Dear Shareholder,
 
 We are pleased to present the 54th Annual Report together with the
 Audited accounts of your Company for the financial year ended 31st
 March, 2011.
 
 MACRO ECONOMIC SCENARIO
 
 With the GDP growth at 8.5% during fiscal 2010- 11, Indian economy
 sustained growth after recovery in the previous year, supported by
 strong rebound in agriculture sector and continued momentum in the
 manufacturing and services sectors. During the year, high inflation
 remained a key area of concern and the Reserve Bank of India pursued
 monetary tightening measures throughout the year.
 
 CONSOLIDATED FINANCIAL PERFORMANCE
 
 Led by continuous pursuit of profitable growth across the businesses,
 your Company has posted strong financial results during the year.
 Consolidated revenue of your Company at Rs. 18,168 Crore crossed USD 4
 billion mark registering year on year growth of 17%. Revenue growth was
 contributed by all the businesses.  Your Company posted its highest
 ever Consolidated EBITDA at Rs. 2,702 Crore (~USD 600 million)
 achieving a robust growth of 60% over previous year. Consolidated net
 profit grew five times from Rs. 155 Crore to Rs. 822 Crore (~USD 183
 million) - the highest ever. The earnings growth was driven by improved
 profitability in the Financial Services, Fashion & Lifestyle and
 IT-ITeS businesses.
 
 During the year, Aditya Birla Financial Services
 
 (ABFS) has strengthened itself as a large non- bank player and posted
 a strong financial performance. Today, ABFS is managing assets worth
 USD 20.5 billion with a customer base of about 5.5 million customers.
 
 - Combined revenue grew from Rs. 5,871 Crore to Rs. 6,296 Crore (~ USD
 1.4 billion).
 
 - ABFS achieved a strong turnaround in profitability with EBITDA of Rs.
 537 Crore vis- a-vis loss of Rs. 231 Crore in the previous year.
 
 - AUM of Birla Sun Life Insurance (BSLI) scaled up by 23% to Rs.
 19,760 Crore (USD 4.5 billion). Fuelled by the growing size of in-
 force book, lower new business strain and better expense management,
 BSLI achieved
 
 EBITDA of Rs. 352 Crore compared to loss of Rs. 378 Crore in the
 previous year. No capital infusion was required during the year.
 
 - The total average AUM (AAUM) of Birla Sun Life Asset Management stood
 at Rs. 67,560 Crore (USD 15 billion). Its market share in terms of
 domestic AAUM increased from 8.3% to 9.1%. Its maiden Real Estate
 Onshore Fund collected Rs. 1,088 Crore.
 
 - The NBFC business more than doubled its book size.
 
 In the Telecom business, Idea Cellular Limited (Idea) ranks among the
 top 10 cellular operators in the world with more than 1 billion minutes
 of usage per day. Idea is the 3rd largest cellular operator in India in
 terms of revenue market share which stands enhanced from 12.6% to 13.6%
 in past one year. Idea has launched 3G services in 19 service areas.
 Post launch of Mobile Number Portability, Idea is leading net
 subscribers gainers and it also has highest active subscribers ratio in
 the industry, reflecting its strong brand equity.  Revenue of Idea rose
 by 25% to Rs. 15,438 Crore (~USD 3.5 billion) while EBITDA grew by 6%
 to Rs. 3,853 Crore. The decline in average revenue per minute was
 compensated by volume led cost efficiencies.
 
 Madura Fashion & Lifestyle has posted a robust 45% growth in revenue at
 Rs. 1,809 Crore (USD 400 million). It continues to leverage its brand
 leadership and expanded retail presence to ride on the buoyant demand
 in the domestic market.  EBITDA shot up to Rs. 137 Crore vis-a-vis loss
 of Rs. 4 Crore in the preceding year.
 
 Revenue of Aditya Birla Minacs, the IT-ITeS business grew by 11% to Rs.
 1,692 Crore (~USD 375 million). EBITDA rose by 75% from Rs. 105 Crore
 to Rs. 183 Crore. Revenue growth and rationalised cost structure
 spurred profitability.
 
 Combined revenue of Manufacturing businesses grew by 26% to Rs. 4,689
 Crore (USD 1 billion).  EBITDA grew from Rs.  748 Crore to Rs. 781
 Crore.  They posted an operating margin of 16% and return on average
 capital employed of 26%. The Greenfield Carbon Black project at
 Patalganga with a capacity of 84,000 MTPA was completed in end May
 2010, thereby taking the total capacity to 314,000 MTPA.
 
