Bhagawati Gas Ltd. ನಿರ್ದೇಶಕರ ವರದಿ

Mar 31, 2014

Dear Members,

The directors have pleasure in presenting their 40th Annual Report, together with the audited accounts of the Company, for the financial year ended March 31, 2014 as follows:

FINANCIAL RESULTS (Amount in Rs. Lacs) Particulars 2013-2014 2012-2013

Gross Income 14 26

Gross Profit (86) (161)

(before extra ordinary items, interest, depreciation and tax)

Bad debts written off - -

Interest 22 33

Depreciation - -

Provision for Tax - -

Net Profit/(Loss) (167) (248)

Profit/(Loss) brought forward from last year - (158)

Profit/(Loss) carried to Balance Sheet (167) (406)



OPERATIONS REVIEW

The Company''s oxygen plants at Khetri Nagar, Rajasthan continued to remain closed because its main supplier Hindustan Copper Ltd (HCL) has not yet restarted its smelter plant operation. This resulted in huge financial losses to the Company.

DIVIDEND

In view of loss, the Board of Directors does not recommend any dividend for the year ended March 31, 2014.

DIRECTORS

Mr. Vivek Sharma (DIN: 00041217), director of the Company retire by rotation and is eligible for re- appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 ("the Act"), the directors confirm:

a. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for the year;

c. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

d. that they have prepared the annual accounts of the Company on a going concern basis.

FIXED DEPOSITS

During the year, the Company has not invited or accepted any deposit from the public under Section 58-A of the Companies Act 1956. No public deposit is outstanding.

LISTING

The equity shares of Company are listed at Bombay Stock Exchange Limited (BSE). The Company has not paid the listing fee for the year 2014-2015 to BSE due to financial constraint.

AUDITORS AND AUDITORS'' REPORT

Pursuant to provisions of Section 224 of the Companies Act, 1956, M/s Chaturvedi & Partners, Chartered Accountants, New Delhi (Firm Registration No. 307068E) were the Statutory Auditors of the Company who hold office up to the conclusion of the forthcoming Annual General Meeting.

As per Section 139(2) of the Companies Act, 2013 they are eligible for re-appointment for a term of three (03) consecutive years (Financial years 2014-15,2015-16,2016-17) till the conclusion of the 43rd Annual General Meeting of the Company, subject to ratification by the Members at every Annual General Meeting. The Company has received a letter from M/s Chaturvedi & Partners, Chartered Accountants, New Delhi to the effect that their re-appointment, if made, would be in accordance with the conditions prescribed under Section 139(2) of the Companies Act, 2013 and they are not disqualified for such re-appointment within the meaning of Section 141 of the Act.

Information and explanation on remarks in the Auditors'' Report:

i. In respect of auditors'' observation regarding absence of external confirmation from the customer/parties from whom these amounts are due. It is submitted that company is trying to get confirmation from the customers/external parties and expects to receive the same by the end of upcoming quarter i.e. 30th September, 2014.

ii. In respect of auditors'' observation regarding expiry of gas supply agreement and restoration of Company''s operation. It is submitted that company is negotiating the extension of the same for the period HCL smelter remained closed as consented by them earlier.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217 (1)(e) of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure I which forms part of the Directors'' Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the operations and financial position of the Company has been provided as Annexure II which forms part of the Directors'' Report.

CORPORATE GOVERNANCE REPORT AND GENERAL SHAREHOLDER INFORMATION

As required by Clause 49 (VI) of the listing agreement entered into by the Company with the Stock Exchanges, a detailed report on corporate governance is provided as Annexure III which forms part of the Directors'' Report. The Company is in compliance with the requirements and disclosures that have to be made in this regard. The practicing Company Secretary certificate on compliance with corporate governance requirements by the Company is attached to the Corporate Governance Report and forms part of the Directors'' Report.

PERSONNEL

None of the employees of the Company was drawing salary in excess of the limits prescribed under the Section 217(2A) of the Companies Act, 1956 read with the Companies (particular of employees) Rules 197

ACKNOWLEDGEMENT

Directors place on record their thanks for the assistance and co-operation received from Banks and all other customers for their continued support and patronage.

Your Directors also wish to place on record the dedicated and devoted services rendered by all personnel of the Company.

Regd. office: For Bhagawati Gas Limited Banawas, Khetri Nagar, Jhunjhunu, Rajasthan-333504 CIN: L24111RJ1974PLC005789 Rakesh Samrat Bhardwaj Chairman

Date: 14th August, 2014

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Mar 31, 2011

Dear Members,

The directors have pleasure in presenting their thirty seventh annual report, together with the audited accounts of the company, for the financial year ended March 31, 2011 as follows:

FINANCIAL RESULTS

(Rs. in Lakhs)

Particulars 2010-11 2009-10

Gross Income 579 710

Gross Profit 266 310 (before extra ordinary items, interest, depreciation and tax)

Loss on sale of Assets and assets discarded 190 0

Bad debts written off 315 0

Interest 52 68

Depreciation 62 74

Provision for Tax (137) 32

Net Profit/(Loss) (216) 136

Profit/(Loss) brought forward from last year 60 (76)

Profit/(Loss) carried to Balance Sheet (156) 60

2010-11 IN RETROSPECT

Hindustan Copper Ltd (HCL) shut down its smelter at Khetri Copper Complex w.e.f. December 9, 2008 due to steep down trend in world copper prices. This resulted in shut down of company’s oxygen plants at Khetri Nagar Rajasthan as the same are dedicated plants fully dependent on HCL. HCL has not yet restarted its smelter plant operation and as such the company’s oxygen plants continued to remain closed during the year under review. It has affected overall functionary of the company.

The sale of 120 TPD plant to Sunflag Iron & Steel Company Ltd. is effected this year. On review assets not useful were also discarded.

Based on review of arbitration awards balance of outstanding dues with Hindustan Copper Ltd. became bad were written off along with some other balances.

TERM LOANS FROM FINANCIAL INSTITUTIONS

The amount of Rs. 34.07 lakhs outstanding against IFCI has been repaid in full during this financial year.

The amount of Rs. 66.59 lakhs, shown as outstanding against IDBI in the balance sheet for the financial year ended March 31, 2011 has since been repaid in full. With this repayment the sub heading of the balance sheet schedule ‘Term loans from financial institutions’ is nil on the date of this report.

DIVIDEND

In view of loss, the Board of Directors do not recommend any dividend for the year ended March 31, 2011.

DIRECTORS

Dr. Gokulanand Mukherjee, director of the company retire by rotation and being eligible offers himself for re-appointment.

DIRECTORS’ RESPONSIBILITY STATEMENT

The directors’ confirm:

a. that in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profits of the company for the year;

c. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

d. that they have prepared the annual accounts of the company on a going concern basis.

FIXED DEPOSITS

During the year, the company has not invited or accepted any deposit from the public under Section 58-A of the Companies Act 1956. No public deposit is outstanding.

AUDITORS AND AUDITORS’ REPORT

M/s. Chaturvedi & Partners, Chartered Accountants, the Statutory Auditors of the company, retire at the ensuing annual general meeting and are eligible for reappointment.

Information and explanation on remarks in the Auditors’ Report

i. In respect of auditors’ observation regarding income in respect of minimum off take charges and other claims it is submitted by the management that the company is expect to recover the same from its customer.

ii. In respect of auditors’ observation regarding non provision for doubtful advances and security deposits, it is submitted by the management that it will be recovered in due course of time and therefore provision there against is not considered necessary.

iii. In respect of auditors’ observation regarding regular payment of interest to the company for inter corporate loan granted by the company, it is submitted by the management that the company and the borrower company are considering the conversion of the said loan into equity, the terms of conversion are in process.

iv. Delay in repayment of dues to financial institution and in a few cases in depositing statutory dues, it is clarified that there was delay in conversion of receivables in cash and raising funds from other sources resultant in delayed fulfillment of commitments towards financial institutions and statutory dues by the company, which were all subsequently rectified.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217 (1)(e) of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure I which forms part of the Directors'' Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the operations and financial position of the company has been provided as Annexure II which forms part of the Directors'' Report.

CORPORATE GOVERNANCE REPORT AND GENERAL SHAREHOLDER INFORMATION

As required by Clause 49 (VI) of the listing agreement entered into by the company with the stock exchanges, a detailed report on corporate governance is provided as Annexure III which forms part of the Directors'' Report. The General Shareholders Information has been provided as Annexure IV which forms part of the Directors'' Report. The company is in compliance with the requirements and disclosures that have to be made in this regard. The practicing Company Secretary certificate on compliance with corporate governance requirements by the Company is attached to the Corporate Governance Report and forms part of the Directors'' Report.

PERSONNEL

None of the employees of the company was drawing salary in excess of the limits prescribed under the Section 217(2A) of the Companies Act, 1956 read with the Companies (particular of employees) Rules 1975.

ACKNOWLEDGEMENT

Relation with the work force at all the units continued to be cordial. Yo u r Directors wish to express their grateful appreciation for the assistance and co-operation received from Financial Institutions, Banks, Government Authorities and Shareholders during the year under review.

Your Directors also wish to place on record their appreciation for the services rendered by our people at all levels in the company and for their contribution towards the success of the organisation.

Corporate Office: for & on behalf the Board

A-27-B, Sector-16,

Noida-201301,

Uttar Pradesh Rakesh Samrat Bhardwaj

August 11, 2011 Chairman

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Mar 31, 2010

The directors have pleasure in presenting their thirty sixth annual report, together with the audited accounts of the company, for the financial year ended March 31, 2010 as follows:

FINANCIAL RESULTS (Rs.in Lakhs)

Particulars 2009-10 2008-09

Gross Income 710 1571

Gross Profit(before interest, depreciation and tax) 310 427

Interest 68 183

Depreciation 74 247

Provision for Tax3254

Net Profit/(Loss) 13 643

Profit/(Loss) brought forward from last year (76) (119)

Profit/(Loss) carried to Balance Sheet 60 (76)



Hindustan Copper Ltd.( HCL) shut down its smelter at Khetri copper complex w.e.f. December 9, 2008 due to steep down turn in world copper prices. This resulted in shut down of companys oxygen plants at Khetri Nagar Rajasthan as the same are dedicated plants fully dependent on HCL This has affected the financial performance of the company.

