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Directors Report of National General Industries Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Twenty Ninth Report of your Company along with the Audited Statement of Accounts for the year ended 31st March, 2015.

FINANCIAL RESULTS (Rs. in Lacs)

The financial performance of the Company for the financial year ended on 31st March, 2015 and 31st March, 2014 are summarized below:-

Particulars 31.03.2015 31.03.2014

Total Income 1795.87 1701.16

Operating profit before interest and depreciation 192.07 89.33

Interest 54.83 55.72

Depreciation 50.02 24.69

Profit before Tax (PBT) 87.22 8.92

Provision for Taxation 16.92 6.07

Security Transaction Tax 0.09 0.06

Deferred Tax Liabilities -8.14 2.04

Minimum Alternate Tax Credit Availed -2.14 -0.84

Profit after Tax (PAT) 80.49 1.59

Balance Brought Forward 55.71 74.12

Profit available for appropriation 136.20 75.71

Transfer to General Reserve 20.00 20.00

Balance carried to Balance Sheet 116.20 55.71

STATEMENT OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK

During the year under review, the total income of your Company increased to Rs. 1795.87 lakhs from Rs. 1701.16 lakhs as compared to previous year. The said total income includes an additional contribution of turnover from new venture of handling services division of the Company of Rs. 174.11 lakhs during the year. During the year, the net profit before interest and tax from steel manufacturing division decreased to Rs. 26.22 lakhs from Rs. 43.18 lakhs as compared from the previous year. However during the year, the new venture of handling services business had contributed an additional net profit before interest and tax of Rs. 84.27 lakhs. The other income comprising the return from investments activities has registered a net profit before interest and tax of Rs. 70.32 lakhs as compared to Rs. 22.57 lakhs in the previous year.

The Management System of your Company is in compliance with the requirement of international quality standard ISO 9001 : 2008 and it has been duly certified by the JAS-ANZ, an International Certification Agency.

Your Directors has explored the handling services business and foresees the activities as profitable venture for future year business of the Company. Your directors are hopeful to record growth in the profitability by earning from handling services business as well as proper savings on account of overhead expenses in the current financial year.

CHANGE IN NATURE OF BUSINESS

There was no change in the nature of business of your company during the year.

DIVIDEND

Your Directors have not recommended dividend for the year ended 31st March, 2015.

TRANSFER TO RESERVES

The net movement in the Reserves of the Company is as under:

Particulars F.Y. 2014-15 F.Y. 2013-14

General Reserve Rs. 20,00,000/- Rs. 20,00,000/-

Security Premium Account Rs. 24,750/- Rs. 7,500/-

Decrease in Revaluation Reserve Rs. 4,40,529/- Rs. 4,40,529/-

Surplus in Statement of Profit and Loss Rs. 60,48,885/- Rs. 18,40,691/-

DEPOSITS FROM PUBLIC

During the year under review, your Company did not invite / accept any Deposits from the public under section 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 1975.

EXTRACT OF ANNUAL RETURN

Pursuant to the Section 92(3) of the Companies Act, 2013 extract of the Annual Return is annexed to this report as Annexure I and form part of the Annual Report.

NUMBER OF BOARD MEETINGS

During the Financial Year 2014-15, 5 (Five) Board Meetings were held and the gap between two meetings did not exceed four months. The Board Meetings were held on 30.05.2014, 13.08.2014, 02.09.2014, 13.11.2014 and 12.02.2015.

DIRECTORS & KEY MANAGERIAL PERSONNEL

In terms of Section 149 of the Act, the Members, at their meeting held on 30th September, 2014, appointed the following as Independent Directors of the Company:

* Mr. Pankaj Aggarwal

* Mr. Chaitanya Dalmia

* Mrs. Abhilasha Goenka

The Company has received the declaration under section 149(6) of the Companies Act, 2013 from the Independent Directors of the Company.

In terms of Section 203 of the Act, the following were designated as Key Managerial Personnel of your Company by the Board:

* Mr. Ashok Kumar Modi, Managing Director

* Mr. Pawan Kumar Modi, Joint Managing Director cum Chief Financial Officer

In terms of section 196 of the Act, on recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company at its meeting held on 3rd July, 2015 extended the terms of Mr. Ashok Kumar Modi, Managing Director and Mr. Pawan Kumar Modi, Joint Managing Director of the Company for five year i.e. upto on 3rd July, 2020.

In accordance with the requirements of the Act and the Articles of Association of the Company, Mr. Vasu Modi retires by rotation and is eligible for re-appointment.

During the year under review Mr. Anshuman Goenka, an Independent Director of the Company, had resigned w.e.f. 2nd September, 2014. Also Mrs. Abhilasha Goenka was appointed as an Independent Director of the Company w.e.f. 2nd September, 2014.

AUDITORS & AUDITORS' REPORT

A. Statutory Auditors

M/s. R. K. Govil & Co., Chartered Accountants, Statutory Auditor of the Company, holds office till the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment.

The Company has received letter from the auditor to the effect that their appointment, if made, would be within the prescribed limits under section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.

B. Secretarial Auditors

M/s. Deepak Bansal & Associates, Company Secretaries, were appointed as Secretarial Auditors to conduct Secretarial Audit of records and documents of the Company for financial year 2014-15. The Secretarial Audit Report confirms that the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, etc. The Secretarial Audit Report is given in Annexure II and form part of the Annual Report.

C. Cost Auditors

In terms of provision of section 148(1) of the Companies Act, 2013 read with rule 4 of the Companies (Cost Records and Audit) Amendment Rules, 2014, Company is not required to maintain cost records for the financial year 2014-15.

