MIRA INFORM REPORT

Report Date :

27.04.2011

IDENTIFICATION DETAILS

Name :	AMBUJA CEMENTS LIMITED (w. e. f. 05.04.2007)

Formerly Known As :	GUJARAT AMBUJA CEMENTS LIMITED

Registered Office :	Ambuja Nagar P.O. Taluka Kodinar, Amreli District, Junagadh-362715, Gujarat

Country :	India

Financials (as on) :	31.12.2009

Date of Incorporation :	20.10.1981

Com. Reg. No.:	04-004717

CIN No.: [Company Identification No.]	L26942GJ1981PLC004717

Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.

Line of Business :	Manufacturing and Marketing of Cement.

RATING & COMMENTS

MIRA’s Rating :

Aa (74)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 258836000

Status :	Good

Payment Behaviour :	Regular

Litigation :	Clear

Comments :	Subject is a well established and a reputed company having fine track. Financial position of the company appears to be sound. Directors are reported to be experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

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 – April 1, 2010

Country Name

Previous Rating

(31.12.2009)

Current Rating

(01.04.2010)

India

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

INFORMATION PARTED BY

Name :	Mr. P. J. Menon
Designation :	Finance Head
Contact No.:	91-22-90667000
Date :	26.04.2011

LOCATIONS

Registered Office :	Ambuja Nagar P.O. Taluka Kodinar, Amreli District, Junagadh - 362715, Gujarat
Tel. No.:	91 - 2795 - 221137/232065
Fax No.:	91 - 2795 -232629
E-Mail :	shares@ambujacement.com tushar@ambujamail.com
Website :	www.gujaratambuja.com

Corporate Office 1 :	122, Maker Chambers III, Nariman Point, Mumbai 400 021, Maharashtra
Tel. No.:	91-22-22853044/22846270
Fax No.:	91-22-22852921
E-Mail :	tushar@ambujamail.com

Corporate Office 2 :	106, Maker Chambers III, Nariman Point, Mumbai 400 021, Maharashtra
Tel. No.:	91-22-66597300
Fax No.:	91-22-22853051 / 22852917

Corporate Office 3 :	Elegant Business Park, MIDC Cross Road ‘B’, Off Andheri-Kurla Road, Andheri (East), Mumbai – 400 059, Maharashtra

Factory :	Cement Plants: · Ambujanagar, P.O. Taluka Kodinar, District Junagadh - 362 715, Gujarat · Village Suli, P.O. Darlaghat, District Solan - 171 102, Himachal Pradesh · Maratha Cement Works, At Post - Upperwahi, District Chandrapur, Maharashtra · Village Daburji, District Roopnagar - 140 001, Punjab · P. O. and District Bathinda, Punjab – 150001 · P.O. and Village Dhulagori, P.S. Sankrail, Dist. Howrah, West Bengal - 711 302 · Roorkee, Village Lakeshwari, Pargana - Bhagwanpur, Tehsil - Roorkee, Dist. Haridwar, Uttarakhand Grinding Stations · Village Daburji, District Roopnagar, Punjab - 140 001. · P. O. and District Bathinda, Punjab - 151 002. · P. O. and Village Dhulagori, P. S. Sankrail, Dist. Howrah, West Bengal - 711 302. · Survey No. 39/40, Magdalla Port Road, Village Gavier, Taluka Choryasi, District Surat, Gujarat - 395 010. · Village Lakeshwari, Pargana - Bhagwanpur, Tehsil - Roorkee, Dist. Haridwar, Uttaranchal. · Village Kendua, P. O. Shrimantapur, P. S. Farakka, Dist. Murshidabad-742 236, West Bengal. Bulk Cement Terminals: · Muldwarka, Taluka Kodinar, District Junagadh - 362715, Gujarat · Survey No. 39/40, Magdalla Port Road, Village Gavier, Taluka - Choryasi, District Surat, - 395010, Gujarat · Village Moha, Near Ulwa Reti Bunder, Post. Ulwa, District Raigad - 410306, Maharashtra · Q1 Berth, Mattancherry Wharf, Willingdon Island, Cochin – 682 003, Kerala

Branches :	Near Vidyanagri, Kalina, C.S.T. Road, Mumbai - 400 029, Maharashtra
Tel. No.:	91-22-26523253 / 3251 / 3252

DIRECTORS

As on 31.12.2009

Name :	Mr. Suresh Neotia
Designation :	Chairman

Name :	Mr. N S Sekhsaria
Designation :	Chairman

Name :	Mr. Markus Akermann
Designation :	Director

Name :	Mr. Paul Hugentobler
Designation :	Vice Chairman

Name :	Mr. M.L. Bhakta
Designation :	Director

Name :	Mr. Nasser Munjee
Designation :	Director

Name :	Mr. Rajendra P. Chitale
Designation :	Director

Name :	Mr. Shailesh Haribhakti
Designation :	Director

Name :	Dr. Omkar Goswami
Designation :	Director

Name :	Mr. A. L. Kapur
Designation :	Managing Director
Qualification	B.A., F.C.A., F.I.C.W.A.
Date of Appointment	20.02.1999
Other Directorship	· W.H.Brady and Company Limited as a Chief Accountant cum Assistant Secretary · Birla Corporation Limited as a Executive Director and Chief Executive Officer

Name :	Mr. Naresh Chandra
Designation :	Director

Name :	Mr. Onne Van Der Weijde
Designation :	Director

KEY EXECUTIVES

Name :	Mr. B. L. Taparia
Designation :	Whole Time Director and Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2011

Names of Shareholders	No. of Shares	Percentage of Holding

(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	40000	-
Bodies Corporate	12041909	0.80
(2) Foreign
Bodies Corporate	695393717	46.29
(B) Public Shareholding
(1) Institutions
Mutual Funds / Axis	23371271	1.56
Financial Institutions / Banks	2950747	0.20
Insurance Companies	198123845	13.19
Foreign Institutional Investors	415622169	27.67
(2) Non-Institutions
Bodies Corporate	16379725	1.09
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	108692821	7.24
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	11844048	0.79
Any Others (Specify)	17748069	1.18
Overseas Corporate Bodies	12870	--
Non Resident Indians	17491662	1.16
Trusts	243537	0.02
(C) Shares held by Custodians and against which Depository Receipts have been issued
(1) Promoter and Promoter Group	--	--
(2) Public	27969865	--
Total (A)+(B)+(C)	1530178186	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing and Marketing of Cement.