 STANDALONE FINANCIAL PERFORMANCE
 
 Standalone revenue soared by 33% to Rs. 6,445 Crore. Revenue growth was
 driven by expansion in the Carbon Black business and strong volume
 growth in Textiles business. Your Company posted its highest ever
 Standalone EBITDA which grew by 16% from Rs. 835 Crore to Rs. 970 Crore
 and highest ever Standalone Net profit which grew by 34% from Rs. 283
 Crore to Rs. 380 Crore. Growth in profitability was contributed by
 strong volume growth in the Fashion & Lifestyle, Textiles and
 Insulators businesses, higher agri-input sales in the agri-business and
 higher power sales in the Carbon Black business. Profitability in the
 Rayon business was strained by a steep rise in the input and fuel cost.
 
 Equity infusion by promoters strengthened balance sheet
 
 The Promoter Group companies further infused Rs. 426 Crore on
 conversion of remaining warrants into equity shares on 20th December,
 2010. As a result, the paid up equity capital of your Company increased
 from Rs. 103.01 Crore to Rs. 113.51 Crore on allotment of 10.5 million
 equity shares.
 
 Led by improved earnings coupled with equity infusion by promoters, the
 standalone balance sheet has also been strengthened with Net Debt to
 Equity improving from 0.74 to 0.58 and Net Debt to EBITDA from 4.1 to
 3.2.
 
 The business-wise performance review, outlook and strategy have been
 spelt out in depth in the Management Discussion and Analysis section,
 which forms part of the Annual Report.
 
 FINANCIAL PERFORMANCE
 
                                                     (Rs. Crore)
 
                                   Consolidated            Standalone
 
                                 2010-11   2009-10    2010-11   2009-10
 
 Profit before Depreciation / 
 Amortisation,
 Exceptional Items and Tax      2,135.54   1024.05     689.03    500.40
 
 Depreciation and Amortisation    940.65    866.48     193.95    180.10
 
 Profit before Exceptional 
 Items and Tax                  1,194.89    157.57     495.08    320.30
 
 Exceptional Items               (103.84)        -          -         -
 
 Prof it before Tax             1,006.64    157.57     495.08    320.30
 
 Provision for Taxation (Net)     183.08    114.00     115.39     36.90
 
 Net Profit before Minority 
 Interest                         907.97     43.57     379.69    283.40
 
 Minority Interest                (85.86)   111.03          -         -
 
 Share of Profit/(loss) of 
 Associate                         (0.01)    (0.04)         -         -
 
 Net Profit                       822.10    154.56     379.69    283.40
 
 Balance brought forward       (1,284.96)(1,112.61)     17.18     86.03
 
 Amount transferred on change 
 in stake in Subsidiaries/ 
 Joint venture and Mergers             -   (105.20)         -   (139.60)
 
 Profit available for 
 Appropriation                   (462.95) (1063.25)    396.87    229.83
 
 Appropriations :
 
 Proposed Dividend                 62.44     53.26      62.44     51.51
 
 Corporate Tax on Dividend         10.13      8.86      10.13      7.95
 
 General Reserve                  250.00    100.00     250.00    100.00
 
 Debenture redemption reserve      46.11     53.19      46.11     53.19
 
 Special Reserve                    7.70      6.40          -         -
 
 Surplus / (Deficit) carried to 
 Balance Sheet                   (839.33) (1284.96)     28.19     17.18
 
                                 (532.54) (1063.25)    396.87    229.83
 
 DIVIDEND
 
 For the financial year ended on 31st March, 2011, Your Directors
 recommend for your consideration a dividend of :-
 
 i.  Rs. 5.50/- per Equity Share of Rs. 10/- (last year Rs. 5 per Equity
 share) and
 
 ii.  Rs. 6/- per Preference share of Rs. 100/- each (last year Rs. 6
 per Preference share)
 
 The said dividend, if approved by the Members, would involve cash
 outflow of Rs. 72.57 crore (including Corporate dividend Tax of
 Rs.10.13 crore) compared to Rs. 59.46 crore (including Corporate
 dividend Tax of Rs. 7.95 crore) paid for the year 2009-10.
 
