NCL Industries Ltd

Your directors have pleasure in presenting their Report for the financial year ended 31^st March 31, 2025.

The Audited Financial Statements (both Standalone and Consolidated) for the year ended March 31, 2025, 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)

After a promising start during 1^st quarter of the year 2024-25, the Cement division had to face several challenges in the subsequent quarters. Downtrend in the market conditions, continuous rains, non availability of sand, reduction in net realization of cement bag etc: which impacted the demand and dispatches of cement. The standalone total income during the year under review is Rs. 2,18,105 Lakhs and the consolidated total income is Rs.2,18,192 Lakhs a decrease of 15 % over the previous year.

Cement Division registered a gross Turnover of Rs.1739.68 Crores which was lower by around 19% in comparison with the previous year. Decreased cement production and sales volumes resulted in lower profitability during the year.

During the year under review Boards Division recorded a turnover of Rs.209.30 Crores (Previous Year Rs.208.97 Crores) and profit before tax increased by 36 % to Rs.14.78 crores (Previous year Rs.10.90 crores) on account of marginal reduction in costs during the year.

The operations of the Energy Division were improved due to good monsoon resulting in generation of 34.44 Million Units of hydel power compared to 8.33 million units in the previous year.

The Ready-Mix Concrete Division recorded a turnover of 148.01 Crores compared to Rs.146.90 Crores in the previous year.

The Readymade Doors division recorded a turnover of Rs, 57.18 Crores compared to Rs.42.60 Crores in the previous year an increase of around 34 % during the year under review.

The company made a standalone profit of Rs.25.16 Crores (after tax) during the year under review compared to Rs.93.79 Crores in the previous year.

The overall profitability (PBT) decreased during the year under review mainly due to the steep fall in the performance of the Cement Division compared with the previous year. Decreased cement production and sales volumes coupled with fall in net realization per bag of cement and slump in market conditions resulted in decreased profitability.

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

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.

As reported in the previous year, 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 acquisition of VCL with a mining lease of 322.06 acres of limestone mines, it becomes a wholly owned subsidiary of your company. It is intended that VCL shall merge with your company which will result in the mines becoming its captive mines.

As already reported previous year, your company in consortium with NCL Buildtek Ltd has bagged an order worth Rs.1863 crores for supply of Pre-painted (GI) Steel Window Frame with Glazed Shutters and GI Powder Coated Door Frames to the Andhra Pradesh State Housing Corporation Ltd (APSHC). However, the actual orders received and executed by this JV so far is only Rs.46.07 Crores.

The Statement containing salient features of the financials of Subsidiaries / Associate Companies / Joint Ventures Pursuant to first proviso 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.

There have been no material changes and commitments, affecting the financial position of the company which have occurred between the end of the financial year 2024-25. HDFC Bank, Kotak Mahindra Bank and SBI were recently sanctioned additional working capital to the company .

As reported in the previous year, setting up a new grinding unit near Visakhapatnam, utilizing the land owned by its wholly owned subsidiary Tern Distilleries (P) Ltd is under advanced stage of completion.

Despite significant rise in production and sales volumes, this division is suffering losses due to steep increase in production costs. Your company is now streamlining its operations to reduce the overhead costs and increase its productivity to make this division profitable.

Your directors are pleased to recommend a final dividend of Rs.2.00ps/- per equity share of the face value of Rs.10/ each at the rate of 20% 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 year 2024-25, including the interim dividend of 10% already paid to the shareholders would work out to 30%.

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 accounting standards 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 reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31^st March, 2025 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 records in accordance with the provisions of the Companies Act 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

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. Appropriate systems were devised to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

During the year under review, your Company had six independent directors. Mr.Kamlesh Gandhi (Investment Banking), Dr.R.Kalidas (Technology) and Lt.General T.A.Dcunha (Retd) (Materials Management & Logistics), Mrs. Sudha Reddy (Woman Entrepreneur) Mr.P.Raja Gopal Reddy (Industrial Management) and Mr.SK Subramanian (finance, accounting and Taxation) constitute the current team 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.

