Notes to Accounts of NCL Industries Ltd.

Mar 31, 2023

1. Additions to Land includes Rs.335.98 Lakhs towards purchase of compensatory afforestation land of 40.07 Acres and 11.19 Acres situated at Guledi village, Bheempur mandal, Adilabad District and Bember (V), Tanur (M), Nirmal District, Telangana respectively and which are proposed to be transferred to the forest department in lieu of forest land diverted for the company''s plant operations situated at Mattapalli village of Mattampalli Mandal of Suryapet district.

2. Addition to Land includes undivided share of land to extent of 506.76 square yards added during the current year on account of capitalisation of Corporate Office Building pursuant to joint development agreement dated 11th June 2019 for the construction of corporate building situated at SD Road, Secunderabad, Telangana -500026.

3. There is no change in the constitution of the firm during the year

4. The firm Follows the same reporting period / dates as that of the Company.

5. The total capital of the firm as on the date of the company''s Balance Sheet i.e. 31st March 2023 is Rs. 1238.17 lakhs

Note 3.6

Company has executed a Share Purchase Agreement dated 12th May, 2023 with Promoter group of Vishwamber Cements Limited and Vishwamber Cements Limited (VCL) for acquisition of 100% shareholding consisting of 77,67,430 equity shares of Rs. 10/- each in Vishwamber Cements Limited (VCL) for a total consideration of Rs. 16.24 crores. Upon acquisition of the above shares, Vishwamber Cements Limited becomes a wholly owned subsidiary of NCL Industries Ltd (NCLIL).

(a) Terms / Rights attached to the Equity Shares:The Company has one class of share capital, comprising ordinary shares of Rs. 10/- each. Subject to the Company''s Articles of Association and applicable law, the Company''s ordinary shares confer on the holder the right to receive notice of and vote at general meetings of the Company, the right to receive any surplus assets on a winding-up of the Company, and an entitlement to receive any dividend declared on ordinary shares.

c) Practical expedients

During the year company has entered into sales contracts with its customers where contracts are not executed, same has not been disclosed as per practical expedient as the duration of the contract is less than one year or right to receive the consideration established on completion of the performance by the company.

B. Significant judgements in the application of this standard

(i) Revenue is recognized by the company when the company satisfies a performance obligation by transferring a promised good or service to its customers. Asset/goods/services are considered to be transferred when the customer obtains control of those asset/goods/services.

(ii) The company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, GST etc.).

(iii) The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Any further adjustment will be made by raising debit/credit notes on the customer. While determining the transaction price effects of variable consideration, constraining estimates of variable consideration, the existence of a significant financing component in the contract, non-cash consideration and consideration payable to a customer is also considered.

34. BorrowingsTerm Loans:

i) Term Loan of Rs.10.58 crores (2022: Rs.24.70 crores) from Axis Bank Ltd towards part takeover of Yes Bank Term Loan, at an interest rate Linked to MCLR @ 8.35% p.a repayable in 17 quarterly instalments starting from Oct''19. The loan amount sanctioned is Rs.60.00 Cr with no moratorium period

ii) Term of Loan of Rs.53.09 crores (2022: Rs.58.47 crores) from Axis Bank Ltd for WHR Project at Mattapally, at an interest rate Linked to MCLR @ 8.35% p.a repayable in 20 Structured quarterly instalments starting from Sept ''21. The loan amount sanctioned is Rs.67.25 Crores with a moratorium period of 2 years.

iii) Term loan of Rs.9.67 crores (2022: Rs.22.55 crores) from HDFC Bank Ltd towards part takeover of Yes Bank Term Loan, at an interest rate Linked to MCLR @ 9.25% p.a repayable in 17 quarterly instalments starting from Oct''19. The loan amount sanctioned is Rs. Rs.54.75 Crores with no moratorium period

iv) Term Loan of Rs.29.25 crores (2022: Rs. 35.75 crores) from Axis Bank Ltd for Modernization of Line 1 at Mattapally, at an interest rate Linked to MCLR @ 8.35% p.a repayable in 24 Equal quarterly instalments of Rs.1.625 Crores starting from Dec''21. The loan amount sanctioned is Rs.39 Crores with a moratorium period of 1 year.

v) Term Loan of Rs.62.92 crores (2022: Rs.21.14 crores) from Kotak Bank Ltd towards Line -3 at Mattapally, at an interest Linked to MCLR @ 9.10% p.a repayable in 78 monthly instalments starting from May''23. The loan amount sanctioned is Rs.75 Crores with a moratorium period of 1.5 years.

vi) The Company availed a loan of Rs.31.21 crores (2022: Rs.37.46 crores) from AXIS Bank under the Emergency Credit Line Guarantee Scheme (ECLGS 2.0) notified by the Government of India in Two Tranches of Rs.25.00 Crores and Rs.13.50 Crores, repayable in 48 equated monthly instalments after a 24-month moratorium period from the date of disbursement, at an interest rate of 9% and 8.85% p.a linked to Repo rate.

vii) The Company availed a loan of Rs.14.80 crores (2022: Rs.19.60 crores) from HDFC Bank under the Emergency Credit Line Guarantee Scheme notified by the Government of India repayable in 48 equated monthly instalments after a 12-month moratorium period from the date of disbursement, at an interest rate of 9% p.a linked to Repo.

viii) All the above are secured by secured by first charge on Fixed assets of the Company excluding the assets disclosed in Note 2.1, ranking pari passu with other Term lenders, further secured by second charge on Current assets of company.

Loans repayable on demand from Banks:

i) Cash Credit from AXIS Bank Ltd Rs.Nil (2022 : Rs.9.73) at an interest rate Linked to MCLR at 8.65%. The sanctioned Limit is Rs.50.00 Cr.

ii) Cash Credit from HDFC Bank Ltd Rs.Nil (2022 : NIL) at an interest rate Linked to MCLR at 8.75%. The sanctioned Limit is Rs.25.00 Cr

iii) Cash Credit from State Bank of India Rs.Nil (2022 : 15.13 Cr) at an interest rate Linked to MCLR at 8.60%. The sanctioned Limit is Rs.20.00 Cr

iv) Cash Credit from Bank of Baroda Rs.Nil (2022 :12.35 Cr) at an interest rate Linked to MCLR at 8.30%. The sanctioned Limit is Rs.65.00 Cr.

v) Cash Credit from Kotak Bank Ltd Rs.Nil (2022 : NIL) at an interest rate Linked to MCLR at 8.60%. The sanctioned Limit is Rs.20.00 Cr.

vi) All the above Working Capital Loans are secured by first charge on current assets of the Company, ranking pari passu with other Working Capital lenders, further secured by second charge on fixed assets of company excluding the assets disclosed in Note 2.1 .

All the Above Term and Working capital Loans are further guaranteed by Mr.K.Ravi and Mr.K.Madhu in their

Personal Capacity.

Vehicle & Equipment Loans

Vehicle and Equipment Loans from various Banks are secured by Hypothecation of respective assets financed,

for a tenure of 35 to 47 months and carries Interest @ 7.85% to 9.00% p.a.

Deposits From Public

Public deposits represent deposits accepted from the public carrying interest varying from 8% to 10% p.a. The

maturity of these deposits falls on different dates depending on the date of each deposit.

35. Contingent Liabilities:

i) Based on the Legal opinion/advice obtained, no financial implication to the Company with respect to the following cases is perceived as on the Date of the Balance Sheet

ii) The Company has received a demand notice from Mines and Geology department for an amount of Rs. 91.43 crores, against which the Company has filed a writ petetion before the Honourable High court of Telangana and an interim order was passed by the Honourable court on payment of a predeposit of Rs. 18.28 Crores.

iii) The Company has given Counter Guarantees to Banks / Financial Institutions for Rs.1763.47 lakhs as at 31st March 2023 (Rs. 1555.20 lakhs as at 31st March 2022) against the Bank Guarantees obtained.

36. Capital Comittments

Capital expenditure contracted for at the end of the reporting period but not recognised/provided in the books as liabilities is as follows:

37. Employee Benefits

a) Provident Fund: Company pays fixed contribution to provident fund at predetermined rates to the government authorities. The contribution of Rs. 286.43 lakhs (Previous year Rs. 259.19 lakhs ) including administrative charges is recognized as expense and is charged in the Statement of Profit and Loss.

b) Gratuity: Gratuity is provided as per the payment of Gratuity Act 1972, covering all the eligible employees. Defined Benefit Plan is payable to the qualifying employees on separation. Company considers the laibilities with regard to gratuity, are independently measured on actuarial valuation carried out as on Balance Sheet date. The liability has been assessed using Projected Unit Credit Method. 100% of the Gratuity Plan Asset is entrusted to LIC of India under their group gratuity Scheme

Reconciliation of opening and closing balances of the present value of the defined benefit obligation as at the year ended March 31, 2023 are as follows:

Fair Value Hierarchy Management considers that,the carrying amount of those financial assets and financial liabilies that are not subsequently measured at fair value in the Financial Statements approximate their transaction value. No financial instruments are recognized and measured at fair value for which fair values are determined using the judgments and estimates. The fair value of Financial Instruments referred below has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy givesthe highest priority to quoted prices in active market for identical assets or liabilies. (Level-1measurements) and lowest priority to unobservable (Level-3 measurements). Investments in subsidiary is at cost.

b) Financial Risk Management:

The Company''s actual exposure to a variety of financial risks viz.,market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is credit risk and liquidity risk.

c ) Management of Market Risk:

Market risks comprises of Price risk and Interest rate risk. The Company does not designate any fixed rate financial assets as fair value through Profit and Loss nor at fair value through OCI. Therefore, the Company is not exposed to any interest rate risk. Similarly, the Company does not have any Financial Instrument which is exposed to change in price.

d) Foreign Currency Risks:

The Company is exposed to foreign exchange risk arising from various Currency exposures primarily with respect to the US Dollars (USD)/EURO, for the imports being made by the Company.

e) Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligations. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. The company considers that, all the financial assets that are not impaired and past due as on each reporting dates under review are considered credit worthy

Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and non-current financial assets.

