413005/02/96ASHOK Artech Power Products Ltd --------------------------------------------------The Company was incorporated on 15/09/1989 with the Registrar of Companies, Kerala at Cochin and obtained the Certificate of Commencement of Business on 08/11/1989. KSIDC Ltd. identified Switch Mode Power Supplies (SMPS) as a feasible project based on preliminary study conducted bu it and signed a Memorandum of Understanding with Mr. I V Vijayan, the main promoter for jointly promoting the industrial venture. The Company applied for and obtained a Letter of Intent for the manufacture of 75,000 numbers of SMPS of various ranges per annum. The Company entered into a Memorandum of Understanding with M/s Tectrol Inc., Toronto, Canada, for technical and financial collaboration. On account of the financial and other internal problems of Tectrol Inc., the Company backed out of the joint venture proposal. The Company later identified M/s Astec America Inc., who are the world's largest vendor of merchant power supplies, as the technical collaborator and signed an MOU with them on 19thn April 1993. Reserve Bank of India (RBI) gave its approval for the collaboration vide letter no.EC CO FITT 623/A-92-92-93 dated 2nd June 1993. The final aggreement with Astec was executed on 3rd November 1993 for manufacturing license and technical collaboration for a range of SMPS upto 500 W and for exclusive distributorship of Astec's other products upto 3,000 W in India, Bangladesh, Pakistan and Sri Lanka. During the year 1997-98, the company has achieved marginal increase is sales of SMPS from 25363 Nos in previous year to 28757 Nos in current year. Due to overall slump in the market and the dumping of imported materials at very low prices, the sales as also the price realisation and contribution of your company's products have been adversely affected impacting the viability of operations and resulting in continuing losses.