NOTICE TO SHAREHOLDERS · 2011-04-11 · NOTICE TO SHAREHOLDERS NOTICE is hereby given that the...

NOTICE TO SHAREHOLDERSNOTICE is hereby given that the Thirty Sixth Annual General Meeting of Bhagawati Gas Limited (formerly BhagawatiGases Limited) will be held at Banawas, Khetrinagar-333504, Jhunjhunu, Rajasthan on Thursday the September 30,2010 at 11.00 a.m. to transact the following businesses:

ORDINARY BUSINESS:1. To receive, consider and adopt the Profit & Loss Account for the year ended March 31, 2010 and the Balance Sheet

as at that date together with the Reports of the Directors’ and Auditors’ thereon.2. To appoint a Director in place of Mr. Kailash Chand Kedia who retire by rotation and being eligible, offers himself for

re-appointment.3. To appoint M/s. Chaturvedi & Partners, New Delhi, the retiring auditors, to hold office as auditors of the company,

from the conclusion of this annual general meeting until the conclusion of the next annual general meeting of thecompany and to authorize the Board of Directors of the company to fix their remuneration.

SPECIAL BUSINESS:4. To consider and if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 257 of the Companies Act, 1956 Mr. Ganga Charan, beand is hereby appointed as a director of the company, liable to retire by rotation.”

5. To consider and if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution:“RESOLVED THAT, in supersession of the ordinary resolution passed at the 31st annual general meeting of thecompany held on September 29, 2005,consent of the company be and is hereby accorded under the provisions ofSection 293(1)(e) and other applicable provisions, if any, of the Companies Act, 1956 to the Board of Directors of thecompany to contribute on behalf of the company to charitable and other funds not directly relating to the business ofthe company or the welfare of the employees of the company from time to time, as it may deem fit, provided howeverthat the total amount up to which the Board of Directors may contribute to such charitable and other funds asaforesaid from time to time shall not exceed, in the aggregate, the sum of ` 5,000,000 (Rupees Fifty Lacs only) inany one financial year.”

Corporate Office: By Order of the BoardA-27-B, Sector-16,Noida - 201301Uttar PradeshAugust 14, 2010

Sanjay KumarCompany Secretary

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTEINSTEAD OF HIMSELF/HERSELF ONLY ON A POLL AND THE PROXY NEED NOT BE A MEMBER. THE PROXIESSHOULD, HOWEVER, BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

2. Members are requested to intimate the company, changes if any, in their registered address at an early date.3. Members whose shareholding is in the electronic mode are requested to direct change of address intimation to their

respective depository participants.4. THE REGISTER OF MEMBERS AND SHARE TRANSFER BOOKS SHALL REMAIN CLOSED FROM MONDAY,

SEPTEMBER 27, 2010 TO THURSDAY, SEPTEMBER 30, 2010 (BOTH DAYS INCLUSIVE).5. The relative explanatory statements pursuant to Section 173(2) of the Companies Act, 1956 in respect of the item

nos. 4 & 5 are annexed.6. Profile of directors seeking appointment/re-appointment as stipulated under Clause 49 of the Listing Agreement

with stock exchanges are given here in under.7. Members are requested to bring their copy of the annual report to the meeting.

EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 173(2) OF THECOMPANIES ACT, 1956.ITEM No. 4According to provisions of Section 260 of the Companies Act, 1956 and the Articles of Association of the company,Mr. Ganga Charan was appointed as additional director on the Board of the company on February 10, 2010. He will holdoffice as director up-to the date of ensuing annual general meeting. The company has received notice from a memberalong with the requisite fee proposing the candidature of Mr. Ganga Charan as director, as required under Section 257 ofthe Companies Act, 1956. The Board considers it desirable that the company should continue to avail the guidance andadvice of Mr. Ganga Charan and recommend the ordinary resolution for approval of the shareholders.Except Mr. Ganga Charan, no other Director is concerned or interested in this resolution.

ITEM No. 5The Board of Directors of the company feels that as a part of its corporate social responsibility initiative, the companyshould contribute certain amount to charitable institutions and / or trusts, etc. However, in terms of Section 293 (1)(e) ofthe Companies Act, 1956, a company cannot contribute to any charitable or other funds not directly relating to thebusiness of the company or welfare of its employees, any amount the aggregate of which will in any financial year exceed` 50,000 (Rupees Fifty Thousand Only) or 5% of its average net profits determined in accordance with the provisions ofSections 349 and 350 of the Companies Act, 1956 during the three financial years immediately preceding, whichever isgreater, except with the consent of members in the general meeting of the company. The company in its 31st annualgeneral meeting held on September 29, 2005 had fixed a limit of ` 1,000,000 (Rupees Ten Lacs Only). It is proposed thatthis limit be increased to ` 5,000,000 (Rupees Fifty Lacs Only).In light of the above read with the provisions of Section 293(1)(e) of the Companies Act, 1956, you are requested to grantyour consent to the ordinary resolution as set out at agenda item no.5 in the above notice.None of the directors of the company is deemed to be concerned or interested in the said resolution, except to the extentthat some of our directors may be associated with companies, trusts or other entities to which the Board of Directors mayconsider making contribution.

Corporate Office: By Order of the BoardA-27-B, Sector-16,Noida - 201301Uttar PradeshAugust 14, 2010

Sanjay KumarCompany Secretary

Profile of Directors seeking appointment/re-appointment at the 36th Annual General Meeting as stipulated underClause 49 of the Listing Agreement with stock exchanges is as under:

A. Mr. Kailash Chand KediaDIN No. : 01243510Date of Birth : July 1,1954Qualification : Bachelor of CommerceExpertise in specific functional area : Finance & TaxationDirctorship held in other Indian Companies : NilNo. of shares held in Bhagawati Gas Limited : Nil

Membership/Chairmanship of CommitteeBhagawati Gas LimitedAudit Committee : ChairmanRemuneration Committee : ChairmanShareholders’/Investors’ Grievance andShare Transfer Committee : Member

B. Mr. Ganga CharanDIN No. : 00387567Date of Birth : October 31, 1950Qualification : B. Tech in Mechanical Engineering from IIT Kanpur

ExperienceDefence Research & Development Organisation : Senior Scientific Officer (1972-1980)Hindustan Aeronautics Limited : Chief Production Engineer (1980-1991)IFCI Limited : General Manager (1991-2008)

Expertise in specific functional area : Engineering & FinanceDirctorship held in other Indian Companies : NilNo. of shares held in Bhagawati Gas Limited : Nil

Membership/Chairmanship of CommitteeBhagawati Gas LimitedAudit Committee : MemberRemuneration Committee : MemberShareholders’/Investors’ Grievance andShare Transfer Committee : Chairman

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

FINANCIAL RESULTS ( ` in Lakhs)

Particulars 2009-10 2008-09

Gross Income 710 1571

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

Interest 68 83

Depreciation 74 247

Provision for Tax 32 54

Net Profit/(Loss) 136 43

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

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

Hindustan Copper Ltd.( HCL) shut down its smelter at Khetri copper complex w.e.f. December 9, 2008 due to steep downturn in world copper prices. This resulted in shut down of company’s oxygen plants at Khetri Nagar Rajasthan as the sameare dedicated plants fully dependent on HCL . This has affected the financial performance of the company.As per the written communication HCL is likely to commission its smelter within the current financial year.

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

DIRECTORSMr. Kailash Chand Kedia, director of the company retire by rotation and being eligible offers himself for re-appointment.Mr. Ganga Charan has been appointed as an additional director of the company on February 10, 2010 to hold office up tothe date of the ensuing annual general meeting. The company has received notice from a member along with the requisitefee proposing his candidature as director of the company as required under Section 257 of the Companies Act, 1956.Your Directors consider it desirable that the company should continue to avail the guidance and advice of Mr GangaCharan and recommend his appointment as regular director.During the year under review, Capt. (Retd.) Sitaram Ramaprasad resigned from the Board of Directors of the company. TheBoard of Directors places on record its appreciation for the valuable services rendered by him during the tenure of his office.

DIRECTORS’ RESPONSIBILITY STATEMENTThe directors’ confirm:a. that in the preparation of the annual accounts, the applicable accounting standards have been followed;b. that they have selected such accounting policies and applied them consistently and made judgements and estimates

that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company at the endof the financial year and of the profits of the company for the year;

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

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

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

AUDITORS AND AUDITORS’ REPORTM/s. Chaturvedi & Partners, Chartered Accountants, the Statutory Auditors of the company, retire at the ensuing annualgeneral meeting and are eligible for reappointment.Information and explanation on remarks in the Auditors’ Reporti. In respect of auditors’ observation regarding non provision for doubtful advances, security deposits and sundry

debtors, it is submitted that the management is hopeful that the same will be recovered in due course of time andtherefore provision there against is not considered necessary.

