The Members of Patel Engineering Ltd,
 
 The Directors are pleased to present the 62nd Annual Report together
 with the Audited Accounts for the year ended March 31, 2011.
 
 FINANCIAL HIGHLIGHTS
 
                                                         (Rsin million)
 
                                   Consolidated          Standalone
                               2010-11     2009-10  2010-11   2009-10
 
 Total Income                 34,988.84   32,539.45 25,446.99  24,350.15
 
 Profit before depreciation    2,667.58    4,140.06  1,884.39   2,520.07
 
 Less: Depreciation              820.41    1,090.16    527.76     501.73
 
 Profit before tax             1,847.17    3,049.90  1,356.63   2,018.34
 
 Tax & other adjustments         621.12    1,068.29    334.53     709.80
 
 Profit after tax              1,226.05    1,981.61  1,022.10   1,308.54
 
 Add: Balance in Profit 
 & Loss A/c                    3,442.29    3,846.96  2,800.14   3,825.53
 
 Amount available for 
 appropriation                 4,668.34    5,828.57  3,822.24   5,134.07
 
 APPROPRIATION:
 
 a.  Interim Dividend              _         140.09      -        140.09
 
 b.  Final Dividend               69.83        -        69.83       -
 
 c.  Tax on Dividend              11.33       23.73     11.33      23.73
 
 d.  General Reserve             175.50      125.50    150.00     100.00
 
 e.  Debenture Redemption 
     Reserve                     210.00      135.00    210.00     135.00
 
 Balance carried forward       4,201.68    3,892.56  3,381.08   3,250.14
 
 OPERATIONAL HIGHLIGHTS
 
 The turnover of the Company for the year ended March 31, 2011 on
 consolidated basis stood at Rs 34759.09 as against Rs 31,909.33 million
 for the previous year ended March 31, 2010, thereby recording a growth
 of 8.93%.  The operating profit for the year is Rs 4,619.75 million as
 compared to Rs 5,085.64 million for the previous year. The Profit after
 tax is Rs 1226.05 million as compared to Rs 1,981.61 million for the
 previous year.
 
 On standalone basis, the turnover of the Company stood at Rs 25,194.31
 million for the year ended March 31, 2011 as against Rs 24,098.92
 million for the previous year ended March 31, 2010, thereby recording a
 growth of 4.55%. The operating profit for the year is Rs 3,548.89
 million as compared to Rs 3,798.07 million for the previous year. The
 Profit after tax is Rs 1022.10 million as compared to Rs 1,308.54 million
 for the previous year.
 
 Rising Interest rate and increase in borrowing has led to higher
 interest cost and hence reduction in profit.
 
 Members are requested to refer to Management Discussion and Analysis
 forming part of the Annual Report for further details on operations of
 the Company.
 
 DIVIDEND
 
 During the year under review, the Directors have recommended a dividend
 of Rs 1/- per Equity Shares (100%), aggregating to Rs 81.1 million
 (including dividend tax).
 
 The payment of the aforesaid dividend is subject to approval of Members
 to be obtained at the ensuing
 
 Annual General Meeting and shall be paid to those members whose name
 appear in the register of members as on the book closure date.
 
 The Register of members and share transfer book will remain closed from
 October 11, 2011 to October 17, 2011.
 
 PUBLIC DEPOSITS
 
 The Company did not invite or accept deposits from public during the
 year under review.
 
 FINANCE
 
 During the year, the Company tied up Long terms debt (5 years) by way
 of issue of Non Convertible Redeemable
 
 Secured Debentures on private placement basis for Rs 1000 million and Rs
 500 million, carrying an interest rate of 9.55% and 10.75%
 respectively. The total amount of outstanding Non Convertible
 Redeemable Secured Debentures as on date is Rs 5000 million repayable
 over period of 3 to 5 years.
 
 The Company has raised money through bank borrowings (long and short
 terms) from time to time and the total amount outstanding as on March
 31, 2011 is Rs 18,957.21 million. The borrowings are within the limit of
 Rs 50,000 million approved by the Members of the Company vide resolution
 dated September 29, 2005.
 
 SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
 
 The Company has 15 direct subsidiaries and 66 step-down subsidiaries
 totaling to 81 subsidiaries as on March 31, 2011.  The following
 Companies became subsidiaries during the year 2010- 2011.
 
 No. Name of Subsidiary   Date of    % of           Remarks
                         becoming   holding 
                         subsidiary 
 
 DIRECT SUBSIDIARIES
 
 1 Patel Lands Ltd, 
   India                 25.08.2010   60%
 
 STEP DOWN SUBSIDIARIES
 
 2 Mineral Resources 
   Holding               27.07.2010  100%    Incorporated as subsidiary
                                             of Patel Param Minerals 
                                             Pte Ltd, Ltd, UAE (Patel 
                                             Engineering Singapore
                                             Pte.Ltd (PESPL) holds 60% 
                                             in Patel Param Minerals Pte
                                             Ltd Company holds 100% in 
                                             PESPL).
 
 3 HCPInc, USA           01.10.2010  100%    Acquired as a subsidiary of
                                             ASI Inc, USA (Company holds
                                             66.46% stake in ASI Inc).
 
 4 Eng & Const Inc, USA  01.10.2010  100%    Acquired as a subsidiary of
                                             ASI Inc, USA (Company holds
                                             66.46% stake in ASI Inc).
 
 5 Patel Hydro Power 
   Pvt Ltd,              29.11.2010  100%    Incorporated as subsidiary
                                             of Patel Energy Resources 
                                             Ltd India (Company holds 
                                             100% stake in Patel
                                             Energy Resources Ltd).
 
 6 Jayshe Gas Power 
   Pvt Ltd,              24.12.2010  100%    Incorporated as subsidiary
                                             of Patel Energy Resources 
                                             Ltd India (Company holds 
                                             100% stake in Patel
                                             Energy Resources Ltd).
 
 7 Patel Thermal 
   Energy Pvt            18.02.2011  100%    Incorporated as subsidiary
                                             of Patel Energy Resources 
   Ltd, India                                Ltd (Company holds 100% 
                                             stake in Patel Energy 
                                             Resources Ltd).
 
 In terms of the General Circular No. 2/2011 dated February 8, 2011
 issued by the Central Government under Section 212 of the Companies
 Act, 1956, the Board of Directors of the Company has accorded their
 consent for not attaching the balance sheet of the subsidiaries with
 the accounts of the Company.  Pursuant to the said circular, a
 statement containing brief financial details of Subsidiaries is
 included in this Annual Report. The annual accounts of the subsidiary
 companies and the related detailed information will be made available
 to the members of the company on request and also for inspection at the
 registered office of the Company.
 
 The Consolidated Financial Statements of the Company have been prepared
 in accordance with the Accounting Standards AS-21, AS-23 and AS-27 of
 the Institute of Chartered Accountants of India.
 
 DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956, Mr.
 Khizer Ahmed and Mr. Jambunathan, Directors of the Company retire by
 rotation at the ensuing Annual General Meeting and being eligible, have
 offered themselves for re-appointment.
 
 Ms. Sonal Patel, Mr. Ajay Tuli and Mr. Danish Merchant resigned from
 the Board of the Company w.e.f March 16, 2011, March 28, 2011 and
 September 2, 2011 respectively. The Board wishes to place on record its
 appreciation for the valuable contribution made by Ms.  Sonal Patel,
 Mr. Ajay Tuli and Mr. Danish Merchant during their tenure as a member
 of the Board.
 
 EMPLOYEES STOCK OPTION
 
 During the year under review, out of 90,000 Stock Options vested to the
 eligible employees/Directors of the Company on August 31, 2010, 82,500
 options were vested and exercised.
 
 Details of the stock option under ESOP plan 2007 are disclosed in
 complience with Clause 12 of the SEBI (Employee Stock Option Scheme &
 Employee Stock Purchase Scheme) Guidelines, 1999 & set out in Annexure
 ''A'' of this report.
 
 The Patel Engineering Employees Welfare Trust, (the Trust) holds and
 issues stock options to employees on behalf of the Company.
 
