To

The Shareholders,

Your Directors present herewith their 25th Report and Statement of Accounts for theyear ended 31st March 2012.

1. FINANCIAL RESULTS

2. OPERATIONS

During the year the Company has registered marginal decrease in turnover due to whichthe profitability also came down. The hospitality industry is reviving but Manali iscrowded with number of hotels and hence there is a stiff competition to attract thetourists. There was a marginal decrease in occupancy levels of rooms and average RoomRevenues during the Financial Year 2011-12.

Your Company is taking various steps to reposition itself to face the competition.

3. SHARE CAPITAL-ANNULMENT OF FORFEITURE

Pursuant to the evidence produced to the Company and request received from few memberswhose shares were forfeited the Company has annulled the forfeiture and restored the namesof such members on the Register of Members. Directors regret inconvenience caused to themembers as it was difficult to reconstruct the exact records as most of the secretarialrecords of the Company were badly damaged at the time of unprecedented flood in the year2005.

The Company has initiated actions for Demat of its shares and in the current year theMembers will be able to convert their physical shareholding in the Demat form. Once theDemat system becomes operational the separate intimation will be sent to all the Membersindividually and through news papers.

4. PROSPECTS

The first quarter of the Financial Year 2012-13 was better for the Company as there wasa marginal increase in the total inflow. The steps taken by Company in the previous yearas regards to cost reduction, rationalisation of tariff rates etc have paved the way toshow expected results. Your Company is optimistic to achieve better results henceforth.

5. DISCLOSURES UNDER SECTION 217(1)(D) OF THE COMPANIES ACT. 1956

Save as mentioned elsewhere in this Report, no material changes and commitmentsaffecting the financial position of the Company have occurred between the end of theFinancial Year of the Company 31st March, 2012 and the date of this Report

6. DIRECTORS

In accordance with the provisions Section 256 of the Companies Act; 1956 and Article105 of the Articles of Association of the Company, Mr.Jyoti Sagar and Mr.Dewan GobindSahai retires by rotation and being eligible offers themselves for re-appointment.

7. DEPOSIT

The Company has not accepted deposits from the public within the meaning of Section 58Aof the Companies Act, 1956.

8. CORPORATE GOVERNANCE

The Company has complied with the requirements under the Corporate Governance reportingsystem. A detailed Compliance Report on Corporate Governance is annexed to this report.The Auditors' certificate on compliance with the conditions of Corporate Governance underclause 49 of the Listing Agreement is also annexed to this report

9. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directorsconfirm that:

i) in the preparation of the annual accounts, the applicable accounting standards havebeen followed along with proper explanations relating to material departures;

ii) they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theLoss of the Company for that period;

iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities; and

iv) the annual accounts have been prepared on a going concern basis.

10. INFORMATION PERSUANT TO SECT10N 217 (2A) OF THE COMPANIES ACT. 1956

There were no employees falling under the purview of Section 217 (2A) of the CompaniesAct, 1956.

11. RELATED PARTY TRANSACTIONS

In accordance with the Accounting Standard 18 prescribed by the Institute of CharteredAccountants of India, transactions with related parties have been disclosed separately andform a part of the Annual Report

12. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AS PERSECTION 217 (1) (e) OF THE COMPANIES ACT, 1956

Pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the followinginformation is provided.

a) Conservation of Energy

In pursuit of continuous improvement towards energy conservation and compliance withenvironmental regulations, few initiatives have been taken and implemented during the yearunder review. The Company is aware about energy consumption and environmental issuesrelated with it and is therefore, continuously making sincere efforts towards conservationof energy.

b) Technology absorption

Not applicable in view of the nature of activities of your Company i.e. hospitality. Notechnology has been imported during the last five years.

c) Foreign Exchange Earnings and outgo

There was no Foreign Exchange Earning and out go during the year under review.

13. AUDITORS

M/s. Rajeev Singhi & Co (Membership No.81892), the Auditors of the Company retireat the ensuing Annual General-Meeting and being eligible, offer themselves forre-appointment

14. AUDITORS' REPORT

The observation of the auditors in their report are self- explanatory and therefore, inthe opinion of the Directors, do not call for further comments.

15. ACKNOWLEDGEMENT

We would like to acknowledge with gratitude, the support and co-operation extended byShareholders, Himachal Pradesh Government, Vendors, Media and Banks and look forward totheir continued support. We also recognize and appreciate the sincere hard work, loyaltyand efforts of the employees and look forward to their continued support