Bhagawati Gas Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2025

(i) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.

Contingent liabilities are disclosed unless the possibility of outflow of resources is remote.

Contingent assets are not recognised in the financial statements.

Contingent assets are disclosed when there is a possible inflow of economic benefits resulting from past events,
the realization of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain

future events not wholly within the control of the company. Alternatively, a contingent asset arises from past
events where it is either not probable that an inflow of economic benefits will occur or a reliable estimate of the
amount cannot be made.

(j) Employee Benefits:

Short Term Employee Benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services
rendered by employees are recognised as an expense during the period when the employees render the
services.

Post-Employment Benefits

Defined Contribution Plans

A defined contribution plan is a post-employment benefit plan under which the Company pays specified
contributions to a separate entity. The Company makes specified monthly contributions towards Provident
Fund, Superannuation Fund and Pension Scheme. The Company''s contribution is recognised as an expense in
the Profit and Loss Statement during the period in which the employee renders the related service.

Defined Benefit Plans

The liability in respect of defined benefit plans and other post-employment benefits is calculated using the
Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived
from employees'' services.

Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the Other
Comprehensive Income.

Employee Separation Costs

Compensation to employees who have opted for retirement under the voluntary retirement scheme of the
Company is charged to the Profit and Loss Statement in the year of exercise of option by the employee.

(k) Taxation:

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to
the extent that it relates to items recognised in the comprehensive income or in equity. In this case, the tax is
also recognised in other comprehensive income and equity.

Current Tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet
date.

Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and
assets are reviewed at the end of each reporting period.

(l) Cash and Cash Equivalents:

Cash and cash equivalents includes cash in hand and deposits with any qualifying financial institution repayable
on demand or maturing within three months of the date of acquisition and which are subject to an insignificant
risk of change in value.

(m) Foreign Currencies:

Company''s financial statements are presented in INR, which is also its functional currency.

Transactions and Ba1ances:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot
rates of exchange at the reporting date.

Exchange differences arising on settlement or translation of monetary items are recognised in profit or loss
except to the extent that exchange differences which are regarded as an adjustment to interest costs on foreign
currency borrowings are capitalized as cost of assets under construction. Additionally, exchange gains or losses
on foreign currency borrowings taken prior to April 1, 2016 which are related to the acquisition or construction
of fixed assets are adjusted in the carrying cost of such assets.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss
arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the
gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or
loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

(n) Revenue Recognition:

Revenue from contract with customer is recognised upon transfer of control of promised products or services to
customers on complete satisfaction of performance obligations for an amount that reflects the consideration
which the Company expects to receive in exchange for those products or services. Revenue is measured based
on the transaction price, which is the consideration, adjusted for discounts and other incentives, if any, as per
contracts with the customers. Revenue also excludes taxes or amounts collected from customers in its capacity
as agent.

Contract Liability

A contract liability is the obligation to transfer goods or services to a customer for which the Company has
received consideration (or an amount of consideration is due) from the customer. Contract liabilities are
recognised as revenue when the Company performs under the contract. The same is disclosed under Other
Current Liabilities.

(o) Interest Income:

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to
the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly

discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net
carrying amount on initial recognition.

(p) Financial Instruments:

Initial recognition

The company recognizes financial assets and financial liabilities when it becomes a party to the contractual
provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition,
except for trade receivables which are initially measured at transaction price. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value
through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of
financial assets are recognised using trade date accounting.

Subsequent measurement

Non-Derivative Financial Instruments

(i) Financial assets carried at amortised cost (AC) :

A financial asset is subsequently measured at amortised cost if it is held within a business model whose
objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial
asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.

(ii) Financial assets at fair value through other comprehensive income (FVTOCI):

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within
a business model whose objective is achieved by both collecting contractual cash flows and selling financial
assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding

(iii) Financial assets at fair value through profit or loss (FVTPL):

A financial asset which is not classified in any of the above categories are subsequently fair valued through
profit or loss.

Mutual funds - All mutual funds in scope of Ind-AS 109 are measured at fair value through profit and loss
(FVTPL).

Equity Instruments

All equity investments in scope of Ind-AS 109 are measured at fair value either as at FVTOCI or FVTPL. The
company makes such election on instrument-by-instrument basis.

For equity instruments measured as at FVTOCI, all fair value changes on the instrument, excluding dividends,
are recognized in the OCI. Equity instruments included within the FVTPL category are measured at fair value
with all changes recognized in the P&L.

Impairment of Financial Assets

The company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on
the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities,
deposits, trade receivables and bank balance

b) Financial assets that are debt instruments and are measured as at FVTOCI

c) Lease receivables

d) Trade receivables or any contractual right to receive cash or another financial asset

e) Loan commitments which are not measured as at FVTPL

f) Financial guarantee contracts which are not measured as at FVTPL

The company follows ''simplified approach'' for recognition of impairment loss allowance on:

• Trade receivables or contract revenue receivables; and

• All lease receivables

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it
recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial
recognition.

Financial Liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and
other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair
value due to the short maturity of these instruments.

De-Recognition of Financial Instruments

The company derecognizes a financial asset when the contractual rights to the cash flows from the financial
asset expire or it transfers the financial asset and the transfer qualifies for de-recognition under Ind AS 109. A
financial liability (or a part of a financial liability) is derecognized from the company''s balance sheet when the
obligation specified in the contract is discharged or cancelled or expires.

Fair Value of Financial Instruments

In determining the fair value of its financial instruments, the company uses a variety of methods and
assumptions that are based on market conditions and risks existing at each reporting date. The methods used to
determine fair value include discounted cash flow analysis, available quoted market prices. All methods of
assessing fair value result in general approximation of value and such value may vary from actual realization on
future date.

(q) Financial Risk Management:

The Company''s principal financial assets include loans and advances, trade and other receivables, and cash and
cash equivalents that are generated from its operations.

This note presents information regarding the company''s exposure, objectives, policies and processes for
measuring and managing these risks

The Company''s activities expose it to the following financial risks, namely:

Credit risk

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To
manage this, the Company periodically assesses the financial reliability of customers, taking into account the
financial condition, current economic trends, and analysis of historical bad debts and ageing of account
receivables. Individual risk limits are also set accordingly. The Company considers the probability of default
upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing
basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the
Company compares the risk of default occurring on the asset as at the reporting date with the risk of default as
at the date of initial recognition. The Company considers reasonable and supportive forward-looking
information.

Liquidity risk

Liquidity risk is defined as the risk that the Group will not be able to settle or meet its obligations on time or at a
reasonable price. The lower management is responsible for maintenance of liquidity, continuity of funding as
well as timely settlement of debts. In addition, policies related to mitigation of risks are overseen by senior
management. Management monitors the Company''s net liquidity position on the basis of expected cash flows
vis-a-vis debt service fulfilment obligation.

Market risk

Market risk is the risk of loss of future earnings, fair value or future cash flows arising out of change in the price
of a financial instrument. These include change as a result of changes in the interest rates, foreign currency
exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market
risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign
currency receivables, payables and loans and borrowings.

CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINITY

Accounting Policies, Changes in Accounting Estimates and Errors:

The amendments will help entities to distinguish between accounting policies and accounting estimates. The
definition of a change in accounting estimates has been replaced with a definition of accounting estimates.
Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject
to measurement uncertainty”. Entities develop accounting estimates if accounting policies require items in
financial statements to be measured in a way that involves measurement uncertainty. The Company does not
expect this amendment to have any significant impact in its financial statements.

When preparing the financial statements, management undertakes a number of judgements, estimates and
assumptions about the recognition and measurement of assets, liabilities, income and expenses.

• Recognition of deferred tax assets - The extent to which deferred tax assets can be recognized is based
on an assessment of the probability of the Company''s future taxable income against which the deferred tax
assets can be utilized.

• Evaluation of indicators for impairment of assets - The evaluation of applicability of indicators of
impairment of assets requires assessment of several external and internal factors which could result in
deterioration of recoverable amount of the assets.

• Recoverability of advances/receivables - At each balance sheet date, based on discussions with the
respective counter-parties and internal assessment of their credit worthiness, the management assesses
the recoverability of outstanding receivables and advances. Such assessment requires significant
management judgement based on financial position of the counter-parties, market information and other
relevant factors.

• Defined benefit obligation (DBO) - Management''s estimate of the DBO is based on a number of critical
underlying assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate
and anticipation of future salary increases. Variation in these assumptions may significantly impact the
DBO amount and the annual defined benefit expenses.

• Fair value measurements - Management applies valuation techniques to determine the fair value of
financial instruments (where active market quotes are not available) and non-financial assets. This
involves developing estimates and assumptions consistent with how market participants would price the
instrument. Management bases its assumptions on observable data as far as possible but this is not always
available. In that case management uses the best information available. Estimated fair values may vary
from the actual prices that would be achieved in an arm''s length transaction at the reporting date.