However, in terms of provision of section 209(1)(d) of the Companies Act, 1956, applicable for the financial year 2013-14 for the product manufactured by the Company, the Company has filed the Cost Audit Report for the financial year 2013-14 on 25th September, 2014, within the prescribed time during the year under review.

D. Internal Auditors

Your Company has appointed M/s. B.R.Maheswari & Co., Chartered Accountants, New Delhi as Internal Auditors of the Company for the financial year 2015-16.

EXPLANATIONS OR COMMENTS ON QUALIFICATION, RESERVATION OR ADVERSE REMARKS:

a) By Statutory Auditors :

There are no qualifications made by the Auditors in their Report which requires any explanation from the Board of Directors of the Company. The Notes to Accounts referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

b) By Secretarial Auditors :

There were no comments in the Secretarial Auditors Report which requires any explanation from the Board of Directors of the Company.

FRAUD

Neither the Auditors nor the Secretarial Auditors have brought to the notice of the Audit Committee or the Board of Directors or the Central Government the occurrence or brewing of any fraud in the Company.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments which can affect the financial position of the company between the end of the period under review and date of this report.

AUDIT COMMITTEE

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report which forms part of this report.

DETAILS OF SUBSIDIARY, JOINT VENTURES AND ASSOCIATE

The Company does not have any Subsidiary Company or Joint Venture Company. The detail of Associate Company is given in Extract of Annual Return under Annexure I of this report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

All related party transactions done by the Company during the financial year were at arm's length and in ordinary course of business. All related party transactions were placed in the meetings of Audit Committee and the Board of Directors for their necessary review and approval. During the financial year your Company has not entered into any material transaction (as per Clause 49 of the Listing Agreement) with any of its related parties which may have potential conflict with the interest of the Company at large. Disclosures pursuant to Accounting Standards on related party transactions have been made in the notes to the Financial Statements.

PARTICULARS OF LOAN, GUARANTEES, SECURITIES AND INVESTMENTS

The Company has not given any loan, guarantee, securities or made any investments under Section 186 of the Companies Act, 2013

INTERNAL FINANCIAL CONTROLS

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee and to the Chairman and Managing Director of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee and the Board.

RISK MANAGEMENT

The Board of Directors of your Company has, on recommendation of the Audit Committee framed and adopted a policy on Risk Management of the Company. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

WHISTLE BLOWER/VIGIL MECHANISM

Your Company has an effective Vigil Mechanism system which is embedded in its Code of Conduct to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the Company's code of conduct or ethics policy. The Code of Conduct of your Company serves as a guide for daily business interactions, reflecting your Company's standard for appropriate behavior and living Corporate Values. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairman of the Audit Committee of the Company.

NOMINATION & REMUNERATION POLICY

The broad terms of reference of the Nomination and Remuneration Committee ("NRC") of the Company are as under:

a) To identify suitable persons, interview them, if necessary, and recommend them as suitable candidates to fill up vacancies on the Board or augment the Board and Senior Management.

b) To develop a policy to ensure the optimum composition of the Board of Directors ensuring a mix of knowledge, experience and expertise from diversified fields of knowledge i.e. Policy on Board Diversity. The Policy also intends to add professionalism and objectivity in the process of deciding Board membership.

c) To lay down criteria for the evaluation of the Board.

d) To formulate a criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a Policy thereon.

e) To formulate criteria for evaluation of Directors.

The company has adopted a Nomination and Remuneration Policy as recommended by "NRC" and the objective of Nomination and Remuneration Policy is to ensure rationale and objectivity in the remuneration of the Directors, Senior Management & employees of the Company. The Policy also intends to bring in a pragmatic methodology in screening of candidates who may be recommended to the position of Directors and to establish effective evaluation criteria to evaluate the performance of every Director and the overall Board of the Company.

The Policy also serves as a guiding principle to ensure good Corporate Governance as well as to provide sustainability to the Board of Directors of the Company

The policy as adopted is framed in accordance with provisions contained in sub-section (3) of Section 178 of the Companies Act, 2013.

Provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not applicable to your Company as no Director of the Company is drawing remuneration from the Company during the year under review. None of the employees is related to any Director of the Company.

FORMAL EVALUATION OF BOARD, COMMITTEES & DIRECTORS' PERFORMANCE

Pursuant to the provisions of the Companies Act, 2013 the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo for the year ended 31st March, 2015 are annexed as Annexure III and form an integral part of this report.

PARTICULARS OF EMPLOYEES

The information required under Rule 5 (2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not required as there was no employee on the payroll of the Company receiving remuneration in excess of limit prescribed under the said rules.

CORPORATE GOVERNANCE

In terms of Circular Number CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014, issued by SEBI, the provision of clause 49 is not mandatory as paid-up share capital of the Company is less than Rs. 10 crore and net-worth of the Company is less than Rs. 25 crore, as on the last day of the previous financial year. Your Directors has voluntarily done compliance to the requirement set out by the Securities and Exchange Board of India's Corporate Governance practices and have implemented the prescribed stipulations.

A Report on Corporate Governance annexed as Annexure V and Management Discussion & Analysis Report annexed as Annexure IV, in terms of Clause 49 of the Listing Agreement together with a Certificate from the Company Secretary in practice confirming compliance with the conditions of Corporate Governance form part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITIES

The provision of section 135 of the Companies Act, 2013 is not applicable on the Company as your Company did not meet any of the applicability criteria as specified under Companies (Corporate Social Responsibility Policy) Rules, 2014.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE, (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

Your company did not come across any complaints by any employees during the year under review relating to the sexual harassment.

