Ladies and Gentlemen,
 
 Despite a promising start, 2011 was a year of slow and fragile
 recovery. the year 2012 started on a promising note amidst hopes that
 the global financial crisis was at a turning point. unfortunately,
 events have proved otherwise.  Europe continues to be plagued by
 persistent recession and high levels of unemployment. the eurozone is
 under immense stress. the economic upheaval in europe could have dire
 consequences, not only for europe, but also for most global economies.
 
 The hospitality industry''s performance is directly related to economic
 growth and investor confdence. unfortunately, the economies on which we
 depend are shrouded in uncertainty.
 
 Business travellers are an important segment for our hotels and
 business sentiment has been on a progressive decline in india in the
 past year. infation and high interest rates are impacting economic
 growth and GDP forecasts have been revised downwards. Foreign investor
 confdence is at a low ebb due to the recent unfriendly government
 policies, corruption scandals and a stalled economic reform agenda. the
 recent standard and Poor''s rating downgrade is refected in the growing
 uneasiness of foreign investors. Most investors are waiting and
 watching.
 
 Despite short term challenges, the long term outlook for the Indian
 hospitality industry is positive. A country as diverse as India with a
 strong historic and cultural heritage will always be sought after by
 international travelers. Multiple centers of economic activity are
 emerging rapidly in India thus creating a growing demand for domestic
 customers who value quality and are prepared to pay for superior
 service and accommodation.
 
 The development of Human Resources continues to be a priority for the
 Company.  We can claim with pride that the oberoi Group has trained
 some of the best people in the hospitality industry. Former employees
 have made successful careers, not only in our industry, but in banking,
 insurance, healthcare and other service industries.
 
 The oberoi Centre of Learning and Development (oCLD) has been
 responsible for training young talent since 1968. Many of our General
 Managers and senior executives are graduates from this institution.
 
 As I have said in the past, infrastructure is a key to economic
 development. Most cities in india are deficient in power and water.
 Despite assurances from the Centre and state Governments there appears
 to be no significant improvement.
 
 Global warming is changing the climate on all continents. the burning
 of fossil fuels, particularly coal and oil, is responsible for climate
 change. it is our endeavour to harness solar and wind power to reduce
 our reliance on power generated by fossil fuels.
 
 I thank all those who work for the Company for their hard work and
 dedication.  I also thank my colleagues on the Board for their advice
 and continued support.
 
 Thank you.
 
 P.R.S. OBEROI
 
 Chairman
 
 15th June, 2012