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Micro Energy (India) Ltd.

BSE: 517483 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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Micro Energy (India) Ltd. (MICROENERGYI) - Director Report

Company director report

ANNUAL REPORT 1998-99 MICRO ENERGY(INDIA) LIMITED DIRECTORS' REPORT To, The Members Your Directors hereby present the Twelth Annual Report with the Audited Balance Sheet and Profit & Loss Account for the year ended 31st March, 1999. 1. Dividend Your Directors regret their enability to recommend any dividend for the year ended 31.03.99. 2. Performance & Prospects The performance of the company during the year was affected by the following reasons: 1. Almost 60 % of the company's sales were from DOT licensees of Telecom Sector Due to sudden change in policy of Govt. of India the company could not get any orders from the DOT Licensees which badly affected the sales of the company. 2. The company had developed new products during the year for computer peripherals and had received good orders from the reputed company from IT Sector. The company could not execute the order fully due to acute shortage of working capital. The company's bankers, Ms Bank of Baroda, have called back the working capital loan sanctioned to the company. Inspite of above situation, the company has coped up with the operational pressure and managed to reach a reasonable turnover during the year. 3. In addition to above the general recession and sluggishness in the industry has further affected the business of the company. Prospects Your company has developed new products for medical applications and is expecting good orders in the coming years. The company has received potential enquiry from abroad for export. The company's R & D team has developed high value products in the field of Power Electronics. The company is expected to receive orders for other model of printer power supplies along with the existing models from the computer peripherals company. Although the company has developed these products independent of the existing financial difficulties, the operations of the company have been severely disrupted due to acute shortage of working capital .The company's bankers, Ms Bank of Baroda have called back all the working capital loans sanctioned to the company and have filed a case with the Debt Recovery Tribunal (DRT) and the case is pending pefore them. Further the company has become a potentially sick company within the meaning of Section 23(1) of the Sick Industrial Companies ( Special Provisions) Act, 1985 inview of the erosion of the net worth of the company by more than 100% as on 31 st March 1999 due to accumulated losses. Accordingly, the company is taking appropriate steps to make reference to the Board for Financial Restructuring ( BIFR) interms of Section 15(1) of the aforsaid Act. To add further misery to the operations of the company Ms Industrial Bank of India has also called back the Term Loan sanctioned to the company. 3. Board of Directors Since the last Annual General Meeting, Mr M S Rajagopal and Mr B S Shashi Kumar, Directors, have resigned. The Board has placed on record its appreciation of the services rendered by them. In accordance with the company's Article of Association, Mr M Jayaram, Director retire by rotation and being eligible, offers himself for re-appointment. 4. Conservation of energy, Technology Absorption and Foreign Exchange Earning and Outgo etc., As required under Section 217(1)(e) read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules,1988, related to conservation of energy and technology absorption is given below: Conservation of Energy Your Company has taken adequate measure to ensure optimum use of plant and machinery so as to conserve energy. As against 200KVA sanctioned power, average consumption is around 40KVA. Cost of Energy through in-house captive power has worked out on an average of Rs.5.00 KWH. Technology Transfer/ Absorption The details of Technology absorption are as given in form B FORM - B (Disclosure of particulars with respect to Technology Absorption) Research & Development (R8D) 1. Specific areas in which R&D carried out by the Company - Design, Development and Prototype production of various custom built SMPS to meet international standards. - Utilization of New Technologies in SMPS design incorporating higher efficiency and cost reduction. - Utilizing collaborators manufacturing processes by employing full fledged documentation systems for qualitative improvement in production. 2. Benefits derived as a result of above R&D. - Indigenisation / Import substitution to export quality products. - Cost reduction. - Improved reliability and cost reduction of units. - Development of new design for higher rated SMPS based power plants for Telecommunication Sector. 3. Future plan of action - Continuation of present work in R&D for introduction of new products and processes, improvement in the existing standard products. - Faster introduction of new products and processes. - Strengthening infrastructure of R&D. 4.Expenditure on R&D Capital Rs. Nil Recurring Rs. 1.53 Lakhs Total Rs. 1.53 Lakhs Total R&D Expenditure as a percentage of total turnover Rs. 1.29% 5. Technology, Absorption Adapation and Innovation 1) Efforts in brief, made towards technology absorption. - Chief Engineer - Designs was sent to USA to learn and incorporate various design practices for export of specific products. ii) Benefits derived as a result of the above efforts e.g. product improvement, cost reduction, product development, import substitution etc. - Design made to state of art Technologies. -Manufacturing of products meeting collaborators standard in quality. 6. Foreign Exchange Earnings and Outgo Earnings: Rs Nil Outgo Technical Know-how fees Rs Nil Travel & Training Rs Nil Components & Spares Rs 1.75 lakhs TOTAL Rs 1.75 lakhs 7. Auditors' Report With regard to the observations of the Auditors under SL. No d(i), (ii) and (iii) and item no 17 and 18 of the Auditors Report and annexure, your Directors state that: a. The Company has received final sanction from Reserve Bank of India vide their letter No. EC.CO.FID. 1.768/ 10.1.02.01.03/95-96 dated August 24, 1995 for allotment and export of 6,50,000 Equity Shares amounting to Rs 65 Lakhs to Foreign Collaborators. The Company has also received the final sanction from Reserve Bank of India vide their letter No. EC.CO. FID (Il) / 2558/10.02.40 (6880)/95-96 dated August 14, 1995 for allotment and export of 20,04,000 Equity Shares amounting to Rs. 200.40 Lakhs to NRls. The formalities for the balance permission for Rs. 19.60 Lakh are in progress and expected to be completed. b. Letter requesting confirmation of balance of Rs. 17.05 lakhs has been sent and we are awaiting the receipt of the same. c. Arrangements are being made to clear provident fund and tax deducted at source dues. 8. Auditors M/s. Vasan & Sampath, Chartered Accountants, Bangalore, Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and being eligible, have offered themselves for reappointment. The Company has received letter from M/s. Vasan & Sampath, to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1 -B) of the Companies Act, 1956. 9. Fixed Deposits During the year under review, The Company has not accepted any deposits under Section 58A of the Companies Act,1956 read with the Companies (Acceptance of Deposits) Rules 1975. 10. Personnel There is no employee drawing salary as specified in section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules,1975 & the said rules are not applicable. 11. Cashflow Statement Cashflow Statement pursuant to Clause 32 of the Listing Agreement with the Stock Exchanges is given alongwith the accounts of the Company. 12. Appreciation Your Directors wish to place on record their sincere appreciation for the continued co - operation, assistance and help received by the Company from customers and all Members of the company. Your Directors wish to place on record their deep sense of appreciation of the devoted services of the employees at all levels. For and on behalf of the Board Place : Bangalore S. Elango Date : 23rd August 1999. Managing Director N Kishen Altemate Director to Dr Dev Sharma