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. These have a bearing on your Company''s growth and performance.
 
 For the Financial Year 2010-11, your Company''s revenues stood at US $
 2.90 billion vis-a-vis US $ 1.57 billion in the previous year. Net
 profit at US $ 308 million reflects a rise of 27% in comparison to US $
 243 million in FY 2010.
 
 I must say that this year has been all about leadership through
 consolidation, employee engagement, performance management and customer
 focus.
 
 Leadership through consolidation
 
 The acquisition of ETA Star Cement marked our foray beyond Indian
 shores. It has always been our aspiration to establish our leadership
 position in India and to have a formidable presence in the Indian Ocean
 rim.  This region is a focus area for your Company in the White Cement
 sector as well. This acquisition along with the amalgamation of
 Samruddhi Cement, has bolstered your Company''s leadership position. We
 have become a pan India player. Alongside, we have gained a strong
 foothold in the growing markets in the Middle East and the neighbouring
 regions. Today, your Company''s cement capacity stands raised to 52
 mtpa. UltraTech is among the top-10 global cement companies.
 
 Capital outlays
 
 To accelerate the pace of growth, over the next 3 years, your Company
 has earmarked a capital outlay of US $ 2.4 billion. We are investing in
 the setting up of additional clinkerisation plants at Chhattisgarh and
 
 Karnataka together with grinding units, bulk packaging terminals and
 ready mix concrete plants across the country. These expansions are
 expected to be operational in FY14 and will augment our cement capacity
 by 9.2 mtpa.
 
 Outlook
 
 I believe, in the cement sector, issues such as the demand supply
 mismatch, infrastructural bottlenecks and rising input costs are
 challenges that we have to grapple with currently. In the last few
 years, new capacity additions of around 100 mtpa, coupled with the
 prevailing sluggish demand has resulted in a surplus scenario. At the
 same time, the substantial hike in coal and petro-product prices have
 led to a drastic increase in input costs. So, overall in the short term
 one feels bearish about the sector.
 
 In my view, over the long term the cement sector is likely to grow in
 excess of 8.5%. My optimism stems from the Government''s enhanced focus
 on urban as well as rural infrastructure development and housing.
 Furthermore, the enhanced capital allocation towards infrastructure in
 the 12th - Five Year Plan will be a growth propeller. We are positive
 that we will continue to do well.
 
 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
 Organisational 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 rigour 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 capitalise 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 organisations, 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