TO THE MEMBERS
 
 The Directors have pleasure in presenting the 31st Annual Report of
 the Company together with the Audited Statement of Accounts for the
 year ended 31 March 2011
 
 FINANCIAL RESULTS
 
                                                    (Rs. in Lakhs)
 
                                                2010-11    2009-10
 
 Sales Turnover                                 5095.77    4152.08
 
 Other Income                                   2850.90    2776.26
 
 Expenditure                                    4416.90    3707.51
 
 Provision for Taxation                          720.88     696.04
 
 Profit for the year                            2808.89    2524.79
 
 Profit brought forward from previous year       737.30     555.52
 
 Dividend including Corporate Dividend Tax       913.84     843.02
 
 Transfer to General Reserve                    1500.00    1500.00
 
 Profit transfer to Balance Sheet               1132.35     737.30
 
 Earning Per Share                                42.88      38.54
 
 HOTEL OPERATIONS
 
 During the year under report, the economy recovered partly from
 economic recession especially in the developed countries. The Indian
 economy has also recovered resulting in higher Hotel room occupancy and
 average room rate. Hence, sales turn over has increased from Rs.4152
 lakhs to Rs.5096 lakhs. During the current financial year 2011-12, the
 hotel business is hit by the entry of new five star hotels in the city
 of Bangalore resulting in stiff competition and undercutting of room
 tariffs. Hence, it will be difficult to maintain the same working
 results in current financial year.
 
 FUTURE PROSPECTS
 
 The future of the hotel industry is entirely dependant on the state of
 the country''s economy. The outlook for the Financial Year 2011 -12 is
 tough due to severe competition with added new five star hotels in the
 city of Bangalore.
 
 FINANCE
 
 During the year under report, the financial position of the Company has
 further been consolidated with significantly increased reserves and
 surplus. However, the ongoing renovation of the Hotel is consuming the
 major surplus funds of the Company.
 
 DIVIDEND
 
 The Board of Directors have recommended a dividend of Rs. 12/- per
 share on share capital of Rs.6.55 crores divided into 65,50,526 equity
 shares of Rs. 10/- each. The said dividend, if approved at the ensuing
 Annual General Meeting, will be paid to those shareholders whose names
 appear in the Register of Members as on 12th August, 2011.
 
 BONUS ISSUE
 
 The Board of Directors have recommended issue of bonus shares to all
 the existing shareholders in the ratio of 1:1 shall rank pari passu
 with the existing shares which will be placed at the ensuing Annual
 General Meeting for approval.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 The Board of Directors of the Company confirms:
 
 a) Applicable accounting standards have been followed in the
 preparation of annual accounts. Material departures therefrom, if any,
 are properly explained in the notes on accounts ;
 
 b) The Board of Directors has selected such accounting policies and
 applied them consistently and made judgements 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 of the Company for the period ;
 
 c) The Board has taken proper and sufficient care for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act for safe-guarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 d) The Annual Accounts have been prepared for the financial year ended
 31 March 2011 on a going concern basis.
 
 FOREIGN EXCHANGE EARNINGS
 
 Foreign Exchange Earnings during the year were Rs.2952 lacs which is
 58% of the Hotel Sales Turnover. The Foreign Exchange utilisation
 during the year was Rs.765 lacs.
 
 SUBSIDIARY COMPANIES
 
 At the beginning of the year, the Company had one Subsidiary Company,
 Airport Golf View Hotels & Suites Pvt. Ltd. (formerly known as Nedstar
 Hotels Pvt. Ltd.)
 
 As required under the Listing Agreements with the Stock Exchanges, a
 Consolidated Financial Statement of the Company and its Subsidiary is
 attached. The Consolidated Financial Statements have been prepared in
 accordance with the relevant Accounting Standards as prescribed under
 Section 211(3C) of the Companies Act, 1956 (Act). These financials
 statements disclose the assets, liabilities, income, expenses and other
 details of the Company, its subsidiary.
 
