UTCL IM Investors Rachna Final

8/8/2019 UTCL IM Investors Rachna Final

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PRIVATE AND CONFIDENTIAL (Not for circulation)

UltraTech Cement Limited(formerly known as UltraTech CemCo Limited)

Registered Office: B Wing, Ahura Centre, 2nd Floor, Mahakali Caves Road, Andheri (E), Mumbai 400 093Contact Person- S.K. Chatterjee

Phone No. 91-22-5691 7800 Fax No. 91-22-5691 7900

E-Mail: [email protected]

INFORMATION MEMORANDUM

FOR ISSUE OF DEBENTURES ON A PRIVATE PLACEMENT BASIS

SHELF INFORMATION MEMORANDUM FOR PRIVATE PLACEMENT OF NCD UPTO AN AMOUNT

OF RS.300 CRORE TO BE ISSUED AT PAR IN ONE OR MORE TRANCHES IN FY 2005-06

GENERAL RISKSGeneral Risks: Investors are advised to read the risk factors carefully before taking an investment decision in thisissue. For taking an investment decision, investors must rely on their own examination of the issuer and the

Information Memorandum including the risks involved. The securities have not been recommended or approved bySecurities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this InformationMemorandum. Special attention of investors is invited to the statement of Risk Factors on page 7 of this InformationMemorandum.

ISSUER’S ABSOLUTE RESPONSIBILITY

Issuer’s Absolute Responsibility: The issuer, having made all reasonable inquiries, accepts responsibility for andconfirms that this Information Memorandum contains all information with regard to the Issuer and the issue, which ismaterial in the context of the issue, that the information contained in the Information Memorandum is true and correctin all material aspects and is not misleading in any material respect, that the opinions and intentions expressed hereinare honestly held and that there are no other facts, the omission of which make this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

ISSUE SCHEDULE<to be specified at the time of issue>

CREDIT RATINGCRISIL has assigned “AA+/ (Stable)” (pronounced “double A plus with stable outlook”) rating to these Debentures.This rating indicates high degree of safety with regard to timely payment of interest and principal on the instrument.

The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. Therating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should beevaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in thefuture. The Rating Agency has a right to suspend, withdraw the rating at any time on the basis of new information etc.

RATING AGENCYCRISIL Limited, CRISIL House, 121-122 Andheri-Kurla Road, Andheri (East), Mumbai – 400 093

Phone No. 91-22 5691 3001 – 09; Fax No. 91 -22 5691 3020; Website: www.crisil.com

LISTING

The Debentures shall be listed on “F” Group of The Stock Exchange, Mumbai (BSE) and Wholesale Debt Market(WDM) segment of The National Stock Exchange of India Limited (NSE).

This Information Memorandum is dated 16 June 2005 and is valid for a period of one year from the said date.



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Lead Arranger to the Issue Distribution and Placement Agent

Arranger to the IssueCitibank N.A.Citigroup Centre,Bandra Kurla Complex,Bandra (East),Mumbai - 400 051.Tel. 91-22-26535757; Fax: 91-22-2653 5877/79

CITICORP CAPITAL MARKETS LTD.4th Floor, Citibank Centre,Plot C-61, Bandra Kurla, ComplexG Block, Bandra (East)Mumbai 400 051

REGISTRAR TO THE ISSUE

Sharepro Services

Satam Estate, 3rd Floor, Above Bank of Baroda,Cardinal Gracious Road, Chakala, Andheri (East),Mumbai – 400 099Tel: 91-22-2821 5168Fax: 91-22-2837 5646

DEBENTURE TRUSTEES

UTI Bank LimitedMaker Towers, 11th Floor,Cuffe Parade,Mumbai 400 005Tel: 91-22-22189106Fax: 91-22-22186944Sebi Reg.No.: IND000000036

Note: This Information Memorandum of private placement is neither a prospectus nor a statement in lieu of a prospectus. This is only an information brochure intended for private use and should not be construed tobe a prospectus and/or an invitation to the public for subscription to Debentures under any law for the timebeing in force. The company can, at its sole and absolute discretion change the terms of the offer.



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TABLE OF CONTENTS

1. DEFINITIONS/ABBREVIATIONS / TERMS USED 4

2. DISCLAIMER 5

3. RISK FACTORS 8

4. INTRODUCTION 8

5. ABOUT THE ISSUER 14

6. FINANCIAL STATEMENTS 28

7. LITIGATION & OTHER INFORMATION 53

8. OTHER REGULATORY AND STATUTORY DISCLOSURES 54

9. OFFERING INFORMATION 69

10. LIST OF MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 74

12. APPLICATION FORM 76



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DEFINITIONS / ABBREVIATIONS / TERMS USED

Act The Companies Act, 1956

Arranger(s) Means the Bankers appointed by the Company as Arrangers tothe issue under this Information Memorandum

Articles of Association The Articles of Association of the Company

Beneficiary / Beneficiaries Those persons whose names appear on the Beneficiary detailsprovided by the Depositories (NSDL and/or CDSL) as on therecord date.

Board / Board of Directors The Board of Directors of the Company or a Committee thereof

BSE The Stock Exchange, Mumbai

CDSL Central Depository Services (India) Limited

DCA Department of Company Affairs, Government of India

Depositories National Securities Depository Limited. (NSDL) and CentralDepository Services Limited (CDSL)

DP Depository Participant

FY Financial Year

GOI Government of India

Grasim Grasim Industries Limited

Information Memorandum / Document

This Information Memorandum through which the Debenturesare being offered for private placement

INR/Rs./Rupees The lawful currency of the Republic of India

Instrument Holders The Debenture Holders are referred to as the “InstrumentHolders”

Investors Those institutions/corporations to whom a copy of theInformation Memorandum may be sent, specifically addressed tosuch person, with a view to offering the Debentures for sale(being offered on a private placement basis) under thisInformation Memorandum

Issue Issue, by the Company, of Secured Redeemable Non-ConvertibleDebentures (Debentures) of Rs. each (Rupees___________Only) each for cash, aggregating Rs.

_______________ (Rupees _________________ Only) on aPrivate Placement Basis

Memorandum Memorandum of Association of UltraTech Cement Limited

NCD / Debenture Secured Redeemable Non-Convertible Debentures

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

SEBI Securities and Exchange Board of India

SEBI Private Placement Circulars SEBI circular no. SEBI/MRD/SE/AT/36/2003/30/09 datedSeptember 30, 2003 and SEBI circular no. EBI/MRD/SE/AT/46/ 2003 dated 22 December 2003

TDS Tax Deducted at Source

UltraTech/The Company / Issuer UltraTech Cement Limited

WDM Wholesale Debt Market



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DISCLAIMER

THIS PRIVATE PLACEMENT INFORMATION MEMORANDUM (HEREINAFTER REFERRED TOAS THE “INFORMATION MEMORANDUM” IS NEITHER A PROSPECTUS NOR ASTATEMENT IN LIEU OF PROSPECTUS. THE ISSUE OF SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES (HEREINAFTER REFERRED TO AS “DEBENTURES”) TO BEISSUED AND LISTED ON THE “F” GROUP OF THE STOCK EXCHANGE, MUMBAI (BSE) ANDTHE WHOLESALE DEBT MARKET (WDM) SEGMENT OF THE NATIONAL STOCK EXCHANGE(NSE) IS BEING MADE STRICTLY ON A PRIVATE PLACEMENT BASIS. IT IS NOT INTENDEDTO BE CIRCULATED TO MORE THAN 49 (FORTY-NINE) PERSONS. MULTIPLE COPIESHEREOF GIVEN TO THE SAME ENTITY SHALL BE DEEMED TO BE GIVEN TO THE SAMEPERSON AND SHALL BE TREATED AS SUCH. IT DOES NOT CONSTITUTE AND SHALL NOTBE DEEMED TO CONSTITUTE AN OFFER OR AN INVITATION TO SUBSCRIBE TO THEDEBENTURES TO THE PUBLIC IN GENERAL. APART FROM THIS INFORMATIONMEMORANDUM, NO OFFER DOCUMENT OR PROSPECTUS HAS BEEN PREPARED INCONNECTION WITH THE OFFERING OF THIS ISSUE OR IN RELATION TO THE ISSUER NOR ISSUCH A PROSPECTUS REQUIRED TO BE REGISTERED UNDER THE APPLICABLE LAWS.ACCORDINGLY, THIS MEMORANDUM HAS NEITHER BEEN DELIVERED FOR REGISTRATIONNOR IS IT INTENDED TO BE REGISTERED.

THIS INFORMATION MEMORANDUM HAS BEEN PREPARED TO PROVIDE GENERALINFORMATION ABOUT THE ISSUER TO POTENTIAL INVESTORS TO WHOM IT ISADDRESSED AND WHO ARE WILLING AND ELIGIBLE TO SUBSCRIBE TO THE DEBENTURES.THIS INFORMATION MEMORANDUM DOES NOT PURPORT TO CONTAIN ALL THEINFORMATION THAT ANY POTENTIAL INVESTOR MAY REQUIRE. NEITHER THISINFORMATION MEMORANDUM NOR ANY OTHER INFORMATION SUPPLIED INCONNECTION WITH THE DEBENTURES IS INTENDED TO PROVIDE THE BASIS OF ANYCREDIT OR OTHER EVALUATION AND ANY RECIPIENT OF THIS INFORMATIONMEMORANDUM SHOULD NOT CONSIDER SUCH RECEIPT, A RECOMMENDATION TOPURCHASE ANY DEBENTURES. EACH INVESTOR CONTEMPLATING THE PURCHASE OF ANYDEBENTURES SHOULD MAKE ITS OWN INDEPENDENT INVESTIGATION OF THE FINANCIALCONDITION AND AFFAIRS OF THE ISSUER, AND ITS OWN APPRAISAL OF THECREDITWORTHINESS OF THE ISSUER. POTENTIAL INVESTORS SHOULD CONSULT THEIR

OWN FINANCIAL, LEGAL, TAX AND OTHER PROFESSIONAL ADVISORS AS TO THE RISKSAND INVESTMENT CONSIDERATIONS ARISING FROM AN INVESTMENT IN THEDEBENTURES AND SHOULD POSSESS THE APPROPRIATE RESOURCES TO ANALYSE SUCHINVESTMENT AND THE SUITABILITY OF SUCH INVESTMENT TO SUCH INVESTOR'SPARTICULAR CIRCUMSTANCES. IT IS THE RESPONSIBILITY OF POTENTIAL INVESTORS TOALSO ENSURE THAT THEY WILL SELL THESE DEBENTURES IN STRICT ACCORDANCE WITHTHIS INFORMATION MEMORANDUM AND OTHER APPLICABLE LAWS, SO THAT THE SALEDOES NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THECOMPANIES ACT, 1956. NONE OF THE INTERMEDIARIES OR THEIR AGENTS OR ADVISORSASSOCIATED WITH THIS ISSUE UNDERTAKE TO REVIEW THE FINANCIAL CONDITION ORAFFAIRS OF THE ISSUER DURING THE LIFE OF THE ARRANGEMENTS CONTEMPLATED BYTHIS INFORMATION MEMORANDUM OR HAVE ANY RESPONSIBILITY TO ADVISE ANYINVESTOR OR POTENTIAL INVESTOR IN THE DEBENTURES OR WARRANTS OF ANY

INFORMATION AVAILABLE WITH OR SUBSEQUENTLY COMING TO THE ATTENTION OFTHE INTERMEDIARIES, AGENTS OR ADVISORS.

THE ISSUER CONFIRMS THAT, AS OF THE DATE HEREOF, THIS INFORMATIONMEMORANDUM (INCLUDING THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN,IF ANY) CONTAINS ALL INFORMATION THAT IS MATERIAL IN THE CONTEXT OF THE ISSUEAND SALE OF THE DEBENTURES, IS ACCURATE IN ALL MATERIAL RESPECTS AND DOESNOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE ANYMATERIAL FACT NECESSARY TO MAKE THE STATEMENTS HEREIN THAT WOULD BE INTHE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY ARE MADE, NOT MISLEADING.







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RISK FACTORS AND MANAGEMENT PERCEPTION

The Company is exposed to risks from market fluctuations of foreign exchange and interest rate. Its policyis to hedge its long-term foreign exchange risk as well as short-term exposures within the definedparameters. The short-term exposures are covered from time to time. As exports exceed imports, theCompany has suitably hedged the differential exposure.

The Company is also open to interest rate fluctuations on its Rupee denominated borrowings. It uses a judicious mix of fixed and floating rate debts within the stipulated parameters.

The Company has appropriate internal control systems relating to its areas of operations. Extensive internalaudits supplement the internal control systems with emphasis on efficiency of operations, financialreporting and compliance with applicable rules and regulations.

INTRODUCTION

SUMMARY

(A) SUMMARY OF THE INDUSTRY AND BUSINESS OF THE ISSUER COMPANY.

The Company is primarily engaged in the business of manufacture and sale of Cement and Clinker in theDomestic and International Markets.

The Indian Cement Industry with a capacity of around 125 Million Ton Per Annum (MTPA) is the fourthlargest in the world after China, Japan and USA. However, the per capita consumption in the country isonly around 90 kgs. as compared to the world average of approx. 250 kgs. The Cement Industry is highlyfragmented comprising of more than 50 players operating from more than 125 plants. The Cement Industryis cyclical and capital intensive.

The Cement Industry witnessed a slow start in the FY 2005 due to change in the Government at the centre;slow down in infrastructure spending during the transition and adversities of drought like conditions in theSouth and West. The subsequent regaining of momentum enabled the industry clock a despatch growth of 7% for the full year. The Cement sector appears to be on a sustainable growth path, given the strong

outlook for the housing sector and the renewed momentum in infrastructure spending.

The cement sector appears to be on a sustainable growth path, given the robust outlook in Governmentinfrastructure spending. It is expected that the industry would grow at an average 8% annual growth in thelong run. The industry has witnessed consolidation in the recent years which is likely to increase with theentry of global players.

(B) OFFERING DETAILS IN BRIEF <to be specified at the time of issue>

ISSUE SCHEDULE

This Umbrella Offer Document is dated 16 June 2005 and is valid for a period of one year from the saiddate. The Company shall have the sole discretion to issue such number of debentures under different series

on such terms as it may deem fit.



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(C) SUMMARY OF FINANCIAL, OPERATING AND OTHER DATA(In Rs. Crore)

Particulars 2004-2005 2003-2004 Total Income 2703.30 2310.72

Interest and Finance Charges 106.88 115.01

Expenses 2331.40 1931.99

Depreciation 221.78 214.52

Diminution in the value of investment 76.84 -

Provision for Taxation -36.45 10.37

Profit After Tax (PAT) 2.85 38.83

GENERAL INFORMATION:

(A) UltraTech Cement Limited(A Public Limited Company incorporated under the Companies Act, 1956)

Date of Incorporation: 24 August 2000Registration No. : 11-128420

(UltraTech Cement Limited was incorporated as a public limited company on 24th

August 2000, as “L&T

Cement Limited” a 100% Subsidiary of Larsen & Toubro Limited. The name of the Company was changed to UltraTech CemCo Limited with effect from 19

thNovember 2003. The name of the company was again

changed to UltraTech Cement Limited with effect from 11th

October 2004)

Registered Office “B Wing”, ‘Ahura Centre’, 2nd Floor,Mahakali Caves Road, Andheri (E),Mumbai 400 093Ph. No. 91-22-5691 7800Fax No.91-22-5691 7900

Address of the Registrar of Companies 100, EVEREST, Marine Drive,Mumbai - 400 002Phone - 91-22- 2281 263

Fax - 91-22- 2281 1977(B) BOARD OF DIRECTORS

The details of the Board of Directors of the Company as of 31 March 2005 are given below:

Sl. No. Name of the Director Designation

1. Mr. Kumar Mangalam Birla Chairman

2. Mrs. Rajashree Birla Director

3. Mr. R.C. Bhargava Director

4. Mr.Y.M.Deosthalee Director

5. Mr.A.R.Gandhi Director

6. Mr.Y.P.Gupta Director

7. Dr. S.Misra Director

8.

Mr. V.T.Moorthy Director9. Mr.J.P.Nayak Director

10. Mr.S.Rajgopal Director

11. Mr. D.D.Rathi Director



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(C) BRIEF DETAIL OF CHAIRMAN AND MANAGER & CEO

• Mr. Kumar Mangalam Birla is the Chairman of the Aditya Birla Group, which is among India’slargest business houses. He also serves as a Director on the Board of the Group’s InternationalCompanies. He is also on the Board of Tata Iron & Steel Company (TISCO), and Maruti UdyogLimited. Mr. Birla has and continues to hold several key and responsible positions on various

regulatory and professional Boards.

• Mr. Saurabh Misra was appointed Manager & CEO with effect from 6 July 2004. He has held toppositions in the corporate sector including Deputy Chairman of ITC Limited and has vastexperience in corporate management. His experience and expertise are being gainfully utilized bythe Company as its Manager & CEO. He has been heading the cement business of the Aditya BirlaGroup for the last five years and this business has grown significantly under his stewardship. Heas Manager & CEO of the Company reports to the Board of Directors. He supervises the day-to-day operations with the help of a team of professionals who head various functional areas.

(D) COMPANY SECRETARY & COMPLIANCE OFFICER

S. K. Chatterjee

UltraTech Cement LimitedPhone No. 91-22-5691 7800 Extn. (7808)Fax No. 91-22-5691 7900E-mail: [email protected]

Investors may contact the Compliance Officer in case of any pre-issue or post-issue related problems suchas non-receipt of Letter of Allotment, credit of allotted Debentures in the respective beneficiary accounts,refund orders etc.

(E) SOLE ARRANGER

Citibank N.A.Citigroup Centre, Bandra Kurla Complex,Bandra (East), Mumbai - 400 051.

