Directors Report of P R Cements Ltd.

Jun 30, 2011

The Directors have the pleasure of presenting this 26th Annual Report along with the Audited Financial Statements and the Auditor's Report thereon for the Financial Year ended 30th June 2011.

FINANCIAL PERFORMANCE: (Amount in Rupees)

Particulars 2010-11 2009-10

Gross Total Income 205956062 113026528

Profit/Loss before financial expenses, depreciation and -798861 -4382749 taxation

Financial Expenses 130604239 0

Depreciation 33S87272 6470713

Profit/loss) Before Taxation 160466300 -2087964

BIFR:

Members are aware that the net worth of the Company had been completely eroded and the Company was registered as sick industrial Company vide No, 57/2000 with BIFR.

Hon'ble BIFR approved the rehabilitation Scheme filed with it and passed the final order on 8th June, 2011 to implement the said Rehabilitation Scheme. And the Company is implementing the Scheme and approaching different government authorities to seek the grants and relief's as directed by Hon'ble BIFR in the Rehabilitation Package.

DIVIDEND:

Your Directors do not recommend any dividend for the financial year due to accumulated losses.

DIRECTORS

During the year Sri. G. Bala Reddy and Sri Ch. Ramesh Babu retires by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Necessary resolutions for the appointment of Sri. Gudipudi Venkateswara Rao, Director, Sri. Vangala Shyam Sunder Reddy and Sri. Yarabolu Venkata Ramana Reddy as Independent Directors to meet the requirements of Corporate Governance were included in the notice of the meeting for the approval of the members of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT:

The Directors of your Company hereby report:

(i) that in the preparation of Annual Accounts for the year ended 30th June, 2011, the applicable accounting standards except Accounting Standard 15 have been followed along with the proper explanation relating to material departures:

(ii) that the directors have selected such accounting policies and applied them consistently and 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 30th June, 2011 and of the profit and loss of the company for that period.

(iii) That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities:

(iv) That the directors have prepared the annual accounts on a going concern basis.

FIXED DEPOSITS:

During the Financial year, company has not accepted any deposits falling with the preview of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975.

AUDITORS:

M/s. Rameau & Co, Chartered Accountants, the Statutory Auditors of your Company, who retires ' at the conclusion of the ensuing Annual General Meeting, and being eligible, expressed their willingness for re-appointment. The board recommends their re-appointment.

AUDITORS REPORT

With regard to Point No. 9 (b) of Annexure to Auditor's Report, due to working capital constraints there was a pending of payment to Sales Tax department for an amount of Rs 178.69 Lakhs.

PARTICULARS OF EMPLOYEES:

There are no employees drawing remuneration exceeding the limits as specified under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

SECRETARIAL COMPLIANCE CERTIFICATE:

Certificate from the Practicing Company Secretary as stipulated in Section 383A of the Companies Act, 1956 read with the Companies (Compliance Certificate) Rules, 2001 and attached to the Directors' Report form a part of this Annual Report.

CORPORATE GOVERNANCE:

A report on Corporate Governance, in accordance with Clause 49 of the Listing Agreement with the Stock Exchanges is set out separately for the information of the shareholders.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis is set out separately for the information of the shareholders.

ACKNOWLEDGEMENTS:

Your Directors take this opportunity to record their appreciation for the continuous support and co-operation extended by the customers and bankers. The Directors also acknowledge the confidence reposed by the investors and shareholders in the Company.

For and on behalf of the Board

Date : 14.11.2011

Place : Vijayawada K.S.N.PRASAD

MANAGING DIRECTOR