MIRA INFORM REPORT

Report Date :

04.02.2008

IDENTIFICATION DETAILS

Name :	MADURA GARMENTS – [DIVISION OF ADITYA BIRLA NUVO LIMITED]

Formerly Known As :	INDIAN RAYON AND INDUSTRIES LIMITED

Registered Office :	Indian Rayon Compound, Junagadh Veraval Road, Veraval - 362266, Gujarat

Country :	India

Financials (as on) :	31.03.2007

Date of Incorporation :	26.09.1956

Com. Reg. No.:	04-1107

CIN No.: [Company Identification No.]	L17199GJ1956PLC001107

TAN No.: [Tax Deduction & Collection Account No.]	BRD100317C

PAN No.: [Permanent Account No.]	AAACI1747H

Legal Form :	Subject is a Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.

Line of Business :	Manufacturing and Marketing of Viscose Filament Yarn, Sulphuric Acid, Carbon-di-sulphide, Anhydrous Sodium Sulphide, Yarn, Cloth, Reinforced Rubberlined Hosepipes, other Hosepipes, High & Low Tension Insulators & Bushings, Portland Black and Liquid Argon.

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	USD 124980000

Status :	Excellent

Payment Behaviour :	Regular

Litigation :	Clear

Comments :	Subject is a well-established company of Aditya V. Birla Group. It is a multi-product, multi-locations and well diversified company with interests in business that range across rayon filament yarn, textile, cement, carbon black, insulators and argon gas. Available information indicates high financial responsibility of the company. Fundamentals are strong and healthy. Their trade relations are fair. Payments are usually correct and as per commitments. The company can be considered good for any normal business dealings at usual trade terms and conditions. The company can be regarded as a promising business partner in a long run.

LOCATIONS

Registered Office :	Indian Rayon Compound, Junagadh Veraval Road, Veraval - 362266, Gujarat, India
Tel. No.:	91-2876-245711/245735/245758
Fax No.:	91-2876-243220
E-Mail :	indrayon@ad1.vsnl.net.in irilsecretarial@adityabirla.com irilveraval@adityabirla.com
Website :	http://www.indianrayon.com http://www.adityabirla.com

Corporate Office :	Survey No. 62/2A, 62/2B, Parappana Agrahara, off Hosur Road, Vegur Hobli, Bangalore – 560068, Karnataka, India
Tel. No.:	91-2876-245711
Fax No.:	91-2876-243220

Head Office :	91 Sakhar Bhawan, 9^th Floor, 230 Nariman Point, Mumbai – 400 021, Maharashtra
Tel. No.:	91-22-2204 5004
Fax No.:	91-22-2204 3686
E-Mail :	cfd@indianrayon.com

Factory :	Garments Division: Madura Garments M G House, 110, 4^th Cross, 5^th Block, Koramangala Industrial Layout, Koramangala, Bangalore - 560 095, Karnataka, India Tel: 91-80-56915000 Fax: 91-80-56915050 Rayon and Caustic Soda Plants: Indian Rayon Division Veraval 362 266, Gujarat Tel: 91-2876-245711 Fax. 91-2876-243220 E-mail: irilveraval@adityabirla.com Carbon Black Plants: Hi-Tech Carbon Murdhwa Industrial Area, P. O. Renukoot 231 217, District Sonbhadra, Uttar Pradesh Tel: 91-5446-252387 to 391 Fax: 91-5446-252502 / 252858 E-mail: hitechr@adityabirla.com htcrkt@vsnl.com Argon Gas Plant: Rajashree Gases IGFL Complex, P. O. Jagdishpur Industrial Area - 227 817, District Sultanpur, Uttar Pradesh Tel: 91-5361-270032 to 38 Fax: 91-5361-270595 / 270165 / 270172 E-mail: igfl@adityabirla.com K-16, Phase II, SIPCOT Industrial Complex, Gummidipoondi - 601 201 District Tiruvallur - Tamil Nadu Tel: 91-4119-223233 to 36 Fax: 91-4119-223129/223116 E-mail: htcgmpd@vsnl.com hitechcarbon@adityabirla.com Website: www.hitechcarbon.com Textile Plants: Jaya Shree Textiles P. O. Prabhasnagar - 712 249, District Hooghly, West Bengal Tel: 91-33-26721146 Fax: 91-33-26721683 / 26722626 E-mail: jayashree-iril@adityabirla.com Rajashree Syntex P. O. Tantigaria, District Midnapur Paschim, PIN: 721 102, (West Bengal) Tel: 91-3222-263131 / 275820 / 263964 Fax: 91-3222-275528 E-mail: rajsyntex@adityabirla.com Other Division: Insulator Division (Domestic Marketing) P. O. Meghasar Taluka Halol, District Panchmahal, Gujarat - 389 330 Tel: 91-2676-221002 Fax: 91-2676-223375 Email: jsihdom@adityabirla.com Fertilizer Plant : Indo Gulf Fertilizers P.O. Jagdishpur Industrial Area, District Sultanpur - 227 817, Uttar Pradesh , India Tel : 91-5361-270032-38 Fax : 91-5361-270165 & 270595 E-mail: igfl@adityabirla.com Financial Services Division Appejay, 2^nd Floor, Shahhid Bhagat Singh Road, Fort, Mumbai-400 001 Tel: 91-22-22880660 Fax: 91-22-22881088 E-mail: bgflcorp@adityabirla.com

DIRECTORS

Name :	Mr. Kumar Mangalam Birla
Designation :	Chairman

Name :	Mrs. Rajashree Birla
Designation :	Director

Name :	Mr. H. J. Vaidya
Designation :	Director

Name :	Mr. B. L. Shah
Designation :	Director

Name :	Mr. P. Murari
Designation :	Director

Name :	Mr. B. R. Gupta
Designation :	Director

Name :	Ms. Tarjani Vakil
Designation :	Director

Name :	Mr. Vikram Rao
Designation :	Director

Name :	Mr. G. P. Gupta
Designation :	Director

Name :	Mr. S. C. Bhargava
Designation :	Director

Name :	Mr. Sanjeev Aga
Designation :	Managing Director

Name :	Mr. S. K. Mitra
Designation :	Whole Time Director

Name :	Mr. Rakesh Jain
Designation :	Whole Time Director

Name :	Mr. K. K. Maheshwari
Designation :	Whole Time Director

Name :	Mr. Adesh Gupta
Designation :	Whole Time Director & Chief Financial Officer

KEY EXECUTIVES

Name :	Mr. Devendra Bhandari
Designation :	Company Secretary

EXECUTIVES RAYON DIVISION
Mr. K. K. Maheshwari	Group Executive President
Mr. K. C. Jhanwar	Executive President
Mr. S. S. Gupta	Joint President
Mr. D. P. Modani	Senior Vice President [Finance & Comm.]
Mr. S. K. Nanda	Senior Vice President [Caustic]
Mr. J. P. Pandey	Senior Vice President [Production]
Mr. K. D. Joshi	Senior Vice President [Marketing]
Mr. R. C. Maheshwari	Senior Vice President [HR]

HI – TECH CARBON
Mr. Rakesh Jain	Business Head
Mr. S. S. Rathi	Executive President
Mr. G. S. Mishra	Joint President [Renukoot Unit]
Mr. R. K. Dad	Senior Vice President [Chennai Unit]

TEXTILE
Mr. Vikram Rao	Business Director
Mr. J. C. Soni	President
Mr. J. Shroff	Senior Vice President
Mr. S. K. Patodia	Senior Vice President
Mr. A. Nair	Senior Vice
Mr. B. D. Daga	Senior Vice President

MADURA GARMENTS
Mr. Vikram Rao	Business Director
Mr. Hemchandra Javeri	President
Mr. P. Kar	Chief Operating Officer
Mr. Shoaib Farooqi	Senior Vice President [Sales & Marketing]

INSULATOR DIVISION DOMESTIC MARKETING
Mr. Jayant Dua	Executive President

INDO GULF FERTILISERS
Mr. Sanjeev Aga	Business Director
Mr. S. K. Jain	Senior President
Mr. R. K. Malhotra	Joint President [Fin. & Comm.]
Mr. C. K. Dutta	Joint President [Manufacturing]
Mr. J. R. Mohan	Senior Vice President [HRD & Personnel]
Mr. S. Sharma	Senior Vice President [Marketing]

CORPORATE FINANCE DIVISION
Mr. Manoj Kedia	Joint President
Ms. Pinky Mehta	Senior Vice President [Taxation]
Mr. Anil Rustogi	Senior Vice President – Corporate Finance

FINANCIAL SERVICES DIVISION
Mr. S. K. Mitra	Director [Financial Services]
Mr. Sushil Agarwal	Chief Operating Officer
Mr. Ravi Bubna	Senior Vice President

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.12.2007

Names of Shareholders	No. of Shares	Percentage of Holding
Shareholding of promoter and promoter group²
Indian
Individuals / Hindu undivided family	136410	0.15
Bodies corporate	36313341	40.35
Institutions
Mutual funds / UTI	8607355	9.56
Financial institutions / banks	7206421	8.01
Insurance companies	2670678	2.97
Foreign institutional investors	16697907	18.55
Any other (specify )
Foreign banks	6515	0.01
Non-institutions
Bodies corporate	2909758	3.23
Individuals
i. Individual shareholders holding nominal share capital up to Rs.0.100 Million	13396068	14.88
ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	847225	0.94
Any other (specify)
Trust	58032	0.06
Non resident	1144649	1.27
OCBs	10267	0.01
Total	90004626	100

BUSINESS DETAILS

Line of Business :

Manufacturing and Marketing of Viscose Filament Yarn, Sulphuric Acid, Carbon-di-sulphide, Anhydrous Sodium Sulphide, Yarn, Cloth, Reinforced Rubberlined Hosepipes, other Hosepipes, High & Low Tension Insulators & Bushings, Portland Black and Liquid Argon.

Products :

Item Code No. (ITC Code)	5403110.09
Product Description	Viscose Filament Rayon Yarn

Item Code No. (ITC Code)	620000
Product Description	Garments

Item Code No. (ITC Code)	2803
Product Description	Carbon Black

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Garments	Nos/000	N.A.	10942.01
Viscose Filament Rayon Yarn	MT	16000	17233.00
Sulphuric Acid & Allied Chemicals	MT	55300	54243.00
Caustic Soda	MT	58400	57051.00
Chlorine	MT	49640	48750.00
Hydro Chloric Acid	MT	11155	5753.00
Spun Yarn	Spd/MT	79592	19190.29
Cloth	Lm/’000mtr	62	4646.09
Carbon Black	MT	170000	175080.00
High and Low Tension Insulators and Bushings $	MT	N.A.	16245.00
Lightning and Surge Arrestors $	Nos	N.A.	N.A.
Liquid Argon	‘000 SM3	3000	2000.13
Urea	MT	N.A.	575646.00
Pesticides	--	N.A.	47760.00

GENERAL INFORMATION

No. of Employees :

8197

Bankers :

Ø State Bank of India

Ø Corporation Bank

Ø Standard Chartered Grindlays Bank Limited

Ø United Bank of India

Ø UCO Bank

Ø Canara Bank

Ø Punjab National Bank

Ø Bank of America NT & SA

Ø HDFC Bank Limited

Ø Citibank NIA.

