Investor PresentationNovember 2010

22

Contents

Prism Cement – An Integrated Building Materials’ Player

Cement Division

RMC Division

TBK Division

Corporate Information

Company Overview

44

Prism Cement Limited – A Snapshot

One of India’s leading integrated Building Materials’ company

Wide product basket comprising cement, ready-mixed concrete, aggregates, tiles, tile adhesives, sanitaryware, and kitchens

Organized into 3 Divisions: Prism Cement RMC Readymix (India) H & R Johnson (India)

Robust business models generating Free Cash Flows

55

Prism Cement Limited – A Snapshot

Market Capitalization (as on 30th October 2010): Rs. 2,962 crores

Rankings: 202—ET 500 2010 rankings 291—by Market Cap among companies listed on the

National Stock Exchange (Source: Capitaline Database) Stand-alone financials (2009-10):

Gross Sales Rs. 2989 Crores

EBITDA Rs. 512 Crores

PAT Rs. 251 Crores

Net Worth Rs. 1170 Crores

Net Debt Rs. 749 Crores

ROCE 21.4%

66

Prism Cement Limited—in a Nutshell Cement Division

Efficient operations Expanding capacities Rural housing and Infrastructure key growth drivers

RMC Strategic route to market for Cement business Higher growth: Growth of cement in India and, in addition,

conversion to Ready-mixed concrete Growth Drivers: Urbanization and industrial infrastructure

HRJ Tile business: Growth drivers are affordable housing and

consumption Bath, Kitchen, and Adhesives: Complimentary business with

operating leverage Brand and distribution driven

7

India—Growth Potential

Urbanization: > 3 mn people expected to migrate to urban areas every year from FY10-20

Affordable housing (Rs. 2.5 mn to Rs. 4.5 mn) to grow from Rs. 432 bn in FY 09 to Rs. 1.7 trn in FY 20

Infrastructure investment to grow from Rs. 21 trn in XI Plan (FY 08-12) to Rs. 62 trn between FY 10 and FY 20. Key sectors: Power: From Rs. 6.7 bn to Rs. 13 trn Roads: From Rs. 3.1 trn to Rs. 11 trn Irrigation: From Rs. 2.5 trn to Rs. 10.4 trn

(Source: Edelweiss India 2020 Report)

88

99

Cement Division - Introduction

Prism Cement commenced production in 1997 Manufactures Portland Pozzollana Cement (PPC) under

the brand name ‘Champion’ and Ordinary Portland Cement (OPC)

Currently sells 3 million tonnes of cement and clinker from its Plant in Satna, Madhya Pradesh

State-wise break-up of salesUttar

Pradesh48%

U’Khand6%

Madhya Pradesh

34%

Bihar10%

Exports2%

10

Cement Division—Strengths

Gross Sales (FY 2009-10): Rs. 1142 Crores Among healthiest EBITDA margins in the industry (34%

in 2009-10). Key reasons: Distribution advantage

An intensive distribution network (~ 2,000 dealers and 46 stocking points)

Among lowest market lead distance (~ 340-370 KMs) Power Consumption

Among lowest in the industry (69 KWH / T of Cement for 2009-10)

Product Mix Higher quantities of PPC (~ 91% of the total cement sales)

11

Cement Division—Power & Fuel

Coal ~ 60% linkage Coal. Remaining purchased from the Open

Market

Electricity Purchased from Grid Stable and good quality source of supply Rate / Unit for 2009-10: Rs. 3.98 7 Power Plants with a capacity of 17,000 MW coming up in

the belt over the next few years

1212

Cement Market in India India is the second largest cement producing country in

the world Produces approx. 7% of the world’s total production Exceptionally stable demand growth for past 15 years Demand at an inflection point as per-capita GDP has

passed US$ 1,000 Infrastructure and Housing key drivers Long-term demand growth of 10-12% per annum Capacity addition of approx. 100 MT between FY10 and

FY12 Supply overhang for the next few quarters, lowering

industry utilisation rates. Prices softening Stronger Balance Sheets and a more consolidated

industry structure

1313

Cement Division - Plans

Expanding capacity at Satna Plant: Cement and clinker capacity increased from 3 million tons

per annum to 6.6 million tons per annum Commercial operations to resume by December, 2010 Total Project Cost: Rs. 965 Crores VAT Benefit on sales in Madhya Pradesh for 7 years