 Pursuant to the provision of Section 212(8) of the Act, the Ministry of
 Corporate Affairs vide its circular dated February 8, 2011 has granted
 general exemption from attaching the Balance Sheet, Profit and Loss
 Account and other documents of the subsidiary Company with the Balance
 Sheet of the Company. A statement containing brief financial details of
 the Company''s subsidiaries for the financial year ended March 31, 2011
 is included in the Annual Report. The annual accounts of these
 subsidiary and the related detailed information will be made available
 to any member of the Company/ its subsidiary seeking such information
 at any point of time and are also available for inspection by any
 member of the Company/its subsidiary at the registered office of the
 Company. The annual accounts of the said subsidiary will also be
 available for inspection, as above, at the Head Office/Registered
 Office of the respective subsidiary company. The Company shall furnish
 a copy of details of annual accounts of subsidiary to any member on
 demand.
 
 DUES TO SMALL SCALE UNDERTAKINGS
 
 There are no dues payable to small scale undertakings.
 
 CORPORATE GOVERNANCE
 
 Members are aware that the Corporate Governance code has become a
 statutory requirement as per listing guidelines framed by the Stock
 Exchanges. Members will be happy to know that their Company is
 complying with the stipulations of the new code as on date. In line
 with this requirement of the code, a Corporate Governance Report and a
 Management Discussion and Analysis Report of the Company is furnished
 elsewhere in this Annual Report.
 
 ENERGY CONSERVATION
 
 Conservation of energy continues to be on top priority of the
 management. The following energy conservation measures have been taken:
 
 a) During the year under report, placed order for one more Wind Turbine
 Generator with a capacity of 2.10 MW apart from existing one number of
 2.10 MW and two numbers of 1.50 MW each environment friendly Wind
 Turbine Generators which generate electricity of about 1.20 crore units
 p.a. of green power which will be utilized partially for captive
 consumption of the Hotel and the balance units generated is being sold
 to Govt, of Karnataka/third parties.
 
 b) an effective key-tag system is in vogue in all guest rooms to switch
 off lights & power connections automatically.
 
 c) substantially switched over to PL lamps from conventional lamps with
 a view to saving energy upto 60% on lighting.
 
 d) installed solar panels which are feeding hot water required for the
 guest rooms.
 
 e) imported and installed three highly fuel efficient screw chillers
 for our AC plant.
 
 f) replaced windows with double glazed reflective glass with a view to
 save power on AC consumption.
 
 g) installed two on load tap charger transformers for stabilising
 voltage fluctuations and thereby to save power and prevent damage to
 electric motors and other installations.
 
 h) thermostatic Controls, Timers and Photo Cell Switches have been
 installed wherever necessary to control power consumption.
 
 i) imported and installed two temperature control systems to reduce
 power consumption.
 
 j) constituted an energy conservation committee to monitor power
 consumption regularly.
 
 TECHNOLOGY ABSORPTION
 
 In the opinion of the Board, the required particulars, pertaining to
 technology absorption in terms of Rule 2 of the Companies (Disclosure
 of Particulars in the Report of Board of Directors) Rules, 1988 are not
 applicable as hotel forms part of the service industry and the Company
 does not have any significant manufacturing operations. However, the
 management has been adopting the latest technology like LCD TV systems,
 high speed internet installed in all the guest rooms, latest high speed
 computers, modern guest amenities, best audio-video equipment, newest
 model transport vehicles for complimentary transport of hotel guests,
 video conferencing facility, latest models of soundfree fridges in
 guest rooms and various latest hotel operational equipments. Further
 the Hotel has been conforming to the stringent Le Meridien''s
 International Standards.
 
 PARTICULARS OF EMPLOYEES
 
 Information under section 217(2A) of the Companies Act. 1956, read with
 Companies (particulars of employees) Rules, 1975, is appended below :
 
 Particulars of employees pursuant to the provisions of Section 217(2 A)
 of the Companies Act, 1956 :
 
 Employed throughout the year :
 
 Name Ms.Sangeeta C. Pardhanani
 
 Age 42 Years
 
 Remuneration Rs.1,08,27,801/-
 
 Qualification B.Com., DBM
 
 Experience 9 Years
 
 Date of commencement
 
 of employment 01.10.2002
 
 Last Employment held Executive Director -
 
 Mac Charles (India) Ltd.
 
