Dear Shareholders,
 
 The Directors take pleasure in presenting the 16th Annual Report and
 the Audited Accounts for the Financial Year ended 31st March, 2011.
 
 Financial Results                                      Rs. in Lakhs
 
 PARTICULARS                                  2010-2011    2009-2010
 
 Gross Income (including other income)        106378.75     90663.08
 
 Profit before interest and depreciation       13810.39     11579.07
 
 Less: Interest and financial charges            782.23       699.08
 
 Profit Before depreciation                    13028.16     10879.99
 
 Less: Depreciation                             4055.01      2617.52
 
 Profit before tax                              8973.15      8262.47 
 
 Provision for tax
 (including Wealth Tax and Deferred Tax )       2666.20      2692.16
 
 Profit after tax                               6306.95      5570.31
 
 Less: Prior year taxes and adjustments          624.43       542.24
 
 Net Profit for the year                        5682.52      5028.07
 
 Profit brought forward from previous year     13436.04      9571.03
 
 Profit available for appropriation            19118.56     14599.10 
 
 Appropriations:
 
 Transfer to General Reserve                     580.00       505.00
 
 Dividend                                        562.47       562.47
 
 Dividend tax                                     91.25        95.59
 
 Balance carried forward                       17884.84     13436.04
 
 Paid –up capital                               2812.35      2812.35
 
 Reserves and Surplus                          32919.07     27890.35
 
 REVIEW OF PERFORMANCE:
 
 Your company continues to be in the business of work contracts
 specializing in Roads and Bridges and other infrastructure projects
 like irrigation projects. During the year under consideration, your
 company has achieved a turnover (on stand alone basis) of Rs 105127.32
 Lakhs as against Rs 89917.27 Lakhs in the previous year, thus
 registering an increase of 17 %. The company has earned a gross profit
 of Rs. 13810.39 Lakhs before interest and depreciation as against Rs
 11579.07 Lakhs in the previous year, thus registering a growth of 19 %.
 After deducting an interest of Rs 782.23 Lakhs, providing for Rs.
 4055.01 Lakhs towards depreciation, Rs 2666.20 Lakhs towards provision
 for income tax, wealth tax, and deferred tax, Rs 624.43 Lakhs towards
 prior period items and taxes, the operations resulted in a net profit
 of Rs 5682.52 Lakhs as against Rs. 5028.07 Lakhs last year, registering
 a growth of 13 %.
 
 Following are the major works awarded to our Company from April 2010 to
 March 2011
 
 Sl.  Particulars of the Project                       Amount
 No.                                              (Rs. In Millions)
 
 1 4 Laning of Bijapur - Hungund Section               8250 
 of NH-13 from Km 102.00 to km 202.00 in the 
 Satate of Karnataka under NHDP Phase III 
 On Design, Build, Finance, Operate and 
 Transfer IDBFOT) Toll Basis from Bijapur
 Hungund Tollway Private Limited, Sadbhav 
 Engineering Limited
 
 2 Nagpur - Saoner - Betul Project –                   3330 
 Construction Contract 01: Four
 Laning of KM 76.000 to KM 117.500 of 
 Nagpur – Saoner – Betual Section of
 NH-69” in the State of Madhya Pradesh 
 to be completed within a period
 of 23 Months from the Appointed Date.  
 on subcontract basis from
 Oriental Structural Engineering Private 
 Limited 
 
 With the above new orders, the order book position as on 31st March
 2011 stands at Rs. 14433.64 Millions.
 
 Dividend
 
 Your Directors have recommended a divided of Rs. 2/- per Equity share
 for the financial year ended 31st March 2011, amounting to Rs. 562.47
 Lakhs. The dividend will be paid to the members whose names appear in
 the Register of Members as on 22nd September 2011 in respect of shares
 held in the dematerialized form, it will be paid to members whose names
 are furnished by National Securities Depository Limited and Central
 Depository Services (India) Limited as beneficial owners as on that
 date.
 
 The dividend pay out for the year under review has been formulated in
 accordance with the Company''s policy linked with long term performance,
 keeping in view the company''s need for capital for its growth plans and
 the intent to finance such plans through internal accruals to the
 maximum.
 
 Reserves
 
 It is proposed to transfer Rs. 580.00 Lakhs to the General Reserves of
 the Company, constituting 10.21 % of the profit made during the year.
 
 Directors
 
 In accordance with the requirements of the Companies Act, 1956 Shri K
 Jalandhar Reddy, Shri L B Reddy and Shri J S R Chandramouli Directors
 of the Company are liable to retire by rotation at the Annual General
 Meeting and, being eligible, offer themselves for reappointment at the
 ensuring Annual General Meeting
 
 Brief resume of the Directors proposed to be reappointed, nature of
 their expertise in specific functional areas, names of the companies in
 which they hold directorships and relationships between directors
 inter-se, as stipulated under Clause 49 of the Listing Agreement with
 the Stock Exchanges in India, are provided in the Report on Corporate
 Governance.
 
 Auditor and Auditors Report:
 
 M/s. Sukumar Babu & Co., Chartered Accountants, Statutory Auditors of
 the company holds office until the conclusion of the ensuring Annual
 General Meeting and is eligible for reappointment.
 