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

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

DELISTING OF EQUITY SHARES FROM JAIPUR STOCK EXCHANGE, RAJASTHANThe equity shares of your company were delisted from Jaipur Stock Exchange, Rajasthan w.e.f. June 7,2010.

CHANGE IN NAME OF THE COMPANYThe name of the company has been changed from Bhagawati Gases Limited to Bhagawati Gas Limited w.e.f. October 23,2009 after obtaining approval of Central Government.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGOThe information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo asrequired under Section 217 (1)(e) of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules,1988 is given in Annexure I which forms part of the Directors’ Report.

MANAGEMENT DISCUSSION AND ANALYSISThe Management Discussion and Analysis Report on the operations and financial position of the company has beenprovided as Annexure II which forms part of the Directors’ Report.

CORPORATE GOVERNANCE REPORT AND GENERAL SHAREHOLDER INFORMATIONAs required by Clause 49 (VI) of the listing agreement entered into by the company with the stock exchanges, a detailedreport on corporate governance is provided as Annexure III which forms part of the Directors’ Report. The GeneralShareholders Information has been provided as Annexure IV which forms part of the Directors’ Report. The company isin compliance with the requirements and disclosures that have to be made in this regard. The practicing CompanySecretary certificate on compliance with corporate governance requirements by the company is attached to the CorporateGovernance Report and forms part of the Directors’ Report.

PERSONNELNone of the employees of the company was drawing salary in excess of the limits prescribed under the Section 217(2A)of the Companies Act, 1956 read with the Companies (particular of employees) Rules 1975.

ACKNOWLEDGEMENTRelation with the work force at all the units continued to be cordial. Your Directors wish to express their grateful appreciationfor the assistance and co-operation received from Financial Institutions, Banks, Government Authorities and Shareholdersduring the year under review.Your Directors also wish to place on record their appreciation for the service rendered by our people at all levels in thecompany and for their contribution towards the success of the organisation.

Corporate Office: For and on behalf of the BoardA-27-B, Sector-16,Noida - 201301Uttar Pradesh14th August, 2010

Rakesh S BhardwajChairman & Managing Director

ANNEXURE I TO THE DIRECTORS’ REPORT

Information as per Section 217(1)(e) of the Companies Act,1956 read with Companies(Disclosure of Particulars inthe report of the Board of Directors)Rules,1988 for the year ended March 31, 2010.

A. Conservation of Energy as per Form A - Not Applicable

B. Particulars as per Form B

1. Research & Development :

a) Specific area in which R & D carried out by the companyResearch and Development has been continuously carried to reduce evaporation of Oxygen Gas andconsumption of power.

b) Benefits derived as a result of the above Research & DevelopmentLoss on account of evaporation has been reduced considerably and less consumption of power.

c) Future Plan of ActionResearch and Development activities continued to reduce process wastage and utilization of waste Nitrogen.

d) Expenditure on R & DCharged under primary heads of accounts.

2. Technology absorption, adaptation & innovation

a) Efforts made towards technology absorption, adaptation and innovationThe Company has successfully absorbed the technology of the plant supplied by the manufacturer.

b) Benefits derived as a result of the above effortsQuality of Oxygen Gas produced is of very high standard and acceptable to the consumers of the company’sproduct.

c) Particulars relating to imported technology: Nil

C. Foreign Exchange Earnings And Outflow (in `)

Particulars 2009-10 2008-09

a) Foreign Exchange Outflow

— CIF value of import of Capital Goods 0.00 0.00

— CIF value of import of Components & Spare parts for repair 805,573 0.00

— Traveling Expenses (on Accrual Basis) 299,281 590,993

Total 1,104,854 590,993

b) Foreign Exchange Earning 0.00 0.00

ANNEXURE II TO THE DIRECTORS’ REPORT

MANAGEMENTS’ DISCUSSION AND ANALYSIS REPORTINDUSTRIAL GAS INDUSTRYThe industrial gas industry can broadly be divided in three categories depending on the requirement of the customers.These are as Tonnage supply scheme, Merchant market for bulk liquid and Cylinder gas deliveries. Tonnage supplyscheme market is primarily composed of bulk volume users who usually get the gas through direct pipe line from on siteproduction plant. The performance of this category is dependent on the performance of the bulk volume user.

Your company is under this category which supplies gas to Hindustan Copper Ltd. (HCL) Global economic crisis led todecline in copper prices in 2008-09 leading to shut down of its smelter at Khetri Nagar by HCL.

FUTURE OUTLOOKGovernment of India has approved issue of 10% of fresh equity by HCL besides divestment of 10% govt. stake in thiscompany. They have prepared expansion plan for their activities. As per the written communication received HCL is likelyto re-start operation of its smelter at Khetri Nagar Copper Complex within this financial year. Thus it is expected thatoxygen plants of your company shall also restart within the current financial year.

SOLAR ENERGYDue to the limited availability of fossil fuels resources government is supporting the applications of nonconventional andrenewable energy industry corporate are also considering this option. Considering the present dependency on solecustomer your company is exploring the entry in solar energy field and alternative energy systems. Solar energy is 100%eco-friendly having zero pollution during operations with no environmental risks. Bhagawati Gas Ltd. has entered in to anagreement with M/s Admira DHES Inc. of Ontario, Canada for collaborating in design, erection, operation & maintenanceand implementing projects of renewable energy systems in India as well as in Canada. Your company has also roped inWolfgang Scheffler of Germany as consultant for designing, engineering, development and training for fabricating Schefflermirror based complete solar thermal system. Your company is planning to undertake a training programme for fabricatingScheffler mirror based complete solar thermal system. Scheffler mirror is a automatically tracked parabolic solar collectorof solar thermal energy systems. It has wide applications in diverse industries like pharmaceutical, chemical, food & milkprocessing, cold storages, hotels & hospitals etc.

SEISMIC SURVEY OF HYDROCARBONSYour company has entered in to an MOU with M/s Rotor International Ltd., of Russia for cooperation in development ofpassive low- frequency seismic survey for direct hydrocarbon indication onshore in India. The company has accordinglyparticipated in the tender of Oil India Ltd, Duliajan, Assam in the current year.

Apart from the organic growth, your company intends to grow inorganically by way of acquisition and merger of domesticcompanies with diversified business interests, which is expected to improve top and bottom lines of the company.

HUMAN RESOURCESThe company regards its human resource as a valuable asset. The company has a team driven work process withcompletely flat organization system. This not only help us nurture leaders but also give us capable and assured col-leagues at all levels. As an integral part of the company’s initiative on Human Resource Management, the organizationhas been restructured to provide greater clarity of roles and responsibilities and clear accountability for business results.It is in the process of implementing a performance management system for all its employees and is upgrading the entiregamut of HR Policies, covering recruitment, compensation, capacity building, performance appraisal and career plan-ning.

CORPORATE GOVERNANCEThe company follows principle of effective Corporate Governance. The endeavor of the company is not only to complywith regulatory requirements but also to practice Corporate Governance principles that lay emphasis on integrity, trans-parency and overall accountability.

The company adheres to most of the recommendations made by the SEBI and incorporated by the Stock Exchanges inthe Standard Listing Agreement.

VALUE CREATIONYour Company is continuously striving to create value in all spheres of its activities. This encompasses not only value forits customers but also for its stakeholders. The Company has adopted Accounting Standards incorporating internationalbest practices and has moved towards transparency in its reporting .We will continuously endeavors to provide insight onthe operation of the Company to aid all stakeholders.

INTERNAL CONTROLS• The company has adequate systems of internal control in place. This is to ensure that assets are safeguarded

against loss from unauthorized use or disposition, and that transactions are authorized, recorded, and reportedcorrectly.

• The internal control systems are supplemented by an extensive program of internal audits. The internal audit func-tion is empowered to examine the adequacy, relevance and effectiveness of control systems, compliance withpolicies, plans and statutory requirements.

• The top management and the Audit Committee of the Board review the findings and recommendations of the inter-nal audit panel.

CAUTIONARY STATEMENTStatements in this management discussion and analysis describing the company’s objectives, projections, estimates andexpectations may be ‘forward looking statements’ within the meaning of applicable laws and regulations. Forward lookingstatements are identified in this report, by using the words ’anticipates’, ‘believes’, ‘expects’, ‘intends’ and similar expres-sions in such statements.

Although we believe our expectations are based on reasonable assumptions, these forward looking statements may beinfluenced by numerous risks and uncertainties that could cause actual outcomes and results to be materially differentfrom those expressed or implied.

