INDIAN RAYON AND INDUSTRIES LIMITED - Aditya Birla Nuvo, Ltd

Birla Sunlife Insurance Company Ltd.Insurance Regulatory Development Authority (IRDA) has granted licence to Birla Sunlife Insurance Company Ltd in February 2001.The life insurance business has started towards end of March 2001.Bina Power Supply Company LimitedBina Power Supply Company Ltd. is setting up a 578 MW coal based Power generation facility at Bina in Madhya Pradesh in a jointventure with M/s. Power Gen of U.K.Consequent to division of the State of Madhya Pradesh and formation of Chattisgarh State Electricity Board, CRISIL has beenrequested to undertake a fresh study on the availability and allocation of Escrow Circles. In the meantime, Bina Power has been grantedEscrow Circles worth Rs.38 Crores monthly on a provisional basis.The project will gather momentum once the payment security mechanism is finalised by Ministry of Power.Rosa Power Supply Company LimitedRosa Power Supply Company Limited is setting up a 567 MW coal based thermal power plant at Rosa, Dist. Shahjahanpur, U.P. Allthe major project contracts and agreements have been executed / in an advanced stage of execution. The Company is targeting to achievefinancial closure within this calendar year.INTERNAL CONTROL SYSTEMManagement Information Systems (MIS) is the backbone of our control mechanism. Clearly defined roles and responsibilities downthe line for all managerial positions have been institutionalised. All operating parameters are monitored and controlled. Regularinternal audits and checks ensure that responsibilities are executed effectively and that the MIS is flawless among a well-conceived annualplanning and budgeting system.Any material change in the business outlook is reported to the Board. Material deviations from the annual planning and budgetingare reported on a quarterly basis to the Board. An effective budgetary control on all capital expenditure ensures that actual spending isin line with the capital budget.HUMAN RESOURCE MANAGEMENTThe Company presently has 11,002 employees on its rolls. These – its human resource assets, are integral to the Company‘s ongoingsuccess. They have been instrumental in uplifting the Company to its performance levels. The Company‘s Human Resource processes havebeen explained in depth in the Director‘s Report.CONCLUSIONTo sum up, all our key businesses except carbon black have demonstrated significant improvement in performance during the year.Going forward, the Garments business will continue to be the key driver of growth, despite short-term challenges faced by the Company.Insulators business has demonstrated improvement during the year under review and is expected to report further improvement inoperations next year. VFY should regain its past glory as well. However, the carbon black business is witnessing sharp fluctuations in thedomestic and export markets, but softening of global oil prices is a positive development for the business. With focus on all roundimprovements in marketing, assets utilizations and cost control, we are confident of delivering superior results in the years to come andenhancing shareholder value.CAUTIONARY STATEMENTStatements in this “Management’s Discussion and Analysis” describing the Company’s objectives, projections, estimates, expectationsor predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results coulddiffer materially from those expressed or implied. Important factors that could make a difference to the Company’s operations includeglobal and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in theCompany’s principal markets, changes in Government regulations, tax regimes, economic developments within India and the countrieswithin which the Company conducts business and other factors such as litigation and labour negotiations.19