Dear Shareholders,
 
 Nobody can predict the future with any level of accuracy. But what one
 can do is minimise the risks associated with it, by developing
 mechanisms to deal with potential future issues.
 
 As the global economy contorted its way through the past several
 fiscals, it is precisely the mechanisms and strategies that we put in
 place over the years that have helped HDIL survive global meltdowns and
 real estate turmoil to return robust numbers through these unsure
 times.
 
 In 2007, who could have foretold what was to come? All was well with
 the world, as the national GDP ticked away at a never-before pace. The
 real estate market was in the midst of an unprecedented boom as well.
 It was a good business to be in.
 
 For us at HDIL, even better. We were only just named Indias fastest
 growing real estate company.  Mumbai, the epicentre of our plans, was
 jockeying to occupying its place amongst the worlds most strategically
 important cities. Reassuringly, 90% of our land reserves lay within the
 Mumbai Metropolitan Region.
 
 Then the world went into a spiral. The much documented economic crash
 of 2008 took its toll across the globe. Established businesses were
 struggling to survive. New entrants were wiped out.  Everything looked
 bleak.
 
 We not only survived, but when the turnaround happened, we were already
 back in the fast lane. Simply because we had already developed
 mechanisms and strategies to deal with imponderables. When off-take in
 the residential and commercial space dried up, we focused our efforts
 on slum rehabilitation. In a city like Mumbai, the unlocking of vital
 land for civic development is critical to its global aspirations.
 
 Our cumulative slum rehabilitation program is unique in that it is the
 largest urban rehabilitation scheme of its kind in the country and
 amongst the largest in the entire world. When completed, over a million
 slum dwellers will have been relocated and, in fact, have access to a
 lifestyle hitherto unthinkable to them.  Not only will they have a
 legal home to call their own, with larger living area, they would also
 be set into a milieu that promotes better living with roads,
 streetlights, hospitals, schools, community centres and other
 amenities.
 
 In a single stroke we are not only contributing to a better city but
 also to social uplifitment. Phase I of our program for MIAL Slum
 Rehabilitation, due for completion in 2012, involves clearing up vital
 airport land of slums. Mumbai can now push through its airport
 expansion plans with a clear conscience and zero impediment, even as
 some 30,000 lesser- privileged people experience a vastly improved
 lifestyle as they move into the new properties we have built for them.
 Having way for the balance 50,000 to 100,000 towards.
 
 Afiter the turmoil of 2008, late 2009 and 2010 signalled the turnaround.
 Especially in India, whose sheer scale helped it insulate itself far
 better than other struggling economies. The real estate market
 experienced an amazingly quick turnaround. Both retail and corporate
 off-take was brisk. Strategy to the fore again, as we turned focus once
 again to residential and commercial properties.
 
 Around our happy hunting ground, Mumbai, interest in real estate was
 peaking again; so much that our projects in Goregaon, Andheri, Kurla,
 Nahur, Mulund, Virar and Palghar were clocking up sales at a frenetic
 pace - some even attaining 90-100% sales at early construction stages.
 
 Mumbai, of course, is a barometer for the rest of the country. A
 precursor and trend setter, even in real estate; we decided the time
 had come to spread our wings and explore other hotbeds of real estate
 potential.
 
 Not arbitrarily, but with deeply thought-out strategy.  Mumbais own
 satellite townships, Palghar and Virar, presented the perfect test
 case. Mumbais sister city, Pune, was next. Then we headed southward.
 We identified Bengaluru as the market also in the throes of a real
 estate boom. Even as I write this, we are being proved accurate in our
 thinking again.
 
 Going further afield, Hyderabad opens up a whole new world of
 opportunity. Another of Indias IT cities, the potential for
 hospitality-related construction is immense. Through our associate
 company, HDIL Leisures, we are exploring a variety of hotels, service
 apartment complexes and mixed-use projects... even venturing into fine
 dining restaurants.  Through the Kulraj Broadway multiplexes, HDIL
 Entertainment is fulfilling our aspirations to carve out a niche in
 entertainment as well.
 
 The biggest news of the last year is the memorandum we have signed with
 the Government of Kerala for developing a mega SEZ, all of 10 million
 square feet of developed property spread over 70 acres.  Located at
 Kalamassery in Kochi, this IT-centric zone will reinforce Keralas
 thrust to make itself a global IT destination. From a more secular
 perspective, it will generate some 60,000 new jobs, while the
 construction itself will open up vast employment opportunities in the
 state. Total launches in the last year are 5.
 
 We are very excited about our Kerala venture. It represents a landmark
 effort in terms of both scale and environmental consciousness. While
 the ? 2300 crore project will do wonders for our own bottom line, its
 green-building concept - where even sewage will be internally treated
 and 80% of the total area dedicated to greening - will become a
 paradigm for similar projects in the future.
 
 To reassure investors and all stakeholders further, I am delighted to
 inform each one of you that, over the past year, we successfully
 completed QIPs that cumulatively raised $ 250 million.
 
 Let me assure each one of you that HDIL remains stronger than ever.
 Having weathered the most difficult of times through astute leadership,
 strategy and vision, we are confident that the measures we took when
 creating your company, will help us withstand every roadblock that
 destiny foists in our path.
 
 HDIL isnt just about me or my board of directors. Nor the senior
 management or the workforce. It is about all of us plus everyone who
 has staked their time, energy and monies on the company. And yes, even
 pride. Because, whoever we are, whatever we do, the pride that comes
 from being associated with one of Indias largest and most stable real
 estate development companies is immense and reassuring.
 
 Rest assured, in good times or in bad, your company will remain stable
 as ever.
 
 Yours sincerely,
 
 Rakesh Kumar Wadhawan
 
 Executive Chairman