ghanshyam steel works ltd Directors report

GHANSHYAM STEEL WORKS LIMITED ANNUAL REPORT 2001-2002 DIRECTORS REPORT TO, The Members, Your Directors have pleasure in presenting the 14th Annual Report together with the Audited Annual Accounts for the year ended 31st March 2002 of your Company. DIVIDEND: In view of the huge loss, the Board of Directors regret their inability to recommended payment of any dividend for the year under review. OPERATIONS: The Company mark the year under review as the year of full of despair and difficulty. During the year under review, the overall operation of the Company continued to be unsatisfactory due to overall economic scenerio and unfavourable conditions prevalent in the Engineering Industry. The Company witnessed drastic reduction of Gross Income from Rs. 1405.26 lacs of previous year to Rs. 400.56 lacs for the year under review. The Company reported huge loss from Rs. 551.10 Lacs of previous year to Rs. 710.88 Lacs for the year under review mainly due to stiff competition, Labour unrest and unfavourable market conditions, lower margin made available, recessionery condition prevailing in heavy engineering equipment industry in India and in Globle, coupled with liquidity crunch and recessionary trend prevailing in the Industry as a Whole. Due to this, the Company has not obtaining any inquiry and orders from various parties. The losses of the Company were mainly on account of various reasons stated above coupled with other reasons like huge bad debts, heavy interest burden of loans and other borrowings, blocking up of funds in idle and unproductive capital assets thereby further eroding the cash profit and networth of the Company. Due to heavy financial crises face by the Company, the main key persons left the Company and most of the labour makes problems and haresement to the management and not make timely production and spoil the reputations of the Company. DIRECTORS RESPONSIBILITY STATEMENT: As required under Section 217 of the Companies Act, 1956, the Directors hereby confirm that (a) that in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures; (b) that the Directors have selected such accounting police 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 ended 31st March, 2002 and of the profit or loss of the Company for that year. (c) that the Directors had 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. (d) that the Directors have prepared the annual accounts on a going concern basis. DIRECTORATE. Shri Bansilal C. Joshi, Shri Mohanlal T.Palrecha and Miss Damini K Shah were resigned as Director from the Board of Directors of the Company with effect from 31st October, 2001. The Board of Directors places-on records its sincere appreciation of the valuable services rendered by Shri Bansilal C. Joshi, Shri Mohanlal T.Palrecha and Miss Damini K. Shah during their period of associations with the Company. The Board of Directors had appointed Shri Chandrakant M. Patel and Shri Hirai Y. Amin, as an Additional Director of the Company with effect from 301h April, 2002. Shri Chandrakant M. Patel and Shri Hirai Y. Amin hold office as a Director upto date of ensuing Annual General Meeting. The Company has received notice under Section 257 of the Companies Act, 1956, from members signifing their intentions to propose Shri Chandrakant M. Patel and Shri Hirai Y. Amin as Directors liable to retire by rotation. Your Directors recommend their appointment as Director liable to retire by rotation. In, accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri Janak B. Raja retire by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment. ENERGY CONSERVATION AND TECHNOLOGY ABSORPTION: Information in accordance with the provisions of Section 217(1)(e) of the Companies act, 1956 read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy technology absorption and foreign exchange earning and outgo is given in the Annexure forming part of this report. PARTICULARS OF EMPLOYERS: As required under the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies ( Particulars of Employees) Rules, 1975, information relating thereto are not given due to non receipt of remunaration by the Managing Director on account of heavy loss. AUDIT COMMITTEE: The Company has constituted Audit Committee comprising of Shri Janak B. Raja, Shri Hashmukh R. Patel, Shri Chandrakant M. Patel and Shri Hiral Y. Amin. The Committee reviewing the Internal Control System, Scop of Internal Audit and compliance of related regulations. The Committee reviewed at length and approved the Annual Financial Statement before the same were considered by the Board of Directors. INSURANCE: The Company has made adequate arrangements for insuring its properties and assets against fire and other probable risks. AUDITORS: M/s. C. Patel & Co., Chartered Accountants, Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are recommended for reappointment. The Company has received a Certificate from the Auditors under Section-224 (1B) of the Companies Act,1 956 as to their eligibility for the reappointment. REFERENCE TO BIFR: As the members are aware that the Company has become a "Sick Industrial Company" within the meaning of Section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The Company has made a reference in accordance with the provision to Section 15 (1) of the said Act, to the Board for Industrial and Financial Reconstruction (BIFR). The Company has received Registration No. 99/2002 dated 21/02/2002 from the BIFR. CORPORATE GOVERNANCE: The Corporate Governance Code prescribed by Clause 49 of the Listing Agreement with the Stock Exchanges would be applicable to your Company from the Financial Year 2002-2003 and accordingly, would be implemented by your Company by 31st March, 2003. The Audit Committee of the Directors, as required under Section 292A of the Companies Act, 1956 has been constituted w.e.f. 30th April, 2002. FIXED DEPOSITS: ** The total amount of fixed deposit which remained due for repayment on 31st March, 2002 was Rs. 14,25,000/-. There were no over due deposits as on 31st March, 2002. APPRECIATION: Your Directors place on record their appreciation for the untiring efforts made by the Chairman and Managing Director Shri S.M. Patel and some of the staff members during the year under review. Your Directors also acknowledge with gratitude for the co-operation and financial assistance extended by Punjab National Bank during the year under review. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Date 26-08-2002 S.M. PATEL Place Baroda CHAIRMAN & MANAGING DIRECTOR ANNEXURE - I TO DIRECTORS REPORT Conservation of Energy, Technology Absorption and Foreign Exchange Earning and outgo pursuant to section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. A. FOREIGN EXCHANGE EARNING AND OUTGO The Company has incurred foreign exchange expenses to the tune of Rs. NIL lacs during the year under report. There has not been any Foreign Exchange earnings during the year under review.