TO THE MEMBERS OF
 
 KOTHARI FERMENTATION AND BIOCHEM LTD.
 
 The Directors are pleased to present the 21st Annual Report together
 with the Audited Accounts for the year ended on 31st March 2011:
 
 1.  FINANCIAL RESULTS                                    (Rs. in lacs)
 
                                          2010-2011          2009-2010
 
 TURNOVER:
 
 MANUFACTURING                              2480.30            1590.48
 
 TRADING                                       0.00             317.04
 
 PROFIT BEFORE INTEREST & DEPRECIATION       299.31             207.44
 
 INTEREST CHARGES                             21.19               2.02
 
 DEPRECIATION                                138.33             127.68
 
 PROFIT BEFORE TAX                           139.79              77.64
 
 TAXES                                         NIL                NIL
 
 NET PROFIT/ (LOSS) AFTER TAX                139.79              77.64
 
 
 2.  OPERATIONS
 
 During the year, the capital expenditure incurred on balancing
 equipments has resulted in better utilization of plant & machineries.
 Various steps have been initiated for further increasing production and
 improving operating efficiencies.
 
 The company achieved production of 6530 MT during 2010-11 as compared
 to 4304 MT in previous year. Resultantly the turnover of the company
 from manufacturing activities has Increased to Rs. 2480.30 Lacs during
 the year 2010-11 as compared to Rs. 1590.48 Lacs during previous year.
 The profitability of the company is Rs. 139.79 Lacs during the year
 2010-11 as compared to profit of Rs. 77.64 Lacs during previous year.
 
 Dividend for the year has not been proposed in order to plough back the
 profit for the growth of the Company.
 
 3.  CURRENT YEAR''S OUTLOOK
 
 The additional investment made in plant & machineries will result in
 increase of production. Various steps have been taken for cost
 reduction and improving operating efficiencies.
 
 The Company further Plans to Install additional Balancing Equipment in
 Plant and Machinery which will result increase in production as well as
 up-gradation of the quality of the products
 
 In view of above it is expected that the production and profitability
 of the company will substantially improve during the current year.
 
 4.  FIXED DEPOSITS
 
 The Company has not accepted any deposit from public during the year
 under review, which would fall under section 58- A of the Companies
 Act, 1956.
 
 5.  DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956 and the
 articles of Association of the Company, Mr. Mal Chand Sharma is
 retiring from the Board by rotation and does not offers himself for
 re-appointment. The Board places on record its sincere appreciation for
 the contribution and support of Mr. Mal Chand Sharma during his tenure
 with the Company.
 
 It is proposed to appoint Shri Kapil Dev Puri as Director liable to
 retire by rotation in the ensuing AGM. He will be a Non Executive
 Independent Director of the company. The Board recommends his
 appointment as director of the company.
 
 6.  CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 The statement containing the necessary information under section
 217(1)(e) of the Companies Act, 1956 read with the Companies
 (Disclosure of Particulars in the Report of the Board of Directors)
 Rules, 1988, is annexed to this report as Annexure-I.
 
 7.  PERSONNEL
 
 Your company keeps harmonious relations with all its employees. No
 employee is drawing salary more than the limits prescribed under
 section 217 (2A) of the Companies Act, 1956, read with the Companies
 (Particulars of Employees) Rules, 1975.
 
 8.  AUDITORS
 
 M/s Nahata Jain & Associates, Chartered Accountants, auditors of your
 company retire at the ensuing annual general meeting and being eligible
 offers themselves for re-appointment. The Board recommends their
 appointment as auditors from the conclusion of this meeting to the
 conclusion of next annual general meeting. The notes on accounts are
 self- explanatory with regards to auditors'' observations.
 
 9.  LISTING OF SHARES
 
 The company''s shares are listed at Stock Exchanges situated at Delhi,
 Mumbai, Kolkata, Jaipur and Guwahati. The listing at Delhi and Mumbai
 is continued, and the listing fee has been paid upto date. Action has
 already been initiated for delisting of shares from stock exchanges at
 Kolkata, Jaipur, and Guwahati. All the formalities have been complied
 with in relating to delisting and as such the listing fee to these
 Stock Exchanges were not paid.
 
 10.  CORPORATE GOVERNANCE
 
 The provisions of clause 49 of the listing agreement relating to
 corporate governance are applicable to the company. So there is a
 separate section on Corporate Governance in the annual report of the
 company, with a detailed compliance report on Corporate Governance.
 
 11.  MANAGEMENT DISCUSSION AND ANALYSIS
 
 A report on Management Discussion and Analysis (MDA), which forms part
 of this Report, inter-alia, deals adequately with the operations as
 also current and future outlook of the Company.
 
 12.  DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Sec.217 (2AA) of the Companies Act, 1956 the Directors
 hereby report:
 
 a) that in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures;
 
 b) that the directors have selected 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 at the end of the financial year 2010-11 and of the
 profit of the company for that year.
 
 c) that the directors have 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,
 
 d) that the Directors have prepared the annual accounts on a going
 concern basis.
 
 13.  ACKNOWLEDGEMENTS
 
 Your Directors place on record their sincere appreciation for the
 wholehearted devotion and cooperation extended by the employees at all
 levels, which has been a source of strength of the company.
 
 The Directors also wish to thank and deeply acknowledge the
 cooperation, assistance and support extended by the shareholders, the
 Dealers, vendors, bankers and financial institution of the Company.
 
                                       For and on behalf of the Board
 
 Place : New Delhi                                   Moti Lal Kothari
 
 Date :12th August, 2011                 Chairman & Managing Director