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Mar 31, 2014

(Figures in Rs.) 1. Contingent liabilities not provided for:

For the For the Year Year Ended Ended Particulars March 31, March 2014 31,2013

Counter 10,000 10,000

Guarantee given to bankers for guarantees issued by the banker (Net of margins) Security 23,083,887 23,083,887

provided against amount withdrawn from the Hon''ble High Court.(refer note 26)

2. The company had, in an earlier year, won an arbitration award in respect of an amount aggregating to Rs. 23,083,887 recoverable from Hindustan Copper Limited (HCL) along with interest. The Additional District Judge, Khetri, Rajasthan has dismissed the appeal filed by HCL against the arbitration award and passed an order for decree. The HCL has preferred an appeal against the said order in the High Court of Judicature for Rajasthan at Jaipur bench, Jaipur. The Hon''ble High Court have admitted HCL''s appeal and granted interim stay and directed HCL to deposit the award amount of Rs. 23,083,887. The Honorable Supreme Court on an appeal of HCL had modified the award and the company was permitted to withdraw the said amount by furnishing security to the satisfaction of the Court. The company has withdrawn the money by furnishing the said Security. The case is pending in the High Court of Rajasthan.

3. An arbitration award in respect of an amount aggregating to Rs. 68,820,333 with interest thereon, claimed from HCL is passed by the arbitral tribunal in favour of the company. Hindustan Copper Limited (HCL) has preferred an appeal under Section 34 of The Arbitration and Conciliation Act, 1996 against the award in the court of the District Judge, Jhunjhunu. The case is being heard by the court as per procedure.

4. Trade Receivable aggregating to Rs. 57,731,233 and other Receivable Rs. 81,920,827 are overdue for recovery. The management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

5. Advances of Rs. 7,218,468 (7,323,468) are considered doubtful of recovery. The management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

6. The company has given interest free loan aggregating to Rs. 17,964,928 as at March 31, 2014 to a borrower company. The borrower company had given a proposal to the Company to convert its borrowings into Equity. The company is still in the process of finalization/ acceptance of the proposal.

7. During the year, Long term gas supply agreement with the customer has expired. The company is negotiating to extend the same as the customer was not able to purchase minimum guaranteed quantity as per the agreement and their plant remained closed. The restoration of operation of the company dependent upon the extension of the supply agreement.

8. There are no dues of micro, small and medium enterprises. The information required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis to information available with the company.

9. Related Party Disclosure: List of related parties

Relationship Name of the related party

Parties under common control Bhagawati International Limited

Bhagawati Combat Systems Limited Lavino Portfolios Private Limited Kamakshi Bricon Private Limited Flow Tech Hotels Private Limited

Key management personnel r. Rakesh S. Bhardwaj (Managing Director)

and their relatives

Mrs. Shachi Bhardwaj (Relative of Managing

Director)

Mr. Vivek Sharma (Whole Time Director)

10. Balance due to/ from various parties are subject to confirmations/ reconciliations thereof. Management does not consider any adjustment on completion of reconciliation/ confirmation.

11. Employee Benefits

The following table sets out the status of the gratuity plan and leave encashment and the amounts recognized in the Company''s financial statements as at March 31, 2014.

12. Figures of previous years have been regrouped or rearranged wherever found necessary. As per our report of even date attached.

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Mar 31, 2011

1. Contingent liabilities not provided for:

(Amount in Rs.)

Year Ended Year Ended Particulars March 31, 2011 March 31,2010

Counter Guarantee given to bankers for guarantees issued by the banker (Net of margins) 510,000 510,000

2. The company had, in an earlier year, won an arbitration award of Rs 23,083,887 recoverable from Hindustan Copper Limited (HCL) along with interest of Rs.12,092,452 till the date of reference and interest @9% on Rs. 35,176,339 from the date of reference till realization. The Additional District Judge, Khetri, Rajasthan has dismissed the appeal filed by HCL against the arbitration award and passed an order for decree. The HCL has preferred an appeal against the said order in the High Court of Judicature for Rajasthan at Jaipur bench, Jaipur. The Hon’ble High Court have admitted HCL’s appeal and granted interim stay and directed HCL to deposit the entire amount of award. The Honorable Supreme Court on an appeal of HCL had modified the order and directed the deposit of Rs. 23,083,887 only and the company was permitted to withdraw the said amount by furnishing security to the satisfaction of the Court. The company has withdrawn the money by furnishing the said Security. The case is pending in the High Court of Rajasthan.

3. Another arbitration award of Rs. 68,820,333 with interest thereon quantified till the date of award (May 09, 2009) Rs. 39,159,711, aggregating to Rs.107,980,044 (Rs. Te n crore seventy nine lakh eighty thousands forty four only) claimed from HCL is passed by the arbitral tribunal in favour of the company. Hindustan Copper Limited (HCL) has preferred an appeal under Section 34 of The Arbitration and Conciliation Act, 1996 against the award in the court of the District Judge, Jhunjhunu. The final argument of the case is being heard by the court.

4. Income for the year ended March 31, 2011, aggregating to Rs 52,715,525 comprise of minimum off take charges and other claims recoverable from the customer. The Company has recognised minimum off take charges which it expects to recover from the customer.

5. Advances of Rs. 23,911,431 (Rs. 23,911,431), Security Deposit of Rs. 300,000 (Rs. 300,000) and Sundry Debtors of Rs. Nil (Rs. 9,978,855) are considered doubtful of recovery. The management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

6. The Company has not given interest free loan aggregating to Rs.4,40,22,524 as at March 31, 2011 to a borrower company. The borrower company has given a proposal to the Company to convert its borrowings into Equity. The Company is in the process of finalization/acceptance of the proposal.

7. The company has not received the required information from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence the information could not be compiled and disclosed.

8. Balance due to /from various parties are subject to confirmations/ reconciliations thereof. Management does not consider any adjustment on completion of reconciliation /confirmation.

9. Figures of previous year have been regrouped or rearranged wherever found necessary.

10. Schedules 1 to 17 form an integral part of the accounts and have duly been authenticated.

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Mar 31, 2010

1. Contingent liabilities not provided for: (Amount in Rs.)



Particulars Year ended Year ended March 31, 2010 March 31, 2009

Counter Guarantee given to bankers for guarantees 500,000 10,000 issued by the banker (Net of margins)

2. Estimated amount of contracts remaining to be executed on capital account and not provided for [net of advances Rs. 0.00 (previous year Rs. 0.00)].

3. The company has not received the required information from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence the information could not be compiled and disclosed.

4. The company had won an arbitration award in respect of an amount aggregating to Rs. 23,083,887 recoverable from Hindustan Copper Limited (HCL) along with interest. The Additional District Judge, Khetri, Rajasthan has dismissed the appeal filed by HCL against the arbitration award and passed an order for decree. The HCL has preferred an appeal against the said order in the High Court of Judicature for Rajasthan at Jaipur bench, Jaipur. The Honble High Court have admitted HCLs appeal and granted interim stay and directed HCL to deposit the award amount of Rs. 2,3083,887. The Honorable Supreme Court on an appeal of HCL had modified the award and the company was permitted to withdraw the said amount by furnishing security to the satisfaction of the Court. The company has withdrawn the money by furnishing the said Security. The case is pending in the High Court of Rajasthan.

5. An arbitration award in respect of an amount aggregating to Rs. 68,820,333 with interest thereon, claimed from HCL is passed by the arbitral tribunal in favour of the company. Hindustan Copper Limited (HCL) has preferred an appeal under Section 34 of The Arbitration and Conciliaton Act, 1996 against the award in the court of the District Judge, Jhunjhunu. The case is being heard by the court as per procedure.

6. Advances of Rs. 23,911,431 (Rs. 22,003,031), Security Deposit of Rs. 300,000 (? 300,000) and Sundry Debtors of Rs. 9,978,855 are considered doubtful of recovery. The management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

7. The company has entered in to an agreement with Sunflag Iron & Steel Company Limited (Sunflag) to sell its Air Separation Plant (120 TPD) to be installed at Sunflags Plant location at Bhandara Road (Warhi), Maharashtra. During the year, major part of the said plant has been delivered by the company. However, the title of the plant will pass to the Sunflag on completion of delivery. Pending completion of delivery and transfer of title, the cost of plant having the aggregate net written down value of Rs. 93,482,377 (Gross value Rs. 393,213,932 and accumulated depreciation of Rs. 299,731,555) related to such plant.

8. Sitting fee paid to the Directors is disclosed under Schedule 14 - Administrative & Other Expenses.

9. In accordance with Accounting Standard (AS 22) on "Accounting for Taxes on Income" issued by the ICAI, the company has accounted for deferred taxes during the year.

10. Balance due to /from various parties are subject to confirmations/ reconciliations thereof. Management does not consider any adjustment on completion of reconciliation /confirmation.

11. Employee Benefits

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity and leave encashment were carried out at March 31, 2010 by an actuary. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

12. Figures of previous year have been regrouped or rearranged wherever found necessary.

13. Schedules 1 to 17 forms an integral part of the accounts and have duly been authenticated.

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Mar 31, 2009

1. Contingent liabilities not provided for:

Particulars Year ended Year ended

March 31, 2009 March 31, 2008 Rupees Rupees

Counter Guarantee given to bankers for guarantees issued by the banker (Net of margins) 10,000 26,66,000

2. Estimated amount of contracts remaining to be executed on capital account and not provided for [net of advances of Rs. Nil (previous year Rs. Nil)].

3. The company has not received the required information from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence the information could not be complied and disclosed.

