MIRA INFORM REPORT

Report No. :	331282
Report Date :	09.07.2015

IDENTIFICATION DETAILS

Name :	SAGAR CEMENTS LIMITED
Registered Office :	Plot No.111, Road No.10, Jubilee Hills, Hyderabad – 500033, Telangana
Tel. No.:	91-40-23351571/ 23356572
Country :	India
Financials (as on) :	31.03.2015
Date of Incorporation :	15.01.1981
Com. Reg. No.:	01-002887
Capital Investment / Paid-up Capital :	Rs. 173.880 Million
CIN No.: [Company Identification No.]	L26942TG1981PLC002887
IEC No.:	Not Available
TAN No.: [Tax Deduction & Collection Account No.]	HYDS00253B
PAN No.: [Permanent Account No.]	AACCS8680H
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchange.
Line of Business :	Manufacturer and Seller of Cement and Clinker.
No. of Employees :	Information declined by the management

RATING & COMMENTS

MIRA’s Rating :

Ba (48)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 14000000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject was established in the year 1981 and it is engaged in manufacturing of cement. It is old and well established company having satisfactory track record. For the financial year ended 2015, company has reported healthy operational performance and it has achieved profile of Rs.2966.517 Million over previous loss of Rs. (255.811) Million. Sale Turnover of the company has increased by 17.72% and it has maintained decent profitability margins during a year under a review. Rating also takes into consideration long standing experienced promoters in cement industry supported by sound financial risk profile and fair liquidity profile of the company. Rating strength partially offset by cyclical nature of the end - user industry with intense competition from other players. However, trade relations are reported as fair. Payment terms are reported to be usually correct. In view long track record of operation backed by experienced promoters, the company can be considered for business dealings at usual trade terms and condition.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	Long Term Bank Facilities: BBB-
Rating Explanation	Moderate degree of safety and moderate credit risk.
Date	10.12.2014

Rating Agency Name	CARE
Rating	Short Term Bank facilities: A3
Rating Explanation	Moderate degree of safety and higher credit risk.
Date	10.12.2014

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2013.

INFORMATION DECLINED

Management non- corporative: 91-40-23351571

LOCATIONS

Registered/ Administrative Office :	Plot No.111, Road No.10, Jubilee Hills, Hyderabad – 500033, Telangana, India
Tel. No.:	91-40-23351571/ 23356572
Fax No.:	91-40-23356573
E-Mail :	info@sagarcements.in soundar@sagarcements.in prasadk@sagarcements.in
Website :	http://www.sagarcements.com
Factory 1 :	Mattampally, Via Huzurnagar, Nalgonda District – 508204, Telangana, India
Tel. No.:	91-8683-247039
Factory 2 :	Pedaveedu, Via Huzurnagar, Nalgonda District – 508204, Telangana, India
Tel. No.:	91-8683-216533/ 247333

DIRECTORS

AS ON 31.03.2015

Name :	Mr. O. Swaminatha Reddy
Designation :	Chairman - Independent and Non-Executive
Qualification :	Charted account and Financial Management
Name :	Mr. S. Veera Reddy
Designation :	Managing Director
Date of Appointment :	13.07.1991
Name :	Dr. S. Anand Reddy
Designation :	Joint Managing Director
Date of Birth/Age :	10.06.1964
Qualification :	M.B.B.S.
Experience in specific functional areas :	Marketing and Project Management
Date of Appointment :	21.11.1992
Name :	Mr. S. Sreekanth Reddy
Designation :	Executive Director
Date of Birth/Age :	27.08.1971
Qualification :	B.E. (I & P) and PG Diploma in cement technology
Experience in specific functional areas :	Cement Technologist
Date of Appointment :	26.06.2003
Name :	Mr. K. Thanu Pillai
Designation :	Independent and Non-Executive Director
Qualification :	MBA and CAIIB
Name :	Mr. John-Eric Fernand Pascal Cesar Bertrand
Designation :	Non-Executive Director (w.e.f.17.10.2012)
Name :	Mr. K. Rajendra Prasad
Designation :	APIDC Nominee Director
Name :	Mr. G. Suneel Babu
Designation :	IDBI Nominee and Independent Director (w.e.f 29.04.2011)

KEY EXECUTIVES

Name :	Mr. R. Soundararajan
Designation :	Company Secretary
Name :	Mr. K P Parsad
Designation :	AVP Finance
Senior Management Team:
	Corporate Office:
Name :	Mr. M.S.A. Narayana Rao
Designation :	Group President
Name :	Mr. M.V. Subba Rao
Designation :	Senior Vice President
Name :	Mr. K. Ganesh
Designation :	President Project
Name :	Mr. P.S. Prasad
Designation :	Vice President - Marketing
Name :	Mr. O. Anji Reddy
Designation :	Vice President (Electrical and Installations)
Name :	Mr. K.V. Ramana
Designation :	Vice President - Mines
Name :	Mr. K. Prasad
Designation :	Vice President (Finance)
	Sites:
Name :	Mr. P. Vasudeva Reddy
Designation :	Vice President (Works)
Name :	Mr. M.V. Ramana Murthy
Designation :	Vice President (Production and QC)

