Directors Report of Gagan Gases Ltd.

Mar 31, 2015

Dear members

The Directors have pleasure in presenting the 29th Annual Report together with audited accounts for the year ended on 31st March, 2015.

FINANCIAL RESULTS

(Rs in lacs) (Rs. in lacs) 2014-15 2013-14

1. Income from operation 155 173

2. Other income 9 3

3. Profit / (Loss) before interest, depreciation and tax 25 (30)

4. Less : Interest 3 3 5. Depreciation 15 13

6. Taxation -- -- 7. Profit/ (Loss) during the year 7 (46)

OPERATIONS

The company has incurred net profit of Rs 7 lac as against loss of Rs.46 lac during previous year. The accumulated losses as on 31.3.15 are Rs 371 lacs as against Rs 380 of last year. The accumulated losses are on account of losses incurred in LPG business. There is revival of LPG business in a small way because of the recent change of policy in selling LPG by Govt owned oil companies. The company has also started LPG cylinder filling for LPG Infrastructure India Ltd and has also done cylinder testing for BPCL

DIVIDEND.

In view of the accumulated losses, the Board of Directors regret to recommend any dividend for the year 2014-2015.

DIRECTOR

Shri V.K.Khanna a Independent Director is retiring by rotation at the ensuring Annual General Meeting and being eligible offer himself for re-appointment as Independent Director for a period of 5 years up to 29 September 2020

Smt. Rekha Maheshwary was appointed as additional director (woman director ) on 31.3.2015 by the Board of Directors. The company has not received proposal from any shareholder for her appointment as Woman Director for the consideration by the member in AGM.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors indicate that they have taken reasonable and bonafide care that :

1. In preparation of the annual accounts, the applicable accounting standards have been followed, and in case of any deviation, necessary explanation has been given and incorporated in director's report to the members.

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

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

4. Directors have prepared the Annual Accounts on a "going concern" basis.

CORPORATE GOVERNANCE

A separate report on corporate governance along with the General Shareholders information, as prescribed under the listing agreement, is annexed as a part of the Annual Report along with the Auditor's Certificate on Corporate Governance.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in the Form MGT-9 are enclose as per annexure to this report.

AUDIT COMMITTEE

Persuant to the provisions of section 177 of Companies Act, 2013 your Company has Audit Committee consisting of two Independent Directors – Mr. R.L.Chhabra( independent director ) as Chairman and Mr V.K.Khanna ( independent director ) and Mr. Gagan Maheshwary as members.

DECLARATION OF INDEPENDENCE

Your Company has received declaration from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules made there under as well as Clause 49 of the Listing Agreement.

PUBLIC DEPOSITS.

During the financial year 2014-15, your company has not accepted any deposits within the meaning of section 73 and 76 of the Companies Act, read with the Companies (Acceptance f Deposits) Rules, 2014 and other applicable laws and as such no amount of principle or interest was outstanding as on date of the Balance Sheet. Company has received unsecured deposit from the Directors and related parties. Company is holding deposit from directors as on 31,3,2015 and deposit from related parties have been paid back during 2014-15

STATUTORY AUDITORS.

The present auditors of the company M/s Dilip K Neema & Associates Charted Accountants are retiring at the conclusion of the annual general meeting and being eligible offer themselves for reappointment. As required under the provisions of sec 139 of the Companies Act 2013, the company has obtained written consent from M/s Dilip K Neema and Associates that their reappointment if made would be in conformity with the limits specified in the said section. None of the directors of the company and their relative is concerned or interested financially or otherwise in the resolution for the appointment of M/s Dilip K Neema & Associates Charted Accountants as Statutory Auditors

The Board of Directors also recommend the reappointment of M/s Dilip K Neema & Associates Charted Accountants as statutory auditors to hold office for two consecutive years till the conclusion of 31st annual general meeting.

AUDITORS' REPORT, ACCOUNTING STANDARDS AND POLICIES.

The Audit Committee and the Board of Directors have considered and approved the accounting policy. Deviation if any from the applicable Accounting Standards in the preparation of the Annual Statement, necessary observations/ explanation of the Board are given. The notes to accounts referred to in the Auditor's Report are self-explanatory and therefore, do not call for any further comments.

