ACCOUNTS

As the commercial production has yet to commence during the year ended 30th September, 1995 no Profit and Loss Account has been prepared for the above period and all expenditure incurred, net of income earned on deployment of fund has been shown as project/other expenses to be capitalised appropriately at a later stage.

PROGRESS OF THE PROJECT

The Company has successfully completed phase I implementation of the project to produce Di-Methyl Amino Ethanol (DMAE) and Di-Ethyl Amino Ethanol (DEAE). Civil work is completed and Plant & Machinery have been installed. The products have found acceptance in market place and supplies have commenced from October 1995. The Company has received active inquiries from European market.

Phase II of the project for down stream products is under implementation. These products will have DMAE and DEAE as raw materials and give higher value addition. The project team has successfully commercialised the in-house technology to give technology strength to the Company.

The demand growth of these products is likely to be very good due to high growth observed in its end use segments like pharmaceuticals, water treatment, paint industries. In export front too, the Company will have distinct advantage as it will be the only company to have integrated manufacturing facilities.

FUTURE OUTLOOK

The Company has already made significant progress in development of range Solvent Dyes. These dyes are used in colouring petroleum fractions, food grade plastics etc. and have very high value addition.

The Company has planned complete vertical integration to produce a host of chemicals based on Di-Methyl Amino Ethanol (DMAE), Di-Ethyl Amino Ethanol (DEAE) and Ethylin Oxide (EO). With this strategy the Company is looking forward to be technology leader.

SHARE CAPITAL

During the year under review, the Paid-up share capital of the Company increased from Rs. 90 lacs to Rs. 1500 lacs consequent upon the allotment made out of the applications received in our Public Issue. The public issue received overwhelming response and oversubscribed by 9,173 times.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. P K Vora and Mr. P J Damany retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

DISCLOSURE UNDER CLAUSE 43 OF THE LISTING AGREEMENT

As required under listing agreement with Stock Exchanges, the Companies who have issued shares during the year are required to furnish comparison of projection given in the prospectus with the actual performance in respect of profitability as well as utilisation of funds. The details of Projected Profitability as given in the prospectus dated 15.9.94 commences from the year 1995-96 and therefore no details of projected v/s actual profitability are submitted in this report.

FIXED DEPOSIT

During the year under review, the Company has not accepted any fixed deposits as contemplated under the provisions of Section 58-A of the Companies Act 1956 read with Companies (Acceptance of Deposits) Rules 1975.

HUMAN RESOURCES

Harmonious Industrial Relations at all levels prevailed throughout the year. Your Directors place on record their appreciation for hard work and dedication shown by all categories of employees.

RESEARCH AND DEVELOPMENT

The Company has developed and successfully commercialised DMAE and DEAE. Pilot plant work for Di-Methyl Amino Ethanol (DMAE) and its Chloride-Hydro Chloride are also completed and phase II of the project is under implementation. The Company has thus developed four technology licenses in a year thereby giving technology edge required in the market place.

The R&D strategy of vertical integration is also completed. Hydroxy Ethyl Cellulose (HEC) is under pilot plant trials and expected to be commercialised soon R&D continues to be the back bone and commercialising of licenses has given the Company confidence to look forward for growth.

POLLUTION CONTROL AND ENVIRONMENTAL SAFETY

The Company has obtained No Objection Certificate (NOC) from Gujarat Pollution Control Board (GPCB) for phase I and II. The plant set up is in total conformity with NOC and consent application has already been made, awaiting clearance.

The Company has ensure "zero discharge" plant by incurring capital costs for better process design and new catalysts.

The Company has developed green belt and gardening in the factory premises with a view to promote clean environment.

AUDITORS

M/s D.Burman & Associates, the Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a certificate from the Auditors to this effect that their appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956. The members are requested to appoint the Auditors and authorise the Board of Directors to fix their remuneration.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act 1956 read with the Companies (Particulars of Employees) Rules 1975, as amended, is not given as no employees of the Company are covered thereby.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS, AND OUTGO

Since commercial production has not yet commenced, the information required under Section 217(1)(e) of the Companies Act 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are not given.