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.06.2015

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of Total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	8694873	50.00
Bodies Corporate	1204785	6.93
Sub Total	9899658	56.93
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	9899658	56.93
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	1235575	7.11
Financial Institutions / Banks	4050	0.02
Foreign Institutional Investors	375000	2.16
Any Others (Specify)	300	0.00
Trusts	300	0.00
Sub Total	1614925	9.29
(2) Non-Institutions
Bodies Corporate	4381384	25.20
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	1243478	7.15
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	169471	0.97
Any Others (Specify)	79098	0.45
Hindu Undivided Families	23497	0.14
Clearing Members	282	0.00
Non Resident Indians	55319	0.32
Sub Total	5873431	33.78
Total Public shareholding (B)	7488356	43.07
Total (A)+(B)	17388014	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	17388014	100.00

Equity Share Break up (Percentage of Total Equity)

BUSINESS DETAILS

Line of Business :	Manufacturer and Seller of Cement and Clinker.
Products :	Cement Clinker
Brand Names :	Not Available
Agencies Held :	Not Available
Exports :	Not Divulged
Imports :	Not Divulged
Terms :	Not Divulged

PRODUCTION STATUS: NOT AVAILABLE

GENERAL INFORMATION

Suppliers :

Reference :	Not Divulged
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Maximum Limit Dealt :	Not Divulged
Experience :	Not Divulged
Remark:	Not Divulged

Customers :

Reference :	Not Divulged
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Maximum Limit Dealt :	Not Divulged
Experience :	Not Divulged
Remark:	Not Divulged

No. of Employees :

Information declined by the management

Bankers :

· State Bank of Hyderabad

· State Bank of India

· IDBI Bank Limited

Facilities :

(Rs. In Million)

SECURED LOAN	As on 31.03.2015	As on 31.03.2014
LONG TERM BORROWING
Term Loans from Financial Institutions - Indian Rupees
Andhra Pradesh State Financial Corporation		8.184
Term Loans from Banks - Indian Rupees
State Bank of Hyderabad	N.A	117.500
State Bank of Hyderabad		148.551
L & T Finance Limited		65.094
L & T Infrastructure Finance Company Limited		450.000
State Bank of India		205.000
SHORT TERM BORROWING
Cash Credit Loans from Banks
State Bank of Hyderabad		286.912
State Bank of India	N.A	279.771
IDBI Bank Ltd		80.142
Bills Discounting		17.597
Total		1658.751

NOTES:

LONG-TERM BORROWING

Term Loan of Rs.1000.000 Million in Indian Rupees was taken from IDBI Bank during the year 2008-09 and is repayable in 60 monthly installments of Rs.16.700 Million each per month. The loan was sanctioned with interest at 175 bps below Bench Mark Prime Lending rate and is payable at monthly rests. As of 31.03.2014, total loan have been repaid.

Term Loan of Rs.450.000 Million in Indian Rupees was taken from State Bank of India during the year 2008-09 and is repayable in 60 monthly installments of Rs.7.500 Million each per month. The loan was sanctioned with interest at 0.50% below Stat Bank Advance Rate and is payable at monthly rests. As of 31.03.2014, total loan have been repaid.

Term Loan of Rs.500.000 Million was taken from State Bank of Hyderabad during the year 2008-09 and it is repayable in 60 monthly installments of Rs.8.330 Million each. The loan carried an interest at 75 base points below the

prime lending rate of the Bank and is payable at monthly rests. As of 31.03.2013, out of total 60 installments, 51 installments were paid and 9 installments are to be paid. Rate of interest as on 31.03.2013 is 14.25%

(31.03.2012: 14.25%). The term loan is secured by a pari-passu charge on the fixed assets i.e, Land, Buildings, Plant & Machinery, Mining Equipment owned by or belonging to the company both present and future, and by a 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. As of 31.03.2014, total loan have been repaid.

Term Loan of Rs.450.000 Million in Indian Rupees was taken from State Bank of Hyderabad during the year 2010-11 and is repayable in 60 monthly installments from Dec, 2010. As of 31.03.2014 out of 60 installments, 40 Installments have been paid & balance 20 installments to be paid every month at Rs.10.000 Million for first 12 installments and Rs. 15.000 Million for next 7 installments & 1 installment Rs.12.500 Million. The interest was fixed at 4.25% above Basic Rate of interest. Present rate of interest as on 31.03.14 is 14.50% (31.03.13: 14.50%). The term loan from the bank is secured by Pari Passu charge on the fixed assets i.e., Land, Buildings, Plant & Machinery, Mining Equipment owned by or belonging to the borrower company both present 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.

