1.The Directors have pleasure in presenting their 70th Annual Report
 together with the Audited Accounts for the year ended 31st March, 2011.
 
 2.  Financial Results
 
                                                          (Rs. In Lakhs)
 
                                For the year ended     For the year ended
        PARTICULARS         31-03-2011  31-03-2010 31-03-2011  31-03-2010
                                   Stand Alone       Consolidated (GROUP)
 
 Gross Turnover                 36,172      41,175     70,467      68,362
 
 Profit for the year 
 (PBDIT)                         8,224      11,053     15,280      17,298
 
 Less:
 
 a) Interest and Finance 
 charges                         1,394         949      1,565       1,336
 
 b) Depreciation                 1,233       1,057      2,233       2,167
 
 Profit before Tax              5,597       9,047     11,482      13,795
 
 c) Provision for Current Tax    1,118       3,000      1,529       3,166
 
 d) Deferred Tax                 1,361          45      1,380          79
 
 e) Minority share of Profit      -            -       1,725       1,485
  Add:
 
 a) Refund of Income Tax            18          -          18          -
 
 b) MAT Entitlement tax            751          -         751          -
 
 c) Excess Provision of income 
 tax of earlier years credited
 back                               248         -         248          10 
 
 Net Profit:                     4,135      6,002      7,865       9,076 
 
 Add Surplus brought forward
 from earlier year                2,755      2,347      8,597       5,114 
 
 Amount available for
 appropriations                   6,890      8,349     16,462      14,190 
 
 Less Transfer to General
 Reserve                          1,000      4,000      1,000       4,000 
 
 Less Preference Capital 
 Dividend                           240         742        40          74 
 
 Less Interim Dividend- 
 Equity Shares                      967         967     1,396         967 
 
 Less Dividend proposed - 
 Equity Shares                      322         322       322         322 
 
 Tax on Distributed
 Profits - Equity                  214         219       214         219 
 
 Tax on Distributed Profits -
 Preference                          39          12        39          12 
 
 Surplus carried to next year      4,108      2,755    13,251       8,597
 
 Segment wise Sales performance:
 
                         2010-2011                      2009-2010
 PARTICULARS        Sales Value  % to Total   Sales Value
                     in lakhs       Sales      in lakhs      % to Total 
                                                                Sales
 
 Engineering        13,067.64        36.13%    16,594.33        40.30%
 
 Cement             22,375.21        61.86%    24,058.00        58.43%
 
 Power                  52.14         0.14%        47.56         0.12%
 
 Others                677.55         1.87%       475.26         1.15%
 
 Total              36,172.54       100.00%    41,175.15       100.00%
 
 Analysis of financial results:
 
 Profit before Tax has registered a downward trend in the year under
 review as compared to the previous year. The cement industry,
 throughout the country suffered severe setbacks in demand and steep
 fall in selling prices especially in the fi rst half. Though a number
 of reasons could be attributed, some of the more major ones were a
 perceptible fall in pub- lic infrastructure spending in the State of
 Andhra Pradesh caused by political instability, severe strain on
 Government revenues, unusual changes in sea- sonal patterns, market
 reaction to a perception of large scale additions to manufacturing
 capacity etc.  A major part of the year also witnessed scarce avail-
 ability of coal necessitating resort to imported coal of larger
 quantities at higher prices pushing up the cost of production. The
 combination of a multitude of such factors resulted in lower off take,
 a slump in the aver- age realization for the product and fall in profi
 ts.
 
 The companys dependence on diversifi ed activ- ity within, however,
 eased the stress on its overall fi nances in that the Engineering
 Division continued to perform comparatively well under the
 circumstances.  Its operations were at lower levels compared to the
 previous year when it had a one-time high value export order.
 
 Also significantly, during the year 2010-11, the new Cement Unit II at
 Muktyala completed only the com- missioning of its clinker Plant with
 cement production having commenced in the current financial year.
 
 The net cash generation of the company during the year under review was
 relatively better in view of a substantially lower provision for
 income-tax of Rs. 1118 lacs (Rs.3000 lacs) on the basis of Minimum
 Alternate Tax (MAT) resulting from an increased claim of depreciation
 under Income-tax Rules on the capitalization of the new Cement Unit
 upto the clinkerisation stage.
 
