Mr. G. D. Birla and Mr. Aditya Birla, our founding fathers.

We live by their values.

Integrity, Commitment, Passion, Seamlessness and Speed

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BOARD OF DIRECTORS

Kumar Mangalam Birla

Chairman

Mrs. Rajashree Birla

R. C. Bhargava

G. M. Dave

Y. M. Deosthalee

N. J. Jhaveri

Dr. S. Misra

V. T. Moorthy

J. P. Nayak

S. Rajgopal

D. D. Rathi

S. Misra

Managing Director

Chief Financial Officer

K. C. Birla

Company Secretary

S. K. Chatterjee

Executives

O. P. Puranmalka Group Executive President &Chief Marketing Officer

S. K. Maheshwari Group Executive President &Chief Manufacturing Officer

C. B. Tiwari Chief People Officer

Unit Heads

K. Y. P. Kulkarni Kovaya & Jafrabad (Gujarat)

S. Kumar Hirmi (Chhattisgarh)

P. S. Mazumdar Tadipatri (Andhra Pradesh)

B. Singh Awarpur (Maharashtra)

Corporate Finance Division

J. Bajaj Joint President (Finance)

M. B. Agarwal Sr. Vice President (F&C)

Auditors

Deloitte Haskins & Sells, Chartered Accountants, Mumbai

G. P. Kapadia & Co., Chartered Accountants, Mumbai

Solicitors

Amarchand & Mangaldas & Suresh A. Shroff & Co.,

Advocates & Solicitors, Mumbai

U l t r a T e c h C e m e n t L i m i t e d

CMYK

Co n t e n t s

The Chairman’s Letter to Shareholders ...................... 3

Notice ........................................................................... 8

Financial Highlights .................................................... 14

Management Discussion and Analysis ....................... 16

Report on Corporate Governance ............................... 24

Shareholder Information .............................................. 37

Social Report ................................................................ 47

Environment Report .................................................... 50

Directors’ Report to the Shareholders ........................ 52

Auditors’ Report .......................................................... 63

Balance Sheet ............................................................... 68

Profit and Loss Account .............................................. 69

Cash Flow Statement ................................................... 70

Schedules ...................................................................... 71

Statement Relating to Subsidiary Companies ............ 94

Consolidated Financial Statements ............................. 95

Subsidiary Companies Reports and Accounts ........... 114

REGISTERED OFFICE: ‘B’ Wing, Ahura Centre, 2nd Floor, Mahakali Caves Road, Andheri (East), Mumbai 400 093

Tel. : (022) 6691 7800 Fax : (022) 6692 8109. Website : www.ultratechcement.com/www.adityabirla.com

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CMYK

Dear Fellow Shareholders,

India continues on its growth trajectory. Since

the year 2003-04, our GDP growth has

exceeded 8% year on year. Today we can

take justifiable pride in having joined the

ranks of the US$ trillion economies of the

world. I do believe India will continue its

momentum despite some strong headwinds.

For instance inflation – where the

Government is trying to pull out all stops to

stem it. Additionally we have to contend with

the hardening interest rates and the volatility

in global financial markets, consequent to

the sub prime crises.

That despite these adverse factors enveloping

the business environment, India continues to

grow is a validation of the inherent

fundamental strengths of our economy.

The Indian cement industry - the second

largest cement producer in the world, has a

capacity of around 195 MTPA. The industry

has been witnessing over 95% capacity

utilisation during the last couple of years, as

compared to 80 – 90 % earlier. An additional

capacity of around 115 MTPA has been

planned, which is likely to be on stream by 2012.

THE CHAIRMAN’S

LETTER TO

SHAREHOLDERS

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CMYK

“I believe our people – our

human capital is our

key resource and we owe a

large part of our success to them.

We have thought leaders

across the Company.

A majority of our people tap

into each others knowledge-base

and collaborate effectively to

achieve a shared vision.”

The per capita consumption of cement at 135 kgs is one of the lowest, when compared with

the levels in other rapidly growing economies, offering scope for future growth. This, together

with the Government’s thrust on infrastructure growth bodes well for your Company.

Your Company’s performance in FY08 has been impressive. Net Revenues at US$ 1,368 million

(Rs. 5,509 crores) was up by 26%, while Net Profit of US$ 250 million (Rs. 1,008 crores)

reflected a growth of 45%.

Your Company has initiated various expansion and modernisation programs to grow in the

markets in which it operates. Continuous efforts are also on to improve productivity and cost

efficiencies. The Clinkerisation unit at Andhra Pradesh Cement Works has been commissioned.

Trials have begun on the 1st Stream of the TPP of 23MW at Gujarat Cement Works and all the

four Streams aggregating 92MW will be fully operational during the year. The work relating

to setting up of the split grinding Unit at Ginigera in Karnataka and thermal power plants at

various locations across your Company is progressing satisfactorily. A capex of around

Rs. 3,300 crores is committed towards these programs and on completion they will result in

sustaining growth and reducing costs.

With an eye on value added growth, your Company

has set up 15 Ready Mix Concrete Plants in FY08.

More such Plants are in the pipeline.

New capacity announcements may lead to a surplus

scenario from the next calendar year, resulting in a

challenging price environment. Your Company will

focus on sustaining plant performance, optimise

efficiencies and improve service standards.

I believe our people – our human capital is our key

resource and we owe a large part of our success to them.

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CMYK

We have thought leaders across the Company. A majority of our people tap into each others

knowledge-base and collaborate effectively to achieve a shared vision.

The Aditya Birla Group: In Perspective

We are moving in sync with our vision to be a premium global conglomerate with a clear

focus at each business level. Our Group is now a US$ 28 billion meritocratic Corporation,

with a market cap in excess of US$ 31.5 billion with a 100,000 strong human capital belonging

to 25 nationalities, spanning 20 countries across 5 continents. Our values – Integrity,

Commitment, Passion, Seamlessness and Speed bind us all together regardless of geographies

and nationalities.

Our HR strategy ongoingly focuses on enhancing

stakeholder value through superior organisation and

people capability. Today, more than ever before,

talent is at a premium, thanks to globalisation and

the multi-polar world, both of which afford unique

opportunities. At our Group attracting the best talent

and engaging them continues to be a key priority.

We have made huge investments in not only

attracting but developing and retaining our human

capital over the long term.

To arrive at an employee proposition that would

draw more talent to our Group, we conducted an

indepth research aimed at finding out what is our

DNA as an employer and what does our employer

brand connote. Apart from trust and admiration for

the Group as a professional values-driven

organisation, what also emerged strikingly was the

“Apart from trust and

admiration for the Group as

a professional values-driven

organisation, what also

emerged strikingly was the

fact of our diversity – the

number of countries and

businesses in which we are

engaged, that is an enduring

characteristic of our Group.

We have therefore

positioned ourselves as an

employer that offers

“a world of opportunities”,

other factors being a given

in our case.”

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CMYK

fact of our diversity – the number of countries and businesses in which we are engaged, that is

an enduring characteristic of our Group.

We have therefore positioned ourselves as an employer that offers “a world of opportunities”,

other factors being a given in our case. I am happy to share with you that our employer brand

has attracted more than 50 top-notch professionals from India and across the globe. To provide

cross-functional, cross-cultural and cross-country agility and learnings, as well as to strengthen

our leadership pipeline, more than 100 colleagues from middle management to senior

management have been job-rotated.

A Performance Management Centre at our Group’s Headquarters has been set up with dedicated

resources to sharpen our high performance culture. This team’s sole responsibility is to assist

in Institutionalising world-class performance framework

and leadership processes.

As in the past our high-calibre Management talent have

been put through our Development Assessment Centres

and their professional development plans drawn up.

Gyanodaya, our Institute of Management Learning

continues to provide a good base for new learnings for

our people, and honing competencies. Up until now

more than 4,500 colleagues have participated in its

programmes.

We had said last year that we would introduce ESOP

schemes during the course of the year.

In this year, we covered 700 employees under ESOP

schemes, a significant move, for the first time in the

history of our Group. And, we will cover many more

from now on.

“Going forward in the

next five years, I see our

workforce mix expanding to

over 100 nationalities and

our senior management

team becoming even more

global. I visualise a multi-

generational workforce able

to overcome generational

barriers, and effectively,

feeding on each one’s core

offerings of experience,

raw energy, risk taking and

organisational knowledge.”

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CMYK

Best regards,

Yours sincerely,

22nd April, 2008 Kumar Mangalam Birla

Going forward in the next five years, I see our workforce mix expanding to over 100 nationalities

and our senior management team becoming even more global. I visualise a multi-generational

workforce able to overcome generational barriers, and effectively, feeding on each one’s core

offerings of experience, raw energy, risk taking and organisational knowledge. Enhancing our

attractiveness as an employer also calls for creating a workspace that accepts and encourages

the existence of a sharp sense of individual identity, even within the strong organisational

brand and cultural fabric. We want to create top-notch leaders on virtually an assembly-line

scale. And lastly, we want to be in that enviable position where the best talent globally wants

to join us, just as much as we seek them.

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CMYK

NOT I C E

NOTICE is hereby given that the Eighth Annual General Meeting of UltraTech Cement

Limited will be held at Ravindra Natya Mandir, P. L. Deshpande Maharashtra Kala Academy,

Near Siddhivinayak Temple, Sayani Road, Prabhadevi, Mumbai – 400 025 on Friday,

18th July, 2008 at 3:30 p.m. to transact, with or without modification(s), as may be permissible,

the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2008 and the

Profit & Loss Account for the year ended 31st March, 2008 and the Report of the Directors’

and Auditors’ thereon.

2. To declare dividend on Equity Shares for the year ended 31st March, 2008.

3. To appoint a Director in place of Mrs. Rajashree Birla, who retires by rotation and, being

eligible, offers herself for re-appointment.

4. To appoint a Director in place of Mr. V. T. Moorthy, who retires by rotation and, being

eligible, offers himself for re-appointment.

5. To appoint a Director in place of Mr. R. C. Bhargava, who retires by rotation and, being

eligible, offers himself for re-appointment.

6. To consider and if thought fit, to pass, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 224 and other applicable

provisions, if any, of the Companies Act, 1956, M/s. Deloitte Haskins & Sells, Chartered

Accountants, Mumbai and M/s. G. P. Kapadia & Co., Chartered Accountants, Mumbai be

and are hereby re-appointed Joint Statutory Auditors of the Company, to hold office from

the conclusion of the Eighth Annual General Meeting until the conclusion of the next

Annual General Meeting at such remuneration to each of them, plus service tax as applicable

and reimbursement of out-of-pocket expenses in connection with the audit as the Board of

Directors may fix in this behalf.”

SPECIAL BUSINESS:

7. To consider and if thought fit, to pass, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 228 and other applicable

provisions, if any, of the Companies Act, 1956 (the “Act”) M/s. Haribhakti & Co., Chartered

Accountants, Mumbai, be and are hereby re-appointed Branch Auditors of the Company,

to audit the Accounts in respect of the Company’s Units at Jafrabad and Magdalla in

Gujarat and Ratnagiri in Maharashtra, to hold office from the conclusion of the Eighth

Annual General Meeting until the conclusion of the next Annual General Meeting of the

Company at such remuneration, plus service tax as applicable and reimbursement of

NOT I C E

9

CMYK

out-of-pocket expenses in connection with the audit as the Board of Directors may fix in

this behalf.

RESOLVED FURTHER THAT the Board be and is hereby authorised to appoint Branch

Auditors of any other Branch / Unit / Division of the Company, which may be opened /

acquired / installed hereafter, in India or abroad, in consultation with the Company’s

Statutory Auditors, any person(s) qualified to act as Branch Auditor within the provisions

of Section 228 of the Act and to fix their remuneration.”

8. To consider and if thought fit, to pass, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 260 and other applicable

provisions, if any, of the Companies Act, 1956 (the “Act”) Mr. S. Rajgopal, who was

appointed as an Additional Director by the Board of Directors of the Company and who

holds office as such only up to the date of this Annual General Meeting and in respect of

whom the Company has received a notice in writing along with a deposit of Rs. 500/-

pursuant to the provisions of Section 257 of the Act from a Member signifying his intention

to propose Mr. S. Rajgopal as a candidate for the office of Director of the Company, be

and is hereby appointed as a Director of the Company liable to retire by rotation.”

By Order of the Board

S. K. Chatterjee

Company Secretary

Place: Mumbai

Date: 22nd April, 2008

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE EIGHTH ANNUAL

GENERAL MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND

VOTE INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A

MEMBER OF THE COMPANY. THE INSTRUMENT APPOINTING A PROXY

SHOULD HOWEVER BE DEPOSITED AT THE REGISTERED OFFICE OF THE

COMPANY NOT LESS THAN FORTYEIGHT HOURS BEFORE THE

COMMENCEMENT OF THE MEETING.

2. An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in

respect of item nos. 7 and 8 of the Notice set out above, is annexed hereto.

3. The Register of Members and Share Transfer Books of the Company will remain closed

from 11th July, 2008 to 18th July, 2008 (both days inclusive) for the purpose of payment of

dividend, if any, approved by the Members.

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CMYK

4. The dividend, as recommended by the Board, if approved at the Annual General Meeting,

will be paid on or after 18th July, 2008 to those Members or their mandates whose names

are registered on the Company’s Register of Members:

a) as Beneficial Owners as at the end of business on 10th July, 2008 as per the lists to be

furnished by National Securities Depository Limited (NSDL) and Central Depository

Services (India) Limited (CDSL) in respect of the shares held in electronic form, and

b) as Members in the Register of Members of the Company after giving effect to all valid

share transfers in physical form which are lodged with the Company or its Registrar &

Transfer Agent (RTA) viz. Sharepro Services (India) Private Limited having their

address at Satam Estate, 3rd Floor, Above Bank of Baroda, Cardinal Gracious Road,

Chakala, Andheri (East), Mumbai - 400 099 on or before 10th July, 2008.

5. a) Members are requested to notify immediately any change of address:

(i) to their Depository Participants (DPs) in respect of the shares held in electronic

form, and

(ii) to the Company or to its RTA in respect of the shares held in physical form

together with a proof of address viz. Electricity Bill, Telephone Bill, Ration Card,

Voter ID Card, Passport etc.

b) In case the mailing address mentioned on this Annual Report is without the PINCODE,

Members are requested to kindly inform their PINCODE immediately.

6. Non-resident Indian Members are requested to inform the Company or its RTA or to the

concerned DP, as the case may be, immediately:

(a) the change in the residential status on return to India for permanent settlement.

(b) the particulars of the NRE Account with a Bank in India, if not furnished earlier.

7. Members are requested to make all correspondence in connection with shares held by

them by addressing letters directly to the Company at its Registered Office or its RTA

quoting reference of their Folio number or their Client ID number with DP ID number, as

the case may be.

8. Members who are holding shares in identical order of names in more than one folio are

requested to send to the Company or its RTA, the details of such folios together with the

share certificates for consolidating their holdings in one folio. The share certificates will

be returned to the Members after making requisite changes thereon.

9. (a) Members are advised to avail of the facility for receipt of dividend through Electronic

Clearing Service (ECS). The ECS facility is available at specified locations. Members

holding shares in electronic form are requested to contact their respective DPs for

availing ECS facility. Members holding shares in physical form are requested to

download the ECS form from the website of the Company viz.

www.ultratechcement.com and the same duly filled up and signed along with a

photocopy of a cancelled cheque may be sent to the Company at its Registered Office

or to its RTA on or before 10th July, 2008.

11

CMYK

(b) Members who hold shares in electronic form and want to change / correct the bank

account details should send the same immediately to their concerned DP and not to the

Company. Members are also requested to give the MICR Code of their bank to their

DPs. The Company will not entertain any direct request from such Members for

change of address, transposition of names, deletion of name of deceased joint holder

and change in the bank account details. The said details will be considered, as will be

furnished by NSDL/CDSL to the Company.

(c) To avoid the incidence of fraudulent encashment of dividend warrants, Members are

requested to intimate the Company under the signature of the Sole / First Joint holder,

the following information, so that the bank account number and name and address of

the Bank can be printed on the dividend warrants:

1) Name of Sole / First Joint holder and Folio number.

2) Particulars of bank account, viz.

i) Name of Bank

ii) Name of Branch

iii) Complete address of Bank with PINCODE

iv) Account type, whether Saving (SB) or Current Account (CA)

v) Bank Account Number

10. Depository System

The Company has entered into agreements with NSDL and CDSL. Members, therefore,

now have the option of holding and dealing in the shares of the Company in electronic

form through NSDL or CDSL.

The Depository System envisages the elimination of several problems involved in the

scrip-based system such as bad deliveries, fraudulent transfers, fake certificates, thefts in

postal transit, delay in transfers, mutilation of share certificates etc. Simultaneously,

Depository System offers several advantages like exemption from stamp duty, elimination

of concept of market lot, elimination of bad deliveries, reduction in transaction costs,

improved liquidity etc.

11. As per the provisions of the Companies Act, 1956, facility for making nominations is now

available to INDIVIDUALS holding shares in the Company. The Nomination Form 2B

prescribed by the Government can be obtained from the Company’s Secretarial Department

at its Registered Office or its RTA or can be downloaded from its website viz.

www.ultratechcement.com.

12. Disclosure pursuant to Clause 49 of the Listing Agreement with respect to the Directors

seeking re-appointment/appointment at the forthcoming Annual General Meeting is attached

hereto.

13. The Annual Report of the Company for the year 2007-08, circulated to the Members of the

Company, will be made available on the Company’s website viz. www.ultratechcement.com.

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CMYK

ANNEXURE TO THE NOTICE

Explanatory Statement Pursuant to Section 173(2) of the Companies Act, 1956:

Item No. 7

M/s. Haribhakti & Co., Chartered Accountants, Mumbai were appointed as Branch Auditors

of the Company’s Units at Jafrabad and Magdalla in Gujarat and Ratnagiri in Maharashtra at

its Seventh Annual General Meeting.

The Board of Directors of the Company have on the recommendation of the Audit Committee

proposed that M/s.Haribhakti & Co., Chartered Accountants, Mumbai be re-appointed as

Branch Auditors of the Company, to audit the Accounts of the Company’s Units at Jafrabad

and Magdalla in Gujarat and Ratnagiri in Maharashtra and to hold office from the conclusion

of this Meeting until the conclusion of the next Annual General Meeting.

Further, the Company may acquire new Units in India or abroad in future and it may be

necessary to appoint Branch Auditors for carrying out the audit of the accounts of such Units.

Your consent is being sought for authorising the Board to appoint Branch Auditors in respect

of such Units in consultation with the Statutory Auditors and to fix their remuneration.

The resolution as set out in Item no. 7 of this Notice is accordingly commended for your

acceptance.

None of the Directors of the Company is, in any way, concerned or interested in the said

resolution.

Item No. 8

Mr. S. Rajgopal, Nominee Director resigned from the Board of the Company with effect from

20th October, 2007 consequent to the withdrawal of his nomination by the Administrator of the

Specified Undertaking of the Unit Trust of India. Considering his vast knowledge and

experience, Mr. Rajgopal was appointed as an Additional Director with effect from that date to

hold office upto the conclusion of the ensuing Annual General Meeting. Mr. Rajgopal served

in the Indian Administrative Service and retired as Union Cabinet Secretary, Government of

India. He has been inducted on the Board of the Company as an Independent Director.

The resolution as set out in Item No. 8 of this Notice is accordingly commended for your

acceptance.

None of the Directors except Mr. S. Rajgopal is interested in the resolution.

By Order of the Board

S. K. Chatterjee

Company Secretary

Place: Mumbai

Date: 22nd April, 2008

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CMYK

Disclosure pursuant to Clause 49 of Listing Agreement

Details of Directors seeking re-appointment / appointment at the Annual General Meeting to be held on 18th July, 2008:

Name of Director Mrs. Rajashree Birla Mr. V. T. Moorthy Mr. R. C. Bhargava Mr. S. Rajgopal

Date of Birth 15th September, 1945 19th January, 1941 30th July, 1934 17th July, 1935

Date of Appointment 14th May, 2004 25th January, 2005 6th July, 2004 20th October, 2007

Expertise in specific general

functional area Industrialist Business Executive General Management Civil Service

Qualifications B.A. B.E. (Mechanical) M.Sc. (Maths), B.A. Hons (Mathematics),

M.A. (Dev. Economics) M.A. (History)

List of outside Directorships 1. Aditya Birla Health Services 1. Tanfac Industries 1. Dabur India Limited 1. Larsen & Toubro Limited

held (Public Limited Companies) Limited Limited 2. Grasim Industries Limited

2. Aditya Birla Nuvo Limited 3. IL&FS Limited

3. Essel Mining & Industries 4. Maruti Udyog Limited

Limited 5. Optimus Global

4. Grasim Industries Limited Services Limited

5. Hindalco Industries Limited 6. Polaris Software Lab Limited

6. Idea Cellular Limited 7. Thomson Press Limited

Chairman / Member of the – – 1. Audit Committee - 1. Audit Committee –

Committee of the Board of Chairman Member

Directors of the Company 2. Share Transfer &

Shareholder / Investor

Grievance Committee –

Member

Chairman / Member of the

Committee of Directors of

other Public Limited

Companies in which he / she

is a Director

a) Audit Committee – – 1. IL&FS Limited - Chairman –

2. Optimus Global Services

Limited - Chairman

3. Thomson Press

Limited - Chairman

4. Dabur India Limited -

Member

5. Grasim Industries

Limited - Member

6. Polaris Software Lab

Limited – Member

b) Shareholders’ Committee – – 1. Maruti Udyog

Limited - Member –

Note: Pursuant to Clause 49 of the Listing Agreement, only two Committees, viz. Audit Committee and Shareholders’ Committee have been considered.

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F I N A N C I A L H I G H L I G H T S

Particulars Units 2007-08 2006-07 2005-06 2004-05 2003-04

PRODUCTION (Quantity)

- Clinker Mn.T 14.35 14.22 12.73 12.36 12.12

- Cement Mn.T 15.07 14.64 13.33 12.11 11.79

SALES (Quantity)

- Clinker Mn.T 2.09 2.50 1.32 2.65 2.94

- Cement Mn.T 15.02 15.17 14.23 12.52 11.93

PROFIT & LOSS ACCOUNT

Gross Sales Rs.Crs 6,286.24 5,484.04 3,785.29 3,057.92 2,693.15

Excise duty Rs.Crs 777.02 573.52 485.84 451.02 442.02

Net Sales Rs.Crs 5,509.22 4,910.52 3,299.45 2,606.90 2,251.13

Operating Expenses Rs.Crs 3,789.16 3,492.71 2,745.19 2,256.07 1,931.99

Operating Profit Rs.Crs 1,720.06 1,417.81 554.26 350.83 319.14

Other Income Rs.Crs 99.85 61.46 37.00 21.07 59.59

EBITDA Rs.Crs 1,819.91 1,479.27 591.26 371.90 378.73

Depreciation / Amortisation Rs.Crs 237.23 226.25 216.03 221.78 214.52

EBIT Rs.Crs 1,582.68 1,253.02 375.23 150.12 164.21

Interest Rs.Crs 75.67 86.83 89.64 106.88 115.01

Profit before Exceptional items and Tax Rs.Crs 1,507.01 1,166.19 285.59 43.24 49.20

Exceptional items Gain / (Loss) Rs.Crs — — — (76.84) —

Profit after Exceptional items Rs.Crs 1,507.01 1,166.19 285.59 -33.60 49.20

Provision for Current Tax Rs.Crs 510.24 396.00 57.00 31.55 19.65

Provision for Deferred Tax Rs.Crs (16.71) (16.70) (4.75) (68.00) (9.28)

Fringe Benefit Tax Rs.Crs 5.87 4.61 3.58 — —

Net Earnings Rs.Crs 1,007.61 782.28 229.76 2.85 38.83

Cash Earnings before Exceptional items Rs.Crs 1,228.13 991.83 441.04 233.47 244.07

Dividend (incl. Dividend tax) Rs.Crs 72.82 56.77 24.85 10.66 7.02

BALANCE SHEET

Net Fixed Assets including CWIP Rs.Crs 4,783.61 3,214.23 2,678.20 2,597.08 2,751.96

Investments Rs.Crs 170.90 483.45 172.39 184.79 238.09

Current Assets Rs.Crs 1,303.89 960.17 772.52 837.65 739.58

Current Liabilities Rs.Crs 1,278.56 755.18 556.05 439.30 384.35

Net Current Assets Rs.Crs 25.33 204.99 216.47 398.35 355.23

Misc. Expenditure (Not written off) Rs.Crs — — — — 15.52

Capital Employed Rs.Crs 4,979.84 3,902.67 3,067.06 3,180.22 3,360.80

Net Worth represented by:-

Equity Share Capital Rs.Crs 124.49 124.49 124.49 124.40 124.40

Employee Stock Options Outstanding/

Share capital extinguished Rs.Crs 0.77 — — — 0.51

Reserves & Surplus Rs.Crs 2,571.73 1,639.29 913.78 942.73 950.54

Net Worth Rs.Crs 2,696.99 1,763.78 1,038.27 1,067.13 1,075.45

Loan Fund

Secured Loans Rs.Crs 982.66 1,151.25 1,221.93 1,253.35 1,245.01

Unsecured Loans Rs.Crs 757.84 427.38 229.90 278.03 390.63

Total Loan Funds Rs.Crs 1,740.50 1,578.63 1,451.83 1,531.38 1,635.64

Deferred Tax Liabilities Rs.Crs 542.35 560.26 576.96 581.71 649.71

Capital Employed Rs.Crs 4,979.84 3,902.67 3,067.06 3,180.22 3,360.80

RATIOS & STATISTICS

EBITDA Margin % 33 30 18 14 17

Net Margin % 18 16 7 0.1 2

Interest Cover (EBITDA/Interest) Times 24.05 17.04 6.60 3.48 3.29

ROCE (PBIT/Average Capital Employed) % 36 36 12 5 5

Current Ratio Times 1.02 1.27 1.39 1.91 1.92

Debt Equity Ratio Times 0.65 0.90 1.40 1.44 1.52

Dividend per share Rs./Share 5.00 4.00 1.75 0.75 0.50

Dividend Payout on Net Profit (Before exceptional items) % 7 7 11 13 18

EPS Rs./Share 80.94 62.84 18.46 0.23 3.12

Cash EPS before exceptional items Rs./Share 98.66 79.67 35.43 18.77 19.62

Book Value per share Rs./Share 216.65 141.69 83.40 85.78 86.45

No. of Equity Shares Nos. Crs. 12.45 12.45 12.45 12.44 12.44

15

CMYK

Net Sales

0

1000

2000

3000

4000

5000

6000

2,2512,607

3,299

4,911 5,509

2003-04 2004-05 2005-06 2006-07 2007-08

Rs. in Crores

Operating Profit

100

500

900

1300

1700

2100

2007-082006-072005-062004-052003-04

319 351554

1,418

1,720

Rs. in Crores

EPS

0

25

50

75

100

2007-082006-072005-062004-052003-04

3.12 0.23

18.46

62.84

80.94

Rupees

Net Worth

500

1000

1500

2000

2500

3000

2007-082006-072005-062004-052003-04

1,075 1,067 1,038

1,764

2,697

Rs. in Crores

Net Earnings

0

200

400

600

800

1000

2007-082006-072005-062004-052003-04

39 3

230

782

1,008

Rs. in Crores

Dividend

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2007-082006-072005-062004-052003-04

0.500.75

1.75

4.00

5.00

Rs. per share

16

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OVERVIEW

FY08 has closed under challenging circumstances. Rising level of inflation resulted in

Government intervention on prices of commodities, despite escalation of input costs and

taxes. It is hoped that investments in infrastructure and capacity expansion by the corporate

sector will help to sustain economic growth.

India is the second largest producer of cement in the world, with a capacity of around

195 MTPA. The cement sector is planning to increase capacity by 115 MTPA during the

11th Plan period at a capital outlay of approximately Rs.50,000 crores. This is likely to be

commissioned by FY12. Cement production grew from 156 MTPA to 168 MTPA in FY08,

registering a growth of 8%. Effective capacity utilisation in industry is over 95% after adjusting

for non-operating plants in the public sector. The per capita consumption of cement is estimated

to be 135 kgs which is significantly lower than levels achieved by rapidly developing economies,

with consequent scope for future growth.

The Indian cement industry is competitive, with imports possible only through the waiver of

countervailing duty, which provides an advantage to imports over domestic production.

Cement being an energy intensive industry needs quality power and fuel on a regular basis, at

economic prices. There is a continuous decline in the availability of linkage coal, with the

industry being compelled to access their requirements either through e-auction or imports,

with consequent increase in overall fuel costs. The industry is also setting up captive power

plants and increasing the use of alternative fuels and materials to optimise costs, while

simultaneously reducing their carbon footprint.

Your Company had announced expansion of capacity at Andhra Pradesh Cement Works (APCW)

along with a split grinding Unit at Ginigera, Karnataka to cater to the growing demand in

South India. The Clinkerisation (pyrosection) Unit was commissioned in March, 2008.

Satisfactory progress is being made on the remaining expansion work. The Unit will be

operational in the first half of the current fiscal. Your Company is also setting up captive

power plants at Awarpur Cement Works (ACW) in Maharashtra, Hirmi Cement Works (HCW)

in Chhattisgarh and Gujarat Cement Works (GCW) in Gujarat to reduce its power cost. These

power plants except ACW will be commissioned in a phased manner in FY09.

On commissioning, around 80% of your Company’s power requirement will be met from

captive sources.

MA N A G E M E N T D I S C U S S I O N A N D A N A L Y S I S

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BUSINESS AND FINANCIAL PERFORMANCE REVIEW

Capacity Utilisation

FY08 FY07 % changeover FY07

Installed capacity (Mn.TPA):

Clinker 14.50 14.50 —

Cement 18.20 17.00 7

Production (Mn. Mt):

Clinker 14.35 14.22 1

Cement 15.07 14.64 3

– clinker capacity utilisation 99% 98%

– effective capacity utilisation@ 101% 101%

@ Effective capacity utilisation: cement production + clinker sold.

The capacity of the existing Units increased from 17.00 MMT to 18.20 MMT throughde-bottlenecking.

Sales Volume

FY08 FY07 % changeover FY07

Sales Volume (Mn. Mt):

Domestic – Cement 14.25* 13.35* 7

– Clinker 0.37 0.30 23

Total 14.62 13.65 7

Exports – Cement 0.73 1.26 -42

– Clinker 1.72 2.21 -22

Total 2.45 3.47 -29

Total Volume 17.07 17.12

* excluding trading sales of 0.04 in FY08 and 0.56 in FY07.

Overall volume remains flat, despite the disruption of operations due to floods at GCW.Exports were curtailed to cater to the domestic market.

Sales Realisation (Net of Excise Duty)

FY08 FY07 % changeover FY07

Average Realisation (Rs./MT) 3,111 2,735 14Domestic – Cement 3,322 2,970 12Exports – Cement 2,503 2,435 3

– Clinker 1,901 1,630 17

Higher capacity utilisation and growing demand in Middle East and India resulted in improved

domestic and export realisation.

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Financial Highlights

(Rs. in crores)

FY08 FY07 % Change

Net Turnover 5,509 4,911 12

Domestic 5,005 4,242 18

Exports 504 669 -25

Other Income 100 61 64

Total Expenditure 3,789 3,493 8

Operating Profit (PBIDT) 1,820 1,479 23

Operating Margin (%) 33 30

Interest 76 87 -13

Gross Profit (PBDT) 1,744 1,392 25

Depreciation 237 226 5

Profit Before Tax 1,507 1,166 29

Current Tax 510 396 29

Deferred Tax (17) (17) —

Fringe Benefit Tax 6 5 20

Net Profit after Total Tax 1,008 782 29

Net Turnover

The increase in turnover is linked to higher domestic cement sales volume and improved

realisation in local and export markets. The Ready Mix Concrete (RMC) sales also rose to

Rs. 271 crores in FY08 compared with Rs. 43 crores in FY07.

Other Income

Other income has risen from Rs. 61 crores to Rs. 100 crores. Your Company earned

Rs. 30 crores on surplus money invested in various debt schemes of mutual funds and Rs. 70 crores

through other operational receipts like carbon credit, sales of scrap, exchange gain etc.

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Operating Profit (PBIDT) and Margin

The operating profit was up by 23% from Rs. 1,479 crores in FY07 to Rs. 1,820 crores inFY08. The PBIDT margins were at 33% in FY08 compared to 30% in FY07. The improvedprofitability is due to better plant productivity and higher realisations. However, costs of rawmaterial, energy and freight rose sharply. Employee costs too witnessed a steep increase.

