NCL Industries Ltd

Your directors have pleasure in presenting their Report for the financial year ended March 31, 2024. (after tax) during

Financial Results

The Audited Financial Statements (both Standalone and Consolidated) for the year ended March 31, 2024, and the report of the Auditors thereon are being circulated with this report. The salient features of the financial results are as follows: (Rs. In Lakhs)

Performance Review & State of Company's Affairs

Your company has posted its highest revenue during the year under review. The standalone total income during the year under review is Rs. 2,55,896 Lakhs. Cement Division registered a gross Turnover of Rs.2140.74 Crores which was higher by around 9% in comparison to the previous year. Increased cement production and sales volumes resulted in improved profitability during the year. The year under review witnessed a 4% rise in the turnover of the Boards Division at Rs.208.97 Crores (Previous Year Rs.200.36 Crores) while the profit before tax reduced by 42 % to Rs.10.90 crores (Previous year Rs.18.77 crores). The fall in profitability in Boards division was due to steep increase in wood costs despite minor increase in terms of net realization during the year 2023-24.

Also the operations affected by the insufficient water inflows due to monsoon. Consequently, the generation of hydel power during the year under review was only 8.33 million units compared to 39.51 million units in the previous year. The Ready-Mix Concrete Division Turnover increased by 32 % at 146.90 Crores compared to Rs.111.04 Crores in the previous year. The Readymade Doors division registered a Turnover of Rs. 42.60 Crores compared to Rs.33.57 Crores in the previous year an increase of around 27 % during the year under review.

The company made a standalone profit of Rs.93.79 Crores the year under review compared to Rs.44.34 Crores in the previous year.

The overall profitability (PBT) increased during the year under review mainly due to the spurt in the performance of the Cement Division compared with the previous year. Increased cement productionand sales volumes were the main factors responsible for the increased profitability during the year.

Consolidated Financial Statement

The Consolidated Financial Statement has been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013.

Subsidiary Companies /Acquisitions / Joint Ventures

As reported in the previous year, Tern Distilleries (P) Limited (TDPL) the wholly owned subsidiary of the company was acquired mainly to utilize its land situated near Visakhapatnam for establishment of a new grinding unit. The approval and clearances from the Government of India to set up the unit were received and civil works are in progress.

Vishwamber Cements ltd

Pursuant to a share purchase agreement executed on 12^th May, 2023 with the Promoter group of Vishwamber Cements Ltd (VCL), your company has acquired 100% stake in VCL at a total consideration of Rs.16.24 crores. With the said acquisition,VCL with a mining lease of 322.06 acres of limestone mines,it has become a wholly owned subsidiary of your company. It is intended that VCL shall merge with your company that would result in your company owning the captive mines.

JV Partnership with NCL Buildtek Ltd

As reported earlier, your company in consortium Buildtek Ltd had bagged an order worth Rs.1863 crores for supply of Pre-painted (GI) Steel Window Frame with to bad Glazed Shutters and GI Powder Coated Door Frames to the Andhra Pradesh State Housing Corporation Ltd (APSHC). During the year under review, the receipt of actual orders from APSHC were slow and the JV Partnership Venture has effected supplies of Rs.324.15lakhs worth of material under the above scheme (Previous Year Rs.3404.50 Lakhs). The Statement containing salient features of the financials of Subsidiaries / Associate Companies / Joint Ventures Pursuant to firstproviso to sub-section (3) of Section 129 read with rule 5 of Companies (Accounts) Rules, 2014 in form AOC-1 is enclosed as Annexure-1.

Material changes and commitments if any financial of the company position

There have been no material changes and commitments, affecting positionof the thefinancial company which have occurred between the end of the financial year 2023-24. HDFC Bank recently sanctioned to the company for the cement grinding unit being implemented near Visakhapatnam in Andhra Pradesh.

Cement Division

During the year under review, the Line-1 modernization project and expansion of Line III phase II works at Mattapalli (V) in Suryapet district in Telangana State were completed and commenced its operations. NCL has planned to establish a new grinding unit near Visakhapatnam,utilizingthe land (P) owned by its wholly owned subsidiary Tern Distilleries Ltd. Necessary approvals to establish the unit were received and civil works at the site are in progress.

