Highlights of the operating results for year are summarized below:-

Sr.             Description                    Year          Year
No.                                          2005-06      2004-05
                                       (Rs. In Lacs)(Rs. in Lacs)

1.  Sales (Net of Central Excise Duty
    plus Education Cess)                     3303.20      5025.17
2.  Other Income                              369.45        62.78
    Profit/(Loss) before Depreciation but
    after interest                            122.13       (73.46)
    Less - Depreciation                       114.89       125.19
    Net Profit/(Loss) before taxation           7.05      (198.65)
    Provision for taxation (FBT)                3.46
    Prior year adjustments                      8.11       339.04
    Extra Ordinary Items                         -            -
    Profit available for appropriation         11.70       140.39
    Balance brought forward                 (1240.93)    (1381.32)
    Balance carried forward 
    to balance sheet                        (1229.23)    (1240.93)

During the year under review, the Companys Captive Distillery Works operated partially during the year under review due to non availability of Molasses at a viable price and produced 73.87 Lac Bulk Litres only. Due to this, the company had to purchase 70.95 Lacs Bulk Litres of Special Denatured Spirit for its Chemical Works from other distilleries this has resulted into lower production of the end chemicals.

(3) Outlook:

In view of excellent Monsoon experienced by the country in general and in Eastern Uttar Pradesh and surrounding area in particular, the sugarcane crop is likely to be substantially better for sugarcane crushing season commencing from Dec, 2006. This is likely to result into much better availability of Molasses at a viable price. The Molasses prices are likely to remain much subdued for the last quarter for the year to end on 31st March, 2007 and thereafter. The market conditions are showing signs of improvement in terms of demand especially of Agro based Ethyl Acetate and it shall have positive impact on the prices of other Chemicals also produced by the Company. It is hoped that in the current year there will be very good improvement in the results of the company when compared with the year under review.

(3) DIVIDENDS:

In view of carry over losses, your Directors do not recommend any Dividend for the year ended 31st March, 2006 on the Equity Share Capital and Preference Share Capital.

(4) FIXED DEPOSITS:

There were no over due deposits unpaid except those which where unclaimed.

(5) CORPORATE GOVERNANCE:

A report on Corporate Governance is enclosed as part of Annual Report alongwith the Auditors certificate on its compliance. The note on Management discussions and Analysis Report is given.

(6) DIRECTORS:

(1) Shri Yadurish Rai Jhunjhunwala, the Senior MostDirector on the Board of the Company passed away on Sunday the 23rd July, 2006 because of heart failure. He was only 63 years old. His insights, inspiration and sagacity will be remembered with gratitude. The Board expresses its deepest condolences on the untimely demise of Shri Yadurish Rai Jhunjhunwala. The Directors wish to place on record their warm appreciation for the valuable services and advice rendered by him during tenure of his office.

(2) Shri Yogendra Kumar Jhunjhunvvala, being the "Rotational Director" will retire at the conclusion of the ensuing Annual General Meeting of the Company. He being eligible, offer himself for re-appointment as Director on the Board of the Company. The Members are requested to consider the proposal for re- appointment of Shri Yogendra Kumar Jhunjhunwala as "Rotational Director" on the Board of the Company.

(3) Shri Haim Chandra Chhjer, being the "Rotational Director" will retire at the conclusion of the ensuing Annual General Meeting of the Company. He being eligible, offer himself for re-appointment as Director "on the Board of the Company. The Members are requested to consider the proposal for re- appointment of Shri Haim Chandra Chhajer as "Rotational Director" on the board of the Company.

(4) The Securities and Exchange Board of India (SEBI) made, appointment of Independent Directors on Companys Board mandatory from January, 2006. Your company has yet to induct three Independent Directors who are professionals i.e. Chartered Accountant, experienced Businessman Industrialist to strengthen the Board. The induction of Independent Directors on the Board of the Company will be done as early as possible to comply with the requirement under Clause 49 of the Listing Agreement.

(7) AUDITORS AND THE AUDITORS REPORT:

M/s Jain Kapoor & Co. the Statutory Auditors of the Company will retire from their office at the end of the ensuing Annual General Meeting and they being eligible have offered themselves for their re-appointment as Statutory Auditors of the Company at the forthcoming Annual General Meeting. They have furnished a Certificate to the effect that their appointment will be in accordance with limits specified in Sub-section (1B) of Section 224 of the Companies Act 1956. You are requested to consider their appointment.

The Comments of Statutory Auditors in their report on Annual Accounts for the year ended 31st March, 2006 are generally self explanatory and / or are conveyed / explained in the notes to the Accounts.

(8) COST AUDITORS:

As per the directives of the Government of India, Department of Company Affairs Cost Audit Branch vide their letter No. 52/276/CAB-89 dt.22:02.1994 for Industrial Alcohol and Letter No. 52/64/CAB-91 dt. 08.01.1991 for Chemical (Acetic Acid) the Company appointed M/s B.J.D. Nanabhoy & Company as Cost Auditors for the year 2005-06 pursuant to Section 233-B of the Companies Act 1956 Subject to approval of the Central Government, their report is being filed with the concerned Authorities.

(9) INFORMATION AS REQUIRED UNDER THE PROVISIONS OF SECTION 217 OF THE COMPANIES ACT 1956.

(A) Particulars of Employees:

As required under the provision of Section 217(2A) of the Companies Act 1956 read with the Companies (Particulars of Employees) Rules, 1975 as upto date amended, the Company did not have any Employee drawing a remuneration of Rs.24,00,000/- or more per annum, if employed through out the year under review or Rs.2,00,000/- or more per month, if employed for a part of the said year.

(B) Directors Responsibility Statement:

Pursuant to the requirement under Section 217(2A) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed-

(i) that in the preparation of the Annual Accounts for the Financial Year ended 31st March, 2006, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures, if at all made,

(ii) that the Directors have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give true and fair view of the State of Affairs of the Company at the end of the financial year and of the profit/loss of the Company for the year under review,

(iii) that the Directors have taken proper and sufficient care tor maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities,

(iv) that the Directors have prepared the accounts for the financial year ended 3 1st March, 2006 on a "going concern basis".

(C) Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo:

Information in accordance with the provisions of Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgoing is given in the Ahnexure attached here to and forming part of this report.

(10) INDUSTRIAL RELATIONS:

Industrial relations between the Management and Employees remained cordial during the financial year 2005-06.

(11) ACKNOWLEDGEMENT:

Your Directors record their appreciation to all the employees for the efforts put in by them in improving Companys operations. The Directors wish to place on record their Sincere thanks to all concerned Central and State Government Departments and Punjab National Bank, the Companys Bankers for their continued support.

                                   For and on behalf of the Board

                 (Yogendra Kumar Jhunjhunwala) (Deoki Nandan Jhunjhunwala)
                           Director                   Director