Products :

ITC Code No.	Product Description
2523	Portland Cement

Import :

Products :

Cement

Country :

· Mauritius

· Germany

· United Kingdom

· Finland

· European Countries

Terms :

Selling :

Cash, Credit (30 / 60 / 90 days)

Purchasing :

L/C, Cash, Credit (30 / 60 / 90 days)

PRODUCTION STATUS (as on 31.12.2009)

Particulars	Unit	Installed Capacity	Actual Production
		(Rs. in millions)
Cement	MT	22000000	18828453

GENERAL INFORMATION

Customers :

· End Users

· OEM’s

No. of Employees :

500 (Approximately)

Bankers :

· Bank of India

· Dena Bank

· Bank of Baroda

· Punjab National Bank

· ANZ Grindlays Bank Plc

· The Hong Kong and Shanghai Banking Corporation Limited

· Credit Lyonnais

Facilities :

SECURED LOAN	31.12.2009 Rs. In Millions	31.12.2008 Rs. In Millions
Debentures : 100 6.85% Secured Redeemable Non-Convertible Debentures of Rs.1,00,00,000 each - Series '30' (Redeemable at par on 31.03.2010)	1000.000	1000.000
Total	1000.000	1000.000
Above Debentures are secured by way of first pari passu charge by mortgage of immovable properties of the three cement plants of the Company situated at Ambujanagar, in the state of Gujarat, as covered under respective Trust Deeds.

UNSECURED LOAN	31.12.2009 Rs. In Millions	31.12.2008 Rs. In Millions
Sales Tax Deferment Loan under Sales Tax Incentive Scheme of various state Governments (Due within one year Rs.73.300 millions 31.12.2008 - Rs.62.300 millions)	657.000	1886.700
Total	657.000	1886.700


Banking Relations :	--

Auditors :
Name :	· Dalal and Shah Chartered Accountants. · Chaturvedi and Company Chartered Accountants · S R Batliboi and Associates Chartered Accountant

Memberships :	Confederation of Indian Industry

Associates:	· Ambuja Cement Rajasthan Limited · ICAN Securities and Research Limited · Development Limited · Sakambari Holdings Private Limited · Bengal Ambuja Housing Development Limited · Bengal Ambuja Metro Development Limited

Subsidiaries :	Cement Ambuja International Limited Ceylon Ambuja Cements (Private) Limited Indo Nippon Special Cements Limited (Merged with the Company on 1.01.2007 with effect from 01.07.2005 Kakinada Cements Limited M.G.T. Cements Private Limited Chemical Limes Mundwa Private Limited Holcim CTC Trading Company - Fellow Subsidiary of Holderind Investments Limited, Mauritius Holcim Trading Pte Limited, Singapore - Fellow Subsidiary of Holderind Investments Limited, Mauritius Holcim Group Supports Limited - Fellow Subsidiary of Holderind Investments Limited, Mauritius ACC Machinery Company Limited - Wholly Owned Subsidiary of ACC Limited ACC Nihon Casting Limited - Wholly Owned Subsidiary of ACC Limited ACC Limited - Associate of Holderind Investments Limited, Mauritius Ambuja Cement India Private Limited - Subsidiary of Holderind Investments Limited, Mauritius (Associate upto 30.04.2007 ) Holcim Trading FZCO, Dubai - Fellow Subsidiary of Holderind Investments Limited, Mauritius Holcim Services (Asia) Limited - Fellow Subsidiary of Holderind Investments Limited, Mauritius Holcim Services (South Asia) Limited - Fellow Subsidiary of Holderind Investments Limited, Mauritius Siam City Cement, Thailand - Fellow Subsidiary of Holderind Investments Limited, Mauritius Holcim Limited - Ultimate Parent Company Holderind Investments Limited, Mauritius

Sub-subsidiary :	Midigama Cements (Private) Limited

CAPITAL STRUCTURE

As on 31.12.2009:-

Authorised Capital :

No. of Shares	Type	Value	Amount
2500000000	Equity Shares	Rs.2/- each	Rs.5000.000 millions
150000000	Preference Shares	Rs.10/- each	Rs.1500.000 millions

	Total		Rs.6500.000 millions

Issued Capital :

No. of Shares	Type	Value	Amount

1524040900	Equity Shares	Rs.2/- each	Rs. 3048.100 millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount

1523711380	Equity Shares	Rs.2/- each	Rs. 3047.400 millions

Notes:

1) Out of above Equity Shares:

a) 973157405 (31.12.2008 - 973157405) Equity Shares of Rs. 2 each have been issued as fully paid-up Bonus Shares by way of capitalisation of Securities Premium and Capital Redemption Reserve.

b) 24717990 (31.12.2008 - 24717240) Equity Shares of Rs. 2 each fully paid-up have been issued against exercise of Tradable Warrants attached to 18.5% Secured Redeemable Non-Convertible Debentures.

c) 13312370 (31.12.2008 - 13312370) Equity Shares of Rs. 2 each fully paid-up have been issued to the Shareholders of the amalgamating company Ambuja Cements Rajasthan Limited (ACRL) pursuant to the scheme of amalgamation as approved by the Board of Industrial and Financial Reconstruction (BIFR) without payment being received in cash.

d) 153961356 (31.12.2008 – 153961356) Equity Shares of Rs. 2 each fully paid-up issued to the Shareholders of the amalgamating company Ambuja Cement Eastern Limited (ACEL) without payment being received in cash.

- Outstanding Employee stock options exercisable into 22215038 (31.12.2008 - 16274711) Equity Shares of Rs. 2 each fully paid-up (Refer Note 10).

- Outstanding tradable warrants and right shares kept in abeyance exercisable into 188190 (31.12.2008 - 188940) and 141330 (31.12.2008 - 142080) Equity Shares of Rs. 2 each fully paid-up respectively.

