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Dowells Elektro Werke Ltd.

BSE: 532157 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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Dowells Elektro Werke Ltd. (DOWELLSELEKTRO) - Director Report

Company director report

DOWELL'S ELEKTRO WERKE LIMITED ANNUAL REPORT 1999-2000 DIRECTORS' REPORT The Directors hereby present the ELEVENTH ANNUAL REPORT together with the AUDITOR'S REPORT of the Company for the year ended 31st March 2000. DIVIDEND In view of the losses incurred by the Company your Directors do not recommend payment of Dividend for the year ended 31st March 2000. OPERATIONS: During the year under review, the company's operations were severely affected due to lack of working capital funds. The company's bankers Canara Bank, have adopted a non cooperative attitude towards the company's efforts to sort out the finance problems. Your company's various proposals for revival of the company's Credit Facilities with the said bank were not considered favourably by the bank which has ultimately led to the recall of the total advances by the bank. On account of the working capital crunch, your company's turnover has declined sharply to Rs. 360 Lacs as against Rs. 649 Lacs in the previous year. Due to lower turnover and increasing costs, overheads and interest burden, your company has incurred a Net Loss of Rs. 194.25 Lacs in the year under review. Your directors are making all possible efforts to overcome this difficult period by taking necessary steps to induct funds in the business. It may be noted that the company continues to enjoy a very good brand loyalty and has a very healthy order book position on hand. If the required funds are inducted in the business, your directors are confident that the company will be able to turn around and start earning profits in near future. FINANCE As stated earlier, the company's bankers CANARA BANK have recalled the entire working capital facilities that were granted by the bank to the company. Your directors are continuing discussions for revival of the facilities with the bank. Due to the heavy lossess incurred by the company in the past three years and the resultant financial difficulties faced by the company, your company has defaulted in repayment of unsecured loans of Rs.65 Lacs which have fallen due for payment. One of the depositors who has placed a deposit of Rs.10 Lacs has filed a winding up petition against the company in High Court at Mumbai. Other depositors for Rs.55 Lacs have also served legal notice on the company for recovery of their deposits. Some of the creditors for supply of raw materials etc. have also served legal notices for recovery of their dues from the company. In some cases, proceedings under Section 138 of the Negotiable Instruments Act have also been launched against the company and its Directors. EROSION OF NET WORTH BY MORE THAN 50% Your director have to report that the company's net worth has eroded by more than 50% of the peak net worth during the preceding four years In accordance with the provisions of section 23 of the Sick Industrial Under- takings (Special Provisions) Act, members are requested to take a note of the erosion of the net worth of the company as per the resolution set out under item no. 7 of the Notice of the 11th Annual General Meeting. The reasons for the erosion of net worth and steps proposed to be taken o revive the company are set out in details in the explanatory statement annexed to the Notice of the 11th Annual General Meeting DIRECTORS Shri Tushar Patel and Shri Rakesh Patel, Whole Time Directors of the company have resigned with effect from 24th June, 2000. Your Board of Directors have placed on record their sincere appreciation for the valuable services rendered by them during their association with the company. Smt. Divyaprabha Patel was appointed as an additional director by the board with effect from 28th June, 2000 and she holds office upto the ensuing Annual General Meeting pursuant to the provisions of section 260 of the Companies Act, 1956. The company has received notice from a member pursuant to section 257 of the Companies Act, 1956 with the amount of deposit of Rs.500 as prescribed under the said section, proposing to appoint Smt. Divyaprabha Patel as the Director of the company Your Board of Directors recommend the relevant resolution for your approval. The tenure of appointment of Shri J.S.Patel as the Managing Director of the company has expired on 31st December, 1999. Your Board of Directors have reappointed him as the Managing Director for a further period of five years from 1/1/2000 to 31/12/2004 subject to your approval. Members are requested to approve the resolution as set out in the Notice of the 11th Annual General Meeting. Shri Dinesh Patel and Shri Manhar Patel, Directors retire by in ion ar being eligible offer themselves for reappointment. AUDITORS Present auditors M/s. ARVIND RAMAN & VIJAY retire at the conclusion of the ensuing Annual General Meeting and the Company has received confirmation from the Auditor regarding their availability if reappointed. Your Directors recommend their reappointment. Observations made in the Auditor's Report read with the relevant notes forming part of the accounts are self explanatory and therefore do not call for any further comments under section 217 (3) of the Companies Act, 1956. Y2K COMPLIANCE Your Company's operations have rolled to the new millennium in a smooth manner without any Y2K problem. LISTING OF EQUITY SHARES The Company's shares are listed to Bombay & Ahmedabad Stock Exchange and listing for the year 1999-2000 have been paid. The listing fees for the year 2000-2001 have yet to be paid. PARTICULARS OF EMPLOYEES Your Company does not have any employee drawing remuneration in excess of the limits prescribed under the provision of section 217 (i) (e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. INFORMATION REGARDING ENERGY CONSERVATION ETC. The information required under section 217 (1) (e) read with the Companies (Disclosure of Particulars in the Report) Board of Directors Rules 1988 is as under:- 1. Conservation of energy and fuel is regarded as one of the priority item for the Company's plans for cost reduction and suitable measures an being taken in that directions as an ongoing exercise. 2. The Company has not spent any amount on Research & Development However, developmental work on new products and improving the, quality of the existing product range is being carried on regular basis. 3. Earnings in Foreign Exchange : Nil ACKNOWLEDGEMENTS: Your Directors wish to place on record their appreciation of the valuable support and co-operation received from the Company's Clients. and Sub pliers. The Directors also wish to express their appreciation for the dedicated services rendered by the employees of the Company at all levels. BY ORDER OF THE BOARD OF DIRECTORS J.S.PATEL CHAIRMAN DATE: SEPTEMBER 4, 2000 REGISTERED OFFICE: Survey No. 193, Hissa No13, Old Ghodbunder Road (East) Dhodbunder Village DIST THANE 401 104