MIRA INFORM REPORT

Report Date :

01.10.2008

IDENTIFICATION DETAILS

Name :	AARTI INDUSTRIES LIMITED
Formerly Known As :	AARTI ORGANICS LIMITED
Registered Office :	Plot Nos. 801, 801/23, G.I.D.C. Estate, Phase III, Vapi – 396195, Gujarat
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	28.09.1984
Com. Reg. No.:	04-7301
CIN No.: [Company Identification No.]	L24110GJ1984PLC007301
TAN No.: [Tax Deduction & Collection Account No.]	SRTA02524E
PAN No.: [Permanent Account No.]	AABCA2787L
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer, Importer and Exporter of Organic Chemicals.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 14000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established pharmaceutical company having satisfactory track. It is controlled and managed by Gogri family who are resourceful and experienced businessmen. Their trade relations are fair. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office/ Factory :	Plot Nos. 801, 801/23, GIDC Estate, Phase III, Vapi – 396 195, District Valsad, Gujarat, India
Tel. No.:	91-2638-25690411 / 2 / 3 / 25918195 / 55976666
Fax No.:	91-2638-25904806 / 25653186-87 / 25653185
E-Mail :	ail@bom2.vsnl.net.in info@aartigroup.com
Website :	http://www.aartigroup.com
Corporate Office :	Udyog Kshetra, II Floor, L.B.S. Marg, Mulund – Goregaon Link Road, Mulund (West), Mumbai – 400 080, Maharashtra, India
Tel. No.:	91-22-65976666 / 25918195
Fax No.:	91-22-25653234 / 25653185
Factory :	· Plot Nos. 902, GIDC Estate, Phase II, Vapi – 396 195, District Valsad, Gujarat, India · Plot Nos. 752-753-754 Sarigam Industrial Area, Sarigam, Taluka Umargaon, District Valsad, Gujarat, India · Plot Nos. 758/1, 758/2, Jhagadia Mega Estate, Village Kapalsadi, Taluka Jhagadia, District Bharuch, Gujarat, India · Plot No. K-18, MIDC, Tarapur, District Thane, Maharashtra, India · Plot No. E-50, MIDC, Tarapur, District Thane, Maharashtra, India

DIRECTORS

Name :	Mr. Chandrakant V. Gogri
Designation :	Chairman
Name :	Mr. Rajendra V. Gogri
Designation :	Vice Chairman and Managing Director
Name :	Mr. Shantilal T. Shah
Designation :	Vice Chairman
Name :	Mr. Parimal H. Desai
Designation :	Director
Name :	Mr. Ramdas M. Gandhi
Designation :	Director
Name :	Mr. Vijay H. Patil
Designation :	Director
Name :	Mr. Laxmichand K. Jain
Designation :	Director
Name :	Mr. Manoj M. Chheda
Designation :	Director
Name :	Mr. Rashesh C. Gogri
Designation :	Director
Name :	Ms. Hetal Gogri Gala
Designation :	Director
Name :	Mr. Kirit R. Mehta
Designation :	Director
Name :	Mr. Murlidhar R. Mondkar
Designation :	Director
Date of Appointment:	27.07.2002
Date of Ceasing:	27.03.2003
Name :	Mr. Haresh K. Chheda
Designation :	Director
Date of Appointment:	27.03.2003

KEY EXECUTIVES

Name :	Mr. Mohan P. Sonar
Designation :	Company Secretary
Date of Appointment :	Upto 09.07.2007
Name :	Ms. Mona Patel
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 31.03.2007)

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters - Indian	31901200	43.81
Bodies Corporate	1839285	2.53
Banks, Financial Institutions	229114	0.31
Mutual Funds	6378051	8.76
FII/NRIs/OCBs	1869606	2.56
Public	30588725	42.03
Others	3443	0.00
Total	72809424	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer, Importer and Exporter of Organic Chemicals.