As per the written communication HCL is likely to commission its smelter within the current financial year.

DIVIDEND

In view of loss, the Board of Directors do not recommend any dividend for the year ended March 31, 2010.

DIRECTORS

Mr. Kailash Chand Kedia, director of the company retire by rotation and being eligible offers himself for re-appointment.

Mr. Ganga Charan has been appointed as an additional director of the company on February 10, 2010 to hold office up to the date of the ensuing annual general meeting. The company has received notice from a member along with the requisite fee proposing his candidature as director of the company as required under Section 257 of the Companies Act, 1956. Your Directors consider it desirable that the company should continue to avail the guidance and advice of Mr Ganga Charan and recommend his appointment as regular director.

During the year under review, Capt. (Retd.) Sitaram Ramaprasad resigned from the Board of Directors of the company. The Board of Directors places on record its appreciation for the valuable services rendered by him during the tenure of his office.

DIRECTORS RESPONSIBILITY STATEMENT

The directors confirm:

a. that in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. that they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profits of the company for the year;

c. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

d. that they have prepared the annual accounts of the company on a going concern basis.

FIXED DEPOSITS

During the year, the company has not invited or accepted any deposit from the public under Section 58-A of the Companies Act 1956. No public deposit is outstanding.

AUDITORS AND AUDITORS REPORT

M/s. Chaturvedi & Partners, Chartered Accountants, the Statutory Auditors of the company, retire at the ensuing annual general meeting and are eligible for reappointment.

Information and explanation on remarks in the Auditors Report

i. In respect of auditors observation regarding non provision for doubtful advances, security deposits and sundry debtors, it is submitted that the management is hopeful that the same will be recovered in due course of time and therefore provision there against is not considered necessary.

ii. In respect of auditors observation regarding regular payment of interest to the company for inter corporate loan granted by the company, it is submitted by the management of the company that repayment of principal & payment of interest are on demand and no such demand is pending for payment or repayment.

iii. Delay in repayment of dues to financial institution and in a few cases in depositing statutory dues, it is clarified that there was delay in conversion of receivables in cash resultant in delayed fulfillment of commitments towards financial institutions and statutory dues by the company, which were all subsequently rectified.

DELISTING OF EQUITY SHARES FROM JAIPUR STOCK EXCHANGE, RAJASTHAN

The equity shares of your company were delisted from Jaipur Stock Exchange, Rajasthan w.e.f. June 7,2010.

CHANGE IN NAME OF THE COMPANY

The name of the company has been changed from Bhagawati Gases Limited to Bhagawati Gas Limited w.e.f. October 23, 2009 after obtaining approval of Central Government.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217 (1)(e) of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure I which forms part of the Directors Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the operations and financial position of the company has been provided as Annexure II which forms part of the Directors Report.

CORPORATE GOVERNANCE REPORT AND GENERAL SHAREHOLDER INFORMATION

As required by Clause 49 (VI) of the listing agreement entered into by the company with the stock exchanges, a detailed report on corporate governance is provided as Annexure III which forms part of the Directors Report. The General Shareholders Information has been provided as Annexure IV which forms part of the Directors Report. The company is in compliance with the requirements and disclosures that have to be made in this regard. The practicing Company Secretary certificate on compliance with corporate governance requirements by the company is attached to the Corporate Governance Report and forms part of the Directors Report.

PERSONNEL

None of the employees of the company was drawing salary in excess of the limits prescribed under the Section 217(2A) of the Companies Act, 1956 read with the Companies (particular of employees) Rules 1975.

ACKNOWLEDGEMENT

Relation with the work force at all the units continued to be cordial. Your Directors wish to express their grateful appreciation for the assistance and co-operation received from Financial Institutions, Banks, Government Authorities and Shareholders during the year under review.

Your Directors also wish to place on record their appreciation for the service rendered by our people at all levels in the company and for their contribution towards the success of the organisation.

Corporate Office: For and on behalf of the Board

A-27-B, Sector-16,

Noida - 201301

Uttar Pradesh Rakesh S Bhardwaj

14th August, 2010 Chairman & Managing Director

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Mar 31, 2009

The Directors have pleasure in presenting their Thirty Fifth Annual Report, together with the Audited Accounts of the company, for the financial year ended March 31, 2009 as follows:

FINANCIAL RESULTS (Rupees in Lakhs)

Particulars 2008-09 2007-08

Gross Income 1571 1686

Gross Profit(before interest, depreciation and tax) 427 492

Interest 83 38

Depreciation 247 272

Provision for Tax 54 (44)

Net Profit/(Loss) 43 226

Profit/(Loss) brought forward from last year (119) (345)

Profit/(Loss) carried to Balance Sheet (76) (119)

MANAGEMENTS DISCUSSION & ANALYSIS REPORT

The Report on Managements Discussion and Analysis covering matters listed inter-alia in Clause 49 of the Listing Agreement for the year under review is attached to this report.

DIVIDEND

Your Directors have not recommended any dividend for the period under review.

FIXED DEPOSITS

During the year, the company has not invited or accepted any deposit from the public under Section 58-A of the Companies Act 1956. No public deposit is outstanding.

DIRECTORS

Mr. Vivek Sharma has been appointed as whole time director, for a period of five years, of the company w.e.f. 1st June, 2008.

Capt.(Retd.) Sitaram Ramaprasad and Dr. Gokulanand Mukherjee retire by rotation and are eligible for reappointment.

Mr. Rakesh Samrat Bhardwaj completed his term as Managing Director of the company on 30th June,2009. The Board of Director at their meeting held on 27th June 2009 has re-appointed Mr. Rakesh Samrat Bhardwaj as Managing Director of the company for a period of 5 years with effect from 1 st July 2009 subject to the approval of the shareholders in the General Meeting.

DIRECTORS RESPONSIBILITY STATEMENT The Directors confirm:

A. that in the preparation of the annual accounts, the applicable accounting standards have been followed;

B. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profits of the company for the year;

C. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

D. that they have prepared the annual accounts of the company on a going concern basis.

AUDITORS REPORT

The Auditors have pointed out in their report [Point 3(xi)] about default in repayment of dues to financial institutions. In this connection, it is submitted that there was delay in conversion of receivables in cash resultant in delayed fulfillment of commitments towards financial institutions by the company.

The Auditors also have pointed out in their report [Point 4] about doubtful advance and security deposits aggregating to Rs. 22,303,031 and that effects of the above on the accounts are indeterminate . In this connection, it is submitted that the management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

AUDITORS

M/s. Chaturvedi & Partners, Chartered Accountants, the Statutory Auditors of the company, retire at the ensuing Annual General Meeting and are eligible for reappointment.

CORPORATE GOVERNANCE

Report on Corporate Governance is separately presented as part of the Annual Report.

PERSONNEL

None of the employee of the company was drawing salary in excess of the limits prescribed under the Section 217(2A) of the Companies Act, 1956 read with the Companies (particular of employees) Rules 1975.

TRADING OF SECURITIES AT DELHI STOCK EXCHANGE

The Securities of your company are re-admitted for trading at Delhi Stock Exchange w.e.f. 29th June, 2009.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217 (1)(e) of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure A.

ACKNOWLEDGEMENT

Relation with the work force at all the units continued to be cordial. Your Directors wish to express their grateful appreciation for the assistance and co-operation received from Financial Institutions, Banks, Government Authorities and Shareholders during the year under review.

Your Directors also wish to place on record their appreciation for the service rendered by our people at all levels in the Company and for their contribution towards the success of the organisation.

Corporate Office: For and on behalf of the Board

A-27-B, Sector-16,

Noida- 201301

Uttar Pradesh Rakesh Samrat Bhardwaj

31st July,2009 Chairman

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Mar 31, 2007

The Directors have pleasure in presenting the 33" Annual Report together with the Audited Accounts for the financial year ended March 31,2007.

Financial Results.

The highlights of the Company for the financial year ended March 31,2007 are as under:

Particulars (in Rs. Lacs) 2007 2006

Gross Income 1518 1766 Gross Profit (before interest, depreciation and tax) 470 427 Interest 30 50 Depreciation 269 268 Provision for Tax (36) (96) Net Profit/(Loss) 207 204 Profif(Loss) brought forward (427) (632) from last year Profit available for appropriation Nil Nil Profit/(Loss) carried to Balance Sheet (220) (428) Profity(Loss) transferred Nil Nil to General Reserve

Operations

During the year only one plant was operated as the other plant of 120 TPD is under relocation to Sunflag Iron and Steel Company Limited site Bhandara (Maharashtra) resulting in to decline in turnover.

Managements Discussion & Analysis Report

The Report on Managements Discussion and Analysis covering matters listed inter alia in Clause 49 of the Listing Agreement for the year under review is attached to this report.

Directors

Dr. Gokulanand Mukherjee retires by rotation and being eligible, offer himself for reappointment at the ensuing Annual General Meeting.

Mr. Kailash Chand Kedia and Mr. Vivek Sharma were appointed as additional directors in terms of Section 260 of the Companies Act, 1956. They shall hold office up to the date of the ensuing Annual General Meeting. The Company has received notice in writing from members proposing the candidatures of Mr. Kailash Chand Kedia and Mr. Vivek Sharma for the office of Director.

A brief resume of the Directors proposed to be appointed/ reappointed, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships/ chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges in India, are provided in the Report on Corporate Governance forming part of the Annual Report.

