�

BOARD OF DIRECTORSChairmanMr. R. AnandDirectors

Mr. Vinodrai V. Goradia

Mr. G.D.L.S.N.Raju

Mr. M. Bhaskara Rao (IREDA Nominee)

Mr. M. Kanna Reddy

Mr. K. Madhu

Mr. Kamlesh Gandhi

Mr. P.S. Reddy

Mr. K. Gautam - Executive Director

Mr. P.N. Raju - Executive Director

Mr. S .S. Raju - Joint Managing Director

Mr. K. Ravi - Managing Director

COMPANY SECRETARYMr. T. Arun Kumar

AUDITORP.V. RatnamChartered Accountant

BANKERSAxis Bank LimitedCanara BankCentral Bank of IndiaCorporation BankIndian Renewable Energy Dev. Agency Ltd.Oriental Bank of CommerceState Bank of HyderabadState Bank of IndiaState Bank of Mysore

Axis Bank LimitedState Bank of Hyderabad

FACTORIES

CEMENT DIVISION

UNIT – ISimhapuri,Mattampally Mandal,Nalgonda DistAndhra PradeshPincode - 508204

BOARDS DIVISION

UNIT – ISimhapuri,Mattampally Mandal,Nalgonda DistAndhra PradeshPincode - 508204

PREFAB DIVISION

UNIT – IPlot No. 34/A, IDA,Jeedimetla,HyderabadAndhra PradeshPincode - 500 055

ENERGY DIVISION

UNIT – IPothireddypadu, HeadRegulator, Chabolu Village,Pothulapadu Post,NandikotkurTQ.Kurnool DistrictAndhra PradeshPincode - 518402

Regd. & Admn. Office7th Floor, Raghava Ratna Towers, Chirag Ali Lane, Abids, Hyderabad - 500 001.

Tel : 91 (040) - 23203637, 23202548, 23204243 Fax : 91 (040) - 23202496, 23203417E-mail : ncl@nclind.com Website : www.nclind.com

UNIT – IIKadimpothavaram,Village, Kondappalli,Krishna District,Andhra PradeshPincode - 521228

UNIT– IIBhothanwali Village,Paonta Sahib,Sirmour District,Himachal PradeshPincode - 173025

Axis Bank LtdCanara BankCentral Bank of IndiaCorporation BankIndian Renewable Energy Dev. Agency LtdOriental Bank of CommerceState Bank of HyderabadState Bank of IndiaState Bank of MysoreIDBI Bank Ltd

UNIT – IIRBHLC Zero Mile Point,Tungabhadra Dam,Tungabhadra Board,Amaravathi Village,HospetKarnatakaPincode - 583225

UNIT – IIBhothanwali Village,Paonta Sahib,Sirmour District,Himachal PradeshPincode - 173025

�

C O N T E N T S������ �

�������� ������ ��

������ �� ��������� ���������� ��

���������� ��������� � �������� ������ ��

�� ����� ������ �!

"������ #$��� �%

&��'�� � (��� ������� )�

���$ *��+ #�������� )�

#�$� ���� ))

"������ #$��� �,������ �

&��-� *��� !

AGM on Thursday the 30th September, 2010 at 10 A.M. atBharatiya Vidya Bhavan, King Koti Road, Hyderabad- 500 029.

�

Notice is hereby given that the 29th Annual General Meeting of NCL Industries Limited will be held on Thursday, the 30th

September, 2010 at 10 A.M. at Bharatiya Vidya Bhavan, King Koti Road, Hyderabad- 500029, to transact the followingbusiness.

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Balance Sheet of the company as at 31st March 2010 and the Profit and LossAccount for the year ended on that date together with the Reports of the Directors and Auditors thereon.

2. To declare dividend.

3. To appoint a Director in place of Mr.R.Anand, who retires by rotation and is eligible for reappointment.

4. To appoint a Director in place of Mr. Vinodrai V.Goradia, who retires by rotation and is eligible for reappointment.

5. To appoint a Director in place of Mr. K.Madhu, who retires by rotation and is eligible for reappointment.

6. To appoint Auditors and fix their remuneration.

By Order of the BoardFor NCL INDUSTRIES LIMITED

Place: Hyderabad T. ARUN KUMARDate: August 13, 2010 Company Secretary

NOTICE

�

NOTES

1. A member entitled to attend and vote at the meetingis entitled to appoint a proxy instead of himself toattend and vote only in a poll and the proxy neednot be a member. Proxies in order to be effectiveshould be duly stamped, completed and signed andmust be received by the company not less than 48hours before the Annual General Meeting.

2. Shareholders seeking any information with regard toaccounts are requested to write to the Company at anearly date so as to enable the Management to keep theinformation ready.

3. The Register of Members and Share Transfer Registerswill remain closed from 23rd September, 2010 to30th September, 2010 (both days inclusive) on accountof the Annual General Meeting and Dividend payment.

4. The Dividend as recommended by the Board, if approvedat the Meeting, will be paid to those members whosenames appear on the Register of Members as on30th September, 2010, or to their nominees. In respect ofshareholding in dematerialised form, dividend will be paidto the beneficial owners as at the end of business on22nd September, 2010, as per details to be furnished bythe depositories for the purpose.

5. The members holding shares in physical mode arerequested to provide their Bank Account Number, Nameand Address of the Bank / Branch to the Registrars of theCompany to enable the company to incorporate the samein the dividend warrant, in order to prevent againstfraudulent encashment of dividend.

6. Members holding shares in electronic form are requestedto inform the changes, if any, in their address or bankparticulars etc., to the Depository Participant with whomthe demat account is maintained.

7. Individual shareholders can avail the facility of nomination.Shareholders holding shares in physical form may writeto the Registrar for assistance. Shareholders holding inelectronic form may approach their DP with whom theymaintain their account.

8. In terms of clause 49(IV)(G) of the Listing Agreement,brief Resumes of Mr. R.Anand, Mr Vinodrai V.Goradia,and Mr. K.Madhu proposed to be reappointed aredetailed below:

Brief Resume of Directors proposed to be appointed/reappointed.

Mr. R.Anand

Mr. R. Anand (aged about 76 years) is associated with thecompany as non executive independent Director since 1982.He is having rich experience in Textile Industry and currently

Chairman of Eastern Engineering Co (Bombay) Pvt Ltd. Mr.Anand was elected Chairman of the Board in place of Mr. KJayabharat Reddy, who resigned on 14th June, 2008. Besidesbeing a Director of the company, he is also a Director in NovaSilk Pvt Ltd, Indo Count Industries Ltd, NSL Textiles Limitedand NSL Textiles (Edlapadu) Limited. He is holding 540 equityshares in the company.

Mr. Vinodrai V.Goradia

Mr. Vinodrai V.Goradia (aged about 73 years) has beenassociated with the company as Promoter Director since1982 except a brief spell between 20.08.1987 to 27.09.1990and is one of the original promoters. He is the proprietor ofShamji Bhanji & Co based in Mumbai engaged in chemicalbusiness. Mr. Goradia brings with him rich commercialexperience.

Mr. Vinodrai Goradia is not a Director in any other company.He currently holds 4,24,970 Equity shares in the Company.

Mr. K.Madhu

Mr. K. Madhu (aged about 54 years) is a Promoter Directorof the Company since 1991. He served as Joint ManagingDirector of the company from 25.07.1991 to 21.11.1992. Mr.Madhu is at present Managing Director of NCL Alltek &Seccolor Ltd, a company dealing in Coating Products andBuilding Materials. Mr K. Madhu is a graduate in Commerceand Law and a successful industrialist with over 25 years ofrich experience in cement and building material Industry. Heis also a director in NCL Homes Ltd, Khandaleru PowerCompany Ltd,NCL Wintech (India)Ltd, Kakatiya IndustriesPvt Ltd and Spantile Mfg.Co.Pvt. Ltd.Currently apart from being a director, he is a member of Auditcommittee, Investor Grievance committee and Remunerationcommittee of the company. He currently holds 11,03,629Equity Shares in the company.

Mr. K. Madhu is the brother of Mr. K. Ravi, Managing Director.

By Order of the BoardFor NCL INDUSTRIES LIMITED

Place: Hyderabad T. ARUN KUMARDate: August 13, 2010 Company Secretary

�

DIRECTOR’S REPORT

Your Directors have pleasure in presenting their Report forthe financial year ended March 31, 2010.

FINANCIAL RESULTS

The Audited Balance Sheet of your Company as at March31, 2010, the Profit & Loss Account for the year ended onthat date and the report of the Auditors thereon are beingcirculated with this report. The salient features of the financialResults are as follows:

(Rs. in Lakhs)

2009 – 2010 2008 – 2009

Gross Income 34,113.66 42,639.47

Profit Before Taxfor the Year 2,339.41 4,337.12

Provision for Tax 101.81 873.32

Deferred Tax 1,066.82 478.72

Net Profit 1,170.78 2,985.08

Profit brought forwardfrom Previous Year 2,500.00 2,205.32

Profit availablefor Appropriation 3,670.78 5,190.40

AppropriationsProvision forDividend & Dividend Tax 408.75 989.18Dividend Paid on the sharesallotted subsequent to the

Balance Sheet Date for 2008-09 32.69 -Transfer to General Reserve 2,075.74 1,701.22

Balance carried forward 1,153.60 2,500.00

During the year under review, there has been a 20 % fall inthe gross turnover, and 61 % in Net Profit compared to theprevious year. The substantial decline in turnover and profitscompared to the previous year was mainly due to lowerrealization of cement prices. Unprecedented floods, civildisturbances in Andhra Pradesh and reduced turnover andmargins in Prefab Division also contributed to the decline inperformance.

Out of the profits, the Directors propose a transfer of anamount of Rs. 2075.74 lakhs to the General Reserve.

DIVIDEND

In view of the lower profitability, your Directors are constrainedto recommend a lower dividend of 10%, compared to the

25% dividend declared in the previous year. The dividendpayout for the year 2009-10 will be 1.00 per share absorbinga sum of Rs 408.75 lakhs (Rs.989.18 lakhs in the previousyear) including the dividend tax, the dividend being free fromincome tax in the hands of the shareholders.

ISSUE OF SHARES ON CONVERSION OFWARRANTS

Members are aware that the company had issued 33,33,400convertible warrants to the Promoters and Promoters Groupon the 17th March, 2008 at a price of Rs.45/- per warrant topart finance the Expansion Project of the Company. EachWarrant is convertible to one equity share of Rs.10/- each ata premium of Rs.35/- per share. In spite of the lower rulingprices of the shares, the Promoters honoured theircommitment by converting the warrants at the issue price.

VARIATIONS IN THE UTILIZATION OF THEISSUE PROCEEDS

Your Directors wish to report in terms of Clause 43 of theListing Agreement with the Stock Exchanges that there havebeen no variations in the utilization of the proceeds of thePreferential Issue of Convertible Warrants from what hasbeen stated in the explanatory statement to the noticeconvening the Extra ordinary General Meeting for consideringpreferential issue of securities.