DIRECTORS' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost auditors, secretarial auditors and external consultants and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15.

Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors in respect of the Audited Annual Accounts for the year ended 31st March, 2015, to the best of their knowledge and ability, hereby state and confirm that:

(i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) They have, selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on March 31, 2015 and of the profit of the Company for that period;

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

(iv) They have prepared the annual accounts on a going concern basis.

(v) They have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

APPRECIATION & ACKNOWLEDGEMENT

Your Directors take this opportunity to express their appreciation for the co-operation and assistance received from the Central Government, the State Government, the Financial Institutions, Banks as well as the Shareholders during the year under review. Your Directors also with the place on record their appreciation of the devoted and dedicated service rendered by all the employees of your Company.

For and behalf of the Board of Directors For NATIONAL GENERAL INDUSTRIES LIMITED

Sd/- Place : New Delhi Ashok Kumar Modi Date : 03.09.2015 Chairman and Managing Director


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Twenty Eighth Report of your Company along with the Audited Statement of Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS (Rs. in Lacs)

The financial performance of the Company for the financial year ended on 31st March, 2014 and 31st March, 2013 are summarized below:-

Particulars 31.03.2014 31.03.2013

Total Income 1701.16 2283.34

Operating profit before interest and depreciation 90.44 136.13

Interest 55.72 63.04

Depreciation 24.69 34.07

Profit before Tax (PBT) 10.03 39.02

Provision for Taxation 6.07 7.70

Security Transaction Tax 0.06 0.06

Deferred Tax Liabilities 2.04 -1.45

Minimum Alternate Tax Credit Availed -0.84 -6.54

Profit after Tax (PAT) 2.70 39.25

Balance Brought Forward 74.12 75.64

Prior year adjustment -1.11 -0.77

Profit available for appropriation 75.71 114.12

Transfer to General Reserve 20.00 40.00

Balance carried to Balance Sheet 55.71 74.12

PERFORMANCE DURING THE YEAR UNDER REVIEW

During the year under review, the turnover of your Company decreased to Rs. 1775.75 lakhs from Rs. 2423.63 lakhs previous year. However the net profit before interest and tax from steel division decreased to Rs. 43.18 lakhs from Rs. 79.38 lakhs in the previous year. The other income comprising the return from investments activities has registered a net profit before interest and tax of Rs. 22.57 lakhs as compared to net loss of Rs. 33.64 lakhs in the previous year.

QUALITY MANAGEMENT

The Management System of your Company are in compliance with the requirement of international quality standard ISO 9001 : 2008 and it has been duly certified by the JAS-ANZ, an International Certification Agency.

FUTURE OUTLOOK

Your Company has upgraded its plant and installed Gassifier Equipment which consumes Coal a cheaper fuel as compared to furnace oil for its production at its re-rolling plant after the close of financial year under review. Your directors are hopeful to improve the profitability by proper savings on account of fuel cost in the current financial year.

DIRECTORS

To satisfy the requirements of the provisions of the Companies Act, 2013, Shri Pawan Kumar Modi, Jt. Managing Director of the Company is made liable to retire by rotation and being eligible offer himself for re-appointment. The existing terms and conditions of employment with the Company of Shri Pawan Kumar Modi, Jt. Managing Director, if re-appointed, shall remain same.

Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Article of Association of the Company, Mrs. Abhilasha Goenka was appointed as an Additional Director designated as Independent Director w.e.f. 2nd September, 2014 and she hold office upto the date of ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Mrs. Abhilasha Goenka for her appointment for a term upto 31st March, 2019, as an Independent Director of the Company, not liable to retire by rotation.

The Board has recommended to fix the term of Shri Pankaj Agarwal and Shri Chaitanya Dalmia, the existing Independent Directors of the Company upto 31st March, 2019. The Company has received requisite notice from members proposing Shri Pankaj Agarwal and Shri Chaitanya Dalmia as Independent Directors of the Company.

Also Mr. Anshuman Goenka, an Independent Director of the Company, has resigned from directorship of the Company w.e.f. 2nd September, 2014.

DIVIDEND

Your Directors have not recommended dividend for the year ended 31st March, 2014.

FIXED DEPOSITS

During the year under review, your Company did not invite/accept any Fixed Deposits from the public under Companies (Acceptance of Deposits) Rules, 1975.

AUDITORS & AUDITORS'' REPORT

M/s. R. K. Govil & Co., Chartered Accountants, Statutory Auditor of the Company, holds office till the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment.

The Company has received letter from the auditor to the effect that their appointment, if made, would be within the prescribed limits under section 149(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.

The comments in the Auditors Report dated 30th May, 2014 read with notes to the financial statements is self-explanatory and do not call for any further comments.

COMPLIANCE WITH THE ACCOUNTING STANDARDS

The Company prepares its accounts and other financial statements in accordance with the relevant Accounting Principles and also complies with the Accounting Standards issued by the Institute of Chartered Accountants of India.

COST AUDITOR

In accordance with Audit Committee''s recommendations at the meeting held on 24th May, 2013, the Board had appointed M/s. Neeraj Sharma & Co., Cost Accountants, as Cost Auditors of the Company for the Financial Year 2013-14. The Company is yet to file its Cost Audit Report for the financial year 2013-14. However, the Cost Audit Report for the financial year 2012-13 was filed within the prescribed time during the year under review.

Further, at the meeting held on 30th May, 2014, the Board has appointed M/s. Neeraj Sharma & Co., Cost Accountants, as Cost Auditors of the Company for the Financial Year 2014-15.