 FINANCE
 
 Durng the year, your Company raised long-term loans aggregating to Rs.
 94 crore by way of foreign currency borrowings and Rs. 200 Crore by way
 of Non-Convertible Debentures (''''NCDs'''').
 
 During the year, term loans aggregating to Rs. 698 Crore and NCDs of
 Rs. 110 Crore were repaid during the year.
 
 HUMAN RESOURCES
 
 Your Company believes that Human Resources play a very critical role in
 its growth. Your Directors'' are pleased to inform you that the Aditya
 Birla Group of which your Company is a part, has been declared as one
 of the Best Employers in India by the Aon-Hewitt survey conducted
 recently. The Group ranked second amongst two hundred other Indian
 organizations which took part. The process entailed a rigorous six
 months exercise involving HR Systems and processes audit, online survey
 with several employees, face to face meetings with Leadership teams, HR
 and a cross section of employees.
 
 Going forward, attracting and retaining talent will be a key challenge.
 Various initiatives have been launched to provide growth opportunities
 to employees and stem attrition. Notable initiatives for the current
 year include the rollout of the Employee Value Proposition and the
 Career Portal Platform to provide visibility of career opportunity to
 the employees.
 
 CORPORATE GOVERNANCE
 
 The Company is committed to maintain the highest standards of Corporate
 Governance and adhere to the Corporate Governance requirements set out
 by SEBI.
 
 Your Company has complied with all mandatory provisions of Clause 49 of
 the Listing Agreement.
 
 The Report on Corporate Governance as stipulated under Clause 49 of the
 Listing Agreement forms part of the Annual Report.
 
 Your Company''s Statutory Auditors'' Certificate conferring compliance
 with Clause 49 of the Listing Agreement with Stock Exchanges is annexed
 to (Annexure A) and forms part of the Directors'' Report.
 
 As required under Section 217(2AA) of the Companies Act, 1956, your
 Directors confirm that:
 
 i) in the preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures;
 
 ii) the Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year and of the profit of
 the Company for that period;
 
 iii) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities; and
 
 iv) the Directors have prepared the annual accounts on a ''going concern
 basis''.
 
 SUBSIDIARY COMPANIES & CONSOLIDATED FINANCIAL RESULTS
 
 During the year, the following changes have taken place in subsidiary
 companies :
 
 Companies which became subsidiaries :
 
 - Bureau of Collection Recovery, LLC,
 
 - Bureau of Collection Recovery (BCR) Inc.,
 
 - Indigold Trade & Services Limited
 
 - Aditya Birla Securities Private Limited and
 
 - Shaktiman Mega Food Park Private Limited
 
 Company which ceased to be subsidiary :
 
 - Compass BPO FZE, UAE.
 
 Name changes:
 
 To reflect group''s strong parentage and commitment to its businesses,
 as also to signify the nature of business, the names of following
 subsidiary companies were changed:-
 
 - Birla Insurance Advisory & Broking Services Limited to Aditya Birla
 Insurance Brokers Limited
 
 - Compass Business Process Outsourcing Private Limited to Aditya Birla
 Minacs BPO Private Limited
 
 - Compass Business Process Outsourcing Limited to Aditya Birla Minacs
 BPO Limited., UK
 
 Consolidated Financial Statements pursuant to Clause 41 of the Listing
 Agreement entered into with the Stock Exchanges and prepared in
 accordance with the Accounting Standards prescribed by the Institute of
 Chartered Accountants of India, are attached for your reference.
 
 In line with the General Exemption granted by Ministry of Corporate
 Affairs vide Circular 2/2011 dated 8th February, 2011 for not attaching
 the Balance Sheet of subsidiaries subject to certain conditions, the
 Balance Sheet, Profit and Loss Account, Report of the Board of
 Directors and Report of the Auditors of the subsidiary companies have
 not been attached to the Balance Sheet of the Company as at 31st March,
 2011.
 
 The Annual accounts of the subsidiary companies and the related
 detailed information are available to Shareholders of the Holding and
 Subsidiary companies at any point of time. The Annual accounts of the
 Subsidiary companies are kept open for inspection by any shareholder(s)
 at the Registered Office of the Company and of the concerned Subsidiary
 Company. Any shareholder of subsidiary Company, who wishes to obtain a
 copy of the said documents of any of the subsidiary companies, may send
 a request in writing to the Company Secretary at the Registered Office
 of the Company so that the needful can be done.
 
