KALINDEE RAIL Chairmans Speech

Dear Shareholder''s

It is with great sadness that I share with you the news of the sad
demise of Sh. Arvind Gemini, Managing Director of the Company, on June
21, 2012 due to massive heart attack. Mr. Gemini joined the Board of
Kalindee in December, 1998 and was elevated to the post of Managing
Director in Oct, 2011 and played a key role in building high standards
of Corporate Governance in your Company. His contribution and
commitment to Company will be cherished for years to come. On behalf of
my Board and all my colleagues at Kalindee, we express our deepest
condolences to his wife and family. Indeed it is a great and
irreparable loss to Kalindee.

Continuing further, over the past year, Kalindee has built on its core
strengths and leveraged its growth drivers to ensure a profitable
future for your Company. Our focus on emerging markets through regional
partnerships, we believe, will help us further stimulate this growth
momentum. We will continue to enhance our brand equity in domestic
markets and in select emerging markets.

Delivery at right time and adhering to quality is at the epicenter of
the global construction sector and Kalindee''s business strategy of
delivering quality construction and at times ahead of schedule is well
aligned with this emerging paradigm.

Over the past decade, Kalindee''s business has evolved to a size and
scale that is poised to address global opportunities. We have also
shaped our business in the manner so that it can help us attain focus
and deliver value. These business segments have been derived from our
core competency that have differentiated us in the marketplace.

At Kalindee, we understand that we play an important role as an engine
of growth and a partner in success for thousands of individuals,
families and businesses. We built this Company with a focus on serving
the common man through the commissioning of world class infrastructure
that would enhance quality of life.

My Message to you on erstwhile occasions have typically covered the
nation''s economic progress as well as the performance of your Company.
On this occasion, I wish to focus on two key issues that should concern
us as a citizen of this country: the state of infrastructure and more
importantly, the risk of increasing over-reach of the State in business
and day to day life. Your Company''s performance during 201 1-12 is
adequately described in Directors Report and sector opportunity in
Management Discussion and Analysis, which I urge you to read.

Everyone recognizes that India desperately needs momentum growth
physical infrastructure. To achieve a steady 9 % growth in GDP, there
has to be a 12 - 14 % growth in real infrastructure spends in
railways, roads, power, ports, airports, telecom, urban facilities and
much else.

It isn''t happening as of today. Yet we are optimist and strongly
believe that while there may be irritating deviations in the short run,
growth will prevail. The time of India has come - an India of hope, of
opportunities, of all kinds of entrepreneurship, of work, and of
growth. Despite being occasionally lost in transit, two decades of
reforms have fundamentally changed this nation. It will demand the
things it needs for more growth and higher employment.

Henceforth I am sure that sooner or later, things will improve. We will
see infrastructure efforts being kick started yet again, as we will see
environmental protection walking in tandem with development. It is this
hope that keeps me optimistic about our country and the potential it
can offer. And of youth, who rightly demand a better life.

The mention of youth is of tremendous importance, since they are future
driver of growth. Our employees are energized to grow our business. Our
brand is stronger and more recognizable. Our insights into managing
large scale infrastructural projects are deeper than before.

The last year was a time to rebuild our brand and infrastructure so as
to generate sustainable growth. Despite the slowdown in general,
delayed financial closure for large projects, land acquisition issues
and no encouraging investment in Railway sector and also hardening
interest rates, our long term fundamentals have remained robust.

The Indian economy grew at a rate of 8% last year. The fiscal deficit
stood at 5.9% of GDP, which is well within the revised target owing to
better collection in taxes, government expenditure cuts and like
factors. Going forward albeit the concerns for inflationary pressures
and tightening monetary control by RBI, the economic slowdown persists,
yet the economy seems to grow @ 6%. Fiscal deficit for current year has
been budgeted at 5.1 % of GDP.

The investment requirement in infrastructure sector over the next five
years is expected to be around USD 445 billion. A preliminary
assessment suggests that at least 50 % of the investment should come
from the private sector. The ensuing plan therefore require a huge
participation from the private sector to create and maintain newer
infrastructure, particularly in road, power, airport and seaport
sectors. A couple of measures have already been declared by Hon''ble
Prime Minister of India recently and that might give the extra phillip
required by the economy. This presents a huge opportunity for private
sector companies including yours.