Tel. 91-22-26535757, Fax: 91-22-2653 5877/79

(F) DISTRIBUTION AND PLACEMENT AGENT

Citicorp Capital Markets Ltd.4th Floor, Citibank Centre,Plot C-61, Bandra Kurla, ComplexG Block, Bandra (East)Mumbai 400 051Tel. 91-22-26535373, Fax: 91-22-2653 5865

(F) REGISTRAR TO THE ISSUE

Sharepro Services

Satam Estate, 3rd Floor, Above Bank of Baroda,Cardinal Gracious Road, Chakala, Andheri (East),Mumbai – 400 099Tel: 91-22-2821 5168, Fax: 91-22-2837 5646



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(G) AUDITORS

The Company’s Statutory Auditors are:

S.B. Billimoria & Co. G. P. Kapadia & Co.Chartered Accountants Chartered Accountants12 Dr. Annie Besant Road, Hamam House,Opposite Shiv Sagar Estate, Ambalal Doshi Marg,Worli, Mumbai-400 018 Fort, Mumbai-400 001Ph. No. 91-22-5667 9121 Ph. No. 91-22-2265 4239Fax No. 91-22-5697 9100 Fax No. 91-22-2265 4256

(H) CREDIT RATING

The Debentures being issued under this Issue have been rated by The Credit Rating & Information Servicesof India Limited (CRISIL) and the rating is as detailed below.

Rating obtained Rating Agency What the Rating means

“AA+/(Stable)” CRISIL This rating indicates high degree of safety with regardto timely payment of interest and principal on the

instrument.

For further details, please see the Rating Letter appended as Appendix I.

Credit ratings obtained for Debt Securities in the preceding three years.

Description of the Instrument Rating Agency Rating

1500 Million Secured Non-ConvertibleRedeemable Debenture Issue

CRISIL AA+/ (Stable)

1000 Million Secured Non-ConvertibleRedeemable Debenture Issue

CRISIL AA+/ (Stable)

(I) DEBENTURE TRUSTEE

UTI Bank LimitedMaker Towers, 11th Floor,Cuffe Parade, Mumbai 400 005Tel: 91-22-22189106, Fax: 91-22-22186944

All the rights and remedies of the Debenture Holders (hereinafter called “Instrument Holders”) under thisIssue shall vest in and shall be exercised by the Debenture Trustees without having it referred to theInstrument Holders. All investors under this issue are deemed to have irrevocably given their authority andconsent to the Debenture Trustee appointed by the Company to act as their Trustees and for doing such actsand signing such documents to carry out their duty in such capacity. Any payment by the Company to theDebenture Trustees on behalf of the Instrument Holders, shall completely and irrevocably from the time of making such payment discharge the Company pro tanto as regard its liability to the Instrument Holders.



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CAPITAL STRUCTURE

(A) DETAILS OF SHARE CAPITAL

Share Capital as at the date of filing of the Information Memorandum is set forth below:

Particulars Amount (Rs.)

Authorised Share Capital:13,00,00,000 Equity Shares of Rs. 10 each Rs.130.00 crore

Issued & Subscribed :12,43,98,621 Equity Shares of Rs. 10 each

Rs.124.40 crore

Paid-up:12,43,98,621 Equity Shares of Rs. 10 each Rs. 124.40 crore

(B) SHARE CAPITAL HISTORY OF THE COMPANY

Year Amount (Rs.) Remarks

2000 7 equity shares of Rs.10/- each 70

2000 29,999,993 equity shares of Rs.10/- each

299,999,930

2004 99,521,437 equity shares of Rs.10/- each

995,214,370 Allotted to shareholders of L&T pursuant to theScheme of Arrangementvesting the CementBusiness of L&T into theCompany

2004 5,122,816 equity shares of Rs.10/-each

(51,228,160) Extinguished in terms of the Scheme of Arrangement

2004 Subscribed and Paid-up :124,398,621 equity shares of Rs.10/- each

1,243,986,210

(i) No shares/debentures/other instruments of the Company have been pledged/mortgaged by theCompany/any other person pursuant to any loan taken by the Company

(ii) “Buy Back”, “Stand By” and similar arrangement for purchase of securities bypromoters/directors- NOT APPLICABLE

(iii) The ten largest shareholders of the Company on the date of filing this Information Memorandum

Sl. No. Name No. of shares % to

Capital

1 Grasim Industries Limited 58464717 46.99

2 Larsen & Toubro Limited 14303294 11.49

3 Life Insurance Corporation. 6196075 4.98

4 Samruddhi Swastik Trading and Inv. 5077603 4.08

5 Unit Trust of India 2517142 2.02

6 HSBC Global Invest. Funds 1803580 1.447 J. P. Morgan Fleming Asset. Mangt 1500000 1.20

8 General Insurance Corpn of India 1041544 0.83

9 Citi Bank N.A 1009418 0.81

10 New India Assurance Company 990648 0.79

(iii) The Company’s top 10 (ten) shareholders and the number of Equity Shares held by them 2 yearsprior to date of filing this Information: NOT APPLICABLE



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(iv) The Company’s top ten shareholders and the number of Equity Shares held by them ten days priorto date of filing this Information Memorandum is as follows:

Sl. No. Name No. of shares % to Capital

1 Grasim Industries Limited 58464717 46.99

2 Larsen & Toubro Limited 14303294 11.49

3 Life Insurance Corporation. 6196075 4.984 Samruddhi Swastik Trading and Inv. 5077603 4.08

5 Unit Trust of India 2517162 2.02

6 HSBC Global Invest. Funds 1788292 1.43

7 J. P. Morgan Fleming Asset. Mangt 1500000 1.20

8 General Insurance Corpn of India 1041544 0.83

9 Citi Bank N.A 1009418 0.81

10 New India Assurance Company 990648 0.79

(v) The Company has not made any initial public offer (equity) in the two years preceding the dateof filing this Information Memorandum.

(vi) The aggregate shareholding in the Company of the promoter group and of the directors of the

promoters, where the promoter is a company, as on 31 March 2005 is as follows:

(vii) The Company belongs to the Aditya Birla Group and its equity shareholding pattern as of 31March 2005 is as provided herein below:

Sl.

No.

Name of the Shareholder No. of shares % of the Share

Capital

1. Grasim Industries Limited 58464717 46.99

2. Samruddhi Swastik Trading &Investments Limited

5077603 4.08



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The Equity Shares of the Company are listed on The Stock Exchange, Mumbai (BSE) and National Stock Exchange of India Limited (NSE).

(viii) None of the Company’s Promoters, members of the Company’s Promoter Group or itsDirectors have purchased or sold any Equity Shares, during a period of 6 (six) monthspreceding the date on which this Information Memorandum is filed.

(ix) There are no outstanding warrants, options, loans or other instruments into the Company’s EquityShares. Further the Company is not in default of any of its loans (including its bridge loans).

(x) The Company and its Directors have not entered into any buy-back and/or standbyarrangements for purchase of Equity Shares of the Company from any person.

(xi) An investor cannot make a bid for more than the number of NCDs offered under thisInformation Memorandum.

(xii) The Company has not revalued any of its assets since its inception.

(xiii) Arrangement for buyback of the Secured Redeemable Non Convertible Debentures.

The Company reserves the right to enter into or permit third parties to provide buyback arrangements.

Category No. of

Shares held

%

of Shareholding

A. Promoters holding

1. Promoters- Indian Promoters Grasim Industries Limited

Samruddhi Swastik Trading & Investments .Limited- Foreign Promoters

58464717

5077603-

46.99

4.08-

2. Persons acting in Concert - -

B. Non-Promoters Holding - -

3. Institutional Investors

a. Mutual Funds and UTI:Unit Trust of IndiaHSBC Equity FundTempleton Mutual Fund A/c Franklin PrudentialICICI AMC Ltd A/c PMSTempleton Mutual Fund A/c FT. IndiaUTI Growth and Value FundUTI-Mid Cap Fund

UTI Master Value FundTATA Equity Opportunities FundHSBC India Opportunities Fund

2226114892500211320263027600007541870369

70548353685-

1.780.710.160.210.040.060.05

0.560.04-

b. Banks, Financial Institutions, Insurance

Companies (Central / State Govt.

Institutions/Non-government Institutions):Life Insurance Corporation of IndiaGeneral Insurance Corporation of IndiaThe New India Assurance CompanyThe Oriental Insurance Company LtdNational Insurance Company LtdUnited India Insurance Company Ltd

61960751041544990648737350386900380536

4.980.830.790.590.310.30



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OBJECTS OF THE OFFERING

The proceeds of the issue(s) will be used by UltraTech Cement Limited for General Corporate Purposes.

BROAD TERMS OF ISSUE

Nature of Instrument Secured Redeemable Non Convertible Price

Face Value (Per Debentures) Rs.10 lac each

Price per Debenture Rs.10 lac each

Size (Face value per series) Rs. crore__________ to Rs.________ crore

Type of Interest Fixed/Floating

Band of Interest 0%-7.5%

Interest Payment in case of couponbearing debentures

Payable monthly/quarterly/semi-annually/annually from thedeemed date of allotment

Band of tenure 15 days-10 years from respective deemed date of allotmentwith put/call option, if any.

TAX BENEFIT

There is no special tax benefit for the issuer company.

ABOUT THE ISSUER COMPANY

UltraTech is a member of the Aditya Birla Group and a subsidiary of Grasim Industries Limited. Its cementcapacity is 17 million tonnes per annum. It manufactures and markets Ordinary Portland Cement, PortlandBlast Furnace Slag Cement and Portland Pozzolana Cement. UltraTech has five integrated plants, fivegrinding units and three terminals – two in India and one in Sri Lanka.

OVERVIEW OF THE INDIAN CEMENT INDUSTRY

The Indian Cement Industry with a capacity of around 125 Million Ton Per Annum (MTPA) is the fourthlargest in the world after China, Japan and USA. However, the per capita consumption in the country isonly around 90 kgs. as compared to the world average of approx. 250 kgs. The Cement Industry is highly

fragmented comprising of more than 50 players operating from more than 125 plants. The Cement Industryis cyclical and capital intensive.

The Cement Industry witnessed a slow start in the FY 2005 due to change in the Government at the centre;slow down in infrastructure spending during the transition and adversities of drought like conditions in theSouth and West. The subsequent regaining of momentum enabled the industry clock a despatch growth of 7% for the full year. The Cement sector appears to be on a sustainable growth path, given the strongoutlook for the housing sector and the renewed momentum in infrastructure spending.

The cement sector appears to be on a sustainable growth path, given the robust outlook in Governmentinfrastructure spending. It is expected that the industry would grow at an average 8% annual growth in thelong run. The industry has witnessed consolidation in the recent years which is likely to increase with theentry of global players.

Cement being an energy intensive industry; power and coal are the major cost contributors. Logistics alsoform a significant portion of the cost. The looming coal shortage will not only affect the cost, but also thequality of coal.

Cement prices are expected to firm up across regions in the medium term on account of a better demand-supply balance and greater consolidation.



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BUSINESS OVERVIEW

The outlook remains challenging for the Company. Oversupply in its core markets of west / south will onlybe partly mitigated by increase demand growth of 8% p.a. as new capacities come on stream. Moreover, theexport boom to the Middle East is subject to commissioning of 30 million tones per annum new capacity inthat region over next 18 months.

Cement is an energy intensive industry, with coal and power being major cost contributors. The loomingcoal shortage will aggravate the situation further. Industry is facing not only the availability of quality coalbut also the rising prices.

The plant situated at Gujarat operates on imported coal where the cost has jumped by 60% and all otherplants operate on indigenous coal where the cost has increased by 16%. Efforts are on for improving costsand efficiencies. To reduce the fuel cost, the Company is considering the use of alternative fuels. The risingcost of power is being addressed with plans for installation of captive power plants. These initiatives areexpected to bring down power costs over a period of time and also ensure a more assured supply.

UltraTech together with Grasim has an installed capacity of 31 mtpa and has a combined market share of 21%. Grasim is the holding company with an equity stake of 51%. The synergistic benefits of Grasim areexpected to improve the company’s performance. UltraTech is a dominant player in the West and Southern

regions of the country and also has a presence in the East. The transition from L&T Cement to UltraTechwas very smooth and well accepted in all markets across the country.

The outlook is challenging for the company with an oversupply in its core market in the West and Southwhich is expected to be partly mitigated by demand-growth of 8%. The export boom to the middle-east issubject to commissioning of new capacities in that region over the next 18 months. To address the growingcost of power and coal, use of alternative fuels is being actioned with plans for setting up of captive powerplants.

DETAILS OF THE BUSINESS

To carry on the business of manufacturers of, dealers in and sellers of cement, clinker, lime, plasters,whiting, clay, granule, sand, coke, fuel, artificial stone, builders’ requisites & convenience of all kinds and

any products or things which may be manufactured out of or with cement or in which the use of cementmay be made.

BUSINESS STRATEGY

Focus on better capacity utilization and efficiencies. Optimise energy and distribution cost and improverealization through better product and market mix. Maximize exports and synergy benefits with Grasim. Torestructure debts and optimise finance costs.

CURRENT YEAR PERFORMANCE (2004-2005)

UltraTech had revenues of Rs. 2,681.1crore as against Rs. 2,251.1 crore in the previous year. Afterproviding for Interest at Rs.106.9 crore (Rs.115.0 crore) and Depreciation at Rs.221.8 crore (Rs. 214.5crore), the Profit Before Tax and provision for diminution in value of investments Rs.76.8 crore (Nil) stoodat Rs. 43.2 crore (Rs. 49.2 crore). Profit after tax stood at Rs. 2.9 crore (Rs.38.8 crore).



17

PROPERTY

The Company has following properties:

• Grey cement manufacturing plants at Awarpur, Korpana Taluka, Chandrapur District,Maharashtra; Kovayya Village, Rajula Taluka, Amreli District, Gujarat; Hirmi, Singa Tehsil,Raipur District, Chattisgarh and Tadipatri, Anantapur District, Andhra Pradesh;

• Captive power plants at Awarpur, Maharashtra and Kovayya, Gujarat;

• Grey cement grinding units at Jharsuguda, Jharsuguda District, Orissa; Arakkonam, ChitteriVillage, Arakkonam, Vellore District, Tamil Nadu and Raj Band, Durgapur District, West Bengal;

• Bulk cement handling terminals at Navi Mumbai, Maharashtra; Beach Road, Panambur,Mangalore, Karnataka and Willingdon Island, Cochin Port Trust, Cochin, Kerala;

• Rights and interest in the jetty situated at Kovayya, Gujarat.

KEY INDUSTRY REGULATION

The Company was incorporated as a public limited Company on 24 August 2000. UltraTech has compliedwith the guidelines prescribed by the Government under various laws, rules and regulations from time totime.

The Company’s Equity Shares are listed on BSE and NSE. The Company is required to comply with theprovisions of the Listing Agreement. Thus, the operations of the Company apart from the Companies Act,1956 are also subject to the regulations and guidelines issued by SEBI as regards a listed company.

HISTORY AND CORPORATE STRUCTURE OF THE ISSUER COMPANY

UltraTech was incorporated on 24 August 2000, as “L&T Cement Limited” as a 100% Subsidiary of Larsen & Toubro Limited. The name of the Company was changed to UltraTech Cemco Limited witheffect from 19 November 2003. The name of the Company was again changed to UltraTech Cement

Limited with effect from 11 October 2004.

In terms of the Scheme of Arrangement (the Scheme) under sections 391-394 of the Companies Act, 1956,which was approved by the Hon’ able High Court, Bombay on 22 April 2004, the Cement Business of Larsen & Toubro Limited (L&T) was demerged from L&T Ltd. and got transferred to UltraTech. All therights were vested in the Company as a going concern so as to become a separate entity with effect fromthe Appointed Date (1 April 2003), having the estate, assets, rights, claims, title, interest and authorities of the Company. The Scheme became effective from 14 May 2004. The Cement business transferred toUltraTech with effect from 14 May 2004 comprises, inter alia, of the following:

• Grey cement manufacturing plants at Awarpur, Korpana Taluka, Chandrapur District,Maharashtra; Kovaya Village, Rajula Taluka, Amreli District, Gujarat; Hirmi, Singa Tehsil,Raipur District, Chattisgarh and Tadipatri, Anantapur District, Andhra Pradesh;

• Captive power plants at Awarpur, Maharashtra and Kovaya, Gujarat;

• Grey cement grinding units at Jharsuguda, Jharsuguda District, Orissa; Arakkonam, ChitteriVillage, Arakkonam, Vellore District, Tamil Nadu and Raj Band, Durgapur District, West Bengal;

• Bulk cement handling terminals at Navi Mumbai, Maharashtra; Beach Road, Panambur,Mangalore, Karnataka and Willingdon Island, Cochin Port Trust, Cochin, Kerala;

• Rights and interest in the jetty situated at Kovaya, Gujarat.



18

Investment comprising 6,96,50,818 equity shares of the face value of Rs.10/- each in Narmada CementCompany Limited (NCCL), which has been delisted was also transferred in favour of UTCL.

Grasim acquired management control of the Company with effect from 6 July 2004. UltraTech is a part of the Aditya Birla Group.

BRIEF PARTICULARS ABOUT THE ADITYA BIRLA GROUP

BACKGROUND

The Aditya Birla Group (or “the Group”) is one of India's largest business houses. The Group’s operationsspan 40 companies, straddling 18 countries with revenues in excess of US$ 6 billion and a marketcapitalisation of US$ 5 billion. The Group has 72,000 committed employees and over 700,000shareholders. A broad overview of the products of the Group with major companies in each productcategory is given below:

Products CompaniesAluminium Hindalco Industries Limited

Indian Aluminium Company LimitedCement Grasim Industries LimitedCopper Hindalco Industries Limited

Birla Mineral Resources LimitedCarbon Black Indian Rayon and Industries Limited

Thai Carbon Black Co. Ltd.Alexandria Carbon Co. S.A.E.Liaoning Birla Carbon Co. Ltd.

Textiles Grasim Industries Ltd.Indian Rayon and Industries Limited

Viscose Staple Fibre Grasim Industries LimitedP.T. Indo Bharat RayonThai Acrylc Fibre

Fertilisers Indo Gulf Fertilisers LimitedChemicals Grasim Industries Limited

Bihar Caustic and Chemicals Ltd.Sponge Iron Grasim Industries Ltd. (Vikram Ispat)Mining Essel Mining and Industries LimitedInsulators Birla NGK Insulators Pvt. Ltd.Palm Oil Pan Century Edible OilsGas HGI Industries Ltd.Software PSI Data Systems LimitedBusiness Process Outsourcing Transworks Information Services Pvt. Ltd.Finance and Insurance Birla Global Finance Limited

Birla Sun Life Insurance Company LimitedBirla Sun Life Asset Management CompanyBirla Sun Life Distribution Company

Birla Sun Life Securities LimitedTelecom IDEA Cellular



19

MAIN OBJECTS

The main object as set forth in the Memorandum of Association is:

“ To carry on the business of manufacturers of, dealers in and sellers of cement, clinker, lime, plasters,whiting, clay, granule, sand, coke, fuel, artificial stone, builders’ requisites & convenience of all kinds andany products or things which may be manufactured out of or with cement or in which the use of cementmay be made.”

