1. Ambuja Cement 1 Ambuja Cement September 2005

2. 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

3. Ambuja Cement 3 GDP Constituent 1997 - 98 2004 - 05 Agriculture 40 23 Industry 35 25 Services 25 52 (%) Agrarian to a Service Economy

4. Ambuja Cement 4 Cement Growth A Proxy to GDP Growth

5. 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

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

7. Ambuja Cement 7 Cement Demand (Apr - Aug) Mn. Tonnes Growth (%) 2005 - 06 53.9 10 2004 - 05 48.8 5

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

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

10. Ambuja Cement 10 Expected Cement Demand 2005-06 2006-07 Base Domestic Demand 123 133 Growth - 8% 10 10 Expected Domestic Demand 133 143 Exports (Potential to be even higher) 4 4 Expected Cement Demand 137 147 mn tonnes

11. Ambuja Cement 11 Cement Production Capability 2005-06 2006-07 Base Clinker Production 109 113 Increased Production due to improvements 44 113 117 Clinker Export 6 6 Clinker for Cement Grinding 107 111 Blending Ratio 1.28 1.28 Cement Production 137 142 mn tonnes

12. Ambuja Cement 12 Demand set to outstrip Supply

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

14. Ambuja Cement 14 Structural change in Pricing Scenario Result

15. Ambuja Cement 15 Cement Prices - Domestic - Sep 2005 Sep 2004 Mar 2005 Bombay 172 162 172 Delhi 156 131 140 Kolkatta 172 167 185 Ahmedabad 154 148 149 Jaipur 143 136 141 Hyderabad 114 119 117 Chennai 148 155 165 Rs. / per Bag Even during monsoon prices have remained stable to firm

16. Ambuja Cement 16 - International - Cement Clinker 2004 - 05 37 28 2005 - 06 (E) 45 35 US$ (FOB) (E) - Expected

17. 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 1986 - 0.7 Mn. Tonnes Today - 14 Mn. Tonnes A growth of 18 times since inception

18. Ambuja Cement 18 Growth With A Sound Business Model

19. 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

20. 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

21. 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

22. 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

23. Ambuja Cement 23 A Comparison (April - June 2005) Ultratech Grasim ACC GAC Sales - Volume (mn tonnes) 4.00* 3.34 4.44 3.28 - Net Sales 8471 7381 9848 7205 Operating Profit 1691 1726 2335 2350 Operating Margin (%) 20 23 24 33 O/P Per tonne (Rs.) 423 516 525 716 (US$) 9.6 11.8 12.2 16.3 Rs. Mn. Source : Stock Exchange Filing * Including Export & Sale of clinker - 0.40 mn. tonnes USD/INR = Rs. 44

24. Ambuja Cement 24 Gujarat Ambuja Cements Limited (Consolidated Income Statement) FY2005 FY 2004 Growth (%) Sales 30855 24150 28 Operating Profit 9278 7098 31 Interest 902 900 - Depreciation 2195 2082 6 Profit Before Tax 6181 4116 50 Prior Period Adjs (credit) - 425 - Tax 831 688 20 Profit After Tax 5350 3853 39 Minority Interest 169 229 (26) Net Profit 5181 3624 43 Operating Margin 30 % 29 % -- Rs. Mn.

25. Ambuja Cement 25 Gujarat Ambuja Cements Limited (Consolidated Balance Sheet) FY2005FY2004 Sources of Funds Shareholders’ Funds 24873 17314 Minority Interest 79 6375 Deferred Tax 3811 3209 Net Debt 8447 11845 Total 37210 38743 Application of Funds Gross Fixed Assets 39210 44434 Less: Depreciation 14792 16005 Net Fixed Assets 24418 28429 Investments 10835 9637 Net Current Assets 1957 677 Total 37210 38743 Rs. Mn.

26. Ambuja Cement 26 Ratios FY 2005 FY 2004 Interest Cover 9.4 7.5 Operating Margin 31 % 30 % Net Debt / EBIDTA 1.1 2.2 Net Debt / Networth 0.37 0.61 ROCE 17 % 12 % RONW 21 % 18 %

27. Ambuja Cement 27 Our Score Card (1987 - 2005) Parameters CAGR (%) Capacity 18 Sales 29 Net Profit 36 Networth 30 Return to Shareholders 29 Wtd. Avg. EBIDTA Margin 33

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

29. Ambuja Cement 29 Partnership with Holcim

30. 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

31. 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

32. Ambuja Cement 32 Ambuja Growth Plans  Plan to increase capacity by 3 to 4 mn. tonnes in next 2 - 3 years by way of acquisition, upgradation & brown field expansion.  Growth to be funded from free cash flows

33. Ambuja Cement 33 Thank You