Ø American Express Bank Limited

Ø Central Bank of India

Ø The Hongkong & Shanghai Banking Corporation Limited

Ø Allahabad Bank

Ø State Bank of Saurashtra

Facilities :

SECURED LOANS	31.03.2005 (Rs in Millions)
Loan From Banks	8227.500
Other Loans :
Deferred Sales Tax Loan	611.700
Others	2002.900

UNSECURED LOANS
Fixed Deposits	48.900
Short Term Loans from :
Banks	2250.000
Other Loans :
Banks	500.000
Others	1950.100
Loan from subsidiary companies	44.600


Banking Relations :	Good

Auditors :
Name :	Khimji Kunverji & Company Chartered Accountants, Mumbai, Maharashtra, India S. R. Batliboi & Company Chartered Accountants, Mumbai, Maharashtra, India Branch Auditors K. S. Aiyar & Company Chartered Accountants, Mumbai, Maharashtra, India Deloittee Haskins & Sells Chartered Accountants, Bangalore, Karnataka Clark, Gardner, Wolf & Company Chartered Accountants Mumbai, Maharashtra

Joint Venture :	¯ Birla Sun Life Insurance Company Limited ¯ Birla Sun Life Distribution Company Limited ¯ Birla Sun Life Trustee Company Private Limited ¯ PSI Data Systems Limited ¯ Birla NGK Insulators Private Limited ¯ Idea Cellular Limited ¯ Birla Sun Life Asset Management Company Limited

Associates:	¯ Indo Gulf Corporation Limited ¯ Crafted Clothing Private Limited (CCPL) ¯ English Apparels Private Limited (EAPL) ¯ Harwood Garments Private Limited (HGPL) ¯ Birla Securities Limited (BSL) ¯ Mangalore Refinery & Petrochemicals Limited ¯ Birla AT&T Communications Limited ¯ Bina Power Supply Company Limited ¯ Rosa Power Supply Company Limited ¯ Birla Sun Life Asset Management Company Limited ¯ Idea Cellular Limited ¯ Birla NGK Insulators Limited ¯ Grasim Industries Limited ¯ Hindalco Industries Limited ¯ Indian Aluminium Company Limited ¯ Bihar Caustic and Chemicals Limited ¯ Shree Digvijay Cement Company Limited ¯ Birla Global Finance Limited ¯ Birla Sun Life Distribution Company Limited ¯ Birla Sun Life Trustee Company Limited ¯ HGI Industries Limited ¯ Tanfac Industries Limited

Subsidiaries :	¯ Aditya Birla Telecom Limited ¯ Madura Garments Exports Limited ¯ Alpha Garments Private Limited ¯ Aditya Vikram Global Trading House Limited ¯ Laxminarayan Investment Limited ¯ Transworks Information Services Limited ¯ Birla Global Asset Finance Company Limited ¯ PSI Data Systems Limited ¯ Birla Technologies Limited ¯ Birla Sun Life Insurance Company Limited ¯ Birla Insurance Advisory Services Limited ¯ Transworks IT Services (India) Private Limited ¯ Transworks Inc., USA ¯ Rajnidhi Finance Limited ¯ BGFL Corporate Finance Private Limited

Membership :	¯ Silk & Rayon Textile Export Promotion Council ¯ Wool & Woollen Export Promotion Council

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
85000000	Equity Shares	Rs.10/- each	Rs. 850.000 millions
1500000	Redeemable Preference Shares	Rs.100/-each	Rs. 150.000 millions
	TOTAL		Rs. 1000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
93305187	Equity Shares	Rs.10/-each	Rs.933.052 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		933.100	598.900	598.800
2] Share Capital Suspense		0.000	236.100	0.000
3] Reserves & Surplus		30312.400	21241.100	12941.800
NETWORTH		31245.500	22076.100	13540.600
LOAN FUNDS
1] Secured Loans		20716.200	10842.100	4930.300
2] Unsecured Loans		7602.100	4793.600	0.000
TOTAL BORROWING		28318.300	15635.700	4930.300
DEFERRED TAX LIABILITIES		0.000	1677.000	1255.200

TOTAL		59563.800	39388.800	19726.100

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		11042.500	10130.700	7552.500
Capital work-in-progress		2038.800	1224.500	550.300

INVESTMENT		38493.900	16757.900	6996.600

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	4752.600	5263.300	3550.000
	Sundry Debtors	5959.900	4154.400	2609.000
	Cash & Bank Balances	227.400	203.200	94.100
	Loans & Advances	3584.000	6641.800	1038.800
Total Current Assets		14523.900	16262.700	7291.900
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	5938.800	4247.800	2285.800
	Provisions	596.500	739.200	379.400
Total Current Liabilities		6535.300	4987.000	2665.200
Net Current Assets		7988.600	11275.700	4626.700

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		59563.800	39388.800	19726.100

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		35548.400	27717.500	19663.700
Other Income		1069.900	627.700	474.600
Total Income		36618.300	28345.200	20138.300

Profit/(Loss) Before Tax		3110.800	2717.500	1570.800
Provision for Taxation		861.100	848.200	433.600
Profit/(Loss) After Tax		2249.700	1869.300	1137.200

Expenditures :
	Manufacturing Expenses	2490.000	2185.400	1585.300
	Selling and Administrative Expenses	2877.500	2432.300	1921.700
	Raw Material Consumed	17828.700	14038.300	9706.700
	Salaries, Wages, Bonus, etc.	1823.800	1626.000	1337.600
	Miscellaneous Expenses	873.400	696.300	634.600
	Interest	1954.000	685.500	230.700
	Excise Duty	1571.300	1406.000	1219.400
	Power & Fuel	3337.500	1875.600	1213.100
	Depreciation & Amortization	1203.200	1118.100	777.400
	Stock Adjustment	[451.900]	[435.800]	[59.000]
Total Expenditure		33507.500	25627.700	18567.500

QUARTERLY RESULTS

PARTICULARS	30.06.2007	30.09.2007	31.12.2007
	1^st Quarter	2^nd Quarter	3^rd Quarter
Sales Turnover	7409.600	9177.500	10974.300
Other Income	128.300	54.300	19.400
Total Income	7537.900	9231.800	10993.700
Total Expediture	6424.300	7645.200	9269.300
Operating Profit	1113.600	1586.600	1724.400
Interest	463.900	475.400	381.700
Gross Profit	649.700	1111.200	1342.700
Depreciation	279.000	352.300	371.200
Tax	80.000	167.900	37.000
Reported PAT	264.600	548.500	840.100

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	0.82	0.58	0.34
Long Term Debt-Equity Ratio	0.40	0.31	0.19
Current Ratio	0.86	1.16	1.11
Fixed Assets	1.39	1.43	1.45
Inventory	7.10	6.29	6.22
Debtors	7.03	8.20	8.79
Interest Cover Ratio	2.59	4.96	7.81
Operating Profit Margin(%)	17.63	16.31	13.12
Profit Before Interest And Tax Margin(%)	14.25	12.28	9.16
Cash Profit Margin(%)	9.71	10.78	9.74
Adjusted Net Profit Margin(%)	6.33	6.74	5.78
Return On Capital Employed(%)	10.41	12.11	10.24
Return On Net Worth(%)	8.48	10.57	8.68

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Incorporated in 1956,Indian Rayon & Industries was taken over by Aditya Birla group. After merging Jayshree Textiles & Industries, the company became a leader-Viscose Filament Yarn, Carbon Black, Insulators and Branded Apparels - both in India and internationally. Under the name of Idea Cellular the company enters the Telecom Segment by joining hands with Tata Group. It is operating in 7 states in India.

During 1988 Indian Rayon forayed into Carbon Black and Hi Tech Carbon (Renukoot) went on stream. The company chalked out a modernisation and expansion of existing equipment at a cost of Rs.2560.000 Millions. It also planned a new project wherein quality of coloured yarns would be increased. The estimated cost would be around Rs.3440.000 Millions.

The company is in the process of expanding the Carbon Black division at Gummidipoondi near Chennai at a capital outlay of Rs.600.000 Millions. On completion of the project the Carbon Black capacity would be enhanced by 40000 tonnes from the present 110,000 tonne to 150,000 tonne. The company acquired 74.6% equity stake in Indal, from Alcan, at an investment of a little over Rs.10000.000 Millions. It has also acquired Nifty Mines in Australia from Straits Pty. Limited

In 1998, Indian Rayon's cement business was transferred to Group Company, Grasim as part of cement business consolidation. Production commenced at Hi Tech Carbon's second carbon black plant at Gummidipoondi during 1999.

In 1999-2000, the Company exited from the Sea Water Magnesia business. The Company also made its entry into Readymade Garments business with the acquisition of Madura Garments, this has brought renowned brands such as Van Heusen, Louis Phillipe, Allen Solly, Peter England, Byford and San Frisco under the Company's fold.

The Company's Insurance subsidiary Birla Sunlife Insurance Company commenced operations in March 2001. The company ventured into Information Technology Sector by acquiring 70.35% stake in PSI Data Systems of which 50.35% shares which was held by Groupe Bull, France in PSI Data Systems. The company has invested around Rs.1003.000 Millions towards the purchase of 70.35% stake in PSI, which was funded through internal accruals. To further consolidate Birla Technologies was acquired by PSI Data Systems for a consideration of Rs.113.000 Millions. During 2002-03 the company has divested its stake in MRPL to ONGC for Rs.2/-per share incurring a one time loss of Rs.571.000 Millions.

The company has transferred its insulator business to a JV company i.e Biral NGK Insulators Private Limited through a Scheme of Arrangement. The JV Partner is NGK Industries of Japan. The JV Company has become operational from Feb 6, 2003.

The company has amalgamated Rajnidhi Finance Limited (for which Indian Rayon is the ultimate holding company) is amalgamated with its parent company Laxminarayan Investments Limited, a subsidiary of the company w.e.f. April 1, 2003.

The company has forayed into BPO business by acquiring 100% stake in TransWorks in July 2003. Transwork has expertise in customer care, transaction processing and financial accounting processing. Transwork has a ready customer base of several Fortune 500 companies and has centres at Mumbai and Bangalore.

The subsidiaries of Indian Rayon and Industries Limited are Birla Sun Life Insurance Company Limited, PSI Data Systems Limited, Birla Technologies Limited, Laxminarayan Investment Limited, Transworks Information Services Limited, Transworks Inc. USA and Aditya Vikram Global Trading House Limited

Transworks IT Services (India) Limited was amalgamated with Transworks Information Services Limited with effect from 6th January 2005.

The company has enhanced its installed capacity of Viscose Filament Rayon Yarn and Carbon black by 1000 MT & 10000 MT respectively. With this expansion the total installed capacity of Viscose Filament Rayon Yarn and Carbon black has increased to 16000 MT & 170000 MT respectively.

