Dear Shareowners,
 
 Can we talk about optimism in the current scenario?  I think we can. I
 believe, rather than putting the entire onus on the external economic
 landscape, we must try to evolve our own strategies of growth and
 resilience.  Interestingly, many large global business enterprises were
 founded, not during years of easy growth. But, during years of economic
 hardships. The reason is simple: hardship teaches us to question
 conventions, think laterally and take the road less travelled.  2012-13
 evoked mixed response from economies across the world. While Europe
 continues to weather uncertainties, the US economy is showing signs of
 sustainable growth. Japan, on the other hand, after several years of
 deflation and marginal growth, is on the road to recovery.  China
 continues to steal the show with above 7% growth, followed by India and
 other emerging economies.
 
 India''s long-term growth prospects continue to be bright, and the
 government is initiating reforms to elevate the economy to a high
 growth trajectory. At Indo Rama, we withstood challenges and were able
 to deliver satisfactory overall performance.
 
 In the current financial year, we achieved a turnover of Rs. 2,865.02
 Crores (Rs. 2,943.27 Crores in 2011-12).  Our EBIDTA stood at Rs.
 282.45 Crores against Rs. 319.06 Crores in 2011-12 and a net profit of
 Rs. 41.26 Crores against Rs. 31.96 Crores in 2011-12. Our earnings per
 share stood at Rs. 2.72, as on 31 March 2013.  In 2012-13, we
 maintained persistent focus on customers and product quality to drive
 creditable sales performance. Moreover, we completed several cost
 optimisation projects that improved our cost competitiveness and
 enhanced profitability, despite the decline in global trade,
 fluctuation in dollar prices and crude oil, and adverse local market
 conditions.
 
 During the year, we completed some key margin strengthening projects.
 We successfully commissioned 11 MW of power to utilise the spare boiler
 capacity for captive consumption. Also, expanded production capacity
 for value-added product Draw Texturized Yarn (DTY) from the earlier
 71,200 tonnes to 87,400 tonnes with the commissioning of 11 new
 machines.
 
 POLYESTER SCENARIO
 
 Over the last few years, the demand for polyester fibre is growing. The
 year 2012 was no exception. During the year, demand grew at 6%.
 Moreover, the year was characterised by soaring capacity additions in
 the PFY segment. Polyester fibre outlook remains positive and demand is
 estimated to increase by 5% between 2013 and 2016, on account of a
 decline in cotton fibre production in 2013-14.
 
 GREEN ENERGY
 
 We entered into the renewable energy space through a wholly-owned
 subsidiary, with a 30 MW wind energy project in Maharashtra. This will
 come on stream by June 2013. The renewable energy sector is expected to
 grow significantly in future. We aim to build a robust portfolio of
 renewable energy assets, offering optimum shareholder returns. We plan
 to add another 60-70 MW of renewable energy capacity by 2014. We have
 already acquired land in Rajasthan and Gujarat, having wind energy
 project development potential of around 300 MW.
 
 BACKWARD INTEGRATION INTO PTA
 
 In my last letter, I talked about our strategic backward integration
 initiative into petrochemical - Purified Terephthalic Acid (PTA),
 Polyethylene Terephthalate (PET) and Polyester Staple Fiber (PSF) -
 where we have entered into a Joint Venture with Indorama Ventures
 (Thailand) having equal equity partnership to set this project with an
 investment of Rs. 5,000 Crores.
 
 In 2012-13, we made significant developments on this project, conducted
 feasibility studies for site location across various states. Finally,
 we zeroed in on a location in Chennai (Tamil Nadu), from where we have
 two ports (Ennore Port and L&T Port) having liquid terminal facility in
 close vicinity. This will enable us to transport Paraxylene (key raw
 material) to our plant at minimal logistical cost and find an MoU with
 the Government of Tamil Nadu for fiscal and infrastructure support.
 This plant would be a strategic backward integration project, ensuring
 100% security of the key raw material (Purified Terephthalic Acid) for
 polyester, enabling uninterrupted operations. The PTA produced would be
 of consistent quality on account of best-in- class technology.
 
 The plant will also manufacture downstream products like PET Resin and
 PSF. PET resin is used for bottle grade applications meant for mineral
 water and carbonated soft drinks packaging. PSF finds application in
 apparel and non-apparel industries.
 
 FUTURE POTENTIAL
 
 Despite challenges, India holds out an enormous market potential. The
 per capita consumption of all fibre in India is around 6.86 kg per
 person, compared to the global per capita consumption of 12 kg per
 person.  However, for polyester fibre and yarns, India''s per capita
 consumption is 2.45 kg per person, as against the global per capita
 consumption of 5.85 kg. Polyester accounts for 36% of per capita fibre
 consumption in India.  On the back of India''s burgeoning population,
 rapid urbanisation, enhanced industrialisation, increasing cotton
 prices and insignificant cotton production growth, I am hopeful that
 polyester consumption will increase substantially in the coming years.
 
 We are strengthening our cost competitiveness by virtue of backward
 integration and cost rationalisation.  Therefore, positioning ourselves
 as a reliable supplier of high quality raw materials to downstream
 industries helps us achieve one of the highest profitability levels in
 the industry.
 
 The future belongs to polyester, and we are well positioned to leverage
 the market potential. On the strength of talent and teamwork, we are
 building an organisation known for its dynamism and constant
 innovation. In short, an organisation constantly on the move to create
 exceptional value for all stakeholders.
 
 On behalf of the Board, I would like to thank our shareowners,
 management team, employees, suppliers, associates and loyal customers
 for their unflinching support and endeavour.
 
 OM PRAKASH LOHiA
 
 Chairman and Managing Director