Products :

Product Description Para Nitro Chloro Benzene ITC Code 29049005 Product Description Ortho Nitro Chloro Benzene ITC Code 29049004 Product Description Sulphuric Acid ITC Code 28070001 Product Description Quinalphos ITC Code 38081021 Product Description Carbendizum ITC Code 29242909 Product Description NN Dhe MCA ITC Code 29241019 2:4 Dinitro Chloro Benzene (DNCB) Para Dichloro Benzene (PDCB) Ortho Dichloro Benzene (ODCB) Nitro Benzene Alkylated Anilines and Toluidines Chloro Phenols Fluoro Compounds Agrochemicals Other Major Products Bulk Drug Intermediates / Speciality Chemicals Bulk Pharmaceuticals Bulk Drugs Under R and D Dyes

PRODUCTION STATUS

(As on 31.03.2007)

Particulars	Installed Capacity	Actual Production
Nitro Chloro Benzenes (NCBs)	60000	26367856
Sulphuric Acid and Allied Products	200000	171077992
Ortho Phenylene Diamine (OPDA)	N.A.	537005
Quinalphos	N.A.	549425

GENERAL INFORMATION

No. of Employees :

2200

Bankers :

· Bank of Baroda

Govind Kunj, 99 J. N. Road, Mulund (West), Mumbai – 400 080, Maharashtra, India

· Union Bank of India

· State Bank of India

· Bank of India

B & C Wing, Mittal Tower, N. P., Mumbai – 400 021, Maharashtra, India

· Corporation Bank

· HDFC Bank Limited

· ICICI Bank Limited

· IDBI Bank Limited

· Citi Bank Limited

· ABN Amro Bank

· Standard Chartered Bank

· Export – Import Bank of India

· AXIS Bank

Facilities :

Secured Loans

(Rs. in millions)

	31.03.2007	31.03.2006
Term Loan --From Scheduled Banks	1197.132	945.671
Working Capital Loan --From Scheduled Banks	1931.225	1937.534
Total	3128.358	2883.205

Unsecured Loans

(Rs. in millions)

	31.03.2007	31.03.2006
From Subsidiary Companies	0.106	2.181
From Others	245.996	118.775
Total	246.102	120.956

Banking Relations :	Satisfactory
Auditors :
Name :	Parikh Joshi and Kothare Chartered Accountants,
Address :	49/2341, Shri Sai Kripa Co-operative Housing Society, M. H. B. Colony, Gandhi Nagar, Bandra (East), Mumbai – 400 051, Maharashtra, India
Associates :	· Ganesh Polychem Limited · Perfect Enviro Control System Limited · Aarti Biotech Limited · Aarti Drugs Limited · Alchemie Dyechem Private Limited · Alchemie Pharma Chem Limited · Alchemie Financial Services Limited · Valiant Chemical Corporation · Alchemie Laboratories · Amulya Bio-Products · Suyash Chemicals · Ganesh Chemical Industries · Surfactant Specialities Limited · Nascent Chemical Industries Limited · Anushakti Chemicals and Drugs Limited · Gogri and Sons Investment Private Limited · Alchemie Industries · Alchemie Leasing and Financing Private Limited · Arihant Industries
Subsidiaries:	· Aarti Corporate Services Limited · Alchemie (Europe) Limited 7-9, St. Mary's Place, Bury Lanes, Bl9 ODZ, England Tel : +44-161-763-1624 Fax: +44-161-763-1621 · Aarti Healthcare Limited · Avinash Drugs Limited
Joint Ventures:	· Ganesh Polychem Private Limited · Perfect Enviro Control System Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
90000000	Equity Shares	Rs.5/- each	Rs.450.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
72809424	Equity Shares	Rs.5/- each	Rs.364.047 millions

Notes: of the above Shares - :

[a] Rs. 62.228 millions (As at 31st March, 2006 - Rs. 62.228 millions) have been issued as fully paid bonus

shares.

[b] Rs. 4.663 millions (As at 31st March, 2006 - Rs. 4.663 millions) have been issued to Shareholders of

Amalgamating Company (Mahaval Organics Limited) Pursuant to its Merger with the Company.

