The Directors have pleasure in presenting their 53rd Annual Report and
 the Audited Accounts of the Company for the year ended 31st March 2011.
 
 FINANCIAL RESULTS
 
                                               Year ended    Year ended
                                                31-3-2011     31-3-2010
                                            (Rs. in lacs) (Rs. in lacs)
 
 Operating Profit: Profit before Interest,
 
 Depreciation and Tax (PBIDT)                       65724         87729
 
 Less: Interest                                     13928         15088
 
 Profit before Depreciation and Tax (PBDT)          51796         72641
 
 Less: Depreciation                                 22077         19608
 
                                                    29719         53033
 
 Add: Extraordinary items                               7            11
 
 Net Profit before Tax                              29726         53044
 
 Less: Provision for Tax
 
 Current Tax                                         8238          8155
 
 Deferred Tax                                         390          9521
 
 Net Profit After Tax                               21098         35368
 
 Add: Balance Profit from last year                  5270          2974
 
 Surplus for Appropriation                          26368         38342
 
 Appropriations:
 
 1.  Transfer to General Reserve                    17500         27500
 
 2.  Interim Dividend                                   –          3575
 
 3.  Final Dividend                                  2979          1191
 
 4.  Tax on Dividends                                 483           806 
 
 Balance carried over to Balance Sheet               5406          5270
 
 TOTAL                                              26368         38342
 
 
 SHARE CAPITAL
 
 The paid up capital of the Company is Rs.23,79,69,380/- consisting of
 23,79,69,380 shares of Rs.1/- each.
 
 DIVIDEND
 
 Your Directors have pleasure in recommending a dividend of Rs.1.25 per
 share on the equity capital of the Company, as against Rs.2.00 per
 share for the previous year. The dividend for the year amounts to
 Rs.29.79 crores as against Rs.47.66 crores for the previous year.
 
 TAXATION
 
 An amount of Rs.82.38 crores towards Current Tax, Rs.3.90 crores
 towards Deferred Tax and Rs.4.83 crores towards Dividend Tax has been
 provided for the year under review.
 
 
 
 MANAGEMENT DISCUSSION & ANALYSIS REPORT
 
 CEMENT DIVISION
 
                                              2010-2011       2009-2010
                                        (In lac tonnes) (In lac tonnes)
 
 PRODUCTION & SALES
 
 Ramasamy Raja Nagar (TN) Factory
 
 Clinker Produced                                  7.05            6.90
 
 Cement Produced                                  12.57           14.39
 
 Cement Sold                                      13.88           14.40
 
 Jayanthipuram (AP) Factory
 
 Clinker Produced                                 15.75           19.02
 
 Cement Produced                                  15.82           19.96
  
 Cement Sold                                      15.69           19.90
 
 Alathiyur (TN) Factory
 
 Clinker Produced                                 19.21           21.54
 
 Cement Produced                                  20.49           27.94
 
 Cement Sold                                      19.20           27.60
  
 Ariyalur (TN) Factory
 
 Clinker Produced                                 12.69           12.17
 
 Cement Produced                                  13.82           11.79
 
 Cement Sold                                      13.33           11.54
 
 Mathodu (Karnataka) Factory
 
 Clinker Produced                                  1.03            1.60
 
 Cement Produced                                   1.66            2.29
 
 Cement Sold                                       1.69            2.28
 
 Salem (TN) Grinding Plant
 
 Cement Produced                                   3.51            1.57
 
 Cement Sold                                       3.54            1.58
 
 Chengalpattu (TN) Grinding Plant
 
 Cement Produced                                   3.01            2.14
 
 Cement Sold                                       3.03            2.11
 
 Kolaghat (WB) Grinding Plant
 
 Cement Produced                                   2.17            0.18
 
 Cement Sold                                       2.19            0.13
 
 
 During the year under review, the cement production was 73.05 lac
 tonnes, compared to 80.26 lac tonnes of the previous year.
 
 At Ramasamy Raja Nagar, subsequent to the installation of a Vertical
 Roller Mill as a pre-grinder to Raw Mill, the combined clinkerisation
 capacity of both the kilns had increased to 3200 Tonnes Per Day (TPD).
 
 At Jayanthipuram, the Line-1 kiln was stopped during October 2010 to
 March 2011 for upgrading the pyro processing system. The upgradation
 had resulted in reduction in emission levels, besides increasing the
 clinkerisation capacity to 3400 TPD.
 
 At Alathiyur, the Line-1 kiln was stopped during November 2010 to
 February 2011 for carrying out upgradation activities.  The upgradation
 included modification of the pre-heater, changing the cooler and
 installation of a higher size venting system. The upgradation was
 completed and the kiln restarted in the month of February 2011. The
 upgradation had resulted in increasing the clinkerisation capacity to
 3500 TPD.
 