(i) Raw Material – The overall raw material cost per ton increased by 7% from Rs. 230 inFY07 to Rs. 245 in FY08 on account of higher prices of all critical inputs viz. gypsum,fly ash, iron ore and inward freight.

(ii) Energy – Energy cost per ton went up by 8% from Rs. 623 in FY07 to Rs. 670 in FY08due to substantial hike in imported and indigenous coal prices. However, the powerconsumption improved from 87 kwh per ton of cement in FY07 to 85 kwh per ton ofcement in FY08.

(iii) Employee costs increased on account of revision in compensation structure in line withmarket, higher retiral dues on account of impact of revised AS15 and ramping up ofRMC business.

(iv) Freight and Handling expenses increased by 10% from Rs. 883 crores in FY07 toRs. 969 crores in FY08 mainly on account of two factors:

(i) higher volumes of RMC sales.

(ii) growth in domestic sales.

Average logistic cost increased from Rs. 585 pmt to Rs. 607 pmt.

Interest

The interest cost (gross) increased from Rs. 88 crores in FY07 to Rs. 92 crores in FY08 due tohigher borrowing cost. However, the net interest has seen a decline from Rs. 87 crores inFY07 to Rs. 76 crores in FY08 due to interest capitalisation at Rs.16 crores in FY08 againstRs.1 crore in FY07 on account of large ongoing capex.

Depreciation

Depreciation stepped up from Rs. 226 crores in FY07 to Rs. 237 crores in FY08 due to

addition in fixed assets of Rs. 227 crores for ongoing capex.

Andhra Pradesh Cement Works

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Income Tax

The higher outgo in current tax resulted from improved earnings. Your Company also provided

Rs. 6 crores towards the Fringe Benefit Tax (FBT) in FY08 against Rs. 5 crores in FY07.

Net Profit

Net profit for FY08 stood at Rs. 1,008 crores compared to Rs. 782 crores in FY07.

Cash Flow Statement

(Rs. in crores)

FY08

Sources of Cash

Cash from operations 1,305

Non-operating cash flow 39

Decrease in working capital 70

Increase in borrowings 167

Net reduction in investments 312

Total 1,893

Uses of Cash

Net capital expenditure 1,793

Interest 89

Increase in cash and cash equivalent 11

Total 1,893

Sources of Cash

Cash from operations

The improved performance is reflected in the cash generation of your Company. Cash generationwas augmented from Rs. 1,037 crores in FY07 to Rs. 1,305 crores in FY08.

Non Operating Cash Flow

It consists of interest and dividend income earned on the temporary surplus funds invested andRs. 2.80 crores dividend received from its Joint Venture Company in Sri Lanka.

Decrease in Working Capital

The current assets have gone up from Rs. 856 crores in FY07 to Rs. 1,202 crores in FY08 dueto higher inventories of coal, stores and spares etc. by Rs. 176 crores. Receivables increasedby Rs. 35 crores and loans and advances increased by Rs. 135 crores due to higher CENVATreceivables. At the same time, liabilities and provisions also increased by Rs. 416 crores dueto various ongoing capex. All of this has resulted in reduction of working capital byRs. 70 crores.

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Increase in Debts

Your Company raised Rs. 381 crores by borrowing in foreign currency and rupee loan forcapex and working capital requirements and repaid debentures and loans of Rs. 285 crores.The sales tax loans increased by Rs. 71 crores.

Net decrease in Investments

The temporary surplus money invested in FY07 was utilised by your Company for its ongoingcapex, resulting in a reduction in investments of Rs. 312 crores.

Uses of Cash

Net Capital Expenditure

The capital expenditure of Rs. 1,793 crores was expended on capex plans such as the expansionat APCW and installation of captive power plants at various locations.

Dividend

The Board has recommended a dividend of Rs. 5/- per equity share for FY08, entailing anoutflow of Rs. 73 crores including corporate tax on dividend of Rs. 11 crores. This accountsfor 7% of the net profits for the year under review. Your Company paid Rs. 4/- per equityshare as interim dividend for FY07, the total payout on which was Rs. 57 crores includingdividend tax of Rs. 7 crores.

CAPITAL EXPENDITURE PLAN

Your Company has initiated several capital expenditure proposals to continue to grow in themarkets in which it operates, improve productivity and cost efficiencies and address theconcern of rising power costs. A sum of around Rs. 3,300 crores had been earmarked towardsthis, of which Rs.1,800 crores has already been spent in FY08. The expansion / modernisationprograms are progressing in line with expectation. Upon completion, they will result in sustaininggrowth and reduce costs.

Overview of Thermal Power Plant at GCW

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Your Company recognises that RMC is the future of the Cement Business. During the year,

15 RMC Plants were set up across the country to cater to growing customer demand. More

RMC Plants are on the anvil.

CONSOLIDATED PERFORMANCE

(Rs. in crores)

FY08 FY07 % Change

Net Turnover 5,624 4,968 13

Operating Profit (PBIDT) 1,831 1,491 23

Interest 76 87 -13

Gross Profit (PBDT) 1,755 1,404 25

Depreciation & Amortisation of Goodwill 240 229 5

Profit Before Tax 1,515 1,175 29

Current Tax & Fringe Benefit Tax 519 404 28

Deferred Tax (15) (15) —

Net Profit before Minority interest 1,012 787 28

Minority Interest 2 2 —

Net Profit after Minority Interest 1,010 785 29

HUMAN RESOURCES

Your Company continues to maintain a constructive relationship with its employees through a

positive environment so as to improve productivity and efficiency.

Your Company also continues to invest in people process and skill development and provide

them with high performance environment.

Attrition in your Company is in line with industry but poses a big challenge. Schemes like

Performance Linked Variable Pay, Deferred Compensation and Employee Stock Options have

been introduced to attract and retain talent.

The Internal Recruitment Scheme serves as a platform for providing growth opportunities to

Managers within the business. This is part of your Company’s continuous effort towards

developing talent from within.

The total number of employees in your Company as on 31st March, 2008 was 3,989 (3,503

employees).

RISK MANAGEMENT

Both the economy and the industry are on a growth trajectory. However, spiraling prices and

availability of key inputs and raw material; delay in infrastructure development; availability of

skilled manpower; volatility in global economy are some of the major risks and concerns that

have to be addressed. All these have an impact on the operations of your Company.

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Your Company is conscious of the risks this entails and has put in place a mechanism for

minimising and mitigating the same. The process is reviewed periodically. A Risk Management

Committee at the Unit and Corporate Level reviews the risks periodically. The Audit Committee

also reviews the Risk Management Process.

Your Company recognises that risk management is an integral part of its business and an aid

for improvement and achieving targets.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has in place adequate internal control systems and procedures commensurate

with the size and nature of its business. The Internal Audit team continuously monitors the

effectiveness of internal control and provides a reasonable assurance of the adequacy and

effectiveness of your Company’s control, governance and risk management process to the

Audit Committee. It also follows up on the implementation of corrective actions and

improvements suggested by the Audit Committee.

Internal Audit focuses on the following objectives, forming part of the Audit Plan approved by

the Audit Committee:

• Adherence to the operating systems and manual;

• Performance of operational activities in an efficient and effective manner;

• Compliance with the risk management process;

• Compliance with legislative and regulatory provisions.

The Audit Committee reviews the Audit Reports and also has discussions with the Statutory

Auditors.

CONCLUSION

The demand for cement is expected to grow around 9% linked to GDP growth. At the same

time, new capacity announcements are likely to result in a surplus scenario, resulting in

pressure on domestic prices from CY09 onwards. The Government’s continued initiatives for

infrastructure development augurs well for the industry.

Against this background, your Company’s focus will be on sustaining plant performance,

improving service standards and timely commissioning of projects.

CAUTIONARY STATEMENT

Statement in this “Management Discussion and Analysis” describing the Company’s objectives, projections,

estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable

securities laws and regulations. Actual results could differ materially from those expressed or implied. Important

factors that could make a difference to the Company’s operations include global and Indian demand supply

conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the Company’s

principal markets, changes in Government regulations, tax regimes, economic developments within India and

the countries within which the Company conducts business and other factors such as litigation and labour

negotiations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking

statements, on the basis of any subsequent development, information or events or otherwise.

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CMYK

COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE

Corporate Governance refers to a set of laws, regulations and good practices that enable an

organisation to perform efficiently and ethically generate long term wealth and create value

for all its stakeholders. There is, however, no single template to define good governance.

Corporate Governance in the Aditya Birla Group is an evolutionary process. The governance

philosophy rests on the tenets listed below:

• Board accountability to Company and stakeholders;

• Equitable treatment of all shareholders;

• Strategic guidance and effective monitoring by the Board;

• Timely disclosure.

These are reflected in the Aditya Birla Group Values:

UltraTech Cement Limited, (your Company) continuously strives for excellence through

adopting best governance and disclosure practices. In terms of Clause 49 of the Listing

Agreement executed with stock exchanges, the details of compliance are as follows:

N O T I C E

RE P O R T O N C O R P O R A T E G O V E R N A N C E

Integrity

Commitment

Passion

Seamlessness

Speed

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BOARD OF DIRECTORS

• Composition

Your Company’s Board comprises of 12 (twelve) Directors, which includes the Managing

Director and 4 (four) Independent Directors. The details of the Directors with regard to

outside directorships and committee positions are as follows:

Director Executive/ No. of outside No. of outside

Non – Executive/ directorship(s) committee position(s)

Independent1 held2 held3

Public Private Chairman Member

Kumar Mangalam Birla Non-Executive 10 12 - -

Mrs. Rajashree Birla Non-Executive 6 12 - -

R. C. Bhargava Independent 7 2 3 4

G. M. Dave Independent 7 1 - 5

Y. M. Deosthalee Non-Executive 10 - 4 1

N. J. Jhaveri Independent 13 2 5 5

Dr. S. Misra Non-Executive 3 1 - -

V. T. Moorthy Non-Executive 1 - - -

J. P. Nayak Non-Executive 9 - 5 1

S. Rajgopal4 Independent 1 1 - -

D. D. Rathi Non-Executive 7 1 - 1

S. Misra Managing

Director 2 1 - 1

1. Independent Director means a Director as defined under Clause 49 of the Listing Agreement.

2. Excluding Alternate directorships and directorships in foreign companies and companies under

Section 25 of the Companies Act, 1956. (“the Act”)

3. Only two committees viz. the Audit Committee and the Shareholders’ / Investors Grievance Committee

of all public limited companies are considered.

4. Mr. S. Rajgopal resigned as Nominee Director w.e.f. 20th October, 2007. He was appointed Additional

Director from that date.

5. No Director is related to any other Director on the Board, except for Mr. Kumar Mangalam Birla and

Mrs. Rajashree Birla, who are son & mother respectively.

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• Attendance of each Director at the Board meetings and the last Annual General

Meeting (AGM)

Director No. of Board meetings Attended last AGM@

Held Attended

Kumar Mangalam Birla 4 4 Yes

Mrs. Rajashree Birla 4 2 Yes

R. C. Bhargava 4 4 Yes

G. M. Dave 4 4 Yes

Y. M. Deosthalee 4 1 No

N. J. Jhaveri 4 4 Yes

Dr. S. Misra 4 4 Yes

V. T. Moorthy 4 4 Yes

J. P. Nayak 4 4 Yes

S. Rajgopal1 4 3 Yes

D. D. Rathi 4 4 Yes

S. Misra 4 4 Yes

@ Annual General Meeting (AGM) held on 20th July, 2007 at Ravindra Natya Mandir, P. L. Deshpande

Maharashtra Kala Academy, Near Siddhivinayak Temple, Sayani Road, Prabhadevi, Mumbai 400 025.

1. Mr. S. Rajgopal resigned as Nominee Director w.e.f. 20th October, 2007. He was appointed Additional

Director from that date.

• Number of Board meetings held, dates on which held and number of Directors present

Date of Board meetings City Board strength No. of

Directors present

21st April, 2007 Mumbai 12 11

20th July, 2007 Mumbai 12 11

20th October, 2007 Mumbai 12 10

19th January, 2008 Mumbai 12 10

The Board meets at least once a quarter to review the quarterly financial results and

operations of your Company. In addition to the above, the Board also meets as and when

necessary to address specific issues relating to the business of your Company.

Your Company’s Board plays a pivotal role in ensuring good governance and functioning

of your Company. The Board consists of professionals from diverse fields possessing vast

experience in their respective areas.

27

CMYK

The Board has unfettered and complete access to any information within your Company.

Members of the Board have complete freedom to express their views on agenda items and

can discuss any matter at the meeting with the permission of the Chairman. The Board

provides direction and exercises appropriate control to ensure that your Company is managed

in a manner that fulfils stakeholder’s aspirations and societal expectations.

The information placed before the Board includes:

— Annual operating plans, capital budgets and any updates.

— Quarterly financial results.

— Minutes of meetings of Audit Committee and other Committees of the Board.

— The information on recruitment and remuneration of Senior Officers just below the

Board level, including appointment or removal of the Chief Financial Officer and the

Company Secretary.

— Show cause, demand, prosecution notices and penalty notices which are materially

important.

— Fatal or serious accidents, dangerous occurrences, any material effluent or pollution

problems.

— Any material default in financial obligations to and by your Company, or substantial

non-payment for goods sold by your Company.

— Any issue, which involves possible public or product liability claims of substantial

nature, including any judgement or order, which may have passed strictures on the

conduct of your Company or taken an adverse view regarding another enterprise that

can have negative implications on your Company.

— Details of any joint venture or collaboration agreement.

— Transactions that involve substantial payment towards goodwill, brand equity or

intellectual property.

— Significant labour problems and their proposed solutions. Any significant development

in human resources / industrial relations front.

— Sale of material nature of investments, subsidiaries, assets, which is not in normal

course of business.

— Quarterly details of foreign exchange exposures and the steps taken by management to

limit the risks of adverse exchange rate movement, if material.

— Non-compliance of any regulatory, statutory or listing requirements and shareholders

service such as non-payment of dividend, delay in share transfer etc.

— Risk Management policies of your Company.

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CMYK

• Remuneration of Directors and their shareholding in your Company

Details of sitting fees paid to Non-Executive Directors for attending Board meetings and

their shareholding in your Company:

Director Sitting fees paid (Rs.) No. of shares held

Kumar Mangalam Birla 80,000 400

Mrs. Rajashree Birla 40,000 400

R. C. Bhargava 80,000 —

G. M. Dave 80,000 —

Y. M. Deosthalee 20,000 1,773

N. J. Jhaveri 80,000 —

Dr. S. Misra 80,000 —

V. T. Moorthy 80,000 420

J. P. Nayak 80,000 1,276

S. Rajgopal 60,000 —

D. D. Rathi 80,000 —

S. Misra Nil 2

Apart from sitting fees that are paid to the Non-Executive Directors for attending Board /

Committee meetings, no other fees / commission were paid during the year. No significant

material transactions have been made with the Non-Executive Directors vis-à-vis your

Company.

The details of remuneration paid to the Managing Director are as follows:

Managing Relationship Remuneration paid during 2007-08

Director with other

Directors

All elements Performance Service Stock option

of remuneration linked contracts, details, if any

package i.e. incentives, notice

salary, benefits, alongwith period,

pensions etc. performance severance

criteria (a) fee

S. Misra – Rs. 3.56 crores Rs. 0.88 crores See note (b) See note (c)

(a) Mr. S. Misra was paid a sum of Rs. 0.88 crores towards performance incentive linked

for achievement of targets for the year 2006-07.

(b) Appointment of Mr. S. Misra as Managing Director is subject to termination by three

months notice in writing by either side.

(c) In terms of your Company’s Employee Stock Option Scheme (“ESOS-2006”),

84,290 stock options have been granted to Mr. S. Misra during the year.

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All decisions relating to the remuneration of the Managing Director is taken by the Board

in accordance with the approval received from the Members of your Company.

• Code of Conduct

The Board of Directors has laid down a Code of Conduct (“the Code”) for all Board

Members and Senior Management Personnel of your Company. The Code is posted on

your Company’s website www.ultratechcement.com

All Board Members and Senior Management Personnel have confirmed compliance with

the Code.

A declaration signed by the Managing Director is attached and forms part of the Annual

Report.

AUDIT COMMITTEE

• Composition

The Board has constituted an Audit Committee comprising of three Non-Executive

Independent Directors. All the Members of the Audit Committee are financially literate as

per the provisions of Clause 49 of the Listing Agreement.

Directors Chairman/Member

R. C. Bhargava Chairman

G. M. Dave Member

S. Rajgopal Member

Permanent Invitees

Mr. D. D. Rathi — Director of your Company and Whole-time Director & Chief

Financial Officer of Grasim Industries Limited, the holding company.

Mr. K. C. Birla — Chief Financial Officer of your Company.

The Statutory, Cost and Internal Auditors of your Company are also invited to the Audit

Committee meetings.

The Company Secretary acts as the Secretary to the Committee.

• Objective

To monitor and effectively supervise your Company’s financial reporting process with a

view to provide accurate, timely and proper disclosure and the integrity and quality of the

financial reporting.

• Powers

The Audit Committee has the following powers:

— To investigate any activity within its terms of reference.

— To seek information from any employee.

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CMYK

— To obtain outside legal or other professional advice.

— To secure attendance of outsiders with relevant expertise, if it considers necessary.

• Role

1. Oversight of your Company’s financial reporting process and the disclosure of its

financial information to ensure that the financial statement is correct, sufficient and

credible.

2. Recommending to the Board, the appointment, re-appointment and, if required, the

replacement or removal of the Statutory Auditor and Cost Auditor and the fixation of

audit fees.

3. Approval of payment to Statutory Auditors for any other services rendered by them.

4. Reviewing with the management, the annual financial statements before submission to

the Board for approval, with particular reference to:

a. Matters required to be included in the Director’s Responsibility Statement to be

included in the Board’s report in terms of clause (2AA) of Section 217 of the Act;

b. Changes, if any, in accounting policies and practices and reasons for the same;

c. Major accounting entries involving estimates based on the exercise of judgment by

management;

d. Significant adjustments made in the financial statements arising out of audit findings;

e. Compliance with listing and other legal requirements relating to financial statements;

f. Disclosure of any related party transactions;

g. Qualifications in the draft audit report.

5. Reviewing with the management, the quarterly financial statements before submission

to the Board for approval.

6. Reviewing with the management, the statement of uses / application of funds raised

through an issue (public issue, rights issue, preferential issue etc.), the statement of

funds utilised for purposes other than those stated in the offer document / prospectus /

notice and the report submitted by the monitoring agency monitoring the utilisation of

proceeds of a public or rights issue and making appropriate recommendations to the

Board to take up steps in this matter.

7. Reviewing with the management, performance of Statutory and Internal Auditors,

adequacy of the internal control systems.

8. Reviewing the adequacy of internal audit function, if any, including the structure of the

internal audit department, staffing and seniority of the official heading the department,

reporting structure coverage and frequency of internal audit.

9. Discussion with Internal Auditors any significant findings and follow up there on.

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10. Reviewing the findings of any internal investigations by the Internal Auditors into

matters where there is suspected fraud or irregularity or a failure of internal control

systems of a material nature and reporting the matter to the Board.

11. Discussion with Statutory Auditors before the audit commences, about the nature and

scope of audit as well as post-audit discussion to ascertain any area of concern.

12. To look into the reasons for substantial defaults in the payment to the depositors,

debenture holders, shareholders (in case of non payment of declared dividends) and

creditors, if any.

• The Audit Committee reviews the following information

1. Management Discussion and Analysis of financial condition and results of operations;

2. Statement of significant related party transactions (as defined by the Audit Committee),

submitted by management;

3. Management letters / letters of internal control weaknesses issued by the Statutory

Auditors, if any;

4. Internal audit reports relating to internal control weaknesses;

5. The appointment, removal and terms of remuneration of the Chief Internal Auditor;

and

6. Risk Management policy of your Company.

During the year, the Committee has reviewed the internal controls put in place to ensure

that the accounts of your Company are properly maintained and that the accounting

transactions are in accordance with prevailing laws and regulations. In conducting such

reviews, the Committee found no material discrepancy or weakness in the internal control

system of your Company.

The Committee has also reviewed the procedures laid down by your Company for assessing

and managing risks.

• Meeting, attendance and sitting fees paid during the year

During the year, the Audit Committee met 6 times. The meetings were held on 21st April,

2007; 20th July, 2007; 27th September, 2007; 20th October, 2007; 19th January, 2008 and

8th March, 2008 .The details of attendance and sitting fees paid are as follows:

Member No. of meetings Sittings fees paid

Held Attended (Rs.)

R. C. Bhargava 6 6 1,20,000

G. M. Dave 6 4 80,000

S. Rajgopal 6 5 1,00,000

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SHARE TRANSFER AND SHAREHOLDER / INVESTOR GRIEVANCE COMMITTEE

• Composition

A “Share Transfer and Shareholder / Investor Grievance Committee” has been constituted

at the Board level, under the Chairmanship of a Non-Executive Independent Director.

Director Chairman/Member

R. C. Bhargava Member

Dr. S. Misra Member

D. D. Rathi Member

Mr. R.C.Bhargava is elected Chairman of every meeting of the Committee. The Company

Secretary acts as Secretary to the Committee and is also the Compliance Officer.

• Role

The Committee looks into:

– issues relating to share / debenture holders including transfer/transmission of shares/

debentures;

– issue of duplicate share / debenture certificates;

– non-receipt of dividend;

– non receipt of annual report;

– non-receipt of share certificate after transfer;

– delay in transfer of shares.

• Meeting, attendance and sitting fees paid during the year

During the year, the Committee met on 21st April, 2007 and 20th October, 2007. The details

of attendance and sitting fees paid are as follows:

Member No. of meetings Sittings fees paid

Held Attended (Rs.)

R. C. Bhargava 2 2 40,000

Dr. S. Misra 2 2 40,000

D. D. Rathi 2 2 40,000

To expedite the transfer in the physical segment, necessary authority has been delegatedby your Board to the Directors and Officers of your Company to approve transfer/transmission of shares / debentures. Details of share transfers / transmissions approved bythe Directors and Officers are placed before the Board.

• Number of shareholder complaints received so far / number not solved to thesatisfaction of shareholders / number of pending complaints

Details of complaints received, number of shares transferred during the year, time takenfor effecting these transfers and the number of share transfers pending are furnished in the“Shareholder Information” section of this Annual Report.

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GENERAL BODY MEETINGS

Year Type Location Date Time

2007 AGM Ravindra Natya Mandir, 20th July, 2007 3:30 p.m.

P. L. Deshpande Maharashtra

Kala Academy,

Near Siddhivinayak Temple,

Sayani Road, Prabhadevi,

Mumbai – 400 025

2006 AGM Birla Matushri Sabhagar, 28th August, 2006 2:00 p.m.

19, New Marine Lines,

Mumbai – 400 020

2005 AGM Birla Matushri Sabhagar, 24thAugust, 2005 2:00 p.m.

19, New Marine Lines,

Mumbai – 400 020

— Whether special resolutions passed in the previous 3 AGMs

Yes, the following resolution was passed as special resolution:

At AGM held on 20th July, 2007

� Keeping of register of members, index of members, register of debentureholders,

index of debentureholders and other related books at the premises of your Company’s

Registrar and Transfer Agent.

— Whether any special resolution passed last year through postal ballot – No

� details of voting pattern N.A.

� person who conducted the postal ballot exercise N.A.

— Whether any special resolution is proposed to be conducted through Will be done

postal ballot and procedure for the same. as per law.

SUBSIDIARY COMPANY

Your Company does not have any material non listed Indian subsidiary company. The Audit

Committee and Board reviews the minutes, financial statements, significant transactions and

working of the unlisted subsidiary companies.

DISCLOSURES

• Disclosure on materially significant related party transactions that may have potential

conflict with the interests of your Company at large

The transactions with related parties entered into by your Company in the normal course

of business were placed before the Audit Committee periodically.

Particulars of related party transactions are listed out in Schedule 21(B)(11) of the Accounts.However, all these transactions are on normal commercial arm’s length basis.

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• Disclosure of accounting treatment

Your Company has followed all relevant accounting standards in preparing the financialstatements.

• Risk Management

During the year, the Audit Committee reviewed the efficacy of the Risk Managementframework, the key risks associated with the business of your Company and the measuresin place to mitigate the same.

• Proceeds from public issues, rights issues, preferential issues etc.

During the year, your Company did not raise any funds by way of public, rights, preferentialissues etc.

• Details of non-compliance by your Company, penalties, strictures imposed on yourCompany by stock exchanges or SEBI or any other statutory authority, on anymatter relating to capital markets, during the year

There has been no instance of non-compliance by your Company on any matter related tocapital markets during the year under review and hence no strictures / penalties have beenimposed on your Company by the stock exchanges or the Securities and Exchange Boardof India (SEBI) or any other statutory authority.

• Management

— The Management Discussion and Analysis forms part of the Annual Report and is inaccordance with the requirements laid out in Clause 49 of the Listing Agreement.

— No material transaction has been entered into by your Company with the Promoters,Directors or the Management, their subsidiaries or relatives etc. that may have apotential conflict with interests of your Company.

• Code for prevention of Insider Trading practices

Your Company has instituted a comprehensive Code of Conduct in compliance with theSEBI regulations on prevention of insider trading.

• Shareholders

— Details of the Directors seeking re-appointment / appointment at the ensuing AGM areprovided in the Notice convening the AGM.

— Press releases and financial results are made available on the website of your Company(www.ultratechcement.com) and also that of the Aditya Birla Group(www.adityabirla.com).

• CEO / CFO Certification

The Managing Director and Chief Financial Officer of your Company have issued necessarycertificate pursuant to the provisions of Clause 49 of the Listing Agreement and the sameis attached and forms part of the Annual Report.

• Adoption of non-mandatory compliances

— A half-yearly declaration of financial performance including summary of the significant

events in last six months have been sent to each household of shareholders.

— The statutory financial statements of your Company are unqualified.

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Apart from the above, your Company has constituted a Finance Committee and an ESOS

Compensation Committee of the Board.

• Finance Committee

The Finance Committee comprises of the following Directors viz. Mr. R. C. Bhargava,

Dr. S. Misra and Mr. D. D. Rathi. The Committee is authorised to exercise all powers and

discharge all functions relating to working capital management, foreign currency contracts,

operation of bank accounts and authorising officers of your Company to deal in matters

relating to excise, sales tax, income tax, customs and other judicial or quasi judicial

authorities.

• ESOS Compensation Committee

The ESOS Compensation Committee constituted for implementing, administering and

supervising the Employee Stock Options Scheme – 2006 (“the Scheme”) comprises of

Mr. Kumar Mangalam Birla, Mr. G. M. Dave and Mr. S. Rajgopal. During the year, the

Committee granted 1,68,070 stock options to eligible employees of your Company in the

management cadre, subject to the provisions of the Scheme, statutory provisions including

SEBI Guidelines as may be applicable from time to time and the rules and procedures set

out by your Company in this regard.

MEANS OF COMMUNICATION

• Quarterly results

— Which newspapers normally published in:

Newspaper Cities of Publication

Business Standard All editions

Economic Times Mumbai

Free Press Journal Mumbai

Navshakti Mumbai

Maharashtra Times Mumbai

— Any website, where displayed www.ultratechcement.com

www.adityabirla.com

— Whether your Company’s website displays

All official news releases Yes

Presentation made to Institutional Investors/Analysts Yes

(through your Company’s

holding company)

Annual Report, Quarterly Results, Shareholding Pattern etc. of your Company are also

posted on the SEBI EDIFAR www.sebiedifar.nic.in

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CODE OF CONDUCT

Declaration

As provided under Clause 49 of the Listing Agreement with the stock exchanges, the BoardMembers and the Senior Management Personnel have confirmed compliance with the Code ofConduct for the year ended 31st March, 2008.

Mumbai S. Misra

22nd April, 2008 Managing Director

CEO/CFO CERTIFICATE

The Board of Directors

UltraTech Cement Limited

We certify that:

1. We have reviewed the financial statement, read with the cash flow statement of UltraTechCement Limited (the Company) for the year ended 31st March, 2008 and to the best of ourknowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any materialfact or contain statements that might be misleading;

(ii) these statements and other financial information included in this report present a trueand fair view of the Company’s affairs and are in compliance with the existing accountingstandards, applicable laws and regulations;

2. There are, to the best of our knowledge and belief, no transactions entered into by theCompany during the year which are fraudulent, illegal or violative of the Company’s Codeof Conduct;

3. We are responsible for establishing and maintaining internal controls for financial reportingand we have evaluated the effectiveness of the internal control systems of the Companypertaining to financial reporting;

4. We have disclosed to the Company’s Auditors and the Audit Committee of the Company’sBoard of Directors all significant deficiencies in the design or operation of internal controls,if any, of which we are aware and the steps taken or proposed to be taken to rectify thedeficiencies.

5. We have indicated to the Auditors and the Audit Committee:

a) significant changes in the Company’s internal control over financial reporting duringthe year.

b) significant changes in accounting policies during the year, if any, and that the samehave been disclosed in the notes to the financial statements.

c) that to the best of our knowledge, no fraud, whether or not material, that involvesmanagement or other employees who have a significant role in the Company’s internalcontrol system over financial reporting existed during the period under review.

Mumbai K. C. Birla S. Misra

22nd April, 2008 CFO Managing Director

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1. Annual General Meeting

— Date and Time : Friday, 18th July, 2008, 3:30 p.m.

— Venue : Ravindra Natya Mandir,P. L. Deshpande MaharashtraKala Academy,Near Siddhivinayak Temple,Sayani Road, Prabhadevi,Mumbai – 400 025

2. Financial Calendar

— Financial reporting for the quarter ending : End July, 200830th June, 2008

— Financial reporting for the half year ending : End October, 200830th September, 2008

— Financial reporting for the quarter ending : End January, 200931st December, 2008

— Financial reporting for the year ending : End April, 200931st March, 2009

— Annual General Meeting for the year ending : End July/August, 200931st March, 2009

3. Dates of Book Closure : 11th July, 2008 to 18th July, 2008(both days inclusive)

4. Dividend Payment Date : On or after 18th July, 2008

5. Registered Office : UltraTech Cement Limited“B” Wing, Ahura Centre,2nd Floor, Mahakali Caves Road,Andheri (East), Mumbai-400 093.Tel. : (022) 66917800Fax : (022) 66928109Email : sharesutcl@adityabirla.comWeb : www.ultratechcement.com

www.adityabirla.com

6. (a) Listing Details:

Equity Shares Non-Convertible Debentures

1. Bombay Stock Exchange Limited 1. Bombay Stock Exchange LimitedPhiroze Jeejeebhoy Towers, Phiroze Jeejeebhoy Towers,Dalal Street, Mumbai-400 001. Dalal Street, Mumbai-400 001.

2. National Stock Exchange of India Limited, 2. National Stock Exchange of India Limited,“Exchange Plaza”, Bandra Kurla Complex, “Exchange Plaza”, Bandra Kurla Complex,Bandra (East), Mumbai-400 051. Bandra (East), Mumbai-400 051.

Note: Listing fees for the year 2008-09 has been paid to the Bombay Stock Exchange Limitedand the National Stock Exchange of India Limited.

SH A R E H O L D E R I N F O R M A T I O N

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(b) Name and address of Trustees : AXIS Bank Limited

for the Debentureholders 131, Maker Tower ‘F’,

13th Floor, Cuffe Parade,

Colaba, Mumbai-400 005

Tel: (022) 67074407

Fax: (022) 22186944

(c) Overseas Depository for GDRs : Citibank N. A.

Depository Receipt Services

388, Greenwich Street,

New York; NY-10013 USA

Tel: +2128166649

Fax: +2128166865

(d) Domestic Custodian of GDRs : Citibank N.A.

Custody Services,

Ramnord House,

77, Annie Besant Road,

Worli, Mumbai – 400 018

Tel: (022) 24978066

Fax: (022) 24978060

7. Stock Code : ISIN INE481G01011

Stock Code Reuters Bloomberg

Bombay Stock Exchange Limited 532538 ULTC.BO UTCEM IB

National Stock Exchange of India Limited ULTRACEMCO ULTC.NS UTCEM IS

8. Stock Price Data:

Bombay Stock Exchange Limited National Stock Exchange of India Limited

High Low Close Avg. Vol High Low Close Avg. Vol.

(In Rs.) (In Rs.) (In Rs.) (In Nos.) (In Rs.) (In Rs.) (In Rs.) (In Nos.)

