Dear Shareholder,
 
 The global economy has withstood the recession though its recovery has
 been rather sluggish. World growth decelerated to nearly 3.8% during
 the second half of 2010 from 5.3% during the first half. The IMF
 forecasts a 4.3% global growth in 2011. The US economy grew at 3% last
 year. Growth in the Euro zone was muted at around 2%.In sharp contrast
 emerging economies have grown briskly - in excess of 7%.  China and
 India are the clear standouts, peaking at over 10% and 9% growth
 respectively.
 
 With the global economic growth slowing, growth levels in India are
 likely to be impacted.  Nevertheless, as we know, the fundamentals of
 the Indian economy remain strong.  Over the past few years India''s
 track record has been impressive. The country recorded almost twice the
 global growth rate. Whilst the country does face roadblocks in the
 short term, the medium to long term growth prospects for India are
 bright. These have a bearing on your Company''s growth and performance.
 Your Company''s inherent strength is in the diversified nature of its
 businesses, which mirrors the economy of India.
 
 Your Company has truly excelled. Its consolidated revenue at US $ 4
 billion (Rs. 18,168 Crores), EBITDA at US $ 600 million (Rs. 2,702 
 Crores) and Net Profit at US $ 183 million (Rs. 822 Crores) have all 
 been the highest ever. Your Company''s performance is the culmination 
 of a tremendous focus on profitable growth across businesses.
 
 I must say that this year has been all about leadership through
 consolidation, employee engagement, performance management and customer
 focus.
 
 Leadership through consolidation
 
 It is gratifying to see that at our Financial Services business, the
 pace of growth across all verticals, has been sustained.  The team is
 managing assets of US $ 20.5 billion with a customer base of about 5.5
 million. We are one of the two non-bank players in India ranking among
 the top-7 Life Insurance as well as Asset Management companies.
 
 Financial Services attained a number of milestones.  Specifically these
 include - maiden profits in the Life Insurance business, scaling up of
 the NBFC business, consistent growth in its Asset Management arm and
 widening of its geographical footprint with the setting up of its
 overseas offices. It posted a revenue of US $ 1.4 billion.
 
 I believe, that the Indian financial services sector offers enormous
 growth potential. Our Financial Services arm will capitalize on it,
 through scaling its efforts for better distribution, greater capital
 efficiency and enhanced profitability.
 
 The Telecom sector is characterized by over capacity, hyper competition
 and severe price cutting. Regardless, Idea is growing from strength to
 strength. It is one of the few companies in the world that is able to
 provide superior quality telecom services at the lowest price point. It
 is able to post stable cash profits, driven by cost efficiencies.  With
 total minutes of usage of more than 1 billion per day, Idea is amongst
 the top-10 cellular operators in the world.  With revenues of around
 US$ 3.5 billion, Idea ranks 3rd in terms of wireless revenue market
 share at 13.6%. We have a large base of 95 million subscribers. Idea
 continues to be among the biggest net gainers in India post the launch
 of the mobile number portability reflecting its brand power.  Idea also
 has the highest active subscribers'' ratio in the industry.  Currently,
 Idea offers 3G services in 19 out of total 22 services areas.
 
 I believe, consolidation in the telecom sector, sooner than later, is
 bound to happen. This will inevitably end the current over capacity
 phase. Idea is indeed poised to benefit from the long term sector
 opportunities.
 
 Focusing on Madura Fashion & Lifestyle, I must say that their success
 story is fascinating. The business'' revenue grew by 45% to cross US $
 400 million. It has outpaced market growth by an impressive margin.
 What is heartening is that it has achieved a swing of about Rs.150 
 crores in profitability. Madura Fashion & Lifestyle sells one branded 
 apparel every two seconds at its over 2,000 exclusive brand boutiques, 
 multibrand outlets and departmental stores. In the Textiles business, 
 the linen segment is gaining momentum. The business achieved its 
 highest ever revenue and EBITDA.
 
 Let me now briefly dwell on IT-ITeS business. Aditya Birla Minacs''
 performance has been noteworthy. Its revenue grew by 11% to US $ 375
 million while its EBITDA soared by 75%. It has sold total contract
 value of more than US $ 775 million. So it should come as no surprise
 that Minacs has been named among the top-5 emerging outsourcing
 companies to watch out in North America, in this domain.
 
 In the Carbon Black business, your Company''s revenues grew by 37% led
 by the recent capacity expansion at Patalganga. Plans to expand your
 Company''s Carbon Black Capacity by an additional 170,000 tons per
 annum, are on the anvil.
 
 As a Group, taking Columbian Chemicals into our fold has been game
 changing. It catapults our Group to the world''s top carbon black
 producer. At one stroke, it doubles our capacity from 1 million tons to
 2 million tons. It creates a business that has the advantage of cutting
 edge technology, and low costs, with a truly global footprint.
 Expansion plans in India, South East Asia, South America and China will
 significantly extend our capacities. The carbon black business is at an
 inflection point and is all set to move into a higher orbit.
 
