1.  CONTINGENT LIABILITIES
 
 a) Estimated amount of contracts to be executed on capital account and
 not provided for Rs.l 92.39 Lakhs (Previous Year: Rs. 857.45 Lakhs).
 
 b) Demand raised by APTRANSCO towards voltage surcharge and grid
 supporting charges is Rs.l,73,50,747/- and the company paid
 Rs.l,08,02,441/- under protest. The said demand is contested by the
 company with Division Bench of High Court of Andhra Pradesh.
 
 c) Bank Guarantees: Rs.292.05 Lakhs (Previous year: Rs.90 lakhs).
 
 d) Letter of Credit: Rs. Nil. (Previous year: Rs.NIL Lakhs).
 
 e) During the year 2009-10, demand raised by Sales Tax Authorities for
 a sum of Rs.l,09,40,297/- in respect of tax on sale of fixed assets. We
 have paid an amount of Rs.27,35,074/- and contested before the State
 Appellate Tribunal.
 
 f) The Income Tax Department has raised a demand of Rs. 74.98 Lakhs on
 disallowances of certain expenditure relating to the Assessment Year
 2006-07 and the same was contested before the Commissioner Appeals.
 
 g) The Income Tax Department has raised a demand of Rs.l 1.42 Lakhs on
 disallowances of certain expenditure relating to the Assessment Year
 2008-09 and the same was contested before the Commissioner Appeals.
 
 h) The Excise Department has raised a demand of Rs.2,24,95,200/-
 denying the benefit of Cenvat credit on capital goods.  The Company has
 paid an amount of Rs.l,95,00,000/- and filed an appeal with CESTAT
 Bangalore.
 
 i) Demand raised by the Sales Tax Authorities for a sum of Rs.l
 9,60,832/- towards interest on delayed payment of tax amount for the
 year 1999-2000 and filed an appeal before the Appellate Tribunal by
 paying an amount of Rs.4,90,208/-.
 
 2.  SECURED LOANS
 
 a) The term loans from the Banks and Financial Institutions are secured
 by the fixed assets i.e., Land, Buildings, Plant & Machinery, Mining
 Equipment owned by or belonging to the borrower company both proposed
 and future, and by second charge on the current assets of the company
 and are guaranteed by Shri S.Veera Reddy, Managing Director, Dr.S.Anand
 Reddy, joint Managing Director and Shri S.Sreekanth Reddy, Executive
 Director.
 
 b) Cash Credit from State Bank of Hyderabad, State Bank of India and
 IDBI Bank Ltd., are secured by hypothecation of raw materials,
 goods-in-process, finished goods, stores and spares and receivables,
 present and future, and by second charge on fixed assets of the company
 and are guaranteed by Shri S.Veera Reddy, Managing Director, Dr.S.Anand
 Reddy, joint Managing Director and Shri S.Sreekanth Reddy, Executive
 Director.
 
 c) Loan from L&T Finance Limited is secured by the mortgage of specific
 assets purchased from that loan and further secured by personal
 guarantees of Dr.S.Anand Reddy, joint Managing Director and Shri
 S.Sreekanth Reddy Executive Director.
 
 d) Vehicle loans from bank are secured by the mortgage of specific
 vehicle purchased from that loan and further secured by personal
 guarantees of Dr.S.Anand Reddy, joint Managing Director and Shri
 S.Sreekanth Reddy Executive Director.
 
 3. As per Andhra Pradesh State Industrial Policy 2005-10, Company has
 made an application to the General Manager, District Industries Centre,
 Nalgonda, Andhra Pradesh for claiming the incentives on Value Added Tax
 and power consumption. General Manager, DIC, Nalgonda has verified and
 recommended an amount of Rs. 1018 lakhs (previous year Rs.400.07 Lakhs)
 during the year to the State Level Committee. This amount has been
 considered as income during the current year and shown in Schedule 14
 ''Other Income''.
 
 e) Investment details
 
 100% invested in LIC Group gratuity (cash accumulation policy)
 
 f) Actuarial assumptions
 
 Mortality table (LIC) 1994-96 (ultimate)
 
 Discounting rate - 8%
 
 Expected rate of return on plan asset - 9.25%
 
 Expected average remaining working lives of employees-!8 Yrs
 
 Rate of escalation in salary - 4%
 
 4.  Scheme of Amalgamation
 
 a) Pursuant to the Scheme of Arrangement for merger of ACL with SCL,
 which was approved by the Shareholders on 7th March 2011 and later
 sanctioned by the Honorable High Court of Andhra Pradesh, the entire
 assets and liabilities, rights and obligations etc., of ACL (Transferor
 Company) as detailed in the Scheme stand transferred to and vested in
 Sagar Cements Limited (the Transferee Company) with effect from 1-
 April 2010 (Appointed Date). A copy of the Scheme was filed with the
 Registrar of Companies on 20* May 2011 (Transferor Company) i.e., after
 the end of the Financial Year 2010-11. This is an amalgamation in the
 nature of merger and has been given effect to in these accounts under
 the pooling of interest method.
 
 b) In accordance with the above said Scheme, the Company is required to
 allot 32,85,714 equity shares of Rs.10/- each at par as fully paid up
 to the equity shareholders of Amareswari Cements Limited, in the ratio
 of 10 equity share of Rs 10/- each fully paid up of the Company for
 every 14 equity shares of the face value of Rs.10/- each fully paid up,
 held in Amareswari Cements Limited towards consideration for the
 aforesaid transfer. Pending the above allotment of shares as at the
 year end, the face value of 32,85,714 shares i.e., Rs 3,28,57,140 has
 been credited to Share Capital Suspense.
 
 c) The difference between the amounts recorded as purchase
 consideration and the value of the net identifiable assets acquired has
 been adjusted against reserves.
 
 d) In accordance with The Scheme, all assets and liabilities pertaining
 to the business of the Transferor Company have been incorporated in the
 books of the Company (Transferee Company) at the book values as on the
 appointed date.
 
 e) Under the Scheme, upon the effective date 9,00,000 Equity Shares
 held in the Transferee Company by the Transferor Company shall stand
 extinguished and no equity shares shall be allotted to the Transferor
 Company.  To reflect this, Share Suspense Account was debited with the
 face value of 9,00,000 equity shares of Rs.10/- each.
 
 5.  There are no amounts due to micro and small enterprises.
 
 6.  Previous year''s figures have been regrouped, recast and
 reclassified wherever necessary to conform with those of the current
 year.
 
 7.  Paise have been rounded to the nearest rupee.