EXPANSION PROJECTS

As reported earlier, the implementation of the further expansionproject to add cement capacity of 13.20 Lakhs TPA wascompleted and the units successfully commencedcommercial operations during the year under review. Whilethe Cement Grinding Unit at Kondapalli has been able tocommence its commercial production in June 2009, SimhapuriUnit commenced commercial operation in the last week ofMarch, 2010. With the expansion project, your company hasgraduated from Mini Cement plant category to become oneof the major cement plants in Andhra Pradesh.

INVESTOR EDUCATION & PROTECTION FUND

The company has transferred Rs.4.39 lakhs relating to unpaidDividend for the Financial Year 2001-02 to the InvestorEducation & Protection Fund.

FIXED DEPOSITS

As on 31st March 2010, Rs 1,604.54 lakhs of Public Depositsare outstanding. The Company repaid all the matureddeposits that have been claimed.

�

AUDITORS

Mr.L.N.Prayaga, the founder partner of the firm M/s Prayaga& Co., Chartered Accountants, the statutory auditors of thecompany expired on 23rd May, 2010. At its Meeting held on30th May, 2010 the Board of Directors appointed Mr.P.V.Ratnam, Chartered Accountant as Auditor of the companyto fill the casual vacancy caused by the demise of Mr.L.N.Prayaga. As per the provisions of Section 224 of theCompanies Act, 1956, Mr. P. V. Ratnam holds office till theconclusion of the ensuing Annual General Meeting. YourDirectors propose that Mr. P. V. Ratnam be reappointed asAuditor.

COST AUDITORS

Mr. R. Srinivasa Rao, Cost Accountant, the Cost Auditor ofthe Company has been re-appointed to conduct the costaudit pertaining to the Cement Division of the company forthe year 2010-2011.

DIRECTORS

Mr. K.Madhu, Mr.R.Anand and Mr. V.V.Goradia Directorsretire by rotation at the ensuing Annual General Meeting andbeing eligible, offer themselves for reappointment. Appropriateresolutions for their appointment as Directors are proposedin the Annual General Meeting.

CORPORATE GOVERNANCE

A separate Report of compliance with the provisions relatingto Corporate Governance as required by Clause 49 of theListing Agreement with the Stock Exchanges is enclosed asAnnexure ‘A’ to this Report.

MANAGEMENT DISCUSSION AND ANALYSISREPORT

The Management Discussion and Analysis Report is annexedas Annexure ‘B’ to this Report.

DIRECTOR’S RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of theCompanies Act, 1956, the Directors of your Company confirm:

I. That all applicable accounting standards have beenfollowed in the preparation of annual accounts and thatthere are no material departures.

II. That the Directors selected such accounting policies andapplied them consistently and made judgments andestimates that are reasonable and prudent so as to give

a true and fair view of the state of affairs of the companyas at 31st March, 2010 and of the profit of the Companyfor the year ended on that date.

III. The Directors have taken proper and sufficient care forthe maintenance of adequate accounting records inaccordance with the provisions of the Companies Act1956, for safeguarding the assets of the company andfor preventing and detecting fraud and other irregularities.

IV. That the Directors prepared the Annual Accounts on agoing concern basis.

PARTICULARS OF EMPLOYEES

The details of employees who have been in receipt of theremuneration envisaged by Section 217(2A) of the CompaniesAct, 1956 read with the Companies (Particulars of Employees)Rules, 1975 as amended is annexed as Annexure –C to thisReport.

ADDITIONAL INFORMATION

The information required to be disclosed in terms of Sec.217(1) (e) of the Companies Act, 1956 relating to conservation ofenergy, technology absorption and foreign exchange etc., isfurnished in Form A & B and forms part of this report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation ofthe support and co-operation extended by IREDA, SBI, SBH,OBC, Axis Bank, Corporation Bank, Canara Bank, State Bankof Mysore, Central Bank of India, IDBI Bank and Central andState Government Departments, Dealers, Stockiest,Consumers and Depositors.

Your Directors also wish to place on record their appreciationof the excellent enthusiastic support received from theshareholders.

Your Directors have pleasure in acknowledging the excellentco-operation received from the team of dedicated executivesand employees who have contributed handsomely to theoperations of the company.

For and on behalf of the Board

Place: Hyderabad R. ANANDDate: August 13, 2010 Chairman

�

FORM-AI. FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

Current Year Previous Year2009-10 2008-09

A. POWER AND FUEL CONSUMPTION

1 ELECTRICITYa. Purchased

Units - Lakhs 625 612Total Amount ( Rs.In Lakhs) 2,105 2,006Rate/Unit( Rs ) 3.37 3.28

b. Own GenerationThrough Diesel Generator ( Units Kwh Lakhs) 9.19 6.06Total Amount ( Rs.In Lakhs ) 97.42 75Rate/Unit( Rs ) 10.60 12.40

2 COALQuantity ( Tonnes ) 1,01,795 90,253

Total Cost (Rs.In Lakhs) 2,681 2,529

Average Rate/Tonne(Rs) 2,634 2,802

3 FIRE WOOD

Quantity ( MT ) 4,750 5,519

Total Cost ( Rs. In Lakhs ) 111 73

Average Rate/Tonne(Rs) 2,337 1,316

4 CONSUMPTION PER MT OF PRODUCTIONElectricity - Units

Cement Division 91.31 * 94.05 *

Boards Division 176.13 180.09

Coal - MT (Cement Division) 17% * 16% *

Kcal/Kg clinker 772 779

*Per MT of equivalent Ordinary Portland Cement

FORM-B

II. FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION, (R&D)

A Reasearch and Development ( R&D) : Not Applicable

B Technology Absorption, adoption and innovation : Not Applicable

For and on behalf of the Board

Place : Hyderabad R. ANANDDate : August 13, 2010 CHAIRMAN

1) Company’s philosophy on Corporate Governance

The company’s philosophy on corporate Governance is to conform to the code of corporate governance in letter andspirit as an aid to efficient conduct of its business and in meeting its obligations to shareholders.

2) Board of Directors:

a) Constitution & Size of the Board

During the year under review, your Board of Directors had 12 Directors, 4 being Executive Directors and 8 Non-Executive Directors. Five of the Non Executive Directors, including the Chairman are independent. Mr.S.S.Raju,Executive Director of the company has been appointed as Joint Managing Director w.e.f. 1st August, 2009. Mr.P.N.Rajuhas been re-appointed as Executive Director and Mr.K.Gautam has been inducted as Executive Director w.e.f 1st

August,2009.

b) Number of Board Meetings held during the year along with dates of the meetings:

Seven Board Meetings were held during the year 2009-2010. The dates on which the said meetings were held areas under:

(1) 23rd May, 2009 (2) 29th June 2009 (3) 27th July 2009

(4) 29th Sept 2009 (5) 31st Oct 2009 (6) 30th Jan 2010

(7) 30th March 2010.

c) Attendance of Directors at Board Meetings, AGM and committees where he is a Director / Member.

Name of the Director Categories No of Board Attendance Directorship No. of membershipsOf Director- Meeting at last in other of other Committees**

ship* attended AGM Companies as

Chairman Member

R. Anand I & NED 6 Yes 6 -- 4

M. Kanna Reddy I & NED 7 Yes 1 -- --

M. Bhaskara Rao I & NED 6 Yes 1 -- --

S. Mallikharjuna Rao I & NED 2 No -- -- --(upto 30th June, 2009)

Kamlesh Gandhi I & NED 6 Yes 6 1 1

V.V. Goradia NED 3 Yes -- -- --

K Madhu NED 7 Yes 6 -- --

P.S.Reddy I & NED 5 Yes 7 1 1

GDLSN Raju NED 6 Yes 3 -- --

K.Gautam (From 1st ED 3 Yes -- -- --August, 2009

P.N.Raju ED 7 Yes 1 -- --

S.S.Raju JMD 7 Yes 1 -- --

K. Ravi MD 7 Yes 5 -- --

REPORT ON CORPORATE GOVERNANCE

** As per explanation to clause 49.1 (C),only Audit committee and Shareholders grievance committee have been consideredfor the purpose

* I & NED Independent and Non- Executive DirectorNED Non-executive DirectorED Executive Director

Annexure - A

as

3) Audit Committee:

The Board has an Audit Committee constituted pursuant to Clause 49 of the Listing Agreement. During the year underreview, five meetings of the audit committee were held on the following dates :

29th June, 2009, 27th July 2009, 31st October 2009, 4th January 2010 and 30th January, 2010.

The constitution of the committee and attendance of each member at the audit committee meetings held during the yearunder review is given below

Name Designation Category Committee meetings attended

M.Kanna Reddy Chairman Independent 5

M. Bhaskara Rao Member Independent (IREDA Nominee) 4

K. Madhu Member Non Executive 4

Kamlesh Gandhi Member Independent 5

The Managing Director, Joint Managing Director, Executive Directors and the Sr. Vice President (F&A) are permanentinvitees to this Committee. The terms of reference of the Audit Committee are in accordance with the provisions of Clause 49of the Listing Agreement.

4) Remuneration Committee:

The Board also has a Remuneration Committee constituted in pursuance of Clause 49 of the Listing Agreement. ThisCommittee considers and recommends the remuneration payable to Executive Directors. During the year under review,one meeting of the committee was convened on 27th July, 2009. Mr. S.Mallikharjuna Rao, ceased to be member onresignation as director from 1st July, 2009 and Mr. P.S. Reddy was elected member in his place w.e.f 27th July, 2009.Theconstitution of the committee along with the attendance details of the members is given hereunder.

Remuneration Policy

The remuneration policy of the Company is to make the compensation payable to the executive directors comparable toindustry standards and commensurate with the performance of the company, while adhering to the ceilings prescribed underthe Statute.

Remuneration paid to Executive Directors

During the period under review, the remuneration paid/payable to the executive directors including the Managing Director isas follows:

(Rs. in Lakhs)

Name of the Director Salary Perquisites Commission Sitting Fee Total

K. Ravi, M.D 12.25 6.37 36.78 -- 55.40

S.S.Raju, J.M.D 17.50 8.80 NIL -- 26.30

P.N.Raju, E.D 11.30 5.13 NIL -- 16.43

K.Gautam, E.D 2.00 1.04 NIL -- 3.04*

* w.e.f 1st August,2009� Perquisites include HRA, Contribution to PF etc.� Commission payable to MD (at 1.5% of Net profits of the company) computed in accordance with Section 198 Companies

Act, 1956 which is separately shown in Notes to Accounts.

Name Designation Category Committee meetings attended

M.Kanna Reddy Chairman Independent 1

M. Bhaskara Rao Member Independent (IREDA Nominee) 1

K. Madhu Member Non Executive 1

P.S.Reddy Member Independent 1

��

Remuneration paid to Non Executive Directors

The Non-Executive Directors were paid sitting fees for attending the meetings of the Board or the Committees thereof at therate of Rs.5000/- per Board/Committee Meeting (Rs.4,000/-per meeting up to 31st May, 2009). In addition they are entitled tocommission at the rate of not exceeding 1% of the net profits of the company in terms of the resolution approved by theshareholders at the last AGM held on 29th September, 2009. During the year under review, they are entitled to receive@0.25% of the net profits aggregating Rs.6.13 Lakhs which will be paid on approval of accounts at the ensuing AGM.