SECRETARIAL AUDITOR

M/s R.Lohia and Co Practicing Company Secretary ( membership no 2694 ) was appointed as Secretariat Auditor to conduct the secretariat audit of the company for the financial year 2014- 15 as required under section 204 of the Companies Act 2013 and rules made there under. The secretariat audit report for the financial year 2014-15 is annexed as annexed and which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY ( CSR )

With regard to the year under review, the company was not required to spend any amount on CSR activities in view of the accumulated losses

PERSONAL RELATIONS

Your company continues to enjoy cordial relations with its employees.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNING AND OUTGO

1. Conservation of energy

The operations of your company are not energy intensive. Because of limited use of electricity, no additional step was taken for the conservation of energy. Power consumption during the was 20,957 units costing Rs 2,01,320 as against 17,969 units costing Rs 1,96,124 of last year.

2. Technology absorption, adoption & innovation:

For the company's existing product line there is no technical collaboration, either indigenous or imported. No new technology was absorbed or adopted during the year.

3. Foreign exchange earnings and outgo:

There is no foreign exchange earnings or out go during the year.

PARTICULARS OF EMPLOYEE

No person in the employment of the company was in receipt of remuneration which attracted provisions of the Companies Act and rules made there under. There is no women employee only roll of the company.

For and behalf of the Board of Directors

Place: Indore

Dated: 20.8.2015

K.R.Maheshwary

Chairman

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Mar 31, 2014

Dear members,

The Directors have pleasure in presenting the 28th Annual Report together with audited accounts for the year ended on 31st March, 2014.

FINANCIAL RESULTS (Rs in lacs) (Rs. in lacs) 2013-14 2012-13

1. Income from operation 173 106

2. Other income 3 3

3. Profit / (Loss) before interest, depreciation and tax (30) (21)

4. Less : Interest 3 29

5. Depreciation 13 12

6. Taxation - -

7. Profit/ (Loss) during the year (46) (62)

OPERATIONS

The company has incurred net loss of Rs 46 lac as against loss of Rs.62 lac during previous year. Loss of Rs 46 lac includes Rs.28 lac paid as arrears of lease charges. The accumulated losses as on 31.3.14 are Rs 380 lacs which are more than 50 % of the capital of Rs 452 lacs. The accumulated losses are on account of losses incurred in LPG business. To cover up these losses the company is doing trading activities for marketing of industrial consumables. There is revival of LPG business in a small way because of the recent change of policy in selling LPG by Govt owned oil companies. The company has also started LPG cylinder filling for LPG Infrastructure India Ltd. The company has also restarted sale of LPG to industrial segment.

DIVIDEND.

In view of the accumulated losses, the Board of Directors regret to recommend any dividend for the year 2013-2014.

DIRECTOR

Shri R.L.Chhabra is a Non-Executive Independent Director is retiring by rotation at the ensuring Annual General Meeting and being eligible offer himself for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors indicate that they have taken reasonable and bonafide care that :

1. In preparation of the annual accounts, the applicable accounting standards have been followed, and in case of any deviation, necessary explanation has been given and incorporated in director''s report to the members.

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

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

4. Directors have prepared the Annual Accounts on a "going concern" basis.

CORPORATE GOVERNANCE

The company has ensured that the Corporate Governance requirements as stipulated in clause 49 of the Listing Agreement with the Stock Exchange are complied with. A separate report on corporate governance is annexed.

The Corporate Governance Compliance Certificate obtained from M/s Dilip K Neema & Associates Charted Accountants, the Statutory Auditors of the Company is also attached to the report.

PUBLIC DEPOSITS.

The company did not accept any deposit from the public during the year as such there is no unpaid or unclaimed deposit with the company. Company has received unsecured deposit from the Directors and related parties.

AUDITORS AND AUDITORS REPORT.

The present auditors of the company M/s Dilip K Neema & Associates Chartered Accountants are retiring at the conclusion of the annual general meeting and being eligible offer themselves for reappointment. As required under the provisions of sec 139 of the Companies Act 2013, the company has obtained written consent from M/s Dilip K Neema and Associates that their reappointment if made would be in conformity with the limits specified in the said section.

