We are pleased to present the Annual Report of the Company for the year
 2010.
 
 1.  FINANCIAL RESULTS 2010
 
 As a result of volatile market conditions in the second half, the
 companys operating results were lower than the previous year.
 
 FINANCIAL RESULTS
 
                                                     (Rs. In Crores)
 
                               Stand Alone              Consolidated
                     Current Year Previous Year  Current Year  Previous
                                                                   Year
                      31.12.2010   31.12.2009    31.12.2010  31.12.2009
 
 Sales
 (net of excise duty)   7390.21      7076.87      7390.21      7076.87
 
 Profit before interest 
 and Depreciation       2071.22      2122.72      2070.60      2121.48
 
 Less: Interest           48.69        22.43        48.69        22.43
 
 Gross profit           2022.53      2100.29      2021.91      2099.05
 
 Less: Depreciation      387.19       296.99       387.21       297.28
 
 Profit before Tax and 
 Exceptional Items      1635.34      1803.30      1634.70      1801.77
 
 Exceptional Items        26.53          -          26.53          -
 
 Profit before Tax      1661.87      1803.30      1661.23      1801.77
 
 Provision for Tax       398.26       584.93       398.26       584.93
 
 Profit after Tax       1263.61      1218.37      1262.97      1216.84
 
 Add: Balance brought 
 forward from
  previous year          349.23       358.58       664.96       675.84
 
 Profit available for 
 appropriation          1612.84      1576.95      1927.93      1892.68
 Appropriations:
 
 Debenture Redemption 
 Reserve(Net)             25.00           -         25.00          -
 
 General Reserve         850.00       800.00       850.00       800.00
 
 Dividend on Equity 
 Shares 
 (including interim)     397.22       365.59       397.22       365.59
 
 Corporate Dividend Tax   65.27        62.13        65.27        62.13
 
                        1287.49      1227.72      1287.49      1227.72
 
 Balance carried forward 325.35       349.23       640.44       664.96
 
                        1612.84      1576.95      1927.93      1892.68
 
 4.  DIVIDEND
 
 The company has paid an interim dividend of 60% (Rs.1.20 per share)
 during the year. The directors are pleased to recommend a final
 dividend of 70% (Rs.1.40 per share).  Thus the aggregate dividend for
 the year 2010 works out to 130% (Rs.2.60 per share), and the total
 payout will be Rs. 462 crore, including dividend distribution tax of
 Rs. 65 crore. This represents a payout ratio of 37%.
 
 5.  MARKET DEVELOPMENTS
 
 India witnessed cement demand growth of 6% in 2010, the slowest growth
 since 2004. In comparison, the Companys domestic cement sales grew
 8.3%, to 19.5 million tonnes as against 18.0 million tonnes in 2009.
 Total sales including exports increased 6.4%, to 20.0 million tonnes
 compared to 18.8 million tonnes in 2009.
 
 The Company maintained its strong position of approximately 16.5%
 market share in its primary markets, and around 10% on an all-India
 basis. The year saw significant industry capacity additions, totalling
 approximately 30 million tonnes, following 60 million tonnes already
 added during the previous two years.  The impact of this surplus
 capacity, together with tepid demand in the second half of 2010,
 exerted considerable pressure on cement prices.
 
 The Company has built a large network of over 7,500 dealers and 20,000
 retailers across 18 states in India. Its reach and penetration helps
 the Company to manage the last mile delivery across our relevant
 markets, and gives us a strong position in our core rural and
 semi-urban markets.
 
 Along with strong brand equity, Ambuja has evolved a unique model of
 channel management, based on values of trust and relationships. The
 strong bond between the dealer network and the Company has helped
 Ambuja to withstand severe competition for more than two decades. With
 the added support of Holcims rich experience of operating in 70
 countries, Ambuja has now added sophisticated IT tools and global
 channel management tools to its traditional Indian model. This has
 enhanced our capability to face the stiff competition resulting from a
 scenario of substantial oversupply.
 
 Holcims global experience has also helped Ambuja in fine tuning its
 product quality management, by introducing best practices from other
 countries. It has helped in enhancing the overall marketing mix,
 clearly targeted at the retail market in rural and semi-urban sectors,
 and the large buyers in the metros and mega cities.
 
 The Companys network of port, bulk terminals, and bulk cement ships,
 on the West coast has supported a sustainable strong market position in
 Mumbai, Surat, and now Cochin.
 
 All India
 
 Demand analysis for all India is given below:
 
 Fig.in mil. tonnes
 
 All-India Demand            2009          2010       Growth %
 
 Domestic                   192.5         204.0          6.0
 
 Export                       2.7           2.1        -21.0
 
 Total – India              195.2         206.1          5.6
 
 Domestic cement demand grew at 9.3% CAGR in the last 5 years. In 2010,
 the domestic demand growth was 6%. However, exports reduced by 21% as
 international demand as well as prices continued to remain at low
 levels.
 
 Northern Region
 
 Demand analysis for the North Region is given below:
 
                                                   Fig.in mil. tonnes
 
 North *                                 2009      2010       Growth %
 
 Aggregate Demand                        38.0      38.7         1.8
 
 Ambujas                                 6.6       6.8         3.0
 
 Volume
 
 Ambujas Share (%)                      17.5      17.6
 
 * (excluding Uttar Pradesh)
 
 Cement market growth in North is showing 8.5% CAGR over the last 5
 years. The demand in 2010 grew by 1.8%, primarily due to reduction in
 the NCR region as a result of completion of Commonwealth Games
 construction activity. Ambuja continues to hold substantial market
 share in Punjab, Himachal Pradesh and Jammu & Kashmir. Meanwhile we
 have further increased sales in Uttaranchal and Delhi. Regional market
 share was marginally improved.
 
 Eastern Region
 
 Demand analysis for the East Region is given below:
 
                                                 Fig.in mil. tonnes
 
 East *                                  2009      2010    Growth %
 
 Aggregate Demand                        32.2      36.4       13.0
 
 Ambujas Volume                          3.2       3.7       15.6
 
 Ambujas Share (%)                       9.9      10.2
 
 * Above figs are exclusive of North East except Assam & Bihar Cement
 demand has grown at 10.1% CAGR over the last 5 years. The industry has
 grown by 13% in 2010 on YoY basis. Ambuja performed well, recording
 15.6% increase in dispatches, and thereby increasing regional market
 share. The Farakka grinding plant performed at full capacity. We could
 also further expand our footprints in Jharkhand, Orissa and Bihar.
 Additionally, clinker sales of 0.28 million tonnes were realised, as a
 result of the fast ramp-up of production from the newly commissioned
 kiln at Bhatapara.
 