The company merged Indo Gulf Fertilizers Limited (IGFL) and Birla Global Finance Limited (BGFL) with itself from September 1st 2005, in the share entitlement ratio of 1 Equity Share of Rs.10/- each of the company for every 3 Equity Share of Rs.10/-each of IGFL and in the share entitlement ratio of 1 Equity Share of Rs.10/- each of the company for every 3 Equity Share of Rs.10/-each of BGFL.

The company name was changed from Indian Rayon and Industries Limited to Aditya Birla Nuvo Limited from October 2005.

The Schemes of Amalgamation of IGFL (Indo Gulf Fertilizers Limited) and BGFL(Birla Global Finance Limited) with the Company have been rendered effective from 3rd April, 2006 and 30th June,2006 respectively. As these Schemes are operative from 1st September, 2005, the entire business and undertaking of the erstwhile IGFL and BGFL have been vested in the Company, on a `going concern' basis.

Consequent to the merger, the Company has allotted 1,50,30,935 equity shares of Rs. 10/- each to the shareholders of IGFL in the ratio of one equity share of Rs.10/- each of the Company for every three equity shares of Rs. 10/- each held by the shareholders of IGFL as on the Record Date, which was the 19th April, 2006.

The Company is in the process of allotment of 85,83,479 equity shares to the shareholders of BGFL in line with the provisions of the Scheme.

The Company invested Rs.6610 millions in Idea Cellular Limited.(Idea) to acquire 16.5% stake in September 2005, increasing its holding to 20.74% . The Company along with its subsidiary has accepted the offer to purchase an additional 15% equity share of Idea. On conclusion of this deal in June 2006, the stake of the Company along with its subsidiary has increased to 35.74%.

In Carbon Black, while the Company is pursuing environmental clearance for its 50,000 tpa Brownfield expansion, it is also exploring possibilities to set a Greenfield project of 60,000 tpa in Western India. The proposed expansion will enable the Company to sustain its leadership position and grow as the demand for Carbon Black in the domestic sector is on the rise, fuelled by the buoyant auto sector.

At the Indian Rayon Division, capacity will be expanded by 1000 tons through de-bottlenecking. The Caustic Soda capacity which went up by 40 TPD to 160 TPD in September'05, will be further expanded to 200 TPD, on the commissioning of Power Plant in September 2006. The implementation of Power Plant is in line with the companies expectations.

To cater to the market needs at Jaya Shree Textiles, a new capacity of 50 looms of Linen Fabrics and 5000 Spindles of Flax Spinning is proposed.

At Indo Gulf Fertilisers Division, the company propose to increase the capacity from 0.865 million tons to 1.10 million tons p.a., through de-bottlenecking.

During the year, Aditya Birla Telcom Limited, Madura Garments Exports Limited, Alpha Garments Private Limited became subsidiary of the company.

The companies production capacity of Caustic Soda, Chlorine, Spun Yarn and Cloth expanded from 41975 MT to 58400 MT, 33470 MT to 49640 MT, 77380 Spindles to 79592 Spindles and 53000 Mtrs to 62000 Mtrs respectively.

1956

The company was incorporated on 26th September, 1956. Formerly the Company was Known as Indian Rayon Corporation Limited. The company manufactures viscose rayon yarn and fabrics, chemical products, reinforced rubberlined products, high and low tension insulators and bushings and Portland Cement.

1958

The Company entered into an agreement with Von Kohorn International Corporation, Von Kohorn International (London), Limited, and Von Kohorn Eastern Corporation, Limited, who agreed to design and supply from U.S.A. and U.K. the entire plant and machinery for the Company's rayon factory.

They also agreed to supervise the erection and installation as well as the commissioning of the plant. Von Kohorn International Corporation also agreed to invest jointly with the Financial Development Fund Inc., U.S.A. a sum of U.S. $8,25,000 in the equity capital of the Company.

1975

- Controlled percolation hoses were manufactured in collaboration with George August & Company, Limited, U.K.

- A collaboration agreement was signed with Ceram Consult Langenthal, Limited, Switzerland for manufacture of Long Red insulators and high alumina bodies.

1976

- Jay Shree Textiles & Industries, Limited was amalgamated with the Company with effect from 1st January.

1977

- The new synthetic spinning unit, acquired with the amalgamation of Jay Shree Textiles & Industries, Limited with the Company, was partially commissioned during the year.

1978

- Philippines Government gave a license to the Company to set up a unit in that country for the manufacture of 3,000 tonnes of insulators per annum.

1979

- The Company received a letter of intent to set up a new industrial undertaking for the manufacture of 6,000 tonnes per annum of sophisticated insulators at Halol in Gujarat State.

- The Company executed a technical collaboration agreement with Doulton Insulators Limited, of U.K., for new range of products for 400 KV transmission line and sub-station insulators and for improving the quality of present range of products.

1981

- The Company issued 10,00,000-12% secured debentures of Rs 100 each. Out of this, 25,000 debentures were reserved for subscription by the employees, directors and business associates of the Company and 4,25,000 debentures were offered to resident equity shareholders in the proportion of 1 deb.: 10 equity shares. The balance of 5,50,000 debentures were offered for public subscription during March 1981.

- During September, the Company offered for public subscription 5,00,000-13 1/2% Secured debentures of Rs 100 each with 1% additional interest per annum when the dividend on equity shares exceeds 14% for the immediate preceding year with appropriate adjustment for any future bonus issue of shares. These debentures are redeemable in 4 equal annual instalments on the commencement of the 8th, 9th, 10th and 11th years from the date of allotment of debentures.

- During September, Vokin Holdings Inc. U.S.A. offered for sale 1,16,250 No. of equity shares of Rs 10 each of the Company to the existing resident Indian shareholders and Indian employees of the Company at a premium of Rs 30 per share.

1982

- The Company revalued the assets of all the units (except Halol Unit) as on 1st July. The net surplus of Rs 28,24,15,415 arising out of this was credited to revaluation reserve.

1983

- The Company received a letter of intent to set up a plant to manufacture 80,000 tonnes of white cement per annum.

- A technical collaboration agreement with the Onuda Engineering & Consulting Co., Limited, of Japan was approved by Government. The plant was commissioned in March 1988. The product "Birla White" was well received in the market.

- The Company set up a carbon black plant at Remikoot in Mirzapur district of Uttar Pradesh with an installed capacity of 20,000 tpa.

1985

- Veraval Properties Private Limited and Indrayon Properties Private Limited became the wholly owned subsidiaries of the Company.

- The company undertook to set up a ceramic unit to manufacture 10,000 tonnes per annum of sanitaryware and 12,000 tonnes per annum of wall tiles in Uttar Pradesh.

- The sanitaryware project was proposed to be set up in technical collaboration with Villeroy and Boch of the Federal Republic of West Germany and equipment for the wall tiles project were to be supplied by SITI of Italy.

- For the manufacture of sanitarywares the company was to incorporate the ceramic fibre lined tunnel and shuttle kilns technology.

- A technical collaboration with Felten & Gujillene Energietichnic GmbH, West Germany was entered into for the manufacture of condensor bushings, coupling capacitors and instrument transformers.

- Another collaboration with Asea Brown Boveri & Co., Limited of Switzerland was finalised for the manufacture of lighting arrestors.

- As per the terms of the issue, a portion of Rs 50/- out of each debenture was converted into 1 equity share of Rs 10 each at a premium of Rs 40/- per share on 30th September, 1987, at the first stage of conversion. The remaining part of Rs 50/- was converted in the same manner as on 1st July, 1988.

1987

- The Company commissioned the expanded worsted rayon project. Machines like radio frequency drier and auto winding unit with electronic controls were installed. Fancy doubling machines were also installed to produce fancy yarn.

- The working of Cotton Spinning division was adversely affected due to higher cotton price, rise in power tariffs etc. To rationalise the product-mix the Company proposed to convert existing spindles for production of high value added synthetic yarn. Also fancy doubling machines were to be installed for production of fancy yarns.

- Production declined due to strike by workmen for 82 days. By the end of the year, the Company proposed to install certain balancing equipments including a roller press for raw material grinding.

- It was also proposed to install two additional DG Sets of 5.4 MW each during the year.

- CE Europe, Luminus Crest division and Engineers India, Limited were appointed as Consultants for the project.

- As on 1st July, the fixed assets of the Company (except the recently set up white cement and a carbon black units) were revalued and the net surplus of

Rs. 755.50 millions arising out of it was credited to the Revaluation reserve.

- The name of the Company was changed from The Indian Rayon Corporation, Limited to Indian Rayon and Industries Limited with effect from 23rd January.

1988

- Two 1950 KVA power generating sets were commissioned during the year.

- The working of cotton spinning division continued to be affected due to high prices of cotton. To ensure its competitive edge over others, the division was upgrading its technology by adding latest machines such as Savio auto-coners. Two-for-one twisters, etc.

- A new kiln was commissioned at Halol to meet the growing demand for the company's product range.

1989

- Necessary balancing equipment was being installed for producing finer denier yarn in view of the increasing demand.

- Operating results of the flax division were however adversely affected by the steep hike in the cost of major inputs coupled with sharp deterioration in the supply of power. One more diesel generating set of 1000 KVA was being installed.

- Additional 2,592 spindles and other balancing equipment were installed to improve flexibility in product-mix and meet the changing demand patterns.

- The Company proposed to expand the capacity to 9 million TPA from 3 million TPA received Government approval.

- The foreign collaboration agreement with AKZO Fibres & Polymers - Enka International b. v. of Netherlands was approved by Government Necessary steps were being taken to implement the project.

- The Company is a co-promoters of the Bina Power Supply Company, Limited, & Rosa Power Supply Company, Limited, to be set up as two separate joint ventures with Powergen of U.K. Bina Power Supply Company Limited was to be set up at Madhya Pradesh and Rosa Power Supply Co., Limited at Uttar Pradesh.

- The Birla Capital International AMC Limited was set up as an asset management Company jointly with Capital Group International, USA.

- Birla Telecom Limited was set up in collaboration with AT & T for bidding for basic telephone services & Birla Communications Limited with McCaw Cellular Communications Inc., for bidding cellular mobile services.

1990

- A superior quality cement under the brand name `BIRLA SUPER' was introduced, initially, in Karnataka and the market response was reported to be good.

- The lightning arrestors project was commissioned during the year and the unit undertook to execute an order for 400 KV transmission line for the National Thermal Power Corporation.

- The company undertook a modernisation programme to improve the quality and enlarge the product range.

1991

- A fire mishap in the dryer plant in May, caused disruption in production for a period of ten days. To tide over power shortage, a DG set of 2270 KVA was installed.

- The Spinning and Weaving division undertook to further modernisation apart from expanding its installed capacity for worsted yarn by 2,400 spindles.

- The Company proposed to convert the Halol factory into a manufacturing unit exclusively for exports.

- All steps were taken to set up a project for the manufacture of 50,000 tonnes of high purity refractory grade magnesia from sea water near Visakhapatnam, Andhra Pradesh

- A collaboration agreement for transfer of technology with Refractories consulting and Engineering GmbH, Austria, was signed for the same.