INTERNAL AUDIT

Your Company has appointed M/s. B.R. Maheswari & Co., Chartered Accountants, New Delhi as Internal Auditors of the Company for the financial year 2014-15.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo for the year ended 31st March, 2014 are annexed as Annexure ''A'' and form an integral part of this report.

PARTICULARS OF EMPLOYEES

Provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, are not applicable to your Company as no employee of the Company is drawing remuneration equal to or more than the limit specified under Companies (Particulars of Employees) Rules, 1975.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors adhere to the requirement set out by the Securities and Exchange Board of India''s Corporate Governance practices and have implemented all the prescribed stipulations.

A Report on Corporate Governance and Management Discussion & Analysis Report, in terms of Clause 49 of the Listing Agreement together with a Certificate from the Company Secretary in practice confirming compliance with the conditions of Corporate Governance are annexed and form part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors in respect of the Audited Annual Accounts for the year ended 31st March, 2014, hereby state and confirm:

(i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) That the Directors had, selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on March 31, 2014 and of the profit of the Company for that period;

(iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(iv) That the Directors had prepared the annual accounts on a going concern basis.

APPRECIATION & ACKNOWLEDGEMENT

Your Directors take this opportunity to express their appreciation for the co-operation and assistance received from the Central Government, the State Government, the Financial Institutions, Banks as well as the Shareholders during the year under review. Your Directors also with the place on record their appreciation of the devoted and dedicated service rendered by all the employees of your Company.

For and behalf of the Board of Directors For NATIONAL GENERAL INDUSTRIES LIMITED

Sd/- Place : New Delhi Ashok Kumar Modi Date : 02.09.2014 Chairman and Managing Director


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the Twenty Seventh Report of your Company along with the Audited Statement of Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS (Rs. in Lacs)

The financial performance of the Company for the financial year ended on 31st March, 2013 and 31st March, 2012 are summarized below:?

Particulars 31.03.2013 31.03.2012 Total Income 2283.34 3189.71

Operating profit before interest and depreciation 136.13 173.89

Interest 63.04 80.38

Depreciation 34.07 36.79

Profit before Tax (PBT) 39.02 56.72

Provision for Taxation & FBT 7.70 11.00

Security Transaction Tax 0.06 0.04

Deferred Tax Liabilities 1.45 4.26

Minimum Alternate Tax Credit Availed 6.54 7.61

Profit after Tax (PAT) 39.25 49.03

Balance Brought Forward 75.64 66.03

Prior year adjustment 0.77 0.58

Profit available for appropriation 114.12 115.64

Transfer to General Reserve 40.00 40.00

Balance carried to Balance Sheet 74.12 75.64

PERFORMANACE DURING THE YEAR UNDER REVIEW

During the year under review, the turnover of your Company decreased to Rs. 1878.94 lakhs from Rs. 2805.91 lakhs previous year. However the net profit before tax from steel division increased to Rs. 16.34 lakhs from Rs. 8.10 lakhs in the previous year. The other income comprising the return from investments activities has registered a net profit of Rs. 22.68 lakhs as compared to net profit of Rs. 48.62 lakhs in the previous year.

QUALITY MANAGEMENT

The Management System of your Company are in compliance with the requirement of international quality standard ISO 9001 : 2008 and it has been duly certified by the JAS?ANZ, an International Certification Agency.

FUTURE OUTLOOK

Your director has taken all necessary steps to maintain profitability and financial health of the Company even in the adverse financial conditions. Your directors are also hopeful to maintain the same in the current financial year as well.

DIRECTORS

Mr. Anshuman Goenka, Director of the Company retires by rotation and being eligible, offer himself for re?appointment. Your directors recommend his re?appointment.

DIVIDEND

Your Directors have not recommend dividend for the year ended 31st March, 2013.

FIXED DEPOSITS

Your Company did not invite / accept any Fixed Deposits from the public and is therefore not required to furnish information in respect of outstanding deposits under Non-Banking Non-Financial Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits) Rules, 1975.

AUDITORS & AUDITORS'' REPORT

M/s R. K. Govil & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and have given their consent for being re- appointed as Statutory Auditors of the Company, if appointed. They have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956.

The comments in the Auditors Report dated 24th May, 2013 read with note no. 26 to 33 are self explanatory.

COMPLIANCE WITH THE ACCOUNTING STANDARDS

The Company prepares its accounts and other financial statements in accordance with the relevant Accounting Principles and also complies with the Accounting Standards issued by the Institute of Chartered Accountants of India.

COST AUDITOR

On the Audit Committee recommendations at the meeting held on 30th May, 2012, the Board had appointed M/s. Neeraj Sharma & Co., as Cost Auditors of the Company for the Financial Year 2012- 13. The Company is yet to file its Cost Audit Report for the financial year 2012-13. Further, at the meeting held on 24th May, 2013, the Board has appointed M/s. Neeraj Sharma & Co., as Cost Auditors of the Company for the Financial Year 2013-14.

AUDIT COMMITTEE

The Audit Committee comprises of three directors namely Shri Pankaj Kumar Agarwal, Shri Anshuman Goenka and Shri Vasu Modi, fully meets the requirement of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement with Stock Exchange.

DEMATERIALISATION OF SHARES

Your company has entered into a tripartite agreement with National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL) and Skyline Financial Services Pvt. Limited for maintaining a common share transfer agency, i.e. both in physical and electronic form. The ISIN Number of the Company is INE654H01011.

STOCK EXCHANGE LISTING

All equity shares issued by your Company are listed at Bombay Stock Exchange Ltd. under Scrip Code No. 531651. The Company has paid annual listing fees due to BSE for the year 2013-2014.