 West / South Region
 
 Demand analysis for the West / South Region is given below:
 
                                                  Fig.in mil. tonnes
 
 West                                 2009      2010       Growth %
 
 Aggregate Demand                     36.2      39.9          9.9
 
 Ambujas Volume                       7.0       7.5          7.1
 
 Ambujas Share (%)                   19.4      18.8
 
 Cement demand has grown at 9.7% CAGR over the last 5 years, and 9.9% in
 2010 compared to last year. There was a further drop in exports of
 cement and clinker from the region. Despite the diversion of export
 volumes into the domestic market, our regional market share declined
 slightly.  6. PRODUCTION & COST DEVELOPMENTS Production Volumes
 
 Clinker production was 23.4% higher than in 2009, following the
 commissioning of the two new kiln lines.  It was still necessary to
 purchase around 0.36 million tonnes of clinker, mainly in the first
 quarter, but this was substantially lower than the 1.7 million tonnes
 purchased in 2009.
 
 Total cement production increased by 6.9% compared to 2009, from 18.8
 to 20.1 million tonnes. Plant utilisation levels on average remained
 above 80% during the year with the exception of the new plants which
 were in the ramp-up phase. The Company continued to focus on production
 of fly ash based PPC, and maintained an average blending ratio of
 approximately 1.43.
 
 Major Costs
 
 Total raw material costs were reduced significantly (Rs.  368 crore)
 compared to the previous year, as a result of substituting own produced
 clinker for purchased clinker to a large extent. However, the costs of
 other raw materials, principally fly ash and gypsum, including
 transportation costs, showed an increasing trend.
 
 Fuel and power costs also increased in 2010, largely as a result of
 steadily rising international coal and freight prices. A lower
 percentage of the Companys total coal requirements could be satisfied
 through linkages compared to the previous year, therefore it was
 necessary to procure greater quantities of imported and e-auction coal.
 Even where linkage coal was available, deterioration in quality has
 increasingly become an issue, necessitating blending of linkage coal
 with higher quality imported coal.
 
 Partially compensating for higher fuel prices, de- bottlenecking
 initiatives at plants began to bear fruit in terms of improved energy
 consumption, with the average consumption rate reducing from 757 kcal
 per kg of clinker in 2009, to 750 kcal per kg in 2010. Some further
 progress was also made in developing the alternative fuels and raw
 materials (AFR) business, in order to reduce dependence on coal in the
 future, as well as improve environmental performance.
 
 Captive power generation capacity increased to more than 400 MW, with
 which around 80% of current power plant requirements are satisfied.
 Average power consumption further improved in 2010, from 83.6 kWh to
 82.7 kWh per tonne of cement produced, as a result of continuous
 improvement in grinding process efficiency.
 
 Freight forwarding costs increased by 12% in absolute terms, and
 freight on cement despatches increased by 5% on per tonne basis.
 Partial liberalisation of fuel prices during 2010 led to increases in
 diesel costs, and average lead distance increased as sales were
 expanded into new markets. In addition there was a further shift away
 from exports, sold on FOB basis, to domestic sales. The cost of packing
 materials also went up during 2010, as PP granule prices increased in
 line with global oil prices.
 
 7.  EXPANSION PROJECTS
 
 During the first quarter of 2010, commercial production commenced at
 two new 2.2 million tonne clinker production lines, at Bhatapara
 (Chattisgarh) and Rauri (HP), as well as two new 1.5 million tonne
 cement grinding facilities, at Dadri (UP) and Nalagarh (HP). In
 addition, a 33 MW captive power unit was commissioned at Bhatapara.
 Following completion of these projects, which cost approximately Rs.
 2,700 crores, the Company can further strengthen its competitive
 position in the northern and eastern markets.
 
 In the western region, an additional 30 MW captive power unit was
 commissioned during the year at Ambujanagar (Gujarat). This brings
 total Company captive power capacity to more than 400 MW. Also in
 Gujarat, a wind power project is currently under implementation, the
 first investment by the Company into renewable energy sources.
 
 In the area of logistics, one of three new ships for western coastal
 transportation was delivered in 2010, with the remaining two expected
 to be brought into service during 2011 bringing the total fleet size to
 ten. A number of projects to improve efficiency of logistics
 operations, including rail connectivity at various locations, are also
 currently in progress.
 
 Further cement grinding capacity additions totalling around 2 million
 tonnes are under construction, at the Bhatapara (CG) and Maratha (MH)
 units. These are scheduled for completion in early 2011, and will take
 the Companys installed cement capacity to approximately 27 million
 tonnes.
 
 All the expansion projects have been financed entirely with internal
 accruals.
 
 In October 2010 it was announced that the Company had signed an
 agreement with the Rajasthan State Industrial Development and
 Investment Corporation, to set up a 2.2 million tonne clinkerisation
 unit in Nagaur district. Pre-project planning is at an advanced stage
 and construction is expected to start around middle of 2011. This
 project will support the Company objective of maintaining long term
 market share at around 10 per cent.
 
 8.  OUTLOOK
 
 Structural reforms still needed
 
 The economy is poised to enter an era of sustained growth, and it is
 widely expected that average GDP growth can be maintained in the range
 of 8% to 9% in the coming years. Domestic demand as well as both public
 and private investment will continue to support that growth: an
 increasing number of young middle class households will have increased
 capacity for discretionary spending, and the housing sector will be a
 major beneficiary.
 
 Nevertheless a number of policy challenges remain, which must be
 tackled in order for the economy to realise its full potential.
 Government initiatives are needed, to implement structural reforms in
 infrastructure, agriculture, and education, and attract more private
 investment into these areas. In the short term, inflation continues to
 pose a serious threat and it will be a major challenge to tame
 inflation without harming growth prospects.
 
 Period of adjustment for cement industry
 
 The longer term outlook for the cement industry remains very positive.
 On one hand the government has ambitious plans for infrastructure
 investment, looking to accelerate spending to USD 1 trillion in the
 next five year plan period.  On the other hand, sustained high growth
 should bring a significant increase in the demand for housing and
 commercial structures.
 