Term Loan of Rs.50.000 Million in Indian Rupees was taken from Andhra Pradesh State Financial Corporation during the year 2010-11 and is repayable in 55 monthly installments of Rs.0.910 Million each per month. As of 31.03.2014

out of 55 installments, 35 installments have been paid and balance installments to be paid are 20. The interest was fixed at 3% below Bench Mark Prime Lending rate of interest. Present rate of interest as on 31.03.14 is 13% (31.03.13: 13.00%). The term loan from the APSFC is secured by Parri Passu charge on the fixed assets i.e., Land, Buildings, Plant & Machinery, Mining Equipment owned by or belonging to the borrower company both present 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.

State Bank of Hyderabad has sanctioned Term Loan for Balancing Equipments, an amount of Rs.400.000 Million during the financial year 2013-14, the company has drawn an amount of Rs.148.551 Million up to 31.03.2014.

The loan principal amount is repayable in 96 monthly installments from March 2015 onwards. The loan was sanctioned with interest at 175 bps below Bench Mark Prime Lending rate and is payable at monthly rests. Present rate of interest as on 31.03.14 is 14.50%. The term loan from the bank is secured by Pari Passu charge on the fixed assets i.e., Land, Buildings, Plant & Machinery, Mining Equipment owned by or belonging to the borrower company both present and future, and by second charge on the current assets of the company.

Term Loan of Rs.200.000 Million was taken from L & T Finance Ltd during the year 2012-13 and is repayable in 31 monthly installments from June, 2013. As of 31.03.14 out of 31 installments 10 installments were paid and 21 installments are to be paid. The interest was fixed at 4.25% above Base Rate of interest. Present rate of interest as on 31.03.14 is 13.00%. The term loan from the L&T Finance Ltd., is secured by Second Pari Passu charge on the fixed assets i.e., Land, Buildings, Plant & Machinery, Mining Equipment owned by or belonging to the borrower company both present and future, and by second charge on the current assets of the company and are guaranteed by Dr.S.Anand Reddy, Joint Managing Director and Shri S.Sreekanth Reddy, Executive Director.

L & T Infrastructure Finance company limited, has sanctioned a Term Loan for Railway Siding Project amounting to Rs.980.000 Million during the financial year 2012-13, the company has drawn an amount of Rs 450.000 Million up to 31.03.2014. The loan principal amount is repayable in 27 quarterly installments from June 2015 onwards. The loan was sanctioned with interest at 175 bps below Bench Mark Prime Lending rate and is payable at monthly rests. Present rate of interest as on 31.03.14 is 13.25%. The term loan from the bank is secured by Pari Passu charge on the fixed assets i.e, Land, Buildings, Plant & Machinery, Mining Equipment owned by or belonging to the borrower company both present and future, and by second charge on the current assets of the company.

Term Loan of Rs.2500 Million in Indian Rupees was taken from State Bank of India during the year 2012-13 and is repayable in 60 monthly installments from September 2013. As of 31.03.2014 out of 60 installments 7 installments were paid and balance 53 installments are to be paid, 25 Million for 1st 21 installments and 5.600 Million for 31 installments & 6.400 Million for Final installment. The interest was fixed at 3.30% above Basic Rate of interest. Present rate of interest as on 31.03.14 is 14.25%. The term loan from the bank is secured by Pari Passu charge on the fixed assets i.e., Land, Buildings, Plant & Machinery, Mining Equipment owned by or belonging to the borrower company both present 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.

Vehicle Loans from various Banks / Financial Institutions are secured by the Hypothecation of Specific assets purchased from those loans and further secured by personal guarantees of Dr.S.Anand Reddy, Joint Managing Director and Shri S.Sreekanth Reddy Executive Director.

SHORT TERM BORROWINGS

Cash credit loans from Banks is secured against Stocks of Raw Materials, Finished Goods & Trade Receivables, Stores & Spares, 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. The cash credit is repayable on demand and carries interest @ 13% to 14.5%.