SUBSIDIARIES OF THE ISSUER COMPANY, IF ANY AND THEIR BUSINESSES

The Company has the following subsidiaries:

1. Narmada Cement Company Limited (NCCL) – NCCL became a subsidiary of UltraTech byvirtue of the Scheme of Arrangement for demerger of Cement Business of Larsen & ToubroLimited. It is engaged in the manufacturing of cement.

2. Dakshin Cements Limited- The Company is wholly owned subsidiary and is yet to start itsoperations.

3. UltraTech Ceylinco (Pvt.) Limited- the shareholding of Larsen & Toubro Limited in L&TCeylinco (P) Limited, incorporated in Sri Lanka was acquired by the Company subsequent to thedemerger and vesting of L&T’s cement business into the Company. The Company is now knownas UltraTech Ceylinco (P) Limited. The main business of the subsidiary is import and export of bulk cement.

MANAGEMENT

UltraTech is a Board managed company. The Board has appointed Mr. Saurabh Misra as the Manager &CEO who is responsible for the day to day operations of the Company.

Mr. Saurabh Misra – Manager & CEO

Mr. Saurabh Misra was appointed Manager & CEO with effect from 6 July 2004. He has held top positionsin the corporate sector including Deputy Chairman of ITC Limited and has vast experience in corporatemanagement. His experience and expertise are being gainfully utilized by the Company as its Manager &CEO. He has been heading the cement business of the Aditya Birla Group for the last five years and thisbusiness has grown significantly under his stewardship. He as Manager & CEO of the Company reports tothe Board of Directors. He manages the day-to-day affairs with the help of a team of professionals whohead various functional areas.

(A) BOARD OF DIRECTORS

As per the Articles of Association, UltraTech cannot have less than 3 or more than 12 directors. TheCompany currently has 11 directors as per details given below:

Name, Designation,Address and Occupation

of the Director

Age(Years) Qualifications Other Directorships Held

Mr. Kumar MangalamBirla16-A Il-PazlazzoLittle Gibbs RoadMumbai-400 006.

38 A.C.A. M.B.A. 1. Grasim Industries Ltd.2. Indian Rayon And Industries Ltd.3. Indo Gulf Fertilisers Ltd.4. Hindalco Industries Ltd.5. Indian Aluminium Co. Ltd.6.Birla Sunlife Asset Management

Company Limited.



20

7. Birla Sun Life Ins. Co. Ltd.8. Essel Mining & Industries Ltd.9. Tata Iron & Steel Co. Ltd.10. Maruti Udyog Ltd.11. PSI Data Systems Ltd.12. Transworks Information Services

Limited.13. Aditya Birla Management Corporation

Ltd.14. Alexandria Carbon Black Co. S.A.E.,

Egypt.15. Thai Rayon Public Co. Ltd. Thailand.16. Indo Thai Synthetics Co. Ltd.,

Thailand.17. Thai Carbon Black Public Company

Ltd., Thailand.18. Century Textiles Co. Ltd., Thailand.19. Thai Polyphosphate & Chemicals Co.

Ltd. Thailand20. Thai Acrylic Fiber Co. Ltd., Thailand.

21. Thai Peroxide Co. Ltd., Thailand.22. Thai Epoxy and Allied Products Co.

Ltd., Thailand.23. Thai Sulphites & Chemicals Co. Ltd.,

Thailand.24. Thai Organics Chemicals Co. Ltd.,

Thailand.25. PT Elegant Textile Industry, Indonesia.26. P.T. Indo Bharat Rayon, Indonesia.27. PT Indo Liberty Textiles, Indonesia.28. Pan Century Edible Oils Sdn. Bhd.,

Malaysia.29. Pan Century Oleochemicals Sdn. Bhd.,

Malaysia.30. Indo Phil Textile Mills Inc. Philippines.31. Birla Sun Life AMC Mauritius Ltd.32. Trapti Trading & Investments Pvt. Ltd.33. Turquoise Investments And Fin. Pvt.

Ltd.34. Gwalior Properties And Estates Pvt.

Ltd.35. Seshasayee Properties Pvt. Ltd.36. Birla Group Holdings Pvt. Ltd.37. TGS Investment & Trade Pvt. Ltd.38. Global Holdings Pvt. Ltd.39. Rajratna Holdings Pvt. Ltd.

40. Vaibhav Holdings Pvt. Ltd.41. Vikram Holdings Pvt. Ltd.

Mrs. Rajashree Birla16-A Il-PazlazzoLittle Gibbs RoadMumbai-400 006.

60 B.A. 1. Grasim Industries Ltd.2. Indian Rayon And Industries Ltd.3. Indo Gulf Fertilisers Ltd.4. Hindalco Industries Ltd.5. Essel Mining & Industries Ltd.,6. Aditya Birla Health Services Ltd.7. Alexandria Carbon Black Co. S.A.E.

Egypt.



21

8. Thai Rayon Public Co. Ltd., Thailand.9. Indo Thai Synthetics Co. Ltd., Thailand.10. Thai Carbon Black Public Co. Ltd.,

Thailand.11. Century Textile Co. Ltd., Thailand.12. Thai Polyphosphate & Chem. Co. Ltd.,

Thailand.13. Thai Acrylic Fiber Co. Ltd., Thailand.14. Thai Peroxide Co. Ltd., Thailand.15. Thai Epoxy and Allied Products Co.

Ltd., Thailand.16. Thai Sulphites & Chemicals Co. Ltd.,

Thailand.17. Thai Organic Chemicals Co. Ltd.,

Thailand.18. PT Elegant Textile Industry, Indonesia.19. PT Indo Bharat Rayon, Indonesia.20. Pan Century Edible Oils Sdn. Bhd.,

Malaysia.21. Pan Century Oleochemicals Sdn. Bhd.,

Malaysia.22. Indo Phil Textile Mills Inc., Philippines

Mr. R. C. Bhargava220 Sector 15-ANoida, UP – 201301

71 M.Sc.(Math), M.A.(Dev. Economics)

1. Optimus Outsourcing Co. Ltd.2. Grasim Industries Ltd.3. Polaris Software Lab Ltd.4. Machino Basell India Ltd.5. Lord Krishna Bank Ltd.6. Roulunds Codan India Ltd.7. Maruti Udyog Ltd.8. Omax Auto Ltd.9. Thomson Press Ltd.10. Dabur India Ltd.

11. IL&FS Ltd.12.Global Education Management Systems

(India) Pvt. Ltd.13. RCB Consulting Pvt. Ltd.

Mr. Y. M. Deosthalee1001, Prabhu Kutir15, Altamout RoadMumbai 400026.

59 B.Com., LL.B.,A.C.A.

1. Larsen & Toubro Ltd.2. L&T-Komatsu Ltd3. L&T Finance Ltd.4. Larsen & Toubro Infotech Ltd.5. L&T Capital Company Ltd.

6. L&T Infrastructure Devp. Projects(formerly L&T Holdings Ltd.)

7. The Dhamra Port Company Ltd.8. L&T-John Deere P Ltd.

9. Larsen & Toubro International FZE10. ISP India P Ltd.

Mr. Arun R. Gandhi10, Sudama214, Walkeshwar RoadMumbai 400006

62 B.Com, F.C.A. 1. Benares Hotels Ltd.2. Tata Infotech Ltd.3. Bayer Diagnostics India Ltd.4. Raychem RPG Ltd.5. Tata Sons Ltd.6. Tata Asset Management Ltd.7. The Paper Products Ltd.8. E2E SerWiz Solutions Ltd.



22

Foreign Companies :1. Tata Tea (GB) Ltd.2. Tata Tea Inc

Mr. Y. P. Gupta177, A. Rajguru NagarFirozpur Road

Ludhiana – 141012

65 M.A. 1. IDBI Home Finance2. I.T.C. Ltd.3. Malwa Cotton Spg. Mills Ltd.

4. Punjab Tractors Ltd.5. Ranauq International6. Grasim Industries Ltd.

Dr. Santrupt Misra3C, Swapnalok 47, Napean Sea RoadOpp. Priyadarshini Park Mumbai 400006.

40 M.A. (Politics)M.A. (PMIR),PhD (PublicAdministration)PhD (IndustrialRelations)

1. Aditya Birla Management Corpn. Ltd.2. Birla Management Centre Services Ltd.3. PSI Data Systems Ltd.4. Birla Technologies Ltd.5. Indian Aluminium Co. Ltd.6. Birla NGK Insulators Pvt. Ltd.

Mr. V.T. MoorthyNo. 5-C, Second Street,Dr. Radhakrishnan Salai,Mylapore,Chennai-600 004

64 Mechanical/ Chemical Engineer

1. TANFAC Industries Ltd.

Mr. J. P. Nayak Gilder House, 67FBhulabhai Desai RoadMumbai 400026.

62 B.E., Post GraduateDiploma(Production Engg.)

1. Audco India Ltd.2. EWAC Alloys Ltd.3. Larsen & Toubro Ltd.4. L&T Finance Ltd.5. L&T-Komatsu Ltd.6. NAC Infrastructure Ltd.7. Tractor Engineers Ltd.8. L&T-Chase Equipments Pvt. Ltd.9. L&T John Deere Pvt. Ltd.10.L&T-Demag Plastics Machinery P Ltd.

Mr. S. Rajgopal232, Buena Vista General

J. Bhosle MargMumbai 400021

70 I.A.S. 1. Amed Consultants (Pvt.) Ltd.

Mr. D. D. Rathi82, Jolly MakerApartments IICuffe ParadeMumbai 400005.

58 B.Com, F.C.A. 1. Idea Cellular Ltd.2. Birla Consultants Ltd.3. Birla Industrial. Investments (I) Ltd4. Birla Indl. Finance (I) Ltd.5. Samruddhi Swastik Trading and

Investments Ltd.6. Sun God Trading and Investments Ltd.7. Grasim Industries Ltd.8. Aditya Birla Energy Pvt. Ltd.9. Vishal Industries and Chemicals Pvt.

Ltd.

(B) COMMITTEES OF THE BOARD

(i) Audit Committee

An Audit Committee at the Board level with the powers and the role that are in accordance with Clause 49II (C) and (D) of the Listing Agreement has been constituted. The Committee acts as a link between themanagement, the statutory and internal auditors and the Board of Directors and oversees the financialreporting process. The Audit Committee was reconstituted on 4 August 2004 and now consists of threeNon-executive Directors viz., Mr. R. C. Bhargava, Mr. A.R. Gandhi, and Mr. S. Rajgopal.



23

(ii) Shareholders’ / Investors’ Grievance Committee

The Shareholders’ Grievance Committee comprises of Mr. R.C. Bhargava, Dr. S. Misra, Mr. D. D. Rathi.The Committee looks into issues relating to Share/Debentureholders, including transfer/transmission of Shares/Debentures, issue of duplicate Share/Debentures certificates, non-receipt of dividend, AnnualReports etc. The Committee meets to review status of investor grievances, ratify share/debenture transfers,approve transmission of shares / debentures and issue duplicate Share/Debentures certificate from time totime. Besides, Officers of the Company have been authorised to approve issue of Share / Debenturecertificates, approve transfer / transmission of Share / Debenture, consolidation, sub-division, split of Share / Debenture certificates, etc.

(C) DETAILS OF BORROWING POWERS

The Board of Directors are authorised to borrow money’s subject to the general body resolution. Aresolution dated 30 April 2004 as per section 293(1) (d) of the Companies Act, 1956, under which theBoard of Directors of the Company has been authorised to borrow sum from time to time which moneyalready borrowed by the Company (apart from the ordinary course of business) may exceed at any time theaggregate of paid up share capital and free reserves of the Company, upto a sum not exceeding Rs. 1,000Crore (Rupees One Thousand Crore Only).

(D) COMPENSATION OF MANAGER

Mr. Saurabh Misra has been appointed as Manager & CEO of the Company for a period of 3 (three) yearswith effect from 6 July 2004 on the terms of remuneration, as approved by the members vide resolutionpassed at the 4th Annual General Meeting held on 11 October 2004. The terms of his remuneration are asfollows:

1. Remuneration:

(A) Basic Salary – Rs. 4,50,000/- (Rupees Four Lac fifty thousand only) per month with such annualincrement(s) as the Board may decide from time to time, subject however to a ceiling of Rs.6,00,000/- (Rupees Six Lac only) per month as basic salary.

(B) Special Allowance – Rs. 4,25,000/- (Rupees Four Lac twenty five thousand only) per month withsuch annual increment(s) as the Board may decide from time to time subject however to a ceilingof Rs. 6,00,000/- (Rupees six Lac only) per month .

(C) Performance linked Variable pay and/or Long Term Incentive Compensation (LTIC) and/or anyother compensation as may be decided by the Board from time to time up to end of his tenure, thesame to be made on a pro rata basis every month or on an annual basis or partly monthly andpartly on annual basis at the discretion of the Board subject to a maximum of Rs. 50, 00,000/-(Rupees fifty Lac only) on this account in each year of his tenure.

(D) Perquisites: The Company shall provide free furnished accommodation and also pay all rents,rates, taxes, electricity, fuel charges, water charges, telephone bills and all other expenses for the

upkeep and maintenance thereof and the expenditure incurred thereon by the Company shall bevalued as per the Income-tax Rules.

(a) Leave Travel expenses for self and family (which shall include spouse, dependent children andparents) in accordance with the Rules applicable to the Company.

(b) Reimbursement of medical expenses (including insurance premium for medical andhospitalization policy, if any) for self and family, which shall include spouse, children anddependent parents, at actuals.



24

(c) Fee for one Club in India.

(d) Leave and encashment of leave as per the Rules applicable to the Company.

(e) Personal Accident Insurance cover as per the Rules applicable to the Company.

(f) Contribution to Provident Fund, Superannuation or Annuity Fund as per the Rules applicable tothe Company, to the extent these, either singly or put together, are not taxable under the IncomeTax Act, 1961.

(g) Gratuity and / or contribution to Gratuity Fund of the Company as per the Rules applicable to theCompany as applicable to Senior Executives.

(h) Company maintained cars with driver for use exclusively on Company’s business.

(i) Reimbursement of entertainment, traveling and all other expenses incurred for the business of theCompany as per the Rules applicable to the Company. Traveling expenses of spouseaccompanying the Manager on any official overseas or inland trip will be governed as per theRules applicable to the Company.

(j)

Any other allowances, benefits and perquisites as per the Rules applicable to the SeniorExecutives of the Company and / or which may become applicable in the future and / or any otherallowance, perquisites as the Board may from time to time decide.

Where in any FY, the Company has no profits or its profits are inadequate, the foregoing amountof remuneration and benefits shall be paid or given to Mr. Saurabh Misra subject to the applicableprovisions of Schedule XIII of the said Act.

(E) COMPLIANCE WITH CORPORATE GOVERNANCE REQUIREMENTS

The equity shares of the Company are listed on BSE and the NSE. As such, the provisions of Clause 49 of the Listing Agreement in respect of Corporate Governance are applicable to the Company. The Companysubscribes to the provisions of clause 49 on an on-going basis.

(F) SHAREHOLDING OF DIRECTORS

Name of Director No. of shares held

Mr. Kumar Mangalam Birla 400

Mrs. Rajashree Birla 400

Mr. Y. M. Deosthalee 1773

Mr. J. P. Nayak 1276

Mr. V.T. Moorthy 300

The Directors are not required to hold any qualification shares.

(G) INTEREST OF DIRECTORS

Apart from the shares held by the Directors in the Company and the sitting fees paid for attendingboard/committee meetings, received by them, the Directors do not have any other interest in the Company.

(H) MANAGEMENT ORGANISATION STRUCTURE

UltraTech is managed by a Board of Directors comprising Mr. Kumar Mangalam Birla(Chairman), and Mrs. Rajashree Birla, Dr. Santrupt Misra, Mr. R.C. Bhargava, Mr. D. D. Rathi,Mr. S. Rajgopal, Mr. Y. M. Deosthalee, Mr. J.P. Nayak, Mr. Arun R. Gandhi, Mr. Y. P. Gupta andMr. V.T. Moorthy being the other Directors. Mr. Saurabh Misra, Manager & CEO reports to the



25

Board of Directors. He manages the day-to-day affairs with the help of a team of professionalswho head various functional areas.

(I) CHANGES IN THE BOARD OF DIRECTORS IN THE LAST THREE YEARS

Sl.

No.

Name of the Director Date of

Appointment

Date of Resignation Reasons for the

Appointments /

Change

1. Mr. M. Karnani 24 August 2000 30 September 2001 Resigned

2. Mr. A. M. Naik 24 August 2000 14 May 2004 Resigned

3. Mr. J.P. Nayak 24 August 2000 - -

4. Mr. Y. M. Deosthalee 24 August 2000 - -

5. Mr. A. Ramakrishna 24 August 2000 14 May 2004 Resigned

6. Mr. K. Venkataramanan 24 August 2000 14 May 2004 Resigned

7. Mr. D. D. Rathi 4 February 2004 14 May 2004 Resigned

8. Mr. S. Rajgopal 14 May 2004 - -

9. Mr. Kumar Mangalam Birla 14 May 2004 - -

10. Ms. Rajashree Birla 14 May 2004 - -

11. Mr. K. S. K. Khare 14 May 2004 4 August 2004 Resigned

12. Mr. S. S. Marathe 14 May 2004 4 August 2004 Resigned13. Mr. D. D. Rathi 6 July 2004 - -

14. Dr. S. Misra 6 July 2004 - -

15. Mr. R. C. Bhargava 6 July 2004 - -

16. Mr. Arun Gandhi 6 July 2004 - -

17. Mr. Y.P. Gupta 4 August 2004 - -

18. Mr. V.T. Moorthy 25 January 2005 - -

(J) DETAILS REGARDING KEY MANAGERIAL PERSONNEL

Name Mr. Saurabh Misra

Qualification B.A.

