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About us

Ambuja Cements 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. Ambuja 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, Ambuja is the most profitable cement company in India, and one of the lowest cost producer of
cement in the world.
Achievement

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.

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

Environment protection measure that conform to the worlds best.


The pollution levels at all our 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.


Ambuja 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.

Our 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 us the first company to introduce the concept of bulk

cement movement by sea in India.


Management policy

When we started out, we approached the cement business with


an open mind. Some things struck us 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. Our plants would have to be set up in record
time. Our capacity utilization would have to be above 100%.
And our power consumption would have to set a record low.

Given this line of thinking, empowerment was not just a


fashionable term, it was the only way to achieve our goals.

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 acl-speakup@ambujacement.com
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.

Over time this has become a natural company culture: I can..

Code of Business Conduct.

Fraud Risk Management Policy

acl-speakup@ambujacement.com
Our strengths

People
The kiln at our Ambujanagar plant is 20 years old. Yet it keeps increasing productivity year after year.
Many would consider this an impossible task. Yet, our people continue to achieve ever higher efficiency
and productivity, not just at Ambujanagar, but at all our other plants.
In Himachal, for instance, they've managed to push up production and bring down power costs. At a plant
that was already functioning above capacity. At the same plant they've managed to cut stabilizing time (a
critical task in a cement plant) from upto 18 months to a mere 3 months.
At our cement shipping terminals in Gujarat, with a few minor modifications, they've succeeded in
exporting clinker, and importing higher quality and far cheaper coal and furnace oil for our captive power
plants.
At our Mumbai terminal meanwhile, they've increased the handling capacity to 100,000 tonnes as against
the terminals stated capacity of 60, 000 tonnes. With no additional capital expenditure.
In the last decade they've managed to keep our power bills to virtually the same amounts they were in 1989.
All of which proves once again, that an asset is worth only as much as the people who use it.
Infrastructure

Over 40% of the production cost of cement is power.

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

Next we set up a captive power plant at a substantially lower cost than the national grid. We 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 our excess power to the local state government.

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

CEMENT PLANTS
Balance sheet 31st dec 2009

Ambuja Cements Limited


Balance Sheet as on 31st December 2009

Schedule Rs. in As on As on
Crores 31.12.2009 Rs. 31.12.2008
in Crores Rs. in
Crores
SOURCES OF
FUNDS
Shareholder's Funds

Share Capital A 304.74 - 304.52

Employee Stock 0.24 - 0.34


Option outstanding
(Refer Note 10)
Reserves & Surplus B 6,165.92 - 5,368.01

6,470.90 5,672.87

Loan Funds

Secured Loans C 100.00 100.00

Unsecured Loans D
65.70 - 188.67
165.70 288.67

Deferred Tax 485.84 380.75


Liability,net{Refer
Note 7}
Total 7,122.44 6,342.29

APPLICATIONS
OF FUNDS
Fixed Assets E

Gross Block 6,224.13 5,706.94

Less: Depreciation 2,784.09 2,514.19

Net Block 3,440.04 3,192.75


Capital Work in 2,564.82 1,560.75
Progress (Refer Note
27)
6,004.86 4,753.50

Advances against 149.61 386.47


Capital Expenditure
6,154.47 5,139.97

Investments F 727.01 332.39

Current Assets,
Loan and Advances
Inventories G 638.24 938.72

Sundry Debtors H 152.20 224.60

Cash and Bank I 880.60 851.84


balances
Other Current Assets J 10.17 24.42

Loans and Advances K 253.05 - 299.87

1,979.34 - 2,339.45

Less Current L
Liabilities and
Provisions
Liabilities 1,067.05 1,003.24

Provisions 674.04 470.56

1,741.09 1,473.80

Net Current Assets 238.25 865.65

Miscellaneous M 2.71 4.28


Expenditure (to the
extent nor written
off or adjusted)
Total 7,122.44 6,342.29

Notes forming part U


of the Accounts
Five year performance

(Rs. Crores)
2004 2005 -06
2007 2008 2009
- (18
05 Months)
Sales 2606 6286 5705 6235 7077
Operating 799 2247 2239 1954 2122
Profit
Cash Profit 714 2168 2163 1922 2100
Profit 519 1842** 2712** 1970** 1803
before Tax
Profit after 468 1503 1769 1402 1218
Tax
Gross Block 3827 5177 5928 7654 8939
Net Worth 2172 3484 4655 5669 6468
Debt 1127 865 330 289 166
Cash EPS 5.28 14.29 14.26 12.62 13.78
(Rs.)
EPS (Rs.) 3.46 10.09 11.61 9.21 7.99
Dividend 90* 165 175 110 120
(%)
Capacity- 13.3 16.30 18.50 22.00 22.00
Million 0
Tons
Production- 12.8 22.63 16.88 17.75 18.83
Million 0
Tons

Note:

* Includes 30% on enlarged captial after issue of Bonus Shares


in the ratio 1:2

** Includes exceptional items of


Rs 308.33 crores for the year 2008
Rs 785.89 crores for the year 2007.
Rs 47.52 crores for the period 2005-06 (18 months).
Cost leader in indian cement industry

Introduction

Gujarat Ambuja Cement Ltd (GACL), which


had grown tenfold during the late 1990s, was
the third largest producer of cement in India in
2004 next only to Birla Groups (consisting of
Grasim Cements and Larsen & Toubro
Cements) and Associated Cement Companies
(ACC) &. In 2003, GACL had a capacity of
12.5 mn tonnes and generated revenue in
excess of Rs. 2,500 crores. The company had
posted a net profit of Rs 221.73 crore for the
year ended June 30, 2003. GACL was the
lowest cost producer in the Indian cement
industry.

GACL's quest for cost leadership had been


driven by productivity improvement and cost
cutting measures.

The company had won various awards for management excellence, quality, and
environment management. Ever since its inception, the company had believed in doing
things in innovative and unconventional ways. GACL's modern plants, large kilns, high
degree of automation, low manpower costs, low power tariff and low fuel costs had
helped it to become the cost leader in the industry.

GACL had cut energy costs by reducing the


usage of coal through use of substitutes like
crushed sugarcane. GACL operated most of
its plants at above 100% capacity utilisation.
The company had pioneered the use of ship
transportation to cut freight costs and also
established the necessary infrastructure like
ports, freight and handling terminals.

Low-cost funds had helped GACL to cut the


cost of capital. The company's engineers had
picked up best practices during visits to
overseas plants in countries like Japan and
Australia. GACL had also reduced pollution
levels at its cement production plants and
complied with the Swiss standards of 100
milligrams per cubic nanometer.
Background Note

GACL was established as Ambuja Cements Private Ltd. (ACPL) in 1981 by Narotam
Satyanarayan Sekhsaria (Sekhsaria), a businessman from Gujarat in western India.
Originally a cotton trader, Sekhsaria liked the cement business because of its stable
demand, lack of substitutes and limited competition. With the support of Gujarat
Industrial Investment Corporation (GIIC), Sekhsaria and his two partners, Suresh Neotia
and Vinod Neotia, set up APCL. Suresh Neotia was appointed Chairman while Sekhsaria
took charge as the Managing Director...

Gujarat Ambuja - Cost Leader in the Indian Cement Industry

In 1983, the company floated a public issue


and its name was changed to GACL. The
same year, production started at a 0.7 million
tons per annum (mtpa) plant, named Ambuja
Cements, in Ambuja Nagar, Gujarat. GIIC
sold its stake in GACL in two tranches to
Sekhsaria in 1987 and 1990.

In 1993, GACL commissioned its second


cement plant at Ambuja Nagar (capacity 1
mtpa), named Gujambuja Cements. Attracted
by buoyant cement demand in the northern
regions, GACL set up a 1.5 mtpa plant at Suli
in Himachal Pradesh (HP), named Ambuja
Cements Himachal Unit in 1995. In the same
year, GACL floated a wholly owned
subsidiary in Mauritius - Cement Ambuja
International Ltd. (CAIL).

In 1996, GACL floated another subsidiary, Ceylon Ambuja Cements (Private) Ltd.,
through which it acquired a small company, Midigama Cement, in Sri Lanka. In 1996,
GACL set up its third plant at Ambuja Nagar, named Guj Line - II (capacity 1 mtpa).
GACL also established grinding and packing units at Ropar (Punjab) and Panvel
(Maharashtra). In 1997, GACL acquired Modi Cements' sick 1.4 mtpa plant at Raipur
(Madhya Pradesh) for Rs 1.66 billion. This plant was renamed Ambuja Cement Eastern
Ltd.

After the acquisition, GACL revamped its


processes to bring them on par with the
standards of its other plants. In 1998, GACL
acquired the Nadikudi (about 100 kms from
Guntur) and Proddatur (near Cuddaph)
limestone mines in Andhra Pradesh to
strengthen its presence in southern India.
In December 1999, GACL paid Rs 3.5 billion
to acquire a 51% stake in Delhi based DLF
Cement. DLF Cement had started its
operations in 1997 in Rajasthan with a plant
capacity of 1.4 mtpa. After this merger,
GACL became the fourth largest cement
manufacturer in India after ACC, L&T and
Grasim. In the same month, GACL also
acquired a 7.2% stake in ACC for Rs 4.55
billion.

With 14 manufacturing units in India, ACC had a total capacity of over 11 mtpa. It was
one of the largest integrated cement companies in the world. In December 2001, GACL
began trial production at a new 2 mtpa plant in Chandrapur, Maharashtra, taking its total
capacity to 12.5 mtpa. In FY 2003, the company recorded a sales figure of Rs 2173 crores
and a PAT of Rs 293 crores...

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