Dividend

Your directors are pleased to recommend a final dividend of Rs.2.50ps/- per equity share of the face value of Rs.10/ each at the rate of 25% per share to those Shareholders whose names appear in the Register of Members as on the Record Date. Thus, the total dividend for the financial 2023-24, including the interim dividend of 15% already paid to the shareholders would work out to 40%.

Transfer to Reserve:

The Board of Directors of your company has decided to transfer an amount of Rs. 30 Crores to the Reserves for the financial

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134 (3) (c) of the Companies Act, 2013, and on the basis of the information furnished to them by the concerned accounting professionals, your Directors confirm that: I. All applicable accountingstandards have been followed in the preparation of annual accounts and that there are no material departures.

II. The Directors selected such accounting policies and applied them consistently and made judgments and estimates that are give a true and fair view of the state of affairs company as at 31^st March, 2024 and of the profit of the Company for the year ended on that date. III. The Directors have taken proper and sufficient care for the maintenance of adequate accounting 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 IV. The Directors prepared the Annual Accounts on a going concern basis.

V. Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

VI. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and TermLoanofRs.90Crores operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONS (KMP) Independent Directors

During the year under review, your Company had four independent directors. Mr. Kamlesh Gandhi (Investment Banking), Dr.R.Kalidas (Technology), Lt.General T.A.Dcunha ) and Mrs. Sudha Logistics (Retd)(MaterialsManagement& Reddy (Woman Entrepreneur) constitute of Independent Directors.

The number of Independent Directors was in conformity with the SEBI (LODR) Regulations throughout the year. Persons from diverse fields of expertise and experience have been invited to join the Board as Independent Directors to ensure that the company gets the optimum benefit of wisdom and expertise.

The 2^nd five year tenure of Mr. Kamlesh Gandhi is scheduled to end on 27^th September 2024. Your Board wishes to place on record its profound appreciation of the contributions made by Mr. Kamlesh Gandhi during his tenure as Chairman cum Independent Director. His expertise will be missed at the Board Room.

Mr. P. Rajagopal Reddy and Mr. S K Subramanian have been inducted as Independent Directors with effect from 9^th August, 2024 as recommended by the Nomination and Remuneration Committee. They have been initially appointedasAdditional in terms of Section 161 of the Companies Act 2013. Proposals to appoint them as Independent Directors are being placed before the ensuing Annual General Meeting for approval of shareholders. Your company follows a policy of total transparency and proactive information flow to the Independent Directors, in order to avail the optimum benefit of their experience and expertise.

The Independent participate in the Directors actively

Board and Committee proceedings, and offer constructive suggestions,which are andprudentsoasto implemented by the company after deliberations ofthe in the full Board. Apart from this, the Independent Directors hold separate meetings and evaluate the performance of the Board and individual directors - Executive and Non-Executive. The feedback on the evaluation of varied attributes is furnished to the company on a confidential basis. records The terms and conditions of appointment of independent directors are as per Schedule IV of the Act. They have submitted of independence as provided and in Section149(6) of the Act and there has been no change in their status as independent director during the year.

Executive Directors

There were five Executive Directors namely Executive Vice Chairman, Mr. K. Gautam, Managing Director, Mr. Utkal B. Goradia & Mrs. Roopa Bhupatiraju Executive Directors and Mr. N.G.V.S.G.Prasad, ED & CFO during the year under review. The current tenure of Mrs.Roopa Bhupatiraju as Executive Director is due to be completed on30^th September,2024 As recommended by the Nomination & Remuneration Committee, the Board has approved the reappointment of Mrs. Roopa Bhupatiraju as Executive Director for a period of five years w.e.f. October 1, 2024 with upward revision in remuneration. An appropriate resolutionis being proposed at the ensuing Annual General Meeting for approval of the shareholders for the reappointment. Apart from what has been detailed in the foregoing paragraphs, there was no change in the key managerial personnel of the Company during the year under review. Mr. T. Arun Kumar is the Company Secretary & Compliance Officer and Nodal Officer under IEPF Rules.

Non-Executive Directors

Mr. P N Raju and Mrs. Pooja Kalidindi are the Non Executive Directors in the Board as on the date of this Report, apart from the Independent Directors.

Retirement by Rotation

Mr.P N Raju and Mr. NGVSG Prasad retire by rotationat the ensuing Annual General Meetingand are eligible for reappointment. Mr. P N Raju in a letter addressed to the Chairman informed that he does not wish to continueas a Director upon completion of his term due to preoccupation with other activities.