Auditors :
Name :	P. Srinivasan and Company Chartered Accountants
Address :	H.No.12-13-422, Street No.1, Lane Opposite Bank of Baroda, Tarnaka, Secunderabad – 500017, Telangana, India
Tel No.:	91-40-65534105
Fax No.:	91-40-27014948
Cost Auditors :
Name :	Narasimha Murthy and Company Chartered Accountants
Address :	104, Pavani Estate, Y. V. Rao Mansion, Himayathnagar, Hyderabad – 500029, Telangana , India
Associates (31.03.2014): :	· Vicat Sagar Cement Private Limited, India
Enterprise where key managerial personnel along with their relatives exercise significant influence(31.03.2014): :	· Panchavati Polyfibres Limited · Sagar Power Limited · RV Consulting Services Private Limited · Sagar Priya Housing and Industrial Enterprises Limited · Sagarsoft (India) Limited · Smt S.Vanajatha

CAPITAL STRUCTURE

AS ON 31.03.2015

Authorized Capital: Not Available

Issued, Subscribed & Paid-up Capital: Rs.173.880 Million

AS ON 31.03.2014

Authorised Capital :

No. of Shares	Type	Value	Amount
20000000	Equity Shares	Rs.10/- each	Rs. 200.000Million
2000000	Preference Shares	Rs. 10/- each	Rs. 20.000Million
	Total		Rs. 220.000Million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
17388014	Equity Shares	Rs.10/- each	Rs. 173.880 Million

Reconciliation of shares outstanding at the beginning and at the end of the reporting period

Equity Shares	As at 31st March, 2014
	No. of Shares	Amount (Rs. in million)
At the beginning of the period	17388014	173.880
No. of shares Issued during the period	0	0
Outstanding at the end of the period	17388014	173.880

1. The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of Equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend, if and when proposed by the Board of Directors is subject to the approval of the shareholders.

2. For the year ended 31^st March 2013, the amount of per share dividend recognized as distribution to equity shareholders is Re.1/-.

3. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Details of Shareholders holding more than 5% shares in the company

Shareholder's Name	As at 31st March, 2014
	No. of Shares	% of holding
S. Veera Reddy	1643795	9.45
S. Aruna	1369545	7.88
S. Rachana	1162535	6.69
S. Anand Reddy	1144913	6.58
S. Sreekanth Reddy	1085757	6.24
S. Vanajatha	990769	5.70
AVH Resources Limited	3225211	18.55
Twinvest Financial Services Limited	1142985	6.57
Parficim S.A.S (A Subsidiary of Vicat S.A.)	1000000	5.75

As per of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

FINANCIAL DATA

[all figures are in Rupees Million]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2015	31.03.2014	31.03.2013
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	173.880	173.880	173.880
(b) Reserves & Surplus	5039.448	2234.775	2490.585
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	5213.328	2408.655	2664.465
(3) Non-Current Liabilities
(a) long-term borrowings	1211.293	1113.542	1026.492
(b) Deferred tax liabilities (Net)	475.411	322.418	445.834
(c) Other long term liabilities	331.914	493.193	459.354
(d) long-term provisions	260.870	186.181	60.693
Total Non-current Liabilities (3)	2279.488	2115.334	1992.373
(4) Current Liabilities
(a) Short term borrowings	635.068	664.423	685.899
(b) Trade payables	513.090	461.326	536.094
(c) Other current liabilities	912.597	1005.979	995.942
(d) Short-term provisions	160.727	17.734	52.679
Total Current Liabilities (4)	2221.482	2149.462	2270.614
TOTAL	9714.298	6673.451	6927.452
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	3333.961	3351.105	3405.723
(ii) Intangible Assets	0.000	0.000
(iii) Capital work-in-progress	1121.934	400.728	215.411
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	0.265	860.265	860.265
(c) Deferred tax assets (net)
(d) Long-term Loan and Advances	458.524	459.867	277.638
(e) Other Non-current assets
Total Non-Current Assets	4914.684	5071.965	4759.037
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	623.084	417.754	652.209
(c) Trade receivables	580.578	484.841	532.955
(d) Cash and cash equivalents	1957.840	45.703	246.008
(e) Short-term loans and advances	1484.947	262.895	361.049
(f) Other current assets	153.165	390.293	376.194
Total Current Assets	4799.614	1601.486	2168.415
TOTAL	9714.298	6673.451	6927.452