 SALES
 
 During the year under review, the sale of cement was at 72.55 lac
 tonnes compared to 79.54 lac tonnes of the previous year.
 
 The demand growth for the cement industry as a whole for the year was
 5%, compared to the growth of 11% for the previous year. The growth
 percentage is the lowest in last several years.
 
 The Southern Region witnessed a decline of 4% compared to a growth of
 5% during the previous year. Within the Southern Region, the States of
 Andhra Pradesh and Kerala, which are important market segments for the
 Company, had witnessed negative growth. Lower infrastructure spending
 and slow-down in the realty sector have contributed to this subdued
 growth. While there has been a decline in the demand, the cement
 industry has seen a growth in the capacity additions on All India basis
 and specifically in the Southern Region. These factors have adversely
 affected the sales volume of the Company for the year.
 
 EXPORTS
 
 During the year 6825 tonnes of cement was exported to Sri Lanka. The
 export turnover of the Company for the year was Rs.1.86 crores.
 
 COST
 
 There has been steep escalations in input costs. The cost of imported
 and indigenous coal has increased, thereby increasing the cost of
 energy. The cost of flyash has also increased.
 
 Road transportation cost has increased due to upward revision in the
 administered fuel cost. The Rail transportation cost has also
 increased, as the Railways have increased the basic freight structure,
 terminal charges and demurrage and wharfage penal charges, in addition
 to imposing various restrictions on movement of material through
 wagons.
 
 The increase in the transportation cost and the general inflationary
 trends has led to overall increase in the cost of raw materials.
 
 The depreciation cost has gone up due to the capacity additions
 implemented by the Company in the past years.
 
 The increase in various statutory levies has also contributed to the
 increase in the cost.
 
 READY MIX CONCRETE DIVISION
 
 The Division has produced 59,589 cu.m. of concrete during the year
 accounting for a revenue of Rs.18.08 crores as against 44,501 cu.m. of
 concrete accounting for a revenue of Rs.12.73 crores during the
 previous year.
 
 DRY MORTAR DIVISION
 
 The Division has produced 27,156 tonnes of Dry Mortar during the year
 as against 23,508 tonnes produced during the previous year. The
 Division has sold 27,089 tonnes of Dry Mortar accounting for a revenue
 of Rs.15.51 crores during the year as against 23,520 tonnes of Dry
 Mortar accounting for a revenue of Rs.13.06 crores during the previous
 year.
 
 WIND FARM DIVISION
 
 The Division has generated 3572 lac KWH as compared to 4115 lac KWH of
 the previous year. The income during the year from the Division was
 Rs.122.28 crores as against Rs.133.89 crores of the previous year.
 
 During the year, the Company has sold 33 Nos. of Wind Electric
 Generators aggregating to a capacity of 26.40 MW.  After this, the
 installed capacity of the Wind Farm Division of the Company stands at
 159.19 MW comprising of 229 Wind Electric Generators.
 
 TURNOVER AND PROFITABILITY
 
 Due to reduction in production and sale quantity and lower realisation
 and reduced contribution from wind farm division, the total revenue for
 the year, net of Central Excise and Sales Tax was Rs.2,645 crores as
 against Rs.2,821 crores of the previous year. The all round increase in
 the cost of production has resulted in lower profit compared to the
 previous year. The operating profit and net profit for the year were
 Rs.657.24 crores and Rs.210.98 crores as against Rs.877.29 crores and
 Rs.353.68 crores respectively for the previous year.
 
 CHANGES IN STATUTORY LEVIES
 
 The following are the changes that have taken place in the Statutory
 Levies.
 
 DIRECT TAX
 
 i) The Minimum Alternate Tax (MAT) rate which was increased from 15% to
 18% for the year 2010 - 2011, had again been increased to 18.5% for the
 year 2011 - 2012.
 
 ii) Surcharge on Income Tax has been reduced from 7.5% to 5% for the
 year 2011 - 2012.
 
 INDIRECT TAX
 
 The following are the changes that have been implemented with effect
 from 1-3-2011.
 
 EXCISE DUTY 
 
 I.  For Cement
 
 A) For Mini Cement Plants             Previous       Revised
 
 1. Cleared in packaged form- 
 
 (i) of Retail Sale Price (RSP) not
     exceeding Rs.190/- per 50 kg     Rs.185/- PMT   10% ad valorem
     bag or of per tonne equivalent 
     RSP not exceeding Rs.3800/- 
 
 (ii) of RSP exceeding Rs.190/- per 
      50 kg bag or of per tonne                      10% ad valorem
      equivalent RSP exceeding        Rs.315/- PMT   + Rs.30/- PMT
      Rs. 3800/-
 
