Aditya Birla Nuvo has posted excellent results for the year ended 31st
March 2006.

Its consolidated turnover of Rs. 4759.36 Crores, is up by 49.2% over
Rs. 3189.11 Crores achieved in the previous year, also placing the
company in the billion dollar league. Net profit has leapfrogged to
Rs. 190.67 Crores against Rs. 58.72 Crores in the previous year.

Revenue from its subsidiaries and associates rose from Rs. 1328.26
Crores to Rs. 2148.95 Crores. Their performance has been impressive,
with Nuvo’s share in profit of JV’s and Subsidiaries jumping from
negative Rs. 55.00 crores to positive Rs. 13.74 crores, mainly driven
by the BPO, and the Telecom business. During the year, the Company
increased stake in Idea Cellular from 4.3% to 20.7%

The Company’s stand-alone turnover at Rs. 2610.40 Crores, grew by
40.3% vis-=E0-vis Rs. 1860.84 Crores attained in the previous year. This
is inclusive of Rs. 368.98 crores reached by its fertilisers business,
incorporating the period from September to March. The Company’s
stand-alone operating profit, also reflecting fertiliser’s profit of
Rs.75.95 Crores, is up by 56.5% at Rs. 413.46 Crores. Stand-alone net
profit is higher at Rs. 176.92 Crores against Rs. 113.72 Crores,
despite a major rise in interest on borrowings to fund the acquisition
of the 16.5% additional stake in Idea Cellular.

Dividend

The Board of Directors has recommended a dividend of 50% for the
current year as against 40% last year. The company will also pay a
dividend tax of 14.025%. The dividend outgo will therefore be Rs.
42.71 Crores.

Madura Garments

Several new stores augmented Madura Garment’s, salient retail
presence, currently at 3.1 lacs sq ft. To give the customer an
international retail experience, the division is aggressively
expanding large format exclusive brand outlets, along with selected
stores. The Esprit brand, which it launched recently in India, has met
with an encouraging response.

Louis Philippe, Van Huesen and Allen Solly - its fashion brands and
Peter England - its popular brand, consolidated their market share,
registering strong profitable growth. Innovative merchandise and
creative campaigns has resulted in an upsurge in brand equity, further
entrenching its leadership status.

MG’s revenue has thus soared by 31.3% to Rs. 620.55 Crores vis-=E0-vis
Rs. 472.63 Crores recorded in the previous year. Strong growth across
its product range particularly in Shirts, Trousers and Suits boosted
revenue growth. Operating Profit is up by 46.9%.

The thrust on Contract Exports towards providing full service is
paying off. To give a fillip to Madura Garment’s Contract Exports
business, a capex of Rs. 46 Crores has been planned to increase
capacity, strengthening design and product development.

Rayon Division

The Rayon Division recorded its highest ever volumes at 17,380 tonnes,
higher by 5.7% over the previous year. Aided by strong volume growth,
revenues increased by 9.5% to Rs. 385.55 Crores as against Rs. 352.00
Crores in the previous year. VFY realisation is marginally lower than
previous year, though it improved in the later part of the year. With
the levy of anti-dumping duty against Chinese imports, realisation is
expected to improve.

In the chlor-alkali segment, the expanded caustic soda capacity has
been fully utilised, leading to enhanced revenues. However, ECU
realisation remained volatile, and is marginally lower than the
previous year. The Division’s operating profit is flat at Rs. 89.71
Crores (Rs.87.62 crores) despite high input prices and maintenance
cost. The 20MW captive power plant and 65 TPD caustic soda expansion
is on track.

Carbon Black Division

The Carbon Black Division has shown a robust performance. Total
volumes grew by 6.6% at 175,944 tons, the highest ever recorded in a
year, on the back of a vibrant auto sector. Realisation is up by 13.3%
supported by a change in market and segment mix and the partial
passing on of the high CBFS prices to its customers. Revenues at Rs.
564.23 Crores grew by 20.8% vis-=E0-vis Rs. 467.25 Crores attained in
the previous year. Operating profits are higher by 19.7% at Rs.92.37
Cores. While the Company is pursuing environmental clearance for
55,000 TPA brown-field expansion, the division is also exploring
possibilities to set up a green-field project of 60,000 TPA in Western
India.

Textiles Division

The Textiles Division’s revenues have gone up 15.1% to Rs. 524.80
Crores as against Rs. 456.12 Crores in the preceding year. Operating
Profits jumped by 69.9% buoyed by a strong performance across
segments. Its Linen fabric segment continued on its expansive growth
trajectory gaining from higher volumes and better realisations. Value
added products and enhanced volumes spurred the performance of the
Worsted segment, while Synthetic yarn segment was impaired due to a
demand supply mismatch.