Apr-07 860.00 662.30 820.30 1,112,381 864.50 662.00 821.25 2,427,519

May-07 859.95 790.00 827.00 605,846 925.00 786.20 831.50 1,224,524

Jun-07 916.20 779.00 900.05 591,676 916.90 778.10 900.40 1,459,651

Jul-07 1,004.00 851.00 932.15 1,086,843 1,004.50 852.50 933.40 2,951,648

Aug-07 950.00 808.20 920.50 972,493 950.00 815.25 920.35 1,888,070

Sep-07 1,090.00 921.95 1,042.55 586,264 1,095.40 920.00 1,047.30 1,557,418

Oct-07 1,165.00 968.50 999.15 1,042,064 1,165.00 955.05 997.20 2,011,702

Nov-07 1,070.00 870.00 987.40 757,020 1,065.50 925.55 984.25 1,972,723

Dec-07 1,050.00 926.00 1,014.50 872,546 1,101.80 960.00 1,013.50 1,892,154

Jan-08 1,040.00 731.00 860.60 1,158,549 1,028.00 706.65 873.45 2,035,053

Feb-08 925.00 785.25 911.35 806,427 925.15 728.60 904.50 1,349,669

Mar-08 940.00 750.00 779.85 334,423 993.00 751.55 784.55 1,261,761

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9. Stock Performance:

10. Stock Performance and Returns:

Absolute Returns

(In Percentage) 1 Year 3 Years 5 Years

UltraTech 1.61 121.16 —

BSE Sensex 19.68 140.95 413.15

NSE Nifty 23.89 132.58 384.00

Annualised Returns

(In Percentage) 1 Year 3 Years 5 Years

UltraTech 1.61 30.29 —

BSE Sensex 19.68 34.06 38.69

NSE Nifty 23.89 32.49 37.09

11. Registrar and Transfer Agents (RTA) : Sharepro Services (India) Private Limited

(For share transfers and other Satam Estate, 3rd Floor, Above Bank of Baroda,

communication relating to Cardinal Gracious Road, Chakala,

share certificates, dividend and Andheri (East), Mumbai-400 099.

change of address) Tel : (022) 67720300/28215168

Fax : (022) 28375646

Email:sharepro@shareproservices.com

12. Share Transfer system:

Share transfer in physical form are registered and returned within a period of 12 days from

the date of receipt, if the documents are clear in all respects. Officers of your Company

have been authorised to approve transfers upto 5,000 shares in physical form under one

transfer deed. One Director jointly with one Officer of your Company have been authorised

to approve the transfers exceeding 5,000 shares under one transfer deed.

Mar-08Feb-08Jan-08Dec-07Nov-07Oct-07Sep-07Aug-07Jul-07Jun-07May-07Apr-07

Sensex UltraTech Nifty

60

80

100

120

140

160

180

200

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The RTA attends to investor grievances in consultation with the Secretarial Department of

your Company.

2007-08 2006-07

Transfer Period No. of No. of % No. of No. of %

(in days) transfers shares transfers shares

1 – 15 999 22,192 47.80 1,565 34,625 48.69

16 – 20 140 6,519 6.70 361 13,399 11.23

21 – 30 951 39,264 45.50 1,288 44,390 40.08

Total 2,090 67,975 100.00 3,214 92,414 100.00

Number of pending share transfers : 46 transfers in respect of 1,806 shares pending

as at 31st March, 2008 as registered notices have been issued to

sellers.

13. Investor Services:

Complaints received during the year

Nature of Complaints 2007-08 2006-07

Received Cleared Received Cleared

Relating to Transfer, Transmission,

Dividend, Interest, Demat & Remat 11 11 21 21

and Change of address etc.

Legal proceedings on share transfer : There are no major legal proceedings relating

issues, if any to transfer of shares.

14. Distribution of Shareholding as on 31st March:

2008 2007

No. of % of No. of % of No. of % of No. of % of

No. of Equity share share shares share share share shares share

Shares held holders holders held holding holders holders held holding

1 – 100 244,434 89.06 7,386,717 5.93 258,881 89.00 7,842,953 6.30

101 – 200 17,678 6.44 2,623,356 2.11 18,822 6.47 2,797,601 2.25

201 – 500 8,540 3.11 2,706,955 2.18 9,127 3.14 2,893,342 2.32

501 – 1000 2,328 0.85 1,662,534 1.34 2,495 0.86 1,778,311 1.43

1001 - 5000 1,214 0.44 2,270,872 1.82 1,323 0.45 2,471,605 1.99

5001-10000 81 0.03 590,299 0.47 92 0.03 652,631 0.52

10001 & above 174 0.07 107,245,146 86.15 153 0.05 106,049,436 85.19

Total 274,449 100.00 124,485,879 100.00 290,893 100.00 124,485,879 100.00

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15. Category of Shareholding as on 31st March:

2008 2007

No. of % of No. of % of No. of % of No. of % ofCategory

share share shares share share share shares share

holders holders held holding holders holders held holding

Promoters &

Promoter Group 5 0.00 67,689,875 54.38 5 0.00 65,947,119 52.97

Banks/MFs / FIs

Mutual Fund

& UTI 49 0.02 2,300,070 1.85 38 0.01 2,497,719 2.01

Banks & FI’s 96 0.03 125,032 0.10 104 0.04 89,919 0.07

Insurance

Companies 14 0.01 8,576,961 6.89 12 0.00 7,381,023 5.93

Foreign Investors

FIIs 189 0.07 8,295,408 6.66 171 0.06 11,647,362 9.36

GDRs 1 0.00 275,804 0.22 1 0.00 422,044 0.34

NRIs/OCBs 3,298 1.20 701,928 0.56 3,509 1.21 728,504 0.58

Corporates 2,004 0.73 18,327,839 14.72 2,244 0.77 16,931,156 13.60

Others 268,793 97.94 18,192,962 14.62 284,809 97.91 18,841,033 15.14

Total 274,449 100.00 124,485,879 100.00 290,893 100.00 124,485,879 100.00

16. Dematerialisation of shares : 96.32% of outstanding shares have beenand liquidity dematerialised as on 31st March 2008. Trading in shares

of your Company is permitted only in thedematerialised form.

17. Details on use of public funds : Not Applicableobtained in the last three years

18. Outstanding GDR/Warrants and : 275,804 GDRs are outstanding as on 31st March, 2008.Convertible Bonds Each GDR represents one underlying equity

share.There are no warrants/convertible bondsoutstanding as at the year end.

Others14.62%

Promoters& Promoter

Group54.38%

Banks/MFs/FI's1.95%

InsuranceCompanies

6.89%

ForeignInvestors7.44%

Corporates14.72%

2008

Others15.14%

Promoters& Promoter

Group52.97%

Banks/MFs/FI's2.08%

InsuranceCompanies

5.93%

ForeignInvestors10.28%

Corporates13.60%

2007

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19. Plant Locations :

Andhra PradeshCement WorksBhogasamudram,Tadipatri Mandal,Anantapur District,Andhra Pradesh - 515 415Tel: 08558-288847/41Fax: 08558-288821/59

Hirmi Cement WorksVillage & Post: Hirmi,Tahsil: Simga,District: Raipur,Chhattisgarh - 493 195Tel: 07726-281217/218/221Fax: 07726-281572

Jharsuguda Cement WorksNear Dhutra Railway Station,P.O. Arda,District: Jharsuguda,Orissa - 768 202Tel: 06645-283104/105Fax: 06645-283108/110

West Bengal Cement WorksNear EPIP,Muchipara,Post: Rajbandh,Durgapur,West Bengal - 713 212Tel: 0343-2533029Fax:0343-2533358

GujaratCement WorksP.O. Kovaya,Taluka - Rajula,District: Amreli,Gujarat - 365 541Tel: 02794-283034Fax:02794-283036

Arakkonam Cement WorksChitteri Village,District Vellore,Arakkonam,Tamil Nadu - 631 003Tel: 04177-293291

Ratnagiri Cement WorksMIDC Industrial Estate,Zadgaon Block, Ratnagiri,Maharashtra - 415 639Tel:02352-223679Fax: 02352-221807

20. Investor Correspondence:

Registered Office Registrar & Transfer Agent (RTA)UltraTech Cement Limited Sharepro Services (India) Private Limited‘B’ Wing, Ahura Centre, Satam Estate, 3rd Floor, Above Bank of Baroda,2nd Floor, Mahakali Caves Road, Cardinal Gracious Road, Chakala,Andheri (East), Mumbai - 400 093 Andheri (East), Mumbai - 400 099Tel: (022) 66917800 Tel: (022) 67720300/28215168Fax: (022) 66928109 Fax: (022) 2837 5646Email: sharesutcl@adityabirla.com; Email: sharepro@shareproservices.com

kamal.r@adityabirla.com satishp@shareproservices.comContact person: Mr. Kamal Rathi Contact person: Mr. Satish PoojariEmail for investor correspondence under SEBI requirements: sharesutcl@adityabirla.com

AwarpurCement WorksP.O. Awarpur CementProject, Taluka: Korpana,District: Chandrapur,Maharashtra - 442 917Tel: 07173-266323Fax: 07173-266339

Jafrabad Cement WorksP. B. No. 10,Village:Babarkot,Taluka: Jafrabad,District: Amreli,Gujarat - 365 540Tel:02794-245103Fax: 02794-245110

Magdalla Cement WorksNear Magdalla Port,Dumas Road,Surat,Gujarat - 395 007Tel:0261-2725175Fax: 0261-2726952

Ginigera Cement WorksGinigera Grinding UnitGinigera Village,Koppal Gangavathi Road,Koppal Taluq & District,KarnatakaTel: 08539-286575/572Fax: 08539-286574

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21. Other Useful Information for Shareholders:

Unpaid/Unclaimed Dividends

Dividend warrants in respect of the interim dividend declared in March, 2007 have been

despatched to the shareholders at the addresses registered with the Company. Those

shareholders who have not yet received the dividend warrants may please write to the

Company or its RTA for further information in this behalf. Shareholders who have not

encashed the warrants are requested to do so by getting them revalidated from the Registered

Office of the Company or its RTA.

ECS Facility

The Company is providing facility of “Electronic Clearing Service” (ECS) for payment of

dividend to shareholders. Shareholders are requested to provide details of their bank

account for availing ECS facility. Further ECS facility is also available to the beneficial

owners of shares in demat form. Those desirous of availing the ECS facility may provide

their mandate to the Company in writing, in the form which can be downloaded from the

Company’s website.

Share Transfer / Dematerialisation

1. Share transfer requests are acted upon within 12 days from the date of their receipt by

the Company or its RTA. In case no response is received from the Company within 30

days of lodgement of transfer request, the lodger should immediately write to the

Company or its RTA with full details so that necessary action could be taken to

safeguard interest of the concerned against any possible loss / interception during

postal transit.

2. Dematerialisation requests duly completed in all respects are normally processed within

7 days from the date of their receipt at the Company or its RTA.

3. Equity shares of the Company are under compulsory demat trading by all investors.

Considering the advantages of scripless trading, shareholders are requested to consider

dematerialisation of their shareholding so as to avoid inconvenience in future.

4. The equity shares of the Company have been admitted with the National Security

Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL)

bearing ISIN No. INE481G01011.

Correspondence with the Company

Shareholders / Beneficial Owners are requested to quote their Folio Number / DP & Client

ID Numbers as the case may be, in all correspondence with the Company. All correspondence

regarding shares & debentures of the Company should be addressed to the Company or its

RTA.

Non-Resident Shareholders

Non-resident shareholders are requested to immediately notify:-

• Indian address for sending all communications, if not provided so far;

• Change in their residential status on return to India for permanent settlement;

• Particulars of their NRE Bank Account with a bank in India, if not furnished earlier.

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Others

1. In terms of the Regulations of NSDL and CDSL, the bank account details of Beneficial

Owners of shares in demat form will be printed on the dividend warrants as furnished

by the Depository Participants(DP). The Company will not entertain any request for

change of bank details printed on their dividend warrants. In case of any changes in

your bank details please inform your DP immediately.

2. Shareholders holding shares in physical form are requested to notify to the Company,

change in their address / pin code number and Bank Account details promptly by

written request under the signatures of sole / first joint holder. Beneficial Owners of

shares in demat form are requested to send their instructions regarding change of

name, change of address, bank details, nomination, power of attorney, etc. directly to

their DP as the same are maintained by the DPs.

3. To prevent fraudulent encashment of dividend warrants, shareholders are requested to

provide their bank account details (if not provided earlier) to the Company (if shares

held in physical form) or to DP (if shares held in demat form), as the case may be, for

printing of the same on their dividend warrants.

4. In case of loss / misplacement of shares, shareholders should immediately lodge a FIR

/ Complaint with the Police and inform the Company along with original or certified

copy of FIR / Acknowledged copy of Police complaint.

5. For expeditious transfer of shares, shareholders should fill in complete and correct

particulars in the transfer deed. Wherever applicable, registration number of Power of

Attorney should also be quoted in the transfer deed at the appropriate place.

6. Shareholders are requested to keep record of their specimen signature before lodgement

of shares with the Company to obviate possibility of difference in signature at a later

date.

7. Shareholders of the Company who have multiple accounts in identical name(s) or

holding more than one share certificate in the same name under different ledger folio(s)

are requested to apply for consolidation of such folio(s) and send the relevant share

certificates to the Company.

8. Section 109A of the Companies Act, 1956 extends nomination facility to individuals

holding shares in physical form in companies. Shareholders, in particular, those holding

shares in single name, may avail of the above facility by furnishing the particulars of

their nominations in the prescribed Nomination Form which can be obtained from the

Company or its RTA or download the same from the Company’s website.

9. Shareholders are requested to give us their valuable suggestions for improvement of

our investor services.

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Ministry of Corporate Affairs (MCA)

‘A’ Wing, Shastri Bhawan,

Rajendra Prasad Road,

New Delhi - 110 001

Tel.: (011) 23384660, 23384470,

23389403

Web: www.mca.gov.in

Stock Exchanges:

Bombay Stock Exchange Limited (BSE)

Phiroze Jeejeebhoy Towers,

Dalal Street,

Mumbai - 400 001

Tel.: (022) 22721233/34

Fax: (022) 22721919

Web: www.bseindia.com

Depositories:

National Securities Depository Limited

(NSDL)

Trade World, ‘A’ Wing, 4th & 5th Floors,

Kamala Mills Compound,

Lower Parel, Mumbai - 400 013

Tel.: (022) 2499 4200

Fax: (022) 24972993/24976351

Web: www.nsdl.co.in

Securities and Exchange Board of

India (SEBI)

Plot No.C4-A,‘G’ Block,

Bandra Kurla Complex,

Bandra (East), Mumbai - 400 051

Tel.: (022) 26449000/40459000

Fax: (022) 26449016-20

Web: www.sebi.gov.in

National Stock Exchange of India

Limited (NSE)

Exchange Plaza,

Plot No. C/1, ‘G’ Block,

Bandra Kurla Complex,

Bandra (East), Mumbai - 400 051

Tel.: (022) 26598100-8114

Fax: (022) 26598120

Web: www.nseindia.com

Central Depository Services (India)

Limited (CDSL)

Phiroze Jeejeebhoy Towers,

16th Floor, Dalal Street,

Mumbai - 400 001

Tel.: (022) 22723333

Fax: (022) 22723199/22722072

Web: www.cdslindia.com

10. Addresses of the redressal agencies for investors to lodge their grievances:

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AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of

UltraTech Cement Limited

We have examined the compliance of the conditions of Corporate Governance by UltraTech

Cement Limited for the year ended on March 31, 2008, as stipulated in Clause 49 of the

Listing Agreement of the said Company with the Stock Exchange.

The compliance of the condition of Corporate Governance is the responsibility of the

Management. Our examination was limited to procedures and implementations thereof, adopted

by the Company for ensuring the compliance of the conditions of Corporate Governance. It is

neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to

us, and the representations made by the Directors and the Management, we certify that the

Company has complied with the conditions of Corporate Governance as stipulated in the

above mentioned Listing Agreement.

We state that such compliance is neither an assurance as to the future viability of the Company

nor the efficiency or effectiveness with which the Management has conducted the affairs of

the Company.

For G. P. Kapadia & Co.

Chartered Accountants

Atul B. Desai

(Partner)

Membership No. 30850

Place: Mumbai

Date: 22nd April, 2008

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S H A R E H O L D E R I N F O R M A T I O NN O T I C E

SO C I A L R E P O R T

Girl child education Polio immunisation camp

Transcending Business

Sweep your gaze in large parts of India’s hinterland. Here you encounter conditions that cause

you pain and concern as well. It is here that the poorest of the poor live – in India’s villages.

A whopping 64% of India’s population is housed here. It is here that you find India’s poverty

and high points of distress.

As a Group we have been and continue to be extremely sensitive to societal needs. In our own

small way, we try to bring in some relief and make a difference to the lives of the weaker

sections of society who live close to our Units. We try to provide health care and raise life

expectancy, and reduce infant mortality. Through our endeavours in education, we lift literacy

rates. Through empowerment and training processes, we promote sustainable livelihood.

All of your Company’s social projects are carried out under the umbrella of the Aditya Birla

Centre for Community Initiatives and Rural Development. These are spearheaded by

Mrs. Rajashree Birla, your Director. For the year 2007-08 we have considerable progress as

indicated.

In Health Care

� At medical camps conducted, 40,844 villagers were examined and those afflicted were

treated for their ailments.

� In dental care camps, of the 464 patients seen, 59 underwent dental surgery.

� This year, 2,12,072 children were immunised against polio.

� At HIV / AIDS awareness programs conducted by us, we enlisted 7,072 participants.

� Our Family Planning awareness program benefited 637 people.

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Tailoring class for women Eye check up camp

� At eye camps conducted by us, 309 people were treated. Of this, 213 were provided with

spectacles for better sight.

� Rehabilitation camp for the physically challenged reached out to 274 beneficiaries.

� At the Awarpur Cement Works, “Mothers Health Month” was organised which benefited

554 women.

Education

� Books, school uniforms, furniture were provided to 5,779 school children.

� Adult Education Centres opened in association with District Adult Education Department

reached out to 1,073 persons.

� We supported 434 meritorious students and financial assistance was accorded to 4,776

students.

� Career guidance programs were conducted for 587 students.

Sustainable Livelihood

� At our Awarpur works, a 5-day “Rock Bee Honey Training Camp’ was organised in

collaboration with “Tribal Cooperative Marketing Federation of India Limited, New Delhi”

and 25 youngsters were trained in honey extraction and collection.

� Facilitated the ‘Krushi Rath’ scheme of the Government to impart knowledge of modern

farming and irrigation to 1,775 farmers.

� 1,771 people participated in various skill development and vocational training programs to

enhance employment prospects.

Women Self-Help Groups

� 248 women were trained on tailoring.

� 225 women participated at an ‘Awareness Development Camp’ held in association with

Central Board for Workers Education, Ministry of Labour & Employment, Government of

India, to promote self employment among poor women.

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� Many village women teamed up at training programs on sea tortoise protection.

� Self Help Groups have enabled the empowerment of women living in villages surrounding your

Company’s Units.

Social Welfare

� 33 tribal participants attended an “Adiwasi Awareness Camp” organised by Awarpur Cement

Works in association with the Central Board of Workers Education, Government of India,

covering topics like rights and facilities for the tribes.

� Refrigerators, Blankets, Stoves, Mixers, Floor mats and other cooking items were given to

an Old Age Home at Akkannapalli village.

Infrastructure

� In collaboration with the District Rural Development Department Agency, Chandrapur, we

have undertaken the construction of 38 houses for Kolam tribes.

� Kitchen sheds were constructed in 6 schools in Awarpur for distribution of mid-day meals

for children.

� Financial assistance was provided

– to BPL families for construction of sanitary blocks.

– for constructing and operating high schools by partnering with the Rural Development

Foundation.

– for laying of cement concrete roads in 4 villages benefiting 6,000 villagers.

� Provision of street lights for 5,600 beneficiaries. Laying of drinking water pipelines in

villages helped 21,951 villagers.

Our Board of Directors, our Management and all of our employees subscribe to the philosophy

of compassionate care. We believe and act on an ethos of generosity and compassion,

characterised by a willingness to build a society that works for everyone.

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S H A R E H O L D E R I N F O R M A T I O NN O T I C E

We have always believed in being caring corporate citizens wherever we operate. Within our

philosophy the concept of caring for the planet is embedded. We are committed to sustainable

development. We believe that economic growth and environmental protection are inextricably

linked.

Your Company is a voluntary member of the Cement Sustainability Initiative (CSI) established

under the banner of the World Business Council for Sustainable Development (WBCSD). The

CSI accords priority to a series of programmes with a view to preserving mineral resources

through the use of alternative fuels and materials; minimising greenhouse gas emissions

through technology upgradation; and interventions to secure employee health and safety at the

work place.

Accordingly your Company is in the process of concluding a baseline report for the year 2007,

prepared in accordance with CSI reporting standards by Ernst & Young, the well reputed

Accounting firm. This Report will also serve to identify priorities for future improvement.

Greenery around your Company’s Unit

EN V I R O N M E N T R E P O R T

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Your Company’s commitment to sustainable development is demonstrated in two Clean

Development Mechanism (CDM) Projects registered with the United Nations Framework

Convention for Climate Change (UNFCCC). Your Company’s Plant at Tadipatri in Andhra

Pradesh has already been awarded Certified Emission Reduction (CERs) for its Project on the

optimum utilisation of Clinker for the production of Pozzolona Cement. Their Waste Heat

Recovery Project has also been registered with the UNFCCC and will also be eligible for carbon

credits.

Your Company is also a member of the Cement Task Force of the Asia Pacific Partnership on

Clean Development & Climate, an initiative spearheaded by Australia, China, Japan, India,

South Korea, USA and Canada. The objective of this initiative is to develop, deploy and

transfer emerging and existing clean technology. This will enable support of rapidly expanding

energy needs, while containing greenhouse gas emissions. Your Company has already submitted

Projects on Waste Heat Recovery and the use of Hazardous Wastes in Cement Kilns for

collaboration with other cement companies in the region.

Your Company’s Units are certified in compliance with ISO 14001 Environment Management

System and OHSAS 18001.

Your Company has validated it’s energy efficiency based on data from Global Benchmarking

Survey conducted by Whitehopleman, an independent UK based Consulting firm.

We have opted for rain-water harvesting in a big way. Our measures include, collecting rain-

water in the lower benches of some of our captive limestone mines, water recharging projects,

creation of water bodies in the catchment areas for rain-water storage. This way we also

provide water to communities that live in proximity to our Units.

In sum, in the words of Theodore Roosevelt, “To waste, to destroy, our natural resources, to

skin and exhaust the land instead of using it so as to increase its usefulness, will result in

undermining in the days of our children the very prosperity which we ought by right to hand

down to them amplified and developed”. We bear this in mind. Always.

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DI R E C T O R S ’ R E P O R T T O T H E S H A R E H O L D E R S

Dear Shareholders,

Your Directors present the Eighth Annual Report together with the Audited Accounts of your

Company for the year ended 31st March, 2008:

FINANCIAL RESULTS

(Rs. in crores)

2007-08 2006-07

Gross Turnover 6,286.24 5,484.35

Gross Profit 1,744.24 1,392.44

Less: Depreciation 237.23 226.25

Profit Before Tax 1,507.01 1,166.19

Tax Expenses 499.40 383.91

Profit After Tax 1,007.61 782.28

Add: Balance brought forward from Previous Year 775.16 180.57

Surplus available for Appropriation 1,782.77 962.85

Appropriation

Debenture Redemption Reserve (8.17) 30.92

General Reserve 120.00 100.00

Dividend 62.24 49.79

Corporate tax on Dividend 10.58 6.98

Balance transferred to Balance Sheet 1,598.12 775.16

Total 1,782.77 962.85

REVIEW OF OPERATIONS AND OVERVIEW

During the year, your Company produced 15.07 MMT of cement (14.64 MMT). Effective

capacity utilisation remained flat at 101%. Exports were curtailed to cater to the growing

domestic demand. This supported domestic volume growth of 7%. Variable cost increased by

over 8% mainly on account of escalation in the cost of raw materials, including imported coal

and mounting freight charges.

Continuous de-bottlenecking efforts across your Company’s Units resulted in a capacity increase

of 1.2 MMT.

Your Company’s turnover at Rs. 6,286.24 crores was up by 15% compared to Rs. 5,484.35

crores achieved in the previous year. Profit after tax stood at Rs.1,007.61 crores (Rs.782.28

crores) after providing for depreciation - Rs. 237.23 crores (Rs. 226.25 crores) and tax -

Rs. 499.40 crores (Rs. 383.91 crores).

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DIVIDEND

Your Directors recommended a dividend of Rs. 5/- per equity share of Rs. 10/- each for the

year ended 31st March, 2008. The dividend distribution would result in a cash outgo of

Rs. 72.82 crores (including tax on dividend of Rs. 10.58 crores) compared to Rs. 56.77 crores

(including tax on dividend of Rs. 6.98 crores) paid for the year 2006-07.

CAPITAL EXPENDITURE

Your Company initiated various expansion and de-bottlenecking programs to maintain growth

and improve efficiencies.

The Clinkerisation (pyrosection) unit at Andhra Pradesh Cement Works (APCW) was

commissioned during the fourth quarter of the financial year ended 31st March, 2008. The

balance work on capacity expansion at APCW is progressing and the split grinding Unit at

Ginigera in Karnataka is on track. The Unit will be operational in the first half of the current fiscal.

Upon commissioning of expanded capacity at APCW, your Company’s total capacity will be

23.1 MMT.

Trials have begun on the 1st Stream of the Thermal Power Plant (TPP) of 23MW at Gujarat

Cement Works (GCW) in Gujarat. All four Streams aggregating to 92MW will be fully

operational by H1FY09. In addition, TPP’s aggregating to 135MWs are being set up at

Awarpur Cement Works (ACW) in Maharashtra, APCW and Hirmi Cement Works (HCW) in

Chhattisgarh. These power plants, except ACW, will be commissioned in a phased manner in

FY09.

In FY08 15 Ready Mix Concrete (RMC) plants have been set up across the country.

EMPLOYEE STOCK OPTION SCHEME

The ESOS Compensation Committee of the Board of your Company formulated the Employee

Stock Option Scheme – 2006 (“ESOS-2006”) at its meeting held on 23rd August, 2007.

The ESOS Compensation Committee granted 1,68,070 stock options to eligible employees of

your Company. The disclosure, as required under Clause 12 of Securities and Exchange Board

of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,

1999 is set out in Annexure I to this Report.

AWARDS

Your Company was the recipient of the following awards:

• The Top Exporter Award from CAPEXIL for the eleventh consecutive year.

• State level award for excellence in energy conservation and management for 2006 for

ACW.

• The CII National award for excellence in Energy Management 2007 – ‘Energy Efficient

Unit’ and ‘Innovative Project’ for APCW.

• Mines safety award – First prize in ‘Method of Working’ and Second prize in ‘Drilling and

Blasting’ for APCW.

• National Safety Award for outstanding performance in industrial safety for HCW.

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RESEARCH AND DEVELOPMENT

Your Company continued its efforts towards maximising waste utilisation, search for alternative

sources of fuel and chemical and mineral evaluation of captive limestone mines. These measures

will aid in conserving natural resources.

HUMAN RESOURCES

At your Company, employees continue to be the key driving force of the organisation and

remain a strong source of our competitive advantage. We believe in aligning business priorities

with the aspirations of employees leading to the development of an empowered and responsive

human capital. We strive to create a work environment which encourages innovation and

creativity.

Through our strong Employer Brand, we were able to attract quality people with required

skills who have become part of our competent and committed workforce. Appropriate measures

are being planned by your Company to ensure talent retention and employee engagement.

Your Company continued to support learning and development initiatives to enhance the

functional as well as the behavioural competencies of our people. At ‘Gyanodaya’ - The

Aditya Birla Institute of Management Learning, executives of your Company were enlisted for

various high quality learning interventions. These programs supplemented with a combination

of developmental assignments, classroom and web based training, has enabled our people to

continuously learn, develop and grow.

Our performance management system is primarily based on competencies and values. We

closely monitor growth and development of top talent in your Company, to align personal

aspirations with the organisation purpose.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices.

During the year under review, your Company complied with the provisions of Clause 49 of the

Listing Agreement with the stock exchanges which relates to corporate governance.

A separate section on corporate governance together with a certificate from your Company’s

Statutory Auditors forms a part of this Annual Report.

SUBSIDIARY COMPANIES

In terms of Section 212 of the Companies Act, 1956, (“the Act”) the Accounts together with

the Report of Directors and the Auditor’s Report of your Company’s subsidiaries viz. Dakshin

Cements Limited (Dakshin) and UltraTech Ceylinco (Pvt) Limited (UltraTech Ceylinco) forms

a part of this Report.

In line with the provisions of the Accounting Standards prescribed by the Institute of Chartered

Accountants of India and the provisions of the Listing Agreement with the stock exchanges,

the duly audited Consolidated Financial Statement has been prepared after considering the

financial statements of your Company’s subsidiaries viz. Dakshin and UltraTech Ceylinco.

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FINANCE

CRISIL has upgraded your Company’s rating from “AA+/Stable” to “AAA/Stable”. Your

Company is also one of the few companies to have its bank loan facilities rated. CRISIL has

assigned your Company’s bank loan facility, the highest rating of “AAA/Stable/P1+”. Such a

rating allows your Company to borrow on competitive terms.

Your Company has raised Rs.90 crores by way of fully hedged Buyers Credit for a tenure of

three years. These funds have been used for various ongoing capex.

Your Company has repaid debentures and loans amounting to Rs. 285 crores.

Your Company has not invited or renewed deposits from the public / shareholders in accordance

with Section 58A of the Act.

ENERGY, TECHONOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption and foreign exchange earnings

and outgo, required to be disclosed pursuant to section 217(1) (e) of the Act, read with the

Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is

given in Annexure II and forms part of this Report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 217(2A) of the Act read with the Companies

(Particulars of Employees) Rules, 1975, the names and other particulars of employees are to

be set out in the Directors’ Report, as an addendum thereto. However, as per the provisions of

Section 219(1)(b)(iv) of the Act, the Report and Accounts as therein set out, are being sent to

all Members of your Company excluding the aforesaid information about the employees. Any

Member, who is interested in obtaining such particulars about employees, may write to the

Company Secretary at the Registered Office of your Company.

DIRECTOR’S RESPONSIBILITY STATEMENT

The Audited Accounts for the year under review are in conformity with the requirements of

the Act and the Accounting Standards. The financial statements reflect fairly the form and

substances of transactions carried out during the year under review and reasonably present

your Company’s financial condition and results of operations.

Your 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, if any;

(ii) the accounting policies selected have been applied consistently and judgments and estimates

are made that are reasonable and prudent so as to give a true and fair view of the state of

affairs of your Company as at 31st March, 2008 and of the profit of your Company for the

year ended on that date;

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(iii) proper and sufficient care has been taken for the maintenance of adequate accounting

records in accordance with the provisions of the Act for safeguarding the assets of your

Company and for preventing and detecting frauds and other irregularities;

(iv) the Annual Accounts of your Company have been prepared on a going concern basis.

DIRECTORS

Mr. S. Rajgopal, Nominee Director resigned from the Board of your Company with effect

from 20th October, 2007 consequent to the withdrawal of his nomination by the Administrator

of the Specified Undertaking of the Unit Trust of India. However, considering his vast knowledge

and experience, the Board inducted Mr. Rajgopal as an Additional Director with effect from

that date. Mr. Rajgopal holds office upto the conclusion of the ensuing Annual General

Meeting. Notice pursuant to Section 257 of the Act has been received from a Member of your

Company proposing Mr. Rajgopal’s appointment as Director.

Mrs. Rajashree Birla, Mr. V. T. Moorthy and Mr. R. C. Bhargava retire from office by rotation

and being eligible, offer themselves for re-appointment.

A brief resume of the Directors being appointed / re-appointed are attached to the Notice of

the ensuing Annual General Meeting.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G. P. Kapadia & Co.,

Chartered Accountants, Mumbai were appointed Joint Statutory Auditors of your Company

from the conclusion of the previous Annual General Meeting until the conclusion of the

ensuing Annual General Meeting. M/s. Deloitte Haskins & Sells, Chartered Accountants,

Mumbai and M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai being eligible, offer

themselves for re-appointment as auditors of your Company.

The Board proposes the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants,

Mumbai and M/s. G. P. Kapadia & Co., Chartered Accountants, Mumbai as Joint Statutory

Auditors of your Company based on the recommendation of the Audit Committee, to hold

office from the conclusion of the ensuing Annual General Meeting until the conclusion of the

next Annual General Meeting.