As on 05.04.2010:-

Authorised Capital :

No. of Shares	Type	Value	Amount
2500000000	Equity Shares	Rs.2/- each	Rs.5000.000 millions
150000000	Preference Shares	Rs.10/- each	Rs.1500.000 millions

	Total		Rs.6500.000 millions

Issued Capital and Subscribed & Paid-up Capital:

No. of Shares	Type	Value	Amount

1530438086	Equity Shares	Rs.2/- each	Rs. 3060.876 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2009 (12 Months)	31.12.2008 (12 Months)	31.12.2007 (12 Months)
SHAREHOLDERS FUNDS
1] Share Capital		3047.400	3045.200	3044.800
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		61659.200	53680.100	43563.900
4] (Accumulated Losses)		0.000	0.000	0.000
5] Employee Stock Option Outstanding		2.400	3.400	3.800
NETWORTH		64709.000	56728.700	46612.500
LOAN FUNDS
1] Secured Loans		1000.000	1000.000	1000.000
2] Unsecured Loans		657.000	1886.700	2304.200
TOTAL BORROWING		1657.000	2886.700	3304.200
DEFERRED TAX LIABILITIES		4858.400	3807.500	3783.800

TOTAL		71224.400	63422.900	53700.500

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		34400.400	31927.500	29598.600
Capital work-in-progress		25648.200	15607.500	5100.300
Advances against capital expenditure		1496.100	3864.700	1867.600

INVESTMENT		7270.100	3323.900	12889.400
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	6832.400	9387.200	5816.000
	Sundry Debtors	1522.000	2246.000	1456.800
	Cash & Bank Balances	8806.800	8518.400	6507.900
	Other Current Assets	101.700	244.200	39.100
	Loans & Advances	2530.500	2998.700	2053.500
Total Current Assets		19793.400	23394.500	15873.300
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	9222.800	8817.100	5739.600
	Current Liabilities	1447.700	1215.300	1015.800
	Provisions	6740.400	4705.600	4935.500
Total Current Liabilities		17410.900	14738.000	11690.900
Net Current Assets		2382.500	8656.500	4182.400

MISCELLANEOUS EXPENSES		27.100	42.800	62.200

TOTAL		71224.400	63422.900	53700.500

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2009 (12 Months)	31.12.2008 (12 Months)	31.12.2007 (12 Months)
	SALES
		Income	70768.700	62202.700	56313.600
		Other Income	2558.400	2109.400	1935.300
		TOTAL (A)	73327.100	64312.100	58248.900

Less	EXPENSES
		Manufacturing Expenses	52293.200	44990.700	35957.100
		Self consumption of clinker, cement and limestone	(193.300)	(211.900)	(94.700)
		Exceptional Items	0.000	(3083.300)	(7858.900)
		TOTAL (B)	52099.900	41695.500	28003.500

Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		21227.200	22616.600	30245.400

Less	FINANCIAL EXPENSES (D)		224.300	320.600	758.500

	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		21002.900	22296.000	29486.900

Less/ Add	DEPRECIATION/ AMORTISATION (F)		2969.900	2597.600	2363.400

	PROFIT BEFORE TAX (E-F) (G)		18033.000	19698.400	27123.500

Less	TAX (H)		5849.300	5675.700	9432.500

	PROFIT AFTER TAX (G-H) (I)		12183.700	14022.700	17691.000

Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		3585.800	3482.000	2720.600

Add	Nippon Special Cements Limited		0.000	0.000	2.100

Less	APPROPRIATIONS
		Transfer to General Reserve	8000.000	10000.000	11000.000
		Transfer to Debenture Redemption Reserve	0.000	0.000	(300.000)
		Dividend	1827.400	1827.100	3804.100
		Tax on Dividend	310.600	310.500	646.500
		Proposed Final Dividend	1828.500	1522.600	1522.400
		Dividend Distribution Tax	310.700	258.700	258.700
	BALANCE CARRIED TO THE B/S		3492.300	3585.800	3482.000

	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	1719.800	2265.300	2774.700
		Other Earnings	128.000	20.000	4.700
	TOTAL EARNINGS		1847.800	2285.300	2779.400

	IMPORTS
		Raw Materials	1805.400	511.400	280.300
		Stores & Spares	546.700	504.100	258.400
		Capital Goods	2415.500	1422.000	197.700
		Others	2452.900	5048.900	3222.300
	TOTAL IMPORTS		7220.500	7486.400	3958.700

	Earnings Per Share (Rs.)		8.00	9.21	11.64

Particulars

31.12.2010

Sales Turnover (Approximately)

80000.000

Expected Sales (2010-2011) : Rs. 85000.000 Millions.

Expected Sales (2011-2012) : Rs. 90000.000 millions

QUARTERLY RESULTS

(Rs. In Millions)

PARTICULARS	31.03.2010	30.06.2010	30.09.2010	31.12.2010
	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Net Sales	20187.600	20883.900	15830.400	18273.600
Total Expenditure	13675.100	14443.800	12808.600	14738.400
PBIDT (Excl OI)	6512.500	6440.100	3021.800	3535.200
Other Income	259.800	259.100	305.200	378.500
Operating Profit	6772.300	6699.200	3327.000	3913.700
Interest	107.800	81.000	89.400	208.700
Exceptional Items	200.800	0.000	0.000	64.500
PBDT	6865.300	6618.200	3237.600	3769.500
Depreciation	767.200	1000.700	1018.000	1086.000
Profit Before Tax	6098.100	5617.500	2219.600	2683.500
Tax	1476.200	1705.400	698.700	102.300
Provisions and contingencies	0.000	0.000	0.000	0.000
Profit After Tax	4621.900	3912.100	1520.900	2581.200
Extraordinary Items	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000
Net Profit	4621.900	3912.100	1520.900	2581.200

KEY RATIOS

PARTICULARS		31.12.2009 (12 Months)	31.12.2008 (12 Months)	31.12.2007 (12 Months)

PAT / Total Income	(%)	16.62	21.80	30.37

Net Profit Margin (PBT/Sales)	(%)	25.48	31.67	48.16

Return on Total Assets (PBT/Total Assets}	(%)	20.91	35.61	59.65

Return on Investment (ROI) (PBT/Networth)		0.28	0.35	0.58

Debt Equity Ratio (Total Liability/Networth)		0.29	0.26	0.25

Current Ratio (Current Asset/Current Liability)		1.14	1.59	1.36

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS

(Rs in Millions)

Particulars	31.12.2009 (12 Months)	31.12.2008 (12 Months)	31.12.2007 (12 Months)
Sundry Creditors
Dues of Micro and Small Enterprises	23.100	4.000	2.000
Others	9199.700	8813.100	5737.600

Total	9222.800	8817.100	5739.600

History:

The Joint Venture between the public sector Gujarat Industrial Investment Corporation (GIIC) and Narottam Sekhsaria and Associates was the reason for confinement of the company. The company was incorporated in the year 1981 as Ambuja Cements Private Limited and it was rehabilitated into a public limited company on 19th March 1983 as Gujarat Ambuja Cements Limited, cement production is the role of the company in nature and a cost efficient cement manufacturer in the country. It is a National Quality ISO 9002 certified company, the only cement company have this so. It's also the first to receive the same and also have ISO 14000 Certification for environmental systems. The total cement capacity of the company is 18.5 million tonnes (MT), having five cement plants at Ambuja Nagar Gujarat (5 MT), Darlaghat Himachal Pradesh (6 MT), Upperwahi Maharashtra (2.5 MT), Rabriyawas Rajasthan (2 MT) and in Chhaattisharh West Bengal (3 MT). It is also having three Bulk Cement Terminals at Surat with a storage capacity of 15,000 tonnes has bulk cement unloading facility, Panvel with a storage capacity of 17,500 tonnes has a bulk cement unloading facility and in Galle 120 kms from Colombo, Sri Lanka. Handles million tonnes of cement annually. The port terminal of the company Muldwarka Gujarat, all weather port, 8 kms from Ambuja Nagar plant, handles ships with 40,000 DWT. Is also equipped to export clinker and cement and import coal and furnace oil. A fleet of seven ships with a capacity of 20500 DWT ferry bulk cement to the packaging units.