 Overall Financial position:
 
 However, following prudent financial management of working capital,
 the companys cash resources have been retained at a healthy level of Rs.
 7146 lacs provid- ing sufficient comfort for on-going and other
 projects in the pipeline. The utilization of working capital limits
 with Banks has also been minimal.
 
 Dividend on Preference Share Capital:
 
 Your Directors recommend a dividend of 12% on the Preference Share
 Capital of the company. The amount of such dividend is Rs. 240.00 lacs
 for the year.
 
 Sub-Division of Equity Shares:
 
 During the year, Equity Shares of Rs. 10 each were sub-divided into ten
 Equity Shares of Rs. 1 each.
 
 Dividend on Equity Shares:
 
 The Board, on a periodical review of the working results of the company
 and assessment of the fi nan- cial position, had declared and paid
 three interim dividends of 25% each during the financial year
 amounting to 75 % (Rs. 0.75 per share) as of date.
 
 Your Directors are now pleased to recommend a final dividend of 25% (Rs.
 0.25 per share) making a total equity dividend of 100% (Rs. 1/-per share)
 for the year.  The total amount of dividend paid on equity capital
 excluding Dividend Distribution Tax thereon will be Rs. 1,289 lacs, which
 is the same as in the previous year.
 
 Reserves:
 
 Your Directors recommend a transfer to General Reserve, of a sum of Rs.
 1000 lacs from out of the Profits available for appropriation for the
 year which will leave Rs. 4,108 lacs in the Surplus Account to be carried
 forward to the next year. The total amount in General Reserve as on
 31st March 2011, after the proposed appropriation, would stand at Rs.
 25,000 lacs.
 
 Credit Rating:
 
 The Credit Rating assigned by CRISIL to the company was revised to A-
 Positive from (A-Stable) for Term loans and Cash Credit facilities and
 continued as P2+ in respect of for Non Fund Based limits.
 
 Fixed Deposits:
 
 The total amount of Fixed Deposits outstanding as on 31st March 2011
 was Rs. 7624.61 lacs as compared to the fi gure of Rs. 6224.91 lacs as on
 31st March 2010.
 
 As on 31st March 2011, Fixed Deposits amounting to Rs. 130.36 lacs had
 matured and remained unclaimed from 229 depositors. As on the date of
 this Report, Fixed Deposits relating to 65 depositors amounting to Rs.
 28.16 lacs have been renewed and Fixed Deposits of Rs. 4.00 lacs of 17
 depositors repaid.
 
 Cement Unit II: Muktyala Cement Project
 
 The expansion of the companys cement production undertaken by way of
 establishment of a Greenfield plant at Muktyala, Krishna District,
 Andhra Pradesh with a capacity of 1.52 million tons was partly com-
 missioned in May 2011. The delay beyond the expected date was mainly
 due to unprecedented unseasonal rains hampering completion of certain 
 portions of civil works and other procedural delays in statutory 
 matters resulting from intermittent and fre- quent State-wide public 
 agitations on certain political issues. The final commissioning, 
 however, coincided with a recovery in cement prices which had 
 witnessed a downward trend in the earlier part of the year.
 
 The new Plant up to the stage of clinkerisation had however, been
 commissioned on 7th March 2011 within the financial year 31.3.2011,
 with a total clinker production of 73,638 MTs of which 28,507 MTs had
 been transferred to the Cement Unit I at Macherla for grinding into
 cement.
 
 The company has now entered into a phase of its becoming a larger
 player in the cement industry with a combined production capacity of
 2.18 million tons and has taken all steps to enlarge its marketing
 operations. Management is also considering various ways and means of
 taking the final product nearer to the consumer in the more rewarding
 markets.  Establishment of grinding units, packing plants, con-
 sidering proposals for forward integration etc are in the process of
 discussion relating to economic and technical viability and are
 expected to be finalized during the course of the current year.
 
