One would have expected that a decline in the global and Indian
 economies would affect our performance significantly.
 
 Although Sturdys gross revenues declined from Rs 118 cr in 2007-08 to
 Rs 112 cr in 2008-09, our businesses were not extensively affected on
 account of one fundamental reality: our businesses are core to Indias
 economic fabric. It is also pertinent to mention that the overall
 economic recession did not affect our production or sale in
 quantitative terms, which increased compared with the previous year.
 
 At a time when the country continued to invest in its core sectors, the
 positive trickle-down sustained the health of our businesses
 (agriculture, building products and power). This is clearly visible in
 our strong first quarter results of 2009-10: revenue increased around
 20% and EBIDTA grew 19% compared to the corresponding period in 2008-
 09. This vindicates the resilience of our business model.
 
 Irrigation solutions:Micro and macro irrigation leveraged the
 governments enhanced agricultural emphasis. The Company grew this
 business 41 % to Rs 118 cr (post-merger) during 2008- 09. Its growth
 was derived from a successful ability to compete with large domestic
 and international players in providing micro irrigation systems around
 a superior price-value. An index of the Companys success was its high
 market presence in the area of irrigation solutions i.e first position
 in Uttar Pradesh, Haryana and third in Andhra Pradesh.
 
 Baiiding products:The Company provides ACC roofing sheets and aluminium
 composite panels used extensively in building applications. It grew
 this business by 4% to Rs 61 cr during 2008-09. The business escaped
 much of the realty slowdown as it manufactured products for the IT
 industry, malls, hotels, automobile and household furniture segments.
 The Company widened its dealer reach across 10 states in India,
 approaching direct ACP customers like petrol stations, signage etc.
 
 Aluminium conductors:The Company i.e. Nu-Line Industries Pvt. Ltd. (one
 of the Group companies and one of the two companies merging with Sturdy
 Industries Ltd.) achieved a revenue of Rs 62 cr in 2008-09 on an
 installed capacity of 4,000 MTPA. It manufactured aluminium conductors,
 which are used extensively in the power transmission and distribution
 industry.  Sturdy Industries Ltd. is in the final stages of
 implementing a plant with an installed capacity of 11,000 MTPA for the
 manufacture of aluminium conductors to scale production for a pan-India
 presence. Correspondingly, the Company intends to extend from supply to
 state electricity boards (Punjab, Haryana, Uttar Pradesh and Himachal
 Pradesh) to private players.  Besides, the increase in scale and spread
 will enable the Company to emerge as one of the principal vendors of
 PowerGrid Corporation of India Limited (PGCIL). This is extremely
 relevant at a time when PGCIL expects to invest Rs 55,000 cr over five
 years in procuring aluminium conductors and other allied items for
 widening Indias power transmission infrastructure.
 
 Our optimism
 
 Our optimism is derived from the enduring appeal of our business
 model. Simply stated, the businesses that we are present today will
 remain relevant in the proximate and distant future in view of
 realities that are not expected to change.
 
 Water scarcity: A growing water scarcity is perhaps one of the most
 threatening realities in the world today, partly on account of climatic
 change, overdrawing of ground water resources, rampant waste and
 increasing consumption. The result is that responsible water management
 is now a government priority, reflected in Prime Minister Mr. Manmohan
 Singhs statement of Save water, save earth.  A renewed emphasis on
 water conservation and increased agricultural production represent
 critical needs of the hour. The governments effort to
 
 increase the irrigation acreage - it wants to bring 6.4 mha of new area
 under irrigation during the Eleventh Five-Year Plan - is helping the
 Company to expand its reach. The government expects to reduce the gap
 between irrigation potential created and irrigation potential utilised
 by enhancing the efficiency of irrigation,systems, micro irrigation,
 fertigation, crop diversification and multiple water uses.
 
 Infrastructure gap:lndias construction market is worth USD 65 billion
 vis-a-vis Chinas USD 165 billion; Indias per capita consumption of
 electricity is a dismal 704 kwh compared to 1,380 kwh in China; China
 has 63,300 km of total expressways, while India has 400 km total
 six-lane expressways; Indias ports have a higher turnaround time of
 three-four days as against 12 hours in Hong Kong and Singapore. Over
 the coming decade, the country expects to correct this divergence
 through one of the highest infrastructure spends in the world, leading
 to the creation of more roads, railways, airports, ports and power
 plants, among others.
 
 Relevantly, during the Eleventh Five-Year Plan, the total investment in
 Indias infrastructure sector is estimated to be around 7.5% of GDP.
 Capex for infrastructure development - which comprises roads, airports,
 ports, power, oil and gas and telecom - was pegged at around USD 514
 billion or Rs 2,056,150 cr for FY07-12.
 