 The Company has received letter from the Statutory Auditors to this
 effect that their reappointment, if made, would be within the
 prescribed limits under the Section 224(IB) of the Companies Act, 1956
 and they are not disqualified for such reappointment within the meaning
 of Section 226 of the said Act.
 
 Subsidiaries of the Company
 
 Your company has the following subsidiaries:
 
 a.  KNR Agrotech & Beverages Private Limited
 
 b.  KNR Infrastructure Projects Private Limited (we.f 28.03.2011)
 
 c.  KNR Constructions LLC, Oman
 
 d.  KNRCL FZE, Ras Al Khaima, UAE (w.e.f 29.11.2010)
 
 The Statement pursuant to Section 212 of the Companies Act, 1956 is at
 Annexure B. The summarized financial performance of the subsidiaries is
 at Annexure C.
 
 Consolidated Financial Statements:
 
 In accordance with the Accounting Standards AS-21 and AS-27 on
 Consolidated Financial Statements read with the Accounting Standard
 AS-23 on Accounting for Investments in Associates, the Audited
 Consolidated Financial Statements are provided in the Annual Report.
 
 Management''s Discussion and Analysis Report
 
 Management''s Discussion and Analysis Report for the year under review,
 as stipulated under Clause 49 of Listing agreement with the Stock
 Exchanges in India, is presented in a separate section forming part of
 the Annual Report.
 
 Fixed Deposits:
 
 The Company has not accepted any deposits from the public in terms of
 Section 58A of the Companies Act, 1956
 
 Particulars of Employees:
 
 The particulars of employees whose details need to be provided under
 section 217(2A) of the Companies Act, 1956 read with the Companies
 (Particulars of Employees) Rules, 1975 is presented as an Annexure A to
 this report.
 
 Directors Responsibility Statement:
 
 Pursuant to the requirements under Section 217 (2AA) of the Companies
 Act, 1956, with respect to Directors'' Responsibility Statement, it is
 hereby confirmed that:
 
 i) in the preparation of the annual accounts, the applicable accounting
 standards read with requirements set out under Schedule VI to the
 Companies Act, 1956, have been followed and there are no material
 departure from the same;
 
 ii) the Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at March 31, 2011 and profit for the year ended on
 that date;
 
 iii) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities and
 
 iv) the Directors have prepared the annual accounts of the Company on a
 ‘going concern'' basis.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings and Out Go:
 
 The particulars to relating Conservation of Energy, Technology
 absorption, Foreign Exchange earnings and outgo as required under
 section 217 (1) (e) of the Companies Act, 1956 read with Companies
 (Disclosure of particulars in the Report of Board of Directors) Rules,
 1988 are as follows
 
 a) Conservation of Energy
 
 The Company has taken suitable measures for conservation of energy. The
 core activity of the company is civil construction which is not an
 energy intensive activity.
 
 b) Technology absorption, Adoption and Innovation
 
 There is no information to be furnished regarding Technology Absorption
 as your Company has not undertaken any research
 
 and development activity in any manufacturing activity nor any specific
 technology is obtained from any external sources which needs to be
 absorbed or adopted.
 
 Innovation is a culture in the Company to achieve cost efficiency in
 the construction activity to be more and more competitive in the
 prevailing environment that cannot be quantified.
 
 Foreign Exchange earnings and outgo
 
 Foreign Exchange Inwards
 
 a) Advances from KNR Constructions LLC Rs. 189.58 Lakhs ( PY. Nil)
 Foreign Exchange outgo towards
 
 a) Travel - Rs. 3.38 lakhs (P.Y Rs. 8.92 lakhs)
 
 b) Import of capital goods Rs. 1243.73 lakhs (P.Y Rs. 158.31 Lakhs)
 
 c) Investment - Rs. Nil (P.Y Rs. 206.07)
 
 d) Advance / Loan to Subsidiaries - Rs. 46.67 lakhs ( P.Y Nil)
 
 e) Term Loan Repayment - Rs. 5.95 Lakhs ( P.Y Nil)
 
 Corporate Governance:
 
 In pursuance of Clause 49 of the Listing Agreement entered into with
 the stock exchanges, a separate section on Corporate Governance has
 been incorporated in the annual report for the information of
 shareholders. A certificate from the auditors of the Company regarding
 compliance with the conditions of Corporate Governance as stipulated
 under Clause 49 also forms part of the annual report.
 
 Acknowledgements:
 
 Your Directors wish to place on record their gratitude to the Company''s
 shareholders, customers, vendors and bankers for their continued
 support to KNRCL''s growth initiatives Your Directors also wish to place
 on record, their appreciation of the contribution made by employees at
 all levels, who through their competence, sincerity, hard work,
 solidarity and dedicated support, have enabled your Company to make
 rapid strides in its business initiatives Your Directors also thank the
 Central and State Government and their various agencies, particularly,
 the National Highway Authority of India and other Governmental agencies
 for extending their support during the year, and look forward to their
 continued support.
 
                                    On behalf of the Board of Directors
                                           of KNR Constructions Limited
 
                                          Sd/-               Sd/-
                                  K Narasimha Reddy   K Jalandhar Reddy
                                  Managing Director   Executive Director
 
 Place: Hyderabad 
 Date : 08.08.2011