1. Pursuant to the implementation of SAP ERP system, during the year, the Company has changed its inventory valuation method from annual weighted average to daily moving weighted average for items procured and monthly moving weighted average in case of material in process and finished goods. As a result profit for the year ended December 31, 2008 is higher by Rs 8340 lakhs.

2. In accordance with the Put and Call option agreement entered into with Holderind Investments Ltd, the Company has sold during the year the remaining 9,53,70,000 (December 31, 2007 - 19,07,50,000) equity shares of Ambuja Cement India Pvt Ltd for a consideration of Rs 58,891 lakhs (December 31, 2007 Rs. 1,06,252 lakhs) and recognised a profit of Rs. 30,320 lakhs (December 31, 2007 Rs. 49,007 lakhs). (Gross of tax of Rs. 3856 lakhs (December 31, 2007 Rs. 6316 lakhs).

3. During the previous year, the Company had revised its estimate of provision for income tax to recognise a provision on sales tax incentive which was hitherto earlier treated as a capital receipt. Tax expenses for year ended 31st December, 2007 included Rs. 20,200 lakhs related to prior years.

4. The Company held 6,76,36,340 ordinary shares of Ceylon Ambuja Cements Ltd (CACL) (including 1,72,22,500 ordinary shares acquired during the year) at a cost of Rs. 3582 lakhs. In the previous year the Company has recognised a provision for diminution in the value of these investments of Rs. 2954 lakhs. During the year the Company has sold its shareholding in CACL for a sale consideration of Rs. 42 lakhs and recognised a loss of Rs. 586 lakhs. Consequently, CACL and its subsidiary Midigama Cements (Pvt) Ltd ceased to be subsidiaries of the Company w.e.f. June 02, 2008.

5. During the year:

(a) the Company has commissioned its grinding plant having capacity of 1.2 million ton, at Surat, in the state of Gujarat.

(b) the Company has commissioned a 18.7 MW thermal power plant at its unit at Rabriyawas, in the state of Rajasthan.

6. Staff cost includes charge on account of retirement benefits such as gratuity, post retirement medical benefits, and compensated absences aggregating to Rs 3413 lakhs (December 31, 2007 Rs. 1604 lakhs). These expenses have been provided on the basis of actuarial valuation in accordance with AS-15 issued by Institute of Chartered Accountants of India. There is substantial impact on account of this change in discount rate. The discounting rate used for the purpose of valuation of liability is 5.95% as compared to 8.05% as used in year ending December 31, 2007.

7. Earning per Share on profit before exceptional items (net of taxes) are as under:

For Year Ended December 31, 2008:

Basic - 7.42
Diluted - 7.42

8. The Company has only one business segment Cement.

9. The Board of Directors has recommended the final dividend on equity shares @ 50% (Rs. 1 per share). The Company has paid interim dividend of 60% (Rs. 1.20 per share). The dividend paid in the previous year was 175% (Rs. 3.50 per share) [which included one time dividend of 65% (Rs. 1.30 per share) on non recurring income].

10. The figures for the previous year have been regrouped/restated wherever necessary to conform to the current year presentation.

11. The above results have been approved and taken on record by the Board of Directors at its meeting held on February 06, 2009.

A L Kapur
Managing Director