Dear Shareholders,
 
 We have pleasure in presenting the Twenty Fifth Annual Report of the
 Company together with the Audited Accounts for the year ended 31 st
 March 2011.
 
 Financial Results:
 
 The performance of the Company forthe financial year ended 31 st March
 2011 is summarized below:
 
                                                       (Rs. in Crores)
 
                               CONSOLIDATED              STANDALONE
 
 Particulars                2010-11     2009-10     2010-11     2009-10
 
 Income from Operations      152.07      120.45       92.87       77.83
 
 Other Income                  2.67        1.42        2.14        1.14
 
 Total Income                154.74      121.87       95.01       78.97
 
 Gross Operating Profit       42.07       28.82       22.58       19.35
 
 Interest                    (11.28)      (7.59)      (2.26)      (2.41)
 
 Depreciation                (13.71)     (12.37)      (5.61)      (5.61)
 
 Profit before Tax            17.08        8.86       14.71       11.33
 
 Provision for Taxation       (5.61)      (3.93)      (5.05)      (3.05)
 
 Minority Interest and Share   0.75        2.04           -           -
 of Profit in Associate
 
 Net profit after tax         12.22        6.97        9.66        8.28
 
 With total consolidated revenue of Rs.154.74 Crores, your Company has
 for the financial year under review reported an increase in its total
 consolidated revenue by 27% as compared to the previous financial year.
 The Gross Operating Profit has also shown an increase of 46% as
 compared to 2009-2010. The Profit after Tax stood at Rs. 12.22 Crores,
 as against Rs. 6.97 Crores of previous year, showing an increase by
 75%. With improving economic conditions and several new hotel projects
 in progress, your Company is hopeful of continuing this trend in the
 current financial year also.
 
 Dividend
 
 The Board of Directors recommends the payment of Rs.1.50 (one rupee and
 fifty paisa) per equity share (15% on face value Rs.10) for the year
 ended 31 st March 2011, subject to the approval of shareholders. The
 outflow of funds on account of payment of dividend, including tax on
 dividend would beRs.476 Lacs.
 
 NEW HOTELS OPENED
 
 During the year, your Company widened its network and added the
 following 5 new hotel properties to its portfolio:
 
 - Hospet
 
 Royal Orchid Central Kireeti, Hospet, with 135 rooms commenced its
 operations in October, 2010.
 
 -Mussoorie
 
 Royal Orchid Fort Resort, Mussoorie, with 60 guest rooms, commenced its
 operations in December 2010.
 
 -Shimoga
 
 Royal Orchid Central, Shimoga, with 108 guest rooms, commenced its
 operations in March, 2011.
 
 - Jaipur
 
 Hotel Royal Orchid, Jaipur, a Five Star Hotel, with 139 guest rooms,
 commenced its operations in March, 2011.  
 
 -Vadodara
 
 Hotel Royal Orchid, Vadodara with 81 guest rooms, commenced its
 operations in May, 2011.  
 
 NEW HOTEL PROJECTS IN PROGRESS
 
 - Hyderabad
 
 The Construction of the Five Star Hotel with 233 rooms at Hyderabad and
 a Suites hotel with 49 rooms in the same location is in the advanced
 stages of completion. The first phase of the Five Star Hotel with 108
 rooms and the Suites Hotel are likely to commence their operations by
 October, 2011.
 
 -Mumbai
 
 The Construction of the Four Star Hotel at Powai, Mumbai with 260 rooms
 has commenced and the hotel is likely to commence its operations by
 2013.
 
 UPCOMING PROJECTS
 
 Your Company is in the process of establishing new hotels in the
 following locations, in nearfuture:
 
 SI No Location
 
 1 Mumbai
 
 2 Surat
 
 3 Delhi
 
 4 Bharuch
 
 5 Greater Noida (UP)
 
 6 Faridabad
 
 7 Chennai
 
 8 Kolkata
 
 9 Shimla
 
 Business Expansion
 
 The Company has drawn ambitious expansion plans so as to reach a target
 of 4000 keys by the year 2015. This will be achieved by using both
 organic and inorganic approaches.
 
