Dalmia Cement (Bharat)

Dear Shareholders,
 
 It is a matter of extreme privilege to address you in the 70th year of
 our enterprise. Having commenced with a mini Polysius Kiln at
 Dalmiapuram in Tamil Nadu, our enterprise has transformed into a
 diversified multi-location, multi-commodity manufacturing Company with
 significant scale in cement and sugar and an annual turnover of about
 Rs. 20 billion.
 
 The calendar year 2009 will be a year of great significance for your
 company, as it will see your installed capacity in cement more than
 double. The year will witness your companys two Greenfield cement
 plants commence operations in Southern India, at Kadapa in Andhra
 Pradesh and Ariyalur in Tamil Nadu.
 
 A legacy of 70 years in itself is a great asset for an organisation.
 What makes your company special is its drive to chart aggressive growth
 in the ensuing years. And to see that very drive, competence and
 resolve in the management of your company is heartening.
 
 Success and profit are obvious objectives of any business.
 
 Maintaining profitability for several decades and still being
 contemporary for today and tomorrow, needs much more. It needs the deep
 rooted values that govern the conduct of the company and a
 philanthropic philosophy of inclusive and sustainable growth. From the
 very beginning of this enterprise, we have been driven by the inclusive
 and sustainable growth objectives of our founders, Shri Ramkrishna
 Dalmia and Shri Jaidayal Dalmia.
 
 To us, the most significant development in your company during the year
 was the development and institutionalisation of its values.  As we
 readied ourselves to take your company on the aggressive growth path,
 the promoter family and the professional managers alike were of the
 opinion that our goodwill and inclusive growth philosophy have been our
 biggest strengths and we must build tomorrows Dalmia Cement on these
 robust growth foundations. A series of internal debates across the rank
 and file of your company were conducted to identify, delve upon, evolve
 and adopt the governing values. Values that would act as lighthouses in
 the growth journey.
 
 We are happy to share with you the meaning and objective of these new
 values and how they translate into day-to-day functioning of your
 company. Our Values Logo is inspired by Akshay Patra – the vessel of
 plenty. Mythology suggests that this vessel could go on producing
 limitless food for innumerable time period - never ending in meeting
 its purpose. We believe that our company too can continue creating
 unlimited value for stakeholders and it can go on doing it for times to
 come.
 
 These values have been adopted across your company and all the
 executives are enthused by these. It gives us pleasure in observing the
 unifying and motivating power of our values.  We have been successful
 in making our vast human resource pool adopt them as their values and
 view them as enablers not only in their professional conduct but also
 in their personal lives. A beautifully coined acronym – LeTS Excel –
 Learning, Teamwork, Speed and Excellence is working as a great reminder
 to all of us.  By consistently practicing these values in day-to-day
 functioning, each employee will strengthen these values to become an
 integral part of the company’s culture.
 
 FY09 proved to be a truly testing year for global economies, one of the
 severest in the post globalisation times of last decade. The underlying
 and accumulating financial crisis of developed world came to light
 coinciding with the saturation of their economic growth. This dual blow
 has impacted their economies almost instantly and the consequent impact
 on emerging economies like ours have also felt the tremors, though with
 a time lag.
 
 Your company has been a big believer in India story and the extent of
 insulation witnessed in the last financial year testifies our belief.
 Our economy draws strength from being domestic consumption led and
 regulated banking & financial system.  Basis these very strengths,
 growth is the only way forward for our economy.
 
 In the near term, following months will be challenging for Indian
 Cement Industry, as there is significant new capacity in the pipeline,
 at different stages of implementation.  Commencement of these
 capacities will create over capacity situation, causing pressure on
 pricing and utilisations due to demand supply mismatch. To meet this
 challenge, we have entered new markets with aggressive marketing plans
 and at the same time consolidated our position in our core markets. le
 and newer markets shall drive better growth and profitability, going
 forward. Global diversion of sugarcane towards energy sector is likely
 to keep sugar as a profitable business of your company, in both import
 and export situations for the country. Both these factors will
 favourably aid to value creation by your company.
 
 Increased capacities in cement operations will bring the economy of
 scale and newer markets shall drive better growth and profitability,
 going forward. Global diversion of sugarcane towards energy sector is
 likely to keep sugar as a profitable business of your company, in both
 import and export situations for the country. Both these factors will
 favourably aid to value creation by your company.
 
 In conclusion, we will like to express our gratitude to our founders
 and their vision and rededicate ourselves to keep the vibrancy of your
 company in ensuing years. We will like to congratulate your companys
 management on institutionalising a strong set of values and weaving the
 company executives thought process around them. We appreciate the
 projects team for successful commissioning of Kadapa plant while
 wishing them luck for the soon to commission Ariyalur Plant. To all the
 employees of Dalmia Cement, we have this message “While we are
 transiting through one of the most exciting times of our business
 journey, we are glad to have you on board. Your efforts and
 contributions made in the last year are laudable.”
 
 We sincerely appreciate all our stakeholders for their continued
 support and patronage and look forward to the same as we move ahead to
 scale greater heights in coming years.
 
                                Jai Hari Dalmia   Yadu Hari Dalmia