The Board also proposes the re-appointment of M/s. Haribhakti & Co., Chartered Accountants,

Mumbai as the Branch Auditors of your Company’s Unit’s at Jafrabad and Magdalla in

Gujarat and Ratnagiri in Maharashtra, based on the recommendation of the Audit Committee,

to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion

of the next Annual General Meeting. In terms of the provisions of the Act the Board also seeks

your approval for the appointment of Branch Auditors in consultation with your Company’s

Statutory Auditors for any other Branch / Unit / Division of your Company, which may be

opened / acquired / installed in future in India or abroad.

Resolutions seeking your approval on these items are included in the Notice convening the

Annual General Meeting.

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The observation made in the Auditor’s Report are self-explanatory and therefore, do not call

for any further comments under Section 217(3) of the Act.

COST AUDITORS

Pursuant to the provisions of Section 233B of the Act, your Directors have appointed

M/s. N. I. Mehta & Co., Cost Accountants, Mumbai as the Cost Auditor to conduct the cost

audit of your Company for the financial year ending 31st March, 2009, subject to the approval

of the Central Government.

APPRECIATION

Your Directors place on record their appreciation of the contribution made by employees at all

levels. Your Company’s growth was made possible by employee’s support, co-operation,

commitment, solidarity and hard work.

Your Directors wish to take this opportunity to express their deep sense of gratitude to the

Central and State Governments, banks, financial institutions, shareholders and business

associates for their co-operation and support and look forward to their continued support in

future.

For and on behalf of the Board

Mumbai Kumar Mangalam Birla

22nd April, 2008 Chairman

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A N N E X U R E IDisclosure pursuant to Clause 12 of Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines, 1999

Particulars ESOS – 2006

Tranche I [23rd August, 2007] Tranche II [25th January, 2008]

a. No. of Options granted 99,010 69,060

b. The Pricing formula The exercise price is the average price The exercise price is the averageof the equity shares of the Company price of the equity shares of thein the immediate preceding seven days Company in the immediate precedingperiod (at a stock exchange as seven days period (at a stock exchangedetermined by the ESOS Compensation as determined by the ESOSCommittee) on the date prior to the Compensation Committee) on thedate on which the ESOS Compensation date prior to the date on which theCommittee finalised the specific number ESOS Compensation Committeeof Options to be granted to the finalised the specific number ofemployees, discounted by 30%. Options to be granted to the

employees, discounted by 2%.

Exercise Price : Rs. 606/- per option Exercise Price : Rs. 794/- per option

c. Options vested Nil Nil

d. Options exercised Nil Nil

e. The total number of shares NA NAarising as a result of exerciseof the options

f. Options lapsed Nil Nil

g. Variation of terms of options Nil Nil

h. Money realised by exercise NA NAof options

i. Total number of optionsin force:

– Vested Nil Nil

– Unvested 99,010 69,060

j. Employee wise details ofoptions granted to:

i. Senior Managerial PersonnelMr. S. Misra, 32,640 51,650Managing Director

ii. Any other employee who Nil Nilreceives a grant in any oneyear of option amounting to5% or more of optiongranted during that year

iii. Identified employees who Nil Nilwere granted option, duringany one year, equal to orexceeding 1% of the issuedcapital (excluding outstandingwarrants and conversions)of the company at the timeof grant

k. Diluted Earnings Per Share(EPS) pursuant to issue of shareson exercise of option calculated NAin accordance with AccountingStandard (AS) 20‘Earning Per Share’

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l. Where the company has The Company has calculated the employee compensation cost using thecalculated the employees intrinsic value method of accounting to account for options issued under thecompensation cost using the ESOS – 2006.intrinsic value of thestock options:

i. the difference between theemployee compensation costso computed and theemployee compensation costthat shall be recognised if ithad used the fair value ofthe options shall be disclosed.

ii. The impact of this difference:– on profits

– EPS

m. Weighted average exerciseprices of options:

i. equal to market price of the —stock

ii. less than market price of the Rs. 683/-stock

Weighted average fairvalues of optionsi. equal to market price of the

stock —ii. less than the market price

of the stock. Rs. 462/-

n. A description of the methodused during the year to estimate Black – Scholes Methodthe fair values of options.

Significant assumptions usedduring the year to estimatethe fair values of optionsincluding the followingweighted average information:

i. Risk – free interest rate 8%

ii. Expected life Period up to vesting plus the average of the exercise period corresponding toeach vesting.

iii. Expected volatility Implied volatility of the Company’s stock prices on NSE based on the pricedata of last one year up to the date of grant

Tranche I = 49%

Tranche II = 52%

iv. Expected dividend Adjustment of the closing price of the Company’s share on the NSE for theexpected dividend yield over the expected life of the options (dividend for FY2006-07 and a growth factor have been considered, which are then discountedand an average present value of dividend ascertained)

v. The price of the underlying Rs. 829/-share in the market at thetime of option grant.

Employee compensation cost:

- intrinsic value based Rs. 0.77 crores

- fair value based Rs. 1.84 crores

Difference Rs. 1.07 crores

Reported Adjusted

Net Profit Rs. 1,007.61 crores Rs. 1,006.54 crores

Basic: Rs. 80.94 Rs. 80.86

Diluted: Rs. 80.91 Rs. 80.83

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A N N E X U R E I IDISCLOSURES OF PARTICULARS WITH RESPECT TO CONSERVATION OF

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

AND OUTGO AS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF

PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

A. CONSERVATION OF ENERGY:

a) Energy Conservation Measures taken

— Installation of Variable Frequency Drives

— Use of fuel efficient and higher capacity mining equipments

— Optimisation of Grinding Media size distribution in mills

— Close circuiting of cement mills

— Cooler Gas waste heat recovery system installed

b) Additional investments and proposals if any, being implemented for reduction

of consumption of energy

— Close circuiting of cement mills

— Installation of Roller Press

— Installation of Vertical roller mill for fuel grinding

— Installation of Dry Fly Ash handling and feeding system

— Modification of clinker characteristic to improve clinker grindability

— Increased Fly Ash absorption and Blended Cement production.

c) Impact of measures at (a) and (b) above for reduction of energy consumption

and consequent impact on the cost of production of goods

The proposals stated above shall result in reduction in power consumption and

recovery of waste heat to use for productive purpose thereby reduction in cost.

d) Total energy consumption and energy consumption per unit of production

As per FORM-A of this Annexure

B. TECHNOLOGY ABSORPTION:

Efforts made in technology absorption as per FORM-B of this Annexure.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on foreign exchange earnings and outgo is contained in Schedule 22(6)

and (5) of the Accounts.

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FORM - A(See Rule 2)

Form for disclosure of particulars with respect to conservation of energy

A. POWER AND FUEL CONSUMPTIONCurrent Year Previous Year

2007-08 2006-071. Electricity

(a) PurchasedUnits 000 Kwh 923400 847582Total Amount Rs. crores 432.69 405.70Rate/unit Rs. 4.69 4.79

(b) Own generation*(i) Through Diesel generator

Units 000 Kwh 176961 188908Units (Kwh) per Ltr. of fuel oil 3.96 4.03Cost/Unit Rs. 5.62 4.91

(ii) Through Steam Turbine/GeneratorUnits 000 Kwh 316750 309571Units(Kwh) per kg of coal 0.70 0.73Cost/Unit Rs. 1.73 1.40

(iii) Through Steam Turbine/GeneratorUnits 000 Kwh 5527 64249Units(Kwh) per kg of Naphtha 3.80 4.73Cost/Unit Rs. 15.05 7.40

(iv) Waste Heat Recovery systemUnits 000 Kwh 19064 477.05Cost/Unit Rs. 0.35 0.25

2. Coal (Slack,Steam & ROM including lighting Coal)For Co-generation of Steam & Power Tonnes 454839 425246Total Cost Rs. crores 46.95 35.23Average rate Rs./Tonnes 1032 828For Process in Cement PlantsQuantity Tonnes 2157186 1991666Total Cost Rs. crores 650.76 543.99Average rate Rs./Tonnes 3017 2731

3. Furnace Oil (Including Naphtha)Quantity K. Ltrs 47020 66184Total amount Rs. crores 86.70 122.70Average rate Rs./K ltr 18438 18539

4. Light Diesel Oil (LDO)Quantity K. Ltrs 1332 1431Total amount Rs. crores 3.70 4.24Average rate Rs./K ltr 27765 29626

5. High Speed Diesel Oil (HSD)Quantity K. Ltrs 358 265Total amount Rs. crores 1.20 0.95Average rate Rs./K ltr 33531 35661

B. CONSUMPTION PER UNIT OF PRODUCTIONElectricity # Kwh /T of Cement 84.69 86.93Furnace oil $ Ltr /T of Clinker 0.11 0.10Coal Kcal /Kg of Clinker 713 707

* Excludes Auxillary & Wheeling# Excludes non production power consumption$ Furnace oil used for kiln light up

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FORM - B(See Rule 2)

Form for disclosure of particulars with respect to absorption

RESEARCH AND DEVELOPMENT (R&D)

1. Specific areas in which R&D carried out by the Company

Evaluation of use of :

• Mineralisers

• Performance improver to enhance quality

• Higher % of Fly Ash Content in PPC without affecting quality

• CFD technique for optimising Plant operations

2. Benefits derived as a result of the above R&D

The above initiatives have resulted in increase in production, energy efficiency, resources conservationand reduction in related cost of production.

3. Future plan of action

• Commercialisation of alternative fuels

• Optimisation of chemistry of raw mix and fuel mix to improve mines life

• Installation of waste heat recovery system for power generation

(Rs. in crores)

4. Expenditure on R&D 2007-08 2006-07

a. Capital expenditure 0.53 1.12

b. Recurring expenditure 8.82 4.90

c. Total expenditure 9.36 6.02

d. Total R & D expenditure as % of turnover 0.17 0.12

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts, in brief, made towards technology absorption, adaptation and innovation:

• Participation in national and international conferences

• Imparting training to personnel by foreign technicians in various manufacturing techniques byforeign and Indian experts and technology suppliers

2. Benefits derived as a result of the above efforts:

• Improvement in existing processes and reducing consumption of scarce raw materials and fuel

• Cost reduction

3. Information regarding technology imported during the last 5 years : Nil

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A U D I T O R S ’ R E P O R T

TO THE MEMBERS OF ULTRATECH CEMENT LIMITED

1. We have audited the attached Balance Sheet of UltraTech Cement Limited as at March

31, 2008, the Profit and Loss Account and the Cash Flow Statement of the Company for

the year ended on that date, both annexed thereto. These financial statements are the

responsibility of the Company’s Management. Our responsibility is to express an opinion

on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in

India. Those Standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatements. An

audit includes examining, on a test basis, evidence supporting the amounts and disclosures

in the financial statements. An audit also includes assessing the accounting principles used

and significant estimates made by the Management, as well as evaluating the overall

financial statement presentation. We believe that our audit provides a reasonable basis for

our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the

Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in

the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above:

(a) we have obtained all the information and explanations, which to the best of our

knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the

Company so far as it appears from our examination of those books and proper returns

adequate for the purpose of our audit have been received from the branches not visited

by us;

(c) the reports of the auditors of the branches have been submitted to us and the same have

been considered by us in preparing this report;

(d) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt

with by this report are in agreement with the books of account and with the audited

returns received from the branches;

(e) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow

Statement dealt with by this report are in compliance with the Accounting Standards

referred to in Section 211(3C) of the Companies Act, 1956;

(f) in our opinion and to the best of our information and according to the explanations

given to us, the said accounts give the information required by the Companies Act,

1956 in the manner so required and give a true and fair view in conformity with the

accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at

March 31, 2008;

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(ii) in the case of the Profit and Loss Account, of the profit of the Company for the

year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the

year ended on that date.

5. On the basis of the written representations from the directors as on March 31, 2008 taken

on record by the Board of Directors, we report that none of the directors is disqualified as

on March 31, 2008 from being appointed as a director under Section 274 (1) (g) of the

Companies Act, 1956.

For DELOITTE HASKINS & SELLS For G. P. KAPADIA & CO.

Chartered Accountants Chartered Accountants

B. P. Shroff Atul B. Desai

Partner Partner

(Membership No.34382) (Membership No.30850)

Mumbai, April 22, 2008

A U D I T O R S ’ R E P O R T

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A N N E X U R E T O T H E A U D I T O R S ’ R E P O R T

(Referred to in paragraph 3 of our report of even date)

(i) The nature of the Company’s business / activities during the year was such that clauses

(x), (xii), (xiii), (xiv), (xviii) and (xx) of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including

quantitative details and situation of fixed assets.

(b) Some of the fixed assets were physically verified during the year by the Management

in accordance with a programme of verification, which in our opinion provides for

physical verification of all the fixed assets at reasonable intervals. According to the

information and explanations given to us, no material discrepancies were noticed on

such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a

substantial part of the fixed assets of the Company and such disposal has, in our

opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories:

(a) As explained to us, inventories were physically verified during the year by the

Management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the

procedures of physical verification of inventories followed by the Management were

reasonable and adequate in relation to the size of the Company and the nature of its

business.

(c) In our opinion and according to the information and explanations given to us, the

Company has maintained proper records of its inventories and no material

discrepancies were noticed on physical verification.

(iv) According to the information and explanations given to us, the Company has not granted

or taken secured or unsecured loans to / from companies, firms or other parties covered

in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly

clauses (iii) (b) to (d), (f) and (g) of CARO are not applicable.

(v) In our opinion and according to the information and explanations given to us, there are

adequate internal control systems commensurate with the size of the Company and the

nature of its business for the purchase of inventory and fixed assets and for the sale of

goods and services. We have not observed any major weaknesses in such internal

controls.

(vi) To the best of our knowledge and belief and according to the information and explanations

given to us, there were no contracts or arrangements particulars of which that needed to

be entered in the Register maintained under Section 301 of the Companies Act, 1956.

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CMYK

A N N E X U R E T O T H E A U D I T O R S ’ R E P O R T

(vii) In our opinion and according to the information and explanations given to us, the

Company has not accepted deposits in terms of the provisions of Sections 58A and

58AA or any other relevant provisions of the Companies Act, 1956.

(viii) In our opinion, the Company has an adequate internal audit system commensurate with

the size and the nature of its business.

(ix) We have broadly reviewed the books of account and records maintained by the Company

relating to the manufacture of cement, pursuant to the order made by the Central

Government for the maintenance of cost records under Section 209(1)(d) of the Companies

Act, 1956 and are of the opinion that prima facie the prescribed accounts and records

have been made and maintained. We have, however, not made a detailed examination of

the records with a view to determining whether they are accurate or complete.

(x) In respect of Statutory dues:

(a) According to the information and explanations given to us, the Company has generally

been regular in depositing undisputed statutory dues, including Provident Fund,

Investor Education and Protection Fund, Employees’ State Insurance, Income Tax,

Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other

material statutory dues with the appropriate authorities during the year.

(b) According to the information and explanations given to us, no undisputed amounts

payable in respect of the aforesaid dues were outstanding as at March 31, 2008 for a

period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, details of disputed Sales

Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess

which have not been deposited as on March 31, 2008 on account of any dispute are

given below:

Name of statute Nature of the dues Amount Period to which Forum where dispute(Rs. in Crores) the amount relates is pending

(Assessment Years)

Income Tax Act Income Tax 0.09 2005-2006 Assessing Officers

Value Added Value Added 18.25 2000-2005 Supreme CourtTax Act Tax and penalty 54.79 2005-2006, High Court

2007-2008

Sales Tax Act Sales Tax and 6.90 1997-1998, High Courtinterest 2000-2001,

2005-200615.26 1985-1992, Tribunal (s)

1993-1994,1995-2006

4.22 1993-2007 Appellate Authorities1.33 2005-2007 Assessing Officers

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A N N E X U R E T O T H E A U D I T O R S ’ R E P O R T

Central Excise Excise Duty, 3.79 1998-1999 High CourtAct penalty and 13.31 1995-2007 Tribunal (s)

interest 1.91 1994-1996, Appellate Authorities2001-2004,2005-2008

2.43 1996-1997, Assessing Officers1998-1999,2003-2005,2006-2008

Service Tax Service Tax 0.85 2004-2006 Tribunal (s)

Act 2.97 2004-2007 Appellate Authorities

0.01 2005-2007 Assessing Officers

Customs Act Custom Duty and 0.11 2001-2002 Supreme Court

penalty

(xi) In our opinion and according to the information and explanations given to us, the

Company has not defaulted in the repayment of dues to financial institutions, banks and

debenture holders.

(xii) In our opinion and according to the information and explanations given to us, the

Company has not given guarantees for loans taken by others from a bank or financial

institution.

(xiii) To the best of our knowledge and belief and according to the information and explanations

given to us, in our opinion, term loans availed by the Company were, prima facie,

applied by the Company during the year for the purposes for which the loans were

obtained, other than temporary deployment pending application.

(xiv) According to the information and explanations given to us, and on an overall examination

of the Balance Sheet of the Company, funds raised on short term basis have, prima

facie, not been used during the year for long term investment.

(xv) According to the information and explanations given to us and the records examined by

us, security / charges have been created in respect of the debentures issued.

(xvi) To the best of our knowledge and belief and according to the information and explanations

given to us, no fraud on or by the Company was noticed or reported during the year.

For DELOITTE HASKINS & SELLS For G.. P. KAPADIA & CO.

Chartered Accountants Chartered Accountants

B. P. Shroff Atul B. Desai

Partner Partner

(Membership No.34382) (Membership No.30850)

Mumbai, April 22, 2008

Name of statute Nature of the dues Amount Period to which Forum where dispute(Rs. in Crores) the amount relates is pending

(Assessment Years)

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Rs. in CroresAs at

Schedules March 31, 2007SOURCES OF FUNDS

Shareholders’ Funds

Share Capital 1A 124.49 124.49

Employees Stock Options Outstanding 1B 0.77 -

Reserves and Surplus 2 2,571.73 1,639.29

2,696.99 1,763.78Loan Funds

Secured Loans 3 982.66 1,151.25

Unsecured Loans 4 757.84 427.38

1,740.50 1,578.63Deferred Tax Liabilities (net) 542.35 560.26

TOTAL 4,979.84 3,902.67

APPLICATION OF FUNDS

Fixed Assets

Gross Block 5 4,972.60 4,784.70

Less: Depreciation 2,472.14 2,267.42

Net Block 2,500.46 2,517.28

Capital Work-in-Progress 2,283.15 696.95

4,783.61 3,214.23Investments 6 170.90 483.45

Current Assets, Loans and Advances

Inventories 7 609.76 433.58

Sundry Debtors 8 216.61 183.50

Cash and Bank Balances 9 100.69 89.59

Loans and Advances 10 376.83 253.50

1,303.89 960.17

Less:

Current Liabilities and Provisions

Current Liabilities 11 1,153.01 736.71

Provisions 12 125.55 18.47

1,278.56 755.18

Net Current Assets 25.33 204.99

TOTAL 4,979.84 3,902.67

Accounting Policies and Notes on Accounts 21 & 22

B A L A N C E S H E E T A S A T M A R C H 3 1 , 2 0 0 8

In terms of our report attached. KUMAR MANGALAM BIRLAChairman

For DELOITTE HASKINS & SELLS For G. P. KAPADIA & CO. S. MISRA R. C. BHARGAVAChartered Accountants Chartered Accountants Managing Director G. M. DAVE

Y. M. DEOSTHALEEN. J. JHAVERI

B. P. SHROFF ATUL B. DESAI K. C. BIRLA DR. S. MISRAPartner Partner Sr. Executive President & CFO V. T. MOORTHY

S. RAJGOPALD. D. RATHI

S. K. CHATTERJEE DirectorsMumbai, April 22, 2008 Company Secretary

69

CMYK

Rs. in CroresPrevious

Schedules YearINCOMEGross Sales 6,286.24 5,484.04Less: Excise Duty 777.02 573.52

Net Sales 5,509.22 4,910.52Interest & Dividend Income 13 37.47 29.82Other Income 14 62.38 31.64Increase / (Decrease) in Stocks 15 26.63 (32.54)

5,635.70 4,939.44

EXPENDITURERaw Materials Consumed 16 536.77 397.23Manufacturing Expenses 17 1,824.91 1,649.76Purchase of Finished Products 13.68 182.43Payments to and Provisions for Employees 18 171.55 117.22Selling, Distribution, Administration andOther Expenses 19 1,282.25 1,118.05Interest 20 75.67 86.83Depreciation and Obsolescence 237.23 226.25

4,142.06 3,777.77Less: Self Consumption of Cement {Net of Excise DutyRs. 5.13 Crores. (Previous Year Rs. 1.14 Crores)} (13.37) (4.52)

4,128.69 3,773.25

Profit Before Tax Expenses 1,507.01 1,166.19Income Tax Expenses

Provision for Current Tax {including provision for Wealth TaxRs. 0.18 Crore (Previous year Rs. 0.11 Crore) and Interest of 510.24 396.00Rs. 4.25 Crores (Previous Year Rs. 0.62 Crore)}Deferred Tax (16.71) (16.70)Provision for Fringe Benefit Tax 5.87 4.61

Profit After Tax 1,007.61 782.28Balance brought forward from Previous Year 775.16 180.57

Profit Available for Appropriation 1,782.77 962.85

AppropriationsInterim Dividend paid - 49.79Proposed Dividend 62.24 -Corporate Dividend Tax 10.58 6.98Debenture Redemption Reserve (8.17) 30.92General Reserve 120.00 100.00Balance carried to Balance Sheet 1,598.12 775.16

1,782.77 962.85

Basic Earnings Per Equity Share (in Rs.) {See Note B 19(A)} 80.94 62.84Diluted Earnings Per Equity Share (in Rs.) {See Note B 19(B)} 80.91 62.84Accounting Policies and Notes on Accounts 21 & 22

P R O F I T A N D L O S S A C C O U N T F O R T H E Y E A R E N D E D M A R C H 3 1 , 2 0 0 8

In terms of our report attached. KUMAR MANGALAM BIRLAChairman

For DELOITTE HASKINS & SELLS For G. P. KAPADIA & CO. S. MISRA R. C. BHARGAVAChartered Accountants Chartered Accountants Managing Director G. M. DAVE

Y. M. DEOSTHALEEN. J. JHAVERI

B. P. SHROFF ATUL B. DESAI K. C. BIRLA DR. S. MISRAPartner Partner Sr. Executive President & CFO V. T. MOORTHY

S. RAJGOPALD. D. RATHI

S. K. CHATTERJEE DirectorsMumbai, April 22, 2008 Company Secretary

70

CMYK

Rs. in CroresA Cash Flow from Operating Activities: March 31, 2008 March 31, 2007

Profit Before tax 1,507.01 1,166.19Adjustments for:Depreciation and Obsolescence 237.23 226.25Employees Compensation Expenses under ESOS 0.77 -Bad Debts Written-off 1.79 0.76Provision for Retirement Benefits 7.40 4.72Provision for Mines Restoration 1.87 1.64Interest & Dividend Income (37.47) (29.82)Interest Expense 75.67 86.83Unrealised Foreign Exchange (Gain)/Loss (8.97) (2.73)(Profit)/Loss on Sale of Fixed Assets 1.18 0.05(Profit)/Loss on Sale of Investment (1.28) (0.26)

Operating Profit Before Working Capital Changes 1,785.20 1,453.63Adjustments for:(Increase)/decrease in Inventories (176.18) (54.01)(Increase)/decrease in Sundry Debtors (34.90) (11.71)(Increase)/decrease in Loans and Advances (134.73) (79.85)Increase/(decrease) in Trade Payables and other Liabilities 416.14 222.27

Cash Generated from Operations 1,855.53 1,530.33Taxes paid (480.27) (417.24)

Net Cash from Operating Activities (A) 1,375.26 1,113.09

B Cash Flow from Investing Activities:Purchase of Fixed Assets (1,798.89) (764.88)Sale of Fixed Assets 5.80 0.41(Increase) / decrease in Current Investments 312.34 (311.00)Profit on Sale of Investments 1.28 0.26Interest and Dividend Received 37.68 29.76

Net Cash used in Investing Activities (B) (1,441.79) (1,045.45)

C Cash Flow from Financing Activities:Repayment of Long Term Borrowings (285.00) (76.00)Proceeds from Long Term Borrowings 161.55 200.43Proceeds of Short Term Borrowings (Net) 290.11 6.76Interest paid (89.03) (89.21)Dividend Paid - (71.58)Corporate Dividend Tax - (10.04)

Net Cash Generated / (Used) in Financing Activities (C) 77.63 (39.64)

Net Increase in Cash and Cash Equivalents (A + B + C) 11.10 27.99Cash and Cash Equivalents at the Beginning of the Year 89.59 61.60Cash and Cash Equivalents at the End of the Year 100.69 89.59

Notes:1. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3

issued by the Institute of Chartered Accountants of India.2. Purchase of fixed assets includes movements of capital work-in-progress between the beginning and the end

of the year.3. Cash and cash equivalents represent cash and bank balances.4. Previous year’s figures regrouped / recasted wherever necessary.

CASH F LOW STATEMENT FOR THE YEAR ENDED MARCH 31 , 2008

In terms of our report attached. KUMAR MANGALAM BIRLAChairman

For DELOITTE HASKINS & SELLS For G. P. KAPADIA & CO. S. MISRA R. C. BHARGAVAChartered Accountants Chartered Accountants Managing Director G. M. DAVE

Y. M. DEOSTHALEEN. J. JHAVERI

B. P. SHROFF ATUL B. DESAI K. C. BIRLA DR. S. MISRAPartner Partner Sr. Executive President & CFO V. T. MOORTHY

S. RAJGOPALD. D. RATHI

S. K. CHATTERJEE DirectorsMumbai, April 22, 2008 Company Secretary

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CMYK

Rs. in CroresPrevious

SCHEDULE 1A YearSHARE CAPITALAuthorised130,000,000 Equity shares of Rs. 10 each 130.00 130.00

Issued, Subscribed and Paid -up 124.49 124.49124,485,879 Equity shares of Rs. 10 each fully paid-up. (Previous Year 124,485,879)

(a) 99,521,437 Equity shares of Rs.10 each issued as fully paid-upfor acquiring the Cement business pursuant to Scheme ofArrangement without payment being received in cash;

(b) 87,258 Equity shares of Rs. 10 each issued as fully paid-up toshareholders of erstwhile Narmada Cement Company Limited(NCCL) pursuant to a Scheme of Amalgamation withoutpayment being received in cash.(Previous Year 87,258);

(c) 60,211,890 shares are held by Grasim Industries Limited(Holding Company), (Previous Year 58,469,134) and 7,477,178shares are held by Samruddhi Swastik Trading & InvestmentLimited (Subsidiary Company of Grasim Industries Limited),{Previous Year 7,477,178}

124.49 124.49

S C H E D U L E S

SCHEDULE 2RESERVES & SURPLUS Rs. in Crores

Balance Additions Deduction/ Balanceas at during Adjustments as at31st the during 31st

March, 07 year the year March, 08

Capital Reserve 25.02 - - 25.02

Cash Subsidy Reserve 0.10 - - 0.10

Debenture Redemption Reserve 169.80 - (8.17) 161.63

General Reserve 669.21 120.00 (2.35)* 786.86

Surplus as per Profit and Loss Account 775.16 1,007.61 (184.65) 1,598.12

1,639.29 1,127.61 (195.17) 2,571.73

Previous Year 913.78 913.20 (187.69) 1,639.29

*Adjustment on account of transitional provision of AS 15 (Revised) (See Note B 16b).

SCHEDULE 1BEMPLOYEES STOCK OPTIONS OUTSTANDING

Employees Stock Options Outstanding 2.45 -

Less: Deferred Employees Compensation Expenses 1.68 -

0.77 -

Outstanding Employees Stock Options exercisable into 168,070 Equity Shares of Rs.10 each fully paid-up.(See Note B 18)

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SCHEDULE 4

UNSECURED LOANS

Short Term:

From Banks 170.19 -

Long Term:

From Banks 262.90 173.88

Sales Tax Deferment Loans 324.75 253.50

757.84 427.38

S C H E D U L E S

Rs. in Crores

Previous

YearSCHEDULE 3SECURED LOANSNon-Convertible Debentures (See Note B 4a) 759.32 943.40

Loans from Banks:

Cash Credits / Working Capital Borrowings from Banks Secured byHypothecation of Stocks and Book Debts of the Company 143.10 20.91

Term Loans (See Note B 4b) 80.24 186.94

982.66 1,151.25

SCHEDULE 5

FIXED ASSETS Rs. in Crores

Particulars Gross Block Depreciation Net Block

As at Additions Deductions/ As at As at For the Deductions/ Upto As at As at

01.04.07 Adjustments 31.03.08 01.04.07 yearAdjustments 31.03.08 31.03.08 31.03.07

Freehold Land 73.25 8.20 - 81.45 - - - - 81.45 73.25

Leasehold Land 20.29 0.59 - 20.88 5.57 0.59 - 6.16 14.72 14.72

Buildings 484.18 25.60 0.83 508.95 152.56 14.16 0.46 166.26 342.69 331.62

Railway Sidings 159.66 - - 159.66 67.40 7.48 - 74.88 84.78 92.26

Plant and Machinery 3,872.48 171.47 34.41 4,009.54 1,921.36 198.37 21.41 2,098.32 1,911.22 1,951.12

Furniture and Fixtures 83.12 16.53 2.45 97.20 47.38 6.74 1.94 52.18 45.02 35.74

Jetty 80.60 - - 80.60 67.16 0.96 - 68.12 12.48 13.44

Vehicles 11.12 5.08 1.88 14.32 5.99 1.44 1.21 6.22 8.10 5.13

Total 4,784.70 227.47 39.57 4,972.60 2,267.42 229.74 25.02 2,472.14 2,500.46 2,517.28

Previous year 4,605.38 206.83 27.51 4,784.70 2,068.21 219.57 20.36 2,267.42

Add: Capital Work-in-Progress {includes advances of Rs. 388.75 Crores (Previous Year Rs. 346.12 Crores)} 2,283.15 696.95

4,783.61 3,214.23

Notes:Rs. in Crores

A) Depreciation for the year 229.74Add: Obsolescence 7.58Less: Depreciation transferred to Pre-operative Expenses (0.09)

Depreciation as per Profit and Loss Account 237.23

B) 1. Leasehold Land includes Mining Rights.2. Cost of Leasehold Land includes Rs. 6.09 Crores (Previous year Rs. 6.09 Crores) for which the lease

agreement has not been executed.3. Cost of Plant and Machinery includes Rs. 29.89 Crores (Previous year Rs. 29.89 Crores) relating to

railway wagons given on operating lease to the Railways under “Own Your Wagon Scheme”.4. Fixed Assets includes assets costing Rs. 127.83 Crores (Previous Year Rs. 123.84 Crores) not owned by

the Company.5. Fixed Assets costing Rs. 26.72 Crores (Previous Year Rs. 26.72 Crores) are held on Co-ownership with

other Company.6. The title deeds of some of the immovable properties transferred pursuant to the Scheme of Arrangement

are yet to be transferred in the name of the Company.