Designation Manager & CEO

Area OperationsDate of Joining 6 July 2004

Experience in the Industry & in

the Company

He has been heading cement business of the AdityaBirla Group for the last five years.

Details of previous employment Business Head of Grasim Industries Limited

(K) SHAREHOLDING OF THE KEY MANAGERIAL PERSONNEL

The key managerial personnel do not have any interest in the Company other than the extent of remuneration and benefits to which they are entitled to as per the terms of their appointment andreimbursement of expenses incurred by them during the ordinary course of business, and no key managerialpersonnel holds any shares in the Company.

(L) BONUS OR PROFIT SHARING PLAN FOR THE KEY MANAGERIAL PERSONNEL

NONE

(M) CHANGES IN THE COMPANY’S KEY MANAGERIAL PERSONNEL IN THE LAST

ONE YEAR

NONE



26

(N) EMPLOYEES

The Company has around 3,000 permanent employees as on 31 March 2005. There are no stock optionplans or stock purchase schemes for its employees.

(O) DETAILS OF THE STOCK OPTION SCHEME, IF ANY

NONE

(P) PAYMENT OR BENEFIT TO OFFICERS OF THE COMPANY (NON-SALARY

RELATED)

NONE

PROMOTERS/PRINICIPAL SHAREHOLDERS

DETAILS OF PROMOTERS

A) Grasim Industries LimitedRegd. Office : Birlagram, Nagda-456 331,

Madhya Pradesh

Permanent Account No. (PAN) : AAACG4464B

Address of the Registrar of Companies where the Regd. Office : The Registrar of Companiesof the Company is situated : Ministry of Finance & Company Affairs

(Department of Company Affairs)Office of the Registrar of Companies M.P. &ChattisgarhSanjay Complex, A Block, 3rd FloorJayendraganj, Gwalior- 474 009

Board of Directors of Grasim

Sr. No. Name Designation



3. Mr. M. L. Apte Director

4. Mr. B. V. Bhargava Director

5. Mr. R. C. Bhargava Director

6. Mr. Y. P. Gupta Director

7. Mr. Cyril Shroff Director

8. Mr. S. G. Subrahmanyan Director

9. Mr. S. B. Mathur Director

10. Mr. Shailendra K Jain Director

11.

Mr. D. D. Rathi Director

B) Samruddhi Swastik Trading & Investments Limited

Regd. Office : Birlagram, Nagda-456 331,Madhya Pradesh

Permanent Account No. (PAN) : AACCS4152N



27

Address of the Registrar of The Registrar of Companiesof the Company is situated : Ministry of Finance & Company AffairsCompanies where the Regd. Office : (Department of Company Affairs)

Office of the Registrar of Companies M.P. &ChattisgarhSanjay Complex, A Block, 3rd FloorJayendraganj, Gwalior- 474 009

Board of Directors of Samruddhi Swastik Trading & Investments Limited

Sl. No. Name Designation

1. O. P. Rungta Director

2. G. K. Tulsian Director

3. S. K. Jain Director

4. D. D. Rathi Director

5. Sanjeev Bafna Director

Shareholding of the Directors of the Promoter Companies in the issuer Company

Name of Director No. of shares heldMr. Kumar Mangalam Birla 400

Mrs. Rajashree Birla 400

Mr. Cyril Shroff 151

Mr. Shailendra K Jain 89

(B) None of the Promoters have disassociated themselves in any of the companies in the last threeyears.

(C) Common pursuits

The Company confirms that there are no interests of the Directors, promoters or their relatives in respect of any property acquired by the Company within two years of this Information Memorandum or proposed tobe acquired by it.

(D) No director or promoter of UltraTech or firm or company in which such a director or promoter is amember, owes any amount of money including for services rendered by him or by the firm orcompany.

(E) Shri Digvijay Cement Company Limited (SDCCL), a company acquired by Grasim and which isits subsidiary company has been referred to Board for Industrial & Financial Reconstruction(BIFR). Apart from SDCCL, there are no companies promoted by Grasim and Samruddhi Swastik Trading & Investments Limited which have become sick companies within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 and that there are no companies that arepromoted by Samruddhi Swastik Trading & Investments Limited, which have been referred toBIFR or which are under the process of winding up or have a negative networth.

(F) There are no cases of pending litigations, defaults, etc. whose material impact is in excess of 1%of the profit of Grasim Industries Ltd. and Samruddhi Swastik Trading & Investments Limited inrespect of companies/firms/ventures with which Grasim Industries Ltd. and Samruddhi Swastik Trading & Investments Limited were associated in the past but are no longer associated buttheir name still continues to be associated with those litigations.

(G) PAYMENT OR BENEFIT TO PROMOTERS OF THE ISSUER COMPANY

No amount or benefit was paid or given or is intended to be paid or given to any promoter.



28

RELATED PARTY TRANSACTIONS AS PER THE FINANCIAL STATEMENTS

For details of the data pertaining to Related Party Transactions please refer the Financial Information of this Information Memorandum.

COMMON PURSUITS AMONG GROUP COMPANIES

The Company confirms that there are no interests of the Directors, promoters or their relatives in respectof any property acquired by the Company within two years of this Information Memorandum or proposedto be acquired by it. However, the Company is a subsidiary of Grasim Industries Limited which is alsoengaged in the manufacture and sale of Cement.





30

6. We have examined the ‘Capitalisation Statement’ enclosed as Annexure VII to this report andreport that it correctly records the matters stated therein.

We further report that the information mentioned in the paragraphs 3 to 6 above has been correctlycomputed from the figures stated in the Statements of Adjusted Profits and Losses and Assets andLiabilities, referred to in paragraph 1(a) above.

This report is intended solely for your information for inclusion in the umbrella offer document inconnection with the proposed issue of debt securities of the Company and is not to be used, referred toor distributed for any other purpose without our prior written consent.

G.P. KapadiaChartered AccountantsPlace: Mumbai Dated: 16 June 2005



31

Annexure I

FINANCIAL INFORMATION OF ISSUER COMPANY

Statement of Adjusted Profit for the year ended 31 March 2005

Rs. in Crore

2004-05 2003-04

Net Sales 2,681.05 2,251.13

Interest & Dividend Income 3.70 17.54

Other Income 18.55 42.05

Increase / (Decrease) in Stocks 20.90 (6.99)

Expenditure 2,352.30 1,925.00

Interest 106.88 115.01

Depreciation 221.78 214.52

Profit before Tax and diminution 43.24 49.20

Provision for Diminution in value of Investment 76.84 -

Profit/(Loss) before tax expenses (33.60) 49.20

Provision for Current Tax 31.55 19.65Deferred Tax (68.00) (9.28)

Profit after Tax 2.85 38.83

Statement of Assets & Liabilities for last two years ended 31 March 2005

Rs. in Crore

Balance Sheet as at March 31 2005 2004

Share Capital 124.40 124.40

Share Capital to be Extinguished - 0.51

Reserves and Surplus 942.73 950.54

Networth 1,067.13 1,075.45

Secured Loans 1,253.35 1,245.01

Unsecured Loans 278.03 390.63

Deferred Tax Liabilities (Net) 581.71 649.71

TOTAL 3,180.22 3,360.80

Fixed Assets

Gross Block 4,304.29 4,275.84

Less : Depreciation 1,755.39 1,547.94

Net Block 2,548.90 2,727.90

Capital Work-in-Progress 48.18 24.06

Investments 184.79 238.09

Net Current Assets 398.35 355.23

Miscellaneous Expenditure - 15.52

TOTAL 3,180.22 3,360.80



32

Annexure II

Significant Accounting Policies

1. BASIS OF ACCOUNTING

The Financial Statements are prepared under the historical cost convention on an accrual basis and inaccordance with the applicable mandatory Accounting Standards.

2. FIXED ASSETS

Fixed assets are stated at cost (including other expenses related to acquisition and installation).

3. FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are accounted for at the rates prevailing on the dates of the transactions/ converted at contracted rate. Foreign currency assets and liabilities covered by forward contracts are statedat the forward contract rates while those not covered are restated at year end rate. Exchange differencesrelating to fixed assets are adjusted in the cost of the asset. Any other exchange difference is dealt with inthe profit and loss account. Premium in respect of forward contracts is recognised over the life of contracts.

4. TREATMENT OF EXPENDITURE DURING CONSTRUCTION PERIOD

Expenditure during construction period is included under Capital Work in Progress and the same isallocated to the respective Fixed Assets on the completion of its construction.

5. INVESTMENTS

Current investments are carried at lower of cost or fair value. Long term investments are stated at cost afterdeducting provisions made for permanent diminution in the value.

6. INVENTORIES

Inventories are valued at lower of cost and net realisable value. The cost is computed on weighted averagebasis.

Finished goods and process stock include cost of conversion and other costs incurred in bringing theinventories to their present location and condition. Obsolete, defective and unserviceable stocks are dulyprovided for.

7. LEASES

a) In respect of lease transactions entered into prior to 1 April 2001, lease rentals of assets acquired arecharged to profit & loss account.

b) Lease transactions entered into on or after 1 April 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 leaseat the lower of the fair value or the present value of minimum lease payments and a liability iscreated for an equivalent amount. Each lease rental paid is allocated between the liability and theinterest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for eachperiod.

ii) Assets acquired under leases where a significant portion of the risks and rewards of ownership areretained by the lessor are classified as operating leases. Lease rentals are charged to the Profit &Loss Account on accrual basis.



33

iii) Assets leased out under operating leases are capitalised. Rental income is recognised on accrualbasis over the lease term.

(Also refer to policy on Depreciation & Amortisation, infra)

8. DEPRECIATION AND AMORTISATION

Depreciation is charged in the Accounts on the following basis:i) Depreciation on original cost is provided on straight-line basis at the rates prescribed in

Schedule XIV to the Companies Act, 1956 except in following.

a) Motor Cars at 14.14 % per annumb) Motor Car given to employees as per Company Scheme at 17 % per annum.c) Personal Computers & Laptops given to employees as per Company Scheme at 31 %

per annum.

ii) Assets acquired up to 30 September 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) Contribution to power lines are amortised over a period of five years.

v) Expenditure incurred on Jetty is amortised over the period of the relevant agreement such that thecumulative amortisation is not less than the cumulative rebate availed by the Company.

vi) Specialised softwares are amortised over a period of three years.

vii) In respect of the amounts capitalised during the year on account of foreign exchange fluctuationdepreciation is provided prospectively over the residual life of the assets.

viii) Depreciation on additions/deductions is calculated pro rata from/to the month of additions/deductions.

9. RETIREMENT BENEFITS

Provisions for/contributions to retirement benefits schemes are made as follows:

a) Provident fund on actual liability basis.b) Superannuation/Pension schemes on the basis of actual liability/actuarial valuation.c) Gratuity based on actuarial valuation.d) Leave encashment benefit on actuarial valuation basis.

10. INTEREST

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 compoundinterest basis determined with reference to the yield inherent in the discount.

11. BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset arecapitalised as part of cost of such asset till such time as the asset is ready for its intended use. A qualifyingasset is an asset that necessarily requires a substantial period of time to get ready for its intended use. Allother borrowing costs are recognised as an expense in the period in which they are incurred.



34

12. PROVISION FOR CURRENT & DEFFERED TAX

Provision for Current Tax is made on the basis of taxable income for the current accounting period and inaccordance with the provisions as per Income Tax Act, 1961.

Deferred Tax resulting from “timing difference” between book and taxable profit for the year is accountedfor using the tax rates and laws that have been enacted or substantively enacted as on the balance sheetdate. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonablecertainty that the assets will be realized in future.

13. SALES

a) Sales are accounted on despatch of products and sales value includes excise duty.b) Export sales are accounted on the basis of date of bill of lading.



35

Annexure III

Consolidated Financial Statements of UltraTech Cement Limited

Rs. in crore

Balance Sheet as at March 31 2005 2004

Share Capital 124.40 124.41

Share Capital to be Extinguished - 0.51

Reserves and Surplus 849.28 928.94

Net Worth 973.68 1,053.86

Loan Funds

Secured Loans 1,259.94 1,257.15

Unsecured Loans 278.03 309.07

Minority Interest 4.08 -

Deferred Tax Liabilities 581.71 602.99

TOTAL 3,097.44 3,223.07

Fixed Assets

Gross Block 4,530.13 4,473.06

Less : Depreciation 1,879.36 1,660.20

Net Block 2,650.77 2,812.86

Capital Work-in-Progress 49.65 27.71

Goodwill on Consolidation 152.98 235.95

Investments - -

Net Current Assets 244.02 114.31

Miscellaneous Expenditure 0.02 32.24

TOTAL 3,097.44 3,223.07

Rs. in crore

Year Ended March 31 2005 2004

Net Sales 2,775.91 2,291.99

Interest & Dividend Income 1.38 0.89

Other Income 19.74 43.06

Increase / (Decrease) in Stocks 21.23 0.31

Expenditure 2,439.30 1,968.85

Interest 109.33 118.46

Depreciation & Amortisation 248.52 247.45

Profit before Tax 21.10 1.49

Less: Profit of UltraTech Ceylinco till date of

acquisition

0.76

Impairment of Goodwill 76.84 -

Profit/(Loss) before tax expenses (56.50) 1.49

Provision for Current Tax 32.50 19.65

Deferred Tax (36.89) (35.47)

Profit after Tax (52.11) 17.31

Minority Interest 1.28 0.12

Profit after Minority Interest (53.39) 17.19



36

1. Principles of consolidation

(a) The Consolidated Financial Statements (CFS) comprises the financial statements of UltraTechCement Limited and its subsidiaries as at 31.03.2005, which are as under:

Name of the Company Country of

Incorporation

% Shareholding &

Voting Power

Narmada Cement Company Limited India 97.80%

Dakshin Cements Limited India 100%

UltraTech Ceylinco (Private) Limited Srilanka 80%

(b) The financial statements of the parent company and its subsidiaries have been consolidated ona line-by-line basis by adding together the book values of like items of assets, liabilities, incomeand 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’sseparate financial statements.

2. The reported FY for NCCL is 12 months ending 30 September 2004 and for UltraTech CeylincoPrivate Ltd. is 31 December 2004. However the unaudited financial statements of NCCL &

UltraTech Ceylinco (Private) Limited for the year ended 31 March 2005 have been considered forthe consolidated purpose.

NCCL accounts are with limited review by auditors of NCCL.

3. UltraTech Ceylinco (Private) Limited became subsidiary company during the current FY.

4. Goodwill:

Goodwill represents the difference between the Group’s share in the net worth of a subsidiary, andthe cost of acquisition at each point of time of making the investment in the subsidiary. For thispurpose, the Group’s share of net worth is determined on the basis of the latest financialstatements 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 equalamounts over a period of 10 years from the date of first acquisition. In the event of cessation of operations of a subsidiary, the unamortised goodwill is written off fully.

During the year Rs. 18.99 crore was amortised from goodwill.

5. Reserve shown in the consolidated balance sheet represents the Group’s share in the respectivereserves of the Group companies. Retained earnings comprise general reserve and profit and lossaccount.





38

Tax saving on this difference 20.88

Total Taxation (current tax) 197.42

Extra Ordinary Items

Taxation on extraordinary items

Tax on Profits before Extraordinary Items

Annexure VII

Capitalisation Statement as on 31 March 2005(Rs. in Crore)

Debt:

Short Term Debt 302Long Term Debt 1,229

Total Debt 1,531

Shareholders Funds:Share Capital 124Reserves 943

Total Shareholders Funds 1,067

Certified byG.P. Kapadia & Co.Chartered Accountants



39

FINANCIAL INFORMATION OF GROUP COMPANIES

GRASIM INDUSTRIES LIMITED

Grasim, a flagship company of the Aditya Birla Group, ranks among India's largest private sectorcompanies, with a turnover of Rs. 52,333 million in 2003-04. Starting as a textiles manufacturer in 1948,Grasim’s businesses today comprise Viscose Staple Fibre (VSF), cement, sponge iron, chemicals andtextiles. Grasim is the world leader in VSF with a 24 per cent global market share. It meets over 90 per centof India's domestic VSF requirements. In the cement industry, Grasim is poised to become the world'sseventh largest cement producer and the largest in a single location.

Further, Grasim is the largest merchant producer of sponge iron in India and has India's second largestcaustic soda unit. In the textiles industry, its premium brands, the 'Grasim' and 'Graviera' range of fabrics,have distinctively positioned themselves as 'the power of fashion'.

Date of Incorporation : 25 August 1947

Audited Financial Highlights (Amount in Rs. Crore)

As on 31 March 2005 2004 2003

Share Capital 92.00 92.00 92.00Reserves & Surplus* 4232.00 3514.00 2879.00

Sales/Income 6229.00 5213.00 4606.00

Profit After Tax (PAT) 886.00 779.00 368.00

Dividend (%) 160.00 140.00 100.00

EPS (Rs.)@ 103.00 85.00 58.00

Book Value per Share (Rs.) 472.00 393.00 324.00*Excluding Revaluation Reserve @Before Exceptional Items

Price and Volume of Shares

BSE NSE

Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)

Dec 2004 1327.00 1119.00 1327.00 1117.00Jan 2005 1355.00 1215.00 1356.00 1212.00

Feb 2005 1386.00 1312.00 1388.00 1312.00

Mar 2005 1409.90 1180.00 1404.00 1180.00

Apr 2005 1248.00 1150.00 1311.55 1148.00

May 2005 1164.90 1028.80 1169.00 1106.00

Board of Directors as on 31 March 2005

Sr. No. Name Designation



3. Mr. M. L. Apte Director

4.

