1996 HARPARTAP STEEL LIMITED DIRECTOR'S REPORT Your Directors have the pleasure in presenting the 10th Annual Report together with the Audited Accounts of the Company for the financial year ending 31st March, 1996. PROJECT IMPLEMENTATION Punjab Small Industries & Export Corporation Limited (PSIEC) has allotted 15.01 acres of land at their prestigious industrial estate located at S.A.S. Nagar (Mohali) in the vicinity of Chandigarh. Directors are pleased to mention that the civil works on building and foundations completed, all the imported machinery has been received and erected, major portion of indigenous plant & machinery and misc. fixed assets have also been received and erected. Balance of the equipment is in the pipeline. Inspite of the effective steps to implement the project at the earliest, the project has been further delayed due to unpredictable circumstances beyond the control of management and it is now proposed to be commissioned by last quarter of 1996-97. Since project is under advanced stage of implementation, comparison of actual expenditure viz-a-viz projections under various heads as mentioned in Prospectus is not warranted at this stage. The Company has utilised the funds as stated in the Prospecturs. FINANCIAL STATUS Members are aware that the cost of the project for manufacturing GP/GC sheets was revised in 1993 to Rs. 4487 lacs. with its means of financing as term , loans from Financial Institutions/Banks (Rs.1740 lacs), Promoters contribution (Rs.1047 lacs), Mutual Fund participation (Rs. 25 lacs), Public Issue (Rs. 1575 lacs), State Subsidy (Rs.30 lacs) and Unsecured loans from promoters (Rs. 70 lacs) During the year Company has not carried out any commercial, trading or manufacturing activity and therefore no Profit & Loss Account has been prepared for this period. FIXED DEPOSITS The Company has not invited and as such has not accepted any deposits during the year. AUDITORS M/s. Kalia & Co., Chartered Accountants, Auditors of the Company, retire at the conclusion of this Annual General Meeting and, being eligible, offer themselves for reappointment. A Certificate u/s 224(1-B) of the Companies Act, 1956 has been obtained from them AUDITORS' REPORT As regards observations of the Auditors in sub para (X) and (XI) of para 5 of their Report, these are self explanatory and do not require further elucidation. DIRECTOR'S In terms of Article-86 of Articles of Association of the Company, Dr. N.S. Datar and Sh. J.S. Dhillon retire by rotation and, being eligible, offer themselves for reappointment. POLLUTION AND ENVIRONMENTAL CONTROL Your Company is installing the most modern plant and equipment involving state-of-art technology for manufacturing GP/GC Sheets so as to be environmental friendly and have pollution level well within the permissible limits as laid down for the project. Solar Evaporation Drying Ponds are also being provided as stipulated by Punjab Pollution Control Board who have already issued, "No Objection Certificate" to the Company. CONSERVATION OF ENERGY The indigenous plant and equipments have been procured, designed as per drawings/ documentation/specifications supplied by M/s. Nippon Kokan Kaisha (NKK) of Japan-the world leaders in the field. Imported equipments have been supplied by M/s. Nichimen Corporation of Japan, an associate of NKK as per the drawings/ specifications/documents of NKK. Technology as such lays great emphasis on Energy Conservation and effective utilisation of power and fuel. TECHNOLOGY ABSORPTION Technology related documentation provided by M/s. Nippon Kokan Kaisha (NKK) has been fully absorbed to get equipment manufactured indigenously as per NKK's drawings/specifications and in designing of building as well as plant layout. The operational manuals received have been fully integrated into the scheme. FOREIGN EXCHANGE EARNING AND OUTGO The Company has neither incurred any expenditure in Foreign Currency nor it has earned any Foreign Exchange during the year. PERSONNEL AND PARTICULARS OF EMPLOYEES The relations of the Company with the staff have been cordial during the period under review. The Company had no employee in the category specified under Section 217 (2A) of the Companies Act, 1956. APPRECIATION Your Company is thankful for the co-operation, guidance and assistance extended by All India Financial Institutions viz IDBI, IFCI & ICICI, Bankers-State Bank of Patiala and Allahabad Bank, Punjab State Industrial Development Corporation Limited (PSIDC), the Govt. of Punjab and its other Statutory/Govt. Bodies viz Income Tax, Excise and Sales Tax, Pollution Control Board, Punjab State Electricity Board, as also Registrar of Companies for their full support and due co-ordination at this critical juncture when the project is under implementation. Your Directors also take this opportunity to place on record their warm appreciation for the valuable contribution and dedication shown by all the employees of the Company. For and on behalf of the Board (G.S. KAIRON) Chairman-cum-Managing Director Place : Chandigarh Dated : 30th November, 1996.