With respect to credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. Cash or other collaterals are obtained from customers as and when required.

The carrying amount of trade receivables represents company''s maximum exposure to the credit risk. No other financial asset carry a significant exposure with respect to the credit risk. Bank deposits and cash balances are placed with reputable banks .

The credit quality of financial assets is satisfactory, taking into account the allowance for credit losses. The management also considers the factors that may influence the credit risk of its customer base, including default risk associated with the industry and country in which customers operate. Credit quality of a customer is assessed based on the past track record.

An impairment analysis is performed at each reporting date on an individual basis for receivables. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company also holds deposits as security from certain customers to mitigate credit risk.

f) Liquidity Risk:

The company''s liquidity needs are monitored on the basis of monthly projections. The principal sources of liquidity are cash and cash equivalents, cash generated from operations and availability of cash credit and overdraft facilies to meet the obligations as and when due.

Short term liquidity requirements consist mainly of sundry creditors, expenses payable and employee dues during the normal course of business. The company maintains sufficient balance in cash and cash equivalents and working capital facilities to meet the short term liquidity requirements.

The company assesses long term liquidity requirements on a periodical basis and manages them through internal accruals and commited credit lines.

40. Capital Management

The Company''s objectives when managing capital are to Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Consistent with others in the industry, the group monitors capital on the basis of the following gearing ratio: .

Net debt (total borrowings net of cash and cash equivalents) divided by Total ''equity'' (as shown in the balance sheet, including non-controlling interests).

In order to achieve the overall objective , the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

There are no changes in the objectives, policies or processes for managing capital during the years ended 31 March 2023 and 31 March 2022.

41 Earnings Per Share

1. Debt = Long Term Secured Loans Current Maturities of Long Term Loans Long Term unsecured Loans Current Maturities of unsecured Loans

2. Net worth= Equity Share Capital Reserves and Surplus

3. Average Inventory =(Opening balance Closing balance)/2

4. Average Trade Receivables =(Opening balance Closing balance)/2

5. Average Trade Payables =(Opening balance Closing balance)/2

6. Capital Employed =Total Assets -Current Liabilities

Notes

1. During the financial year 2022-23 increase in cost of materials in comparision with previous financial year which directly effected the operating margins and as a consequence the variance in ratios are as reported above

2. Additional Loans were obtained for various ongoing projects, hence the variance in ratios as reported above.

Note 46:

Other information as required under Scedule III of Companies Act, 2013:

i) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries."

(ii) The Company has not advanced, loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries"

"iii) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property"

iv) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

v) The Company has no Loans or Advances in the nature of Loans to specified persons that are Repayable on Demand or without specifying any terms or period of repayment.

vi) The Company had no transactions with Companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 during the year.

vii) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

viii) The Code on Social Security, 2020 (“Code”) relating to employee benefits during employment and postemployment benefits received presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

ix) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

x) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year. Note 47

Previous year figures have been re-casted / restated wherever necessary including those as required in keeping with revised Schedule III amendments

48 Segmental Reporting :

Based on the “management approach” as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates the company''s performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, information has been presented for each business segment. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual business segments, and are as set out in the significant accounting policies. Business segments of the company are.

1. Cement2. Boards3. RMC4. Energy5. Doors

Types of products and services in each business segments (1) OPC/PPC/53 S Cement (2) Plain and laminated Cement Bonded Particle Boards . (3) Ready Mix Concrete. (4) Generation of Hydel power. (5) Doors

Segment Revenue and Expense

Details regarding revenue and expenses attributable to each segment must be disclosed

Segment assets include all operating assets in respective segments comprising of net fixed assets and current

assets, loans and advances etc. Assets relating to corporate and construction are included in unallocated

segments. Segment liabilities include liabilities and provisions directly attributable to respective segment.

Segment revenues and results:

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Mar 31, 2018

Note:

a) The Third Cement Bonded particle Boards Plant of the Company at Simhapuri, Suryapet District, Telangana State was successfully commissioned and commenced its commercial operations with effect from 2nd December, 2017. The expenditure capitalised during the year is Rs. 4959.71 lakhs

b) The Fourth RMC Plant of the Company at Vellanki, Visakhapatnam District, Andhra Pradesh was successfully commissioned and commenced its commercial operations with effect from 14th December, 2017. The expenditure capitalised during the year is Rs. 258.15 lakhs

c) The capacity expansion of Clinker and Cement production of the Company at Simhapuri, Suryapet District, Telangana State was successfully commissioned and commenced its commercial operations with effect from 7th March, 2018. The expenditure capitalised during the year is Rs. 23472.77 lakhs.

Nature of Reserves:

Capital Reserve: Represent the Capital Subsidies received from government.

Securities Premium Reserve: Amounts received in excess of the face value of the equity shares issued.

General Reserve: This represents the appropriation of Profit

Debenture Redemption Reserve: This is a reserve created as per the Companies Act, 2013 for the debentures issued. Retained Earnings: Represents the undistributed earnings post taxes.

a. Secured Redeemable Non-Convertible debentures carrying an interest @ 15% per annum payable monthly are secured by the first charge on all the fixed assets and second charge on all the current assets and pledge of the shares held by promoters of the Company.

The Company has raised amounts of Rs. 8000 lakhs (18000 lakhs) through issue of Secured Redeemable Non-Convertible Debentures and repaid Rs. 16,500 lakhs (PY Nil). The objective of raising funds through debentures was to meet the capital expenditure requirements of the capacity expansion projects of Cement and Boards divisions .

b. Vehicle and Equipment Loans from various Banks are secured by Hypothecation of respective assets financed for a tenure of 35 to 47 months and carries Interest @ 7.85% to 12.25% p.a.

c. Sales Tax Deferment Loan received from Government of Andhra Pradesh/Telangana State. The loan shall be repaid based on the deferment availed.

d. Deposits from Dealers / Stockists represent amounts collected from Dealers / Stockists / Agents as collateral at the time of granting the dealership to sell the products of the Company which is repayable on cancellation of the said dealership. These deposits attract interest @ 6% p.a.

e. Public Deposits aggregating to Rs. 4,289.67 lakhs (Previous year Rs 3,651.76 lakhs, as at 1st April 2016 Rs. 3,773.64 lakhs) is repayable within one year and Rs 1,220.76 lakhs (Previous Year Rs 1,234.34 lakhs, as at 1st April 2016 Rs 839.09 lakhs) is repayable within next two years.

1. Contingent Liabilities:

i) Based on the Legal opinion/advice obtained, no financial implication to the Company with respect to the following cases is perceived as on the Date of the Balance Sheet

ii) The Company has given Counter Guarantees to Banks / Financial Institutions for Rs.618.67 lakhs as at 31st March 2018 (Rs. 531.51 lakhs as at 31st March 2017) (Rs. 262.85 lakhs as at 1st April 2016) against the Bank Guarantees obtained.

2. Capital Commitments

Capital expenditure contracted for at the end of the reporting period but not recognised/provided in the books as liabilities is as follows:

3. Employee Benefits

a) Provident Fund: Company pays fixed contribution to provident fund at predetermined rates to the government authorities. The contribution of Rs. 144.23 lakhs (Previous year Rs. 124.28 lakhs ) including administrative charges is recognized as expense and is charged in the Statement of Profit and Loss.

b) Gratuity: Gratuity is provided as per the payment of Gratuity Act 1972, covering all the eligible employees. Gratuity is a non-fund based Defined Benefit Plan payable to the qualifying employees on separation. Company considers the liabilities with regard to gratuity, are independently measured on actuarial valuation carried out as on Balance Sheet date. The liability has been assessed using Projected Unit Credit Method.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation as at the year ended

March 31, 2018 are as follows:

Actuarial assumptions

a) Mortality IALM 2006-08 (ultimate)

b) Discounting rate - 7.65% Previous year 6.69 %

d) Expected average remaining working lives of employees-12.90 Years (PY12.47 Years)

e) Rate of escalation in salary - 6 %

Sensitivity Analysis:

Sensitivity to significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant.

4. Financial Instruments- Fair Values and Risk Management a. Financial Instruments by Categories

The following tables show the carrying amounts and fair values of financial assets and financial liabilities by categories. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value

Fair Value Hierarchy Management considers that, the carrying amount of those financial assets and financial liabilities that are not subsequently measured at fair value in the Financial Statements approximate their transaction value. No financial instruments are recognized and measured at fair value for which fair values are determined using the judgments and estimates. The fair value of Financial Instruments referred below has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets or liabilities. (Level-1measurements) and lowest priority to unobservable (Level-3 measurements).