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2015	31.03.2014	31.03.2013
	SALES
		Income	5755.747	4889.383	5585.155
		Other Income	3662.648	178.162	260.295
		TOTAL	9418.395	5067.545	5845.450
Less	EXPENSES
		Cost of Materials Consumed	677.856	522.812	538.568
		Power and Fuel	1085.690	1058.556	0.000
		Freight and forwarding expenses	2102.340	1982.865	0.000
		Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	(104.595)	12.728	57.519
		Manufacturing Expense	0.000	0.000	2657.029
		Employees benefits expense	334.463	253.127	230.340
		Other expenses	1096.083	1046.163	1679.779
		TOTAL	5191.837	4876.251	5163.235
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		4226.558	191.294	682.215
Less	FINANCIAL EXPENSES		230.824	295.474	305.538
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		3995.734	(104.180)	376.677
Less/ Add	DEPRECIATION/ AMORTISATION		215.047	269.340	267.439
	PROFIT BEFORE TAX		3780.687	(373.520)	109.238
Less	TAX		814.170	(117.709)	21.440
	PROFIT AFTER TAX		2966.517	(255.811)	87.798
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		821.129	1076.940	1009.485
Less	APPROPRIATIONS
		Dividend		0.000	17.388
		Tax on Dividend		0.000	2.955
	Total		N.A	0.000	20.343
	BALANCE CARRIED TO THE B/S		821.129	821.129	1076.940
	Earnings Per Share (Rs.)		17.061	(1.471)	0.505

CURRENT MATURITIES OF LONG TERM DEBT DETAILS

Particulars	31.03.2015	31.03.2014	31.03.2013
Current Maturities of Long term debt	N.A	271.913	531.233
Cash generated from operations	N.A	179.975	639.571
Net Cash Generated from Operations	N.A	474.802	343.782

KEY RATIOS

PARTICULARS		31.03.2015	31.03.2014	31.03.2013
Net Profit Margin (PAT / Sales)	(%)	51.54	(5.23)	1.57
Operating Profit Margin (PBIDT/Sales)	(%)	73.43	3.91	12.21
Return on Total Assets (PBT/Total Assets}	(%)	44.00	(6.90)	1.87
Return on Investment (ROI) (PBT/Networth)		0.73	(0.16)	0.04
Debt Equity Ratio (Total Debt /Networth)		0.35	0.85	0.84
Current Ratio (Current Asset/Current Liability)		2.16	0.75	0.95

FINANCIAL ANALYSIS

[all figures are in Rupees Million]

DEBT EQUITY RATIO

Particular	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Share Capital	173.880	173.880	173.880
Reserves & Surplus	2490.585	2234.775	5039.448
Net worth	2664.465	2408.655	5213.328
long-term borrowings	1026.492	1113.542	1211.293
Short term borrowings	685.899	664.423	635.068
Total borrowings	2243.624	2049.878	1846.361
Debt/Equity ratio	0.842	0.851	0.354

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	5585.155	4889.383	5755.747
		(12.458)	17.719

NET PROFIT MARGIN

Net Profit Margin	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	5585.155	4889.383	5755.747
Profit	87.798	(255.811)	2966.517
	1.57%	(5.23)%	51.54%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check list by info agents	Available in Report (Yes/No)
1	Year of establishment	Yes
2	Constitution of the entity -Incorporation details	Yes
3	Locality of the entity	Yes
4	Premises details	No
5	Buyer visit details	--
6	Contact numbers	Yes
7	Name of the person contacted	Yes
8	Designation of contact person	Yes
9	Promoter’s background	Yes
10	Date of Birth of Proprietor / Partners / Directors	Yes
11	Pan Card No. of Proprietor / Partners	No
12	Voter Id Card No. of Proprietor / Partners	No
13	Type of business	Yes
14	Line of Business	Yes
15	Export/import details (if applicable)	No
16	No. of employees	No
17	Details of sister concerns	Yes
18	Major suppliers	No
19	Major customers	No
20	Banking Details	Yes
21	Banking facility details	No
22	Conduct of the banking account	--
23	Financials, if provided	Yes
24	Capital in the business	Yes
25	Last accounts filed at ROC, if applicable	Yes
26	Turnover of firm for last three years	Yes
27	Reasons for variation <> 20%	--
28	Estimation for coming financial year	No
29	Profitability for last three years	Yes
30	Major shareholders, if available	Yes
31	External Agency Rating, if available	Yes
32	Litigations that the firm/promoter involved in	--
33	Market information	--
34	Payments terms	No
35	Negative Reporting by Auditors in the Annual Report	No

FUTURE OUTLOOK

It is fervently hoped that the division of Andhra Pradesh, into Telangana and Andhra Pradesh, where new governments have since assumed office would end the uncertainties and usher in era of all-round development, This augurs well particularly for the cement industry, as these Governments, in order to woo investors, are likely to announce fresh incentives on new investments and expansions and also take up more infra projects, housing and urban development. In fact, setting up of a new capital for Andhra Pradesh alone may require infrastructure to tune of anywhere around Rs 1 lakh crore. However, till such time, your company may have to face the problems like rising input costs, higher freight and distribution costs and low price realizations due to weak demand. Your company therefore attaches greater importance to keep its energy cost to the minimum by ensuring an optimum combination in the consumption of imported and indigenous coal. As a long term measure, your company proposes to set up a waste heat recovery plant to ease the pressure on energy cost. Further, as you are aware, a railway siding project is under implementation near your plant at Mattampally and it is hoped that, barring unforeseen circumstances, the same would be completed in the current year and this project would see the optimization of the transportation cost and reduced dependence on road transport apart from enabling your company to reach newer markets. Taking an overall view of the above, your Board, is cautiously optimistic about the future outlook for your company.

