The Indian economy in tandem with that of many countries of the globe entered a lower phase of growth mirroring the world wide financial turmoil and slow down witnessed in the recent past, though mercifully, India escaped many of the worst scenarios. India's return to the former trajectory has been interrupted due, among other reasons, to the sovereign debt crisis in the Euro Zone, political turmoil in the middle east, and a policy reform deadlock at home. Further, the economy has had to battle with nearly double digit inflation for almost two years. Monetary and fiscal policies were geared towards taming domestic inflation which adversely impacted investments and consumption growth. However, recently inflation has moderated somewhat and it is hoped that it will remain under reasonable control. Although RBI has recently taken some steps to reduce the interest rates but the need to further reduce the same would be felt by the industry. Further reduction could make credit more readily available and cheaper. Agriculture continues to perform well and the Indian manufacturing sector remains robust. The expectations of growth of the Indian economy have to be more modest than in the years immediately before 2008 but much depends on various extraneous factors, such as the price of crude oil and the adequacy of monsoon. Fiscal prudence at home and a supportive and stable business environment, aided by legislation as the Goods and Services Tax Act would be of great help in boosting growth.

Due to difficult circumstances prevailing particularly in industries in which our Company operates, in terms of reduced demand, higher costs of many major inputs including cost of raw materials, fuel and transport and a temporary shutdown of the pulp and paper mill at Lalkua, the performance of our Company has not been satisfactory. As the demand for cement and paper which are two major contributors to the revenue of the Company is expected to remain firm due to Government's continuous thrust on infrastructure and education, the performance of our Company in the current year and the near term is expected to reflect this inherent strength of the product portfolio.

I would like to extend my gratitude to all our stakeholders including shareholders, customers, lenders and our loyal, hardworking and committed employees for their continued support and faith in the Company.

– B. K. Birla, Chairman