Mr. B. V. Bhargava Director5. Mr. R. C. Bhargava Director

6. Mr. Y. P. Gupta Director

7. Mr. Cyril Shroff Director

8. Mr. S. G. Subrahmanyan Director

9. Mr. S. B. Mathur Director

10. Mr. Shailendra K Jain Director

11. Mr. D. D. Rathi Director



40

- Any public or rights issue during last 3 years:a. Issue Price of the Securityb. Current Market Pricec. Particulars of changes in the capital structuresince thend. Statement regarding the cost and progress of

implementation of the project in comparisonwith the cost and implementation schedulegiven in the offer document

-Information regarding adverse factors

a. Whether the Company has become a sick company within the meaning of Sick IndustrialCompanies (Special Provisions) Act, 1995 or isunder winding up

b. Whether the Company has made a loss in theimmediately preceding year and if so, the profitor loss figure for the immediately preceding

three years

:

:

:

NONE

NO

NO

- If the promoters have disassociated themselvesfrom any of the companies/firms duringpreceding three years, the reason therefore andcircumstances leading to disassociationtogether with terms of such disassociation

: Divestment of Aditya Birla Group in MRPL toONGC due to lack of leadership position in thesector, no presence in marketing of petroleumproducts and no significant synergies with othergroup companies. The decision was also in linewith the recommendation of the BostonConsulting Group where the investment inMRPL was identified as “non-core”.

- In case there are common pursuits among groupcompanies, the reasons and justification for the

same shall be spelt out and the conflict of interest situation

: NONE

- Sale and Purchase between companies in thepromoter group when such sales or purchaseexceed in value in aggregate 10% of total salesor purchase of the issuer and also disclosematerial items of income or expenditure arisingout of transaction in the promoter group

: NIL





42

has been raised by MPSEB towards minimum tariff charges. The matter is pending before theM.P. High Court. An appeal against a demand of electricity tax of Rs.7.23 crore made by CEIG ispending with Energy Secretary for disposal. There are 2 other minor cases amounting to a sum of Rs.5.64 crore pending before different levels of appeals.

5. In addition to the above, 2 cases aggregating to Rs.3.54 crore with regard to Mineral AreaDevelopment Cess & Royalty, 61 cases aggregating to Rs.23.43 crore with regard to Sales Tax &Entry Tax, 6 cases aggregating to Rs.6.15 crore with regard to Land compensation, 69 casesaggregating to Rs.2.99 crore with regard to Labour disputes, 8 cases aggregating to Rs.3.55 crorewith regard to Freight disputes, 1 case for Rs.0.57 crore with regard to Betterment fees, 2 casesaggregating to Rs.0.21 crore with regard to Service tax matters, 4 cases aggregating to Rs.0.90crore with regard to Property & road tax matters, 4 cases aggregating to Rs.0.93 crore with regardto Water cess, 4 cases aggregating to Rs.2.43 crore with regard to price difference due to weightloss, 35 cases of claims from parties aggregating to Rs.2.33 crore and 17 miscellaneous casesaggregating to Rs.8.03 crore are pending before the appropriate authorities.

Samruddhi Swastik Trading and Investments Limited and Sun God Trading and Investments Limited(Subsidiaries of Grasim)

There were no material litigations pending against the subsidiary companies as on 31 March 2005

PROMISE vs. PERFORMANCE

Promises Performance

CEMENT

1. Plant installation in Raipur (M.P.) with capacityof 1 Million Metric Tonnes per annum-Cost Rs.3.9 billion expected to be commissioned by theend of last Quarter of 1994

2. Plant installation in Shambhupura (Rajasthan)with capacity of 1 Million Metric Tonnes per

annum-Cost Rs. 3.9 billion expected to becommissioned by the end of first quarter of 1995

Plant installed on 29 March 2005 at a cost of Rs.380.02 crore

Plant installed on 28 March 2005 at a cost of Rs. 317.15 crore

STAPLE FIBRE

1. Expansion at Mavoor by 11,000 MT at a cost of Rs.300 million expected by June 1994

2. New Plant with annual capacity of 60,000 tonnesto be commissioned. Commissioning is to bedone in two stages involving a cost of Rs. 3200million

Expansion took place in June 1994 involving a costof Rs. 300 million

1st

Phase- It included an expansion of 30,000 tonnesinvolving a cost of Rs. 3297.40 million and it wascompleted by December 1997.

2nd

Phase- It included an expansion of the balance30,000 tonnes involving a cost of Rs.1240.50

million and it was completed by March 1999

CHEMICAL

1. Expansion of caustic soda capacity at Nagda from123000 to 176000 metric tonnes per annum baseson membrane cell technology of Rs. 1750 million,expected to be commissioned by the end of 2nd Quarter of 1994

Commissioned on 21August 1994 with an installedcapacity of 198300 metric tonnes per annum. In1993-94, the installed capacity was 112500 metrictonnes per annum. Amount spent on the project Rs.1430 million upto March 1995



43

2. New 40 MW power plant to be commissioned bylast quarter of 1995

Commissioned on 13 June 1996

TEXTILE

1. Project to manufacture worsted yarns nearGwalior with the capacity of 6000 spindles

2. Spinning capacity increase by installing 12000spindles

Project was established on 22 April 1994 having aninstalled capacity of 8832 spindles, the commercial

production commenced from 8 November 995

Commissioned on 8 February 1996 having aninstalled capacity of 13824 spindles. Thecommercial production started from 9 February1996

SPONGE IRON

Purchase of 4 nos. of 2,500 tonnes mini-bulk carriers for total Rs. 300 million. To be deliveredtowards end of 1994 to be used in transport of ironore to the plant at Raigarh

4 mini-bulk carriers delivered by March 1995 worthRs. 319.44 crore

RELATED PARTY TRANSACTION WITHIN THE GROUP AND ITS SIGNIFICANCE ON THEFINANCIAL PERFORMANCE OF THE COMPANY

A. Parties where control exists-

SubsidiariesSun God Trading & Investments Ltd.Samruddhi Swastik Trading & Investment Ltd.UltraTech Cement Ltd.Narmada Cement Company Ltd.Dakshin Cements Ltd.UltraTech Cylinco Private Ltd.

B. Other Related Parties with whom transactions have taken place during the FY 2004-05

Joint Ventures

Idea Cellular Ltd.AV Cell Inc., CanadaTANFAC Industries Ltd.

Key Management Personnel

i) Mr. Shailendra K. Jain, Manager/Whole Time DirectorRelatives of Mr. Shailendra K. Jain-Ms. Niharika Jain, Wife-Mr. Suvvrat Jain, Son-Mr. Devvrat Jain, Son

ii) Mr. D. D. Rathi, Whole Time DirectorEnterprise where significant influence exists:-Vishal Industries and Chemicals Pvt. Ltd.





45

Hindalco Industries Limited

Hindalco Industries Limited (Hindalco), another flagship company of the Aditya Birla Group, is structuredinto two strategic businesses- aluminum and copper- and is an industry leader in both segments. A non-ferrous metals powerhouse, close to global scale, it ranks among India's top 10 companies in terms of market capitalisation. Hindalco commenced its operations in 1962 with an aluminum facility at Renukootin eastern Uttar Pradesh. Over the years, it grew into the largest integrated aluminum manufacturer in thecountry. With an eye to build size and scale, Hindalco acquired a majority stake in Indian AluminumCompany Limited (Indal) in FY 2000 - having a major presence in downstream aluminum products and aleader in special alumina from Alcan of Canada. In FY 2002, Hindalco acquired the copper business of theerstwhile Indo-Gulf Corporation Limited, a group company. Over the last two years, with a strategic intentto achieve vertical integration, the copper business of Hindalco has acquired two captive copper mines inAustralia - Nifty and Mt. Gordon. In August 2004, the boards of Hindalco and Indal approved a Scheme of Arrangement wherein all the assets of Indal other than the foil unit at Kollur in Andhra Pradesh were to bedemerged into Hindalco. This has come into effect retrospectively from 1 April 2004.

Hindalco is Asia's largest primary producer of aluminium, and among the most cost-efficient producersglobally. In India, Hindalco enjoys a leadership position in primary aluminium and downstream products.Besides the integrated complex at Renukoot, Hindalco's other manufacturing facilities are located at manydiverse locations in the country. The company's R&D centres are located at Belgaum, Renukoot and Taloja.These have been recognized by the government of India's Department of Scientific and Industrial Research(DSIR). Hindalco's units are ISO 9001 and 14001 certified, while several have also attained the OHSAS18001 - the occupational health and safety certification. On the export front, the company has beenaccorded a 'Trading House' status by the Indian government.

Hindalco’s copper division at Dahej in Gujarat, Birla Copper, enjoys a leadership position in India, havingbuilt up over 40 per cent of the domestic market share within three years of its commissioning. It has alsomade successful forays into the export markets of the Middle East, South East Asia, China, Korea andTaiwan.

Date of Incorporation : 15 December 1958

Audited Financial Highlights(Rs. in Lacs)

As on 31st March 2004 2003 2002

Share Capital 9247.73 9246.43 7446.32

Reserves & Surplus 676542.30 609862.80 450710.00

Sales / Income (Net) 620835.20 498562.23 233136.33

Profit After Tax (PAT) 83892.90 58214.2 6859.99

Dividend per share (Rs.) 16.50 13.50 13.50

Dividend (%) 165.00 135.00 135.00

EPS (Rs.) 90.71 62.92 92.12

Book Value (Rs.) 741.59 669.24 615.26

Price and Volume of Shares

BSE NSE

Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)

Dec 2004 1472.8 1247.0 1474.9 1249.0

Jan 2005 1487.0 1220.0 1499.7 1218.1

Feb 2005 1418.0 1302.1 1424.7 1305.3

Mar 2005 1465.0 1265.1 1465.0 1267.0

Apr 2005 1430.0 1180.0 1429.9 1179.0

May 2005 1250.0 1127.0 1240.0 1125.0





47

- Arrangement or mechanism evolved forRedressal of investor grievance

-Time normally taken by it for disposal of varioustypes of investor grievances

:

:

Hindalco has an in-house share transferdepartment, which is registered with SEBI as aCategory II Share Transfer Agent. The companyhas developed a mechanism whereby each queryof the shareholder is entered in the softwaresystem of the Share Department against thename of the concerned personnel and removedautomatically at the satisfaction of the query.The officials of the Company can see thepending queries on screen. Thus it ensures thatall the queries of the shareholders aresatisfactorily attended and replied to.

The disposal of all types of investor grievancesis within the statutory time frame laid down.

- Sale and Purchase between companies in the

promoter group when such sales or purchaseexceed in value in aggregate 10% of total salesor purchase of the issuer and also disclosematerial items of income or expenditure arisingout of transaction in the promoter group

: NIL

List of Related Parties

(a) Subsidiary Companies of the Company

Indian Aluminium Company Limited

Indal Exports Limited

Minerals and Minerals Limited

Renukeshwar Investments & Finance Limited

Renuka Investments & Finance Limited

Dahej Harbour and Infrastructure Limited

Lucknow Finance Company Limited

Birla Maroochydore Pty Limited

Birla Mineral Resources Pty Limited

Birla Resources Pty Limited

Birla (Nifty) Pty Limited

Birla Mt Gordon Pty Limited

Bihar Caustic and Chemicals Limited

Utkal Alumina International Limited

Suvas Holdings Limited



48

(b) Trusts of the Company

Trident Trust

(c) Joint Ventures

Tanfac Industries LimitedIDEA Cellular Limited

(d) Key Managerial Personnel

Mr. Debu Bhattacharya- Managing Director

The following transactions were carried out with the related parties in the ordinary course of

business:

2004-05 2003-04

Transaction during the year Subsidiary Joint

Venture

Subsidiary Joint

Venture

1 Sales and Conversion`` 327.73 108.36 1,113.98 0.592 Services rendered 24.72 0.02 17.77 0.24

3 Interest and dividend received ` 48.46 0.90 78.80 48.68

4 Interest paid 21.53 - 22.37 -

5 Purchase of materials 4146.73 181.71 371.08 633.58

6 Services received 278.63 0.38 318.40 0.757 Investments, Deposits, loans and advances made

during the year1117.69 - 1,111.15 700.00

8Investments, Deposits, loans and advances as on31.03.2005 5877.91 2293.36 16,462.25 2,293.36

9 Guarantees and Collateral securities given 11400.00 875.00 5,110.90 849.96

10 Licence and Lease arrangements

a) Licence Fees 4.92 - 4.92 -

b) Deposits 54.85 - 44.45 -

Outstanding balance as on 31 March 2005

1 Debit Balances 5.57 13.11 11.43 0.412 Credit Balances 350.23 5.49 141.93 0.89

(b) Trident Trust Beneficiary Interest in the Trust 344.52 344.52

(c) Key Managerial Personnel:Managerial Remuneration (including perquisites) 25.82 16.51

PROMISE vs. PERFORMANCE

Not Applicable



49

OUTSTANDING/ PENDING LITIGATION

Details of the Case Status As on

31.03.05

As on

31.03.04

i) Demand notice by Asstt.Collector Central Excise

Mirzapur for excise duty onpower generated bycompany's captive powerplant, Renusagar Power Co.Ltd. (Since amalgamated).

Writ petition pending with Delhi High Court, Delhi.Earlier demand raised was quashed by Delhi High

Court. The amount has been sequestered in theAluminium Regulation account. According to theterms of settlement dated 5.12.83 between the CentralGovt. and the Company, this amount will bereimbursed to the Company in the event the case isdecided against the Company.

91.21 91.21

ii) Demand of interest on pastdues of the AluminiumRegulation account upto31.12.1987.

The demand is in dispute with Controller of Aluminium Regulation Account.

63.29 29.04

iii) Retrospective Revision of Water Rates by UP JalVidyut Nigam Limited (April1989 to June 1993 & Jan2000 to Jan 2001)

Writ petition pending with Lucknow Bench of Allahabad High Court. The demand stayed vide orderdated 11.5.2001

40.80 40.80

iv) Transit fees levied byDivisional Forest officer,Renukoot on coal and bauxite

Appeal pending with Allahabad High Court andpayment of transit fee has been stayed. According tolegal opinion received by the Company, the forestdepartment has no authority to levy such fee.

52.05 37.73

v) M.P Transit Fee on Coaldemanded by Nothern CoalFields Limited

Writ petition pending with Jabalpur High Court. TheCompany has paid Rs 105.90 million to NCL underprotest subject to the final conclusion of the writpetition

112.48 82.67

vi) Withholding Tax on paymentof fees on GDR issue

Appeal pending before Income Tax AppellateTribunal, Mumbai. Demand adjusted against refunddue to the Company

91.56 91.56

vii) Imposition of Cess on Coal

by Shaktinagar Special AreaDevelopment Authority

Appeal pending before Allahabad High Court,

Allahabad. Demand and levy stayed. According tolegal opinion received by the Company, the state hasno power to tax the mineral since this field is coveredunder Mines and Minerals Development andRegulation Act

31.40 10.11

viii) Demand of Royalty onVanadium by District Miningofficer, Lohardaga

Appeal pending with Allahabad High Court,Allahabad. The demand stayed on certain conditionswhich has been fulfilled by the Company

12.90 12.90

ix) The demand of Excise Dutyon gold

Appeal pending with Customs, Excise and Service taxAppellate Tribunal, West Zone, Mumbai

1557.70 1557.70

x) The Demand for CustomDuty on Engg, Fees

Appeal with Customs, Excise and Service taxAppellate Tribunal, West Zone, Mumbai decided infavour of Company

- 113.70

xi) Demand for non-payment of sales tax on leased assets

Writ petition admitted and stay granted by High Court,Ahemdabad

212.26 218.90

xii) Arbitration proceeding withIFFCO for claim of shortsupply of Phosphoric Acid

Matter settled - 45.09

xiii) Other Contingent Liabilitiesin respect of Excise, customs,Sales Tax etc. each being forless than 10 millions

The demands are in dispute at various legal forums 84.85 37.84



50

UNSECURED LOANS

(Rs. in Million)

as on 31 March 2005

Employees and other Deposits Rs. 268.25 millionRupee Loans from Banks Rs. 55.02 millionForeign Currency Loans from Banks Rs. 3,420.31 millionForeign Currency Loans from Financial Institutions Rs. 1,484.11 millionBuyers credit Rs. 3,248.90 million

The terms and conditions including interest rates and repayment schedule:

All the short-term loans are payable within a period of less than one year.

Employees Deposits amounting to Rs. 262.86 million are accepted for a maximum duration of 1 year andthe rate of interest paid is 7.50%.

The interest rates on this loans ranges from 2% - 15%



51

Indo Gulf Fertilisers Limited

Indo Gulf Fertilisers Limited (IGFL), an Aditya Birla Group company, is among the largest private sectorfertiliser companies in India. Strategically located at Jagdishpur, near Lucknow, in the heart of the fertile,agriculture intensive Indo-Gangetic plain in Uttar Pradesh, Indo Gulf manufactures and markets urea, anitrogenous fertiliser.

IGFL enjoys a leadership position in the nitrogenous fertiliser sector supported by a strong distribution andcustomer service network. IGFL’s marketing areas include Uttar Pradesh, Bihar, Jharkhand and WestBengal, which together account for over 40 per cent of the total urea consumption in India.

Major brand building initiatives include the Extension Education Service and Customer RelationshipManagement Plan. Indo Gulf's 'service-centric' marketing strategy focuses on providing complete agri-solutions to the farmers and service support to the channel partners. IGFL's work amidst farmers - who areits ultimate customers, has made a lasting impact.

The move to demerge the fertiliser business of erstwhile Indo Gulf Corporation Limited into anindependent entity and amalgamate the remaining copper business with Hindalco Industries Ltd was amajor strategic initiative, aimed at enhancing shareholder value. As a result of the exercise, Indo Gulf has

emerged fully focused on fertilisers, commanding strong brand equity and a leadership position in thefertiliser industry. IGFL recorded a turnover of Rs. 678.35 crore for FY 2005. It produced 9.85 Lakh MTof Urea, reflecting a capacity utilization of 113 per cent, and higher on-stream days operation.

IGFL addresses its societal responsibilities and provides support to the communities as a good corporatecitizen. It is also signatory of the UN Global Compact based on Ten Principles related to Human Rights,Child Labour, Environment and Anti Corruption.