The Company does not hold any equity investment and no financial instruments hence the disclosures are nil.

b) Financial Risk Management:

The Company''s actual exposure to a variety of financial risks viz., market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is credit risk and liquidity risk.

c ) Management of Market Risk:

Market risks comprises of Price risk and Interest rate risk. The Company does not designate any fixed rate financial assets as fair value through Profit and Loss nor at fair value through OCI. Therefore, the Company is not exposed to any interest rate risk. Similarly, the Company does not have any Financial Instrument which is exposed to change in price.

d) Foreign Currency Risks:

The Company is exposed to foreign exchange risk arising from various Currency exposures primarily with respect to the US Dollars (USD)/EURO, for the imports being made by the Company.

The Company exposure to foreign currency risk as at the end of the reporting period expressed in INR as on March 31, 2018 is as follows:

e) Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligations. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. The company considers that, all the financial assets that are not impaired and past due as on each reporting dates under review are considered credit worthy

Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and non-current financial assets.

With respect to credit exposure from customers, the Company has a procedure in place aiming to minimize collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. Cash or other collaterals are obtained from customers as and when required.

The carrying amount of trade receivables represents company''s maximum exposure to the credit risk. No other financial asset carry a significant exposure with respect to the credit risk. Bank deposits and cash balances are placed with reputable banks .

The credit quality of financial assets is satisfactory, taking into account the allowance for credit losses. The management also considers the factors that may influence the credit risk of its customer base, including default risk associated with the industry and country in which customers operate. Credit quality of a customer is assessed based on the past track record.

An impairment analysis is performed at each reporting date on an individual basis for receivables. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company also holds deposits as security from certain customers to mitigate credit risk.

Credit risk on trade receivables and other financial assets is evaluated as follows:

For the year ended March 31, 2018

f) Liquidity Risk:

The company''s liquidity needs are monitored on the basis of monthly projections. The principal sources of liquidity are cash and cash equivalents, cash generated from operations and availability of cash credit and overdraft facilities to meet the obligations as and when due.

Short term liquidity requirements consist mainly of sundry creditors, expenses payable and employee dues during the normal course of business. The company maintains sufficient balance in cash and cash equivalents and working capital facilities to meet the short term liquidity requirements.

The company assesses long term liquidity requirements on a periodical basis and manages them through internal accruals and committed credit lines.

The following table shows the maturity analysis of the Companies Financial Liabilities based on contractually agreed, undiscounted cash flows as at the balance sheet date

5. Capital Management

The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Consistent with others in the industry, the group monitors capital on the basis of the following gearing ratio:

Net debt (total borrowings net of cash and cash equivalents) divided by Total ‘Equity'' (as shown in the Balance Sheet, including non-controlling interests).

The gearing ratio at the end of the reporting period was as follows:

In order to achieve the overall objective , the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

There are no changes in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.

6.Segmental Reporting :

Based on the “management approach” as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates the company''s performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, information has been presented for each business segment. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual business segments, and are as set out in the significant accounting policies. Business segments of the company are.

1. Cement

2. Boards

3. RMC

4. Energy

5. Prefab

Types of products and services in each business segments (1) OPC/PPC/53 S Cement (2) Plain and laminated Cement Bonded Particle Boards . (3) Ready Mix Concrete. (4) Generation of Hydel power. (5) Prefab Shelters

Segment Revenue and Expense

Details regarding revenue and expenses attributable to each segment must be disclosed

Segment assets include all operating assets in respective segments comprising of net fixed assets and current assets, loans and advances etc. Assets relating to corporate and construction are included in unallocated segments. Segment liabilities include liabilities and provisions directly attributable to respective segment.

Note 7: Corporate Social Responsibility (CSR)

As per Section 135 of the Companies Act, 2013 and rules made there under on CSR Activities, the Company has incurred an amount of Rs.145.55 (2017 year Rs.152.93) towards Corporate Social Responsibility activities during the Financial Year 2017-18 and debited to Statement of Profit and Loss.

The amount of expenditure to be spent on CSR activities and financial details as per the Companies Act, 2013 for the F.Y 2017-18 are as under:

** Pursuant to section 135(5) of the Companies Act 2013, CSR obligation for the year 2016-17 is Rs. 99.17 lakhs (PY Rs. 24.70 lakhs). Amount spent by the Company during the year on education and health sectors is Rs. 145.55 lakhs (PY Rs. 152.93 lakhs).

Note 8. Confirmations

The Company requested its debtors and creditors to confirm the balances as at the end of year in respect of trade payables, trade receivables and advances .

Note 9.

Previous year''s figures have been regrouped/reclassified/recasted wherever necessary to confirm to the current year''s presentation.

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Mar 31, 2017

1. Notes to Financial Statements for the year ended 31 March 2017

1. The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of Equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees.

2. For the Year Ended 31st March,2017, the amount of per share dividend recognized as distribution to equity share holders was Rs. 2.50 (31st March 2016: Rs. 2/- per share)

3. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a. Secured Redeemable Non Convertible debentures carrying an interest @ 16.67% per anum payable monthly are the part of the aggregate of Rs. 325 Crores of debentures to be issued on private placement basis are secured by the first charge on all the fixed assets and second charge on all the current assets and pledge of the shares held by promoters of the Company.

The debentures are to be redeemed in the 4th, 5th and 6th years, commencing from the last quarter of financial year 2018-19.

b. Vehicle and Equipment Loans from various Banks are secured by Hypothecation of respective assets financed, for a tenure of 35 to 47 months and carries Interest @ 9% to 12.25% p.a.

c. Interest free Sales Tax Deferment Loan received from Governmnet of Andhra Pradesh/Telangana, shall be repaid in the year 2017-18.

2.1 OTHER LONG TERM LIABILITIES

a. Deposits from Dealers / Stockists represent amounts collected from Dealers / Stockists / Agents as collateral at the time of granting the dealership to sell the products of the Company which is repayable on cancellation of the said dealership. These deposits attract interest @ 6% p.a.

b. Public Deposits aggregating to Rs 3,651.76 lakhs (Previous year Rs 3,773.64 lakhs) is repayable within one year and Rs 1234.34 lakhs (Previous Year Rs 839.09 lakhs) is repayable within next two years.

Cash credit Loans from Banks viz. Axis Bank Ltd, IDBI Bank Ltd and State Bank of Hyderabad (Now merged with State Bank of India) are secured by pari passu first charge on current assets of the Company (both present & future) and second charge on fixed assets of the company and are guaranteed by promoter directors in their personal capacity.

Segment Accounting Policies:

In addition to the significant accounting policies applicable to the business, the accounting policies in relation to segment accounting are as under:

a) Segment Assets and Liabilities:

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

b) Segment Revenue and Expenses:

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

2.2 a) Contingent Liabilities

i) Based on the Legal opinion/advice obtained, no financial implication to the Company with respect to the following cases is perceived as on the Date of the Balance Sheet

2.2 b) Capital Commitments :

The Company is Committed to incur Capital Expenditure of Rs. 18,150 lakhs on its Cement Expansion Projects and Rs. 4,170 lakhs on its Boards expansion project. The Orders placed/ Contracts entered not provided in the books are as follows:

2.3 As required by Accounting Standards AS 18, the related parties’ disclosure issued by the Institute of Chartered Accountants of India is as follows:

a. List of related parties and relationships

i. Enterprises controlled by Key Management Personnel / Relatives of Key Management Personnel

1. NCL Alltek & Seccolor Limited

2. NCL Homes Limited

3. Kakatiya Industries (P) Limited

4. Nagarjuna Cerachem (P) Limited

5. NCL Wintech India Limited

6. Khandaleru Power Company Limited

7. Vikram Chemicals Pvt Limited

8. Ashven Datla

9. Deccan Nitrates Pvt Limited

10. NCL Green Habitat Pvt Limited

ii. Key Managerial Personnel :

1. Mr. K Ravi, Managing Director

2. Mr. K Gautam, Executive Director

3. Mr. N G V S G Prasad, Executive Director & CFO

4. Mr. T Arun Kumar, Company Secretary

2.4 Figures for the previous year are reclassified / regrouped and rearranged wherever necessary.

---

Mar 31, 2016

1. Capital Commitments:

During the year the Company is committed to incur capital expenditure of Rs. 18,150 lakhs on its Cement Expansion Project and Rs. 4,170 lakhs on its Boards Division expansion project. The Orders placed/ Contracts entered into so far by the company and not provided in the books are as follows:

Actuarial assumptions

a) Mortality IALM 2006-08 (ultimate)

b) Discounting rate - 7.46% (Previous year 7.77 %)

c) Expected average remaining working lives of employees-13.01 Years

d) Rate of escalation in salary - 6 %

2.As required by Accounting Standards AS 18, the related parties’ disclosure issued by the Institute of Chartered Accountants of India is as follows:

?. List of related parties and relationships

i Enterprises controlled by Key Management Personnel / Relatives of Key Management Personnel

1. NCL Alltek & Seccolor Limited

2. NCL Homes Limited

3. Kakatiya Industries (P) Limited

4. Nagarjuna Cerachem (P) Limited

5. NCL Wintech (India) Limited

?. Khandaleru Power Company Limited

7. Vikram Chemicals Pvt Limited

8. Mr. Ashven Datla

9. Deccan Nitrates Pvt Limited

ii. Key Management Personnel : Mr. K. Ravi, Managing Director

Segment Accounting Policies:

In addition to the significant accounting policies applicable to the business, the accounting policies in relation to segment accounting are as under:

a) Segment Assets and Liabilities:

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

b) Segment Revenue and Expenses:

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

---

Mar 31, 2015

1.1 SHARE CAPITAL

1. The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of Equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees.

