BOARD OF DIRECTORS - bseindia.com · Sri Y D MURTHY CANARA BANK ... Meeting of the members of NCC...

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BOARD OF DIRECTORS REGISTERED OFFICE

41, NAGARJUNA HILLS Sri A G K RAJU PUNJAGUTTA Director HYDERABAD-500 082

Sri A S R RAJU Director BANKERS Sri Y D MURTHY CANARA BANK Director SYNDICATE BANK

Sri M PEDDI RAJU Director AUDITORS

M/s. M BHASKARA RAO &CO CHARTERED ACCOUNTANTS 5-D FIFTH FLOOR “KAUTILYA” 6-3-652,SOMAJIGUDA HYDERABAD-500082

SEVENTEENTH ANNUAL GENERAL MEETING ON WEDNESDAY DAY, THE 28-09-2011 AT 10.30 A.M AT SRI SAGI RAMAKRISHNAM RAJU COMMUNITY HALL, MADHURANAGAR,

HYDERABAD-500 038

NOTE: NO GIFTS WILL BE DISTRIBUTED AT THE AGM

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NOTICE is hereby given that the 17th Annual General Meeting of the members of NCC FINANCE LIMITED will be held on Wednesday, the 28th day of September, 2011, at 10.30 A.M at Sri Sagi Ramakrishnam Raju Community Hall, Madhura Nagar, Hyderabad – 500038, to transact the following items of business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2011, the Profit & Loss Account for the year ended on that date together with the Reports of the Directors and the Auditors thereon.

2. To appoint a Director in place of Sri A G K Raju who retires by rotation and being eligible offers himself for reappointment.

3. To consider, and if thought fit, to pass with or without modifications, the following resolution as an Ordinary Resolution:

RESOLVED THAT M/s. M. Bhaskara Rao & Co., Chartered Accountants (Registration No.000459S) be and are hereby re-appointed as Auditors of the Company to hold office from the conclusion of the 17th Annual General Meeting until the conclusion of the next Annual General Meeting at such remuneration as may be determined by the Board of Directors of the Company.

By Order of the BoardFor NCC Finance Limited

Place : HYDERABAD A G K RAJUDate: 26-05-2011 DIRECTOR

NOTES:1. A member entitled to attend and vote is entitled

to appoint a proxy to attend and vote instead of himself and a proxy need not be a member. The instrument appointing proxy, in order to be effective, should reach the registered office of the company at least 48 hours before the time of the meeting.

2. The Register of Members and the Share Transfer Books of the Company will be closed from 22nd September, 2011 to 28th September, 2011 (both days inclusive).

3. Members are requested to bring their copies of Annual Report to the Annual General Meeting.

4. Members desiring to seek any information on the annual accounts are requested to write to the Company at the early date to enable compilation of the required information.

5. All communication relating to shares are to be addressed to M/s.Sathguru Management Consultants Pvt. Ltd., Registrars and Share Transfer Agents at Plot No.15, Hindi Nagar, Punjagutta, Hyderabad - 500 034 quoting your Client I.D together with DP I.D / Folio No.

6. Re-appointment of Sri A G K Raju as Director At the ensuing Annual General Meeting,

Sri A G K Raju, Director retires by rotation and being eligible offers himself for re-appointment. The relevant information as required under clause 49 of the Listing Agreement concerning Corporate Governance code in respect of appointment / re-appointment of Directors is given below for the information of members.

Sri A. G. K. Raju is one of the Chief Promoters of the Company and has been associated with the Company since inception as Director. He holds a Masters Degree in Business Administration and has over 24 years rich experience in the construction industry along with finance & manufacturing and allied areas. He is also a Executive Director of NCC Limited, Director on the Board’s of NCC Infrastructure Holdings Ltd and NCC Urban Infrastructure Ltd.

By Order of the Board For NCC Finance LimitedPlace : HYDERABAD A G K RAJUDate : 26-05-2011 DIRECTOR

NOTICE

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DIRECTORS’ REPORT

ToThe Members,NCC Finance Limited

Your Directors present the 17th Annual Report together with Audited Statement of Accounts of the Company for the year ended 31st March 2011.

FINANCIAL RESULTS (` in Lakhs)

Particulars 2010-2011 2009-2010

Gross Income 1.72 12.64

Profit / Loss before interest, depreciation and tax (12.73) (11.85)

Interest 0.01 0.01

Profit / Loss before depreciation & tax (12.74) (11.86)

Depreciation - -

Profit/Loss before Tax (12.74) (11.86)

Provision for Tax - 3.21

Profit / Loss After Tax (12.74) (15.07)

Balance of loss b/f from previous year (585.19) (570.12)

Accumulated Loss (597.93) (585.19)

DIVIDEND:In view of the loss suffered by the company, your Board regrets for its inability to recommend dividend for the year ended 31-3-2011.

