Dear Shareholder,
 
 The global economy has withstood the recession though its recovery has
 been rather sluggish. World growth decelerated to nearly 3.8% during
 the second half of 2010 from 5.3% during the first half.  The IMF
 forecasts a 4.3% global growth in 2011.  The US economy grew at 3% last
 year. Growth in the Euro zone was muted at around 2%. In sharp contrast
 emerging economies have grown briskly - in excess of 7%. China and
 India are the clear standouts, peaking at over 10% and 9% growth
 respectively.
 
 With the global economic growth slowing, growth levels in India are
 likely to be impacted.  Nevertheless, as we know, the fundamentals of
 the Indian economy remain strong. Over the past few years India''s track
 record has been impressive.  The country recorded almost twice the
 global growth rate. Whilst the country does face roadblocks in the
 short term, the medium to long term growth prospects for India are
 bright.
 
 In the Telecom sector, with the granting of New Licenses in 2008, the
 number of mobile operators rose from an average of 8 per circle to 14
 for every circle. The last two years have witnessed hyper- competition
 phase and it is apparently continuing.  This has led to a steep decline
 in mobile tariffs, resulting in the slowdown of the Mobile Industry
 Revenue growth to 11.9% in 2010-11.
 
 In contrast, your Company continued on its upward growth trajectory,
 clocking an annual revenue growth of 29.0%. I am pleased to share with
 you that your Company is the fastest growing Indian Mobile Operator. It
 achieved an annual revenue of Rs. 153.9 billion and EBITDA of Rs. 31.3
 billion on a standalone basis.  Your Company strengthened its revenue
 market share to 13.2% in FY''11 vis-à-vis 12.4% in the previous year as
 per the TRAI release. This reaffirms the increasing consumer preference
 for brand Idea.
 
 Your Company also leads the Industry in terms of the quality of its
 subscribers. It has the highest ratio of active subscribers to reported
 subscribers in the sector, at 93.1% with VLR subscribers (surrogate to
 active subscribers) base of 83.3 million against the reported
 subscriber base of 89.5 million.
 
 In January 2011, the Department of Telecommunications introduced the
 global practice of Mobile Number Portability (MNP) - an invite to
 customers to change their Wireless Operator, while retaining their
 mobile number. It is heartening to record that your Company is the
 leader on the MNP space and is the biggest net gainer nationally. The
 overwhelming response from the consumers on MNP highlights your
 Company''s network quality, superior customer service and brand
 strength.
 
 The consolidated revenue of your Company for the year stood at Rs. 155.0
 billion with an EBITDA of Rs. 37.9 billion.
 
 Early this year, your Company rolled out its 3G services in 9 out of
 the 11 service areas, where it won 3G Spectrum. Idea''s 3G services
 connect with the world of faster internet with the speed of upto 21
 Mbps, video calling and conferencing on the handset, Mobile TV and many
 more exclusive applications, which will help your company to tap the
 growing opportunity in the field of wireless broadband and other ''Non
 voice'' revenue services.
 
 Your Company is also among the first major telecom operator to initiate
 mobile banking service in alliance with likeminded Banks.  Idea has
 developed a facility titled Idea MyCash. It provides
 
 basic banking services including money transfer using the mobile
 platform – to offer banking services to the ''Unbanked'' that will play
 an important role in financial inclusion of a large mass of Indian
 population.
 
 The service area specific strategy of consolidating its leadership
 position in the thirteen Established service areas and cautious
 expansion in nine New service areas, has enabled your Company to
 strengthen its competitiveness in tough market conditions.  The
 improving capacity utilization of our 2G voice services, capturing
 future opportunities in wireless broadband, increasing preference of
 customers for brand Idea and the generation of healthy cash profits
 with a strong Balance Sheet, underscores Idea''s ability to benefit from
 long term sector opportunities. I expect this to happen once the
 hyper-competitive phase draws to its inevitable close and the pricing
 power returns to the operators.
 
 To our teams
 
 I would like to say a big thank you to all of our teams for their
 consistent high performance. I take great pride in the performance of
 our people.
 
