The Directors have pleasure in presenting their Report and the Audited
 Accounts of the Company for the year ended 31st March 2011.
 
 FINANCIAL RESULTS                                        Rs. in lacs
 
                                                  2010-2011 2009-2010
 
 Profit before Interest,
     Depreciation, Exceptional
     Items and Taxation                             9759.27  15772.12
 
 Less:Interest                                       550.53    625.14
 
      Depreciation                                  1794.93   1554.71
 
 Profit before Exceptional
        Items & Taxation                            7413.81  13592.27
 
 Exceptional Items                                        –     18.37
 
 Profit after Exceptional Items                     7413.81  13573.90
 
 Taxes                                            (2353.39) (4602.08)
 
 Profit after Tax                                   5060.42   8971.82
 
 Balance as per last year                           4262.68   5181.10
 
 AVAILABLE FOR APPROPRIATION                        9323.10  14152.92
 
 APPROPRIATION
 
 General Reserve                                    3000.00   8493.30
 
 Interim Dividend on Equity Shares                   447.75    447.75
 
 Proposed Final Dividend on
 Equity Shares                                       746.26    746.26
 
 Corporate Dividend Tax                              195.43    202.93
 
 Balance carried to Balance Sheet                   4933.66   4262.68
 
 DIVIDEND
 
 During the year the Board has declared an Interim Dividend of Rs. 6/-
 per equity share (60% of the paid-up capital).  Your directors are now
 pleased to recommend a final dividend of Rs. 10/- per equity share
 (100% of the paid- up capital) for your consideration and approval at
 the ensuing Annual General Meeting of the Company.
 
 With the proposed final dividend, the total dividend for the year
 2010-11 would be Rs. 16/- per share (160% of the paid-up equity
 capital).
 
 The total dividend outgo would be Rs 1389.44 lacs (including dividend
 distribution tax)
 
 OVERALL ECONOMY
 
 The Indian Economy in 2010-11 has been considered as one of the fastest
 growing economies of the world, and is known to have made one of the
 most rapid recoveries after the global financial meltdown of 2008-09
 and the affect of two poor monsoons in 2008-09 & 2009-10. Although the
 monsoon in 2009-10 was poor which resulted in unsatisfactory yield of
 Kharif crop, the recovery of both agricultural and manufacturing
 sectors in the early months of 2010 resulted in an overall GDP of 8.6%
 in 2010-11.  However, the agricultural GDP rate of 0.4% in 2009-10, and
 unseasonal rains affecting winter crops in 2010-11, combined with high
 inflation has resulted in lower demand and absence of growth in our
 industry.
 
 High inflation continues to be an area of concern for the common man
 and was a serious challenge for the Government during 2010-11. Driven
 mainly by food inflation and increasing cost of living, Government was
 compelled to take stern actions such as raising the interest levels.
 The weaker segments of the population were affected the most, which to
 a large extent explains the lack of growth in demand for some of the
 rural/semi-urban products including the fibre cement roof sheeting.
 
 However, the medium to long-term prospect of the economy, including the
 infrastructure and industrial sectors, continue to remain positive.
 India is today rated as one of the most attractive investment
 destinations across the globe.  In 2011-12 the growth in our industry
 is expected to be between 5% to 7%.
 
 PERFORMANCE
 
 In the year 2010-11 the Companys revenue increased to Rs. 801 Crores,
 a growth of 6% over the previous year and a CAGR of 12% in the last 5
 years.
 
 Sales, in quantity terms, of Fibre Cement Sheets increased by 4% over
 the previous year, as compared to 2% growth in the industry. Poor
 monsoon in 2009-10 coupled with high inflation had an impact on the
 spend for new shelter or upgradation. The Industry saddled with excess
 capacity faced severe pricing pressure. Inspite of escalation in raw
 material prices the Industry could not pass on the increase to its
 customers. On account of these two major factors, the Industry saw a
 drop in profitability. HIL increased its sales volume and market share
 marginally over the previous year due to its competitive strength.
 