 While these developments augur well for long term cement demand, in the
 short term the demand-supply imbalance as a result of the significant
 recent capacity additions is likely to widen further. Effective supply
 is expected to increase by approximately 30 million tonnes in the
 coming year, while demand may increase by around 20 million tonnes.
 Industry capacity utilisation will consequently remain relatively low
 for some time, and temporary pricing pressures will continue to surface
 from time to time, and across almost all regions.
 
 Meanwhile, the upward trend in input costs shows no sign of abatement,
 and Coal India has a stated objective to bring coal prices in line with
 international prices, although there is no clear timeframe for this.
 
 Ambuja Cement is well positioned, following the commissioning of its
 new capacities, and with the strength of its brand and focused
 distribution channels, to consolidate its position as one of the most
 competitive and profitable players in the industry.  9. RISKS AND AREAS
 OF CONCERN Energy Costs
 
 Notwithstanding initiatives to reduce the dependence on coal, it will
 remain the most important cost element for the cement industry for some
 time yet. Availability of linkage coal is therefore an important cost
 driver, and every effort is being made to maximise the quantity of
 linkage coal supplied. Measures have also been implemented with a view
 to improve the quality of coal received. Development of our allocated
 captive coal block is progressing, but will still take some time before
 it is operational. Further opportunities to acquire captive fuel
 sources are continually being explored.
 
 From a longer term perspective, it is important to continue developing
 AFR sources, in particular industrial and agricultural waste materials,
 and we are investing significant amounts to develop this business
 model.  Renewable energy sources for power, such as wind and hydro,
 also become increasingly important as well as economically viable, and
 the Company recently started implementation of its first wind power
 project in Gujarat.
 
 Logistics Infrastructure
 
 Availability of adequate logistics infrastructure is just as critical
 for future success as building clinker and cement plants.
 Implementation of the ambitious plans for public road and highway
 construction, expansion of rail networks and rolling stock, port
 improvements, etc, will be vital to ensure the cost efficient – as well
 as safe – movement of materials between cement plants, customers, and
 suppliers. There have been several examples in the past year of
 shortages of rail wagons causing bottlenecks in the supply chain.
 Recognising the importance of this, the Company is also investing in
 several projects to improve its own logistics infrastructure, in
 particular rail connectivity of our plants.
 
 Competitive Environment
 
 The developments in the second half of 2010, following the unexpected
 slowdown in demand growth, demonstrated how quickly the competitive
 environment can change, and how volatile the market can become,
 particularly in a scenario of excess supply. Assuming that demand
 growth can recover fairly soon, in line with GDP resuming steady growth
 of 8.5% to 9%, the supply overhang can potentially be absorbed
 relatively quickly. Infrastructure spending moving to a new higher
 trajectory would certainly help sustain a double-digit cement demand
 growth rate.
 
 On the other hand, should there be a period of sustained low demand
 growth, this could lead to further volatility and pricing pressures,
 especially in the more fragmented markets such as South region. In
 addition, a disproportionate quantity of the new capacities in the
 pipeline is being added by smaller regional and / or new players, which
 could further increase the possibility of future market instability.
 
 Talent Crunch
 
 The projected rate of growth for the cement industry in coming years
 will require a constant stream of new skilled workers as well as
 managerial talent. Skill shortages have been developing for several
 years, and have become an issue for most sectors of the economy.
 Structural and policy reforms are needed, in order to improve the
 quality of education and skill development, and promote vocational
 training. This will be critical to the successful exploitation of the
 countrys potential demographic advantages.
 
 In order to mitigate the risk of skill shortages and maintain its
 competitive position, the Company endeavours to attract, develop and
 retain talented individuals by ensuring a continuous inflow of bright
 campus graduates; skills- based trainings and structured employee
 engagement initiatives. Establishing a systematic approach to
 management and leadership development, in particular through its People
 Power initiative helps in creation of a pipeline for future leaders and
 will play an important role in supporting the achievement of the
 Companys business objectives.
 
 Taxation / Administrative burden
 
 As expected, the reduction in excise duties introduced as part of the
 2008 stimulus package was partially rolled back in the 2010 Union
 budget, and had an impact on cement realisations. Further roll-back of
 stimulus measures could prove damaging for the industry during what
 already promises to be a challenging period.
 
 Cement in India continues to be more highly taxed than anywhere else in
 the world. In addition, the system is very complex and places a heavy
 administrative and compliance burden on companies. The implementation
 of GST and the new direct tax code (DTC), hopefully in 2012, should
 bring much needed simplification making it easier to do business, as
 well as a reduction in the overall administrative burden on the
 industry.  
 
 10.  HUMAN RESOURCES
 
 Talent Management a priority
 
 An extensive job study has helped establish a well defined organisation
 structure and an appreciation of roles at different levels. This
 framework forms the basis of a structured talent management system,
 including people development, career pathing, succession management,
 and reward management. Since changes in business requirements and
 technology require changes in business processes, there is an ongoing
 effort to implement the most effective organisation structure leading
 to enhanced manpower productivity. Linkage has been drawn from the
 People Power project to ensure uniformity across all locations.
 
 Succession management for critical roles has its genesis in a
 structured talent review at different management levels, leading to
 creation and implementation of individual development plans. Planned
 interventions for leadership development in general management and
 leadership competencies serves as an efficient leadership pipeline.
 Leadership development starts at lower levels of frontline management
 and extends to senior management levels. Functional expertise
 development is being planned at individual and team levels through
 competency mapping and development.  Expansion and greenfield projects,
 expanding markets, and new cross functional initiatives, serve as
 holistic avenues for individual development. Overseas learning trips
 and short term overseas assignments have provided exposure to
 international best practices that have been customised to our
 operational requirements.
 
 Engagement levels of our employees are recognised by the Company as a
 leading indicator for Company growth, profitability and efficient
 operations. Towards this end, an objective mechanism is in place for
 measuring employee engagement. Organisation Development interventions,
 designed to enhance employee engagement, are being implemented at
 several levels, including the plant teams. A structured mechanism
 monitors action plans and implementation progress.
 
