Your Directors present Sixteenth Annual Report and Audited Statement of
 Accounts of the Company for the year ended 31st March, 2003.
 
 1. FINANCIAL RESULTS
 
                                                  Current       Previous
                                                     Year           Year
                                              1.4.2002 to    1.4.2001 to
                                                31.3.2003      31.3.2002
                                           (Rs. in Lakhs) (Rs. in Lakhs)
 
 Profit/fLoss) for the year                        (2.96)         (6.50)
 before depreciation
 
 Less : Depreciation for the year                  (6.06)         (6.06)
 
 Profit/(Loss) after depreciation                  (9.02)        (12.56)
 
 Your Company has not recorded any income during the year.
 
 Your Company has incurred a loss of Rs. 9.02 lacs after charging
 depreciation of Rs. 6.06 lacs as against the previous years net loss
 of Rs. 12.56 Lacs.
 
 2. OPERATIONS
 
 During the year under review The State Bank of India (SBI), operating
 agency, has forwarded the offers received from parties for takeover of
 the management of the company to BIFR. BIFRs response is awaited.
 
 3. EXPANSION-CAPITAL PROJECTS
 
 Since the Company has become sick industrial undertaking and as a
 consequence of suspension of operations at Companys plant at Mahad,
 question of Expansion/Capital Projects does not arises.
 
 4. PUBLIC DEPOSITS
 
 During the year under report the company has not accepted/renewed any
 Fixed Deposits under the Companies (Acceptance of Deposits) Rules, 1975
 from the Shareholders and public. As on 31.3.2003 and till the date of
 this report 8 deposits amounting to Rs. 34,000/- have matured but had
 not been claimed.
 
 The company has written to these depositors requesting them to forward
 the duly discharged receipts for repayment of the deposits.
 
 5. INDUSTRIAL RELATIONS
 
 During the year the Lockout in the factory continued. The lockout had
 been declared with a veiw to protect the assets in the factory after
 labour unrest commenced.
 
 The Commissioner of Labour is reviewing the progress of BIFR every
 quarter as directed by Bombay High Court.
 
 6. DIRECTORS
 
 Smt. N.P. Deshmukh was appointed as wholetime Director for a period of
 5 years from 1st March, 1998 and as such ceased to be a wholetime
 Director fo the company from 1st March, 2003. However, she continues to
 be a Director of the company, liable to retire by rotation. Under
 Article 166 of the Articles of Association of the Company Smt. N.P.
 Deshmukh and Dr. R. S. Shah retire by rotation and being eligible offer
 themselves for reappointment.
 
 7. DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirement under Section 217 (2AA) of the Companies
 Act, 1956 with respect to Directors Responsibility Statement, it is
 hereby confirmed :
 
 i) that in the preparation of annual accounts for the financial year
 ended 31st March, 2003, the applicable accounting standards have been
 followed along with proper explanation relating to material departures.
 
 ii) that the Directors had selected such accounting policies and
 applied them consistently and made judgements and estimates that were
 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 and of the
 profit and loss of the Company for the year under review.
 
 iii) 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, 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 31st March, 2003 on a `going concern basis.
 
 8. PARTICULARS OF EMPLOYEES
 
 There were no employees covered under Section 217 (2A) of the Companies
 Act, 1956, read with the Companies (Particulars of Employees) Rules
 1975, who were in receipt of remuneration in excess of the prescribed
 limits.
 
 9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO.
 
 Since the Company has suspended its activities and has been declared a
 sick industrial unit, no particulars under this heading are available.
 
 10. AUDITORS
 
 Members are requested to appoint Auditors for the current year and fix
 their remuneration. M/s. Thanawala & Co., Chartered Accountants, retire
 at the conclusion of the ensuing Annual General Meeting and being
 eligible, offer themselves for reappointment. The Auditors have
 furnished to the company the requisite certificate under section 224
 (1-B) of the Companies Act. 1956.
 
 11. ACKNOWLEDGEMENT
 
 Your Dirctors wish to place on record their appreciation for the
 valuable assistance and guidance given to them by the State Bank of
 India. Your Board also acknowledges valuable assistance given to them
 by various Central and State Government Departments and Corporations.
 Finally we owe sincere gratitude to all shareholders for their support.
 
                                          For and on behalf of the Board
                                      For VARUN POLYMOL ORGANICS LIMITED
                                                                    sd/-
 Place: Mahad                                             P. D. DESHMUKH
 Dated: 28.4.2003                           Chairman & Managing Director
 Registered Office
 A-4, M.I.D.C., Mahad,
 Dist. Raigad,
 Maharashtra.