The sitting fees paid to the Directors during the year under review was as follows

Name of Director No. of Board/ Committee meetings attended Sitting Fees paid (Rs)

M.Kanna Reddy 15 74,000

M. Bhaskara Rao 11 54,000

V.V. Goradia 3 15,000

R.Anand 6 30,000

S Mallikharjuna Rao 1 4,000

GDLSN Raju 7 34,000

K Madhu 14 69,000

Kamlesh Gandhi 11 55,000

P.S.Reddy 6 30,000

Total Sitting Fees Paid 3,65,000

Shareholdings of Non Executive Directors as on 13th August, 2010:

Non-executive Directors No. of Shares

R.Anand 540M. Kanna Reddy NILV.V. Goradia 4,24,970K. Madhu 11,03,629M. Bhaskara Rao NILGDLSN Raju 2,60,437Kamlesh Gandhi NILP.S.Reddy 25,218

5) Investor’s Grievance Committee :This committee comprises three members namely Mr. M. Kanna Reddy as its Chairman and Mr. K. Madhu and Mr.G.D.S.L.N. Raju as its members. The Committee is formed for the purpose of complying with the guidelines on CorporateGovernance to monitor redressal of Complaints received from the shareholders.During the period under review, the Committee met once on 21st August, 2009. The attendance details of the membersare given hereunder

Name Designation Category Committee meeting attendedM. Kanna Reddy Chairman Independent 1K. Madhu Member NED 1GDLSN Raju Member NED 1

Compliance Officer

Mr. T. Arun Kumar, Company Secretary of the company is also designated as the Compliance Officer.

i) Details of Investors letters / complaints received during the year ended 31st March 2010.Sl No Nature of letter / complaints Received Disposed Pending1 Non-receipt of Dividend warrant(s) 37 37 Nil2 Non - Receipt of Share certificates after transfer / duplicate 2 2 Nil3 Non – Receipt of Annual Report 9 9 Nil4 Miscellaneous – others 4 4 Nil

��

ii) Number of Complaints pending with the Company:All the complaints / letters received during the financial year were replied / resolved to the satisfaction of the shareholders.

6) General Body Meetings:

a) Details of the location of the last 3 Annual General Meetings (AGM) are given hereunder:

Year Date & Time of AGM Place

2008-2009 29.09.2009 at 10 AM Bharatiya Vidya Bhavan, King Koti, Hyderabad

2007-2008 29.09.2008 at 11 AM Bharatiya Vidya Bhavan, King Koti, Hyderabad

2006-2007 26.09.2007 at 10 AM Bharatiya Vidya Bhavan, King Koti, Hyderabad

b) Details of Special Resolutions passed in last three AGMs

Year Gist of the Resolutions

2008-2009 a) Appointment of Mr. P.S.Reddy as Directorb) Appointment of Mr. K.Gautam as Directorc) Remuneration payable to Mr.K.Gautam- Executive Directord) Remuneration payable to Mr.P.N.Raju - Executive Directore) Appointment of Mr. Nirmal Goradia as Vice President(Commercial)f) Remuneration by way of commission payable to Non-Executive Directors

2007-2008 g) Revision of remuneration payable to Mr. K. Ravi, Managing Directorh) Revision of remuneration payable to Mr.S.S.Raju Executive Directori) Revision of remuneration payable to Mr.P.N.Raju Executive Directorj) Appointment of Mr. Kamlesh Gandhi as Directork) Appointment of Mr. Aswin Goradia as Regional Managerl) Appointment of Mr. G. T. Sandeep as Management Trainee

2006-2007 None

In addition, the following Special Resolutions were passed in the Extraordinary General Meeting held on 30th July, 2007.1. Increase in limit for total holding of FIIs / subaccount of FIIs to 49% of the aggregate paid up share capital of the

Company.2. Issue of FCCBs and other convertible securities upto Rs 100 crores.3. Issue of 33,33,400 Warrants to Promoters / Promoter group carrying an entitlement to subscribe to 33,33,400

Equity Shares of Rs 10/- each at a price of Rs 45/- per share (including premium of Rs 35/- per share) byconversion of one warrant into one equity share.

4. Appointment of Ms. K. Roopa, daughter of Mr. K.Ravi, Managing Director as Executive Assistant to MD, under theprovisions of section 314 of the Companies Act, 1956.

5. Appointment of Mr. Utkal Goradia, grandson of Mr. V.V.Goradia, Director as Manager (Administration), under theprovisions of section 314 of the Companies Act, 1956.

6. Appointment of Mr. K. Gautam, son of Mr. K.Madhu, Director as Management Trainee, under the provisions ofsection 314 of the Companies Act, 1956.

c) There was no special resolution passed last year through postal ballot, nor is there any proposal this year for passingany special resolution by postal ballot.

7) Disclosures

a) The related party transactions made by the Company with its Promoters, Directors, Management or Relatives aredisclosed in the Notes to the Account. There have been no related party transactions that may have conflict with theinterest of the company at large.

b) During the last 3 years there were no strictures or penalties imposed by either the SEBI or the Stock Exchanges orany statutory authority for noncompliance of any matter related to the capital markets.

c) The company does not have a formal whistle blower policy. However, the employees have free access to AuditCommittee, if they desire to bring any matter to the notice of the Committee.

��

8) Means of communication:I. The quarterly and half yearly financial results are published in any two of the national and local dailies such as

Business Standard, Financial Express, and Andhra Prabha .II. Quarterly / Half yearly financial results of the company are forwarded to the stock exchanges and published in

Business Standard/Financial Express and Andhra Prabha. Half yearly report is not sent to each household ofshareholders as the results are published in the news papers

9) Shareholders information:

i) AGM : 29th Annual General MeetingDate : 30th September, 2010Time : 10.00 AMVenue : Bharatiya Vidya Bhavan,

King Koti, HYDERABAD.

ii) Financial Year April 1 to March 31 next.

iii) Date of Book Closure 23/09/2010 to 30/09/2010, (both days inclusive)

iv) Dividend payment date Within 30 days from the date of declaration

v) Listing on Stock Exchanges BSE & NSE

vi) A) Script Code BSE- 502168, NSE – NCLIND

B) Demat ISIN No in NSDL & CDSL for equity shares INE 732CO1016

C) Corporate Id. No. L33130AP1979SGC002521

vii) Stock Market Data

SHARE PRICE (BSE)

Month & Year High Low Close No of Shares Traded(Rs.) (Rs.) (Rs.) (in Lakhs)

Apr-09 35.50 22.45 30.50 6,91,426May-09 46.50 30.05 43.70 10,90,450Jun-09 48.00 36.50 38.95 8,29,975Jul-09 44.00 34.05 38.40 8,74,750Aug-09 45.25 38.00 43.90 15,71,544Sep-09 47.00 40.50 41.25 11,04,485Oct-09 42.20 35.15 35.60 7,26,564Nov-09 38.30 34.00 36.95 6,46,586Dec-09 41.00 36.80 40.40 6,35,058Jan-10 44.00 37.30 38.35 7,55,827Feb-10 37.45 32.75 33.90 4,55,896Mar-10 37.00 33.25 35.80 3,57,243

viii) Address of Registrar and Share Transfer Agents

Venture Capital & Corporate Investments Pvt. Ltd12-10-167 (MIG), Bharath Nagar, HYDERABAD 500 018 (AP)Phones: 040 - 23818475 / 76 & 23868023, Fax : 040 - 23868024E-mail:info@vccilindia.com

ix) Share transfer system:Transfer of securities in physical form is registered and the duly transferred share certificates are despatched within30 days of receipt, provided the transfer documents are in order. The Board of Directors have delegated powers toapprove the transfer, transmissions, folio consolidations etc to Mr. K.Madhu, Director and Mr.T.Arun Kumar, CompanySecretary.

��

x) Distribution of Shareholding as on 31.03.2010

Ordinary No. of % No. of %Shares held Shareholders Sharesheld

Upto 5000 40,796 98.88 1,05,45,080 30.185001 - 10000 209 0.51 14,99,024 4.2910001 - 20000 102 0.25 15,05,319 4.31

20001 - 30000 52 0.13 12,74,057 3.65

30001 - 40000 15 0.04 5,32,431 1.52

40001 - 50000 13 0.03 5,93,666 1.70

50001 - 100000 23 0.05 15,79,994 4.52

100001 & ABOVE 47 0.11 1,74,07,764 49.83

TOTAL 41,257 100 3,49,37,335 100

xi ) Shareholding Pattern As on 31.03.2010No. of Percentage

Sharesheld

PromotersIndividuals 1,08,45,249 31.04Body Corporates 44,48,083 12.73Financial Institutions/Banks 2,86,690 0.82Public shareholdingIndividuals holding nominal share capital upto Rs.1Lakh 1,12,68,734 32.25Individuals holding nominal share capital in excess of Rs.1 Lakh 56,37,015 16.14Body Corporates 22,22,702 6.36Mutual Funds/FI’s 97,290 0.28NRI’s 1,31,572 0.38

TOTAL 3,49,37,335 100.00

xii) Dematerialisation of Shares:

The shares of the company are compulsorily traded in DEMAT form by all categories of investors. The company hasarrangements with National Securities Depositories Ltd (NSDL) and Central Depository Services India Ltd (CDSL) toestablish electronic connectivity of shares for script-less trading. As on 31st March 2010, 86.45% of shares of thecompany were held in Dematerialized form with the following depositories

Depository No. of Shares Percentage

1) NSDL 2,56,96,981 73.55 %

2) CDSL 45.06.515 12.90 %

TOTAL 3,02,03,496 86.45 %

xiii) Outstanding GDRs, ADRs or Warrants or Convertible Instruments:During the year under review, there were no outstanding GDRs or ADRs. On 17/03/2008, the Company issued33,33,400 Warrants to the Promoter Group, each convertible to one equity share of Rs. 10/- each at a price ofRs. 45/- per Share on or before 16th September, 2009. As on the date of this Report, the company has no outstandingConvertible Warrants.

xiv) Plants Location:

CEMENT UNIT – I : Simhapuri, Mattampally Mandal, Nalgonda Dist-508204, Andhra Pradesh

UNIT – II : Grinding Unit, Kadimpothavaram Village, Kondappalli, Krishna District- 521228, Andhra Pradesh

BOARDS UNIT – I : Simhapuri, Mattampally Mandal, Nalgonda Dist-508204, Andhra Pradesh

UNIT – II : Bhothanwali Village, Paonta Sahib, Sirmour District, Himachal Pradesh - 173025

��

CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of NCL INDUSTRIES LIMITED

We have examined the compliance of conditions of Corporate Governance by NCL Industries Limited, for the year ended on31.03.2010, as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges. The complianceof conditions of Corporate Governance is the responsibility of the Management. Our examination has been limited to a reviewof the procedures and implementations thereof adopted by the Company for ensuring compliance with the conditions of theCorporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the financialstatements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, and based on the representationsmade by the Directors and the Management, we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in Clause 49 of the Listing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India we have to state that no investorgrievances were pending for a period of one month against the Company as per the records maintained by the Shareholders/Investor’s Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency oreffectiveness with which the management has conducted the affairs of the Company.