 2. Cleared other than in packaged 
    form                              Rs.215/- PMT   10% ad valorem
 
 
 B) For Cement Plants other than 
    mini cement plants
 
 1. Cleared in packaged form- 
 
 (i) of RSP not exceeding Rs.190/- 
     per 50 kg bag or of per tonne                   10% ad valorem
     equivalent RSP not exceeding     Rs.290/- PMT   + Rs.80/- PMT
     Rs. 3800/-
 
 (ii) of RSP exceeding Rs.190/- per 
      50 kg bag or of per tonne                       10% ad valorem
      equivalent RSP exceeding         10% of RSP 
      Rs.3800/-                                       + Rs.160/- PMT
 
                                         10% or
                                       Rs.290/- PMT,
 2. Cleared other than in packaged                    10% ad valorem
    for                                whichever is
                                       higher
 
 II) For Clinker, Excise Duty has been increased from Rs.375/- per tonne
 to 10% ad valorem + Rs.200/- per tonne.
 
 III) For Ready Mix Concrete, Excise Duty has been introduced at the
 rate of 5% with CENVAT facility or 1% without CENVAT facility.
 
 IV) For Fly Ash, Excise Duty has been introduced at the rate of 1%
 without CENVAT facility.
 
 V) For Coal, Pet Coke and Lignite, Excise Duty has been introduced at
 the rate of 5% with CENVAT facility or 1% without CENVAT facility.
 
 CUSTOMS DUTY
 
 For Pet Coke and Gypsum, Customs Duty has been reduced from 5% to 2.5%.
 
 CENTRAL SALES TAX (CST)
 
 For Iron and Steel items, Coal and Crude Oil, CST has been increased
 from 4% to 5%.
 
 VALUE ADDED TAX (VAT)
 
 i) In West Bengal, VAT has been increased from 12.5% to 13.5% with
 effect from 15-11-2010.
 
 ii) In Orissa, VAT has been increased from 12.5% to 13.5% with effect
 from 1-4-2011.
 
 iii) In Karnataka, the VAT which had been increased from 12.5% to 13.5%
 with effect from 1-4-2010 has further been increased to 14% with effect
 from 1-4-2011.
 
 iv) In Jharkhand, VAT has been increased from 12.5% to 14% with effect
 from 7-5-2011.
 
 Above taxes were levied, when cost of production itself has gone up.
 This will affect the profit margins.
 
 NEW PROJECTS
 
 At R R Nagar, the Company is installing a Roll Press for increasing the
 cement grinding capacity from the present level of 210 TPH to 260 TPH
 at a cost of Rs.60 crores. The project is expected to be commissioned
 in March 2012.
 
 At Ariyalur, as informed in the Annual Report for the year 2009 - 2010,
 to further augment the production capacity the Company is in the
 process of establishing a second unit with a capacity of 2 MTPA. The
 project is slated to be commissioned in the month of August 2011.
 Consequently, the cement production capacity of the Company will go up
 from 10.49 MTPA to 12.49 MTPA.
 
 At Salem Grinding Unit, the cement grinding capacity is proposed to be
 increased from the present level of 90 TPH to 230 TPH by installation
 of a Roll Press, at a cost of Rs.60 crores. The project is expected to
 be commissioned in December 2011.
 
 POWER PLANTS
 
 The Company continues to lay emphasis on captive source of energy, to
 cater to the electrical energy requirements of its production
 facilities.
 
 - In the Annual Report for the year 2009 - 2010, it was informed about
 the Companys proposal to install a thermal power plant of 60 MW
 capacity, consisting of 3 x 20 MW at Ariyalur. Accordingly, 2 Nos. of
 20 MW capacity thermal power plant have been commissioned in the months
 of November 2010 and February 2011. The balance 20 MW is expected to be
 commissioned in the month of December 2011.
 
 - At R R Nagar, the Company is in the process of installing a thermal
 power plant of 25 MW capacity at a cost of Rs.110 crores. The project
 is expected to be commissioned in the month of August 2011.
 
 - At Salem Grinding Unit, the Company is in the process of installing a
 Heavy Fuel Oil based power generator of 5 MW capacity, at a cost of
 Rs.23 crores. The project is expected to be commissioned in the month
 of June 2011.
 
 PROSPECTS FOR 2011-2012
 
 Though, demand for cement is expected to grow at 8% in the coming year,
 the Southern Region will continue to bear the impact of the surplus
 capacity. With the capacity growth outstripping demand in the Southern
 Region, the prices would continue to be under pressure. The Cement
 industry would continue to experience lower capacity utilisation
 levels.  The inflation would also affect the costs of various inputs of
 production and distribution, thereby affecting the realisation.
 
 The expected increase in per capita consumption of cement to reach the
 global average and the infrastructure push being given by the
 Government would indicate the growth potential for the cement industry
 in medium and long term.  The Companys enhanced capacity would enable
 it to participate in the growth and to increase its market share.
 
