1.  CONTINGENT LIABILITIES:
 
 a) Claims against the Company not acknowledged as Debts Rs. 1,215.18
 Lakhs (previous year Rs. 1,671.36 Lakhs).
 
 b) In respect of Letters of Credit, Bank Guarantees issued and Bills
 discounted by the Company''s Bankers Rs. 4,024.46 Lakhs (previous year
 Rs. 4,836.78 Lakhs).
 
 c) Estimated amount of Contracts remaining to be executed on capital
 account and not provided for, net of advances, Rs. 1,278.96 Lakhs
 (previous year Rs. 121.43 Lakhs).
 
 2.  SECURED LOANS:
 
 Security for Loans taken from Banks:
 
 a) Outstanding Term Loans aggregating to Rs. 10,352.98 Lakhs (previous
 year Rs. 2,451.89 Lakhs) from banks subject to (c) and (d) below, are
 secured/to be secured by way of Joint Equitable Mortgage of the
 Company''s immovable properties situated at Sarigam, Vapi and Jhagadia,
 in the State of Gujarat further by way of hypothecation of all moveable
 plant & machinery, machinery spares, tools and accessories and other
 movables, both present and future (except book debts & inventories)
 wherever situated.
 
 b) In case of vehicle loans from banks/NBFC of Rs. 23.02 Lakhs
 (previous year Rs. 21.81 Lakhs) against hypothecation of the vehicles.
 
 c) External Commercial Borrowings (ECB) of JPY 462.50 Million availed
 from Royal Bank of Scotland (earlier known as ABN AMRO Bank N.V.)
 Singapore and of USD 11.00 million availed from Standard Chartered
 Bank, London, both aggregating to Rs. 6,498.40 Lakhs (previous year Rs.
 3,016.13 Lakhs) are secured/to be secured by way of Joint Equitable
 Mortgage of the Company''s immovable properties situated at Sarigam,
 Vapi and Jhagadia, in the State of Gujarat and further by way of
 hypothecation of all moveable plant & machinery, machinery spares,
 tools and accessories and other movables, both present and future
 (except book debts & inventories) wherever situated.
 
 d) Working Capital Loans of Rs. 28,501.01 Lakhs (previous year Rs.
 24,610.70 Lakhs) availed from Scheduled Banks, are secured by
 hypothecation of Raw Materials, Stock-In-Process, Semi-Finished Goods,
 Finished Goods, Packing Materials and Stores and Spares, Bills
 Receivables and Book Debts and all other moveable, both present and
 future. Further, by way of Joint Equitable Mortgage of the Company''s
 immoveable properties situated at Sarigam, Vapi and Jhagadia in the
 State of Gujarat, ranking second to that of Banks mentioned in (a) and
 (c) above. These loans are personally guaranteed by three Directors of
 the Company.
 
 3.  In the opinion of the Board, except as otherwise stated, the
 Current Assets and Loans and Advances have a value on realization at
 least equal to amounts at which they are stated in the Balance Sheet.
 
 4.  Interest received of Rs. 11.50 Lakhs (Tax Deducted at Source Rs.
 1.38 Lakhs) [previous year Rs. 54.72 Lakhs (Tax Deducted at Source Rs.
 7.05 Lakhs)] is netted off against interest paid on Working Capital.
 
 5. Sales and other sales incomes are inclusive of conversion charges
 amounting to Rs. 89.11 Lakhs (previous year Rs. 194.62 Lakhs), export
 benefits amounting to Rs. 85.56 Lakhs (previous year Rs. 142.88 Lakhs),
 Fertilizer subsidy amounting to Rs. 2,422.57 Lakhs (previous year Rs.
 1,106.06 Lakhs) and insurance claim on goods lost by fire Rs. 64.58
 Lakhs (previous year Rs. Nil).
 
 6. Revenue Expenditure of Rs. 417.35 Lakhs (previous year Rs. 265.49
 Lakhs) [including depreciation of Rs. 23.83 Lakhs (previous year Rs.
 30.45 Lakhs)] on Research & Development activities at the Company''s R &
 D Centre is charged to Profit and Loss Account for the year.  Capital
 Expenditure includes Rs. 46.74 Lakhs (previous year Rs. 235.16 Lakhs)
 towards Fixed Assets purchased for Research & Development activities at
 the Company''s R & D centre. Of the above, Revenue Expenditure of Rs.
 171.75 Lakhs (previous year Rs. 167.49 Lakhs) [including depreciation
 of Rs. 23.83 Lakhs (previous year Rs. 30.45 Lakhs)] is in respect of
 the Research & Development activities carried on at the Company''s
 recognized R & D Centre at Vapi. Similarly, Capital Expenditure
 includes Rs. 23.20 Lakhs (previous year Rs. 35.65 Lakhs ) towards Fixed
 Assets purchased for Research & Development activities at the Company''s
 recognized R & D centre at Vapi.
 
