Ambuja Cement 1 Ambuja Cement September 2005

Ambuja Cement 2 Indian Economy  In a Sustainable high growth mode  Impetus on Service Sector  Changing Demography - A Growth Driver  Economy getting delinked from Agriculture & unpredictable monsoons

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

Ambuja Cement 4 Cement Growth A Proxy to GDP Growth

Ambuja Cement 5 Other Asian countries experience has been that whenever Per Capita GDP crosses USD $ 500 there is a substantial rise in the cement consumption India set to witness this growth in Cement Consumption

Ambuja Cement 6 Cement Growth in India Not a Challenge As Demand has been growing at a CAGR of 7% over last Decade

Ambuja Cement 7 Cement Demand (Apr - Aug) Mn. Tonnes Growth (%)

Ambuja Cement 8 Momentum of Growth to continue due to Initiatives in Housing & Infrastructure Development

Ambuja Cement 9  Large forex reserves  Abundant liquidity  Consumer Driven  Low interest rates Enabled by : Infrastructure Development now Not only Viable but Profitable

Ambuja Cement 10 Expected Cement Demand Base Domestic Demand Growth - 8% Expected Domestic Demand Exports (Potential to be even higher) 4 4 Expected Cement Demand mn tonnes

Ambuja Cement 11 Cement Production Capability Base Clinker Production Increased Production due to improvements Clinker Export 6 6 Clinker for Cement Grinding Blending Ratio Cement Production mn tonnes

Ambuja Cement 12 Demand set to outstrip Supply

Ambuja Cement 13 As Last Plant was set up in March ’03 No new supply expected till March ‘06 It Never happened in past

Ambuja Cement 14 Structural change in Pricing Scenario Result

Ambuja Cement 15 Cement Prices - Domestic - Sep 2005 Sep 2004 Mar 2005 Bombay Delhi Kolkatta Ahmedabad Jaipur Hyderabad Chennai Rs. / per Bag Even during monsoon prices have remained stable to firm

Ambuja Cement 16 - International - Cement Clinker (E) US$ (FOB) (E) - Expected

Ambuja Cement 17 Sea terminals Cement factories HP Gujarat Rajasthan Maharashtra Punjab Ambuja Cement Gujarat 5.0 North India 6.0 Maharashtra 3.0 Total Capacity 14.0 Mn. tonnes Mn. Tonnes Today - 14 Mn. Tonnes A growth of 18 times since inception

Ambuja Cement 18 Growth With A Sound Business Model

Ambuja Cement 19 Our Business Model  Huge owned Infrastructure  Presence in the growing markets of North & West  Premium Brand - only selling in Retail Markets.  Largest Exporter of cement – 15% of Production  35% Cement transport by sea - Cheapest Mode  Low Cost Cement Producer

Ambuja Cement 20  7 Owned Ships for transporting Cement by Sea  Large port in Gujarat to handle export of Cement  3 Cement receiving terminals  200 MW of Captive Power Plants at various Cement Plants to give reliable and cheap power Own Infrastructure

Ambuja Cement 21 Premium Brand India - A bagged market Individual home builder - key driver of demand Our focus :  Best quality cement  Good packaging  Logistic management - strong distribution network  Customer service Ambuja Cement - Most preferred brand - Fetching higher realisation

Ambuja Cement 22 Direct Cost FY 2005 Power 202 Fuel 298 Raw material 172 Consumables 49 Direct cost 721 US $ 16.4 Rs./ tonne USD/INR = Rs. 44

Ambuja Cement 23 A Comparison (April - June 2005) Ultratech Grasim ACC GAC Sales - Volume (mn tonnes) 4.00* Net Sales Operating Profit Operating Margin (%) O/P Per tonne (Rs.) (US$) Rs. Mn. Source : Stock Exchange Filing * Including Export & Sale of clinker mn. tonnes USD/INR = Rs. 44

Ambuja Cement 24 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 25 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 26 Ratios FY 2005 FY 2004 Interest Cover Operating Margin 31 % 30 % Net Debt / EBIDTA Net Debt / Networth ROCE 17 % 12 % RONW 21 % 18 %

Ambuja Cement 27 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 28 Our Shareholders Management 24% Domestic Pension & Mutual Funds 18% FII's (Incl. GDR) 41% Others 17%

Ambuja Cement 29 Partnership with Holcim

Ambuja Cement 30 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% ACC 34.70% ACIL GACLHOLCIM 33% 67% BeforeCurrent

Ambuja Cement 31 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 32 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 33 Thank You