 In addition to this, the Trust conducted various programs for the
 welfare of the employees of the Company viz seminar on cancer
 awareness, heart ailments, comprehensive free health check up for
 employees.  These programs benefited about 600 employees at various
 offices/sites. The Trust also provided loans/ grants to employees for
 purposes such as house repairs, children''s higher education, serious
 ailments. The Trust has also organized social events viz craft and
 painting competition for the children of employees. The Trust proposes
 to continue such activities at an enlarged scale.  The total amount
 spent during the year for the welfare of the employees is Rs 27,50,354.
 
 The present Trustees are in the process of formulating further scheme
 under ESOP for the benefit of eligible employees of the company and the
 subsidiaries as well.
 
 AUDITORS
 
 M/s. Vatsaraj & Co. Chartered Accountants, Auditors of the Company,
 hold office until the conclusion of the ensuing Annual General Meeting
 and are eligible for re-appointment. The members are requested to
 consider their appointment and authorize the Board of Directors to fix
 their remuneration. The retiring auditors have, under Section 224(1B)
 of the Companies Act, 1956, furnished certificates of their eligibility
 for the appointment.
 
 PARTICULARS OF EMPLOYEES
 
 The information as per Section 217(2A) of the Companies, 1956 read with
 Companies (Particulars of Employees) Rules, 1975 as amended forms part
 of this Report and is set out in Annexure ''C of this report.
 
 SECRETARIAL AUDIT REPORT
 
 As a measure of good governance practice, the Company has appointed Dr.
 K. R. Chandratre, Practicing Company Secretary, to conduct Secretarial
 Audit of the Company.  The Secretarial Audit Report for the financial
 year ended March 31, 2011 forms part of this Annual Report.
 
 CORPORATE GOVERNANCE
 
 Pursuant to Clause 49 of the Listing Agreement, the report of Corporate
 Governance together with the Auditors'' Certificate on compliance form
 part of the Annual Report.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 Corporate Social Responsibility has been the company''s priority. The
 Company donated to social care centers and its contribution to social
 activities, awareness campaign, education and cultural events and sport
 activities viz Childlink India Foundation, Yashwantrao Chavan Shikshan
 Prasarak Mandal, Kamakhya Education Society, Maruti Education Trust,
 Universal Sports & Art Foundation, ISKCON etc.
 
 DONATIONS
 
 The donations made by the Company during 2010 -11 is Rs 55.83 million
 which is within the limit Rs 100 million approved by the Members of the
 Company vide meeting dated July 31, 2009.
 
 During the year under review, the Company made political donation of an
 amount of Rs 0.2 million.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956, with regard to Directors'' Responsibility Statement, the
 Board of Directors confirms that:-
 
 a.  In the preparation of annual accounts, the applicable accounting
 standards have been followed and that there are no material departures.
 
 b.  The selected accounting policies were applied consistently and the
 Directors 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 of the profit and loss account of the
 Company for the year ended on that date.
 
 c.  Proper and sufficient care has been taken 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.
 
 d.  The annual accounts have been prepared on a going concern basis.
 
 EQUITY SHARES IN THE SUSPENSE ACCOUNT
 
 As per clause 5A of the Listing Agreement, the Company reports the
 following details on claim/unclaimed shares during the year 10-11
 relating to Follow on Public Issue (FPO) of 2006:
 
 Particulars
 
 1.  Aggregate number of shareholders at the                   59 
     beginning of the year
 
 2.  Outstanding shares in the suspense account              1327 
     lying at the beginning of the year
 
 3.  No of shareholders who approached the                      1 
     company for transfer of shares from suspense 
     account during the year
 
 4.  Number of shareholders to whom shares                      1 
     were transferred from the suspense account 
     during the year
 
 5.  Aggregate number of shareholders at the                   58 
     end of the year
 
 6.  Outstanding shares in the suspense account              1305 
     at the end of the year
 
 The voting rights on the outstanding shares shall remain frozen till
 the rightful owner of such shares claims the shares.
 
 ACKNOWLEDGEMENTS
 
 The Directors wish to place on record their appreciation for their
 continued support and co-operation by Shareholders, Financial
 Institutions, Banks, Government authorities and other stakeholders.
 
 Your Directors also acknowledge and appreciate the support extended by
 all the employees for their dedicated service.
 
                                   On behalf of the Board of Directors,
 
                                                           Pravin Patel 
                                                               Chairman
 
                                                     September 10, 2011