2. For the Year Ended 31st March,2015, no dividend was recognized for distribution to equity share holders (31st March 2014: Nil).

3. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

1.2 SHARE APPLICATION MONEY PENDING ALLOTMENT

The above amount represents the upfront contribution brought in by the Promoters in compliance with the conditions stipulated for sanctioning the Company's Debt Restructuring Proposal by the CDR Cell. At the EGM held on 02.04.2014, Shareholders approved to make a Preferential Issue of 17,95,455 Equity Shares to the Promoters Group at a premium of Rs 12/- per Share. SEBI has granted exemption from regulation 72(2) of SEBI (ICDR) Regulations, 2009 and accorded approval for preferential allotment on 14.05.2015. Accordingly, Equity shares were alloted to the promoters on 26.05.2015.

a. Keeping in view of the sluggish cement market conditions resulted because of downturn of Infra Sector, at the reguest of the Company, the outstanding loans as of 1.7.2013 (except Rs 7.23 crores of Funded Interest Term Loan availed from IREDA) have been rescheduled under Corporate Debt Restructuring mechanism (CDR). As per the scheme sanctioned, the outstanding loans are to be repaid in 28 calibrated guarterly installments commencing from March 2014. Rate of Interest has been reduced to 12% per annum with a reset option once in every two years. Interest arrears for a period eight months has been funded, of which first two months interest has to be repaid three egual guarterly installments commencing from March 2014. Balance six months interest has to be repaid in ten egual guarterly installments from March 2014. Lenders have the Right for Recompense. Due amounts as of 31st March 201S were fully paid as per the sanctioned scheme.

b. Term Loans from the Banks and Financial Institutions viz. Axis Bank Ltd, Canara Bank, Central Bank of India, Corporation Bank, Indian Renewable Energy Development Agency Ltd (IREDA), Oriental Bank of Commerce, State Bank of Hyderabad and State Bank of Mysore are secured by a pari passu first charge on all movable and immovable properties of the Company and second charge on current assets of the Company (both present and future) except receivables of Energy Division.

c. Term Loans availed from all Banks and Financial Institutions are guaranteed by Four Promoter Directors in their personal capacity. Further, entire unencumbered shareholdings of Promoters have also been pledged as additional security.

d. Vehicle and Equipment Loans from various Banks are secured by Hypothecation of respective assets financed, for a tenure of 35 to 45 months and carries Interest @ 9% to 11% p.a.

e. Represents 8 years Interest free Sales Tax Deferment Loan received from Governmnet of Andhra Pradesh. The loan repayments are to be made from March 31, 2013 based on the deferment availed in the corresponding year.

a. Deposits from Dealers / Stockists represent amounts collected from Dealers / Stockists / Agents as collateral at the time of granting the dealership to sell the products of the Company which is repayable on cancellation of the said dealership. These deposits attract interest @ 6% p.a.

b. Public Deposits aggregating to Rs 2,760.61 lakhs (Previous year Rs 3,107.45 lakhs) is repayable within one year and Rs 369.05 lakhs (Previous Year Rs 76.98 lakhs) is repayable within next two years.

2.1 SHORTTERM BORROWINGS

Cash credit Loans from Banks viz. Axis Bank Ltd, IDBI Bank Ltd and State Bank of Hyderabad are secured by pari passu first charge on current assets of the Company excluding receivables of Energy Division (both present & future) and second charge on fixed assets of the company and are guaranteed by four promoter directors in their personal capacity. Further, entire unencumbered shareholdings of Promoters have also been pledged as additional security. These facilities also have been restructured under CDR Mechanism and Rate of Interest has been reduced to 12% per annum effective from 1.7.2013 with a reset option every year.

2.2 TRADE PAYABLES

Based on the information available with the Company, amount of dues to Micro, Small and Medium Enterprises outstanding formore than 45 days as at 31st March 2015 is Rs. Nil (Previous Year: Rs. Nil)

b) Segment Revenue and Expenses;

B. SECONDARY DISCLOSURES:

Revenue from external customers by location of customers

The main customer base of company's products are in India only

Carrying amount of segment assets by location of assets Costs to acquire tangible and intangible fixed assets by location of assets.

All manufacturing units are located in India

Other Disclosures:

Basis of pricing Inter segment transfers and any change therein

Inter division transfers of goods are at market price.

Types of products and services in each business segments

(1) OPC/PPC/53 S Cement

(2) Plain and laminated Cement Bonded Particle Boards

(3) Prefab Shelters.

(4) Generation of Hydel power.

(5) Ready Mix Concrete.

Segment Accounting Policies:

In addition to the significant accounting policies applicable to the business, the accounting policies in relation to segment accounting are as under:

a) Segment Assets and Liabilities:

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

b) Segment Revenue and Expenses:

31 Mar 2015 31 Mar 2014

Disputed Paid Under Disputed Paid Under Amount Protest Amount Protest

Demand by Sales tax authorities -Interest on HSD Oil used in Tippers for transportation of lime stone (Note 'a') 4.26 - 4.26 -

Demand by Sales tax authorities -Penalty on delayed payment (Note 'b') 16.88 4.00 16.88 4.00

Demand by Sales tax authorities for the year 2004-05 - Rate of tax on erection of prefab structures on CST. (Note 'c') 14.92 - 14.92 -

Demand by Sales tax authorities for the year 2008-09 - Disallowance of Input tax credit. (Note 'd') 175.82 56.00 175.82 56.00

Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note 'e') 464.98 50.00 464.98 50.00

Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note 'f') 163.18 5.00 163.18 5.00

Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note 'g') 116.34 - 116.34 -

Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note 'h') 80.85 - 101.61 -

Excise department claimed return of refund of Excess

Excise duty paid by the Company (Note 'i') 29.22 - 29.22 -

Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note 'j') 16.88 10.44 16.88 8.44

Demand of Central Excise Department denying benefit of Cenvat credit on cement transferred to Kondapalli unit from Mattapally unit for despatch in a railway rake (Note 'k') 2.00 - 2.00 -

Miscellaneous Issues pending with Excise department 6.15 - 7.15 -

Customs department raised a demand classifying imported steam coal as Bituminous coal ( Note 'l') 42.19 - 42.19 -

Customs department raised a demand classifying imported steam coal as Bituminous coal ( Note 'm') 87.79 - 87.79 -

Demand of NALA Tax pertaining to Non Agricultural Tax in Mining Areas by the state government ( Note 'n') 43.56 - 43.56 -

Demand raised for payment of permit fee by the forest department for mining and transportation of Lime Stone ( Note 'o') ** 382.45 127.41 300.03 99.94

Counter Guarantees given to Banks / FIs 258.11 - 340.34 -

a. Sales Tax Authorities treated the usage of HSD oil on Hired tippers on cost recovery basis for transport of Lime Stone From Mines to Factory, on the presumption that it is a sale. The company filed an appeal before the Sales Tax Appellate Tribunal.

b. In the year 1999-00, Sales Tax Authorities raised a demand for Rs.16.88 lakhs as penalty on delayed payment. The Company has preferred an Appeal before the Sales Tax Appellate Tribunal. The company has paid an amount of Rs. 4.00 lakhs and obtained a stay from the Commissioner of Commercial Taxes.

c. Sales Tax Authorities disputed the rate of tax for interstate supplies of prefab structures in the year 2004-05 and raised

a demand for a sum of Rs. 14.92 Lakhs. Company preferred an appeal before STAT, the case is remanded to Assessing Officer.

d. Sales Tax Authorities raised a demand for Rs.175.82 lakhs for the year 2008-09 disallowing the input tax credit on materials used in construction of plant structure, input tax credit on SEZ supplies and also demanded differential tax on local as well as CST purchases under Works Tax .The Company has preferred an Appeal before the Sales Tax Appellate Deputy Commissioner. The company has initially paid an amount of Rs. 80.00 lakhs in protest out of which Rs. 34.00 lakhs was adjusted against sales tax payable and further paid another 10.00 lakhs and has obtained a stay from the Honourable High Court of Andhra Pradesh. Sales Tax Appellate Deputy Commissioner has remanded the case back to the Assistant Commisioner to verify and pass necessary orders.

e. The Excise Department has raised a demand of Rs.464.98 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Mattapally and Kondapalli. Company has preferred an appeal before CESTAT and is pending. CESTAT ordered payment of Rs. 2.50 crores in the case of Mattapally unit and the Company filed a writ before the Honourable High Court of Andhra Pradesh. A stay on payment of pre-deposit was granted on a payment of Rs. 50.00 lakhs.

f. The Excise Department has raised a demand of Rs.163.18 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Mattapally and Kondapalli. Company has preferred an appeal before CESTAT and a stay was granted on payment of a pre-deposit of Rs. 5.00 lakhs.

g. The Excise Department has raised a demand of Rs.116.34 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Mattapally and Kondapalli. Company has preferred an appeal before CESTAT and a stay was granted.

