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Harig Crankshafts Ltd.

BSE: 500178 Sector: Engineering
NSE: HARIGCRANK ISIN Code: INE905C01026
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Harig Crankshafts Ltd. (HARIGCRANK) - Director Report

Company director report

HARIG CRANKSHAFTS LIMITED ANNUAL REPORT 2008-2009 DIRECTOR'S REPORT TO THE MEMBERS Your Directors are pleased to present the Annual Report for the year 2008- 09 on the business and operations of the Company together with Balance Sheet as at 31st March 2009 and Profit and Loss Account for the year ended on that date. OPERATING PERFORMANCE: (Rs. In Lacs) 2008-09 2007-08 Total Income 2011.84 4247.85 Operating Profit 208.68 661.30 Less: Interest 297.36 248.10 Cash Accruals -88.68 413.20 Less: Depreciation 308.09 307.66 Profit/Loss before Tax -396.77 105.54 Provision for Taxation (including FBT) 3.32 13.84 Profit/Loss after Tax -400.09 91.70 During the year under review, the auto industry witnessed turbulent times, which affected the performance of automobile majors, and cheaper import of crankshafts from China. Your Company also suffered on account of decline in demand due to these factors. The Government of India also imposed dumping duty on cheap crankshafts import. The Government of India announced stimulus packages for revival of the industry and the demand for vehicles and auto components is reviving. FUTURE OUTLOOK AND PROSPECTS With the announcement of stimulus packages by the Government of India the automobile industry is showing signs of revival and outlook for the next couple of years remains positive. The new crankshafts machining line is likely to commence commercial production by January 2010, and shall improve the profitability of the Company. However, the availability and price of steel are the major cause of concern for the industry. DIRECTORS Your Directors deeply condole the demise of Mr. N.S. Parulekar and accordingly he has ceased to be a Director of the Company. Your Board places on record its appreciation of the services rendered by Mr. Parulekar during his association with the company. Mr. Anil Sharma, Mr. Sushil Nanda and Mr. N. Sinha, Directors retire by rotation and being eligible offer themselves for re-election. Mr. Deshbir Singh, Managing Director is proposed to be reappointed as Managing Director for a further period of 5 years with effect from 1st November 2009. AUDITORS AND AUDITORS' REPORT M/s. J.K. Arora & Co. Chartered Accountants hold office until the conclusion of the ensuing Annual General Meeting and have signified that they are eligible for re-appointment. The observations of the auditors have been explained by way of notes to accounts. PERSONNEL During the year, none of the employee was in receipt of remuneration as prescribed under section 217(2A) of the Companies Act, 1956. The industrial relations during the year remained cordial. DIRECTORS RESPONSIBILITY STATEMENT Your Directors' declare: 1. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures. 2. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and Fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period. 3. that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities. 4. that the directors had prepared the annual accounts on a going concern basis. ACKNOWLEDGEMENTS Your Directors' place on record the assistance extended by All India Financial Institutions, Banks, PICUP, the Central and State Government of Uttar Pradesh, and customers of the company. Your Directors are grateful to the shareholders for their continued support. For and on Behalf of the Board DESHBIR SINGH CHAIRMAN & MANAGING DIRECTOR Place: NOIDA Dated: 31.08.2009 ANNEXURE TO THE DIRECTOR REPORT INFORMATION AS PER SECTION 217(E) READ WITH COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988AND FORMING PART OF THE DIRECTOR'S REPORT FOR THE YEAR ENDED 31st MARCH, 2008. 1. Conservation of Energy A. The Company has over the previous years taken several steps to conserve energy wherever possible. This continues to remain area with studies, discussions and analysis being undertaken regularly for further improvements. B. The induction heaters installed on the press line are more efficient and will have lower power consumption per kg, and shall also save fuel cost. FORM 'A' Form of disclosure of Particulars with respect to Conservation of Energy. A. Power and Fuel Consumption For the year For the year ending March ending March 2009 2008 a. Electricity Purchase 28.41 34.04 Units (Lacs) 163.88 195.66 Total/Amount (Rs. In Lacs) 5.77 5.75 Rate /Unit Diesel Oil Quantity (K ltrs.) 0.68 0.60 Total Amount (Rs. In Lacs) 24.39 19.92 Average Rate/unit per ltr. 35.87 33.20 b. Consumption per unit of Production Machined Crankshafts Forgings (Per k.g.) (per Crankshafts) Standard Current Previous Standard Current Previous (if Any) Year Year (if any) Year Year Electricity (Kwt) 180.60 178.60 - 2.37 2.25 B. TECHNOLOGY ABSORPTION FORM 'B' Disclosure of Particulars with respect to absorption, research & development (R&D) A Research and Development (R&D) 1. Specific areas in which R&D carried out by the Company (a) Research & Development is carried out for development of new products and for the improvement in the production process and quality of products. (b) Improvement actions are being taken to reduce the number of billets that are heated but not forged (commonly called drop outs). These actions will be given by the introduction and adherence to the correct process controls. (c) Greater emphases will be given to making quality parts that will not require additional operations (elimination of the work). (d) All dies and tooling designs will be interrogated to identify ways to improve yield and reduce the number of defectives being produced. (e) Training will be given to all employees associated with the production process in order that they can contribute to the reduction in waste, improvement in quality and productivity, (f) Preventive maintenance will be carried out to reduce lost time and identify when corrective actions will be required. 2. Benefits derived as a results of the above R&D (a) The Company has improved the quality of existing products and entered into new products and has also been able to reduce the cost of production. (b) Die life improvement and less die cost per ton. (c) Reduction in set up time and contingencies planning. 3. Future Plan of Action (a) The Management is committed to strengthen R&D activities to improve its competitiveness in times to come. (b) Promote a team working culture. (c) Create a total quality approach. (d) Provide a safe and ordered working environment. (e) Encourage ideas and invention at all levels of the work force. (f) Make quality parts in required numbers, on time, at the right cost. (g) Gas fired heat treatment furnace which shall result in cost benefit to the company. 4. Expenditure on R & D (i) Capital (ii) Recurring (iii) Total (iv) Total R&D expenditure as a percentage of total turnover. The Company intends to make R&D integral part of the Corporate Philosophy and attains to develop consciousness for devising new technologies and processes at all levels and with this objective in view, the expenditure incurred on Research & Development has not been quantified and segregated. C. Technology Absorption, Adoption and Innovation 1. Efforts in brief, made towards technology absorption, adaptation and innovation (a) The company has continued with its efforts to absorb the Press Forgings Technology and manufacture of Forging dies for it, with the help of Computer Aided Design/Computer Aided Manufacturing (CAD7CAM) for efficient and precise manufacture of Forging Dies. In addition, the new processes and technologies developed through R&D have been adapted and absorbed in manufacturing techniques. (b) Fully automated line for crankshaft machining has been imported from Daimler Chrysler, USA. The training of operators is in-house. 2. Benefits derived as a result of the above efforts e.g. Product Improvement, Cost Reduction, Product development, Import substitution etc. By virtue of the measures adopted by the Company and which are in process, the efforts shall result in optimization of Raw Material utilization, lesser machining time, consequent reduction in energy consumption, better metallurgical properties, significant reduction in cost of production and also consumer satisfaction. C. Foreign Exchange Earnings & Outgo During the year, the Company has spent Rs. 11,53,552/- (previous year Rs. 16,805/-) (Traveling) and earned Rs. 4,71,770/- (previous year Rs. 1922268/-), in foreign exchange.