Dear Shareholders,
 
 Government initiatives The Government has allowed 100% foreign
 investment under the automatic route in the hotel and tourism related
 industry, according to the Consolidated FDI Policy, released by DIPP,
 Ministry of Commerce and Industry, Government of India. The terms hotel
 includes restaurants, beach resorts and other tourism complexes
 providing accommodation and /or catering and food facilities to
 tourists.
 
 The term tourism related industry includes:
 
 Travel agencies, tour operating agencies and tourist transport
 operating agencies
 
 Units providing facilities for cultural, adventure and wildlife
 experience to tourists
 
 Surface, air and water transport facilities for tourists
 
 Convention/seminar units and organisations
 
 The Government of India has announced a scheme of granting Tourist Visa
 on Arrival (T- VoA) for the citizens of Finland, Japan, Luxembourg, New
 Zealand and Singapore. The scheme is valid for citizens of the above
 mentioned countries planning to visit India on single entry strictly
 for the purpose of tourism and for a short period of upto a maximum of
 30 days.
 
 The government has taken up a number of initiatives to enhance the
 tourism and hospitality sector performance and profits. Identification
 and development of 37 destinations within the last
 
 two years, and execution of 600 projects for 300 tourist spots across
 the country with an investment of over US million are some projects
 taken by the Government to boost the travel industry and create
 awareness for the sector.  These efforts have been coupled with
 monetary assistance from the Central government to the tune of US$ 5
 million and US$ 10 million, as per the Tourism report by the Gujarat
 Government.
 
 The Ministry of Tourism under the Marketing Development Assistance
 (MDA) Scheme has also set up committees to assist and motivate travel
 tour operators and help them to familiarise with international
 standards of hospitality. Also, the Government provides financial
 assistance to travel agents to participate in travel marts and annual
 conventions for travel and tourism, as per the Annual report by the
 Ministry of Tourism.
 
 The Uttarakhand State Government has launched 100% tax exemption
 program to exempt multiplex projects, amusement parks, and other
 tourist facilities for a period of five years under the Vision 2020
 document. On the same lines, Rajasthan has reduced the luxury tax level
 to 8% from the existing 10% levels. Kerala, Madhya Pradesh, Orissa and
 Gujarat have entered into Private Public Partnerships (PPP) to promote
 travel and tourism to attract tourists.
 
 According to the Eleventh Five Year Plan, a total of US2 billion is
 planned to be invested in upgrading and modernising civil amenities
 like bridges, ropeways, roads, telecom services, ports, and other forms
 of transport as per a report by the Planning Commission.
 
 Industry initiatives The Indian hospitality sector is expected to see
 an estimated investment of US$ 12 billion in the next 2 years, and
 various new industry initiatives are being taken up. Given the current
 growth, demand-supply gap and investment norms (100% FDI allowed), the
 country provides opportunities for International brands to enter India
 with a long term commitment as stated in a report by the ministry of
 external affairs.
 
 Medical tourism
 
 India has emerged as the major destination for medical tourists from
 across the globe.  Lower costs combined with effective healthcare
 therapies have attracted a number of foreign patients. The Indian
 medical tourism sector valued at US$ 310 million, currently, receives
 more than 100,000 foreign patients each year and is expected to reach
 US$ 2 billion by 2012. With an annual growth of the sector projected at
 30%, the number of medical tourists is anticipated to grow at a CAGR of
 over 19% during the forecast period to reach 1.3 million by 2013.
 
 To offer superior healthcare services, the government has adopted the
 Public Private Partnership (PPP) Model to enhance the infrastructure
 requirements of the sector with the expertise of private sector and
 better
 
 support of public sector.
 
 Kerala, termed as ''God''s Own Country'' promises world class hospitals
 coupled with cost-effective treatments and opportunities for tourists
 to relax and enjoy. The state has been witnessing a steady growth in
 the number of foreign nationals visiting the country for procedures
 like knee replacement, weight reduction surgery, liver transplant,
 cardiac care, ophthalmic care and dentistry.
 
 Additionally, the Ministry of Tourism is aiming at leveraging India''s
 potential in conventional systems of wellness and medicines, such as
 Ayurveda, Siddha, and Yoga. The prominent American Association of
 Physicians of Indian Origin (AAPI) has acknowledged Jaipur as the
 center of medical tourism.
 
 Hospitality
 
 The Indian Hospitality industry, estimated at US$ 17 billion,
 contributes 2.2% of India''s GDP. The sector is expected to grow to US$
 36 billion by the end of 2018. Seventy per cent of the total
 contribution (US$ 11.85 billion) comes from the unorganized sector and
 the remaining 30% (estimated at US$ 5.08 billion) comes from the
 organised sector of the hospitality industry.
 
 The industry also witnessed an increase in the number of hotel rooms
 with a growth of 5% during the last three to four years. In the next
 two tears, a total investment of US$ 12.17 billion is expected that
 will add over 20 new international brands in the hospitality sector.
 
 Road ahead
 
 The tourism and hospitality sector report by the Ministry of Tourism
 suggests that the demands are expected to increase up to US$ 34.7
 billion by the end of 2020. In order to promote this target, the
 Ministry has already sanctioned the development of 169 rural sites
 across the country. These sites have been selected based upon their
 competencies for craft and handloom skills.
 
 Statistics suggest a triple fold increase in the number of tourists
 visiting the country. The sector has witnessed a steady growth from
 four million travelers in 1998 to 11 million in 2008. As expected, the
 figure in intended to reach a mark of 29 million visitors by 2018.
 There is an opportunity in the inbound MICE sector (meetings,
 incentives, conventions and events) which has already registered a
 growth of 15% to 20% during the last five years as stated in the report
 by the Ministry of Tourism.
 
 Signed
 
 Y Rajeev Reddy
 
 CMD