I C R A Limited

(An Associate of Moodys Investor Service)

FOR IMMEDIATE RELEASE

June 25, 2012

Competition Commission of Indias order a negative for cement industry

The Competition Commission of India (CCI) vide its order dated 21 June 2012 has found 11 cement companies guilty of violation of the provisions of Competition Act, 2002 which deals with anti-competitive agreements including cartels. The commission has imposed penalty on 11 cement manufacturers including ACC Limited, Ambuja Cements Limited, Utltratech Cement Limited, Grasim Cement (now merged with Ultratech Cement Limited), The India Cements Limited, Madras Cements Limited, Century Textiles and Industries Limited, Binani Cement Limited, Lafarge India Private Limited and Jaypee Cement. These companies have to pay a penalty of 50% of their profits for the year 2009-10 (from 20th May 2009 onwards) and 2010-11 with the total amount of penalties aggregating to ~Rs. 6300 crores. The cement manufacturers have to deposit this amount within a period of 90 days. CCI has also imposed a fine of Rs. 73 lakhs on the industry association- Cement Manufacturers Association (CMA) and asked it to disassociate itself from collecting wholesale and retail prices data through member companies and also from circulating details on cement production and dispatches to its members. Table 1: Penalties imposed by CCI on cement companies Penalty ACC Limited 1147.59 Ambuja Cements Limited 1163.91 Ultratech Cement Limited 1175.49 JK Cement Limited 128.54 The India Cements Limited 187.48 Madras Cements Limited 258.63 Century Textiles and Industries Limited Binani Cement Limited Lafarge India Private Limited Jaypee Cement TOTAL 274.02 167.32 480.01 1323.60 6306.59

Net Profit (2011-12) 1300.80* 1227.74* 2403.26 174.57 271.46 385.11 22.13 48.40 632.92

Note: Amount in Rs. Crores *For ACC and Ambuja Cements Limited, net profit signifies consolidated net profit after minority interest for CY 2011 Source: CCIs order, Annual reports of companies, ICRAs estimates

As shown in Table 1, the penalties imposed by CCI are quite significant in relation to the profitability of the aforementioned companies. CCIs order would directly impact the cashflows and capital structure of these companies. However, most of the companies plan to contest CCIs order in Competition Appellate Tribunal which may result in a long-drawn litigation process. ICRA would continue to monitor the developments in this regard and its impact on the sector. Any adverse judgement would continue to remain an event-based risk for the industry participants till such time the matter is resolved. Madras Cements Limited is the only company amongst the entities rated by ICRA which has been penalized by CCIs order. ICRA also notes that apart from the direct impact on the cashflows and capital structure of the aforementioned companies, CCIs rulings may also impact the pricing dynamics in the industry and could result in lower margins going forward. ICRA will continue to closely monitor the developments in the cement industry, including both the final outcome of the aforesaid action impacting the 11 companies named as well as the impact on the pricing in the industry which would affect the entire industry.

PRESS RELEASE

Page 1

ICRA has classified various instruments based on their complexity as "Simple", "Complex" and "Highly Complex". The classification of instruments according to their complexity levels is available on the website www.icra.in
Disclaimer: ICRA Ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA
Ratings are subject to a process of surveillance, which may lead to revision in ratings. Please visit our website (www.icra.in) or contact any ICRA office for the latest information on ICRA Ratings outstanding.

I C R A Limited
(An Associate of Moodys Investor Service)

ICRAs ratings in the cement industry are as follows: Table 2: List of Cement Companies with ICRA-Assigned Ratings Outstanding (as on June 24, 2012) Name of Company Long-Term Medium-Term Short-Term Outlook Rating Rating Rating Bhavya Cements Limited [ICRA]BB+ [ICRA]A4+ Stable Bheema Cements Limited [ICRA]D [ICRA]D BMM Cements Limited [ICRA]BB+ [ICRA]A4+ Stable Dalmia Cement Bharat Limited [ICRA]AAMAA [ICRA]A1+ Stable Dalmia Cement Ventures Limited [ICRA]BBB[ICRA]A3 Stable Deccan Cements Limited [ICRA]BBB [ICRA]A2 Negative Hi Bond Cement (India) Private Limited [ICRA]B [ICRA]A4 Hills Cement Company Limited [ICRA]D [ICRA]D K.D. Cements [ICRA]B+ KJS Cement Limited [ICRA]BB+ Stable Madras Cements Limited [ICRA]A+ [ICRA]A1+ Stable NCL Industries Limited [ICRA]BB+ [ICRA]A4+ Stable OCL India Limited [ICRA]AA[ICRA]A1+ Stable Orient Paper & Industries Limited [ICRA]A1+ Parasakthi Cements Industries Limited [ICRA]BBB[ICRA]A3 Stable Prism Cement Limited [ICRA]A+ [ICRA]A11 Stable Sri Mata Infratech Limited [ICRA]BB[ICRA]A4 Stable Topcem India [ICRA]BBBStable Toshali Cements Private Limited [ICRA]B+ Source: ICRA

Analyst Contacts: Mr. Anjan Ghosh (Tel No. +91-22-30470006) aghosh@icraindia.com Analyst Contacts: Mr. Sabyasachi Majumdar (Tel. No. +91 124 4545304) sabyasachi@icraindia.com

PRESS RELEASE

Page 2

ICRA has classified various instruments based on their complexity as "Simple", "Complex" and "Highly Complex". The classification of instruments according to their complexity levels is available on the website www.icra.in
Disclaimer: ICRA Ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA
Ratings are subject to a process of surveillance, which may lead to revision in ratings. Please visit our website (www.icra.in) or contact any ICRA office for the latest information on ICRA Ratings outstanding.

I C R A Limited
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PRESS RELEASE

Page 3

ICRA has classified various instruments based on their complexity as "Simple", "Complex" and "Highly Complex". The classification of instruments according to their complexity levels is available on the website www.icra.in
Disclaimer: ICRA Ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA
Ratings are subject to a process of surveillance, which may lead to revision in ratings. Please visit our website (www.icra.in) or contact any ICRA office for the latest information on ICRA Ratings outstanding.