Chairmans Statement
 
 Dear Shareholders,
 
 The country has faced one of the worst droughts in recent years.
 Needless to say, it has had an effect on the consumers. Despite this,
 the market for consumer goods has attained some semblance of stability.
 The overall economy has grown slowly, but inflation is under control.
 After a prolonged period of turbulence, the Indian economy is offering
 rays of hope and I am happy to share my view on some aspects of the
 situation The world is sitting up and taking note of this nation and
 appreciating the capabilities of this emerging force. We are now
 witnessing a distinct move towards some of the milestones listed out in
 my communication with you exactly two years back.
 
 The global business community is considering India as an important and
 efficient source of goods and services. Private educational
 institutions have been given deemed university status, non-resident
 Indians and foreign financial institutions are more comfortable to
 invest in the country and some initiatives have been taken to establish
 basic research facilities. I hope this is the beginning of a long and
 fruitful journey with the ultimate objective to achieve the status of a
 developed economy.
 
 The Indian currency has appreciated strongly against US Dollar over the
 last two years. Interest rates have come down to unprecedented levels.
 This has created a long awaited level playing field for the
 entrepreneur. However, it is distressing to note the apathy of the
 Indian financial system towards borrowers. The entrepreneur seems to be
 the last one to benefit from the reduced interest rates, even later
 than consumers. And that is when he does manage to avail of a loan.
 This scenario has arisen because of the monopolistic situation the
 Banking system is in. It is high time the State gives up ownership and
 control on the Banking system and allows wider competition in this
 fundamental sector.
 
 The State needs to focus on providing the right environment for growth.
 Even today in this electronic age, the Indian entrepreneur needs a
 plethora of approvals to set up a business and run it. Single window
 clearances need to become a norm rather than an exception. The State
 also needs to focus on infrastructure development. The existing
 infrastructure is not capable of handling the existing demand, leave
 alone the anticipated growth in economic activity. Steps have been
 taken in the right direction in the road & telecom sectors. However,
 much needs to be done in the power and ports sectors, At the cost of
 repetition, I will reiterate the need to revamp the education system.
 
 At Nirma too, we have miles to go. In the year just concluded, your
 Company has achieved the debottlenecking of the Soda Ash Project
 resulting in an increase in installed capacity of Soda Ash to 650000
 tpa. With this, your Company will be able to reduce the cost of
 production of this critical input for detergents and extract better
 margins.
 
 As you are aware, your Company decided to acquire the trademarks
 Nirma and Nima from Nirma Industries Limited. This step is
 expected to enable the perception of the complete characteristics of a
 Fast Moving Consumer Goods company among the various stakeholders and
 add significant value to your Company. The Scheme of Arrangement will
 be operational once all approvals for the same are obtained.
 
 Your Company has been able to withstand several odds and is presenting
 yet another year of improved financial results. In adverse
 circumstances, the import of stability is best appreciated. I am proud
 to report that Nirma has exhibited highest standards of stability and
 resilience in the most testing times witnessed by businesses not only
 in India, but also across the world over the last two years. Having
 gone through this period of consolidation satisfactorily, I look
 forward to another period of strong growth with renewed optimism and
 assure you that your. Company is fully geared to take on the future.
 
 I sign off by making a renewed commitment to our philosophy of
 providing Better Products, Better Value, Better Living.
 
                                                            Truly Yours,
                                                         Dr. K. K. Patel
                                                                Chairman