Fertilisers Division

Increased operational efficiencies coupled with rising demand for urea
fertiliser, aided the Fertiliser division’s production and sales
reaching higher levels at 5.76 lacs MT and 5.64 lacs MT respectively
for the period from 1st September, 05 to 31st March, 2006,
representing 115% of re-assessed capacity. The net turnover stood at
Rs. 368.98 Crores for the seven months ending March 31, 2006, while
operating profits have been impressive at Rs. 75.95 Crore.

Insulators Domestic Marketing

A Strong demand in the Transmission and Distribution segment led to a
20.4% volume growth in the insulators business. Revenue at 135.89
crores reflect a 35.7% rise stemming from higher volumes and better
realisation.

BIRLA NGK Insulators Private Limited, the 50:50 JV with NGK has posted
a turnover of Rs.226.60 crores, a growth of 34.2%. Led by NGK experts,
yield improvement efforts are being pursued. The JV has substantially
curtailed its losses from Rs.25.33 crores in the previous year to
Rs.3.62 crores in the current year.

Other Joint Ventures and Subsidiaries

At Birla Sun Life Insurance, the total premium income has grown by
36.7% to Rs. 1237.84 Crores. The Individual new business annualised
premium advanced by 16% at Rs. 711.11 Crores. The Group business was
impacted by the intense pricing pressure from the competitors. The
Company has multiplied its branches; today it has 85 branches as
against 44 in the preceding year. The company is focusing on expanding
its branch network by adding another 31 in the ensuing year, while
ramping up the agency force considerably. It has an agency force of
18,000.

At TransWorks, revenues have risen significantly by 50.9% to Rs.
163.30 Crores vis-=E0-vis Rs. 108.23 Crores in the previous year. While
four new major clients were added, business from existing clients was
ramped up. The Company has also been able to improve its business mix
with a growing share of outbound and non-voice business. Further, the
company increased its seat capacity to 2,235 (1656) and strengthened
its employee base to 4100 for catering to its fast growing business.
The Company is optimising its infrastructure utilisation leading to
improved margins, and has wiped off all carried forward losses.

At PSI Data Systems, the business has turned into the black with
positive net profits on improved margins. Revenues stood at Rs. 85.79
Crores. Gross margins improved from 36% to 39% through an increased
share of high margin offshore business and improved manpower
utilisation. The Company has added 11 clients while focusing on core
verticals namely Corporate Banking, High Tech and Testing.

IDEA Cellular’s subscriber base grew by 45.3% to 7.37 million.
Revenues for the year showed an impressive jump of 31.1% at Rs.
2965.78 Crores. The Company has an 8.2% market share in the total
mobility segment. It enjoys a predominant position in Maharastra,
Gujarat, Andhra Pradesh, Kerala, Madhya Pradesh, Delhi, U.P. (E) and
Haryana, and is planning to roll out in three new circles, increasing
its presence in 11 circles.

Strategic Highlights

The Company has merged Indo Gulf Fertilisers with Aditya Birla Nuvo,
effective September 1, 2005. Its accounts include the seven months
financials of the Indo Gulf fertilisers.

Status of Consolidation of Birla Global Finance with Aditya Birla Nuvo

The Company is taking necessary steps to complete the corporate
restructuring to merge Birla Global Finance with Aditya Birla Nuvo.
The scheme of amalgamation between Birla Global Finance and Aditya
Birla Nuvo has been sanctioned by the Hon’ble High Court, Mumbai on
January 27, 2006. However, the sanction from High Court of Gujarat is
pending.

Going Forward

Overall, the outlook for Aditya Birla Nuvo is optimistic given its
strategic thrust, growth and capex initiatives taken in each of the
businesses.

– Madura Garment thrust will continue on retail expansion,
merchandise management, sell thrus and optimising cost. In export
manufacturing, strengthening manufacturing, design and product
development is on the cards
– VFY’s focus is on improving quality. To offset the declining ECU
realisation, endeavours to improve productivity and reduce costs are
ongoing.
– Carbon Black will push volumes in domestic market and pass on the
increased CBFS cost to its customers.
– Fertilisers will focus on increasing share of value added products
while maximising volumes through higher operational efficiency,
increased on-stream days and de-bottlenecking to increase capacity
– Textiles will gain from the focus on value added yarns and the
retail reach of Linen Fabrics.
– The Insulator JV will continue its emphasis on higher value
products and yield improvement
– Birla Sun Life insurance’s emphasis is on increasing the branch
network and strengthening its agency force while enriching its product
portfolio
– BPO - is geared to up its performance through expanding and
optimally utilising its seat capacity through existing new clients and
raising its service quality.
– IT Services - attention will be on building scalability to support
business growth and improving delivery capabilities
– Telecom - will be expanding its reach through a roll out in three
new circles. Its debt restructuring will further strengthen the
company.