P.V. RatnamChartered Accountant

Membership No. : 9281Place: HyderabadDate: August 13, 2010

DECLARATION FOR COMPLIANCE WITH CODE OF CONDUCT

Pursuant to Clause 49 I (D) (ii) of the Listing Agreement, I hereby declare that the Company has adopted a Code of Conductfor Directors and Senior Management Personnel of the company at the meeting of the Board of Directors held on 15.12.2005.

A statement of allegiance to the Code of Conduct has been obtained from all the senior management personnel and functionalheads, and such statement of allegiance is being obtained on an Annual basis from Senior Management Personnel and thefunctional heads.

K. RAVIDate: August 13, 2010 Managing Director

xv) Address for Investor’s Correspondence Secretarial DepartmentNCL Industries Limited7th Floor, Raghava Ratna TowersChirag Ali Lane, Abids, Hyderabad - 500001E-mail : cs@nclind.com

xvi)CEO/CFO Certification

The CEO/CFO of the Company have issued a certificate to the Board on the matter specified under clause 49 (v) ofthe Listing Agreement.

The above Report was adopted by the Board of Directors at their meeting held on 13th August, 2010.

PREFAB UNIT – I : Plot No. 34/A, IDA, Jeedimetla Hyderabad- 500 055, Andhra Pradesh.

UNIT – II : Bhothanwali Village, Paonta Sahib, Sirmour District, Himachal Pradesh - 173025.

ENERGY UNIT – I : Pothireddypadu, Head Regulator, Chabolu Village, Pothulapadu Post, NandikotkurTQ. - 518402, Kurnool District, Andhra Pradesh.

UNIT – II : RBHLC Zero Mile Point, Tungabhadra Dam, Tungabhadra Board, Amaravathi Village, Hospet - 583225, Karnataka.

��

MANAGEMENT DISCUSSION AND ANYALYSIS REPORT Annexure - B

The Company’s performance during the year ended 31stMarch, 2010 and the Management’s view on future outlookare detailed below:

A. INDUSTRY STRUCTURE AND DEVELOPMENT

Your Company has four operating Divisions with Cementsbeing the major revenue contributor. The IndustryStructure and Developments in respect of each of theDivisions are briefly discussed below:

Cement

The boom in the cement industry brought about creationof additional capacities during the year under review.This in turn resulted in a pressure on the realization andmargins, which was particularly evident for companies inAndhra Pradesh. The performance of the cementcompanies in Andhra Pradesh was also affected by otherfactors like flood, civil disturbances and reducedgovernment spending on infrastructure projects duringthe year under review.

Demand and supply, production of cement are pickingup but there could be pressure on profit-margins due toincrease in inputs and logistics costs.

Boards

Your Company is the only manufacturer of Cement BondedParticle Boards (CBPB) in the country. There arehowever, other Boards which compete with the Boardsmanufactured by the company.

Prefab

Your company is pioneer in manufacture and supply ofprefab shelters widely accepted by both public and privatesector undertakings. However entry of a number ofplayers in the unorganised sector offering lower rateshas resulted in a situation where the DGS&D Rates havebecome unviable for the company. Your company hasbeen concentrating on large project orders, which havebeen few and far-between.

Your Directors are exploring possibilities of acquiringnewer technology in the field of prefab structures.Establishment of joint venture with some Europeanbusiness groups in the field is also on the cards.

Hydel Energy

Hydro power projects are generally categorized in twosegments i.e. small and large hydro. Up to 25MW comesunder small hydro. Your company is at present havingtwo small hydel power projects with a total capacity of15.75 MW is a small player in this field.

B. OPPORTUNITIES AND THREATS

During the year under review, your company expandedits cement capacity from 6.27 Lakhs MT to 11.38 Lakhs

MT (proportionate to no. of days in operation against thetotal install capacity of 19.47 Lakh MT). While theincreased competition and pressure on market pricesparticularly in Andhra Pradesh is a threat, your companyconsiders that its own railway siding at Kondapalli offersan opportunity to reach out to distant markets in differentparts of the country, where better realizations arepossible.

In the Boards Division, the increasing demand for Boardsin the construction industry and the new applications forthe products offers opportunities. However, advent ofnew materials and substitute products poses a potentialmarket risk.

There is a perception that prefabrication offers non-permanent solution, and is suitable only for transitorystructures. This limits the scope for penetrating thetraditional construction industry. Your company is on thelookout for collaborations and joint ventures with playersin the prefab technology which offer more permanentstructures.

Hydel Energy generation is seasonal in nature and isdependant on the rainfall pattern. Stiff resistance in thisfield due to new entrants and adverse changes in tariffstructure could have a material impact on the profitability.

C. SEGMENT–WISE OR PRODUCT-WISEPERFORMANCE.

The performance of the various segments during theperiod under review is as follows:

Segments Percentage Quantity of Turnover Segmentcontribution production (Rs. In Profit before

to total Lakh) Interest &turnover Tax

Cement 77.53 5,90,141 MT 26,292.38 3771.00

Boards 13.70 38,038 MT 4,646.60 678.85

Prefab 6.10 38,781 Sq.Mtrs 2,068.68 (201.17)

Energy 2.67 40.47 MU 906.72 604.01

Rs. In Lakhs

D. OUTLOOK

The outlook for cement industry in the medium to longterm looks promising though there are concerns of risinginput costs especially as a result of steep hike in fuelcosts, shortage of railway wagons, and highertransportation costs as well as the pressure of supply –demand imbalances on profit margins in the near future.Increased supplies due to expansion of existing cementcapacities and adverse weather conditions in southernparts of the country likely to be a major threat to cementindustry for its survival and growth.

��

E. RISKS AND CONCERNS.

Your Company does not perceive any serious risks andconcerns apart from the normal business risks connectedwith the industries in which it operates.

F. INTERNAL CONTROL SYSTEMS AND THEIRADEQUACY.

The company has proper and adequate systems forinternal controls in place. The Management continuouslyreviews the internal control systems and procedures toensure orderly and efficient conduct of business.Emphasis of internal controls prevails across functionsand processes covering the entire gamut of activitiesincluding finance, supply chain, sales, distribution,marketing etc.

G. DISCUSSION ON FINANCIAL PERFORMANCE WITHRESPECT TO OPERATIONAL PERFORMANCE.

This aspect has been covered in the analysis of theSegment-wise performance in the previous paragraphs.

H. MATERIAL DEVELOPMENTS IN HUMANRESOURCES / INDUSTRIAL RELATIONS FRONT,INCLUDING NUMBER OF PEOPLE EMPLOYED.

The company has cordial relations with employees andstaff. As on 31st March 2010, the company has 725employees working in its factories and various offices.

I. CAUTIONARY STATEMENT

Some of the statements made in this Report are forwardlooking, based on the perceptions and views of themanagement. The projections or expectations aresubject to market uncertainties and vicissitudes.Shareholders and investors are advised to form theirown opinion, and management assumes noresponsibilities for the variances if any in the actualscenario emerging.

Annexure ‘C’

Statement of Particulars of Employees pursuant to Section 217 (2A) of the Companies Act, 1956, read with theCompanies (Particulars of Employees) Rules, 1975 as amended and forming part of the Directors’ Report for theyear ended 31st March 2010.

Name: Mr. K. Ravi Mr.S.S.Raju

Age 56 years 64 years

Qualification Diploma holder in B.E(Mech)Electrical Engineering

Designation: Managing Director Joint Managing Director

Date of commencement of Since 11th January 2003 Since 25th October, 2006employment

No. of year of experience over 25 years over 40 years

Remuneration Rs.55.40 lakhs Per Annum. ** Rs.26.30 lakhs Per Annum. **

Last employment held Managing Director of Executive Director ofNCL Energy Ltd. NCL Energy Ltd.

Nature of employment As per the terms As per the termsapproved by the shareholders approved by the shareholders

Percentage of equity shares 4.30 % Less than 0.1 %held in the company

Notes:**(Remuneration as shown above includes salary, contribution to provident, commission and , taxable value of perquisites interms of their appointment and all expenses incurred by the company in providing amenities and benefits to the employees).

For and on behalf of the Board

Place : Hyderabad R. AnandDate: August 13, 2010 Chairman

��

AUDITORS REPORT

To the Members of NCL INDUSTRIES LIMITED1. I have audited the attached Balance Sheet of NCL

Industries Limited, as at 31st March 2010, and the relatedProfit and Loss Account and Cash Flow Statement forthe year ended on that date annexed thereto. Thesefinancial statements are the responsibility of theCompany’s management. My responsibility is to expressan opinion on these financial statements based on myaudit.

2. I conducted the audit in accordance with the auditingstandards generally accepted in India. Those Standardsrequire that I plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accounting principlesused and significant estimates made by management,as well as evaluating the overall financial statementpresentation. I believe that the audit provides a reasonablebasis for my opinion.

3. As required by the Companies (Auditor’s Report) Order,2003 as amended by the Companies (Auditor’s Report)(Amendment) Order, 2004 (the ‘Order’) issued by theCentral Government of India in terms of sub-section (4A)of Section 227 of the Companies Act, 1956 I give in theAnnexure a statement on the matters specified inparagraphs 4 and 5 of the said Order.

4. Further to my comments in the Annexure referred to inparagraph 3 above, I report that:

(a) I have obtained all the information and explanations,which to the best of my knowledge and belief,necessary for the purposes of my audit;

(b) In my opinion, proper books of account as requiredby law have been kept by the Company so far as itappears from my examination of those books;

(c) The Balance Sheet, Profit and Loss Account andCash Flow Statement dealt with by this report are inagreement with the books of account;

(d) In my opinion, the Balance Sheet, Profit and LossAccount and Cash Flow Statement dealt with by thisreport comply with the accounting standards referredto in sub-section (3C) of Section 211 of the CompaniesAct 1956.

(e) On the basis of written representations received fromthe directors, as on March 31, 2010 and taken onrecord by the Board of Directors, none of the directorsis disqualified as on that date from being appointed asa director in terms of clause (g) of sub-section (1) ofSection 274 of the Act;

(f) In my opinion and to the best of my information andaccording to the explanations given to me, the saidfinancial statements together with the notes thereonand attached thereto give in the prescribed mannerthe information required by the Act and give a trueand fair view in conformity with the accountingprinciples generally accepted in India:

� in the case of the Balance Sheet, of the state ofaffairs of the Company as at 31st March 2010;

� in the case of the Profit and Loss Account, of theprofit for the year ended on that date; and

� in the case of the Cash Flow Statement, of thecash flows for the year ended on that date.

P.V.RATNAMPlace : Hyderabad Chartered AccountantDated : May 30, 2010 Membership No. : 9281

ANNEXURE TO AUDITOR’S REPORT:[Referred to in paragraph 3 of the Auditor’s Report themembers of NCL Industries Limited on the financial statementsfor the year ended 31st March, 2010]1. (a) The Company has maintained adequate records

showing full particulars including quantitative detailsand situation of fixed assets.

(b) A substantial portion of the fixed assets of theCompany has been physically verified by themanagement during the year and no materialdiscrepancies between the book records and thephysical inventory have been noticed. In my opinion,the frequency of verification is reasonable.