[c] Rs. 1.025 millions (As at 31st March, 2006 - Rs. 1.025 millions) have been issued to Shareholders of

Amalgamating Company (Alchemie Organics Limited) Pursuant to its Merger with the Company.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		364.000	364.047	364.047
2] Reserves & Surplus		2460.600	2202.941	2004.085
NETWORTH		2824.600	2566.988	2368.132
LOAN FUNDS
1] Secured Loans		3881.100	3128.358	2883.205
2] Unsecured Loans		411.900	246.102	120.956
TOTAL BORROWING		4293.000	3374.460	3004.161
DEFERRED TAX LIABILITIES		0.000	327.207	260.208
Equity Share Warrants		0.000	18.456	18.456
TOTAL		7117.600	6287.111	5650.957
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2802.700	2773.372	2295.350
Capital work-in-progress		342.500	179.776	279.752
Pre-operative Expenses		0.000	0.000	0.000
INVESTMENT		261.800	260.665	247.421
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1971.300	1477.605	1216.471
	Sundry Debtors	1990.300	1617.313	1748.928
	Cash & Bank Balances	75.900	73.032	71.733
	Loans & Advances	1648.400	1327.047	1245.380
Total Current Assets		5685.900	4494.997	4282.512
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	1343.700	924.988	1469.337
	Provisions	641.100	509.110	0.000
Total Current Liabilities		1984.800	1434.098	1469.337
Net Current Assets		3701.100	3060.899	2813.175
MISCELLANEOUS EXPENSES		9.500	12.399	15.259
TOTAL		7117.600	6287.111	5650.957

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		9558.200	7496.500	7804.000
Other Income		47.200	157.800	112.700
Total Income		9605.400	7654.300	7916.700
Profit/(Loss) Before Tax		531.800	347.700	716.100
Provision for Taxation		165.100	85.600	225.500
Profit/(Loss) After Tax		366.700	262.100	490.600
Earnings in Foreign Currency :
	Export Earnings	3552.900	2850.700	3067.590
Total Earnings		3552.900	2850.700	3067.590
Imports :
	Raw Materials	712.400	648.800
	Stores & Spares	3.000	0.400
	Capital Goods	30.100	79.100
Total Imports		745.500	728.300	642.661
Expenditures :
	Manufacturing Expenses	915.700	738.100	908.100
	Administrative Expenses	592.700	538.700	592.600
	Raw Material Consumed	5665.700	4458.100	4770.300
	Excise Duty	696.700	510.100	118.300
	Increase/(Decrease) in Finished Goods	(319.700)	(111.200)	(220.500)
	Employee Cost	214.100	151.500	130.900
	Interest and Financial Charges	388.300	301.900	211.100
	Miscellaneous Expenses	5.700	4.600	23.000
	Power & Fuel	639.400	458.500	444.900
	Depreciation & Amortization	275.000	256.300	221.900
Total Expenditure		9073.600	7306.600	7200.600

QUARTERLY RESULTS

Year	30.06.2008
Type	1st Quarter
Sales Turnover	3377.300
Other Income	1.900
Total Income	3379.200
Total Expenditure	2724.200
Operating Profit	655.000
Interest	144.800
Gross Profit	510.200
Depreciation	80.400
Tax	85.500
Reported PAT	332.300

KEY RATIOS

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
Debt-Equity Ratio	1.42	1.29	1.19
Long Term Debt-Equity Ratio	0.57	0.5	0.49
Current Ratio	1.22	1.18	1.23
TURNOVER RATIOS
Fixed Assets	2.04	1.81	2.27
Inventory	5.54	5.57	7.2
Debtors	5.3	4.45	5.09
Interest Cover Ratio	2.37	2.15	4.39
Operating Profit Margin(%)	12.5	12.08	14.72
Profit Before Interest And Tax Margin(%)	9.63	8.67	11.88
Cash Profit Margin(%)	6.71	6.92	9.13
Adjusted Net Profit Margin(%)	3.84	3.5	6.29
Return On Capital Employed(%)	14.14	11.53	19.23
Return On Net Worth(%)	13.6	10.62	22.17

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Incorporated in Sep.'84, Subject (formerly Aarti Organics) was promoted by Chandrakant V Gogri and Associates. The flagship of the Alchemie group, it was the first to go public in Feb.'92. 