REVIEW OF OPERATIONS:During the year your Company has earned a gross income of ` 1.72 lakhs (previous year ` 12.64 lacs) which has resulted in net loss of ` 12.74 lakhs. During the year under review, your Company has recovered Bad Debts amounting to ̀ 0.50 lakhs written off in the earlier year(s). The company is exploring various alternatives available for restructuring its business.

PUBLIC DEPOSITS:During the year the Company has not accepted any Deposits.

FUTURE OUTLOOK: The Company will continue its efforts in the recovery of the outstanding amounts from parties who have defaulted earlier.

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DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, your Director’s confirm as under.

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors hereby state that

a) in the preparation of the annual accounts for the year ended March 31, 2011, the applicable accounting standards have been followed along with proper explanations relating to material departures;

b) we have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the loss suffered by the company for the year ended on that date;

c) we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;and

d) the accounts for the year ended March 31, 2011 have been prepared on a going concern basis.

DISCLOSURES:

Personnel

Information as required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees’) Rules, 1975 as amended are Nil.

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

The Company did not have any activities either relating to Conservation of Energy or Technology Absorption and therefore the provisions relating to Conservation of Energy or Technology Absorption are not applicable. The Company did not have any foreign exchange earnings and foreign exchange outgo during the year under review.

DIRECTORS

Sri A G K Raju, Director retires by rotation and being eligible offers himself for re-appointment.

AUDITORS:

The Auditors of your Company, M/s M Bhaskara Rao & Co. retire at the forthcoming Annual General Meeting and being eligible offer themselves for reappointment as auditors of the Company to hold office up to the conclusion of the next Annual General Meeting.

COMMENTS OF AUDITORS:

The observations/comments made by the auditors in their report attached have been suitably clarified/explained in terms of Section 217 (3) of the Companies Act,1956, the Directors state as follows:

1) For Item No.2 (e) of the Audit Report read with Note.2 of the Schedule IX(B):

In order to overcome the current situation and put the company back on successful track, the company is exploring alternative business opportunities. The Company has also taken necessary steps to recover the dues outstanding from defaulting clients and during the year the company has recovered bad debts amounting to `.0.50 lakhs which were written off in earlier years.

2) Item No.7 of the annexure to the Audit Report.

Although the Company has no formal internal audit system, there are necessary internal control systems which are sufficient to take care of the present size of operations of the company.

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CORPORATE GOVERNANCE:

In pursuance of clause 49 of the Listing Agreement entered into with the Stock Exchanges, a separate section on Corporate Governance has been incorporated in the annual report for the information of the shareholders. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under said clause also forms part of the Annual Report.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their sincere appreciation and gratitude to the Company’s Bankers and Shareholders for their continued support. Your Directors also place on record their appreciation for the dedicated services rendered by the employees of the Company.

For and on behalf of the Board

Place : Hyderabad A G K RAJU A S R RAJUDate : 26-05-2011 DIRECTOR DIRECTOR

MANAGEMENT DISCUSSION AND ANALYSIS

A. INDUSTRIAL STRUCTURE AND DEVELOPMENT

Economy

India’s GDP growth for FY 2010-11 is at 8.5%. The growth, which is fastest in three years, has come on the back of a sharp recovery in farm output, but high inflation remains an area of concern.

B. OPPORTUNITIES AND STRENGTHS

In view of the cut throat competition in the NBFC Sector and due to lack of level playing field, your company has excited from the sector and has surrended its NBFC certificate to Reserve Bank of India. We have consolidated our operations and repayed the entire public deposits and loans from banks. At present NCC Finance Ltd is a debt free company. The company is exploring various alternatives available for restructuring the business.

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REPORT ON CORPORATE GOVERNANCE

In compliance with Clause 49 of the Listing Agreement entered into with the Stock Exchanges, the Company hereby submits the report on the matters as mentioned in the said clause.

1. PHILOSOPHY OF THE COMPANY ON THE CODE OF GOVERNANCE:

The Company aims at achieving transparency, accountability and equity in its operations, and in all interactions with the stakeholders, including the shareholders, employees, government and other constituents while fulfilling the role of a responsible corporate representative committed to good corporate practices. The Company is committed to achieve the good standards of Corporate Governance.