The company's cement plant was commissioned in 1985, had set up in technical collaboration with Krupp Polysius, Germany, Bakau Wolf and Fuller KCP. The 12.6 MW diesel-generating sets were commissioned during the year, which were imported in the year 1988-89. The company got necessary approvals for setting up another cement plant with 1 million tonne capacity per annum at Himachal Pradesh in the year 1991. The Company undertook bulk cement transportation, by sea, to the major markets of Mumbai, Surat and other deficit zones on the West Coast. Transportation was to be carried out by three specially designed ships during the year 1992. During the year 1994, the company's Muller location 1.5 million tonne cement project with clinkeriation facility at site in H.P and grinding facility both at Suli and Ropar in Punjab was bespoken. In 1997, Kodinar plant of the company was originated its commercial production with an enhanced capacity.

Subject had set up a $20 million clinker Grinding unit in Sri Lanka in the year 1998. In the year of 2000 cement giants Larsen and Tubro (L and T) and Gujarat Ambuja Cements entered a unique agreement to reduce transportation costs in dispatching bulk cement in Gujarat and also in the same year the company has entered into an annual contract with a Soinhalese firm, Mahaveli Marine Cement, to supply around 0.250 million tonnes of cement. The company has kick started its operations in Sri Lanka with help of a cement terminal in the port of Galle, in the south of the island country, which was started by the company. The commercial production of Maratha Cement Works plant of the company was started in the year 2002, a new 2-million tonne Greenfield cement plant at Chandrapur, Maharashtra has started its commercial production on June of the year and the merger of Ambuja Cement Rajasthan with the company was happened in the same year. Again in the year 2004, the company merged Ambuja Cement Rajasthan with itself.

During 2004-05 the company has installed a cement mill with a capacity of 80 TPH at Darlaghat and commenced its commercial production in February 2005. The company have commissioned a captive thermal power plant with two 12 MW Steam Turbo Generators (STG), with two boilers of 45 TPH capacity each at a cost of Rs.940 millions. The first STG was commissioned in February 2005 and the second in May 2005. The company has amalgamated its subsidiary company Indo-Nippon Special Cements Limited in July of the year 2005. Subject has entered into a partnership with Holcim Limited of Switzerland through Ambuja Cement India Limited (ACIL) during 2004-05. The company is setting up new clinker capacity at Bhatapara in Chattisgarh and Rauri in Himachal Pradesh, each having a capacity of 2.2 million tonnes per annum cost of 16000 millions, the enchantment in the year 2007 around the amount of about Rs 35000 millions in different areas of the company.

The company has awarded for its credit, the National Award for commitment to quality by the Prime Minister of India, National Award for outstanding pollution control by the Prime Minister of India, Best Award for highest exports by CAPEXIL and Economic Times - Harvard Business School Association Award for corporate excellence in different years. The company was adjudged as the top Indian company in the cement sector for the Dun and Bradstreet - American Express Corporate Awards 2007. The company developed a unique homespun channel management model called Channel Excellence Programme (CEP) for marketing their product. Over 7000 dealerships and 20,000 retailers across India are covered under this model. The company name was changed from Gujarat Ambuja Cements Limited to Ambuja Cements Limited on April, 2007, the word Gujarat was dropped to reflect the true geographical presence of the company.

In the last decade the company has grown tenfold. The first company in India introduced the concept of bulk cement movement by the sea transport. The company's most distinctive attribute, however, is its approach to the business. Subject follows a unique homegrown philosophy for successful survival. Subject is the most profitable cement company in India, and one of the lowest cost producers of cement in the world.

additional information

2009 - ROAD TO RECOVERY:

Indian economy shows resilience:

The year 2009 began amid great uncertainty with regard to the likely impact of the global financial crisis, which had finally erupted in the second half of 2008. Governments around the world acted quickly and decisively, and in a coordinated manner, which helped prevent the situation slipping into a full scale depression. Nevertheless, recession on a global scale was inevitable and the only questions were, and still are to some extent, how deep the recession would be and how long it would last. And, in particular, to what extent would the Indian economy be affected.

The various stimulus measures which were introduced by the government and Reserve Bank of India towards the end of 2008 played an important role in maintaining liquidity in the financial system, limiting the spill over impact on the real economy, and underpinning a widespread confidence that the Indian economy was well placed to weather the storm and emerge from the downturn in a strong position.

That resilience has been demonstrated during 2009, as India was one among the handful of countries not to experience outright recession, and indeed has managed to maintain GDP growth at 6.7% for the year 2008-09. Emerging markets in general, and India in particular, are leading the way on the road to recovery, with strong growth rates based on robust economic fundamentals. Despite inflationary pressures gradually building, a steady monetary policy course has been maintained, with a focus on supporting growth recovery.

The federal parliamentary elections in India in May resulted in a renewed mandate for the incumbent government, which is now in a favourable position to carry out much needed economic reforms, and provide the impetus for a major thrust in infrastructure development. Encouraging signs already began to appear in 2009, for example the initiative to dramatically increase road and highway construction, to 20 kms per day from the present 2.5 kms per day.

Conditions remain favourable for cement industry:

It was expected that the general economic slowdown would have a corresponding impact on construction and the cement industry. However, although some large real estate projects in metro areas were impacted by the liquidity crunch, this was generally compensated by a number of other factors:

· Increased infrastructure spending as part of the stimulus measures

· Across the board excise duty cuts to stimulate demand

· Solid demand for housing in rural and semi-urban areas

· Low cost housing initiatives

· Pre-election spending

Consequently, cement demand growth remained buoyant and in double digits throughout most of calendar year 2009, and total industry dispatches increased by 10.5%, from 177 million tonnes to 195 million tonnes.

Export markets in contrast declined sharply, as demand in the Gulf region contracted at the same time as new capacities came on stream in Saudi Arabia and the Emirates.