Off late the rate of growth in construction activity seems to have
slowed down, be it in the sector of Power, Railways, Ports, Road, Urban
Infrastructure or Housing. The targets set up by planning commission in
the past has been under achieved. This scenario started with the
financial breakdown in the leading financial institutions of America
and Europe. Although, India was comparatively less affected by this
down turn, still the rate of growth slowed down.

One of the vital reasons for dismal performance in last couple of
quarters has been that the Government expenditure on infrastructure
construction has come down. The socio-political issues, environmental
issues, governance issues have considerably impeded the decision making
and infra spending. The high rate of inflation and subsequently growing
interest rates has contributed to less investment in construction
activities. The spill-over effect of the global recessionary trends,
the financial crunch, dear- money policy, elongated working capital
cycle, reduced demand, regulatory delays in approvals, complex land
acquisition regulations and increased competition have impacted the
construction industry in general and our Company was no exception.

A paradigm shift is taking place with more foreign players coming in
the market and with increase in competition. To meet the external
challenges, we are in the process of building up our in-house
capability in further strengthening and improving the internal
processes as well as the business model. Though the environment for
growth is conducive, still, it is the survival of the fittest. The IT
enabled software tools have revolutionized the design, planning
process, MIS and is helping us integrate the functional components in
an effective manner with the help of capable developments and an
implementation team.

EXPERTISE ACROSS INFRASTRUCTURE

Our Research & Development activities span across construction
technology, methodology, materials, machines and manpower. We are
re-energizing our focus and efforts to confront complex construction
challenges, enhance productivity, efficiency, wastage reduction,
quality improvement, improvement of health, safety and environment. We
are continuously evolving strategies to improve the working of the
Company in terms of automation and shorter delivery cycles.

ORDERS

In the year under review, your Company has performed marginally better
compared to the previous year. Looking ahead one can be optimistic
about the future. There is a realization that the near miraculous
growth in the economies of South East Asian Nations, such as Japan,
Hongkong, Korea, Singapore and Thailand etc. were preceded and
reinforced by quantum investments in physical and social infrastructure
and that for India to achieve sustainable and inclusive growth in its
economy there will be a robust increase in the planned development of
the Infrastructure.

With a view to attract investment in infrastructure from private
sector, the Government has taken several measures, such as introduction
of viability gap funding programme, promotion of India Infrastructure
Finance Company Limited, increased availability of bank finance and
liberalization of ''foreign direct investment'' norms. The Reserve Bank
of India has also made significant policy changes to attract private
investment in infrastructure. All this bodes well for the future of the
Company and your investments in the Company.

Your Company now has a portfolio of several large projects both in
Government and Private sector including a recent foray into Overseas
Metro Rail Project offered by Government of Bangladesh. The Company
hopes to complete several on-going projects during the current year.

On the immediate horizon, your Company has been shortlisted to bid for
a number of large projects in Railway sector. In addition, your Company
is evaluating certain projects in some emerging foreign economies as
well which will enable your Company to establish itself overseas.

We have identified and pursued some more growth opportunities in the
areas of roads and power transmission projects, on a view to improve
business base of the company. We are focusing on our financial model,
cashflow and interest rates with better utilization of money.

Kalindee has done much last year internally to strengthen your
Company''s businesses and delivery capabilities. However difficult and
challenging external factors and business environment have come in the
way of translating Kalindee''s various initiatives to higher revenues
and Profits. It is widening its railway sector footprint, capitalizing
on rapidly growing segments on the one hand and derisking its industry
presence on the other. The Company is concurrently engaged in
strengthening access to diverse technologies, reducing costs, enhancing
capacities, and enriching management bandwidth with a singular
objective : to report sustainable growth across one of the most
exciting periods in the country''s railway industry.

Your Company has continued to display a remarkable acumen and success
in bagging projects in a cross section of segments. While your Company
is making further inroads into emerging sectors, it has maintained its
good track record in executing various projects. Excellent project
execution and revenue generation have always been our key focus areas
and we are glad that our strength persists in these areas.