Date of Incorporation : 10.03.1998

Audited Financial Highlights(Rs. in Lacs)

As on 31

st

March 2005 2004 2003Share Capital 4509 4509 4509

Reserves & Surplus 55756 51506 43904

Sales, Price Support &Other Income

69872 60456 70088

Profit After Tax (PAT) 5693 9027 17280

Dividend (%) 28 28 26

EPS (Rs.) 12.63 20.02 38.32

Book Value (Rs.) 134 124 107

Share Price Data

BSE NSE

Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)Dec 2004 131.00 101.00 130.80 103.70

Jan 2005 131.25 115.25 131.00 114.10

Feb 2005 141.00 123.15 140.00 125.20

Mar 2005 131.00 108.00 130.50 109.25

Apr 2005 119.00 105.55 121.00 107.00

May 2005 129.65 111.00 144.20 109.10



52

Board of Directors as on 31 March 2005

Sr. No. Name of the Director Designation

1 Mr. Kumar Mangalam Birla Chairman

2 Mrs. Rajashree Birla Director

3 Mr. B.N. Puranmalka Director

4 Mr. V.T. Purswani Director5 Mr. V.N. Nadkarni Director

6 Mr. D.C. Gami Director

7 Mr. G.P. Gupta Director

8 Mr. Rakesh Jain Managing Director





b. Whether the Company has made a loss in theimmediately preceding year and if so, the profitor loss figure for the immediately precedingthree years

:

:

:

NONE

NO

NO


: NO

- In case there are common pursuits among groupcompanies, the reasons and justification for thesame shall be spelt out and the conflict of interest situation

: NONE


: NIL



53



:

:

An investor-centric mechanism is in place forredressal of the investor grievances, monitoredby the Investors’ Grievance Committeecomprising of Non-executive/Independentdirectors.

Average time taken for disposal of investorcomplaints is 1 day.

No material business transaction with the group companies/related parties. Transactions with group

companies as disclosed in the Annual Accounts for the year 2004-05 pursuant to AS – 18 are as

under: - (Rs. in Crore)

Name of Company Inter Corporate

Deposits given*

Inter Corporate

Deposits received

back*

Interest on Inter

Corporate Deposits*

2004-05 2003.04 2004-05 2003.04 2004-05 2003.04

Birla Global FinanceLtd.

163.50 14.00 172.50 NIL 0.71 Rs.37,260

BGFL Corporate FinancePvt. Ltd.

28.00 NIL 28.00 NIL 0.13 NIL

Birla Global AssetFinance Company Ltd.

181.50 NIL 181.50 NIL 1.56 NIL

Birla TMT Holdings Pvt.Ltd.

185.00 NIL 185.00 NIL 0.99 NIL

Balance Outstanding asat the year end

NIL 14.00 NIL NIL NIL NIL

* Represents the aggregate of various amounts given and received back during the year.

The Significance of these transactions on the financial performance of the company shall be

stated

No material significance on the financial performance of the Company.

Outstanding/Pending Litigation as on 31 March 2005

Particulars/Act Details of the case/demand Amount

Involved (Rs.

Crore)

The West Bengal SalesTax Act, 1994

Tax & other dues on sale of Urea, trading materials and onsecondary freight.

0.68

Commercial Disputewith Vendor

Claim made by Hindustan Petroleum Corporation Limited(HPCL) for amount deducted by the Company for certaindisputes relating to poor quality of products and shortages.

Counter claim amounting to Rs.2, 53, 82,555/- filed by theCompany against HPCL on account of certain disputesrelating to poor quality of products and shortages.

Case pending in the District Court, Sultanpur.

2.08



54

Demand by the Asst. Director, Electric Safety towards interestin connection with captive power generation is pending beforethe Hon’ble High Court, Lucknow.

0.03

Claims made by ex-employees of the Company pending inCourts

0.59

Demands made by the Employees State InsuranceCorporation (ESIC)

0.18

Claims for recovery towards staff cost, siding inspectioncharges, etc. of personnel deployed by the Indian Railways atthe Company’s private siding.

0.17

Disputed claims/ demands

Claims for detention charges of dedicated trucks and toll taxetc. on trucks for transportation of Urea

0.01

Claim against the owner of the vehicle engaged on contractbasis by the Company under the Motor Vehicles Act beforethe Motor Accident Claims Tribunal. The Company too wasmade a party in the case.

0.12Other legal cases*

Case filed by Sub-contractor for recovery of dues from theContractor engaged by the Company for execution of workscontract. The Company too was made a party in the case.

0.04

* The Company has since been acquitted in the cases.

The Company had not been subject to any disciplinary action or any demand by SEBI, Stock Exchangesetc.

Breakup of total outstanding unsecured loans taken

Fixed Deposits (FDs) from employees, etc. - Rs. 5.05 Crore

The terms and conditions including interest rates and repayment schedule

FDs are accepted in accordance with the relevant provisions of the Companies Act, 1956 read with theCompanies (Acceptance of Deposits) Rules, 1975. FDs are accepted for 1 year maturity and interest ispaid @ 10%, 9% & 7.5% p.a. depending upon the aggregate amount of deposits placed by a singleperson together with his/her dependant relatives.





56





b. Whether the Company has made a loss in theimmediately preceding year and if so, the profitor loss figure for the immediately preceding

three years

:

:

:

NONE

NO

NO


: NO

- In case there are common pursuits among groupcompanies, the reasons and justification for thesame shall be spelt out and the conflict of

interest situation

: NONE


: NIL


: The Company attends all investor complaints onpriority and ensures that proper and prompt

response is given to every complaint. It receivescomplaint from Investors, SEBI, NSDL, CDSL,DCA, BSE, NSE etc. Every complaint receivedis noted in a register with the details such asInward date, letter ref. No, Name of complainant, Marked to, and Replied on etc.

Complaint of regulatory authorities is beingattended by the Head of the Share Departmentso as to ensure proper and timely redressal. Any



57


:

complaint from statutory authorities is replied tothem along with a copy to the Complainant. Themost common complaints that are received bythe Share Department pertain to:

a. Non- receipt of shares after transfer andtransmission.

b.

Issue of Duplicate Share Certificatesc. Non- receipt of Dividend Warrant.d. Non- receipt of interest / redemption

warrant on Debentures.e. Non- receipt of shares after conversion of

Debentures.f. Non- receipt of Share certificates after

demat rejection.g. Pending demat request.

It is the constant endeavor of the Company tominimize the complaints by pro-activelysending periodical reminders for Unpaid

dividends/ Undelivered Share Certificates etc.

Share department attends investor complaints onpriority and ensures timely redressal of complaints. Such complaints are generallyreplied within 2-3 days of receipt.

- Sale and Purchase between companies in thepromoter group when such sales or purchaseexceed in value in aggregate 10% of total salesor purchase of the issuer and also disclose

material items of income or expenditure arisingout of transaction in the promoter group

: NIL

Disclosure in respect of Related Parties pursuant to Accounting Standard 18:

a) List of Related Parties:

I. Parties where control exists - Subsidiaries: -

Aditya Vikram Global Trading House Ltd.

Laxminarayan Investment Ltd.

PSI Data Systems Ltd. (PSI)

Birla Technologies Ltd. (Subsidiary of PSI) Birla Sun Life Insurance Co. Ltd. (BSLICL)

Transworks Information Services Ltd. (TW) (includes Transworks IT Services (India) Ltd. Mergedwith TW w.e.f. 1 April 2003)

Transworks Inc. USA (Subsidiary of TW)



58

II. Other Parties with whom the Company has entered into transactions during the year:

Joint Ventures

IDEA Cellular Limited

BIRLA-NGK Insulators Pvt. Ltd. (BNIPL)

Associates

Crafted Clothing Pvt. Ltd. (Ceased to be an Associate w.e.f 2 June 2004)

Key Management Personnel and enterprises having common key management personnel

Key Management Personnel - Mr. K.K. Maheshwari, ManagerEnterprises having common key management personnel - Tanfac Industries Ltd.

b) During the year following transactions were carried out with the related parties in the ordinary courseof business: -

(Rs. In Crore)

Transaction/ Nature of Relationship Subsidiaries Associates JointVentures Enterprisehaving commonKeyManagementPersonnel

KeyManagementPersonnel

Sales, Service and otherincome

0.01

(1.24)

-

(0.95)

10.58BNIPL(16.75)

3.30

(4.52)

-

-

Purchase of goods andservices

-

(0.15)

1.15

(6.80)

73.86BNIPL(50.54)

-

-

-

-

Expenditure on Royalty,Commission andcompensation

-(6.07)

--

2.91-

--

--

Purchase of fixed assets -(42.64)

--

--

--

--

Sale of fixed assets --

-(0.19)

--

--

--

Managerial remuneration --

--

--

--

0.96(0.84)

Fresh investment made 44.42BSLICL(96.40)

-

(5.70)

-

(8.00)

-

-

-

-

Loans granted -(12.54)

--

(0.90)(73.65)

--

--

Loans obtained --

--

-(4.00)

--

--

Guarantees Provided for -(112.20)

-(4.00)

--

--

--

Outstanding balances as at

31 March 2005

Loans granted --

--

2.54(6.35)

--

--

Amount receivable 0.01(0.05)

-(0.53)

10.36(10.27)

0.36(0.37)

--

Amount Payable - - 16.88 - -



59

(0.07) (0.03) (10.15) - -

Guarantees Provided for 87.32(89.70)

-(12.72)

30.00(30.00)

--

--

Investments 459.37(414.95)

-(5.70)

109.31(109.31) - -

-Figures in brackets represent corresponding amount of previous year-No amount in respect of the related parties have been written off/back are provided for during the year-Related party relationship have been identified by the management and relied upon by the auditors.

Outstanding/Pending Litigation as on 31 March 2005

Statute Matter Status Amount

(Rs in crore)

Excise Duty Cases more than Rs.5 crore

Other cases

The Excise department hasmade a demand of Rs.5.51crore in respect of importedreadymade garmentspurchased in bulk and

repacked in small quantityfor sale, considering thisactivity as manufacturing.The company has submittedthat this activity does notamount to manufacture andno excise duty is payable.

5.51

21.87

Total 27.38

Customs Duty Cases more than Rs.5 crore

Other cases

--

1.51

Total 1.51Sales Tax Cases more than Rs.5 crore

Other cases

--

5.83

Total 5.83

Income Tax Cases more than Rs.5 crore The Income TaxDepartment has filed appealbefore Appellate Tribunalagainst the Company inconnection with favourableorder received by theCompany from CIT(A) forthe Assessment Year 1995-96

The Income TaxDepartment has filed appealbefore Appellate Tribunalagainst the Company inconnection with favourableorder received by theCompany from CIT(A) for

5.57

17.59



60

Other cases

the Assessment Year 1997-1998

11.63

Total 34.79

Labour Cases more than Rs.5 crore

Other cases

--

5.85

Total 5.85

Civil and OtherMisc. cases

Cases more than Rs.5 crore

Other cases

The company entered into acontract with a party forsupply of hardwareaccessories to Uttar PradeshState Electricity Board(UPSB). The party failed tosupply the hardwareaccessories and so theCompany procured theaccessories from analternative supplier. Inresponse, the party has fileda suit against the companyand UPSEB forcompensation amounting toRs.5.82 crore. TheCompany has also filed asuit against the party forRs.1.62 crore additionalcosts incurred.

5.82

6.41

Total 12.23

Grand Total 87.59



61

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS

OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS

Financial Highlights(In Rs. Crore)

FY05 FY 04 % Change

Net TurnoverDomesticExports

2681.052166.69514.36

2251.131858.47392.66

19.1

Other income 22.25 59.59 (62.7)

Total Expenditure 2331.40 1931.99 20.7

Operating Profit (PBIDT) 371.90 378.73 (1.8)

% Operating Margin 13.9% 16.8%

Interest 106.88 115.01 7.1

Gross Profit (PBDT) 265.02 263.72 0.5

Depreciation 221.78 214.52 3.4

Profit Before Tax and Diminution 43.24 49.20 (12.1)

Diminution in Value of Investment (EI) 76.84 -

Profit Before Tax /(Loss) (33.60) 49.20

Current Tax 31.55 19.65Deferred Tax (68.00) (9.28)

Net Profit after Total Tax and EI 2.85 38.83 (92.7)

Capacity Utilisation

The Company enhanced its capacity utilisation across all its plants. Capacity utilisation (Cement productionand Clinker sales) was 91% as against 90% in the previous year. Capacity utilisation in the 2nd half of FY2004-05 was 93%, as against 88% in 1 st half. Consequently production grew by 2.7% from 11.79 milliontonnes to 12.11 million tonnes.

Sales Volume

The domestic cement sales volume grew by 4% to 11.66 mn tonnes as against industry average of 7%. Thevolumes suffered due to production constraints at Gujarat Cement Works. Export volumes remained flat at3.5 million tonnes. Hence aggregate sales volumes grew by 2 % to 15.17 mn tonnes. The domestic marketshare has been maintained at 9.81%.

Sales Realisation

Domestic Cement realisation improved by 12% from Rs.1632 per metric tonne to Rs 1822 per metrictonne. Export price has seen substantial increase, Cement realisation improved by 24% to Rs 1920 permetric tonne from 1543 pmt and Clinker realisation improved by 28% to Rs.1297 per metric tonne from1014 per metric tonne.

Net Turnover

Net turnover has increased by 19 % from Rs.2251 crore to Rs.2681 crore, mainly on account of increase indomestic export realisation.

Other Income

Other income was lower at Rs.22.25 crore compared to Rs.59.59 crore in the previous year was lowermainly on account of exchange gain and higher interest income from its subsidiary company in theprevious year.



62

Operating Profit (PBDIT) & Margin

Operating profit down by 1.8 % to Rs.371.90 crore mainly on account of substantial increase in power andfuel cost. The company has also incurred additional sum of Rs.25 crore towards brand transition and haswritten off deferred revenue expenditure of Rs 12.60 crore which was hitherto amortised over five years.

The operating margins were lower at 14% against 17% in FY 2003-04 due to substantial increase in power,

fuel and logistics cost. The consistent rise in prices of naphtha, resulted in substantial increase in generationcost of power at Gujarat plant which has 38% capital employed and which contributes around 40% to itsrevenue. Fuel costs were also affected with domestic coal prices rising by 16% and imported coal price upby over 60%.

Interest

Interest and finance charges were lower by 7% at Rs.106.88 crore compared to Rs.115.01 crore in theprevious year. This was on account of rationalisation of high cost debts and better working capitalmanagement.

Depreciation

Depreciation at Rs.221.78 crore in the current year was higher compared to Rs.214.52 crore in the previous

year on account of depreciation of Rs.18.34 crore relating to earlier years

Diminution in Value of Investment

Based on an independent valuation report and to comply with the requirement of Accounting Standard 13, aprovision of Rs.76.84 crore has been made towards permanent diminution in the value of investment duringthe year in your company’s subsidiary viz. NCCL.

Income Tax

The provision for current tax has increased by 61% from Rs 19.65 crore in FY 2003-04 to Rs 31.55 crore inFY 2004-05 due to lower income tax depreciation. There is increase in deferred tax credit from Rs 9.28crore in FY 2003-04 to Rs 68.00 crore in FY 2004-05 on account of reduction in income tax rates inFinance Bill 2005.

Net Profit

Net profit during the year was Rs.2.85 crore as compared to Rs.38.83 crore in the previous year.

Cash Flow Analysis (In Rs. Crore)

FY 05

Source of CashCash from OperationsNon-operating Cash flowTotal

371.673.70

375.37

Use of CashNet Increase in Investments

Net Capital ExpenditureDecrease in debtsIncrease in Working CapitalDividendsInterestShare Capital ExtinguishmentIncrease in Cash and Cash equivalentTotal

22.03

68.85120.1234.25

7.02108.16

0.5114.43

375.37



63

Sources of Cash

Cash from Operations

Cash from operations was higher at Rs. 371.67 crore in FY 2004-05 as against Rs. 314.89 crore inFY 2003-04.

Non-operating Cash Flow

Non operating Cash flow includes interest from subsidiary and other investments.

Use of Cash

Net Increase in Investments

The company has acquired 4 Crore shares in UltraTech Ceylinco Private Limited from Larsen & ToubroLimited for value of Rs. 23.03 crore

Net Capital Expenditure

The capital expenditure of Rs. 68.85 Crore was on account of Modernisation / Replacement of existingassets.

Decrease in Debts

The total debts decreased by Rs 120.12 crore in FY 2004-05. The Company raised Rs 500.44 crore onaccount of long term debts and repaid Rs 612.00 crore. There was further reduction in short termborrowings by Rs 57.75 crore. Sales tax deferment loan increased by Rs 49.19 crore. The company enjoysAA+/Stable and P1+ for its long term and short term debts from CRISIL.

Increase in Working Capital

Increase in working capital of Rs 34.25 crore was mainly on account of increase in inventory by Rs 60.54

crore and loans and advances Rs 26.43 crore compensated by decrease in current liabilities by Rs 52.72crore.

Dividend

The Company has paid Rs 7.02 crore as dividend to its shareholders including corporate tax on dividend of Rs 0.80 crore. For the Current year, the board has recommended a dividend of Rs 0.75 per share, entailingan outflow of Rs 10.64 crore including corporate tax on dividend of Rs 1.31 crore. This accounts for 13.4%of net profit after total taxes but before exceptional items for the year.

LITIGATION & OTHER INFORMATION

Contingent Liabilities not provided for in respect of:

Claims not acknowledged as debts:

Rs. in crore Rs. in crore

(a) Sales-tax liability that may arise in respect of matters inappeals.

31.47 30.89

(b) Excise duty liability that may arise in respect of matters inappeals which are pending for disposal.

19.02 8.11

(c) Demand of Royalty on Limestone/ Marl for which thecompany has gone in appeal.

13.53 12.87



64

(d) Others - Including claims in respect of which the Company iscontingently liable.

9.54 12.13

Except as described below, there are no outstanding litigations, suits or criminal or civil prosecutions,proceedings or tax liabilities against the Company, its Directors, its promoters and companies promoted bythe promoter that would have a material adverse effect on the Company’s business other than unclaimed

liabilities of the Company or its Directors or its promoters and companies promoted by the promoter andthere are no defaults, non-payment or overdues of statutory dues, institutional/bank dues and dues payableto holders of any debentures, bonds and fixed deposits and arrears of preference shares of the Company thatwould have a material adverse effect on the Company’s business. Further, the Company, the Company’sDirectors or the Company’s promoters or companies promoted by the promoter have not been declared aswillful defaulter by RBI, have not been debarred from dealing in securities and / or accessing the capitalmarkets by SEBI and no disciplinary action has been taken against them by SEBI or any stock exchange.