A Coal Block allotted at Chindwara, Madhya Pradesh: Estimated reserves of 15 million tones Mining Plans approved Final clearances awaited Planned to be operational by 2013

14

Cement Division - Plans

Second plant to come up in Kurnool District, Andhra Pradesh:

Capacity: 4.8 million tons per annum

Almost the entire land acquired. Awaiting certain State Government clearances

Project to be completed in 3 years from zero date

1515

16

RMC Snapshot

Ready-mixed Concrete is concrete (Mixture of Cement, Sand, Aggregates, Admixtures, and Water) in ready-to-use form

Several benefits such as assured quality, speed, saving of site space, reduced labour, reduced wastage etc

17

Ready-Mixed Concrete Industry

Industry commenced in early 1990s

Real growth commenced from second half of 1990s

At present:

Around 500 commercial RMC Plants

Industry volume: ~ 30 million m3 per annum

5 key players in the Organized sector

18

Ready-mixed Concrete Potential

  2009-10 2014-15 (Est.) CAGR

Cement demand (Mn. tons per annum) 200 337 11.0%

Ready-Mixed Concrete (Mn m3 per annum) 30 83 22.7%

Reasons for Growth: Cement demand growth—1.25x GDP growth rate Cement used for concrete grows from 50% to 55% due to

infrastructure growth Ready-mixed concrete grows from 10% of total concrete at present

to 15% in 5 years (In developed countries, this is up to 70%)

1919

RMC Ready Mix (India) - Introduction

Third-largest player in India with national footprint

65 Plants in 28 cities / towns

High Growth:

Last 10 years Sales growth: 48% CAGR

H1 2010-11 Sales growth: 26%

20

Ready-Mixed Concrete Dynamics

Return on Capital Employed (ROCE):

EBITDA / Sales: 6%(x)

Sales / Capital Employed: 4.5x(=)

27%(-)

Depreciation / Capital Employed: 12%

ROCE = 15%

2121

RMC Ready Mix - Strategy

Plants in cities for commercial sales

Infrastructure Vertical—Ports, Highways, Power Plants etc.

Backward integration—Quarries for aggregates

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2323

HRJ – Introduction India’s Number 1 Tile

Company since 1958

Ranked 16th in the study of “World’s top ceramic tile manufacturers” by Ceramic World Review—Only Indian entity to feature in the list

Key Brands:

***Sales 10-year CAGR: 15%

H1 2010-11 Sales Growth: 21%***

0

200

400

600

800

1000

1200

1400

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10

Year

Rup

ees

(In C

rore

s)

HRJ Nitco Kajaria Somany Asian

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Ceramic Tile Industry—Potential Ceramic Tile Industry—Potential In absolute terms, India has become third largest consumer of

ceramic tiles in the world—after China and Brazil

However, still huge Potential for growth in India. Per Capita consumption of ceramic tiles per annum:

Iran - 4.64 m2 Vietnam - 3.50 m2

China - 2.22 m2 Brazil - 2.96 m2

Spain - 7.55 m2 India - 0.4 m2

Industry Growth Rate: 12% per annum (Source: www.icctas.com)

By 2015, India expected to become the second-largest consumer of ceramic tiles in the world

Exponential growth due to high growth in construction due to urbanization and creation of commercial infrastructure

2525

Ceramic Tile Industry – An Overview

Industry Characteristics: Capital Intensive

Profits need to be ploughed back to maintain market share

Working Capital Intensive Fuel and Power Intensive Freight Intensive Technology Intensive

To upgrade designs / effects from time to time without increasing capacity

Unattractive investment:

Poor Return on Capital

No Free Cash Flows

HRJ’s business model addresses these issues in a

positive way

2626

Indian Business Environment in the Last Decade

Source of machinery Shift from Italy to China Capital Cost lower by 60% Handicap for the older plants

Imports from China Significant competition in the past No longer a threat to the Domestic industry

Gujarat region Hub for the industry with most new plants Almost 70% of the Industry’s capacity Unorganized Sector with poor tax compliance

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Business Environment in Future Goods & Services Tax (GST) to be implemented

Would improve tax compliance Would spur consumption

Importing from China has become unattractive  2007 2013

  India China India China

Raw Material + - + -

Fuel - + + -

Power - + Neutral Neutral

Packaging Neutral Neutral Neutral Neutral

Transportation + - + -

Currency - + + -

Capital Cost - + Neutral Neutral

2828

HRJ - Manufacturing Strategy Manufacturing Strategy—A healthy-mix. FY 2009-10

split: Own Manufacturing: 35% of sales Joint Ventures: 55% of sales Outsourcing: 10% of sales