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CMYK

S C H E D U L E SRs. in Crores

PreviousSCHEDULE 6 Year

INVESTMENTS - At Cost

LONG TERM (TRADE)

Government and Trust Securities -Unquoted - -

(Rs. 10,000, Previous Year Rs. 10,000)Pledged as security deposit

Shares in Subsidiary Companies- Unquoted

Fully paid-up Equity Shares of Rs. 10 each50,000 Dakshin Cements Limited (Previous Year 50,000) 1.21 1.21

Fully paid-up Equity Shares of Sri Lankan Rupee 10 each40,000,000 UltraTech Ceylinco (Pvt.) Limited.(Previous Year 40,000,000) 23.03 23.03

24.24 24.24Others -Unquoted

2,000,000 4.5% Cumulative Non Convertible RedeemablePreference Shares of Rs. 100 each in Aditya Birla HealthServices Limited. (Previous Year Nil) 20.00 -

44.24 24.24

CURRENT - Unquoted (Other Investments)

Units of Debt Schemes of Mutual Funds:

Description No. of Units Face Value Value

a) Liquid Scheme - Dividend Plan:

Birla Sunlife Mutual Fund(Previous year 24,001,347 units) - 10 - 24.00

LIC Mutual Fund (Previous year Nil) 1,821,826 10 2.00 -

b) Income Scheme - Dividend Plan:

Birla Sunlife Mutual Fund (Previous year Nil) 42,565,128 10 45.04 -

Prudential ICICI Mutual Fund (Previous year Nil) 14,105,173 10 14.82 -

c) Fixed Maturity Plan - Dividend Plan:

Birla Sunlife Mutual Fund(Previous year 54,941,544 units) - 10 - 54.99

UTI Mutual Fund (Previous year 80,000,000 units) - 10 - 80.00

Prudential ICICI Mutual Fund(Previous year 25,136,000 units) - 10 - 25.14

Kotak Mahindra Mutual Fund(Previous year 35,000,000 units) - 10 - 35.00

Standard Chartered Mutual Fund(Previous year 40,000,000 units) - 10 - 40.00

LIC Mutual Fund (Previous year 20,000,000 units) - 10 - 20.00

Tata Mutual Fund (Previous year 15,000,000 units) - 10 - 15.00

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ING Vysya Mutual Fund(Previous year 10,000,000 units) - 10 - 10.00

Lotus Mutual Fund (Previous year 15,077,418 units) - 10 - 15.08

Deustche Mutual Fund (Previous year 5,000,000 units) - 10 - 5.00

Principal Mutual Fund (Previous year 15,000,000 units) - 10 - 15.00

Reliance Mutual Fund (Previous year 50,000,000 units) - 10 - 50.00

ABN Amro Mutual Fund (Previous year 10,000,000 units) - 10 - 10.00

HDFC Mutual Fund (Previous year Nil) 19,800,000 10 19.80 -

d) Fixed Maturity Plan - Growth Plan:

Prudential ICICI Mutual Fund(Previous year 25,000,000 units) - 10 - 25.00

Birla Sunlife Mutual Fund(Previous year 25,000,000 units) 25,000,000 10 25.00 25.00

UTI Mutual Fund (Previous year 10,000,000 units) 10,000,000 10 10.00 10.00

Lotus India Mutual Fund (Previous year Nil) 10,000,000 10 10.00 -

126.66 459.21

170.90 483.45

Note: No. of Units of various Mutual Funds - Debt Schemes purchased and redeemed during the year are asfollows:

(A) Liquid Schemes (Dividend Plan) - ABN Amro Mutual Fund-60,999,640; Birla Sunlife Mutual Fund -689,554,172; DSP Merrill Lynch Mutual Fund -4,497,550; Deutsche Mutual Fund -153,815,277;Franklin Templeton Mutual Fund -192,904,744; HDFC Mutual Fund -258,824,980; HSBC Mutual Fund -99,302,443; ICICI Prudential Mutual Fund -2,318,947,570; ING Mutual Fund -64,976,309; JM FinancialMutual Fund -134,954,167; JP Morgan Mutual Fund- 9,991,108; Kotak Mahindra Mutual Fund -113,301,283;LIC Mutual Fund -817,175,417; Lotus India Mutual Fund -43,961,579; Principal Mutual Fund -175,783,786;Reliance Mutual Fund -156,227,395; SBI Mutual Fund -20,571,006; Standard Chartered Mutual Fund -105,521,090; Sundaram BNP Paribas Mutual Fund-58,695,029; TATA Mutual Fund -56,702,889;UTI Mutual Fund -119,412,720.

(B) Floating Rate Schemes (Dividend Plan) - UTI Mutual Fund- 48,810; Birla Sunlife Mutual Fund- 9,992,605

(C) Short Term Schemes (Dividend Plan) - Franklin Templeton Mutual Fund -98,933

(D) Dynamic Bond Fund Schemes (Dividend Plan) - Birla Sunlife Mutual Fund- 48,151,346.

(E) Fixed Maturity Plans (Dividend Plan) - ABN AMRO Mutual Fund -115,000,000; Birla Sunlife MutualFund -39,978,148; DSP Mutual Fund- 200,000; Deutsche Mutual Fund -15,000,000; HDFC MutualFund- 15,000,000; HSBC Mutual Fund- 25,000,000; JM Financial Mutual Fund- 25,000,000; Kotak MahindraMutual Fund -50,000,000; LIC Mutual Fund -45,000,000; Lotus India Mutual Fund- 35,000,000;ICICI Prudential Mutual Fund -10,000,000; Reliance Mutual Fund -39,974,039; SBI Mutual Fund -50,000,000; Standard Chartered Mutual Fund -45,000,000; Sundaram BNP Paribas Mutual Fund- 5,000,000;Tata Mutual Fund- 10,000,000; UTI Mutual Fund -50,000,000.

CURRENT - Unquoted (Continued).... Rs. in CroresUnits of Debt Schemes of Mutual Funds: Previous

Year

Description No. of Units Face Value Value

S C H E D U L E S

75

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S C H E D U L E S

Rs. in CroresPrevious

SCHEDULE 7 Year

INVENTORIES

Stores & Spare parts, Packing Material, Fuels and Scrap 408.03 275.10

Raw Materials 43.26 23.43

Work-in-progress 102.35 75.60

Finished Goods 56.12 59.45

609.76 433.58

SCHEDULE 8

SUNDRY DEBTORS

Exceeding six months:

Good and Secured 6.18 5.65

Good and Unsecured 3.13 3.15

9.31 8.80Others:

Good and Secured 97.99 107.37

Good and Unsecured 109.31 67.33

207.30 174.70

216.61 183.50

SCHEDULE 9

CASH AND BANK BALANCES

Cash Balance on Hand {Including Cheques on HandRs. 17.62 Crores; (Previous Year Nil)} 18.53 0.18

Bank Balance with Scheduled Banks:

In Current Accounts 82.16 89.41

In Fixed Deposit Accounts {(Rs. 24,548),(Previous Year Rs. 23,085)} - -

100.69 89.59

SCHEDULE 10

LOANS AND ADVANCES

Secured and Considered Good

Loan against mortgage of House Property 1.64 1.57

Unsecured

Considered Good:

Loans and Advances to Subsidiary Company 0.35 0.13

Deposits and Balances with Government and other Authorities

(including accrued interest) 151.33 69.04

Advances recoverable in cash or in kind orfor value to be received 223.51 168.35

Advance Tax (Net of Provision) - 14.41

Considered Doubtful:

Advances recoverable in cash or in kind from others 0.22 0.22

375.41 252.15Less: Provision for doubtful Loans and Advances 0.22 0.22

375.19 251.93

376.83 253.50

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S C H E D U L E SRs. in Crores

PreviousSCHEDULE 11 YearCURRENT LIABILITIESSundry Creditors

Dues of Micro, Small and Medium Enterprises 0.21 0.47(To the extent identified with available information)Parent Company and Fellow Subsidiaries 0.60 0.09Others 775.98 463.43

776.79 463.99Security and Other Deposits 149.85 112.99Advances from Customers 104.73 53.93Investor Education and Protection Fund, Amount not due:

Unpaid Dividend 0.37 0.39Other Liabilities 89.00 73.37Interest accrued but not due on loans 32.27 32.04

1,153.01 736.71

SCHEDULE 12PROVISIONSProvision for Retirement Benefits 27.79 16.83Provision for Mines Restoration 3.51 1.64Provision for Tax (Net of Advance Tax) 21.43 -Proposed Dividend 62.24 -Corporate Dividend Tax 10.58 -

125.55 18.47

SCHEDULE 13INTEREST & DIVIDEND INCOMEInterest (Gross) on others 5.92 3.15(Tax Deduted at Source Rs. 0.57 Crore, Previous Year Rs. 0.47 Crore)Dividend from Current Investments 28.75 23.12Dividend from a Subsidiary 2.80 3.55

37.47 29.82

SCHEDULE 14OTHER INCOMELease Rent 0.68 1.28Insurance Claim 0.26 0.36Profit on Sale of Current Investments (Net) 1.28 0.26Exchange Rate Difference (Net) 11.00 3.19Miscellaneous Income / Receipts 49.16 26.55

62.38 31.64

SCHEDULE 15INCREASE / (DECREASE) IN STOCKSClosing StockWork-in-progress 102.35 75.60Finished Goods 56.12 59.45

158.47 135.05

Opening stockWork-in-progress 75.60 105.97Finished Goods 59.45 59.84

135.05 165.81

Add: Increase / (Decrease) in Excise Duty on Stocks 3.21 (1.78)

Increase / (Decrease) in Stocks 26.63 (32.54)

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S C H E D U L E S

Rs. in Crores

Previous

SCHEDULE 16 Year

RAW MATERIALS CONSUMED

Opening Stock 23.43 12.74Purchase and Incidental Expenses 556.60 407.92

580.03 420.66Less: Closing Stock 43.26 23.43

536.77 397.23

SCHEDULE 17MANUFACTURING EXPENSESFreight and Handling expense on Clinker transfer 133.68 126.97Consumption of Stores, Spare Parts, Components and Packing Materials 348.21 295.88Power & Fuel Consumed 1,253.26 1,138.32Hire Charges of Plant & Machinery and others 6.26 5.78Repairs to Plant & Machinery 61.52 60.43Repairs to Buildings 5.12 5.82Repairs to Others 16.86 16.56

1,824.91 1,649.76

SCHEDULE 18PAYMENTS TO AND PROVISIONS FOR EMPLOYEESSalaries, Wages and Bonus 130.30 87.16Contribution to and Provisions for Provident and other Funds 20.90 13.53Compensation Expenses under ESOS 0.77 -Welfare Expenses 19.58 16.53

171.55 117.22

SCHEDULE 19SELLING, DISTRIBUTION, ADMINISTRATION AND OTHER EXPENSESCommission paid to Distributors and Selling Agents 14.72 11.57Cash Discount 57.52 37.35Freight, Handling and other Expenses 969.26 882.65Advertisement and Sales Promotions 101.52 74.88Insurance 9.28 11.17Rent (including Lease Rent) 13.26 9.67Rates and Taxes 29.86 16.03Stationery, Printing and Communication Expenses 9.90 8.68Travelling and Conveyance 21.61 19.09Legal and Professional Charges 16.23 15.51Bad Debts and Advances Written off 1.79 0.76Directors’ Fees 0.12 0.18Power (other than related to Manufacturing Activity) 1.79 1.53Loss on Sale of Fixed Assets (Net) 1.18 0.05Contribution for Political Party (General Electoral Trust) 2.80 -Miscellaneous Expenses 31.41 28.93

1,282.25 1,118.05

SCHEDULE 20INTERESTOn Debentures and Fixed Loans 62.38 79.18On other Loans 13.29 7.65

75.67 86.83

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S C H E D U L E S

SCHEDULE 21

ACCOUNTING POLICY AND NOTES ON ACCOUNTS

A Significant Accounting Policies:

1. Basis of Accounting:

The financial statements are prepared under the historical cost convention on an accrual basis and in

accordance with the applicable mandatory Accounting Standards.

2. Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles

requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on

the date of financial statements and the reported amounts of revenues and expenses during the reported

period. Difference between the actual results and estimates are recognised in the period in which the results

are known or materialise.

3. Fixed Assets:

Fixed assets are stated at cost (including other expenses related to acquisition and installation) less accumulated

depreciation / amortisation.

4. Foreign Currency Transactions:

Foreign currency transactions are accounted for at the rate prevailing on the date of the transaction. Foreign

currency monetary assets and liabilities at the balance sheet date are restated at the year end rate. Premium

in respect of forward contracts is recognised over the life of the contracts. Exchange differences in case of

borrowed funds and liabilities in foreign currency for projects are adjusted to the cost of fixed assets, till the

commissioning of the project and thereafter recognised in the Profit and Loss Account. Any other exchange

difference is dealt with in the Profit and Loss account.

5. Financial Derivatives:

Derivative financial instruments are used to hedge risk associated with foreign currency fluctuations and

interest rates. The derivative contracts are closely linked with the underlying transactions, and are intended

to be held to maturity. These are accounted on the date of settlement.

6. Treatment of Expenditure during Construction Period:

Expenditure during construction period is included under Capital Work-in-Progress and the same is allocated

to the respective Fixed Assets on the completion of its construction.

7. Investments:

Current investments are carried at lower of cost or fair value. Long term investments are stated at cost after

deducting provisions made for diminution other than temporary.

8. Inventories:

Inventories are valued at the lower of weighted average cost and net realisable value except waste / scrap

which is valued at net realisable value.

Finished goods and process stock include cost of conversion and other costs incurred in bringing the

inventories to their present location and condition. Obsolete, defective and unserviceable inventories are

duly provided for.

9. Leases:

a) In respect of lease transactions entered into prior to April 1, 2001, lease rentals of assets acquired are

charged to the Profit and Loss Account.

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b) Lease transactions entered into on or after April 1, 2001:

i) Assets acquired under leases where the Company has substantially all the risks and rewards of

ownership are classified as finance leases. Such assets are capitalised at the inception of the lease

at the lower of the fair value or the present value of minimum lease payments and a liability is

created for an equivalent amount. Each lease rental paid is allocated between the liability and the

interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each

period.

ii) Assets acquired under leases where a significant portion of the risks and rewards of ownership are

retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit and

Loss Account on accrual basis.

iii) Assets leased out under operating leases are capitalised. Rental income is recognised on accrual

basis over the lease term.

(Also refer to the policy on Depreciation and Amortisation below)

10. Depreciation and Amortisation:

Depreciation is charged in the accounts on the following basis:

i) Depreciation is provided on the straight-line basis at the rates prescribed in Schedule XIV to the Companies

Act, 1956 except for the following:

a) Motor Cars at 14.14 % per annum except for Motor Cars given to the employees.

b) Motor Cars given to the employees as per the Company’s Scheme is depreciated over the Scheme

period.

c) Personal Computers and Laptops given to the employees as per the Company’s Scheme at 31 %

per annum.

d) Roads, Culverts, Walls, Buildings etc. within factory premises are depreciated at 3.34 %.

ii) Assets acquired up to September 30, 1987, are depreciated at the rates prevailing at the time of

acquisition.

iii) The value of leasehold land and mining lease is amortised over the period of the lease.

iv) Assets not owned by the Company are amortised over a period of five years or the period specified in

the agreement.

v) Expenditure incurred on Jetty is amortised over the period of the relevant agreement such that the

cumulative amortisation is not less than the cumulative rebate availed by the Company.

vi) Depreciation on additions / deductions is calculated pro-rata from / to the month of addition / deduction.

11. Impairment of Assets:

The carrying amount of assets are reviewed at each Balance Sheet date if there is an indication of impairment

based on the internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An

impairment loss, if any, is charged to the Profit and Loss Account in the year in which the asset is identified

as impaired. Reversal of impairment loss recognised in prior years is recorded when there is an indication

that impairment losses recognised for the asset no longer exists or has decreased.

12. Employee Benefits:

(i) Defined Contribution Plan

Contributions to defined contribution plans are recognised as expense in the Profit and Loss Account,

as they are incurred.

SCHEDULE 21 (Contd.)

S C H E D U L E S

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(ii) Defined Benefit Plan

The obligation in respect of defined benefit plans is determined using projected unit credit method,

with actuarial valuation at the end of each financial year. Actuarial gains/losses are recognised immediately

in the Profit and Loss Account.

Obligation is measured at the present value of estimated future cash flows using a discount rate that is

based on the prevailing market yields of Indian government securities as at the balance sheet date for

the estimated term of the obligations.

13. Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are

capitalised as part of the cost of such asset till such time as the asset is ready for its intended use.

A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its

intended use. All other borrowing costs are recognised as an expense in the period in which they are

incurred.

The difference between the face value and the issue price of ‘Discounted Value Non-Convertible Debentures’,

being in the nature of interest, is charged to the Profit and Loss account, on a compound interest basis

determined with reference to the yield inherent in the discount.

14. Provision for Current and Deferred Tax:

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting

period and in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax resulting from

“timing differences” between book and taxable profit for the year is accounted for using the tax rates and

laws that have been enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are

recognised and carried forward only to the extent that there is a reasonable certainty, except for carried

forward losses and unabsorbed depreciation which are recognised based on virtual certainty, that the assets

will be realised in future.

15. Revenue Recognition:

Sales Revenue is recognised on transfer of significant risks and rewards of ownership of the goods to the

buyer and stated net of sales tax. VAT, trade discounts and rebates but includes excise duty. Income from

services is recognised as they are rendered, based on agreement/arrangement with the concerned parties.

Dividend income on investments is accounted for when the right to receive the payment is established.

Interest income is recognised on time proportion basis. Export Incentives, insurance, railway and other

claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on

acceptance basis.

16. Mines Restoration Expenditure:

The Company provides for the estimated expenditure required to restore quarries and mines. The total

estimate of restoration expenses is apportioned over the estimate of mineral reserves and a provision is

made based on minerals extracted during the year.

17. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present

obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent

Liabilities are not recognised but are disclosed, while Contingent Assets are neither recognised nor disclosed,

in the financial statements.

18. Employees Share based payments:

The Company follows intrinsic value method for valuation of Employees Stock Options. Value at the time

of grant of ESOS is considered as compensation expense and is amortised in the Profit and Loss account

over the period of vesting, adjusting for the actual and expected vesting.

SCHEDULE 21 (Contd.)

S C H E D U L E S

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SCHEDULE 21 (Contd.)

B. Notes on Accounts

1. Contingent Liabilities not provided for in respect of:

Rs. in Crores

Previous

Year

Claims not acknowledged as debts in respect of matters in appeals

(a) Sales tax liability 51.30 80.51

(b) Excise duty 27.35 35.75

(c) Royalty on Limestone / Marl 43.27 43.48

(d) Customs 0.11 0.19

(e) Others 31.82 33.53

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of

advances) Rs. 491.32 crores (Previous year Rs. 1,749.10 crores).

3. (i) Derivative Instruments outstanding:

Derivatives for hedging currency and interest rates, outstanding as on March 31, 2008 are as under:

In Millions

Particulars Purpose Currency Current Previous Cross

Year Year Currency

A. Forward Contracts Exports USD 28.97 — Rupees

Buyers Credit USD 18.39 — Rupees

Capital Imports USD — 7.00 Rupees

Capital Imports Euro 9.41 5.70 USD

Buyers Credit JPY 1,845.28 — USD

B. Options (Derivatives) ECB Loan USD 40.00 40.00 Rupees

Buyers Credit JPY 2,506.25 — Rupees

Capital Imports Euro — 2.00 USD

(ii) Un-hedged Foreign Currency exposure:

In Millions

Type of Exposure Currency Current Previous Cross

Year Year Currency

ECB Loan USD 20.00 20.00 Rupees

Buyers Credit USD 24.44 — Rupees

4a) Secured Non-Convertible Debentures : Rs. in Crores

Previous

Year

i) Fixed Rate Non-Convertible Debentures (NCDs)

1. 8.25% NCDs (Redeemable at par on September 2, 2012) 65.00 65.00

2. 8.40% NCDs (Redeemable at par on July 22, 2007) — 45.00

3. 8.30% NCDs (Redeemable at par on September 2, 2012) 25.00 25.00

4. 8.09% NCDs (Redeemable at par on July 25, 2007) — 40.00

5. 6.00 % NCDs (Redeemable at par on March 12, 2009) 225.00 225.00

6. Step up interest NCDs (Redeemable at par on September 16, 2012) 25.00 25.00

7. 6.65% NCDs (Redeemable at par on April 30, 2013) 5.00 5.00

8. 5.78 % NCDs (Redeemable at par on May 11, 2009) 150.00 150.00

9. 6.25% NCDs (Redeemable at par on June 25, 2009) 150.00 150.00

10. 6.70% NCDs (Redeemable at par on June 16, 2008) 50.00 50.00

S C H E D U L E S

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ii) Floating Rate Debentures

1. MIBOR Linked NCD’s (Redeemable at par on August 1, 2007) — 100.00

2. 1 year GoI Security Linked NCD’s (Redeemable at par on June 16, 2008) 50.00 50.00

iii) Discounted Value Debentures

1. Issued as zero coupon at Yield to Maturity of 6.80%

(Carrying amount Rs. 14.32 crores, previous year Rs. 13.40 crores,

Redeemable at par on April 30, 2013) 20.00 20.00

The Company retains the options to purchase the Debentures in the secondary market, and cancel, hold, or

reissue the same at such price and on such terms as the Company may deem fit or as permitted under the

Company Law. Debentures repurchased have not been kept alive for reissuance as at March 31, 2008.

The Non-Convertible Debentures are secured by way of first charge, having pari passu rights, on the

Company’s immovable/movable properties (save and except book debts and inventory).

b) The other loans of Rs. 80.24 crores (previous year Rs. 186.94 crores) are secured by a first mortgage and

charge on the Company’s immovable properties at certain locations and / or by hypothecation of movables

at those locations (save and except book debts and inventory) both present and future, having pari passu

rights, subject to prior charges, on specific assets in favour of the Company’s Bankers.

5. Loans and Advances includes payment of Rs. 0.96 crore (previous year Nil) towards the preliminary

expenses of Madanpura (North) Coal Co. (Pvt.) Ltd; a proposed Joint Venture for coal mining activities.

6. As required by Section 22 of The Micro, Small and Medium Enterprises Development Act, 2006 the

following information is disclosed:

Rs. in Crores

Sr. Particulars 2007-08 2006-07

No.

(a) (i) Principal amount remaining unpaid at the end of the accounting year. — 0.74

(ii) Interest due on above. — (Rs. 36,826)

Total (i)+(ii) — 0.74

(b) The amount of interest paid by the buyer along with amount of the

payment made to the suppliers beyond the appointed date. — —

(c) The amount of interest accrued and remaining unpaid

at the end of financial year. 0.04 —

(d) The amount of interest due and payable for the period of delay in

making payment (which have been paid but beyond the due date

during the year) but without adding interest specified under this act. (Rs. 34,787) —

(e) The amount of further interest remaining due and payable in the

succeeding years, until such interest is actually paid. 0.04 —

7. Disclosure as per clause 32 of the listing agreement – loans in the nature of Inter Corporate deposits (ICD)

and trade credit given to subsidiaries:

Rs. in Crores

Name of Subsidiary Companies Amount Outstanding Maximum Balance

Outstanding during the Year

UltraTech Ceylinco (Pvt.) Ltd. 16.66 28.12

Dakshin Cements Ltd. 0.15 0.15

SCHEDULE 21 (Contd.)

Rs. in Crores

Previous

Year

S C H E D U L E S

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8. Auditors remuneration (excluding service tax) and expenses charged to the accounts:

Rs. in Crores

a) Statutory Auditors: 2007-08 2006-07

Audit fees 0.32 0.24

Tax audit fees 0.03 0.03

Fees for other services 0.21 0.14

Expenses reimbursed 0.01 0.02

b) Branch Auditors:

Audit fees 0.04 0.04

Fees for other services 0.01 —

Expenses reimbursed (Rs. 10,480, Previous Year Rs. 4,871) — —

c) Cost Auditors:

Audit fees 0.02 0.02

Expenses reimbursed (Rs. 7,645, Previous Year Rs. 7,495) — —

9. Managing Director’s Remuneration:

Rs. in Crores

2007-08 2006-07

Salary 3.93 2.97

Contribution to Provident Fund & Other Funds* 0.36 0.26

Perquisites 0.15 0.13

* Excluding Contribution to Gratuity Fund and provision for leave encashment, as separate figures

cannot be quantified.

10. Segment Reporting :

The Company has one business segment ‘Cement’ as its primary segment. The Company’s operations are

solely situated in India.

Rs. in Crores

Revenue 2007-08 2006-07

Sales:

Domestic 5,005.44 4,241.77

Export 503.78 668.75

Total 5,509.22 4,910.52

11. Disclosure of related parties / related party transactions:

a) List of related parties

Name of the Related Party Nature of Relationship

Grasim Industries Ltd. (Grasim) Holding Company

Sun God Trading & Investment Ltd. Fellow Subsidiary

Samruddhi Swastik Trading & Investment Ltd. (SSITL) Fellow Subsidiary

Shree Digvijay Cement Co. Ltd. (SDCCL) (upto 24.03.2008) Fellow Subsidiary

Harish Cement Ltd. (HCL) Fellow Subsidiary

Grasim Bhiwani Textiles Ltd. (GBTL) (w.e.f. 01.10.2007) Fellow Subsidiary

UltraTech Ceylinco (Pvt.) Ltd. (UCPL) Subsidiary

Dakshin Cements Ltd. (DCL) Wholly Owned Subsidiary

Key Management Personnel (KMP)

Mr S. Misra, Managing Director of the Company

SCHEDULE 21 (Contd.)

S C H E D U L E S

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b) Disclosure of related party transactions:

Rs. in Crores

Sr. Nature of Holding Subsidiary Fellow Subsidiary KMP Total

No. Transaction Company Company Companies

Grasim UCPL SSITL SDCCL GBTL

1. Sale of Goods 44.51 101.72 — 0.05 — — 146.28

(265.07) (139.91) — (0.33) — — (405.31)

2. Purchase of Goods 25.50 — — 2.59 0.03 — 28.12

(191.69) — — (2.41) — — (194.10)

3. Sale of Fixed Assets 5.68 — — — — — 5.68

— — — — — — —

4. Purchase of 0.09 — — — — — 0.09

Fixed Assets (0.21) — — — — — (0.21)

5. Receiving of 0.11 — 0.17 — — 4.44 4.72

Services (0.08) — (0.12) — — (3.36) (3.56)

6. Dividend & other

income received / — 2.80 — — — — 2.80

receivable — (3.55) — (0.04) — — (3.59)

Figures in brackets are pertaining to previous year.

Outstanding Balance as on March 31, 2008

Rs. in Crores

Sr. Nature of Holding Subsidiary Fellow Subsidiary KMP Total

No. Transaction Company Company Companies

Grasim DCL UCPL SDCCL SSITL

1. Loans and Advances 0.51 0.15 0.21 — 0.09 0.50 1.46

— (0.13) — (Rs. 1,276) (0.09) (0.50) (0.72)

2. Debtors — — 16.45 — — — 16.45

(0.27) — (18.92) (Rs. 6,305) — — (19.19)

3. Other Liabilities 1.07 — — — — — 1.07

and Creditors (0.36) — — — — — (0.36)

Figures in brackets are pertaining to previous year.

SCHEDULE 21 (Contd.)

S C H E D U L E S

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12. Leases:

Operating Leases:

i) The Company has taken various plant and machinery under cancellable operating leases. These lease

agreement are generally renewed on expiry.

ii) (a) The Company has taken on non-cancellable operating leases certain assets, the future minimum

lease payments in respect of which, as at March 31, 2008 are as follows:

Rs. in Crores

Minimum Lease Payments Payable 2007-08 2006-07

i. Not later than 1 year 0.08 0.28

ii. Later than 1 year and not later than 5 years — 0.12

iii. Later than 5 years — —

Total Minimum Lease Payable 0.08 0.40

(b) The lease agreements provide for an option to the Company to renew the lease period at the end of

the non-cancellable period. There are no exceptional / restrictive covenants in the lease agreements.

iii) The rental expense in respect of operating leases was Rs. 0.21 crore (Previous Year Rs. 0.36 crore).

13. Deferred Tax Assets and Liabilities as on March 31, 2008 are as under: Rs. in Crores

Particulars Deferred Tax Deferred Tax

(assets)/liabilities Current Year (assets)/ liabilities

as at 01.04.2007 Charge/(Credit) as at 31.03.2008

Deferred Tax Assets:

Provision allowed under tax on payment basis (11.96) (1.64)* (13.60)

(11.96) (1.64) (13.60)

Deferred Tax Liabilities:

Accumulated Depreciation 564.47 (16.27) 548.20

Payments allowed under tax not

expensed in books 7.75 — 7.75

572.22 (16.27) 555.95

Net Deferred Tax Liability 560.26 (17.91) 542.35

*Out of Rs. 1.64 Crores Rs. 1.21 crores adjusted in General Reserve on account of transitional provision of

AS – 15 (Revised 2005)

14. The following expenses are included in the different heads of expenses in the Profit and Loss Account:

Rs. in Crores

2007-08 2006-07

Particulars Raw Power Total Raw Power Total

Materials & Fuel Materials & Fuel

Consumed Consumed Consumed Consumed

Stores and Spares Consumed 36.10 15.85 51.95 40.94 19.62 60.56

Royalty and Cess 94.26 — 94.26 84.04 — 84.04

SCHEDULE 21 (Contd.)

S C H E D U L E S

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15. Movement of provisions during the period as required by Accounting Standard - 29 “Provisions, Contingent

Liabilities and Contingent Asset” issued by the Institute of Chartered Accountants of India:

Mines Restoration Expenditure:

Rs. in Crores

2007-08 2006-07

Opening Balance 1.64 —

Expenditure in current year — —

Provision during the year 1.87 1.64

Closing Balance 3.51 1.64

16. Employee Benefits:

a) Defined Benefit Plans as per Actuarial Valuation on March 31, 2008:

Rs. in Crores

Post

Retirement

Gratuity Medical

(Funded) Pension Benefits

(i) Opening Balance of Present value of

Defined Benefit Obligation 22.35 0.80 0.57

Adjustment of:

Current Service Cost 2.24 — —

Interest Cost 1.80 0.06 0.04

Actuarial Loss / (Gain) 3.44 0.03 (Rs. 3,209)

Benefits Paid (2.42) (0.07) (0.04)

Past Service Cost 0.72 — —

Closing Balance of Present value of

Defined Benefit Obligation 28.12 0.82 0.58

(ii) Change in Fair Value of AssetsOpening Balance of Fair Value of Plan Assets 16.46 — —Adjustment of:Expected Return on Plan Assets 2.01 — —Contribution by the employer / participants 6.14 0.07 0.04Benefits Paid (2.42) (0.07) (0.04)Amount lying with the Company 0.47 — —Closing Balance of Fair Value of Plan Assets 22.66 — —

(iii) Net Asset / (Liability) recognised in the Balance SheetPresent value of Defined Benefit Obligation (28.12) (0.82) (0.58)Fair Value of Plan Asset 22.66 — —Net Asset / (Liability) in the Balance Sheet (5.46) (0.82) (0.58)

(iv) Expenses recognised in the Profit andLoss AccountCurrent Service Cost 2.24 — —Interest Cost 1.80 0.06 0.04Expected Return on Plan Assets (2.01) — —Actuarial (Gain) / Loss 3.44 0.03 (Rs. 3,209)

Total Expenses 5.46 0.09 0.04

(v) The major categories of plan assets as a percentageof total planInsurer Managed Funds 100% N.A. N.A.

SCHEDULE 21 (Contd.)

S C H E D U L E S

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(vi) Actuarial Assumptions:

Discount Rate 8.00% 7.70% 7.70%

Turnover Rate 1% - 3% — —

Published rates PA (90) PA (90)

Mortality of LIC 94-96 Annuity Annuity

rates down rates down

by 4 years by 4 years

Salary Escalation Rate 6% — —

Retirement age Staff- 60 Yrs 60 Yrs

Workers – 58 Yrs —

(vii) Basis used to determine Expected Rate of Return on Plan Assets:

Expected rate of return on Plan Assets is based on expectation of the average long term rate of

return expected on investments of the fund during the estimated term of the obligations.

(viii) Salary Escalation Rate:

The estimates of future salary increases are considered taking into account the inflation, seniority,

promotion and other relevant factors.

(b) Change in Accounting Policy:

During the year, the Company has decided to adopt Accounting Standard (AS) 15 (Revised 2005)

“Employee Benefits”, issued by the Institute of Chartered Accountants of India. Accordingly the Company

has adjusted Rs. 2.35 crores (net of deferred tax liability of Rs. 1.21 crores) against the General

Reserve in accordance with transitional provision of the said standard.

(c) Defined Contribution Plans:

Amount recognised as an expense and included in Schedule 18 under the head “Contribution to and

Provisions for Provident and other Funds” of Profit and Loss account Rs. 9.64 crores.

(d) Amount recognised as an expense in respect of Compensated Leave Absences is Rs. 5.44 crores.

17. Capital work-in-progress includes:

Rs. in Crores

2007-08 2006-07

Pre-operative expenses pending allocation:

Stores & Spares Consumed 0.29 0.33

Power & Fuel Consumed 0.53 0.63

Salary, Wages, Bonus, Exgratia and Provisions 3.14 1.05

Insurance 0.47 0.15

Exchange Gain (1.22) (2.95)

Depreciation 0.08 0.02

Interest 15.85 0.80

Misc. Expenses 9.76 6.10

Total Pre-operative expenses 28.90 6.13

Less: Income 0.36 —

Add: B/f From Previous Year 6.64 0.51

Total 35.18 6.64

SCHEDULE 21 (Contd.)

Rs. in Crores

Post

Retirement

Gratuity Medical

(Funded) Pension Benefits

S C H E D U L E S

88

CMYK

SCHEDULE 21 (Contd.)