None of the directors of the company and their relative is concerned or interested financially or otherwise in the resolution for the appointment of M/s Dilip K Neema & Associates Chartered Accountants as Statutory Auditors The Board of Directors also recommend the reappointment of M/s Dilip K Neema & Associates Chartered Accountants as statutory auditors to hold office till the conclusion of next annual general meeting.

AUDITORS'' REPORT, ACCOUNTING STANDARDS AND POLICIES.

The Audit Committee and the Board of Directors have considered and approved the accounting policy. Deviation if any from the applicable Accounting Standards in the preparation of the Annual Statement, necessary observations/ explanation of the Board are given. The notes to accounts referred to in the Auditor''s Report are self-explanatory and therefore, do not call for any further comments.

PERSONAL RELATIONS

Your company continues to enjoy cordial relations with its employees.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNING AND OUTGO

1. Conservation of energy

Because of limited use of electricity, no additional step was taken for the conservation of energy. Power consumption during the was 17969 units costing Rs 196124 as against 18701 units costing Rs 206300 of last year.

2. Technology absorption, adoption & innovation:

For the company''s existing product line there is no technical collaboration, either indigenous or imported. No new technology was absorbed or adopted during the year.

3. Foreign exchange earning and outgo:

There is no foreign exchange earning or out go during the year.

PARTICULARS OF EMPLOYEE

No person in the employment of the company was in receipt of remuneration which attracted provisions of the Companies Act and rules made there under.

For and behalf of the Board of Directors

Place: Indore Dated: 19.8.2014 K.R.Maheshwary Chairman

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Mar 31, 2013

Dear members

The Directors have pleasure in presenting the 27th Annual Report together with audited accounts for the year ended on 31st March, 2013.

FINANCIAL RESULTS (Rs in lacs) (Rs. in lacs) 2012-13 2011-12

1. Income from operation 106 351

2. Other income 3 -

3. Profit / (Loss) before interest,

depreciation and tax (21) 6

4. Less ^Interest 29 -

5. Depreciation . 12 (13)

6. Taxation - -

7. Profit/ (Loss) during the year (62) (7)

OPERATIONS

The company has incurred net loss of Rs 62 lac (Rs.7 lac) during previous year. In earlier years company was earning profit from trading of lubricants. The trading activities are stopped. Loss of Rs 62 lac includes Rs.27 lac paid to Bank as interest. There is loss of Rs.571ac (Rs.37 lac) in LPG segment. The accumulated losses as on 31.3.13 are Rs 336 lacs which are more than 50 % of the capital of Rs 452 lacs. The accumulated losses are on account of losses incurred in LPG business. To cover up these losses the company has planned to do trading activities for marketing of industrial consumables. There is revival of LPG business in a , small way because of the recent change of policy in selling LPG by Govt owned oil companies. The company has also started LPG cylinder filling for LPG Infractuerer Ltd. The company is also exploring the possibility to restart industrial gases activities.

DIVIDEND.

In view of the accumulated losses, the Board of Directors regret to recommend any dividend for the year 2012- 2013, .

DIRECTOR and MANAGING DIRECTOR

Shri V.KKhanna is retiring by rotation at the ensuring Annual General Meeting and being eligible offer himself for reappointment. The Board of Directors recommend his re-appointment as director. Sh V.K.Khanna is associated with the company as director since 2004.

Shri K.R.Maheshwary is associated with the company since its incorporation in the year 1986 as a Managing Director and has experience of over 27 years in gases line. He is a law graduate. He is attending to the business of the company. The Board of Directors recommend his re-appointment as Managing Director of the Company with effect from 1st Nov 013 for a period of 3 years on the following remuneration:

Basie salary of Rs 57,000 ( Fifty seven thousands ) per month in the pay scale of Rs 57,000-3000- 72,000 plus allowances as per prevailing rules of the company.

PERQUISITES.

In addition to the above salary, the Managing Director shall also be entitled to the following perquisites.

