Dear Shareholder''s
 
 AM PLEASED TO PRESENT A GROWING PERFORMANCE IN 2011-12 FOR THE
 ATTENTION OF OUR SHAREHOLDERS.
 
 While growth in any year would be considered creditable, the fact that
 we grew in a challenging year like 2011-12 must make our performance
 even sweeter. The year under review was marked by several challenges
 like rising inflation, increased cost of borrowed capital, economic
 uncertainty, global slowdown and low consumer confidence.
 
 Performance
 
 Despite these challenges, your Company was able to post its best-ever
 performance.
 
 We increased revenues 32.25% from Rs.291.29 crore in 2010-11 to
 Rs.385.23 crore
 
 We increased profit after tax 14.88% from Rs.18.01 crore in 2010-11
 to Rs.20.69 crore
 
 We achieved the benefit of a full year''s production across our
 expanded capacity in Rudrapur, enhancing the Company''s production 15%
 over the previous year
 
 This counter-slowdown performance was achieved on account of the
 Company''s proactive investment in capacity, geographic presence and
 portfolio.
 
 Challenges
 
 The Company addressed the following challenges during the year under
 review:
 
 The Company absorbed a part of the increase in the wages of rag pickers
 and neutralised a part of the increase through superior
 procurement management. The Company selected a mix of foreign currency
 and rupee- based loans, reducing its average borrowing cost to 11% in
 2011-12, lower than the prevailing rates in the Indian economy.
 
 Market scenario
 
 Globally, the demand for polyester fibre is on the rise due to diverse
 applications in various sectors. The global consumption of man- made
 fibre was 51 million against 30 million tonnes of cotton fibre. The
 consumption ratio of polyester fibre to cotton fibre in India increased
 from 20:80 in 1980 to 40:60 in 2011.
 
 PET is one of the fastest-growing segments in plastics, providing a
 hygienic, durable and user-friendly packaging solution for various
 kinds of bottled drinks, beverages, pharmaceuticals, liquor, chemicals
 and other liquid products. With lifestyle changes and higher disposable
 incomes, demand for PET bottles is set to grow rapidly. Since PET
 bottles take a considerable amount of time to decompose and a huge
 amount of land is required to dispose them, there is a growing need to
 recycle PET bottles into something productive, economical and relevant.
 
 India''s PET resin demand of around 500,000 tonnes per annum is growing
 at around 7.5% annually. Even as India is emerging as one of the
 largest consumers of polymers, per capita PET consumption in India is a
 mere 0.3 kg compared with 2.1 kg the world over. Going ahead, as
 India''s PET consumption catches up with the global average, the Company
 will need to find a responsible long-term solution for the growing
 quantity of PET waste.
 
 At GESL, we address a significant opportunity.  Recycling is practiced
 worldwide; when one tonne of PET container is recycled, it saves around
 7.4 cubic yards of land fill space. Even as there is a growth in the
 manufacture of PET resin with some of the leading players in India
 doubling their capacities in near term, the country''s PET recycling
 capacity is placed at around 300,000 TPA.
 
 Our positioning
 
 GESL is advantageously positioned to capitalise on this opportunity.
 The Company was the first to commission PET recycling capacity in 1995,
 which has now resulted in an attractively low capital cost, the largest
 Indian waste recycling capacity, one of the widest product portfolios
 and the pioneering manufacturer of coloured fibres in India. The result
 is that GESL possesses a relatively de- risked business model across
 regions and market cycles.
 
 Product relevance
 
 The business of recycled PET fibres possesses certain advantages over
 virgin fibres. The raw material procurement price of virgin fibre is
 linked to the crude oil price movement, unlike waste PET, which is
 priced lower and based on our ability to negotiate with intermediaries
 who derive material from rag pickers. As a result, there is always a
 ready market for our products on the one hand and an easier ability to
 engage in business forecasting on the other. PET recycling is also
 energy- efficient; one tonne of PET recycling conserves energy
 equivalent to lighting a 60W bulb for six hours.
 
 At GESL, we are attractively and competitively placed to capitalise on
 the upside of our potential. We provide customised products that
 address the needs of our customers. We are engaged in a
 relationship-centric business model where we work with longstanding
 customers and most of our revenues is derived from existing customers.
 
 At GESL, our primary raw material is PET waste. India has abundant PET
 waste due to a growing use of PET across various products.  The Company
 created a strong network of collection centres backed by dedicated rag
 pickers. Besides, the Company developed a strong network of scrap
 dealers for PET waste sourcing.
 
 At GESL, we also derive strength through our strong balance sheet. A
 prudent financial strategy helped us expand without stretching our
 balance sheet. Our debt-equity ratio stood at 0.64 as on 31st March,
 2012.
 
 Way forward
 
 At GESL, we are strengthening our business through various initiatives:
 
   We are expanding our PET bottle recycling capacity by 30,000 TPA.
 The first phase of this expansion is expected to go on-stream by March
 2013 and second phase by September 2013.
 
   We are climbing the value chain by setting up a greenfield capacity
 (25,920 spindles) to manufacture spun yarn, which will make further
 value-addition of about 75% over PSF prices. We are also contemplating
 an integration forward into the manufacture of value-added products
 like technical non- woven textile, geo-textiles, etc.
 
 At GESL, we are growing the Company without compromising its solidity.
 Our sustainable business model is founded on long experience, solid
 business model, ethical business practices and lasting customer
 relationship along with a deep market understanding.
 
 The result is that we expect to achieve revenues of Rs.10 billion in five
 years through secure and sustainable means.
 
 With such a productive past, and with such an exciting future,
 encompassing foray into new segments and strategic projects, the
 Company looks to the future with confidence.  On behalf of the Board of
 Directors I take this opportunity to convey my gratitude to the
 management team and employees for their continued support, undiluted
 commitment, enthusiasm and devoted efforts . I would like to place on
 record my heartiest appreciation to our shareowners, suppliers,
 associates and loyal customers for their continued trust, they have
 placed in our Company, thus helping it emerge as a leader in the field
 of recycling.
 
 Regards,
 
 Shyam Sunder Sharmma
 
 Chairman