GHANSHYAM STEEL WORKS LIMITED
ANNUAL REPORT 2001-2002
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
In view of the huge loss, the Board of Directors regret their inability to
recommended payment of any dividend for the year under review.
The Company mark the year under review as the year of full of despair and
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
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
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
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.
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.
The Company has made adequate arrangements for insuring its properties and
assets against fire and other probable risks.
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
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
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
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Date 26-08-2002 S.M. PATEL
Place Baroda CHAIRMAN & MANAGING DIRECTOR
ANNEXURE - I TO DIRECTOR'S 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.