Despite the cancellation or postponement of some expansion projects, Indian cement capacity additions during 2009 nevertheless totalled approximately 40 million tonnes. However, the increase in effective supply was much less, owing to delays in commissioning and ramp-up of various units. The buoyant demand meant that most of the new supply could be effectively absorbed, resulting in only a minor surplus for the year as a whole, and indeed some shortages in the first half.

Capacity utilisation levels consequently remained at around 85% on an average, and pricing pressure, which had been a concern at the start of the year, did not materialise in the first 9 months. Rather, shortages in certain markets led to increased realisations during this period, which largely corrected in the last quarter when demand growth dipped, particularly in the South region.

Against the backdrop of continuing strong demand, Ambuja has endeavoured to maintain its market position despite significant internal constraints in terms of clinker availability, by purchasing clinker from third parties as well as maximising the blending ratio without compromising product quality.

HIGHLIGHTS OF 2009:

· Cement production and sales volumes increased by 6% and 6.5% respectively, to reach 18.83 million tonnes and 18.79 million tonnes.

· Average sales realisation increased by 7%, to Rs. 3,760 per tonne.

· Net sales were 14% higher, at Rs.70770 millions

· EBITDA was 8% higher, at Rs.19720 millions

· Consolidated net profit excluding exceptional items increased 12%, to Rs.12170 millions

· The clinkerisation expansion projects at Bhatapara and Rauri were commissioned in December 2009 and January 2010 respectively. While Bhatapara plant has come closer to the stabilisation by the date of this report, the Rauri plant is busy attaining stabilisation.

FINANCIAL RESULTS 2009:

As a result of the consistently strong growth in demand for cement, the Company's operating results improved as compared to 2008, despite the fact that availability of clinker was a major limiting factor during the year.

MARKET DEVELOPMENTS:

Despite the significant capacity additions in the industry, the Company kept pace with the double digit demand growth, and maintained its strong position of approximately 18% market share in its main markets, and around 10% on an all India basis. Sales volumes increased by 6.5%, to 18.8 million tonnes in 2009 as against 17.6 million tonnes in 2008.

The Company has built a large network of over 6,000 dealers and 20,000 retailers across 18 states in India. Its reach and penetration helps the Company to manage the last mile delivery across their relevant markets, and gives them a strong positioning in the booming rural markets.

Along with strong brand equity, Ambuja has evolved a unique model of channel management, based on values of trust and relationships. The strong bond between the dealer network and the Company has helped Ambuja to withstand severe competition for more than two decades. With the added support of Holcim's rich experience of operating in 70 countries, Ambuja has now added sophisticated IT tools and global channelmanagement tools to its traditional Indian model, thus adding to their capabilities to face stiff competition endemic to large capacity additions.

Holcim's global experience has also helped Ambuja in fine tuning its product quality management, by introducing best practices from other countries. It has helped in enhancing the overall marketing mix, clearly

targeted at the retail market in semi urban and rural sectors, and the large buyers in the metros and mega cities.

Their network of port, bulk terminals, and bulk cement ships, on the west coast has supported a sustainable strong market position in Mumbai and Surat. In 2009, another bulk terminal in Kochi has been added to the network to establish a footprint in Kerala.

PRODUCTION and COST DEVELOPMENTS:

Volumes:

Total cement production increased by 6% compared to 2008, from 17.8 to 18.8 million tonnes, despite the fact that clinker production was marginally lower at 11.4 million tonnes (11.5 million tonnes in 2008). This could be achieved only by purchasing significant quantities of clinker from third parties, and in total 1.7 million tonnes were purchased, compared to 0.7 million tonnes in 2008. Plants were running flat out for most of the year, trying to keep up with the demand, and utilisation levels on average remained above 85% during the year.

Major Costs:

Although EBITDA increased in absolute terms in 2009, the EBITDA margin reduced slightly, from 29.3% to 27.9%. Two main factors had a significant impact on production costs in 2009:

Clinker purchases were 1 million tonnes higher than the previous year, as a result of building market positions in the East and North in preparation for the new capacities, as well as to sustain production at the Maratha unit during major maintenance work on the kiln. For the year as a whole this had a negative impact on EBITDA margin of approximately 400 basis points.

The year began with a large inventory of imported coal, which had been procured in 2008 at what turned out to be peak prices of more than Rs. 9,000 per tonne (landed cost), and this had a significant negative impact on the EBITDA margin during the first half of 2009, as those inventories were consumed.

Otherwise, global commodity prices, including oil and coal, were relatively stable during 2009 compared to the previous year, therefore once the coal inventory overhang was absorbed, the Company's variable input costs reduced significantly in the second half, compared to the first half year. However, the quality of domestic coal continued to be a challenge and the average fuel consumption rate increased from 744 kcal to 755 kcal per kg of clinker. Many initiatives are underway at all the plants, aimed at sustainable reducing thermal energy consumption rates.

Efforts to optimise the fuel mix, and reduce the dependence on coal for both kilns and captive power plants, have been intensified, and usage of alternatives such as petcoke, lignite, biomass, and co-processing of industrial waste materials, increased during 2009. Financial benefits currently remain modest, however, the development of the Alternative Fuels and Raw Materials (AFR) business represents an important investment for the future.

Power consumption in 2009 has by and large remained at the same level as that of 2008.

Total freight and forwarding costs increased by 8% in absolute terms, and freight on cement increased by 6% per tonne sold, mainly as a result of the continued shift from exports to domestic sales, and longer average lead distances. The costs of diesel and packing materials remained stable during the year and only slightly increased compared to 2008.

EXPANSION PROJECTS:

During 2009 a new bulk cement terminal started operation at Kochi, providing access to new markets in the South, and two new captive power units, each with 15 MW capacity, were commissioned at Bhatapara (Chhattisgarh) and Maratha (Maharashtra).

Significant progress has been made during 2009 on the two major expansion projects which will enable the Company to secure its market position through the next business cycle.

Production trials at the 2.2 million tonnes clinker production line at Bhatapara (Chhattisgarh) began in mid December 2009, and the plant is expected to be fully stabilised during the first quarter of 2010, along with a 33 MW captive power unit. The new clinker production line at Rauri (HP), also with 2.2 million tonnes capacity, has commenced production trials during January 2010 and is expected to get fully stabilised during the first quarter of 2010. The associated cement grinding facilities at Dadri (UP) and Nalagarh (HP), each with 1.5 million tonnes capacity, will also be commissioned during this quarter.