h. The Excise Department has raised a demand of Rs.101.61 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Mattapally and Kondapalli. On an appeal, CESTAT has remanded the cases back to the Commissioner of Central Excise. The Appellate Commissioner decided the case partially in Company's favour and confirmed the balance demand along with interest and penalty. Company preferred an appeal before CESTAT.

i. The Excise Department has claimed return of the refund of Rs. 29.22 lakhs paid to the Company on their appeal decided in their favour by the Commissioner (Appeals). The Honourable High Court of Andhra Pradesh granted stay.

j. Excise department has raised a demand of Rs. 16.88 lakhs denying the cenvat credit on usage of Cement, Steel, M.S. Plates, M.S.Flats, M.S.Angles, M.S.Channels M.S.Coils, Steel Tubes, Pipes, beams, Plates/Sheets, Rebars, Conductors in construction of civil structures like Silo, Dump Hopper etc. The matter was contested and pending before the Appellate Authority and a stay was obtained on payment of Rs. 8.44 lakhs being 50% of the demand raised and the was subsequently rejected. The Company preferred an appeal before CESTAT and further predeposit of Rs. 2 lakhs was paid.

k. Excise department has raised a demand of Rs. 11.18 lakhs denying the cenvat credit taken on transfer of cement from Mattapally unit to Kondapalli unit for despatch by rail. On an appeal before the Commissioner of Central Excise the demand was dropped but imposed a penalty of Rs. 2.00 lakhs. Company preferred an appeal before CESTAT and obtained a stay.

l. The Customs Department raised a demand of Rs. 42.19 lakhs classifying imported steam coal as bituminous coal. Company preferred an appeal before the Appellate Commissioner of Customs & Central Excise (Appeals), Visakhapatnam.

m. The Customs Department raised a demand of Rs. 87.79 lakhs classifying imported steam coal as bituminous coal. Company preferred an appeal before CESTAT, Bengaluru.

n. The State Government has issued a notice claiming NALA Tax of Rs. 43.56 lakhs regarding Non Agricultural Tax on Mining areas.On dismissal of our appeal by the Joint Collector of Nalgonda, Company filed a writ petition before the Honourable High Court of Andhra Pradesh.

o. Forest deparment demanded payment of permit fee for Lime Stone mining & Transportation @ 10/- per ton. Company filed a writ petition before the Honourable High Court of Andhra Pradesh. High Court has granted an interim stay subject to payment of 1/3 amount of the imposed permit fee.

** Though Rs. 127.41 lakhs was paid under protest, this amount was not shown as a current asset. This was included in consumption of materials in the respective years.

Actuarial assumptions

a) Mortality IALM 2006-08 (ultimate)

b) Discounting rate - 7.77% Previous year 9.19 %

c) Expected average remaining working lives of employees-13.06 Years

d) Rate of escalation in salary - 6 %

2.3 As required by Accounting Standards AS 18, the related parties' disclosure issued by the Institute of Chartered Accountants of India is as follows;

a. List of related parties and relationships

i. Enterprises controlled by Key Management Personnel / Relatives of Key Management Personnel

1. NCL Alltek & Seccolor Limited

2. NCL Homes Limited

3. Kakatiya Industries (P) Limited

4. Nagarjuna Cerachem (P) Limited

5. NCL Wintech India Limited

6. Khandaleru Power Company Limited

7. Vikram Chemicals Pvt Limited

8. Ashven Datla

ii. Key Management Personnel ; Mr. K. Ravi, Managing Director

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Mar 31, 2014

1. The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of Equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed for the Year 2012-13 was subsequently withdrawn by the Board of Directors in view of adverse cement market conditions, hence provision made was reversed.

2. For the Year Ended 31st March,2014, no dividend was recognized for distribution to equity share holders (31st March 2013: Nil).

3. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

4 SHARE APPLICATION MONEY PENDING ALLOTMENT

The above amount represents the upfront contribution brought in by the Promoters in compliance with the conditions stipulated for sanctioning the Company''s Debt Restructuring Proposal by the CDR Cell. At the EGM held on 2.4.2014, Shareholders approved to make a Preferential Issue of 17,95,455 Equity Shares to the Promoters Group at a premium of Rs 12 per Share. The Shares will be issued upon receipt of Approval of SEBI under ICDR Regulations.

Keeping in view of the sluggish cement market conditions resulted because of downturn of Infra Sector, at the request of the Company, the outstanding loans as of 1.7.2013 (except Rs 7.23 crores of Funded Interest Term Loan availed from IREDA) have been rescheduled under Corporate Debt Restructuring mechanism (CDR). As per the scheme sanctioned, the outstanding loans are to be repaid in 28 calibrated quarterly installments commencing from March 2014. Rate of Interest has been reduced to 12% per annum with a reset option once in every two years. Interest arrears for a period eight months has been funded, of which first two months interest has to be repaid three equal quarterly installments commencing from March 2014. Balance six months interest has to be repaid in ten equal quarterly installments from March 2014. Lenders have the Right for Recompense. Due amounts as of 31st March 2014 as per the sanctioned scheme were paid in toto.

a. Term Loans from the Banks and Financial Institutions viz. Axis Bank Ltd, Canara Bank, Central Bank of India, Corporation Bank, Indian Renewable Energy Development Agency Ltd (IREDA), Oriental Bank of Commerce, State Bank of Hyderabad and State Bank of Mysore are secured by a pari passu first charge on all movable and immovable properties of the Company and second charge on current assets of the Company (both present and future) except receivables of Energy Division.

b. Term Loans availed from all Banks and Financial Institutions are guaranteed by Four Promoter Directors in their personal capacity. Further, entire unencumbered shareholdings of Promoters have also been pledged as additional security.

c. Term Loans availed from all Banks and Financial Institutions are repayable in Quarterly Installments ansd carries interest @9% to 12% p.a.

d. Vehicle and Equipment Loans from various Banks are secured by Hypothecation of respective assets financed, for a tenure of 35 to 45 months and carries Interest @ 9% to 11% p.a.

e. Represents 8 years Interest free Sales Tax Deferment Loan received from Governmnet of Andhra Pradesh. The loan repayments are to be made from March 31, 2013 based on the deferment availed in the corresponding year.

a. Deposits from Dealers / Stockists represent amounts collected from Dealers / Stockists / Agents as collateral at the time of granting the dealership to sell the products of the Company which is repayable on cancellation of the said dealership. These deposits attract interest @ 6% p.a.

b. Public Deposits aggregating to Rs 3,107.45 lakhs (Previous year Rs 3,363.15 lakhs) is repayable within one year and Rs 76.98 lakhs (Previous Year Rs 32.78 lakhs) is repayable within two years.

5 SHORT TERM BORROWINGS

Cash credit Loans from Banks viz. Axis Bank Ltd, IDBI Bank Ltd and State Bank of Hyderabad are secured by pari passu first charge on current assets of the Company excluding receivables of Energy Division (both present & future) and second charge on fixed assets of the company and are guaranteed by four promoter directors in their personal capacity. Further, entire unencumbered shareholdings of Promoters have also been pledged as additional security. These facilities also have been restructured under CDR Mechanism and Rate of Interest has been reduced to 12% per annum effective from 1.7.2013 with a rest opinion every year.

Segment Accounting Policies:

In addition to the significant accounting policies applicable to the business, the accounting policies in relation to segment accounting are as under:

a) Segment Assets and Liabilities:

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

b) Segment Revenue and Expenses:

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

6 contingent Liability

31 Mar 2014 Disputed Paid Under Amount Protest

Demand by Sales tax authorities -Interest on HSD Oil used in Tippers for transportation of lime stone (Note ''a'') 4.26 - Demand by Sales tax authorities- Penalty on delayed payment (Note ''b'') 16.88 4.00 Demand by Sales tax authorities for the year 2004-05 - Rate of tax on erection of prefab structures on CST. (Note ''c'') 14.92 - Demand by Sales tax authorities for the year 2008-09 - Disallowance of Input tax credit. (Note ''d'') 175.82 56.00 Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note ''e'') 464.98 50.00 Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note ''f'') 163.18 5.00 Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note ''g'') 116.34 - Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note ''h'') 101.61 -

Excise department claimed return of refund of Excess Excise duty paid by the Company (Note ''I) 29.22 - Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note ''j'') 16.88 8.44 Demand of Central Excise Department denying benefit of Cenvat credit on cement transferred to Kondapalli unit from Mattapally unit for despatch in a railway rake (Note ''k'') 2.00 - Return of Refund of Additional duty paid under protest made to the Company , claimed by Excise department. (Note ''l'') 18.41 -

Miscellaneous Issues pending with Excise department 7.15 -

Customs department raised a demand classifying imported steam coal as Bituminous coal ( Note ''m'') 42.19 -

Customs department raised a demand classifying imported steam coal as Bituminous coal ( Note ''n'') 87.56 -

Demand of NALA Tax pertaining to Non Agricultural Tax in Mining Areas by the state government ( Note ''o'') 43.56 -

Service Tax on outward transport & Insurance 2.17 -

Demand raised for payment of permit fee by the forest department for mining and transportation of Lime Stone ( Note ''p'') ** 300.03 99.94