 Awards
 
 I.  During the year, Hotel Royal Orchid Central, Pune was declaredas
 Hotel of the Year in the First Class Business Hotel Category at the
 GOLDEN STAR AWARDS 2010. The award was presented by the Ministry of
 Tourism, Government of India.  
 
 ii.  Royal Orchid Central Grazia.Navi Mumbai wontheBest Emerging Hotel
 of theYear-2010-11attheGOLDEN STAR AWARDS, instituted by Stars of the
 Industry Group.
 
 iii.  Royal Orchid Beach Resort & Spa, Goa won the Pegas Award for
 Excellence.
 
 iv.  Your Company is also proud that an executive of Royal Orchid Hotel
 was awarded the Most Admired Executive House Keeper award at the
 GOLDEN STARAWARDS 2010
 
 v.  Royal Orchid Central Ahmedabad was awarded the Most Admired
 General Manager of theYear at the GOLDEN STARAWARDS.
 
 vi.  Royal Orchid Central Grazia, Navi Mumbai won the Most admired GM
 of the year award at the GOLDEN STAR AWARDS, instituted by Stars of
 the Industry Group.
 
 Subsidiary Companies
 
 Your Company has 14 subsidiary companies as at 31st March 2011, of
 which 11 are wholly owned subsidiaries. Your Company has obtained the
 required approval from the Central Government, Ministry of Corporate
 Affairs (MCA) exempting from attaching the detailed financial
 statements of each Subsidiary Company with this Annual Report, pursuant
 to the provisions of Section 212(8)of the Companies Act,1956( letter
 dated 17/01/2011 vide No. 47/5/2011-CL- III) and accordingly, only a
 Consolidated Financial Statement is presented with this Annual Report,
 along with the Standalone Financial Results of the Company.
 
 However, in compliance with the terms of the said exemption approval of
 MCA, a statement showing the relevant details of the Subsidiary
 Companies is enclosed as a part of this Annual Report. The annual
 accounts of the subsidiary companies and the related detailed
 information will be made available to the holding and subsidiary
 company investors seeking such information at any point of time and
 also on the website of the Company, www.royalorchidhotels.com
 
 Central Government Approvals
 
 During the year, your company has obtained the approval of Central
 Government for payment of remuneration to Mr. C K Baljee, Chairman &
 Managing Director and Mr. Keshav Baljee, President of the Company, for
 the year ended 31st March 2011.
 
 Directors
 
 The Director Mr. Jaithirth Rao resigned with effect from 16th May 2011
 and the Directors wish to place on record their sincere thanks for his
 valuable contribution to the Board, during his tenure.
 
 The Director Mr. RVS Rao retires by rotation at the ensuing Annual
 General Meeting and being eligible, offers himself for re-appointment.
 
 Mr. Vijay K Rekhi was appointed as an Independent Director of the
 Company effective 6th July 2011. As Mr. Vijay K Rekhi shall hold
 office, up to the date of the ensuing Annual General Meeting, the
 consent of Shareholders is sought for his appointment at the said
 meeting.
 
 Auditors
 
 The Statutory Auditors M/s. Walker, Chandiok & Co., Chartered
 Accountants, Bangalore, retire at the ensuing Annual General Meeting
 and have confirmed their eligibility and willingness to accept office,
 if re-appointed.
 
 Auditors'' Report to Shareholders
 
 In respect of the comments of the Auditors on the frequency of the
 physical verification of fixed assets, as advised by the Audit
 Committee of Directors, physical verification of fixed assets would be
 carried out once in a year, hereinafter.
 
 Public Deposits
 
 The Company has not accepted any fixed deposits from Public during the
 year.
 
 Management Discussion and Analysis Report
 
 The Report as required underthe Clause 49 of the Listing Agreement is
 annexed and forms part of the Directors'' Report.
 
 Corporate Governance
 
 The Report on Corporate Governance along with a Certificate from a
 Practicing Company Secretary confirming the Compliance is annexed and
 forms part of the Directors'' Report.
 
 Employees Stock Option Scheme (ESOS)
 
 The details of the ESOS as required underthe Securities and Exchange
 Board of India (Employee Stock Option Scheme and Employee Stock
 Purchase Scheme) Guidelines, 1999 are annexed and form part of the
 Directors'' Report.
 
 Personnel
 
 In terms of Companies (Particulars of Employees) Rules, 1975 read with
 the Notification dated 31st March 2011, issued by the Ministry of
 Corporate Affairs, New Delhi, the details of employees as required to
 be furnished under Section 217 (2A) of the Companies Act, 1956 are not
 applicable to the Company.
 
