The Directors are pleased to present their Thirty First Report
 together with the audited accounts of the Company for the year ended
 31st March, 2012.
 
 Financial Results
 
 The performance of your company during the year 2011-12 was satisfying
 in the context of the slowdown of the economy in general and
 infrastructure industry in particular during the said period.
 
 A summarized financial performance of your company during the year
 under review is given below:
 
                                                        Rs. in Millions
 
 Discribtion                               2011-12         2010-11
 
 Net Sales                                   6061            4250
 
 Other Income                                   7              89
 
 Total Income                                6068            4339
 
 Profit before Depreciation, Financial 
 Charges and Tax                             1247             814
 
 Less: Depreciation                     259             276
 
 Financial Charges                      342   601       311   587
 
 Profit before Tax                            646             227
 
 Less: Net Provision for Tax                  205              53
 
 Profit After Tax                             441             174
 
 Add : Profit brought forward                 829             711
 
 Profit available for appropriation          1270             885
 Appropriations proposed
 
 Dividend @ 30% (Rs.3.00 per equity share)     52              35
 
 Dividend Tax                                   9               4
 
 Transfer to General Reserve                  200              17
 
 Carried to Balance Sheet                    1009             829
 
 Basic Earnings Per Share                   25.37            11.61
 
 Diluted Earnings Per Share                 25.37            10.01
 
 Dividend
 
 Based on the Company''s performance, the Directors are pleased to
 recommend for approval of the members a dividend of Rs.3/- per share
 for the financial year 2011-12.
 
 Transfer to reserves
 
 The Company proposes to transfer Rs.200 millions to the general reserve
 out of the amount available for appropriations and an amount of
 Rs.1009.48 million is proposed to be retained in the Balance Sheet.
 
 Company''s performance
 
 While the total income of your Company rose by 40%, the Profit before
 and after tax went up by 185% and 153% respectively over the previous
 year.
 
 The performance of your company in terms of production and sale of
 clinker / cement is given below:
 
 Descrintion                              2011-12           2010-11
 Production ( in MT)
 
 Clinker                                  1348080           1510135
 
 Cement                                   1625336           1490662
 
 Sales (MT)
 Clinker                                        0             30840
 
 Cement                                   1631392           1470049
 
 Sagar Cements could register a reasonable level of growth in 2011-12,
 both in terms of volume as well as price. Its sales in quantitative
 terms went up by 11% over the previous year. The average net sales
 realization per ton of cement was also higher at Rs.2,945/-, an
 increase of 32 %, over the previous year, resulting in an net operating
 revenue of Rs.6061 million.
 
 Corporate Governance
 
 Your Company has complied with the mandatory provisions relating to
 Corporate Governance as prescribed under Clause 49 of the Listing
 Agreement with the Stock Exchanges. A separate report detailing such
 compliance together with the Certificate obtained from the Statutory
 Auditors in connection therewith is included as part of the Annual
 Report.
 
 Internal Control Systems
 
 Your Company has adequate internal control systems in all important
 areas of its operations and effectiveness of these systems is
 periodically reviewed for possible improvement in them.
 
 Insurance
 
 All the properties of the Company have been adequately insured.
 
 Particulars of Employees
 
 Particulars of employees required to be furnished in this Report
 pursuant to Sec.217 (2A) of the Companies Act, 1956 are given in the
 annexure.
 
 Industrial Relations
 
 Your Company continues to enjoy cordial relationship with all its
 personnel at the Plant, Office and on the field.  Conservation of
 Energy, Technology absorption and Foreign Exchange Earnings and Outgo:
 
 The particulars required under Sec.217 (1) (e) of the Companies Act,
 1956 have been provided in the annexure, which forms part of the
 Report.
 
 Pollution Control
 
 Your company is committed to keep the pollution at its plant within the
 acceptable norms and as part of this commitment, it has an ESP system
 at the plant.
 
 Directors
 
 The APIDC, has appointed Shri K.Rajendra Prasad as its nominee director
 in the place of its earlier nominee Shri P.Rajeswara Rao. Your Board
 placed on record its appreciation of the guidance and co-operation
 extended by Shri Rajeswara Rao during his tenure as the nominee
 director. In compliance with Sec.256 of the Companies Act, 1956,
 Dr.S.Anand Reddy and Shri Werner C.R.Poot retire by rotation at the
 ensuing Annual General Meeting and, being eligible, offer themselves
 for re-appointment.
 
 Sub Committees of the Board
 
 The Board has Audit Committee, Remuneration Committee, Investment
 Committee and Investors'' Grievances Committee, the composition and
 details of which have been given in the Report on the Corporate
 Governance forming part of the Annual Report.
 
 Auditors
 
 Messrs. P.Srinivasan & Co., Chartered Accountants, the present Auditors
 of your Company will be holding their office up to the ensuing Annual
 General Meeting. Shareholders are requested to appoint Auditors to the
 Company to hold office from the conclusion of its ensuing Annual
 General Meeting until the conclusion of its next Annual General
 Meeting.  Your Board has accepted the recommendation of its Audit
 Committee to re-appoint the retiring auditors, who, being eligible for
 re-appointment, have since consented to the proposed re-appointment and
 confirmed that the said re- appointment, if approved by the
 shareholders, would be within the limits specified in Sub Section (1B)
 of Section 224 of the Companies Act, 1956.
 
 Directors'' Responsibility Statement
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956, we state:
 
 (i) that in the preparation of the annual accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material developments;
 
 (ii) that the directors had selected such accounting policies and
 applied them consistently and made judgment and estimates that were
 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 and of the
 profit of the company for the period;
 
 (iii) that the directors had 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;
 
 (iv) that the directors had prepared the annual accounts on a going
 concern basis.
 
 Public Deposits
 
 Your Company has not accepted any Deposits from the public and as such,
 no amount on account of principal or interest on public deposits was
 outstanding as on the date of the balance sheet.
 
 Compliance Certificate
 
 A certificate from the Auditors of the Company regarding compliance of
 conditions of Corporate Governance as stipulated under Clause 49 of the
 Listing Agreement is attached to this Report along with a report on
 Corporate Governance.
 
 Management Discussion and Analysis Report
 
 In accordance with Clause 49 of the Listing Agreement with the Stock
 Exchanges, the Management Discussion and Analysis Report is given in
 the Annexure, to form part of the Annual Report.
 
 Acknowledgement
 
 Your Directors wish to place on record their appreciation of the
 valuable co-operation extended to the Company by its bankers and
 various authorities of the State and Central Government. They thank the
 Distributors, Dealers, Consignment Agents, suppliers and other business
 associates of your Company for their continued support. Your Board also
 takes this opportunity to place on record its appreciation of the
 contributions made by the employees at all levels and last but not
 least, of the continued confidence reposed by you in the Management.
 
                             For and on behalf of the Board of Directors
 
                                           Hyderabad O. Swaminatha Reddy
 
 18th July 2012                                                 Chairman