Subject manufactures intermediate Chemicals such as Para Nitro Chloro Benzene (PNCB) and Ortho Nitro Chloro Benzene (ONCB). It's subsidiaries are Alchemie Drugs and Aarti Corporate Services Limited Salvigor Laboratories, a group company manufacturing dimethyl sulphate sulphuric acid and allied products, was merged with the company in Oct.'94. 

The company commenced operations at Sarigam in 1986. During 1990, it first expanded the capacity of PNCB/ONCB (organics division) from 1200 tpa to 4500 tpa. Its maiden public issue financed manufacturing facilities for high value-added downstream products based on PNCB/ONCB. During 1994-95, it further expanded its organics division in four phases. A recognised Export House, the company offers a wide range of value-added intermediate products to its international customers. 

During 1998-99, the company has enhanced its installed capacity of PNCB/ONCB from 15000 tpa to 22000 tpa which further increased its capacities to 30000 tpa in the year 1999-2000.  

The Company has commissioned manufacturing operations at its new unit at Bharuch. In this project the Nitration plants alongwith Distillation and Crystallisation sections have been commissioned. The reduction plant utilising advance technology has been commissioned in April, 2001. 

The Company has set up two R and D Centres - one at Turbhe and the other at Vapi, Gujarat. The R and D activities has been commenced and going on well at both these centres. 

The Mumbai High Court has approved the amalgamation of Alchemic Organics (AOL) with the company. The board fixed an exchange ratio of 1 equity share of subject for every 4 equity share of AOL. Accordingly AOL was amalgamated with Aarti Industries during 2002. The expansion of GIDC Jhagadia for manufacturing Nitro Chlro Benzenes is nearing completion. The company is also having plans to set up Power Generation Plant at Vapi and also proposes to enter into the field of manufacturing SSP which is a widely used fertilizer. The estimated cost of the above said project is pegged to be around Rs.250 millions. 

Sarigam and Vapi units have been awarded ISO 9002 Certification during the year 2002-03. 

Vapi Plant has started the commercial production of Single Super Phosphate(SSP) in 2003. 

The company has decided to amalgamate its subsidiaries Aarti Healthcare Limited (AHL) and Avinash Drugs Limited with the company in December 2004. According to the scheme of amalgamation, i) In case of AHL, One Equity share of Rs.10/- each will be issued as fully paid up at par of the company for every Two Equity shares of Rs.10/- each fully paid up held in AHL ii) In case of Avinash Drugs Limited, One Equity share of Rs.10/- each will be issued as fully paid up at par of the company for every Fifteen Equity shares of Rs.100/- each fully paid up held in Avinash Drugs. Further,no equity shares will be issued for equity shares held by subject in AHL and Avinash Drugs as the same will be cancelled.

DIVIDEND

The Company had declared and paid Interim Dividend of Re.1/- @ 20% per share (of Rs.5/- each). The Directors are pleased to recommend Final Dividend of Re. 0.50/- @ 10% per share (of Rs. 5/- each). The total amount of Dividend pay-out for the Financial Year 2007-2008 would be Rs.109.200 millions as compared to Rs.58.200 millions for the previous year.  

OPERATIONS

During the year, the Company has recovered from the past setbacks and has posted much better performance due to optimization of the resources. During the year 2007-2008, the turnover of the Company has increased to Rs. 9590.900 millions from Rs. 7580.300 millions last year. Similarly, Operating Profit before Interest, Depreciation and Tax and Non- Operating Expenses have been increased to Rs. 1186.800 millions from Rs. 836.300 millions last year. Profit after Tax has also increased to Rs. 366.700 millions from Rs. 262.100 millions last year. 

EXPORTS: 

Exports of the Company had increased from Rs.3035.700 millions (2006-07) to Rs. 3765.000 millions (2007-08) (Inclusive of Export through export trading houses and relevant export benefits). 