1992

- A diesel generating set of 2270 KVA was commissioned. The Company undertook further investments in installation of balancing equipment as well as equipment for upgradation of quality.

- Two additional CS2 furnaces were commissioned to increase the carbon-di-sulphide capacity from 6000 TPA to 10,000 TPA. It was proposed to install 10 contravan spinning machines at an estimated cost of Rs 360 millions.

- The installed capacity of worsted yarn was increased by 1200 spindles. Capacity was being further increased through installation of 24 sophisticated looms.

- It was proposed to implement modernisation programme involving a capital outlay of Rs. 60 millions

- However, Government permitted to expand the capacity to 40,000 tpa and the Company was obtaining necessary clearances for the import of capital goods.

1994

- The working in the Rishra Insulator plant suffered loss on account of a five months strike.

- Work was underway to increase the capacity of Halol plant from 6,000 TPA to 10,000 TPA and subsequent to which combined capacity of the two plants would be 30,000 TPA.

- The Cement grinding and packing facilities of new plant of 1.2 million tonnes capacity at the existing location was commissioned and the remaining sections were to be commissioned by June 1995.

- The split grinding unit of 1.2 million tonnes capacity being set up at Sholapur in Maharashtra was to be commissioned in June 1995.

- The Company proposed to set up a 400 TPA capacity fibre glass plant at an estimated capital outlay of Rs. 1090 millions to be located in the Alwar district of Rajasthan.

1995

- The division undertook to set up 8 continuous spinning machines on parallel yarn at an estimated cost of Rs. 360 millions.

- The working of the Cotton Spinning Division was affected by strike between mid February 1996 to mid May 1996. This in turn affected the modernisation work also.

- The Halol Unit had undertaken substantial expansion and two new kilns were set up. Negotiations were on with Overseas companies manufacturing lighting arrestors in India. Negotiations were also underway for acquiring technology to produce silicon based insulators, in some applications.

- 1-2 million TPA capacity raw material grinding and clinkerisation unit was commissioned at Malkhed, Karnataka. Also, a 1-2 million TPA capacity grinding unit was commissioned.

- 9,085 shares allotted.

1996

- A 16.5 MW Co-generation thermal plant was being set up. An additional 12 MW captive power plant was to be set up as an extension to 16.5 MW plant at a cost of Rs. 400 millions.

- The Company proposed to add 8 continuous spinning machines on parallel yarn at an estimated cost of Rs. 400 millions.

- The sluggish market conditions and strike at the Cotton Spinning Division plant between mid February 1996 to mid May 1996 affected the flax division's working.

- Performance of the division was affected due to labour trouble at Rishra plants and sluggish market conditions.

- The Company proposed to install a new carbon black plant of 35,000 tonnes capacity at Gummidipondi, Chennai.

1997

- The Company proposed to set up a second power plant of 15 MW capacity, at a cost of Rs 700.00 millions to ensure complete self-sufficiency of stable and uninterrupted power to VFY and caustic soda plants.

- Sea Water Magnesia plant was commissioned with an installed capacity of 50,000 TPA.

- The Company had made a bonus issue in the ratio of 1:2 to the existing shareholders of the Company.

- Indian Rayon Industries, the Aditya Birla Group diversified company, has commissioned its 36,000 tpa caustic soda plant at Veraval in Gujarat.

- It has singed a Memorandum of Understanding with the Orissa Mining Corporation for setting up a mega integrated aluminium complex comprising an alumina refinery of 1 million tonnes per annum capacity based on the Kadnagamali-Pottangi bauxite deposit in Karaput district in south Orissa and a greenfield aluminium smelter of 0.25 million tpa.

- Indian Rayon & Industries Limited has proposed to issue bonus shares in the ratio of one share for every two shares held. Reacting to the news, the Indian Rayon scrip declined by Rs.10, before closing on Tuesday at Rs.392.75, as the bonus ratio fell short of market expectations.

- The company is also setting up a 35,000 tonne carbon black unit to be commissioned in October 1998. It is already the second largest installed capacity in the industry after Philips Carbon Black's 78,000 tonne.

- The company is seriously considering a proposal to issue bonus shares in the proportion of one new equity share for every two existing equity shares held.

- The company is an Aditya Birla group company, is setting up a 25 mw captive hydel power project in West Bengal.

- The Company, an Aditya Birla Group company and one of the leading players in its field, has become the first private sector firm to raise Rs. 400 millions through private placement of secured redeemable non-convertible debentures at a coupon rate of 14.25 per cent, payable half yearly for a five years period.

1998

- Sea Water Magnesia suffered a set back due to substantial dumping from China leading to poor offtake and huge inventory.

- The Company has commissioned its Greenfield 35,000 MTPA carbon black plant, set up at an investment of Rs. 1350 millions. With this plant at Gummidipondi, near Chennai, the Aditya Birla group company's carbon black capacity stands raised to 95,000 MTPA. The plant at Renukoot (UP) has a manufacturing capacity of 60,000 MTPA.

- Company has temporarily suspended the operations of its Sea Water Magnesia plant at Visakhapatnam.

1999

- The Company is flagship company of the Aditya Birla group, is yet to find buyer for its sea water magnesia project.

- The company, which has an installed capacity of 95,000 tonnes per annum, is "strongly" considering the option to hike capacity by another 50,000 tonnes.

2000

- The strike from March 11 by a section of workmen of the viscose filament rayon plant at Veraval, Gujarat, has been called off from the night of March 22 and normalcy is being restored.

- Company has assigned `LAAA' rating to the non-convertible debentures aggregating Rs. 500 millions privately placed by the company with ABN Amro Securities (India) Private Limited.

- The Aditya Birla group Company, Indian Rayon and Industries Limited, will promote an insurance joint venture with 125 year old Sun Life Financial of Canada.

- The Company has entered into agreements, with NSDL, CDSL and MCS Limited, for dematerialisation.

2001

- The shares department of the company has been accredited with ISO 9002:1994 certification by KPMG.

- Aditya Birla group flagship Indian Rayon will acquire a 50.35 per cent controlling stake in PSI Data Systems from Groupe Bull, France, for Rs. 710 millions.

2002

- Company has informed that Mr. Devendra Bhandari has been appointed as Vice President and Company Secretary of the company in place of Mr. Mehernosh Kapadia.

Merger of Indo Gulf and Birla Global with Aditya Birla Nuvo

In a consolidation move to further enhance shareholder value, the company proposed the merger of Indo Gulf Fertilisers and Birla Global Finance with itself effective from September 1, 2005.

This is a major step in taking forward the well-crafted strategy of leveraging value businesses for accelerated growth. Post-consolidation, Aditya Birla Nuvo will become a more sizeable player, with a diversified, high growth business engine. The company has a good record of managing a diverse portfolio with razor sharp focus on each business. While the merger with Indo Gulf will strengthen the financials of the company, the merger with Birla Global will create an integrated financial service provider. As the schemes have been sanctioned by the respective high courts, the merger of Indo Gulf and Birla Global has become effective from September 1, 2005.

The merger creates a company that captures opportunities in the evolving Indian economy through leadership in focused value businesses i.e., carbon black, rayon, textiles and fertilisers, and driving high growth businesses viz., garments, IT / ITES, financial services and telecom.

MAJOR ACTIVITIES:

1. Acquisition of Minacs Worldwide Inc., Canada:

To enhance its presence in the BPO segment, the Company through its subsidiaries, Transworks Informations Services Limited (Transworks) and AV Transworks Limited, Canada completed the acquisition of Minacs Worldwide Inc. (Minacs), a leading Canadian company, through an open offer made in July, 2006.

An additional investment of Rs.1500 Millions has been made towards the share capital in Transworks at a price of Rs.300/- per share. Subsequently Transworks issued 275 Millions equity shares of Re.1/- each to RHCP TXW Investment Inc. at the same price for a consideration of Canadian Dollars 20 million, consequent to which the Company’s holding in Transworks stands reduced from 100% to 88.3%.

2. Idea Cellular Limited:

Along with a clutch of Aditya Birla group companies, the company has acquired the 48.14% equity shares of Idea Cellular Limited (Idea) held by Tata Industries Limited and Apex Investment Mauritius Holdings Private Limited. Of this a 15% shareholding in Idea has been acquired by the Company, increasing its total holding to 35.74%.

Idea came out with an IPO placement in February, 2007 for an aggregate sum of Rs.25000.000 Millions including a Green Shoe Option of Rs.3187.500 Millions. Prior to the IPO placement, the Company acquired 30,000,000 shares of Rs.10/-each at a price of Rs.75/- per share for an overall amount of Rs.2250 Millions. Currently the Company holds 31.78 % of the equity share capital of Idea.

3. Insulator Business:

As the Joint Venture (JV) with NGK Insulators Limited, Japan (NGK) was not progressing in line with expectations, both the partners decided to terminate the JV. Consequently, the Company and its subsidiary, viz.

Laxminarayan Investment Limited (LIL) acquired 49% equity shares in Birla NGK Insulators Private Limited (Birla NGK) from the erstwhile Joint Venture Partner, NGK. The remaining 1% share was also bought by LIL from Mitsubishi Corporation, Japan , their associate, in April, 2007. Birla NGK has become a subsidiary of the Company from 29th November, 2006 and rechristened as Aditya Birla Insulators Limited (ABIL).

4.Garments Business:

To leverage the potential in the Garment Export Business (post WTO), the Company transferred its contract export business to its wholly owned subsidiary, viz. Madura Garments Export Limited (MGEL) from the 1st of July, 2006.

To bolster its presence significantly in the growing retail market segment, the Company through one of its subsidiary has floated the following subsidiaries in the current financial year:

1) Madura Garments Lifestyle Retail Company Limited for a razor sharp focus on Mens Lifestyle Retailing including MG?s fashion brands e.g. Louis Philippe, Van Huesen, Allen Solly etc.

2) Peter England Fashions and Retail Limited for the requisite thrust on mid-segment brands such as Peter England.

FINANCIAL PERFORMANCE:

The Company's performance has been impressive. Its turnover grew by 29% from Rs.26420.500 Millions to Rs.34204.700 Millions. While operating profit increased from Rs.4433.900 Millions to Rs.6037.900 Millions by 36%, the interest cost has escalated from Rs.685.500 Millions to Rs.1954.000 Millions on funds borrowed for the acquisition of the additional stake in Idea Cellular and capital expenditure.

The net profit increased from Rs.1869.300 Millions to Rs.224.970 Millions.

OPERATIONAL REVIEW:

An unrelenting focus on operational efficiencies, cost optimization coupled with an improved product mix across all the businesses, have contributed significantly to the Company's growth.

* The branded Garments business posted a healthy revenue growth of 28% on a like to like basis. Volumes increased by 15%. Its Fashion brands viz.

Louis Philippe, Van Huesen & Allen Solly experienced a healthy growth supported by new launches. Its popular brand Peter England continued to expand its reach. The Operating Profit of the branded business has increased by 33% to Rs.812.200 Millions on a like to like basis. It was supported by a better channel mix and pricing notwithstanding the high discount and the dormancy phenomena that prevailed across the industry, throughout the year.