 Rolling out People Power
 
 The successful implementation of the People Power initiative at
 Ambujanagar has, through improved maintenance practices, resulted in
 significant improvement in meantime between failures (MTBF) in kilns,
 raw mills, and cement mills. Electricity and thermal energy consumption
 have reduced and equipment availability has improved. In 2010 the
 People Power project was launched at the Bhatapara and Maratha plants,
 and during 2011 it will be replicated at the remaining plants.
 
 The roll-out at all locations would result in standardisation of
 organisation structures across Units, institutionalisation of the
 Academy concept, and creation of leadership positions at lower levels.
 This would also provide an opportunity to integrate technical training
 at plants with the Academy.
 
 The People Power roll-out has specific quantifiable KPIs in terms of
 attaining sustainable manufacturing excellence; competitive plants,
 EBITDA gain through efficiency improvement, and enhanced productivity
 and development of the leadership pipeline.  
 
 11.  SUSTAINABLE DEVELOPMENT
 
 The major thrust in 2010 was to provide renewed impetus on the process
 of sustainability in our overall business planning and strategy.
 Faculty members of Harvard Business School (HBS) were engaged for a
 detailed assessment of our initiatives in this sphere, and have
 provided certain recommendations to improve our working in this area.
 
 We have simultaneously worked out a strategy and framework to undertake
 endeavours in a more structured, systematic, integrated and coordinated
 manner to achieve our goal of corporate sustainability. To achieve this
 objective, the earlier formed Sustainable Development Steering
 Committee (SDSC) has been re-constituted as Corporate Sustainability
 Steering Committee (CSSC) with a clear mandate and programme of
 implementation.  This committee has been entrusted with the assessment
 of upcoming risks and opportunities in the business, social, and
 environment, fields. The whole gamut of issues dealing with
 environment, community development, resource optimisation, Alternative
 Fuels and Raw materials, energy etc, are part of the mandate for this
 committee.  The decisions will be adopted and implemented by units
 through Unit Sustainability Steering Committees. The risks and
 opportunities arising from latest legislation and regulations in
 environment, labour, etc. are also included.  As a leadership
 commitment we are updating our CSR, climate change, and green
 procurement policies, and decided to have an over-arching
 Sustainability Policy.
 
 We have released our third Corporate Sustainable Development Report in
 October 2010. It is based on the Global Reporting Initiative (GRI) G3
 format.
 
 Proactive Environment Management
 
 Moving ahead fulfilling our targets for the year, we have proactively
 commissioned Continuous Emission Monitoring Systems (CEMS) at 7 out of
 9 kiln stacks so far. These systems monitor all vital emissions from
 our operations online. We have also commissioned Continuous Ambient Air
 Quality Monitoring Stations at 5 plants, for keeping track of our
 fugitive emissions.
 
 In 2010, 50 solar street lights were commissioned at Roorkee (UT), a
 further 22 at Dadri (UP), and 15 at Farakka (WB), in addition to the
 previous years installations at Ambujanagar, Bhatapara and Bhatinda.
 This is in line with the target of installing solar street lights at
 all our plants.
 
 Special type of dust suppression system has been installed at Maratha,
 in the open coal storage area, which will be used for fire fighting,
 besides dust suppression.
 
 At Rauri (HP) plant, 6 telescopic chutes were installed at the clinker
 loading point, a technique to reduce dust generated during loading of
 clinker in trucks. Rubber curtains are also attached with this
 telescopic chute, for dust minimisation.
 
 Sankrail (WB) is our first unit to be certified for SA 8000, which is
 based on adherence to international human rights norms and national
 labour laws, to protect and empower all personnel within a companys
 scope of control and influence. It also includes the Companys
 suppliers and sub-contractors.
 
 Zero discharge-based Effluent Treatment Plant has been installed at
 Ropar plant with a capacity of 517 m3 per day, and its treated water is
 re-circulated for cooling.
 
 Water treatment unit with a capacity of 9000 litres has been set up at
 Surat (Gujarat) in order to reduce water consumption. Waste bath water
 is re-used for the plantation. Rain water harvesting structure with
 storage capacity of 2600 m3 is provided, and construction for another
 such structure with capacity of 4500 m3 is in progress at Nalagarh
 (HP).
 
 Management Systems
 
 Environment Management System (ISO 14001) is established at most of our
 plants. Currently all 5 integrated plants and 7 out of 8 grinding units
 are certified to ISO 14001. In a path breaking effort, the Dadri
 grinding unit has been certified for Integrated Management Systems
 including ISO 14001, ISO 9001, OHSAS 18001, within its first year of
 operation.
 
 Co-processing: Solutions for waste disposal
 
 A modern AFR laboratory has been set up at Ambujanagar for determining
 the physico-chemical characteristics of wastes to be used for
 co-processing. This is done to gain better control over legal aspects
 and stipulating the internal technical specifications and benchmarks,
 environmental monitoring, and heavy metals and organic analysis. Each
 month 100 to 150 samples from all the locations are analysed.
 
 Extending our steps further, paint sludge, a hazardous waste from the
 automobile industry, is being co-processed at Rabriyawas (RJ). The
 wastes added for co-processing in 2010 are: FMCG waste, liquid waste
 mix, gelatin waste, and mill scales, in addition to TDI tar, shredded
 tyres, glycerin foot, groundnut husk, cotton stalk, FO sludge etc.
 which were earlier being processed.
 
 Voluntary Reporting
 
 Ambuja Cement is proud to be amongst the top 10 companies qualifying
 for first Carbon Disclosure Leadership Index, India (CDLI), 2010. This
 leadership index has been prepared by the Carbon Disclosure Project
 (CDP) of WWF and CII, India. Ambuja is one of the few companies in
 India reporting GHG emissions through CDP, which today holds the
 largest database of primary corporate climate change information in the
 world.
 
 CORPORATE SOCIAL RESPONSIBILTY (CSR)
 
 Ambuja Cement has consistently demonstrated its commitment to have
 positive and meaningful relations with communities around the Companys
 plants. They are a large and significant stakeholder group, and our
 excellent relations with them is one of our strengths. This approach is
 integrated in our core values and business ethics.
 
 Ambuja Cement Foundation (ACF), the CSR arm of the Company, works with
 community stakeholders, balancing their expectations and concerns with
 our business needs.
 