INDUSTRY REVIEW

As one of the basic infrastructure industries, cement industry continues to contribute in a significant way to the Indian economy in terms of employment generation, tax revenues, and industrial growth. Though India is the second largest producer of cement, its per capita consumption of cement, which is an important indicator of a country’s economic development, is very much low. This is due to low infrastructure intensity coupled with high level of housing deficit. Though, housing sector accounts for more than 60 % of cement demand in the country, the residential demand is yet to realize its full potential. A significant percent of urban as well as rural population has no access to cement houses. However, this offers vast scope for the cement industry to grow.

This industry produces several varieties of cement such as Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement, etc.

The industry has made great progress in technological up-gradation and assimilation of latest technology. Presently, more than 95 per cent of the total capacity in the industry is based on modern and environment-friendly dry process technology. Telangana State and Andhra Pradesh have together 37 large cement plants with a combined capacity of 68 MTPA, constituting the maximum number of cement plants in India.

Being a huge country, there is a difference in the region wise demand for cement in India, which is broadly divided into the western, eastern, northern and southern regions. Cement being a bulk item, transporting it over long distances can prove to be uneconomical. Thus, the industry is completely domestic driven. As the cement is a low value and high volume product, it does not offer much scope for export either.

During the last few years, most cement companies expanded their capacities hoping for increased consumption of cement on account of anticipated hike in government spending, which however did not materialize to the extent hoped for and because of the continuing depressed housing / real estate market, the construction spending levels remained low in 2013-14 too.

Despite higher cement prices realized now and then, the margins continue to be under pressure particularly over the last couple of years due to steep hike in cost of all major inputs like raw material, fuel, power and freight, which together account for around 70 per cent of the cost of production.

The slowdown in the economy continued in 2013-14 as well, forcing the financial institutions to tighten their credit norms, which inter-alia, impacted the on-going as well as upcoming real estate, infrastructure and other projects leading to a fall in the demand for cement and resulting in its excess supply, putting pressure on the price.

OVERALL PERFORMANCE

Performance of Sagar Cement during the year 2013-14 has to be evaluated against the backdrops of the current mismatch between cement demand and its supply in Andhra and Telangana regions, which are the major markets for the Company. The increasing cost of coal and other input materials is pushing up the cost of production of cement, squeezing the earnings of the company. The lower demand for cement in these regions and their neibhouring States, has put severe pressure on the price. Due to these reasons, there was a marginal dip in production, sales as well as in net sales realization per ton of cement.

During the year the company earned a total revenue of Rs.50.675 Million, lower by 13.31 % than that of the previous year. The Loss for the year stood at Rs.373.520 Million as against profit before tax of Rs.109.238 Million in the previous year. The Company has incurred a loss of Rs.255.811 Million from continuing operations as against a profit of Rs.87.798 Million earned in the previous year

FINANCIAL REVIEW

During the year the company sold 1419857 MT’s of cement with an average gross realization of Rs.4442/MT, whereas in the previous year, the company had sold 1585003 MT’s at an average gross realization of Rs.4550/MT. The net revenue from operations during the year under discussion is Rs.4889.383 Million as compared to Rs.5585.155 Million during the previous year. Other income included an amount of Rs.150.000 lakhs on account of Incentives from A.P. Government as per the Industrial Policy 2005-10 and Rs.108.00 Million towards gain on sale of land at Mattampally (Compulsory Acquisition of Land). The balance retained in the Statement of Profit and Loss as on 31st March 2014 is Rs.821.129 Million.

OUTLOOK

The next couple of years may see a period of consolidation in the industry with the smaller players withdrawing from the industry by selling out to the financially stronger cement producers. On the macro level, the per capita consumption of cement being very low in India, there is a vast scope for growth in demand for cement on the long term. The main drivers for the growth in demand for cement being road and housing projects, the increased spending by the Government in these areas and the revival of the real estate sector would ensure no let up in the demand for cement, notwithstanding the substantial additions to capacity recently witnessed in the industry.

