FINANCIAL RESULTS :

                                            2010-2011         2009-2010
                                                  (Rs in lakhs)

Turnover                                      7930.21           6122.91

Operating Profit for the year                 1207.87            440.01

Depreciation for the year                      287.27            296.05

Net Profit for the year before tax             920.60            143.96

Less:   Provision for taxation and 
Income tax of earlier years                    170,20             25.99

Deferred tax liability                         409.28                 -

Net Profit after Tax                           341.12            117.97

Balance of Profit brought                     2380.25           2262.28
forward from previous year

Balance of Profit carried forward             2721.37           2380.25

BUSINESS REVIEW :

During the year under review, the business turnover increased by about 30% compared to the previous year. Margins have also improved over the previous year, though lower than potential.

Unstable political environment in Andhra Pradesh, frequent bandhs and strikes in the last one year have affected hospitality and tourism industry adversely.

Margins are likely to be impacted by continuing inflation, oil price volatility and raising payroll costs.

The Indian economy though inherently stronger than most other countries, continues to face uncertainty and volatility because of the adverse macro economic scenario in global markets.

However, the long term outlook for the industry appears to be bright despite short term concerns.

DIRECTORS' RESPONSIBILITY STATEMENT :

In accordance with Section 217(2AA) of the Companies Act, 1956, the Directors of the Company hereby state that:

- In the preparation of the Annual Accounts, the applicable accounting standards have been followed and that there are no material departures.

- The Directors had, in consultation with the Statutory Auditors, selected such accounting policies and 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 March 31, 2011 and of the profit of the Company for that year.

- The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of knowledge and ability of the Directors.

- The Directors had prepared the annual accounts on a going concern basis.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO :

Constant efforts are being made to reduce energy consumption through energy saving devices, employee awareness and effective monitoring.

Disclosure of particulars with respect to conservation of energy, technology absorption is not applicable to the Company for the time being In compliance with Section 217 (1) (e) of the Companies Act, 1956, and the Rules framed there under. Details of income and expenditure in foreign currency, during the year are given in the Notes to Accounts.

DIRECTORS :

Pursuant to the provisions of the Articles of Association of the Company, Sri Ch. Kiron and Sri P. Satyaprakash Reddy, retire by rotation and being eligible, offer themselves for reappointment.

AUDITORS :

M/s. Brahmayya & Co., Statutory Auditors of your Company, retire at this meeting and are eligible for reappointment. Regarding the observation about the outstanding Sales Ta x and property tax liability, your Directors wish to state that steps are being taken to pay the amount, after obtaining relevant clarifications. Regarding non provision of arrears of interest on promoters loans, the Directors wish to clarify that these loans were brought in as their contribution for financing the Hotel Projects at Ramoji Film City during 1995 to 2001 and no interest was provided or paid to the promoters for the past period, as per the terms of the loan agreements with the financial institutions and banks since the loans were treated as quasi equity. However, interest for the current period is being paid to the promoters since FY 2006, after obtaining relevant approvals.

SECRETARIAL COMPLIANCE CERTIFICATE :

Pursuant to the provisions of Section 383 A of the Companies Act, 1956, and the Rules framed there under, a Compliance Certificate from a Company Secretary in whole time practice is attached to this report.

PERSONNEL :

Your Directors wish to place on record their sincere appreciation to all the employees for their dedication, teamwork and commitment, during the year under review. There are no employees who are covered by Section 217(2A) of the Companies Act, 1956.

Your Directors also gratefully acknowledge the continued support and cooperation extended to the Company by Union Bank of India.

                                            For and on behalf of the
                                               Board of Directors

Place : Ramoji Film City,                         RAMOJI RAO

Date : 06.09.2011.                                 Chairman