The Board at its meeting held on 9^th August, 2024 desired not to fill the vacancy caused by the retirement of Mr. P N Raju. An appropriate Resolution not to fill the said vacancy is being proposed at the ensuing Annual General Meeting. The Board places on record the valuable contribution and services rendered by Mr. P N Raju during his tenure as Director of the company. His expertiseand experience will be missed at the Board Room.

Particulars of Directors whose appointment / reappointment sought are given in Annexure A-1 to this Report as part of the Report on Corporate Governance under SEBI (LODR) Regulations, 2015

BOARD MEETINGS

During the year under review, six Board meetings were held on 11^th May,2023, 26^th May, 2023, 11^th August,2023, 25^th September, 2023, 9^th November, 2023, and 9^th February, 2024.The maximum time gap between any two meetings was within the period prescribed under the Companies Act, 2013.

Committees of the Board

The Board has constituted various committees as under the Companies Act, 2013 and SEBI (LODR)

Regulations, 2015. The details of such Committees given in Annexure ‘A' as a part of the report on Corporate . K Ravi, Governance.

Plans for Orderly Succession for appointments to Board etc:

Your directors are fully satisfied that orderly succession for appointments to the Board and to seniormanagementpositions

CORPORATE GOVERNANCE

A separate report of compliance with the provisions relating to Corporate Governance as required SEBI (LODR) Regulations, 2015 is enclosed asAnnexure ‘A' and forms part of this Report.

COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company has Complied with the applicable Secretarial Standards (as amended from time) issued by The to Institute of Company Secretaries of India by Central Government under section 118(10) of the Companies Act, 2013.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

Your company did not figure in the top 1000 listed entities based on market capitalization as on 31^st March, 2024. Hence the requirement to furnish BRSR is not applicable to the company.

Risk Management

The company has a system of constantly identifying and monitoring the risks that the company may be exposed to. A Risk Management Committee is in place headed by Independent Director as Chairman. The Committee includes one Executive and one Non-Executive and when required, the Committee reviews various risks and steps taken to manage the risks. The Board is of the opinion that there are no elements of risks that may threaten the existence of the Company. Kindly refer Point No.39 of notes to financial statements

Internal Financial Controls:

The Company has in place adequate internal financial controls with reference to financial statements. During the financial year, no design or operation of such controls was observed.

Particulars of Loans, Guarantees, or Investments under section 186of the Companies Act, 2013

The company has not granted any loans, given any guarantees during the year which would be covered under section 186of the Companies Act, 2013.

Related Party Transactions consecutive All Related Party Transactions entered during the financial year 2023-24 were in ordinary course of business and at arm's length basis. Your Company did not enter into any Material Related Party Transactions review. Transactions are pursuant to the omnibus approval granted, reviewed and approved by the Audit Committeeand the Board of

Directors on quarterly basis. Pursuant to Section 134 (3) (h) of the companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the details of the Related Party Transactions are contained in Annexure A-2 to this Report.

Management Discussion and Analysis Report

The Management Discussion & Analysis Report is annexed as Annexure ‘B' to this Report.

Regulators, Courts and Tribunals:

During the year under review, no significant or material orders were passed by any regulatory/statutory authorities or courts / tribunals against the company impairing its going concern status and operations in future.

However, members' attention contingent liabilities partofthefinancial

Corporate Social Responsibility (CSR) Activities

The company has a CSR Committee as prescribed by the Statute with Dr.R.Kalidas, Independent Director as Chairman. The Committee and one Independent Director. Your company has in place a CSR Policy which is available at www.nclind.com. Your company's CSR activities are welfare, and healthcare. One CSR Committee held on 18^th March, 2024 and reviewed the CSR Policy and CSR activities. Under the provisions of Section Act, 2013 an amount of Rs.311.26 Lakhs was required to be spent on CSR activities After setting off preceding financial was spent during the year under review, leaving a balance of Rs. 5.18 Lakhs eligible for set off against the mandatory

CSR obligation for the succeeding years. The details of the CSR activities during the year Annexure C to this Report.

Investor Education & Protection Fund

The Company has transferred an amount of Rs.16.86 Lakhs relating to Dividends on the shares transferred to the Investor Education & Protection 2023-24. Apart from above, the Company has also transferred unclaimed Dividend amount of Rs.27.44 Lakhs to the Investor Education & Protection of 7 consecutive years as required by Section 124(5) of the Companies Act, 2013 and the rules made there under,

Disclosure with respect to Demat Suspense Account / Unclaimed Suspense Account: is drawn to the statement on The Company does not have any Demat Suspense / Unclaimed Suspense Account.