Outstanding Litigations against the Company (as of 31 March 2005)

Litigations involving UltraTech

(A) There are no litigations against the Company involving criminal offences.

(B) There is one case pending in civil court against the Company for recovery of an amount of Rs.3.80 crore for alleged breach of contract for supply of clay. In this case writtenstatement has been filed and the case is attended by our advocates locally and monitored by us.

(C) There is one Arbitration matter pending in Mumbai High Court claiming demurrage amountof Rs. 1.20 crore arising out of contract for supply of coal.

Litigation against any other company whose outcome could have a materially adverse effect on the

position of UltraTech-

NONE

Litigations involving Statutory and other Offences:

(A) Consumer Dispute Cases: There are 7 cases pending against the Company in Consumer Courts.These are mainly against alleged quality of cement supplied. The amount of contingent liability inthese cases is around Rs. 75.48 Lac.

Consumer Cases filed against UTCL

Sl. No Consumer Forum Amount (Rs.)

1) Kochi 25000

2) Udupi 150000

3) Thane 100000

4) Jalgaon 673000

5) Bokaro 14000006) Avadi 2200000

7) Tanjavore 2000000

8) Dongargarh 1000000

TOTAL 7548000

(B) Income Tax Cases: There are no income tax cases pending against the Company.

(C) Sales Tax Cases: There is one case pending as per details given below:



65

Particulars Amount

involved

(Rs. Crore)

Remarks

Orissa Sales TaxTribunal

8.93 Commissioner of Sales Tax, Orissa challenged theAssessment Order passed by the first AppellateAuthority- Matter under appeal.

Pending proceedings initiated for economic offences against UltraTech or its directors

NONE

Past cases in which penalties were imposed on UltraTech or its directors

NONE

Outstanding litigations, defaults, etc., pertaining to matters likely to affect operations and finances of

UltraTech, its operations and finances, including disputed tax liabilities, prosecution under any

enactment in respect of Schedule XIII to the Companies Act, 1956 etc.

NONE

OTHER REGULATORY AND STATUTORY DISCLOSURES

AUTHORITY FOR THE ISSUE AND DETAILS OF THE RESOLUTION PASSED FOR THE

ISSUE.

The present issue of debentures is being made pursuant to the resolution passed by the Board of Directorsof the Company at their meeting held on 4 August 2004, and subject to the provisions of the Act and theMemorandum and Articles of Association of the Company.

The present issue is within the general borrowing limits in terms of the resolution passed under Section293(1)(d) of the Companies Act, 1956 at the Meeting of the shareholders of the Company held on30 April 2004 giving their consent to the borrowing by the Directors of the Company from time to time up

to Rs.1,000 Crore (Rupees One Thousand Crore Only). The borrowings under these Debentures will bewithin the prescribed limits as aforesaid.

PROHIBITION BY SEBI

The Company is not prohibited from accessing the capital market / corporate debt securities market underany order or direction passed by SEBI.

ELIGIBILITY OF THE COMPANY TO ENTER THE CAPITAL MARKET

The Company is eligible to access the capital market / corporate debt securities market.

DISCLAIMER CLAUSE

As required, a copy of the Information Memorandum for issue of Debentures aggregating <to be specifiedat the time of issue> on private placement basis will be filed with the “F” Group of the Stock Exchange,Mumbai and the Wholesale Debt Market (WDM) of the National Stock Exchange segment of in terms of the SEBI circular no. SEBI/MRD/SE/AT/36/2003/30/09 dated 30 September 2003 and SEBI circular no.SEBI/MRD/SE/AT/46/2003 dated 22 December 2003 (“SEBI Private Placement Circulars”).

As per the provisions of the SEBI Private Placement Circulars, a copy of this Information Memorandumhas not been filed with or submitted to SEBI. It is distinctly understood that this Information Memorandumshould not in any way be deemed or construed to have been approved or vetted by SEBI. SEBI does not



66

take any responsibility either for the financial soundness of any scheme or the project for which the issue isproposed to be made or for the correctness of the statements made or opinions expressed in this InformationMemorandum.

It is also to be distinctly understood that filing of the Information Memorandum with The Stock Exchange,Mumbai and National Stock Exchange of India Limited should not in any way be deemed or construed thatthe same has been cleared or vetted or approved by them. The Stock Exchange, Mumbai and NationalStock Exchange of India Limited does not take any responsibility either for the financial soundness of anyscheme or the project for which the issue is proposed to be made or for the correctness of the statementsmade or opinions expressed in this Information Memorandum.

Mr. K. C. Birla and Mr. S. K. Chatterjee, of the Company have certified that the disclosures made in theInformation Memorandum are adequate and in conformity with SEBI (Disclosure and Investor Protection)Guidelines, 2000 in force for the time being and as applicable as per the SEBI Private Placement Circulars.This requirement is to facilitate Investors to take an informed decision for making investment in theproposed issue. However, before investing, the investor is advised to read the “Disclaimer” of thisInformation Memorandum.

DISCLAIMER STATEMENT FROM THE COMPANY

The Company accepts no responsibility for statements made otherwise than in the InformationMemorandum or any other material expressly stated to be issued by or at the instance of the Company andthat anyone placing reliance on any other source of information would be doing so at their own risk.

FILING OF INFORMATION MEMORANDUM

This Information Memorandum shall be filed with The Stock Exchange, Mumbai and National Stock Exchange of India Limited in terms of Clause 4.2(b) of the SEBI circular no. SEBI/MRD/SE/AT/46/2003dated 22 December 2003 as the Debentures are being privately placed and the Debentures are being issuedin the denomination of Rs. 10, 00,000 (Rupees Ten Lac Only) each. This Information Memorandum is notrequired to be filed with any other regulatory authority as per the provisions of the SEBI Private PlacementCirculars.

LISTING

An application will be made to the Stock Exchange, Mumbai and National Stock Exchange of IndiaLimited for permission to list the Debentures to be issued and allotted in terms of this InformationMemorandum.

The Company shall complete all the formalities relating to listing of the Debentures within 70 days fromthe Date of Closing of each issue, failing which the Company undertakes to repay all monies received fromthe applicants pursuant to the Information Memorandum as regards such issue with interest from theDeemed Date of Allotment at the Coupon rate and if such monies are not repaid within 8 days after theabove referred to 70 days period, then the Company and every Director of the Company who is an officerin default shall, on and from the expiry of such period, will be jointly and severally liable to repay themoney, with interest at the rate of 15 per cent per annum on the application money, as prescribed under

Section 73 of the Companies Act, 1956.

The application has been made for listing of the present issue to the Stock Exchange, Mumbai and theNational Stock Exchange of India Limited

OPTION TO SUBSCRIBE

Debentures to be issued under this Information Memorandum shall be issued and held in dematerializedform only, and the Company shall make necessary arrangements in this regard.



67

ISSUE OF DEBENTURES IN DEMATERIALISED FORM

The Debentures issued under this Information Memorandum will be issued in dematerialised form. TheCompany has made arrangements with the Depositories for the issue of the Debentures in dematerializedform. Investors will hold the Debentures in dematerialised form as per the provisions of Depositories Act,1996 and rules made there under as may be amended from time to time.

The Depository Participant’s name, DP-ID and Beneficiary Account Number must be mentioned at theappropriate place in the application form. The Company shall take necessary steps to credit the Debenturesallotted to the Depository Account of the investor.

CONSENTS

Consents in writing of: Directors, Compliance Officer, the Statutory Auditors, Trustees, Bankers to theCompany and Bankers to the Issue have been obtained and such consents have not been withdrawn upto thetime of filing this Information Memorandum with The Stock Exchange, Mumbai and National Stock Exchange of India Limited.

M/s. G. P. Kapadia & Co., Chartered Accountants, Statutory Auditors of the Company, have given their

written consent to the inclusion of their report in this Information Memorandum in the form and context inwhich it appears herein and such consent has not been withdrawn up to the date of filing of this InformationMemorandum with BSE and NSE.

DETAILS OF FEES PAYABLE AND EXPENSES OF THE ISSUE

The total fees payable comprising Lead Arranger Fees, Listing Fees, Auditors’ Fees, Debenture TrusteeFees, etc., and the total expenses of the issue comprising Registration and Depository Charges etc., wouldbe Rs. 19, 75,850.

UNDERWRITING COMMISSION, BROKERAGE AND SELLING COMMISSION

NIL

PREVIOUS RIGHTS AND PUBLIC ISSUES IF ANY (DURING THE LAST FIVE YEARS).

The Company has not made any Rights or Public Issue during last five years.

PREVIOUS ISSUES OF SHARES OTHERWISE THAN FOR CASH.

NONE

COMMISSION AND BROKERAGE ON PREVIOUS ISSUES.

NOT APPLICABLE.

PARTICULARS IN REGARD TO THE ISSUER COMPANY AND OTHER LISTED COMPANIESUNDER THE SAME MANAGEMENT WITHIN THE MEANING OF SECTION 370 (1)(B) OF

THE COMPANIES ACT, 1956 WHICH MADE ANY CAPITAL ISSUE DURING THE LAST

THREE YEARS.

There are no companies under the same management within the meaning of Section 370(1)(B) of theCompanies Act, 1956.



68

PROMISE VS PERFORMANCE - LAST THREE ISSUES

NONE

LISTED VENTURES OF PROMOTERS: "PROMISE VS PERFORMANCE - LAST ONE ISSUE

OF GROUP/ASSOCIATE COMPANIES"

None of the listed companies of promoters made a public / rights issue in last three years and no projectionswere made in earlier issues.

OUTSTANDING DEBENTURES OR BONDS AND REDEEMABLE PREFERENCE SHARES

AND OTHER INSTRUMENTS ISSUED BY THE ISSUER COMPANY OUTSTANDING AS ON

THE DATE OF INFORMATION MEMORANDUM AND TERMS OF ISSUE.

Name of lender AmountRs. Cr.

Special Terms & Conditions Particulars

12.00% NCDs 50.00 Redeemable at par on 22.12.2006 Secured by way of first charge, havingpari passu Rights as the case may be, onCompany’s immovable / movableproperties

12.60% NCDs 26.00 Redeemable at par on 17.09.2006 -do-8.25% NCDs 65.00 Redeemable at par on 02.09.2012 -do

8.40% NCDs 50.00 Redeemable at par on 22.07.2007 -do



10.80% NCDs 50.00 Redeemed on 10.05.2005 -do


11.75% NVDs 22.00 Redeemable at par on 11.01.2006 -do

Step up InterestNCDs

25.00 Redeemable at par on 16.09.2012 -do




MIBOR+100BPS 100.00 Redeemable at par on 01.08.2007 -do

Zero CouponYTM of 6.8058%

20.00 Redeemable at par on 30.04.2013(value as on 31.03.05 Rs. 11.75crore)

-do

HDFC LimitedUSD 18,174,396

79.50 An installment of USD 256,800due on 14.08.2005. Prepaymentexercisable on 09.09.2005

-do

IDBI Limited 5.82 Final Installment on 01.07.2005 -do

IDBI Bank Ltd 50.00 Bullet repayment on 28.09.2007 -do-

CITI Bank N. A. 50.00 Bullet repayment on 09.11.2007 -do-

Cash Credit/ Working capital

68.28 Secured by hypothecation of stock andbook debts of the company

(b) Unsecured Loans

Name of

Depositor

Nature of

Instrument

Interest Rate Date of

availment

Maturity Date Amount in

Rs. Cr.VariousBanks

Buyers Credit LIBOR+35-40BPS

Various Various 41.06

VariousBanks

PCFC LIBOR+40BPS Various Various 35.00

Variousparties

S. Tax Defermentloan

Interest freeloan`

Various Various 201.97



69

STOCK MARKET DATA FOR EQUITY SHARES OF THE ISSUER COMPANY

NSE

Year Date of High

High(Rs.)

Volume Date of Low

Low(Rs.)

Volume Average

2004-05 11.03.05 393.00 259571 25.08.04 249.20 2794161 321.10

BSE

Year Date of High

High(Rs.)

Volume Date of Low

Low(Rs.)

Volume Average

2004-05 11.03.05 392.90 279257 25.08.04 248.90 1436087 320.9

Movement of Share Prices of the Company

NSE BSEPeriod

High Low Average High Low Average

Dec 04 351.80 293.25 310.33 351.00 294.00 310.14

Jan 05 361.00 300.15 331.23 360.00 310.50 331.80

Feb 05 391.90 334.30 368.94 391.00 337.50 368.70

Mar 05 393.00 338.00 363.94 392.90 338.10 363.93Apr 05 379.90 331.00 355.14 377.85 331.25 354.76

May 05 368.30 315.00 337.99 367.00 315.10 337.85SOURCE: NSE & BSE WEB SITE

Monthly Highs And Lows –Volumes – for the shares of the Company

NSE High NSE Low BSE High BSE LowMonth

Date No. of

shares

traded

Date No. of

shares

traded

Date No. of

shares

traded

Date No. of

shares

traded

Dec 04 30.12.04 86142 06.12.04 200821 30.12.04 147311 06.12.04 65548

Jan 05 28.01.05 569873 25.01.05 158479 28.01.05 501174 27.01.05 202070

Feb 05 04.02.05 225957 21.02.05 38600 04.02.05 291713 01.02.05 306185Mar 05 11.03.05 259571 29.03.05 45975 11.03.05 279257 29.03.05 23248

Apr 05 04.04.05 53495 29.04.05 20109 18.04.05 24437 29.04.05 6606

May 05 06.05.05 65830 24.05.05 122677 06.05.05 31463 24.05.05 68474

Monthly Trading Volumes for the Shares of the Company for the Period 1 December 2004 -

31 May 2005

Month NSE BSE

Dec 04 162368.39 77506

Jan 05 220927.37 150466.7

Feb 05 146790.85 117064.1

Mar 05 97073.73 74465.73

Apr 05 73536.45 47591.9May 05 60376.73 47962.55



70

Market price immediately after the date on which the resolution of the Board of Directors approving

the issue was approved

Since the shares of the Company were admitted for trading on 24 August 2004, and the resolution of theBoard of Directors approving the borrowing was passed in the meeting of the Board held on4 August 2004, the market price immediately after passing the resolution is not available. However, theprice on 24 August 2004 is given as under:

• NSE: Rs. 260.20 (24.08.2004 – Closing Price)

• BSE: Rs. 260.35 (24.08.2004 – Closing Price)

MECHANISM EVOLVED FOR REDRESSAL OF INVESTOR GRIEVANCES

Investor grievances are settled expeditiously and satisfactorily by the Company. The Company, retainrecords for an appropriate period from the last date of despatch of Letters of Allotment/ DebentureCertificates//Refund Orders to enable the investors to approach the Company for redressal of theirgrievances. All grievances relating to the Issue may be addressed to the Company/Registrar and TransferAgents giving full details such as name, address of the applicant, application number, number of NCDsapplied for, amount paid on application and the bank branch/collection centre where the application wassubmitted.

DISPOSAL OF INVESTOR GRIEVANCES

The average time required by the Company/Registrar and Transfer Agents for the redressal of routineinvestor grievances is 7-10 days from the date of receipt of the complaint. In case of non-routinecomplaints and where external agencies are involved, the Company/Registrar and Transfer Agents strive toredress these complaints as expeditiously as possible. All investors are hereby informed that the Companyhas appointed Mr. Sanjeeb Chatterjee–Company Secretary as the Compliance Officer who may becontacted in case of any pre-issue/post-issue related problems.

CHANGE, IF ANY, IN THE AUDITORS DURING THE LAST THREE YEARS, AND REASONS

THEREOF

M/s Sharp & Tannan the Statutory Auditors of the Company expressed their unwillingness to be re-appointed as Auditors of the Company. At the Annual General Meeting held on 11October 2004, M/s. S. B.Billimoria & Co., Chartered Accountants, Mumbai and M/s. G. P. Kapadia, Chartered Accountants,Mumbai were appointed Joint Statutory Auditors of the Company.

CAPITALISATION OF RESERVES OR PROFITS (DURING LAST FIVE YEARS)

NONE

OFFERING INFORMATION

TERMS OF THE ISSUE

A. MINIMUM SUBSCRIPTION

As the issue of Debentures is being made on a private placement basis, the requirement of minimumsubscription shall not be applicable.

B. RIGHTS OF THE INSTRUMENT HOLDER

The instrument holder will not be entitled to any rights and privileges of shareholders other than thoseavailable to them under statutory requirements. The Debentures issued under this InformationMemorandum shall not confer upon the Instrument Holder the right to receive notice, or to attend and vote



71

at the general meetings of shareholders or the holders of Debentures issued under this InformationMemorandum or of any other class of securities of the Company.

C. MODIFICATION OF RIGHT

The Instrument Holders’ rights, privileges, terms and conditions attached to the Debentures under this issuemay be varied, modified or abrogated with the consent, in writing, of those holders of the Debentures (orthrough the Debenture Trustee) who hold at least three-fourth of the outstanding amount of the Debenturesor with the sanction accorded pursuant to a resolution passed at a meeting of the Instrument Holders,provided that nothing in such consent or resolution shall be operative against or bind the Company or (anythird party security provider) in any manner where such consent or resolution modifies or varies the termsand conditions of the Debentures which are not acceptable to the Company.

D. DEEMED DATE OF ALLOTMENT

The deemed date of allotment shall be 16 June 2005.

E. INTEREST ON THE COUPON BEARING DEBENTURES

Series I

Payable annually @ 6.70% on 16 June 2005 till the date of redemption on 16 June 2008

Series II

A fixed spread of 0.30% over the one year bench mark GoI security reset and payable semi-annually. Thefirst six months setting will be 5.95% pa.

F. COMPUTATION OF INTEREST

Interest for each of the interest periods shall be computed on an actual-by-365 days a year basis on theprincipal outstanding on the Debentures at the Coupon rate. If the interest period from start date to end dateincludes February 29, then interest shall be paid on the basis of (End Date-Start Date)/366.