ANNEXURE III TO THE DIRECTORS’ REPORT

REPORT ON CORPORATE GOVERNANCE(As required by Clause 49 of the Listing Agreement)

1. PhilosophyThe company believes that good corporate governance is essential to achieve long-term corporate goals and enhancestakeholders’ value.Thus the company’s philosophy on corporate governance is aimed at the attainment of highest level of transparency,accountability and compliance of laws in all facets of operations, leading to best standards of corporate governance.It is company’s belief that good ethics make good business sense and our business practices are in keeping withthis spirit of maintaining the highest level of ethical standards.

2. Board of DirectorsThe board consists of five directors. The composition of the board conforms to the Listing Agreement as per thedetails given below:

Category Name of DirectorPromoter/Executive Director Mr. Rakesh S Bhardwaj

Executive ChairmanMr. Vivek Sharma

Non-Executive Independent Director Dr. Gokulanand MukherjeeMr. Kailash Chand KediaMr. Ganga Charan*

* appointed as additional director w.e.f. February10, 2010.

3. Board Meetings, Attendance and other DirectorshipsThe company held five board meetings during the period April 1, 2009 to March 31,2010.The dates of the meetingsare April 30, 2009, June 27, 2009, July 31, 2009, October 30, 2009 and January 30, 2010.The attendance particularsare as follows:

Name of Director Attendance No. of other directorshipsParticulars and committee membership/chairmanship

Board Last Other Committee CommitteeMeetings AGM Directorships+ Memberships Chairmanships

Mr. Rakesh Samrat Bhardwaj 5 Yes 4 - -

Mr. Vivek Sharma 5 Yes 3 - -

Dr. Gokulanand Mukherjee 0 No - - -

Capt.(Retd.)Sitaram Ramaprasad# 3 Yes 1 - -

Mr. Kailash Chand Kedia 5 Yes - - -

Mr. Ganga Charan* 0 No - - -+Other directorship does not include private companies.#Resigned on September 24, 2009* Appointed on February 10, 2010.

4. Audit CommitteeThe company has complied with the requirements of Clause 49 of the Listing Agreement of the Stock Exchangesand Section 292A of the Companies Act, 1956 as regards composition of Audit Committee.

The Audit Committee consists of three non-executive independent directors. The committee is chaired by Mr. KailashChand Kedia, a non-executive independent director. The committee has held four meetings during the financial year2009-2010 i.e. April 30, 2009, July 31, 2009, October 30, 2009 and January 30,2010 .The composition of the Audit

Committee and the attendance of members at the meetings of the Audit Committee held during the financial year2009-2010 are as follows:

Name of the Members No. of meetings attended

Mr. Kailash Chand Kedia 4Dr. Gokulanand Mukherjee 2Capt. (Retd.) Sitaram Ramaprasad# 2Mr. Ganga Charan* 0

#Resigned on September 24, 2009,* Appointed on February 10, 2010.

The Audit Committee meetings were also attended by the Statutory/Cost auditors, wherever necessary.

The Audit Committee is responsible for overseeing the company’s financial reporting process, reviewing the quarterly/half yearly/annual financial statements, reviewing with the management the financial statements and adequacy ofinternal audit function, recommending the appointment/re-appointment of statutory auditors and fixation of auditfees, reviewing the significant internal audit findings/related party transactions, reviewing the management discussionand analysis of financial condition and result of operations and also statutory compliance issue. The committee actsas a link between the management, external and internal auditors and the Board of Directors of the company.

In addition, the committee has discharged such other role/function as envisaged under Clause 49 of the ListingAgreement of the Stock Exchanges and the provisions of Section 292A of the Companies Act,1956.

5. Remuneration CommitteeThe Remuneration Committee consists of three non-executive independent directors namely Mr. Kailash ChandKedia as Chairman and Dr. Gokulanand Mukherjee and Mr. Ganga Charan as members of the committee.

The role of the Remuneration Committee is to recommend to the board, the remuneration package of the executivedirectors. Remuneration of the executive directors is governed by the external competitive environment, track record,potential and performance of the executive and performance of the company.

The committee met once during the year.

6. Shareholders’/Investors’ Grievance and Share Transfer CommitteeThe committee consists of Mr. Ganga Charan, Mr. Rakesh Samrat Bhardwaj and Mr. Kailash Chand Kedia. Thiscommittee was earlier chaired by Capt.(Retd.) Sitaram Ramaprasad and after his resignation from the directorshipthe committee was chaired by Mr. Kailash Chand Kedia and when Mr. Ganga Charan joined as additional director hetook over the chairmanship of the committee. The committee’s scope includes share transfer, issue of duplicateshare certificates, overseeing of process of investor grievances and the performance of the Registrar and ShareTransfer Agent. The meetings of the committee were generally held in the time gap of 10 days. During the financialyear 2009-10 the committee met twenty one (21) times. The attendance of members at the meetings of theShareholders’/Investors’ Grievance and Share Transfer Committee held during the financial year 2009-2010 are asfollows:

Name of the Members No. of meetings attended

Mr. Ganga Charan* 3Capt.(Retd.)Sitaram Ramaprasad# 8Mr. Rakesh Samrat Bhardwaj 21Mr. Kailash Chand Kedia+ 21

*Appointed as chairman on February 10, 2010#Resigned from membership & chairmanship on September 24, 2009,+Appointed as chairman from September 24 ,2009 to February 10,2010 .

The Board has designated the Company Secretary as the Compliance Officer.

The total number of complaints received and replied to the satisfaction of shareholders during the year under review,were four (4).

7. Directors’ RemunerationThe details of remuneration paid to executive and non-executive directors for the year 2009-10 are as follows:

A. Executive Directors (Amount in `)Name/Designation Salary & Contribution to Other Total

Allowances Provident Fund Benefits

Mr. Rakesh S Bhardwaj 1,800,000 9,360 12,157 1,821,517Executive Chairman & Managing Director

Mr. Vivek Sharma 300,000 0.00 0.00 300,000Whole Time Director

B. Non- Executive DirectorsThe company doesn’t pay any remuneration to its non-executive directors except sitting fee for attending themeetings of the board and committee thereof. (Amount in `̀̀̀̀)

Name Sitting FeesDr. Gokulanand Mukherjee 0.00Capt.(Retd.)Sitaram Ramaprasad 0.00Mr. Kailash Chand Kedia 7,000Mr. Ganga Charan 0.00

The company currently does not have Stock Option Schemes.

8. General Body MeetingsA. Annual General Meeting (AGM)

Location and time for last three annual general meetings were:

Financial Year AGM No. Location Date Time2008-09 35th Banawas, Khetrinagar, September 12, 20092007-08 34th Distt. - Jhunjhunu, September 27, 2008 11.00 a.m.2006-07 33rd

Rajasthan - 333504September 29, 2007

Special Resolutions passed at the last three AGMsI. At the 35th AGM held on September 12, 2009 – Re-appointment of Mr. Rakesh Samrat Bhardwaj as

Managing Director of the company for a period of 5 years w.e.f. July 1,2009.

II. At the 34th AGM held on September 27,2008 - Voluntary de-listing of the equity shares of the companyfrom following stock exchanges:a. Jaipur Stock Exchange Limitedb. The Delhi Stock Exchange Association Limitedc. The Stock Exchange, Ahmedabadd. The Calcutta Stock Exchange Association Limited

B. Extra Ordinary General MeetingPlace : Banawas, Khetrinagar-333504, Jhunjhunu, RajasthanDate : October 20, 2009Type of Resolution : Special ResolutionPurpose : Name of the company changed from Bhagawati Gases Limited to

Bhagawati Gas Limited

C. Details of resolution passed by way of Postal BallotPursuant to Section 192A of the Companies Act, 1956 read with the Companies (Passing of the Resolution byPostal Ballot) Rules, 2001, during the year 2009-10, the company had conducted a postal ballot process videnotice dated June 27,2009, for obtaining approval of shareholders on the following ordinary resolution, the

results of which were declared on September 16, 2009. The details of ordinary resolution passed and votingpattern are noted below:“To lease, sell, transfer and/or otherwise dispose of the company’s 120TPD oxygen gas plant situated atBanawas, Khetrinagar, Distt.-Jhunjhunu, Rajasthan-333504 to any suitable party/parties at such considerationand with effect from such date as the Board of Directors of the company deem appropriate.”

