We are living through a historic cycle of ascendancy in India,
 following decades of sluggish economic performance. The country is now
 poised at the epicenter of a new wave of economic growth, supported by
 a vast and expanding middle class, strong domestic consumption, high
 rate of investments and a robust regulatory framework. The immensity of
 the market potential can be highlighted by a reliable figure: the size
 of the middle class households with an annual income of at least US$
 4000 dollars increased from 13.8 million households in 2001-02 to 46.7
 million households in 2009-10, according to the National Council of
 Applied Economic Research. The latter figure translates to about 200
 million people. With the economy projected to grow around 8% annually,
 and the middle class set to triple in 15 years, the most important
 characteristic of the market is the high potential of domestic demand,
 which is expected to grow at a compounded rate of 9.2% year-on-year
 between 2010 and 2030.
 
 Indias textile industry is an enthusiastic participant in this new era
 of growth, which is expected to drive the polyester industry. Textiles
 contribute about 14% to industrial production, 4% to the GDP and 17% to
 the countrys export earnings. It provides direct employment to over 35
 million people. The industry is expected to grow from the present US$
 70 billion to US$ 220 billion by 2020. Growth in demand will be driven
 by the limited availability of cotton and the resulting high cotton
 prices, warranting a demand shift from cotton towards polyester.
 Besides, in India the cotton-polyester blend is low. However, owing to
 consistent innovation if this blending proportion rises even 1% in
 favour of polyester, the resulting demand for the fibre would be
 significant. Constraints in enhancing polyester capacities in the short
 run, coupled with a surge in national and international polyester
 demand will shape the industrys future.
 
 At Indo Rama, our strategic focus revolves around consistent value
 creation through innovation and research, cost optimization and market
 expansion. These strategies have strengthened our financial performance
 significantly. In 2010-11, our gross sales touched Rs. 3,000.14 crores;
 an increase of 12.81%, compared to Rs. 2,659.41 crores in 2009-10. This
 was on account of the rising polyester demand. The EBIDTA stood at Rs.
 427.90 crores as against Rs. 233.80 crores last year, a staggering
 83.01% surge. Profit before tax stood at Rs. 208.34 crores against Rs.
 7.62 crores for the previous year. The net profit also increased
 considerably by 1855.26% to Rs. 139.41 crores vis-a-vis Rs. 7.13 crores
 in the previous year.
 
 We have recently commenced an 11 MW thermal power project to generate additional power and reduce power
cost. We are focusing on accelerated
 execution and plan to commission it by the end of 2011. Post
 commissioning, the overall captive power cost of polyester production
 will decline and enhance profitability. The installed power capacity,
 post commissioning, will be 93.5 MW.
 
 We are also installing coal fired Dowtherm Heaters in place of Furnace
 Oil fired which will result into significant operating savings. The
 plant is expected to be on stream from July this year.
 
 So what is the big picture on the horizon? Let me enumerate our
 priorities:
 
 - Capacity addition of 14 DTY machines with expected annual capacity of
 98,000 tonne by 2012;
 
 - Generation of repeat business from existing clients;
 
 - Strengthening of intellectual capital through prudent and timely
 recruitment;
 
 - Aggressive forays into new geographies;
 
 - Enhance logistics fleet to facilitate the inflow and outflow of goods
 and reduce cost;
 
 - Financial transaction efficiency, cost rationalization and
 optimization of cash flow;
 
 - Drive export contribution to revenues to the levels of 25% of
 topline;
 
 - Alignment of corporate objectives with that of stakeholders.
 
 The future is mapped out, the strategy finalised, now comes the role of
 human resources, who will turn this vision into a corporate reality. At
 Indo Rama, we need to nurture competence and create ‘a dedicated army
 of thought leaders, who will elevate the organization into the next
 orbit.
 
 take this opportunity to thank you for supporting the Company in all
 these years and look forward to your wholehearted support and
 encouragement.
 
 would also like to express my gratitude to my colleagues, our
 customers, business associates and members of the Board and our
 extended family of stakeholders for their valuable assistance and trust
 in our capabilities.
 
 Together, we will continue to do everything possible to justify your
 trust.
 
 Best wishes,
 
 O. P. Lohia
 Chairman and Managing Director