Grasim Industries

Dear Shareholders,
 
 At the business level too, we are on a strong footing. Your Companys
 consolidated turnover (gross) crossed US$ 4 billion (Rs.20,432 crores)
 up by 7% over that of the preceding year. Of this, the Cement
 businesss contribution is 74% and VSF 15%, the two core businesses of
 your Company. Your Companys consolidated net profit is in excess of
 US$ 430 million (Rs.2,187 Crores).
 
 Your Company has taken major initiatives to sustain profitable growth
 ongoingly. An in- depth presentation of these steps has been detailed
 in the Management Discussion and Analysis, so I will highlight only the
 key points.
 
 As part of its strategic growth initiatives, your Company has embarked
 on a series of expansion projects. In the Cement business, your
 Companys major projects are nearing completion. Clinkerisation plants
 at Shambhupura and Kotputli, both in Rajasthan, with a capacity of 3.3
 million TPA each, have been commissioned. Additionally, work on the
 cement mills in Shambhupura (1.5 Million TPA) and Kotputli (3.2 Million
 TPA) is progressing well and one of the cement mills in Shambhupura
 with a 1.6 million TPA capacity is already operational.
 
 The 1.3 million TPA split – grinding unit at Dadri in Uttar Pradesh has
 started, while the one at Aligarh in Uttar Pradesh will go in stream by
 September 2009.
 
 With thermal power Plants having a total capacity of 144 MW installed,
 including 23 MW installed in April 2009, the Cement Business total
 thermal power generation capacity is now at 268 MW, meeting nearly 80%
 of the businesss total power requirement.
 
 Your Companys capex in Cement during the year was US$ 289 million
 (Rs.1,467 crores). An investment of over US$ 250 million (Rs.1,300
 crores) has been earmarked for completion of the current projects and
 towards modernisation in the coming year.
 
 Consolidated cement capacity will rise further from 41.6 million TPA to
 48.8 million TPA upon the completion of all projects under
 implementation.
 
 In the VSF business, your Company faced a rather tough and challenging
 year. The global economic crisis severely impaired the textile sector,
 which in turn had repercussions on your Companys VSF operations.
 Consequently both volumes and realisations took a hit. Bearing in mind
 the market dynamics, your Company has put its VSF capacity expansion
 plans on hold. The conversion of the A. V. Nackawic plant from paper –
 grade pulp to Rayon – grade pulp has been successfully completed.
 
 In the recent past, market sentiments in the textile sector have shown
 a positive swing which bodes well for the VSF sector.
 
 Outlook
 
 Your Company will continue to strengthen its leadership position in the
 Cement and VSF sectors. Substantial increase in capacities, improved
 cost optimization, higher productivity and strong fundamentals augur
 well for your Company in the years to come.
 
 I believe our people are our biggest strength. We have further
 strengthened our endeavour, in these times of a slowdown, to
 aggressively establish a performance – oriented culture that rewards
 better performance and distinguishes the best performers from the
 others. I would like to acknowledge all of our performers who deliver
 results.
 
 The Aditya Birla Group: In Perspective
 
 Today, we manage multinational teams – 1,30,000 employees, comprising
 30 nationalities, across 25 countries, anchor our US$ 29.2 billion
 meritocratic conglomerate. Our values – Integrity, Commitment, Passion,
 Seamlessness and Speed, is the thread that strings us together.
 
 Post our Group being declared the Best Employer in 2007 by the Hewitt
 / Economic Times / Wall Street Study, our brand as an employer
 continues to grow strongly. More than 8,000 leading professionals from
 India and globally have teamed up with us.
 
 Our rigorous assessment process, inclusive of Development Assessment
 Centres, assesses our people early in their career on their potential
 to hold leadership roles. This way, we have ensured that we have a
 robust bench strength of talent. We also use short-term secondments and
 long-term assignments to develop the capability of our people to work
 across borders. This year over 1,700 colleagues have been job rotated.
 
 Over 80% of our businesses have participated in a compensation
 benchmarking exercise this year and we have taken significant
 corrective and proactive measures to stay competitive and attractive.
 This positioning will further help us to attract and retain the right
 talent.
 
 We lay great emphasis on continuous learning through our in-house
 learning university – Gyanodaya.  This globally benchmarked institution
 leverages resources from around the world to meet the development needs
 of our people. Over a 1,000 executives have taken courses this year.
 Additionally, more than 14,000 employees spread across the world, from
 Farmington Hills in USA to Giza in Egypt to Perth in Australia and
 Renukoot in Uttar Pradesh have used Gyanodayas E-learning platform
 called GVC. GVC prides itself in having a course completion ratio of
 90%, which is a world benchmark.
 
 As perhaps many of you may be aware we track the organisational climate
 every two years. We use the Organisational Health Survey (OHS), as the
 barometer of employee engagement at work. It is conducted by Gallup.
 Over 22,000 executives, across 17 businesses, spanning 25 countries and
 750 cities/interiors participated in the OHS6. The participation level
 at 94%, according to Gallup, is a benchmark. 83% of the employees
 surveyed in the OHS6 said that they are proud to be an employee of the
 Aditya Birla Group and get professional satisfaction working here. 67%
 of our management employees have clearly emphasized their confidence in
 the ability of the leaders at various levels to successfully manage the
 emerging challenges that the Group is facing. Almost three-fourths of
 our employees (73%) have stated that they would definitely advocate our
 Group as a place to build a meaningful career.
 
 Going forward, I would like to emphasize that the brand of leadership
 that we seek to build combines the virtues of professionalism with the
 commanding power of the mind, heart and soul. The mind which has the
 intellect to perceive the right from the wrong, the heart which has an
 emotional bond with the organisation that cannot be severed, and a soul
 that is indomitable. Our biggest strength has been an emotional bonding
 that our employees have with the Group that makes the paradigm of duty
 truly boundaryless.
 
 Best regards,
 
 Yours sincerely,
 Kumar Mangalam Birla