Counter Guarantees given to Banks / Fis 340.34 -

31 Mar 2013 Disputed Paid Under Amount Protest

Demand by Sales tax authorities -Interest on HSD Oil used in Tippers for transportation of lime stone (Note ''a'') 4.26 - Demand by Sales tax authorities- Penalty on delayed payment (Note ''b'') 16.88 4.00 Demand by Sales tax authorities for the year 2004-05 - Rate of tax on erection of prefab structures on CST. (Note ''c'') 14.92 - Demand by Sales tax authorities for the year 2008-09 - Disallowance of Input tax credit. (Note ''d'') - - Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note ''e'') 464.98 50.00 Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note ''f'') 163.18 5.00 Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note ''g'') 116.34 - Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note ''h'') 101.61 - Excise department claimed return of refund of Excess Excise duty paid by the Company (Note ''I) 29.22 - Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note ''j'') 16.88 8.44 Demand of Central Excise Department denying benefit of Cenvat credit on cement transferred to Kondapalli unit from Mattapally unit for despatch in a railway rake (Note ''k'') 11.18 - Return of Refund of Additional duty paid under protest made to the Company , claimed by Excise department. (Note ''l'') 18.41 -

Miscellaneous Issues pending with Excise department 7.37 - Customs department raised a demand classifying imported steam coal as Bituminous coal ( Note ''m'') - - Customs department raised a demand classifying imported steam coal as Bituminous coal ( Note ''n'') - - Demand of NALA Tax pertaining to Non Agricultural Tax in Mining Areas by the state government ( Note ''o'') 43.56 - Service Tax on outward transport & Insurance 2.17 - Demand raised for payment of permit fee by the forest department for mining and transportation of Lime Stone ( Note ''p'') ** 226.60 75.46 Counter Guarantees given to Banks / Fis 336.94 -



a. Sales Tax Authorities treated the usage of HSD oil on Hired tippers on cost recovery basis for transport of Lime Stone From Mines to Factory, on the presumption that it is a sale. The company filed an appeal before the Sales Tax Appellate Tribunal.

b. In the year 1999-00, Sales Tax Authorities raised a demand for Rs.16.88 lakhs as penalty on delayed payment. The Company has preferred an Appeal before the Sales Tax Appellate Tribunal. The company has paid an amount of Rs. 4.00 lakhs and obtained a stay from the Commissioner of Commercial Taxes.

c. Sales Tax Authorities disputed the rate of tax for interstate supplies of prefab structures in the year 2004-05 and raised a demand for a sum of Rs. 14.92 Lakhs. Company preferred an appeal before STAT and is pending.

d. Sales Tax Authorities raised a demand for Rs.175.82 lakhs for the year 2008-09 disallowing the input tax credit on materials used in construction of plant structure, input tax credit on SEZ supplies and also demanded differential tax on local as well as CST purchases under Works Tax .The Company has preferred an Appeal before the Sales Tax Appellate Deputy Commissioner. The company has initially paid an amount of Rs. 80.00 lakhs in protest out of which Rs. 34.00 lakhs was adjusted against sales tax payable and further paid another 10.00 lakhs and has obtained a stay from the Honourable High Court of Andhra Pradesh.

e. The Excise Department has raised a demand of Rs.464.98 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Mattapally and Kondapalli. Company has preferred an appeal before CESTAT and is pending. CESTAT ordered payment of Rs. 2.50 crores in the case of Mattapally unit and the Company filed a writ before the Honourable High Court of Andhra Pradesh. A stay on payment of pre-deposit was granted on a payment of Rs. 50.00 lakhs.

f. The Excise Department has raised a demand of Rs.163.18 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Mattapally and Kondapalli. Company has preferred an appeal before CESTAT and a stay was granted on payment of a pre-deposit of Rs. 5.00 lakhs.

g. The Excise Department has raised a demand of Rs.116.34 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Mattapally and Kondapalli. Company has preferred an appeal before CESTAT and a stay was granted.

h. The Excise Department has raised a demand of Rs.101.61 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Mattapally and Kondapalli. On an appeal, CESTAT has remanded the cases back to the Commissioner of Central Excise.

I The Excise Department has claimed return of the refund of Rs. 29.22 lakhs paid to the Company on their appeal decided in their favour by the Commissioner (Appeals). The Honourable High Court of Andhra Pradesh granted stay.

j. Excise department has raised a demand of Rs. 16.88 lakhs denying the cenvat credit on usage of Cement, Steel, M.S. Plates, M.S.Flats, M.S.Angles, M.S.Channels M.S.Coils, Steel Tubes, Pipes, beams, Plates/Sheets, Rebars, Conductors in construction of civil structures like Silo, Dump Hopper etc. The matter was contested and pending before the Appellate Authority and a stay was obtained on payment of Rs. 8.44 lakhs being 50% of the demand raised and the was subsequently rejected. The Company preferred an appeal before CESTAT.

k. Excise department has raised a demand of Rs. 11.18 lakhs denying the cenvat credit taken on transfer of cement from Mattapally unit to Kondapalli unit for despatch by rail. On an appeal before the Commissioner of Central Excise the demand was dropped but imposed a penalty of Rs. 2.00 lakhs. Company preferred an appeal before CESTAT and obtained a stay.

l. The Excise Department has issued a notice to return the refund of Additional Excise duty paid under protest, amounting to Rs. 18.41 lakhs paid to the Company. Company has filed a reply to the notice.

m. The Customs Department raised a demand of Rs. 42.19 lakhs classifying imported steam coal as bituminous coal. Company is preferring an appeal before the Commissioner of Customs & Central Excise (Appeals), Visakhapatnam.

n. The Customs Department raised a demand of Rs. 87.79 lakhs classifying imported steam coal as bituminous coal. Company is preferring an appeal before CESTAT, Bengaluru.

o. The State Government has issued a notice claiming NALA Tax of Rs. 43.56 lakhs regarding Non Agricultural Tax on Mining areas.On dismissal of our appeal by the Joint Collector of Nalgonda, Company filed a writ petition before the Honourable High Court of Andhra Pradesh.

p. Forest deparment demanded payment of permit fee for Lime Stone mining & Transportation @ 10/- per ton. Company filed a writ petition before the Honourable High Court of Andhra Pradesh. High Court has granted an interim stay subject to payment of 1/3 amount of the imposed permit fee.

** Though Rs. 99.94 lakhs was paid under protest, this amount was not shown as a current asset. This was included in consumption of materials in the respective years.

Actuarial assumptions

a) Mortality IALM 2006-08 (ultimate), Previous Year (LIC) 1994-96 (ultimate)

b) Discounting rate - 9.19% Previous year 8.06 %

d) Expected average remaining working lives of employees-13.2 Years

e) Rate of escalation in salary - 6 %

8 As required by Accounting Standards AS 18, the related parties'' disclosure issued by the Institute of Chartered Accountants of India is as follows:

a. List of related parties and relationships

I Enterprises controlled by Key Management Personnel / Relatives of Key Management Personnel

1. NCL Alltek & Seccolor Limited

2. NCL Homes Limited

3. Kakatiya Industries (P) Limited

4. Nagarjuna Cerachem (P) Limited

5. NCL Wintech India Limited

6. Khandaleru Power Company Limited

7. Vikram Chemicals (P) Limited

ii. Key Management Personnel : Mr. K. Ravi, Managing Director

* As already reported in the last Annual Report 2012-13, pursuant to the special resolution passed by the shareholders at the AGM held on 28.9.2013, the company submitted an application to the Central Government for the approval of exess remuneration of Rs 25.19 lakhs paid to Mr. K. Ravi, Managing Director during the Financial Year 2012-13. The Company also made an application to the Central Governmet for the approval of remuneration approved by the shareholders at their meeting held on 14.9.2012 (with a reduction of 25% in the salary and without commission) as minimum remuneration to Mr. K. Ravi, Managing Director in the event of absence or inadequacy of profits for the Financial Year 2013-14 onwards. The applications made by the company are under active consideration with the MCA.

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Mar 31, 2013

Note: Investor Education and Protection Fund will be credited by this amounts as and when due.

Note: As per Andhra Pradesh State Industrial Policy 2005-10, Amounts of incentives from Industries Department receivable for the year amounting to Rs.165.01 lakhs (Previous Year Rs. 793.12 lakhs) is deducted from Taxes on Sales.

Note: As per Andhra Pradesh State Industrial Policy 2005-10, amounts of incentives from Industries Department receivable for the year amounting to Rs. 361.70 lakhs (Previous Year Rs. 388.51 lakhs) is deducted from the Cost of Power.