4. The Company had made claims aggregating to Rs. 96,930,680 on Hindustan Copper Limited (HCL) in earlier years towards non-compliance of agreement including Minimum Off-take Guarantee. HCL had also preferred claim for Rs. 61,800,689 on the Company for non-supply. Both the parties have disputed the claims of each other and referred the matter to arbitrator for settlement. Subsequent to the year end, the case has been decided in favor of the Company and its claim of Rs. 68,820,333 and interest thereon aggregating to Rs. 39,159,711 and the claim of HCL was not allowed. The Award is under appealable period.

5. The company had won an Arbitration award in respect of an amount aggregating to Rs. 23,083,887 recoverable from HCL. The Additional District Judge, Khetri, Rajasthan has dismissed the appeal filed by HCL against the arbitration award and passed an order for decree. The HCL has preferred an appeal against the said order in the High Court of Judicature for Rajasthan at Jaipur bench, Jaipur. The Honble High Court have admitted HCLs appeal and granted interim stay and directed HCL to deposit the award amount of Rs. 23,083,887 and the Company was permitted to withdraw the said amount by furnishing security to the satisfaction of the Court and filling undertaking for restitution with interest. The Company has withdrawn the money by furnishing the said documents.

6. Advances of Rs. 22,003,031 (22,002,981) and Security Deposit of Rupees 300,000 (300,000) are considered doubtful of recovery. The management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

7. The Company had entered into an agreement with Sunflag Iron & Steel Company Limited (Sunfiag) to provide its Air Separation Plant (120 TPD) on lease for a period of ten years at Sunflags Plant location at Bhandara, Maharashtra. Subsequent to year ended, Sunflag has agreed to buy the said plant and an agreement has been entered into for this purpose.

8. Sitting fee paid to the Directors is disclosed under Schedule 15 - Administrative & Other Expenses.

9. Balance due to /from various parties are subject to confirmations / reconciliations thereof. Management does not consider any adjustment on completion of reconciliation /confirmation.

10. Employee Benefits

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity and leave encashment were carried out at March 31, 2009 by an actuary. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

11. Figures of previous year have been regrouped or rearranged wherever found necessary.

12. Schedulesl to 17 forms an integral part of the accounts and have duly been authenticated.

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Mar 31, 2007

1. Contingent liabilities not provided for:

Particulars Year ended Year ended March 31, 2007 March 31, 2006 Rupees Rupees Counter Guarantee given to bankers for guarantees issued by 10,000 10,000 the banker (Net of margins)

2. Estimated amount of contracts remaining to be executed on capital account and not provided for [net of advances of Rs. 2,256,052 (previous year Rs. Nil) Rs. 17,240,350 (previous year Rs. Nil).

3. a. There are no outstanding dues to Small Scale Industrial Undertaking as at March 31, 2007.

b. The Company has initiated the process of identification of suppliers registered under the Micro, Small and Medium Enterprises Development Act, 2006 which comes into force with effect from October 2, 2006. The Company has, however, not received the required information from the suppliers regarding their status under the said Act and hence the information under the Act could not be compiled and disclosed.

4. The Company had made claims aggregating to Rs. 96,930,680 on Hindustan Copper Limited (HCL) in earlier years towards non-compliance of agreement including Minimum Off-take Guarantee. HCL had also preferred claim for Rs. 61,800,689 on the Company for non-supply. Both the parties have disputed the claims of each other and referred the matter to arbitrator for settlement. In view of pending arbitration award, no accounting has been done by the management in respect of amount recoverable from or payable to HCL.

5. The company had won an Arbitration award in respect of an amount aggregating to Rs. 23,083,887 recoverable from HCL. The Additional District Judge, Khetri, Rajasthan has dismissed the appeal filed by HCL against the arbitration award and passed an order for decree. The HCL has preferred an appeal against the said order in the High Court of Judicature for Rajasthan at Jaipur bench, Jaipur. In view of favorable award / order, amount recoverable is considered good and recoverable.

6. Advances of Rs 22,002,981 (23,702,981) and Security Deposit of Rupees 300,000 (300,000) are considered doubtful of recovery. The management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

7. The Company had entered in to an agreement with Sunflag Iron & Steel Company Limited (Sunflag) to provide its Air Separation Plant (120 TPD) on lease for a period of ten years from the date of commencement of supply of product to Sunflag and can be renewed for a further period of ten years. Pursuant to the agreement, the Air Separation Plant will be shifted to Sunflags Plant location at Bhandara Road (Warhi), Maharashtra.

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Mar 31, 2006

ANNUAL REPORT 2005-2006

NOTES ON ACCOUNTS

I. SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF ACCOUNTING

i) Financial Statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles, the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and relevant provisions of the Companies Act, 1956.

ii) The Company follows the mercantile system of accounting & recognizes income & expenditure on accrual basis except those with significant uncertainties.

2. FIXED ASSETS

Fixed assets are stated at their cost of acquisition or construction less accumulated depreciation. Cost of acquisition or construction is inclusive of freight, duties, taxes, incidental expenses and borrowing costs related to such acquisition or construction.

Fixed Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the income statement. For items of fixed assets carried at cost, the recoverable amount is the higher of an asset's net selling price and value in use. The net selling price is the amount obtained from the sale of an asset in an arm's length transaction while value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if not possible for the cash generating unit. Impairment loss recognised for an asset in earlier accounting periods is reversed, to the extent of its recoverable amount, if there has been change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised.

3. DEPRECIATION

Depreciation on fixed assets is provided for on the Straight Line method in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956.In respect of additions or deletions made during the year, depreciation has been calculated on actual basis from the date of such additions or up to the date on which the asset has been discarded, as the case may be.

4. INVENTORIES

Inventories have been valued at lower of cost or net realizable value. In respect of stores and spares, cost has been arrived at on FIFO basis. Scrap has been valued at estimated net realizable value.

5. REVENUE RECOGNITION

i) Revenue from sales is recognized on dispatch of goods from the factory. Sales are inclusive of excise duty but exclusive of sales tax.

ii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

6. FOREIGN CURRENCY TRANSACTIONS

i) Transactions denominated in the foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

ii) Monetary items denominated in foreign currencies other than those covered by forward exchange contracts are translated in to rupee equivalent at the rates of exchange prevailing on the Balance Sheet date. In the case of forward contract the difference between the forward rate and the exchange rate on the date of transaction is recognized as income or expense over the life of the contract.

iii) All exchange differences arising on settlement/conversion of foreign currency transactions, are recognized as income or expenses in the Profit & Loss account, except in cases where they relate to the acquisition of fixed assets, in which case they are adjusted in the carrying cost of the asset.

7. INVESTMENTS

Investments are classified in to current and long term investments. Current investments are stated at the lower of cost and fair value. Long term investments are valued at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investments.

8. RETIREMENT BENEFITS

i) Retirement benefits in the form of Provident Fund is accounted on accrual basis and charged to the Profit & Loss Account.

ii) Provision for liability towards gratuity to employees and unavailed earned leave benefits is made on the basis of actuarial valuation.

9. SEGMENT REPORTING

The business of the company consists of Manufacturing of Single Product i.e. Gases. Therefore the Accounting Standard (AS-17), Segment Reporting is not applicable.

10. LEASES

Finance leases or similar arrangement, which effectively transfer to the company substantially all the risks and benefits incidental to ownership of the leased items, are capitalized and disclosed as leased assets. Finance charges are charged directly against income. Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased Items are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on a basis, which reflect the time pattern of such payment appropriately.

11. EARNINGS PER SHARE

The earnings considered in ascertaining the company's Earnings per Share (EPS) comprises the Net Profit or Loss for the period after tax and extra ordinary items. The basic EPS is computed on the basis of weighted average number of equity shares outstanding during the year. The number of shares for computation of diluted EPS comprises of weighted average number of equity shares considered for deriving basic EPS and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year unless they are issued at a later date. The diluted potential equity shares are adjusted for the proceeds receivable assuming that the shares are actually issued at fairvalue. The number of shares arid potentially dilutive shares are adjusted for shares splits/reverse share splits (consolidation of shares) and bonus shares, as appropriate.

12. TAXES ON INCOME

Tax expense for the year comprises of current tax and deferred tax. Current taxes are measured at the current rate of tax in accordance with provisions of the Income Tax Act, 1961.

Deferred tax Assets and Liabilities are recognized for future tax consequences attributable to the timing differences that result between taxable profit and the profit as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized on unabsorbed depreciation and carry forward of losses under tax laws to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Profit & Loss Account in the year of change.

13. CONTINGENT LIABILITIES Contingent liabilities are determined on the basis of available information and are disclosed byway of note to accounts.

II. NOTES TO ACCOUNTS

1. Contingent liabilities not provided for: Particulars Year ended Year ended March 31, 2006 March 31, 2005 Rupees Rupees

Counter Guarantee given to bankers for guarantees issued by the banker (Net of margins) 10,000 10,000 Corporate guarantee - 5,100,000

2. There are no outstanding dues to Small Scale Industrial Undertaking as at March 31, 2006.

3. The Company had made claims aggregating to Rs. 96,930,680 on Hindustan Copper Limited (HCL) in earlier years towards non-compliance of agreement including Minimum Off-take Guarantee. HCL had also preferred claim for Rs.61,800,689 on the Company for non-supply. Both the parties have disputed the claims of each other and referred the matter to arbitrator for settlement. In view of pending arbitration award, no accounting has been done by the management in respect of amount recoverable from or payable to HCL.