CONSERVATION OF ENERGY, TECHNOLOGLY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo for the year ended 31st March, 2013 are annexed as Annexure ''A'' and form an integral part of this report.

PARTICULARS OF EMPLOYEES

Provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, are not applicable to your Company as no employee of the Company is drawing remuneration equal to or more than the limit specified under Companies (Particulars of Employees) Rules, 1975.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors adhere to the requirement set out by the Securities and Exchange Board of India''s Corporate Governance practices and have implemented all the prescribed stipulations.

A Report on Corporate Governance and Management Discussion & Analysis Report, in terms of Clause 49 of the Listing Agreement together with a Certificate from the Auditors confirming compliance with the conditions of Corporate Governance are annexed and form part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors in respect of the Audited

Annual Accounts for the year ended 31st March, 2013, hereby state and confirm:

(i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) That the Directors had, selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on March 31, 2013 and of the profit of the Company for that period;

(iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(iv) That the Directors had prepared the annual accounts on a going concern basis.

APPRECIATION & ACKNOWLEGEMENT

Your Directors take this opportunity to express their appreciation for the co-operation and assistance received from the Central Government, the State Government, the Financial Institutions, Banks as well as the Shareholders during the year under review. Your Directors also with the place on record their appreciation of the devoted and dedicated service rendered by all the employees of your Company.

For and behalf of the Board of Directors

For NATIONAL GENERAL INDUSTRIES LIMITED

Sd/-

Place : New Delhi Ashok Kumar Modi

Date : 13.08.2013 Chairman and Managing Director


Mar 31, 2012

Dear Members,

The Directors have pleasure in presenting the Twenty Sixth Report of your Company along with the Audited Statement of Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS (Rs. in Lacs)

The financial performance of the Company for the financial year ended on 31st March, 2012 and 31st March, 2011 are summarized below:-

Particulars 31.03.2012 31.03.2011

Total Income 3189.71 4103.00

Operating profit before interest and depreciation 173.89 119.23

Interest 80.38 42.83

Depreciation 36.79 33.25

Profit before Tax (PBT) 56.72 43.15

Provision for Taxation & FBT 11.00 8.22

Security Transaction Tax 0.04 0.08

Deferred Tax Liabilities 4.26 17.66

Minimum Alternate Tax Credit Availed -7.61 -4.30

Profit after Tax (PAT) 49.03 11.43

Balance Brought Forward 66.03 83.93

Prior year adjustment 0.58 0.61

Profit available for appropriation 115.64 106.03

Transfer to General Reserve 40.00 40.00

Balance carried to Balance Sheet 75.64 66.03

PERFORMANACE DURING THE YEAR UNDER REVIEW

During the year under review, new Steel Casting unit at Bhiwadi, Rajasthan, which earlier had commenced its commercial production during previous financial year, could not become stable due to competitive market of the steel industry in its region. With a view to achieve substantial growth in the year under review, product line was changed to engineered product viz., casting products as per customer''s specification which resulted in decrease of turnover of the Company. Further, due to long transition period from one product line to another and increased burden of fixed expenses as well as interest cost of the financial institution has impacted profitability of the company severely.

During the year under review, the turnover of your Company decreased to Rs. 2805.91 lakhs from Rs. 4064.76 lakhs previous year. However the net profit before tax from steel division decreased to Rs. 2.46 lakhs from Rs. 86.90 lakhs in the previous year. The other income comprising the return from investments activities has registered a net profit of Rs. 54.26 lakhs as compared to net loss of Rs. 43.74 lakhs in the previous year.

QUALITY MANAGEMENT

The Management System of your Company are in compliance with the requirement of international quality standard ISO 9001 : 2000 and it has been duly certified by the JAS-ANZ, an International Certification Agency.

FUTURE OUTLOOK

Even after facing inflation and increasing interest rate your company has maintained its position remarkably. Also, in spite of a downward trend in the overall economic space, the company hopes to maintain both the top and the bottom lines in financial year ending March, 2013.

DIRECTORS

Mr. Pankaj Agarwal, Director of the Company retires by rotation and being eligible, offer himself for re-appointment. Your directors recommend his re-appointment.

DIVIDEND

Your Directors have not recommend dividend for the year ended 31st March, 2012.

FIXED DEPOSITS

Your Company did not invite / accept any Fixed Deposits from the public and is therefore not required to furnish information in respect of outstanding deposits under Non-Banking Non-Financial Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits) Rules, 1975.

AUDITORS & AUDITORS'' REPORT

M/s R. K. Govil & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and have given their consent for being re- appointed as Statutory Auditors of the Company, if appointed. They have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956. The comments in the Auditors Report dated 30th May, 2012 read with note no. 30 are self explanatory.

COMPLIANCE WITH THE ACCOUNTING STANDARDS

The Company prepares its accounts and other financial statements in accordance with the relevant Accounting Principles and also complies with the Accounting Standards issued by the Institute of Chartered Accountants of India.

COST AUDITOR

The Ministry of Corporate Affairs has introduced the Companies (Cost Audit Report) Rules, 2011 vide its notification no. GSR 430(E) dated June 3, 2011. These rules make it mandatory for industries to appoint a Cost Auditor within 90 days of the commencement of the Financial Year. The Cost Audit Order No. 52/26/CAB/2010 dated June 30, 2011 covers your Company''s manufacturing operation w.e.f. April 1, 2011. Based on the Audit Committee recommendations at the meeting held on 30th May, 2011, the Board has appointed M/s. Neeraj Sharma & Co., as Cost Auditors of the Company for the Financial Year 2011-12. The Company is yet to file its Cost Audit Report for the f.y. 2011-12. Further, at the meeting held on 30th May, 2012, the Board has appointed M/s. Neeraj Sharma & Co., as Cost Auditors of the Company for the Financial Year 2012-13.