2. BOARD OF DIRECTORS:

As on 31st March, 2011 the Board of the Company consists of Four Directors. The details of the Composition and Category of Directors, number of Board Meetings held during the year, attendance of the Directors at the Board Meetings and other Directorships held by the Directors are as follows:

Name Category Designation

No. of Board

Meetings held

during the last

financial Year

No. of Board

Meetings Attended

No. of Memberships in Boards of other Public

CompaniesAttendance

of each Director at last AGM

Board # Committee

Sri A G K Raju

Promoter/Non Executive Director

Director 4 4 3 5 No

Sri A S R Raju

Promoter/ Non Executive Director

Director 4 2 5 NIL No

Sri Y D Murthy

Non Executive and Independent Director

Director 4 4 5 1 Yes

Sri M Peddi Raju

Non Executive and Independent Director

Director 4 3 NIL NIL Yes

# Membership in Audit and Investor/Shareholder Grievance Committee of Public Limited Companies (including NCC Finance Ltd) only.

The Meetings of the Board of Directors of the Company were held on the following dates:12th May,2010, 31st July,2010, 8th November, 2010 and 9th February, 2011.

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Information Supplied to the Board

As a policy measure, all the major decisions, which involve new investments and capital expenditure, in addition to the matters which statutorily require Board approval, are put up for consideration of the Board. The relevant information is regularly provided to the Board as part of the agenda papers well in advance of the Board meetings or is tabled at the Board Meeting. The information provided to the Board include

• Annualoperatingplans&budgetsandanyupdates.

• Capitalbudgetsandanyupdates.

• Quarterly,halfyearlyandannualresultsoftheCompany.

• MinutesofthemeetingsoftheAuditCommitteeandotherCommitteesoftheBoard.

• Showcause,demand,prosecutionnoticesandpenaltynoticeswhicharemateriallyimportant.

• Fatalorseriousaccidents,dangerousoccurrences,anymaterialeffluentorpollutionproblems.

• Anymaterialdefaultinfinancialobligationstoandbythecompany,orsubstantialnon-paymentbyclients.

• Non-complianceofany regulatory, statutoryor listing requirementandshareholdersservicesuchasnon-payment of dividend, delay in share transfer etc.,

The Board also periodically reviews compliance reports of all laws applicable to the company, prepared by the Company as well as steps taken by the company to rectify instances of non-compliances. Code of Conduct

The Board of Directors of the company has laid a Code of Conduct for Directors and Senior Management Personnel. The Code of Conduct is posted on the Company’s web-site www.nccsoftech.com. All Directors and designated personnel in the senior management cadre of the Company have affirmed compliance with the code for the year under review. The declaration to this effect which is signed by Sri A G K Raju, Director is annexed to this report.

3. AUDIT COMMITTEE OF THE BOARD:

In terms of clause 49 of the Listing Agreement, the Audit Committee comprises of three Directors viz., Sri Y.D.Murthy (Chairman of the Committee), Sri M Peddi Raju and Sri A.G.K.Raju. The Committee met four times during the financial year on the following dates,

12th May,2010, 31st July,2010, 8th November, 2010 and 9th February,2011.

The terms of reference as stipulated by the Board to the Audit Committee include

a. Oversight of the Company’s financial reporting process and the disclosure of its financial information.

b. Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment for any other services.

c. Reviewing with management the annual financial statements before submission to the Board, focusing primarily on

(i) Any changes in accounting policies and practices.

(ii) Major accounting entries based on exercise on judgment by management.

(iii) Qualificationsindraftauditreport.

(iv) Significant adjustments arising out of audit.

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(v) The going concern assumption.

(vi) Compliance with accounting standards.

(vii) Compliance with Stock Exchange and legal requirements concerning financial statements.

(viii) Disclosure of any related party transactions.

d. Reviewing with the management, external and internal auditors, and the adequacy of internal control systems.

e. Reviewing with the management, the quarterly financial statements before submission to the Board for approval.

f. Discussion with internal auditors any significant findings and follow up there on.

g. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or failure of internal control systems of a material nature and reporting the matter to the Board.

h. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

i. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

4. REMUNERATION COMMITTEE:

The Board of the Company has constituted a Remuneration Committee of the Board, comprising of Three Directors viz., Sri A G K Raju (Chairman of the Committee), Sri M Peddi Raju and Sri Y D Murthy. The Committee has been constituted to recommend/review the remuneration package of the Managing/Whole Time Directors. The remuneration policy is directed towards rewarding performance, based on review of achievements on a periodical basis. The remuneration policy is to be in consonance with the existing Industry Practice.

No Remuneration was paid during the financial year 2010-2011 to any director.

The Company pays sitting fees to the Non-Executive Directors at the rate of Rs.500/- per Board Meeting. The details of total amount of Sitting Fees paid to each of the Non-Executive Directors for the year ended 31st March, 2011 are as follows:

Sri Y D Murthy ` 2000/-

Sri M Peddi Raju ` 1500/-

5. SHAREHOLDERS’/INVESTORS’ GRIEVANCE COMMITTEE :

The Board of the Company Re-constituted a Shareholders’/Investors’ Grievance Committee comprising of Sri A G K Raju (Chairman of the Committee), and Sri A S R Raju and Sri M Peddi Raju as its members.

