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FEBRUARY 2013. Strictly Private & Confidential Disclaimer  No representation or warranty, express or implied, is made as to, and no reliance should be.

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Presentation on theme: "FEBRUARY 2013. Strictly Private & Confidential Disclaimer  No representation or warranty, express or implied, is made as to, and no reliance should be."— Presentation transcript:

1 FEBRUARY 2013

2 Strictly Private & Confidential Disclaimer  No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements" based on the currently held beliefs and assumptions of the management of J. K. Cement Limited (“Company” or “JKC”), which are expressed in good faith and in their opinion reasonable, including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment.  Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance or achievements of the Company or industry results to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or developments in the Company’s business, its competitive environment and political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments.  This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any jurisdiction, including the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration therefrom.  This presentation is confidential and may not be copied or disseminated, in whole or in part, and in any manner. 2

3 Strictly Private & Confidential 3 Indian Cement Industry: Sustained Demand Growth Expected interest rate cuts in 4QFY13 positively impacting demand from housing, infrastructure and industry segments Multiple state/general elections in the next 18 months The government’s focus on reviving investment demand Positive outlook on the Rabi crop rubbing off on rural housing demand. Demand growth - 8% (FY13) & 10% (FY14-FY15)  The Cement industry has witnessed secular growth in consumption with quarterly variation in a year  The momentum will sustain and gather further steam, driven by: India, the 2 nd largest cement producer in the world with total installed capacity of 350 mn tonnes Source: CMA Source: Company Estimates

4 Strictly Private & Confidential Expected Slowdown in New Capacity Addition will Improve Utilization of Current Capacity  In the current economic and political scenario, setting up a new Greenfield project has become challenging in view of the following: Long arduous process of environmental approvals Land acquisition Complexity of mineral composition in new areas Supporting infrastructure of rail connect and water availability Greenfield project cost in current context is $135- $150/ton, depending on the site location  With strong volume growth and decline in pace of capacity addition, utilization (%) will improve, having bottomed out in 2H CY11  The average utilization will be 80% going ahead Most regions will operate at 90%+ utilization except Andhra Pradesh, which has capacity overhang 4 Capacity Utilization to improve from FY13 onwards Source: Company Estimates

5 Strictly Private & Confidential Prices will Continue to Remain Robust Resulting in Improved Profitability  An annual increase of INR / bag is expected, considering: Improvement in demand growth Pass-on of cost-push Increase in capital costs Slowing capacity addition  The rising costs of power, fuel and freight are likely to stabilize, although at slightly elevated levels  50% of India’s installed capacity has come up in last 5 years This relatively new capacity requires an EBITDA/ton of Rs.1,000 – 1,100 to justify equity returns  At the current Replacement Cost and Variable cost levels, an increase of Rs.20-25/bag is necessitated to earn new capacities 15% RoCE 5 A significant improvement is seen in EBITDA/ton from the trough levels of ~INR525/ton in 2HCY10. The EBITDA/ton is likely to be ~INR1034/ton in FY13 and INR 1,184/ton in FY14 (v/sFY12 average of INR 850/ton). Source: Company Estimates

6 Strictly Private & Confidential 6 Company Background  J. K. Cement Ltd. (“JKCL” or “Company”) is part of the $3 billion conglomerate, JK Organisation. The company is promoted by Dr. Gaur Hari Singhania & Mr. Yadupati Singhania and entered cement business in 1975  2 nd largest white cement manufacturer in India with 0.40 MTPA capacity and one of the leading grey cement producers in North India with over 36 years of experience.  Highly reputed brand with extensive nation-wide distribution  Integrated Cement manufacturing company with 7.5 MTPA grey cement capacity Nimbahera, Mangrol and Gotan (Rajasthan): 4.5 MTPA Muddapur (Karnataka): 3 MTPA MW of Captive power Proximity and access to large high quality reserves of limestone, sufficient to operate cement plants for the next 30 years.  Expanding domestic grey cement capacity to 10.5 MTPA and white cement capacity to 0.60 MTPA and wall putty capacity to 0.60 MTPA by Sept Mangrol (Rajasthan): 1.5 MTPA Jhajjar (Haryana): 1.5 MTPA split grinding Gotan (Rajasthan): 0.20 MTPA white cement and 0.30 MTPA wall putty  Greenfield Expansion in the Middle East Fujairah (UAE): Dual process plant MTPA white cement or 1.0 MTPA Grey cement  JK Cement’s LT credit rating was recently upgraded to AA- by CARE Ratings  Listed on National Stock Exchange (“NSE”) and Bombay Stock Exchange (“BSE”) with a market capitalization of INR 23bn