 EMPLOYEE STOCK OPTION SCHEME (ESOS)
 
 During the year, ESOS compensation Committee granted 17,174 and 11,952
 Stock Options under the Third and Fourth tranche respectively under
 ESOS - 2006 to eligible employees of the Company.
 
 During the year, after receiving approval from shareholders at the 53rd
 Annual General Meeting held on August 6, 2010, ESOS Compensation
 Committee re-priced the Stock options granted to employees under
 Tranche I and Tranche II at Rs. 687/- per Stock Option.
 
 Further on 7th June, 2011, the ESOS Compensation Committee approved
 grant of 3,370 Stock Options under Fifth Tranche to an eligible
 employee of the Company at an exercise price of Rs. 748/- per option.
 
 Details of the options issued under ESOS - 2006 upto March 31, 2011, as
 also the disclosures in compliance with Clause 12 of Securities and
 Exchange Board of India (Employees Stock Option Scheme and Employees
 Stock Purchase Scheme) Guidelines 1999 are set out in the Annexure B to
 this report.
 
 The Company has received a certificate from the Auditors of the Company
 that the Scheme has been implemented in accordance with the SEBI
 Guidelines and the resolution passed by the shareholders. The
 Certificate shall be placed at the Annual General Meeting for
 inspection by members.
 
 FIXED DEPOSITS
 
 Your Company was accepting fixed deposits from the employees.
 Acceptance of such fixed deposits has been discontinued from January,
 2009 onwards. As on 31st March, 2011, there are no outstanding
 deposits.
 
 The erstwhile Birla Global Finance Limited (since amalgamated with the
 Company) had accepted deposits from the public till May, 2005. Of the
 total matured fixed deposits, as on 31st March, 2011, there were
 unclaimed fixed deposits of Rs. 68,000. These unclaimed deposits are
 kept in a separate earmarked bank account.
 
 PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
 
 The Information relating to the Conservation of Energy, Technology
 Absorption and Foreign Exchange Earnings and Outgo required under
 Section 217(1) (e) of the Companies Act, 1956, is set out in a separate
 statement attached to this Report (Annexure C) and forms part of it.
 
 In accordance with the provisions of Section 217(2A) read with the
 Companies (Particulars of Employees) Rules, 1975, the names and other
 particulars of employees are to be set out in the Directors'' Report, as
 an addendum thereto.  However, as per the provisions of Section
 219(1)(b)(iv) of the Companies Act, 1956, the Report and accounts as
 therein set out, are being sent to all members of the Company excluding
 the aforesaid information about the employees.  Any member, who is
 interested in obtaining such particulars about employees, may write to
 the Company Secretary at the Registered Office of the Company.
 
 DIRECTORS
 
 Mr. Tapasendra Chattopadhyay has been nominated by Life Insurance
 Corporation of India (LIC) as a Director in place of Mr. S.C Bhargava
 with effect from 30th May, 2011.
 
 Considering his valuable contribution to the growth of the Company, Mr.
 S. C. Bhargava has been appointed as an Independent Director of the
 Company.
 
 Mr. Sushil Agarwal, Chief Financial Officer of the Company has been
 appointed as Whole Time Director of the Company w.e.f. 1st June, 2011.
 
 Mr. Kumar Mangalam Birla, Mrs. Rajashree Birla and Mr. P Murari,
 Directors of the Company retire from office by rotation, and being
 eligible, offer themselves for reappointment at the ensuing Annual
 General Meeting.
 
 Resolutions seeking appointment of Mr. Kumar Mangalam Birla, Mrs.
 Rajashree Birla, Mr. P Murari, Mr. S.C. Bhargava and Mr. Sushil Agarwal
 have been included in the notice of ensuing Annual General Meeting
 together with their brief details.
 
