Dear Shareholder''s
 
 FISCAL 2011-12 WAS ONE OF THE CHALLENGING YEARS FOR THE INDIAN ECONOMY
 AND INDIA INC., AS WE WERE FACED WITH THE DIFFICULT TASK OF MANAGING
 ADVERSITY.
 
 Challenging times
 
 Stubborn inflation compelled the RBI to resort to interest rate hikes
 primarily due to lack of innovation in managing inflationary pressures.
 This adversely impacted capital intensive initiatives by India Inc.
 Besides, the surfacing of various high-level improprieties forced the
 active involvement of the Indian judiciary which diverted the policy
 makers'' attention on managing tough situations and compulsions of
 coalition politics have resulted in a freeze on growth- oriented
 policies. The other roadblock that severely challenged economic
 progress was the sharp rupee depreciation and increasing fuel prices.
 
 The prevailing overall uncertainty and lack of optimism, bulging fiscal
 deficit, rising cost of funds and increased cost of living forced India
 Inc., and the average Indian to postpone investment and consumption
 respectively - clearly borne out in India''s economic progress - a 6.5%
 GDP growth, lower than what we achieved in the 2008 global slowdown.
 
 Inspired response
 
 Our performance in 2011 -12 was very satisfying even as the external
 environment remained challenging.
 
 We sustained the growth momentum, increased market share and reinforced
 our leadership across our key business verticals. Net sales grew 34%
 and profit after tax grew 45%.
 
 The Company''s ability to grow in the rapidly evolving and adverse
 external environment was due to its customer- centric approach,
 balanced nature of the business portfolio and entrenched presence
 across India and strengthening footprint in international markets -
 which resulted in a positive divergence - high sales growth and an even
 higher profit growth.
 
 For the automotive battery business, we focused on strengthening our
 presence in the aftermarket segment. We filled the gaps in our product
 offering, widened our distribution network and invested in enhancing
 brand visibility resulting in increased market share.  Besides, we
 developed batteries for some fast-moving OEM diesel platforms which
 improved the share of business and strengthened our market share.
 
 In the industrial battery business, our alliance with Bharti Airtel
 generated large exports to Africa, Sri Lanka and Bangladesh. Besides,
 our transformation from a product vendor to a solution provider
 generated good business in the telecom space. Strengthening
 penetration, enhanced recognition of product performance in BFSI,
 government and corporate circles delivered sizeable volumes for our UPS
 batteries - we grew faster than the industry.
 
 On the cost front, our shop floor teams successfully implemented various
 measures germinating out of their rich knowledge capital and lateral
 thinking ability - partly neutralizing the impact of inflationary
 headwinds on business profitability.
 
 The result is that we exceeded our business target for 2011 -12 even as
 the country passed through economic slowdown.
 
 Prospects for 2012-13
 
 The challenges posed by an adverse external environment are expected to
 continue. India''s economy is expected to grow at 6.5-7%. Inflation
 remains high at 7.5%-plus levels. The political instability continues
 to withhold the passage of important growth-oriented policies. The
 rupee value continues to hover around 55 against the US$, making
 imports dearer. As a result, the performance of India Inc., will
 largely remain subdued during the current fiscal. This is already
 reflected in low IIP growth and significant underperformance by the
 automobile segment.
 
 The immediate action plan
 
 At Amara Raja, we continue to defy these challenging times.
 
 We have created a business plan with stretch targets. We are confident
 that we will be able to catalyse growth and meet aggressive targets
 through stronger capabilities.
 
 Leadership and management: We plan to expand our operations - new
 capacities, new products, new technologies and new markets. As a
 precursor to this expansion, we are reinforcing the leadership team and
 nurturing leaders to make our targeted goals a reality. We are
 fast-tracking the growth of star performers to undertake larger
 organisational responsibilities.
 
 Research and development: We will continue to invest in R&D and
 engineering capabilities that strengthen innovation, widen product
 offerings and improve our performance.
 