Results of Postal Ballot

Sl.No. Particulars No. of No. of % ofPostal Ballot Shares Total Votes

1 Total Postal Ballot Forms dispatched to all 24,415 16,742,459 100.00the shareholders

2 Total number of Postal Ballot Forms received 44 5,221,480 31.19from the shareholders of the company till 15September,2009 in respect of the above resolution

3 Total number of Postal Ballot Forms not 24,371 11,520,979 68.81sent back by shareholders to the company till 15September,2009 in respect of the above resolution

4 Total number of Postal Ballot Forms found invalid 0 0 0.00

5 Total number of Postal Ballot Forms found valid 44 5,221,480 100.00

6 Total number of vote cast in favour of the resolution 41 5,221,080 99.99

7 Total number of vote cast against the resolution 3 400 0.01

8 Total number of vote cast neither in favour nor 0 0 0.00against resolution

Name of scrutinizerMs. Anjali Yadav, Practicing Company Secretary, New Delhi.Procedure of postal ballotThe postal ballot process was conducted in accordance with the provisions of Section 192A of the CompaniesAct, 1956, read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001.Resolutions, if required, shall be passed by postal ballot during the year ending March 31, 2011, as per theprescribed procedure.

9. Disclosures

a. Subsidiary CompaniesThe company has no subsidiary company.

b. Disclosure on materially significant related party transactionsThere were no materially significant related party transactions during the financial year 2009-10, that may havepotential conflict with the interest of the company at large. The details of related party transactions as perAccounting Standard -18 forms part of Notes to the Accounts (Note No. 8 of Schedule No.-17).

c. Disclosure of accounting treatmentThe company follows accounting standards issued by the Institute of Chartered Accountants of India and in thepreparation of financial statements, the company has not adopted a treatment different from that prescribed inany accounting standard.

d. Board disclosures - risk managementThe risk assessment and minimisation procedures are in place and the Audit Committee of the Board is regularlyinformed about the business risks and the steps taken to mitigate the same.

e. Proceeds from public issue / private placementThe proceeds raised in previous years from Initial Public Offering (IPO) have been fully utilised in terms of theobjects of the issue as stated in the offering documents.

f. Management Discussion and Analysis ReportThe Management Discussion and Analysis Report has been provided as Annexure II of the Director’s Report.

g. Profile of directors seeking appointment / re-appointmentProfile of the directors seeking appointment / re-appointment forms part of the notice of the AGM.

h. Certification from Managing Director and Chief Financial OfficerThe requisite certification from the Chairman & Managing Director and Chief Financial Officer for the financialyear 2009-10 required to be given under Clause 49(V) was placed before the Board of Directors of the companyat board meeting held on August 14, 2010. A copy thereof is reproduced in this report.

i. Details of non-compliance with regard to capital marketWith regards to the matters related to capital markets, the company has complied with all requirements of theListing Agreement as well as SEBI regulations and guidelines. No penalty was imposed or strictures passedagainst the company by the Stock Exchanges, SEBI or any other statutory authority during the last three yearsin this regard. The company has paid listing fees to Bombay & Delhi Stock Exchange and annual custodial feesto the depositories for the financial year 2010-11, in terms of Clause 38 of Listing Agreement but to Kolkata andAhmedabad Stock Exchanges remain unpaid till date. There was no penalty imposed or stricture passed on thecompany by the Stock Exchanges, SEBI or any other statutory authority on any matter related to capitalmarkets, during last three years.

j. Details of compliance with mandatory requirements and adoption of non-mandatory requirements ofClause 49 of the Listing AgreementThe company has complied with all the mandatory requirements as mandated under Clause 49 of the ListingAgreement except, due to resignation of director, Audit Committee, Shareholders’/Investors’ Grievance andShare Transfer Committee and Remuneration Committee of the board had only 2 members instead of minimum3 members from September 24, 2009 to February 9, 2010. A certificate on compliance of the conditions ofcorporate governance under Clause 49 of the Listing Agreement from a practicing company secretary hasbeen included in this report.Besides mandatory requirements, the company has constituted a Remuneration Committee to consider andrecommend the remuneration of the executive directors.

k. Whistle Blower PolicyThe company has well defined Whistle Blower Policy and no persons have been denied access to the AuditCommittee.

l. Means of Communication(i) Quarterly / Annual Results

The Quarterly/Annual results and notices as required under Clause 41 of the Listing Agreement are normallypublished in the ‘Business Standard’ (English edition) and ‘Dainik Lokmat’ (Hindi edition, Jaipur).

(ii) Posting of information on the website of the companyThe Annual/Quarterly results of the company, shareholding pattern, the official news releases, are notifiedto the Stock Exchanges. The company is in the process of relaunching its official web site to post relevantdata on it.

ANNEXURE IV TO THE DIRECTORS’ REPORT

GENERAL SHAREHOLDER INFORMATION(As required by Clause 49 of the Listing Agreement)

1. Annual General Meeting : 36th Annual General MeetingDay and date : Thursday, September 30, 2010Time : 11.00 a.m.Venue : Banawas, Khetrinagar,

Distt. - Jhunjhunu, Rajasthan - 333504

2. Financial Calendar for 2010-11 (tentative schedule)Financial year : April 1 to March 31

Board meetings for approval of unaudited quarterly results1st quarter ended on June 30, 2010 : on or before August 15, 2010,2nd quarter ended on September 30, 2010 : on or before November 15, 2010,3rd quarter ended on December 31, 2010 : on or before February 15, 2011,4th quarter ended on March 31, 2011 : on before May 15, 2011,Annual results for financial year ended : Within 60 days of the close of Financial YearMarch 31, 2011(audited)Annual General Meeting for the year 2010-11 : In accordance with Section 166 of Companies Act, 1956.

3. Book Closure date : Monday, September 27, 2010 toThursday, September 30, 2010(both days inclusive)

4. Dividend payment date : Not Applicable

5. Listing on Stock Exchanges : The equity shares of the company are listed on the followingstock exchanges:i. Bombay Stock Exchange Limited (BSE)

P.J.Towers,Dalal Street,Fort,Mumbai-400001.ii. The Delhi Stock Exchange Limited (DSE)

DSE House, 3/1, Asaf Ali Road, New Delhi–110 002iii. The Stock Exchange, Ahmedabad

Kamdhenu Complex, Opp. Sahajanand College,Panjarapole, Ambawadi, Ahmedabad-380001

iv. Calcutta Stock Exchange Association Limited, Kolkata7 ,Lyons Range, Calcutta 700 001.

7. Stock codeFor equity shares:Bombay Stock Exchange Limited : 500051The Delhi Stock Exchange Limited : 02171The Stock Exchange, Ahmedabad : 08217Calcutta Stock Exchange Asoociation Ltd. : 12052International Security Identification Number : INE099C01010

8. Corporate Identity Number (CIN) : L24111RJ1974PLC005789

9. Share Price Performance in comparisons with Sensex (BSE) & Oil Gas Indices (BSE)

BHAGAWATI GAS LIMITED BSE SENSEX BSE OILGAS INDICES

Month High Low Volume High Low High Low(in `) (in `)

Apr-09 6.75 4.11 314875 11,492.10 9,546.29 8,331.65 6,934.38

May-09 9.76 4.51 872603 14,930.54 11,621.30 10,607.66 8,284.73

Jun-09 10.94 7.00 553667 15,600.30 14,016.95 10,617.87 8,901.98

Jul-09 8.09 5.75 243961 15,732.81 13,219.99 9,738.39 8,335.82

Aug-09 10.11 6.76 840598 16,002.46 14,684.45 10,082.84 9,221.18

Sep-09 10.30 8.02 391665 17,142.52 15,356.72 10,518.89 9,546.77

Oct-09 8.60 6.07 302135 17,493.17 15,805.20 10,749.15 9,401.49

Nov-09 8.50 5.90 389768 17,290.48 15,330.56 10,561.15 9,008.52

Dec-09 7.99 6.63 381134 17,530.94 16,577.78 10,701.62 9,857.49

Jan-10 10.30 7.00 1091608 17,790.33 15,982.08 10,895.69 9,738.29

Feb-10 8.75 6.78 637934 16,669.25 15,651.99 10,110.75 9,470.31

Mar-10 7.80 6.55 626574 17,793.01 16,438.45 10,336.68 9,583.41

10. Registrar & Transfer Agent : Skyline Financial Services Private Limited,D-153 A, Okhla Industrial Area,Phase - I, New Delhi - 110 020

: E-mail : [email protected]: Phone : 011-26812682,83: Fax : 011-26812684

11. Share Transfer System : In compliance of SEBI requirement, Share transfers areentertained, both under Demat Form and Physical Form. Sharetransfers in respect of physical shares are normally effectedwithin 10-15 days from the date of receipt.