It is disheartening to place on record the sudden demise of our esteemed director Mr. V.P.Punj who left us for his heavenly abode on October 08, 2006.The Board members pays its homage to the departed soul.

Dividend

Your Directors have not recommended any dividend for the financial year 2006-07.

Fixed Deposits

During the year, the Company has not invited or accepted any deposit from the public under Section 58-A of the Companies Act 1956.No public deposit is outstanding.

Directors Responsibility Statement

The Directors confirm:

(i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for the year;

(iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that they have prepared the annual accounts of the Company on a going concern basis.

Auditors and Auditors Report

Messrs Chaturvedi & Partners, Chartered Accountants, the Statutory Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. Your Directors have recommended the re-appointment of Messrs Chaturvedi & Partners, Chartered Accountants, as auditors of the Company.

The Company has received certificate from the above mentioned firm of Chartered Accountants, confirming that their appointment if made would be within the limits prescribed under section 224(1 B) of the Companies Act., 1956 and that they are not disqualified for such appointment, within the meaning of sub-sections (3) and (4) of Section 226 of the Companies Act,1956.

There being no reservation, qualification or adverse remarks in the Auditors Report, no further explanations are required.

Cost Auditors

The Central Government had directed an audit of the cost accounts maintained by the Company in respect of its industrial gases products. The Central Government has approved the appointments of M/s.J.K.Kabra & Company Cost Accountant, for conducting the cost audit for the financial year ending March 31, 2008.

Personnel

None of the employees of the Company was drawing salary in excess of the limits prescribed under the Section 217(2A) of the Companies Act, 1956 read with the Companies (particular of employees) Rules 1975.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217 (1)(e) of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is attached to this report.

Corporate Governance

Your Company is committed to good Corporate Governance practices. As per Clause 49 of the Listing Agreement a separate section on Corporate Governance forms part of the Annual Report. A certificate from the practicing company secretary regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

Acknowledgement

Relation with the work force at all the units continued to be cordial.

Your Directors wish to express their grateful appreciation for the assistance and co-operation received from Financial Institutions, Banks, Government Authorities and Shareholders during the year under review.

Your Directors also wish to place on record their appreciation for the service rendered by our people at all levels in the Company and for their contribution towards the success of the organisation.

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Mar 31, 2006

ANNUAL REPORT 2005-2006

DIRECTORS' REPORT

Your Directors have pleasure in presenting the 32nd Annual Report together with the Audited Accounts for the financial year ended March 31, 2006.

Financial Results:

The highlights of the Company for the financial year-ended March 31, 2006 are as under:

Particulars (in Rs. Lacs) 2006 2005

Gross Income 1766 489 Gross Profit (before interest, depreciation and tax) 427 (62) Interest 51 39 Depreciation 268 300 Provision for Tax 96 0.32 Net Profit/(Loss) 204 4 Profit/(Loss) brought forward from last year 632 399 Profit available for appropriation Nil Nil Profit/(Loss) carried to Balance Sheet 204 Nil Profit/(Loss) transferred to General Reserve (428) (632)

Management's Discussion & Analysis Report:

The Report on

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Mar 31, 2005

Your Directors have pleasure in presenting the 31st Annual Report together with the Audited Accounts for the financial year ended March 31,2005.

Financial Results.

The highlights of the Company for the financial year ended March 31, 2005 are as under

Particulars (in Rs. Lacs) 2005 2004

Gross Income 489 2096

Gross Profit (62) 576

(before interest, depreciation and tax) Interest 39 199

Depreciation 300 374

Provision for Tax 0.32 0.25

Net Profit/(Loss) 4 3

Profit brought forward from last year (399) (527)

Profit available for appropriation Nil Nil

Profit carried to Balance Sheet Nil Nil

Loss transferred to General Reserve (632) (399)

Managements Discussion & Analysis Report.

The Report on Managements Discussion and Analysis covering matters listed inter alia in Clause 49 of the Listing Agreement for the year under review is attached to this report.

Dividend.

Due to inadequacy of profit, Directors regrets their inability to recommend any dividend.

Fixed Deposits.

During the year, the Company has not invited or accepted any deposit from the public, under Section 58-A of the Companies Act 1956. No public deposit is outstanding.

Directors.

Capt.(Retd.) Sitaram Ramaprasad is the director liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for re-appointment.

Brief resume of Capt.(Retd.) Sitaram Ramaprasad, nature of his expertise in specific functional area and names of the other Companies in which he hold Directorship and Membership/Chairmanship of Committees of the Board and his shareholding in the Company, as stipulated under Clause 49 of the Listing Agreement, are given in the report on Corporate Governance elsewhere in the Annual Report.

During the year under review, IDBI withdrew nomination of Shri Rajesh Malhotra from the Board of the Company with effect from May 18, 2004. The Board places on record its highest appreciation for the valuable guidance by him during his tenure as a Director of the Company.

Directors Responsibility Statement.

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:-

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(II) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2005 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a `going concern basis.

Auditors and Auditors Report.

Messrs Chaturvedi & Partners, Chartered Accountants, the Statutory Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. Your Directors have recommended the re-appointment of Messrs Chaturvedi & Partners, Chartered Accountants, as auditors of the Company. The Company has received certificate from the above mentioned firm of Chartered Accountants, confirming that their appointment if made would be within the limits prescribed under section 224(1 B) of the Companies Act., 1956 and that they are not disqualified for such appointment, within the meaning of sub-sections (3) and (4) of Section 226 of the Companies Act, 1956.

There being no reservation, qualification or adverse remarks in the Auditors Report, no further explanations are required.

Cost Auditors.

As per the requirement of the Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956, the Company has appointed M/s.J.K.Kabra & Company for conducting Cost Audit for the financial year ended March 31, 2005 the same has been applied to Central Government for their approval.

Personnel.

None of the employees of the Company was drawing salary in excess of the limits prescribed under the Section 217(2A) of the Companies Act, 1956 read with the Companies (particular of employees) Rules 1975.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo.

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies(Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is annexed and forms a part of this report.

Corporate Governance.

The Company has been proactive in following the principles and practices of good Corporate Governance. The Company has ensured that the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement with Stock Exchange(s) are duly complied with. A separate report on Corporate Governance is given elsewhere in the Annual Report.

Acknowledgement.

Relation with the work force at all the units continued to be cordial.

Your Directors wish to express their grateful appreciation for the assistance and co-operation received from Financial Institutions, Banks, Government Authorities and Shareholders during the year under review.

Your Directors also wish to place on record their appreciation for the service rendered by our people at all levels in the Company and for their contribution towards the success of the organisation.

By Order of the Board Place: New Delhi Sanjay Kumar Date : July 30,2005 Company Secretary

ANNEXURE - A

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

As required under Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule 1988, a statement showing the information relating to the Research and Development, Technology Absorption and Foreign Exchange earnings and outgo are forming part of |the Directors Report are stated below: - Form A requiring disclosure of particulars with respect to conservation of energy is not applicable in the case of our Company.

1. RESEARCH & DEVELOPMENT:

a) Specific area In which R & D carried out by the Company

Research and Development has been continuously carried to reduce evaporation of Oxygen Gas and consumption of power.

b) Benefits derived as a result of the above R & D: -

Loss on account of evaporation has been reduced considerably and less consumption of power.

c) Future Plan of Action: -

Research and Development activities continued to reduce process wastage and utilisation of waste Nitrogen.

d) Expenditure on R & D: -

Charged under primary heads of accounts.

2.TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION: -

a. Efforts made towards technology absorption, adaptation and innovation: -

The Company has successfully absorbed the technology of the plant supplied by the supplier.

b. Benefits derived as a result of the above efforts: - Quality of Oxygen Gas produced is of very high standard and acceptable to the consumers of the Companys product.

c. Particulars relating to imported technology: - Nil

3. FOREIGN EXCHANGE EARNING AND OUTGO: -

a. Foreign Exchange earning - Nil

b. Foreign Exchange outgo - Rs.2, 27,190/-

---

Mar 31, 2004

The Directors have pleasure in presenting the 30th Annual Report along with the audited statements of accounts for the year ended 31 March 2004.

2003-04 in retrospect:

The Company's plants are tailor-made to suit the gas requirements of Hindustan Copper Limited. The Company has two tonnage oxygen gas plant-50 Tons per day and 120 Tons per day. The contract with Hindustan Copper Limited for 50 Tons per day oxygen gas supply has expired on 14 August 2002. The contract for 120 TPD plant was expired on 31 March 2004. On mutual discussions, the contract for 120 TPD plant was extended till 30 June 2004. At present, Hindustan Copper Limited's plant is under maintenance and our contract is also not renewed. The Hindustan Copper Limited 's requirement of gas was only met through 120 TPD plant, which remain more or less stable throughout the year. The 50 TPD plant was lying idle for the full year. The Company is trying to find out an alternative user for this plant.

Financial Results and Operations

PARTICULARS (in Rs. Lacs)

2004 2003

Gross Income 2096 1872 Gross Profit (before interest, depredation and tax) 576 413 Interest 99 317 Depreciation 374 338 Provision for Tax 0.25 Nil Net Profit (+)/loss (-) 3 (242) Profit brought forward from last year (527) (468) Profit available for appropriation Nil Nil Profit carried to Balance Sheet Nil Nil Loss transferred to General Reserve (524) (527)

Dividend

Due to inadequacy of profit, Directors regrets its inability to recommend any dividend.

Public deposits

During the year, the Company has not invited or accepted any deposit from the public, under Section 58-A of the Companies Act 1956. No public deposit is outstanding.

Particulars in respect of conservation of energy technology absorption and foreign exchange earnings and outgo

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under section 217(1)(e) of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is annexed and forms a part of this report.

Particulars of employees.

None of the employee of the company was drawing salary in excess of the limits prescribed under the Section 217(2A) of the Companies Act, 1956 read with the Companies (particular of employees) Rules 1975.

Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Dr.G.Mukherjee retire by rotation at the ensuing Annual General Meeting. He is eligible for re-appointment. Shri Rajesh Malhotra, Nominee Director (IDBI) and Shri P.B.Vijayaraghavan, Nominee Director (UTI) had resigned from the board on 18 May 2004 and 29 December 2003 respectively.

Management discussion and analysis

The Company's plants are tailor-made to suit the requirements of Hindustan Copper Limited .As per our discussions and analysis, Hindustan Copper Limited does not require oxygen supply from 50TPD plant. Their requirement can be met through 120TPD plant. We are trying to relocate our 50TPD plant. In the current financial year, Hindustan Copper Limited plant is closed from 1 July 2004 for major maintenance and overhauling. This year the turnover of the Company is expected to drop considerably.

Hindustan Copper Limited has floated tender for 120TPD plant. The company has participated in the tender. This tender is under evaluation process with Hindustan Copper Limited.

Our Company's finances suffered due to the bottlenecks in the operations of Hindustan Copper Limited. Considering our dependence on Hindustan Copper Limited & poor off take by Hindustan Copper Limited in the past years, our financial institutions have agreed to restructure the loan of the Company. The Company has fulfilled its commitment as per the sanctioned packaged of IDBI, IIBI & IFCI. The Company is in the process of settling the dues of UTI.

Directors responsibility statement

As required under Section 217 of the Companies Act, the Directors hereby confirm that:

(i) in the preparation of the annual accounts the applicable accounting standards has been followed along with proper explanation relating to material departures,

(ii) had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period,

(iii) had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities,

(iv) had prepared the annual accounts on a going concern basis.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Report on Corporate Governance with Auditors' Certificate has been attached to form part of the Annual Report.

Auditors' Report

The observations of the Auditors in their Report on Accounts read with the relevant notes are self-explanatory.

Auditors

M/s. Chaturvedi and Partners, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment.

Cost Audit

As per the requirement of the Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956, the Company carries out an audit of cost accounts every year. Subject to the approval of Central Government, the Company has appointed M/s. J. K. Kabra & Co. Cost Auditors to audit the cost accounts for the financial year ended 31 March 2004.

Industrial Relations

Relation with the work force at all the units, continued to be cordial.

the Directors wish to express their grateful appreciation for the assistance and co-operation received from Financial Institutions, Banks, Government Authorities and shareholders during the year under review.

The Directors also wish to place on record their appreciation for the service rendered by our people at all levels in the Company and for their contribution towards the success of the organisation.

By Order of the Board

For Bhagawati Gases Limited Place : New Delhi (Rakesh S. Bhardwaj) Date : 20 August 2004 Managing Director

ANNEXURE-A

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule 1988, a statement showing the information relating to the Research and Development, Technology Absorption and Foreign Exchange earnings and outgo are forming part of the Directors' Report are stated below :-

Form A requiring disclosure of particulars with respect to conservation of energy is not applicable in the case of our company.

1. RESEARCH & DEVELOPMENT

a. Specific area in which R & D carried out by the Company

Research and Development has been continuously carried to reduce evaporation of oxygen gas and consumption of power.

b. Benefits derived as a result of the above R & D

Loss on account of evaporation has been reduced considerably and less consumption of power.

c. Future Plan of Action

Research and Development activities continued to reduce process wastage and utilisation of waste Nitrogen.

d. Expenditure on R & D

Charged under primary heads of accounts.

2. TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION

a. Efforts made towards technology absorption, adaptation and innovation

The Company has successfully absorbed the technology of the plant supplied by the supplier.

b. Benefits derived as a result of the above efforts

Quality of Oxygen Gas produced is of very high standard and acceptable to the consumers of the company's product.

c. Particulars relating to imported technology - Nil

3. FOREIGN EXCHANGE EARNING AND OUTGO

a. Foreign Exchange outgo - Nil b. Foreign Exchange earning - Nil

---

Mar 31, 2003

Your Directors have pleasure in presenting the 29th Annual Report alongwith the audited statement of accounts for the year ended 31st March 2003.

1. 2002-03 in retrospect:

Company's plants are tailor-made for the captive consumption of gas by M/s. Hindustan Copper Ltd. (HCL), Khetrinagar. Hence the marketing strategy is limited and company cannot supply the gas to any other consumer. Due to some problems at their end, consumption of gas by HCL has come down drastically. This has resulted into low capacity utilisation of the plants and ultimately low sales realisation. All these factors adversely affected trie capacity utilisation and operation of the company. The 50 TPD Plant contract with HCL has already expired on 14th August,2002andthe120TPD Plant contract with HCL will expire on 31st March, 2004.

FINANCIAL RESULTS AND OPERATIONS

PARTICULARS RS.(LACS) 2003 2002

Gross Income 1933 2526 Gross Profit (before interest, depreciation and tax) 413 473 Interest 317 570 Depreciation 338 322 Provision for Tax Nil 11 Net Profit +/loss (-) (242) (430) Profit Brought forward from Last year (468) (38) Profit available for appropriation Nil Nil Profit carried to Balance Sheet Nil Nil Loss transferred to General Reserve (527) (468)

2. Dividend

Due to inadequacy of profit, Directors regret its inability to recommend any dividend.

3 Public deposits

During the year, the Company has not invited or accepted any deposit from the public under Section 58-A of the Companies Act 1956. No public deposit is out standing.

4. Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under section 217 (1)(e) of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is annexed and forms a part of this report.

5. Particulars of employees.

None of the employees of the company was drawing salary in excess of the limits prescribed under the section 217(2A) of the Companies Act, 1956 read with the Companies (particular of employees) Rules 1975.

6. Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Sh. V.P. Punj retire by rotation at the ensuing Annual General Meeting. He is eligible for re-appointment.

The Board of Directors have appointed Captain S. Ramaprasad as an additional Director w.e.f. 15th July, 2003. Captain S. Ramaprasad will hold office as director up to the date of the ensuing Annual General Meeting. The Company has received notice under section 257 of the Companies Act, 1956, proposing his candidature as Director subject to retirement by rotation.

7. Managing Director

Shri Rakesh S. Bhardwaj was appointed as Managing Director of the Company for a period of 5 years and he will hold office up to June 30, 2004.

In view of his vast business experience and expertise, the Board of Directors wants to re-appoint him for a period of 5 years w.e.f July 1, 2004.

8. Management discussion and analysis

Company have two plants of 50 TPD & 120 TPD capacity. Company's plants are tailor-made for M/s. Hindustan Copper Limited (HCL). Company have long term supply agreement with HCL. The contract for 50 TPD plant with HCL has expired on 14th August 2002. Oxygen requirement of HCL has come down considerably. With this, company's overall turnover has been reduced as compared with its performance of last year.

Three financial institutions i.e. IDBI, IFCI and IIBI have sanctioned a package of restructuring of its term liabilities. Company has already cleared the initial down-payment of IIBI. Company is in the process of clearing the dues of IDBI & IFCI.

UTI has not agreed to restructure the loan in lines with other Institutions & in effect has moved an application to DRT. Company has filed the reply in the court.

9. Directors responsibility statement

As required under Section 217 of the Companies Act, the Directors hereby confirm that:

i) in the preparation of the annual accounts the applicable accounting standards has been followed along with proper explanation relating to material departures,

(ii) had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period,

(iii) had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities,

(iv) had prepared the annual accounts on a going concern basis.

10. Corporate Governance

Necessary measures have been adopted to comply with the requirements of the Listing agreement with Stock Exchanges wherein the company's shares are listed. A separate report on Corporate Governance measures adopted by the company forms part of this report.

A certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement is attached to this report.

11. Auditors Report:

The observations of the Auditors in their Report on Accounts read with the relevant notes are self- explanatory.

12. Auditor

M/s Chaturvedi and Partners, Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible for re-appointment.

13. Cost Audit:

As per the requirement of the Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956, the Company carry out audit of cost accounts every year. Subject to the approval of Central Government, the Company has appointed M/s.J. K. Kabra&Co. Cost Auditors, to audit the cost accounts for the financial year ended 31 st March, 2003.

14. Industrial Relations:

Relation with the work force at all the units continued to be cordial.

Your Directors wish to express their grateful appreciation for the assistance and co-operation received from Financial Institutions, Banks, Government Authorities and shareholders during the year under review.

Your Directors also wish to place on record their appreciation for the service rendered by our people at all levels in the Company and for their contribution towards the success of the organisation.



ANNEXURE- A

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

As required under Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule 1988, a statement showing the information relating to the Research and Development, Technology Absorption and Foreign Exchange earnings and outgo and forming part of the Directors' Report are stated below: -

Form A requiring disclosure of particulars with respect to conservation of energy is not applicable in the case of the company.

1. RESEARCH & DEVELOPMENT:

a) Specific area in which R & D carried out by the Company:-

Research and Development has been continuously carried to reduce evaporation of oxygen gas and consumption of power.

b) Benefits derived as a result of the above R & D :-

Loss on account of evaporation has been reduced considerably and less consumption of power.

c) Future Plan of Action: -

Research and Development activities continue to reduce process wastage and utilisation of waste Nitrogen

d) Expenditure on R & D :-

Charged under primary heads of accounts.

2 TECHNOLOGY ABSORPTION, ADAPTATION & INNOVAT10N:-

a) Efforts made towards technology absorption, adaptation and innovation :-

The Company has successfully absorbed the technology of the plant supplied by the supplier.

b) Capital Investment for Capacitor Bank.

Capacitor Bank has been installed in view of the fact that Ajmer Vidut Vitran Nigam Ltd. gives incentive to those who use quality power. The company can recover the entire amount of expenditure within two years.

c) Benefits derived as a result of the above efforts :-

Quality of Oxygen Gas produced is of very high standard and acceptable to the consumers of the company's product

d) Particulars relating to imported technology - Nil

3 FOREIGN EXCHANGE OUTGO: -

i) CIF value of imported spares for Plant and Machinery - Rs. 4,82,795/-

By and on behalf of the Board of Directors

RAKESH S. BHARDWAJ Place : New Delhi (Managing Director) Date : 19th August 2003

---

Mar 31, 2002

Your Directors have pleasure in submitting their report and the statement of accounts for the year ended 31st March, 2002.

