Dear Members
 
 The Directors are pleased to present their Thirtieth Report together
 with the audited accounts of the Company for the year ended 31s'' March,
 2011
 
 As you are aware, your Company saw in the year 2010-11 one of the major
 developments in its history, namely, the merger of Amareswari Cements
 Limited (ACL) with it. This merger, which is the logical outcome of the
 relationship that was existing between these two companies for well
 over a decade, is expected to result in a lot of synergy in the
 operations of your company and place your company in a stronger footing
 as far as the availability of lime stone and other incidental matters
 are concerned.
 
 Financial Results
 
 The financial results achieved by your company for the year 2010-11 are
 given below. As these results include the operations of erstwhile
 Amareswari Cements Limited, they are not strictly comparable with the
 financial results relating to the previous year.
 
                                                          Rs. In lakhs
 
 Description                                 2010-11        2009-10
 
 Net Sales                                     47685          47957
 
 Other Income                                   1930            679
 
 Total Income                                  49615          48636
 
 Profit before Depreciation, Financial 
 Charges and Tax                                8139           8646
 
 Less: Depreciation                     2760            2769
 
 Financial Charges                      3114    5874    2895   5664
 
 Profit before Tax                              2265           2982
 
 Less: Net Provision for Tax                     524           1070
 
 Profit After Tax                               1741           1912
 
 Add: Profit brought forward                    7115           6127
 
 Profit available for appropriation             8856           8039
 
 Appropriations proposed 
 
 Dividend @ 20% (Rs. 2.00 per 
 Equity Share)                                   348            375
 
 Dividend Tax                                     45             49
 
 Transfer to General Reserves                    174            500
 
 Carried to Balance Sheet                       8289           7115
 
 Total                                          8856           8039
 
 Basic Earning Per Share                       11.61          12.75
 
 Diluted Earning Per Share                     10.01          12.75
 
 Dividend
 
 Your Board has recommended for declaration at the forthcoming Annual
 General Meeting, a dividend @ Rs.2 per share (20%) on the Equity Shares
 for the year ended 31- March, 2011.
 
 Operations review
 
 While there was a marginal increase of 2% in the total income of your
 company as compared to the previous year, Operating Profit and PAT were
 however marginally lower as compared to the previous year.
 
 The performance of your company in terms of quantity of production and
 sale is given below:
 
 Description                            2010-11       2009-10
 
 Production ( in MT)
 
 Clinker                                1510135       1430000
 
 Cement                                 1490662       1120350
 
 Sales (MT)
 
 Clinker                                  30840        350133
 
 Cement                                 1469172       1127739
 
 Cement - Second sales                        0        204191
 
 Self consumption                           877          2897
 
 Total Cement Sales                     1470049       1334827
 
 Andhra Pradesh, which is a major market for your Company saw a lull in
 the construction and infrastructure industries in 2010-11 causing a
 fall in the demand for cement. Despite this, your company, marginally
 improved its market shares in the said State. There was also a respite
 in the form of a marginal improvement on the price front in the form of
 better sales realisation, mainly due to the efforts initiated in the
 recent past to improve upon its brand image among the intermediaries
 and end users and to extend its reach further. These factors saw your
 company avoiding any significant fall in its revenue and profitability.
 
 Share Capital
 
 Pursuant to the Scheme of Arrangement for the merger of ACL with your
 Company, your Board of Directors, at their meeting held on 12''h July
 2011, have allotted 32,85,714 Equity Shares to the shareholders of ACL.
 900000 equity shares of your Company held by ACL as its investments
 have been cancelled pursuant to the said Scheme. Reflecting these
 developments, the equity share capital of your company now stands at
 Rs.17,38,80,140 divided into 1,73,88,014 Equity Shares of Rs.10/- each.
 
 Future Outlook
 
 Fresh investments in infrastructure projects have slowed down in the
 recent times. The projects already announced are also not implemented
 with the speed with which they were initiated. Nor is there any sign of
 revival in the construction activities. In such a scenario, we do not
 foresee any significant increase in demand for cement in the next
 couple of years atleast. This, along with increasing inputs costs, will
 continue to put the margins under pressure. However, in the longer term
 , growth of the cement industry is expected to turn robust, as
 infrastructure development is vital for the development of any country
 and cannot therefore be allowed to be ignored for a long in a welfare
 State like that of ours.  We therefore remain cautiously optimistic of
 maintaining our growth amidst aggressive competition by improving our
 market share through innovative strategies and by cutting costs and
 improving efficiency in all areas of our operations.
 