AUDIT COMMITTEE

The Audit Committee comprises of three directors namely Shri Pankaj Kumar Agarwal, Shri Anshuman Goenka and Shri Vasu Modi, fully meets the requirement of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement with Stock Exchange.

DEMATERIALISATION OF SHARES

Your company has entered into a tripartite agreement with National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL) and Skyline Financial Services Pvt. Limited for maintaining a common share transfer agency, i.e. both in physical and electronic form. The ISIN Number of the Company is INE654H01011.

STOCK EXCHANGE LISTING

All equity shares issued by your Company are listed at Bombay Stock Exchange Ltd. under Scrip Code No. 531651. The Company has paid annual listing fees due to BSE for the year 2012-2013.

CONSERVATION OF ENERGY, TECHNOLOGLY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND

OUTGO

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo for the year ended 31st March, 2012 are annexed as Annexure ''A'' and form an integral part of this report.

PARTICULARS OF EMPLOYEES

Provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, are not applicable to your Company as no employee of the Company is drawing remuneration equal to or more than the limit specified under Companies (Particulars of Employees) Rules, 1975.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors adhere to the requirement set out by the Securities and Exchange Board of India''s Corporate Governance practices and have implemented all the prescribed stipulations.

A Report on Corporate Governance and Management Discussion & Analysis Report, in terms of Clause 49 of the Listing Agreement together with a Certificate from the Auditors confirming compliance with the conditions of Corporate Governance are annexed and form part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors in respect of the Audited

Annual Accounts for the year ended 31st March, 2012, hereby state and confirm:

(i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; (ii) That the Directors had, selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on March 31, 2012 and of the profit of the Company for that period; (iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; (iv) That the Directors had prepared the annual accounts on a going concern basis.

APPRECIATION & ACKNOWLEGEMENT

Your Directors take this opportunity to express their appreciation for the co-operation and assistance received from the Central Government, the State Government, the Financial Institutions, Banks as well as the Shareholders during the year under review. Your Directors also with the place on record their appreciation of the devoted and dedicated service rendered by all the employees of your Company.

For and behalf of the Board of Directors

For NATIONAL GENERAL INDUSTRIES LIMITED

Sd/-

Place : New Delhi Ashok Kumar Modi

Date : 13.08.2012 Chairman and Managing Director


Mar 31, 2010

The Directors have pleasure in presenting the Twenty Fourth Report of your Company along with the Audited Statement of Accounts for the year ended 31 March, 2010.

AMALGAMATION OF MODI METAL UDYOG PVT. LTD. WITH THE COMPANY

Modi Metal Udyog Pvt. Ltd. (MMUPL) has been amalgamated with the Company. The Scheme of Amalgamation was sanctioned by the Honble High Court of Judicature at New Delhi vide Order dated 26th February, 2010. The Scheme became effective on 20th April, 2010, the Appointed Date of the Scheme being 1st April, 2010.

FINANCIAL RESULTS (Rs. in Lacs)

The assets and liabilities of MMUPL and its operating results have been incorporated in the Companys books with effect from 1st April, 2008 (Appointed Date). The figures for the financial year ended 31st March, 2009 have been re-worked and re-stated giving effect to the amalgamation. The financial performance of the Company for the financial year ended on 31st March, 2010 and 31st March, 2009 are summarized below:-

Particulars 31.03.2010 31.03.2009

Total Income 2041.12 1785.15

Operating profit before interest and

depreciation 77.44 43.94

Interest 13.60 14.03

Depreciation 25.32 23.28

Profit before Tax (PBT) 38.52 6.63

Provision for Taxation & FBT 5.48 1.70

Security Transaction Tax 0.68 0.02

Deferred Tax Liabilities 6.50 0.54

Minimum Alternate Tax Credit Availed -5.48 -0.56

Profit after Tax (PAT) 31.34 4.93

Balance Brought Forward 89.61 118.89

Prior year adjustment -0.02 0.79

Profit available for appropriation 120.93 124.61

Transfer to General Reserve 37.00 35.00

Balance carried to Balance Sheet 83.93 89.61



PERFORMANACE DURING THE YEAR UNDER REVIEW

During the year under review, the turnover of your Company increased to 1840.50 lakhs from 1608.40 lakhs previous year, registering an increase of 14.43%. However the net profit before tax from steel division increased to 70.45 lakhs from 32.86 lakhs in the previous year. The other income comprising the return from investments activities has registered a net loss of Rs. 38.44 lakhs as compared to net loss of Rs. 25.98 lakhs in the previous year.

QUALITY MANAGEMENT

The Management System of your Company are in compliance with the requirement of international quality standard ISO 9001 : 2000 and it has been duly certified by the JAS-ANZ, an International Certification Agency.

FUTURE OUTLOOK

Your Directors are pleased to report that your Company has expanded the business by setting up a Steel Casting unit at the industrial plot at Bhiwadi, Rajasthan. The said unit has commenced its commercial production during the first quarter of financial year 2010-11. The range of product manufactured at the new unit includes backward integrated product for the unit of the Company at Ghaziabad, U.P. Your Company looks forward towards better performance since the new unit has already established in-house market as well as it opens up a broad market as the product range of your Company now covers top to bottom line of products in the steel industry. Also in view of development of various infrastructure projects all over the Country, your Directors look forward to increase the market share of your Company.

