Your Directors present herewith the 7th Annual Report of the Company
together with Audited Accounts for the financial year ended 31.03.1996.
Present status and future prospects:
The Company could not perform to its full potential due to shortage of
funds and as a result could achieve only 9% capacity utilisation.
LCC even though expressed its intention of entering into sub contract for
ferrite production along with its partners namely FDK, Japan they withdrew
from the proposal as FDK Japan did not show their keeness in entering into
such a proposal.
IML had under the sub contract arrangement with EID Parry produced ferrites
on their arranging Raw material and they were satisfied with the yields and
the quality of the output.
The Company has become a sick company as defined under section 3(o) of the
Sick Industrial Companies (Special Provisions) Act, 1985 and accordingly
the Company is getting itself registered with Board for Industrial and
Financial Reconstruction and a revival proposal is being submitted to the
Financial Institutions as the Project was adversely affected by the De-
valuation of Indian Rupee, Reduction in Import Duty on Ferrites and Gulf
War which was beyond the control of the Management and since the Project
was under implementation stage the viability got affected and fell into a
debt trap from which it could not recover even though the Management tried
its best to over come the problems.
The Management feels that on the Financial Institutions waiving the
accumulated interest and reducing the interest to the present levels the
Company would be able to stabilise and become viable as the demand for
products manufactured by the Company is booming and the technology used by
the Company in manufacture of Ferrites is the most advanced. The Ferrites
also have a very good export market potential.
The Company has not accepted any fixed deposits from the Public.
Mr. S R Mohapatra and Mr. P R Patnaik were nominated by OSEDC as Additional
Directors of the Company with effect from 29th March, 1996 in place of Mr.
B B Padhy and Mr. U K Panda.
Mr. S.P. Sen Gupta was appointed as Alternate Director for Mr. Armin Albert
Pursuant to section 257 of,the Companies Act, 1956 Company has received a
notice proposing the candidature of Mr. S.R. Mohapatra and Mr. P.R. Patnaik
as Director liable to retire by rotation.
Under to the provisions of the Section 255 and 256 of the Companies Act,
1956 Mr. G S Mishra and Mr. C S Sastry, Directors retire by rotation and
are eligible for re-appointment.
M/s. Karvy & Co., Chartered Accountants, Hyderabad the Auditors of the
Company retire at the conclusion of the Annual General Meeting and are
eligible for re-appointment.
With reference to the Auditors remark we wish to state that:
Due to paucity of funds we could not remit the dues of Employees Provident
Fund and Employees State Insurance to the prescribed authorities. The
Company would take steps to remit the dues during the current year.
Energy, Technology and Foreign Exchange:
Additional information on Conservation of Energy, Technology Absorption,
Foreign Exchange Earnings and Outgo as required to be disclosed in terms of
Section 217 (1) (e) of the Companies Act, 1956 read with the Companies
(Disclosure of particulars in the of Board of Directors) Rules, 1988 is
given in Annexure - I to the Directors' Report.
Particulars of Employees:
Information as required in accordance with the provisions of Section 217
(2A) of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 as amended, regarding employees is given in Annexure
- II to the Directors' Report.
Your Directors take this opportunity to place on record their deep
appreciation and gratitude for the unstinted support, assistance, co-
operation and guidance that is being extended by IDBI, IFCI, Indian Bank,
Vysya Bank, Allahabad Bank, DES, OSEDC, DOE and various departments of the
State and Central Governments for this Project. The Directors further thank
all the employees for their dedication and co-operation.
ANNEXURE - I
ANNEXURE TO THE DIRECTOR'S REPORT
In formation as required under Section 217(1)(e) of the Companies
(Disclosure of particulars in the report of Board of Directors) Rules,
A. CONSERVATION OF ENERGY
(a) Company has installed power factor capacitors to improve lead factors.
(b) No additional investments were made for reduction of consumption of
B. TECHNOLOGY ABSORPTION:
Disclosure of particulars with respect to Technology absorption (to the
extent applicable) is shown in Form - B.
Form of Disclosure of particulars with respect to absorption:
1. Specific areas in which R & D : No research is carried out by the
carried out by the company company but indegenous sources for
raw materials are being developed
by getting samples and testing, to
determine suitability for import
2. Benefits derived as a result : Indigenisation of Raw Material
of the above R & D
3. Future plan of action it : With the sophisticated test equip-
ments installed in the plant will
be possible to develop ferrites
power for various applications
using indigenous materials even for
sophisticated communication ferrites.
The company is planning to go for
4. Expenditure on R & D : Nil
TECHNOLOGY ABSORPTATION AND INNOVATION
1. Effort in brief made towards : During the year under review the
technology, absorption, company absorbed the imported
adaptation & innovation technology from LCC.
Adaptation : The company achieved cost effective
Innovation : The Company successfully achieved
rationalising the varieties of raw
materials both imported and indig-
eneous. This has resulted cost
effective procurement of these items
as also lowering of stock levels to
support the planned production.
2. Benefits derived as the result : Due to what is stated in (1) above
the above improvement the company will realise the
following benefits :-
(a) Secure optimum market share &
achieve rated production of
(b) Derive benefit of cost reduction
due to indigenisation of refrac-
tories which are not only cost
effective directly but also will
result in substantial reduction
of inventory holdings and avoid
interruption in kiln operations.
(c) Higher yields achieved in the
production of RTP will not only
fully support higher level of
production of TV Ferrites but
could also result in increasing
the effective installed capacity
from 1000 tons to 1300 tons per
3. In case of imported technology
(imported during the last five
years reckoned from the begin-
ning of the financial year) the
following information may be
a) Technology : Yes imported from France.
b) Year of import : 1991
c) Has technology been : Yes, for TV Ferrites, for which the
fully absorbed process of production has been stab-
ilised. As regards pot cores plant
fully installed and commissioned.
Trial production being taken up to
make samples to be furnished to OEMs
and the market.
4. If not fully absorbed area : Not applicable.
where this has not taken
place reasons therefor and
future plans of action.
FOREIGN EXCHANGE EARNINGS AND OUTGO
1. Activities relating to : The Company has entered overseas
exports initiatives taken Distribution Agreement with TCA
to increase exports, Hongkong for export of Soft
Development of new exports Ferrites.
markets for products and
services and export plans
2. Total Foreign Exchange : Earnings: Nil
used and earned. Outgo : Rs. 6,27,200
For and on behalf of the Board
For INDO MAXWELL LIMITED
Place : Bhubaneswar
Date : 28th June, 1996.