 Infrastructure investments in the Eleventh Plan (Rs cr at 2006-07
 prices)
 
 Sector                               Total investment in Eleventh Plan 
  
 Electricity (incl. NCE)                            666,525
 
 Roads                                              314,152
 
 Telecom                                            258,439
 
 Railways (incl. MRTS)                              261,808
 
 Irrigation (incl. watershed)                       253,301
 
 Water supply and sanitation                        143,730
 
 Ports                                               87,995
 
 Airports                                            30,968
 
 Storage                                             22,378
 
 Sas                                                 16,855 
 
 Total                                            2,056,150
 
 In USD billion - 514.04 [Source: Planning Commission]
 
 Construction
 
 The construction sector was the biggest beneficiary of infrastructure
 expansion.  Structural infrastructure construction • across all sectors
 will require a Rs 14,500-billion cumulative capex in the Eleventh
 Five-Year Plan. Housing construction and surface transportation (roads)
 represent the major growth drivers for this sector. 
 
 Power sector
 
 . India is the worlds sixth largest energy consumer and Asia-Pacifics
 third largest power generator (after China and Japan).
 
 . Indias per capita electricity consumption stands at a low 704 units
 against the 2,596 KWhr world average.  The Eleventh Five-Year Plan
 envisages an increase in per capita consumption to 1,000 KWHr,
 catalysed by its Power for all by 2012 programme.
 
 . The domestic power sector demonstrates a huge growth potential as 
 Indias elasticity of electricity, with reference to GDP growth, 
 is estimated at 0.95.
 
 Power anomaly:lndias per capita power consumption is nearly one-fourth
 the global average, almost half of the Chinese per capita consumption
 and around 4% of the US per capita power consumption. As on 31st March
 2009, the country had 147,965.4 MW installed power generation capacity,
 of which around 63.34% was thermal in nature. The peak power deficit
 stood at 12% during 2008-09. A huge percentage of the Indian population
 still lives in darkness without electricity; • around 60% of Indian
 firms and a large percentage of homes rely on captive or back-up
 generation [Source:- World Bank Report].
 
 Our strategies
 
 Sturdy is responding to these realities through the following: an
 expanding presence in the right product segments; an increase in
 capacities timed with demand growth; investments in technology and
 quality certifications;
 
 commissioning of units in locations with attractive tax incentives.
 
 ExpansiorvWe are commissioning a large factory (11,000 MTPA) for the
 manufacture of large diameter cable conductors at Baddi (Himachal
 Pradesh), which will be fully operational by December 2009. This plant
 will enhance our manufacturing capacity from 4,000 MTPA (presently
 under Nu- Line Industries Pvt. Ltd.) to 15,000 MTPA and widen our range
 of cable conductors. In addition to the above a new project for the
 manufacture of aluminium conductors for power grid corporation, having
 30,000 MTPA capacity with an estimated capex of Rs 60 cr. This will
 enlarge the scope of revenues from this business from Rs 62 cr in
 2008-09 to Rs 350 cr in 2011 - (at 2008-09 realisations). We will be
 advantageously placed to service the raw material requirements of the
 expanded capacity through our backward integration plant.
 
 In the irrigation segment we are enhancing our production capacity from
 
 13,000 TPA in 2008-09 to 43,000 TPA in 2011 by setting up a plant
 capacity of 30,000 MTPA in Baddi. This plant will manufacture drip
 irrigation equipment - with large diameter (up to 1,000 mm) HDPE and
 PVC pipes involving a Rs 65- cr outlay at Baddi (Himachal Pradesh), a
 tax-free zone.
 
 Integration: We are commissioning two power projects (3 MW hydro and
 200 MW gas-based) for captive consumption starting 2011, generating
 savings of around Rs 2 per unit. The agreement of the gas-based plant
 (located in Punjab) has already been concluded with GAIL and the plant
 should be partially operational by 2011-12. While on the one hand, the
 hydro plant will provide for the Companys growing captive power needs,
 the other plant will provide sizeable revenues and attractive
 PPA-driven cash flow. As a result, we expect that a sizeable percentage
 of our revenues in the first full year of implementation will be
 derived through a stable revenue source, providing the Company with a
 consistent resource for sustaining its growth.
 
 Distribution:Our capacities for ACC roofing sheets and irrigation
 systems were utilised optimally. Our immediate priority is to widen
 distribution, enhance offtake and raise utilisation.  Since Sturdy
 enjoys attractive recall in the export of aluminium composite panels in
 Europe, we appointed an exclusive distributor in Slovakia to deepen our
 presence in Slovakia, Austria, Rumania, Hungary, Poland and Germany.
 The result is that we expect this business to grow attractively.
 
 Outlook
 
 The interplay of our sectoral synergies and corporate competitive
 positioning will enable us to grow revenues from Rs 241 cr
 (post-merger) in 2008-09 to Rs 400 cr in 2009-10 and a projected Rs 750
 cr in 2011-12, translating into enhanced value for all those who own
 shares in our Company.
 
 Sincerely,
 
 ML Gupta