2001-02 in Retrospect.

The past year has been a difficult one for your Company. Industrial growth was at its lowest for past several years and there was a widespread sense of instability as the overall confidence in the economy was low. The Union budget for 2002-2003 also confirmed sluggishness in the market.

FINANCIAL RESULTS AND OPERATIONS

(in Rs. Lacs) 2002 2001

Gross Income 2526 1954

Gross Profit (before interest, depreciation and tax) 473 436

Interest 570 434

Depreciation 322 224

Provision for Tax 11 15

Net Profit+/loss(-) (430) (237)

Profit Brought forward from Last year (38) 199

Profit available for appropriation Nil Nil

Profit carried to Balance Sheet Nil Nil

Loss transferred to General Reserve (468) (38)

DIVIDEND

In view of the adverse performance and the loss incurred during the year, your Directors express their inability to declare any dividend for the year.

PUBLIC DEPOSITS

The Company has not invited or accepted any deposits from the public, pursuant to the provisions of Section 58-A of the Companies Act, 1956.

DEPOSITORY SYSTEM

As the members are aware, your Companys shares are tradable compulsorily in electronic form and your Company has established connectivity with both the depositories i. e National Securities Depository Ltd (NSDL) and Central Depository Services (India) Ltd (CDSL). In view of the numerous advantages offered by the Depository System, members are requested to avail the facility of dematerialisation of the Companys share on either of the Depository as aforesaid.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 the information relating to Conservation of energy, Technology absorption, Foreign exchange earnings and outgo and forming part of the Directors Report is stated in Annexure `A.

CORPORATE GOVERNANCE.

The Company has complied with the mandatory provisions of Corporate Governance as prescribed in the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance is included as a part of the Annual Report alongwith Auditors Certificate on its compliance.

MANAGEMENT DISCUSSION AND ANALYSIS

Capitive consumption of gas market constitute 60%, rest is for merchant market. Gas industry is directly proportional to the growth of the economy. With the slow-down in economy, gas industry out look does not look bright. Steel sector is major consumer in the industrial gases. But from the last 2 quarters, the steel industry is doing good. This might throw some opportunity in the gas industry. The demand for all our three products like oxygen, nigrogen and argon has been consist in the market. But Company is having capitive plant, it can not shift to the merchant market. Our operation entirely depended on Hindustan Copper Ltd. (HCL). The Company is passing through very bad shape due to low consumption of oxygen gas by HCL. Our Sales revenue are going down and our expenses mainly electricity is increasing due to fixed in nature. There is no change in the organisation structure of the Company. No Sr. Executive has resigned nor joined.

DIRECTORS

At the forthcoming Annual General Meeting, Shri V. P. Punj retire in accordance with the provisions of the Companies Act, 1956 and being eligible, offer himself for reappointment. Your directors recommend his reappointment.

During the year under review. UTI withdrew the nomination of Shri S. S. Ratra from the Board of this Company and in his place appointed Shri P. B. Vijayaraghavan as its Nominee Director with effect from 1st November, 2001. The Board places on record its highest appreciation for the valuable guidance given by Shri S. S. Ratra during his tenure as a Director and welcomes Shri P. B. Vijayaraghavan in his place.

It is disheartening to place on record sudden demise of two of our esteemed directors Shri V. B. Chaturvedi and Shri Ramrup Sharma who left us for their heavenly abode on 8th August, 2001 and 23rd February 2002 respectively The Board members pays its homage to the departed souls.

AUDITORS

M/s. Chaturvedi and Partners, Statutory Auditors of the Company retire at the conclusion of the Annual General Meeting and being eligible, offer themselves for reappointment.

They have furnished a certificate to the effect that the proposed appointment if made, will be in accordance with the provisions of Section 224 (1B) of the Companies Act, 1956.

AUDITORS COMMENTS

Auditors Report

Auditors Comments are self explanatory.

COST AUDIT.

As per the requirement of the Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956, the Company carries out an audit of cost accounts every year. Subject to the approval of Central Government, the Company has appointed M/s. J. K. Kabra & Co cost auditors to audit the cost accounts for the financial year ended 31st March, 2003.

DIRECTORS RESPONSIBILITY STATEMENT.

As required under Section 217 of the Companies Act, the Directors hereby confirm that:-

(i) in the preparation of the annual accounts the applicable accounting standards has been followed along with proper explanation relating to material departures,

(ii) had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at end of the financial year and of the profit of the company for that period,

(iii) had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities,

(iv) had prepared the annual accounts on a going concern basis.

PERSONNEL

The Directors hereby wish to place on record their appreciation and gratitude to the Companys personnel at all levels for their dedication, commitment, efficient and loyal services rendered during the year.

The Labour Management relations remained cordial and harmonious in general.

Information as per Section 217(2A) of Companies Act, 1956 read with the Companies (Particular of Employees) Rules, 1975 as amended from time to time does not form part of this Report as no employee is covered by this Section.

FINANCIAL INSTITUTIONS, BANKS AND INVESTORS

Your Directors also wish to thank Financial Institutions, Bankers, Central and Sate Governments, Foreign as well as Indian investor and traders for the consistent support received from them throughout the period.

ANNEXURE - A CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS and OUTGO:

As required under Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule 1988, a statement showing the information relating to the Research and Development, Technology Absorption and Foreign Exchange earnings and outgo - and forming pari of the Directors Report are stated below:-

Form A requiring disclosure of particulars with respect to conservation of energy is not applicable in the case of our company.

1. Research & Development:

a) Specific area in which R&D carried out by the Company:-

Research and Development has been continuously carried to reduce evaporation of oxygen gas and consumption of power.

b) Benefits dervied as a result of the above R & D:-

Loss on account of evaporation has been reduced considerably and less consumption of power.

c) Future Plan of Action:-

Research and Development activities continued to reduce process wastage and utilisation of waste Nitrogen.

d) Expenditure on R & D:-

Charged under primary heads of accounts.

2. Technology Absorption. Adaptation & Innovation:-

a) Efforts made towards technology absorption, adaptation and innovation:-

The Company has successfully absorbed the technology of the plant supplied by the supplier.

b) Benefits derived as a result of the above efforts:-

Quality of oxygen gas produced is of very high standard and acceptable to the consumers of the companys product.

c) Particulars relating to imported technology:- Nil

3. Foreign Exchange Outgo:-

i) ClF of imported spares for Plant and Machinery - Rs. 2,63,409/-

By and on behalf of the Board of Directors

Registered Office: (R. S. BHARDWAJ) Banawas, Khetrinagar - 333 504 Managing Director Ditt. Jhunjhunu Rajasthan

Dated: 23rd August, 2002.

---

Mar 31, 2001

Your Directors have pleasure in submitting their report and the statement of accounts for the year ended 31st March, 2001.

FINANCIAL RESULTS AND OPERATIONS

(in Rs.lacs) 2001 2000

Gross Income 1954 2146 Gross Profit (before interest, depreciation and tax) 436 678 Interest 434 444 Depreciation 224 222 Provision for Tax 15 1 Net Profit +/loss(-) (237) 11 Profit Brought forward from Last year 199 188 Profit available for appropriation Nil 199 Profit carried to Balance Sheet Nil 199 Loss transferred to General Reserve (38) Nil

Sales and other income have decreased by Rs.192 lakhs during the year showing a decrease of 9% as compared to the previous year. The decrease is primarily due to the biannual maintenance shutdown of the smelter plant of M/s Hindustan Copper Ltd. However, company has shown improvement in the last two quarters with a sales figure touching to Rs. 786 lakhs in the fourth quarter. The company posted a net loss of Rs. 237 lakhs due to lower capacity utilisation.

Company has undertaken major restructuring of its long term liability with the help of financial institutions. Company with this complete overhauling of its operations expects better results in the coming year.

DIVIDEND

In view of the adverse performance and the loss incurred during the year, your Directors express their inability to declare any dividend for the year.

PUBLIC DEPOSITS

The Company has not invited or accepted any deposits from the public, pursuant to the provisions of Section 58-A of the Companies Act, 1956.

DEPOSITORY SYSTEM

The Equity shares of your company is included in the list of SEBI for compulsory trading in dematerialised form by all investors with effect from 27th February, 2001 .Your Company has entered into agreement with both National Securities Depository Limited (NSDL) and Central Depository Service (India) Limited (CDSL) during the year under review and the shares of the Company had been activated for dematerialised trading on NSDL with effect from 9th October, 2000 and CDSL with effect from that 4th November, 2000.

Your Company has appointed M/s.Skyline Financial Services Pvt. Ltd., New Delhi as its Depository Registrars for the limited purpose of establishing electronic connectivity of the Company, and its interface with National Securities Depository Limited/ Central Depository Service (India) Ltd with respect to dematerialised shares.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956 read wrth Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 the information relating to Conservation of energy, Technology absorption, Foreign exchange earnings and outgo and forming part of the Directors' Report is stated in Annexure 'A'.

CORPORATE GOVERNANCE

Under Clause 49 of the listing agreement with the Stock Exhanges, it is mandatory for us to implement Corporate Governance by 31st March, 2002. However, as far as possible we have tried to implement requirements of Corporate Governance. In this direction, a separate section on Corporate Governance is included in the Annual Report.

DIRECTORS

At the forthcoming Annual General Meeting, Shri R.R. Sharma retire in accordance with the provisions of the Companies Act, 1956 and being eligible, offer himself for reappointment. Your directors recommend his reappointment.