1. Reimbursement of all medical expenses, leave travel assistance incurred for self and family.

2. Gratituity/leave or any other statutory benefit as per the rules of the company.

3. A suitable personal accident/medical insurance.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 ( 2AA) of the Companies Act,1956, the Directors indicate that they have taken reasonable and bonfire care that:

1. In preparation of the annual accounts, the applicable accounting standards have been followed, and in case of any deviation, necessary explanation has been given and incorporated in director''s report to the members.

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

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

4. Directors have prepared the Annual Accounts on a "going concern" basis.

CORPORATE GOVERNANCE

The company has ensured that the Corporate Governance requirements as stipulated in clause 49 of the Listing Agreement with the Stock Exchange are complied with. A separate report on corporate governance is annexed.

The Corporate Governance Compliance Certificate obtained from M/s Dalip K Neema & Associates Charted Accountants, the Statutory Auditors of the Company is also attached to the report .

PUBLIC DEPOSITS.

The company did not accept any deposit from the public during the year as such there is no unpaid or unclaimed deposit with the company.

AUDITORS.

The present auditors of the company M/s Dilip K Neema & Associates Charted Accountants are retiring at the conclusion of the annual general meeting and being eligible offer themselves for reappointment. The Board of Directors also recommend the reappointment of M/s Dilip K Neema & Associates Charted Accountants as statutory auditors to hold office till the conclusion of next annual general meeting.

AUDITORS'' REPORT, ACCOUNTING STANDARDS AND POLICIES.

The Audit Committee and the Board of Directors have considered and approved the accounting policy. Deviation if any from the applicable Accounting Standards in the preparation .of the Annual Statement, necessary observations/ explanation of the Board hre given. .

PERSONAL RELATIONS

Your company continues to enjoy cordial relations with its employees.

CONSERVATION OF ENERGY. RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNING AND OUTGO

1. Conservation of energy

Because of limited use of electricity, no additional step was taken for the conservation of energy.

Power consumption during the was 18701 units costing Rs 206300 as against last year units 192S2 costing Rs 193996.

. 2. Technology absorption, adoption & innovation:

For the company''s existing product line there is no technical collaboration, either indigenous or imported. No new technology was absorbed or adopted during the year.

PARTICULARS OF EMPLOYEE

No person in the employment of the company was in receipt of remuneration which attracted provisions of Section 217 (2A) and Companies (particulars of employee) Rule,1975.

For and behalf of the Board of Directors

Place: Indore

Dated:30.5.2013 K.R.Maheshwary

Chairman

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Mar 31, 2012

The Directors have pleasure in presenting the 26th Annual Report together with audited accounts for the year ended on 31st March, 2012.

FINANCIAL RESULTS (Rs. in lacs) (Rs. in lacs) 2011-12 2010-11

Income from operation 351 417

Other income

Profit/(Loss) before interest,

Depreciation and tax 6 14

Less: Interest - 1

Depreciation (13) 12

Taxation Profit/ (Loss) during the year (7) 1

OPERATIONS

The company has earned net loss of Rs. 7 lac (Profit of Rs.l lac) during previous year. Since Govt. Oil Companies are still supplying LPG at subsidised rates, the company could not compete in selling LPG to the consumers. It is because of such adverse circumstances, the business of the company is very much affected. There is loss of Rs. 37 lac (Rs. 23 lac) in LPG segment. The company has also undertaken marketing of industrial lubricants in the state of M.P. The total LPG sale amounted to Rs. 41 lacs(26 lacs).

As per the reports appearing in the news papers, GOI is likely to revise policy to sell LPG at subsidised rates. If it materializes, the LPG plants in private sector will get an opportunity to revive their business. LPG plant was set up in the year 1995 and it needs major maintenance. Also keeping in mind the likely opportunities, the directors have decided to carry out the major repair/maintenance of the plant for which services of consultants are being hired.

DIVIDEND

In view of the accumulated losses, the Directors regret to recommend any dividend for the year 2011-2012.