 Our strong relations with the community are built and strengthened on
 the basis of mutual respect and trust.  Initiatives in natural resource
 management, agro and skill- based livelihood, health and education,
 begin with careful assessment of their impact on society, company and
 the environment, and involve stakeholder participation.  This year too,
 the Foundation also strengthened and forged new partnerships with local
 community-based organisations, the government, and other NGOs at the
 local, state, national and international level.
 
 Innovations in Natural Resource Management
 
 Salinity ingress, or the seepage of saline sea water into land-based
 water resources, is a major issue along the coastline of Gujarat. ACF
 has been working in partnership on several projects with the Government
 of Gujarat (GoG) and donor agencies, like Sir Ratan Tata Trust (SRTT),
 on this theme.
 
 A two-day conference on Coastal Salinity Ingress Mitigation and
 Prevention: Experiences and Challenges was conducted in Diu to look at
 various alternatives towards salinity ingress prevention. The
 conference aimed at synergising efforts of various stakeholders,
 including corporate agencies working in the coastal regions. More than
 120 delegates representing universities, scientific institutions, the
 government, corporates, NGOs, and local communities, participated. The
 conference helped pool information and resources about the various
 methods of salinity ingress prevention undertaken by different groups.
 The Companys innovative water resource management programmes in
 Ambujanagar were appreciated for their impact and effectiveness.
 
 Rajasthan too faces frequent droughts and water scarcity.  The team at
 Rabriyawas brought in a mix of traditional as well as modern
 technological methods to conserve water in many villages around the
 Company plant. Khadins are a traditional method to catch and store
 rainwater. These structures, built around farms, prevent excess rain
 water from draining off, and help saturate the soil moisture. This
 ensures that farmers are able to grow an additional crop, with
 increased financial returns.
 
 Agro-based Livelihood Initiatives
 
 Enhancing agro-based livelihoods for rural communities is another area
 of focus for ACF. Better Cotton Initiative (BCI) is a programme for
 producing economically, environmentally, and socially sustainable
 cotton. BCI is a farm level intervention that has the potential to
 change the scenario on the global market, and has demonstrable long
 -term benefits for both farmers and the environment.
 
 Better Cotton Initiative is an international programme implemented in
 major cotton producing countries in the world, including India. Major
 retailers and promoters have pooled money in a Fast Track Fund (FTF),
 to enable cotton growers access to technology, and inputs on producing
 environmentally friendly, higher grade cotton. ACF is the largest among
 the 8 implementing agencies in the country, a process coordinated by
 the Dutch organisation Solidairdad.
 
 In 2010, ACF worked with cotton farmers in Bhatinda, Kodinar,
 Chandrapur and Nadikudi, to integrate BCI techniques in current farming
 practices. Through planned interventions, strategic pesticide use,
 contamination prevention and effective picking, storing and harvesting
 methods, more than 2552 farmers across locations have been able to show
 a reduction of Rs. 3000 per acre on production costs. And BCI cotton
 has been able to command upper-band rates bringing in profits to
 farmers.  Projected figures of BCI cotton produced in 2010-11 under ACF
 are expected to be 83537 quintals. In recognition of ACFs efforts, we
 have been invited to be a partner in the global BCI programme, a move
 that will bring in additional funds and technical inputs to processes
 here.
 
 In 2010, ACFs nascent organic farming intervention grew exponentially
 to reach out to more farmers. Awareness programmes among the farming
 community provided a glimpse of a viable, alternate way of farming.
 Currently there are 558 farmers growing organically on more than 564
 acres of land in Punjab alone. Using organic manures and preventive
 pest control methods has ensured that the yield they get from their
 land is sufficient, and the crop produced is healthy and safe for
 consumption. The soil is no longer getting stripped of its nutrients
 and is in fact on the road to recovery. Farmers are recognising the
 profitability in organic farming, and motivating others to take it up
 as well.
 
 Other innovative initiatives include the Wadi project, wherein
 fruit-bearing trees are planted along existing farms. At no extra cost
 or effort, the farmer is ensured of additional income within five
 years. Quality Seed Production in collaboration with the Rajasthan
 State Seed Corporation has taken root in Rajasthan. Farmers from 6
 villages are involved in raising quality seeds in a controlled manner
 in more than 230 acres of land. The plots on which the seeds are
 produced are closely monitored and are inspected periodically by the
 Rajasthan State Seed Certifying Agency. These seeds are then certified,
 bought and marketed by the State Agency, bringing in additional income
 to the farmers.
 
 Skills and Capacity Building
 
 The construction sector is closely related to the cement industry. In
 view of the paucity of skilled workers, ACF, along with the Tribal
 Development Department of Government of Gujarat, has been working on
 mason training for the past two years. The process brought together
 ACFs community mobilisation skills, ACLs technical inputs, and
 governmental support to train hundreds of unskilled tribal youths into
 skilled masons.
 
 This year ACF initiated the Advanced Mason Training
 
 programme, to hone the semi-skilled into skilled professionals. The
 course is shorter in duration, but more intense, and includes skills
 such as plumbing, pointing, tiling and roofing.
 
 ACF has also focused on providing alternate skills for employment
 generation to rural youth. The number of Skill and Entrepreneurship
 Development Institutes (SEDI) has increased to 12 this year. The new
 SEDIs though are in various stages of development. More than 1500
 students have been trained this year in 17 different technical trades
 including welding, carpentry, repairs of domestic appliances, mobiles,
 two-wheelers, computer basics and DTP and security guard training.
 SEDIs are also ideal vehicles for collaboration with other
 organisations. Apart from centres that are solely managed by ACF, SEDIs
 have also been set up in PPP with the government in different
 locations.
 
 Post-training, SEDI provides trainees assistance in finding suitable
 job opportunities or in establishing small scale enterprises. Across
 the Institutes, the rate of employment of those trained has reached
 about 70%, which is very encouraging.
 
 By concentrating on livelihood generation of various kinds, ACF is
 working towards improving the standard of living of people and
 improving the quality of their life – a factor that is inextricably
 linked to the Companys growth and expansion.
 
 Integrated Health Programme
 
 Access to health care has been identified by ACF as one of the critical
 community issues. Communities around the Company plants have little or
 no access to clean drinking water, or health care services. ACF
 addresses these issues through its integrated health programme.
 