The total cost of these two projects will be approximately Rs. 27000 millions part from the above two major projects, an additional 30 MW captive power unit at Ambujanagar (Gujarat) is currently undergoing production trials and will be commissioned during the first quarter 2010, taking total captive power capacity to more than 400 MW. In addition, three new ships for western coastal transportation are under construction, of which two are expected to be brought into service in 2010. Further investments to improve rail connectivity at several locations are also in progress, for increased efficiency of logistics operations.

Additional cement grinding capacity is also under construction, at the Bhatapara and Maratha units, and will be completed during 2010. By the end of the year, the Company's total installed cement capacity will be increased from 22 million tonnes to approximately 27 million tonnes.

All the expansion projects have been financed through internal accruals.

OUTLOOK:

Economy heading for strong growth recovery:

As green shoots tentatively start to appear across the globe, the Indian economy, which in any case suffered less during the financial crisis, is well positioned to quickly get back to a sustainable high growth trajectory. The inherent advantages of strong domestic consumption, favourable demographics, relatively low export dependence, political stability, and a well regulated financial sector, mean that there is less vulnerability to any negative impact from the rolling back of emergency stimulus measures which is likely during 2010. The government nevertheless still has to deliver on reforms, in order to further stimulate free markets and facilitate private investment, particularly in infrastructure.

Infrastructure and housing are key drivers:

Infrastructure development and rising housing construction, as a result of recovery in the urban real estate sector as well as expansion of affordable housing provision, will be key drivers in accelerating growth. This augurs well for the cement industry, and cement consumption growth is expected to be in the range of 9% to 9.5% for the next couple of years, with further upside potential if infrastructure spending really takes off in a big way.

There will still be significant cement capacity additions during 2010, totalling 40 to 50 million tonnes (installed capacity), therefore temporary pricing pressures are almost inevitable in certain markets. However, as long as the economy maintains high growth and demand remains buoyant, it should be possible for the new capacity to be absorbed without major disruption.

Ambuja Cement, with its own new capacity in place, intends to fully participate in the anticipated industry growth and maintain its strong market position, through continuous improvement in the construction solutions offered to their customers.

Logistics Infrastructure:

While road and rail infrastructure development is important for stimulating the demand for cement, it is also critical in terms of enabling ever increasing volumes of cement to be delivered to relevant markets cost effectively, as well as for bringing fuel and other material inputs to the production facilities.

Shortages of rail wagons in particular have increasingly imposed logistical constraints, and increased investment is required from both, public and private sectors in order to adequately expand rail infrastructure and ensure the continuous smooth flow of goods and materials. They are actively working to improve the rail connectivity.

FIXED ASSETS:

· Freehold Land

· Leasehold Land

· Buildings, Roads and Water Works

· Marine Structures

· Plant and Machinery

· Electrical Installations

· Railway Sidings and Locomotives

· Railway wagons given on lease

· Furniture, Fixtures and Office Equipments

· Ships

· Vehicles

· Power Lines

Intangible Assets:

· Water Drawing Rights

· Computer Software

CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

	(As on 31.12.2009) Rs. In millions
Bank guarantees given to mines and Geology Dept. Government of Rajasthan for setting up of Cement Plant	20.00

a) Claims against the Company not acknowledged as debts
For acquisition of land	513.900
Disputed liability relating to labour matters	440.900
For Non Agriculture Assessment Tax	26.500
Others	245.100

Tax matters
Disputed liability in respect of Income-tax demands (including interest) matters under appeal	607.800
Disputed Sales-tax demands (including interest and penalty)	259.600
Disputed Excise demands – matters under appeal (Deposit with Excise Department Rs. 2.100 millions; Previous Year Rs.0.400 million)	266.600
Disputed Customs demands – matters under appeal	14.300
Disputed liability of RTO Tax on Mining Machinery	6.200
Disputed liabilities relating to Railway Freight on Cement – matter once decided in favour of the Company by the Honourable High Court of Gujarat was remanded back by the Honourable Supreme Court pursuant to a Special Leave Petition filed by the railways.	55.100

Disputed liabilities relating to Coal claims – matter pending in the Honourable High Court :
Railway freight on Coal	14.900
Penal freight on Excess Weight of Coal	2.400
Interest on Premium on Coal	32.900

In respect of items above, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgments/decisions pending at various forums/authorities.

b) The Honourable High Court of Himachal Pradesh has passed an order in favour of the Company for its claim in respect of power subsidy in the form of Power Tariff Freeze (PTF) and Peak Load Exemption Charges (PLEC). Against this, Government of Himachal Pradesh on 1st May, 2004, has issued 296 5.13% H P Infrastructure Development Bonds of face value of Rs.1.000 million each, having a value of Rs. 296.000 millions redeemable after 10 years and balance of Rs. 0.800 million is refunded to the Company.

The Government of Himachal Pradesh has filed Special Leave Petition in the Honourable Supreme Court against the decision of the Honourable High Court of Himachal Pradesh. The Company has given an undertaking to refund Rs. 296.800 millions paid by the State Government together with interest thereon up to the date of final judgment in time bound manner, in the event that the matter is decided against the Company.

296.800

c) The Government of Rajasthan has granted 75% exemption from Sales Tax in respect of Rabriyawas unit. However, the eligibility of exemption in excess of 25% has been contested by the State Government in a similar matter of another Company and the matter is pending before the Honourable Supreme Court. The Company has given an undertaking to the Government of Rajasthan that the Company will deposit the differential amount of Sales Tax, in case the Supreme Court’s decision goes against in the matter referred above.

821.600

d) Writ petition filed by erstwhile ACEL against the order of Madhya Pradesh State Mining Department demanding Rs. 47.600 millions towards payment of additional royalty on limestone based on the ratio of 1.6 tonnes of limestone to 1 tonne of cement produced at its factory in Chhattisgarh. The matter is now pending before Honourable High Court at Bilaspur.