DIRECTOR and WHOLE TIME DIRECTOR

Shri Gagan Maheshwary, Director is retiring by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment. The Board of Directors recommend his re-appointment as director. Shri Gagan Maheshwary is associated with the company as director for the last more than 15 years. Shri Gagan Maheshwary was appointed as whole time director for a period of 5 years w.e.f 8th August 2007. He is looking after the whole business of the company for the last 15 years. The board of directors have recommended the reappointment of Shri Gagan Maheshwary as a whole time director for a further period of five years with effect from 9th August 2012. The terms of appointment are approved by the remuneration committee.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 ( 2AA) of the Companies Act, 1956, the Directors indicate that they have taken reasonable and bonafide care that:

1. In preparation of the annual accounts, the applicable accounting standards have been followed, and in case of any deviation, necessary explanation has been given and incorporated in director's report to the members.

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

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

4. Directors have prepared the Annual Accounts on a going concern basis.

CORPORATE GOVERNANCE

The company has ensured that the Corporate Governance requirements as stipulated in clause 49 of the Listing Agreement with the Stock Exchange are complied with. A separate report on corporate governance is annexed. The Corporate Governance Compliance Certificate obtained from M/s Dilip K. Neema & Associates, Chartered Accountants, the Statutory Auditors of the Company is also attached to the report.

PUBLIC DEPOSITS

The company did not accept any deposit from the public during the year as such there is no unpaid or unclaimed deposit.

AUDITORS

The present auditors of the company M/s Dilip K Neema & Associates, Chartered Accountants are retiring at the conclusion of the annual general meeting and being eligible offer themselves for reappointment. The Board of Director s also recommend the reappointment of M/s Dilip K Neema & Associates, Chartered Accountants as statutory auditors to hold office till the conclusion of next annual general meeting.

AUDITORS' REPORT, ACCOUNTING STANDARDS, POLICIES AND DISCLOSURES.

The Audit Committee and the Board of Directors have considered and approved the accounting policy, Deviation if any from the applicable Accounting Standards in the preparation of the Annual Statement, necessary observations/explanation of the Board are given.

The accumulated losses as on 31.3.12 are Rs. 276.92 lacs which exceed 50 % of the capital of Rs. 452 lacs, but the company has not incurred any cash loss during the current year as well as immediate financial year. The accumulated losses are on account of losses incurred in LPG business. To cover up these losses the company has continued trading activities during the year.

Under Udyog Mittra Yojna introduced by M.P.Govt for SSI units in the year 2008, the company made application for the restoration of lease deed and remittance of 50 % interest for non payment of lease charges. Under orders from the higher authorities, MPAKVN was asked to give the benefit of Udyog Mittra Yojna to our unit treating it as SSI unit. Since We have not received any communication of rejection of our application from MPAKVN, it is assumed that our application stands accepted. However the company has not received any communication regarding the amount of arrears of lease charges payable by the company. As and when our account is settled by MPAKVN, necessary provision will be made in the accounts.

PERSONAL RELATIONS

Your company continues to enjoy cordial relations with its employees.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNING AND OUTGO

1. Conservation of energy

Because of limited use of electricity, no additional step was taken for the-conservation of energy. Power consumption during the was 19252 units (21096 units)

2. Technology absorption, adoption & innovation:

For the company's existing product line there is no technical collaboration, either indigenous or imported. No new technology was absorbed or adopted during the year.

3. Foreign exchange earning and outgo:

There is no foreign exchange earning or out go during the year.

PARTICULARS OF EMPLOYEE

No person in the employment of the company was in receipt of remuneration which attracted provisions of Section 217 (2A) and Companies (particulars of employee) Rule, 1975.

For and behalf of the Board of Directors

K.R.Maheshwary Chairman

Place : Indore Dated : 26.5..2012

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Mar 31, 2010

The Directors have pleasure in presenting the 24th Annual Report together with audited accounts for the year ended on 31st March, 2010

FINANCIAL RESULTS

(Rs in lacs) (Rs. in lacs)

2009-10 2008-09

Income from operation 404 323

Other income 1 4

Profit/ (Loss)before interest,

depreciation and tax 14 14

Less: Interest 1 0

Depreciation 13 17

Taxation -- --

Profit/(Loss) during the year 0 (3)

OPERATIONS

The company has earned net loss of Rs 0.39 lac against net loss of Rs.3 lac during previous year. Since Govt. Oil Companies are still supplying LPG at subsidised rates, the company could not compete in selling LPG to the consumers. It is because of such adverse circumstances, the business of the company is very much affected. The company has also undertaken marketing of industrial lubricants in the state of M.P. The total lubricant sale amounted to Rs. 370 lac (278 lac).

