Last 3 Yrs Profitability Comparison

PEE AAR EXIM PVT LTD 11,VIGYAN VIHAR,NEW DELHI-92 Particulars (A) SALES MANUFACTURING Sales Increase in stock TOTAL Less Manufacturing cost Gross profit G.P.Ratio

2006-07

2005-06

2004-05

72,399,323 2,168,208 74,567,531 71,656,045 2,911,486 3.90%

62,863,614 62,863,614 58,322,601 4,541,013 7.22%

64,307,047 64,307,047 55,780,563 8,526,484 13.26%

The fall in G.P.Ratio from 13.26% in FY 04-05 to 7.22% in FY 05-06 is attributed to Indigenization of the raw material as the impotrts have fallem from Rs.398.50 Lacs in FY 04-05 to Rs.255.57 Lacs. The imports have further fallen to Rs.130.87 Lacs in FY 06-07 which has resulted in increase in manufacturing cost. This way the Company has saved foreign exchange outgo to meet the Central Government's objective of saving foreign exchange resources. Besides the indigenization of the raw material, in view of more and more new models of the passenger cars were being launched, the customers forced upon the Company to develop new products which has also contributed to increase in manufacturing cost thus further adversely affecting the G.P.Ratio in FY 06-07. (B) SALES TRADING Sales Trading 56,220,170 57,267,165 27,240,353 Cost of goods sold 44,292,274 41,019,070 16,415,339 Gross profit 11,927,896 16,248,095 10,825,014 G.P.Ratio 21.22% 28.37% 39.74% The reduction is G.P.Ratio from 39.74% in FY 2004-05 to 28.37% in FY 2005-06 is due to offer by the Company its products at competitve prices in order to achieve higher sales which has almost doubled in FY 05-06 from that in FY 04-05. In FY 06-07, the Company's new management choose to exit from trading business with effect from Oct.,06 since trading business is not the core business as per the new management's philosphy as a result the Company disposed off all its inventories at a meagre margin. (C) JOB WORK INCOME Job work income 727,826 1,004,650 1,302,690 Job work expenses 636,869 834,911 1,069,500 Net income 90,957 169,739 233,190 G.P.Ratio 12.50% 16.90% 17.90% The Job Income primarily comprises Swimming Pool hotels job work. As the trading sales comprises sale of chemical used for Swimming pools and the job work also relates to Swimming pool cleaning, this job work was considered only incidental income to the main business of the Company, hence, the mangement was not aggresive on Job work income. The Job work orders were accepted by the Company in view of the overall profitability and potential from Chemical sale. The YOY variation in G.P.Ratio from 2004-05 to 2005-06 is not significant. As regards, FY 2006-07, the Company did the business primarily only upto Sept.,06 and the new management discontinued the business with effect from Oct.,06 since it was a non core business.

(D) OTHER INCOME 161,611.85 1,487,478.00 2,698,107.00 The fall in other income YOY is solely due to decrease in Commission income which has contributed to reduction in net profit or net loss YOY. NET PROFIT ANALYSIS Direct Profit - A+B+C+D 15,091,951 22,446,325 22,282,795 Selling exps 2,040,614 2,339,225 2,768,865 Admin/other exps 10,190,075 9,627,885 7,349,295 Interest 1,664,715 1,474,671 749,130 Depreciation 2,356,614 1,992,091 1,525,804 Prior period Expenses 27,372 PBT (1,187,439) 7,012,453 9,889,701 The admisntrat9ve expenses are higher primarily due to increase in salary of the Director in FY 06-07 from Rs.18.60 Lacs to Rs.31.87 Lacs. The increase in interest cost is self explanatory.