 The Company continues its endeavour for the sale of Blended Cement,
 which would help in improving its capacity utilisation and achieving
 economies in production. By concentrating on operational efficiencies
 and cost reduction measures in all areas of production and
 distribution, the Company will strive to protect and improve its
 profitability.
 
 CONSERVATION OF ENERGY, ETC.
 
 The Company continues to take keen interest in conservation of energy
 and the information required under Section 217(1)(e) of the Companies
 Act, 1956 read with the relevant Rules, with regard to Conservation of
 Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
 are set out in Annexure I to this report.
 
 INDUSTRIAL RELATIONS & PERSONNEL
 
 The Company has 2593 employees as on 31-3-2011. Industrial relations in
 all the Units continue to be cordial and healthy. Employees at all
 levels are extending their full support and are actively participating
 in the various programmes for energy conservation and cost reduction.
 There is a special thrust on Human Resources Development with a view to
 promoting creative and Group effort.
 
 In terms of the provisions of Section 217(2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975 as
 amended, the names and other particulars of the employees are required
 to be set out in the Annexure to the Directors Report. However, as per
 the provisions of Section 219(1)(b)(iv) of the said Act, the Annual
 Report excluding the aforesaid information is being sent to all the
 Members of the Company and others entitled thereto.  Member who is
 interested in obtaining such particulars may write to the Company
 Secretary.
 
 AWARDS
 
 The Companys Units secured many Awards during the year in Mines
 Safety, Mines Environment & Mineral Conservation and Quality Circles.
 
 DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Companys Articles of Association, Shri.R.S.Agarwal retires by rotation
 and is eligible for re-election.
 
 PUBLIC DEPOSITS
 
 The total deposits from the public outstanding with the Company as on
 31st March 2011 were Rs.3.07 crores including the deposits renewed in
 accordance with Section 58A of the Companies Act, 1956. This also
 includes 31 deposits aggregating to Rs.5.89 lacs which had fallen due
 on or before 31-3-2011 but not claimed by the depositors. Reminders
 have been sent to these depositors for disposal instructions. On the
 date of this report, Rs.1.35 lacs thereof have been claimed and
 refunded/renewed in respect of 5 depositors.
 
 SHARES
 
 The Companys shares are listed in Madras Stock Exchange Limited,
 Bombay Stock Exchange Limited and National Stock Exchange of India
 Limited.
 
 AUDITORS
 
 M/s.M.S.Jagannathan & N.Krishnaswami, Chartered Accountants and
 M/s.CNGSN & Associates, Chartered Accountants, Auditors of the Company
 retire at the end of the 53rd Annual General Meeting and are eligible
 for reappointment.
 
 COST AUDITOR
 
 The Government has approved the Companys proposal to appoint
 M/s.Geeyes & Co., Cost Accountants, Chennai for audit of Companys cost
 accounts relating to the cement manufacturing activities for the year
 ended 31-3-2011 on a remuneration of Rs.1,00,000/- exclusive of
 out-of-pocket expenses. As per Central Governments direction, cost
 audit will be done every year.
 
 The Government of India has made Cost Audit compulsory for the
 Companies activities relating to generation of electricity as well
 from the year 2011 - 2012.
 
 CORPORATE GOVERNANCE
 
 The Company has complied with the requirements regarding Corporate
 Governance as stipulated in Clause 49 of the Listing Agreement with the
 Stock Exchanges. A Report on Corporate Governance followed by the
 Company together with a Certificate from the Statutory Auditors
 confirming compliance is set out in Annexure II to this Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 The Directors confirm that -
 
 - In the preparation of the annual accounts for the year ended 31st
 March 2011, the applicable accounting standards had been followed;
 
 - The selected accounting policies were applied consistently and
 judgments and estimates that are reasonable and prudent were made so as
 to give a true and fair view of the state of affairs of the Company at
 the end of the financial year and of the profit of the Company for that
 period;
 
 - Proper and sufficient care for the maintenance of adequate accounting
 records in accordance with the provisions of the Companies Act had been
 taken for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities;
 
 - The Annual Accounts were prepared on a going concern basis.
 
 ACKNOWLEDGEMENT
 
 The Directors are grateful to the various Departments and agencies of
 the Central and State Governments for their help and co-operation. They
 are thankful to the Financial Institutions and Banks for their
 continued help, assistance and guidance. The Directors wish to place on
 record their appreciation of employees at all levels for their
 commitment and their contribution.
 
 
 
 
                                  On behalf of the Board of Directors,
                                         For MADRAS CEMENTS LTD.,
 
 
                                       P.R.RAMASUBRAHMANEYA RAJHA 
                                      Chairman & Managing Director
 
 Chennai 
 25-5-2011