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Better Off without Piaggio

Better Off without Piaggio Hansavivek BAJAJ AUTO has had another good year when it registered all round further impressive growth in production, sales and profits. Board has recommended a gift of shares on a one-for- one basis by capitalising Rs 4.70 crore from reserves besides stepping up dividend by 5 points to 30 per cent. Company achieved production of 1,97,681 scooters against 1,32,336 in previous year. Production of 'Bajaj M 50' motorcycles was 20,103 (3,850) and of three-wheelers 25,104 (18,501). Sales and other income expanded from Rs 94.76 crore to Rs 150.86 crore and with margins widened gross profit more than doubled to Rs 31.88 crore (Rs 15.41 crore). Even alter higher provisions for depreciation and taxation net profit stood at Rs 9.34 crore (Rs 4.61 crore). Enhanced distribution is covered a hefty 6.62 times against 3.91 times previously.

Wide-Ranging Expansion

Wide-Ranging Expansion Hansavivek VOLTAS has once again turned in impressive working results. Although income from sales and services has increased marginally from previous year's Rs 281 crore to Rs 284 crore, gross profit has expanded from Rs 11.26 crore to Rs 14.55 crore. These figures reflect notable increase in margins. Net profit is also higher at Rs 4.73 crore against Rs 3.92 crore and dividend raised by a point to 22 per cent is covered 2.73 times by earnings against 2.37 times previously. Rise in dividend rate is for sixth time running. Besides, shareholders have been offered opportunity of subscribing to an attractive combined offer of convertible and non-convertible bonds with conversion of former into equity share to be at par value of Rs 100, as against break-up value of Rs 321.

Mounting Losses

Mounting Losses Hansavivek ROHTAS INDUSTRIES has suffered the worst-ever setback in 1982-83 with a staggering trading loss of Rs 9.83 crore, against a loss of Rs 55 lakh in the previous year, following a decline in sales from Rs 88.11 crore to Rs 76.65 crore. With the fresh loss, accumulated deficit has mounted up to Rs 12.93 crore to stand against share capital of Rs 6.05 crore and reserves of Rs 93 lakh. No depreciation has been provided since 1977-78 and arrears on this account aggregate Rs 6.62 crore. Directors attribute this disappointing outcome mainly to the decision of the Bihar State Electricity Board (BSEB) to completely cut off power supply to the Dalmianagar complex from November 5, 1982 on grounds that the company had not paid dues claimed against fuel surcharge, imposed with retrospective effect from 1979-80, amounting to over Rs 3 crore. After prolonged negotiations at the instance of the State government it was decided to pay the dues in instalments, and, power supply was resumed after 5 months on April 4, 1983. During the period of total power cut, the company sustained partial operation of its cement and vanaspati units through its own meagre generation of power, which too was affected due to supply of coal with high ash content. Moreover, the breakdown of a steel turbine further hampered production. The company laid off its labour at Dalmianagar from November 5, 1982 and also served a notice to close down the paper and vanaspati units. At the State government's insistence, the management withdrew the closure notice as well as the lay off. Again, the company declared a lay off in the paper and vanaspati divisions on October 23, 1983 due to meagre supply of power by BSEB. This lay off was lifted 4 days later OP an assurance by the State government that the power supply would be im proved to at least 12 MW for the Dalmianagar complex. Workmen however continued their agitation even after the lifting of the lay off. They raised various demands and absented from work. A violent section of the workers assaulted senior officers and con- tinue to threaten loyal workers. The State government prohibited continuance of the strike on November 13 last. During 1982-83, the company's production of cement increased to 2,65,400 tonnes against 2,48,000 tonnes in 1981-82, but the output of all the other products declined

Weathering Recession

further strengthened by the fact that conservatives and conservatism are on the ascendancy everywhere in the developed capitalist world. Andropov walked out of the Geneva talks and stationed missiles on eastern European soil as a counter-measure to Reagan's decision. In spite of the fact that the peace movement in Western Europe is no small force, it is certain that alternative politics will take a long time to emerge in Europe. It is a tension ridden impasse in Europe.

Modernising Paper Technology

Modernising Paper Technology Hansavivek BALLARPUR INDUSTRIES has final- ised a Rs 80 crore scheme for full scale modernisation and renovation of its paper mills at Ballarpur and Yamuna- nagar. To be completed in about five years, the scheme is in final stages of discussion with financial institutions. The sixth paper machine at Ballarpur unit was commissioned in January 1983. This will augment capacity by 11,500 tonnes per annum of paper of lower grammages, industrial grades and specialities. Fifth paper machine at Yamunanagar capable of producing similar varieties of paper was commissioned in June 1983. During 1982-83, paper division produced 1,21,819 tonnes of paper as against 1,15,340 tonnes in previous year. COB licences for stationery works remain unaltered, as dompany's application for acceptance of installed capacity still awaits clearance of Central government. Production of coated papers declined from 7.069 tonnes to 6.715 tonnes due to frequent power trippings and load shedding. A second coating plant is proposed to be installed in May 1984. Production in Chlor Alkalisplants was affected by power cuts and erratic supply. Recessionary conditions in other industries induced a diminishing offtake of caustic soda, chlorine and hydrochloric acid which, coupled with commissioning of additional manufacturing capacity in different parts of the country, resulted in fierce competition and reduction in price realisations. The Singuch salt works produced 1,16,605 tonnes of salt against 72,369 tonnes in previous year. Production is now sufficient to meet requirements of company's chlor alkali plants. A bromine plant made wholly of glass and only one of its kind in India, litis been set up at Singach salt works and commissioned in June 1983. In a normal year, availability of bitterns will be sufficient, to produce 220 to 250 tonnes of bromine at this plant. Gokarna salt works produced 3.618 tonnes of salt against 4,959 tonnes previously. Vanaspati division produced 14,749 tonnes against 17,183 tonnes due to limited availability of imported and indigenous oils. Company introduced KM) per cent pure refined corn oil which met with quick success. but distribution had to be restricted on account of limitations in availability of raw materials. Shipping division, which has only one bulk carrier of L0,119 DWT completed 8 voyages against 3 in previous year and incurred a cash loss of about Rs 37 lakh against lis 67 lakh previously. Company is awaiting MRTP clearance for purchase of more ships which it will undertake at a more propitious time.