4. The company had won an Arbitration award in respect of an amount aggregating to Rs. 23,083,887 recoverable from HCL. The Additional District Judge, Khetri, Rajasthan has dismissed the appeal filed by HCL against the arbitration award and passed an order for decree. The HCL has preferred an appeal against the said order in the High Court of Judicature for Rajasthan at Jaipur bench, Jaipur. In view of favorable award/order, amount recoverable is considered good and recoverable.

5. Advances of Rs 2,06,02,981 (2,55,32,981), Share application money Rs.31,00,000 (31,00,000) and Security Deposit of Rupees 300,000 (300,000) are considered doubtful of recovery. The management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

6. The Company has, during the year, entered in to an agreement with Sunflag Iron & Steel Company Limited ('Sunflag') to provide its 'Air Separation Plant' (120 TPD) on lease for a period of ten years from the date of commencement of supply of product to Sunflag and can be renewed for a further period often years. Pursuant to the agreement, the Air Separation Plant will be shifted to Sunflag's Plant location at Bhandara Road (Warhi), Maharashtra.

7. Related Party Disclosure: List of related parties Relationship Name of the related party Parties under common control Bhagawati International Limited Paramahansa Bhagawati Combat Systems Limited Lavino Portfolios Private Limited Ramrup Credit & Leasing Private Limited Hill Queen Investments Private Limited Shiva Gases (Partnership firm)

Key Management personnel : Mr. R.S.Bhardwaj, and their relatives Managing Director Mrs. Shachi Bhardwaj

Summary of the Transactions with the above related parties are given below:

Nature of Key management transaction personnel Parties under and their relatives common control March March March March 31, 2006 31, 2005 31, 2006 31, 2005

Advances Given - - 3020000 2272200 Advances repaid - - 1550000 14864665 Payment of Rent 7200000 2880000 - - Remuneration 510150 560524 - - Balance outstanding (Cr) (Cr) (Dr) (Cr) at the year end 1417306 717306 20000 3400000 Nature of Key management Total March March 31, 2006 31, 2005

Advances Given 3020000 2272,200 Advances repaid 1550000 14864665 Payment of Rent 7200000 2880000 Remuneration 510150 560524 Balance outstanding (Cr) (Cr) at the year end 1397306 4117306

Disclosure of Material Transactions with Related Parties:

Particulars Year Ended Year Ended March 31, 2006 March 31, 2005 (Rs) (Rs) Advances Given Paramahansa Bhagawati Combat Systems Limited 3,020,000 2,272,200

Advances repaid Bhagawati International Limited 1,550,000 14,864,665

Payment of Rent Mrs. Sachi Bhardwaj 7,200,000 1,440,000

Mrs Neha Sharma - 1,440,000

8. Sitting fee paid to the Directors is disclosed under Schedule 14- 'Administrative & Other Expenses.'

9. In accordance with Accounting Standard (AS 19) 'Leases' issued by the ICAI, the total of minimum payments at the balance sheet date, for each of the following periods in respect of Hire Purchase Finance are:

Principal Interest

Not later than one year 381,303 21,273 (449,640) (51,572) Later than one year and not laterthan five years, 104,397 1,382 (485,700) (22,649) Total 485,700 22,655 (935,340) (74,221)

10. In accordance with Accounting Standard (AS 22) 'Accounting for Taxes on Income' issued by the ICAI, the company has accounted for Deferred Taxes during the year.

Following are the major components of deferred tax assets/(liabilities):

Current year Component As at (charge) As at March 31, 2005 /credit March 31, 2006 Deferred Tax Liability Difference in depreciation between Accounting books and Tax Return (69,658,888) (15,957,272) (53,701,616) Total (69,658,888) (15,957,272) (53,701,616) Deferred Tax Assets Brought forward losses and unabsorbed depreciation 24,110,079 1,932,178 22,177,901 Provision for retirement benefits 750,200 (116,093) 866,293 Other items allowable on payment basis 7,195,676 3,493,076 3,702,600 Total 32,055,955 5,309,161 26,746,794 (37,602,933) (10,648,111) (26,954,822)

11. Earnings per Share:

Basic and diluted earnings per share Year ended Year ended March 31, 2006 March 31, 2005 Rupees Rupees

A. Number of Shares 15,720,293 15,720,293 Before extra ordinary items Profit/Loss after tax but before extra ordinary items 20,427,401 17,279,556 Basic & diluted EPS 1.30 1.1 After extra ordinary items Profit/Loss after tax 20,427,401 (23,273,990) Basic & diluted EPS 1.30 (1.48)

Reconciliation of Profit/Loss for the purpose of calculating EPS before extra ordinary items

Profit/loss as per Profit & Loss Account 20,427,401 (23,273,990) Add/Less: Extra ordinary items - 40553546 Adjusted Profit/Loss 20,427,401 17,279,556

12. Managerial Remuneration

Managerial remuneration paid during the financial year to the Managing Director. Year ended Year ended March 31, 2006 March 31, 2005

Salary & allowances 4,80,000 480,000 Contribution to Provident Fund 9,360 9,360 Other benefits 30,150 71,164 Total 5,19,510 560,524

Since the employee-wise break-up of liability on account of gratuity based on actuarial valuation is not ascertainable, the amount relatable to Managing Director could not be included in the above figures.

13. Payment to Auditors:

Year ended Year ended March 31, 2006 March 31, 2005

(A) Statutory Auditors:

Audit Fee 66,120 66,120 Tax audit Fee 16,530 16,860 Limited Review of Results 26,448 26,316 In other capacity For Certification work 2,000 2,160 Reimbursement of expense 3,220 9,220 Total (A) 1,14,318 120,676 (B) Cost Auditors Audit Fee 13,224 13,224 Total (B) 13,224 13,224 Total (A+B) 1,27,542 133,900

14. Balance due to/from various parties are subject to confirmations/ reconciliations thereof. Management does not consider any adjustment on completion of reconciliation/confirmation.

15. Additional information pursuant to the provisions of paragraph 3, 4C and 4D of Part-II of Schedule VI to the Companies Act, 1956:

A. Particulars of Capacity (In Thousands)

Class of Goods Capacity Capacity Installed* Licensed (On triple shift basis) (NM3)

Oxygen N.A. 43,800 Nitrogen N.A. 876 Argon N.A. 613

* As certified by the management and relied upon by the Auditor being a technical matter.

B. Particulars in respect of Production, Sales and Stocks of Finished goods: Class of Opening Stock Production Goods Unit Qty. Value Qty. Qty.

Oxygen 11 64,062 20532 20491 NM3 (40) (2,79,077) (4978) (5007) Nitrogen 1 18,378 273 272 NM3 (8) (51,546) (34) (41) Argon 2 45,444 141 142 NM3 (7) (87,234) (58) (63) Total 14 1,17,884 20946 20905 (55) (4,17,857) (5070) (5111)

Class of Sales Closing stock Goods Unit Value Qty. Value

Oxygen 14,60,59,887 52 3,66,652 NM3 (4,20,54,628) (11) (64,062) Nitrogen 18,70,074 2 15,268 NM3 (2,70,275) (1) (8,378) Argon 60,35,316 1 27,664 NM3 (20,51,957) (2) (45,444) Total 15,39,65,277 55 4,09,584 (4,43,76,860) (14) (1,17,884)

C. Particulars in respect of Purchases, sales and Stocks of Finished goods purchased for resale:

Class of Goods Opening Stock Purchases Unit Qty. Value Qty. Value

Power Nos 13 47,996 - - Cells (13) (47,996) - - Polymers Kgs 1473 7,43,970 - - (1473) (29,75,880) - - Total 1486 7,91,966 - - (1486) (30,23,876) - -

Class of Goods Sales/adjustment Closing stock Unit Qty. Value Qty. Value

Power Nos - - 13 47,996 Cells - - (13) (47,996) Polymers Kgs 1473 7,43,970 0 0 - (22,31,910) (1473) (7,43,970) Total 1473 7,43,970 13 47,996 - (22,31,910) (1,486) (7,91,966)

D. Raw Material Consumption: Atmospheric air is the raw material, which is not purchased.

E. Value of imported & indigenous Stores & Spares consumed and percentage of each of the total consumption:

Particulars Year ended Year ended March 31, 2006 March 31, 2005 Value % Value % Stores & Spares Imported - - - - Indigenous 13,33,424 100 4,35,606 100 Total 13,33,424 100 4,35,606 100

F. CIF value of Imports:

Components & spare parts for repair 14,08,534

G. Expenditure in Foreign Currency (On Accrual Basis)

Traveling Expenses 1,03,748

16. Figures of previous year have been regrouped or rearranged wherever found necessary.

17. Schedules 1 to 19 forms an integral part of the accounts and have duly been authenticated.

For CHATURVEDI & PARTNERS FOR AND ON BEHALF OF THE BOARD Chartered Accountants

R.N. CHATURVEDI R.S. Bhardwaj Capt. S. Ramaprasad Partner Chairman & Managing Director Membership No.: 92087 Director

New Delhi September 1, 2006.

