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Clarification On The Business Times Article Dated 29 May 2007 Entitled “Meghmani To Raise 1b Rupees From Indian Share Sales”

The Board of Directors (the “Board”) of Meghmani Organics Limited (“Meghmani or “the Group””) refers to the article entitled “Meghmani to raise 1b rupees from Indian share sales”” on page 8 of The Business Times dated 29 May 2007 (the “Article”), specifically, to the second paragraph of the article.

In that paragraph of the article, Ms Deval Soparkar, Head of Corporate Communications, was quoted as saying “‘For the past seven to eight years, we have been growing double-digit, so we will continue to do that . . . 20 per cent growth in topline is achievable, even bottomline.”

The Board wishes to clarify that during the interview with The Business Times reporter, Ms Soparkar expressed that, in view of the Group’s expansion plans to set up a High Performance Pigments (HPP) plant and a 3 megawatt (MW) captive power plant, the Group would be in a position to maintain its current gross profit margins. This was premised on the fact that, in the pigments industry, HPP traditionally commands a higher profit margin and the energy savings that will arise for the Group from providing its own energy supply from a captive power plant. Based on historical figures in the past four financial years, the Group’s gross profit margins ranged from approximately 21% to 26%.

BY ORDER OF THE BOARD
Kamlesh Dinkerray Mehta
Company Secretary
29 May 2007