 Designation Managing Director
 
 Name
 
 Mr. M.S. Reddy
 
 Age
 
 57 Years
 
 Remuneration
 
 Rs. 17,90,577/-
 
 Qualification
 
 B.Com.,L.L.B.,
 
 MBIM., from London, UK,
 
 FCA, FCS
 
 Experience
 
 31 years
 
 Date of commencement of employment
 
 13.08.1983
 
 Last Employment held
 
 CompanySecretary & Chief Accounts Officer, Sri Krishna Rajendra Mills
 Ltd., Mysore
 
 Designation
 
 Vice President Finance and Company Secretary
 
 Name
 
 Mr. G Vijay
 
 Age
 
 49 years
 
 Remuneration
 
 Rs.25,92,528/-
 
 Qualification
 
 B.com.,Diploma in Hotel Mgmt.from Florida, USA, Advance Mgmt. from
 Cornell University, USA
 
 Experience
 
 25 years
 
 Date of commencement of employment
 
 01.10.2005
 
 Last Employment held
 
 Director of Operation, Harsha Hospitality Management, USA
 
 Designation
 
 Vice President and Director of Development
 
 Note : Ms.Sangeeta C. Pardhanani, Managing Director is the daughter of
 Mr. C.B.Pardhanani, the Chairman of the Company.
 
 EMPLOYEES
 
 The relationship with employees has been cordial. The total number of
 persons employed by the Company is 411 as at 31 March 2011.
 
 DIRECTORS
 
 During the year, Mr. K. R. Sampath, ceased to be Director with effect
 from 31 st August, 2010, as he retired by rotation at the previous
 Annual General Meeting held on 31 st August, 2010 and did not seek
 reappointment. Mr. J. Matthan resigned from the Board on 28th July,
 2011 due to his old age. Your Directors place on record their
 appreciation for the services rendered by Mr. K. R. Sampath and Mr. J.
 Matthan during their tenure as Directors of your Company.  During the
 year, the Board has co-opted Mr. M. R. Prasanna and Mr. M. R. B. Punja
 as independent Directors till the ensuing Annual General Meeting.
 
 AUDIT COMMITTEE
 
 The Audit Committee comprising of Mr. C.B. Pardhanani, Mr. J.  Matthan,
 Mr. M.R.B. Punja (w.e.f. 29th June, 2011) and Mr. P.B.  Appiah, all
 Directors of the Company with Mr. J. Matthan as the Chairman,
 discharged its duties and functions in consultation with the Internal
 and Statutory Auditors: (a) To review the adequacy of the internal
 control system and internal Audit Reports and their compliance thereof:
 (b) To oversee the Company''s financial reporting process and the
 disclosure of its financial information to ensure that the financial
 statements are correct, sufficient and credible: and (c) To review with
 the management, the financial statements before submission to the
 Board.
 
 AUDITORS'' REPORT ON CORPORATE GOVERNANCE
 
 As required by Clause 49 of the Listing Agreement, the Auditor''s
 Certificate is given as an annexure to Directors Report.
 
 AUDITORS
 
 M/s. K.B. Nambiar & Associates, Chartered Accountants, retire at the
 forthcoming Annual General Meeting and being eligible offer
 
 themselves for re-appointment.
 
 INTERNALAUDITORS
 
 M/s. B.P. Rao & Company, Internal Auditors have been conducting
 quarterly audits of all operations of the Company and their findings
 have been reviewed regularly by the Audit Committee. Your Directors
 note with satisfaction that no material deviations from the prescribed
 policy and procedures have been observed.
 
 SECRETARIALAUDIT
 
 As per SEBI Regulations, secretarial audit is being carried out at the
 specified periods by a practicing Company Secretary. The findings of
 the secretarial audit are satisfactory.
 
 DEMATERIALISATION
 
 The equity shares of the Company have been admitted for
 dematerialization with both the Depositories viz., Central Depository
 Services (India) Limited (CDSL) and National Securities Depository
 Limited (NSDL). The ISIN allotted to your Company''s equity shares is
 INE435D01014.
 
 ACKNOWLEDGEMENTS
 
 Your Directors are grateful to the Shareholders for their support and
 co-operation extended to the Company for many years. The Directors also
 thank the Banks namely State Bank of India and State Bank of Mysore for
 their co-operation and support. The Directors wish to place on record
 the support and encouragement received from the Department of Tourism,
 Government of India, Karnataka State Government and Foreign
 collaborators M/s.Le Meridien. The Directors also acknowledge the
 dedicated services rendered by the officers and all the staff of the
 Company.
 
                                         For and on behalf of the Board
 
 Bangalore                                              C.B. Pardhanani
 
 28 July 2011                                                  Chairman