The Government''s thrust in this sector continues and is visible from
the developments and recent announcement made by Planning Commission
and Hon''ble Prime Minister of India which will increase private sector
engagement. The entire focus seems to be on the revamping of sector and
your Company will selectively continue to tap these opportunities so as
to enlarge its presence in said segment.

In the international arena too your Company is proud to be part of new
progress initiative of Bangladesh.

Some of the key achievements of your Company recently are bagging quite
large projects both from Indian Railway and Private Sector for their
railway linkages projects.

Our continued success will depend in part on our ability to retain and
attract key personnel with relevant skills, expertise and experience.
We are aware of the challenges in attracting and retaining the best of
talents in the industry. Despite the current scenario, the attrition
rate among our top management and executive level is insignificant.
Your Company has established process of human resource development.
Presently Kalindee has about 430 employees at all levels.

We are focused on efficient and timely project execution as before as
we sincerely believe that our way of working have a direct bearing on
improving the quality of life of our fellowmen. We are happy that we
could contribute and are eager and passionate about to continue to do
so at an even faster pace.

Infrastructure is given due recognition for a nation''s economic
progress. To sustain growth in the Infrastructure Sector, despite the
global meltdown, the Government is planning massive investment in
coming years for infrastructure development. Further the government has
also set aside a considerable amount for improving the condition of
ports, railroads, highways and airports over a period of 15 years.

Infrastructure Sector Growth Rate in Indian GDP has been on the rise in
the last few years and this in turn has given a major boost to the
country''s economy and your Company too will be benefitted out of it.

To conclude, I would like to record my gratitude to all employees for
the commitment and hard work they have exhibited in obtaining, managing
and executing projects, despite many challenges. I would also like to
thank business associates, lenders, customers, auditors, consultants
and shareholders for their abiding faith in us. Finally, I am indebted
to the Members of the Board for guiding us wisdom and direction. Thank
you all for making Kalindee what it is today.

At the end I would once again like to take this opportunity to once
again convey our deepest condolences and our prayers for the departed
soul.

Some of the major on-going projects being executed by your Company are
as under:

1) Talwandi Sabo Power Ltd: Railway Siding and Linkage from Sada Singh
Wala Railway station to Talwandi Sabo plant including in plantyard in
village Banwala , District Mansa-Punjab

2) Bangalore Metro Rail Corporation Ltd (BMRC) Design, Manufacture,
Supply Installation Testing and Commissioning of Automatic Fare
Collection System

3) Bangladesh Railway: Rehabilitation of Laksman-Chandpur section of
Bangladesh Railway on turnkey basis.

4) Railway formation work between Jharsuguda to Sardega alignment of
Chakradharpur divisions in connection with construction of new Railway
Siding.

5) Jaipur Metro: Laying and commissioning of track work and Automatic
Fare Collection system (for 9 stations) of phase-1, stage-1, standard
gauge corridor from Mansrovar Depot.

6) Design supply of materials, installation , testing & commissioning
of level crossing gates interlocking (58 gates) using MSDAC along with
construction of masonry building in Sealdah division of Eastern
Railway.

7) Rajkharswan-Dangoaposi third line: execution of the railway
formation work involving blanketing minor bridges P way linking works
and other related works for the section 1 in Chakradharpur division of
South Eastern Railway.

8) Broad Gauge Railway siding works at 2x500MW Super Thermal Power
Station, Chandrapur, Maharashtra.

9) Construction of Railway siding for 4x660 MW power plant by Abhijeet
Group Pas infrastructure and power Ltd) at Banka, Bihar.

10) Construction of roadbed, major & minor bridges track linking and
electrical works at Bhigwan Mohol section (1 27.14 kms part of Daund
Gulbarga doubling in Sholapur division of Central Railway) in the state
of Maharashtra, India

11) Construction of roadbed, major & minor bridges, civil works and
track lining, general electrical work and S&T works in connection with
doubling between Rani-Keshavganj (59.5 kms) on Ajmer Division of North
Western Railway in Rajasthan, India.

Thank you,

Sd/-

R. D. Sharma

Chairman cum Managing Director

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