ANNUAL REPORT 1999-2000 PROGRESSIVE STEELS (INDIA) LIMITED DIRECTORS' REPORT Dear Members, Your Directors present their Report and Audited Accounts of the company for the year ended March 31, 2000 OPERATIONS / REASONS OF SICKNESS Total sales during the year was Rs 499.52 lakhs as against Rs 1443.90 lakhs in previous year. Out of total sales during the year sales on account of trading activity was only Rs.45.68 lacs as against Rs.841.01 lacs in the previous year. Trading activity could not be carried out in full due to lack of resources and adequate working capital. Manufacturing activity and corresponding sales have also been lower due to closure/shutdown of plants of Rolling Division from 14.09.1999 and Casting Division from 14.09.1999 to 19.10.1999 and again from 1.11.19 till the end of financial year.. Company suffered a loss of Rs. 524.97 lacs as against Rs. 99.20 lacs in the previous year.. Steel Industries in the country has passed through a difficult phase and there has been overall demand recession for the past 2 years. The problem has further aggravated due to adverse Govt. Policy in the form of compounding of excise duty for Mini Steel Plants and re-rolling units w.e.f. September 1997. In Bihar, Mini Steel units have been further crippled with the imposition of compounding of system of electricity charges w.e.f September,1999 making the entire operation unviable. As a result, the company has suffered heavy losses during the year leading to erosion of networth. The Auditors have reported that the company has become a sick industrial company within the meaning of Clause (O) of sub section 1 of section 3 of Sic Industrial Companies (Special Provisions) Act,1985.. Full erosion of networth has taken place due to reasons already enumerated above. Hence, your Directors propose to make reference to Board for Industrial and Financial Reconstruction after due approval and adoption of accounts by the shareholders for necessary reliefs and suitable rehabilitation scheme. Your Directors are hopeful of turning around the unit with a suitable rehabilitation package approve by BIFR and also because of the fact of advalorem system of excise duty on Mini Steel Plants in place of compounding system w.e.f. 01.04.200 . DIRECTORS Sri C. R Sengupta, Director of the company ,retires by rotation, but being eligible, offers himself for reappointment. PARTICULARS OF EMPLOYEES Pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies Particulars of Employees) Rules 1975 as amended, particulars of employees have not been given as no employee was in receipt of remuneration of Rs.5000 or more per month during the year. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information required under Section 217(1) (e) of the Companies Act,1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules,1988 with respect to energy consumption is appended hereto and forms part of this report. Neither the company has earned nor spent foreign exchange during the year. No new technology has been imported. Company l;as not undertaken any research and development activities and no expenditure has been incurred there on. AUDITORS M/s. R. Sinha Associates, Chartered Accountants were appointed as Auditors of the company in the last Annual General Meeting of the company held on 29th Sept.,1999 in place of M/s P. Agarwal Co., Chartered Accountants. M/s R. Sinha & Associates retire at the ensuing Annual Meeting and being eligible offer themselves for re-appointment. AUDITORS REPORT Notes on accounts referred to in the Auditors Report are self explanatory and therefore do not require for further comments on the Auditors Report u/s.217(3) of the companies Act,1956. LISTING Equity Shares of the company are listed with Ahmedabad, Magadh, Mumbai and Calcutta Stock Exchanges. APPRECIATION Your Directors place on record their appreciation for continued cooperation and support extended by State Bank of India, Patliputra, Commercial Branch, Patna. For and on behalf of Board of Directors Place : Patna RAJ KUMAR PATWARI Date : 28.08 2000 Chairman