(1) FINANCIAL HIGHLIGHTS AND OPERATIONS
 
 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)
 
 (2)      OPERATIONS:
 
 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
 
 Place: Barabanki
 Date : 4th Sept., 2006