 Technology alliance: We leveraged the rich intellectual capital of
 Johnson Controls for the manufacture of automotive batteries leading to
 sectoral leadership in a short time. We will explore strategic alliance
 for the industrial battery business and cater to dynamic technology
 changes in the standby power segment.
 
 Information technology: We will strengthen our investments in IT
 solutions that provide the critical backbone for strategic and informed
 1 decision-making.
 
 Visibility & Reach: Our objective is to transform the ''give some
 battery'' customer response to ''give Amaron®'' through innovative
 branding and visibility initiatives and widespread reach.
 
 The big question
 
 The big question is whether Amara Raja will now reconcile to a mature
 growth rate on a larger base or sustain its growth percentage. At our
 Company, the answer is clear: having crossed an important revenue
 milestone of Rs20 billion in 2011 -12, we are forging ahead to emerge as
 Rs40 billion revenue company in the next four years.
 
 The medium-term aspiration
 
 In the next three years, we will invest more than what we invested in
 the past.  Our medium-term blueprint comprises a dual strategy: create
 demand faster than what the industry provides and augment supplies in
 existing and new technologies.
 
 Automotive battery space
 
 Creating demand: As India strengthens its position to emerge as a
 global automotive hub, we work with leading global and domestic OEMs to
 customise products that meet their standby power requirements and to
 position us as a preferred vendor of automotive majors (four-and
 two-wheelers). We intend to continue the growth momentum in the
 aftermarket by increasing visibility, through attractive product
 offering and enhancing Amaron''Bl and Power Zone™ network pan- India.
 We will enable PowerZone™ to emerge as the second national brand,
 accelerating off take. We will also make exports more strategic in
 certain geographies in the Indian Ocean Rim.
 
 Augmenting supply: We will be expanding our four-wheeler and two-
 wheeler battery capacity to six million units during 2013-14 in our
 existing location. We also intend to commission new manufacturing
 facilities to further augment four-wheeler automotive capacities at a
 strategic second location, while we continue to augment the two-
 wheeler capacities, as and when required, at the existing location.
 
 Innovation: We are evaluating novel process technologies that promise
 cost optimization and enhanced product performance. We also intend to
 introduce new range of products for micro hybrid application, inverter
 batteries and will explore opportunities for introducing VRLA
 four-wheeler batteries.
 
 Industrial battery space
 
 Creating demand: As the telecom space upgrades its operating platforms
 to 3G and 4G and deepens its presence in rural India, incremental
 demand will be derived through new roll- outs and upgrades; while the
 replacement demand for existing infrastructure will continue to provide
 enough opportunity. Besides, as India''s power demand and supply gap
 continues to widen, we expect that the demand for UPS batteries will
 increase.  We will strengthen our dominance in these spaces through
 collaborative customer partnerships with the objective to develop
 customized products and comprehensive solutions. Besides, we are
 analyzing market realities to establish a
 
 presence in the tubular flooded/gel space, widening our opportunities.
 
 Augmenting supply: We are expanding the medium VRLA product line
 capacity from existing 1.80 million units to 3.00 million units in a
 strategic second location, which will go on stream in the next 12-1 6
 months. We will also create tubular flooded/gel product lines in
 existing or new location in line with emerging market dynamics.
 
 The proposed investment in the second location will provide enough room
 for future expansions both in industrial and automotive battery
 businesses.
 
 Concluding remarks
 
 We are very much excited about the long-term prospects of the industry
 and our Company. In the past, we demonstrated our ability to provide
 superior shareholder returns than they would otherwise have earned
 through alternative investment options. We continue to be confident of
 doing the same over the foreseeable future.
 
 On behalf of the Company, the management takes this opportunity to
 convey their sincere thanks to all shareholders and place on record
 their gratitude to their employees, customers, channel partners,
 bankers, suppliers and our joint-venture partner Johnson Control Inc.
 
 Warm regards,