UNSECURED LOAN

Particulars	As on 31.03.2015	As on 31.03.2014
LONG TERM BORROWING
Other Loans & Advances
Sales Tax Deferment		49.771
Hire Purchase Loans	N.A
Vehicle Loans from Banks		69.443
Total		119.214

CONTINGENT LIABILITIES

(Rs. in million)

Particulars	31.03.2014 (Rs. in million)
	Disputed Amount	Paid Under Protest
AP TRANSCO Voltage surcharge and grid supporting charges	17.350	2.740
Demand by Sales tax authorities year 2009-10-Sale of Fixed Assets	10.940	2.740
Demand by Sales Tax authorities year 1999-2000-Interest on delayed payment	1.960	0.490
Demand by Central Excise Department benefit of Cenvat credit on capital goods	22.500	19.500
Demand by Central Excise Department benefit of Cenvat credit on capital goods	65.080	0.000
Demand by Road Transport Authority, Nalgonda for payment of Life Tax on dumpers used in the mines	2.850	0.320
Demand Raised by Central Excise Department	5.941	0.000
Demand Raised by Central Excise Department	14.630	0.000
Demand Raised by Central Excise Department	0.767	0.384
Disallowed input tax credit on steel during the year 2007-08.	0.629	0.000
Disallowed input tax credit on steel during the year 2008-09	14.425	1.803
Disallowed input tax credit on steel during the year 2007-08.	7.568	0.946
Demand raised by Commissioner of Customs Visakhapatnam, relating to coal classification.	6.792	0.000
Demand raised by Commissioner of Customs Guntur, relating to coal classification.	5.475	0.000
Disallowance of Expenditure U/s 14A	3.760	0.000

Notes:

APTRANSCO had raised a demand of Rs.17.350 Million towards voltage surcharge and grid supporting charges and the company has paid Rs.10.800 lakhs under protest. The said demand is contested by the company and the matter is pending before the Division Bench of the Honorable High Court of Andhra Pradesh.

In the year 2009-10, Sales Tax Authorities raised a demand for Rs.10.940 Million in respect of tax on sale of fixed assets. The company has paid an amount of Rs. 2.740 Million and contested before the Sales Tax Appellate Tribunal.

Demand raised by the Sales Tax Authorities for a sum of Rs.19.60 Million towards interest U/s.16(3) of the APGST Act, on delayed payment of tax for the AY 1999-2000. The company filed an appeal with Sales Tax Appellate Tribunal by paying an amount of Rs.0.490 Million.

The Excise Department had raised a demand of Rs.22.500 Million denying the benefit of Cenvat credit on dumpers used in captive mines. The company has paid an amount of Rs.195 Million under protest and filed an appeal with CESTAT, Bangalore. Matter is pending before CESTAT.

The Excise Department had raised a demand of Rs.650.80 Million denying the Cenvat credit on MS Steel, Cement, TMT bars etc., used in expansion. The company has contested the same before CESTAT who in turn demanded 50% of the aforesaid amount i.e. Rs.32.540 Million to be paid. The company went for an appeal before AP High Court. The AP High Court has granted interim stay order. Show Cause Notice has been received from the RTA, Nalgonda demanding Life Tax on dumpers purchased during year 2006 – 2010 and used in the captive mines. The matter is contested and pending in the Honorable High Court of Andhra Pradesh.

Additional Director General Intelligence Hyderabad has issued a Show Cause Notice No.26/2012(OR Mo.53/ 2012) dated 27-03-13 for an amount of Rs.5.941 Million and an equal amount of penalty along with interest on the ground that cement has been cleared to the contractors at a rate which is lesser than the price at which the cement was sold in the normal course of transaction, resulting into a short payment of Central excise duty. Matter is pending before CESTAT Bangalore.

The Commissioner of Central Excise, Customs and Service Tax, Hyderabad III Commissionerate has raised a Demand for Rs.13.630 Million along with interest and also imposed a penalty Rs.1.000 Million on the ground that the Company has availed Cenvat Credit against Service Tax paid on the freight charges incurred for the transportation of cement beyond the place of removal during the period from July 2008 to February 2011. Matter is pending before CESTAT Bangalore.

The Commissioner (Appeals) of Central Excise, Customs and Service Tax has disallowed CENVAT credit of Rs.0.767 Million availed during the period from December 2006 to March 2010 on the ground that Cenvat Credit had been availed on Input Services such as Advertisement, Audit and Telephone telex services used in relation to the trading activity which did not have any nexus with the manufacturing activity. An amount Rs.0.384 Million has been deposited by the company under protest and an appeal has been filed before CESTAT, Bangalore in this regard.

Input tax credit on sales made to SEZ units during the year 2010-11 amounting to Rs.0.629 Million has been disallowed. Interim stay was granted by AP High court. Final hearing is pending before the AP High Court.

Input tax credit on steel, MS Angles, etc. taken at the time of factory expansion during the year 2007-08 has been disallowed by the Commercial Tax authorities. Demand was raised for an amount of Rs.14.425 Million. An amount of Rs.1.803 Million have been paid in order to maintain the appeal. Matter is pending before Appellate Deputy Commissioner Tribunal.