During the year under review, IDBI withdrew the nomination of Shri N.L.Mehrotra from the Board of this Company and in his place appointed Shri Rajesh Malhotra as its Nominee Director with effect from 9th January, 2001. The Board places on record its highest appreciation for the valuable guidance give by Shri N.L.Mehrotra during his tenure as a Director, and welcomes Shri Rajesh Malhotra in his place.

It is disheartening to place on record sudden demise of our esteemed director Shri V.B. Chaturvedi who left us for his heavenly abode on 8th August, 2001. The Board members pays its homage to the departed soul.

AUDITORS

M/s. Chaturvedi and Partners, Statutory Auditors of the Company retire at the conclusion of the Annual General Meeting and being eligible, offer themselves for reappointment.

They have furnished a certificate to the effect that the proposed appointment if made, will be in accordance with the provisions of Section 224 (1B) of the Companies Act, 1956.

AUDITORS REPORT

The auditors in their report have mentioned the Notes No.(i) - (v).The directors wish to offer their clarification on the above Notes as follows:-

Note No (i): The rate of interest was decreased, therefore the adjustment has been made.

Note No (ii):This note is self explanatory and is according to the instruction No.3(iv) of Part-ll of Schedule VI of the Companies Act, 1956.

Note No (iii) and (iv): The case is still under arbitration and as such the provision has not been made.

Note No (v): This note is self explanatory and no further explanation is required.

COST AUDIT

As per the requirement of the Central Government and pursuant to the provisions of Section 233B of the Companies Act,1956, the company carries out an audit of cost accounts every year. Subject to the approval of Central Government, the Company has appointed M/s.J.K.Kabra & Co., cost auditors to audit the cost accounts for the financial year ended 31st March, 2002.

DIRECTORS RESPONSIBILITY STATEMENT.

As required under Section 217 of the Companies Act, the Directors hereby confirm that :-

(i) in the preparation of the annual accounts the applicable accounting standards has been followed along with proper explanation relating to material departures.

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at end of the financial year and of the profit of the company for that period.

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(iv) the Directors had prepared the annual accounts on a going concern basis.

PERSONNEL

The Directors hereby wish to place on record their appreciation and gratitude to the Company's personnel at all levels for their dedication, commitment, efficient and loyal services rendered during the year.

The Labour Management relations remained cordial and harmonious in general.

* Regarding the information required to be given under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 it is hereby stated that no employee is getting remuneration of Rs. 1,00.000/- per month (Rs. One Lacs) or Rs.12,00,000/- (Rs. Twelve Lacs) per annum and hence not annexed to the Directors' Report.

FINANCIAL INSTITUTIONS, BANKS AND INVESTORS

Your Directors also wish to thank Financial institutions, Bankers, Central and Sate Governments, Foreign as well as Indian investors, architect, and traders for the consistent support received from them throughout the period.

By and on behalf of the Board of Directors

Registered Office : (R.R. SHARMA) Banawas, Khetrinagar-333 504 Chairman Ditt. Jhunjhunu Rajasthan

Dated : 28th August, 2001.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS and OUTGO :

As required under Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule 1988, a statement showing the information relating to the Research and Development, Technology Absorption and Foreign Exchange earnings and outgo and forming part of the Director's Report are stated below :-

Form A requiring disclosure of particulars with respect to conservation of energy is not applicable in the case of our company.

1. Research & Development :

a) Specific area in which R & D carried out by the Company :-

Research and Development has been continuously carried to reduce evaporation of oxygen gas and consumption of power.

b) Benefits dervied as a result of the above R & D :-

Loss on account of evaporation has been reduced considerably and less consumption of power.

c) Future Plan of Action :-

Research and Development activities continued to reduce process wastage and utilisation of waste Nitrogen.

d) Expenditure on R & D :-

Charged under primary heads of accounts.

2. Technology Absorption, Adaptation & Innovation :-

a) Efforts made towards technology absorption, adaptation and innovation :-

The Company has successfully absorbed the technology of the plant supplied by the supplier.

b) Benefits derived as a result of the above efforts :-

Quality of oxygen gas produced is of very high standard and acceptable to the consumers of the company's product.

c) Particulars relating to imported technology :- . Nil

3. Foreign Exchange Outgo:-

i) GIF of imported spares for Plant and Machinery - Rs.10,07,691.00

---

Mar 31, 2000

The Directors have pleasure in submitting their report and the statement of accounts for the year ended 31st March, 2000.

FINANCIAL RESULTS AND OPERATIONS

(Rs. in Lacs)

2000 1999

Gross Income 2146 2400

Gross Profit (before interest, depreciation and tax) 678 807

Interest 444 543

Depreciation 222 244

Provision for Tax 1 2

Net Profit 11 18

Profit Brought forward from Last year 188 170

Profit available for appropriation 199 188

Profit carried to Balance Sheet 199 188

The Company's performance during the year was adversely affected due to various factors, both external and internal. The sudden and unexpected breakdown of the Air Compressor of 120 TPD plant at Khetrinagar works on 17th November 1999 resulted into loss of production for a period of 2 1/2 months. The Company had to engage foreign technician and import critical parts for repair of the machinery. The Company was doing fairly good in the quarter ended 30th September, 1999. The gross profit was Rs. 57.00 lakhs during the said quarter as against Rs. 32.00 lakhs during the quarter ended 31st December, 1999 which was mainly due to the breakdown as stated above.

The Operation of the Company also suffered a major set back because of frequent shut down of the smelter plant of M/s Hindustan Copper Ltd., who is the main customer or your Company. This has affected the overall result during the year.

The first half-yearly result clearly indicates that the Company would have had a better financial standing during this year also, but for the factors as mentioned above.

With proposed diversification into other fields of business, your Company hope to do well in the coming years.

DIVIDEND

Due to inadequate profits, your Directors regret their inability to declare any dividend for the year.

PUBLIC DEPOSITS

The Company has not invited or accepted any deposits from the public pursuant to the provisions of Section 58-A of the Companies Act, 1956.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO As required under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 the information relating to Conservation of energy, Technology absorption, Foreign exchange earnings and outgo and forming part of the Directors' Report is stated in Annexure `A'.

Y2K COMPLIANCE

As a result of the series of prudent and reasonable steps taken, your Company rolled over to the new millennium without any Y2K problem.

DEPOSITORY SYSTEM

In line with your Company's constant endeavour to provide best possible services to the shareholders and investors, your Company is entering into agreements with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) to enable the shareholders hold the shares in demat form with either of these depositories under the Depository System. Shares of your Company are going to be compulsorily traded in demat form w.e.f. 30th October, 2000.

CORPORATE GOVERNANCE

The Directors are committed to engender good governance practices. The Corporate Governance Code recently introduced by SEBI is mandatory for your Company from 31st March, 2002. Your Company has started the process of complying with various recommendations and will simultaneously take steps to comply with mandatory provisions and non-mandatory provisions to the extent feasible.

EXTRA ORDINARY GENERAL MEETING

Pursuant to resolution passed in Extra Ordinary General Meeting held on 23rd May, 2000, your Company has diversified into fields of Computer Software, Engineering activities, Telecommunication, Power Generation and Waste Management.

DIRECTORS

At the forthcoming Annual General Meeting, Shri V.B. Chaturvedi retire in accordance with the provisions of the Companies Act, 1956 and being eligible, offer himself for reappointment. Your directors recommend his reappointment.

AUDITORS

M/s. Chaturvedi and Partners, Statutory Auditors of the Company retire at the conclusion of the Annual General Meeting and being eligible, offer themselves for reappointment.

They have furnished a certificate to the effect that the proposed appointment if made, will be in accordance with the provisions of Section 224 (1B) of the Companies Act, 1956.

AUDITORS COMMENTS

The observation of the Auditors read with the notes on the Accounts are self explanatory and do not call for any further explanation.

PERSONNEL

The Directors hereby wish to place on record their appreciation and gratitude to the Company's personnel at all levels for their dedication, commitment, efficient and loyal services rendered during the year.

The Labour Management relations remained cordial and harmonious in general.

Regarding the information required to be given under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 it is hereby stated that no employee is getting remuneration of Rs. 50,000/- per month (Rs. Fifty Thousand) or Rs. 6,00,000/- (Rs. Six Lacs) per annum and hence not annexed to the Directors' Report.

FINANCIAL INSTITUTIONS, BANKS AND INVESTORS

The Directors also wish to thank Financial Institutions, Bankers, Central and State Governments, Foreign as well as Indian investors, architect, builders and traders for the consistent support received from them throughout the period.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS and OUTGO :

As required under Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule 1988, a statement showing the information relating to the Research and Development, Technology Absorption and Foreign Exchange earnings and outgo and forming part of the Directors Report are stated below :-

Form A requiring disclosure of particulars with respect to conservation of energy is not applicable in the case of our company.

1. Research & Development :

a) Specific area in which R & D carried out by the Company :- Research and Development has been continuously carried to reduce evaporation of oxygen gas and consumption of power.

b) Benefits derived as a result of the above R & D :- Loss on account of evaporation has been reduced considerably and less consumption of power.

c) Future Plant of Action :- Research and Development activities continued to reduce process wastage and utilisation of waste Nitrogen.

d) Expenditure on R & D :- Charged under primary heads of accounts.

2. Technology Absorption, Adaptation & innovation :-

a) Efforts made towards technology absorption, adaptation and innovation :- The Company has successfully absorbed the technology of the plant supplied by the supplier.

b) Benefits derived as a result of the above efforts :- Quality of oxygen gas produced is very high standard and acceptable to the consumers of the company's product.

c) Particulars relating to imported technology :- Nil

3. Foreign Exchange Outgo :- Nil

i) CIF of imported spares for : 75,63,882

Plant and Machinery.

---

Mar 31, 1999

The Directors have pleasure in submitting their report and the statement of accounts for the year ended 31st March, 1999.