18. Under the Employees Stock Options Scheme - 2006 (ESOS -2006), the Company has granted 168,070

options to its eligible employees in two tranches, the details are as follows:

(A) Employees Stock Option Scheme :

Particulars Tranche I Tranche II

No. of Options 99,010 69,060

Method of Accounting Intrinsic Value Intrinsic Value

Vesting Plan Graded Vesting - Graded Vesting -

25% every year 25% every year

Exercise Period 5 Years from the 5 Years from the

date of Vesting date of Vesting

Grant Date 23.08.2007 25.01.2008

Grant Price (Rs. per share) 606 794

Market Price on the date of Grant of Option (Rs.) 853 794

Discount on Average Price 30.00% 1.98%

(B) Movement of Options granted :

2007-08

Options outstanding at beginning of the year —

Granted during the year 168,070

Exercised during the year —

Lapsed during the year —

Options outstanding at the end of the year 168,070

Options unvested at the end of the year 168,070

Options exercisable at the end of the year —

(C) Fair Valuation:

The fair value of options used to compute proforma net income and earnings per equity share have been

done by an independent firm of Chartered Accountants on the date of grant using Black-Scholes Model.

The Key assumptions in Black-Scholes Model for calculating fair value as on that date of grant are:

1. Risk Free Rate — 8%

2. Option Life — Vesting period (1 Year) + Average of exercise period

3. Expected Volatility — Tranche-I: 0.49, Tranche-II: 0.52

4. Expected Growth in Dividend — 20%

The weighted average fair value of the option, as on the date of grant, works out to be Rs. 462 per stock

options.

S C H E D U L E S

89

CMYK

SCHEDULE 21 (Contd.)

Had the compensation cost for the stock options granted under ESOS 2006 been determined, based on

fair-value approach, the Company’s net profit and earnings per share would have been as per the

proforma amounts indicated below:

Rs. in Crores

Particulars 2007-08

Net Profit (As Reported) 1,007.61

Add: Compensation Expenses under ESOS included in the Net Profit 0.77

Less: Compensation Expenses under ESOS as per Fair Value (1.84)

Net Profit (Fair value basis) 1006.54

Basic Earning Per Share (Reported) – Rs. / Share 80.94

Basic Earning Per Share (Fair value basis) – Rs. / Share 80.86

Diluted Earning Per Share (Reported) – Rs. / Share 80.91

Diluted Earning Per Share (Fair value basis) – Rs. / Share 80.83

19. Earning per Share (EPS):

Particulars 2007-08 2006-07

(A) Basic EPS:

(i) Net Profit attributable to Equity Shareholders (Rs. Crores) 1,007.61 782.28

(ii) Weighted Average number of Equity Shares Outstanding (Nos.) 124,485,879 124,485,879

Basic EPS (Rs.) (i) / (ii) 80.94 62.84

(B) Diluted EPS:

(i) Weighted average number of Equity Shares Outstanding 124,485,879 124,485,879

(ii) Add: Potential Equity Shares on exercise of options 45,852 —

(iii) Weighted average number of Equity Shares Outstanding

for calculation of Diluted EPS (i+ii) 124,531,731 124,485,879

Diluted EPS (Rs.) {(A) (i) } / (iii) 80.91 62.84

Face value of Shares (Rs.) 10 10

20. Figures less than Rs. 50,000 have been shown at actuals, wherever statutorily required to be disclosed, as

the figures have been rounded off to the nearest lakh.

21. Previous year’s figures have been regrouped and rearranged wherever necessary to conform to this year’s

classification.

22. Additional information required under Part II of Schedule VI to the Companies Act, 1956 (as certified by

the Executives of the respective Divisions) is as per Schedule 22.

S C H E D U L E S

90

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SCHEDULE 22

ADDITIONAL INFORMATION UNDER PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956

1. CAPACITIES AND PRODUCTION:

Product Unit Installed Capacity* Actual Production**

2007-08 2006-07 2007-08 2006-07

Cement Lakh tonnes 182.00 170.00 150.69 146.35

Licensed capacity not indicated due to abolition of Industrial Licenses as per Notification No. 477 (E) dated

July 25, 1991 issued under The Industries (Development and Regulation) Act, 1951.

* As Certified by the Management and accepted by the Auditors.

** Excludes Clinker not converted into Cement Production

2. TURNOVER:

Product Unit 2007-08 2006-07

Quantity Value Quantity Value

Rs. in Crores Rs. in Crores

Cement Lakh tonnes 150.19 4,838.88 151.69 4,459.06

Clinker Lakh tonnes 20.87 399.08 25.00 408.79

Others — 271.26 — 42.67

Total 5,509.22 4,910.52

3. INVENTORY:

As at 31.03.2008 As at 31.03.2007

Product Unit Quantity Value Quantity Value

Rs. in Crores Rs. in Crores

Cement Lakh tonnes 2.59 56.12 2.65 59.45

4. RAW MATERIAL, STORES AND SPARE PARTS:

a) Raw Material Consumed:

2007-08 2006-07

Product Unit Quantity Value Quantity Value

Rs. in Crores Rs. in Crores

Limestone* Lakh tonnes 203.08 175.78 201.77 170.61

Slag Lakh tonnes 2.74 10.86 2.55 9.34

Gypsum Lakh tonnes 6.57 82.15 6.19 76.77

Fly Ash Lakh tonnes 20.56 66.52 17.62 51.11

Iron ore Lakh tonnes 2.63 24.51 4.31 47.73

Others — 176.95 — 41.67

Total 536.77 397.23

*Including Royalty and Cess on limestone and other related overheads.

S C H E D U L E S

91

CMYK

b) Purchase of Finished Goods:

2007-08 2006-07

Class of goods Unit Quantity Value Quantity Value

Rs. in Crores Rs. in Crores

Cement Lakh tonnes 0.43 13.64 5.58 182.38

Others — 0.04 — 0.05

Total 13.68 182.43

c) Value of imports (on CIF basis): Rs. in crores

2007-08 2006-07

(i) Raw materials 3.15 9.57

(ii) Fuel, stores and spares 460.97 363.03

(iii) Capital goods 353.51 140.12

d) Value of imported and indigenous raw materials, stores and spare parts consumed:

2007-08 2006-07

Value % Value %

Rs. in Crores Rs. in Crores

Raw materials:

Imported 8.26 1.5 9.57 2.4

Indigenous 528.51 98.5 387.66 97.6

Total 536.77 100.0 397.23 100.0

Stores & spares:

Imported 38.10 9.5 29.06 8.2

Indigenous 362.06 90.5 327.38 91.8

Total 400.16 100.0 356.44 100.0

5. EXPENDITURE IN FOREIGN CURRENCY:

Rs. in Crores

2007-08 2006-07

Freight / Despatch / Demurrage 72.09 67.68

Service Fees 1.28 2.93

Interest 6.84 6.04

Other Matters 0.45 0.46

SCHEDULE 22 (Contd.)

S C H E D U L E S

92

CMYK

6. EARNINGS IN FOREIGN EXCHANGE:

Rs. in Crores

2007-08 2006-07

Export of goods {Including Rs. 476.94 crores 503.78 668.75

(Rs. 639.73 crores) on FOB basis}

Professional fees 0.06 1.01

Other receipts 17.22 3.74

7. DIVIDENDS REMITTED IN FOREIGN CURRENCY TO NON-RESIDENT SHAREHOLDERS:

2007-08 2006-07

No of Shares Gross Amount No of Shares Gross Amount

Shareholders Held of Dividends Shareholders Held of Dividends

Final Dividend

on Equity — — — 3,781 11,142,104 Rs. 1.95 crores

Interim Dividend

on Equity — — — 3,677 12,780,845 Rs. 5.11 crores

SCHEDULE 22 (Contd.)

Signatures to Schedules ‘1’ to ‘22’KUMAR MANGALAM BIRLA

ChairmanS. MISRA

Managing Director R. C. BHARGAVAG. M. DAVE

Y. M. DEOSTHALEEK. C. BIRLA N. J. JHAVERI

Sr. Executive President & CFO DR. S. MISRAV. T. MOORTHY

S. RAJGOPALS. K. CHATTERJEE D. D. RATHI

Mumbai, April 22, 2008 Company Secretary Directors

S C H E D U L E S

93

CMYK

A D D I T I O N A L I N F O R M A T I O N U N D E R P A R T I V O F S C H E D U L E V I T O T H E C O M P A N I E S A C T , 1 9 5 6

Balance Sheet Abstract and General Business Profile

I Registration Details

Registration No. 1 1 - 1 2 8 4 2 0 State Code 1 1

Balance Sheet Date 3 1 - 0 3 - 0 8

II Capital Raised during the year (Amount in Rs. Thousands)

Public Issue Right Issue

N I L N I L

Bonus Issue Private Placement

N I L N I L

III Position of Mobilisation & Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities Total Assets

6 2 5 8 3 9 9 6 6 2 5 8 3 9 9 6

Source of Funds: Paid-up Capital Reserve & Surplus

1 2 4 4 8 5 9 2 5 7 1 7 3 3 2

Secured Loans Unsecured Loans

9 8 2 6 6 1 7 7 5 7 8 3 7 5

Application of Funds: Net Fixed Assets Investments

4 7 8 3 6 1 4 4 1 7 0 8 9 6 4

Net Current Assets Miscellaneous Expenditure

2 5 3 2 5 5 N I L

IV Performance of Company (Amount in Rs. Thousands)

Turnover Total Expenditure

6 2 8 6 2 3 9 7 4 7 7 9 2 3 1 6

+/- Profit/(Loss) Before Tax +/- Profit/(Loss) After Tax

+ 1 5 0 7 0 0 8 1 + 1 0 0 7 6 0 5 1

Earning Per Share (Rs.) Dividend Rate (%)

8 0 . 9 4 5 0

V Generic Name of Principal Product of the Company

Item Code 2 5 2 3 2 9 . 0 1

Product Description P O R T L A N D C E M E N T

KUMAR MANGALAM BIRLA

ChairmanS. MISRA

Managing Director R. C. BHARGAVAG. M. DAVE

Y. M. DEOSTHALEEK. C. BIRLA N. J. JHAVERI

Sr. Executive President & CFO DR. S. MISRAV. T. MOORTHY

S. RAJGOPALS. K. CHATTERJEE D. D. RATHI

Mumbai, April 22, 2008 Company Secretary Directors

94

CMYK

S T A T E M E N T P U R S U A N T T O S E C T I O N 2 1 2 O F T H E C O M P A N I E S A C T , 1 9 5 6 R E L A T I N G T O S U B S I D I A R Y C O M P A N I E S

Name of the Subsidiary Company Dakshin UltraTech

Cements Ceylinco

Limited (Pvt.) Limited

1 Financial year of the subsidiary company ended on March 31, 2008 March 31, 2008

2 Holding Company’s Interest

a) Number of Shares fully paid 50,000 40,000,000

b) Extent of holding 100% 80%

3 Net aggregate amount of Profit/(Loss) of the Rs. Crore Rs. Crore

subsidiary, so far as they concern members of the

UltraTech Cement Limited

i) for the financial year of the subsidiary

a) Dealt with in the account of the — 2.80

holding company

b) Not dealt with in the accounts of the — 3.05*

holding company

ii) for the previous financial years of

the subsidiary since it became the holding company’s subsidiary

a) Dealt with in the account of the — 7.04

holding company

b) Not dealt with in the accounts of the — 10.85#

holding company

4 As the financial year of the subsidiary companies

coincide with the financial year of the holding company,

Section 212(5) of the Companies Act, 1956 is not applicable.

* converted Re. 1 = Sri Lankan Rupees 2.61

# converted Re. 1 = Sri Lankan Rupees 2.42

KUMAR MANGALAM BIRLA

ChairmanS. MISRA

Managing Director R. C. BHARGAVAG. M. DAVE

Y. M. DEOSTHALEEK. C. BIRLA N. J. JHAVERI

Sr. Executive President & CFO DR. S. MISRAV. T. MOORTHY

S. RAJGOPALS. K. CHATTERJEE D. D. RATHI

Mumbai, April 22, 2008 Company Secretary Directors

95

CMYK

A U D I T O R S ’ R E P O R T O N T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S

TO THE BOARD OF DIRECTORS OF

ULTRATECH CEMENT LIMITED ON THE CONSOLIDATED FINANCIAL STATEMENTS

OF ULTRATECH CEMENT LIMITED AND ITS SUBSIDIARIES

1. We have examined the attached Consolidated Balance Sheet of UltraTech Cement Limited

(“the Company”) and its subsidiaries which together constitute “the Group” as at March31, 2008, the Consolidated Profit and Loss Account and the Consolidated Cash FlowStatement of the Group for the year ended on that date, both annexed thereto. Thesefinancial statements are the responsibility of the Company’s Management. Our responsibilityis to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted inIndia. Those Standards require that we plan and perform the audit to obtain reasonableassurance whether the financial statements are free of material misstatements. An auditincludes, examining on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accounting principles usedand significant estimates made by the Management, as well as evaluating the overallfinancial statements. We believe that our audit provides a reasonable basis for our opinion.

3. We did not audit the financial statements of subsidiaries, whose financial statements reflecttotal assets of Rs. 50.94 crores as at March 31, 2008, the total revenue of Rs. 218.19 croresand cash flows amounting to Rs. 4.73 crores for the year then ended. These financialstatements and other financial information have been audited by other auditors whosereports have been furnished to us, and our opinion, in so far as they relate to the amountsincluded in respect of these subsidiaries is based solely on the report of other auditors.

4. We report that the consolidated financial statements have been prepared by the Company,in accordance with the requirements of Accounting Standard 21 (Consolidated FinancialStatements), issued by the Institute of Chartered Accountants of India and on the basis ofthe separate audited financial statements of the Company and the separate audited accountsof subsidiaries, which have been included in the consolidated financial statements.

5. Based on our audit and on consideration of reports of other auditors on separate financialstatements and on the other financial information of the components, and to the best of ourinformation and according to the explanations given to us, we are of the opinion that theattached consolidated financial statements give a true and fair view in conformity with theaccounting principles generally accepted in India:

(a) in the case of the consolidated balance sheet, of the state of affairs of the Group as atMarch 31, 2008;

(b) in the case of the consolidated profit and loss account, of the profit for the year endedon that date; and

(c) in the case of the consolidated cash flow statement, of the cash flows for the yearended on that date.

For DELOITTE HASKINS & SELLS For G. P. KAPADIA & CO.Chartered Accountants Chartered Accountants

B. P. SHROFF ATUL B. DESAIPartner Partner(Membership No.34382) (Membership No.30850)

Mumbai, April 22, 2008

96

CMYK

C O N S O L I D A T E D B A L A N C E S H E E T A S A T M A R C H 3 1 , 2 0 0 8Rs. in Crores

As atMarch 31, 2007

SchedulesSOURCES OF FUNDSShareholders’ FundsShare Capital 1A 124.49 124.49Employees Stock Options Outstanding 1B 0.77 —Reserves and Surplus 2 2,577.32 1643.72

2,702.58 1,768.21Loan FundsSecured Loans 3 982.66 1,151.25Unsecured Loans 4 757.84 427.38

1,740.50 1,578.63Minority Interest 5.74 5.30Deferred Tax Liabilities (net) 545.38 562.09

TOTAL 4,994.20 3,914.23

APPLICATION OF FUNDSFixed AssetsGross Block 5 4,997.21 4,810.81Less: Depreciation 2,479.48 2,274.16

Net Block 2,517.73 2,536.65Capital Work-in-Progress 2,283.41 697.19

4,801.14 3,233.84Goodwill 7.75 9.10Investments 6 146.66 459.21Current Assets, Loans and AdvancesInventories 7 619.65 441.19Sundry Debtors 8 202.63 173.89Cash and Bank Balances 9 114.30 100.11Loans and Advances 10 382.97 254.26

1,319.55 969.45

Less:Current Liabilities and ProvisionsCurrent Liabilities 11 1,154.55 738.80Provisions 12 126.35 18.57

1,280.90 757.37

Net Current Assets 38.65 212.08

TOTAL 4,994.20 3,914.23

Accounting Policies and Notes on Accounts 21

In terms of our report attached. KUMAR MANGALAM BIRLAChairman

For DELOITTE HASKINS & SELLS For G. P. KAPADIA & CO. S. MISRA R. C. BHARGAVAChartered Accountants Chartered Accountants Managing Director G. M. DAVE

Y. M. DEOSTHALEEN. J. JHAVERI

B. P. SHROFF ATUL B. DESAI K. C. BIRLA DR. S. MISRAPartner Partner Sr. Executive President & CFO V. T. MOORTHY

S. RAJGOPALD. D. RATHI

S. K. CHATTERJEE DirectorsMumbai, April 22, 2008 Company Secretary

97

CMYK

C O N S O L I D A T E D P R O F I T A N D L O S S A C C O U N T F O R T H E Y E A R E N D E D M A R C H 3 1 , 2 0 0 8Rs. in Crores

PreviousSchedules Year

INCOMEGross Sales 6,400.84 5,541.91Less: Excise Duty 777.02 573.52

Net Sales 5,623.82 4,968.39Interest & Dividend Income 13 36.32 27.01Other Income 14 63.47 32.21Increase / (Decrease) in Stocks 15 26.50 (30.38)

5,750.11 4,997.23

EXPENDITURERaw Materials Consumed 16 622.72 427.24Manufacturing Expenses 17 1,836.24 1,658.75Purchase of Finished Products 13.68 182.43Payments to and Provisions for Employees 18 174.50 118.99Selling, Distribution, Administration andOther Expenses 19 1,285.76 1,123.51Interest 20 75.67 86.83Depreciation and Obsolesence 238.27 227.31Amortisation of Goodwill on Consolidation 1.35 1.35

4,248.19 3,826.41Less: Self Consumption of Cement {Net of ExciseDuty Rs. 5.13 Crores. (Previous Year Rs. 1.14 Crores)} (13.37) (4.52)

4,234.82 3,821.89

Profit Before Tax Expenses 1,515.29 1,175.34Provision for Current Tax 513.30 399.42Deferred Tax (15.39) (15.35)Provision for Fringe Benefit Tax 5.87 4.61

Profit After Tax 1,011.51 786.66Minority Interest 1.46 1.75

Profit After Minority Interest 1,010.05 784.91Balance brought forward from Previous Year 796.81 199.59

Profit Available for Appropriation 1,806.86 984.50

AppropriationsInterim Dividend - 49.79Proposed Dividend 62.24 -Corporate Dividend Tax 10.58 6.98Debenture Redemption Reserve (8.17) 30.92General Reserve 120.00 100.00Balance carried to Balance Sheet 1622.21 796.81

1806.86 984.50

Basic Earnings Per Equity Share (in Rs.) {See Note B 13(A)} 81.14 63.05Diluted Earnings Per Equity Share (in Rs.) {See Note B 13(B)} 81.11 63.05Accounting Policies and Notes to Account 21

In terms of our report attached. KUMAR MANGALAM BIRLAChairman

For DELOITTE HASKINS & SELLS For G. P. KAPADIA & CO. S. MISRA R. C. BHARGAVAChartered Accountants Chartered Accountants Managing Director G. M. DAVE

Y. M. DEOSTHALEEN. J. JHAVERI

B. P. SHROFF ATUL B. DESAI K. C. BIRLA DR. S. MISRAPartner Partner Sr. Executive President & CFO V. T. MOORTHY

S. RAJGOPALD. D. RATHI

S. K. CHATTERJEE DirectorsMumbai, April 22, 2008 Company Secretary

98

CMYK

C O N S O L I D A T E D C A S H F L O W S T A T E M E N T F O R T H E Y E A R E N D E D M A R C H 3 1 , 2 0 0 8Rs. in Crores

March 31, 2008 March 31, 2007

A Cash Flow from Operating Activities:Profit before tax 1,515.29 1,175.34Adjustments for:Depreciation and Obsolescence 238.27 227.31Amortisation of Goodwill on Consolidation 1.35 1.35Employees Compensation Expenses under ESOS 0.77 -Provision for Doubtful Debts and Advances / (Written back) 0.20 -Bad Debts Written-off 1.79 0.76Provision for Retirement benefits 7.43 4.71Provision for Mines Restoration 1.87 1.64Interest & Dividend Income (36.32) (27.01)Interest Expense 75.67 86.83Unrealised Foreign Exchange (Gain)/Loss (8.97) (2.73)(Profit)/Loss on Sale of Fixed Assets 1.18 -Profit on Sale of Investment (1.28) (0.26)

Operating Profit Before Working Capital Changes 1,797.25 1,467.94Adjustments for:(Increase)/decrease in Inventories (178.46) (54.40)(Increase)/decrease in Sundry Debtors (30.73) (12.60)(Increase)/decrease in Loans and Advances (139.03) (81.65)Increase/(decrease) in Trade Payables and other Liabilities 415.59 222.48

Cash Generated From Operations 1,864.62 1,541.77Taxes paid (483.74) (421.01)

Net Cash from Operating Activities (A) 1,380.88 1,120.76

B Cash Flow from Investing Activities:Purchase of Fixed Assets (1,799.13) (765.23)Sale of Fixed Assets 7.07 2.39(Increase)/decrease in Current Investments 312.34 (311.00)Profit on Sale of Investments 1.28 0.26Interest and Dividend Received 36.53 26.95

Net Cash used in Investing Activities (B) (1,441.91) (1,046.63)

C Cash Flow from Financing Activities:Repayment of Long Term Borrowings (285.00) (76.00)Proceeds from Long Term Borrowings 161.55 200.43Proceeds of Short Term Borrowings (Net) 290.11 6.60Interest paid (89.03) (89.21)Dividend Paid (0.77) (72.37)Corporate dividend tax - (10.04)

Net Cash Generated / (Used) in Financing Activities (C) 76.86 (40.59)

Net increase in cash and cash equivalents (A + B + C) 15.83 33.54Cash and Cash Equivalents at the Beginning of the Year 100.11 68.39Effect of exchange rate on consolidation of Foreign Subsidiary (1.64) (1.82)Cash and Cash Equivalents at the End of the Year 114.30 100.11

Notes:1. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3 issued by the

Institute of Chartered Accountants of India.

2. Purchase of fixed assets includes movements of capital work-in-progress between the beginning and the end of the year.

3. Cash and cash equivalents represent cash and bank balances.

4. Previous year’s figures regrouped / recasted wherever necessary.

In terms of our report attached. KUMAR MANGALAM BIRLAChairman

For DELOITTE HASKINS & SELLS For G. P. KAPADIA & CO. S. MISRA R. C. BHARGAVAChartered Accountants Chartered Accountants Managing Director G. M. DAVE

Y. M. DEOSTHALEEN. J. JHAVERI

B. P. SHROFF ATUL B. DESAI K. C. BIRLA DR. S. MISRAPartner Partner Sr. Executive President & CFO V. T. MOORTHY

S. RAJGOPALD. D. RATHI

S. K. CHATTERJEE DirectorsMumbai, April 22, 2008 Company Secretary

99

CMYK

S C H E D U L E S F O R M I N G P A R T O F C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T SRs. in Crores

PreviousYear

SCHEDULE 1A

SHARE CAPITAL

Authorised

130,000,000 Equity shares of Rs. 10 each 130.00 130.00

Issued, Subscribed and Paid-up 124.49 124.49

124,485,879 Equity shares of Rs. 10 each fully paid-up.(Previous Year 124,485,879)

124.49 124.49

SCHEDULE 1B

EMPLOYEES STOCK OPTIONS OUTSTANDING

Employees Stock Options Outstanding 2.45 —Less: Deferred Employees Compensation Expenses 1.68 —

0.77 —

Outstanding Employees Stock Option exercisable into 168,070 Equity Shares ofRs.10 each fully paid-up.

SCHEDULE 2

RESERVES & SURPLUS Rs. in Crores

Balance Additions Deduction/ Balanceas at during Adjustments as at31st the during 31st

March, 07 year the year March, 08

Capital Reserve 25.02 — — 25.02

Cash Subsidy Reserve 0.10 — — 0.10

Debenture Redemption Reserve 169.80 — (8.17) 161.63

General Reserve 653.49 120.00 (2.35)** 771.14

Exchange Variation Reserve * (1.50) (1.28) — (2.78)

Surplus as per Profit & Loss Account 796.81 1,010.05 (184.65) 1622.21

1,643.72 1,128.77 (195.17) 2,577.32

Previous Year 916.88 914.53 (187.69) 1643.72

* Exchange Variation Reserve has been created for Exchange Variation loss in Opening Equity Share Capitaland Reserve & Surplus of UltraTech Ceylinco (Pvt.) Ltd.**Adjustment on account of transitional provision of AS 15 (Revised).

SCHEDULE 3

SECURED LOANS

Non-Convertible Debentures 759.32 943.40

Loans from Banks:

Cash Credits / Working Capital Borrowings from Banks Secured by

Hypothecation of Stocks and Book Debts 143.10 20.91Term Loans 80.24 186.94

982.66 1,151.25

100

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S C H E D U L E S F O R M I N G P A R T O F C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T SRs. in Crores

PreviousSCHEDULE 4 Year

UNSECURED LOANS

Short Term Loans from Banks 170.19 —

Long Term:

From Banks 262.90 173.88

Sales Tax Deferment Loans 324.75 253.50

757.84 427.38

SCHEDULE 5

FIXED ASSETSRs. in Crores

Particulars Gross Block Depreciation Net Block

As at Additions Deductions/ As at As at For the Deductions/ Upto As at As at

31.03.07 Adjustments 31.03.08 31.03.07 year Adjustments 31.03.08 31.03.08 31.03.07

Freehold Land 75.01 8.20 — 83.21 — — — — 83.21 75.01

Leasehold Land 20.07 0.59 0.10 20.56 5.97 0.63 0.03 6.57 13.99 14.10

Buildings 485.67 25.60 0.92 510.35 152.93 14.22 0.48 166.67 343.68 332.74

Railway Sidings 159.66 — — 159.66 67.40 7.48 — 74.88 84.78 92.26

Plant & Machinery 3,898.81 171.48 35.88 4,034.41 1,927.32 199.21 21.77 2,104.76 1,929.65 1,971.49

Furniture & Fixtures 83.56 16.74 2.48 97.82 47.67 6.81 1.96 52.52 45.30 35.89

Jetty 76.63 — — 76.63 66.83 0.96 — 67.79 8.84 9.80

Vehicles 11.40 5.08 1.91 14.57 6.04 1.47 1.22 6.29 8.28 5.36

4,810.81 227.69 41.29 4,997.21 2,274.16 230.78 25.46 2,479.48 2,517.73 2,536.65

Previous year 4,633.75 207.08 30.02 4,810.81 2,074.46 220.63 20.93 2,274.16

Add: Capital Work-in-Progress {includes advances of Rs. 388.75 Crores (Previous Year Rs. 346.12 Crores)} 2,283.41 697.19

4,801.14 3,233.84

Note: Rs. in Crores

Depreciation for the year 230.78

Add: Obsolesence 7.58

Less: Depreciation transferred to Pre-operative Expenses (0.09)

Depreciation as per Profit and Loss Account 238.27

SCHEDULE 6

LONG TERM (TRADE)

Government and Trust Securities -Unquoted — —(Rs. 10,000, Previous year Rs. 10,000) Pledged as security deposit

Others -Unquoted2,000,000 4.5% Cumulative Non-Convertible RedeemablePreference Shares of Rs. 100 each in Aditya Birla HealthServices Limited. (Previous Year Nil) 20.00 —

CURRENT - Unquoted (Other Investments)Investment in Debt Schemes of Various Mutual Funds 126.66 459.21

146.66 459.21

Note: No. of Units of Various Mutual Funds - Debt Schemes purchased and redeemed during the year6,289,564,035.

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S C H E D U L E S F O R M I N G P A R T O F C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T SRs. in Crores

PreviousSCHEDULE 7 Year

INVENTORIES

Stores & Spare parts, Packing Material, Fuels and Scrap 409.08 275.10Raw Materials 43.26 23.43Work-in-Progress 102.35 75.60

Finished Goods (Includes transit stock of Rs. 5.02 CroresPrevious Year Rs. 2.61 Crores) 64.96 67.06

619.65 441.19

SCHEDULE 8

SUNDRY DEBTORSExceeding six months:Good and Secured 6.18 5.72Good and Unsecured 3.29 3.55Doubtful and Unsecured 1.55 1.14

11.02 10.41Less: Provision for Doubtful Debts 1.37 1.25

9.65 9.16Others:

Good and Secured 83.67 97.40

Good and Unsecured 109.31 67.33

192.98 164.73

202.63 173.89

SCHEDULE 9

CASH AND BANK BALANCES

Cash Balance on Hand {Including Cheques on HandRs. 17.62 crores; (Previous Year Nil)} 18.69 0.48

Bank Balance with Scheduled Banks:

In Current Accounts 82.66 92.49

In Fixed Deposit Accounts 12.95 7.14

114.30 100.11

SCHEDULE 10

LOANS & ADVANCESSecured & Considered Good

— Loan against mortgage of House Property 1.64 1.57UnsecuredConsidered Good:Deposits and Balances with Government and other Authorities

(including accrued interest) 155.74 70.58Advances recoverable in cash or in kind or for value to be received 225.59 168.78Advance Tax (Net of Provision) — 13.33

Considered Doubtful:Advances recoverable in cash or in kind 0.22 0.22

381.55 252.91Less: Provision for doubtful Loans and Advances 0.22 0.22

381.33 252.69

382.97 254.26

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PreviousYear

SCHEDULE 11

CURRENT LIABILITIES

Sundry Creditors 777.05 464.37Security and Other Deposits 150.11 113.25Advances from Customers 104.73 53.93Investor Education and Protection Fund, Amount not due:

Unpaid Dividend 0.37 0.39Other Liabilities 90.02 74.82Interest accrued but not due on loans 32.27 32.04

1,154.55 738.80

SCHEDULE 12PROVISIONSRetirement Benefits 27.92 16.93Provision for Mines Restoration 3.51 1.64Provision for Tax (Net of Advance Tax) 22.10 -Proposed Dividend 62.24 -Corporate Dividend Tax 10.58 -

126.35 18.57

SCHEDULE 13

INTEREST & DIVIDEND INCOME

Interest (Gross) on others 7.57 3.89(Tax Deducted at Source Rs. 0.57 Crore, Previous Year Rs. 0.47 Crore)Dividend from Current Investments 28.75 23.12

36.32 27.01

SCHEDULE 14OTHER INCOMELease Rent 0.68 1.28Profit on Sale of Current Investments (Net) 1.28 0.26Insurance Claim 0.26 0.36Exchange Rate Difference (Net) 11.89 3.19Miscellaneous Income / receipts 49.36 27.12

63.47 32.21

SCHEDULE 15INCREASE / (DECREASE) IN STOCKSClosing StockWork-in-progress 102.35 75.60Finished Goods 60.99 64.45

163.34 140.05

Opening stockWork-in-progress 75.60 105.97Finished Goods 64.45 62.68

140.05 168.65

Add: Increase / (Decrease) in Excise Duty on Stocks 3.21 (1.78)

Increase / (Decrease) in Stocks 26.50 (30.38)

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PreviousYear

SCHEDULE 16

RAW MATERIALS CONSUMED

Opening Stock 23.43 12.74Purchase and Incidental Expenses 642.55 437.93

665.98 450.67Less: Closing Stock 43.26 23.43

622.72 427.24

SCHEDULE 17

MANUFACTURING EXPENSES

Freight and Handling expense on Clinker transfer 133.68 126.97Consumption of Stores, Spare Parts, Components and Packing Materials 358.43 303.78Power & Fuel Consumed 1,254.17 1,139.22Hire Charges of Plant & Machinery and others 6.26 5.78Repairs to Plant & Machinery 61.54 60.48Repairs to Buildings 5.26 5.92Repairs to Others 16.90 16.60

1,836.24 1,658.75

SCHEDULE 18

PAYMENTS TO AND PROVISIONS FOR EMPLOYEESSalaries, Wages and Bonus 132.86 88.66Contribution to and Provisions for Provident and Other Funds 21.19 13.70Compensation Expenses under ESOS 0.77 —Welfare Expenses 19.68 16.63

174.50 118.99

SCHEDULE 19

SELLING, DISTRIBUTION, ADMINISTRATION AND OTHER EXPENSESCommission paid to Distributors and Selling Agents 14.72 11.60Cash Discount 57.53 37.35Freight, Handling and Other Expenses 969.88 883.74Advertisement and Sales Promotion 102.30 77.25Insurance 9.34 11.21Rent (including Lease Rent) 13.36 9.75Rates and Taxes 29.96 16.14Stationery, Printing and Communication Expenses 10.12 8.93Travelling and Conveyance 22.23 19.52Legal and Professional charges 16.36 15.62Bad Debts and Advances Written off 1.79 0.76Provision for Doubtful Debts and Advances 0.20 -Directors’ Fees 0.12 0.18Power (other than related to Manufacturing Activity) 1.79 1.53Exchange Rate difference (Net) - 0.34Loss on Sale of Fixed Assets (Net) 1.18 0.05Contribution for Political Party (General Electoral Trust) 2.80 -Miscellaneous Expenses 32.08 29.54

1,285.76 1,123.51

SCHEDULE 20

INTEREST

On Debentures and Fixed Loans 62.38 79.18On Others Loans 13.29 7.65

75.67 86.83

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SCHEDULES 21

ACCOUNTING POLICY AND NOTES ON ACCOUNTS

A Significant Accounting Policies:

1. Basis of Accounting:

The financial statements are prepared under the historical cost convention on an accrual basis and in

accordance with the applicable mandatory Accounting Standards.

2. Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles

requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities

on the date of financial statements and the reported amounts of revenues and expenses during the

reported period. Difference between the actual results and estimates are recognised in the period in

which the results are known or materialise.

3. Fixed Assets:

Fixed assets are stated at cost (including other expenses related to acquisition and installation) less

accumulated depreciation / amortisation.

4. Foreign Currency Transactions:

Foreign currency transactions are accounted for at the rate prevailing on the date of the transaction.

Foreign currency monetary assets and liabilities at the balance sheet date are restated at the year end

rate. Premium in respect of forward contracts is recognised over the life of the contracts. Exchange

differences in case of borrowed funds and liabilities in foreign currency for projects are adjusted to the

cost of fixed assets, till the commissioning of the project and thereafter recognised in the Profit and

Loss Account. Any other exchange difference is dealt with in the Profit and Loss account.

5. Financial Derivatives:

Derivative financial instruments are used to hedge risk associated with foreign currency fluctuations

and interest rates. The derivative contracts are closely linked with the underlying transactions, and are

intended to be held to maturity. These are accounted on the date of settlement.

6. Treatment of Expenditure during Construction Period:

Expenditure during construction period is included under Capital Work-in-Progress and the same is

allocated to the respective Fixed Assets on the completion of its construction.

7. Investments:

Current investments are carried at lower of cost or fair value. Long term investments are stated at cost

after deducting provisions made for diminution other than temporary.

8. Inventories:

Inventories are valued at the lower of weighted average cost and net realisable value except waste /

scrap which is valued at net realisable value.

Finished goods and process stock include cost of conversion and other costs incurred in bringing the

inventories to their present location and condition. Obsolete, defective and unserviceable inventories

are duly provided for.

9. Leases:

a) In respect of lease transactions entered into prior to April 1, 2001, lease rentals of assets acquired

are charged to the Profit and Loss Account.

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b) Lease transactions entered into on or after April 1, 2001:

i) Assets acquired under leases where the Company has substantially all the risks and rewards of

ownership are classified as finance leases. Such assets are capitalised at the inception of the lease

at the lower of the fair value or the present value of minimum lease payments and a liability is

created for an equivalent amount. Each lease rental paid is allocated between the liability and the

interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each

period.

ii) Assets acquired under leases where a significant portion of the risks and rewards of ownership are

retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit and

Loss Account on accrual basis.

iii) Assets leased out under operating leases are capitalised. Rental income is recognised on accrual

basis over the lease term.

(Also refer to the policy on Depreciation and Amortisation below)

10. Depreciation and Amortisation:

Depreciation is charged in the accounts on the following basis:

i) Depreciation is provided on the straight-line basis at the rates prescribed in Schedule XIV to the

Companies Act, 1956 except for the following:

a) Motor Cars at 14.14 % per annum except for Motor Cars given to the employees.

b) Motor Cars given to the employees as per the Company’s Scheme is depreciated over the Scheme

period.

c) Personal Computers and Laptops given to the employees as per the Company’s Scheme at 31 %

per annum.

d) Roads, Culverts, Walls, Buildings etc., within factory premises are depreciated at 3.34 %

ii) Assets acquired up to September 30, 1987, are depreciated at the rates prevailing at the time of

acquisition.

iii) The value of leasehold land and mining lease is amortised over the period of the lease.

iv) Assets not owned by the Company are amortised over a period of five years or the period specified in

the agreement.

v) Expenditure incurred on Jetty is amortised over the period of the relevant agreement such that the

cumulative amortisation is not less than the cumulative rebate availed by the Company.

vi) Depreciation on additions / deductions is calculated pro-rata from / to the month of addition / deduction.

11. Impairment of Assets:

The carrying amount of assets are reviewed at each Balance Sheet date if there is an indication of impairment

based on the internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An

impairment loss, if any, is charged to the Profit and Loss Account in the year in which the asset is identified

as impaired. Reversal of impairment loss recognised in prior years is recorded when there is an indication

that impairment losses recognised for the asset no longer exists or has decreased.

12. Employee Benefits:

(i) Defined Contribution Plan

Contributions to defined contribution plan are recognised as expense in the Profit and Loss Account, as

they are incurred.

SCHEDULE 21 (Contd.)

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(ii) Defined Benefit Plan

The obligation in respect of defined benefit plan is determined using projected unit credit method, with

actuarial valuation at the end of each financial year. Actuarial gains / losses are recognised immediately

in the Profit and Loss Account.

Obligation is measured at the present value of estimated future cash flows using a discount rate that is

based on the prevailing market yields of Indian Government Securities as at the balance sheet date for

the estimated term of the obligations.

13. Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are

capitalised as part of the cost of such asset till such time as the asset is ready for its intended use. A

qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended

use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

The difference between the face value and the issue price of ‘Discounted Value Non-Convertible Debentures’,

being in the nature of interest, is charged to the Profit and Loss account, on a compound interest basis

determined with reference to the yield inherent in the discount.

14. Provision for Current and Deferred Tax:

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting

period and in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax resulting from

“timing differences” between book and taxable profit for the year is accounted for using the tax rates and

laws that have been enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are

recognised and carried forward only to the extent that there is a reasonable certainty, except for carried

forward losses and unabsorbed depreciation which are recognised based on virtual certainty, that the assets

will be realised in future.

15. Revenue Recognition:

Sales Revenue is recognised on transfer of significant risks and rewards of ownership of the goods to the

buyer and stated net of sales tax. VAT, trade discounts and rebates but includes excise duty. Income from

services is recognised as they are rendered, based on agreement / arrangement with the concerned parties.

Dividend income on investments is accounted for when the right to receive the payment is established.

Interest income is recognised on time proportion basis. Export Incentives, insurance, railway and other

claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on

acceptance basis.

16. Mines Restoration Expenditure:

The Company provides for the estimated expenditure required to restore quarries and mines. The total

estimate of restoration expenses is apportioned over the estimate of mineral reserves and a provision is

made based on minerals extracted during the year.

17. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present

obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent

Liabilities are not recognised but are disclosed, while Contingent Assets are neither recognised nor disclosed,

in the financial statements.

18. Employees Share based payments:

The Company follows intrinsic value method for valuation of Employees Stock Options. Value at the time

of grant of ESOS is considered as compensation expense and is amortised in the Profit and Loss Account

over the period of vesting, adjusting for the actual and expected vesting.

SCHEDULE 21 (Contd.)

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B. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Principles of consolidation:

(a) The Consolidated Financial Statements (CFS) comprises the financial statements of UltraTech Cement

Limited and its subsidiaries as at 31.03.2008, which are as under:

Name of the Company Country of % Shareholding &

Incorporation Voting Power

Dakshin Cements Limited India 100%

UltraTech Ceylinco (Private) Limited Sri Lanka 80%

(b) The financial statements of the parent company and its subsidiaries have been consolidated on a line-

by-line basis by adding together the book values of like items of assets, liabilities, income and expenses,

after eliminating intra-group balances and the unrealised profits / losses on intra-group transactions and

are presented to the extent possible, in the same manner as the Company’s separate financial statements.

2. Notes on Accounts of the financial statements of the Company and all the subsidiaries are set out in their

respective financial statements.

3. Goodwill:

Goodwill represents the difference between the Group’s share in the net worth of a subsidiary and the cost

of acquisition at each point of time of making the investment in the subsidiary. For this purpose, the

Group’s share of net worth is determined on the basis of the latest financial statements prior to the

acquisition after making necessary adjustments for material events between the date of such financial

statements and the date of respective acquisition.

Goodwill arising out of an acquisition of equity stake in a subsidiary is amortised in equal amounts over a

period of 10 years from the date of acquisition. In the event of cessation of operations of a subsidiary, the

unamortised goodwill is written off fully.

During the year Rs. 1.35 crores (Previous year Rs. 1.35 crores) was amortised from goodwill.

4. Reserves shown in the consolidated balance sheet represents the Group’s share in the respective reserves of

the Group companies.

5. Contingent Liabilities not provided for in respect of:

Rs. in Crores

Previous

Year

Claims not acknowledged as debts in respect of matters in appeals

(a) Sales tax liability 51.30 80.51

(b) Excise duty 27.35 35.75

(c) Royalty on Limestone/ Marl 43.27 43.48

(d) Customs 0.11 0.19

(e) Others 31.82 33.53

6. Estimated amount of contracts remaining to be executed on capital account and not provided (net of

advances) Rs. 491.32 crores (Previous year Rs. 1,749.10 crores).

SCHEDULE 21 (Contd.)

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7. Segment reporting:

The Group has one business segment ‘cement’ as primary segment. The secondary segment is geographical,

which is as under:

Rs. in Crores

2007-08 2006-07

Revenue

Net Sales:

In India 5,005.43 4,241.77

Outside India 618.39 726.62

Total 5,623.82 4,968.39

8. Disclosure of related parties / related party transactions:

a) Names of the related parties with whom transactions were carried out during the year and description of

relationship:

Name of the Related Party Nature of Relationship

Grasim Industries Limited (Grasim) Holding Company

Sun God Trading & Investment Ltd. Fellow Subsidiary

Samruddhi Swastik Trading & Investment Ltd.(SSITL) Fellow Subsidiary

Shree Digvijay Cement Co. Ltd. (SDCCL) (upto 24.03.2008) Fellow Subsidiary

Harish Cement Ltd (HCL) Fellow Subsidiary

Grasim Bhiwani Textiles Limited (w.e.f. 01.10.2007) Fellow Subsidiary

Key Management Personnel (KMP) and their relatives:

Mr. S. Misra, Managing Director of the Company

b) Disclosure of related party transactions:

Rs. in Crores

Sr. No. Nature of Transaction Grasim SSITL GBTL SDCCL KMP Total

1. Sale of Goods 44.51 — — 0.05 — 44.56(265.07) — — (0.33) — (265.40)

2. Purchase of goods 25.50 — 0.03 2.59 — 28.12(191.69) — — (2.41) — (194.10)

3. Sale of Fixed Assets 5.68 — — — — 5.68— — — — — —

4. Purchase of Fixed Assets 0.09 — — — — 0.09(0.21) — — — — (0.21)

5. Receiving of Services 0.11 0.17 — — 4.44 4.72(0.08) (0.12) — — (3.36) (3.56)

6. Interest & Other Income — — — — — —received/receivable — — — (0.04) — (0.04)

SCHEDULE 21 (Contd.)

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Outstanding Balance as on March 31, 2008

Rs. in Crores

Sr. No. Nature of Transaction Grasim SSITL SDCCL KMP Total

1. Debtors — — — — —(0.27) — (Rs.6,305) — (0.27)

2. Loans & Advances 0.51 0.09 — 0.50 1.10— (0.09) (Rs.1,276) (0.50) (0.59)

3. Other Liabilities & Creditors 1.07 — — — 1.07(0.36) — — — (0.36)

Figures in brackets are pertaining to previous year.

9. Leases:

Operating Leases:

i) The Company has taken various plant and machinery under cancellable operating leases. These lease

agreement are generally renewed on expiry.

ii) (a) The Company has taken on non-cancellable operating leases certain assets, the future minimum

lease payments in respect of which, as at March 31, 2008 are as follows:

Rs. in Crores

2007-08 2006-07

Minimum Lease Payments Payablei. not later than 1 year 0.08 0.28ii. later than 1 year and not later than 5 years — 0.12iii. later than 5 years — —

Total Minimum Lease Payments 0.08 0.40

(b) The lease agreements provide for an option to the Company to renew the lease period at theend of the non-cancellable period. There are no exceptional / restrictive covenants in the leaseagreements.

iii) The rental expense in respect of operating leases was Rs. 0.21 crore (Previous year Rs. 0.36 crore).

10. Deferred Tax Assets and Liabilities as on March 31, 2008 are as under:

Rs. in Crores

Particulars Deferred Tax Current Year Deferred Tax

(assets)/ Charge/ (assets)/

liabilities as at (Credit) liabilities as at

01.04.2007 31.03.2008

Deferred Tax Assets:Provision allowed under tax on payment basis (11.96) (1.64)* (13.60)Unabsorbed Losses (4.12) 1.88 (2.24)

(16.08) 0.24 (15.84)

Deferred Tax Liabilities:Accumulated Depreciation 570.46 (16.94) 553.52

Payments allowed under tax not expensed in books 7.71 (0.01) 7.70

578.17 (16.95) 561.22

Net Deferred Tax Liability 562.09 (16.71) 545.38

*Out of Rs. 1.64 crores, Rs. 1.21 crores adjusted in General Reserve on account of transitional provision of

AS – 15 (Revised 2005)

SCHEDULE 21 (Contd.)

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11. Auditors’ remuneration (excluding service tax) and expenses charged to the accounts:

Rs. in Crores

a) Statutory Auditors: 2007-08 2006-07

Audit fees 0.34 0.26

Tax audit fees 0.03 0.03

Certification fees 0.21 0.14

Expenses reimbursed 0.01 0.02

b) Branch Auditors:

Audit fees 0.04 0.04

Expenses reimbursed (Rs.10,480, previous year Rs. 4,871) 0.01 —

c) Cost Auditors:

Audit fees 0.02 0.02

Expenses reimbursed (Rs. 7,645, previous year Rs 7,495) — —

12. Employee Benefits:

a) Defined Benefit Plans as per Actuarial Valuation on March 31, 2008:

Rs. in Crores

Gratuity Pension Post

Funded OtherRetirement

Medical Benefits

(i) Opening Balance of Present value of

Defined Benefit Obligation 22.35 0.10 0.80 0.57

Adjustment of:

Current Service Cost 2.24 0.02 — —

Interest Cost 1.80 0.02 0.06 0.04

Actuarial Loss / (Gain) 3.44 — 0.03 (Rs. 3,209)

Benefits Paid (2.42) (Rs.46,035) (0.07) (0.04)

Past Service Cost 0.72 — — —

Closing Balance of Present value of

Defined Benefit Obligation 28.12 0.14 0.82 0.58

(ii) Change in Fair Value of Assets

Opening Balance of FairValue of Plan Assets 16.46 — — —

Adjustment of:

Expected Return on Plan Assets 2.01 — — —

Cont. by the employer / participants 6.14 — 0.07 0.04

Benefits Paid (2.42) — (0.07) (0.04)

Amount lying with the Company 0.47 — — —

Closing Balance of Fair Value of Plan Assets 22.66 — — —

(iii) Net Asset / (Liability) recognised in the

Balance Sheet

Present value of Defined Benefit Obligation (28.12) (0.14) (0.82) (0.58)

Fair Value of Plan Asset 22.66 — — —

Net Asset / (Liability) in the Balance Sheet (5.46) (0.14) (0.82) (0.58)

SCHEDULE 21 (Contd.)

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(iv) Expenses recognised in the

Profit and Loss Account

Current Service Cost 2.24 0.02 — —

Interest Cost 1.80 0.02 0.06 0.04

Expected Return on Plan Assets (2.01) — — —

Actuarial (Gain) / Loss 3.44 — 0.03 (Rs. 3,209)

Total Expenses 5.46 0.04 0.09 0.04

(v) The major categories of plan assets as a

percentage of total plan

Insurer Managed Funds 100% N.A. N.A. N.A.

(vi) Actuarial Assumptions

Discount Rate 8.00% 15% 7.70% 7.70%

Turnover Rate 1% - 3% 1% - 10% — —

Mortality Published 1983 PA (90) PA (90)

rates of LIC Mortality Annuity Annuity rates

94-96 Table rates down down by

by 4 years 4 years

Salary Escalation Rate 6% 12% — —

Retirement age Staff- 60 Yrs 55 Yrs — 60 Yrs

Workers –

58 Yrs

(vii)Basis used to determine Expected Rate of Return on Plan Assets:

Expected rate of return on Plan Assets is based on expectation of the average long term rate of return

expected on investments of the fund during the estimated term of the obligations.

(viii)Salary Escalation Rate:

The estimates of future salary increases are considered taking into account the inflation, seniority,

promotion and other relevant factors.

(b) Change in Accounting Policy:

During the year, the Company has decided to adopt Accounting Standard (AS) 15 (Revised 2005)

“Employee Benefits”, issued by the Institute of Chartered Accountants of India. Accordingly the Company

has adjusted Rs. 2.35 crores (net of deferred tax liability of Rs. 1.21 crores) against the general reserve

in accordance with transitional provision of the said standard.

(c) Defined Contribution Plans:

Amount recognised as an expense and included in Schedule 18 under the head “Contribution to and

Provisions for Provident and other Funds” of Profit and Loss account Rs. 9.89 crores.

(d) Amount recognised as an expense in respect of Compensated Leave Absences is Rs. 5.44 crores.

Rs. in Crores

Gratuity Pension Post

Funded OtherRetirement

Medical Benefits

SCHEDULE 21 (Contd.)

S C H E D U L E S F O R M I N G P A R T O F C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S

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13. Earning per Share (EPS):

2007-08 2006-07

(A) Basic EPS:

(i) Net Profit attributable to Equity Shareholders (Rs. Crores) 1010.05 784.91

(ii) Weighted average number of Equity Shares outstanding (Nos.) 124,485,879 124,485,879

Basic EPS (Rs.) (i)/(ii) 81.14 63.05

(B) Diluted EPS:

(i) Weighted average number of Equity Shares Outstanding 124,485,879 124,485,879

(ii) Add: Potential Equity Shares on exercise of option 45,852 —

(iii) Weighted average number of Equity Shares Outstanding

for calculation of Diluted EPS (i+ii) 124,531,731 124,485879

Diluted EPS (Rs.) {(A) (i) } / (iii) 81.11 63.05

Face value of Shares (Rs.) 10 10

14. Movement of provisions during the period as required by Accounting Standard - 29 “Provisions, Contingent

Liabilities, and Contingent Asset” issued by the Institute of Chartered Accountants of India:

Mines Restoration Expenditure:

Rs. in Crores

2007-08 2006-07

Opening Balance 1.64 —

Expenditure in current year — —

Provision during the year 1.87 1.64

Closing Balance 3.51 1.64

15. (i) Derivative Instruments outstanding

Derivatives for hedging currency and interest rates, outstanding as on March 31, 2008 are as under:

Particulars Purpose Currency In Million Cross Currency

CurrentYear PreviousYear

A. Forward Contracts Exports USD 28.97 – Rupees

Buyers Credit USD 18.39 – Rupees

Capital Imports USD – 7.00 Rupees

Capital Imports Euro 9.41 5.70 USD

Buyers Credit JPY 1,845.28 – USD

B. Options (Derivatives) ECB Loan USD 40.00 40.00 Rupees

Buyers Credit JPY 2,506.25 – Rupees

Capital Imports Euro – 2.00 USD

SCHEDULE 21 (Contd.)

S C H E D U L E S F O R M I N G P A R T O F C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S

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(ii) Un-hedged Foreign Currency exposure

Type of Exposure Currency In Million Cross Currency

CurrentYear PreviousYear

ECB Loan USD 20.00 20.00 Rupees

Buyers Credit USD 24.44 — Rupees

16. Figures pertaining to the subsidiary companies have been reclassified wherever necessary to bring them in

line with the Company’s financial statements.

17. Previous year’s figures have been regrouped and rearranged wherever necessary to confirm to this year’s

classification.

Signatures to Schedules ‘1’ to ‘21’

S. MISRA KUMAR MANGALAM BIRLA Managing Director Chairman

R. C. BHARGAVAG. M. DAVE

Y. M. DEOSTHALEEK. C. BIRLA N. J. JHAVERI

Sr. Executive President & CFO DR. S. MISRAV. T. MOORTHY

S. RAJGOPALD. D. RATHI

S. K. CHATTERJEE DirectorsCompany Secretary

Mumbai, April 22, 2008

SCHEDULE 21 (Contd.)

S C H E D U L E S F O R M I N G P A R T O F C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S

DAKSHIN CEMENTS LIMITED

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S u b s i d i a r y C o m p a n i e s R e p o r t s a n d A c c o u n t s

CMYK

DAKSHIN CEMENTS LIMITED

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DIRECTOR’S REPORT

Dear Shareholders,

Your Directors have pleasure in presenting the Fifteenth

Annual Report of your Company together with the

Audited Accounts of your Company for the year ended

31st March, 2008.

FINANCIAL RESULTS

During the year under review, your Company did not

carry on any business activities and accordingly no

Profit and Loss Account has been prepared.

CAPITAL EXPENDITURE

During the year under review, your Company did not

incur any capital expenditure.

FIXED DEPOSITS

Your Company has not accepted any fixed deposit

during the year ended 31st March, 2008.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies

Act, 1956, your Directors confirm that:

i) in the preparation of Annual Accounts, the

applicable accounting standards had been followed

along with proper explanation relating to material

departures;

ii) the Directors had selected such accounting policies

and made judgments and estimates that are

reasonable and prudent so as to give a true and

fair view of the state of affairs of your Company

as at 31st March, 2008;

iii) the Directors had taken proper and sufficient care

for the maintenance of adequate accounting records

in accordance with the provisions of the Companies

Act, 1956 for safeguarding the assets of your

Company and for preventing and detecting the

fraud and other irregularities; and

iv) the Directors had prepared the annual accounts on

a going concern basis.

AUDITORS’ REPORT

There are no adverse comments, observation or

reservation in the Auditors’ Report on the Annual

Accounts of your Company.

The Notes to the Accounts referred to in the Auditors’

Report are self explanatory and therefore do not call

for any further comments from the Directors.

PARTICULARS OF EMPLOYEES

Section 217(2A) of the Companies Act, 1956 read with

the Companies (Particulars of Employees) Rules, 1975

do not apply to your Company as none of its employees

are covered under these provisions.

CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION, FOREIGN EXCHANGE

EARNINGS & OUTGO

During the year under review, your Company did not

carry any commercial / business activity and

accordingly particulars under conservation of energy,

technology absorption, foreign exchange earnings &

outgo have not been provided.

AUDITORS

M/s. G. P. Kapadia & Co., Chartered Accountants,

Mumbai the existing Auditor will retire at the ensuing

Annual General Meeting of your Company. They being

eligible to be re-appointed have expressed their

willingness to be re-appointed as the Statutory Auditor

of your Company for the financial year 2008-09.

A resolution seeking your approval for the

re-appointment of the said auditor has been included

in the Notice convening the Annual General Meeting.

ACKNOWLEDGEMENT

The Board of Directors wish to place on record their

appreciation for the support and co-operation extended

by UltraTech Cement Limited, the Auditors and the

Bankers of your Company.

For and on behalf of the Board of Directors

K. C. BIRLA

O. P. PURANMALKA Directors

M. R. PRASANNA

Place: Mumbai

Date: 14th April, 2008

}

DAKSHIN CEMENTS LIMITED

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AUDITORS’ REPORT

We have audited the attached Balance Sheet of Dakshin

Cements Limited as at 31st March, 2008. No Profit and

Loss Account has been prepared as the Company has

not carried out any activities. These financial statements

are the responsibility of the Company’s Management.

Our responsibility is to express an opinion on these

financial statements based on our audit.

We conducted our audit in accordance with auditing

standards generally accepted in India. Those Standards

require that we plan and perform the audit to obtain

reasonable assurance about whether the financial

statements are free of material misstatement. An audit

includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements.

An audit also includes assessing the accounting

principles used and significant estimates made by

management, as well as evaluating the overall financial

statement presentation. We believe that our audit

provides a reasonable basis for our opinion.

In accordance with the provisions of Section 227 of

the Companies Act, 1956, we report that:

1. As the Company has carried out no activities

during the year, the requirement by the Companies

(Auditor’s Report) Order, 2003 issued by the

Central Government of India in terms of Section

227(4A) of the Companies Act, 1956, is not

applicable.

2. Further to our comments in paragraph 1 above,

we report that:

(a) We have obtained all the information and

explanations, which to the best of our

knowledge and belief were necessary for the

purposes of our audit;

(b) In our opinion, proper books of account as

required by law have been kept by the

Company so far as appears from our

examination of those books;

(c) The Balance Sheet dealt with by this report is

in agreement with the books of account;

(d) In our opinion, the Balance Sheet dealt with

by this report, complies with the accounting

standards referred to in Section 211(3C) of

the Companies Act, 1956, to the extent

applicable;

(e) On the basis of written representations received

from the directors as on 31st March, 2008,

and taken on record by the Board of Directors,

we report that none of the directors is

disqualified as on 31st March, 2008 from being

appointed as a director in terms of Section

274(1)(g) of the Companies Act, 1956, and

(f) In our opinion and to the best of our

information and according to the explanations

given to us, the said Balance Sheet read

together with the significant accounting

policies and other notes appearing in

Schedule 5, gives the information required by

the Companies Act, 1956, in the manner so

required and give a true and fair view in

conformity with the accounting principles

generally accepted in India , of the state of

Company’s affairs as at 31st March, 2008.

For G. P. Kapadia & Co.

Chartered Accountants

ATUL B. DESAI

Partner

(Membership No 30850)

Mumbai, April 14, 2008

DAKSHIN CEMENTS LIMITED

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Balance Sheet as at March 31, 2008

As at As at

31st March, 2008 31st March, 2007

Schedules Rupees Rupees Rupees Rupees

I. SOURCES OF FUNDS:

Shareholders’ Funds

Share Capital 1 500,000 500,000

Loan Funds – –

500,000 500,000

II. APPLICATION OF FUNDS:

Fixed Assets 2

Gross block – –

Less : Depreciation – –

Net block – –

Captial Work in progress – –

Incidental Expenditure pending

allocation / capitalisation 1,758,047 1,758,047 1,554,969 1,554,969

Current Assets, Loans and Advances 3 391,327 365,576

391,327 365,576

Less : Current Liabilities and Provisions 4 1,686,768 (1,295,441) 1,457,939 (1,092,363)

Miscellaneous Expenditure

(to the extent not written off or adjusted) 37,394 37,394

500,000 500,000

Notes on Accounts 5

As per our report attached.

For G. P. Kapadia & Co.

Chartered Accountants

ATUL B. DESAI K. C. BIRLA O. P. PURANMALKA M. R. PRASANNA

Partner Director Director Director

Membership No. 30850

Mumbai, April 14, 2008

DAKSHIN CEMENTS LIMITED

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Schedules forming part of the Balance SheetAs at As at

31st March, 31st March,

2008 2007

Schedule - 1 Rupees Rupees

SHARE CAPITAL

Authorised

500,000 Equity shares of Rs. 10 each 5,000,000 5,000,000

Issued and Subscribed

50,000 Equity shares of Rs. 10 each

fully paid (All the shares are held by

UltraTech Cement Limited,

the holding company) 500,000 500,000

Schedule - 2

FIXED ASSETS

Gross block — —

Less : Depreciation — —

Net block — —

Captial work in progress — —

Incidental Expenditure pending allocation

/ capitalisation 1,758,047 1,554,969

1,758,047 1,554,969

Schedule - 3

CURRENT ASSETS, LOANS AND ADVANCES

Cash and Bank Balances

Cash on Hand 241 241

Balance with Scheduled Bank

on currentt account 200,305 200,305

200,546 200,546

Loans and Advances

unsecured, considered good

TCS Receivable 3,583 —

Advances recoverable in cash or in kind

or for value to be received 187,198 165,030

Total 391,327 365,576

Schedule - 4

CURRENT LIABILITIES AND PROVISIONS

Liabilities

Due to UltraTech Cement Limited

(The Holding Company) 1,488,081 1,264,870

Due to Others 171,187 171,187

Other liabilities 27,500 21,882

Total 1,686,768 1,457,939

Schedule - 5

NOTES ON ACCOUNTS

1. Significant Accounting Policies :

The Company maintains its accounts on accrual basis following the historical

cost convention in accordance with generally accepted accounting principles

(“GAAP”) and in compliance with the accounting standards referred to in

Section 211 (3C) and other requirements of the Companies Act, 1956, to

the extent applicable.

2. As the Company has not yet started commercial operation no Profit & Loss

Account has been prepared. The statement showing the unallocated,

pre-operative expenditure incurred up to 31st March 2008 is shown in

Schedule - 2.

3. The pre-operative expenditure as under pending allocation will be allocated

to appropriate fixed assets on commencement of the commercial production:

Incidental expenditure pending allocation / capitalisation

As at As at

31st March, 31st March,

2008 2007

Rupees Rupees

Travelling and conveyance 134,629 134,629

Subscription 1,000 1,000

Survey expenses 90,750 90,750

Testing charges 8,000 8,000

Consultancy charges 2,500 2,500

Auditors’s remuneration 68,900 63,282

Printing & Stationery 3,764 3,764

Office expenses 2,745 2,745

Bank charges 325 325

Directors sitting fees 7,500 7,500

Filing fees 33,770 33,770

Royalty / dead rent 1,113,271 915,811

Legal fees 262,000 262,000

Interest 7,008 7,008

Miscellaneous expenses 21,885 21,885

Total 1,758,047 1,554,969

Contingent liabilities - Nil.

Previous year figures have been regrouped wherever necessary.

Signature to Schedule 1 to 5

As per our report attached.

For G. P. Kapadia & Co.

Chartered Accountants

ATUL B. DESAI K. C. BIRLA O. P. PURANMALKA M. R. PRASANNA

Partner Director Director Director

Membership No. 30850

Mumbai, April 14, 2008

DAKSHIN CEMENTS LIMITED

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Balance Sheet abstract and Company’s General Business Profile

1. Registration Details

Registration No. 0 1 - 0 1 6 0 0 2 State Code 0 1

Balance Sheet Date 3 1 - 0 3 - 0 8

2. Capital raised during the year (Amount in Rs. Thousands)

Public Issue Rights Issue

N I L N I L

Bonus Issue Private Placement

N I L N I L

3. Position of Mobilisation and Development of Funds (Amount in Rs. Thousands)

Total Liabilities Total Assets

5 0 0 5 0 0

Sources of Funds :

Paid up Capital Reserves & Surplus

5 0 0 N I L

Secured Loans Unsecured Loans

N I L N I L

Application of Funds :Net Fixed Assets Investments

1 7 5 8 N I L

Net Current Assets Miscellaneous Expenditure

( 1 2 9 5 ) 3 7

Accumulated Losses

N I L

4. Performance of the Company (Amount in Rs. Thousands)

Turnover (including other income) Total Expenditure

N I L N I L

+ / - Profit / (Loss) Before Tax + / - Profit / (Loss) After Tax

N I L N I L

Please Tick Appropriate box + for Profit, - for loss

Earnings Per Share (Rs.) Dividend Rate (%)

N A N A

5. Generic Names of Three Principal Products / Services of the Company (as per monetary terms)

No Activities during the year

K. C. BIRLA O. P. PURANMALKA M. R. PRASANNA

Director Director Director

Mumbai, April 14, 2008

U l t r a T e c h C e y l i n c o ( P v t ) L t d

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DIRECTORS’ REPORT

The Directors of UltraTech Ceylinco (Pvt) Ltd have pleasure

in presenting to the Members their Report for the year ended

31st March, 2008.

PRINCIPAL ACTIVITY

The principal activity of the Company is carrying on business

of importers, exporters, distributors, warehousemen,

wholesalers, retailers and dealers of cement and to establish

storage terminals and other facilities for the bagging and

distribution of bulk cement.

PROFIT & LOSS ACCOUNT

Year ended Year ended

31.03.2008 31.03.2007

SLR (Millions) SLR (Millions)

Turnover 5,648 4,778

Cost of Sales (5,277) (4,345)

Gross Profit 371 433

Other Operating Income 5 16

Administrative expenses (57) (50)

Distributive expenses (71) (70)

Profit from Operation 248 329

Finance Income-Net 75 7

Profit before taxation 323 336

Taxation (118) (115)

Net Profit for the year 205 221

Earnings per share – (Rs.) 4.11 4.42

DIRECTORATE

The names of the Director of the company as at date are

given under Corporate Information. There have been no

change in the directorate during the year under review.

