The Members,
 
 Madhucon Projects Limited
 
 The Directors have pleasure in presenting the Twenty First Annual
 Report on Business Operations, Performance & Progress of the company
 together with the Audited Financial Statements for the year ended March
 31, 2011.
 
 A. FINANCIAL RESULTS:
 
                                                        (Rupees in Lakhs)
 
             PARTICULARS                2010-2011      2009-2010
 
   Gross Income                         182486.27      134216.45
 
   Profit before Depreciation 
   & Taxation                           11857.33       11587.40
 
   Depreciation                          4780.17        4642.70
 
   Profit before Taxation                7117.42        6944.69
   Provision for Taxation
 
    i)  Current Tax                      4562.51        2566.22
 
    ii) Deferred Tax                    (685.93)       (199.19)
 
    iii) Fringe Benefit Tax                               -
 
   Profit after Taxation                 3240.85        4577.66
 
   Profit available for 
   appropriation                         3240.85        4577.66
 
   APPROPRIATION
 
   General Reserve                       324.08         457.77
 
   Proposed Dividend                     184.49         295.18
 
   Corporate Tax on Proposed
   Dividend                               30.64          49.03
 
   Balance transferred to 
   Balance Sheet                        2701.63        3775.69
 
   Earnings per Share (Rs.)                4.39           6.20
 
   Book Value (Rs.)                       82.47          78.37
 
   Paid-up Equity Share Capital          740.32         740.32
 
   Reserves & Surplus                  60121.38       57095.66
 
 B. REVIEW OF OPERATIONAL PERFORMANCE:
 
 During the year under review, your company has achieved a gross income
 of Rs. 182486.27 lakhs as against Rs.  134216.45 lakhs in the previous
 year registering a growth by 35.96%. The company has earned a net
 profit of Rs.  3240.85 lakhs as against Rs.4577.66 lakhs in the
 previous year after providing for depreciation of Rs. 4780.17 lakhs
 (Rs.4642.70 lakhs in the previous year).
 
 Your Company has consolidated its financial statements combining the
 financial information from its various subsidiary companies as per the
 applicable Accounting Standards and as a result, the consolidated
 turnover and consolidated loss is shown as Rs.80269.19 lakhs and
 Rs.15959.18 lakhs respectively.
 
 
 XIV.  Corporate Governance:
 
 In terms of compliance with the requirement of clause 49(VI)(i) of
 Listing Agreement, a separate section titled Corporate Governance
 containing the due compliance on corporate governance is given in the
 Directors'' Report forming the part of this Annual Report.
 
 In terms of compliance with the requirement of clause 49(VII) of
 Listing Agreement, the Auditors'' certificate confirming the compliance
 of the conditions of the Corporate Governance is annexed hereto which
 form the part of this Annual Report and the same will be sent to
 National and Mumbai Stock Exchanges along with the Annual Report.
 
 XV.  Directors:
 
 Dr. C. Venkateshwara Rao, Independent Director, who retires by rotation
 at this Annual General Meeting, is eligible to be re-appointed as
 Independent Director of the Company and who has given his consent in
 writing to act as Independent Director, if appointed at this Annual
 General Meeting. The Board of Directors of the company recommends the
 appointment of Dr.C.Venkateshwara Rao, as Independent Director of the
 Company in the best interest of the Company. The profile of Dr. C.
 Venkateshwara Rao is given in the report on Corporate Governance.
 
 Sri S.Vaikuntanathan was appointed as Whole-time Director of the
 Company for a period of two years with effect from 5th March, 2009 and
 whose period of office expired on 4th March, 2011. The Board of
 Directors, at its meeting held on 25th February, 2011, has re-appointed
 him as Whole-time Director for a further period of two years with
 effect from 5th March, 2011 on terms and conditions mentioned in the
 resolution based on the recommendations of Remuneration Committee. The
 Board of Directors of the company recommends the appointment of Sri
 S.Vaikuntanathan, as Whole-time Director of the Company in the best
 interest of the company.  The profile of Sri S.Vaikuntanathan is given
 in the report on Corporate Governance.
 
 XVI.  Directors'' Responsibility Statement:
 
 Pursuant to the requirement u/s 217 (2AA) of the Companies Act, 1956,
 it is hereby confirmed:
 
 a) That in the preparation of annual accounts for the financial year
 ended 31st March, 2011, the applicable accounting standards have been
 followed along with proper explanation relating to material departures.
 
 b) That 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, at the end of the financial year and of the
 profit or loss of the Company for that period.
 
 c) That 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 frauds and other
 irregularities.
 
 d) That the Directors have prepared the annual accounts for the year
 ended 31st March 2011 on a going concern basis.
 
 XVII.  Industrial Relations:
 
 The relations with the employees are cordial.
 
 XVIII. Deposits:
 
 The company has not accepted any deposits from the public within the
 meaning of Section 58A of the Companies Act, 1956.
 
 XIX.  Particulars of Employees:
 
 As required by the provisions of Section 217 (2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975,
 as amended and forming part of the Directors'' Report for the year ended
 31st March, 2011, none of the employees of the company was in receipt
 of remuneration, which exceeds the limits fixed under Section 217 (2A)
 of the Companies Act, 1956, except Sri.N.Seethaiah, Managing Director
 of the Company.
 
 XX.  Quality Management System - AN ISO 9001- 2008:
 
 The Company has established a Quality Management System in Design,
 Execution, Operation & Maintenance of Irrigation & Water Resources
 Projects, Highway/Road Projects, Power Transmission Projects, Building
 and Property Development Projects and Design & Execution of Power
 Projects and Over Burden Removal in Opencast Mining Projects in
 compliance with the International Quality System Standards - ISO
 9001-2008.
 
 The Company is planning to obtain EMS-ISO 14001:2004 and
 OHSAS-18001:2007 registration during the year 2011-12.
 
 XXI.  Credit Rating Under Basel-II:
 
 As per the New Capital Adequacy Framework based on Basel-II
 guidelines of RBI, your Company is rated by ICRA for different limits
 as follows:
 
 Fund based / Non-Fund based limits - LA 
 
 Short term Debt/Commercial papers - A1
 
 Long term Debt/NCD - LA 
 
 XXII.  Auditors:
 
 M/s Kota & Company, Statutory Auditors of the Company expressed their
 willingness to be re-appointed for the financial year 2011 - 2012 and
 to hold office up to the conclusion of the next Annual General Meeting,
 if they are appointed at this Annual General Meeting. They have
 furnished a certificate to the effect that their proposed appointment,
 if made, will be in accordance with the limits specified under 224(1-B)
 of the Companies Act, 1956.
 
 XXIII.  Information as per Sec- 217(1) (e) of The Companies Act, 1956
 read with Companies (Disclosure of Particulars in the Report of the
 Board of Directors) Rules, 1988:
 
 The information as required u/s 217(1)(e) of the Companies Act, 1956
 relating to conservation of energy, technology absorption and foreign
 exchange earnings and outgo are set out in the annexure attached to
 this Report.
 
 XXIV. Acknowledgements:
 
 Your Directors express their appreciation to the Foreign Collaborators,
 Joint Venture Partners, Bankers, Central and State Government
 Authorities including National Highway Authorities of India (NHAI),
 Irrigation & CAD Department, Central Government, Government of various
 States including Andhra Pradesh, Clients, Consultants, Employees,
 Suppliers etc., for their continued support and encouragement from time
 to time.
 
                                         For and on behalf of the Board
 
 Place: Hyderabad                     N. SEETHAIAH    S. VAIKUNTANATHAN
 
 Date: 30.08.2011                     Managing 
                                      Director        Whole-time Director