Benefits of Joint Ventures: Efficient operations run by Local Promoters Most profitable plants in the Industry within respective

categories Leverage efficient manufacturing with brand equity and

distribution of HRJ Takes care of capital intensity Enables faster scale-up

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Focus on Capital efficiency

Capital Cost

Move towards lower capital cost

New capacities using Chinese machinery

Mix of Machinery:

Working Capital—Substantially better than competitors. Working Capital Turnover: 11 times Debtors: 37 days

Indian Italian Chinese

Own Plants 25% 70% 5%

Joint Ventures 30% 30% 40%

3030

Focus on Low Costs - Freight, Fuel and Power

Regionalized manufacturing to address freight intensity. Average Selling radius of 1,000 KMs

Using judicious mix of fuel for efficient manufacturing

Generating own power for cost efficiency:

Cogeneration Plant at Pen: Capacity 4.6 MW

Cogeneration Plant at Morbi JV for Vitrified tiles: Capacity 5.6 MW

3131

HRJ – Key Strategies Fundamentally, modified the Business model in the last 10

years, thereby generating Free Cash Flows Taken a hit by proactively shutting some of own mfg.

capacities, thereby addressing capital & fuel intensity: Thane, Dewas Wall Tile

Build Complementary businesses: Ardex Endura—Adhesives, Grouts, Industrial Flooring,

Waterproofing Pioneer and Leader in the Industry

Johnson Bath Division—Sanitaryware, Taps & faucets, Bath accessories Gone through initial learning curve; Scale-up phase for

increasing market share Johnson Kitchen and Wooden Flooring Division

Modular Kitchen Industry at nascent stage Sunrise industry Going through learning curve

3232

HRJ – Growth Path

Benefit of scale in tiles business: Sold ~ 1.1 million ft2 of tiles every day in 2009-10 Average gross realization of Rs. 27 per ft2

Potential of complimentary businesses: Operating Leverage Marginal investment needed when compared to tiles Healthy ROCE High Free Cash Flows Scalable

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Corporate Information

34

Management Profile Mr. Manoj Chhabra, 59 years, Managing Director

Chartered Accountant. Joined the Company in 1993. Appointed as MD in 2003 Past experience includes senior positions at Larsen and Toubro

Mr. Vijay Aggarwal, 42 years, Managing Director B. Tech (Elec.) from IIT, Delhi and PGDM from IIM, Ahmedabad. Joined Hathway Investments in 1993. Appointed MD of erstwhile H. &

R. Johnson (India) Limited in 1998 Past experience includes SBI Capital Markets. On the Board of

various companies including Exide Industries, ING Vysya Life Insurance, Aptech, and Asianet Satellite Communications.

Mr. Ganesh Kaskar, 51 years, Executive Director M. Tech (Civil) from IIT, Mumbai. Joined erstwhile RMC Readymix (India) Pvt. Limited in 1996.

Appointed ED of RMC Readymix (India) in 2001 Past experience includes ACC and Tata Consulting Engineers

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Dividend History

Year End Dividend % Dividend amount (Rs. Crores)

30-Jun-07 10 29.83

30-Jun-08 10 29.83

31-Mar-09 15 44.75

31-Mar-10 10 + 15 105.33

Note: An interim Dividend of Re. 1 per share (10%) has been declared in October 2010 for the year 2010-11

36

Shareholding Pattern (As on 30.09.2010)

Promoters 74.87%

Public25.13 %

FII 6.54%DII 0.76%

Non-Institutions

17.83%

Total Number of issued Shares: 503.36 million

3737

Disclaimer

Disclaimer :Cautionary statement regarding forward – looking statementsThis presentation may contain certain forward – looking statements relating to the future business, development and economic performance.Such statements may be subject to a number of risks, uncertainties and other important factors, such as but not limited to (1) competitive pressures; (2) legislative and regulatory developments; (3) global, macroeconomic and political trends; (4) fluctuations in currency exchange rates and general financial market conditions; (5) delay or inability in obtaining approvals from authorities; (6) technical developments; (7) litigations; (8) adverse publicity and news coverage, which could cause actual development and results to differ materially from the statements made in this presentation. Prism Cement Limited assumes no obligation to update or alter forward – looking statements whether as a result of new information, future events or otherwise.

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