 Modernization/Expansion: Engineering Unit
 
 The Unit has completed the modernisation and debot- tlenecking of
 operations comprised in the initial phase of its
 modernization-cum-expansion proposals at a cost of Rs. 1600 lacs funded
 from internal generations.
 
 The second phase of the proposed scheme, namely, the expansion of the
 Foundry estimated to cost about Rs. 6000 lacs and expected to be
 implemented in 2010- 11 has presently been rescheduled to be taken up
 in the second half of the current financial year. This has been
 necessitated due to the fact that following the recovery from the
 global economic slow-down; cus- tomers are in the process of
 consolidating their posi- tion before going in for procurement of
 capital goods to increase their capacities. They are seen to be
 revisiting their requirements for acquisition of capital machinery and
 equipment and enquiries are expected to fl ow in during the current
 year. The rescheduling of this phase of the proposal would conserve
 resources for the present and save considerable interest cost.  The
 statutory approvals in respect of civil works have also witnessed
 delays and are expected to be in place in time for commencement of
 implementation later in the year.
 
 The Banks which had sanctioned term loans for this purpose have been
 requested to cancel the same for the present to avoid incurrence of
 unnecessary com- mitment and other charges. Fresh proposals would be
 submitted at the appropriate time for funding the project.
 
 Diversifi cation: Hotel Project at Hyderabad
 
 Approvals of building plans by the Greater Hyderabad Municipal
 Corporation have been slower than expected due to the requirement of
 simultaneous clearances from multifarious State agencies. Nevertheless,
 the proposal already has on hand NOCs from the Airport Authority of
 India, the Fire Department and the Metro Rail authorities and has been
 placed and discussed at the level of the High Rise Building Committee
 of the Corporation. The final approvals are expected in due course of
 time. Pending this, excavation of land is being completed and
 consultations in respect of other facilities and amenities for a Hotel
 Project have been taken on hand. As reported last year, the con- tract
 for civil works has been awarded and work is being carried on as per
 schedule commensurate with the statutory approvals.
 
 The company has tentatively agreed on preliminary terms for a
 management contract and operation of the Hotel with a leading
 international hotel chain. The brand under consideration has models
 perceived as a business hotel in the upper middle segment with four
 star category standards and is one of the leading franchises on a
 global basis. In India, several proper- ties of such brand are coming
 up in almost all leading cities and the growth phase for this brand
 appears to be impressive. The detailed terms and conditions of the
 agreement are under consideration and discus- sions before a final
 view is taken and agreed upon.
 
 The estimated cost of the Project, excluding land cost, remains at Rs.
 6302 lacs for a 130 room facility for which an in-principle sanction of
 a term loan of Rs. 4500 lacs has already been given by a Bank.
 Finalization of the loan facility is awaiting the sanction by GHMC of
 the plans which is a pre-requisite.
 
 Establishment of a Captive Power Plant:
 
 The proposal of the company to set up a 2x18 MW Power Plant at the site
 of New Cement Unit II at Muktyala for captive use of generated power in
 its cement production facilities has been finalized. The Detailed
 Project Report has been received according to which the Cost of the
 Project has been estimated at Rs. 16400 lacs. Based on this, sanction 
 from a bank has been received for Term Loan of Rs. 11400 lacs.
 
 From a present study of power requirements for the two cement units, it
 is expected that a major portion of the total generation of power will
 be consumed on a captive basis, with the balance to be sold to the
 State Grid or to private consumers through Power Trading companies. The
 generation of power at this proposed facility will ensure continuous
 supply of quality power to the cement units which will maintain the
 quality of the final product in addition to considerable saving in its
 cost of production.
 
 The basic input for the proposed Project, namely coal is to be procured
 under the Coal Linkage System for which necessary applications to the
 relevant authori- ties have been made and approvals awaited.
 
