To the Members,

The Directors have pleasure in presenting before you the 32nd Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2018.

FINANCIAL RESULTS :

The performance during the period ended 31st March, 2018 has been as under:

(In Lakhs)

OPERATIONS:

The gross income of the Company is s11.78 Crores during the current financial year 2017-18 as against s12.77 Crores during the previous financial year. The very low turnover is due to the abnormal delay in finalization of tenders by the customers on account of changes in Government of India’s policy to encourage indigenous manufacturers under the Make in India Policy. Major tenders were finalized by the customers during the last quarter of financial year 2017-18 only and hence low turnover during current financial year 2017-18.

PROSPECTS:

The order book position of the Company stood at s 270 Crores as at 31st March, 2018. The raw materials procurement against new orders are in place and expected to be received in first quarter of 2018-19. The manufacturing will be taken up thereafter. The Company expects a turnover of around s150 Crores during the financial year 2018-19.

The Exploration and Drilling Activities world over has shown an increase with rise in the crude oil prices, now at 74 USD/ Barrel, thereby increasing the requirement of Tubulars and Drilling Products. In India, the Exploration and Drilling activities continue to remain at steady levels and more drilling and exploration activities are expected with the rise in the crude oil prices.

The Government of India has issued the Steel Policy for Domestically Manufactured Iron and Steel Products, including the Seamless Pipes, under the Make in India Policy. Under the Steel Policy, minimum value addition of 15% has been prescribed with input material to be sourced indigenously. The Processors of the Seamless Pipes have to procure the green pipes from the seamless pipe manufacturers in India.

These Policy changes under Make in India Policy will give the necessary thrust to the domestic Industry including Oil & Gas Sector and indigenous manufacturers of various Tubulars and the Company’s products required for the Industry.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required under Regulations of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is enclosed as a part of this report.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down in Reg. 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. A report on Corporate Governance is included as a part of this Annual Report. Certificate from the Statutory Auditors of the company M/s G Nagendrasundaram & Co., Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under above regulation is included as a part of this report.

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2018-19 to NSE and BSE where the Company’s Shares are listed.

DEMATERIALISATION OF SHARES:

96.29% of the company’s paid up Equity Share Capital is in dematerialized form as on 31st March, 2018 and balance 3.71% is in physical form. The Company’s Registrars are M/s XL Softech Systems Ltd., having their registered office at 3 Sagar Society, Road No.2, Banjara Hills, Hyderabad - 500 034.

Number of Board Meetings held :

The Board of Directors duly met 5 times during the financial year from 1st April, 2017 to 31st March, 2018. The dates on which the meetings were held are as follows: 25th May, 2017, 10th August, 2017, 9th November, 2017, 8th February, 2018 and 24th February, 2018.

DIRECTORS:

Appointment by rotation :

In accordance with the provisions of the Companies Act, 2013 read with the Articles of Association of the Company Mrs. K Indira, Director of the Company will retire by rotation at this meeting and being eligible, has offered herself for re-appointment.

Independent Directors Declaration :

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT :

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

a) in the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Profit / (Loss) of the company for the same period;

c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls in the company that are adequate and were operating effectively;

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.

AUDIT OBSERVATIONS :

Auditors’ observations are suitably explained in notes to the Accounts and are self-explanatory. The Company has taken steps, to make payment of Service Tax for which provision has been made in the Balance Sheet and regularize the Working Capital overdues. AUDITORS:

i) Statutory Auditors :

M/s.G.Nagendrasundaram & Co., Chartered Accountants, Hyderabad, Statutory Auditors have been appointed for a period of Five Years at the 31st Annual General Meeting until 36th Annual General Meeting subject to ratification every year at the conclusion of next Annual General Meeting.

ii) Cost Auditors :

The Company is required to appoint Cost Auditors, if the turnover of the Company is more than Rs.100 Crores in the previous year. Since the turnover of the Company is far below .100 Crores threshold during the year 2017-18. The Cost Auditors are not required to be appointed for the year 2018-19.

iii) Secretarial Audit :

Ms.Manjula Aleti, Practicing Company Secretary in practice was appointed as Secretarial Auditor to conduct the Secretarial Audit of the Company for the year 31st March, 2018 as per the section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report for the year ended 31st March, 2018 (in Form MR-3) submitted by Company Secretary in Practice is enclosed as a part of this report ‘Annexure-A.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO :

Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in the Annexure-B to this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) :

In terms of section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors of your Company have constituted a CSR Committee. The Committee comprises of all Independent Directors. CSR Committee of the Board has developed a CSR Policy under Health care and Education activities which are enclosed as part of this report Annexure-C. Additionally, the CSR Policy has been uploaded on the website of the Company at www.octlindia.com under investors/ policy documents/CSR Policy link.

VIGIL MECHANISM :

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.octlindia.com under investors / policy documents / Vigil Mechanism Policy link.

RELATED PARTY TRANSACTIONS :

Related party transactions that were entered during the financial year were on an arm’s length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company’s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure-D.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013, the Rules thereunder and the Listing Agreement. This Policy was considered and approved by the Board has been uploaded on the website of the Company at www.octlindia.com under investors/ policy documents/Related Party Policy link.

EXTRACT OF ANNUAL RETURN :

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-E.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished hereunder:

1) Details of percentage increase in the remuneration paid to Key Managerial Personnel (KMP)

2) Particulars of Employees:

As required under the provisions of Companies Act, 2013 and Rule 5(2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there are no employees falling under the category thus no information is required to be given in the report.

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY:

The Company has been addressing various risks impacting the Company and the policy of the Company on risk management is provided elsewhere in this annual report in Management Discussion and Analysis.

ACKNOWLEDGEMENT:

Directors take this opportunity to express their thanks to various departments of the Central and State Government, ONGC, Oil India Limited, Multinational Companies operating in India and Abroad for Oil and Gas Exploration and Drilling, Bankers, Material Suppliers, Customers and Shareholders for their continued support and guidance.

The Directors wish to place on record their appreciation for the dedicated efforts put in by the Engineers and Employees of the Company at all levels.

By Order of the Board of Directors

For Oil Country Tubular Limited

Place : Hyderabad K SURYANARAYANA

Date : April 26th, 2018 Chairman