Dear Shareholders,
 
 It gives me great pleasure to share with you the highlights of your
 Company''s performance during the year 2010-11.
 
 The Indian economy has shown remarkable resilience and smart recovery.
 It recorded a growth rate of over 8%, making it the world''s
 second-fastest growing major economy after China. But inflation and
 volatility in commodity prices continue to remain a concern.
 
 The progress of any economy is interlinked to infrastructure.  And a
 crucial parameter for our economy to shine bright is Infrastructure
 Development. Ironically, while the Indian economy has grown by leaps
 and bounds, infrastructure still remains an area that is grossly
 underdeveloped and is dragging down the economic growth rate. However,
 the
 
 infrastructure sector in India has witnessed encouraging growth in the
 last few years on account of Government initiatives at various levels
 which have paved the way for increased and growing participation of the
 private sector in developing the infrastructure of the country.
 
 We are buoyed by the continued thrust of Government policies to create
 world-class infrastructure assets. To compliment this, there has been
 increasing learning, adaption, acceptance and implementation of
 Public-Private Partnerships (PPP) in this domain. We believe that your
 Company is well poised to leverage this and deliver the promise of
 providing superior infrastructure assets.
 
 Reviewing the year gone by
 
 Financially, the year was fruitful. Our revenues crossed Rs. 1000
 crores for the first time as the turnover for FY 11 stood at Rs.
 1051.27 crores. Profit after tax reported was Rs. 56.82 crores as
 against Rs. 50.28 crores in the previous fiscal.
 
 On the back of our strong experience and domain expertise we bagged
 four key projects valued at Rs. 1884.06 crores.  Further, to achieve
 our growth objectives we have adopted a multi-fold strategy which
 includes:
 
 - Maintaining performance and competitiveness of existing business to
 capitalise on huge investments expected to be made in infrastructure
 development especially in segments where we presently operate
 
 - Focusing on BOT projects
 
 - Procuring projects involving higher degree of engineering skills
 
 - Leveraging our business growth by identifying and forming strategic
 joint venture relationships for mutual benefit through sharing of
 resources and business skills
 
 Armed a sound business strategies chalked out on account of a unique
 combination of expertise drawn from wealth of experience and a
 consistent track record of performance, your Company features amongst
 the trusted names in this industry.
 
 Future prospects
 
 With the Central and State Government undertaking very ambitious
 programmes of highway construction during the coming years your Company
 hopes to bag a number of contracts.
 
 Clearly, the trend in investments in the infrastructure sector over the
 last half decade has been upward. Even though external factors are
 hinting at a slowdown of sorts in the short term, the strong long-term
 prospects of the segment remain intact.
 
 This has accentuated the role well-organised players like KNR
 Constructions who can meet global quality standards using advanced
 technology and the other resources required in this segment. Your
 Company, with its strategic expertise, strong execution capabilities,
 and commitment to adopting the highest quality, safety, and
 environmental policies has the capability to be a prominent player in
 the near future.
 
 On a concluding note
 
 I take this opportunity to sincerely thank our banks, financial
 institutions, clients and suppliers for their constant support in the
 progress of the Company. I also thank you, shareholders, for your
 constant support.
 
 I would also place on record my deep appreciation to management team of
 the Company and its staff for their constant endeavour to help the
 Company in seeking and achieving higher goals.
 
 Yours Sincerely,
 
 K Narasimha Reddy
 Managing Director