12. Status of investors’ complaintsThe status of investors’ complaints as on March 31, 2010, is as follows:

Number of complaints as on April 1, 2009 0

Number of complaints received during the financial year 2009-10 4

Number of complaints resolved up to March 31, 2010 4

Number of complaints pending as on March 31, 2010 0

13. Shareholding Pattern as on March 31, 2010

CATEGORY NO. OF PERCENTAGE OFSHARES HELD SHAREHOLDING

A. Promoter’s HoldingPromoters & their relatives 5,706,090* 34.08

B. Non-Promoters Holding1. Institutional Investors

Mutual Funds/UTI 24,800 0.15Financial Institutions/Banks 922,966 5.51

CATEGORY NO. OF PERCENTAGE OFSHARES HELD SHAREHOLDING

2. OthersPrivate Corporate Bodies 2,097,087 12.53Indian Public 7,911,111 47.25NRI 80,405 0.48TOTAL 16,742,459 100.00

* 1,449,800 shares are pledged.

14. Directors’ Shareholding

Name of Directors No. of Shares HeldMr. Rakesh S Bhardwaj 1,549,017

Mr. Vivek Sharma 24,400

Dr. Gokulanand Mukherjee 500

15. Distribution of Shareholding as on March 31, 2010

SHARE SHARE %TO SHARES TOTAL %AGEHOLDING HOLDERS TOTAL SHARES

NUMBERS NUMBER PHYSICAL NSDL CDSLUp to 500 21,585 89.88 1,461,425 1,104,069 549,328 3,114,822 18.60501-1000 1,276 5.31 74,200 692,923 374,628 1,141,751 6.82

1001-2000 576 2.40 57,800 571,391 306,090 935,281 5.59

2001-3000 195 0.81 21,700 305,258 187,805 514,763 3.07

3001-4000 77 0.32 19,500 168,237 91,608 279,345 1.67

4001-5000 97 0.40 32,800 287,606 149,598 470,004 2.81

5001-10000 108 0.45 29,700 536,834 247,239 813,773 4.8610001&Above 103 0.43 6,467,643 2,244,138 760,939 9,472,720 56.58

24,017 100.00 8,164,768 5,910,456 2,667,235 16,742,459 100.00

16. Outstanding GDRs/ADRs/Warrants or : The company has not issued any GDRs/ADRs/Warrants &any convertible Instruments convertible instruments.

17. Registered Office & Plant Location : Banawas,Khetrinagar, Distt.-Jhunjhunu, Rajasthan-333504.Phone : 01593-221478-80Fax : 01593-221477.

18. Corporate Office : A-27-B, Sector-16, Noida-201301, Uttar Pradesh.Phone : 0120-4749901Fax : 0120-4749919E-mail : [email protected]

19. Name, designation and contact details : Mr. Sanjay Kumar (Company Secretary)of the Compliance Officer Bhagawati Gas Limited

A-27-B, Sector-16, Noida-201301, Uttar Pradesh.Phone : 0120-4749901Fax : 0120-4749919E-mail : [email protected]

BALANCE SHEET AS AT MARCH 31, 2010As at As at

Schedule March 31, 2010 March 31, 2009`̀̀̀̀ `̀̀̀̀ `̀̀̀̀ `̀̀̀̀

SOURCES OF FUNDSShareholders FundsShare Capital 1 167,424,590 167,424,590Reserves & Surplus 2 85,245,529 252,670,119 71,601,436 239,026,026

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Loan FundsSecured Loans 3 35,830,141 79,099,001Unsecured Loans 4 9,554,743 9,336,253

Deferred Tax Liabilities 25,942,549 22,780,873----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------

323,997,552 350,242,153====================================== ======================================

APPLICATION OF FUNDSFixed Assets 5Gross Block 649,999,817 637,968,152Less : Depreciation (457,455,713) (452,006,986)

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Net Block 192,544,104 185,961,166Investments 6 335,000 335,000Current Assets, Loans and Advances 7Inventories 1,033,949 2,618,380Sundry Debtors 89,861,481 82,509,093Cash and Bank Balances 17,267,561 9,338,367Other Current Assets 8,360,903 385,043Loans and Advances 131,975,712 115,214,499

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------248,499,606 210,065,382

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Less : Current Liabilities & Provisions 8Current Liabilities 103,558,691 34,915,033Provisions 13,822,467 11,204,362

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------117,381,158 46,119,395

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Net Current Assets 131,118,448 163,945,987

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------323,997,552 350,242,153

====================================== ======================================Significant Accounting Policies 16Notes on Accounts 17

As per our report of even date attachedFor CHATURVEDI & PARTNERS FOR AND ON BEHALF OF THE BOARDChartered AccountantsFirm Registration No. 307068E

R. N. Chaturvedi Rakesh S. Bhardwaj Kailash Chand KediaPartner Chairman & Managing Director DirectorMembership No. 092087

Pradeep Puranik Sanjay KumarChief Financial Officer Company Secretary

Membership No. 17021Place: New Delhi Place : New DelhiDate : August 14, 2010 Date : August 14, 2010

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010For the Year Ended For the Year Ended

Schedule March 31, 2010 March 31, 2009`̀̀̀̀ `̀̀̀̀ `̀̀̀̀ `̀̀̀̀

INCOMESales & Services 9 61,511,795 148,179,732Less: Excise Duty — 61,511,795 13,312,349 134,867,383

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Other Income 10 9,457,588 22,184,993Increase / (Decrease) in Stock 11 — —

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------70,969,383 157,052,376

====================================== ======================================

EXPENDITUREPurchases — 21,128,922Manufacturing and Operating Expenses 12 4,585,753 45,529,466Personnel Expenses 13 8,119,640 9,329,731Administrative & Other Expenses 14 26,982,814 38,154,326Financial Expenses 15 7,104,526 8,522,485Depreciation 7,361,414 24,664,320

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------54,154,147 147,329,250

====================================== ======================================Profit for the year before Tax 16,815,236 9,723,126

Provision for Tax— Current Tax 2,596,492 947,087— Deferred Tax (Refer Note 10 of Schedule 17) 3,161,677 4,910,597— Fringe Benefit Tax 9,466 528,090— Mat Credit Carried Forward (2,596,492) 3,171,143 (947,087) 5,438,687

----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Profit /(Loss) for the Year 13,644,093 4,284,439Balance brought forward from Previous Year (7,609,977) (11,894,416)

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Balance Transferred to Balance Sheet 6,034,116 (7,609,977)

====================================== ======================================Earnings per Share (Basic & Diluted) (in `) 0.81 0.26(Refer Note 11 of Schedule 17)

Significant Accounting Policies 16Notes on Accounts 17

As per our report of even date attachedFor CHATURVEDI & PARTNERS FOR AND ON BEHALF OF THE BOARDChartered AccountantsFirm Registration No. 307068E



Membership No. 17021Place: New Delhi Place : New DelhiDate : August 14, 2010 Date : August 14, 2010

SCHEDULES FORMING PART OF THE BALANCE SHEETAs at As at

March 31, 2010 March 31, 2009`̀̀̀̀ `̀̀̀̀ `̀̀̀̀ `̀̀̀̀

SCHEDULE - 1 : SHARE CAPITALAuthorised25,000,000 (25,000,000) Equity Shares `10/- each 250,000,000 250,000,000

====================================== ======================================Issued ,Subscribed & Paid Up16,742,459 (16,742,459)Equity Shares of `10/- each 167,424,590 167,424,590

====================================== ======================================SCHEDULE - 2 : RESERVES & SURPLUSShare Premium Account 66,700,165 66,700,165General ReserveBalance at the beginning of the year 12,511,248 12,511,248Add: Balance as per Profit & Loss Account — 12,511,248 (7,609,977) 4,901,271

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Profit & Loss AccountSurplus as per Profit & Loss Account 6,034,116 —

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------85,245,529 71,601,436

====================================== ======================================SCHEDULE - 3 : SECURED LOANSTerm Loans - From Financial InstitutionsIndustrial Development Bank of India Limited 15,845,000 36,690,000IFCI Limited 3,407,218 6,814,436Term Loans- From BanksCentral Bank of India 10,153,006 15,044,323Other LoansVehicle loans from others 982,710 1,367,594Cash Credit loan from Bank 5,442,207 19,182,648

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------35,830,141 79,099,001

====================================== ======================================

Notes :

1 Term loan (Zero Rate Optionally convertible Loan) from Financial Institutions, are secured by mortgage of company’simmovable properties and hypothecation of all movable properties both present and future subject to prior charge infavour of Company’s bankers on specified movables.The lenders have the right/option to convert the loan into fullypaid up equity share capital anytime during the currency of loan.

2 Term loan from Banks are secured by Second Charge on Block Assets of the company and further secured bypersonal guarantee of the Chairman & Managing Director.

