Articles by Hansavivek

Pricing Policy the Hurdle Hansavivek HINDUSTAN ALUMINIUM CORPORATION (HINDALCO) expects to complete facilities for achieving a production of 1.5 lakh tonnes of aluminium by the first quarter of 1986, by which time it will be self-sufficient in production of alumina too. Foreign collaborations are being entered into to enable the company reduce energy costs by almost 15 per cent. The modernisation of the entire plant will entail considerable expenditure which the company expects to meet from internal generation and long-term credits from financial institutions, either by way of loans or by way of non-convertible debentures. The company's wholly-owned subsidiary, Renusagar Power Company, has plans afoot to set up another power generating set with a capacity of 68 MW, pushing the total capacity to about 240 MW. With the commissioning of the fifth set, Hindalco will be self-sufficient in its power requirements. Meanwhile, the management has planned proper over hauling schedules to maintain these units in a healthy state. On account of continuous operation over the years, these generators need frequent and extensive maintenance.

Hard Pressed by Rising Costs Hansavivek RALLIS INDIA has compiled accounts for the nine months ended May 1984 without incorporating the operating results of Protein Products of India (PPI), a subsidiary proposed to be amalgamated with the company with effect from September 1, 1983. On completion of the legal formalities for amalgamation, those shareholders-of PPI, who opt for the com pany's shares in lieu of their holding in PPI will be entitled to the dividend declared by the company commencing from September 1, 1983. In view of the delay in completion of the legal formalities, the directors had decided to pay an interim dividend of 11 per cent. No final dividend has been recommended. The company has earned during 1983-84 a gross profit of Rs 2.17 crore against Rs 5.24 crore in the previous year following sales of Rs 118.12 crore against Rs 178.75 crore. These figures show a marked contraction of pro fit margins. Net profit is Rs 89 lakh (Rs 211 lakh). The distribution is covered 1.43 times by earnings as against 2.93 times previously. The company sold its chemicals factory at Magarwara on March 1, 1984 as a going concern to Jay Shree Tea and Industries at a slump price of Rs 295 lakh. The company also disposed of its shareholding in Searle (India) in compliance with the condition laid down by the Central government in the letter of intent granted to it for the manufacture of Fenvalerate. The company proposes to extend the maturity period of the 7

touching Brahmins, Rajputs and tribals. We treat sensitive political appointments, like those of Governors, as if they were perks for distribution by the PM. As far as one can make out, only certain senior police officers (superseded because of their involvement in cases against Indira Gandhi and Sanjay!) have been resorted to seniority, even to positions of power. This development will be interpreted in a variety of ways unless a new pattern of probity emerges at various levels.

Market Constraint Hansavivek SIEMENS INDIA has suffered a sharp setback in its performance during 1983-84 forcing the directors to slash dividend by four points to 14 per cent. Gross profit has tumbled from previous year's Rs 27.17 crore to Rs 14.69 crore following a comparatively modest decline in turnover from Rs 143.76 crore to Rs 138:99 crore. Although tax liability is much lower, the net profit is halved to Rs 5.23 crore (Rs 10,49 crore) and earnings cover for the reduced dividend has thinned down to 3.46 times from 5.41 times previously. This outcome is attributed to sluggish market conditions with pressure on margins and cost increases in all inputs of production. Orders carried forward at the year-end stood at Rs 98.7 crore, about 10 per cent lower than the level of at the beginning of the year. The company was able to achieve an export turnover of Rs 14.9 crore despite a much reduced volume of business from USSR. Fresh inroads were made in the field of project work abroad with a repeat order for a 70 kV substation from Indonesia and a first-ever order from Aden for a substation worth Rs 60 lakh. Power Engineering Division, which has largely contributed to the company's growth over several years in the past, had a difficult time, with the order inflow having been affected due to the generally recessionary conditions in the industry and postponement of several large projects. The products particularly affected were switchboards and motors, which had to contend with severe competition at the market place. Execution of ongoing projects, however, has progressed well. The management proposes to ensure growth for this division by updating the existing products as well as by entering into more sophisticated areas of control and automation systems. The company has already commenced production of programmable control systems. It has also developed a range of thyristonsed force-commutated AC drives, which have hitherto been imported by the synthetic fibre industry. These are to be produced this year. The company has introduced a new series of switchgear and motors to cater to the changing needs of the Indian industry. In the Medical Engineering Division, the company's endeavour is to modernise the existing product range to meet the market requirement. The company has plans to enter into the electromedicine market in the next two years and for this purpose it has already received letters of intent for the manufacture of ultrasound diagnostic, patient monitoring and electrocardiograph units. In the field of advanced technology, particularly in computerised tomography and diagnostic equipment, the company has successfully installed sophisticated units manufactured by us principals, Siemens of West Germany, in various major hospitals in the country. The Components Data and Communications Division did well, despite entry of new firms in the field of railway signalling. It has introduced three phase point machines and AC immunised relays, for which orders are now being received.

Hampered by Price Control Hansavivek BALLARPUR INDUSTRIES (BILT) has suffered a setback during 1983-84 with a drop in gross profit from the previous year's Rs 19.01 crore to Rs 15.72 crore, even though turnover increased from Rs 197.27 crore to Rs 212,68 crore. There is saving in taxation but with depreciation claiming more, net profit is halved to Rs 4.02 crore (Rs 8.09 crore). Dividend is maintained at 22 per cent, but is covered only 1.24 times by earnings. Recession in the chlor-alkali industry and loss of production due to power-cuts have resulted in reduced profits. The sixth and seventh paper machines at the Yamunanagar unit of the paper division were commissioned, but sustained production could not be established on these machines.