 In 2010, ACF continued to strengthen its cadre of health workers under
 the Village Health Functionary (VHF) Programme. VHFs, also called
 Sakhis, are village women trained in clinical, preventive and
 promotive aspects of health. Sakhis are the crucial link bridging the
 community with health care access. They conduct sessions on health with
 women, and youth, interact with Panchayats to implement sanitation
 programmes in the villages, promote sustainable practices like kitchen
 garden and vermin composting, and work closely with state-run
 anganwadis to monitor health of young children.
 
 Currently, 309 Sakhis from 258 villages cater to a population of over
 1.4 lacs. ACF is proud that the health programme is completely
 supportive of and complementary to the National Rural Health Mission
 (NRHM) and will be replicated to more villages in our current
 operational areas in partnership with the government.
 
 ACFs health programme is moulded to suit the conditions and the
 specific needs of communities in the region.  In Bhatinda, ACF
 implements a drug de-addiction programme, while malnutrition among
 young children is a key area of focus in Bhatapara in Chhattisgarh.
 Given the skewed sex-ratio in Punjab, ACF implements a programme
 against sex-selection in Ropar. In Chandrapur, Maharashtra, ACF
 broadened the Home Based Neo-natal Care (HBNC) programme to tackle
 maternal and infant mortality, institutionalise deliveries and promote
 safe child care. This shift in approach has been able to meet community
 needs better, and in turn contributed to greater trust and a more solid
 stakeholder relationship with the Company.
 
 Truckers are also an important stakeholder for a cement company.
 However, they also are a high-risk group for HIV and AIDS. In 2010, the
 HIV and AIDS Prevention Programme continued to reach out to them and
 other communities though setting up of Sexually Transmitted Infection
 (STI) Clinics and Voluntary Counselling and Testing Centres (VCTC).
 
 Education Development
 
 ACFs work in raising the quality of education in village- level
 government schools got a boost in 2010 with the introduction of various
 innovative learning tools and concepts for trainers, teachers, and
 students.
 
 For many students, maths continues to remain a complex and unfriendly
 subject. Activity-Based Maths Learning, introduced this year,
 combines a hands-on and practical process to make maths enjoyable and
 fun. Reading as a Way to Literacy focuses on building and retaining a
 childs interest in reading. Introduced in three locations in HP, UP,
 and Maharashtra, the programme includes training of teachers, resource
 acquisition, and giving a new lease of life to existing school
 libraries. Concept Learning through Technology was launched as a
 pilot project in primary schools in Dadri and Darlaghat. This programme
 integrates the use of computers into the education process.
 
 ACF also concentrated on strengthening the existing School Management
 Committees (SMC). Set-up by the government, this group is empowered to
 make decisions for the school. With ACFs intervention these
 committees, in schools across three locations, are now able to make a
 bigger difference.
 
 Regular and sustained training of anganwadi workers and school teachers
 are an important feature of the ACF education programme. Fifty
 anganwadi workers and teachers each were trained this year on various
 methods of learning and teaching.
 
 A significant collaboration has been with UNICEF in Maharashtra, to
 promote sport and leadership skills among school children in district
 Chandrapur.
 
 Measuring Success
 
 At ACF, communication and stakeholder involvement is a continuous
 activity. Understanding their needs and expectations is therefore
 fundamental to our work. It is important to assess, take stock and
 receive feedback from the communities we are working with, on a regular
 basis. This helps in gauging the effectiveness of our programmes.
 
 The unique Social Engagement Scorecard (SES) was used this year as well
 to assess community development initiatives at all locations. The
 responses have been encouraging, with scores in all locations in the
 range of 75% to 100%. Many discussions were also able to identify newer
 issues facing the community, and the ways in which the Company could
 contribute to its solution. For example in the SES process in Bhatinda,
 community representatives expressed their satisfaction with the way ACF
 had taken up organic farming practices. However, they also shared their
 need for intensive programmes in water management and sanitation, areas
 which ACF will include in future planning.
 
 To further integrate CSR into its culture and thinking, ACF is in the
 process of establishing Community Advisory Panels (CAP). Comprising
 representatives from the Company, ACF, and community stakeholders, CAP
 is designed to coordinate and conduct engagement with stakeholders.
 Through regular meetings and other trust-building activities, CAP aims
 to promote sustainable local development and ensure synergy between
 community initiatives in all business segments. These processes are
 opportunities to identify and address stakeholder concerns proactively,
 and the natural way to earn trust and gain acceptance for our business
 activities.
 
 OCCUPATIONAL HEALTH & SAFETY (OH&S)
 
 Towards Zero Harm
 
 We have significantly improved OH&S awareness across all levels and
 have adopted a structured approach towards achieving our objective of
 Zero Harm to People.  The key focus areas in 2010 were:
 
 1) Increase in Visible Leadership by line managers. This has been
 achieved through conducting awareness programmes on OH&S, safety
 observation tours, and sharing of leadership experience across the
 organisation.
 
 2) Implementing OH&S management system, including Fatality Prevention
 Elements, and other Holcim directives.
 
 3) Reducing vehicle and traffic safety risks through structured
 approach in the form of conducting surveys and risk assessments. This
 has resulted in significant improvements in the operating environment.
 
 4) Establishing capacity and capability to manage projects, which
 present significant OH&S risks. We have addressed this challenge by
 strengthening OH&S systems and their application, by establishing
 formal project OH&S organisations.
 
 We have also initiated the process of implementing Contractor Safety
 Management systems. This will enable us to significantly mitigate the
 OH&S risks. Our long term OH&S strategy is to reduce OH&S risks through
 engineering design improvements, together with behaviour-based safety
 interventions.  12.  EMPLOYEE STOCK OPTION SCHEME
 
 In recognition of the valuable contribution made by the employees in
 the progress of the Company, and with a view to remain a preferred
 employer, the Company has granted Stock Options for the eleventh year
 in succession to all management grade employees and the then Managing
 Director. The particulars required to be disclosed pursuant to Clause
 12 of SEBI (Employees Stock Option Scheme) Guidelines 1999, are given
 in subsequent paragraphs.
 
 a) ESOS 2010
 
 Salient Features:
 
 During the year 2010, the company granted 99,98,900 stock options on
 22nd April, 2010 (each option carrying entitlement for one share of the
 face value of Rs.2/- each) at an exercise price of Rs.119.00 per share.
 The exercise price was determined by averaging the daily closing price
 of the equity shares of the Company on the National Stock Exchange
 during 7 days immediately preceding the date of grant. The market price
 of the shares on the date of grant was Rs.121.05 per share. These stock
 options shall vest on expiry of one year from the date of grant and can
 be exercised during a period of four years from the date of vesting.
 
