Konar Organics Ltd.

Konar Organics Limited, a company with its registered office  at
 Hyderabad, was incorporated as Private Limited Company on  21st
 January, 1988 and later on converted into Public  Limited Company on
 19th September, 1994 in terms of Special  Resolution Passed u/s 31/44
 on 9th August, 1994.  The Units  of the Company are situated at
 Kukatpally, Hyderabad,  Mallapur, Ranga Reddy Dist. and the new unit
 is proposed to 
 be set up at Kazipalli Vilage, Medak Dist A.P.  The main  objects of
 the Company is to carry on the business of manufacturing, selling of
 drugs and Chemicals, which are  fully set out in its Memorandum and
 Articles of Association and are also mentioned below in this
 prospectus.
 
 The Company has taken over the running business of KONAR CHEMICALS
 AND SURAJ CHEMICALS two partnership firms engaged in manufacturing
 and marketing of Sodium-bi-Sulphite and Niacinamide respectively,
 wide agreements dated 25th May, 1994 for a consideration of Rs. 30
 and Rs. 40 lakhs respectively.  The consideration was paid by issue
 of shares 
 of Rs. 10/- at par.  These agreements have been taken into
 consideration by APITCO Ltd., while appraising the project cost.
 
 Mr.B. Ramachandra Raju and Mr. D. Mahesh Redy, Directors are
 interested in taking over of M/s. Konar Chemicals to the extent of
 consideration of Rs. 30.00 lakhs for which the Company has allotted
 shares.
 
 Mr. D. Narayana Raju and Mr. D. Vishnu Vardhan Reddy, Directors are
 interested in taking over of M/s. Suraj Chemicals to the extend of
 consideration of Rs. 40.00 lakhs for which the Company has allotted
 shares.
 
 KONAR CHEMICALS
 
 Promoted in the Year 1985 as a partnership by Mr. B. Ramachandra
 Raju, and his associates, the Company hs been having moderate
 urnovers in the last three accounting years as given below.
 
 NATURE OF BUSINESS
 
 Konar Chemicals was initially meant for Sodium Bi-sulphite which is a
 drug intermediate.  In the year 1993-94 the plant was converted for
 manufacturing of Niacinamide.  Bulk Drug with an installed capacity
 of 120 tpa.
 
 VALUATION OF ASSETS
 
 The Fair Market value of the Plant & Machinery items is Assessed as
 Rs. 8,66,000/- as per the Valuation Report given by R.L.N. Sastry,
 Government Registered Valuer for Plant & Machinery dated 02.05.1994. 
 The fair market value of land (2108.34 Sq. Yards) and Buildings is
 assessed as Rs. 21.89 Lakhs as per the valuation report given by
 Suvela 
 Associates, Engineers & Valuers, Dated 02/05/1994.
 
 SUMMARY OF VALUATION
 
                                         (Rs. in Lakhs)
 Item Description    Book  Purchase   Value as   Take-over
                     Value   Value         per      Value
                                     Valuation
                                       Report
 1. Land & Buildings  1.12    2.14       21.90      21.81
 2. Plant & Machinery 2.80   10.41        8.66       8.19
 3. Other Assets        -       -           -          -
 4. Current Assets      -       -           -          -
 5. Current
    Liabilities         -       -           -          -
                                                   ------
 TOTAL                                             30.00
                                                   ------
 The Consideration value for take-over of Konar Chemicals is Rs. 30
 Lakhs and the shares have been allotted for Rs. 30 Lakhs at par as
 per the agreement entered into dated 25/05/94.
 
 PRESENT BUSINESS
 
 KOL an existing company, now setting up a project for manufacturing
 of the following bulk drugs and drug intermediates
 
 Name                Application              Installed
                                         Capacity p.a.(MT.)
 Ibuprofen           Pain Killer                   180
 
 Ampicillin
 Amoxicillin         Antibiotic                     60
 Cloxacillin 
 SUBSIDIARIES OF THE COMPANY
 
 The Company does not have any subsidiaries.