The Committee, inter alia, approves the issue of duplicate certificates and oversees and reviews all matters connected with servicing of investors. The Committee oversees the performance of the Registrar and Transfer Agents, and recommends measures for overall improvement in the quality of investor services.

The Company has not received complaints during the year. The Company has received 6 requests for transfers and 38 requests for dematerialisation during the year. No requests received for dematerialisation and no requests received for transfer were pending for approval as on 31st March, 2011.

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6. GENERAL BODY MEETINGS :

YEAR AGM TIME PLACE

2007-2008 29-09-2008 10.30 A.M Sri Sagi Ramakrishnam Raju Community Hall, Madhura Nagar, Hyderabad-500038



Postal Ballot : During the financial year the company has not passed any resolutions through postal ballot.

Details of Special Resolutions passed in Annual General Meetings held during past three years

AGM dt.29-09-2008 NIL

AGM dt.29-09-2009 NIL

AGM dt.28-09-2010 NIL

7. DISCLOSURES:

a. During the year no transactions have been entered into with related parties.

b. There have not been any occasions of non-compliance by the Company and no penalties or strictures imposed on the Company by the Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.

8. MEANS OF COMMUNICATION :

Quarterly results The quarterly results of the Company are generally published in newspapers {(Business Standard and Andhra

Prabha (regional language)} along with the official press releases.

DateofpublicationofQuarterlyResults:

1stQuarterended30thJune,2010 :02-08-2010

2ndQuarterended30thSeptember,2010 :09-11-2010

3rdQuarterended31stDecember,2010 :10-02-2011

4thQuarterended31stMarch,2011 :27-05-2011

The Management Discussion and Analysis Report is a part of the Annual Report.

9. General Shareholders’ Information 17th Annual General Meeting : Date : 28th September, 2011 Time : 10.30 A.M Venue : Sri Sagi Ramakrishnam Raju Community Hall Madhuranagar, Hyderabad-500 038.

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Financial Calendar : The Tentative Calendar of events for the financial year

2011-2012 is given below:

ResultsforQuarterendingJune30,2011-August,2011

ResultsforQuarterendingSept30,2011-November,2011

ResultsforQuarterendingDec31,2011-February,2012

Results for year ending March, 31, 2012 - May, 2012

Book closure date : 22nd September, 2011 to 28th September, 2011 (both days inclusive)

Listing of Equity Shares : The Stock Exchange Mumbai

Stock Code : BSE Code : 531452

Demat ISIN Numbers in : ISIN NO : INE768B01012

NSDL & CDSL For Equity shares

Market price Data: The monthly high and low stock quotations during the last financial year and performance in comparison to BSE is given below:

Month & YearBSE SENSEX

High Low No.of Shares Traded High Low

Apr-10 4.20 2.53 139419 18047.86 17276.86

May-10 4.45 3.29 76529 17536.86 15960.15

Jun-10 4.00 2.90 114443 17919.62 16318.39

July-10 4.54 3.50 96707 18237.56 17395.58

Aug-10 4.55 3.49 60521 18475.27 17819.99

Sep-10 4.56 3.66 114820 20267.98 18027.12

Oct-10 4.15 3.43 47418 20854.55 19768.96

Nov-10 3.99 3.16 30234 21108.64 18954.82

Dec-10 3.10 2.05 27704 20552.03 19074.57

Jan-11 2.67 2.23 17190 20664.80 18038.48

Feb-11 3.00 2.12 20941 18690.97 17295.62

Mar-11 3.60 3.00 6193 19575.16 17792.17

Share Transfer System : The share transfers which were received in physical form were processed and the share certificates returned within a period of 15 days from the date of receipt, subject to the documents being found valid and complete in all respects. The company has appointed M/s. Sathguru Management and Consultants (Pvt.) Ltd. w.e.f. 1st April, 2003 as the Registrar and Transfer Agents for dealing with all the activities connected with both physical and demat segments pertaining to the share transactions of the company.

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Dematerialisation of Shares : Over 75.26 % of the Company’s shares have been dematerialised upto 31st March,2011. Trading in Equity Shares of the Company is permitted only in dematerialised form w.e.f. 25th September, 2000 as per notification issued by the Securities and Exchange Board of India (SEBI).

