Hindalco Industries

At the business level too we had to grapple with many challenges given
 the piquant environment.  Your Company’s consolidated turnover (gross)
 crossed US$ 13.5 billion (Rs.65,625 crores) and EBIDTA of US$ 763
 million (Rs.3,665.2 crores).  Of the revenues, over US$ 11.3 billion
 came from the aluminium business, while copper accounted for US$ 2.2
 billion (Rs.10,760.26 crores).
 
 Your Company has taken major initiatives to ensure to sustain
 profitable growth. 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.
 
 Your Company’s Greenfield’s projects – Utkal Alumina and Aditya
 Aluminium in Orissa, Mahan Aluminium in Madhya Pradesh and Jharkhand
 Aluminium in Jharkhand will go on stream between 2011 and 2013. With
 these, your Company’s smelting capacity will increase from 0.5 million
 tons to 1.7 million tons with three new projects of 360 ktpa each.
 Likewise, your Company’s refining capacity will increase from 1.7
 million tons at present to 6.15 million tons. These expansions will
 give your Company a greater edge.
 
 I would like to add that the liquidity position of Novelis has remained
 stable despite challenging market conditions. The Company’s actions
 taken to adjust metal intake, reduce production and decrease fixed
 costs will deliver an estimated 0 million annualized future savings.
 
 The fundamental reason for which we acquired Novelis – global market
 leadership, cutting edge technology, going up the value chain in the
 largest segment of value added products and a highly competent team,
 remain unchanged.  However, Novelis has been impacted negatively,
 especially due to the falling off of markets in North America and
 Europe. Our Hindalco/Novelis teams are working double time to take
 appropriate action. I remain very confident,
 
 that the inherent strengths of Novelis will see us through the next two
 years. Our commitment to Novelis remains unflinching.
 
 Birla Copper demonstrated outstanding resilience by delivering highest
 ever PBT in a year when the TcRcs fell by 39% and market volitality was
 unprecedented. This was achieved through a combination of savvy
 
 marketing, innovative cost management and deft leveraging of its
 business model to maximise value creation. Effort towards significant
 value unlocking through marketing of waste materials are unrelenting.
 Birla Copper is today in the top quartile in the global pecking order,
 in so far as it relates to smelting costs.
 
 Outlook
 
 Your Company will continue to strengthen its leadership position.
 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 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 Gyanodaya’s 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