RETIREMENT BY ROTATION AND/OR OTHERWISE

By virtue of provisions contained in the Articles of

Association of the Company, the Directors are not subject

to retirement by rotation.

DIRECTORS INTEREST IN THE CONTRACTS

The Directors of the Company have no direct or indirect

interest in any contract or proposed contract of the Company,

except those specified in Note 18 to the financial statement.

AUDITORS

The accounts for the year under review have been audited

by Messers KPMG Ford Rhodes Thornton & Company

Chartered Accountants, who retire and being eligible offer

themselves for re-appointment for the year 2008-2009.

The Directors do recommend their re-appointment.

BY ORDER OF THE BOARD

Sgd. (Authorised Signatory)

INTERNATIONAL CONSULTANCY AND

CORPORATE SERVICES (PVT) LIMITED

SECRETARIES FOR ULTRATECH CEYLINCO (PVT)

LIMITED

28th April, 2008

Colombo

The Company Distributed 0.55 Million M.Tons of cementagainst 0.51 Million M.Tons. This has given 8% growth asagainst market growth 3% which has resulted in marketshare of 13%.

The sales and other income for the financial year underreview were Rs. 5,648 Millions as against Rs. 4,778 Millionsduring the same period last year, which has given us agrowth of 18%. The profit after providing for tax for theperiod was Rs. 205 Millions as against the profit of Rs. 221Millions in previous year which has given us a de-growthof 7%.

The performance during the year compared to previous yearwas better in terms of the quantity sold and continuousefforts in the cost reduction activities and better productivity.However, Company could not achieve higher profitscompared to last year. The main reasons for this decrease inprofits are due to increase in cement /freight cost globally

and price controls introduced by the Sri Lankan Government.The Authorities did not allow us to increase the marketprices to cover the total cost increases resulting in decreasinggross margins by approximately 2.5%, which was material.

Looking into the current position of the cement industry,we have to face the following challenges in coming financialyear and hope we can overcome all.

a) Purchase of cement from countries other than fromIndia due to the export restrictions on India.

b) Continuous increase on global cement purchaseprices. As a result, to convince Government toallow us to increase prices to cover total costincrease.

c) Carry out a brand building exercise.

K.G. Redkar

MESSAGE FROM THE CHIEF EXECUTIVE

U l t r a T e c h C e y l i n c o ( P v t ) L t d

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REPORT OF THE AUDITORS

TO THE MEMBERS OF ULTRATECH CEYLINCO

(PVT) LTD

Report on the Financial Statements

We have audited the accompanying financial statements of

UltraTech Ceylinco (Private) Limited, which comprise the

balance sheet as at March 31, 2008, and the income

statement, statement of changes in equity and cash flow

statement for the year then ended, and a summary of

significant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial

Statements

Management is responsible for the preparation and fair

presentation of these financial statements in accordance with

Sri Lanka Accounting Standards. This responsibility includes:

designing, implementing and maintaining internal control

relevant to the preparation and fair presentation of financial

statements that are free from material misstatement, whether

due to fraud or error; selecting and applying appropriate

accounting policies; and making accounting estimates that

are reasonable in the circumstances.

Scope of Audit and Basis of Opinion

Our responsibility is to express an opinion on these financial

statements based on our audit. We conducted our audit in

accordance with Sri Lanka auditing Standards. Those

standards require that we plan and perform the audit to

obtain reasonable assurance whether the financial statements

are free from material misstatement.

An audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting

principles used and significant estimates made by

management, as well as evaluating the overall financial

statement presentation.

We have obtained all the information and explanations which

to the best of our knowledge and belief were necessary for

the purposes of our audit. We therefore believe that our

audit provides a reasonable basis for our opinion.

Opinion

In our opinion, so far as appears from our examination, the

Company maintained proper accounting records for the year

ended March 31, 2008 and the financial statements give a

true and fair view of the Company’s state of affairs as at

March 31, 2008 and its profit and cash flows for the year

then ended in accordance with Sri Lanka Accounting

Standards.

Report on Other Legal and Regulatory Requirements

These financial statements also comply with the requirements

of Section 151(2) of the Companies Act No.07 of 2007.

For KPMG FORD, RHODES, THORTON & CO

Chartered Accountants

Colombo, 10th April, 2008.

U l t r a T e c h C e y l i n c o ( P v t ) L t d

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Balance Sheet as at 31st March, 2008

31.03.2008 31.03.2007

ASSETS Note SLR INR SLR INR

Non-Current Assets

Leasehold Land 7 27,542,552 10,198,497 28,724,351 11,361,670

Property, Plant & Equipment 8 440,889,326 163,253,159 462,978,101 183,127,008

Deffered Tax Asset 15 61,825,700 22,892,913 104,939,371 41,507,866

530,257,578 196,344,569 596,641,823 235,996,544

Current Assets

Inventories 9 292,404,726 108,272,059 234,903,215 92,913,947

Trade Receivables 10 66,779,214 24,727,107 235,579,071 93,181,276

Other Receivables 11 120,411,546 44,586,167 39,409,610 15,588,131

Prepayment and Advances 54,713,534 20,259,408 8,088,492 3,199,334

Cash and Cash Equivalents 12 367,049,242 135,911,542 265,402,633 104,977,729

901,358,262 333,756,283 783,383,021 309,860,417

Total assets 1,431,615,840 530,100,852 1,380,024,844 545,856,961

EQUITY & LIABILITIES

Equity

Share Capital 13 500,000,000 185,140,748 500,000,000 197,770,701

Retained Earnings 275,566,541 102,037,189 169,990,236 67,238,176

Total Equity 775,566,541 287,177,937 669,990,236 265,008,877

Non-Current Liabilities

Retiring Benefit Obligations 14 3,527,386 1,306,126 2,566,754 1,015,257

Deferred Tax Liability 15 143,725,670 53,218,956 151,111,666 59,770,920

147,253,056 54,525,082 153,678,420 60,786,177

Current Liabilities

Trade Payables 16 456,298,611 168,958,932 486,291,532 192,348,434

Other Payables 17 13,647,799 5,053,527 38,882,495 15,379,636

Income Tax Payables 17,945,286 6,644,807 26,879,771 10,632,062

Accrued Expenses 20,904,547 7,740,567 4,302,390 1,701,775

508,796,243 188,397,833 556,356,188 220,061,907

TOTAL EQUITY AND LIABILITIES 1,431,615,840 530,100,852 1,380,024,844 545,856,961

The figures in INR is converted at the rate of 2.70065 =108.35/40.12 2.5282 = 109.9/43.47

The Directors are responsible for the preparation and presentation of these Financial Statement.

The Accounting Policies and Notes annexed form an integral part of the Financial Statement.

Signed for and on behalf of the Board

K.C.Birla

Directors

A.R.Gunawardena }

U l t r a T e c h C e y l i n c o ( P v t ) L t d

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Income Statement for the period ended 31st March, 2008

Year ended Year ended

31.03.2008 31.03.2007

Note SLR INR SLR INR

Turnover 1 5,648,144,817 2,163,245,935 4,777,959,022 1,977,756,205

Cost of sales (5,276,939,403) (2,024,884,572) (4,345,202,370) (1,803,518,266)

Gross profit 371,205,414 138,361,363 432,756,652 174,237,939

Other operating income 2 5,001,276 1,915,494 16,307,571 6,750,246

Administrative expenses (56,967,354) (21,761,002) (50,087,336) (20,732,814)

Distribution cost (70,856,156) (27,057,605) (70,016,265) (28,982,062)

Finance income - Net 3 75,448,508 25,428,658 7,452,548 3,911,785

Profit before income tax 4 323,831,688 116,886,908 336,413,170 135,185,094

Taxation 5 (118,255,383) (43,787,780) (115,255,124) (47,707,930)

Net profit for the year 205,576,305 73,099,128 221,158,046 87,477,164

Earnings per share - Rs 6 4.11 - 4.42 -

The figures in INR is converted at the rate of 2.6109 =((108.35+109.9)/2)/((40.12+43.47)/2) 2.415848 = ((109.9+102.9)/2)/((44.615+43.47)/2)

Statement of changes in equityFor the period ended 31st March, 2008

Share Capital Retained Total

Earnings

SLR SLR SLR

Balance as at 1st April 2006 500,000,000 48,832,190 548,832,190

Profit for the year - 221,158,046 221,158,046

Dividend paid - (100,000,000) (100,000,000)

Balance as at 31st March 2007 500,000,000 169,990,236 669,990,236

Profit for the year - 205,576,305 205,576,305

Dividend paid - (100,000,000) (100,000,000)

Balance as at 31st March 2008 500,000,000 275,566,541 775,566,541

U l t r a T e c h C e y l i n c o ( P v t ) L t d

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Cash Flow Statement for the period ended 31st March, 2008

Year ended Year ended

31.03.2008 31.03.2007

SLR INR SLR INR

Cash flows from operating activities

Profit before tax 323,831,688 116,886,908 336,413,170 135,185,094

Adjustment for

Depreciation on property, plant and equipment 26,810,183 9,927,315 25,757,070 10,187,988

Amortization of leasehold land 1,181,799 437,598 1,113,393 440,393

Provision for retiring gratuity 1,084,868 401,707 222,904 88,168

Provision for bad and doubtful debts 5,464,519 2,023,410 (2,070,323) (856,976)

Interest income (43,172,234) (16,535,015) (17,767,873) -

(Gain) / loss on translation of foreign currency - (2,411,518) - (3,052,135)

Gain / (loss) on disposal of property, plant and equipment 110,735 42,412 (771,292) (319,263)

Operating profit before working capital changes 315,311,558 110,772,817 342,897,049 141,673,269

(Increase) / decrease in inventories (57,501,511) (21,291,744) (17,426,396) (1,378,846)

(Increase) / decrease in trade and other receivables 35,708,360 13,222,144 (80,082,137) (38,237,167)

Increase / (decrease) in trade and other payables (38,625,460) (14,302,292) 46,274,860 6,360,481

(60,418,611) (22,371,892) (51,233,673) (33,255,532)

Cash generated from operations 254,892,947 88,400,925 291,663,376 108,417,737

Dividend paid (100,000,000) (38,300,115) (100,000,000) (39,554,140)

Income tax paid (91,462,193) (33,866,757) (88,576,693) (35,035,749)

Retiring gratuity paid (124,236) (46,002) (192,900) (76,300)

Net cash flow from operating activities 63,306,519 16,188,051 102,893,783 33,751,548

Cash flows from investing activities

Purchase and construction of property, plant & equipment (6,199,202) (2,295,450) (8,422,301) (2,496,629)

Interest income received 43,172,234 16,535,015 17,767,873 7,354,714

Proceeds on disposal of property, plant and equipment 1,367,059 506,197 771,292 319,263

Net cash flow from investing activities 38,340,091 14,745,762 10,116,864 5,177,348

Net increase / (decrease) in cash & cash equivalent 101,646,610 30,933,813 113,010,649 38,928,896

Cash & cash equivalents at the beginning of the year 265,402,632 104,977,729 152,391,983 66,048,833

Cash & cash equivalents at the end of the year 367,049,242 135,911,542 265,402,632 104,977,729

Analysis of cash and cash equivalents

Cash in hand 4,221,190 1,563,029 7,567,294 2,993,178

Cash at bank 362,828,052 134,348,513 257,835,339 101,984,551

367,049,242 135,911,542 265,402,633 104,977,729

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Notes to the Accounts for the period ended

31st March, 2008

31.03.2008 31.03.2007SLR INR SLR INR

1 TURNOVER

Turnover-Cement 5,648,144,817 2,163,245,935 4,777,959,022 1,977,756,205

2 OTHER OPERATING INCOME

Income from storage

and handling 5,100,174 1,953,372 13,035,602 5,395,869

Scrap Sales 11,837 4,534 430,354 178,138

Reversal of provision for

bad and doubtful debts - - 2,070,323 856,976

Gain/(loss) on disposals of

property, plant and equipments (110,735) (42,412) 771,292 319,263

5,001,276 1,915,494 16,307,571 6,750,246

3 FINANCE INCOME - NET

Interest income 43,172,234 16,535,015 17,767,873 7,354,714

Gain/(loss) on translation of 32,276,274 8,893,643 (10,315,325) (3,442,929)

foreign currency

75,448,508 25,428,658 7,452,548 3,911,785

4 PROFIT BEFORE INCOME TAX

Profit before income tax is stated after charging all expenses including the following

Directors’ emoluments 11,224,656 4,299,056 1,988,229 822,994

Auditors’ remuneration 500,000 191,501 400,000 165,573

Depreciation and amortisation 27,991,982 10,364,913 26,870,462 10,628,380

of leasehold land

Donation - - 43,000 17,799

Provision for bad and

doubtful debts 5,464,519 2,023,410 - -

Staff costs (Note 4.1) 74,548,119 28,552,015 39,285,856 16,558,770

4.1 Staff costs

Salaries and related costs 66,565,565 25,494,688 35,132,359 14,542,452

Defined contribution plan

cost- EPF and ETF 6,633,318 2,540,568 3,930,593 1,627,003

Other staff cost 1,349,236 516,759 222,904 389,315

74,548,119 28,552,015 39,285,856 16,558,770

5 TAXATION

Taxation charge is made up as follows

Income tax on current year profit 81,710,602 30,255,924 81,807,912 33,863,016

Deferred tax charge 35,727,675 13,229,297 32,629,133 13,506,284

Social Responsibility Levy 817,106 302,559 818,079 338,630

118,255,383 43,787,780 115,255,124 47,707,930

Numerical reconciliation between tax charge and the product of accounting profit multiplied by theapplicable tax rate.Accounting profit before tax 323,831,688 116,886,907 336,413,170 135,185,094Disallowable expenses 35,572,476 13,624,300 28,034,438 11,604,387Allowable expenses (5,251,522) 2,011,339 (4,852,392) (2,008,566)Less - other income (42,954,309) (16,451,550) (17,767,873) (7,354,712)

Taxable business income 311,198,333 116,070,997 341,827,343 137,426,203

Taxable non business income 47,969,149 18,372,239 17,767,873 7,354,712

Tax loss brought forward

from previous years claimed 125,708,619 48,146,545 125,858,326 52,096,949

Taxable income 233,458,864 86,296,691 233,736,890 92,683,966

Tax liability @ 35% 81,710,602 30,255,924 81,807,912 33,863,016

As per the provisions of the Inland Revenue (Amendment) Act No 10 of 2006, with effect from the year

of assessment 2005/2006, the brought forward tax loss (other than capital loss) which could be claimed

in arriving at the Assessable Income is restricted to 35% of the total statutory income for the year.

The tax loss of the company brought forward from the year of assessment 2006/2007 was Rs.298,826,091-

and the company claimed Rs. 125,708,619/- during the year of assessment 2007/2008. The tax loss

carried forward for the year of assessment 2008/2009 is Rs. 173,117,472/-.

6 EARNINGS PER SHARE

The calculation of basic earnings per ordinary share is based on the profit attributable to ordinary

shareholders and the weighted average number of ordinary shares in issue during the year.

31.03.2008 31.03.2007

SLR INR SLR INR

Net profit attributable to

ordinary shareholders (Rs.) 205,576,305 73,099,127 221,158,046 87,477,163

Number of ordinary shares in issue 50,000,000 50,000,000 50,000,000 50,000,000

Basic earnings per ordinary share (Rs.) 4.11 1.46 4.42 1.75

There were no potentially dilutive ordinary shares issued at any time during the year

31.03.2008 31.03.2007SLR INR SLR INR

7 LEASEHOLD LAND

Cost 38,946,767 14,421,267 38,946,767 15,405,059

Cumulative amortisationAs at the beinning ofthe year 10,222,416 3,785,171 9,109,023 3,602,996Charge for the year 1,181,799 437,598 1,113,393 440,393

Balance at the end of the year 11,404,215 4,222,770 10,222,416 4,043,389

Written down value 27,542,552 10,198,497 28,724,351 11,361,670

Leasehold land is amortised over the lease period of 30 years.

8 PROPERTY, PLANT AND EQUIPMENT - Refer next page

9 INVENTORIES

Naked cement 128,506,289 47,583,501 154,146,768 60,971,429

Bags 11,058,021 4,094,581 2,568,850 1,016,087

Stores and spares 17,218,179 6,375,573 12,174,655 4,815,580

Goods-in-transit 135,622,237 50,218,405 66,012,942 26,110,852

292,404,726 108,272,059 234,903,215 92,913,947

10 TRADE RECEIVABLES

Trade receivables 103,744,023 38,414,492 267,079,361 105,640,945

Provision for bad and

doubtful debts (36,964,809) (13,687,385) (31,500,290) (12,459,669)

66,779,214 24,727,107 235,579,071 93,181,276

11 OTHER RECEIVABLES

Value Added Tax recoverable 118,977,422 44,055,137 38,330,145 15,161,159

Others 1,434,124 531,030 1,079,465 426,972

120,411,546 44,586,167 39,409,610 15,588,131

12 CASH AND CASH EQUIVALENTS

Cash in hand 4,221,190 1,563,029 7,567,294 2,993,178

Cash at bank 362,828,052 134,348,513 257,835,339 101,984,551

367,049,242 135,911,542 265,402,633 104,977,729

13 SHARE CAPITAL

Issued & fully paid number of shares50,000,000 ordinary shares 500,000,000 185,140,748 500,000,000 197,770,701

14 RETIREMENT BENEFIT OBLIGATIONSProvision for retiring gratuityAs at the beginning of the year 2,566,754 950,422 2,536,750 1,003,390Provision for the year 1,084,868 401,707 222,904 88,167

3,651,622 1,352,129 2,759,654 1,091,557

Payments made during the year (124,236) (46,002) (192,900) (76,300)

Balance at the end of the year 3,527,386 1,306,127 2,566,754 1,015,257

15 DEFERRED TAX ASSET /(LIABILITY)

As at the beginning of the year 46,172,295 17,096,746 13,543,162 5,356,881

Provision for the year 35,727,675 13,229,297 32,629,133 12,906,173

Balance at the end of the year 81,899,970 30,326,043 46,172,295 18,263,054

Deferred income tax and liabilities are offset when there is a legally enforceable right to offset assets

against tax liabilities and when the deferred income taxes relate to the same fiscal authority.

Deferred tax assets 61,825,700 22,892,913 104,939,371 41,507,866Deferred tax liabilities (143,725,670) (53,218,956) (151,111,666) (59,770,920)

(81,899,970) (30,326,043) (46,172,295) (18,263,054)

2008 2007Assets Liabilities Assets Liabilities

SLR INR SLR INR SLR INR SLR INRRecognised deferredtax assets and liabilitiesProperty, plant and equipment - - 143,725,670 53,218,956 - 151,111,666 59,770,920Defined benefitobligation 1,234,585 457,144 - - 898,364 355,340 - -Tax loss carried forward 60,591,115 22,435,769 - - 104,041,007 41,152,526 - -

61,825,700 22,892,913 143,725,670 53,218,956 104,939,371 41,507,866 151,111,666 59,770,920

Net deferred tax 81,899,970 30,326,043 46,172,295 18,263,054

16 TRADE PAYABLES

UltraTech Cement Limited 449,874,037 166,580,031 478,299,911 189,187,417

Other trade payables 6,424,574 2,378,901 7,991,621 3,161,017

456,298,611 168,958,932 486,291,532 192,348,434

17 OTHER PAYABLES

Retention money from contractors 500,000 185,141 - -

Rebate payable to distributors 6,123,933 2,267,579 7,107,393 2,811,268

Withholding tax payable 235,194 87,088 277,034 109,578

Stamp duty payable 111,375 41,240 365,636 144,624

Distribution expense payable 1,973,488 730,746 30,027,624 11,877,169

Others 4,703,809 1,741,733 1,104,808 436,997

13,647,799 5,053,527 38,882,495 15,379,636

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Notes to the Financial Statement

8 PROPERTY, PLANT & EQUIPMENT

Plant & Office Lab Computer Electrical HT power Furnitures Motor Motor

Buildings machinery equipment equipment equipment installation line & fittings vehicles cycles Total

SLR SLR SLR SLR SLR SLR SLR SLR SLR SLR SLR

Cost

Cost

Balance as at 31-03-2007 37,574,084 490,596,770 3,730,401 2,039,822 5,712,322 71,748,890 1,167,013 1,523,884 4,601,668 2,390,195 621,085,048

Additions during the year - 50,050 44,189 160,433 5,602,281 183,950 - 83,573 - - 6,124,476

Disposals during the year - (1,122,175) - - - - - - - (463,400) (1,585,575)

Balance as at 31-03-2008 37,574,084 489,524,645 3,774,590 2,200,255 11,314,603 71,932,840 1,167,013 1,607,457 4,601,668 1,926,795 625,623,949

Depreciation

Balance as at 31-03-2007 9,288,775 122,410,801 2,301,346 2,009,484 3,407,844 17,939,641 338,435 1,360,403 649,882 510,710 160,217,321

Additions during the year 1,502,963 19,610,010 386,539 37,390 1,421,797 2,875,474 46,681 70,580 657,381 201,368 26,810,183

Disposals during the year - (41,168) - - - - - - - (66,613) (107,781)

Balance as at 31-03-2008 10,791,738 141,979,643 2,687,885 2,046,874 4,829,641 20,815,115 385,116 1,430,983 1,307,263 645,465 186,919,723

Written down value

As at 31-03-2008 26,782,346 347,545,002 1,086,705 153,381 6,484,962 51,117,725 781,897 176,474 3,294,405 1,281,330 438,704,227

Capital work in progress 2,185,099

440,889,326

As at 31-03-2007 28,285,310 368,185,968 1,429,055 30,338 2,304,478 53,809,249 828,578 163,481 3,951,786 1,879,485 460,867,728

Capital work in progress 2,110,373

462,978,101

8 PROPERTY, PLANT & EQUIPMENT

Buildings Plant & Office Lab Computer Electrical HT power Furniture & Motor Motor Total

machinery equipments equipments equipments installation line fittings vehicles Cycles

INR INR INR INR INR INR INR INR INR INR INR

Cost

Balance as at 31-03-2007 13,912,988 181,658,906 1,381,298 755,308 2,115,167 26,567,286 432,123 564,266 1,703,913 885,045 221,437,405

Additions during the year - 18,533 16,362 59,405 2,074,421 68,113 - 30,946 - - 2,267,780

Disposals during the year - (415,521) - - - - - - - (171,588) (587,109)

Balance as at 31-03-2008 13,912,988 181,261,917 1,397,661 814,714 4,189,588 26,635,400 432,123 595,212 1,703,913 713,457 223,118,076

Depreciation

Balance as at 31-03-2007 3,439,461 45,326,454 852,146 744,075 1,261,862 6,642,717 125,316 503,732 240,639 189,106 59,325,509

Additions during the year 556,519 7,261,224 143,128 13,845 526,465 1,064,735 17,285 26,134 243,416 74,563 9,927,315

Disposals during the year - (15,244) - - - - - - - (24,666) (39,909)

Balance as at 31-03-2008 3,995,981 52,572,434 995,274 757,920 1,788,327 7,707,452 142,601 529,867 484,055 239,004 69,212,915

Written down value

As at 31-03-2008 9,917,007 128,689,483 402,387 56,794 2,401,261 18,927,948 289,522 65,345 1,219,857 474,453 162,444,057

Capital work in progress 809,102

163,253,159

As at 31-03-2007 11,188,010 145,632,793 565,251 12,000 911,517 21,283,786 327,738 64,664 1,563,095 743,414 182,292,268

Capital work in progress 834,740

183,127,008

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18 RELATED PARTY DISCLOSURES

18.1 Identity of related parties

The Company has a related party relationship with its Parent Company UltraTech Cement Limited, Affiliate Companies and with its Directors.

18.2 The Company’s transactions with its related Companies are as follows

31.03.2008 31.03.2007

SLR INR SLR INR

- Import of cement 3,309,155,509 1,267,410,351 3,487,243,521 1,443,486,116

- Import of spares for machinery - - 1,425,157 589,920

- Amount payables as at the balance sheet date 449,874,037 166,580,031 478,299,911 189,187,417

Ceylinco Homes International Limited

- Sale of cement 1,326,049 507,878 - -

- Amount receivable as at the Balance Sheet date 256,671 95,041 - -

International Consultancy & Corporate Services (Private) Limited

- Secretarial services 334,837 128,243 207,000 85,684

Ceylinco Insurance Company PLC

- Insurance services 3,696,488 1,415,759 1,024,592 424,113

- Commission on sales - - 439,000 181,717

- Professional services - - - -

- Amount payable as at the Balance sheet date - - - -

Celinco CISCO Security Transport & Allied Services (Private) Limited

- Cash transpotation services 360,442 138,050 287,709 119,092

- Security services 4,699,887 1,800,062 1,493,573 618,240

Ceylinco Developers Limited

- Sale of cement 6,187,742 2,369,912 - -

- Amount receivable as at the Balance Sheet date 234,156 86,704 - -

Ceylinco Internet Services Limited

- E-mail & Internet servies - - 6,250 2,587

Ceylinco Villas Housing Limited

- Sale of cement 1,401,600 536,814 - -

18.3 Transactions with key management personnel

Directors’ emoluments 11,224,656 4,299,056 1,988,229 822,994

Key management personnel compensation

Housing rent 840,000 321,721 765,000 316,659

Medical expenses reimbersement 346,006 132,521 73,763 30,533

Traveling 254,577 97,503 248,530 102,875

Other non cash benefits 257,650 98,680 177,848 73,617

19 CAPITAL EXPENDITURE COMMITMENTS

Capital expenditure approved by the Directors as at 31st March 2008 but not contracted for was Rs. 8,616,869/-.

20 CONTINGENT LIABILITIES

There are no contingent liabilities as at the balance sheet date which require adjustments or disclosure in the accounts

21 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

No circumstances have arisen since the balance sheet date which would require adjustments to or disclosure in the financial statements.

ACCOUNTING POLICIES

1. CORPORATE INFORMATION

• Domicile and Legal Form

Larsen and Toubro Ceylinco (Pvt) Ltd was incorporated on 2ndAugust, 1997 as a Private limited liability Company anddomiciled in Sri Lanka. Consequence to the change in the majorshareholder of the Company, the Company was renamed asUltraTech Ceylinco (Pvt) Ltd on 11th March, 2005.

• Principal Business Activities

The Company imports naked cement and markets it inSri Lanka in 50kg bags and in bulk form.

• The Name of the Parent Enterprise and the Ultimate ParentEnterprise

The shareholding of the Company at the Balance Sheet date isas follows.

UltraTech Cement Limited 80%

Ceylinco Insurance Company Limited 18%

Ceylinco International Trading Limited 2%

Accordingly, UltraTech Cement Ltd incorporated in India isthe Ultimate Parent Company.

• Number of Employees

Number of employees as at the end of the period - 74(2007-77)

1.1 Statement of Compliance

The Financial statements have been prepared in accordancewith the accounting standards issued by the Institute ofChartered Accountant of Sri Lanka (ICASL), and therequirements of the Companies Act No. 17 of 1982.

1.2 Basis of Preparation

The financial statements are presented in Sri Lankan Rupeesand prepared on the historical cost basis. The AccountingPolicies are consistent with those used in the previous year.

1.3 Foreign Currency Transactions

Transactions in foreign currencies are translated to rupees atthe foreign exchange ruling at the date of the transaction.

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Monetary assets and liabilities denominated in foreigncurrencies at the balance sheet date are translated to rupees atthe foreign exchange rate ruling at that date. Foreign exchangedifferences arising on translation are recognised in the incomestatement. Non-monetary assets and liabilities denominated inforeign currencies, which are stated at historical cost, aretranslated to rupees at the foreign exchange rate ruling at thedate of the transaction.

2. ASSETS AND BASES OF THEIR VALUATIONS

2.1 Property, Plant & Equipment

2.1.1 Leasehold Property

Leasehold Property located at 81/11/1, New NugeRoad, Peliyagoda has been sub-leased for a period of30 years from East West Properties Limited who havetaken on lease the said premises for a period of 99years from the Urban Development Authority.

The sub-lease rentals and related expenses areamortised on a yearly basis as per the schedule of theagreement.

2.1.2 Owned Assets

Items of Property, Plant and Equipment are stated atcost less accumulated depreciation. Where an item ofProperty, Plant and Equipment comprises majorcomponents having different useful lives, they areaccounted for as separate items of Property, Plant andEquipment.

2.1.3 Subsequent Expenditure

Expenditure incurred to replace a component of anitem of Property, Plant and Equipment that is accountedfor separately, is capitalised with the carrying amountof the component being written off. Other subsequentexpenditure is capitalised only when it increases thefuture economic benefits embodied in the item ofProperty, Plant and Equipment. All other expenditureis recognised in the income statement as an expenseas incurred.

2.1.4 Depreciation

Depreciation is charged on a straight-line basis overthe estimated useful lives of the assets.

The estimated useful lives are as follows.

ASSET No. of Years

Building 25

Plant and Machinery 25

Lab Equipment 06

Electronic Installation 25

Office Equipment 06

Motor Cars 07

Motor Cycles 10

IIT Power line 25

Computers 06

Furniture & Fittings 06

As per SLAS 18 (Revised) assets purchased duringthe year were depreciated from the month the assetwas available to use.

2.2 Inventories

Inventories are stated at the lower of cost and net realisablevalue. Net realisable value is the estimated selling price in theordinary course of business, less the estimated costs and sellingexpense.

The cost of inventory is based on the FIFO cost price principleand includes expenditure incurred in acquiring the inventoriesand bringing them to their existing location and condition.

2.3 Trade and Other Receivables

Trade and other receivable are stated at the amounts estimatedto be realised. Provisions have been made in the accountswhere necessary for bad and doubtful debts.

2.4 Cash and Cash Equivalents

Cash and cash equivalents comprise cash balance and short-term highly liquid investments that are readily convertible toknown amounts of cash.

For the purpose of Statement of Cash Flow, cash and cashequivalents are presented net of bank overdraft.

3. LIABILITIES AND PROVISIONS

All known liabilities have been accounted in preparing the financialstatements.

3.1 Classification of Liabilities

Liabilities classified as current liabilities on the Balance Sheetdate are those, which fall due for payment on demand withinone year from Balance Sheet date. Non-current liabilities arethose balances that fall due for payment after one year fromthe Balance Sheet date.

3.2 Employee Benefits

3.2.1. Defined Contribution Plan

Contributions to defined contribution pension arerecognized as an expense in the income statement asincurred.

3.2.2. Defined Benefit Plan

Provision for Gratuity on the Employees of thecompany is based on an actuarial valuation, using theProjected Unit Credit (PUC) method as recommendedby Sri Lanka Accounting Standard No.l6 “RetirementBenefits Costs”. The actuarial valuation was carriedout by a professionally qualified firm of actuaries,Messer’s Piyal S Goonetilleke and Associates as at31st March 2008. The Company expects to carry outactuarial valuation every year.

The key assumptions used by the actuary include thefollowing:

Rate of interest - 15% (Per annum)

Rate of Salary Increase - 12% (Per annum)

Retirement Age - Normal Retirement ageor age on valuationdate, if greater.

However, according to the payment of Gratuity ActNo.12 of 1983, the liability for payment to an employeearises only after the completion of 5 years continuedservice.

The liability is not externally funded.

4. REVENUE RECOGNITION

Revenue is generally accounted for on accrual basis and is recognizedas follows:

4.1 On sale of goods all significant risks and rewards of ownershiphave been transferred to the buyer, which normally occurs ondelivery of the goods.

4.2 Interest income on short-term investment is accounted on cashbasis.

5. BORROWING COST

Borrowing costs are recognized as an expense in the year in whichthey are incurred, except to the extent where borrowing costs thatare directly attributable to the acquisition, construction or productionof a qualifying asset that take a substantial period of time to getready for intended use or sale is capitalized as part of that asset.

6. TAXATION

6.1 The liability to taxation has been computed according to theprovisions of the Inland Revenue Act No.10 of 2006 andamendments thereto.

6.2 Deferred tax is provided using the liability method, providingfor temporary differences between the carrying amounts ofassets and liabilities for financial reporting purposes and theamounts used for taxation purpose.

7. CASH FLOW

The Cash Flow Statement has been prepared using the indirectmethod.

Mr. G. D. Birla and Mr. Aditya Birla, our founding fathers.

We live by their values.

Integrity, Commitment, Passion, Seamlessness and Speed

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