Distribution of Shareholding :as on 31st March, 2011

As on 31.03.2011, the distribution of Company’s Shareholding was as follows :

Category (No of shares) Shareholders Shares

From To Number % of Total Number % of Total

1 5,000 4182 77.25 902807 14.98

5,001 10,000 540 9.97 478756 7.95

10,001 20,000 270 4.99 424784 7.05

20,001 30,000 167 3.09 426473 7.08

30,001 40,000 55 1.02 202022 3.35

40,001 50,000 60 1.11 291465 4.84

50001 1,00,000 77 1.42 565419 9.38

1,00,001 And above 62 1.15 2733964 45.37

Total 5413 100.00 6025690 100.00

Investor’s correspondence

Physical/Electronic mode M/s. Sathguru Management Consultants Pvt. Ltd., Plot No 15, Hindi Nagar, Punjagutta, Hyderabad – 500 034. Ph. No’s 040- 30160333, Fax: 040-40040554 E-Mail: [email protected]

Investor’s General Correspondence Secretarial Department 41 Nagarjuna Hills, Hyderabad – 500 082 Ph.No. 040 – 23351753, Fax No.040 – 23350214 E-Mail: [email protected]

Declaration of Compliance with the Code of Conduct

I hereby confirm that the company has obtained from all the members of the Board affirmation that they have complied with the Code of Conduct Board members in respect of the financial year ended 31st March, 2011

For NCC Finance Limited

A G K RajuDirector

Place: HyderabadDate:26th May,2011

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AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

To The Members of NCC FINANCE LIMITED

We have examined the compliance of conditions of Corporate Governance by NCC Finance Limited, for the year ended on March 31, 2011, as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has been limited to a review of the procedures and implementations thereof adopted by the Company for ensuring compliance with the conditions of Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representation made by the Directors and the management, we certify that the Company has complied with the conditions of the Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

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

For M. Bhaskara Rao & Co.Chartered Accountants(Regn.No.000459S)

V K MuralidharPartnerM.No.201570 Place: HyderabadDate: 26-05-2011

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To The Members of Ncc Finance LimitedWe have audited the attached Balance Sheet of NCC Finance Limited as at March 31, 2011 and also the Profit and Loss account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003, as amended, issued by the Central Government of India, in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956 (the ‘Act’), we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books.

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting

standards referred to in sub-section (3C) of section 211 of the Act.

(e) We draw attention to the Note No.2 in the Notes on accounts relating to preparation of financial statements on a going concern basis. The company has discontinued its finance business. The accumulated losses as at 31st March, 2011 have almost eroded the net worth of the company. These factors along with the other matters setforth in Note No.2 raise substantial doubt that the company will be able to continue as a going concern.

(e) In our opinion and based on the information and explanations given to us and written representations received from the Directors as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

(f ) Subject to Para (e) above, in our opinion, and to the best of our information and according to the explanations given to us, the said accounts read together with notes on accounts and the significant accounting policies, give the information required by the act manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of Balance Sheet, of the state of affairs of the company as at March 31, 2011.

(ii) In the case of the Profit and Loss Account, of the loss for the year ended on that date, and

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

for M.BHASKARA RAO & CO., CHARTERED ACCOUNTANTSFIRM REGISTRATION NO: 000459S

V.K.MURALIDHAR Place: Hyderabad PARTNERDate: 26.05.2011 Membership No. 201570

AUDITOR’S REPORT

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STATEMENT REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE

1. The Company does not have any fixed assets. Hence the provisions of Clause 4(i) (a), (b) and (c) of the Companies (Auditor's Report) Order, 2003 are not applicable.

2. The Company had no inventory during the year. Hence the provisions of clause 4(ii)(a), (b) and (c) of the Companies (Auditor’s Report) Order, 2003 as amended are not applicable to the company.

3. According to the information and explanations given to us, the company has neither granted nor taken any loans, secured or unsecured from / to Companies firms are other parties covered in the Register maintained under section 301 of the Companies Act, 1956. Hence, the provisions of Clause 4(iii) (b), (c), (d), (e), (f ) & (g) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets, and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct any major weaknesses in internal controls.

5. In respect of contracts or arrangements entered in the register maintained in persuance of Section 301 of the Companies Act, 1956 to the best of our knowledge and belief and according to the information and explanations given to us.

(a) Ther are no contracts or arrangements referred to Insection 301 of the Companies Act, 1956 that need to be entered in the register maintained under the section.

(b) In our opinion, there are no transactions exceeding the value of rupees five lakhs in respect of any party during the year.

6. According to the information and explanations given to us, the company has not accepted any deposits from the public.

7. There is no internal audit system in vogue for the period covered by the audit.

8. In our opinion and according to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act for any of the products / activities of company.

9. (a) The company is generally regular in depositing undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employee’s State Insurance, Income Tax, Sales Tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March 2011 for a period of more than six month from the date they became payable.

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues on account of Income Tax, Sales Tax, Wealth Tax, Service tax, Customs duty, Excise duty, Cess and other statutory dues as at 31st March 2011 which have not been deposited on account of any dispute.