 Valuation and Accounting:
 
 The company has adopted intrinsic value method for the valuation and
 accounting of the stock options as per SEBI guidelines. Since the
 market price per share on the previous day of the date of grant was
 more by Rs. 2.05 than the exercise price, a sum of Rs. 2.05 crores has
 been accounted for as compensation cost for the year ended 31st
 December, 2010. The fair value of the options as per the Black
 Scholes model comes to Rs. 39.37 per option. Had the Company valued
 and accounted the options as per the Black Scholes model, the net
 profit for the year would have been lower by Rs. 39.37 crores and the
 diluted earnings per share (of the face value of Rs. 2 each) would have
 been Rs. 8.05 instead of Rs. 8.26 per share.
 
 The Black Scholes model captures all the variables with their
 respective appropriateness which influences the fair value of stock
 options. The significant assumptions to estimate the fair value of
 options as per Black Scholes model are:
 
 (i) Risk-free interest rate – 6.64%.
 
 (ii) Expected life of the option – 3 years.
 
 (iii) Expected volatility – 43.75%.
 
 (iv) Expected dividend yield – 2.30%.
 
 Grants beyond threshold:
 
 No employee or Director has been granted options in excess of 1% of the
 issued equity share capital of the Company. None of the Directors have
 been granted options of more than 5% of the total options granted
 during the year.
 
 Disclosure on grants:
 
 (i) To senior management employees:
 
 The options granted to the then Managing Director and other Executive
 Committee members are as follows:
 
 Mr. A. L. Kapur                325000
 
 Mr. David Atkinson              95000
 
 Mr. B. L. Taparia               95000
 
 Mr. J.C. Toshniwal              95000
 
 Mr. S.N. Toshniwal              95000
 
 Mr. Ajay Kapur                  50000
 
 Mr. R.R. Darak                  44600
 
 Ms. Meenakshi Narain            44600
 
 Total                          844200
 
 (ii) To other employees:
 
 An aggregate of 91,54,700 options were granted
 to all other employees in management grades.
 Some important data relating to them:
 Total number of other employees                   3658
 
 Total number of options granted                9154700
 
 Max. number of options granted                   44600
 
 Min. number of options granted                     350
 
 Avg. number of options granted                    2500
 
 b) Cumulative disclosure
 
 The particulars with regard to the stock options as on 31st December,
 2010 as required to be disclosed under the SEBIs guidelines are as
 follows:
 
 13.  CORPORATE GOVERNANCE
 
 The company has complied with the Corporate Governance requirements as
 stipulated under the listing agreement with the stock exchanges. A
 separate section on corporate governance, along with a certificate from
 the auditors confirming the compliance, is annexed and forms part of
 the Annual Report.  Corporate Governance Voluntary Guidelines The major
 part of the Corporate Governance Voluntary Guidelines, 2009, has been
 complied with by complying the requirements under the Companies Act,
 1956, the Listing Agreement, and the Companys own governance policies.
 
 14.  DIRECTORS
 
 Cessation
 
 A.L. Kapur
 
 Mr. A.L. Kapur superannuated on 30th April 2010 as Managing Director of
 the Company. He joined the Board as Whole-time Director in May 1999 and
 became Managing Director in May 2007.
 
 Amongst many achievements during his tenure as Managing Director, his
 significant achievements were: efficient handling of the transition
 phase upon Holcim taking over the management control, implementation of
 SAP and People Power Projects, successful commissioning of Rauri,
 Bhatapara, Dadri and Nalagarh projects, and Captive Power Plants at
 Bhatapara and Ambujanagar. He was also responsible for building a
 strong team across all levels in the Company. During his tenure, major
 thrust was given in the areas of HR, Health and Safety, Alternative
 Fuels and Raw materials.
 
 The Board placed on record its appreciation for the valuable services
 rendered by Mr. Kapur during his tenure.  Retirement by rotation
 
 In accordance with the provisions of Article 147 of the Articles of
 Association of the company, (i) Mr. M. L. Bhakta, (ii) Dr. Omkar
 Goswami, (iii) Mr. Naresh Chandra, Directors of the company, will
 retire by rotation at the ensuing Annual General Meeting of the Company
 and being eligible, offer themselves for re-appointment. The Board
 recommends their re-appointment.  Onne van der Weijde, new Managing
 Director The Board has appointed Mr. Onne van der Weijde as the
 Managing Director of the Company w.e.f. 1st May, 2010 upon
 superannuation of Mr. A. L. Kapur. The Members at their 27th Annual
 General Meeting held on 5th April, 2010, approved his appointment.
 Since Mr. Weijde is a foreign national, additional approval of the
 Central Government was also obtained on 24th May, 2010, confirming his
 appointment as the Managing Director.  Further details about Directors
 are given in the Corporate Governance Report as well as in the Notice
 of the ensuing Annual General Meeting being sent to the shareholders
 along with the Annual Report.
 
 15.  DIRECTORS RESPONSIBILITY
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956 as amended,
 the Directors confirm that:
 
 i) In the preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanations relating to
 material departures.
 
 ii) Appropriate accounting policies have been selected and applied
 consistently, and judgments and estimates made are reasonable and
 prudent, so as to give a true and fair view of the state of affairs of
 the company as on 31st December, 2010, and of the profit and cash flow
 of the company for the period ended 31st December, 2010.
 
 iii) Proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the company and for
 preventing and detecting fraud and other irregularities.
 
 iv) The annual accounts have been prepared on a going concern basis.
 
 16.  INTERNAL CONTROL SYSTEM
 
 The company has implemented a robust and comprehensive internal control
 system in order to direct, monitor, and measure its resources. The
 internal control system has been established by standardising and
 documenting policies and procedures for all the major processes, to
 ensure reliability of financial reporting, timely feedback on
 achievement of operational and strategic goals, and compliance with
 laws and regulations.  The formalised systems of control are designed
 to ensure effective compliance as per Clause 49 of the Listing
 Agreement, and article 728 (a) of the Swiss Code of Obligations,
 applicable to the Holcim Group since 2008.  The Companys Internal
 Audit department independently tests the design and operating
 effectiveness of the internal control system across the Company. This
 provides an objective assurance to the Board of Directors and Audit
 Committee regarding the adequacy and effectiveness of the internal
 control system.
 
