1.  BASIS OF ACCOUNTING
 
 i) Financial Statements have been prepared under the historical cost
 convention in accordance with the generally accepted accounting
 principles, the mandatory Accounting Standards issued by the Institute
 of Chartered Accountants of India and relevant provisions of the
 Companies Act, 1956.
 
 ii) The company follows the mercantile system of accounting &
 recognizes income & expenditure on accrual basis except those with
 significant uncertainties.
 
 2.  FIXED ASSETS
 
 Fixed assets are stated at their cost of acquisition or construction
 less accumulated depreciation. Cost of acquisition or construction is
 inclusive of freight, duties, taxes, incidental expenses and borrowing
 costs related to such acquisition or construction.
 
 3.  DEPRECIATION
 
 Depreciation on fixed assets is provided for on the Straight Line
 method in the manner and at the rates specified in Schedule XIV to the
 Companies Act, 1956. In respect of additions or deletions made during
 the year, depreciation has been calculated on actual basis from the
 date of such additions or up to the date on which the asset has been
 discarded, as the case may be.
 
 4.  INVENTORIES
 
 Inventories have been valued at lower of cost or net realizable value.
 In respect of stores and spares, cost has been arrived at on FIFO
 basis. Scrap has been valued at estimated net realizable value.
 
 5.  REVENUE RECOGNITION
 
 i) Revenue from sales is recognized on dispatch of goods from the
 factory. Sales are inclusive of excise duty but exclusive of sales tax.
 
 ii) Interest income is recognized on a time proportion basis taking
 into account the amount outstanding and the rate applicable.
 
 6.  FOREIGN CURRENCY TRANSACTIONS
 
 i) Trans a ctions denominated in the foreign currencies are normally
 recorded at the exchange rate prevailing at the time of the
 transaction.
 
 ii) Monetary items denominated in foreign currencies other than those
 covered by forward exchange contracts are translated in to rupee
 equivalent at the rates of exchange prevailing on the Balance Sheet
 date. In the case of forward contract the difference between the
 forward rate and the exchange rate on the date of transaction is
 recognized as income or expense over the life of the contract.
 
 iii) All exchange differences arising on settlement / conversion of
 foreign currency transactions, are recognized as income or expenses in
 the Profit & Loss account, except in cases where they relate to the
 acquisition of fixed assets, in which case they are adjusted in the
 carrying cost of the asset.
 
 7.  INVESTMENTS
 
 Investments are classified in to current and long term investments.
 Current investments are stated at the lower of cost and fair value.
 Long term investments are valued at cost. A provision for diminution is
 made to recognize a decline, other than temporary, in the value of long
 term investments.
 
 8.  EMPLOYEE BENEFITS
 
 i) 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 the balance sheet date.  Actuarial gains and losses are
 recognised in the Profit and Loss Account in the period of occurrence
 of such gains and losses.
 
 iii) Short Te r m Employee Benefits: Short-term employee benefits
 expected to be paid in exchange for the services rendered by employees
 are recognized undiscounted during the period employee renders
 services.
 
 9.  SEGMENT REPORTING
 
 The business of the company consists of manufacturing of single product
 i.e. Gases. Therefore the Accounting Standard (AS-17) on Segment
 Reporting is not applicable.
 
 10.  LEASES
 
 Finance leases or similar arrangement, which effectively transfer to
 the company substantially all the risks and benefits incidental to
 ownership of the leased items, are capitalized and disclosed as leased
 assets. Finance charges are charged directly against income.
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership of the leased items are classified as
 operating leases. Operating lease payments are recognized as an expense
 in the Profit and Loss Account on a basis, which reflect the time
 pattern of such payment appropriately.
 
 11.  EARNINGS PER SHARE
 
 The earnings considered in ascertaining the company’s Earnings per
 Share (EPS) comprises the Net Profit or Loss for the period after tax
 and extra ordinary items. The basic EPS is computed on the basis of
 weighted average number of equity shares outstanding during the year.
 The number of shares for computation of diluted EPS comprises of
 weighted average number of equity shares considered for deriving basic
 EPS and also the weighted average number of equity shares which could
 be issued on the conversion of all dilutive potential equity shares.
 Dilutive potential equity shares are deemed converted as of the
 beginning of the year unless they are issued at a later date. The
 diluted potential equity shares are adjusted for the proceeds
 receivable assuming that the shares are actually issued at fair value.
 The number of shares and potentially dilutive shares are adjusted for
 shares splits/reverse share splits (consolidation of shares) and bonus
 shares, as appropriate.
 
 12.  TAXES ON INCOME
 
 Tax expense for the year comprises of current tax and deferred tax.
 Current taxes are computed at the current rate of tax in accordance
 with provisions of the Income Ta x Act, 1961
 
 Deferred tax assets and liabilities are recognized for future tax
 consequences attributable to the timing differences that result between
 taxable profit and the profit as per the financial statements.
 Deferred tax assets and liabilities are measured using the tax rates
 and tax laws that have been enacted or substantively enacted by the
 Balance Sheet date.
 
 Deferred tax assets are recognized on unabsorbed depreciation and carry
 forward of losses under tax laws to the extent there is virtual
 certainty that sufficient future taxable income will be available
 against which such deferred tax assets can be realized.  The effect on
 deferred tax assets and liabilities of a change in tax rates is
 recognized in the Profit & Loss Account in the year of change.
 
 13.  IMPAIRMENT
 
 The 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 amount
 is the greater of the net selling price and their value in use. Value
 in use is arrived at by discounting the estimated future cash flows to
 their present value based on appropriate discount factor.
 
 14.  CONTINGENT LIABILITIES
 
 Contingent liabilities are determined on the basis of available
 information and are disclosed by way of note to accounts.