 7. There are no Micro and Small Enterprise, to whom the Company owes
 dues, which are outstanding for more than 45 days as at 31st March,
 2011. This information as required to be disclosed under the Micro,
 Small and Medium Enterprise Development Act, 2006 has been determined
 to the extent such parties have been identified on the basis of
 information available with the Company.
 
 Segmental Capital Employed :
 
 Fixed Assets used in the Company''s business or liabilities contracted
 have not been identified to any of the reportable segments, as the
 Fixed Assets and services are used interchangeably between segments.
 The Company believes that it is currently not practicable to provide
 segment disclosures relating to Capital employed.
 
 8. RELATED PARTY DISCLOSURE UNDER ACCOUNTING STANDARD (AS: 18):
 
 I.  Following are the Subsidiaries of the Company as defined in Para
 3(a) of Accounting Standard – 18.
 
 1.  Aarti Healthcare Limited 
 
 2.  Aarti Corporate Services Limited
 
 3.  Alchemie (Europe) Limited (upto 30th March, 2011) 
 
 4.  Shanti Intermediates Private Limited (Through its holding Company:
 Aarti Corporate Services Limited)
 
 II.  Following are the associates of the Company as defined in Para
 3(b) of the AS - 18, with which there were transactions during the
 year.
 
 1.  Ganesh Polychem Limited 
 
 2.  Anushakti Chemicals and Drugs Limited
 
 3.  Alchemie (Europe) Limited (w.e.f. 31st March, 2011) 
 
 4.  Nascent Chemical Industries Limited (Associate of 100%
 
 Subsidiary: Aarti Corporate Services Limited)
 
 III.  Following are the Enterprises/Firms over which controlling
 individuals/key Management Personnel, of the Company along with their
 relatives, have significant influence as defined in para 3(e) of the AS
 - 18 and with which there were transactions during the year.
 
 1.  Alchemie Pharma Chem Limited 
 
 2.  Alchemie Industries
 
 3.  Gogri and Sons Investments Private Limited 
 
 4.  Alchemie Leasing and Financing Private Limited
 
 5.  Alchemie Laboratories 
 
 6.  Aarti Drugs Limited
 
 7.  Spack Chemicals Private Limited
 
 IV.  Following are the individuals who with their relatives as defined
 in the para 3(c) and 3(d) of the AS - 18 own Directly/indirectly 20% or
 more voting power in the Company or have significant influence or are
 Key Management Personnel.
 
 Sr. No.  Name Status
 
 1.  Shri Chandrakant V. Gogri Director
 
 2.  Shri Rajendra V. Gogri Director
 
 3.  Smt. Hetal Gogri Gala Director
 
 4.  Shri Rashesh C. Gogri Director
 
 5.  Shri Shantilal T. Shah Director
 
 6.  Shri Parimal H. Desai Director
 
 7.  Shri Kirit R. Mehta Director
 
 8.  Shri Manoj M. Chheda Director
 
 Leave Encashment:
 
 Leave Encashment liability amounting to Rs. 160.07 Lakhs (previous year
 Rs. 139.74 Lakhs) has been provided in the Accounts.  
 
 9. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
 
 (A) The Company uses Forward Exchange Contract to hedge against its
 Foreign Exchange exposures relating to underlying transactions and firm
 commitments. The Company does not enter into any derivatives
 instruments for Trading or Speculative purposes.
 
 The Company had hedged in aggregate an amount of Rs. Nil (previous year
 Rs. 705.60 Lakhs) out of its Trade related operations (Exports &
 Imports) aggregating to Rs. 74,868.90 Lakhs (previous year Rs.
 73,107.76 Lakhs).
 
 The Company had hedged its currency risks to the tune of Rs. 1,900.00
 Lakhs (previous year Rs. 4,200.00 Lakhs) in respect of its long term
 Foreign Currency Loans/Borrowings. Relating to the same, the Company
 had also swapped its floating interest rate borrowing of Rs. 4,906.00
 Lakhs (previous year Rs. 1,100.00 Lakhs) into a fixed rate loan through
 an interest rate swap.
 
 (B) Exchange gain net of exchange loss of Rs. 220.27 Lakhs (previous
 year net exchange gain of Rs. 408.96 Lakhs) is included in Profit &
 Loss Account.
 
 10. The figures of previous year have been regrouped and rearranged
 wherever necessary.