 The Internal Audit function monitors the effectiveness of controls, and
 also provides an independent and objective assessment of the overall
 governance processes in the company, including the application of a
 systematic risk management framework.
 
 The scope and authority of the Internal Audit activity are well defined
 in the Internal Audit Charter, approved by the Audit Committee.
 Internal Audit plays a key role by providing an assurance to the Board
 of Directors, and value adding consultancy service to the business
 operations.
 
 17.  AUDITORS
 
 M/s. S.R. Batliboi & Associates, the Statutory Auditors of the company,
 will retire at the ensuing Annual General Meeting and are eligible for
 re-appointment. M/s. S.R.  Batliboi & Associates have expressed their
 unwillingness to get re-appointed as the Statutory Auditors of the
 company.
 
 The Board, based on the recommendation of the Audit Committee,
 recommends the appointment of M/s S.R.  Batliboi & Co. as the Statutory
 Auditors of the company, for whom the company has received a notice u/s
 225 read with section 190 of the Companies Act from a shareholder
 seeking their appointment in place of M/s.S.R. Batliboi & Associates.
 M/s S.R. Batliboi & Co have confirmed that their appointment, if made,
 shall be within the limits of Section 224(1B) of the Companies Act,
 1956.
 
 M/s. P.M. Nanabhoy & Co., Cost Accountants, have been appointed as Cost
 Auditors of the company for the year 2011.
 
 18.  TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
 
 The company has transferred a sum of Rs 0.31 crore during the financial
 year 2010 to the Investor Education and Protection Fund established by
 the Central Government, in compliance with Section 205C of the
 Companies Act, 1956. The said amount represents unclaimed dividends
 which have been with the company for a period of 7 years from their
 respective due dates of payment. Prior to transferring the aforesaid
 sum, the Company has sent reminders to the shareholders for submitting
 their claims for unclaimed dividend.
 
 19.  ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE Information on
 conservation of energy, technology absorption, foreign exchange
 earnings and outgo, is required to be given pursuant to Section 217 (1)
 (e) of the Companies Act, 1956 read with the Companies (Disclosure of
 Particulars in the Report of the Board of Directors) Rules, 1988 is
 annexed hereto marked Annexure - I, and forms part of this report.
 
 20.  PARTICULARS OF EMPLOYEES The information required under Section
 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of
 Employees) Rules, 1975 as amended, in respect of the employees of the
 Company, is provided in the Annexure forming part of this Report. In
 terms of Section 219(1)(b) (iv) of the Act, the Report and Accounts are
 being sent to the Members and others entitled thereto, excluding the
 aforesaid Annexure. The Annexure is available for inspection by Members
 at the Registered Office of the Company during business hours on
 working days upto the date of the ensuing Annual General Meeting, and
 if any Member is interested in obtaining a copy thereof such Member may
 write to the Company Secretary, whereupon a copy would be sent.
 
 21.  SUBSIDIARY COMPANIES As required u/s 212 of the Companies Act,
 1956, the audited statements of accounts, alongwith the report of Board
 of Directors, relating to the Companys subsidiaries, viz. Kakinada
 Cements Limited, MGT Cements Private Limited, and Chemical Limes Mundwa
 Private Limited, and respective Auditors Report thereon for the year
 ended 31st December, 2010, are annexed to this report.
 
 22.  CONSOLIDATED FINANCIAL STATEMENTS As stipulated by Clause 32 of
 the listing agreement with the stock exchanges, the consolidated
 financial statements have been prepared by the company in accordance
 with the applicable accounting standards issued by The Institute of
 Chartered Accountants of India. The audited consolidated financial
 statements together with Auditors Report form part of the Annual
 Report.  The consolidated net profit of the Company, its subsidiaries
 and associates, amounted to Rs.1,263 crores for the corporate financial
 year ended on 31st December, 2010 as compared to Rs.1,264 crores for
 the Company on a standalone basis.
 
 23.  EQUAL OPPORTUNITY EMPLOYER The company has always provided a
 congenial atmosphere for work to all sections of the society. It has
 provided equal opportunities of employment to all without regard to
 their caste, religion, colour, marital status and sex.
 
 24.  AWARDS AND RECOGNITION
 
 (a) Our mines continued to be adjudged among the best mines in their
 respective regions by the Director General of Mines on various
 parameters such as mine working, maintenance, innovations, health &
 safety, training, environmental protection etc.
 
 (b) Our MCW plant won the following awards:
 
 1) Awarded for National award for Excellence in Water Management -
 2010 given by Confederation of Indian Industries (CII).
 
 2) Awarded Silver Medal in IMEA-2010 (Indian Manufacturing Excellence
 Award) conducted jointly by Frost and Sullivan and Economic Times.
 
 3) Awarded Green Tech Environment Excellence award - 2010 in Gold
 category in Cement Sector.
 
 4) Awarded IIIrd in Inter Industrial Safety Performance 2009-10
 conducted by Vidarbh Industrial Safety Council.
 
 25.  CAUTIONARY STATEMENT
 
 Statements in the Directors Report and the Management Discussion &
 Analysis describing the Companys objectives, expectations or
 predictions, may be forward- looking within the meaning of applicable
 securities laws and regulations. Actual results may differ materially
 from those expressed in the statement. Important factors that could
 influence the Companys operations include: global and domestic demand
 and supply conditions affecting selling prices, new capacity additions,
 availability of critical materials and their cost, changes in
 government policies and tax laws, economic development of the country,
 and such other factors which are material to the business operations of
 the Company.
 
 26.  ACKNOWLEDGEMENTS
 
 Your Directors take this opportunity to express their deep sense of
 gratitude to the banks, Central and state governments and their
 departments and the local authorities for their continued guidance and
 support.  We would also like to place on record our sincere
 appreciation for the total commitment, dedication and hard work put in
 by every member of the Ambuja family.  To them goes the credit for the
 Companys achievements.  And to you, our shareholders, we are deeply
 grateful for the confidence and faith that you have always reposed in
 us.
 
 For and on behalf of the Board,
 
 N. S. Sekhsaria
 Chairman
 
 Mumbai
 
 3rd February, 2011