(c) In my opinion and according to the information andexplanations given to us, fixed assets disposed offby the Company during the year were not substantialand therefore do not effect the going concernassumption.

2. (a) The inventory (excluding stocks with third parties)has been physically verified by the managementduring the year. In respect of inventory lying withthird parties, these have substantially been confirmed

by them. In my opinion, the frequency of verificationis reasonable.

(b) In my opinion, the procedures of physical verificationof inventory followed by the management arereasonable and adequate in relation to the size of theCompany and the nature of its business.

(c) On the basis of my examination of the inventoryrecords, in my opinion, the Company is maintainingproper records of inventory. The discrepanciesnoticed on physical verification of inventory ascompared to book records were not material.

3. According to the information and explanations given tome-(a) the company has not granted any loans, secured or

unsecured, to companies, firms or other partiescovered under the section 301 of the Act.

(b) the company has taken Inter Corporate Depositsaggregating to Rs.500 lakhs including Rs.250 lakhsoutstanding at the end of last year from NCL Alltek &Seccolor Ltd and repaid the entire amount during theyear. The rate of interest and other terms and

�

Sl. Name of the Nature of Forum AmountNo. statute Dues where (Rs.

Pending In Lakhs)1. Sales Tax Act Sales Tax Tribunal 21.57

(APGST & VAT) High Court 27.122. Central Excise Disputed Excise Tribunal 274.52

dues High Court 29.22CEC 84.84

3. Nala Tax Non-Agriculture High 43.56Tax on CourtMining of A.P.Area

10. The Company has no accumulated losses as at March31, 2010 and it has not incurred any cash losses in thefinancial year ended on that date or in the immediatelypreceding financial year.

11. The Company has not defaulted in repayment of duesto any financial institution or bank or debenture holdersas at the balance sheet date.

12. The Company has not granted any loans and advanceson the basis of security by way of pledge of shares,debentures and other securities.

13. The provisions of any special statute applicable to chitfund / nidhi / mutual benefit fund/ societies are notapplicable to the Company as it is not in such business.

14. The Company is not a dealer or trader in shares,securities, debentures and other investments.Therefore, the provisions of clause 4 (xiv) of the Orderare not applicable.

15. According to the information and explanations given tome, no guarantee is given by the Company, for loanstaken by others from banks or financial institutions duringthe year.

16. According to the information and explanations given tome, on an overall basis, the term loans have been appliedfor the purposes for which they were obtained.

17. According to the information and explanations given tome, there are no funds raised on a short-term basis,which have been used for long-term investment, andvice versa.

18. The Company has made preferential allotment of33,33,400 share warrants (Convertible on or before16-09-09) to Companies covered under section 301.Out of this 11,17,652 warrants are converted into Equityshares and allotted during the year.

19. The Company has not issued any debentures duringthe year.

20. The company has not made any public issue during theyear.

21. During the course of my examination of the books andrecords of the Company, carried out in accordancewith the generally accepted auditing practices in India,and according to the information and explanations givento me, I have neither come across any instance offraud on or by the Company, nor have I been informedof such case by the management, during the year.

P.V.RATNAMPlace : Hyderabad Chartered AccountantDated : May 30,2010 Membership No. : 9281

conditions are prima facie not prejudicial to the interestof the company. The repayments are regular.

4. In my opinion and according to the information andexplanations given to me, having regard to the explanationthat certain items purchased are of special nature forwhich suitable alternative sources do not exist for obtainingcomparative quotations, there are adequate internalcontrol procedures commensurate with the size of theCompany and the nature of its business for the purchaseof inventory, fixed assets and for the sale of goods.Further, on the basis of my examination of the books andrecords of the Company, and according to the informationand explanations given to me, I have neither come acrossnor have been informed of any continuing failure to correctmajor weaknesses in the aforesaid internal controlprocedures.

5. In my opinion and according to the information andexplanations given to me-(a) the particulars of contracts or arrangement referred

in section 301 of the Act have been entered in theregister required to be maintained under that section;and

(b) the transactions made in pursuance of suchcontracts or arrangement has been made at priceswhich are reasonable having regard to the prevailingmarket prices at the relevant time.

6. In my opinion and according to the information andexplanations given to me, the Company has compliedwith the directives issued by the Reserve Bank of Indiaand provisions of Sections 58A , 58AA or any otherrelevant provisions of the Act and the rules framed thereunder, where applicable, in the case of deposits acceptedfrom the public. According to the information andexplanations given to us, no Order under the aforesaidSections has been passed by the Company Law Boardor National Company Law Tribunal or Reserve Bank ofIndia or any court or any other Tribunal on the Company.

7. In my opinion, the Company has adequate internal auditsystem commensurate to the size and operations of thecompany.

8. I have broadly reviewed the books of account maintainedby the Company in respect of products, where pursuantto the Rules made by the Central Government of India,the maintenance of cost records has been prescribedunder clause (d) of sub-section (1) of Section 209 of theAct and are of the opinion that prima facie, the prescribedaccounts and records have been made and maintained.I have not, however, made a detailed examination of therecords with a view to determine whether they areaccurate or complete.

9. [a] According to the information and explanations givento me and the records of the Company examinedby me, in my opinion, the Company is generallyregular in depositing the undisputed statutory duesincluding provident fund, investor education andprotection fund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty,excise duty, cess and other material statutory duesas applicable with the appropriate authorities.

[b] The disputed statutory dues not deposited on accountof matters pending before appropriate authorities areas under

�

Rs. In Lakhs

Schedule As at 31-3-2010 As at 31-3-2009

SOURCES OF FUNDS

SHAREHOLDERS FUNDS:a) Share Capital 1 3,493.73 3,381.97

Share Application Money (Warrants) 0.00 346.98b) Reserves and Surplus 2 10,300.65 9,150.13

13,794.38 12,879.08LOAN FUNDS:a) Secured Loans 3 32,494.36 28,287.69b) Unsecured Loans 4 6,086.74 4,319.18

38,581.10 32,606.87

Deferred Tax 5 2,775.96 1,709.15

TOTAL 55,151.44 47,195.10

APPLICATION OF FUNDS

FIXED ASSETS: 6a) Gross Block 57,107.74 36,328.98b) Less: Depreciation 10,998.99 8,921.93c) Net Block 46,108.75 27,407.05d) Capital Work-in-progress 1,097.14 11,845.08

47,205.89 39,252.13CURRENT ASSETS, LOANS AND ADVANCES 7a) Inventories 4,443.75 4,069.93b) Sundry Debtors 4,899.01 4,810.15c) Cash & Bank Balances 453.23 1,534.82d) Other Current Assets 23.67 32.16e) Loans & Advances 4,406.49 4,159.66

14,226.15 14,606.72LESS: CURRENT LIABILITIES & PROVISIONS 8a) Current Liabilities 5,717.60 4,703.64b) Provisions 600.01 1,999.04

6,317.61 6,702.68

7,908.54 7,904.04

MISCELLANEOUS EXPENDITURE 9 37.01 38.93

TOTAL 55,151.44 47,195.10

NOTES TO ACCOUNTS 16

As per my report of even date attached For and on behalf of the Board

K. Ravi R. AnandManaging Director Chairman

P.V.Ratnam N.G.V.S.G. Prasad T. Arun KumarChartered Accountant Sr. Vice President (F&A) Company SecretaryMembership No.: 9281

Place: HyderabadDate: May 30, 2010

BALANCE SHEET AS AT 31ST MARCH, 2010

��

Rs. In Lakhs

Schedule For the year ended For the year ended31-3-2010 31-3-2009

INCOME:Gross Turnover 33,914.38 42,457.62Less: Inter Segment Transfers 5,528.78 5,378.82Less: Taxes and Duties 5,113.83 6,680.84Net Turnover 23,271.77 30,397.96Other Income 10 199.28 181.85TOTAL 23,471.05 30,579.81EXPENDITURE :Manufacturing, Administration, Selling and Other Expenses 11 17,033.66 23,043.46Interest 12 2,513.28 1,846.06Stock Variation 13 (392.17) 79.03Depreciation, Obsolescence & Amortisation 14 2,087.56 1,356.48TOTAL 21,242.33 26,325.03Profit before Prior Year Adjustments 2,228.72 4,254.78Net Prior Year Adjustments 15 110.69 82.34Profit Before Tax 2,339.41 4,337.12Fringe Benefit Tax - 19.76Provision for Tax - Current - 838.54Provision for Tax - Previous Years 101.81 15.02Profit After Tax 2,237.60 3,463.80Deferred Tax 1,066.82 478.72Net Profit 1,170.78 2,985.08Profit brought forward from previous year 2,500.00 2,205.32PROFIT AVAILABLE FOR APPROPRIATIONS 3,670.78 5,190.40APPROPRIATIONS:Transfer to General Reserve 2,075.74 1,701.22Dividend Paid on the shares allotted subsequentto the Balance Sheet Date for 2008-09 32.69 -Provision for Dividend 349.37 845.49Provision for Dividend Tax 59.38 143.69BALANCE CARRIED TO BALANCE SHEET 1,153.60 2,500.00

3,670.78 5,190.40Earinings per Share (in Rs.)Basic 3.39 9.04Diluted 3.35 8.54NOTES TO ACCOUNTS 16

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

As per my report of even date attached For and on behalf of the Board

K. Ravi R. AnandManaging Director Chairman

P.V.Ratnam N.G.V.S.G. Prasad T. Arun KumarChartered Accountant Sr. Vice President (F&A) Company SecretaryMembership No.: 9281

Place: HyderabadDate: May 30, 2010

��

Rs. In Lakhs

2009 - 2010 2008 - 2009

CASH FLOW FROM OPERATIONSNet Profit / (Loss) before Tax & Extra - Ordinary Items 2,185.71 4,217.27Adjustments for:Depreciation, Obsolescence & Amortisation 2,087.56 1,356.48Net Prior Year Adjustments 110.69 82.34Profit / (Loss) on Sale of Fixed Assets (1.77) 2,196.48 (5.18) 1,433.64Operating Profit before Working Capital Changes 4,382.19 5,650.91Adjustments for changes in:Receivables (88.86) (1,326.00)Inventories (373.82) (526.39)Other Current Assets (238.34) (1,611.26)Current Liabilities 1,033.90 1,285.70Bank Borrowings 3,063.20 3,396.08 (1,639.13) (3,817.08)Net Cash Flow from Operations (A) 7,778.27 1,833.83Cash Flow from Investing Activities :Sale of Net Fixed Assets 9.33 12.95Purchase of Fixed Assets & WIP (10,046.64) (17,390.79)Miscellaneous Expenditure (2.09) (6.84)Net Cash Flow from Investing Activities (B) (10,039.40) (17,384.68)Cash Flow from Financing Activities :Sales Tax Deferrment Loan 134.46 198.38Net Proceeds from Issue of shares against share warrants 155.96 687.96Capital Investment Subsidy 30.00 -Term Loans 1,162.24 11,938.95Deposits 1,633.10 1,090.56Hire Purchase (18.77) 276.11Fringe Benefit Tax - (19.76)Dividend & Tax (1,021.87) (965.78)Income Tax (940.35) (762.82)Interest Income 44.78 42.67

Net Cash Flow from Financing Activities (C) 1,179.55 12,486.27

Net Increase in Cash & Cash Equivalents (A+B+C) (1,081.58) (3,064.58)

Opening Cash & Cash Equivalents 1,534.81 4,599.39

Closing Cash & Cash Equivalents 453.23 1,534.81

AUDITORS CERTIFICATEI have verified the above Cash Flow Statement of NCL Industries Ltd from the Audited Annual Financial Statements for theYear Ending 31st March 2010 and 31st March 2009 and found the same in accordance therewith and also with therequirements of caluse 32 of the Listing Agreements with Stock Exchanges.