 Corporate Social Responsibility:
 
 Corporate Social Responsibility (CSR) as a form of corporate
 self-regulation to practice an intertwined model of business management
 system which auto- matically integrates ethical standards to safeguard
 the interests of all stakeholders, the public and the sur- rounding
 community, has been in vogue in one form or another in the Company over
 the years. Viewed as a medium to reward the community in which it
 works, management has endeavored to bring in best inter- national
 practices in its day-to-day management of its affairs which in itself
 provides for the fulfi llment of its responsibility in this direction. 
 While addressing a care for its various stake holders, it is also seen 
 as a catalyst to many integrated community service proj- ects which 
 can, to some extent supplement efforts of the Governments. Clean and 
 transparent manage- ment is one of the many ways of practicing corpo- 
 rate social responsibility as it includes public interest, prudent 
 use of common resources such as energy, air, water and other natural 
 elements leading to more efficient use of public funds.
 
 The more visible form of Corporate Social Responsibility (CSR) involves
 responsibilities of a corporate in the following areas:
 
 - Integrated Rural & Urban Community Development programmes with
 communi- ties living in the periphery of its units, includ- ing
 provision of potable water, plantation of trees, renovation of places
 of worship etc.
 
 - Encouraging voluntary involvement of employees to devote time and
 effort to address social issues.
 
 A more detailed report on activities under Corporate Social
 Responsibility is furnished separately in this Annual Report.
 
 Management Discussions and Analysis:
 
 Details of Management discussions and analysis for each segment of the
 companys business are pre- sented separately for ease of access and
 perusal.
 
 Details of Retiring Director seeking re-appointment
 
 Name of 
 Director       Sri. O. Swaminatha Reddy Sri.   Pinnamaneni Koteswara Rao
 
 Date of
 Birth                   25-12-1930                    08-09-1929
 
 Nationality                Indian                       Indian
 
 Date of
 Appointment              14-03-1991                   29-01-1976
 
 Expertise in 
 specific 
 general        Chartered Accountant and Former  
 functional 
 area           Banker                                   Agriculturist
 
 Qualifi cation   B.Com (Hons),ACA                       Agriculturist
 
 List of 
 outside Chair
 manships /      1 M/s. Transport Corporation of 
                   India Ltd,
                                                     1.  Veeraiah Non-co
                                                         nventional 
 Directorships 
 held Ltd,         New Delhi                             Power   
                                                         Projects Ltd.,
 
                 2.  M/s. Surana Ventures Ltd, 
                      Hyderabad
 
                 3.  M/s. Bhagyanagar India Ltd, 
                      Hyderabad
 
                 4.  M/s. K.M. Power Pvt. Ltd,
                       Hyderabad
 
                 5.  M/s. Thembu Power Pvt. Ltd, 
                        Pune
 
                 6.  M/s. E.P.R. Gene Technologies
                      Pvt. Ltd, Hyderabad
 
                 7.  M/s. E.P.R. Pharmaceuticals Pvt.
                     Ltd, Hyderabad
 
                 8.  M/s. E.P.R. Centre for Cancer
                     Research and Biometrics Pvt. Ltd,
                     Hyderabad
 
                 9.  M/s. Sagar Cements Ltd -
                     Hyderabad
 
                10.  M/s. T.C.I. Finance Ltd -
                     Hyderabad
 
                11.  M/s. Sagar Power Ltd - Hyderabad
 
                12.  M/s. T.C.I. Developers Ltd -
                     New Delhi
 
 Chairman / 
 Member of the   1.  Audit Committee – Chairman             1.   Audit 
                                                            Committee- 
                                                            Member
 Committee of 
 the Board of    2.  Remuneration Committee –
 Directors of 
 the Company         Chairman
 
                 3.  Investment Committee- Chairman
 
                 4.  Shareholders Grievance
                     Committee-Chairman
 
 
 Chairman / Me
 mber of the
 Committee of 
 Directors of 
 other Public 
 Limited Compa
 nies in
 which he / she 
 is a Director
 
 a)   Audit 
 Committee       1.   M/s. Sagar Cement Ltd –Chairman           -
 
                 2.   M/s. Transport Corp. of India Ltd
                      –Chairman
 
                 3.   M/s. Bhagyanagar India Ltd -
                      Chairman
 
                 4.   M/s. Surana Ventures Ltd -
                      Chairman
 
 b) Sharehol
 ders Griev
 ance                           -                               -
 committee
 
 
 
 Note: Pursuant to Clause 49 of the Listing Agreement,
 Chairmanship/membership of the Audit Committee and the Sharholders
 Grievance Committee alone have been considered.
 