565.400

AUDITED FINANCIAL RESULTS

(Rs. in millions)

Sr. No.	Particular	Audited
		Quarter ended 31.12.2010
1.	Gross Sales / Income
	a. Net Sales / Income from Operations (Net of Excise and Discounts)	73902.100
	b. Other Operating Income	1273.400
	Total Income (a+b)	75175.500

2.	Expenditure
	a) (Increase) / Decrease in Stock in Trade and Work In Process	(542.800)
	b) Consumption of Raw Materials (Net)	5962.800
	c) Power and Fuel	16973.400
	d) Employee Cost	3436.600
	e) Depreciation	3871.900
	f) Other Expenditure	13735.100
	g) Fright and Forwarding	16100.800
	g) Total Expenditure (a to f)	59537.800

3.	Profit From Operations before Other Income, Interest and Exceptional Items (1-2)	15637.700

4.	Other Income	1202.600

5.	Profit Before Interest and Exceptional Items (3+4)	16840.300

6.	Interest	486.900

7.	Profit After Interest but before Exceptional Items (5-6)	16353.400

8.	Exceptional Items	265.300

9.	Profit from Ordinary Activities before Tax (7+8)	16618.700

10.	Tax Expense	3982.600

11.	Net Profit from Ordinary Activities after Tax (9-10)	12636.100

12.	Extraordinary Item (net of expense)	--

13.	Net Profit for the period (11-12)	12636.100

14.	Paid-up Equity Share Capital (Face Value of Rs.10/- Each)	3059.700

15.	Reserves Excluding Revaluation Reserve	--

16.	Basic and Diluted Earning Per Share (EPS) (Rs.)-Not Annualised
	a) Basic and diluted EPS before extraordinary items	8.28
	b) Basic and diluted EPS after extraordinary items	8.26

17.	Public Shareholding
	-Number of Shares	8050
	- Percentage of Shareholding	53%

18.	Promoters and Promoter Group Shareholding
	a) Pledged/Encumbered
	- Number of Shares	Nil
	- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)	Nil
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	Nil

	b) Non Encumbered
	- Number of Shares	7075
	- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)	100%
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	46%

BALANCE SHEET ITEMS AS PER CLAUSE 41 (V) OF THE LISTING AGREEMENT

(Rs. in Millions)

4. STATEMENT OF ASSETS AND LIABILITIES	31.12.2010 AUDITED
SHAREHOLDERS FUNDS
1] Share Capital	3059.700
2] Reserves & Surplus	70227.900
3] Share Application Money	0.000
4] Employee Stock Option Outstanding	13.400
LOAN FUNDS	650.300
DEFERRED TAX LIABILITIES	5308.800

TOTAL	79260.100

FIXED ASSETS [Net Block]	56277.500
INVESTMENT	6259.500
Capital Work in Progress	9307.00

CURRENT ASSETS, LOANS & ADVANCES
Inventories	9018.600
Sundry Debtors	128.1800
Cash & Bank Balances	17481.700
Other Current Assets	165.700
Loans & Advances	3405.500
Total Current Assets	30199.680
Less : CURRENT LIABILITIES & PROVISIONS
Current Liabilities	12976.100
Provisions	10965.700
Total Current Liabilities	23941.800
Miscellaneous Expenditure	4.600

TOTAL	79260.100

Notes :

1. Other operating income includes sale of power for the year ended 31^st December 2010 Rs. 291.700 millions (31.12.2009 Rs. 425.100 millions).

2. Interest income for the previous year ended 31^st December, 2009 includes Rs. 461.600 millions being discount on pre-payment of an outstanding deferred sales tax loan.

3. Exceptional items for the year ended 31^st December 20 10, includes :

a) Profit on sale of investment in ING Vysya Life insurance Company Limited Rs. 726.300 millions.

b) Provision of Rs. 461.000 millions consequent to change in policy bf recognizing provision for slow moving inventories of spares based on the age of inventory.

4. Tax expenses is stated at net of credit relating to earlier years Rs. 371.100 millions (31.12.2009 Rs. Nil).

5. During the year the Company has commenced commercial production at following locations :

a) Clinker plant of 2.2 million tons capacity at Bhatapara in the state of Chhattisgarh.

b) Clinker plant of 2.2,miIlion tons capacity at Rauri in the state of Himachal Pradesh.

c) Cement grinding plant of 1.5 million tons capacity at Dadri in the state of Uttar Pradesh.

d) Cement grinding plant of 1.5 million tons capacity at Nalagarh in the state of Himachal Pradesh.

e) Thermal power plant of 33 MW capacity at its unit at Bhatapara in the state of Chhattisgarh.

f) Thermal power plant of 30 MW capacity at its unit at Ambujanagar in the state of Gujarat.

6. During the year, the Company has subscribed to 272,700 Equity shares of Rs. 10 each representing 27.27% paid-up Equity Share Capital of Wardha Vaalley Coal Field Private Limited, a joint venture company formed for captive coa1 mining.

7. During the year :

a) The Company has subscribed to 15,000,000 Redeemable Cumulative Preference Shares of Rs. 10 each, carrying dividend of 6.24, at par in Counto Microfine Products Private Limited (Chfitl).

b) The Company has entered into Supplementary Share Subscription Agreement, and in terms of the agreement the Company has agreed to acquire 50% Equity Share Capital in CMSPL for a consideration of Rs. 100.000 millions, on or before 30th July, 201 1. Advance of Rs. 75.000 millions has been given for the same.

8. Public Shareholding excludes shares held by the custodian against Global Depository Receipts.

9. The Company has only one business segment "Cement".

10. At the beginning of the year ended 31st December, 2010, no investor complaint was pending. During the year, 78 complaints were received and all complaints were resolved. No complaint was pending disposal as on 31st December, 2010.

11. The Board of Directors has recommended the final dividend on equity shares @ Rs. 1.40 per Equity Share. The Company has paid interim dividend of Rs. 1.20 per Equity Share. The dividend paid in the previous year was Rs. 2.40 per Equity Share.

12. The figures for the previous year have been regrouped wherever necessary to conform to the current year presentation.

13. The consolidated financial results as stated above have been drawn in accordance with applicable Accounting Standards.

14. The above results have been approved and taken on record by the Board of Directors at its meeting held on 3rd February, 2011.

WEB DETAILS

Subject was set up in 1986. In the last decade the company has grown tenfold. The total cement capacity of the company is 18.5 million tonnes.

Its plants are some of the most efficient in the world. With environment protection measures that are on par with the finest in the developed world.

The company's most distinctive attribute, however, is its approach to the business. Subject follows a unique homegrown philosophy of giving people the authority to set their own targets, and the freedom to achieve their goals. This simple vision has created an environment where there are no limits to excellence, no limits to efficiency. and has proved to be a powerful engine of growth for the company.

As a result, Subject is the most profitable cement company in India, and one of the lowest cost producer of cement in the world.

Achievements

In essence, cement is a simple business. Unlike other industries it does not suffer rapid technological obsolescence or shifting consumer trends. Therefore, it constantly attracts new investments. Which results in surplus capacity. This means only the very efficient players can prosper.

The people recognize this. And their efforts to constantly raise efficiency has not only raised the bar at company. But across the industry as well.

Environment protection measure that conform to the worlds best.