 The Fibre Cement Sheet Industry is estimated to grow at about 5% - 7%
 in financial year 2011-12 on account of good monsoon in 2010-11,
 increase in rural income on account of record agriculture production
 coupled with increase in minimum support price. The housing shortage
 continues to be large which offers opportunity for growth.  With the
 additional capacities established and further enhancement in capacity
 planned during the year, your Company is confident of maintaining its
 market leadership.
 
 Implementation of Government of Indias infrastructure development
 projects have started gaining momentum. This together with other
 Government sponsored initiatives in providing homes and schools for the
 masses in general and the poor in particular is expected to increase
 demand for construction materials.
 
 Green Building Products
 
 Emphasis on environment and preference for Green building products
 remains a focus area for the construction Industry.  The Companys
 drive in growing the Green Building Products business also met with
 considerable success.
 
 Aerocon Panels
 
 Aerocon Panels, used for construction of prefab structures and
 partition walls, has been extensively used in the infrastructure
 sectors like roadways, irrigation, power plants, airports etc and also
 in the construction of malls, schools, colleges etc.
 
 The production in quantity terms of Aerocon Panels has increased by 40%
 and the sales have increased by 39% respectively over the previous
 year. The business is expected to grow in excess of 25 % p.a. for next
 few years.
 
 Aerocon AAC - Blocks
 
 The Aerocon Blocks, another key offering of the Company as part of its
 Green Building Products initiative, also registered a good growth in
 2010-11. This was possible due to the newly commissioned Plant at
 Golan. After the stabilization period of six months of operation, the
 Golan plant is operating at above 60% of its capacity. This has helped
 your Company to capture significant portion of the markets in west and
 south in a short time amidst intense competition, which is a reflection
 of the Companys aggressive and successful strategies in developing
 this business. The division will continue to grow in volumes in the
 coming year, although there will be pressure on prices as competition
 is likely to intensify further with new entrants in the market.
 However, the high acceptance of our
 
 Aerocon brand and our focus on quality and reliability will help the
 company to grow this business.
 
 The Company has started offering building solutions to its customers,
 which will help the customers use our products more efficiently and
 utilize the full value of these products.
 
 Production and Sales, in quantity terms, of AAC Blocks have increased
 by 42% and 63% respectively over the previous year largely contributed
 by our newly commissioned Gujarat facility.
 
 Thermal Insulation
 
 During 2010-11, the Thermal Insulation product, which faced capacity
 constraints also suffered due to surge in imports from China. The
 augmented capacity, improvements in efficiency and costs will help in
 recovery of this product segment in 2011-12.
 
 Production and Sales, in quantity terms, of Thermal Insulation products
 have decreased by 20% and 21% respectively over the previous year on
 account of the reasons cited above.
 
 NEW PROJECTS
 
 During the year under review the Company started commercial production
 of its AAC Blocks manufacturing unit at Golan, near Surat, Gujarat in
 July 2010. This unit will help the company to cater to the growing
 market for AAC Blocks in the western part of the country, as the demand
 for this product is expanding due to its inherent advantages of being
 environment friendly, light weight, good compressive strength and
 providing better heat insulation.
 
 Wind Power :- The Company has forayed into renewable energy sector in
 the year under review, in line with the Companys mission of pursuing
 green businesses. HIL took the initial step by setting up a 3.60 MW
 (2x1.80MW) Wind Power Project in Vandhiya Village, Kutch Dist, Gujarat.
 The two Wind Turbines have been commissioned in March and April 2011,
 respectively. A part of the energy generated from the project shall be
 used for captive consumption at our AAC Blocks manufacturing unit at
 Golan, Gujarat and the surplus energy generated shall be sold to
 Gujarat Electricity Board.
 
 MANAGEMENT DISCUSSION & ANALYSIS REPORT
 
 A Report on Management Discussion & Analysis is appended as Annexure
 (IV) to this report as per the requirements of Listing Agreement with
 the Stock Exchange(s).
 
 DIRECTORS
 
 In accordance with the provisions of Companies Act, 1956 and the
 Articles of Association of the Company, Mr. Shreegopal Daga and Mr.
 Yash Paul, Directors of the Company will retire by rotation at the
 ensuing Annual General Meeting and, being eligible, will be offering
 themselves for re-appointment.
 