 Directors Responsibility Statement:
 
 The Directors confirm that:
 
 1.  In the preparation of the Annual Accounts, the applicable
 Accounting Standards have been followed and that no material departures
 have been made from the same.
 
 2.  The selected accounting policies were applied consistently and the
 Directors made judgments and estimates that are reasonable and prudent
 so as to give a true and fair view of the state of affairs of the
 company at the end of the financial year ended 31st March, 2011 and of
 the Profit of the Company for the year ended as on that date.
 
 3.  They have taken proper and sufficient care for 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
 
 4.  They have prepared the Annual Accounts on a going concern basis.
 
 Auditors:
 
 M/s Brahmayya and Co, Chartered Accountants, Vijayawada, Auditors of
 the company retire at the conclusion of the ensuing Annual General
 Meeting.  They are, however eligible for reappointment. They have
 furnished a certifi cate to the effect that their appointment, if made
 will be in accordance with the limits specifi ed in sub section (IB) of
 Section 224 of the Companies Act, 1956.
 
 The Board recommends the reappointment of M/s Brahmayya & Co
 Vijayawada, as Auditors of the company to hold offi ce till the
 conclusion of the next Annual General Meeting.
 
 Cost Auditors:
 
 Pursuant to the directives from the Central Government and the
 provisions of Section 233B of the Companies Act 1956, M/s
 Narasimhamurthy & Co. Cost Accountants, Hyderabad have been appointed
 as Cost Auditors of the company subject to the approval of the Central
 Government for the ensuing year to conduct the cost audit of the cement
 and Power units of the company.
 
 Human Resources:
 
 Industrial Relations in the company, across all its units, have
 remained cordial throughout the year. The employees have always been a
 pillar of strength to the company. Your Directors appreciate the
 significant contribution made by the employees to the operations of
 your company during the year.
 
 The information required on Particulars of Employees as per Sec. 217
 (2A) of the Companies Act 1956, read with Companies, (Particulars of
 Employees) Amendment Rules, 2011 forms part of this report.
 
 Subsidiary company:
 
 The Company has fulfi lled all the conditions pre- scribed under Sec
 212 (8) of the Companies Act 1956 read with General Circular 2/2011 to
 avail exemption from publishing the Balance Sheet and other state-
 ments of its subsidiary company, M/s KCP Vietnam Industries Ltd.
 Vietnam for the financial year 2010-11.  However, a statement giving
 certain information as required in the said circular is placed along
 with the Consolidated Accounts.
 
 The company will provide to any shareholder, on request and without any
 cost, the Balance Sheet and other particulars and statements of
 accounts of the subsidiary company, M/s KCP Vietnam Industries
 Ltd. Vietnam as per Section 212 of the Companies Act, 1956.
 
 Consolidated Financial Statements:
 
 Pursuant to the requirements of Accounting Standard – 21 and the
 Listing Agreement with National Stock Exchange, financial statements
 consolidating those of its subsidiary KCP Vietnam Industries Ltd and
 its Joint Venture company, Fives Cail K C P Ltd, consid- ering the
 minority interest in them and duly audited have been attached to this
 Directors Report.
 
 Conservation of Energy, Technology absorption, Foreign Exchange Earning
 and Outgo:
 
 The particulars as prescribed under Section 217(1)(e) of the Companies
 Act, 1956, read with the Companies (Disclosure of Particulars in the
 Report of the Board of Directors) Rules, 1988 are attached as Annexure
 2 to this report.
 
 Cautionary Statement:
 
 Statements in the Management Discussion and Analysis describing the
 Companys objectives, expectations or predictions are as perceived
 currently.  Actual results may differ materially from those expressed
 in the statement. Important factors that could infl uence the Companys
 operations include domestic supply and demand conditions affecting
 selling prices of fi nished goods, input prices, changes in government
 regulations, tax laws, economic developments within the country and
 other factors such as litigation and industrial relations.
 
