Ambuja Cement 1 Ambuja Cement November 2005

Ambuja Cement 2 Indian Economy  On a Consistent growth path  Impetus on Service Sector  Changing Demography - A Growth Driver  Moved from being an Agrarian Economy to Services & Manufacturing Economy

Ambuja Cement 3 GDP Constituent Agriculture Manufacturing Services (%) Agrarian to a Service Economy

Ambuja Cement 4 Infrastructure & Housing New Drivers of Economic Growth

Ambuja Cement 5 Cement - Proxy to Growth

Ambuja Cement 6 Future Cement Scenario  Indian economy expected to grow at - 7 to 8%  Infrastructure development at an inflection point  Housing to be the main driver of cement growth  Cement Growth expected to be over 9%  After a long gap demand would exceed supply

Ambuja Cement 7 Cement Demand (Apr - Nov) Mn. Tonnes Growth (%) * * Estimated for November 2005

Ambuja Cement 8 Expected Cement Demand Base Domestic Demand Growth - 8% % Expected Domestic Demand Exports Expected Total Cement Demand Mn. Tonnes

Ambuja Cement 9 Cement Production Capability Base Clinker Production Increased Production due to improvements/Expansions Clinker Export 6 66 Clinker for Cement Grinding Blending Ratio Cement Production Mn. Tonnes

Ambuja Cement 10 Demand set to outstrip Supply

Ambuja Cement 11 Result A Structural change in Pricing Scenario….

Ambuja Cement 12 …. As  No Major Cement Capacity expected in near future  Reasonably Consolidated Industry

Ambuja Cement Top 5 Groups 26% Others 74% 2005 Top 5 Groups 65% Others 35% Fragmentation To Consolidation

Ambuja Cement 14 Average Cement Prices - Domestic - US $% Change US $/ Per Tonne Cement Prices Net of Duties, Taxes and Freight

Ambuja Cement 15 - International Cement Clinker (FOB) - Free on Board US $/ Per Tonne (FOB)

Ambuja Cement 16 Sea terminals Cement factories HP Gujarat Rajasthan Maharashtra Punjab Ambuja Cement Western India 8.0 Northern India 6.0 Total Capacity 14.0 Mn. tonnes Mn. Tonnes Today - 14 Mn. Tonnes Predominant Player in West & North India

Ambuja Cement 17 Growth With A Sustainable Business Model

Ambuja Cement 18 Our Business Model  Owned Infrastructure  Logistic Management  Premium Brand - Only selling in Retail Markets  Environment Friendly operations  Social Corporate Citizen  Low Cost Cement Producer

Ambuja Cement 19  200 MW of Captive Power Plants  100% captive power - Reliable & cheap generation  Large port handling Export of Cement & Import of Coal  3 Cement receiving terminals  7 Owned Ships for transporting Cement by Sea  35% Cement transport by sea - Cheapest Mode  Largest Exporter of Cement - 15% of Production Infrastructure & Logistic Management

Ambuja Cement 20 Premium Brand India - A bagged market Individual home builder - Key driver of demand Our focus :  Best quality cement  Good packaging  Strong distribution network  Customer service Ambuja Cement - Most preferred brand - Fetching higher realisation

Ambuja Cement 21  Use of surface miners - Blast free mining  Restoration of mines - green spots & water reservoirs  Use of bio-gas, agro waste as alternate fuels  Rose Garden & Cement Plants - Co-exist  Many International Awards in Environment Management  Global Standards for Environmental Measures  ISO for Environment Management System Environment Friendly Operations

Ambuja Cement 22  Raising Environment Awareness  Building up of check dams, salinity ingress checks  Water Harvesting & Ecology Pits - Visit of Siberian Cranes  Programs for rural healthcare and women development  Asian CSR Awards 2005 for Environmental Excellence among 94 companies participating from 16 countries Corporate Social Responsibility

Ambuja Cement 23 Direct Cost FY 2005 Power 202 Fuel 298 Raw material 172 Consumables 49 Direct cost 721 US $ 16.0 Rs./ tonne USD/INR = Rs. 45

Ambuja Cement 24 F.Y Operating Margin (%) Highest Operating Margins in the Indian Cement Industry Operating Margin

Ambuja Cement 25 Gujarat Ambuja Cements Limited (Consolidated Income Statement) FY2005 FY 2004 Growth (%) Sales Operating Profit Interest Depreciation Profit Before Tax Prior Period Adjs (credit) Tax Profit After Tax Minority Interest (26) Net Profit Operating Margin 30 % 29 % -- Rs. Mn.

Ambuja Cement 26 Gujarat Ambuja Cements Limited (Consolidated Balance Sheet) FY2005FY2004 Sources of Funds Shareholders’ Funds Minority Interest Deferred Tax Net Debt Total Application of Funds Gross Fixed Assets Less: Depreciation Net Fixed Assets Investments Net Current Assets Total Rs. Mn.

Ambuja Cement 27 Ratios FY 2005 FY 2004 Interest Cover Operating Margin 30 % 29 % Net Debt / EBIDTA Net Debt / Networth ROCE 17 % 12 % RONW 21 % 18 %

Ambuja Cement 28 Our Score Card ( ) Parameters CAGR (%) Capacity 18 Sales 29 Net Profit 36 Networth 30 Return to Shareholders 29 Wtd. Avg. EBIDTA Margin 33

Ambuja Cement 29 Our First Quarter Financials (June - Sept 2005) 1Q Q 2005 Sales Operating Profit Other Income Interest Depreciation Share Profit of Associates Profit Before Tax Tax Minority Interest - 79 Profit After Tax Rs. Mn. The Results are not comparable as ACEL during the current quarter has been considered as an associate as compared to a subsidiary company in the previous quarter.

Ambuja Cement 30 Our Shareholders Management 24% Domestic Pension & Mutual Funds 18% FII's (Incl. GDR) 41% Others 17% Current Market Capitalization - Over US$ 2 Bln. One of the most traded shares in India

Ambuja Cement 31 Payout Ratio Year Equity PAT Dividend Payout Capital (%) Ratio (%) * Rs. Mln. A Policy of % Payout * On Expanded Capital

Ambuja Cement 32 Partnership with Holcim

Ambuja Cement 33 Structure Due to this Structure GACL’s effective shareholding in ACC goes up to 11.5% from 8.3 % without any fresh investments by GACL. ACEL 94.6% ACC 13.8% ACIL GACL AIG/GIC 60% 40% ACEL 97.0% ACC 34.7% ACIL GACLHOLCIM 33% 67% BeforeCurrent

Ambuja Cement 34 Salient Features of the Partnership  Holcim Investments in India through ACIL only  Access to Holcim’s best practices in areas such as waste heat recovery, use of alternative fuels, human resources and Information technology  Opening of new cement trading opportunities in Middle East and Indian Ocean

Ambuja Cement 35 Ambuja Growth Plans  Plan to increase capacity by 3 to 4 mn. tonnes in next years by way of acquisition, upgradation & brown field expansion.  Growth to be funded from free cash flows

Ambuja Cement 36 Thank You