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010

As per my report of even date attached For and on behalf of the Board

K. Ravi R. AnandManaging Director Chairman

N.G.V.S.G. Prasad T. Arun KumarSr. Vice President (F&A) Company Secretary

Place: HyderabadDate: May 30, 2010

P.V.RatnamChartered AccountantMembership No.: 9281

��

Rs. In Lakhs

As at As at31-3-2010 31-3-2009

1. SHARE CAPITAL :

AUTHORISED6,20,00,000 (Previous Year 6,20,00,000)Equity Shares of Rs.10/- each 6,200.00 6,200.00

ISSUED AND SUBSCRIBED3,49,37,335 (Previous Year 3,38,19,683)Equity Shares of Rs.10/- each 3,493.73 3,381.97

PAID UP CAPITAL3,49,37,335 (Previous Year 3,38,19,683)Equity Shares of Rs.10/- each 3,493.73 3,381.97

Share Application Money (Warrants) 0.00 346.98

TOTAL 3,493.73 3,728.95

2. RESERVES AND SURPLUS

CAPITAL RESERVE :

As per last Balance Sheet 210.91 210.91

Add: Central Subsidy Received 30.00 240.91 0.00 210.91

SHARE PREMIUM

As per last Balance Sheet 1,714.96 1,254.45

Add: Received During the Year 391.18 2,106.14 460.51 1,714.96

GENERAL RESERVE :

As per last Balance Sheet 4,724.26 3,023.04

Add: Transfer from Profit and Loss Account 2,075.74 6,800.00 1,701.22 4,724.26

Profit and Loss Account Balance 1,153.60 2,500.00

TOTAL 10,300.65 9,150.13

3. SECURED LOANS:

Rupee Term Loans 25,591.81 24,429.57

Working Capital Borrowings (Cash Credits) 6,325.65 3,262.45

Lease / Hire Purchase Loans 576.90 595.67

TOTAL 32,494.36 28,287.69

4. UNSECURED LOANS:

Sales Tax Deferrment Loan 870.16 735.70

Deposits from Public & Shareholders 1,604.54 1,113.12

Deposits / Loans from Stockists, banks and others 3,612.04 2,470.36

TOTAL 6,086.74 4,319.18

5. DEFERRED TAX

ASSET :

Others 0.00 0.000.00 0.00

LIABILITY :

Arising on account of timing difference - Depreciation 2,775.96 1,709.15

NET DEFERRED TAX 2,775.96 1,709.15

SCHEDULES

��

SCH

ED

UL

ES

6.FI

XE

D A

SS

ETS

Rs.

In L

akhs

Des

crip

tion

Gro

ss B

lock

Dep

reci

atio

n N

et B

lock

of th

e A

sset

As

atA

s at

As

atFo

r the

Tran

sfer

As

at A

s at

As

at01

.04.

2009

Add

ition

sTr

ansf

er31

.03.

2010

01.0

4.20

09Y

ear e

nded

31.

03.2

010

31.0

3.20

1031

.03.

2009

31.0

3.20

10

FR

EE

HO

LD L

AN

D1,

369.

2422

.54

-1,

391.

78-

--

-1,

391.

781,

369.

24

BU

ILD

ING

S4,

988.

851,

152.

05-

6,14

0.90

1,00

3.26

158.

43-

1,16

1.69

4,97

9.21

3,98

5.59

PLA

NT

AN

DM

AC

HIN

ER

Y28

,739

.74

19,4

91.3

9-

48,2

31.1

37,

514.

951,

619.

52-

9,13

4.47

39,0

96.6

621

,224

.79

FU

RN

ITU

RE

SA

ND

FIX

TU

RE

S78

.63

8.33

-86

.96

37.8

37.

62-

45.4

541

.51

40.8

0

OF

FIC

E A

PP

LIA

NC

ES

& E

QU

IPM

EN

T18

1.53

22.2

5-

203.

7810

8.43

15.4

1-

123.

8479

.94

73.1

0

VE

HIC

LES

970.

9998

.02

15.8

21,

053.

1925

7.46

282.

576.

4953

3.54

519.

6571

3.53

36,3

28.9

820

,794

.58

15.8

257

,107

.74

8,92

1.93

2,08

3.55

6.49

10,9

98.9

946

,108

.75

27,4

07.0

5

Cap

ital W

ork

in P

rogr

ess

11,8

45.0

8(1

0,74

7.94

)1,

097.

14-

--

-1,

097.

1411

,845

.08

TO

TA

L48

,174

.06

10,0

46.6

415

.82

58,2

04.8

88,

921.

932,

083.

556.

4910

,998

.99

47,2

05.8

939

,252

.13

PR

EV

IOU

S Y

EA

R30

,799

.94

17,3

90.7

816

.66

48,1

74.0

67,

573.

171,

352.

473.

718,

921.

9339

,252

.13

23,2

26.7

7

��

Rs. In Lakhs

As at As at31-3-2010 31-3-2009

7. CURRENT ASSETS, LOANS & ADVANCESCURRENT ASSETS :A. Inventories

a) Stores & Spares 1,410.48 1,250.96b) Raw Materials 632.61 569.32c) Other Materials 403.01 644.17d) Work-in-process 479.56 85.67e) Finished Goods 1,518.09 1,519.81

SUB TOTAL 4,443.75 4,069.93

B. Sundry Debtors(Unsecured & Considered good)a) Debts outstanding for a period exceeding six months 157.91 149.41b) Other Debts 4,741.10 4,660.74

SUB TOTAL 4,899.01 4,810.15

C. Cash and Bank Balancesa) Cash on Hand 11.08 20.59b) Cheques/DDs. on hand & Remittances in Transit 24.63 263.01

35.71 283.60c) Bank Balances

(with Scheduled Banks)

i) Current Account 241.03 166.38

ii) No Lien Current Account 5.43 549.44

iii) Branch accounts 4.02 5.80

iv) Deposits With Banks 167.04 529.60

417.52 1,251.22

SUB TOTAL 453.23 1,534.82

D. Accrued Interest 23.67 32.16

E. LOANS AND ADVANCES :(Unsecured - Considered Good)a) Advances for purchase of Raw Materials and

Other Materials 1,489.89 1,243.99b) Advances to Employees 15.65 81.14c) Other Advances 118.41 568.66d) Prepaid Taxes & Duties 1,235.44 1,094.94e) Deposit with Electricity Board and Others 810.30 610.93f) Prepaid Expenses 22.55 10.49g) Claims Receivables 705.16 540.42h) Sales Tax paid Under protest 9.09 9.09

SUB TOTAL 4,406.49 4,159.66

TOTAL 14,226.15 14,606.72

SCHEDULES

��

Rs. In Lakhs

As at As at31-3-2010 31-3-2009

8. CURRENT LIABILITIES & PROVISIONS

A CURRENT LIABILITIES :

Creditors for :

Goods and Services 2,241.11 1,384.24

Capital Goods 273.38 1.45

Expenses 520.38 3,034.87 1,244.30 2,629.99

Interest accrued but not due 287.31 250.17

Advances from Stockists and Others 2,109.25 1,559.43

Unpaid Dividend 134.07 109.79

Statutory Liabilities 152.10 154.26

5,717.60 4,703.64

B PROVISIONS :

Income Tax 0.00 838.54

Employee Retirement Benefits 191.26 171.32

Dividend & Dividend Tax 408.75 989.18

600.01 1,999.04

TOTAL 6,317.61 6,702.68

9. MISCELLANEOUS EXPENDITURE

Mining and Prospecting 37.01 38.93

TOTAL 37.01 38.93

10. OTHER INCOME

Interest 44.78 42.67

Net Profit / (Loss) on Sale of Assets (1.77) (5.18)

Scrap Sales & Misc.Income 156.27 144.36

TOTAL 199.28 181.85

SCHEDULES

��

Rs. In Lakhs

For the Year ended For the Year ended31-3-2010 31-3-2009

11.A MANUFACTURING EXPENSES

Consumption of Raw Materials 9,577.14 12,440.33Consumption of Stores and Spares 989.65 1,762.23Consumption of Trading Goods 20.73 34.59

10,587.52 14,237.15Less: Consumption of Inter Segment Transfer Materials 5,528.78 5,378.82Net Consumption of Materials 5,058.74 8,858.33Power 2,202.38 2,070.47Fuel 2,792.02 2,778.32Packing Materials & Expenses 765.06 762.24Direct Manufacturing Expenses:a) Labour Charges 14.53 21.08b) Erection & Fabrication Charges 743.12 2,752.56c) Others 78.20 835.85 112.57 2,886.21Repairs and Maintenance 224.53 327.52

SUB TOTAL 11,878.58 17,683.09B STAFF COSTS

a) Salaries,Wages and other Employee Benefits 1,229.13 1,108.71b) Contribution to P.F. & E.S.I. 74.81 63.32

SUB TOTAL 1,303.94 1,172.03C ADMINISTRATION EXPENSES

a) Directors’ Remuneration 107.30 132.34b) Travelling & Conveyance 118.21 112.83c) Directors’ Travelling & Conveyance 10.73 7.22d) Directors’ Sitting fees 3.65 3.79e) Printing & Stationery 20.50 21.57f) Postage and Telehones 55.42 54.26g) Legal Charges 11.02 4.94h) Professional Charges 121.08 91.20i) Insurance 16.91 27.92j) Auditors’ Remuneration

i) Statutory Audit Fees 1.65 0.90ii) Cost Audit Fee 0.15 0.15iii) Tax Audit Fees 0.25 0.25iv) Certification & Reimbursement of Expenses 0.10 0.10

k) Internal Auditors’ Remuneration 4.20 3.60l) Staff Recruitment and Training 12.52 10.81m) Licences, Rents, Rates & Taxes 64.35 98.31n) Bank Charges 88.99 63.88o) Vehicle Maintenance 49.20 50.82p) Office Maintenance 60.85 54.05q) Donations 3.11 3.84r) Bad Debts written off 7.60 63.11s) Security Services 47.02 41.42t) Miscellaneous Expenses 70.15 104.10SUB TOTAL 874.96 951.41

SCHEDULES

��

Rs. In Lakhs

For the Year ended For the Year ended31-3-2010 31-3-2009

D SELLING & DISTRIBUTION EXPENSES

a) Advertisement & Publicity 141.78 388.10

b) Commission & Selling Expenses 535.10 481.48

c) Transport & Handling 2,299.30 2,367.35

SUB TOTAL 2,976.18 3,236.93

TOTAL 17,033.66 23,043.46

12. INTEREST

1. Term Loans 1,620.68 941.24

2. Working Capital 571.39 553.95

3. Deposits & Others 321.21 350.87

TOTAL 2,513.28 1,846.06

13. STOCK VARIATION

Opening Stock

i) Work in progress 85.67 256.01

ii) Finished Goods 1,519.81 1,428.50

1,605.48 1,684.51

Closing Stock

i) Work in progress 479.56 85.67

ii) Finished Goods 1,518.09 1,519.81

1,997.65 1,605.48

DECREASE / (INCREASE) (392.17) 79.03

14. DEPRECIATION, OBSOLOSCENCE & AMORTISATION:

1. Deprecaition as per Schedule - 6 2,083.55 1,352.47

2. Provision for Impairment - -

3. Amortisation 4.01 4.01

TOTAL 2,087.56 1,356.48

15. NET PRIOR YEAR ADJUSTMENTS

INCOME :

(PROVISIONS NO LONGER REQUIRED)

Interest - 49.66

Others 145.28 32.68

TOTAL 145.28 82.34

EXPENSES:

Others 34.59 -

TOTAL 34.59 0.00

NET PRIOR YEAR ADJUSTMENTS 110.69 82.34

SCHEDULES

�

pari passu first charge on fixed assets of the Company & second charge oncurrent assets of the Company (both present & future) except receivables ofEnergy Division.