 Safety and Pollution Control:
 
 The manufacturing units are fully compliant with pol- lution control
 measures as directed by the statutory authorities from time to time and
 have obtained nec- essary approvals from them.
 
 Adequacy of Internal control systems:
 
 The company firmly believes that Internal control is a process,
 designed to provide reasonable assurance regarding the effectiveness
 and effi ciency of opera- tions of a company, the reliability on its
 systems of financial reporting, compliance with applicable laws and
 regulations, effective implementation of transpar- ency in significant
 transactions, agreements, con- tracts which may impact its financial
 performance, prevention of the occurrence of frauds and collusions in
 the conducts of its affairs, adequate reporting sys- tems to apprise
 management by way of periodical MIS reports etc. The Board perceives
 that this process has been adequately put in place and to ensure its 
 effective administration and implementation, internal audits are 
 periodically carried out by duly appointed Internal Auditors
 
 The planning of the internal audit function by the Internal Auditors
 typically include test checks and pro- cesses to ensure the adequacy of
 the system of inter- nal control, the reliability of data, and the effi
 cient use of the organizations resources etc. Internal auditors also
 identify control problems and suggest and fol- low up implementation of
 solutions for improving and strengthening such controls on a
 progressive basis.  Internal auditors in their reports to the Board
 concern themselves with the entire range of an organizations internal
 controls, including operational, financial, and compliance controls.
 
 Quarterly reports are placed and discussed in con- siderable detail by
 the Internal Auditors with mem- bers of the Audit Committee and
 suggestions and corrective action, where necessary, are taken up and
 conveyed to the CFO, Company Secretary and other senior fi nance
 functionaries at such meetings.  The responses of the concerned offi
 cials are also obtained and discussed on the reports of the Internal
 Auditors.
 
 Risk Management System:
 
 As a system designed to contain and minimize an organizations exposure
 to risk, Risk Management policies have been laid out by the Board. With
 opera- tions spanning different segments of business and in different
 regions and countries, the company periodi- cally evaluates the
 procedures by collating informa- tion in this regard from its operating
 units, the policies of Government, the evolving economic development,
 emerging competition, changes following technologi- cal upgradation,
 improvement in international best practices, study of peer company
 approaches etc.  Discussions at various levels are held to analyze the
 various inputs and take corrective action and make changes in
 established risk management policies. A continuing awareness in this
 regard is an important ingredient to manage risk.
 
 The Risk Management Policy as formulated by the Board is being followed
 as a guide in on-going assessment and the steps to be taken as
 necessary from time to time.
 
 
 Corporate Governance:
 
 The company places significant reliance on a ethi- cal and prudent
 governance. It has followed such a system of corporate governance over
 a long period of time and the same is enumerated and placed on record.
 Transparency in operations by means of professional management with
 empowered manag- ers is firmly believed as the heart of a healthy sys-
 tem of corporate governance. The various internal controls laid down
 for day-to-day operations provide the necessary checks and balances to
 prevent collu- sion and subjective decisions and these in turn go to
 make governance effective. Authority fl ows down a line of executives
 in a given order with top manage- ment seeking to provide leadership
 and policy inputs.  The mechanism also results in prudent and diligent
 decision making at all levels ensuring for the overall benefit of all
 stakeholders. It also gives considerable comfort to banks, deposit
 holders, vendors, custom- ers and others who interact with the company
 in their assessment of the companys performance.
 
 A Detailed Report on matters relating to Corporate Governance as
 statutorily required is annexed as part of this Annual Report together
 with the report of the Auditors on its compliance.
 
 Acknowledgements:
 
 Your Directors wish to thank the Central and State Governments,
 Financial Institutions, Banks, Government authorities, customers,
 vendors and shareholders for their continued co-operation and support
 extended. We wish to whole heartedly thank our employees for their
 sincere and devoted contribu- tion to the companys continued good
 performance.
 
 Ladies and gentlemen, your involvement as share- holders is deeply
 valued. Your Directors look forward to your continuing support in all
 their endeavors.
 
                                             For and on behalf the Board
 
 Place: Chennai                                      (V. L. DUTT)
 Date: 27th, May, 2011                    Chairman and Managing Director