 The Aditya Birla Group in perspective
 
 Today, we are a multi ethnic, multi dimensional Group with a bench
 strength of 133,000 passionate and committed people, belonging to 42
 nationalities across 6 continents. For the year 2010-11, our
 consolidated revenues stand at US $ 35 billion, compared to US $ 29
 billion in the preceding year, recording a 22% growth. Our leadership,
 regardless of levels, has a penchant for collaborative and innovative
 solutions, for new ways of working that keep our Companies and our
 products on our clients and customers radar all the time. This is what
 drives our performance.
 
 I believe that purposive actions in the people area can be huge
 differentiators to our growth plans. For us, it is very important to
 know what our people think of us. So we recourse to a biannual
 Organizational Health Survey (OHS) conducted by Gallup as the barometer
 of the engagement at work index in our Group. Over 28,000 executives
 spanning 31 countries participated in OHS 7 (2010).  The participation
 level at 97%, in Gallup''s opinion, sets a new benchmark. Given its
 objectivity and rigor of its process, there is immense value in its
 findings.
 
 It is a matter of great satisfaction for me that the key strength of
 the Group, as identified in the OHS, continues to be the great sense of
 pride that our employees experience and express in working for the
 Aditya Birla Group. More importantly, this pride stems from our
 employees'' belief and conviction that we are a good corporate citizen.
 Given the decline in ethics we see in business today, that is a huge
 validation of our insistence on value- based leadership. Pride, in turn
 is a great driver of positive energy and performance.
 
 To capitalize on this positivity and to grow and hone the talent
 resident in the Group, we have launched several initiatives that
 further our Employee Value Proposition – a World of Opportunities.  We
 have launched the ''Career Management Services'' – a pioneering effort
 which is an integrated end-to-end career service aimed at all
 employees. This is already afoot in the cement business. Over the
 coming years it will be extended across other businesses in the Group.
 
 On the issue of grooming talent, collectively our Business Directors
 and Business Heads, along with me, have invested over 500 man- hours in
 discussing, reviewing and working through the development plans of each
 of our talent pool members at the Group level. Their development plans
 include engagement with special projects, coaching and mentoring by the
 top leadership team, besides attending cutting-edge functional and
 behavioural programmes globally that open the frontiers of their mind
 and goad them to defy limitations. That 60% of the total leadership
 positions were filled in from our existing talent in 2010-11 validates
 the talent honing processes which have laid a robust leadership
 pipeline within our Group.
 
 Our commitment to employee learning and development at all levels, is
 unrelenting. In 2010-11, there were 30,000 touch points
 
 with our learners through multiple formats of learning. More than
 25,000 employees enlisted in e-learning programmes at Gyanodaya, our
 Institute of Management Learning. This year, at Gyanodaya, 200
 colleagues at very senior levels attended specially designed
 programmes. They had the opportunity to interact with professors from
 leading Universities and B-Schools. They were a great faculty, drawn
 from Universities such as Stanford, RICE, Michigan and Duke at the
 global level along with professors from the IIMs and ISB (Hyderabad).
 Our senior managers also derived immense value from training and
 learning sessions conducted by leading consultancies such as The Centre
 for Creativity Leadership (CCL), The Hay Group and The Works
 Partnership (TWP), among others.
 
 Finally, I am delighted to share with you that our employees have given
 a thumping vote of confidence to our Group as the ''Best Employers'' in
 India and in Asia Pacific. Aditya Birla Group, of which your Company is
 an integral member, has been declared as one of the ''Best Employers'' in
 India in the Aon Hewitt Survey conducted recently. We ranked 2nd from
 among 200 other Indian organizations, who participated in the survey.
 In Asia Pacific, we have been ranked among the top companies as well.
 Soon we hope to attain this stature in the rest of the world too -
 wherever we operate.
 
 Our people are our future. With them and the wind in our sails, we feel
 buoyant about achieving our stretch goal of becoming a 65 billion
 dollar Group by 2015. Your Company will play an important role in
 reaching this destination.
 
                                                      Yours sincerely, 
 
                                                  Kumar Mangalam Birla