 For Directors seeking re-appointment in the forthcoming Annual General
 Meeting of the Company; the particulars as required to be disclosed in
 accordance with Clause 49 (Corporate Governance) of Listing Agreement,
 forms part of Corporate Governance Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Directors Responsibility Statement as required under the provisions of
 Section 217 (2AA) of the Companies Act, 1956, is given in the Annexure
 (I) attached hereto and forms part of this Report.
 
 CORPORATE GOVERNANCE
 
 The Company has been making every effort to improve governance and
 transparency in the conduct of business.  Your Company is committed to
 good Corporate Governance with ethical corporate practices. As per the
 requirements of Listing Agreement with the Stock Exchanges, a
 Compliance Report on Corporate Governance for the year 2010-11 and a
 Certificate from the Auditors of the Company are furnished as part of
 this Annual Report.
 
 The Ministry of Corporate Affairs has issued Corporate Governance
 Guidelines in December, 2009. While these Guidelines are recommendatory
 in nature, the Company has already adopted most of the Guidelines. The
 Company will be reviewing its Corporate Governance Practices in the
 context of other recommendations under the said Guidelines for
 appropriate adoption.
 
 HUMAN RESOURCES DEVELOPMENT
 
 The Companys growth and profitability plans can be achieved only
 through a competent and motivated team of employees. Various
 initiatives towards having high quality talent, retaining talent and
 training have been put in place.
 
 A separate cell PACE (Performance And Career Enhancement) has been
 established to design talent development plans that ensures attracting
 and retaining the talent and prepare them for taking up critical
 positions in the future.
 
 We have rolled out the YUVA (Young Unique Vibrant Achievers) programme
 under which high calibre young talent is hired from top ranking
 institutes to create a pipeline of talent within the company.
 
 The Industrial Relations at all plants of HIL continue to be cordial,
 except for the disturbance in our Dharuhera Plant for a period of four
 weeks.
 
 AUDITORS
 
 The Statutory Auditors of the Company, M/s. S.R.Batliboi & Associates.,
 who retire at the conclusion of ensuing Annual General Meeting, being
 eligible, offer themselves for re-appointment.
 
 PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 Particulars with respect to Conservation of Energy, Technology
 Absorption and Foreign Exchange Earnings and Outgo as required under
 Section 217(1)(e) of the Companies Act, 1956, read with the Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988 are given in the Annexure (ii) attached hereto and forms part of
 this Report.
 
 PARTICULARS OF EMPLOYEES
 
 In terms of the provisions of Section 217(2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975 as
 amended, the names and other required particulars of the employees are
 set out in Annexure (III) attached hereto and forms part of this
 Report.
 Annexure (I): Directors Responsibility Statement
 
 Pursuant to the requirement of Section 217(2AA) of the Companies Act,
 1956 and on the basis of compliance certificate received from the
 executives of the Company and subject to disclosures in the Annual
 Accounts, as also on the basis of the discussion with the Statutory
 Auditors of the Company from time to time, and to the best of their
 knowledge and information furnished, the Board of Directors states:
 
 i) That in preparation of the Annual Accounts for the year ended 31st
 March, 2011; all the applicable Accounting Standards prescribed by the
 Institute of Chartered Accountants of India have been followed along
 with proper explanation relating to material departures, if any.
 
 ii) That the Directors have adopted such accounting policies, as
 selected in consultation with Statutory Auditors, 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 the financial year ended 31st March, 2011.
 
 iii) That the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956, for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities.
 
 iv) That the Annual Accounts for the year ended 31st March, 2011, has
 been prepared on a going concern basis.
 
 
 ACKNOWLEDGEMENTS
 
 The Board of Directors places on record their appreciation for the
 co-operation and support extended by all stakeholders in the Company
 including the Shareholders, Bankers, Suppliers and other Business
 Associates.
 
 The Directors also wish to place on record their appreciation of all
 the employees for their commitment and contribution towards achieving
 the goals of the Company.
 
                                  On behalf of the Board of Directors
 
                                                           C.K. BIRLA 
                                                             Chairman
 
 New Delhi, 27th April, 2011