7 Strictly Private & Confidential Key Highlights 7  Cement Sector on Strong Foundation with Positive Future Outlook Sustained demand coupled with slowdown in capacity addition resulting in higher capacity utilization Improvement in profitability, backed by higher cement prices and operating margins  Integrated manufacturing facilities at multiple locations Plants in North & South India enable the company to serve multiple regions 105 MW of captive power and large limestone reserves at close proximity, sufficient for the next 30 years  White cement business cash cow with strong growth and profitability White cement & wall putty segments contribute consistently to profitability and provide healthy margins & stable cash flows White cement capacity to increase from 0.4 mtpa to 0.6 mtpa by Sept ‘14 and augment current market share of 40%. Wall putty capacity will increase from 0.3 mtpa to 0.6 mtpa, in phases during next two years  Domestic expansion to consolidate leadership in North and improve operating efficiencies Expansion plan to tap new markets, increase market share in North India and derive benefit from VAT incentives for entire production at Mangrol and Haryana North based plants operating at 90%+ and newer plants will offer better operating efficiency Increase in share from south plant, which serves higher realization markets, will improve margins  Dual process plant in UAE to grow internationally Cater to white cement demand in Middle East & North Africa(MENA) and infrastructure development projects in Qatar Unit in UAE provides logistical advantage to serve GCC and MENA countries and frees up current export quantity from India for domestic sale

8 Strictly Private & Confidential Corporate Milestones 8 May 1975 Entered cement business with 0.3 mtpa plant at Nimbahera, becoming one of the first few to enter the cement business Nov 2004 Acquired a cement division from its affiliate through slump sale, on a going concern basis, with a capacity to manufacture 3.55 mtpa of grey cement and 0.3 mtpa of white cement along with 15 MW of captive power plant June 2005 The Company got listed on the Bombay Stock Exchange (“BSE”) March 2006 Successfully raised INR 2960 mn through the Follow on Public Offer (“FPO”) Sept 2009 Commissioned a 3 mtpa Greenfield plant in south at Muddapur, Karnataka Oct 2012 Foundation laying ceremony for brownfield expansion at Mangrol Dec 2012 Company’s long term credit rating upgraded from A+ to AA- by CARE Rating  Enhanced grey cement capacity by 0.50 mtpa, set up a 20MW coal based power plant and 13.2MW of heat recovery based power plant at Nimbahera and enhanced white cement capacity by 0.1 mtpa at Gotan, through IPO proceeds  Acquired a 0.1 mtpa white cement unit at Gotan from Nihon Nirmaan and subsequently in 2009, converted the unit to produce 0.47 mtpa grey cement July 2012 “National Award for Excellence in Cost Management – 2011” from The Institute of Cost Accountants of India Nov 2012 “Best Employer Award ” from Employer’s Association of Rajasthan Foundation laying ceremony for setting up a split grinding unit at Jhajjar, Haryana Nov 2011 Foundation laying ceremony at Fujairah to set up dual process plant 10.5

9 Strictly Private & Confidential 9 Existing Plant locations and Market Reach Cement Plant Power Plant Market Reach Gotan - Nagaur (Rajasthan)  0.47 MTPA # :Grey Cement  0.40 MTPA* :White Cement  0.3 MTPA: Wall Putty  7.5 MW: Thermal Power Plant Gotan - Nagaur (Rajasthan)  0.47 MTPA # :Grey Cement  0.40 MTPA* :White Cement  0.3 MTPA: Wall Putty  7.5 MW: Thermal Power Plant Nimbahera – Chittorgarh (Rajasthan)  3.2 MTPA : Grey Cement  20 MW:Thermal Power Plant  13 MW: Waste Heat Recovery  15 MW (Bamania): Thermal Plant Nimbahera – Chittorgarh (Rajasthan)  3.2 MTPA : Grey Cement  20 MW:Thermal Power Plant  13 MW: Waste Heat Recovery  15 MW (Bamania): Thermal Plant Mangrol - Chittorgarh (Rajasthan)  0.75 MTPA - Grey Cement Mangrol - Chittorgarh (Rajasthan)  0.75 MTPA - Grey Cement Muddapur - Bagalkot (Karnataka)  3 MTPA: Grey Cement  50 MW: Thermal Power Plant Muddapur - Bagalkot (Karnataka)  3 MTPA: Grey Cement  50 MW: Thermal Power Plant Pan-India market reach in white cement & presence in 13 states for grey cement MW of captive power and abundant limestone reserves # The grey cement capacity is interchangeable with white cement * The white cement capacity is being expanded to 0.60 MTPA