The pollution levels at all the cement plants are even lower than the rigorous Swiss standards of 100 mg/NM³. The air is so clean that a rose garden flourishes right next to the main plant.

Benchmarking quality standards for the industry.

Subject has received the highest quality award - the National Quality Award. The only cement company to do so. Its also the first to receive the ISO 9002 quality certification.

Reinventing cement transportation.

Almost 90% of cement in India travels by rail or road. And in bags.

The people realized that the only way to speed up transportation was a completely different approach. The result: a bulk transporting system via the sea. Making them the first company to introduce the concept of bulk cement movement by sea in India.

· National Award for commitment to quality by the Prime Minister of India.

·
National Award for outstanding pollution control by the Prime Minister of India.

·
ISO 9002 Quality Certification.

· ISO 14000 Certification for environmental systems.

· Best Award for highest exports by CAPEXIL.

· Economic Times - Harvard Business School Association Award for corporate excellence

Management Policy

When they started out, they approached the cement business with an open mind. Some things struck them immediately. To compete with the older, established players who had already written off their plant cost, it was important to have the lowest capital cost per ton of cement. The plants would have to be set up in record time. The capacity utilization would have to be above 100%. And the power consumption would have to set a record low.

If costs had to be controlled, it seemed absurd for engineers to check back with their seniors for every little decision. The time lost would be far more expensive than any errors they would make. It was the same with controlling power consumption. Who better than the engineers to suggest ways to cut costs. They knew the plants inside out. It made sense to listen to them.

Infrastructure

40% of the production cost of cement is power.

It quickly became clear to them that if they were to run a profitable company, wed need to keep power costs to the minimum. So they focused the efforts on improving efficiency at the kilns to get more output for less power.

Next they set up a captive power plant at a substantially lower cost than the national grid. They sourced a cheaper and higher quality coal from South Africa. And a better furnace oil from the Middle East.

The result is that today were in a position to sell the excess power to the local state government.

The sea-borne bulk cement transportation facilities meanwhile has brought many coastal markets within the easy reach. It has also made subject India's largest exporter of cement consistently for the last five years.

PRESS RELEASE:-

02.03.2010

Cement Production and Despatches figures of Ambuja Cements Limited for the month of February 2010 is as follows:

(Lakh Tonnes)

	For the month
Particulars	Feb- 10	Feb - 09

Cement Production	16.84	16.09

Cement Despatch	16.90	16.49

(Lakh Tonnes)

Cumulative	For the month
Particulars	Jan - Feb 10	Jan - Feb 09

Cement Production	34.21	32.19

Cement Despatch	34.38	32.75

(For the Quarter ended 31^st March, 2008)

Financial Highlights:

· Cement sales volumes up 11%, to 4.8 million tons

· Net sales up 17%,to Rs. 16550.000 millions

· EBITDA reduced 7%, to Rs. 5570.000 millions

· Profit before Tax reduced 37%, to Rs. 4830.000 millions

· Net Profit reduced 42%, to Rs. 3260.000 millions

Operating Results

Subject saw Net Sales rise 17%, to reach Rs, 16550.000 millions for the quarter ended 31st March 2008 mainly as a result of high despatches , Exports were, at 0.2 million tons, 50% lower than the same quarter last year, as volumes were diverted in order to increase availability of cement in the domestic market. Consequently domestic despatches rose 16% in the quarter, reflecting our efforts to maximize production and despatches despite several constraints.

ACL currently faces unprecedented increases in major operating costs, in particular for coal, power, raw materials and logistics, as well as a higher indirect tax burden due to a slew of fiscal impositions by both State and Central

Government. These comprise: an increase in Excise Duty on clinker of Rs. 100 per ton (impacts them in HP and UTC),.a change in the ED rate for bulk and institutional cement sales, from Rs. 400 per ton to 14% ad valorem, an increase in Additional Goods Tax (HP) by Rs. 40 per tons of cement and Rs. 45 per tons of clinker, and an increase in VAT in Gujarat, from 12.5% to 15%. Despie maximizing despatches into the domestic market to increase availability and continuous efforts to improve logistics operational efficiency, it has not been possible to fully compensate for the impact of cost increases experienced during the quarter.

Furthermore, competitive market conditions did not allow them to pass on the incidence of cost increases through higher prices, thereby impacting margins and lowering Profit before exceptional items and Tax by 7% compared to same quarter last year.

Proiects Update

During the quarter, a new 1 million tons grinding facility was commissioned at Surat, where subject already hada terminal operation. This takes OPC shipped from .the Ambuja nagar plant, and blends it with locally sourced flyash.

Work continues to progress satisfactorily on the major clinkerisation expansion projects at Bhatapara and Rauri which, together with. associated grinding facilities, will increase the company's cement capacity by 6 million tons (to 25 million tons) by the second half of 2009. The total outlay 0/1these projects will be in the region of Rs. 35000.000 millions.

In anticipation of increased volumes to be transported on the coastal routes, three new vessels have been ordered for delivery in 2008 and 2009, at. a total cost of approximately Rs. 1500.000 millions.

Outlook

As expected, economic growth is slowing to some extent, although the construction sector remains relatively buoyant and cement demand is unlikely to be significantly affected.

However, the necessity to absorb ever-increasing input costs means that ACL's profit margins will remain under pressure. While all possible measures will be taken to mitigate this impact by further improving energy efficiency and operating processes, coal prices in particular continue to escalate to new highs, imported coal prices having almost doubled year-on-year.

The Government has banned exports of cement and clinker (currently 6 million tons per annum) with effect from 11^th April, to increase availability of cement in domestic markets. However, since 90% of industry exports are shipped from Gujarat, the Government's objective may not be realized due to locational disadvantage, as well as infrastructure constraints, in transporting from Gujarat to other markets.

Government and the cement industry should work together, with the aim of streamlining the indirect tax regime through abatements, as well as improving access to, and pricing of, key inputs such as coal; in order that cement prices can remain at reasonable levels.

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 records 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.44.59
UK Pound	1	Rs.73.44
Euro	1	Rs.64.81

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	9
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	8
--RESERVES	1~10	9
--CREDIT LINES	1~10	8
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--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
TOTAL		74

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

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.

MIRA INFORM REPORT

6832.400

9387.200

5816.000

1522.000

2246.000

1456.800

8806.800

8518.400

6507.900

101.700

244.200

39.100

2530.500

2998.700

2053.500

19793.400

23394.500

9222.800

8817.100

5739.600

1447.700

1215.300

1015.800

6740.400

4705.600

4935.500

17410.900

14738.000

2382.500

8656.500

4182.400

Unit