Weighed Down by Textile Crisis

DCM, formerly Delhi Cloth and General Mills Company, has suffered a setback m its working during the year ended June 1983., Gross profit has shrunk to Rs 12.75 crore from previous year's Rs 15,06 crore despite increase in turnover from Rs 398 crore to Rs 432 crore. After depreciation and taxation, there is a net loss of Rs 3.17 crore against a net profit of Rs 3.50 crore previously. Depreciation has uniformly been calculated on building and plant and machinery on 'straight line' basis and on other assets on 'written-down value' basis. The resultant excess depreciation provision of previous'years amounting to Rs 16.35 crore has been written back. This hfcs enabled the company to announce an unchanged 15 per cent dividend.

A Share of Automobile Boom

A Share of Automobile Boom Hansavivek KELVINATOR OF INDIA is establishing a moped factory in collaboration with Agrati-Garelli, Italy. It has already commenced production and sale of scooters at the factory of erstwhile ASV, since amalgamated with it. Company has in hand further expansion and diversification projects, which it is pursuing. As a result of R and D efforts, it has introduced a 2-door deep freezer-cum-refrigerator, which has heen well received in the market. Company has suffered a setback during the year ended June 1983 due to recession in the consumer durables industry. Although sales increased from Rs 49.08 crore to Rs 54.67 crore, gross profit slipped to Rs 4,73 crore from previous year's Rs 6.07 crore, reflecting heavy pressure on margins. Net profit is also lower at Rs 2.32 crore (Rs 3,26 crore). Unchanged dividend is still covered 5.80 times by earnings, but last year distribution had a hefty cover of 8.34 times. Production of refrigerators was substantially higher, but value of receipts lagged behind. Moreover, company extended credit covering sale of refrigerators and spent considerable funds on establishment and operation of scooter plant, advertising and establishment of a dealer network on country-wide basis.

Ground-work for Expansion

January 21, 1984 as 100 per cent on their machinery imports from the Soviet Union compared to what West European importers of Soviet machinery pay.

Walking on Two Legs

Walking on Two Legs Hansavivek ITC has turned in good results for 15 months ended June 1983. Overall turnover for the period is Rs 759 crore compared to Rs 578 crore last year, representing a growth of 5.1 per cent on an annualised basis. Net sales realisations have crossed Rs 200 crore mark in 12 months for the first time with all round growth in company's main products and services, of which traditional cigarette business constitutes a 60 per cent share for the second year running. Gross profit has increased from Rs 21.49 crore to Rs 26.97 crore following net turnover of Rs 266 crore against preceding 12 months Rs 178 crore. Profit figure has been arrived at after setting aside on estimate, Rs 15.70 crore as 'extraordinary excise item'. A dispute exists between the company and excise authorities and the company's excise liability cannot be correctly determined at this stage. Net profit is Rs 8.77 crore (Rs 7.77 crore).

Looking Beyond Tea

Hansavivek LIPTON INDIA is widening its horizons by diversifying its activities. It proposes to acquire from Hindustan Lever, On going concern basis certain undertakings engaged in the manufacture and sale of food products such as edible fats, vanaspati, refined oil, margarine, dairy products and animal and poultry feeds. To finance the acquisition of these undertakings, the company proposes to issue new shares. Work is in hand for obtaining necessary approvals from concerned authorities in the government. Meanwhile, the company has turned in impressive working results for the year ended June 1983 with significant improvement in turnover and profits thereby completing the process of recovery that commenced in early 1981.

Continuing Recession

liven then, coming back to India, she has to prepare herself to face a situation where her access to IDA finance will be severely curtailed. Whereas in the past India was allocated as much as 40 per cent of the IDA credits (in fact, this has been the principal source of external aid received by India since the mid-sixties), now 40 per cent of the IDA funds would be shareable between China and India together. Thus, from July 1984 India must not expect to be in a position to tap this source or foreign exchange anywhere near on the scale reached in the past. While it is only right to face the situation forthrightly and not have any illusions about a last minute breakthrough, it also becomes necessary to make a realistic apprisal of the import capacity the country would, in the changed circumstances, really possess. Development castles built in the air can only meet one late, that is to crumble.

Beckoned by Biotechnology

Beckoned by Biotechnology Hansavivek BRITANNIA INDUSTRIES' negotiations with government with regard to company's proposal to put up a soyabean complex in MP are in an advanced stage and the company expects to receive shortly a letter of intent. The management is also exploring other suitable growth opportunities in areas related to company's existing business. Prospects of prosperous development in the future have brightened since Nabisco Brands of US acquired Huntley and Palmer Foods, UK, in December 1982. US firm is one of the largest food processing company in the world and is able to offer to Britannia a wide range of food and packaging technology and other management skills. Meanwhile, in view of growing importance and application of bio-technology, Indian company's R and D scientists are engaged in selective investigations to explore diversification possibilities in allied businesses.


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