The company, Bells Softech, will develop and provide software and information technology services. Shareholders had already approved Bells Controls equity investment in BSL at the company's last annual general meeting.

Bells Controls now proposes to transfer its Bangalore unit as a going concern to BSL with effect from October 1, for Rs 1.86 crore. For the transfer of this business, the company is seeking shareholders' approval under Section 293 (1) of the Companies Act, 1956.

In 1998-99, Bells Controls suffered major reverses with sales declining sharply from Rs 64.62 crore to Rs 43.29 crore. It reported a net loss of Rs 13.40 crore against a profit of Rs 62.91 lakh in the preceding year.

According to the company, the losses were the result of funds blocked with customers. Besides, most of the projects for which thecompany supplied equipment were "inordinately delayed" leading to rise in interest costs and substantial erosion in profitability.

The company's power transmission division suffered heavy losses on account of "inadequate control on site expenses, excessive deployment of manpower, adverse climatic conditions, project delays due to unfavourable terrain and soil conditions, high cost of stringing," which were not provided for at the time of quoting for these orders.

The division, which executed contracts of major power transmission companies, suffered "huge" losses due to cost overruns at various project sites.

Bells Controls has now undertaken a major restructuring of business to reduce losses. It is now focusing on the "core business of process control and fire protection". Other steps include rationalisation of manpower, greater thrust on exports, better receivables and inventory management and strengthening internal controls and procedures.

On the export front, the company has received orders fromFoxboro Singapore for control panels worth Singapore dollar 1 million and from Foxboro, USA for convertors worth $1.2 million. Its exports grew to Rs 7.06 crore in 1998-99 from Rs 3.55 crore in 1997-98.