Company

There are no binding agreements, among the Promoters or other parties which impact the management or control of also includes one Executive the company or impose any restrictionor create any liability upon the company as envisaged by clause 5A of paragraph focusedoneducation, A of Part A of Schedule III of the SEBI LODR 2015 meeting was

Fixed Deposits

The details relating to Fixed Deposits are as follows: As on 31^st135 March 2024, Rs.5,859.98 Lakhs of Public of the Companies Deposits were outstanding. The Company has repaid all the matured deposits thefinancial that have been claimed, and there have theCSRexpenditureincurredduringthe been no defaults in payment of interest or repayment of principal. The years, details totalamountofRs.316.44Lakhs of deposits received from the directors / relatives of directors during the year under review in terms of MCA Notification No.GSR 695 (E) dated 15 ^th September, 2015 are as under:

Particulars of Employees

The details of employees who have been in receipt of remuneration envisaged by Section Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial personnel) vide MCA Notification ^th June, 2016 are annexed as Annexure D to this Report.

Auditors

M/s M. Bhaskara Rao & Co were appointed as statutory auditors for a period of five years at the Annual General Meeting held in 2022.They have confirmed that they are not disqualifiedfromcontinuingas auditors of the company.

The Notes on the financial the Independent Auditor's Report are self explanatory. The Auditor's report does not contain any qualification, .reservation,

Cost Audit

M/s S.R. and Associates, Cost Accountants have been reappointed to conduct the cost audit pertaining to Cement as well as RMC of the company for the year 2023-24. They have been reappointed by the Board of Directors as Cost Auditors of the Company for the Financial Year 2024-25. The remuneration of the cost auditors is required to be ratified by the members in terms of the relevant Rules. Accordingly, the matter is being placed before the Members for ratification The Cost Audit Report for the financial year ended March, 31st, 2024 was duly filedwith Ministry of Corporate Affairs.

Secretarial Audit

M/s. A J Sharma & Associates, Company Secretaries, have been reappointed to conduct the Secretarial Audit of the Company. The Secretarial Audit Report pursuant to the provisions of Section 204 of the Companies Act, 2013 is attached Annexure E to thisReport.Theobservationsof the Report do not call for any explanation as envisaged by Section 204(3) of the said Act.

Details in respect of frauds reported by auditors under Section 143(12) other than those which are reportable to Central Government

No frauds were reported by the Auditors under Sub Section 143 of the Companies Act, 2013 read with 12ofSection the Rules made there under.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has constituted an Internal Complaints Committeeon Prevention of Sexual Harassment at workplace for women in the line with the requirements of the ‘The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Rules made there under and had complied with provisions made under the said Act.

During the year under review, there were no references or complaints pursuant to the aforesaid Act.

Conservation of Energy, Technology197ofthe Absorption Foreign Exchange Earnings and Outgo

Particulars required under Section 134 (3) (M) of the dated 30 Companies act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 are furnished under Annexure ‘F” which forms part of this Report. Your Company continues to be conscious of the need for conservation of energy, and wherever feasible, effective steps for energy conservation are taken.

There were no significant investments or developments in this regard during the year under review. The technology statements referred to in procured for the various operating Divisions has been fully absorbed. There was no significant & Development warranting a special mention in this Report.

PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

No application has been made nor any proceeding pending against the company under the Insolvency and Bankruptcy Code, 2016 during the year under review.

ONE-TIME SETTLEMENT WITH THE BANKS OR FINANCIAL INSTITUTIONS

There was no instance of onetime settlement or Financial Institution during the year under review. the ensuing Annual General Meeting

Extract of Annual Return

The Annual Return as required under Section 92 and Section 134 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the Company's website www.nclind.com.

Acknowledgements

Your directors wish to place on record their appreciation of the support and co-operation extended by Axis Bank, HDFC Bank, SBI, Kotak Mahindra Bank, Bank of Baroda and Central and State Government Departments, Dealers, Stockists, Consumers and Depositors.

Your directors also wish to place on record their appreciation of the enthusiastic support received from the shareholders. Your directors have pleasure in acknowledging the excellent co-operation received from the team of dedicated executives and employees who have contributed handsomely to the operations of the company.