DIVIDEND

In view of the brought forward losses, the Board of Directors regret to recommend any dividend for the year 2009-2010.

DIRECTOR

Shri V.K.Khanna Director is retiring by rotation at the ensuring Annual General Meeting and being eligible offer himself for re- appointment. The Board of Directors recommend his re-appointment as director. Shri V.K.Khanna is associated with the company as director since the year 2004.

Shri Ajay Kapoor Director is retiring by rotation at the ensuring Annual General Meeting and being eligible offer himself for re- appointment. The Board of Directors recommend his re-appointment as director. Shri Ajay Kapooris associated with the company as a director since the year 2008.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 ( 2AA) of the Companies Act, 1956, the Directors indicate that they have taken reasonable and bonafide care that:

1. In preparation of the annual accounts, the applicable accounting standards have been followed, and in case of any deviation, necessary explanation has been given and incorporated in directors report to the members.

2. The directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that period.

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

4. Directors have prepared the Annual Accounts on a "going concern"basis.

CORPORATE GOVERNANCE

The company has ensured that the Corporate Governance requirements as stipulated in clause 49 of the Listing Agreement with the Stock Exchange are complied with. A separate report on corporate governance is annexed.

The Corporate Governance Compliance Certificate obtained from M/s Dalip K Neema & Associates Charted Accountants, the Statutory Auditors of the Company is also attached to the report.

PUBLIC DEPOSITS:

The company did not accept any deposit from the public during the year as such there is no unpaid or unclaimed deposit with the company.

AUDITORS

The present auditors of the company M/s Dilip K Neema & Associates Charted Accountants are retiring at the conclusion of the annual general meeting and being eligible offer themselves for reappointment. The Board of Directors also recommend the reappointment of M/s Dilip K Neema & Associates Charted Accountants as statutory auditors to hold office till the conclusion of next annual general meeting.

AUDITORS REPORT, ACCOUNTING STANDARDS AND POLICIES.

The Audit Committee and the Board of Directors have considered and approved the accounting policy. Deviation if any from the applicable Accounting Standards in the preparation of the Annual Statement, necessary observations/ explanation of the Board are given. A sum of Rs 52214 and Rs 107615 payable to MP Commercial Deptt is pending for rectification/adjustment.

Provision of Rs 3836375/- as interest payable to bank was made in earlier years and was shown under the head current liabilities till 31.3.09. This amount is being written back and is credited to profit and loss account during the year as prior year adjustment. In the opinion of the management, the company has paid total settled liability of Rs 242.60 lacs during previous years and nothing is due for payment now. In respect of the interest the company has informed the bank that there is no liability to pay interest in view of the decision of the higher authorities of the bank. The company has ,therefore, written back the provision made in earlier years of interest payable to bank. The accumulated losses as on 31.3.10 are Rs 267 lacs which are more than 50 % Of the capital of Rs 452 lacs. The accumulated losses are on account of losses incurred in LPG business. To cover up these losses the company has started trading activities.

PERSONAL RELATIONS

Your company continues to enjoy cordial relations with its employees.

CONSERVATION OF ENERGY. RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNING AND OUTGO

1. Conservation of energy

Because of limited use of electricity, no additional step was taken for the conservation of energy.

2. Technology absorption, adoption & innovation:

For the companys existing product line there is no technical collaboration, either indigenous or imported. No new technology was absorbed or adopted during the year.

3. Foreign exchange earning and outgo:

There is no foreign exchange earning or out go during the year.

PARTICULARS OF EMPLOYEE

No person in the employment of the company was in receipt of remuneration which attracted provisions of Section 217(2A)and Companies (particulars of employee) Rule,1975.

For and behalf of the Board of Directors

Place : Indore K.R. Maheshwary

Dated : 30-6-10 Managing Director