FINANCIAL RESULTS AND OPERATIONS. 1999 1998

Gross Income 2400 2369

Gross Profit (before interest, depreciation and tax) 807 820

Interest 543 571

Depreciation 244 224

Provision for Tax 2 3

Net Profit 18 22

Profit Brought forward from Last year 170 148

Profit available for appropriation 188 170

Profit carried to Balance Sheet 188 170

Due to lower off take of oxygen by M/s Hindustan Copper Limited and overall recession in industry the overall performance of the Company has decreased. The current year has started well with M/s. Hindustan Copper Limited picking up our gaseous production and the balance liquid oxygen, liquid nitrogen and liquid argon being marketed by Air Liquide North India (P) Ltd. We are hopeful of ending the year 2000 with further improvement.

FUTURE OUTLOOK

The Company has taken steps to strengthen its marketing network and efforts are on with its major customer M/s. Hindustan Copper Limited to adhere to terms and conditions agreed upon initially.

With the capital restructuring of M/s. Hindustan Copper Limited the production capacity of M/s. Hindustan Copper Limited has also increased as a result of which there will be a marked improvement in the Company's production and consequently offtake of oxygen by M/s. Hindustan Copper Limited.

London Metal Exchange (L.M.E.) has also started showing upward trend and very soon increased demand for copper will be reflected in domestic as well as international markets.

DIVIDEND

Due to inadequate profits, the Directors regret their inability to declare any dividend for the year.

Y2K Compliance

During the year, the Company has been actively working on the year 2000 (Y2K) hardware/software problem and has already made a significant progress in this area. The Company has already taken a series of prudent and reasonable steps to minimise the risk of exposure to Y2K problem. Contingency Plans have been drawn up.

PUBLIC DEPOSITS

The Company has not invited or accepted any deposits from the public pursuant to the provisions of Section 58-A of the Companies Act, 1956.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 the information relating to Conservation of energy, Technology absorption, Foreign exchange earnings and outgo and forming part of the Directors' Report is stated in Annexure 'A'.

DIRECTORS

The term of office of Shri Rakesh S. Bhardwaj expired on 30th June 1999 and subject to the approval of members in Annual General Meeting the Board of Directors had in their meeting held on 23rd April, 1999 reappointed Shri Rakesh S. Bhardwaj for a period of five years.

At the forthcoming Annual General Meeting, Dr. G. Mukherjee retire in accordance with the provisions of the Companies Act, 1956 and being eligible, offer himself for reappointment. The directors recommend his re-appointment.

AUDITORS

M/s. Chaturvedi and Partners, Statutory Auditors of the Company retire at the conclusion of the Annual General Meeting and being eligible, offer themselves for reappointment.

They have furnished a certificate to the effect that the proposed appointment if made, will be in accordance with the provisions of Section 224 (1B) of the Companies Act, 1956.

PERSONNEL

The Directors hereby wish to place on record their appreciation and gratitude to the Company's personnel at all levels for their dedication, commitment, efficient and loyal services rendered during the year.

The Labour Management relations remained cordial and harmonious in general.

Regarding the information required to be given under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 it is hereby stated that no employee is getting remuneration of Rs. 50,000/- per month (Rs. fifty thousand) or Rs. 6,00,000/- (Rs. Six Lacs) per annum and hence not annexed to the Directors' Report.

FINANCIAL INSTITUTIONS, BANKS AND INVESTORS

The Directors also wish to thank Financial Institutions, Bankers, Central and State Government, Foreign as well as Indian investors, architect, builders and traders for the consistent support received from them throughout the period.

As required under Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule 1988, a statement showing the information relating to the Research and Development, Technology Absorption and Foreign Exchange earnings and outgo and forming part of the Directors Report are stated below

Form A requiring disclosure of particulars with respect to conservation of energy is not applicable in the case of our company.

1. Research & Development:

a) Specific area in which R & D carried out by the Company :-

Research and Development has been continuously carried to reduce evaporation of oxygen gas and consumption of power.

b) Benefits derived as a result of the above R & D :-

Loss on account of evaporation has been reduced considerably and less consumption of power.

c) Future Plant of Action

Research and Development activities continued to reduce process wastage and utilisation of waste Nitrogen.

d) Expenditure on R & D :-

Charged under primary heads of accounts.

2. Technology Adsorption. Adaptation & Innovation

a) Efforts made towards technology absorption, adaptation and innovation

The Company has successfully absorbed the technology of the plant supplied by the supplier.

b) Benefits derived as a result of the above efforts :-

Quality of oxygen gas produced is of very high standard and acceptable to the consumers of the company's product.

c) Particulars relating to Imported technology :- Nil.

3. Foreign Exchange Earnings & Outgo :

i) CIF of imported spares for Plant & Machinery 271327

ii) Expenses in Foreign Currency (Travelling) Swiss Frank 600 17250 U S Dollar 1613 69331 86581

---

Mar 31, 1998

The directors have the pleasure in presenting their 24th Annual Report on the operations of the company together with the Audited Accounts for the year ended 31st March 1998 and Auditor's Report thereon.

FINANCIAL RESULTS :

(Rupees in lakhs)

Year ended Year ended 31.3.1998 31.3.1997

Sales & Other Income 2393 2214 Gross Profit 845 737 Financial Expenses 596 495 Depreciation 224 214 Net Profit 25 28 Provision for Income Tax 3 4 Profit after tax 22 24 Profit brought forward from last year 148 124 Profit available for appropriation 170 148 Profit carried to Balance Sheet 170 148

YEAR IN RETROSPECT

Operations of the Company during the year are affected due to the lower offtake of oxygen gas by M/s. Hindustan Copper Ltd., the major customer resulting in closure of the 50 TPD Plant throughout the year. Inspite of the above sales and other income for the financial year increased to Rs. 2393 lakhs as against Rs. 2214 lakhs for the previous financial year. Profitability of the Company was also affected due to the sluggish market, stiff competition and liquidity crunch, resulting in the lower rate realisation for the products.

Company has entered into a Marketing agreement with Air Liquid North India Pvt Ltd Subsidiary of Air Liquide France a leading Gas Manufacturer for the supply of surplus liquid oxygen, Argon, and Nitrogen Gases.

DIVIDEND

Due to inadequate profits, your Directors regret for the inability to declare any dividend for the year.

PUBLIC DEPOSIT

The Company has not accepted any deposit from the public during the year and there are no overdue deposits as on the date of the Balance Sheet.

PARTICULARS OF EMPLOYEES :

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of employees) Rules, 1975 and forming part of the Directors Report for the year ended 31st March, 1996 are stated in Annexure-A.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO :

As required under Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule 1988, a statement showing the information relating to the Research and Development, Technology Absorption and Foreign Exchange earnings and outgo and forming part of the Directors Report are stated in Annexure-B.

Form A requiring disclosure of particulars with respect to conservation of energy is not applicable in the case of our company.

INDUSTRIAL RELATIONS :

Company's industrial relations continued to be cordial during the year under review.

DIRECTORS :

Shri. Ramrup Sharma and Shri V.P. Punj retires by rotation and being eligible offers themselves for re-appointment as directors.

AUDITORS :

M/s Chaturvedi & Partners, Statutory Auditor of the Company retire at the conclusion of ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Particulars as required under Companies (Disclosures of Particulars in the Report of Directors) Rules, 1988 and forming part of Directors Report for the year ended 31.3.1998.

1. Research & Development :

a) Specific area in which R&D carried out by the Company :-

Research and Development has been continuously carried to reduce evaporation of oxygen gas and consumption of power.

b) Benefits derived as a result of the above R & D :-

Loss on account of evaporation has bee reduced considerably and less consumption of power.

c) Future Plan of Action :-

Research and Development activities are continued to reduce process wastage and utilisation of waste Nitrogen.

d) Expenditure on R & D :-

Charged under primary heads of accounts.

2. Technology Absorption, Adapation & Innovation :-

a) Efforts made towards technology absorption, adapation and innovation :-

The Company has successfully absorbed the technology of the plant supplied by the supplier.

b) Benefits derived as a result of the above efforts :-

Quality of oxygen gas produced is of very high standard and acceptable to the consumers of the company's product.

c) Particulars relating to imported technology :-

Nil

3. Foreign Exchange Earnings & outgo :-

Nil

---

Mar 31, 1997

YEAR IN RETROSPECT

Operations of the Company during the year are affected due to the shut-down taken for maintenance by M/s. Hindustan Copper Ltd., the major customer resulting in closure of the unit for about 70 days and lower off-take of oxygen by them during the remaining period and also due to the power cuts during the month of January.,1997 for 20 days due to failure of Northern Grid. Inspite of the above sales and other income for the financial year increased to Rs.2216 lakhs as against Rs.2121 lakhs for the previous financial year. Profitability of the Company was also affected due to the sluggish market,stiff competition and liquidity crunch.

DIVIDEND

Due to inadequate profits, the Directors regret for their inability to declare any dividend for the year.

PUBLIC DEPOSIT

The Company has not accepted any deposit from the public during the year and there are no overdue deposits as on the date of the Balance Sheet.

PARTICULARS OF EMPLOYEES:

Information as per Section 217(2A) of the Companies Act,1956, read with the Companies (Particulars of employees) Rules, 1975 and forming part of the Directors Report for the year ended 31st March., 1997 are stated in Annexure-A.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS and OUTGO:

As required under Companies(Disclosure of Particulars in the Report of the Board of Directors) Rule 1988, a statement showing the information relating to the Research and Development, Technology Absorption and Foreign Exchange earnings and outgo and forming part of the Directors Report are stated in Annexure-B.

Form A requiring disclosure of particulars with respect to conservation of energy is not applicable in the case of our company.

INDUSTRIAL RELATIONS:

Company's industrial relations continued to be cordial during the year under review.

DIRECTORS:

Shri.V.B.Chaturvedi and Dr.G.Mukherjee retires by rotation and being eligible offers themselves for re-appointment as directors.