10 Strictly Private & Confidential Strengths 10 Over 100 MW power generation through coal-based & waste heat recovery plants Total power requirement met at lower cost through captive generation JK Cement has access to large reserves of high-quality limestone, adjacent to the manufacturing facility, estimated to suffice for 30 years at current production capacity Superior product mix as one of only 2 producers of white cement in India. White cement & wall putty segment contribute ~25% of top line, providing stability in cash flows and superior margins Plants in Rajasthan & Karnataka gives wider market reach covering North, West & Southern regions JK’s white cement & wall putty are marketed and sold across the country Multi- Region Presence Superior Product Mix Captive Power Abundant Limestone Reserves

11 Strictly Private & Confidential Established Brands 11 Ordinary Portland Cement (OPC) is sold under the J.K. Cement brand name, Sarvashaktiman Grey Cement Portland Pozzolana Cement (PPC) and Portland Slag Cement (PSC) variants are sold under the J.K. Super Cement brand name White Cement J.K. White Cement is marketed and distributed across the country Value Added Products White cement based Wall Putty and Water Proofing Compound

12 Strictly Private & Confidential Superior Product Mix on account of White Cement 12 Growth Drivers White cement growing at 10% annually and expected to increase on account of: Increase in per-capita consumption Demand from wall putty, registering 30% annual growth Increase in demand for Housing sector JK White Cement  Current market share: 40%  Pan-India reach with established brand  White cement contributes ~25% to revenue & ~30% to profitability  Sufficient to service interest liability & tax payout of the entire company White cement provides J.K. Cement with superior product mix and unique position to leverage on high-growth, superior margin segment White Cement Industry in India  Installed Capacity: 1.0 mtpa  Only 2 producers – UltraTech Cement & JK Cement  Domestic Sales: 0.9 mtpa  Export Quantity: 0.1 mtpa  Key Export Markets: South-Asia, Middle East & Africa  Entry of new players remote as: Requirement of Special quality limestone High investment costs Problems in mine allocation Price Realization (INR/ton) – Grey vs White* * White cement price including wall putty

13 Strictly Private & Confidential Advantageous Revenue & Market Mix 13 Increasing share of White Cement in RevenuesProduct Mix – Grey Cement (FY12) Market Mix evenly distributed (FY12)Rising share from West & South to improve Realization

14 Strictly Private & Confidential Consolidate position in white cement New Domestic Markets Brand Visibility Energy Efficiency International Opportunities Strategy 14 STRATEGY  Poised to be among top 5 white cement producers globally  Increasing white cement and wall putty capacity to sustain present share of revenue from this business  All plants enjoy proximity to raw material & growth markets  Brown field expansion  Split grinding in Haryana for logistical advantage in National Capital Region  A leading brand in North for Grey Cement. JK White and JK Wall Putty are marketed across the country  Enhance visibility further through print & online media and consumer promotions  Captive power generation to provide long term sustained source of low cost power at fixed rate  Use of waster heat recovery to reduce environmental impact  Dual process plant in UAE to cater to growing markets of Middle East & Africa  Infrastructure development demand in Qatar for soccer world cup

15 Strictly Private & Confidential Expansion Plan Domestic – Rajasthan & HaryanaFujairah, UAE Nature Brownfield Greenfield- In a subsidiary, held 90% by JK Cement along with Govt. of UAE (10%) Capacity 3.0 mtpa, with 1.5 mtpa grinding in Mangrol & 1.5 mtpa split grinding at Jhajjar, Haryana Dual process cement plant capable of producing 0.6 mtpa white cement or 0.9 mtpa grey cement Commissioning  Haryana: June ’14  Mangrol: Sep ’14 Mar ‘14 Features  Abundant land  Captive thermal plant of 25 MW and 9 MW WHR  Railway siding at both locations  Connectivity to road & port  Quality limestone reserves  Flexibility to switch between white & grey cement Capital Outley & Funding Mix Total project cost: Rs Cr. Debt: Rs.1200 Cr. Equity Contribution: Rs. 534 Cr. Total project cost: Rs. 765 Cr. Debt: Rs. 510 Cr. Equity Contribution: Rs. 255 Cr Tied-up Proposal moved to banks and in the process of tie-up. Company also has sufficient internal resources for equity financing Financial closure achieved for debt portion. Loan of Rs.150 Cr. for promoter contribution and Rs.95 Cr. of own resources remitted Project Status  Entire land acquired at both locations  Mining lease allotted for additional limestone mine  Civil work has commenced  Orders placed for equipments with renowned vendors  Civil & mechanical work progressing on schedule.  60% of the RCC work completed till date  Erection of equipment has commenced Target Market Haryana unit provides logistical advantage to serve the National Capital Region and helps consolidate JK’s leadership position in the North. Cater to Middle East and North African white cement demand and infrastructure development projects in Qatar for soccer world cup 15