 AWARDS AND RECOGNITION
 
 Your Company has been the proud recipient of the following awards and
 recognitions -
 
 - INDIAN RAYON DIVISION
 
 - Rajiv Gandhi Environment Award for Prevention of pollution from
 Ministry of Environment & Forests, Government of India
 
 - Environment Excellence Award -2010 in Chemical Sector Awarded by
 Green Tech Foundation, New Delhi
 
 - National Award for excellence in Energy Conservation and Management -
 2009 awarded by Indian Chemical Council (ICC)
 
 - Mumbai
 
 - Server virtualization & thin client deployment awarded by IDG Group
 (USA)
 
 - Publishers of CIO Magazine
 
 - Automation of batch scheduling jobs in Spinning Department awarded by
 UBM GROUP- publishers of Dataquest PC World Magazine
 
 - JAYA SHREE TEXTILES DIVISION
 
 - IMC Ramakrishna Bajaj National Quality Award 2010 in the
 manufacturing category.
 
 - INDO GULF FERTILISERS DIVISIOIN
 
 - Agriculture Leadership Today from National Agricultural Magazine for
 Innovative Extension Model and the outstanding contribution in
 agriculture extension and development through pioneering use &
 application of Six Sigma Methodology
 
 - MADURA FASHION & LIFESTYLE
 
 - Van Heusen received Best Loyalty Programme in the Retail Sector at
 4th Loyalty Summit.
 
 - The Collective - won Fashion Apparel- Speciality store at In Store
 Asia 2011- VMRD Retails Design Awards.
 
 - The Collective - was recognized in the merit list for Window
 Display at In Store Asia 2011- VMRD Retails Design Awards.
 
 - The Collective- was recognized in the merit list for Best Visual
 Merchandising at In Store Asia 2011- VMRD Retails Design Awards.
 
 - Peter England was recognized as 2nd Most Trusted Brand in Apparel &
 Textile Category at Economic Times- Brand Equity Awards.
 
 - Peter England was awarded as Best Performing Brand in Retail Sector
 by Reliance Retail.
 
 - Van Heusen won Most popular Formalwear Brand Award- Female at 3rd
 Global Youth Marketing Awards.
 
 - Madura Clothing was awarded with IMC RBNQA Award for Performance
 Excellence by IMC RBNQUA.
 
 - ADITYA BIRLA INSULATORS, RISHRA
 
 - Quality Circle Team AGNI got GOLD level recognition (par
 excellence) in chapter convention on Quality circle Competition (CCQC)
 2010.
 
 - Quality Circle Team AGNI got DISTINGUISHED level recognition in
 National Convention on Quality circle Competition (NCQC) 2010.
 
 - IMC RAMKRISHNA BAJAJ NATIONAL QUALITY AWARD 2010 in Quality Category
 
 - ISO 9001:2008 certification awarded for The Design, Development,
 Manufacture & Supply of Extra High, High & Low Voltage
 Electro-porcelain Insulators by British Standards Institution (BSI)
 
 - ISO14001:2004 certification awarded for The Design, Development,
 Manufacture & Supply of Extra High, High & Low Voltage
 Electro-porcelain Insulators by British Standards Institution (BSI)
 
 - OHSAS 18001:2007 certification awarded for The Design, Development,
 Manufacture & Supply of Extra High, High & Low Voltage
 Electro-porcelain Insulators by British Standards Institution (BSI)
 
 - Social Accountability 8000 : 2008 certificate for Manufacture of H.V
 & L.V.  Electro Porcelain Insulators by Det Norske Veritas AS
 
 - ISO/IEC 17025:2005 certificate received for General Requirements for
 the Competence of Testing & Calibration Laboratories in Chemical,
 Mechanical & Electrical Testing Laboratories by NABL
 
 AUDITORS
 
 The observations made in the Auditors'' Report are self-explanatory and
 therefore, do not call for any further comments under section 217(3) of
 the Companies Act, 1956.
 
 Your Directors request you to appoint Auditors for the current year as
 set out in the accompanying notice of the Annual General Meeting.
 
 APPRECIATION
 
 Your Directors take this opportunity to express their sincere
 appreciation for the excellent support and co-operation extended by the
 shareholders, customers, suppliers, bankers and other business
 associates. Your Directors gratefully acknowledge the ongoing
 co-operation and support provided by Central and State Governments and
 all Regulatory bodies.
 
 Your Directors place on record their deep appreciation for the
 exemplary contribution made by employees at all levels. Their dedicated
 efforts and enthusiasm have been pivotal to your Company''s growth.
 
                                      For and on behalf of the Board
 
                                                Kumar Mangalam Birla
 
                                                            Chairman
 
 Mumbai
 
 August 13, 2011