* The Rayon Division improved its overall performance. Its revenue rose by 15% to Rs.4414.600 Millions and the operating profit increased by 33% to Rs.1196.800 Millions.

In VFY realization improved by 13% to Rs.169 per Kg. while sales volume remained flat. The Chloralkali Segment has witnessed a revenue growth of 22% to Rs.1528.000 Millions. Its recently Commissioned Power Plant has led to saving in energy cost.

* The Carbon Black business achieved its best ever-annual results with a record production and sales volume. Revenues soared by 31% to Rs.7389.400 Millions backed by higher realisation and enhanced volumes. The operating profit magnified by 43% to Rs.1322.300 Millions. The Fertilisers business benefited from higher dispatches. Revenues on like to like basis built up by 20% to Rs.7784.800 Millions due to higher volumes and rising input prices. The operating profits were sustained at Rs.1296.000 Millions despite the profitability in the 2nd half of the year being constrained by the new pricing policy norms emanating from NPS III.

* The Textiles business attained higher revenues and profits. Revenues at Rs. 6250 Millions mounted by 18% and operating profits stepped up to Rs. 674.000 Millions, up by 19%. In the Linen Segment, Linen Yarn benefited from a volumes increase, while Linen Fabrics registered a marginal growth. In the Wool Segment, both Worsted yarn and Wool Combing rode on the back of higher volumes and better product mix.

SUBSIDIARY COMPANIES:

During the year, the following companies have become subsidiaries of the Company,:

Birla Global Finance Company Limited (Formerly Birla Global Asset Finance Company Limited)

Birla Insurance Advisory Services Limited

* BGFL Corporate Finance Private Limited

* Crafted Clothing Private Limited alongwith its subsidiaries viz. English Apparels Private Limited and Harwood Garments Private Limited. (both have since been amalgamated with Crafted Clothing Private Limited.)

* A.V. Transworks Limited (Canada)

* Micas Worldwide Inc. (Canada) and its following subsidiaries

- Micas Group (U.S.A.) Inc.

- Minacs Worldwide Gmbh (Germany)

- Millman Insurance Limited (Canada)

- Minacs Limited (UK)

- Minacs Worldwide S.A. de C.V.(Mexico)

- Minacs Kft (Hungary)

* Transworks BPO Philippines Inc.

* Aditya Birla Insulators Limited (Formerly Birla NGK Insulators Limited)

During the year under review, Aditya Birla Telecom Limited and Alpha Garments Private Limited ceased to be subsidiaries of the Company. Madura Garments Lifestyle Retail Company Limited and Peter England Fashions and Retail Limited have become subsidiaries of the Company, since the close of the financial year 2006-07.

* In the Insulators Business, good realisations have bettered the profit though revenues are lower.

AWARDS AND RECOGNITION:

The Company has been the proud recipient of the following awards and recognitions:

The following accolades have been showered on the Company:

* INDIAN RAYON DIVISION

* The Top Rank Certificate in the Textile Sector for Energy Conservation for the year 2006 from the Union Ministry of Power, New Delhi

* The Gold Trophy for the Best Performance in the Category of Viscose Filament Yarn Export for the year 2005-06

* An Appreciation Certificate for excellent Safety Standards for the year 2005

* JAYASHREE TEXTILES DIVISION:

* Recognition for Energy Conservation initiatives from Ministry of Power

* MADURA GARMENTS DIVISION:

* The 'AVAYA GLOBAL CONNECT CUSTOMER RESPONSIVENESS AWARD 2006' for the best service in Indian Industry?s manufacturers sector by ECONOMIC TIMES.

* Best Shirts Brand for Men to 'Allen Solly' by Business World.

* Clothing Manufactures Association of India (CMAI) Awards:

* 'Louis Philippe' was adjudged the Best Men?s wear brand under formals category.

* 'Allen Solly' was declared the best Women?s wear brand under Western wear category.

* Madura Garments - Most admired company of the year.

* Madura Garments - Clothing Company of the year in the Domestic Category.

* Madura Garments - Supply Chain Management Company of the year.

* Images Fashion Awards:

* 'Louis Philippe' - the Best Formal Wear Brand

* 'Allen Solly' - the Best Women's Wear Brand

* 'Van-Heusen' - the Best Shirts Brand for men.

* HI-TECH CARBON DIVISION, GUMMIDIPOONDI: * A Commendation prize under the Steam Process in Energy Conservation by the Andhra Pradesh Productivity Council.

i) Indian Rayon Division:

* Adoption of Variable Frequency Dissolving System in place of PIV (Positive invert variable) on Spinning Machines.

* Replacement of old and inefficient Motors/pumps by energy efficient motors/pumps

* Installation of FRP (Forced Reinforced Plastic) Fan in spinning air washers.

* Optimizing the temperature of chilled water in the process

* Better monitoring and control of humidity in the Spinning Halls.

* Optimizing combination of Spin bath pump for least power consumption.

* Use of double speed motors in the agitator system of dissolvers.

ii) Carbon Black Division:

* Installed 6 capacitor Banks to reduce the power loss.

* Reutilization of Boilers CBD (Continous blow down) water

* Replacement of APH (Air Pre-heater) in HBRx D (Hard Block Roator D)

* Soft black Rx Oil Pre Heater coil modification.

* VFD (Variable Frequency Drive) installation for P & V system Boiler.

iii) Textile Division:

* Installed/Replaced 14 Variable Frequency Drive for humidification tower.

* Replaced old inefficient compressors of smaller size with big size of GA-75 model.

* Auto on-off system of factory lighting.

iv) Fertiliser Division:

* Installation of variable speed drive in motors running on reduced load

* Installation of step down lighting transformer for energy conservation in plant lighting.

b) Additional Investments & Proposals, if any, being implemented for reduction of consumption of energy.

i) Rayon Division:

* Replacement of existing mixer with more efficient pulper

* Installation of Variable Frequency Dissolving System on all the chimney exhaust fans

* To provide false ceiling in all the spinning halls.

ii) Carbon Black Division:

* Istallation of VFD (Variable Frequency Drive) in L-1 MBF (Membrane Bag Filter) screw.

* Replacement of APH (Air pre-heater) in HBRx D (Hard Black Reator D)

iii) Fertilizer Division:

* Utilization of low grade waste heat getting dumped in cooling water and effectively utilizing it as heat source in vapor absorption machine for suction chilling of process air compressor of Ammonia Plant at Indo Gulf Fertilizers.

MANAGEMENT DISCUSSION AND ANALYSIS:

OVERVIEW:

During the year, India emerged as one of the fastest growing major economies of the world. A robust growth in the manufacturing and services sector continues to sustain the country on a high growth track. Their economy clocked an impressive growth of 9.2% during FY '07, thus maintaining the momentum despite challenging conditions of a surge in commodity prices that posed inflationary threats, hardening of interest rates and appreciation of the rupee that clouded exports prospects. Viewed against this backdrop, the company has posted good performance during the year. Standalone revenues have grown by 29% from Rs.26420 Millions in the previous year to Rs.34205 Millions. Standalone Profit before Interest, Depreciation and Tax is higher by 36% at Rs.60380 Millions. Consolidated net revenues have increased by 65% at Rs.82580 Millions while consolidated net profit grew by 38% to Rs.2812.000 Millions.

STRATEGIC MOVES:

The company has taken many strategic steps during the year to strengthen its financials and boost the growth of new age businesses.

Successful completion of the Rights Issue:

To strengthen its balance sheet and to provide financial resources to pursue growth opportunities, the company has successfully raised Rs.7772 Millions through a rights issue of 9,80,0201 equity shares priced at Rs.793 per share. The proceeds from the Rights issue are used/being used for repaying debt and for making fresh investments in Idea.

Increase of equity stake in Idea Cellular Limited:

The company has fortified its presence in the fast growing telecom space.

In a strategic move, the company, along with its wholly owned subsidiary, acquired additional equity stake in Idea Cellular at a cost of Rs.13729 Millions in the first quarter of FY '07. The company further invested Rs.22500 Millions in Idea's pre-placement IPO. With these investments, Aditya Birla Nuvo?s stake in Idea Cellular has increased from 20.74% to 31.78%.

Acquisition of Minacs Worldwide:

In 2006, TransWorks Information Services Limited, a subsidiary of the company, acquired 100% of the shareholding of Minacs Worldwide Inc., Canada, through its wholly owned subsidiary A.V. TransWorks Limited Canada at a total outlay of CAD$ 127.1 million. Minacs is a leading BPO provider.

The combined BPO business, now, has over 21 delivery centers in 7 countries across 3 continents. With a global client base including 15 Fortune 500 companies, the business supports customers in 30 different languages. It has about 11000 employees worldwide. The BPO business now has a global delivery model with integrated management and marketing structure.

Insulators Business:

The joint venture with NGK Insulators Limited, Japan was terminated during the year. The company, along with its wholly owned subsidiary viz.

Laxminarayan Investment Limited (LIL), acquired 49% equity shares in Birla NGK Insulators Private Limited (Birla NGK) at a total cost of Rs.741 Millions. The remaining 1% share was also bought by LIL from Mitsubishi Corporation, Japan in April '07. Birla NGK has become a subsidiary of the company from 29th November, 2006 and has been rechristened as Aditya Birla Insulators Limited The company's proposed merger with Nuvo is subject to requisite approvals.

With various investments and growth initiatives, Aditya Birla Nuvo has a business portfolio that captures opportunities in the evolving Indian economy through leadership in focussed value businesses i.e., carbon black, rayon, textiles, insulators and fertilizers, and driving high growth businesses viz., garments, telecom, ITES / IT and financial services. In a nutshell, Aditya Birla Nuvo is a business builder, it nurtures and handholds businesses, helping them to stand on their own feet, eventually.

Performance Review:

The Garments business has posted a healthy performance. The business leveraged its brand equity by executing a strategic brand architecture.

Madura Garments? brands viz. Louis Philippe, Van Huesen and Allen Solly strengthened their position as ?Lifestyle brands? by constantly enriching the product mix and introducing new product categories and accessories with global benchmarks. The Peter England brand continued to expand its reach.

The focus of the business was to expand the retail reach by increasing the controlled retail space, though delays in opening of malls impacted aggressive growth in retail space.

The Branded garments business posted a healthy growth of 15% in volumes.

The net turnover grew, on like to like basis, by 28% at Rs.6704 Millions as against Rs.5257 Millions in the previous year. The division's operating profit, on like to like basis, was higher by 33% at Rs.812 Millions vis-a-vis Rs.612 Millions in the previous year. The contract exports business has been divested into Madura Garment Exports Limited w.e.f. July 1, 2006. Volumes increased through capacity expansion and revenues grew, on like to like basis, by 58% to Rs.1732 Millions. A new facility to manufacture shirts is slated to be completed by August '07, which will give a fillip to the Contract Exports business.

Business Outlook:

The branded garments business has a positive outlook. The business has a well defined strategy and a focused growth plan to maintain leadership and increase market share. Madura Garments will aggressively pursue retailing of both 'Lifestyle' and 'Popular' brands by expanding its reach with bigger size stores, besides creating specialized outlets.