AUDITORS:

M/s Chaturvedi & Partners,Statutory Auditor of the Company retire at the conclusion of ensuing Annual General Meeting and being eligible offer themselves for reappointment.

ACKNOWLEDGEMENT

The Directors place on record their appreciation to various Central and State Government Authorities, Financial Institutions and Banks. They also wish to place their appreciation of the devoted services by executives, officers and staff of the Company for its success.

1. Research & Development:

a) Specific area in which R & D carried out by the Company : -

Research and Development has been continuously carried to reduce evaporation of oxygen gas and consumption of power.

b) Benefits derived as a result of the above R & D

Loss on account of evaporation has ben reduced considerably and less consumption of power

c) Future Plan of Action

Research and Development activities are continued to reduce process wastage and utilisation of waste Nitrogen.

d) Expenditure on R & D -

Charged under primary heads of accounts.

2. Technology Absorption, Adaptation & Innovation :-

a) Efforts made towards technology absorption adaptation and innovation

The Company has successfully absorbed the technology of the plant supplied by the supplier.

b) Benefits derived as a result of the above efforts

Quality of oxygen gas produced is of very high standard and acceptable to the consumers of the company's product.

c) Particulars relating to imported technology :- Nil

3. Foreign Exchange Earnings & Outgo:- Nil

---

Mar 31, 1995

Your directors have the pleasure in presenting their 21st Annual Report on the operations of the company together with Audited Accounts for the year ended 31st March, 1995 and Auditor's Report thereon.

(Rs. in lakhs)

For the year For the year ended on ended on 31.3.1995 31.3.1994

Sales & other Income 854.41 505.73 Gross Profit 306.73 279.58 Financial Expenses 42.49 80.07 Depreciation 56.21 46.35 208.03 153.16 Profit brought forward from last year. 58.92 23.96 Profit available for appropriation 266.95 177.12 Transfer to General Reserve 50.00 75.00 Proposed Dividend 179.95 43.20 Profit carried to Balance Sheet 37.00 58.92

DIVIDEND

The Directors recommend a dividend for the year ended 31st March, 1995, to be paid as follows, if approved by the Shareholders in the forth-coming Annual General Meeting.

(Rs. in lakhs) (a) On 23,80,260 Equity Shares @ Rs. 2.00 per shares 47.60 (b) On 73,33,333 Equity Shares @ Rs. 2.00 per share w.e.f. 30.7.1994 pro-rata 98.45 (c) On 60,06,700 Equity Shares @ Rs. 2.00 per share w.e.f. 19.12.1994 pro-rata 19.12.1994 33.90 ------- Total 179.95 --------

YEAR IN RETROSPECT

The company has again achieved good results. Sales and other income for the financial year under review were Rs. 854 lakhs as against Rs. 606 lakhs for the previous year registering an increase of 41%. Net Profit increased by 36% during the year from Rs. 153 lakhs in the previous year to Rs. 208 lakhs during the current year.

EXPANSION SCHEME

Your Directors are pleased to inform you that 120 TPD Industrial Gases Plant at Khetri was successfully commissioned and running satisfactorily. The implementation was affected due to delay in getting some equipments from foreign vendors.

Both 50 TPD & 120 TPD plants of the Company are running satisfactorily and Company hopes to achieve better results during the current year.

Projections V/s Performance:

The projections as per IDBI appraisal as reported in the Company's Prospectus dated 13th September 1994 with corresponding figures of actuals as per the audited accounts for the year ended 31st March, 1995 are as under:

Projections Actuals

Total income (Rs. in lakhs) 1640 854 Profit after tax (Rs. in lakhs) 480 208 Earning per share Rs. 3.06 2.31 Dividend (%) 25 20

RIGHTS OFFER

73,33,333 equity shares of Rs. 10/-each at a premium of Rs. 5/- were subscribed for and allotment was made to the applicants.

PUBLIC OFFER

Public offer of 60,00,000 equity shares of Rs. 10/- each at a premium of Rs. 5/- was oversubscribed by 38.05 times. Allotment out of the above 60,06,700 equity shares were allotted to Financial Institutions, Mutual Funds, Non-Resident Indians, Employees and the Public.

PARTICULARS OF EMPLOYEES

With reference to Section 217 (2A) of the Companies Act, 1956 there is no employee drawing salary more than Rs. 25,000/- per month during the year under review.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS and OUTGO

As required under Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule 1988, a statement showing the information relating to the Research and Development,Technology Absorption and Foreign Exchange earnings and outgo and forming part of the Directors Report is enclosed.

Form A requiring disclosure of particulars with respect to conservation of energy is not applicable in the case of our company.

INDUSTRIAL RELATIONS

Company's industrial relations continued to be cordial during the year under review.

DIRECTORS

Shri.V.B. Chaturvedi and Dr. G. Mukherjee retires by rotation and being eligible offers themselves for re-appointment as directors.

AUDITORS:

M/s Chaturvedi & Partners, Statutory Auditor of the Company retire at the conclusion of ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation to various Central and State Government Authorities, IDBI, IFCI, UTI, IDBI, AFIC and Banks for their valuable guidance and assistance. They also greatfully thanks the Public for the confidence shown in the Public offer made during the year.

Your Directors wish to place their appreciation of the devoted services by executives, officers and staff of the company for its success.

1. Research & Development:

a) Specific area in which R & D carried out by the Company

Research and Development has been continuously carried to reduce evaporation of oxygen gas and consumption of power.

b) Benefits derived as a result of the above R & D :-

Loss on account of evaporation has been reduced considerably and less consumption of power

c) Future Plan of Action :-

Research and Development activities are continued to reduce process wastage and utilisation of waste Nitrogen.

d) Expenditure on R & D :-

Charged under primary heads of accounts

2. Technology Absorption, Adaptation & Innovation

a) Efforts made towards technology absorption, adaptation and innovation The Company has successfully absorbed the technology of the plant supplied by the supplier

b) Benefits derived as a result of the above efforts :-

Quality of oxygen gas produced is of very high standard and acceptable to the consumers of the company's product.

c) Particulars relating to imported technology :- Nil

Foreign Exchange Earnings & Outgo :- Nil

---

Mar 31, 1994

Directors have the pleasure in presenting their 20th Annual Report on the operations of the company for the year ended 31st March, 1994

DIVIDEND The Directors recommend a dividend for the year ended 31st March, 1994, to be paid as follows, if approved by the Shareholders in the forth-coming Annual General Meeting.

(Rs. in lacs)

a. On 1,874,220 Equity Shares @ Rs.2.00 per shares subject to tax 37.48

b. On 506,040 Equity Shares @ Rs.2.00 per w.e.f. 7.9.93 pro-rata subject to tax 5.72 ------ Total 43.20 -----

YEAR IN RETRO-SPECT

The Company has against achieved goods reuslts, however performance of the company is affected due to the closure of HCL plant for about 3 months for routine overhauling. Sales and other income for the financial year under review were Rs.606 lakhs as against Rs.632 lakhs for the previous financial year. Net Profit was Rs.153.16 lakhs against Rs.111.15 lakhs for the previous Financial Year. EXPANSION SCHEME IDBI, IFCI, IRBI and UTI sanctioned term loan assistance to the extent of Rs.1100 lakhs, Rs.500 lakhs, Rs.300 lakhs and Rs.300 lakhs respectively for the implementation of proposed expansion scheme of Rs.4415 lakhs, for the installation of 120 TPD Industrial Gases Plant for the manufacture of oxygen, nitrogen and argon gases at Khetrinagar (Rajasthan). IDBI, IRBI and UTI disbursed Rs.929 lakhs, Rs.253 lakhs and Rs.300 lakhs respectively out of their term loans assistance. IDBI and AFIC contributed Rs.185 lakhs each towards their Right entitlements of equity shares of Rs.10/- each at premium of Rs.5/- share. UTI has agreed to subscribe to 10 lakhs equity shares of Rs.10/- each for cash at a premium of Rs.5/- per share aggregating to Rs.150 lakhs on firm allotment basis out of the company's proposed public issue of Rs.900 lakhs. Project implementation work is in advance stage. Civil Construction work is almost completed. Fabrication of 1500 Mtr pipeline for the supply of gas to HCL is completed. Almost all the electrical items reached at site and 60% items already erected. 90% of the indigenous machinery equipments arrived at site and their erection and commissioning work is in full swing. All the critical imported equipments for theplant from L'Air Liquide France the world leader in the field, arrived at Bombay Port and under custom clearance. The Company has already incurred an expenditure of Rs.2700 lakhs till date towards the implementation of the scheme. Barring unforeseen circumstances, Company hopes to start the commercial production by October, 1994.

ISSUE OF SHARES ON RIGHT BASIS During the year the Company has alloted 506,040 equity shares of Rs.10/- each at par. Out of which 400,000 equity shares were allotted to Asian Finance & Investment Corporation Limited, Manila, Phillipines and 106,040 shares were allotted to Shri R. S. Bhardwaj.

PUBLIC DEPOSITS The Company has not accepted any deposits from the public during the year.

RESEARCH AND DEVELOPMENT a. Specific area in which R&D carried out by the Company: Research and Development has been continuously carried to reduce evaporation of oxygen gas and consumption of power.

b. Benefits derived as a result of the above R&D: Loss on account of evaporation has been reduced considerably and less consumption of power.

c. Future Plant of Action: Research and Development activities are continued to reduce process wastages and utilisation of waste Nitrogen.

d. Expenditure on R&D: Charged under primary heads of accounts.

TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION: a. Efforts made towards technology absorption, adaptation and innovation: The Company has successfully absorbed the technology of the plant supplied by the supplier.

b. Benefits derived as a result of the above efforts: Quality of oxygen gas produced is of very high standard and acceptable to the consumers of the company's product.

c. Particulars relating to imported technology: Nil Foreign Exchange Earnings & Outgo : Nil