10. The company has accumulated losses eroding almost of its networth as on 31st March 2011 and it has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

11. The company has not taken any loans from financial institutions or banks.

12. In our opinion and according to the information and explanations given to us, company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the company is not a Chit Fund or a Nidhi or Mutual Benefit Fund / Society. Therefore, the

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provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 as amended are not applicable to the company.

14. In our opinion and according to the information and explanations given to us, the company does not deal or trade in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 as amended are not applicable to the company.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks and financial institutions.

16. To the best of our knowledge and belief and according to the information and explanations given to us, the company has not availed any term loans during the year. Further, there are no term loans outstanding at the beginning of the year. Therefore, provisions of clause 4(xv) of the Companies (Auditor's Report) Order, 2003 as amended are not applicable to the company.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that the company has not utilized short term funds towards acquisition of fixed assets.

18. According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act. Therefore, the provisions of clause 4(xviii) of the Companies (Auditor's Report) Order, 2003 as amended, are not applicable to the company.

19. According to the information and explanations given to us, the company has not issued any debentures. Therefore, the provisions of Clause 4(xix) of the Companies (Auditor’s Report) Order, 2003, as amended, are not applicable to the Company.

20. The Company has not raised any money by public issue during the year. Therefore, the provisions of clause 4(xx) of the Companies (Auditor's Report) Order, 2003 as amended are not applicable to the company.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

for M.BHASKARA RAO & CO., CHARTERED ACCOUNTANTS

FIRM REGISTRATION NO: 000459S

V.K.MURALIDHAR PARTNER

Membership No. 201570Place: Hyderabad Date: 26.05.2011

17

BALANCE SHEET AS AT 31ST MARCH, 2011

PARTICULARS ScheduleAs at 31.03.2011 As at 31.03.2010

(`) (`) (`) (`)

SOURCES OF FUNDS

SHARE HOLDERS` FUNDS

Share Capital I 60240320 60240320

Reserves & Surplus II 1500000 1500000

61740320 61740320

TOTAL 61740320 61740320

APPLICATION OF FUNDS

INVESTMENTS III 895290 1553010

CURRENT ASSETS, LOANS & ADVANCES IV

Sundry Debtors - 590298

Cash & Bank Balances 1680169 1723536

Other Current Assets 67602 23722

Loans & Advances 77723 103833

1825494 2441389

Less: Current Liabilities & Provisions V 774207 773732

Net Current Assets 1051287 1667657

PROFIT AND LOSS ACCOUNT 59793743 58519653

TOTAL 61740320 61740320

Accounting Policies and Notes on Accounts IX

Schedules referred to above form an integral part of the accounts.

In terms of our report attached For and on behalf of the Board For M.BHASKARA RAO & Co., CHARTERED ACCOUNTANTS V.K.Muralidhar A G K Raju A S R Raju Partner Director Director Membership No: 201570 Place: Hyderabad Date:26.05.2011

18

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2011

PARTICULARS ScheduleYear ended 31.03.2011

(`)

Year ended 31.03.2010

(`)

A. INCOME:

Other Income VI 172325 1263711

TOTAL (A) 172325 1263711

B. EXPENDITURE :

Operating and Administration Expenses VII 1445080 2448429

Finance Cost VIII 1335 876

TOTAL (B) 1446415 2449305

C. PROFIT/ (LOSS) BEFORE TAX: (1274090) (1185594)

Provision for Taxes:

- Currrent Tax - -

- Deferred Tax Liability/(Asset) - 321097

Profit/(Loss) after Tax (1274090) (1506691)

Loss brought forward from previous year (58519653) (57012962)

Balance Carried to Balance Sheet (59793743) (58519653)

Earnings per share: Basic & Diluted (0.21) (0.25)

(Equity Share of ` 10/- each)

Accounting Policies and Notes on Accounts IX

Schedules referred to above form an integral part of the accounts

In terms of our report attached For and on behalf of the Board For M.BHASKARA RAO &Co., CHARTERED ACCOUNTANTS

V.K.Muralidhar A G K Raju A S R Raju Partner Director Director Membership No: 201570 Place : Hyderabad Date : 26.05.2011

19

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2011

PARTICULARS As at 31.03.2011(`)

As at 31.03.2010(`)

A CASH FLOW FROM OPERATING ACTIVITIES

Net profit/(Loss) Before Tax And Extraordinary items (1274090) (1185594)

Adjustments :

Interest/Dividend Received (122325) (103711)

Interest paid 865 -

Provision for Doubtful Debts 590297 447253

Provision for Investments 657720 1632754

Loss on Assets sold/ discarded - 99347

Operating Profit Before Working Capital Changes (147533) 890049

(Increase)/Decrease in Trade & Other receivables - 10186

Increase /(Decrease) in Trade payables 475 -

Cash Generated From Operations (147058) 900235

Direct Taxes paid

Taxes paid ( net of provision) 26110 (6326)