DIRECTORS

Mr. Vasu Modi, Director of the Company retires by rotation and being eligible, offer himself for re-appointment. Your directors recommend his re-appointment.

DIVIDEND

Due to expansion of operations, your Directors have not recommend dividend for the year ended 31st March, 2010.

FIXED DEPOSITS

Your Company did not invite / accept any Fixed Deposits from the public and is therefore not required to furnish information in respect of outstanding deposits under Non-Banking Non-Financial Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits) Rules, 1975.

AUDITORS & AUDITORS REPORT

M/s R. K. Govil & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and have given their consent for being reappointed as Statutory Auditors of the Company, if appointed. They have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (IB) of the Companies Act, 1956.

As regard the observation made by the Statutory Auditors in their Report dated 28th May, 2010, in respect of appeal pending against sales tax authority, it is clarified that the Company has filed the appeal before Honble High Court at Allahabad against imposition of Entry Tax on Job Work.

While accepting appeal the Honble High Court at Allahabad has stayed the said imposition of Entry Tax on Job Work and further directed the Company to submit Bank Guarantee to the sales tax authority for an amount equivalent to Entry Tax on Job Work, if applicable, due upto the date of such order. The Company has accordingly submitted a Bank Guarantee of Rs. 5,28,000/-to the sales tax authority, which has been stated under contingent liability vide point no. 3(a) of notes to accounts annexed to the Balance Sheet for the year under review.

The other observations of Statutory Auditors and Notes to the Accounts are self explanatory.

COMPLIANCE WITH THE ACCOUNTING STANDARDS

The Company prepares its accounts and other financial statements in accordance with the relevant Accounting Principles and also complies with the Accounting Standards issued by the Institute of Chartered Accountants of India.

AUDIT COMMITTEE

The Audit Committee comprises of three directors namely Shri Pankaj Kumar Agarwal, Shri Anshuman Goenka and Shri Vasu Modi, fully meets the requirement of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement with Stock Exchange.

DEMATERIALISATION OF SHARES

Your company has entered into a tripartite agreement with National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL) and Skyline Financial Services Pvt. Limited for maintaining a common share transfer agency, i.e. both in physical and electronic form. The ISIN Number of the Company is INE654H01011.

STOCK EXCHANGE LISTING

All equity shares issued by your Company are listed at Bombay Stock Exchange Ltd. under Scrip Code No. 531651. Trading Permission has been given by Bombay Stock Exchange Ltd. for 4,71,704 nos. of equity shares issued by your Company on 17th May, 2010, in accordance with the Scheme of Amalgamation sanctioned by Honble High Court of Delhi vide order dated 26th February, 2010. The Company has paid annual listing fees due to BSE for the year 2010-2011.

CONSERVATION OF ENERGY, TECHNOLOGLY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo for the year ended 31st March, 2010 are annexed as Annexure A and form an integral part of this report.

PARTICULARS OF EMPLOYEES

Provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, are not applicable to your Company as no employee of the Company is drawing remuneration equal to or more than the limit specified under Companies (Particulars of Employees) Rules, 1975.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors adhere to the requirement set out by the Securities and Exchange Board of Indias Corporate Governance practices and have implemented all the prescribed stipulations.

A Report on Corporate Governance and Management Discussion & Analysis Report, in terms of Clause 49 of the Listing Agreement together with a Certificate from the Auditors confirming compliance with the conditions of Corporate Governance are annexed and form part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors in respect of the

Audited Annual Accounts for the year ended 31st March, 2010, hereby state and confirm:

(i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; (ii) That the Directors had, selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on March 31, 2010 and of the profit of the Company for that period; (iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; (iv) That the Directors had prepared the annual accounts on a going concern basis.

APPRECIATION & ACKNOWLEGEMENT

Your Directors take this opportunity to express their appreciation for the co-operation and assistance received from the Central Government, the State Government, the Financial Institutions, Banks as well as the Shareholders during the year under review. Your Directors also with the place on record their appreciation of the devoted and dedicated service rendered by all the employees of your Company.

For and behalf of the Board of Directors

For NATIONAL GENERAL INDUSTRIES LIMITED

Sd/-

Place : New Delhi Ashok Kumar Modi

Date : 13.08.2010 Chairman and Managing Director


Mar 31, 2009

The Directors have pleasure in presenting the Twenty Third Report of your Company along with the Audited Statement of Accounts for the year ended 31 March, 2009.

FINANCIAL RESULTS ( Rs. In Lacs)

Particulars 31.03.2009 31.03.2008

Total Income 1776.21 1601.43

Operating profit before interest and depreciation 39.85 151.39

Interest 14.02 23.88

Depreciation 22.06 26.13

Profit before Tax (PBT) 3.76 101.38

Provision for Taxation 0.00 12.00

Provision for Fringe Benefit Tax (FBT) 1.37 1.55

Security Transaction Tax 0.02 0.49

Deferred Tax Liabilities -0.97 -1.71

Minimum Alternate Tax Credit Availed 0.00 1.56

Profit after Tax (PAT) 3.34 87.49

Balance Brought Forward 116.99 95.11

Prior year adjustment 0.81 9.39

Profit available for appropriatin 121.14 191.99

Transfer to General Reserve 34.00 75.00

Balance carried to Balance Sheet 87.14 116.99

PERFORMANACE DURING THE YEAR UNDER REVIEW

During the year under review, the turnover of your Company increased to 1608.40 lakhs from 1446.64 lakhs last year, registering an increase of 11.18%. However the net profit before tax from steel division decreased to 33.11 lakhs from 72.97 lakhs in the last year. This was due to recession faced by the industry during the year under review. The Company is emphasizing to improve the same in the years to come. The other income comprises only the return on investments. The company incurred net loss from its investments activity of Rs. 29.35 lakhs as compared to profit of Rs. 28.41 lakhs in the last year. The sharp fall in the income is due to fall in capital market.