 Additional Information in accordance with the provisions of section
 217(1) (e) of the Companies Act, 1956 read with the Companies
 (Disclosure of Particulars in the Report of the Board of Directors)
 Rules, 1988
 
 - Conservation of Energy
 
 Your company is continuously putting its efforts towards conservation
 of energy across all its units and in the process, has implemented a
 well documented Energy Conservation Program, which includes use of:
 
 - Energy efficient lighting- LED
 
 - BMS - Building automation system
 
 - VFD -Variable frequency drive for motors
 
 - Modulating valves to control the flow
 
 - Heat exchanger systems for utilizing the waste heat
 
 - Solar system for generating hot water
 
 - Sewerage Treatment Plants - for reuse of water for gardening, Cooling
 tower, flushing and cleaning purpose
 
 - Latest energy conservation gadgets
 
 - Technology absorption
 
 In the opinion of the Board, the required particulars pertaining to
 technology absorption as per Rule 2 of Companies (Disclosure of
 Particulars in the Report of Board of Directors) Rules, 1988 are not
 applicable as the hotel forms a part of the service industry and the
 company does not have any significant manufacturing operations.
 
 - Foreign Exchange Earnings and Outgo
 
 During the year under review, your Company earned Foreign Exchange
 Revenue of Rs. 37.41 Crores (Previous Year Rs.30.87 Crores) and the
 Foreign Exchange outgo on account of commission and others is Rs.2.26
 Crores (Previous year Rs.0.85 Crores).
 
 Safety and security
 
 Keeping in mind the security threats to the hospitality industry in
 India, your Company has stepped up its efforts to ensure an environment
 of well being, safety and security for all its guests and co-workers.
 Our guest floors as well as all public areas are well equipped with
 closed circuit cameras and alarm system. Moreover, guest room doors are
 installed with computerized electronic card locking system to enhance
 security. Safety deposit lockers have been placed in all rooms to store
 valuables. Movement of all vehicles, employees, vendors and guests is
 monitored, scanned and electronic data preserved in our archives. An
 Emergency Response Team exists in all the hotels, which is always on a
 standby mode to respond immediately to any unforeseen emergency in the
 hotel.
 
 Trade Mark Case
 
 In a suit filed by Kamat Hotels (India) Limited against the Company for
 alleged infringement and passing off of Trade Mark ''the Orchid'', a
 single Judge of the Hon''ble High Court of Bombay vide its Interim Order
 dated 5th April 2011, has allowed our Company to continue with its
 existing hotels and business under its Trade Mark but restrained the
 use of the same, for any new hotel or line of business. A division
 bench of the Bombay High Court has admitted the appeal filed by the
 Company against the above interim order and granted a partial stay
 allowing the Company to open its new hotel at Vadodara in May 2011. The
 appeal is now posted for hearing in July 2011.
 
 Briefly, it is the case of our Company that we are the prior adopter
 and user of the mark ''the Orchid'' in relation to Hotel Business and
 that there has been inordinate delay in filing the suit and
 acquiescence by Kamat Hotels, disentitling it to the reliefs claimed.
 
 Directors'' Responsibility Statement
 
 Pursuant to the provisions of Section 217(2AA) of the Companies Act,
 1956, the Board of Directors, based on the representations received
 from the Operations Management, hereby confirms that:
 
 I. In the preparation of the annual accounts forthe year ended 31st
 March 2011, the applicable accounting standards have been followed and
 that there are no material departures.
 
 ii. It has in the selection of the accounting policies, consulted the
 Statutory Auditors and has applied them consistently and 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 31 st March 2011
 and of the profit of the Company for that period.
 
 iii. It has taken proper and sufficient care forthe maintenance of
 adequate accounting records in accordance with the provisions of the
 Act for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities, to the best of its knowledge
 and ability. There are however, inherent limitations, which should be
 recognized while relying on any system of internal control and records.
 
 iv.  It has prepared the annual accounts forthe year ended 31 st March
 2011, ''on a going concern basis''.
 
 Acknowledgments
 
 Your Directors record their sincere thanks for the valuable support
 extended by the customers, suppliers, investors, bankers and other
 statutory authorities. Your Directors acknowledge with deep
 appreciation the dedicated services rendered by the employees of the
 Company. Your Directors express their sincere thanks to all the
 shareholders for the confidence reposed in the Management and look
 forward to their continued support.
 
                            For and on behalf of the Board of Directors,
 
 Bangalore,
 
 6th July 2011                              Chander K Baljee
 
                                     Chairman & Managing Director