16 Strictly Private & Confidential 16 Past consolidated financials Income Statement Highlights INR mnFY '10FY '11FY '12H1FY13 Operating Income18,26820,94325,46814,483 Other Income Total Income18,46121,24325,93614,770 Total Operating Expenses13,89118,18020,32911,623 EBIDTA (B’fore Excep. Items)4,5703,0635,6083,147 Interest6161,1851, Depreciation8551,1281, Exceptional Item -(72)78 - PBT3, ,8301,850 Provisions , PAT2, ,7461,230 Balance Sheet Highlights INR mnFY '10FY '11FY '12H1FY13 Equity Share Capital 699 Reserves & Surplus 12,786 13,250 1, ,762 Networth 13,486 13,949 15,221 16,461 Long Term Loans 10,138 10,584 9,965 9,455 Total Borrowings 10,737 11,183 10,808 10,618 Deferred Tax Liability (net) 1,858 2,109 2,291 2,436 Other Liab & Provisions 3,579 6,746 7,440 8,402 Net Fixed Assets (Incl CWIP) 22,822 23,996 24,071 23,997 Investments ,483 Cash & Cash Equivalents 1,318 3,215 4,332 3,445 Other Assets 5,473 6,734 7,264 8,993 Note: H1FY13 numbers are on standalone basis.

17 Strictly Private & Confidential Latest Quarter Performance 17 ParticularsQ3 FY13Q2 FY13 Change (%) Q-o-Q Q3 FY13Q3 FY12 Change (%) Y-o-Y 9M Change (%) Y-o-Y FY 12 INR million Dec 31, 2012 Sept 30, 2012 Dec 31, 2012 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 Mar 31, 2012 Total Operating Income (Net) % % % EBITDA % % % PBT % % % PAT % % % EPS – Basic & Diluted Raw Material Cost %15.3%13.1%15.3%12.1%13.6%12.4%12.2% Power & Fuel Cost %24.8%24.4%24.8%25.3%25.1%26.5%25.7% Freight Costs %20.5%20.4%20.5%19.3%20.0%19.5%19.1% Others %19.8%23.7%19.8%23.8%21.5%23.6%22.8% EBITDA %19.6%18.4%19.6%19.5%19.8%18.0%20.2% PAT %7.9%7.5%7.9%7.0%8.2%5.5%6.9%  During 9MFY12, Company’s revenue grew by 23.2% as compare to the corresponding period 9MFY11.  During 9MFY12, Company’s EBIDTA margin improved by 1.8% primarily on account of reduction in power & fuel cost and other expenses.

18 Strictly Private & Confidential 18 Management Board Of Directors Gaur Hari SinghaniaChairman Yadupati SinghaniaManaging Director and CEO K.B. AgarwalIndependent Director J. P. BajpaiIndependent Director Suparas BhandariIndependent Director J. N. GodboleIndependent Director Achintya KaratiIndependent Director K. N. KhandelwalIndependent Director Raj Kumar LohiaIndependent Director Ashok SharmaIndependent Director Key Management Experience Raghavpat Singhania Special Executive5 years Madhavkrishna Singhania Special Executive2 years A K SaraogiPresident (Corp. Affairs) & CFO25 years M. P. RawalPresident (Tech. & Mgmt Service)37 years D RavisankarPresident (Projects)35 years R. C. ShuklaPresident (Mktng, Grey Cement)28 years Mohan SharmaHead (Mktng, White Cement)24 years Kaustubh Dadhich Head (Mktng, South-West)25 years B. K. AroraPresident (J.K. White Cement Works)34 years K. K. JaloriPlant Head, Nimbahera32 years A. K. JainPlant Head, Muddapur26 years

19 Strictly Private & Confidential Awards & Recognition 19 Best Employer Award, 2011 Employers’ Association of Rajasthan 9th National Award for Excellence in Cost Management, 2011 (The Institute of Cost Accountants of India) Commemorative Stamp in honor of the Founding Father Productivity Excellence Award (Rajasthan State Productivity Council) Over All Performance Award by Indian Bureau of Mines

20 Strictly Private & Confidential 20 Thank You


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