NOTES TO ACCOUNTS

16. ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES

1. Accounting Concepts

Accounts are based on historical cost convention and prepared in accordance with the Generally Accepted AccountingPrinciples and applicable Accounting Standards in India.

2. Fixed Assets and Depreciation

Fixed Assets are stated at cost of acquisition and putting to working condition.

Depreciation on Buildings and Plant & Machinery is provided on Straight Line Method and on other assets on WrittenDown Value method as per the Companies Act, 1956, except assets of Energy Division.

Depreciation on fixed assets of Energy Division is provided on straight line method at the rates and in the mannerprescribed as per notification no.151 dated 29.03.1994 issued by Ministry of Power (Department of Power).

3. Inventories:

Inventory of (i) Raw materials and other materials are valued at weighted average cost (ii) stores & spares at cost, (iii)Work-in-Process at cost of material plus labour and other overheads and (iv) Finished Goods at cost or net realisablevalue whichever is lower.

4. Retirement Benefits:

Employee retirement benefits are provided on actuarial valuation as required in AS-15.

5. Taxes on Income

Deferred tax is provided as required in AS-22.

6. Foreign Currency Transactions

Loss or gain due to fluctuations in foreign currencies is recognized as required in AS 11.

7. Revenue Recognition:

Revenue from Sale of Cement and Boards is recognised on accrual basis. Revenue from Prefab division is recognisedbased on percentage completion of contract(s) as required in AS-7. Revenue from Energy division is recognised on thebasis of energy units delivered at rates provided under power purchase agreement(s) and as modified subsequently byregulatory/court orders.

B NOTES ON ACCOUNTS:

1. Contingent Liabilities not provided for

i. Counter-Guarantees given to Financial Institutions / Banks – Rs.345.08 lakhs (Rs. 337.47 lakhs)

ii. Disputed Sales tax liability Rs. 48.69 lakhs (Rs. 49.39 lakhs) for which appeals have been filed by the company.

iii. Central Excise Liability Rs.388.58 lakhs (Rs.150.57 lakhs) for which appeals have been filed by the company.

iv. Disputed Nala Tax regarding Non Agricultural Tax on Mining areas Rs.43.56 lakhs (Rs. 43.56 lakhs)

2. Secured Loans:

(1) Term Loans:

S.No Facility Nature of Security

A Term Loans from Banksand Financial Institutions

B Vehicle Loans Hypothecation of respective vehicles

�

NOTES TO ACCOUNTS

2) Working Capital:

S.No Working Capital Nature of Security

1. SBH, IDBI Bank & Pari passu first charge on current assets of the Company excludingAxis Bank receivables of Energy Division (both present & future) and second charge

on fixed assets of the company .

The above term loans and working capital are guaranteed by promoter directors in their personal capacity.

3. Earnings per share:Basic Earnings per share has been computed by dividing net profit after tax by the weighted average number of sharesoutstanding for the period. Diluted earnings per share have been computed using the weighted average number ofshares and dilutive potential equity shares outstanding during the period. The reconciliation between basic and dilutedearnings per share is as under.

Particulars Units Year Ended Year Ended31. 3. 2010 31 .3. 2009

a Net Profit after Tax Rs. in Lakhs 1170.78 2,985.08

b Weighted average no. of shares used in computing No. of Shares 344.99 330.20basic earnings per share in Lakhs

c Basic Earnings per Share (a/b) Rs. 3.39 9.04

d Effect of potential equity shares for preferential No. of Shares 0 11.18allotment in Lakhs

e Weighted average no. of shares used in No. of Shares 349.37 349.37computing diluted Earnings per Share in Lakhs

f Diluted earnings per share Rs 3.35 8.54

g Effect of potential equity shares forpreferential allotment (c-f) Rs 0.04 0.50

4. Segment Reporting:The company operates in four segments namely, Cement, Boards, Prefab and Energy Divisions. Segments areidentified and reported as required in AS 17:

A. PRIMARY DISCLOSURES: Rs. In Lakhs

Year ended Year ended31.03.2010 31.03.2009

1 Segment Revenue/incomea) Cement Division 26,292.38 27,695.27

b) Boards Division 4,646.60 4,328.19

c) Prefab Division 2,068.68 9,595.14

d) Energy Division 906.72 839.02

TOTAL 33,914.38 42,457.62Less : Inter segment revenue 5,528.78 5,378.82

Net Sales/income from Operations 28,385.60 37,078.80

2 Segment Results:

PROFIT BEFORE INTEREST & TAX

a) Cement Division 3,771.00 5,597.02

b) Boards Division 678.85 (123.86)

��

NOTES TO ACCOUNTS

c) Prefab Division (201.17) 195.10

d) Energy Division 604.01 514.90

TOTAL 4,852.69 6,183.16

Less: i) Interest 2,513.28 1,846.06

ii) Other un-allocable expenses net off un-allocable income - -

TOTAL PROFIT BEFORE TAX 2,339.41 4,337.10

3 Capital employed

(Segment Assets – Segment liabilities)

a) Cement Division 41,181.82 32,209.75

b) Boards Division 5,158.58 5,441.74

c) Prefab Division 3,084.27 3,831.07

d) Energy Division 4,136.20 4,246.72

e) Unallocated 1,553.56 1,426.89

TOTAL 55,114.43 47,156.17

B. SECONDARY DISCLOSURES:

Revenue from external customers The main customer base of company’s products are in India onlyby location of customers

Carrying amount of segment assets All manufacturing units are located in Indiaby location of assets

Costs to acquire tangible and intangible Pl Refer Sch 6 to Accountsfixed assets by location of assets.

Other disclosures:

Basis of pricing Inter segment transfers and Inter division transfers of goods are at market price.any change therein

Types of products and services in each (1) OPC/PPC/53 S Cementbusiness segments (2) Plain and laminated Cement Bonded Particle Boards

(3) Prefab Shelters.(4) Generation of Hydel power.

Segment accounting policies:

In addition to the significant accounting policies applicable to the business as set out in Schedule 16A – Notes to Accounts,the accounting policies in relation to segment accounting are as under:

a) Segment assets and liabilities:

Segment assets include all operating assets used by the segment and consist principally of fixed assets, inventories,sundry debtors and loans & advances less current liabilities. Segment assets and liabilities do not include investments,cash and bank balances, inter corporate deposits, reserves and surplus, borrowings, provision for contingencies andincome tax (both current and deferred).

b) Segment revenue and expenses:

Segment revenue and expenses are taken directly as attributable to the segment. It does not include interest incomeon inter-corporate deposits, profit on sale of investments, interest expense, provision for contingencies and income tax.

��

NOTES TO ACCOUNTS

Rs. In Lakhs

5. Related Party Disclosures

a) List of Related Parties & Relationships

i. Enterprises controlled by key management personnel/relatives of key management Personnel1. NCL Alltek & Seccolor Limited2. NCL Homes Limited3. Kakatiya Industries (P) Limited4. Nagarjuna Cerachem (P) Limited5. NCL Wintech India Limited.

ii. Key Management personnelMr. K. Ravi, Managing Director

b) Related Party Transactions for the year ended 31st March 2010.

Key Management Personnel

i) Remuneration to key management personnel Rs. 55.40 lakhsRemuneration to relatives of key management personnel Rs. 24.05 lakhs

Transactions of Enterprises controlled by Key Management personnel / Relatives of Key managementPersonnel

DESCRIPTION CURRENT YEAR PREVIOUS YEAR

i) Sale of Finished Goods 3.71 27.60ii) Purchases / Services 179.32 227.54iii) ICD Received 250.00 450.00iv) ICD Repaid 500.00 200.00v) Interest 14.71 34.98vi) Expenses reimbursement 3.90 3.98

6. A)MANAGERIAL REMUNERATION: Rs.In Lakhs

Mr. K. Ravi Mr. S.S. Raju Mr. P.N. Raju Mr. K. Gautam Particulars Managing Director Jt. Managing Director Executive Director Executive Director

2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09Salary 12.25 18.66 17.50 15.25 11.30 9.15 2.00 0.00HRA 4.90 7.47 7.00 6.10 3.77 3.66 0.80 0.00Cont. to PF 1.47 2.24 0.00 0.00 1.36 1.10 0.24 0.00Commission 36.78 66.88 0.00 0.00 0.00 0.00 0.00 0.00Others 0.00 0.00 1.80 1.83 0.00 0.00 0.00 0.00Total 55.40 95.25 26.30 23.18 16.43 13.91 3.04 0.00

B) CALCULATION OF COMMISSION PAYABLE TO MANAGING DIRECTOR Rs. In LakhsCURRENT YEAR PREVIOUS YEAR

Net Profit as per P & L A/c 1,170.78 2985.06ADD: Depreciation under section 350 2,083.54 1,352.47

Provision for Income Tax 101.81 132.34Deferred Tax 1,066.82 3.79Directors Remuneration 107.30 853.55Sitting fee 3.65 478.72Loss on Assets sold / discarded 1.77 3,364.89 5.18 2,826.05

4,535.67 5,811.11LESS: Depreciation under section 350 2,083.54 1,352.47

Profit on sale of Assets 0.00 2,083.54 0.00 1,352.472,452.13 4,458.64

Commission @ 1.50% 36.78 66.88Commission @ 0.25% 6.13 0.00

��

NOTES TO ACCOUNTS

An amount of Rs. 6.13 lakhs being 0.25% of the profits earned by the Company calculated in the above manner is providedtowards commission payable to non executive directors of the Company.7. As per Guidance note of The Institute of Chartered Accountants of India, MAT for the year is to be recognised on

payment, no provision is made for MAT amounting to Rs. 397.59 lakhs on the profit for the current year.8. Based on the information available with the Company, amount of dues to Micro, Small and Medium Enterprises outstand-

ing for more than 45 days as at 31st March 2010 is Rs. Nil.9. Refund of Adhoc Custom Duty of Rs. 29.47 lakhs on plant and machinery of Boards Division pursuant to order of

CESTAT dated March 24, 2005 is yet to be received.10. Out of 33,33,400 Share Warrants issued in the year 2007-08 and convertible on or before 16.09.2009 into Equity Shares

of Rs 10 each fully paid up, during the year 11,17,652 Share warrants were converted and allotted to promoters /promoter group for which full value of Rs. 45 per share was received, thereby completing the conversion of all theoutstanding Share Warrants.