G. PAYMENT OF INTEREST

<to be decided at the time of issue

H. TAX DEDUCTION AT SOURCE (TDS)

Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactmentthereof will be deducted at source. For seeking TDS exemption/lower rate of TDS, relevant certificate / document must be lodged by the Instrument Holders at the registered office of the Company at least 30days before the interest payment becoming due and if required, be submitted afresh annually and/or as andwhen called upon for the same by the Company. Tax exemption certificate / declaration of non-deductionof tax at source on interest on application money, should be submitted along with the application form.

Failure to comply with the above shall entitle the Company to deduct tax at source as may be advised to it.

I. REDEMPTION

The Debentures shall be redeemed at face value at the expiry of tenure of three years in one singlepayment.



72

J. MODE OF TRANSFER

The Debenture issued under the Information Memorandum shall be transferable freely to all classes of investors.

K. NOTICES

The notices to the debenture holders required to be given by the Company or the trustees shall be deemedto have been given if sent by ordinary post to the sole/first registered holders of the debentures, as the casemay be. All notices to be given by debenture holders shall be sent by registered post or by hand delivery tothe Company at its registered office.

L. REDEMPTION OF DEBENTURES

The payment on redemption will be made in the name of the sole holder or first holder (in case of jointholders) whose name appears in the list of beneficial owners given by the depository on the Record Date.

The Company’s liability to Debenture holders towards all their rights, including for payment or otherwiseshall cease and stand extinguished from the due date of redemption in all events. Further, the Company willnot be liable to pay any interest, income or compensation of any kind from the date of such redemption of

the Debentures.

On dispatching the amounts as specified above in respect of the Debentures, the liability of the Companyshall stand extinguished.

M. DEBENTURE REDEMPTION RESERVE (DRR)

The Company shall be creating a debenture redemption reserve for the redemption of the Debentures, asper requirements of applicable laws, to which adequate amounts shall be credited from out of its profitsevery years until the Debentures are redeemed.

N. EFFECT OF HOLIDAYS

Should any of the dates defined above or elsewhere in this Information Memorandum other than thedeemed date of allotment, fall on a Saturday, Sunday or a public holiday, the next (working day/businessday) shall be considered as the effective date(s).

O. LETTERS OF ALLOTMENT, DEBENTURE CERTIFICATES IN DEMAT MOD

The Debentures at the first instance will be credited in dematerialised form on Letter of Allotment ISIN(LOA ISIN) within 7 (seven) days of the deemed date of allotment. The Company will instruct theconcerned Depository (NSDL/CDSL) to convert the said LOA ISIN to Secured Debenture ISINimmediately after the receipt of confirmation of registration of charge from the Registrar of Companiescreated for this issue.

P. RIGHT TO ACCEPT OR REJECT APPLICATIONS

The Company is entitled at its sole and absolute discretion to accept or reject an application, in part or infull, without assigning any reason thereof. The application form, which is not complete in all respects, shallbe liable to be rejected. The rejection of any application would be intimated by the Company along with therefund warrant but without having to assign any reason for any rejection.Q. RECORD DATE

The record date will be 30 days prior to each interest payment/principal repayment.



73

R. RIGHT OF COMPANY TO PURCHASE, RE-SELL AND RE-ISSUE DEB

Purchase and Resale of Debentures:

The Company may, at any time and from time to time, purchase Debentures under this issue at discount, atpar or premium in the open market or otherwise. Such Debentures may, at the option of the Company, becancelled, held or resold.

Reissue of Debentures:

Where the Company has redeemed any such Debentures, subject to the provisions of Section 121 of theCompanies Act, 1956 and other applicable legal provisions, the Company shall have and shall be deemedalways to have had the right to keep such Debentures alive for the purpose of reissue and in exercising suchright, the Company shall have and shall be deemed always to have had the power to re-issue suchDebentures either by reissuing the same Debentures or by issuing other Debentures in their place in eithercase, at such a price and on such terms and conditions (including any variations, dropping of or additions toany terms and conditions originally stipulated) as the Company may deem fit.

S. FUTURE BORROWINGS

The Company shall be entitled, from time to time, to make further issue of Debentures and/or such otherdebt instruments or other securities (whether or not the same constitutes securities for the purposes of theAct or the Securities (Contracts Regulations) Act, 1956) to the public, any section of the public in India orany part of the world, members of the Company, by way of a private placement or bilateral arrangementsand/or avail of further financial and/or guarantee facilities from financial institutions, banks and/or anyother person(s) on the security or otherwise of its properties or against any security provided by any thirdparty security provider without the consent of Instrument holders.

T. HOW TO APPLY

Applications for the Debentures must be in the prescribed application form, and must be completed inblock letters in English. Application forms must be accompanied by a demand draft or pay order or cheque,drawn or made payable in favour of “UltraTech Cement Limited” and crossed Account Payee only.

Demand draft(s) / Pay Order(s) /Cheque(s) may be drawn on any bank including a co-operative bank,which is a member or sub-member of the High Value Clearing, Banker’s Clearing House located at Fort,Mumbai.

U. SUCCESSION

In the event of the demise of the debenture holder, the Company will recognise the executor oradministrator of the deceased debenture holder, or the holder of succession certificate or other legalrepresentative as having title to the debentures. The Company shall not be bound to recognise suchexecutor, administrator or holder of the succession certificate or other legal representative as having title tothe debentures, unless such executor or administrator obtains probate of letter or administration or suchholder is the holder of succession certificate or other legal representation, as the case may be, from acompetent court in India having jurisdiction over the matter. The Directors of the Company may, in their

absolute discretion, where they think fit, dispense with production of probate or letter of administration orsuccession certificate or other legal representation, in order to recognise such holder as being entitled to thedebentures standing in the name of the deceased debenture holder on production of sufficient documentaryproof or indemnity.



74

V. UNDERTAKING BY THE COMPANY

The Company hereby undertakes that:

• The complaints, if any, in respect to the issue would be attended to expeditiously andsatisfactorily;

•

It shall take the necessary steps for the purpose of listing the debentures within the specified time;• No further issue of debentures shall be made till the debentures offered through this offer

document are listed or till the application moneys are refunded on account of non-listing etc.

• Necessary co-operation with the credit rating agencies shall be extended in providing true andadequate information till the debt obligations in respect of the debentures are outstanding

APPLICATIONS

A. FICTITIOUS APPLICATIONS

As a matter of abundant caution and although not applicable in the case of Debentures, attention of applicants is specially drawn to the provisions of subsection (1) of Section 68A of the Companies Act,1956:

“Any person who:

a) makes in a fictitious name an application to a company for acquiring, or subscribing for, any

shares therein, or

b) otherwise induces a company to allot, or register any transfer of shares therein to him, or any

other person in a fictitious name, shall be punishable with imprisonment for a term which may

extend to five years.”

B. WHO CAN APPLY

Only the persons who are specifically addressed through a communication by or on behalf of the Company

directly are eligible to apply for the Debentures. No other person may apply.

GOVERNING LAW

The Debentures are governed by and shall be construed in accordance with the existing Indian laws asapplicable in the State of Maharashtra. Any dispute arising in respect thereof will be subject to theexclusive jurisdiction of the courts and tribunals in the city of Mumbai.

DEBENTURES SUBJECT TO DEBENTURE TRUST DEED

Over and above the aforesaid terms and conditions, the Debentures, if any, issued under this InformationMemorandum, shall be subject to the Terms and Conditions incorporated elsewhere in this InformationMemorandum, in the Debenture Trust Deed, and also be subject to the provisions of the Memorandum and

Articles of Association of the Company.

POWER OF COMPANY TO DEAL WITH ASSETS CHARGED AS SECURITY

Nothing contained in this Information Memorandum or in any Debenture Trust Deed or any otherdocument will prevent the Company from selling, removing, replacing or disposing off any of the assetscharged as security in respect of this issue of Debentures issued under this Information Memorandum(“Secured Assets”) in the ordinary course of business provided the consent of Trustee(s) for any suchdebenture issue is obtained in the manner provided in the relevant Debenture Trust Deed. The Companyundertakes not to create any mortgage, charge, or encumbrance on any of its Secured Assets in favour of



75

any person whosoever without the prior written approval of the Trustee except as otherwise provided in thisInformation Memorandum.

Nothing contained in this Clause will prevent the Company from acquiring assets under hire purchase and / or lease transactions and from creating mortgage, charge, or encumbrance on the specified assets soacquired. Further, nothing contained in this Information Memorandum will prevent the Company fromborrowing from time to time in whatever form and / or obtaining any guarantee for the debts of theCompany and creating any subordinate mortgage, charge or encumbrance on any of its properties in favourof any person whosoever for the additional debt so raised or guarantees so obtained including creation of suitable charge in favour of the Government.

The Company shall be entitled to create the mortgage and/or charge over the Secured Assets in favour of the Trustee(s) in one or more forms and through one or more documents as may be decided by Board of Directors or Committee of Directors appointed for this purpose, in consultation with the Trustee(s), at theirdiscretion, without requiring any consent/confirmation from the Debenture Holders. The security will becreated by the Company as aforesaid in favour of the Trustee(s) before issuing (in physical form or throughthe Depositories) the debenture certificates for this debenture issue under which such trustee has beenappointed.

LIST OF MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

Copies of the contracts and documents referred to below, all of which have been attached to a copy of thisInformation Memorandum, which has been delivered to The Stock Exchange, Mumbai and National Stock Exchange of India Limited may be inspected at the Registered office of the Company at “B” Wing, 2nd Floor, Ahura Center, Mahakali Caves Road, Andheri (East), Mumbai-400 093 between 10.00 a.m. To 5.30p.m., on any working day between the date of this Information Memorandum and the date of closing of thisissue.

Sr. No. Nature of Contract

1 Certified copy of the Memorandum & Articles of Association of the Company

2. Certified true copy of the resolution passed by the Board of Directors at the meeting held on4 August 2004 approving the private placement

3. Certified true copy of the resolution passed by the Members of the Company at the Annual

General Meeting held on 30 April 2004 under section 293(1)(d) of the Companies Act, 19564. In-principle approval of the Stock Exchange, Mumbai

5. In-principle approval of the National Stock Exchange

6. Annual Report of the Company

7. A letter explaining the Rating Rationale by CRISIL

8. Letter from UTI Bank giving its consent to act as debenture trustees





77

APPLICATION FORM

UltraTech Cement LimitedRegistered Office: “B” Wing, 2nd Floor, Ahura Centre, Mahakali Caves Road, Andheri (East), Mumbai-400 093

Application No. Date : ___________

Dear Sirs,

Sub. : Issue of 1000 NCDs of the face value of Rs. 10,00,000 each, for cash at par, aggregating Rs. 100 crore on

Private Placement basis

Having read and understood the contents of the Information Memorandum of Private Placement, We apply forallotment to us of the Debenture(s). The amount payable on application is remitted herewith. We bind ourselves by theterms and conditions as contained in the Information Memorandum of Private Placement.

(Please read carefully the instructions before filling this form)

No. in figures No. in wordsNo. of debentures applied for:Series ISeries II

Series I:Amount (Rs.) in figures

Series II:Amount (Rs.) in figures

Series I:Amount (Rs.) in wordsSeries II: Amount (Rs.) in words

Cheque/Demand Draft No. Date Cheque/Demand Draft drawn on.

Applicants Name & Address in full (Please use Capital Letters)

Pin Code:

Tel: Fax: E-mail:

Status: [ ] Banking Company [ ] Others – Please specify

Name of Authorised Signatory Designation Signature

1.

2.

3. 4.

Details of Bank Account

Bank Name and Branch

Nature of Account Account No.

Depository Details

DP Name

DP ID Client ID

UIN

We understand that in case of allotment of Debentures to us, our Beneficiary Account as mentioned above would becredited to the extent of Debentures allotted.

Taxpayer’s PAN or GIR No. IT Circle/Ward/District [ ] Not Allotted

Tax Deduction Status: [ ] Fully Exempted [ ] Tax to be deducted at Source [ ] Yes [ ] No

----------------------------------------------------------------------(Tear here)------------------------------------------------------------UltraTech Cement LimitedRegistered Office: “B” Wing, 2nd Floor, Ahura Centre, Mahakali Caves Road, Andheri (East), Mumbai-400 093

Phone No. 91-22-5691 7800 Fax No. 91-22-5691 7900ACKNOWLEDGEMENT SLIP

Application No. : _________________ Date : ________________Received from_________________________________________________________________________Rs.___________________________ /- by Cheque / Demand Draft No.____________ drawn on __________________________ towards application for ______________ Debentures.

(Cheques / Demand Drafts are subject to realization)



78

INSTRUCTIONS

1. Application Form must be completed in full in BLOCK LETTERS IN ENGLISH

2. Signatures should be made in English or in any of the Indian languages. Signature in a languageother than English must be attested by an authorized official of a Bank or by a magistrate / notarypublic under his / her official seal.

3. The full amount of Debenture has to be paid alongwith the application form.

4. Application form duly completed in all respects, together with Cheque / Demand Draft / PayOrder drawn in favour of Citibank, D.N. Road, Fort Mumbai, Account UltraTech Cement Limited,A/c. No.0015850035 and crossed “A/c Payee” must be lodged with the Sole Arranger on or beforethe closing date of the issue.

5. Applications made by categories of investors other than individuals must be accompanied bycertified copies of Memorandum and Articles of Association, Board Resolution / Power of Attorney for investment, authority to authorized signatories in case of limited companies orcorporate bodies.

6. Minimum application shall be for 10 Debentures thereafter in the multiples of 10 Debentures.

7. Cash / money order / Outstation cheque will be accepted.

8. Please mention your Permanent Account Number or the GIR number allotted under Income TaxAct, 1961 and the Income Tax Circle/Ward/District. In case where neither the PAN nor GIRnumber has been allotted, the fact of non-allotment should be mentioned in the application form inspace provided.

9. Receipt of application will be acknowledged in the “Acknowledgement Slip” appearing below theApplication Form. No separate receipt will be issued.

10. The application would be accepted as per the terms of the issue outlined in the Information

Memorandum.*****



79

ISSUE SCHEDULE

Issue

Opening Date

Issue

Closing Date

Date of

Earliest Closing

of The Issue

Deemed

Date of Allotment

13 June 2005 15 June 2005 15 June 2005 16 June 2005



80

Series I

Private Placement of 500 (Five Hundred Only) NCDs of the Face Value Of Rs.10, 00,000

Each (Rupees Ten Lac Only) Aggregating Rs. 50 Crore (Rupees Fifty Crore Only).

Instrument Secured, Redeemable, Non-Convertible Debentures (“Debenture”)Issue Rating “AA+/Stable” by CRISIL

Issue Size Rs. 50 crore

Final Maturity 3 years from the Deemed Date of Allotment

Redemption At par on 16 June 2008

Interest Rate A fixed rate of 6.70% p.a.

Interest paymentFrequency

Payable annually from the deemed date of allotment 16 June 2005.

Interest onapplication money

Interest on Application money (if any) shall be paid at 6.70% fromthe date of realisation of the cheque/ Demand Draft till the dateimmediately preceding the Deemed Date of allotment

Expenses All expenses including but not limited to Stamp Duties, Legal

expenses and Issuances costs are to the account of the IssuerArrangement Fees An upfront fee of 0.10% on the final amount collected and retained

by the issuer in the following manner:Citibank N.A. : 0.03% on Rs. 50 croreCCML : 0.07% on Rs. 50 crore

Security The Debentures will be Secured by first pari passu charge on thefixed assets of the company with an asset cover of not less than 1.25times.

Issuance Format The Debentures/Letters of Allotment will be issued inDematerialized Form within 7 days from deemed date of allotment.

Trustees UTI Bank Limited

Listing The Debentures are proposed to be listed on the WDM segment of BSE and NSE

Face Value Rs. 10,00,000 per DebentureIssue Price Rs. 10,00,000 per Debenture

MinimumApplication

1 Debenture

Scheduled LaunchDate

13 June 2005

ScheduledClosing Date

15 June 2005

Pay in Dates 16 June 2005

Deemed Date of Allotment

16 June 2005



81

Series II

Private Placement of 500 (Five Hundred Only) NCDs of the Face Value Of Rs.10, 00,000

Each (Rupees Ten Lacs Only) Aggregating Rs. 50 Crore (Rupees Fifty Crore Only).

Instrument Secured, Redeemable, Non-Convertible Debentures(“Debenture”)

Issue Rating “AA+/Stable” by CRISIL

Issue Size Rs. 50 crore

Final Maturity 3 years from the Deemed Date of Allotment

Redemption At par on 16 June 2008

Interest Rate A fixed spread of 0.30% over the 1 year benchmark GoI Securityreset and payable semi annually. The first six month setting willbe 5.95% p.a.Benchmark will be the Simple average of the bid side of yields of 1 year GoI Bond as set on the <INBMK=F3> page of Reuters at12:30 p.m. IST for immediately preceding three business daysbefore each interest period start date rounded off to two decimals.

Interest payment

dates

Payable on 16 December 2005, 16 June 2006, 16 December 2006,

16

June 2007, 16 December 2007 and 16

June2008.Interest onapplication money

Interest on Application money (if any) shall be paid at 5.95%from the date of realisation of the cheque/ Demand Draft till thedate immediately preceding the Deemed Date of allotment

Expenses All expenses including but not limited to Stamp Duties, Legalexpenses and Issuances costs are to the account of the Issuer

Arrangement Fees An upfront fee of 0.05% on the final amount collected andretained by the issuer in the following manner:Citibank N.A. : 0.015% on Rs. 50 croreCCML : 0.035% on Rs. 50 crore

Security The Debentures will be Secured by first pari passu charge on thefixed assets of the company with an asset cover of not less than1.25 times.

Issuance Format The Debentures/Letters of Allotment will be issued inDematerialized Form within 7 days from deemed date of allotment.

Trustees UTI Bank Limited

Listing The Debentures are proposed to be listed on the NSE

Face Value Rs. 10,00,000 per Debenture

Issue Price Rs. 10,00,000 per Debenture

MinimumApplication

1 Debenture

Scheduled LaunchDate

13 June 2005

ScheduledClosing Date

15 June 2005

Pay in Dates 16 June 2005

Deemed Date of Allotment

16 June 2005



UTCL IM Investors Rachna Final

Documents