Segment Accounting Policies:

In addition to the significant accounting policies applicable to the business, the accounting policies in relation to segment accounting are as under:

a) Segment Assets and Liabilities:

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

b) Segment Revenue and Expenses:

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

1.1 Contingent Liabilities

31 Mar-2013 31 Mar-2012 Disputed Paid Under Disputed Paid Under Amount Protest Amount Protest

Demand by Sales tax authorities

-Interest on HSD Oil used in Tippers for transportation of lime stone (Note ''a'') 4.26 - 4.26 -

Demand by Sales tax authorities- Interest on delayed

payment (Note ''b'') 16.88 4.00

16.88 4.00

Demand by Sales tax authorities for the year 1997-98 - on revised assessment (Note ''c'') 9.81 4.90

9.81 4.90

Demand by Sales tax authorities for the year 2004-05 - Rate of tax on erection of prefab structures on CST. (Note ''d'') 14.92 14.92

Demand of Central Excise Department denying benefit of Cenvat credit on capital goods (Note ''e'') 744.50 50.00

744.50

Demand of Central Excise Department denying benefit of

Cenvat credit on capital goods (Note ''f'') 101.61 100.72

Excise department claimed return of refund of Excess Excise duty paid by the Company (Note ''g'') 29.22 29.22

Demand of Central Excise Department denying benefit of

Cenvat credit on capital goods (Note ''h'') 16.88 8.44

17.77

Demand of Central Excise Department denying benefit of

Cenvat credit on cement transferred to Kondapalli unit from

Mattapally unit for despatch in a railway rake (Note ''i'') 11.18 11.18 -

Return of Refund of Additional duty paid under protest made

to the Company , claimed by Excise department. (Note ''j'') 18.41 18.41 -

Miscellaneous Issues pending with Excise department 7.37 8.52

Demand of NALA Tax pertaining to Non Agricultural Tax in

Mining Areas by the state government ( Note ''k'') 43.56 43.56

Service Tax on outward transport & Insurance 2.17 2.17

Demand raised for payment of permit fee by the forest department for mining and transportation of Lime Stone ( Note ''l'') 226.60 75.46 158.00 52.61

Counter Guarantees given to Banks / FIs 3 36.94 342.61

a. Sales Tax Authorities treated the usage of HSD oil on Hired tippers on cost recovery basis for transport of Lime Stone From Mines to Factory, on the presumption that it is a sale. The company filed an appeal before the Sales Tax Appellate Tribunal.

b. In the year 1999-00, Sales Tax Authorities raised a demand for Rs.16.88 lakhs as penalty on delayed payment. The Company has preferred an Appeal before the Sales Tax Appelate Tribunal. The company has paid an amount of Rs. 4.00 lakhs and obtained a stay from the Commissioner of Commercial Taxes.

c. Demand raised by the Sales Tax Authorities on revised assessment for the year 1997-98 for a sum of Rs. 9.81 Lakhs levying tax on regular rate when the turnover was under works contract. Obtained a stay on payment after payment of 50% of Sales Tax demanded. Appeal is pending before STAT.

d. Sales Tax Authorities disputed the rate of tax for interstate supplies of prefab structures in the year 2004-05 and raised a demand for a sum of Rs. 14.92 Lakhs. Company preferred an appeal before STAT and is pending.

e. The Excise Department has raised a demand of Rs.744.50 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Mattapally and Kondapalli. Company has preferred an appeal before CESTAT and is pending. CESTAT ordered payment of Rs. 2.50 crores in the case of Mattapally unit and the Company filed a writ before the Honourable High Court of Andhra Pradesh. A stay on payment of predeposit was granted on a payment of Rs. 50.00 lakhs.

f. The Excise Department has raised a demand of Rs.101.61 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Mattapally and Kondapalli. The appeal before Commissioner was rejected and Company has preferred an appeal before CESTAT.

g. The Excise Department has claimed return of the refund of Rs. 29.22 lakhs paid to the Company on their appeal decided in their favour by the Commissioner (Appeals). The Honourable High Court of Andhra Pradesh granted stay.

h. Excise department has raised a demand of Rs. 16.88 lakhs denying the cenvat credit on usage of Cement, Steel, M.S. Plates, M.S.Flats, M.S.Angles, M.S.Channels M.S.Coils, Steel Tubes, Pipes, beams, Plates/Sheets, Rebars, Conductors in construction of civil structures like Silo, Dump Hopper etc. The matter was contested and pending before the Appellate Authority and a stay was obtained on payment of Rs. 8.44 lakhs being 50% of the demand raised and it was subsequently rejected. The Company preferred an appeal before CESTAT.

i. Excise department has raised a demand of Rs. 11.18 lakhs denying the cenvat credit taken on transfer of cement from Mattapally unit to Kondapalli unit for despatch by rail. The Company preferred an appeal before the Commissioner of Central Excise and the personal hearing was completed and the order is awaited.

j. The Excise Department has issued a notice to return the refund of Additional Excise duty paid under protest, amounting to Rs. 18.41 lakhs paid to the Company. Company has filed a reply to the notice.

k. The State Government has issued a notice claiming NALA Tax of Rs. 43.56 lakhs regarding Non Agricultural Tax on Mining areas.On dismissal of our appeal by the Joint Collector of Nalgonda, Company filed a writ petition before the Honourable High Court of Andhra Pradesh and has been granted an interim stay on the total amount demanded.

l. Forest deparment demanded payment of permit fee for Lime Stone mining & Transportation @ 10/- per ton. Company filed a writ petition before the Honourable High Court of Andhra Pradesh. High Court has granted an interim stay subject to payment of 1/3 amount of the imposed permit fee.

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Mar 31, 2012

A Term Loans from the Banks and Financial Institutions viz. Axis Bank Ltd, Canara Bank, Central Bank of India, Corporation Bank, Indian Renewable Energy Development Agency Ltd (IREDA), Oriental Bank of Commerce, State Bank of Hyderabad, State Bank of India and State Bank of Mysore are secured by a pari passu first charge on all movable and immovable properties of the Company and second charge on current assets of the Company (both present and future) except receivables of Energy Division.

b. Term Loans availed from all Banks and Financial Institutions except Axis Bank are repayable in Quarterly Installments of Rs 1140 lakhs each.

c. Term Loans availed from Axis Bank are repayable in Monthly Installment of Rs 57 lakhs each.

d. Term Loans carries interest @ 9% to 14.50% p.a.

e. Vehicle and Equipment Loans from various Banks are secured by Hypothecation of respective assets financed, for a tenure of 35 to 45 months and carries Interest @ 9% to 11% p.a.

f. Represents 8 years Interest free Sales Tax Deferment Loan received from Government of Andhra Pradesh. Repayment commences from January 31, 2014 based on the deferment availed in the corresponding year.

g. No Default in repayment of any loan or interest thereon.

a. Deposits from Dealers / Stockiest represents amounts collected from Dealers / Stockiest / Agents as collateral at the time of granting the dealership to sell the products of the Company which is repayable on cancellation of the said dealership. These deposits attract interest @ 6% p.a.

b. Public Deposits aggregating to Rs 2,713.23 lakhs (Previous year Rs 1,907 lakhs) is repayable within one year and Rs 173.80 lakhs (Previous Year Rs 187.65 lakhs) is repayable within two years.

Cash credit Loans from Banks viz. Axis Bank Ltd, IDBI Bank Ltd and State Bank of Hyderabad are secured by pari passu first charge on current assets of the Company excluding receivables of Energy Division (both present & future) and second charge on fixed assets of the company and are guaranteed by four promoter directors in their personal capacity. The cash credit is repayable on demand and carries interest @ 13% to 14.5% p.a.

Based on the information available with the Company, amount of dues to Micro, Small and Medium Enterprises outstanding for more than 45 days as at 31st March 2012 is Rs. Nil (Previous Year: Rs. Nil)

Note: Investor Education and Protection Fund will be credited by this amounts as and when due.

Note: As per Andhra Pradesh State Industrial Policy 2005-10, Amounts of incentives from Industries Department receivable for the year amounting to Rs.793.12 lakhs (Previous Year Rs. 411.92 lakhs) is deducted from Taxes on Sales.

Note: As per Andhra Pradesh State Industrial Policy 2005-10, Amounts of incentives from Industries Department receivable for the year amounting to Rs. 388.51 lakhs (Previous Year Rs. 80.69 lakhs) is deducted from the Cost of Power.

The company operates in five segments namely, Cement, Boards, Prefab, Energy and RMC Divisions. Segments are identified and reported as required in AS 17 Segment Accounting Policies:

In addition to the significant accounting policies applicable to the business, the accounting policies in relation to segment accounting are as under:

a) Segment Assets and Liabilities:

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

b) Segment Revenue and Expenses:

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

1.1 Contingent Liabilities Rs- in Lakhs

31-Mar-12 31-Mar-11

Disputed Paid Under Disputed Paid Under Amount Protest Amount Protest

Demand by Sales tax authorities -Interest on HSD Oil

used in Tippers for transportation of lime stone (Note 'a') 4.26 - 4.26 -

Demand by Sales tax authorities-Interest on delayed 16.88 4.00 16.88 4.00

payment (Note 'b')

Demand by Sales tax authorities for the year 1997-98 9.81 4.90 9.81 4.90

- on revised assessment (Note 'c')

Demand by Sales tax authorities for the year 2004-05 14.92 - 14.92 -

- Rate of tax on erection of prefab structures on CST. (Note 'd')

Claim of Input Tax on purchase of Coal not accepted by - - 14.42 -

Sales Tax Authorities , the appeal was decided in Company's favour.