CHEMICAL INDUSTRY - STRUCTURE AND DEVELOPMENT: 

Chemical Industry plays a key role in the World Economy. The chemicals manufactured globally are consumed directly or indirectly in almost all types of Industries. Its major segments are Petrochemicals, Specialty Chemicals, Pharmaceuticals, Agrochemicals, Fertilizers, etc. 

With the shifting of Foreign Business from Developed Countries to Asia (especially India and China) had boosted the growth of Asian Chemical Industries. The reduction of Exports Incentives in China that came into effect from 1st July 2007 and with the appreciation of the Chinese Currency, the demand for the Indian made chemicals had surged steeply in the recent months. 

The Chemical Industry in India is also poised for rapid development in coming years. With the increase in India's consuming middle class & the population's disposable income, the per-capita consumption of these chemicals has been increasing substantially. Coupled with the anticipated GDP growth rates of around 8% to 9%, the demand for the products are expected to increase. With the plans for setting up various Special Economic and Investment Zones for the Chemical Sector and awarding them with various special benefits provides additional incentives for the growth of Indian Chemical Industry over next few years. 

OPPORTUNITIES, THREAT AND OUTLOOK 

On the domestic front, with the reduction in tariffs, Indian Companies with strong systems and organised operations have been benefited in the liberal environment. The Companies like us, with competitive advantages, such as having competence in the areas of high value-added chemicals, conforming with international quality standards, have translated this as a growth opportunity to establish a dominant presence in both international and domestic markets. The company has also been able to increase its global operations and presence and also strengthen its competitive advantage against Chinese manufacturers on account of the economic factors such as appreciation in the Chinese Currencies, reduction in the export incentives in China, etc. 

The Company continuously strives, through research in its recognised R and D Centre, to device various measures for cost reduction and yield improvements in its existing range of products. The Company has also introduced new products through this research. Such continuing measures are expected to enable the Company for its growth rate and profitability. 

The Company has got approval for its State-of-the-Art USFDA Compliant Pharmaceutical Unit which in turn will increase the Company's sales volume from the US markets for various high value lifestyle APIs' which are used in manufacturing Cardio-vascular, Anti-Asthamatic, Anti-Cancer, Anti-Thalassaemic, Anti-hypertensive, Anti-Depressant Drugs etc. 

Further, the Pharmaceutical businesses in other markets are also poised for strong growth in coming years.  

ENVIRONMENTAL, SAFETY AND HEALTH 

The Company is committed to ensure sound Safety, Health and Environmental (SHE) performance related to its activities, products and services. The Company is taking continuous steps and also developing environment friendly processes for effective resource management with specific focus to energy, water and basic raw materials. Monitoring and periodic review of the designed SHE Management System is done on a continuous basis. The Company is committed to strengthen pollution prevention and waste abatement practices and strives to provide a safe and healthy environment. 

The Company’s Fixed Assets of important value includes:

· Land

· Building

· Plant and Machinery

· Furniture and Fixture

· Office Equipment

· Vehicles

WEBSITE DETAILS

The first unit of AARTI group, ALCHEMIE LABORATORIES, commenced commercial production of DIMETHYL SULPHATE (DMS) in the year 1975. Today, AARTI has acquired world-class expertise in the development and manufacturing of basic bulk chemicals, dyes and pigment intermediates, pharmaceuticals and agrochemicals along with their intermediates, rubber chemicals, surfactant intermediates and speciality chemicals. AARTI is amongst the largest producers of Benzene based basic and intermediate chemicals in India.

AARTI has attained a total turnover of US $ 189 million in the year April 2003 - March 2004 with flagship companies AARTI INDUSTRIES LIMITED (AIL) and AARTI DRUGS LIMITED (ADL) listed on Stock Exchanges. AARTI has a Subsidiary AARTI HEALTHCARE LIMITED (AHCL), which is engaged in manufacturing of Active pharma ingredients ranging from Ace Inhibitors, Broncodialators to Steroids.

