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Star Precision Electronics (India) Ltd.

BSE: 513505 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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Star Precision Electronics (India) Ltd. (STARPRECELECT) - Director Report

Company director report

1995 STAR PRECISION ELECTRONICS (INDIA) LIMITED DIRECTORS' REPORT FINANCIAL RESULTS Your Directors present the Twenty-third Annual Report of the company together with the Audited Statement of Accounts for the year ended 30th June, 1995. In view of the plans of long term restructuring, your Directors decided to extend the year-ending from 31st March to 30th June, 1995. During the year, the Company has performed below expectation and the combined turnover of manufacturing, investment and trading activities on annualised basis was in fact less than that in the previous financial year. The company's manufacturing turnover and profitability were adversely affected by the liquidity crunch faced by the textile industry last year, and by the industry in general, in the current financial year. More important, the unprecented increase in the cost of imported components resulted in an increase in Raw Material and Components cost from 31.8 to 41.6 % of the manufacturing turnover, thus greatly affecting your company's performance. The company has subsequently made a loss of Rs. 24.94 lacs during the period. Hence, the Directors are not in a position to recommend any dividend on the equity shares of the company. During the year under review, the company has concentrated on development of new models of Yarn Evenness Tester and Autospan, particularly with the objective of overcoming the problems of high cost of imported components, to be overcome through sophisticated software development and hi-tech indeginzation. Your Directors are pleased to inform you that as a result of the successful development, the company was able to introduce and exhibit the new Yarn Evenness Tester model ST-4 and Autospan model 901 at the International Textile Machinery Association (ITMA) exhibition held in October 1995 at Milan, Italy. Both these models received significant international accolade at ITMA '95, serious enquiries of almost U.S.$ 1 million were received for these models. As a result the company is not only able to offer equivalent hardware to that offered by other world-renowned international manufacturers, but also specialized software, which has additional features. The company, through its associates, M/s. APS-STAR Industries Limited and its international marketing subsidiary StarWorld - Technologies & Trade Limited, UK and International Engineering & Textile Services Pte. Ltd., Singapore, has already made significant breakthrough or penetration into the export market. The company expects to increase substantially its interest in the international markets in the coming years. With the introduction of software-based instruments and reduced costs due to successful indegenisation, your Directors are confident that the company will have a competitive edge, both in the domestic and international markets, and will achieve higher turnover and profitability in the next years. 2. IMPLEMENTATION OF THE PROJECT The company's activity of manufacture of industrial control valves has taken off well. The company has also taken up agency for Weft Accumulators of IRO, Sweden, which give the company's entry into the Weaving Sector. 3. R & D ACTIVITIES & PRODUCT DEVELOPMENTS The company has a strong R & D Department which bears recognition from the Ministry of Science & Technology, Government of India, since 1982. The R & D Department is not only involved in upgradation of its existing technologies but also strives to introduce new products with latest state- of-art technology and of user-friendly features. The company, apart from the introduction of new models of Yarn Evenness Tester and Autospan, is undertaking development of complete range of fibre and yarn testing instruments, new designs for its textile process-control instruments including electronic Weft Straightener in technical collaboration with M/s. Reytex of Germany. Know-how acquired: The company has signed an agreement with M/s. Reytex, Germany (now renamed as Setex) for Electronic Weft Straightener. The company acquired know-how from M/s. Microverse, Pune, for Microprocessor-based Multipoint temperature Control System for Draw Twisters. 4. DIRECTORS In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the company, Mr. Y. P. Dandiwala, Mr. Ambrish Parikh and Mr. Manoj Parikh retire by rotation and are eligible for re- appointment. Your Directors with deep regret inform the sad demise of Mr. J. H. Dalal, Director of the company on 20.2.96 after a brief illness and place on record the sincere appreciation of the valuable guidance and advice given by Mr. J. H. Dalal during the period of his association with the company. 5. FIXED DEPOSITS The company did not accept / renew any deposits during the period under review. The deposits outstanding as on 30th June, 1995 was nil. 6. INSURANCE All the properties of the company such as Buildings, Furniture and Fixtures, Plant & Machinery, Stock, etc. are adequately insured. 7. AUDITORS Messrs. Nanubhai & Co., Chartered Accountants, Bombay as auditors of the company retire at the conclusion of this Annual General Meeting and they are eligible for reappointment. You are requested to appoint the auditors. 8. AUDITOR'S REPORT With reference to the observations made by the Auditors in their Report, the Notes on Accounts are self-explanatory. As regards Income tax of Rs. 18.28 lacs unclaimed salary, wages etc. of Rs 0.18 lacs, necessary arrangement for the payment is being made. 9. ENERGY, TECHNOLOGY, FOREIGN EXCHANGE Disclosures of particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under the Companies (Disclosures of Particulars in the Board of Directors' Report) Rules, 1988 is annexed hereto, Annexure 1. 10. PARTICULARS OF EMPLOYEES As required under the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of the employees of the company who were in receipt of remuneration not less than Rs. 3,00,000/- during the period ended 30.6.1995 or Rs. 25,000/- per month are set out in the statement appended hereto and the appendix forms an integral part of this report. None in the statement annexed hereto except the Managing Director himself is a relative of any of the Directors of the Company, Annexure II. 11. ACKNOWLEDGMENT AND APPRECIATION Your Directors appreciate the co-operation and efforts put by all Staff Members of the company in meeting the manufacturing and dispatching target and also place on record their gratitude to the company's bankers for their valuable support. ANNEXURE INFORMATION PURSUANT TO THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988. FORM - B Form for disclosure of particulars with respect to technology, absorption, adoption and innovation A. RESEARCH & DEVELOPMENT (R & D) 1. Specific areas in which R & D is carried out by the Company R & D is carried out in the following main areas (a) Textile Electronics (b) Process Control Instrumentation & Machine Control Systems (c) Variable Speed Drives / Power Electronic Systems (d) Industrial Valve, Pneumatic & Electrically Actuated Control Valves and Actuator. 2. Benefits derived as a result of the above R & D R&D activities have resulted in developments of (i) Software Electronic circuits for company's existing products (ii) New Models of Yarn Evenness Tester (iii) Data Acquisition System (iv) Motorised Actuator for Hazardous Areas Heavy Duty Pneumatic Actuator. 3. Future Plan of Action The Company will concentrate on R&D in the field of textile electronics for fibre, yarn & process control. The Company will also continue developing various types of Process Control Instruments / Systems, Variable Speed Drive / Power Electronic Systems, Industrial Valves & Control Valves, for textile as well as non-textile applications. 4. Expenditure on R&D (a) Capital Rs. 20.34 lacs (b) Recurring (including deferred Rs. 73.85 lacs R&D expenditure of Rs. 63.29 lacs) (c) Total Rs. 94.19 lacs (d) Total R&D Expenditure as per percentage of total turnover 14.05% B. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION 1. Apart from adding and modifying the software in Yarn Evenness Tester ST1 PC3, in order to make it more versatile and user friendly, the company took up development of various new products. A new model of Yarn Eveness Tester / Analyser ST4 incorporating Digital Technology has been developed and is a much more advanced model than ST1 PC3. It contains not only the feature of the ST1 PC3, but several additional ones. A PC- based model of Fibre Length Tester Fibrescan has been developed with not only user-friendly features but enhanced facilities for data storage & retrieval. Also developed a Motorised Actuator for use in hazardous areas and a heavy duty Pneumatic actuator. 2. Benefits derived as a result of the above efforts are Inport substitution, product development, cost reduction, product improvement, upgradation to bring in latest technology and wider user - friendly features. The above efforts have resulted in bringing our products to the forefront of the Indian and International market, establishing our products to be equal in specifications to international brands. This will in turn result in enhanced local sales and exports. Import substitution and cost reduction will also result in better profitability. 3. New Technology Imported during the last 5 Year (i) YARN HAIRINESS MONITOR (a) Technology Imported - Yarn Hairiness Monitor Model SDL-103 (b) Year of Import - 1992 (c) Has technology been fully absorbed - Fully absorbed. (d) If not fully absorbed, areas where this has not taken place reasons therefore and future plan of action - NA (ii) ELECTRONIC WEFT STRAIGHTENER (a) Technology Imported - Electronic Weft Straightener (b) Year of Import - (c) Has technology been fully absorbed - No. (d) If not fully absorbed, areas where this has not taken place reasons therefore and future plan of action : The technical drawings furnished by the foreign company do not have complete information. We have asked more details, after receipt of which development will be initiated. C. FOREIGN EXCHANGE EARNINGS AND OUTGO Foreign Exchange earned through others amounted to Rs. 4.41 lacs Foreign Exchange used Rs. 69.99 lacs For and on behalf of the Board of Directors SURESH M. MEHTA Chairman Place : Mumbai Date : 24th February, 1995.