Issues pertaining to F forms non submission, Entry Tax - - 3.12 -

on CST purchases which were decided in company's favour

Demand of Central Excise Department denying benefit of 744.50 - 279.52 -

Cenvat credit on capital goods (Note 'e')

Demand of Central Excise Department denying benefit 100.72 - 83.83 -

of Cenvat credit on capital goods (Note 'f')

Excise department claimed return refund of Excess 29.22 - 29.22 -

Excise duty paid by the Company (Note 'g')

Demand of Central Excise Department denying benefit of 17.77 - 17.77 -

Cenvat credit on capital goods (Note 'h')

Demand of Central Excise Department denying benefit 11.18 - 11.18 -

of Cenvat credit on cement transferred to Kondapalli unit from Martially unit for dispatch in a railway rake (Note 'i')

Return of Refund of Additional duty paid under protest made 18.41 - -

to the Company , claimed by Excise department. (Note 'j')

Miscellaneous Issues pending with Excise department 8.52 - -

Demand of NALA Tax pertaining to Non Agricultural Tax 43.56 - 43.56 -

in Mining Areas by the state government ( Note 'k')

Service Tax on outward transport & Insurance 2.17 - 15.10 -

Demand raised for payment of permit fee by the forest 105.39 - 52.36 -

department for mining and transportation of Lime Stone ( Note 'l')

Counter Guarantees given to Banks / FIs 342.61 - 245.51 -

a. Sales Tax Authorities treated the usage of HSD oil on Hired tippers on cost recovery basis for transport of Lime Stone From Mines to Factory, on the presumption that it is a sale. The company filed an appeal before the Sales Tax Appellate Tribunal. The matter is pending before STAT.

b. In the year 1999-00, Sales Tax Authorities raised a demand for Rs.16.88 lakhs as penalty on delayed payment. The Company has preferred an Appeal before the Sales Tax Appellate Tribunal. The company has paid an amount of Rs. 4.00 lakhs and obtained a stay from the Commissioner of Commercial Taxes

c. Demand raised by the Sales Tax Authorities on revised assessment for the year 1997-98 for a sum of Rs. 9.81 Lakhs levying tax on regular rate when the turnover was under works contract. Obtained a stay on payment after payment of 50% of Sales Tax demanded. Appeal is pending before STAT.

d. Sales Tax Authorities disputed the rate of tax for interstate supplies of prefab structures in the year 2004-05 and raised a demand for a sum of Rs. 14.92 Lakhs. Company preferred an appeal before STAT and is pending.

e. The Excise Department has raised a demand of Rs.744.50 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Martially and Kondapalli. Company has preferred an appeal before CESTAT and is pending.

f. The Excise Department has raised a demand of Rs.100.72 lakhs disallowing the Cenvat credit on Steel items used in construction of plant structure at both Mattapally and Kondapalli. Company has preferred an appeal before Commissioner.

g. The Excise Department has claimed return of the refund of Rs. 29.22 lakhs paid to the Company on their appeal decided in their favor by the Commissioner (Appeals). The Company preferred an appeal before the Honourable High Court.

h. Excise department has raised a demand of Rs. 17.77 lakhs denying the cenvat credit on usage of Cement, Steel, M.S. Plates, M.S.Flats, M.S.Angles, M.S.Channels M.S.Coils, Steel Tubes, Pipes, beams, Plates/Sheets, Rebars, Conductors in construction of civil structures like Silo, Dump Hopper etc. The matter is contested and pending befoe the Appellate Authority.

i. Excise department has raised a demand of Rs. 11.18 lakhs denying the cenvat credit taken on transfer of cement from Mattapally unit to Kondapalli unit for dispatch by rail. The Company preferred an appeal.

j. The Excise Department has issued a notice to return the refund of Additional Excise duty paid under protest, amounting to Rs. 18.41 lakhs paid to the Company. Company has filed a reply to the notice.

k. The State Government has issued a notice claiming NALA Tax of Rs. 43.56 lakhs regarding Non Agricultural Tax on Mining areas. On dismissal of our appeal by the Joint Collector of Nalgonda, Company filed a writ petition before the Honorable High Court of Andhra Pradesh. High Court has granted an interim stay on the total amount demanded.

l. Forest department demanded payment of permit fee for Lime Stone mining & Transportation @ 10/- per ton. Company filed a writ petition before the Honorable High Court of Andhra Pradesh. High Court has granted an interim stay subject to payment of 1/3rd of the demanded fee.

Actuarial assumptions

a) Mortality table (LIC) 1994-96 (ultimate)

b) Discounting rate - 8.65 %

c) Expected average remaining working lives of employees-13 Years

d) Rate of escalation in salary - 6 %

1.2 As required by Accounting Standards AS 18, the related parties' disclosure issued by the Institute of Chartered Accountants of India is as follows:

a. List of related parties and relationships

i. Enterprises controlled by Key Management Personnel / Relatives of Key Management Personnel

1. NCL Alltek & Seccolor Limited

2. NCL Homes Limited

3. Kakatiya Industries (P) Limited

4. Nagarjuna Cerachem (P) Limited

5. NCL Wintech India Limited

6. Khandaleru Power Company Limited

ii. Key Management Personnel : Mr. K. Ravi, Managing Director

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Mar 31, 2011

1. Related Party Disclosures

a) List of Related Parties & Relationships

i. Enterprises controlled by key management personnel/relatives of key management Personnel

1. NCL Alltek & Seccolor Limited

2. NCL Homes Limited

3. Kakatiya Industries (P) Limited

4. Nagarjuna Cerachem (P) Limited

5. NCL Wintech India Limited.

ii. Key Management personnel Mr. K. Ravi, Managing Director

b) Related Party Transactions for the year ended 31st March 2011.

Key Management Personnel

i) Remuneration to key management personnel Rs. 79.07 lakhs

Remuneration to relatives of key management personnel Rs. 8.96 lakhs

An amount of Rs. 7.42 lakhs (Rs.6.13 lakhs) being 0.25% of the profits earned by the Company calculated in the above manner is provided towards commission payable to non executive directors of the Company.

2. As per Guidance note of The Institute of Chartered Accountants of India MAT for the year is to be recognised on payment, no provision is made for MAT amounting to Rs. 570.17 lakhs (Rs. 397.59 lakhs) on the profit for the current year.

3. Based on the information available with the Company, amount of dues to Micro, Small and Medium Enterprises outstanding for more than 45 days as at 31st March 2011 is Rs. Nil (Rs. Nil).

4. Refund of Adhoc Custom Duty of Rs. 29.47 (Rs. 29.47) lakhs on plant and machinery of Boards Division pursuant to order of CESTAT dated March 24, 2005 is yet to be received.

5. Amounts of incentives from Industries Department (Govt. of Andhra Pradesh) receivable for the year amounting to Rs. 80.69 Lakhs (Rs. 55.62 Lakhs) & Rs.411.92 Lakhs (Rs. 203.08 Lakhs) are deducted from Power and Taxes & Duties respectively. Cumulative total amount of Rs. 783.43 Lakhs (Rs. 258.70 Lakhs) receivable is included in claims receivable.

6. Confirmations of balances from all Debtors, Creditors etc were not received.

7. Employee Retirement benefit plans as per actuarial valuation:

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

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Mar 31, 2010

1. Contingent Liabilities not provided for

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

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

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

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

2. Secured Loans: (1) Term Loans:

Sl. No Facility Nature of Security

A Term Loans from Banks pari passu first charge on fixed assets of the Company & second charge on and Financial Institutions current assets of the Company (both present & future) except receivables of Energy Division.

B Vehicle Loans Hypothecation of respective vehicles



2) Working Capital:

S.No Working Capital Nature of Security

1. SBH, IDBI Bank & Pari passu first charge on current assets of the Company excluding

Axis Bank receivables of Energy Division (both present & future) and second charge on fixed assets of the company.

B. SECONDARY DISCLOSURES:

Revenue from external customers The main customer base of companys products are in India only by location of customers

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

Costs to acquire tangible and intangible PI Refer Sch 6 to Accounts fixed assets by location of assets.

Other disclosures:

Basis of pricing Inter segment transfers and Inter division transfers of goods are at market price. any change therein bypes of products and services in each (1) OPC/PPC/53 S Cement business segments (2) Plain and laminated Cement Bonded Particle Boards

(3) Prefab Shelters.

(4) Generation of Hydel power.

Segment accounting policies:

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

a) Segment assets and liabilities:

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

b) Segment revenue and expenses:

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

4. Related Party Disclosures

a) List of Related Parties & Relationships

i. Enterprises controlled by key management personnel/relatives of key management Personnel

1. NCLAIItek&Seccolor Limited

2. NCL Homes Limited

3. Kakatiya Industries (P) Limited

4. Nagarjuna Cerachem (P) Limited

5. NCL Wintech India Limited.

ii. Key Management personnel

Mr. K. Ravi, Managing Director

b) Related Party Transactions for the year ended 31sl March 2010. Key Management Personnel

5. As per Guidance note of The Institute of Chartered Accountants of India, MAT for the year is to be recognised on payment, no provision is made for MAT amounting to Rs. 397.59 lakhs on the profit for the current year.

6. Based on the information available with the Company, amount of dues to Micro, Small and Medium Enterprises outstand- ing for more than 45 days as at 31s1 March 2010 is Rs. Nil.

7. Refund of Adhoc Custom Duty of Rs. 29.47 lakhs on plant and machinery of Boards Division pursuant to order of CESTAT dated March 24,2005 is yet to be received.

8. Out of 33,33,400 Share Warrants issued in the year 2007-08 and convertible on or before 16.09.2009 into Equity Shares of Rs 10 each fully paid up, during the year 11,17,652 Share warrants were converted and allotted to promoters / promoter group for which full value of Rs. 45 per share was received, thereby completing the conversion of all the outstanding Share Warrants.

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

10. Confirmations of balances from all Debtors, Creditors etc were not received.

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

11. Previous year numbers are shown in parenthesis.