As reported in the previous year, the 2^nd five year tenure of Mr. Kamlesh Gandhi ended on 27^th September 2024 and Mr.P.Rajagopal Reddy and Mr.S K Subramanian have been appointed as directors (Independent Category) with effect from 9^th August, 2024 at the Annual General Meeting held on 20^th September,2024

The 2^nd five-year tenure of Dr. R. Kalidas (Chairman) and Lt. Gen (Retd) T A DCunha is scheduled to end on 13^th August, 2025. Your Board wishes to place on record its profound appreciation of the contribution of Dr. R. Kalidas (Chairman) and Lt..Gen (Retd) T A DCunha during their tenure as Independent Directors. Their expertise and experience will be missed at the Board Room.

Mrs.Renu Challu has been inducted as additional director (Independent Category) with effect from 8^th August,2025 as recommended by the Nomination and Remuneration Committee. Proposal to appoint her as Independent Director is 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 Directors also actively participate in the Board and Committee proceedings, and offer constructive suggestions, which are implemented by the company after deliberations 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.

The terms and conditions of appointment of independent directors are as per Schedule IV of the Act. They have submitted declarations that each of them meets the criteria of independence as provided and in Section 149(6) of the Act and there has been no change in their status as independent director during the year.

There were five Executive Directors namely Mr. K Ravi, 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 five year tenure of Mr.NGVSG Prasad as Executive Director & CFO is due to be completed on 31^st December, 2025. As recommended by the Nomination & Remuneration Committee, the Board has approved the reappointment of Mr. N.G.V.S.G. Prasad as Executive Director &CFO for a further period of five years w.e.f. October 1, 2025 with an upward revision in remuneration. Appropriate resolution is 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.

As reported in the previous year, the tenure of Mr.P N Raju as Non Executive director ended on 20^th September,2024. Mrs. Pooja Kalidindi is the Non-Executive Director in the Board as on the date of this Report, apart from the Independent Directors.

Mr.Utkal B Goradia and Mrs. Pooja Kalidindi retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment.

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.

During the year under review, six Board meetings were held on 10^th May,2024, 5^th August, 2024, 9^th August,2024, 20^th September, 2024, 8^th November, 2024, and 12^th February, 2025.The maximum time gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013.

The Board has constituted various committees as required under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The details of such Committees are given in Annexure - 'A' as a part of the report on Corporate Governance.

Your directors are fully satisfied that plans are in place for orderly succession for appointments to the Board and to senior management positions.

A separate report of compliance with the provisions

relating to Corporate Governance as required SEBI (LODR) Regulations, 2015 is enclosed as Annexure 'A' and forms part of this Report.

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

Your company did not figure in the top 1000 listed entities based on market capitalization as on 31^st December,2024 as per notification issued by Securities Exchange Board of India vide Gazette notification dated17th May,2024 under SEBI (LODR)(Amendment) Regulations, 2024. Hence the requirement to furnish BRSR is not applicable to the company.

The company has a system of constantly identifying and monitoring the risks that the company may be exposed to. A Risk Management Committee headed by Independent Director as Chairman. The Committee also includes one Executive and one Independent Director. As 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 on financial risks.

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

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

All Related Party Transactions entered during the financial year 2024-25 were in ordinary course of business and at arm's length basis. Your Company did not enter into any Material Related Party Transactions during the year under review. Transactions entered into with the related parties are pursuant to the omnibus approval granted are reviewed and approved by the Audit Committee and 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.

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

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 is drawn to the statement on contingent liabilities and commitments in the notes forming part of the financial statements.

The company has a CSR Committee as prescribed by the Statute with Mr.P.Rajagopal Reddy, Independent Director as Chairman. The Committee also includes one Executive 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 focused on education, social welfare, and healthcare. One CSR Committee meeting was held on 18^th March, 2025 and reviewed the CSR Policy and CSR activities.