Two new subsidiary companies have been formed viz. Peter England Fashion and Retail Limited to promote large format stores offering affordable mega retail brand and Madura Garments Lifestyle Retail Company Limited for promoting the Lifestyle brands.

The business is focusing on cost efficiencies by efficient management of discounting, supply chain and outsourcing.

Performance Review:

Idea Cellular Limited has delivered a robust performance during the year.

The Company has over 14 million subscribers as on March 31, 2007. Total subscribe base increased by 90% over the corresponding period last year.

The All India market share has improved from 7.7% to 8.6% between March 31, 2006 and March 31, 2007. The company's gross revenues have risen significantly by 47% to Rs.43664.000 Millions from Rs.29655.000 Millions in the previous year. The Company's net profit soared to Rs.5033.000 Millions, from Rs.2118.000 Millions, an increase of 138%.

The company rolled out operations in three new circles viz. Himachal Pradesh, Rajasthan and U.P (E), thus expanding its network across 11 circles. The initial launch expenses in these circles created some pressure on margins. The operating margins of the Company declined to 34% vis-a-vis 37% in FY '06.

The Company has successfully completed its Initial Public Offering and raised Rs.28190 Millions. The Company is focusing on building, strengthening and expanding network and related services in the new circles and has planned roll out of services in Mumbai and Bihar circles. National Long Distance roll out is being worked upon.

Business Outlook:

The outlook for the telecom sector is positive. With the telecom space growing rapidly, they believe Idea Cellular is on a high growth trajectory and will continue to gain momentum going forward.

Performance Review:

During the year, TransWorks Information Services Limited., a subsidiary of the company, successfully acquired Minacs Worldwide Inc., Canada, a leading BPO provider, through its wholly owned subsidiary i.e. A V Transworks Limited, Canada. During the year, Transworks also started operations in Philippines, through its newly formed wholly subsidiary Transworks BPO Philippines Inc. Company has robust plan to gain foothold in this region.

Revenues at TransWorks increased by 21% to Rs.1972 Millions as against Rs.1633 Millions in the previous year supported by improved share in non voice business. Net profit declined by 11% to Rs.235 Millions because of increase in interest cost on funds borrowed for acquisition of Minacs.

Revenues of Minacs has been at Rs.8184 Millions for the period from 18th August 2006, the date of its acquisition, to 31st March 2007. The profits of Minacs were affected by unusual costs like one time restructuring cost and accounting readjustment expenses.

Business Outlook:

The ITeS sector is on a high-growth trajectory. TransWorks & Minacs are well positioned to maintain the growth momentum and are committed to increase their share in the industry. The BPO business will continue to focus on meeting customers' expectations with a thrust on excellence in execution. It will also have a strong focus on being a high quality provider of call center/BPO services and on adding value to clients across multiple service lines through superior service innovation and distinctive delivery.

The BPO business has a well defined strategy. It will continue to improve its performance by building a robust sales pipeline and ensuring cost efficiency company wide. It will work on extracting value from the synergy between TransWorks and Minacs. Also, it will strive towards improving asset utilization through value added services and migrating to more sustainable high value BPO/KPO mix and focusing on high growth sectors like

retail banking, insurance and telecom/technology. The company is exploring expansion opportunities in India, Philippines and other new locations. The company is focusing on best in class people practices in areas like recruitment, training, talent and performance management, etc. to become a preferred employer.

Performance Review:

In the life insurance business, at Birla Sun Life Insurance (BSLI) the new business annualized premium grew by 25% to Rs.8412 Millions. The Company recorded an increase of 41% in gross premium income to Rs.17352 Millions. To regain its market position, the Company undertook several initiatives. BSLI ramped up its branches and agency force with the number of branches increasing from 85 to 137 and agency force increasing from 17986 to 56603.

Higher marketing expenses on account of competitive pressures and opening of new branches led to a higher loss compared to last year. Introduction of Unit linked Insurance Product (ULIP) guidelines impacted sales of some of the products of the Company.

BSLI continues to leverage technology for achieving business goals and views technology as a key driver for supporting growth. The core of the technical architecture is the policy management system - Ingenium, is robust and scalable that provides the means to manage the entire life cycle of the policy management process. In continuance with the effort to provide the highest level of customer service, the Company has successfully launched the auto-settle program which automates some of the steps of the issuance process, and will lead to substantial reduction in turn around times.

Due to additional ramping-up and other efforts taken to meet the competition, the breakeven may be delayed by two to three years.

Business outlook:

India is one of the fastest growing markets in Asia in the life insurance industry. It offers a strong potential, driven by buoyant economic growth, increasing penetration, regulatory reforms and rising awareness amongst the population about the need for insurance. BSLI is well positioned to capitalize on these opportunities. The Company has proactively taken steps to increase its distribution reach and is in advanced stages of implementing its plans for rural and micro insurance markets. The Company will continue to remain focused on launching new and innovative products to meet the varied needs of different customer segments.

Performance Review:

The performance of Birla Sun Life Asset Management Company (BSLAMC) has been satisfactory. The Company attained gross revenue of Rs.819 Millions and a net profit of Rs.143 Millions during the year ended 31st March, 2007. The net profit was impacted by higher marketing expenses on new fund offerings and higher proportion of low margin liquid funds in Assets Under Management (AUM) .The Company's AUM stood at Rs.20,8490 Millions.

Business Outlook:

The favorable outlook for GDP growth coupled with high financial savings, healthy capital markets and increasing preference towards investment with the help of professional fund management, augurs well for the mutual fund industry. The Asset management business is witnessing increased competition and growing interest from global players. The Company is looking forward to proactively meeting the forthcoming challenges and has geared itself for the future growth by increasing its reach.

To capitalize on the emerging opportunity and to regain its market position, BSLAMC will focus on increasing distribution reach by adding more branches, providing superior returns to the investors consistently and institutionalizing processes. BSLAMC will continue to focus on innovative product launches.

Performance Review:

Birla Sun Life Distribution attained a gross revenue of Rs.210 Millions and a net profit of Rs.7 Millions during the year ended March 31, 2007.

During FY 2007, the company had mobilized funds to the tune of Rs.26,1670 Millions for various Asset management companies. The AUM as at March 31, 2007 was Rs.4,9530 Millions. The share of equity AUM increased to 27% as at the end of March 31, 2007.

Business Outlook:

The favourable outlook for GDP growth coupled with high financial savings, healthy capital markets and increasing preference towards investment with help of professional fund management portends well for the wealth management industry.

To capitalize on the emerging opportunity as well as with a view to regain its market position, BSDL's thrust will be on increasing distribution reach, providing guidance to its client and institutionalising processes.

Performance Review:

The Financial Services division (FSD) along with Birla Global Finance Company Limited (BGFCL), a subsidiary of the company are among the leading players in the IPO finance and Loan against securities market. Riding on the boom in Capital Markets, the total amount extended to various investors in IPO finance was at Rs.33050 Millions as against Rs.24480 Millions the last year. The total amount of finance extended to various investors under Loan against securities aggregated to Rs.7680 Millions as against Rs.5470 Millions in the previous year. The Company has maintained its leadership position in the IPO finance market. The Corporate Finance Group of Financial Services division / BGFCL are also among the large players in the bills discounting market.

During the year under review, BGFCL successfully marketed housing loans, personal loans, other retail loans and investment products etc worth Rs.4190 Millions to more than 8000 customers. Successive increase in the lending rates by the banks affected the demand of loan products in the last quarter of the year.

Birla Insurance Advisory (BIASL), a subsidiary of the company has created a dominant position for itself in General Insurance broking business in the four years of its existence. It placed a business of over Rs.125 Millions for the year with several non-life insurance companies on behalf of its clients. Birla Insurance Advisory had total revenue of Rs. 82.000 Millions and reported a net profit after tax of Rs.280 Millions for the year ended March 31, 2007. The company has also been issued licence to conduct Reinsurance Broking business by Insurance Regulatory and Development Authority.

Business Outlook:

The increased volatility in capital markets has slowed the pace of new public offerings which should pick up with Companies approaching capital markets to meet their long term fund requirements. Reserve Bank of India has tightened exposure norms for non-banking finance companies. Many more players including a few international ones entering the segment and rising interest rates will put some pressure on margins in the near term. However, with strong economic growth, the long term prospects of the financial services sector remain optimistic. The company will keep its growth momentum by expanding its business operations by strengthening its branch network.

Performance Review:

PSI Data Systems Limited generated revenues of Rs.936 Millions as against Rs.858 Millions in the previous year. The net profit is at Rs.15 Millions as against Rs.13 Millions in the previous year. This has been possible because of the increased thrust on select verticals of Banking, Financial Services and High Technology.

The company has been successful in increasing its high margin offshore business to 50% as compared to 40% in the previous year. Its manpower utilization for the full year has been at about 83%, which is in line with the

industry. The Company has added 20 new clients during the year. Its employee base has been strengthened to 684.

Business Outlook:

The overall outlook for the business is positive with the Indian IT industry regaining momentum, and off-shoring becoming mainstream. PSI Data Systems has ramped up its sales team and is poised to grow with its initiatives for revenue enhancement and curtailing costs. Towards this end, scalability is being built up and delivery capabilities are being strengthened with differentiation in service offering. The company's focus on high growth verticals like Banking, High Technology, Financial Services and Insurance, increasing orders in the high margin off-shore business and strengthening relationships with strategic clients will help it grow further.

FIXED ASSETS:

Tangible Assets

Land

Freehold

Leasehold

Buildings
Lease Hold
Improvements
Plant & Machinery
Furniture, Fixtures &
Iiqutpment
Vechiles and Aircraft
Livestock

Intangible Assets

Goodwill
Trade mark/Brands
Specialised Software

WEBSITE DETAILS:

Profile

Madura Garments is division of Aditya Birla Nuvo, an A V Birla Group Company. India’s leading apparel and retail company owns/have perpetual licence for premier brands like Louis Philippe, Van Heusen, Allen Solly Women’s Wear, Peter England, Byford, Elements and SF Jeans, Madura Garments also plays a significant role as a preferred global supplier for international brands such as Marks and Spencer’s, Tommy Hilfiger, Polo Ralph Lauren and several other discerning international buyers, Pouis Philippe, Van Heusen, Allen Solly, Peter England, Byford, Elements and San Frisco reach the customer through a network of exclusive stores, department chains and premier multi brand outlets both within the outside India. Madura Garments also distributes its brands through its own retail chains namely Planet Fashion and Trouser Town. The company is also well on its way to achieving world class standards of quality, customer service, design and brand equity through empowered and motivated employees.

A DIVERSIFIED CONGLOMERATE

Aditya Birla Nuvo Limited, is the Aditya Birla Group's most diversified conglomerate, with a consolidated turnover of Rs. 48303 millions for FY 2006. It is a leading player in its key business segments, including viscose filament yarn (VFY), carbon black, branded garments, textiles and insulators. Over the past few years, Aditya Birla Nuvo through its subsidiaries has made successful forays into high growth sectors viz. life insurance, IT services and Business Process Outsourcing (BPO), striking a balance between value and growth businesses.