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

4 Vehicle loans are secured by hypothecation / lien over respective vehicles.

SCHEDULE - 4 : UNSECURED LOANSFrom Body Corporate 9,554,743 9,336,253

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------9,554,743 9,336,253

====================================== ======================================

SCHEDULE - 5 : FIXED ASSETS(Amount in `)

GROSS BLOCK DEPRECIATION NET BLOCK

PARTICULARS As at Sales/ As at Up to For the On On Up to As at As atApril 1,2009 Additions Adjustments March 31, March 31, Year Sales Adjusments March 31, March 31, March 31,

2010 2009 2010 2010 2009

Freehold Land 6,675,340 — — 6,675,340 — — — — — 6,675,340 6,675,340

Building 52,960,097 327,002 — 53,287,099 18,214,194 1,501,057 — — 19,715,251 33,571,848 34,745,903

Plant & Machinery 522,537,564 13,077,327 — 535,614,891 390,066,732 3,809,593 — — 393,876,325 141,738,566 132,470,832

Truck & Tankers 33,536,482 — 2,853,098 30,683,384 32,125,096 — 1,912,686 — 30,212,410 470,974 1,411,386

Furniture & Fixture 3,073,428 3,938 — 3,077,366 2,264,494 108,438 — — 2,372,932 704,434 808,934

Office Equipment 7,362,945 149,525 — 7,512,470 5,840,220 303,654 — — 6,143,874 1,368,596 1,522,725

Vehicles 6,008,055 — — 6,008,055 3,198,014 433,659 — — 3,631,673 2,376,382 2,810,041

Lease HoldImprovement 5,814,241 1,326,971 — 7,141,212 298,236 1,205,012 — — 1,503,248 5,637,964 5,516,005

Total 637,968,152 14,884,763 2,853,098 649,999,817 452,006,986 7,361,413 1,912,686 — 457,455,713 192,544,104 185,961,166

Previous year 639,416,269 8,976,381 10,424,498 637,968,152 436,167,688 24,664,320 8,825,022 — 452,006,986 185,961,166

As at As atMarch 31, 2010 March 31, 2009

`̀̀̀̀ `̀̀̀̀

SCHEDULE - 6 : INVESTMENTSLong Term InvestmentsQuoted190,000 Equity Shares of ` 10 each ofBhagawati Oxygen Limited 1,900,000 1,900,000Market Value ` 285,000(Previous year ` 285,000)

Un-Quoted65,000 Equity Shares of ` 10 each ofChaturvedi Metals Private Limited 650,000 650,000

Franklin Asian Equity Fund 50,000 50,000----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------

2,600,000 2,600,000Less: Provision for diminution invalue of investments (2,265,000) (2,265,000)

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------335,000 335,000

====================================== ======================================


`̀̀̀̀ `̀̀̀̀

SCHEDULE - 7 : CURRENT ASSETS,LOANS AND ADVANCES

CURRENT ASSETSInventoriesStores & Spares 1,033,949 2,488,672Material (Trading goods) — 47,996Gases — 81,712

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------1,033,949 2,618,380

====================================== ======================================Sundry Debtors(Unsecured, Considered good,unless otherwise stated)Debts outstanding for a period exceeding six months 77,739,677 44,035,812(Refer Note 4 of Schedule 17)Other Debts 14,284,704 38,473,281

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------92,024,381 82,509,093

Less:Provision for Doubtful Debt 2,162,900 —----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------

89,861,481 82,509,093====================================== ======================================

Cash & Bank BalanceCash in hand 1,038,021 694,882Cheques in Hand 2,057,797Balances with scheduled banksIn Current Account 13,291,893 5,105,072In Fixed Deposit Account 879,850 3,538,413

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------17,267,561 9,338,367

====================================== ======================================Other Current AssetsInterest accrued on deposits 8,360,903 385,043

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------8,360,903 385,043

====================================== ======================================Loans and Advances (unsecured , consideredgood unless otherwise stated)Loan to Body Corporate 72,489,355 60,398,572Advances recoverable in cash or in kind or forvalue to be received— Capital Advances 7,583,436 7,583,369— Other Advances 25,843,940 26,622,981Prepaid Expenses 185,955 199,981Tax deducted at source 8,849,626 6,536,757Advance from Suppliers 811,649 —MAT credit entitlement 7,511,025 4,914,536Security deposits 8,435,881 8,778,480Balance with Excise Department 264,845 179,823

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------131,975,712 115,214,499

====================================== ======================================


`̀̀̀̀ `̀̀̀̀

SCHEDULE - 8 : CURRENT LIABILITIESAND PROVISIONS

Current LiabilitiesSundry Creditors 32,901,920 31,123,717Advance received 66,177,425 —Security Deposits from customers 2,305,823 2,305,823Other Current liabilities 2,173,523 1,485,493

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------103,558,691 34,915,033

====================================== ======================================ProvisionsFor Retirement Benefits 5,419,248 5,397,632For Income Tax 8,403,219 5,806,730

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------13,822,467 11,204,362

====================================== ======================================

SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNTFor the Year Ended For the Year Ended

March 31, 2010 March 31, 2009`̀̀̀̀ `̀̀̀̀

SCHEDULE - 9 : SALES & SERVICESSales of Gases & OthersManufactured — 106,022,432Trading Goods — 9,003,631Compensation from the customers 61,511,795 33,153,669

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------61,511,795 148,179,732

====================================== ======================================

SCHEDULE - 10 : OTHER INCOMEInterest— On Bank deposits 2,288 178,166

(Gross,Tax deducted at source ` 0.00,Previous Year ` 17,550)

— On Loans/ Advances 8,350,716 7,440,807(Gross,Tax deducted at source ` 901,002,Previous Year ` 1,552,209)

Profit on sale of fixed Assets 104,588 620,524(Net of Loss of ` 859,017, Previous Year ` 412,430)Rent received 999,996 999,996Foreign Exchange Gain — 580,500Survey Charges — 10,320,000Miscellenous Receipt — 2,045,000

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------9,457,588 22,184,993

====================================== ======================================

For the Year Ended For the Year Ended March 31, 2010 March 31, 2009

`̀̀̀̀ `̀̀̀̀ `̀̀̀̀ `̀̀̀̀

SCHEDULE - 11 :INCREASE/(DECREASE)IN STOCKStock at closingTrading goods — 47,996Gases — — 81,712 129,708

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Stock at OpeningTrading goods 47,996 47,996Gases 81,712 129,708 81,712 129,708

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Stocks Written OffTrading goods 47,996 —Gases 81,712 129,708 — —

----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------— —

====================================== ======================================SCHEDULE - 12 : MANUFACTURINGAND OPERATING EXPENSESPower & Water Charges 3,745,778 41,031,658Stores & Spares Consumed 889 276,613Repairs to :Building 90,770 873,077Plant & Machinery 559,812 3,279,098Other Assets 188,504 839,086 69,020 4,221,195

----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------4,585,753 45,529,466

====================================== ======================================SCHEDULE - 13 : PERSONNEL EXPENSESSalary, Wages, Allowances, Bonus and Benefits 7,031,377 8,435,101Contribution to Provident and Other Funds 395,032 398,066Workmen & Staff Welfare Expenses 693,231 496,564

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------8,119,640 9,329,731

====================================== ======================================SCHEDULE - 14 : ADMINISTRATIVE &OTHER EXPENSESTravelling & Conveyance 2,750,488 7,076,193Directors’ Remuneration 2,121,517 2,062,410Directors’ Sitting Fees 7,000 43,750Rates, Taxes & Fees 254,142 154,192Electricity charges 378,005 440,594Rent 8,053,800 7,647,225Business Promotion Expenses 2,075,424 2,342,199Other Miscellaneous Expenses 3,565,752 6,375,371Auditors’ Remuneration 288,511 283,291Security Service Charges 589,291 507,161Telephones & Fax 403,057 411,954Commission 1,800,000 —Provision for Doubtful Debts 2,162,900 —Legal & Professional 837,417 1,276,512Doubtful debtors written off — 459,913Stocks written off 129,708 —Contribution to Scientific Research Institution 325,000 327,700Insurance Charges 241,562 324,029Hire charges 37,800 1,157,579Survey Charges — 3,328,800Vehicle expenses 961,440 3,935,453

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------26,982,814 38,154,326

====================================== ======================================


`̀̀̀̀ `̀̀̀̀ `̀̀̀̀ `̀̀̀̀

SCHEDULE - 15 : FINANCIAL EXPENSESInterestOn fixed loans 3,139,575 4,672,985On others 3,703,696 6,843,271 3,686,426 8,359,411

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Bank Charges 261,255 163,074

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------7,104,526 8,522,485

====================================== ======================================

SCHEDULE - 16 : SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF ACCOUNTINGi) 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 CharteredAccountants of India and relevant provisions of the Companies Act, 1956.

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

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

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

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

5. REVENUE RECOGNITIONi) 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 TRANSACTIONSi) 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 offorward contract the difference between the forward rate and the exchange rate on the date of transaction isrecognized as income or expense over the life of the contract.