QUALITY MANAGEMENT

The Management System of your Company are in compliance with the requirement of international quality standard ISO 9001 : 2000 and it has been duly certified by the JAS-ANZ, an International Certification Agency.

FUTURE OUTLOOK

The Directors are pleased to report that an industrial plot at Industrial Area Kahrani (Bhiwadi Extension), Distt. Alwar, Rajasthan, has been allotted to the Company by Rajasthan State Industrial Development & Investment Corporation Limited (RIICO Ltd.), Bhiwadi, Rajasthan. Your Board of Directors has planned to set up a steel casting facility at the said industrial plot.

DIRECTORS

Mr. Anshuman Goenka, Director of the Company retires by rotation and being eligible, offer himself for re-appointment. Your directors recommend his re-appointment.

DIVIDEND

Due to expansion of operations, your Directors have not recommend dividend for the year ended 31st March, 2009.

FIXED DEPOSITS

Your Company did not invite / accept any Fixed Deposits from the public and is therefore not required to furnish information in respect of outstanding deposits under Non-Banking Non-Financial Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits) Rules, 1975.

AUDITORS & AUDITORS’ REPORT

M/s R. K. Govil & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and have given their consent for being re-appointed as Statutory Auditors of the Company, if appointed. They have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956.

As regard the observation made by the Statutory Auditors in their Report dated 3rd September, 2009, in respect of appeal pending against sales tax authority, it is clarified that the Company has filed the appeal before Hon’ble High Court at Allahabad against imposition of Entry Tax on Job Work. While accepting appeal the Hon’ble High Court at Allahabad has stayed the said imposition of Entry Tax on Job Work and further directed the Company to submit Bank Guarantee to the sales tax authority for an amount equivalent to Entry Tax on Job Work, if applicable, due upto the date of such order. The Company has accordingly submitted a Bank Guarantee of Rs. 5,28,000/- to the sales tax authority, which has been stated under contingent liability vide point no. 1(a) of notes to accounts annexed to the Balance Sheet for the year under review.

The other observations of Statutory Auditors and Notes to the Accounts are self explanatory.

COMPLIANCE WITH THE ACCOUNTING STANDARDS

The Company prepares its accounts and other financial statements in accordance with the relevant Accounting Principles and also complies with the Accounting Standards issued by the Institute of Chartered Accountants of India.

AUDIT COMMITTEE

The Audit Committee comprises of three directors namely Shri Pankaj Kumar Agarwal, Shri. Anshuman Goenka and Shri Vasu Modi, fully meets the requirement of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement with Stock Exchange.

AMALGAMATION OF MODI METAL UDYOG PRIVATE LTD. WITH THE COMPANY

Your Company has submitted a petition before Hon’ble High Court at Delhi u/s. 391 and 394 for approval of Scheme of Amalgamation of Modi Metal Udyog Pvt. Ltd. with the Company from Appointed date i.e. 1st April, 2008. Earlier, the said Scheme has been approved by the shareholders at the High Court convened shareholders meeting held on 30th June, 2009. Upon receipt of statutory approvals, the Scheme will be given effect to in the financial statements for the year ended 31st March, 2009.

DEMATERIALISATION OF SHARES

Your company has entered into a tripartite agreement with National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL) and Skyline Financial Services Pvt. Limited for maintaining a common share transfer agency, i.e. both in physical and electronic form. The ISIN Number of the Company is INE654H01011.

STOCK EXCHANGE LISTING

All equity shares issued by your Company are listed at Bombay Stock Exchange Ltd. (BSE) under Scrip Code No. 531651. The Company has paid annual listing fees due to BSE for the year 2009-2010.

CONSERVATION OF ENERGY, TECHNOLOGLY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo for the year ended 31st March, 2009 are annexed as Annexure ‘A’ and form an integral part of this report.

PARTICULARS OF EMPLOYEES

Provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, are not applicable to your Company as no employee of the Company is drawing remuneration equal to or more than the limit specified under Companies (Particulars of Employees) Rules, 1975.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors adhere to the requirement set out by the Securities and Exchange Board of India’s Corporate Governance practices and have implemented all the prescribed stipulations.

A Report on Corporate Governance and Management Discussion & Analysis Report, in terms of Clause 49 of the Listing Agreement together with a Certificate from the Auditors confirming compliance with the conditions of Corporate Governance are annexed and form part of the Annual Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors in respect of the Audited Annual Accounts for the year ended 31st March, 2009, hereby state and confirm:

(i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) That the Directors had, selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on March 31, 2009 and of the profit of the Company for that period;

(iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(iv) That the Directors had prepared the annual accounts on a going concern basis.

APPRECIATION & ACKNOWLEGEMENT

Your Directors take this opportunity to express their appreciation for the co-operation and assistance received from the Central Government, the State Government, the Financial Institutions, Banks as well as the Shareholders during the year under review. Your Directors also with the place on record their appreciation of the devoted and dedicated service rendered by all the employees of your Company.

For and behalf of the Board of Directors For NATIONAL GENERAL INDUSTRIES LIMITED

Place : New Delhi Sd/-

Date : 03.09.2009 Ashok Kumar Modi

Chairman and Managing Director