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Mar 31, 2005

1. Contingent liabilities not provided for:

Particulars Year Ended Year ended March 31, 2005 March 31, 2004 Rupees Rupees

Counter Guarantee given to bankers for guarantees issued by the banker (Net of margins) 10,000 10,000

Corporate guarantee 5,100,000 5,100,000

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances):

Rupees Nil (Previous year Rupees NIL).

3. There are no outstanding dues to Small Scale Industrial Undertaking as at March 31, 2005.

4. The company has won an Arbitration award of Rs. 23,083,887/- with interest under 50 TPD contract against Hindustan Copper Ltd (HCL). HCL has filed appeal against the said award.

The company has written off Sundry Debtors to the extent of Rs.68,919,840/- as unrecoverable debts out of Rs.112,274,676/-. The balance amount, which includes arbitral amount is recoverable.

5. The Company had made claims aggregating to Rs. 96,930,680 on Hindustan Copper Limited (HCL) in earlier years towards non-compliance of certain issues including Minimum Off-take Guarantee under 120 TPD contract. HCL had also preferred claim under Penalty for Rs,61,800,689/- on the Company towards non-supply of oxygen. Both the parties have disputed the claims of each other and referred the matter to arbitrator for settlement. In view of pending arbitration award, no accounting had been considered necessary by the management in respect of amount recoverable from or payable to HCL.

6. Advances of Rs.2,55,32,981 (2,58,72,981), Share application money Rs. 31,00,000 (31,00,000) and Security Deposit of Rupees 300,000 (300,000) are considered doubtful of recovery. The management is hopeful of recovering the amount progressively and accordingly provision there against is not considered necessary at this stage by the management.

7. Company has written back the excess interest on term loans charged in the Profit & Loss Account in the earlier years there is no term loan interest liability on the Company as on date.

8. The Companys contract with its customer M/s Hindustan Copper Ltd.(HCL) for supply of oxygen had expired on 26/06/04. The Companys ability to continue its operation and as `going concern depended upon further renewal of the contract. HCL has entered in to a new Purchase agreement with the Company on May 5,2005 valid for a period of seven years.

9. "Prior year adjustments" represents: -

Particulars Year ended Year Ended March 31, 2005 March 31, 2004 (Rs.) (Rs.)

Legal & Professional 30,590 Nil

11. Sitting fee paid to the Directors is disclosed under Schedule 14- Administrative & Other Expenses

12. In accordance with Accounting Standard (AS 19) "Leases" issued by the ICAI, the total of minimum payments at the balance sheet date, for each of the following periods in respect of hire purchase finance are:

Principal Interest Not later than one year

449,640 51,572 (100,521) (17,846)

Later than one year and not later than five years 485,700 22, 649 (93,431) (5,210)

NIL NIL Later than five years (Nil) (Nil)

Total 935,340 74,221 (193,952) (23,056)

14. Earning per Share

Basic and diluted earnings per share Year Ended Year ended March 31, 2005 March 31, 2004 Rupees Rupees

A Number of Shares 15720293 15720293 Before extra ordinary items

Profit/(Loss) after lax but before extra ordinary items 17279556 302126

Basic & Diluted EPS 1.1 0.02

After extra ordinary items Profit/(Loss) after tax (23273990) 302126

Basic & Diluted EPS (1.48) 0.02

B. Reconciliation of Profit/(Loss) for the purpose of calculating EPS before extra ordinary item

Profit/(Loss) as per Profit & Loss Account (23273990) 302126

Add/(Less): Extra ordinary items 40553546 0

Adjusted Profit/Loss 17279556 302126

15. Advance/Security deposits include year end balance of Rupees 64,20,000(Rs. 1,27,00,000) received from a customer under an agreement that the amount shall be secured against first pari passu charge of all the assets of the Company. The Charge is yet to be created in favour of the customer.

16. Managerial Remuneration

Managerial remuneration paid during the financial year to the Managing Director.

Year Ended Year ended March 31, 2005 March 31, 2004

Salary & allowances 480,000 480,000

Contribution to Provident Fund 9,360 9,360

Other benefits 71,164 87,901

Total 560,524 577,261

Since the employee-wise break-up of liability on account of gratuity based on actuarial valuation is not ascertainable, the amount relatable to Managing Director could not be included in the above figures.

17 Payment to Auditors

Year Ended Year ended March 31, 2005 March 31, 2004 (A) Statutory Auditors

Audit Fee 66,120 64,800

Tax audit Fee 16,860 16,200

Limited Review of Results 26,316 25,920

In other capacity

For Certification work 2,160 10,800

Reimbursement of expenses 9,220 3,990

Total (A) 120,676 121,710

(B) Cost Auditors

Audit Fee 13,224 12,960

Total (B) 13,224 12,960

Total (A+B) 133,900 134,670

Remuneration in Schedule 14 includes only the Audit fees paid to the Auditors.

18. Balance due to/from various parties are subject to confirmations /reconciliations thereof. Management does not consider any adjustment on completion of reconciliation/confirmation.

19. Figures of previous year have been regrouped or rearranged wherever found necessary.

20. Schedules 1 to 18 forms an integral part of the accounts and have duly been authenticated.

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Mar 31, 2004

1. Term loans/Corporate loan from Financial Institutions are secured by mortgage of Company's immovable properties and hypothecation of all movable properties both present and future subject to prior charge in favour of Company's bankers on specified movables.

2. Overdraft from bank is secured by way of book debts, second charge on the block of assets of the Company and personal guarantee of the Chairman & Managing Director.

3. (*) As per the Negotiated Settlement, Term Loans of Industrial Development Bank of India, IFCI Limited and Industrial Investment Bank of India Limited are to be converted into Zero Rate Optionally Convertible Loan (ZROCL) repayable in three equal annual instalments.

4. Interest accrued and due include Rupees 109,552,092 waived by the Lenders in Negotiated Settlement (NS) and will be written back when all material conditions of NS are complied with by the Company.

5. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances): Rupees Nil (Previous year Rupees 3,350,000).

6. There are no outstanding dues to Small Scale Industrial Undertaking as at March 31, 2004.

7. Sundry debtors include overdue debts of Rupees 112,274,676 (Previous year Rs. 112,274,676) recoverable from Hindustan Copper Ltd (HCL) towards compensation for Plant Stoppages and Minimum Off take Guarantee. The HCL has not accepted the claim. The Management is confident of recovering the amount and, therefore, provision there against is not considered necessary.

8. The company had during an earlier year made claims aggregating to Rs. 96,698,472 on Hindustan Copper Limited (HCL) towards non-compliance of certain-clauses of the contract and minimum off take guarantee. The HCL had also levied penalty of Rs. 61,800,689 on the Company towards non-supply of oxygen. Both the parties have disputed the claims of each other and referred the matter to arbitration for settlement. In view of pending arbitration award, no adjustment had been considered necessary by the Management in respect of amount recoverable from or payable to HCL.

9. Loans & Advances, other Current Assets and Security Deposits include advances Rupees 25,872,981 (26,097,981) Share application money Rupees 3,100,000 (3,100,000) and Security Deposits of Rupees 300,000 (300,000) respectively considered doubtful of recovery. The Management is hopeful of recovering the amount progressively. Accordingly provision there against is not considered necessary at this stage by the Management.

10. Company has settled its dues with the lenders. Adjustments regarding waiver of interest during the year and also in pursuance of Negotiated Settlement (NS) arrived at with lenders in previous year will be done when all the material conditions relating to the NS are complied with by the Company.

11. The Company had supply contract for supply of Oxygen to its Customer Hindustan Copper Ltd. (HCL). The Contract was expired during the year and was renewed by HCL up to June 30, 2004. The Company's ability to continue its operations and as 'going concern1 predominantly dependent upon the further renewal of the Contract by HCL. The Company is pursuing the matter with HCL for renewal of contract. Accordingly these Financial Statements have been prepared on the basis of going concern.

12. Figures of previous year have been regrouped or rearranged wherever found necessary.

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Mar 31, 2003

Secured Loan

1. Term loans / Corporate loan from Financial Institution are secured by mortgage of Companys immovable properties and hypothecation of all movable properties both present and future subject to prior charge in favour of Company 's bankers .on specified movables.

2. Overdraft from bank is secured by way of book debts, second charge on the block of assets of the Company and personal guarantee of the Managing Director. -

3. Term loans from IFCI include deferred.interest of Rs.11238640 accrued up to march 31,2001 in terms of restructuring of liabilities.

4. Term loans repayable within one year Rs.75893314 (Rs.6,60,86,470 )

Fixed Assets

1) Truck & Tankers include Rs. Nil (13,45,126) acquired on hire purchase basis.

2) Vehicles include Rs. 3,51,030 ( 9,44,289) acquired on hire purchase basis.

3) Depreciationon Plant & Machinery incluede Rs. 3,85,82,711 ( Nil) not provided in earlier years and charged during the year to Profit & Loss account as exceptional item in Schedule -17 and Rs. 22,58,278 on process and allied softwares consequent to accelerated derpreciation relating to earlier year charged during the year.