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

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

8. EMPLOYEE BENEFITSi) Defined Contribution Plan : The company’s contribution paid/payable for the year to defined contribution

retirement benefit schemes are charged to Profit and Loss Account.ii) Defined Benefit Plan : The company’s liabilities towards defined benefits schemes are determined using the

Projected Unit Credit Method. Actuarial valuations under the Projected Unit Credit Method are carried out at thebalance sheet date. Actuarial gains and losses are recognised in the Profit and Loss Account in the period ofoccurrence of such gains and losses.

iii) Short Term Employee Benefits : Short-term employee benefits expected to be paid in exchange for theservices rendered by employees are recognized undiscounted during the period employee renders services.

9. SEGMENT REPORTINGThe business of the company consists of manufacturing of single product i.e. Gases. Therefore the AccountingStandard (AS-17) on Segment Reporting is not applicable.

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

11. EARNINGS PER SHAREThe earnings considered in ascertaining the company’s Earnings per Share (EPS) comprises the Net Profit or Lossfor the period after tax and extra ordinary items. The basic EPS is computed on the basis of weighted averagenumber of equity shares outstanding during the year. The number of shares for computation of diluted EPS comprisesof weighted average number of equity shares considered for deriving basic EPS and also the weighted averagenumber of equity shares which could be issued on the conversion of all dilutive potential equity shares. Dilutivepotential 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 actuallyissued at fair value. The number of shares and potentially dilutive shares are adjusted for shares splits/reverse sharesplits (consolidation of shares) and bonus shares, as appropriate.

12. TAXES ON INCOMETax expense for the year comprises of current tax and deferred tax. Current taxes are computed at the current rateof tax in accordance with provisions of the Income Tax Act, 1961Deferred tax assets and liabilities are recognized for future tax consequences attributable to the timing differences thatresult between taxable profit and the profit as per the financial statements. Deferred tax assets and liabilities are measuredusing 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 theextent there is virtual certainty that sufficient future taxable income will be available against which such deferred taxassets can be realized.The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Profit & Loss Account inthe year of change.

13. IMPAIRMENTThe carrying values of assets of the cash-generating units at each balance sheet date are reviewed for impairment.If any indication of such impairment exists, the recoverable amounts of those assets are estimated and impairment

loss is recognised, if the carrying amount of those assets exceeds their recoverable amount. The recoverable amountis the greater of the net selling price and their value in use. Value in use is arrived at by discounting the estimatedfuture cash flows to their present value based on appropriate discount factor.

14. CONTINGENT LIABILITIESContingent liabilities are determined on the basis of available information and are disclosed by way of note toaccounts.

SCHEDULE - 17 : NOTES ON ACCOUNTS1. Contingent liabilities not provided for: (Amount in `)

Particulars Year ended Year endedMarch 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 `0.00 (previous year ` 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 ` 23,083,887 recoverable fromHindustan Copper Limited (HCL) along with interest. The Additional District Judge, Khetri, Rajasthan has dismissedthe appeal filed by HCL against the arbitration award and passed an order for decree. The HCL has preferred anappeal against the said order in the High Court of Judicature for Rajasthan at Jaipur bench, Jaipur. The Hon’ble HighCourt have admitted HCL’s appeal and granted interim stay and directed HCL to deposit the award amount of` 2,3083,887. The Honorable Supreme Court on an appeal of HCL had modified the award and the company waspermitted to withdraw the said amount by furnishing security to the satisfaction of the Court. The company haswithdrawn 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 ` 68,820,333 with interest thereon, claimed from HCL ispassed by the arbitral tribunal in favour of the company. Hindustan Copper Limited (HCL) has preferred an appealunder 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 ` 23,911,431 (` 22,003,031), Security Deposit of ` 300,000 (` 300,000) and Sundry Debtors of` 9,978,855 are considered doubtful of recovery. The management is hopeful of recovering the amount in duecourse 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 ‘AirSeparation Plant’ (120 TPD) to be installed at Sunflag’s 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 willpass to the Sunflag on completion of delivery. Pending completion of delivery and transfer of title, the cost of planthaving the aggregate net written down value of ̀ 93,482,377 (Gross value ̀ 393,213,932 and accumulated depreciationof ` 299,731,555) related to such plant.

8. Related Party Disclosure:List of related parties

Relationship Name of the related party

Parties under common control Bhagawati International LimitedBhagawati Combat Systems LimitedLavino Portfolios Private Limited

Key management personnel and their relatives Mr. Rakesh S. Bhardwaj (Managing Director)Mrs. Shachi BhardwajMr. Vivek Sharma (Whole Time Director)

Summary of the transactions with the above related parties are given below: (Amount in `)

Nature of Key management Parties under TotalTransaction personnel and their relatives common control

March 31, March 31, March 31, March 31, March 31, March 31,2010 2009 2010 2009 2010 2009

Advances Given 0.00 0.00 15,706,870 15,027,333 15,706,870 15,027,333

Advances Repaid 0.00 0.00 5,344,855 3,500,000 5,344,855 35,00,000

Payment of Rent 7,800,000 7,200,000 0.00 0.00 7,800,000 7,200,000

Remuneration 2,121,517 2,071,770 0.00 0.00 2,121,517 2,071,770

Balance (Dr) (Dr) (Dr) (Dr) (Dr) (Dr)outstanding at 1,022,434 1,040,931 57,950,250 47,588,235 58,972,684 48,629,166the year end

Disclosure of Material Transactions with Related Parties: (Amount in `)


Advances Given

Bhagawati International Limited 15,706,870 15,027,333

Advances Repaid

Bhagawati International Limited 5,344,855 3,500,000

Payment of Rent

Mrs Shachi Bhardwaj 7,800,000 7,200,000

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

10. In accordance with Accounting Standard (AS 22) on “Accounting for Taxes on Income” issued by the ICAI, thecompany has accounted for deferred taxes during the year.Following are the major components of deferred tax assets / (liabilities): (Amount in `)

Component As at Charge/ As atApril 1, 2009 (Credit) March 31, 2010

Deferred Tax Liabilities

Difference in depreciation betweenAccounting Books and Tax Return 36,764,562 2,905,439 33,859,124

Total 36,764,562 2,905,439 33,859,124

Deferred Tax (Assets)

Provision for retirement benefits (1,905,068) 152,695 (1,752,372)

Expenses disallowed u/s 40(a) (252,430) 252,430 0.00

Brought forward income tax losses (1,10,56,320) 6,260,338 (4,795,982)

Provision for doubtful debt 0.00 (668,336) (668,336)

Provision for dimulation in investment (7,69,874) 69,989 (699,885)

Total (13,983,691) 6,067,116 (7,916,575)

Net Deferred Tax Liability/(Assets) 22,780,872 (3,161,677) 25,942,549

11. Earnings per Share (Amount in `)

Basic and diluted earnings per share Year ended Year endedMarch 31, 2010 March 31, 2009

A. Number of shares 16,742,459 16,742,459

B. Weighted average number of shares during the year 16,742,459 16,742,459

C. Profit/Loss after tax (in `) 13,644,093 4,284,440

D. Basic & Diluted EPS (in `) 0.81 0.26

12. Managerial RemunerationManagerial remuneration paid during the financial year to the executive directors. (Amount in `)


Mr. Rakesh S. Bhardwaj (Managing Director)

Salary & Allowances 1,800,000 1,800,000

Contribution to Provident Fund 9,360 9,360

Other benefits 12,157 12,410

Total (A) 1,821,517 1,821,770

Mr. Vivek Sharma (Whole Time Director)

Salary & Allowances 300,000 250,000

Total (B) 300,000 250,000

Total (A+B) 2,121,517 2,071,700

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

13. Payment to Auditors (Amount in `)


(A) Statutory Auditors

Audit Fee 187,510 187,510

Tax Audit Fee 55,150 55,150

Limited Review of Results 26,843 26,843

In other capacity

(a) For Certification work 0.00 3,037

(b) Reimbursement of expenses 4,008 10,694

Total (A) 273,511 283,234

(B) Cost Auditors

Audit Fee 15,000 13,788

Total (B) 15,000 13,788

Total (A+B) 288,511 297,022

14. Balance due to /from various parties are subject to confirmations/ reconciliations thereof. Management does notconsider 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 CompaniesAct, 1956:

i. Particulars in respect of Production, Sales and Stocks of Finished goods: (Qty in Thousands)

Class of Unit Opening Stock Production Sales/ Closing stockGoods As on Adjustiments As on

April 1, 2009 March 31, 2010

Qty. Value (`̀̀̀̀) Qty. Qty. Value (`̀̀̀̀) Qty. Value (`̀̀̀̀)Oxygen NM3 1 9,896 0.00 1 9,896 0.00 0.00