 In the Agri-business, Indo Gulf achieved its highest ever production -
 in excess of 1.1 million tons. Our strategy is to move up the value
 chain from urea to seeds to being crop protection agents. Once the
 sector frees up from regulatory controls, the growth potential is huge.
 So we are exploring a Brownfield expansion. Our plans are hinged on
 policy clarity on the allocation of natural gas and of course pricing.
 
 To lift the performance of Viscose Filament Yarn, we are planning to
 expand its presence in the fine and superfine segment using the spool
 based technology from ENKA, Germany. The Caustic Soda Plant capacity
 expansion by 45,625 tons per annum is on track.
 
 The Insulator business has achieved its highest ever volumes, way ahead
 of its peers. We will be adding a 2,000 tons capacity to enable us
 manufacture high rating insulators for the power sector.
 
 Outlook
 
 Across the businesses, given your Company''s strong fundamentals and
 leadership position in the sectors, in which it operates, we envisage
 superior growth in revenues and earnings. Your Company will leverage
 its conglomerate structure to scale the next level of growth. The
 outlook is positive.
 
 To our teams
 
 I would like to say a big thank you to all of our teams for their
 consistent high performance. I take great pride in the performance of
 our people.
 
 The Aditya Birla Group in perspective
 
 Today, we are a multi ethnic, multi dimensional Group with a bench
 strength of 133,000 passionate and committed people, belonging to 42
 nationalities across 6 continents.  For the year 2010-11, our
 consolidated revenues stand at US $ 35 billion, compared to US $ 29
 billion in the preceding year, recording a 22% growth. Our leadership,
 regardless of levels, has a penchant for collaborative and innovative
 solutions, for new ways of working that keep our Companies and our
 products on our clients and customers radar all the time. This is what
 drives our performance.
 
 I believe that purposive actions in the people area can be huge
 differentiators to our growth plans. For us, it is very important to
 know what our people think of us. So we recourse to a biannual
 Organizational Health Survey (OHS) conducted by Gallup as the barometer
 of the engagement at work index in our Group. Over 28,000 executives
 spanning 31 countries participated in OHS 7 (2010). The participation
 level at 97%, in Gallup''s opinion, sets a new benchmark. Given its
 objectivity and rigor of its process, there is immense value in its
 findings.
 
 It is a matter of great satisfaction for me that the key strength of
 the Group, as identified in the OHS, continues to be the great sense of
 pride that our employees experience and express in working for the
 Aditya Birla Group. More importantly, this pride stems from our
 employees'' belief and conviction that we are a good corporate citizen.
 Given the decline in ethics we see in business today, that is a huge
 validation of our insistence on value-based leadership. Pride, in turn
 is a great driver of positive energy and performance.
 
 To capitalize on this positivity and to grow and hone the talent
 resident in the Group, we have launched several initiatives that
 further our Employee Value Proposition - a World of Opportunities. We
 have launched the ''Career Management Services'' - a pioneering effort
 which is an integrated end-to-end career service aimed at all
 employees. This is already afoot in the cement business.  Over the
 coming years it will be extended across other businesses in the Group.
 
 On the issue of grooming talent, collectively our Business Directors
 and Business Heads, along with me, have invested over 500 man-hours in
 discussing, reviewing and working through the development plans of each
 of our talent pool members at the Group level. Their development plans
 include engagement with special projects, coaching and mentoring by the
 top leadership team, besides attending cutting-edge functional and
 behavioural programmes globally that open the frontiers of their mind
 and goad them to defy limitations. That 60% of the total leadership
 positions were filled in from our existing talent in 2010-11 validates
 the talent honing processes which have laid a robust leadership
 pipeline within our Group.
 
 Our commitment to employee learning and development at all levels, is
 unrelenting. In 2010-11, there were 30,000 touch points with our
 learners through multiple formats of learning. More than 25,000
 employees enlisted in e-learning programmes at Gyanodaya, our Institute
 of Management Learning. This year, at Gyanodaya, 200 colleagues at very
 senior levels attended specially designed programmes.  They had the
 opportunity to interact with professors from leading Universities and
 B-Schools. They were a great faculty, drawn from Universities such as
 Stanford, RICE, Michigan and Duke at the global level along with
 professors from the IIMs and ISB (Hyderabad). Our senior managers also
 derived immense value from training and learning sessions conducted by
 leading consultancies such as The Centre for Creativity Leadership
 (CCL), The Hay Group and The Works Partnership (TWP), among others.
 
 Finally, I am delighted to share with you that our employees have given
 a thumping vote of confidence to our Group as the ''Best Employers'' in
 India and in Asia Pacific. Aditya Birla Group, of which your Company is
 an integral member, has been declared as one of the ''Best Employers'' in
 India in the Aon Hewitt Survey conducted recently. We ranked 2nd from
 among 200 other Indian organizations, who participated in the survey.
 In Asia Pacific, we have been ranked among the top companies as well.
 Soon we hope to attain this stature in the rest of the world too -
 wherever we operate.
 
 Our people are our future. With them and the wind in our sails, we feel
 buoyant about achieving our stretch goal of becoming a 65 billion
 dollar Company by 2015. Your Company will play a important role in
 reaching this destination.
 
                                                     Yours sincerely, 
 
                                                Kumar Mangalam Birla