 Subsidiary Company
 
 In our previous report we had conveyed your company''s proposal to
 divest its holdings in Sagar Power Limited, with a view to enabling
 your company to focus more on its core area namely cement business. The
 entire stake held by your company in Sagar Power having since been
 divested, the latter ceased to be a subsidiary of your Company.
 
 Vicat Sagar Cement
 
 As you are aware, your Company and Parficim S.A.S., a wholly owned
 subsidiary of Vicat S.A. of France have jointly promoted Vicat Sagar
 Cement Private Limited as a special purpose vehicle, to set up a 5.5
 mtpa capacity cement plant along with a captive power unit of 60MW
 capacity in Culbarga District of Karnataka State. Sagar Cements and the
 Vicat Croup have so far invested a sum of Rs.860 million and Rs. 4140
 million respectively in the project. This project is implemented in two
 phases, each phase with a capacity of 2.75 mtpa. The major part of the
 acquisition of land in respect of first phase having since been
 completed, the civil works in respect of the project is in progress.
 Financial closure has already been achieved for this phase through
 tie-up with International Lending Institutions. This phase, barring
 unforeseen circumstances, is expected to go on stream by the middle of
 2012.
 
 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, 1 956 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 IDBI, has appointed Shri G. Suneel Babu as its nominee director in
 the place of its earlier nominee director Shri V.V.S.Ravindra. Your
 Board placed on record its appreciation of the guidance and
 co-operation received by it from Shri Ravindra during his tenure as the
 nominee director. In compliance with Sec.256 of the Companies Act,
 1956, Shri OSwaminatha Reddy and Shri K.Thanu Pillai retire by rotation
 at the ensuing Annual General Meeting and, being eligible, offer
 themselves for re-appointment.
 
 Audit Committee
 
 The Audit Committee of the Board, constituted pursuant to Sec.292 (A)
 of the Companies Act, 1 956 read with Clause 49 of the Listing
 Agreement, currently consists of the following directors as its
 members:
 
 Shri CSwaminatha Reddy Chairman
 
 Shri K.Thanu Pillai Member
 
 Shri C. Suneel Babu Member
 
 Shri P.Rajewara Rao Member
 
 Shri R.Soundararajan, Company Secretary is the Secretary to the
 Committee. The Committee had met five times during the year ended 31s''
 March 2011 and, inter-alia, reviewed the financial results of the
 Company for the respective quarters.
 
 Remuneration Committee
 
 The Remuneration Committee of the Board, constituted pursuant to
 Schedule XIII to the Companies Act 1956 read with Clause 49 of the
 Listing Agreement has the following Directors as its members:
 
 Shri K.Thanu Pillai Chairman
 
 Shri CSwaminatha Reddy Member
 
 Shri P.Rajeswara Rao Member
 
 During the year 2010-11 this committee did not hold any meeting as
 there was no occasion for the same. However, a meeting of the committee
 was later held on 17''h May 2011 to recommend a suitable remuneration to
 the Managing Director on his proposed re-appointment and to review the
 remuneration paid to other whole time directors of the Company. The
 Committee''s recommendations, which have since been accepted by the
 Board of Directors, are placed before the shareholders for their
 approval under the relevant provisions of the Companies Act, 1956.
 
 Investment Committee
 
 With a view to evaluating investment opportunities available to the
 Company from time to time, your Board has constituted an Investment
 Committee with the following directors as its members:
 
 Shri CSwaminatha Reddy Chairman
 
 Shri S.Veera Reddy Member
 
 Shri K.Thanu Pillai Member
 
 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 (1 B)
 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 had not accepted any Deposits from the public under
 Section 58A of the Companies Act, 1 956 during the year 2010-11.
 
 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.
 
 Listing
 
 As stipulated under Clause 32 of the Listing Agreement, the names and
 addresses of Stock Exchanges on which the Company''s equity shares have
 been listed are given below:
 
 1.  National Stock Exchange of India Limited Exchange Plaza, Bandra
 Kurla Complex Bandra East, Mumbai - 400051
 
 2.  Bombay Stock Exchange Limited Phiroze jeejeebhoy Towers Dalai
 Street, Mumbai - 400001
 
 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
 
 12th July 2011                                               Chairman