General Information

No of Share Holders 164,847

Price per Share 543 Rs.

In the Cellulosics Fiber Business, while as a Group we enjoy a leadership position

globally with a 22 % market share; our intent is to take the business to a new level. Aditya
Groups plan to expand its capacity by around 20% from its existing level of 257,325 MT per
annum. As we expand, we will be requiring far larger quantity of pulp. Our strategy to
maintain our edge dedicates the setting up of Holistic backward integration right from the
plantation stage to final Viscose Staple Fiber(VSF) production we have their for envisioned
an integrated plantation and Pulp Project with a 200,000 TPA capacity Laos in join ventures
with our group Company. The project will be implemented in two stages- 1 st the plantation
phase and 2nd the commissioning of the pulp plant which would coincide with the harvest of
the first plantation, viz, the 7th year.

Company continuous to be market leader in the Viscose Staple Fiber (VSF) sector,
having notched a world wide market share of 12% and well positioned to capitalize on
emerging opportunities to make the growing demand for VSF in INDIA, as well as South
Asian Countries, we are expanding our capacity by around 50,000 tones at a capex of Rs. 368
Crores.
Company plans for backward integration in pulp have been further strengthened.
Nackawic Pulp Mill, which was acquired during the year jointly other group companies has
all ready started producing grade pulp. Rayon Grade Pulp will roll out by the 2nd quarter of
FY 08.
Specialty Fibers, such as Spun Died Fiber, model and viscose plus, which cater to the
premium of the fiber market, has stemmed from the company research and the application
center at Kharach (Gujarat). It continues to the development of new application and value
added products which will translate in to a rise in the demand for VSF.
The out look for the VSF business is bright, given the anticipated rise in demand post
MFA abolition the planned capacity expansion and bolstering of the captive supply of quality
pulp.
The comical business is on the growth truck as the VSF sector, and the end user keep
ascending. The residual Caustic soda capacity, based on the mercury cell technology, will
transits to the new energy efficient memorial cell technology at an investment of Rs. 148
Crores. The converted plant is expected to go on strength by the third quarter of the ensuring
fiscal.

Kumar Mangalam Birla

Many years ago, after the death of the Pope, when he
was being taken to heaven, his new home, he was joined
by a businessman. As both of them got talking with one
another, the Archangel came with a set of keys to take the Pope and the businessman to their
new abodes. The businessman was totally aghast to find that the Pope was being taken to a
multi-storied apartment, while he himself was being escorted to a fine looking sprawling
bungalow. Naturally he thought that there was some mistake. So he said to the Archangel that
he was only a businessman and that the other person was the Pope. To which the Archangel
quipped, "Oh, I know that for sure. But you see, we already have 200 Popes here and you are
the first businessman to be welcomed in heaven".

Humour aside, why are we focusing so much on

the primacy of values in business? I believe, the days are
long past when the business of business was just
business. The idea that a corporation is merely a legal
abstraction, devoid of heart and soul, no longer has
legitimacy. The corporation may be an economic
wunderkind — but it falls short and often falls apart if it
does not meet the needs of society, or if it does not act
with a conscience. Today, no stakeholder — be it
shareholders, employees, community or government —
would accept a business whose rationale is limited to
profits at any cost — or only to compulsions of its
immediate business. It has by now been categorically demonstrated in research after research
that investors are willing to pay a substantial premium for good governance because, over
time, good governance flows through to superior performance and higher valuations.
So let me zero in on this accent on values. Maximising value, of course, has to be a
prime objective for any corporation. But it is value — plus 's' added on, i.e., values — that
will ensure the sustainability and survival of an organisation. In this case the addition of a
single letter makes all the difference — value and values! So superior values leads to superior
value for stakeholders.
The values of an organisation define its character and personality. They guide, shape
and influence behaviour and actions. The external world perceives and responds to an
organisation based on the way it goes about conducting its business. The world of business
even today is going through a crisis of trust, where the credibility of business leaders and the
very legitimacy of business organisations are being questioned. corporation, its values.

This leads to the premise that values and business objectives are
not mutually exclusive. Doing business with a strong sense of values is a
win-win game for all. Customers, employees, suppliers and investors
trust organisations that live by a clear set of values. Trust is invaluable
and is intrinsic to building a strong brand equity, which commands a
premium. Within the same industry, companies that enjoy a score higher
on ethics and principles also seem to command more respect, which
leads to long-term gains — by way of higher customer trust, greater
market share, higher stock valuations. Most important, good corporate
behaviour tends to attract the best talent to work for an organisation. So
being good is not only good in itself, but also very good for business
growth and sustainability.
Let me also talk about how values enhance the effectiveness of
organisations. I believe that the articulation of a common set of values enables organisations
to pull in a common direction, gives employees something they can easily identify with, helps
them to find common cause with each other and creates a common sense of purpose. It also
makes the assimilation of new employees and cultures easier and faster in periods of rapid
growth. It gives everyone in the organisation a sense of clarity so that, when put on the spot,
they can act with a high degree of confidence. There's no doubt that people contribute more
when they can relate to an organisation, when they can understand the organisation — and
when the values of the individual and the organisation are in harmony. Let me reinforce the
idea of values, by citing examples — at the level of the individual and at the organisational
level.
At the individual level, take for instance the example of successful athletes, who were
hailed as heroes for their outstanding performance, only to be later on found to be guilty of
substance abuse. At the business level, take the example of the housing sector in India. Until
even a decade ago, it was like the 'Wild West' — unscrupulous builders, poor construction
quality, unofficial payments and flimsy or non-existent consumer rights and questionable
lending practices. These unethical practices stunted the housing sector, despite the huge
potential demand. HDFC introduced order, transparency and ethical practices into the
housing industry to a considerable extent.
I would also like to underline that values vary across cultures and environments.
Societal culture has a strong bearing on value systems. For example, the sanctity of contracts
differs across countries. In some countries the idea of merit includes a high component of
loyalty; in some others, loyalty doesn't count for much. In some countries doing business
with relations and friends is not acceptable; in other places, personal associations count for a
lot. Oriental values are in many respects different from those of the West. Anglo-Saxon
values differ markedly from the European.
But I believe that great and lasting businesses are never built on the quick sands of
opportunism. If living by our values means, perhaps growing at a pace slower than we would
otherwise have liked, so be it. The key to enduring leadership lies in knowing what we stand
for and in living by that. In essence our values provide us with a moral compass, they provide
us with our roots and they provide us our wings.