Input tax credit on steel, MS Angles, etc. taken at the time of factory expansion during the year 2008-09 has been disallowed by the Commercial Tax authorities. Demand was raised for an amount of Rs.7.568 Million. An amount of Rs.0.946 Million have been paid in order to maintain the appeal. Matter is pending before Appellate Deputy Commissioner Tribunal.

Commissioner of Customs Visakhapatnam has served a demand order on the ground that imported coal was wrongly classified under steam coal instead of bituminous coal. Demand was raised for an amount of Rs.6.792 Million. The company has filed an appeal before CESTAT Bangalore against the said order.

Commissioner of Customs Guntur has served a show cause notice on the ground that imported coal was wrongly classified under steam coal instead of bituminous coal. Demand was raised for an amount of Rs. 5.475 Million. The matter is pending before Commissioner (Appeals).

The Deputy Commissioner of Income Tax Circle-1(1), Hyderabad has disallowed an amount of Rs.3.760 Million under Section 14A (Disallowance of expenditure incurred in relation to income which is not included in the total income) claimed as expenditure during the assessment years from 2008-09 to 2010-11 on account of Interest paid on term loans to Financial Institutions. In this regard an appeal is being filed by the company with Appellate Tribunal.

Bank Guarantees Pending as on 31.03.14 Rs.41.850 Million ( Previous year Rs. 37.693 Million).

INDEX OF CHARGES

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10493282	29/03/2014	90,800,000.00	ICICI BANK LIMITED	LANDMARKRACE COURCE CIRCLE, ALKAPURI, BARODA, GUJARAT - 390015, INDIA	C04229233
2	10445314	01/03/2014 *	400,000,000.00	STATE BANK OF HYDERABAD	PANJAGUTTA BRANCH, `ROSE MODE', H.NO.6-3-542/2, P  OST BOX NO.1525, HYDERABAD, ANDHRA PRADESH - 50008  2, INDIA	B97963748
3	10403585	18/09/2013 *	980,000,000.00	L&T INFRASTRUCTURE FINANCE COMPANY LIMITED	MOUNT POONAMALLEE ROAD, MANAPAKKAM, CHENNAI, TAMILNADU - 600089, INDIA	B85231413
4	10392242	18/09/2013 *	200,000,000.00	L & T FINANCE LIMITED	L&T HOUSE,, BALLARD ESTATE, MUMBAI, MAHARASHTRA - 400001, INDIA	B84970789
5	10252704	18/11/2010	50,000,000.00	ANDHRA PRADESH STATE FINANCIAL CORPORATION	POST BOX NO.165, CHIRAGE ALI LANE. ABIDS, HYDERABAD, ANDHRA PRADESH - 500001, INDIA	A98648769
6	10249562	24/06/2011 *	450,000,000.00	STATE BANK OF HYDERABAD	PUNJAGUTTA BRANCH, H.NO.6-3-542/2, `ROSE MODE', P  UNJAGUTTA, HYDERABAD, ANDHRA PRADESH - 500082, INDIA	B14947162
7	10057931	06/01/2014 *	250,000,000.00	STATE BANK OF INDIA	INDUSTRIAL FINANCE BRANCH, 6-3-1109/1, RAJBHAVAN  ROAD, NAVABHARAT CHAMBERS, HYDERABAD, ANDHRA PRADESH - 500082, INDIA	B95126223
8	90126147	09/11/2011 *	1,020,000,000.00	STATE BANK OF HYDERABAD (LEAD BANK)	PUNJAGUTTA BRANCH, H.NO.6-3-542/2, `ROSE MADE', P  UNJAGUTTA, HYDERABAD, ANDHRA PRADESH - 500082, INDIA	B24653875
9	90129524	22/01/1997	8,037,425.00	DCL FINANCE LTD.	DECCAN CHAMBERS SOMAJIGUDA, HYDERABAD, ANDHRA PRADESH, INDIA	-
10	90130817	22/01/1997	8,037,425.00	DCL FINANCE LTD.	DECCAN CHAMBERS SOMAJIGUDA, HYDERABAD, ANDHRA PRADESH, INDIA	-

FIXED ASSETS

· Land

· Buildings

· Plant and Machinery

· Plant and Machinery (DG Set)

· Electrical Installations

· Furniture and Fixtures

· Office Equipment

· Computers

· Vehicles

· Other Equipment

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.63.56
UK Pound	1	Rs.98.22
Euro	1	Rs.69.93

INFORMATION DETAILS

Information Gathered by :	GYA
Analysis Done by :	KAR
Report Prepared by :	RKI

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILITY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		48

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.