AARTI has manufacturing sites at Gujarat, India (Vapi, Sarigam and Jhagadia) and at Maharashtra, India (Tarapur and Dombivli).

Recognizing the importance of research, AARTI has established three full-fledged DSIR (Dept. of Scientific and Industrial Research)-Government of India recognized R and D centers, which carry innovative product and process development work.

AARTI has the privilege of catering to the requirements of leading manufacturers of dyes, pigments, pharmaceuticals, agrochemicals and rubber chemicals in countries such as USA, UK, Germany, Spain, Italy, Switzerland, Belgium, Japan, Korea, China, Russia, etc. Aarti also has representatives in USA and a subsidiary company in UK to provide better services to its Export Customers.

WEB DETAILS

Profile

Benzene Based Intermediates

AARTI is amongst the largest manufacturer of Benzene based intermediates in India with products classified into the following categories:

Chlorination of Benzene into MCB, ODCB, PDCB & TCB. AARTI presently has a chlorination capacity of 70,000 tons per annum - Largest in India.

NITRATION of MCB into PNCB, ONCB and Dinitration to 2:4 Dinitro Chloro Benzene with a capacity of 90,000 tons per annum - Largest in India.

AMMONOLYSIS of Nitro Chloro compounds such as PNCB, ONCB, 2:5 DCNB and 3:4 DCNB in a high pressure batch (autoclave) process. AARTI is the largest manufacturer of Amination products in India and is making various Amino compounds such as PNA, ONA, OCPNA, PCONA, etc.

REDUCTION of various Nitro compounds such as PNCB, ONCB, MNCB, ONA, PNA, MDNB, 2:5 DCNB and 3:4 DCNB mainly by catalytic Hydrogenation to PCA, OCA, MCA, OPDA, PPDA, MPDA, 2:5 DCA and 3:4 DCA respectively. AARTI presently has a reduction capacity of 20,000 tons per annum

Sulphonation, methoxylation, condensation & fluorination products are also a part of aarti's range.

Acetylation and other chemical reaction facilities to manufacture various derivatives which are mainly used in dyes & pigments.

sulphuric acid and it's allied products.

Aarti's Sulphuric Acid plant has a capacity of 1,75,000 tons per annum where, in addition of 98% Sulphuric Acid, Aarti also manufactures Oleums, Sulphur Trioxide and Chloro Sulphonic Acid.

AARTI has most backward integrated plant for Dimethyl Sulphate (the key methylating agent ) i.e. starting from Sulphur and Methanol.

Bulk pharmaceuticals:

AARTI is making various Bulk Pharmaceuticals in the range of Antidiarrhoeals, Antiinflammatory, Vitamins, Antiasthama, Anti HIV, Antijetlag / Sleep Disorder, Ace Inhibitor, Antibiotics and Antidiabetics.

Agrochemicals:

These comprise of Quinalphos and Carbendazim.

Dyes:

Aarti has started getting dyes manufactured on contract basis from the local manufacturers exclusively for exports.

They have a well equipped quality control laboratory at MUMBAI with sophisticated equipments like:
Gas Chromatography Machine, UV/LR Spectrophotometer, Potentiometric Titration equipments, HPTLC, High Pressure Rotta Dyer.

They are now able to supply chromium free dyes in powder and liquid form for Swimming Pool and Spa applications.

They supply liquid dyes in Eco friendly packing of IBC Tunner and powder in biodegradable corrugated boxes.

Other intermediates and speciality chemicals:

· Alkylated amines and toluidines.

· Chloro phenols.

· Fluoro compounds.

· Other speciality chemicals.

Goals

Aarti group is strategically placed to exploit growth opportunities in the Chemical Industry. In view of its technical expertise and broad base satisfied clientele in India and abroad, Aarti is looking for global partners and strategic alliances in areas of mutual interest viz.

· Development of International markets for AARTI's products.

· Toll manufacturing.

· Transfer of Technology / Technical know-how.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.46.94
UK Pound	1	Rs.85.57
Euro	1	Rs.67.79

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		64

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions