Your Directors present below the Annual Report and audited statement of
 accounts for the period ended 31st March, 2001.
 
                                                      (RS. IN MILLIONS)
 
 FINANCIAL RESULTS                          31st March,      30th Sept,
                                                   2001            2000
                                              (6 months)     (18 months)
 
 Profit/(Loss) for the period 
 before providing for Depreciation               (19.22)         25.60
 (Previous year profit)
 
 Less : Depreciation                               8.18          23.29
 
 Net Profit/(Loss) before tax and 
 exceptional items                               (27.40)          2.31
 
 Less : Provision for taxation                     0.03           0.14
 Less : Adjustment relating to earlier 
 years                                             6.56              -
 
 Less : Exceptional items relating to 
 capital work in progress w/off and 
 market cess/fee                                 152.94          10.64
 
 Leaving a balance of                           (186.93)         (8.47)
 
 To which is added:
 
 Balance brought forward from 
 previous year                                     0.15          10.42
 
 Making a balance of                            (186.78)          1.95
 
 Transfer to Debenture Redemption 
 Reserve                                              -           1.79
 
 Balance Carried to balance Sheet               (186.78)          0.16
 
 ACCOUNTING YEAR
 
 The accounting year under review consists of 6 months i.e. 1st October,
 2000 to 31st March, 2001 as compared to last accounting period of 18
 months i.e. 1st April, 1999 to 30th September, 2000.  Hence, the
 previous period figures are not strictly comparable.
 
 DIVIDEND
 
 In view of the loss, the Directors do not recommend any dividend for
 the period ended 31st March, 2001.
 
 OPERATIONS
 
 YAMUNANAGAR : During the 6 months period under review the production
 and sales stood at 13365 MT and 14161 MT as against 14207 MT and 14237
 MT respectively for 1999-2000 (on an annualised basis). The performance
 of the division was under pressure due to increased cost of raw
 material and lower sales realisation. The slow down of the economy had
 its impact on the volume growth in the sales of the company.
 
 PONDICHERRY : The production and sales of speciality starch for 6
 months period stood at 2767 MT and 2734 MT as against 2875 MT and 2683
 MT for the corresponding previous period (1999-2000). The slow down of
 the economy also had its impact on the volume growth of the division.
 
 CITRIC ACID PROJECT : As reported earlier, the operations of the Citric
 Acid plant were closed for improvement of utilities and corrective
 engineering. However, the funds requirement to restart the operations
 and complete the purchase of key equipments could not be tied up and
 the plant continued to remain closed for about 3 years. In an attempt
 to restructure the affairs of the Company, a scheme of Reorganisation
 by way of Arrangement, Amalgamation and Reconstruction between the
 Company and BILT Bio Chemicals Ltd. and English Indian Clays Ltd.
 (EICL) and Bharat Projects Ltd. has been formulated under section 391
 and 394 of the Companies Act, 1956 and according to the Scheme (i) with
 effect from close of business hours of 31st March 2001, the Company
 proposes to transfer the Citric Acid Undertaking to BILT Bio Chemicals
 Ltd on going concern basis. Consideration under this scheme of
 arrangement for transfer of Citric Acid Division would be settled by
 taking over liabilities of the citric business to the extent specified
 in the Scheme.
 
 (ii) With effect from 1st April 2001 the Residuary Undertakings (Starch
 Division and Investments) of the Company would merge with EICL in terms
 of the provisions of the Scheme.
 
 (iii) Bharat Projects Ltd., a 100% subsidiary of English Indian Clays
 Ltd. under the Scheme of arrangement shall apply to the High Court for
 reduction of its capital to the extent not represented by assets as
 specified in the scheme. The aforesaid Scheme has been approved by the
 Board and would be circulated to all the shareholders in accordance
 with the procedure under law. The Board is of the opinion that the
 Scheme of Reorganisation by way of Arrangement, Amalgamation and
 Reconstruction would be in the overall interest of shareholders,
 respective creditors, fixed depositholders and employees of the Company
 and would ensure the existence and continuance of the Citric and Starch
 Business of the Company.
 
 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
 
 As reported earlier the Company had received in principal approval for
 one time settlement from CDC Group Plc. and Asian Finance & Investment
 Corporation Ltd. vide their letters dated 28th February, 2001 and 1st
 March, 2001 respectively to settle their total dues including
 principal, interest and penal interest. We are pleased to inform that
 the Company has made the payment as per the settlement agreed with
 these institutions/banks and the financial effect of these settlement
 have been considered while preparing the accounts. Your Directors
 gratefully acknowledge with appreciation the pragmatic approach of
 ICICI, CDC, AFIC, PNB and OBC, the majority secured lenders to the
 Company on the one hand, and M/s A.E.Staley and the various Thapar
 Group Companies on the other, for their timely support and sacrifices.
 
 RESEARCH & DEVELOPMENT
 
 The Research & Development activities of the Company has resulted in
 the development of new value added products for different applications.
 Particulars with respect to R&D activities carried out during the
 period under review are provided in Form B annexed to this report
 
 FIXED DEPOSITS
 
 As On 31st March, 2001 fixed deposits amounting to Rs. 26,50,000/-
 which became due for repayment had remained unclaimed by 101
 depositors.
 
 AUDIT COMMITTEE
 
 In terms of section 292(A) and SEBI Guidelines for Corporate
 Governance, the Company has constituted an Audit Committee comprising
 of 3 Non-Executive Directors viz. (1) Shri S.N.Dua, Chairman, (2) Shri
 D.Kohli and (3) Shri M.M.Khanna as Members of the Audit Committee.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 As required under rule 2 of the Companies (Disclosure of Particulars in
 the Report of Board of Directors) Rules, 1988, the particulars relating
 to Conservation of Energy and Technology absorption are given in Form A
 and B in Annexure 1 of this report.
 
 Further, as required under the said rules with regard to Foreign
 Exchange earnings and outgo, we have to state that during the year
 under review, the Foreign Exchange earnings and outgo had been to the
 extent of Rs. 1.48 Millions and Rs. 10.80 Millions respectively.
 Details relating to Foreign Exchange outgo/earning have been
 incorporated in the notes on account nos. 3, 4 & 5 of Part (B) of
 Schedule (21 B).
 
 PARTICULARS OF EMPLOYEES
 
 Statement of employees required under Section 217(2A) of the Companies
 Act, 1956 read with the Companies (particulars of employees) Rules,
 1975 as amended upto date is annexed to this report and forms part of
 this report.
 
 DIRECTORS
 
 Shri Karan Thapar, Shri D. Kohli and Shri M.M. Khanna being longest in
 the office retire by rotation and are eligible for reappointment. Their
 appointment is recommended for the approval of the Shareholders.
 
 Shri Ajay Gupta, nominee of ICICI Ltd. ceased to be the Director of the
 Company w.e.f. 3rd May, 2001 since ICICI Ltd. had withdrawn him from
 the Board of the Company. The Board record its appreciation for the
 valuable guidance provided by Shri Ajay Gupta during his tenure on the
 Board of the Company.
 
 Shri Ramesh M. Bhujang, nominee of Asian Finance & Investement
 Corporation Ltd. (AFIC) ceased to be the Director of the Company w.e.f.
 2nd August, 2001. The Board record its appreciation for the valuable
 guidance provided by Shri Ramesh M. Bhujang during his tenure on the
 Board of the Company.
 
 AUDITORS
 
 M/s Price Waterhouse, Chartered Accountants, the existing Auditors
 retire and are eligible for reappointment. Their appointment is
 recommended for your approval.
 
 The Auditor's observation in para 2 of their report essentially relates
 to the restructuring of the Company u/s 391 and 394 of the Companies
 Act, 1956. The Directors have incorporated suitable details in respect
 of the Scheme of Reorganisation by way of Arrangement, Amalgamation and
 Reconstruction of the Company in Clause 1 and 5 of Schedule 27A to the
 Balance Sheet and has also given an explanation herein above. These
 details are considered as self explanatory and do not call for any
 further explanation and comments.
 
 RESPONSIBILITY STATEMENT
 
 a) The Company has followed the applicable accounting standards for the
 preparation of the Annual Accounts and there is no material deviation
 from the previous year.
 
 b) The Company has selected such accounting policies and applied them
 consistently and made judgements and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the company for the period ended 31st March, 2001 and the loss of that
 period.
 
 c) The Company has taken proper and sufficient care for the 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 and;
 
 d) The Annual Accounts are prepared on a going concern basis.
 
 INDUSTRIAL RELATIONS
 
 The Board of Directors wishes to express its appreciation to all the
 employees of the Company for their dedication and contribution to the
 operations of the Company during the period. The Industrial relations
 continued to be cordial through out the period under review.
 
 LISTING ARRANGEMENTS
 
 The Company's shares are listed on the Vadodara, Delhi and Mumbai Stock
 Exchanges. The Listing fee for 2001-2002 to these Stock Exchanges are
 being paid.
 
 ACKNOWLEDGEMENT
 
 The Directors wish to places on record their appreciation for the
 cooperation and assistance extended by Financial Institutions
 particularly from ICICI Ltd., Asian Finance & Investment Corporation
 (AFIC) & CDC Group Plc., Company 's Bankers i.e. Punjab National Bank
 and Oriental Bank of Commerce, Central and State Govts. and other
 Government authorities.
 
 The Board, also, takes this opportunity to express its deep gratitude
 for the continued co-operation and support received from the
 shareholders.
 
                                   FOR AND ON BEHALF OF THE BOARD
 
 Place: New Delhi                           B.M. THAPAR
 Date : September 3, 2001                    CHAIRMAN
 
 F O R M - B
 
 1. Specific Areas in which R & D Carried out by the Company
 
 (a) New Modified Starches for wet end additive based on acrylamide.
 
 (b) Binders for mosquito coil.
 
 (c) New formulation for laundry starch.
 
 2. Benefits derived as a result of the above Research and Development
 
 (a) Improved quality of wet end additive to sustain the
 competitiveness.
 
 (b) The new Oxidised Starch developed in R&D is towards an import
 substitution and has high potential in surface sizing of Paper.
 
 3. Future Plan of Action
 
 (a) Improvements in quality of dextrine with respect to its
 adhesiveness.
 
 (b) Manufacture of Spray Starch through chemically modified route.
 
 (c) Improvement in Amphoteric Starch.
 
 4. Expenditure on R & D
 
                                31st March, 2001     30th Sept.,2000
                                   (Rs. in lacs)       (Rs. in lacs)
 
 a) Capital                                    -                   -  
 
 b) Recurring                               3.47               15.31
 
 c) Total                                   3.47               15.31
 
 d) Total R&D Expenditure                                      0.13%
 as a percentage of total
 turnover
 
 5. Technology Absorptions, Adaptation and innovation.
 
 The particulars required to be furnished in respect of imported
 technology (imported during the last five years reckoned from the
 beginning of the financial year) are not applicable.