We have audited the attached Balance Sheet of PROGRESSIVE STEELS
(INDIA) LTD. as at 31st March 2002 and the Profit & Loss Account for
the year ended on that date annexed thereto and report that;
1. As required by the Manufacturing and Other Companies (Auditors
Report) order 19SS issued by the Company Law Board in terms of section
227 (4A) of the Companies Act, 1956. We enclose in the annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
Order to the extent applicab1e
2. Further to our comments in the Annexure referred to in paragraph (i)
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
b) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appeals from our examination of the
c) The Balance Sheet and Profit & Loss Account dealt with by this
report are in agreement with the books of account.
d) In our opinion, the Balance Sheet and Profit & Loss Account complies
with the requirements of the Mandatory Accounting Standards referred
to in sec, 211 (3C) of the Companies Act, 1956.
e) On the basis of written representations received from the Directors
of the Company as at March, 2002 and taken on record by the Board of
Directors, we report that no Director is disqualified from being
appointed as Director of the Company under Clause (B) of Bub—section
(1) of Section 274 of the Companies Act, 1956,
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts subject to Notes no.
1(b) relating to non-provision of gratuity, Mote no. 2 relating to
investment in SB I bonds, and Note No. 12 Sundry Debtors relating to
provisions for bad and doubtful debts forming part of the schedule
31st and other notes appearing thereat to keep the information as
required by the Compannies Act, 1956 in the manner so squired and give
a true and fair view :
i) In the case of Balance Sheet of trie state of affairs of the Company
as at 31st March 2O02; and
ii) In the case of the Profit & Loss Account, of the loss of the
company for the year ended on that date.
ANNEXURE REFERRED TO IN PARABRAPH (1) OF OUR REPORT OF EVEN DATE ON
THE ACCOUNTS OF PROGRESSIVE STEELS (INDIA) LTD. FOR THE YEAR ENDED 31ST
I. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets. The fixed
assets have been physically verified by the Management at reasonable
intervals. No material discrepancies were noticed on such verification.
II. The fixed assets have not been revalued during the financial year.
III. The stock of finished goods, spare parts and raw materials have
been physically verified by the management during the year. In our
opinion, the frequency of verification is reasonable.
IV. In our opinion, the procedures of physical verification of stock
followed by the management are reasonable and sdequate in relation to
the size of the Company and the nature of its business.
V. The discrepancies noticed on physical verification of stock as
compared to book records were not material and the same have been
properly dealt with in the books of account,
VI. In our opinion, the valuation of stock, subject to notes is fair
and proper inaccordance with the normally accepted accounting
principles and is on the same basis as in the preceding year.
VII. The Company has not taken loans secured or unsecured from
Companies, firms or other-parties listed in register maintained under
section 301 of the Companies Act, 1956 and/or from the companies under
the same management as defined under Sec. 370(1B) of the Companies Act,
VIII. The Company has not granted any loans secured or unsecured to
Companies, firms or other parties listed in the the reqisters
maintained under section 301 of the Companies Act,1956 an or to the
Companies under the same management as defined under section 37O(1B)
of the Companies Act, 1956 except in tersest free advance. The terms
and conditions of such advances are not prima facie prejudicial to the
interest of the company,
IX. In respect of loans & advances in the nature of loans given by the
company, one of the parties have re-paid the principal amounts as
stipulated but few others are irregular in payment of principal and
interest as originally stipulated.
X. In our opinion and according to the information and explanation
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the sa1e of goods.
XI. In our opinion and according to the information and explanations
given to us, there are no transactions of sale of goods, material or
services, made in pursuanc e of contracts or arrangement entered in the
register maintained under section 301 of the Companies Act, 1956 and
aggregating during the year to Rs.50,000/- or more in respect of each
XII. In our opinion and accoridng to information and explanations given
to us the Company has not accepted any deposit from the Public within
the meaning of section 58A of the Companies Act, 1956 and Companies
(Acceptance of deposit is) Rupees 1975.
XIII. In our opinion the company is maintaining reasonable records for
sale and disposal of realisable scrap. As explained to us, the
companys operations do not generate any realisable by-product.
XIV. In our opinion, the company does not have an Internal Audit system
commensurate with the size and nature of its, business during the
XV. The company is not under an obligation of maintaining cost records
as prescribed by the Central Government; u/s 209 (1) (d) of the
Companies Act,1956 since its lying closed.
XVI. Provident Fund and Employees State Insurance dues relating to
financial year 1999-2000 for Rs. 41969. SO and Rs. 8255.95/-
respectively which had fallen overdue for deposit with the appropriate
authority had not been so deposited on or before 31.03.2O02.
XVI I.Accord ing to the records of the Company and the information and
explanations given to us there are undisputed amounts payable in
respect of Sales tax amounting to Rs.948800.28 and Excise duty
amounting to Rs. 13046179.75/- outstanding as at 31st March, 2OO2 for
a period of more than six months from date they become payable.
XVIII. In our opinion, according to the records of the Company and the
information and explanations given to us, no personal expenses have
been charged to revenue account.
XIX. The Company has become a sick industrial company within the
meaning of clause (0) of sub-sect ion (1) of section 3 of Sick
Induslists Companies (Special Provisions) Act, 1985 and reference has
been made by the company to the Board for Industrial and Financial
Reconstruction under sec. 15 of the Act.
XX. There were no damaged goods during the year, in the case goods
traded by the company.
For R. SINHA & ASSOCIATES
Place: PATNA (MANOJ KUMAR)
Date: 2002 PARTNER