GHANSHYAM STEEL WORKS LIMITED
ANNUAL REPORT 2001-2002
The Shareholders of
GHANSHYAM STEEL WORKS LIMITED
We have audited the attached Balance Sheet of M/s. GHANSHYAM STEEL WORKS
LTD. as at 31st March, 2002 and the Profit and Loss Account of the company
for the year ended on that. date annexed thereto and report that :
1. We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purpose of our audit.
2. In our opinion, proper books of accounts as required by the law have
been kept by the company so far as it appears from our examination of those
3. The Balance Sheet and Profit and Loss Account dealt within this report
are in agreement with the books of accounts.
4. Subject to remarks in para 6 below, in our opinion, the Balance Sheet &
the Profit & Loss Account complied with the accounting standards referred
to in Sub Section (3c) of the Section 211 of the Companies Act, 1956 to the
extent applicable except AS-9 as the provision for Gratuity is not made.
5. On the basis of written representations received from Directors we
report that none of the Director is disqualified as on 31/03/2002 from
being appointed as director under clause (g) of sub-section 1 of section
274 of the Companies Act, 1956.
6. a) Interest Receivable on Fixed Deposits with Punjab National Bank., The
Baroda Peoples Co. Op. Bank Ltd., The Swaminarayan Co. Op. Bank Ltd., IDBI
Bank and Bajaj Auto and interest provision on outstanding amount of SSI
units are not accounted for in the Books of Accounts of the Company. Loss
is overstated and current assets are under stated to that extent. In
absence of the necessary details, amount of interest receivable can not be
b) IDBI Penal Interest of Rs.4956277/- and Liquidated damages of
Rs.816797/- payable on 31/03/2002 are not provided for in the Books of
Accounts of the Company. As explained to us, the same are not provided
since their charge ability is under negotiation. Loss and secured Loans are
under stated to that extent.
c) Interest on Public Deposits payable on 31/03/2002 is not provided for in
the books of accounts of the company. Loss and unsecured loans are under
stated to that extent. In absence of the necessary details amount of
interest payable is not quantified.
d) Various perquisites paid to the Directors are not seperately shown under
the heading of the Directors Remuneration. The same however, does not
affect the loss of the company.
e) The Company has filed application for BIFR which is primary accepted in
the month of February, 2002. However, necessary procedure has not been
started till date from BIFR.
7. Subject to remarks in para No. 6 above, in our opinion, and to the best
of our information and according to the explanations given to us, the said
accounts read in conjunction with the Schedule 1 to 19 give the information
required by the Companies Act, 1956 in the manner so required to give a
true and fair view.
(a) In the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2002 and,
(b) In the case of Profit and Loss Account, of the Loss of the company for
the year ended on that date.
As required by the Manufacturing and Other Companies (Auditors' Report)
order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of
the Companies Act, 1956 and on the basis of such checks as we considered
appropriate, we enclose in an annexure hereto a statement on the matter
specified in paragraph 4 and 5 of the said order to the extent applicable.
For C. Patel & Co,
PLACE: AHMEDABAD (M.D. POLARA)
DATE : 26TH AUGUST, 2002 PARTNER
Annexure referred to in paragraph (1) of the Auditors' Report of the even
date on the accounts of GHANSHYAM STEEL WORKS LIMITED for the year ended
31st March, 2002.
i) The Company has maintained proper records to show full particulars
including quantitative details and situation of its Fixed Assets. The Fixed
Assets have been physically verified by the Management wherever possible at
the close of the year as confirmed by the Management. No material
discrepancies have come to notice on such physical verification.
ii) No revaluation has been made during the year.
iii) The stock of work in progress and other goods, spare parts and raw
material of the Company have been physically verified by the Management at
the close of the year.
iv) The procedures of physical verification of stock followed by the
Management are reasonable and adequate in relation to the size of the
Company and nature of its business.
v) The valuation of stock of finished and other goods, stores, spare parts
and raw-material has been fair and proper in accordance with the normally
accepted principles. There are certain stock of Raw Material, WIP and
Finished Goods which is obsolesce and for that value taken as market
realizable. In order to comply with Accounting Standards (AS-2) issued by
the Institute of Chartered Accountants of India. The company has changed
the method of valuation of closing stock of Raw materials and semi-finished
goods from "Cost" to "lower of cost or net realisable value".
vi) The Company has taken unsecured loans from Companies, Firms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956 and not taken from Companies under the same management.
The interest rates and other terms and conditions of such loans are prima
facie not prejudicial to the interest of the company.
vii) Except interest free loan to the employees of the Company the Company
has not granted any loan to Companies firms or other parties listed in the
register maintained under section 301 of the Companies Act, 1956.
viii) Interest free loan/advances are given to the employees of the Company
and they are repaying the installment as stipulated.
ix) On the basis of checks carried out during the course of audit and as
per explanations given to us, there is adequate internal control procedure
commensurate with the size of the, Company and the nature of its business
for the purchase of stores, raw-materials, goods, plant and machinery
equipment and other assets and for the sale of goods.
x) The Company has purchased the goods and sales of goods and materials,
and services made in pursuance of contracts or arrangements entered in the
register maintained under section 301 of the Companies Act, 1956 as
aggregating during the year to Rs. 50,000 or more in respect of each party.
The prices paid and or received are reasonable having regard to prevailing
market prices for such goods, materials or services or other price at which
transaction for similar goods materials or services have been made with
xi) According to the information and explanation given to us the company
has no unserviceable or damaged stores, item for the year under review.
xii) The company has not accepted any deposits from the public during the
year and the directives of the Reserve Bank of India and the provision of
section 58(A) of the Companies Act, 1956 and the rules made there under
have been complied with. However, matured deposit as on 31.03.2002 and
amount of interest due thereon are still unpaid. Moreover, deposit returns
are not submitted to the appropriate authorities. Also company has applied
with Company Law Board for extention of time limit for repayment of
xiii) The Company has maintained reasonable records for sales and disposal
of scraps during the year. However the company has no bye-product during
the year under audit.
xiv) In our opinion, the company has an adequate internal audit system
commensurate with the size of the company and nature of its business.
xv) The maintenance of cost records has not been prescribed by the Central
Government under section 209 (i) (d) of the Companies act, 1956 in respect
of any product of the company for the year under review.
xvi) During the year under audit, the company was irregular in depositing
the provident fund dues with the appropriate authority. Outstanding amount
as on 31.03.2002 is Rs.1242624/-.
xvii) There is no undisputed amounts payable in respect of Wealth-tax,
Sales-tax, Customs Duty and Excise Duty as at 31st March, 2002 which are
outstanding for a period of more than six months from the date they become
payable except undisputed Sales-Tax liabilities payable Rs.3322314/-.
xviii) In our opinion and according to the information and explanations
given to us and as certified by the Directors, Personal expenses have not
been charged to revenue account.
xix) The Company is not a Sick Industrial Company within the meaning of
clause (O) of sub section (1) of section 3 of the Sick Industrial Companies
(Special Provisions) Act, 1985 (1 of 1986). For that Company has been made
reference u/s 15 of the Act to the Board of Industrial and Financial
xx) In respect of the Trading activities of the company there were no
For C. Patel & Co.
PLACE: AHMEDABAD, (M.D. POLARA)
DATE : 26TH AUGUST, 2002 PARTNER