Under the provisions of Section 135 of the Companies Act, 2013 an amount of Rs.259.41 Lakhs was required to be spent on CSR activities for the financial year 2024-25. After setting off the CSR expenditure incurred during the preceding financial years, a total amount of Rs.240.26 Lakhs was spent during the year under review, leaving a balance of Rs. Nil Lakhs is eligible for set off against the mandatory CSR obligation for the succeeding years. The details of the CSR activities during the year under review are listed in Annexure C to this Report.

The Company has transferred an amount of Rs.33.93Lakhs

relating to Dividends on the shares transferred to the Investor Education & Protection Fund for the financial year 2024-25.

Apart from above, the Company has also transferred unclaimed Dividend amount of Rs.46.42 Lakhs and 73,482 Equity Shares to the Investor Education & Protection Fund A/c on completion of 7 consecutive years as required by Section 124(5) of the Companies Act, 2013 and the Rules made there under,

The Company does not have any Demat Suspense / Unclaimed Suspense Account.

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

The details relating to Fixed Deposits are as follows:

As on 31^st March 2025, Rs.5,887.65 Lakhs of Public Deposits were outstanding. The Company has repaid all the matured deposits that have been claimed, and there have been no defaults in payment of interest or repayment of principal. The details of deposits outstanding from the directors / relatives of directors as on 31^st March,2025 in terms of MCA Notification No.GSR 695 (E) dated 15^th September, 2015 are as under:

The details of employees who have been in receipt of remuneration envisaged by Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial personnel) vide MCA Notification dated 30^th June, 2016 are annexed as Annexure D to this Report.

M/s M. Bhaskara Rao & Co who have been 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 disqualified from continuing as auditors of the company.

The Notes on the financial statements referred to in the Independent Auditor's Report are self explanatory. The Auditor's report does not contain any qualification, reservation, or adverse remark.

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 2024-25. They have been reappointed by the Board of Directors as Cost Auditors of the Company for the Financial Year 2025-26. 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 at the ensuing Annual General Meeting.

The Cost Audit Report for the financial year ended March, 31st, 2025 was duly filed with Ministry of Corporate Affairs.

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 as Annexure E to this Report. The observations of the Report do not call for any explanation as envisaged by Section 204(3) of the said Act.

Based on the recommendation of the Board at its meeting held on 8^th August, 2025, M/s. A J Sharma & Associates, Company Secretaries, is proposed to be appointed as the Secretarial Auditors of the Company to hold office for a term of five consecutive years from 2025-26 to 2029-30 subject to the approval of shareholders as per the SEBI, (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) read with Section 204 of the Act and Rules thereunder. The matter relating to their appointment has been included in the Notice convening the AGM, for Members' approval.

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

The Company has constituted an Internal Complaints Committee on 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 Redressal) Act, 2013 and

the Rules made there under and had complied with provisions made under the said Act. An Internal Compliance Committee (ICC) has been constituted in compliance with the requirements of said Act to redress complaints received regarding sexual harassment.

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

The Company had complied with provisions made under Maternity Benefit Act,1961 and the Rules made there under the said Act. There are 999 employees on rolls as on 31^st March,2025 out of which 965 are male and 34 are female employees.

The following Awards were received by the company during the year 2024-25

• Best Energy Efficient Unit, Mattapally at the 25th National Award for Excellence in Energy Management 2024

• Third Fastest Growing Cement Company (Small Category) at the 8th Indian Cement Review

• Women Leadership Award to Mrs. Roopa Bhupatiraju, Executive Director at the 5th Realty+ Women Icon Conclave & Awards 2025

Particulars required under Section 134 (3) (M) of the 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 procured for the various operating Divisions has been fully absorbed. There was no significant expenditure in Research & Development warranting a special mention in this Report.

There is no proceeding pending against the company under the Insolvency and Bankruptcy Code, 2016 during the year under review.

There was no instance of onetime settlement with any Bank or Financial Institution during the year under review.

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.

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, 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.