Dear Shareholders,
 
 The year 2010-11 tested the resilience and the innate potential of
 industry players, particularly in the construction and infrastructure
 space. As a Leader in the infrastructure and construction sector your
 Company had to deal with an overall environment dominated by
 competitive pressures, strain on liquidity and the resultant pressure
 on operating margins.
 
 The trickledown effect of the global meltdown and the increased
 uncertainties in markets across the world contributed to the overall
 pessimism. Although India continued to be largely insulated from the
 uncertainties of the global market environment, there continued to be a
 strain on large scale investments required in the construction and
 infrastructure domain. The sector therefore did not grow in line with
 earlier expectations and failed to meet investment targets during the
 year.  We hope, the much talked about reform process will bring in the
 much needed funds from the global arena to the Indian infrastructure
 sector if we are to meet the planned target of over US$ one trillion
 (i.e. Rs. 45 lakh crores) earmarked for the infrastructure sector
 during the ensuing 12th five year plan 2012-17. It will be a significant
 challenge as well as an opportunity for the government, the public and
 private players involved with the sector to meet with the plan targets.
 The opportunities for your Company in this growth agenda of the Country
 are indeed promising. This industry is the second largest contributor
 to the nation''s GDP after the agricultural sector. Given the right
 platform this sector can grow at a dynamic rate of over 9% year on
 year.
 
 Further, as a major contributor at over 7% to the employment workforce
 of the country the industry has significant prospects to register an
 impressive and sustained growth. In this scenario, your Company is well
 equipped in terms of its legacy, strong track record and professional
 expertise to play a lead role in the economic growth story of the
 country.
 
 Reverting to the annual consolidated results the Annual report of the
 Company gives an overview of the operations, prospects and challenges
 faced by each of the group companies in its sphere of activity. While
 your Company''s consolidated Turnover during the financial year 2010-11
 increased by 25.11% amounting to Rs. 8,899.70 crore, the Operating
 Profit margins were strained.
 
 These got further impeded by a less than projected order inflow during
 the year under review. The Company''s order book position as on 31st
 March, 2011 was approximately Rs. 15,600 crore.
 
 Your Company will continue to grow in its core EPC business as well as
 in the energy space through its Associates/subsidiaries viz Sofnter
 group, Ansaldo Caldaie, Franco Tosi Meccanica SpA and SAE Power Lines,
 Italy by further consolidating its order bookings in individual
 segments.
 
 In addition, your Company has also embarked on some realty development
 projects through its subsidiary Gammon Realty, which has tied up with
 the Indian arm of Multiplex Construction, Australia, part of Brookfield
 Multiplex Group, Canada. Your Company will, in the coming years, adopt
 such structured international partnerships with strategic intent to
 strengthen its geographical spread and resource capabilities.
 
 The ultimate goal of your Company is to build on a strong base to act
 as a one-stop EPC resource entity, that is, a total solutions provider
 in the entire energy value chain while continuing to be a dominant
 player in the areas of public private infrastructure projects covering
 bridges, flyovers, highways, mass transportation, irrigation and
 airports.  Going forward, these initiatives and strategic moves will
 deliver increased value to beneft all stakeholders.
 
 It has become important to gear up and upgrade the Company''s internal
 capabilities across its human, technical and capital resource base to
 ensure that corporate goals are accomplished.
 
 Your Company constantly strives to improve its management and
 information systems as well as its plant and personnel deployment
 techniques. It has taken initiatives in areas such as integrated
 approach to management processes and introduction of work methodologies
 such as the 5 S at project sites along with renewed attention to
 occupational health, safety practices, risk assessment and
 preparedness.  This will significantly help your Company enhance its
 organizational performance in the years to come.
 
 The Company has also put in place a new group website that is more
 customer and stakeholder centric, interactive and informative. Your
 Company continues to play its role as a responsible corporate citizen
 by taking initiatives both, at the corporate level and across its
 various project sites to undertake and partner in projects relating to
 community welfare and development.
 
 We owe a word of special thanks and gratitude to all our stakeholder
 constituents. This important group comprises of our investors,
 shareholders, customer groups and bankers. We will strive to meet each
 of our stakeholder''s expectations. Towards this I seek your continuing
 support and goodwill.
 
 Thank you,
 
 Abhijit Rajan
 
 Chairman & Managing Director