Letter

Dear Shareholders,

2011-12 was highlighted by a landmark achievement by your Company as the year saw us complete toll road in the Bijapur-Hungund project in Karnataka in record time. The project was completed in a record time of 582 days against schedule duration of 910 days which in turn translates in to completion of project 328 days ahead of schedule time. The achievement also includes construction of 810m dual carriageway bridge over river Krishna on NH-13 (recently changed as NH-50) in a record time of 11 months and 16 days which is an engineering feat unparalleled.

Riding on this accomplishment, we enter the next fiscal with high expectations for continued earnings growth as we focus on providing a full spectrum of EPC solutions across sectors such as roads and highways, irrigation and water management.

Our confidence is derived from our commitment levels and infrastructure domain expertise which has been drawn from a wealth of experience and a consistent track performance of executing and completing projects on time. Our dedication to maintaining the highest standards of safety, ethics, quality and reliability in everything we do has ensured that our clients come back to us with repeated orders.

Let me take you through a more detailed review of our financial and operational results, as well as our outlook for the year ahead. For the financial year 2011-12, your Company has achieved a turnover of Rs. 865.99 crores with an operating profit of Rs. 139.43 crores and net profit of Rs. 52.76 crores reflecting our success to execute projects on time and on budget. Our robust business model enabled us to earn a bonus of Rs. 50 crores for an early completion - a unique earnings opportunity vis-a-vis our peers. Though our financials have been impacted on account of the economic uncertainty, we are optimistic that the future unfolds a better picture.

Operationally our ability to do everything in-house reduced our dependence on third party, helped to control costs more effectively thus ensuring better returns for our shareholders. Also, adopting a prudent policy of procuring and maintaining supply chain of raw materials worked in the favour of your Company's bottom line results.

We are acutely aware of the insecure economic climate and its impact on the construction industry and your Company However, renewed thrust by both the Central and State Governments on road projects, to connect people and improve lives, fuels growth opportunities for us on the basis of our high comfort level in EPC contracts. In fact, the Central Government's initiative to expand investments in the infrastructure sector to $1 trillion by 2017 augurs well for our business prospects. While our area of business has enormous growth potential, we also realise it is incumbent on us to be diligent and ensure expeditious execution while performing our road transportation engineering projects to maximise returns for our shareholders.

Going forward into 2012-13, we are pleased with the order book of Rs. 3,042 crores out of which Rs. 2,808 crores is from road projects and the rest from irrigation and water management projects. We have a vision to touch a orderbook of Rs. 5,000 crores by 2015 with a portfolio mix of projects in PPR BOT and EPC models. Business prospects in the field of water segments for pipelines, canal contracts and mining projects are also being given a serious consideration.

In summary, we are on the right path. We are focussing on our core strengths, investing in our people and being more decisive both operationally and administratively relative to cost control. Your Company is especially proud of the loyalty, dedication and tireless efforts of its employees which have made us a reputed leader in the provider of EPC services across the infrastructure sector. I would like to extend my thanks to our employees for their personal commitment to achieve the goals of your Company

On a concluding note, I would like to express my gratitude to our suppliers, partners, government organisations, bankers and stakeholders for their unwavering support and belief in your Company and our future. We look forward to the coming year with confidence in our ability to sustain our excellent performance, win major new works, grow your Company and capitalise on the talent of our people to provide solid returns for our shareholders.

Thank you.

Yours Sincerely,

K Narasimha Reddy

Managing Director