11. Amounts of incentives from Industries Department (Govt. of Andhra Pradesh) receivable for the year amounting to Rs.55.62 Lakhs (Rs. 64.50 Lakhs) & Rs.203.08 Lakhs (Rs. 242.57 Lakhs) are deducted from Power and Duties & Taxesrespectively. Cumulative total amount of Rs. 258.70 Lakhs (Rs. 307.07 Lakhs) receivable is included in claims receiv-able.

12. The Cement Expansion Projects at Simhapuri and Kondapalli are commissioned and the expenditure capitalized duringthe year is as under.

Rs. In LakhsSimhapuri 16,654.40Kondapalli 3984.94

20639.3413. Confirmations of balances from all Debtors, Creditors etc were not received.14. Employee Retirement benefit plans as per actuarial valuation:a) Expense recognized in profit and loss account for the year ended 31.03.2010

Particulars Gratuity Leave EncashmentCurrent Service cost 25.51 14.60Interest Cost 10.53 0.70Net Actuarial (Gain) / Loss including settlements (14.63) 5.70Total Cost 21.41 21.00

b) Liability recognized in the Balance Sheet as at 31.03.2010 and Changes in present value obligationsParticulars Gratuity Leave EncashmentPresent value of obligations as at 01.04.2009 155.64 16.46Current Service cost 25.51 14.60Interest Cost 10.53 0.70Actuarial Loss /( Gain) (14.63) 5.70Settlements (10.45) (12.80)Present value of obligations as at 31.03.2010 166.60 24.66

15. Additional Information required under Part II of Schedule VI .i) CAPACITY AND PRODUCTION: Rs. In LakhsPRODUCTS UNITS INSTALLED CAPACITY PRODUCTION (QTY)

2009-2010 2008-2009 2009-2010 2008-2009a) Cement

(1) Simhapuri M.T 3,13,000* 2,97,000 2,81,314 2,95,650(2) Kondapalli M.T 8,25,000** 3,30,000 3,08,827 2,80,846

b) Cement Boards(1) Simhapuri M.T 30,000 30,000 22,328 24,120(2) Paonta sahib M.T 50,000 50,000 15,710 15,909

c) Prefab Sq.Mtr --- --- 38,781 1,54,322d) Energy M U 53 53 40.47 36.46

* Line 1 - 2,97,000 MTs and for Line - 2 Proportionate to the no. of days in operation** Line 1 - 3,30,000 MTs and for Line - 2 Proportionate to the no. of days in operation

��

NOTES TO ACCOUNTS

ii) TURNOVER AND STOCKS: Rs. In LakhsPRODUCTS UNITS TURN OVER STOCKS

2009-2010 2008 – 2009 As on 31.03.2010 As on 31.03.2009QTY VALUE QTY VALUE QTY VALUE QTY VALUE

(M.Ts) (M.Ts) (M.Ts) (M.Ts)

a. Cement{Incl 27,732 M.Ts(30,892 MTs py)for selfconsumption} 587695 21767.05 577959 23678.01 5152 117.90 2706 63.96

b. Clinker 211403 4525.33 169546 4017.26 — 0 — —

c. Cement Boards(incl 3344.30 M.Ts(6141 MTs)for selfconsumption) 38840 4616.33 39066 4286.89 17311 1375.13 18114 1455.85

d. Prefab structures(Sq Mtr) 38781 2068.68 154322 9595.14 — 25.06 — —

e. Energy (MU) 40.47 906.72 36.46 839.02 — 0 — —

f. Trading Turnover — 30.27 — 41.30 — 0 — —

TOTAL 33914.38 42457.62 1518.09 1519.81

iii) RAW MATERIALS, STORES, SPARE PARTS AND CONSUMABLES

a) RAW MATERIALS CONSUMED Rs. In Lakhs

Unit 2009-2010 2008-2009

Qty Value Qty ValueCEMENT DIVISIONLimestone M.Tonnes 6,60,000 837.02 5,60,000 628.05Al.Laterite “ 20,228 146.66 15,920 139.67Gypsum “ 24,034 325.01 28,131 356.73Iron Ore / Powder “ 13,379 123.02 13,366 134.18Fly Ash “ 96,239 282.86 1,01,847 328.00Clinker Purchased/Transfer “ 2,48,311 5357.19 2,04,646 4664.14from Mattapally PlantCement Transfer toKondapalli Plant “ 3,470 77.89BOARDS DIVISIONCement “ 25,056 812.71 26,860 969.81Wood “ 23,585 721.50 25,452 819.69Chemicals(Boards) “ 1,138 123.12 1,550 165.90Paper — 42.89 — 41.57Chemicals (Lam) — 32.59 — 30.31PREFAB DIVISIONCement Boards Sq.Mtr 130,906 170.42 3,03,131 386.19Steel M.Ton 1,120 464.34 3,719 1756.74Others — 59.52 — 2019.35TOTAL 9577.14 12,440.33

��

NOTES TO ACCOUNTS

b) IMPORTS AT CIF VALUE Rs. In Lakhs

2009-2010 2008-09

i) Raw Materials NIL NIL NIL NIL

ii) Components & Spares 11.28 — NIL

iii) Capital Goods — NIL — 538.54

iv) Trading Goods — 24.70 — 42.76

TOTAL 35.98 971.30

c) VALUE OF IMPORTED AND INDIGENOUS RAW MATERAILS, STORES & SPARE PARTS CONSUMED.Rs. In Lakhs

UNITS RAW MATERIALS STORES, SPARES, COMPONENTS ETC.2009-2010 2008 – 2009 2009-2010 2008-2009

Value % Value % Value % Value %

Imported — — — — 9.73 0.99 -- --

Indigenous 9577.14 100 12440.33 100 979.92 99.01 1762.23 100

TOTAL 9577.14 100 12440.33 100 989.65 100 1762.23 100

iv) EARNINGS IN FOREIGN EXCHANGE: Rs. In Lakhs

PRODUCT 2009-2010 2008-2009

QTY VALUE QTY VALUE

Export of goods FOB basis 1. Cement Boards (MT) 732 102.81 — —

2. Prefabricated Structures — — — 33.68

TOTAL 102.81 — 33.68

v) EXPENDITURE IN FOREIGN CURRENCY: Rs. In Lakhs

2009 - 2010 2008-2009

i) Traveling Expenses 2.79 2.66

ii) Trading Goods 12.96 24.28

iii) Import of Capital Goods Nil 1,395.50

iv) Import of Stores and Spares 9.73 Nil

v) Others 0.20 Nil

TOTAL 25.68 1,422.44

17. Previous year numbers are regrouped wherever necessary to be comparable to those of current year.

18. Previous year numbers are shown in parenthesis.

SIGNATURES TO SCHEDULES 1 TO 16

As per my report of even date attached For and on behalf of the Board

K. Ravi R. AnandManaging Director Chairman

P.V.Ratnam N.G.V.S.G. Prasad T. Arun KumarChartered Accountant Sr. Vice President (F&A) Company SecretaryMembership No. : 9281

Place: HyderabadDate: May 30, 2010

��

I. Registration Details

Registration No. (CIN) : 2521

Balance Sheet : 31.03.2010 State Code : 01

II. Capital raised during the year (Rs. in Thousands)

Public Issue : Nil Right Issue : NIl

Bonus Issue : NIl Private Placement : NIl

Warrrants issue : 15596

III. Position of Mobilization and Deployment of funds (Rs. in Thousands)

Total Liabilities : 5515144 Total Assets : 5515144

Sources of Funds

Paid- Up Capital : 349373 Reserves & Surplus : 1030065

Secured Loans : 3249436 Unsecured Loans : 608674

Deferred Tax : 277596

Apppication of funds :

Net Fixed Assets : 4720589 Investments : ---

Net Current Assets : 790854 Misc. Expenditure : 3701

Deferred Rev. Expenditure: : --- Accumulated Losses : ---

IV Performance of Company (Rs. in Thousands)

Turnover (Net) & : 2347105 Profit After Tax : 117078Other Income

Profit Before Tax : 233941 Dividend Rate (%) : 10

Earnings per Share (in Rs.) : 3.39

V. Generic Name of Three Principal Products/Services of Company

1. Product Description : Cement

Item Code No : 25232901

2. Product Description : Cement Bonded Particle Board

Item Code No : 6808000

3. Product Description : Prefab House

Item Code No : 94060001

4. Product Description : Distribution and Generation of Hydel Power

Item Code : Not Applicable

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

As per my report of even date attached For and on behalf of the Board

K. Ravi R. AnandP.V.Ratnam Managing Director Chairman

Chartered AccountantMembership No. : 9281 N.G.V.S.G. Prasad T. Arun Kumar

Sr. Vice President (F&A) Company Secretary

Place: HyderabadDate: May 30, 2010

��

��

NCL INDUSTRIES LIMITED7th Floor, Raghava Ratna Towers, Chirag Ali Line, Abids, Hyderabad - 500 001.

PROXY FORMFOLIO / ID NO. No. of Shares held

I/We ...............................................................................................of .........................................................................................being

a Member / Member (s) of NCL Industries Limited hereby appoint ..................................................................................................

................................................................................................ or failing him / her ..............................................................................of

................................................................. as my / our proxy to vote for me / us on my / our behalf at the 29th Annual General

Meeting of the Company to be held on Thursday, the 30th September, 2010 and at any adjournment thereof.

Signed this .....................................................................day of ................................ 2010.

Signature ...........................................................................................................................

Note : The Proxy form duly completed must be returned so as to reach the Registrated Office of the Company not less than48 hours before the time for holding the aforasaid meeting. The Proxy need not be a member of the Company.

NCL INDUSTRIES LIMITED7th Floor, Raghava Ratna Towers, Chirag Ali Line, Abids, Hyderabad - 500 001.

ATTENDANCE FORMTO BE HANDED OVER AT THE ENTRANCE OF THE VENUE OF THE MEETING

FOLIO / ID NO. No. of Shares held

I hereby record my presence at the 29th Annual General Meeting of the Company held on Thursday, the 30th September,2010 at 10.00 A.M. at Bharatiya Vidya Bhavan (Auditorium), King Koti Road, Hyderabad - 500 029.

Note :

1. This Meeting is of Members only and you are requested not to bring along with you any person, who is not a Member.

2. Please carry with you this attendance Slip, sign at the space provided and hand over the same at the entrance of thevenue of the Meeting. No duplicate Attendance Slip will be issued at the venue of the Meeting.

Member / Proxy’s Name Member / Proxy’s Signature(to be signed at the time ofhanding over the slip)

Affix

Rs. 1/-

Revenue

Stamp

No Gifts will b

e

distributed

at AGM

��

NOTES

NOTES