AMBUJA CEMENTS

Ambuja Cements Limited, formerly known as Gujarat Ambuja Cement Limited, is a major cement producing company in
India. The Group's principal activity is to manufacture and market cement and clinker for both domestic and export
markets.

Ambuja Cements Ltd (ACL), a part of a global conglomerate Holcim, is one of India's leading cement manufacturers and
has completed over 30 years of operation

S.No Name Designation

1 Mr.N S Sekhsaria Chairman Founder of Ambuja cement.

2 Mr.Eric Olsen
3 Mr.Ajay Kapur
4 Mr.Christof Hassig
5 Mr.Martin Kreigner
6 Mr.Nasser Munjee
7 Mr.Rajendra P Chitale
Former CEO and MD of the company.
Vice Chairman CEO of LafargeHolcim Ltd., the ultimate holding
company of Ambuja.
Managing Director & CEO Current CEO and MD of the company.
Director Head of the Corporate Strategy and Mergers &
Acquisitions function at LafargeHolcim Ltd
Non Exe.Non Ind.Director Region Head of India & South East Asia at
LafargeHolcim Ltd
Director Former president of the Bombay Chamber of
(Independent) Commerce and Industry.
Chairman of DCB bank..
Director Managing Partner of M/s. Chitale & Associates
(Independent)

8 Mr.Shailesh Haribhakti Director Managing Partner of Haribhakti & Co LLP, Chartered

(Independent) Accountants.
Chairman of the National Pension Scheme Trust of
India

9 Dr.Omkar Goswami Director (Independent) Founder and Executive Chairman of CERG Advisory
Pvt. Ltd
10 Mr.Haigreve Khaitan Director (Independent) Partner of reputed law firm, Khaitan & Co
11 Ms.Usha Sangwan Director Managing Director of Life Insurance Corporation of
India
12 Mr.B L Taparia Director Joined the company as Deputy Company Secretary.

The current total Board strength is 12, which includes five independent, six non-independent non-executive members
including the Chairman, and one non-independent executive (MD & CEO). The BoD currently comprises of 11 males and
one female, all above the age of 30.
Ambuja Cement showcases a good deal of diversity, with 5 members being independent and on the board of various
other reputed companies (Munjee- HDFC, Tata Motors, Tata Chemicals among others, Chitale- Director of Reliance
General Insurance Company Limited, JM Financial National Securities Clearing Corporation Ltd., Life Insurance
Corporation of India, Unit Trust of India, SBI Capital Markets Ltd. , Haribhakti- Chairman of the National Pension Scheme
Trust of India, Khaitan-JSW ISPAT Steel Limited , Goswami- Cairn India Ltd, Godrej Products Ltd, Dr. Reddy's
Laboratories Ltd. )
Despite there being 6 non-independent members of the board, the influence of the independent directors is enough to
ensure small shareholders' interests are not completely neglected. However, all board meetings are led by the Chairman,
in this case, Mr. N S Sekhsaria who is also the former founder, CEO and MD of Ambuja Cement, and thus there is a
greater possibility of biased decisions being made, which would contribute negatively to wealth maximization.
SHAREHOLDING PATTERN OF AMBUJA CEMENTS

Holder's Name No of Shares % Share Holding

ForeignInstitutions 365018001 18.38%

ForeignPromoter 1253156361 63.11%

FinancialInstitutions 172556918 8.69%

GeneralPublic 95150364 4.79%

Others 45550470 2.29%

NBanksMutualFunds 37847176 1.91%

CentralGovt 777352 0.04%

As we can see, the general public or the minority shareholders of the company are only 4.79%. This tells us that the
interests of the minority shareholders need not be the top priority for the company. Several board members of Ambuja
Cements are part of the foreign promoter group called LafargeHolcim which has a 63.11% stake in the company.
LafargeHolcim tends to give their needs more priority than the shareholders.

In October 2013,
there was a deal announced between Holcim and Ambuja Cements. This deal was financed using the funds that could
have been used to pay dividends to the shareholders or for business maximization. The funds were used for the deal. The
deal led to an increase in the share price of Ambuja Cements.

As we can see the share price of Ambuja Cements has increased from 2013 to 2016. This tells that though in the short
term the interests of the minority shareholders might not be protected, in the long term they are protected.

The fact that Ambuja chose the Holcim deal over business expanison and the increase in share price after the deal show
that the company is interested in shareholders wealth maximization and not business maximization.

Announcement Date Effective Date Dividend Type Dividend(% Remarks

 )

20/02/2017 16/03/2017 Final 60% Rs.1.2000 per share(60%)Final Dividend.

12/07/2016 02/08/2016 Interim 80% Rs.1.6000 per share(80%)Interim Dividend

10/02/2016 22/02/2016 Final 60% Rs.1.2000 per share(60%)Final Dividend

20/07/2015 31/07/2015 Interim 80% Rs.1.6000 per share(80%)Interim Dividend

18/02/2015 02/03/2015 Final 160% Rs.3.2000 per share(160%)Final Dividend

14/07/2014 30/07/2014 Interim 90% Rs.1.8000 per share(90%)Interim Dividend

05/02/2014 12/02/2014 Final 110% 2.2000 per share(110%)Final Dividend

18/07/2013 30/07/2013 Interim 70% Rs.1.4000 per share(70%)Interim Dividend

08/02/2013 18/02/2013 Final 110% Rs.2.2000 per share(110%)Final Dividend

18/07/2012 30/07/2012 Interim 70% Rs.1.40 per share(70%)Interim Dividend

As we can see all the profitablity ratios above have seen an all time low in 2015. But overall through the years the
company has seen up's and down's in its return on capital. It shows that the company is trying to maximize shareholder
wealth. We can also see that the return on capital of 2014 is higher than that of 2013 which shows that the merger was
good for the shareholders.

Therefore, the company is focused on shareholder wealth maximization and also protects shareholders' interest in the
long run.

Dec-13 Dec-14 Dec-15

MVA 121.21 163.57 138.5
NPM 8.6 10.7 7.2
Net Profit 12945.7 14963.6 8075.6
Sales 91742.6 99781.2 94614
ROE 13.17 15.12 7.71
ROI 14.1 15.2 7.9
EPS 8.4 9.7 5.2
EVA
R&D
Expense 10.1 54.4 23.6

GOI 10 year bond: 6.19%