(1) (9,896) (12,401) (12,401) (92,710,083) (1) (9,896)Nitrogen NM3 4 34,815 0.00 4 34,815 0.00 0.00

(4) (34,815) (0.00) (0.00) (0.00) (4) (34,815)Argon NM3 1 37,001 0.00 1 37,001 0.00 0.00

(1) (37,001) (0.00) (0.00) (0.00) (1) (37,001)Total NM3 6 81,712 0.00 6 81,712 0.00 0.00

(6) (81,712) (12,401) (12,401) (92,710,083) (6) (81,712)

ii. Particulars in respect of Purchases, sales and Stocks of Finished goods purchased for resale:(Qty. NM3 In Thousands)

Class of Unit Opening Stock Production Sales / Adjustment Closing StockGoods As on As on

April 1, 2009 March 31, 2010Qty. Value (`̀̀̀̀) Qty. Value ( `̀̀̀̀) Qty. Value ( `̀̀̀̀) Qty. Value (`̀̀̀̀)

Oxygen NM3 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00(0.00) (0.00) (1,092) (9,115,071) (1,092) (9,102,763) (0.00) (0.00)

Power Cells Nos. 13 47,996 0.00 0.00 13 47,996 0.00 0.00(13) (47,996) (0.00) (0.00) (0.00) (0.00) (13) (47,996)

Total 13 47,996 0.00 0.00 13 47,996 0.00 0.00(13) (47,996) (1,092) (9,115,071) (1,092) (9,102,763) (13) (47,996)

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

iv. Value of imported & indigenous stores & spares consumed and percentage of each of the total consumption:


Value (`̀̀̀̀) % Value (`̀̀̀̀) %Stores & Spares— Imported 0.00 0.00 0.00 0.00

— Indigenous 0.00 0.00 276,613 100.00Total 0.00 0.00 276,613 100.00

v. CIF value of Imports (Amount in `)


Capital Goods 0.00 9,815,680

Components & spare parts for repair 805,573 2,710,155

vi. Expenditure in Foreign Currency (On Accrual Basis) (Amount in `)


Traveling Expenses 299,281 590,993

16. Employee BenefitsThe most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuityand leave encashment were carried out at March 31, 2010 by an actuary. The present value of the defined benefitobligations and the related current service cost and past service cost, were measured using the Projected UnitCredit Method.The following table sets out the status of the gratuity plan and leave encashment and the amounts recognized in theCompany’s financial statements as at March 31, 2010.

I. Gratuity Plan (Non-Funded): (Amount in `)

Sr. Particulars As on As onNo. March 31, 2010 March 31, 2009

i) Reconciliation in Present Value ofObligations (PVO) – defined benefit obligation:Current Service Cost 201,720 214,369Interest Cost 221,110 169,027Actuarial (gain)/losses (266,082) 150,077Benefits paid (304,268) 0.00Past service cost 0.00 0.00PVO at the beginning of the year 2,948,138 2,414,665PVO at end of the Year 2,800,618 2,948,138

ii. Net cost for the year ended March 31, 2010:Current Service Cost 201,720 214,369Interest Cost 221,110 169,027Actuarial (gain)/losses (266,082) 150,077Net cost 156,748 533,473

iii. Assumption used in accounting for the gratuity plan:Discount rate (in %) 7.5 7.0Salary escalation rate (in %) 5.0 4.5

II. Leave Encashment: (Amount in `)

Particulars As on As onMarch 31, 2010 March 31, 2009

PVO at the beginning of the year 2,449,494 2,232,072PVO at end of the year 2,618,630 2,232,072Expenses for the year 404,257 1,213,277

Assumption used in accounting for the gratuity plan:Discount rate (in %) 7.5 8.0Salary escalation rate (in %) 5.0 5.5

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

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

As per our report of even date attached

For CHATURVEDI & PARTNERS FOR AND ON BEHALF OF THE BOARDChartered AccountantsFirm Registration No. 307068E



Membership No. 17021

Place: New Delhi Place : Noida, U.P.Date : August 14, 2010 Date : August 14, 2010

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010For the Year Ended For the Year Ended

March 31, 2010 March 31, 2009`̀̀̀̀ `̀̀̀̀ `̀̀̀̀ `̀̀̀̀

CASH FLOW FROM OPERATING ACTIVITIESProfit for the year before Taxation 16,815,236 9,723,126Adjustments forDepreciation and Amortisation 7,361,414 24,664,320(Surplus)/ Loss on Sale of Fixed Assets (104,588) (620,524)Doubtful debts written off — 459,913Interest/Financial Charges 7,104,526 8,522,485Interest Income (8,353,004) 6,008,348 (7,618,973) 25,407,221

----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Operating profit before workingcapital changes 22,823,584 35,130,347Changes in assets and liabilities(Increase)/Decrease in Inventories 1,584,431 (1,381,246)(Increase)/Decrease in Sundry Debtors (7,352,388) 2,923,806(Increase)/Decrease in Loans and Advances (11,851,855) (5,056,732)Increase/(Decrease) in Current Liabilities & Provisions 2,487,849 (15,131,963) (3,479,124) (6,993,296)

----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Cash generated from operating activities 7,691,621 28,137,051Taxes Paid 2,322,335 2,816,261

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Net cash provided by operating activities 5,369,286 25,320,790

CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (14,884,763) (8,976,381)Proceeds from sale of Fixed Assets 1,045,000 2,220,000Advance for sales of Fixed Assets 66,177,425Purchase of Investments — —Interest Received 377,143 52,714,805 7,815,518 1,059,137

----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Net cash used in investing activities 52,714,805 1,059,137

CASH FLOW FROM FINANCING ACTIVITIESIncrease in Share Capital — —Proceeds from Term Loans (29,143,535) (29,882,941)Increase/ (Decrease) in Cash Credit Loans (13,740,441) 9,792,750Vehicle Loans Taken / (Repaid) (384,884) 640,912Interest / Finance charges Paid (7,104,526) (8,522,485)Increase in Unsecured Loans 218,490 (50,154,897) — (27,971,764)

----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------Net Cash provided by financing activities (50,154,897) (27,971,764)

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------


`̀̀̀̀ `̀̀̀̀

NET (DECREASE)/ INCREASE IN CASH ANDCASH EQUIVALENTS DURING THE YEAR 7,929,194 (1,591,837)

====================================== ======================================Cash and cash equivalents at thebeginning of the year 9,338,367 10,930,204Cash and cash equivalents at the end of the year 17,267,561 9,338,367

Notes:1. The cash flow statement has been prepared under the indirect method as set out in the Accounting Standard 3 on

Cash Flow Statement issued by the Institute of Chartered Accountants of India.2. Figures in brackets indicate cash outflow.3. Previous year figures have been regrouped and recast wherever necessary to conform to current year classification.4. Cash & Cash Equivalents include:

Cash in Hand 1,038,021 694,882Cheques In Hand 2,057,797 —Balances with Scheduled Banks— In Current Accounts 13,291,893 5,105,072— In Fixed Deposits 879,850 3,538,413

----------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------17,267,561 9,338,367

====================================== ======================================

As per our report of even date attached

For CHATURVEDI & PARTNERS FOR AND ON BEHALF OF THE BOARDChartered AccountantsFirm Registration No.307068E




Place : New Delhi Place : Noida, U.P.Date : August 14,2010 Date : August 14,2010

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILSRegistration No. 05789 State Code 017Balance Sheet Date 31.03.2010

II. CAPITAL RAISED DURING THE YEAR (AMOUNT IN `̀̀̀̀ THOUSANDS)Public Issue NIL Right Issue NILBonus Issue NIL Private Placement NIL

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN `̀̀̀̀ THOUSANDS)Total Liabilities 323998 Total Assets 323998

Sources of Funds:Paid up Capital 167425 Reserves & Surplus 85246Secured Loans 35830 Unsecured Loans 9555

Application of Funds :Net Fixed Assets 192544 Investments 335Net Current Assets 131118 Misc. Expenditure 0Accumulated Losses 0

IV. PERFORMANCE OF COMPANY (AMOUNT IN `̀̀̀̀ THOUSANDS)Turnover 70969 Total Expenditure 54154Profit before Tax 16815 Profit after Tax 13644Earning per Share (in `) 0.81 Dividend rate (%) 0

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY (AS PER MONETARY TERMS)Product Description item code (ITC Code)Oxygen 28044000Nitrogen 28043000Argon 28042100

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

FOR AND ON BEHALF OF THE BOARD

Rakesh S. Bhardwaj Kailash Chand KediaChairman & Managing Director Director

Place: Noida, U.P. Pradeep Puranik Sanjay KumarDate : August 14, 2010 Chief Financial Officer Company Secretary


BHAGAWATI GAS LIMITED

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