Other notes

1. Contingent liabilities not provided for:

Particulars Year ended Year ended March 31, 2003 March 31, 2002 Rs Rs

Counter Guarantees given to bankers for guarantees issued by the bankers ( Net of margins) 10,000 10,000 Corporate guarantees 51,00,000 51,00,000

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances): Rs. 33,50,000 (Previous year Rs 33,50,000).

3. There are no outstanding dues to Small Scale Industrial Undertaking as at March 31, 2003.

4 Sundry debtors include overdue debts of Rs. 11,22,74,676 (Previous year Rs. 11,22,74,676) recoverable from Hindusthan Copper Ltd (HCL) towards compensation for Plant Stoppage and Minimum Off take Guarantee. The HCL has not accepted the claim. The Management is confident of recovering the amount and therefore provision there against is not considered necessary by the Management.

5. The company had during an earlier year made claims aggregating to Rs. 9,66,98,472 on Hindusthan Copper Limited (HCL) towards non-compliance of certain clauses of the contract and minimum off take guarantee. The HCL had also levied penalty of Rs. 6,18,00,689 on the Company towards non-supply of oxygen. Both the parties have disputed the claims of each other and referred the matter to arbitration for settlement. In view of pending arbitration award, no adjustment had been considered necessary by the Management in respect of amount recoverable from or payable to HCL.

6. Loans & advances, other current Assets and security deposits include advances Rs. 26,097,981 (2,31,91,252) Share application money Rs. 31,00,000 (Nil) and Security deposits of Rs. 3,00,000 (Nil) respectively considered doubtful of recovery. The Management is hopeful of recovering the amount progressively. Accordingly provision there against is not considered necessary at this stage by the Management.

7 Extraordinary Items

7.1 The Company had in earlier years, provided Depreciation in proportion to the use of assets. As a consequence, Depreciation of Rs. 3,85,82,711 has not been provided in the accounts of earlier years. During the year the Company has provided the arrears of depreciation in the Profit & Loss account.

7.2 During the year the Company has settled its dues of Term Loans and outstanding interest with one of the Financial Institution. In accordance with the negotiated settlement of dues the financial Institution has waived entire outstanding interest up to July 1,2002 , and has the option to convert 50% of the outstanding Principal amount of Rs. 1100.70 lacs into zero rate optionally convertible loan repayable / redeemable in three equal yearly installments commencing from April 1, 2008. In accordance with the NS the Company had to pay 50% of the Principal (i.e Rs. 550.35 lacs) by March 2003. However the Company has paid Rs. 500.35 lacs by March and has requested the financial Institution to' allow time for payment of balance amount. As the Company has substantially complied with terms and conditions of NS outstanding interest of Rs.588.34 lacs has been reversed by the Company.

8. During the year one of the lender has recalled its term loan of Rs. 3,00,00,000 and interest and Other charges payable upto March 31,2003 Rs. 7,08,26,259 and filed a case for recovery of dues before debt recovery Tribunal (DRT) Jaipur. The Company has requested the lender to restructure its dues in line with other'institutions and hopeful of amicable settlement.as lead financial institution alongwith other Consortium members has already settled its dues and waived interest payable by the Company subject to compliance of certain conditions.

9. The Company had two supply contracts of 50 TPD and 120 TPD Plants for supply of Gasous Oxygen to its Main Customer Hindustan Copper Ltd. (HCL). The Contract for 50TPD Plant has expired during the year which was not renewed by HCL and contract for 120 TPD Plant is valid upto March 31, 2004 . The Company's ability to continue its operations and as 'going concern' dependent upon the renewal of the Contract by HCL and concession / relief by the Financial Institution'(Described fully in Note 8 above ). The Company is pursuing the matter with HCL and Financial Institution and hopeful of favorable settlement. Accordingly these Financial Statements have been prepared on the basis of going concern.

10. Balance due to /from various parties are subject to confirmations / reconciliations thereof. Management does not consider any adjustment on completion of reconciliation /confirmation.

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Mar 31, 2002

Secured Loans:

1. Term loans/Corporate loan from Financial Institution are secured by mortgage of Companys immovable properties and hypothecation of all movable properties both present and future subject to prior charge in favour of Companys bankers on specified movables.

2. Hire purchase finance are guaranteed by the Managing Director. The financiers have a lien on the respective assets financed by them.

3. Overdraft from bank is secured by way of book debts, second charge on the block of assets of the Company and personal guarantees of the Chairman and the Managing Director.

4. Term loans from IDBI and IFCI include deferred interest of Rs. 32367751 and Rs. 11238640 accrued up to march 31, 2001 in terms of restructuring of liabilities done by respective institution.

5. Amount repayable within one year Rs. 6,60,86,470 (Rs. 3,11,33,862)

Fixed Assets:

1) Land include Rs. 25,60,440 (Rs. 25,60,440) on account of site development.

2) Trucks and tankers include Rs. 13,45,126 (Rs. 13,45,126) acquired on hire purchase basis.

3) Vehicles include Rs. 9,44,289 (Rs 12,64,534) acquired on Hire purchase basis.

Other Notes:

1. Contingent liabilities not provided for:

Year ended Particulars March 31, 2002 March 31, 2001 Rs. Rs.

Counter Guarantees given to bankers for guarantees issued 10,000 3,10,000 by the bankers ( Net of margins)

Corporate guarantees 51,00,000 51,00,000

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances): Rs. 33,50,000 (Previous year Rs 33,50,000).

3. There are no outstanding dues to Small Scale Industrial Undertaking as at March 31, 2002.

4. Sundry debtors include overdue debts of Rs. 11,22,74,676 (Previous year Rs. 10,59,86,174) recoverable from Hindusthan Copper Ltd (HCL) towards compensation for Plant Stoppage and Minimum Off take Guarantee. The HCL has not accepted the claim. The Management is confident of recovering the amount and therefore provision there against is not considered necessary by the Management.

5. The company had made claims aggregating to Rs. 9,66,98,472 on Hindusthan Copper Limited (HCL) towards non compliance of certain clauses of the contract and minimum off take guarantee. The HCL had also levied penalty of Rs. 6,18,00,689 on the Company towards non supply of oxygen. Both the parties have disputed the claims of each other and referred the matter to arbitration for settlement. In view of pending arbitration award, no adjustment had been considered necessary by the Management in respect of amount recoverable from or payable to HCL.

6. Loans & advances include overdue advances to suppliers and other parties of Rs. 23,191,252. The Management is taking necessary action for collection of such overdue amount and is confident of recovering the same progressively. Accordingly provision there against is not considered necessary at this stage by the Management.

7. The Company had in earlier years, provided Depreciation in proportion to the use of assets. As a consequence, Depreciation of Rs. 3,85,82,711/- (Rs. 3,85,82,711) has not been provided in the accounts of earlier years. The Reserves and Surplus and fixed Assets are overstated by the same amount.

8. "Prior year adjustments" represents:

Particulars Current Year Previous Year

Rent 72,000 -

Salary 1,32,000 -

Interest 1,11,01,971 -

Total 1,13,05,971 -

9. Related party disclosures

Persons having significant influence in the company (holding 20% or more of the paid up equity capital of the Company together with relatives.:

Mr. R. S. Bhardwaj

Mrs. Shachi Bhardwaj Wife of Mr. R. S. Bhardwaj)

Parties under common control: Bhagawati International Ltd Ramrup Credit & Leasing (Pvt.) Ltd: Kaushal Holding Pvt Ltd: Shiva Gases (Partnership firm)

Key Management personnel and their relatives: Mr. R. S. Bhardwaj (Mg. Director)

Mrs. Shachi Bhardwaj: (Wife of Mr. R. S. Bhardwaj)

Mrs. Neha Sharma (Sister of Mr. R. S. Bhardwaj)

10. In accordance with Accounting standard 19 "Leases" issued by the ICAI, the total of minimum payments at the balance sheet date, for each of the following periods in respect of hire purchase finance are:-

1. Not later than one year - 4,12,560

2. Later than one year and not later than five years - 49,350

3. Later than five years - Nil

Total - 4,61,910

11. In accordance with Accounting standard (AS22) "Accounting for taxes on Income" issued by the ICAI, the company has accounted for deferred taxes during the year.

The Deferred tax liabilities pertaining to the period prior to April 1, 2001, amounting to Rs. 1,59,88,752/- have been recognised by deduction from General reserves as on April 1, 2001 as shown in the Reserves & Surplus.

Keeping in view the deferred tax assets as at April 1, 2001 and consideration of prudence, recognition of deferred tax assets of Rs. 1,33,64,435 for the timing differences arising during the year (Losses for the year and expenses allowable on payment basis accruing during the year) is not considered necessary by the Management. The Management believes that deferred tax assets recognized for the period prior to April 1, 2002 will be sufficient to realize against future taxable income of the company.

12. Provision for diminution of Rs. 16,15,000/- in the value of quoted investments has not been made as in the opinion of the Management, such diminution is on account of temporary feature and the investment is long term investment.

13. In the opinion of the Management, the "Current assets, loans & advances" have a value on realization in the ordinary course of business atleast equal to the amount at which they are stated in the balance sheet.

14. Managerial Remuneration: Managerial remuneration paid during the financial Year to the Managing Director.

Year ended Year ended March 31, 2002 March 31, 2001 Rs. Rs.

