moderation exercise was completed in FY 20-21 and the effects of this will be visible

from FY 21-22. The Company reported attractive savings across the board that moderated its break-even point. The Company expects to generate a sustainable decline in its cost structure year-on-year. The Company expects to maintain its FY 21-22 inflation-adjusted spending on talent at the same level as FY 20-21 despite a new manufacturing line to be commissioned from the third quarter onwards. A moderated capital expenditure for the capacity expansion is expected to keep in check the role of debt and debt cost (about 7.5% per annum), strengthening long-term competitiveness.

Capacity growth

At OCCL, we embarked on an expansion in our manufacturing capacity before the outbreak of the pandemic. The Company sustained this expansion through the pandemic: the downtrend empowered the Company to capitalise on a superior terms for equipment and ancillaries, enhancing project value (stronger

power access, zero liquid discharge plant, centralised utility and higher capacity of the supporting acid plant).

The first phase of expansion of the insoluble sulphur plant and the sulphuric acid plant is expected to be commissioned by October 2021, potentially increasing the Company’s global insoluble

sulphur market share about 10% to 12%.

Besides, by selecting to invest during the down cycle, possibly one of only two such instances in the world at this juncture, the Company intends to emerge opportunity-ready – not just larger but stronger as well.

Market presence redistribution

At OCCL, we believe the time has come to broad base our global footprint with the objective to seed our presence in markets where we enjoy only a small presence.

At a time when global insoluble sulphur demand is growing 2-3% a year and no further capacity

expansion is likely, we believe that there could be a possibility of the sector looking at a probable consolidation that could lead to a turnaround. This puts a premium on OCCL to commission capacities on schedule and strengthen its marketing cum research focus.

OCCL intends to focus on increasing its market share in North America to 10% in three years. The Company intends to increase global market share from 10% to 12%. The Company intends to sustain the increased share of Indian revenues at 40% across the foreseeable future.

Talent management

In a knowledge-driven business, the competitive difference comes down to talent. At OCCL, we intend to leverage talent by providing a platform that makes it possible for our people to do different things; besides, we have invested in our business with the objective to enhance people productivity (increased production per person). In a business where people cost as a component of revenues was 13% in FY 20-21,

any improvement in people productivity can translate into enhanced margins.

During the year under review, the Company strengthened talent management through a new Performance Management System. The Company plugged gaps across functions at the General Manager level by recruiting from larger respectable multi-national chemical companies. This strengthened

a culture of specialisation and embedded succession planning deeper into the organisation.

The Company intends to graduate its people productivity into a visible competitiveness driver in FY 21-22 through a prudent reallocation of existing employees across the new manufacturing line, increasing capacity (and production) without a corresponding increase in people.

Research focus

OCCL has always been a research-driven organisation. Over the years, this commitment translated into the development of quality-enhanced products that generated superior productivity at the customer end.

During the last couple of years, the Company deepened this

focus. Even as most budgets were pruned during the pandemic in 2020, the Company sustained its research spending. The Company invested 0.6% of its revenues in research, reflected in the increased recruitment of specialised research professionals and increased allocation for a

full-fledged research laboratory expected to be commissioned in FY 21-22.

This sustained research focus is expected to translate into the development of specialised insoluble sulphur grades and a widening of the product basket.

ESG recall

In the speciality chemicals industry, there is a growing respect for companies that invest deeper in their ESG personality.

ESG is seen as a business feature that balances the interests of the earth, community, vendors, customers, employees and shareholders – a framework of how a company can grow in a sustainable manner.

At OCCL, we enhanced this ESG perspective across our operating teams. The Company deepened investments in talent, strengthened vendor eco-system

stability, enhanced customer service through better products delivered around a superior price-value proposition, deepened environment compliance, moderated resource consumption and strengthened de-risking.

The Company charted out a strategy to enhance installed capacity at a lower average input cost (people, funds, land and resource economies). It moderated water consumption and intends to switch to the use of natural gas in Mundra. Besides, it intends to seek respect-enhancing certifications like

Responsible Care Chemicals and Eco Vadis, validating its credibility.

As an extension of this conviction, the Company arranged for the vaccination of all employees and their family members. From a community perspective, the Company invested in a rejuvenation of water ponds in villages proximate to its manufacturing facilities, which will help groundwater recharge, provide water supply to the community and strengthen the Company’s commitment towards sustainability.

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