A leading player

:: The second largest producer of viscose filament yarn (VFY) in India

:: The largest branded apparel company in India

:: The second largest producer of carbon black in India and fourth largest in the world

:: Life insurance joint venture, Birla Sun Life Insurance Company Limited, is India's fourth largest private sector insurance company

:: Insulators joint venture with Birla NGK Insulators Private Limited is India's largest and world's fourth largest producer of insulators

:: Amongst top three in third party BPO providers with the acquisition of Minacs

:: Among the best energy efficient fertiliser plants globally

:: Among the first five mobile telephony players in India

:: A leading player in life insurance and asset management in India

Capacities

Business Capacity

Viscose Filament Yarn (VFY) 16,000 tpa

Caustic soda 58,400 tpa

Carbon black 170,000 tpa

Fertilisers 8,64,600 tpa

Flax yarns 6,136 spindles

Wool combing 8,000 tpa

Worsted yarns 22,224 spindles

Synthetic yarns 51,232 spindles

Linen / fire retardant fabrics / other fabrics 62 looms

Insulators 36,000 tpa

BPO 2,235 seats

Expansion underway

Business Capacity

Caustic soda 23,725 tpa

Linen fabric 58 looms

Carbon Black 55,000 tpa

BPO 450 seats

Aditya Birla Nuvo's products and brands:

:: BPO

:: Carbon Black

:: Fertilisers

:: Financial services

:: Garments

:: Insulators

:: Insurance

:: IT services

:: Telecom

:: Textiles

:: Viscose Filament Yarn (VFY)

PRESS RELEASE

30^th July, 2007

Aditya Birla Nuvo reports good performance for the quarter ended 30 June 2007
Click here to view the results

	Q1 FY08
Consolidated net sales	Rs. 23208 Millions 78 per cent
Consolidated net profit	Rs. 998 Millions 50 per cent

Particulars	Consolidated
	Quarter ended 30 June
	2007	2006	Growth per cent
Net income from operations	2,320.8	1,305.7	78
Operating profit (PBDIT)	307.2	221.1	39
Profit before depreciation and tax	221.5	170.3	30
Net profit (after minority interest)	99.8	66.7	50
EPS (Rs.)	10.7	7.5	43

Aditya Birla Nuvo has posted good performance for the first quarter ended 30 June 2007.

Substantial growth in revenues

The company's consolidated revenues increased by 78 per cent from Rs. 13057 Millions to Rs. 23208 Millions. Revenues from its subsidiaries and joint ventures, where the company has made substantial investments in the past, saw a phenomenal rise of 202 per cent, from Rs. 5225 Millions to Rs. 15798 Millions. All the businesses are on high growth trajectory.

Telecom business has shown a spectacular growth in revenues from Rs. 8999 Millions to Rs. 14773 Millions up by 64 per cent
In the BPO sector revenues have soared from Rs. 481 Millions to Rs. 3524 Millions with the acquisition of Minacs on 18 August 2006
Life insurance has reported a total income of Rs. 6254 Millions, up by 205 per cent with an increase in its distribution reach
However, standalone revenues declined from Rs. 7832 Millions to Rs. 7410 Millions . This was on account of the transfer of contract export business to a wholly-owned subsidiary on 1 July 2006 and a planned shutdown at the fertilisers plant for 42 days for maintenance and de-bottlenecking.

Growth in consolidated net profit

The company's consolidated net profit of Rs. 998 Millions grew by 50 per cent over Rs. 667 Millions attained in the corresponding quarter of the last year.

The contribution of joint ventures and subsidiaries to net profit has jumped from Rs. 104 Millions to Rs. 733 Millions

Telecom's net profit at Rs. 3085 Millions vis-à-vis Rs. 892 Millions earned in the corresponding quarter of the last year is commendable. The growth in profitability is despite launches in three new circles.

Life insurance incurred higher losses due to higher spends on augmenting its sales force and opening new branches to regain the market share.

The BPO business bottom line has been constrained by the interest burden on funding its new acquisition and by the weakening of US Dollar.

The company's standalone net profit has been impacted by the planned shutdown at the fertilisers plant for 42 days, which reduced the profits of the fertilisers business substantially. High interest cost on borrowings for funding of investment in Idea and various capex initiatives also impaired profitability. Additionally, the profits of Madura Garments were lower due to a massive ramp up. Hence the standalone net profit is down from Rs. 563 Millions to Rs. 265 Millions.

Business performance

Garments
Branded garments business continued to expand its retail space. Branded garments business revenues grew, on like-to-like basis, by 14 per cent from Rs. 1413 Millions to Rs. 1612 Millions. Operating profit saw a decline with stock liquidation, high lease rentals, high discount and the dormancy phenomena across the industry.

The contract exports business has been divested into Madura Garments Exports Limited from 1 July 2006. On a like-to-like basis volumes increased through the revenues were almost flat at Rs. 392 Millions impacted by a stronger Rupee. The phase I of a new facility to manufacture shirts is slated to commence production from August 2007.

Rayon division

Rayon division recorded revenues of Rs. 1040 Millions against Rs. 1122 Millions in the corresponding quarter of the last year. VFY segment revenues were at Rs. 700 Millions, impacted by lower sales volumes of VFY. In the chlor-alkali segment, revenues declined by 12 per cent at Rs. 340 Millions due to lower ECU realisation.

Carbon black division

Capitalising on the vibrant auto sector, the Carbon black division continues to show a good performance. Revenues stood at Rs. 1612 Millions vis-à-vis Rs. 1751 Millions in the corresponding quarter of the last year, on account of lower sales volumes due to the plant shutdown for annual maintenance. The brownfield capacity expansion of 60,000 mtpa at Gummidipondi has been commissioned in July 2007.

Textiles division

Textiles division's revenues have dropped by 4 per cent from Rs. 1548 Millions to Rs. 1488 Millions In the wool segment, revenues have stepped up. In line with its strategy to exit from the synthetic segment, the Rajashree Syntex unit at Midnapur was divested on 1 July 2007. Operating profits have been flat at Rs. 159 Millions despite downsizing in the synthetic segment.

Fertilisers division

The net turnover of the fertiliser division stood at Rs. 1163 Millions with operating profit at Rs. 170 Millions. Both are lower compared to the corresponding quarter of the last year because of the plant shutdown for maintenance and de-bottlenecking.

Insulators business

Insulators business has reported revenues of Rs. 841 Millions vis-à-vis Rs. 534 Millions attained in the preceding year, and a higher operating profit at Rs. 265.800 Millions as against Rs. 824 Millions in Q1 of FY 07. The preceding year's revenues and operating profit were constrained by the strike at Halol plant. An optimised product mix improved realisations in the growing market for insulators.

Telecom business

In the telecom business, Idea Cellular ended the quarter with a subscriber base of 16.13 mn, adding 2.12 mn subscribers during the quarter. In its current 11 service areas of operation, Idea consolidated its subscriber market share from 14.9 per cent at the end of March 2007, to 15.4 per cent at the end of June 2007. Revenues for the quarter showed an impressive jump of 64 per cent at Rs. 14773 Millions. The company posted a healthy rise in profits despite the gestation period for the three newly rolled-out circles putting pressure on EBITDA margins.

Financial services

In the life insurance business at Birla Sun Life Insurance, the total income rose by 205 per cent to Rs. 6254 Millions. The individual business annualised premium grew by 44 per cent at Rs. 3446 Millions. The company is focusing on expanding its distribution reach. During the quarter the direct sales force has increased from 56,603 to 60,676. As a result of these long-term investments, net loss is higher at Rs. 336 Millions from Rs. 193 Millions in the corresponding quarter of the preceding year.

In the asset management business at Birla Sun Life Asset Management Company, assets under management (AUM) stood at Rs. 21,5940 Millions with a domestic market share of 4.9 per cent. The business reported revenues of Rs. 201 Millions and net profit at Rs. 17 Millions.

ITES/IT
In the BPO business, an important step was taken by re-branding of Transworks-Minacs as Aditya Birla Minacs. At TransWorks, revenues stood at Rs. 422 Millions as against Rs. 481 Millions in Q1 FY 07 and net loss at Rs. 31 Millions as against net profit of Rs. 63 Millions in Q1 FY 07. Minacs reported revenues at Rs. 3102 Millions and net loss at Rs. 48 Millions. The weakening of the US Dollar and higher interest cost on borrowings for the acquisition of Minacs have affected this business's profitability.

In the software business at PSI Data Systems, revenues stood at Rs. 235 Millions against Rs. 232 Millions in the corresponding quarter of the last year.

Merger of Aditya Birla Insulators Limited

The Board of Directors of the company, at its meeting held on 3 May 2007, have approved, subject to requisite approvals, the merger of Aditya Birla Insulators Limited (ABIL), a wholly owned subsidiary of the company, with the company with effect from 1 April 2007 through a Scheme of Amalgamation (Scheme), u/s 391 to 394 of the Companies Act, 1956. On the Scheme coming into effect, the business of ABIL will be transferred to the company on an on-going concern basis.

Growth initiatives

Madura Garments will aggressively pursue retailing of lifestyle and popular brands by expanding its reach with larger store size besides creating specialised outlets
Carbon black is working on the environmental clearance for 1,20,000 tpa greenfield project in Western India
Textiles will increase its capacity in linen fabrics and flax yarns
Fertilisers will focus on de-bottlenecking to increase capacity
Insulators business is expanding its capacity and investing for yield improvement
Telecom will strengthen and expand its network in existing circles and better its reach through a roll-out in Mumbai and Bihar circles. Plans for acquiring licences in the remaining circles are underway
Birla Sun Life Insurance's emphasis is on regaining its market position of being amongst the top three, increasing the branch network, strengthening its agency force and launching contemporary products
AMC and distribution have aggressive branch opening plans as well
The BPO business is working on a global delivery model with an additional share of KPO business

In most of our businesses, we are going ahead with our investment plans to leverage growth opportunities. Aditya Birla Nuvo is very optimistic about meeting the challenges of strategic growth initiatives and stretching out in the short term.

3 May 2007

Aditya Birla Nuvo reports good performance for year ended 31 March 2007

	Fourth quarter	Full Year
Consolidated net sales	Rs.25441 Millions 45 per cent	Rs. 82580 Millions 65 per cent
Consolidated net profit	Rs.825 Millions 18 per cent	Rs. 281.238 per cent

Particulars	Consolidated [Rs in Millions]
	Quarter ended 31 March			Full year ended on 31 March
	2007	2006	Growth %	2007	2006	Growth %
Net income from operations	2,5441	1,7550	45	8,2580	5,0069	65
Operating profit (PBDIT)	3050	1998	53	1,1391	6157	85
Profit before depreciation and tax	1956	1636	20	7762	5119	52
Net profit (after minority interest)	825	701	18	2812	2041	38
EPS (Rs.)	9.0	7.9	14	32.0	26.1	23

Aditya Birla Nuvo has posted good performance for the year ended 31 March 2007.