Prior Year Taxation - -

Net Cash Flow From Operating Activities (A) (120948) 893909

B CASH FLOW FROM INVESTING ACTIVITIES

Sale of Fixed Assets - 2700

Interest/Dividend Received 78446 88364

investments made during the year - (3185764)

Net Cash flow from Investing Activities (B) 78446 (3094700)

C CASH FLOW FROM FINANCING ACTIVITIES

Interest Paid (865) -

Net Cash Flow from Financing Activities (C) (865) -

Net Increase/(Decrease)In cash and cash Equivalents (A+B+C) (43367) (2200791)

Cash & Cash Equivalents As at 1st April ,2010 (Opening Balance) 1723536 3924327

Cash & Cash Equivalents As at 31st March, 2011 (Closing Balance) 1680169 1723536

Interms of our report attached For and on behalf of the Board

For M. BHASKARA RAO &CO., CHARTERED ACCOUNTANTS V.K.Muralidhar Partner A G K RAJU A S R RAJUMembership No: 201570 Director Director

Place : Hyderabad Date : 26.05.2011

20

SCHEDULES FORMING PART OF THE BALANCE SHEET

SCHEDULE I: SHARE CAPITAL


As at 31.03.2010(`)

AUTHORISED :

7000000 Equity Shares of `10/-each 70000000 70000000

ISSUED AND SUBSCRIBED:

6025690 Equity shares of `10/- each 60256900 60256900

Less: Calls-in-Arrears 16580 16580

TOTAL 60240320 60240320

SCHEDULE II: RESERVES AND SURPLUS


As at 31.03.2010(`)

SECURITIES PREMIUM ACCOUNT:(As per last Balance Sheet) 1500000 1500000

TOTAL 1500000 1500000

SCHEDULE III: INVESTMENTS

PARTICULARSFace Value As at 31.03.2011 As at 31.03.2010

(`) Nos (`) Nos (`)

LONGTERMIN EQUITY SHARES

A) QUOTED - FULLY PAID UP

NAME OF THE COMPANY

Somkan Marine Ltd 10/- 2000 46750 2000 46750

Ncc Bluewater Products Ltd 10/- 40900 314210 40900 314210

Akai Impex Ltd 10/- 1000 60000 1000 60000

Stieful und Schuh (I) Ltd. 10/- 500 5000 500 5,000

Lloyds Finance Ltd 10/- 10 100 10 100

K L G Systels Ltd 10/- 11600 2987054 11600 2987054

Pennar Industries Ltd 5/- 8000 198710 8000 198710

3611824 3611824

Less: Provision for Diminution in value 2716534 2058814

TOTAL 895290 1553010

AggregateMarketValueofQuotedInvestments 1055380 1553010

21

SCHEDULES FORMING PART OF THE BALANCE SHEET

SCHEDULE IV: CURRENT ASSETS, LOANS AND ADVANCES

PARTICULARSAs at 31.03.2011 As at 31.03.2010

(`) (`) (`) (`)

A) CURRENT ASSETS Interest Accrued 67602 23722

Sundry Debtors (Unsecured)

More than 6 months

Considered Good - 590298

Considered Doubtful 1854011 1263713

1854011 1854011

Less: Provision for Doubtful Debts 1854011 - 1263713 590298

Cash and Bank Balances

a) Cash on hand 16160 5000

b) Balances with Scheduled Banks

- in Current Accounts 64009 218536

- in Deposit Accounts 1600000 1680169 1500000 1723536

B) LOANS & ADVANCES

(Unsecured and considered good)

Advances recoverable in cash or in kind

or for value to be received

Deposits with others 5164 5164

Prepaid Expenses 5000 5000

Advance tax / Tax deducted at source 67559 77723 93669 103833

TOTAL: 1825494 2441389

SCHEDULE V: CURRENT LIABILITIES & PROVISIONS

PARTICULARSAs at 31.03.2011 As at 31.03.2010

(`) (`) (`) (`)

CURRENT LIABILITIES

Sundry Creditors

1) Micro Small and Medium Enterprises - -

2) Others 743788 743788

Other Liabilities 30419 29944

774207 773732

TOTAL 774207 773732

22

SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT

SCHEDULE VI: OTHER INCOME

PARTICULARSYear ended 31.03.2011

(`)


(`)

Interest/Dividend 122325 103711

Bad debts Recovered 50000 1160000

TOTAL 172325 1263711

SCHEDULE VII: OPERATING AND ADMINISTRATION EXPENSES



(`) (`) (`) (`)

Travelling & Conveyance 100 718

Postage & Telegrams 23615 27000

Directors` Sitting Fee 3500 4000

Printing & Stationery 21476 20111

Legal & Consultancy charges 46500 121462

Registration and Renewals 39699 19695

Advertisement Expenses 23730 15768

Auditors Remuneration:

Audit Fee 15000 15000

Out of Pocket Expenses 5000 20000 5000 20000

Miscellaneous Expenses 18443 40321

Loss on assets sold/discarded - 99347

Provision for Doubtful Debts 590297 447253

Provision for diminution in value of Investments 657720 1632754

TOTAL 1445080 2448429

SCHEDULE VIII : FINANCE COST


(`)


(`)

Interest

Others 865 -

Bank charges 470 876

TOTAL 1335 876

23

SCHEDULE FORMING PART OF THE ACCOUNTSSCHEDULE IX: SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

A) Significant Accounting Policies:

i) The accounts are prepared under Historical Cost Convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

ii) Investments:

Long term Investments are valued at cost less provision made to recognize any decline, other than temporary, in the value of such investments.

iii) Taxes on Income:

i) Current tax is determined as the amount of tax payable in respect of taxable income for the year.

ii) Deferred tax is recognised on timing differences, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods.

B. Notes On Accounts

1. The company on analysing it’s investments outstanding as on 31.03.2011 considered the diminution in value as permanent and accordingly made a provision of ` 6,57,720/-.

2. The Company has drawn up its accounts on a going concern basis, not withstanding the erosion of its net worth, accumulated losses and closure of its finance business. The Company is exploring alternative business opportunities.

3. Other income of ` 1,72,325/- includes an amount of `. 50,000/- recovered towards Bad debt, which was written off in earlier years.

4. Transactions with related parties is :

Related Parties:1) Key Management Personnel :

i Sri A. G. K. Raju

ii Sri A. S. R. Raju

2) Enterprises Owned or significantly influenced by Key management personnel:

NCC Limited.

There are no related party transactions relating to the year 2010-11 and also corresponding previous year 2009-10

5. Earnings per share: (Amount in `)

Particulars 2010-11 2009-10

Profit/ (Loss) after tax (12,74,090) (15,06,691)

Weighted average No. of shares 60,25,690 60,25,690

Earnings per share - Basic &Diluted (0.21) (0.25)

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6. Director’s Remuneration: (Amount in `)

Particulars 2010-11 2009-10

Salaries - -

Allowances - -

Sitting Fee 3,500 4,000

7. Balances in respect of some of the Sundry Debtors and Loans and Advances are subject to confirmation.

8. Previous year figures are regrouped, reclassified wherever necessary to conform to current year classification.

9. Paise have been rounded off to the nearest rupee.

SIGNATURES TO SCHEDULES - I TO IX

As per our report attached For and on behalf of the Boardto the Balance Sheet For M.BHASKARA RAO & CO., CHARTERED ACCOUNTANTS V.K.Muralidhar A G K Raju A S R ajuPartner Director DirectorMembership No:201570 Place: Hyderabad,Date : 26.05.2011

25

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

26

NOTES

27

NCC FINANCE LIMITED.41, Nagarjuna Hills, Hyderabad – 500 082.

P R O X Y F O R M17TH Annual General Meeting

Folio No : ………… DP ID No:………………. Client A/c No : ……………..

I/We …………………………of ………..………….. in the district of ………….…….…being a member/members

of the above named Company, hereby appoint Mr./Ms …………………….. in the district of ……………………. as my/our proxy to attend and vote for me/us on my/our behalf at the 17th Annual General Meeting of the Company to be held at Sri Sagi Ramakrishnam Raju Community Hall, Madhuranagar, Hyderabad-500 038. on Wednesday, the 28th September, 2011, at 10.30 a.m and at any adjournment thereof.

Signed this ……………………. Day of September, 2011

Address…………………………………………………………………………………

Signature …………………………………..

Note : The Proxy form duly completed must be deposited at Registered Office of the Company at 41, Nagarjuna Hills, Hyderabad – 500 082, not less than 48 hours before the time fixed for holding the meeting, Proxy need not be a member.

NCC FINANCE LIMITED41, Nagarjuna Hills, Hyderabad – 500 082.

A T T E N D A N C E S L I P

I hereby record my presence at the 17th Annual General Meeting of the Company held on Wednesday, the 28th September, 2011 at 10.30 a.m. at Sri Sagi Ramakrishnam Raju Community Hall, Madhuranagar, Hyderabad-500 038.

………………………………………… …………………………………Full Name of the Shareholder (in block letters) Signature

Folio No / DP ID& Client A/c No ………………. No of shares held ………………

…………………………………………… ………………………………..Full name of the Proxy (in block letters) Signature(To be filled if the Proxy attends instead of the members)

Note : Shareholders attending the meeting in person or by proxy are requested to complete the attendance slip and hand it over at the entrance of the meeting hall.

Affix ` 1/-Revenue

Stamp

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