Salary & allowances 480,000 480,000

Contribution to Provident Fund 9,000 7,200

Other benefits 66,014 41,762

Total 555,014 5,28,962

Since the employee-wise break-up of liability on account of gratuity based on actuarial valuation is not ascertainable, the amount relatable to Director could not be included in the above figures..

15. Payment to Auditors

Year ended Year ended Year ended March 31st, 2002 March 31st, 2002 March 31st, 2001

A) Statutory Auditors Rs. Rs.

Statutory Audit 63,000 63,000

Review Audit 10,500 10,500

Reimbursement of expenses 1,130 -

74,630 73,500

B) Tax Auditors

Tax Audit fee 15,750 15,750

15,750 15,750

C) Cost Auditors

Audit fee 12,600 10,500

12,600 10,500

Total 102,980 99,750

16. Balance due to/from various parties are subject to confirmations/reconciliations thereof. Management does not consider any adjustment on completion of reconciliation/confirmation.

17. Figures of previous year have been regrouped or rearranged wherever found necessary.

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Mar 31, 2001

1) Contingent Liabilities not provided for in respect of :

a) Outstanding bank guarantees for Rs. 3,10,000/- ( previous year Rs20,10,000)-Margin money kept by banks there against Rs.1,24,418/- (Previous Year Rs. 7,29,353/-).

b) Corporate guarantees given by the Company in favour of the financial institutions-on behalf of a company in which a director is interested- Rs. Nil (Previous year Rs. 492 lacs) and other body corporate - Rs. 51 lacs (Previous year Rs. 51 lacs).

2) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.138 lacs (Previous Year Rs. 173.06 lacs), advances paid there against Rs.137.06 lacs (Previous Year Rs. 140.06 lacs).

3) Miscellaneous income include excess provision of interest written back amounting to Rs. 37,69,099/-. The same is subject to confirmation by the concerned financial institution.

4) Depreciation on assets has been provided in proportion to the use of the assets during the year. As a consequence, the charge of depreciation for the year is lower by Rs.96,42,677/-(Previous year Rs. 92,46,074/-) resulting into decrease in Loss to that extent and the Reserves & Surplus and Fixed Assets are over stated by Rs.3,85,82,711./- as on 31.3.2001 (Previous year Rs. 2,89,40,034).

5) Sundry debtors include a sum,, of Rs.45,828/- (Previous year Rs. 86,000) due from a company in which a director is interested.

6) There is no outstanding dues to Small Scale Industrial Undertaking as on 31st March,2001 .

7) Sundry Debtors include Rs. 10,59,86,174/- (Previous year Rs.10,46,84,977/-) towards compensation claimed from a customer for non compliance of certain clauses of the contract. The customer has not accepted the claim.

8) Loans & advances include advance of Rs. 67,00,000/- lacs against purchase of land to a firm in which directors are interested and a sum of Rs.50,000/- (Previous year Rs. 99,900/-) in the name of the Managing Director (Maximum balance during the year Rs.99,900/-).

9) The Company has made claims aggregating to Rs.966.99 lacs on a customer, Hindustan Copper Ltd (HCL). Whereas HCL has levied penalty of Rs. 618.01 lacs on the company. Both the parties have referred the matter to arbitration for Settlement. As the actual amount receivable/payable by the company can not be ascertained at this stage, necessary adjustments in the accounts in this regard will be made on settlement.

10) Sundry Debtors, Creditors and loans & advances are subject to confirmation/reconciliation.

11) Provisions for diminution of Rs.16,15,000/- in the value of quoted investment has not been made as in the opinion of the management, such diminution is on account of temporary features and the investement is long term investment.

12) The investment of Rs. 24,37,500/- in 66,900 equity shares of IDBI has been written off during the year, as the shares have been forfeited by the IDBI due to non payment of call money.

13) In the opinion of the Board of directors, the "Current assets, loans & advances" have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

14. Term loans/Corporate loan from Financial Institutions are secured by mortgage of Company's immovable properties and hypothecation of all movable properties both present and future subject to prior charge in favour of Company's bankers on specified movables.

15. Hire purchase finance are guaranteed by the Managing Director. The financiers have a lien on the respective assets financed by them.

16. Overdraft from bank is secured by way of book debts, second charge on the block of assets of the Company and personal guarantees of the Chairman and the Managing Director.

17. land include Rs. 25,60,440/- on account of site development.

18. Trucks & Tankers include Rs. 13,45,126/- acquired on hire purchase basis.

19. Vehicle include Rs. 12,64,534/- acquired on hire purchase basis.

20. Adjustment to Plant & Machinery represent adjustment of MODVAT pertaining to additions of previous year.

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Mar 31, 2000

1. Term loans/Corporate loan from Financial Institutions are secured by mortgage of Company's immovable properties and hypothecation of all movable properties both present and future subject to prior charge in favour of Company's bankers on specified movables.

2. Hire purchase finance are guaranteed by the Managing Director. The financiers have a lien on the respective assets financed by them.

3. Overdraft from bank is secured by way of book debts, second charge on the block assets of the Company and personal guarantees of the Chairman and the Managing Director.

General Notes :

1. Contingent Liabilities not provided for in respect of :

a) Outstanding bank guarantees for Rs.20,10,000/- ( previous year Rs.30,10,000) - Margin money kept by banks there against Rs.7,29,353/- (Previous Year Rs.9,06,753/-).

b) Corporate guarantees given by the Company in favour of the financial institutions on behalf of a company in which a director is interested - Rs. 500 lacs (Previous year Rs. 500 lacs) and other body corporate - Rs. 43 lacs (Previous year Rs. 43 lacs).

2) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.173.06 lacs (Previous Year Rs. 173.06 lacs), advances paid there against Rs.140.06 lacs (Previous Year Rs.145.06 lacs).

3) Miscellaneous income includes written back of excess provision of interest during the earlier years amounting to Rs.89,80,497/-. The same is subject to confirmation by the concerned financial institutions.

4) Depreciation on assets has been provided in proportion to the use of the assets during the year. As a consequence, the charge of depreciation for the year is lower by Rs.92,46,074/- (Previous year Rs.35,01,068/-) resulting into increase in profit to that extent and the Reserves & Surplus and Fixed Assets are over stated by Rs.2,89,40,034/- as on 31.3.2000 (Rs.1,96,93,960/- as on 31.3.1999)

5) Sundry debtors include a sum of Rs.86,000/- due from a company in which a director is interested.

6) There is no outstanding dues to Small Scale Industrial Undertaking as on 31st March, 2000.

7) Considering the fall in the market rate of the equity shares of Industrial Development Bank of India, the Company has not paid the allotment/call money amounting to Rs.62,59,500/- & interest thereon. The due date for payment of the amount payable has already been expired. Therefore, the shares alloted to the company are liable to be forfeited by IDBI.

8) Sundry Debtors include Rs.10,46,84,977/- (Previous year Rs.8,89,78,904/-) towards compensation claimed from a customer.

The Customer has disputed the claim. Besides sundry debtors of Rs.5,25,512/- and advances recoverable of Rs.2,61,216/- are considered doubtful. However, the management is hopeful of recovery of the amounts, hence no provision has been made for the same.

9) Loans & advances include advance of Rs. 67 lacs against purchase of land to a firm in which directors are interested and a sum of Rs.99,900/- in the name of the Managing Director (Maximum balance during the year Rs.1,45,000/-).

10) The Company has made claims aggregating to Rs.537.56 lacs (excluding sum of Rs. 263.64 lacs pertaining to the year 2000-2001) on a customer, Hindustan Copper Ltd (HCL) for non compliance of certain clauses of the contract entered into between them. On the other end, HCL has levied penalty of Rs. 618.01 lacs on the company. Both of the parties have agreed in principal for referring the matter for settlement to arbitration. As the actual amount receivable/payable by the company can not be ascertained at this stage, necessary adjustments in the accounts in this regard will be made on settlement.

11) Sundry Debtors, Creditors and loans & advances are subject to confirmation/reconciliation.

12) Provisions against diminution in the value of quoted investments has not been made as in the opinion of the management, such diminution is on account of temporary features and the investments are long term investments.

13) Income and expenditure amounting to Rs. 60,000/- and Rs. 2,70,548/- respectively related to previous years are included under the respective heads of accounts.

14) in the opinion of the Board of directors, the "Current assets, loans & advances" have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

C) Consumption

No raw material is required for production of any product of the company.

17) Previous Year figures have been re-grouped/re-arranged wherever considered necessary.

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Mar 31, 1999

Notes on Secured Loans:

1) Term Loans/Corporate loan from Financial Institutions are Secured by mortgage of Company's immovable properties and hypothecation of all movable properties both present and future subject to prior charge in favour of Company's Bankers on specified movables.

2) Hire purchase finance are guaranteed by the Managing Director. The financiers have a lien on the respective Assets financed by them.

General Notes:

3) Contingent Liabilities not provided for in respect of:

a) Outstanding Bank Guarantees for Rs. 30,10,000/- (previous year Rs. 20,10,000) Margin money kept by Bank Rs. 9,06,753 (Previous Year Rs. 6,04,830/.).

b) Corporate Guarantee given by the company in favour of Financial Institutions (IDBI,IFCI & ICICI) on behalf of bodies corporate for Rs. 543 lacs (Previous year Rs. 543 Lacs).

4) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 102.25 lacs (Previous Year Rs. 191 Lacs), advance paid there against Rs. 74.25 lacs (Previous Year Rs. 186.2 Lacs).

5) Future liability in respect of lease rental aggregating to Rs. 30,86,826/- will be accounted in subsequent years as and when the same accrues and becomes due.

6) In the opinion of the Board of directors the "Current assets loans & advances" have a value on realisation in the ordinary course of business, atleast equal to the amount at which they are stated in the Balance Sheet.

7) Depreciation on Assets has been provided in Proportion to the use of Assets during the year. As a Consequence, the charge of Depreciation for the year is lower by Rs. 35,01,068/- (Previous year Rs.75,59,781/-) resulting in increase in Profits to that extent. As a result of this Policy, the Reserves & Surplus and Fixed Assets are over stated by Rs. 1,96,93,960/-.

8) Interest paid on other loans has been shown after reduceing there from interest received from banks and other parties amounting to Rs. 13,41,049 (24,78,581)

9) There is no outstanding dues to small scale Industrial Undertaking as on 31st, March 1999.

10) Provision against diminution in the value of quoted investments is not made as in the opinion of the Management, such diminution is on account of temporary features and, further, these investments are long term investments.

11) The company has not paid the allotment/call money on the investment in the equity shares of Industrial Development Bank of India Ltd. The last date of payment of such call money has already expired. As a consequence the equity shares worth Rs. 24,37,500/- of IDBI are liable to be forfeited.

12) Sundry Debtors, Creditors and loans. & advances are subject to confirmation/reconciliation.

13) Sundry Debtors include Rs. 7,63,74,844 (Previous year Rs. 7,63,74,844) is compensation claimed from a customer, The Customer has disputed the claim however Management is hopefull of recovery of the amount.

14) Loans & advances include interest free advances due from Bhagawati Casting Pvt Ltd, in which directors are interested Rs. 2,51,300/-

15) During the physical verification in earlier year the stock of Power Cells and Polymers was inadvertently classified into wrong category and consequently undervalued by Rs. 3,59,354/- the correction has been made during the year and valuation is done accordingly.

16) At the time of installation of 120 TPD Plant capacity was in advertantly overstated due to some error in evaluation of installed capacity. In view of this installed capacity is derated during the year so as to disclose correct capacity utilisation.

17) Previous Year figures have been re-grouped/re-arranged wherever found necessary.

18) Particulars required as per notification No. GSR. No. 388 (E) (Fno. 3/24/94-CLV) dated 15.5.95 issued by department of the company affairs, ministry of Law, justice & company affairs.

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Mar 31, 1998

1. Term Loans from Financial Institutions are Secured by mortgage of Company's immovable properties and hypothecation of all movable properties both present and future subject to prior charge in favour of Company's Bankers on specified movables.

2. Hire purchase finance are guaranteed by the Managing Director. The financiers have a lien on the respective Assets financed by them.

3. Term Loans from financial institutions include interest accrued & due of Rs. 3,66,84,845/- previous year Rs. 2,44,43,604/-.

4. Future liability in respect of lease rental aggregating to Rs. 55,15,148/- will be accounted in subsequent years as and when the same accrues and becomes due.

5. In the opinion of the Board of directors the "Current assets loans & advances" have a value on realisation in the ordinary course of business alteast equal to the amount at which they are stated in the Balance Sheet.

6. Depreciation on Assets has been provided in Proportion to the use of Assets during the year. As a Consequence, the charge of Depreciation for the year is lower by Rs. 75,59,781/- (Previous year Rs. 8,33,111/-) resulting in increase in Profits to the extent. As a result of this Policy, the reserves & Surplus and Fixed Assets are over stated by Rs. 1,61,92,892/-.

7. Provision against diminution in the value of quoted investments is not considered necessary as in the opinion of the board, such diminution is on account of temporary features and, further, these investments are long term investments.

8. The company has not paid the allotment/call money on the investment in the equity shares of Industrial Development Bank of India Ltd. The last date of payment of such call money has already expired. As a consequence the equity shares worth Rs. 24,37,500/- of IDBI are likely to be forfeited.

9. Sales figure includes inter unit transfer of Rs. 27,30,603/- (Previous year Rs. 9,49,264) This accounting treatment has no impact on the profit of the company for the year.

10. Sundry Debtors, Creditors and loans & advances are subject to confirmation/reconciliation.

11. Sundry Debtors include Rs. 7,63,74,844 (Previous year Rs. 5,55,26,452), as compensation claimed from a the customer. The customer has not acknowledged the claim.

12. Loans & advances include interest free advances due from the parties in which directors are interested Rs. 13,0,037/- (Previous year Rs. 13,52,035/-).

i) In view of inadequacy of profits under Section 198 of the Companies Act, 1956, no commission is payable to Managing Director. Hence no computation of net profits is given.

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Mar 31, 1997

Notes to Secured Loans:

1 Term Loans from Financial Institutions are Secured by mortgage of Company's immovable properties and hypothecation of all movable properties both present and future subject to prior charge in favour of Company's Bankers on specified movables

2 Hire purchase finance are guaranteed by the Managing Director. The financiers have a lien on the respective Assets financed by them.

3 Term Loans from financial institutions include interest accrued & due of Rs. 2,44,43,604/- previous year Rs.1,55,67,441/-)

Notes to Accounts:

1. Contingent Liabilities not provided for in respect of

a) Outstanding Bank Guarantees for Rs. 61,70,486 (previous year Rs 62,20,486) Margin money kept by Bank Rs. 20,43,000(Previous Year Rs 34,18,000/-)

b) Corporate Guarantee given by the company in favour of Financial Institutions (IDBI, IFCI & ICICI) on behalf of a Company for Rs.543 lacs (Previous Year Rs.543 lacs).

2) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs 195 lacs (Previous Year Rs 550 Lacs, advance paid there against Rs. 195 lacs (Previous Year Rs 497.69 Lacs)

3) Future liability in respect of lease rental aggregating to Rs. 4,16,64,907/-will be accounted in subsequent years as and when the same accrues and becomes due.

4) In the opinion of the Board of directors the "Current assets loans & advances" have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

5) Depreciation on Assets, w.e.f 1st April 1996, has been Provided in Proportion to the use of Assets during the year, instead of for full Year. As a Consequence, the charge of Depreciation for the year is lower by Rs 86,33,111 (Rs Eighty Six lakhs Thirty Three Thousand One Hundred Eleven only/-) resulting in increase in Profits to that extent. As a result of this Policy, the Reserves & Surplus and Fixed Assets are over stated to that extent

6) In the opinion of the board of directors investments are on long term basis. In view of this, the provision for diminution in the Market value of the shares has not been made,

7) The company has not paid the allotment money on the investment in the equity shares of Industrial Development Bank of India Ltd interest on delay in payment of allotment money shall be accounted at the time of payment

8) Sales figure includes inter unit transfer of Rs. 9.49,264/- (Previous year Rs. 4,75,398/-) This accounting treatment has no impact on the profit of the company for the year.

9) Sundry Debtors and Creditors are subject to confirmation. Sundry Debtors include Rs. 5,55,26,452/- (Prev. year Rs. 2,71,33,410/-) as compensation charged from a customer, which is not yet acknowledged.

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Mar 31, 1995

Contingent Liabilities not provided for in respect of

a) Outstanding Bank Guarantee for Rs.1,12,20,486/ (Previous Year Rs. 75,60,000/-) Margin money kept by Bank Rs.30,83,000 (Previous Year Rs.23,05,000/-

b) Corporate Guarantee given by the company in favour of Financial Institutions (IDBI,IFCI & ICICI) on behalf of a Company for Rs.492 lacs and interest their on. (Previous Year Rs.492 lacs).

2. Estimated amount of contracts remaining to be executed on Capital account and not provided for Rs.60000000/- (Previous Year Rs.25,67,58,316/-) advance paid there against Rs 5,50,95,523/- (Previous Year Rs. 12,89,00,689).

3. Provision has not been made for custom duty on stores & spares material lying at port Rs 54,89,189 (Previous Year Rs 4,86.539/-).The same shall be accounted for at the time of clearance from custom authorities.

4. Provision has not been made for income tax demand of Rs. 2,81,924/- relating to earlier years. Amount paid there against Rs 2,81.924/-

5 Public Issue expenses are net of interest earned on share application money.

6. Sales figure includes inter unit transfer of Rs.3,82,362. This accounting treatment has no Impact on the profit of the Company for the year

7. Depreciation on fixed assets has been provided for on straight line basis at the rates prescribed in schedule XIV to the Companies (Amendment) Act,1993.

9. Capital work-in progress is net of Modvate received on Capital Goods.

11. Previous Year figures have been re-grouped/re-arranged wherever found necessary.

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Mar 31, 1994

Provision has not been made for custom duty on stores & spares material lying at port Rs.489,189 (previous year Rs.486,539/-). The same shall be accounted for at the time of clearance from custom authorities.

Depreciation on fixed assets has been provided for on straight line basis at the rates prescribed in schedule XIV to the Companies (Amendment) Act, 1993.