Substantial growth in revenues

The company's consolidated turnover of Rs.82580 Millions is up by 65 per cent over Rs.50069 Millions achieved in the preceding year. The company's standalone turnover at Rs.34205 Millions grew by 29 per cent vis-a-vis Rs.26420 Millions attained in the preceding year.

Revenues from its subsidiaries and joint ventures, where the company has made substantial investments in the past, saw a phenomenal rise of 105 per cent, from Rs.23649 Millions to Rs.48375 Millions.

All the businesses are on high growth trajectory.

Ø Telecom business has shown a spectacular growth in revenues from Rs.29655 Millions to Rs.43664 Millions up by 47 per cent, almost doubling the subscriber base. During the year, the company raised its stake in Idea Cellular from 20.74 per cent to 31.78 per cent (post IPO)

Ø In BPO business, revenues have soared to 10155 Millions with the acquisition of Minacs on 18 August 2006. In the preceding year, revenues stood at Rs.1633 Millions.

Ø Life Insurance has reported a total income of Rs.19600 Millions, up by 24 per cent with an increase in its distribution reach.

Ø Garments business achieved a turnover of Rs.8304 Millions vis-a-vis Rs.6206 Millions while maintaining its industry leadership.

Growth in profit across businesses

The company’s consolidated net profit of Rs.2812 Millions grew by 38 per cent over Rs.2041 Millions in the preceding year.

Its standalone net profit at Rs.2250 Millions is higher by 20 per cent as against Rs.1869 Millions earned preceding year. At the operating level all the businesses have done well. The company’s standalone operating profit is up by 36 per cent at Rs.6038 Millions. A major rise in interest cost on account of borrowings for the acquisition of a higher stake in Idea has strained profit numbers, which could have been much higher.

The contribution of joint ventures and subsidiaries to net profit has been at Rs.563 Millions as against Rs.171 Millions preceding year.

Ø Telecom’s net profit at Rs.5033 Millions vis-a-vis Rs.2118 Millions earned preceding year is commendable. The growth in profitability is despite launches in three new circles.

Ø Life insurance incurred higher losses due to higher spend on augmenting its sales force and opening new branches to regain the market share.

Ø The BPO business bottom line has been impacted by the interest burden on funding its new acquisition, restructuring and accounting readjustment at Minacs, to bring it at par with Indian accounting standards.

Ø In the standalone businesses, garments and Carbon Black have substantively contributed to the operating profit of the company.

Successful completion of the rights issue

The company has raised Rs.7772 Millions through a rights issue. The equity share capital of the company has increased from Rs.835 Millions to Rs.933 Millions. The proceeds are being used for repayment of debt and fresh investments in Idea.

Dividend

The company had paid an interim dividend of 55 per cent in March 2007 which was treated as the final dividend for the current year as against 50 per cent preceding year. The dividend outgo, including dividend tax, has been at Rs.585 Millions against Rs.476 Millions preceding year.

Standalone performance

Garments

In branded garments business, fashion brands viz. Louis Philippe, Van Heusen, Allen Solly and Espirit saw a healthy growth supported by new launches. The popular brand Peter England continued to expand its reach. Innovative merchandise and creative campaigns have resulted in an upsurge in brand equity; further entrenching Madura Garments’ leadership status. The division is aggressively expanding its controlled retail space.

Branded garments business revenues grew, on like to like basis, by 28 per cent to Rs.6704 Millions vis-à-vis Rs.5257 Millions recorded in the preceding year. Operating profit, on like to like basis, is up by 33 per cent supported by better channel mix and pricing despite high discount and the dormancy phenomena across the industry.

The contract exports business has been divested into Madura Garment Exports Limited from 1 July 2006. Volumes increased through capacity expansion and revenues grew, on like to like basis, by 58 per cent to Rs.1732 Millions. A new facility to manufacture shirts is slated to be completed by August 2007, which will give a fillip to the contract exports business.

Rayon division

VFY segment recorded sales volumes at 17,039 tonnes against 17,380 tonnes in the preceding year. Aided by a 13 per cent increase in realisation rates, revenues stepped up by 11 per cent to Rs.2886 Millions as against Rs.2604 Millions in the preceding year.

In chlor-alkali segment, ECU realisation remained flat but the volumes rose by 18 per cent backed by expanded caustic soda capacity. This resulted in a 22 per cent growth in revenues at 1528 Millions as against Rs.1252 Millions in the preceding year.

Carbon Black division

Capitalising on the vibrant auto sector growth Carbon Black division continues to show a robust performance. Sales volumes stood at 180,893 tonnes, the highest ever recorded in a year. Realisation is up by 27 per cent on account of high CBFS prices and optimised product, market and logistics mix. Revenues at Rs.7389 Millions extended by 31 per cent vis-à-vis Rs.5642 Millions attained in the preceding year. Operating profits are higher by 43 per cent at Rs.1322 Millions.

Textiles division

Textiles division’s revenues have gone up by 18 per cent to Rs.6250 Millions as against Rs.5277 Millions in the preceding year. Operating profits increased by 19 per cent at Rs.674 Millions despite downsizing in the synthetic segment which is being phased out. Linen fabric volumes remained flat. Linen yarn witnessed increase in volumes and the wool segment outperformed with higher volumes and realisations.

Fertilisers division

Increased operational efficiencies coupled with the rising demand for urea, aided the fertiliser division’s production and sales to reach highest levels at 10.28 lakh mt and 10.44 lakh mt respectively for the year ended 31 March 2007. Its net turnover stood at Rs.7785 Millions, while operating profits have been impressive at Rs.1296 Millions. The stringent pricing policy norms announced on 8 March 2007 (with retrospective effect from 1 October 2006) have affected the profits for second half year.

Insulators business

Insulators business has reported revenues of Rs.2895 Millions vis-a-vis Rs.3625 Millions attained in the preceding year. Revenues have been affected by an illegal strike at the Halol plant for major part of the year. After amicable settlement with the workers in December 2006, the working of the plant is normalised now at improved efficiency, the full benefit of which of will be reflected in financial year 2007-08. The business has reported a higher operating profit at Rs.543 Millions as against Rs.440 Millions in the preceding year, supported by improved realisations and a strong demand for insulators.

Other joint ventures and subsidiaries

In telecom business, Idea Cellular’s subscriber base at 14.01 million doubled over preceding year, recording an 8.63 per cent market share. Revenues for the year showed an impressive jump of 47 per cent at Rs.43664 Millions. The company posted a healthy rise in profits despite the gestation period for the three newly rolled out circles putting pressure on EBITDA margins. Idea strengthened its balance sheet by raising Rs.28190 Millions through an IPO and pre- IPO placement. Post IPO, Nuvo’s share in Idea has diluted to 31.78 per cent. The Mumbai and Bihar circles are expected to be operational by Januray 2008.

In life insurance business at Birla Sun Life Insurance, the total premium income grew by 41 per cent to Rs.17352 Millions. The individual business annualised premium grew by 41 per cent at Rs.15750 Millions. The company is focusing on expanding its distribution reach; today it has 137 branches as against 85 in the preceding year and the direct sales force has increased to 56,603 from 17,986 in preceding year. As a result of these long-term investments, net loss has increased to Rs.1397 Millions from Rs.611 Millions in the preceding year.

In the asset management business at Birla Sun Asset Management Company, assets under management (AUM) stood at Rs.208490 Millions with 5.8 per cent market share. Business reported revenues at Rs.819 Millions and net profits at Rs.143 Millions.

In BPO business, at TransWorks, revenues rose by 21 per cent to Rs.1972 Millions supported by the improved share of non-voice business. Minacs reported revenues at Rs.8184 Millions for the period from 18 August 2006, the date of its acquisition to 31 March 2007. The profits of Minacs have been affected by unusual items like one time restructuring cost and accounting readjustment expenses. In Philippines, the Manila centre went live in March 2007.

On a combined basis, the BPO business has 21 delivery centres in seven countries across three continents. With a global client base including 15 Fortune 500 companies, the business supports customers in 30 different languages. It has over 11,000 employees worldwide. The BPO business now has a global delivery model with integrated management and marketing structure.

In software business at PSI Data Systems, revenues stood at Rs.936 Millions with a positive bottom line. The company has ramped up its sales team and net staff strength is up from 573 to 684 during the year. The company has added 20 marquee clients while focusing on core verticals viz. corporate banking and high tech.

Merger of Aditya Birla Insulators Limited

The Board of Directors of the company, at its meeting held on 3 May 2007, have approved, subject to requisite approvals, merger of Aditya Birla Insulators Limited (ABIL), a wholly owned subsidiary of the company, with the company with effect from 1 April 2007 through a Scheme of Amalgamation (Scheme), u/s 391 to 394 of the Companies Act, 1956. On the Scheme coming into effect, the business of ABIL will be transferred to the company on an on going concern basis.

Growth initiatives

Ø Madura Garments will aggressively pursue retailing of lifestyle and popular brands by expanding its reach with bigger size stores besides creating specialised outlets

Ø Carbon Black's brownfield expansion of 60,000 tpa is targeted by the end of June 2007. Land acquisition for 1,20,000 tpa greenfield project in western India is being accelerated

Ø Fertilisers will focus on debottlenecking to increase capacity

Ø Textiles will increase its capacity in linen fabrics and flax yarns

Ø Insulators is expanding its capacity and investing for yield improvement

Ø Birla Sun Life insurance's emphasis is on regaining its market position of being amongst the top three, increasing the branch network, strengthening its agency force and launching contemporary products

Ø AMC and Distribution have aggressive branch opening plans as well

Ø The BPO business is working on a global delivery model with an additional share of KPO business

Ø Telecom will strengthen and expand its network in existing circles and better its reach through a roll out in Mumbai and Bihar circles. Plans for acquiring licences in the remaining circles are underway. National long distance roll out is being worked upon.

Investments in various businesses are happening in their growth phases which seem to be coinciding. Aditya Birla Nuvo is very optimistic about coping

with the challenges of strategic and growth initiatives and stretching out in the short term.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.39.36
UK Pound	1	Rs.78.29
Euro	1	Rs.58.48

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	9
PAID-UP CAPITAL	1~10	9
OPERATING SCALE	1~10	9
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	10
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	9
--RESERVES	1~10	9
--CREDIT LINES	1~10	9
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	YES
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		81

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

MIRA INFORM REPORT

Branch Auditors

NETWORTH

TOTAL BORROWING

TOTAL

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]

Capital work-in-progress

INVESTMENT

CURRENT ASSETS, LOANS & ADVANCES

Inventories

4752.600

5263.300

3550.000

Sundry Debtors

5959.900

4154.400

2609.000

Cash & Bank Balances

227.400

203.200

94.100

Loans & Advances

3584.000

6641.800

1038.800

Total Current Assets

14523.900

Less : CURRENT LIABILITIES & PROVISIONS

Current Liabilities

5938.800

4247.800

2285.800

Provisions

596.500

739.200

379.400

Total Current Liabilities

6535.300

Net Current Assets

7988.600

11275.700

MISCELLANEOUS EXPENSES

TOTAL

Unit