MIRA INFORM REPORT

Report Date :

13^th June, 2006.

IDENTIFICATION DETAILS

Name :	BHARAT ELECTRONICS LIMITED
Registered Office :	Nagavara, Outer Ring Road, Bangalore-560045, Karnataka, India
Country:	India
Financials as on:	31.03.2005
Date of Incorporation :	21.04.1954
Com. Reg. No.:	08-787
CIN No.: [Company Identification No.]	L32309KA1954G0l000787
TAN No.: (Tax Deduction & Collection Account No.)	BLRB04051F BLRC00582B
PAN No.: (Permanent Account No.)	AAACB5985C
Legal Form :	Public Limited Liability Company. Company’s shares are listed on the stock Exchanges.
Line of Business :	Engaged in manufacturing, importing and exporting of Radars and Communication Equipments for the defence services communication including Satcom Systems, Optical & Opto Electronics and Telecommunications, Broadcast (Radio and TV) for I & B Ministry and Electronic Components I.E. Semiconductors Electron Tubes and X-Ray Tubes.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	USD 63000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a very old, well established and reputed company. The company is making steady progress in its turnover and profits. Its products are well accepted in Indian as well as overseas markets. The company’s payments are correct and as per commitments. It can be considered good for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Nagavara, Outer Ring Road, Bangalore-560045, Karnataka, India
Tel. No.:	91-80-25039300/25039266
Fax No.:	91-80-25039305/25039233
E-Mail :	cmd@giasbg01.vsnl.net.in imd@bel-india.com info@bel-india.com
Website :	http://www.bel-india.com
Corporate Office :	2^nd Floor, Shankaranarayana Building, 25, M. G. Road, Bangalore - 560 001, Karnataka, India
Tel. No.:	91-80-2559 5001 / 2559 5017 / 2558 3851
Fax No.:	91-80-2558 4911 / 2558 3675
E-Mail :	imd@bel-india.com
Factory 1 :	Jalahalli Post, Bangalore - 560 013, Karnataka, India
Tel. No.:	91-80-28382626
Fax No.:	91-80-28380266
Factory 2 :	Bharat Nagar Post, Ghaziabad - 201 010, Uttar Pradesh, India
Tel. No.:	91-120-2619786
Fax No.:	91-120-2776730
Factory 3 :	NDA Road, Pashan, Pune - 411 021, Maharashtra, India
Tel. No.:	91-20-25881400/5881408
Fax No.:	91-20-25880577/5888789
Factory 4 :	Post Box No. 26, Ravindranath Tagore Road, Machalipatnam - 521 001, Andhra Pradesh, India
Tel. No.:	91-8672-223581
Fax No.:	91-8672-222640
Factory 5 :	Plot No. 405, Industrial Area, Phase III, Panchkula - 134 113, Haryana, India
Tel. No.:	91-172-2588252
Fax No.:	91-172-2594548
Factory 6 :	Balbhadrapur, Kotdwara - 246 149, Uttaranchal, India
Tel. No.:	91-1382-231171
Fax No.:	91-1382-231132
Factory 7 :	Plot No. L-1, MIDC, Industrial Area, Raigad District, Taloja - 410 308, Maharashtra, India
Tel. No.:	91-22-27412700
Fax No.:	91-22-27412888
Factory 8 :	Post Box No. 981, Nandambakkam, Chennai – 600 089, Tamil Nadu, India
Tel. No.:	91-44-22326906
Fax No.:	91-44-22326905
Factory 9 :	Nacharam Industrial Estate, Hyderabad – 501 507, Andhra Pradesh, India
Tel. No.:	91-40-27150113
Fax No.:	91-40-27171406
Overseas Office:	53-55, Hilton Avenue, Garden City, New York – 11530, USA
Tel. No.:	516-248-4020
Fax No.:	516-741-5894 / 516-877-7907
Email:	belnyro@ix.netcom.com
Overseas Office:	06-01, BSL Industrial Building, 156, MacPherson Road, Singapore – 348 528
Tel. No.:	65-741-8401
Fax No.:	65-741-8402
Email:	besing@singnet.com.sg

DIRECTORS

Name :	Dr. Y Gopal Rao
Designation :	Chairman and Managing Director
Address :	“Trade Centre”, 116/2, Race Course Road, Bangalore-560001, Karnataka, India
Name :	Prof. N. Balakrishnan
Designation :	Director
Name :	Vice Admiral P. Jaitly
Designation :	Director
Name :	Mr. K. N. Gupta
Designation :	Director
Name :	Mr. P. R. K. Hara Gopal
Designation :	Director (Finance)
Address :	“Trade Centre”, 116/2, Race Course Road, Bangalore-560001, Karnataka, India
Name:	Mr. S. C. Khanna
Designation:	Director (Commercial & Management Services)
Address:	“Trade Centre”, 116/2, Race Course Road, Bangalore-560001, Karnataka, India
Name:	Dr. M. Rammohan Rao
Designation:	Director
Name:	Mr. S K Mehta
Designation:	Director ( Research & Development)
	“Trade Centre”, 116/2, Race Course Road, Bangalore-560001, Karnataka, India
Name:	Mr. Basavarajaiah
Designation:	Director
Name:	Lt. Gen. Davinder Kumar, VSM and Bar
Designation:	Director
Name:	Mr. A. Muralidhar
Designation:	Director (Other Unit)
Name:	Mr. M. L. Shanmukh
Designation:	Director (Personnel)
Name:	Mr. Matcheri S. Sreedhara
Designation:	Chief Regional Manager
Date of Birth/Age :	56 Years
Qualification :	B.E. (Mechanical)
Experience :	32 Years
Date of Appointment :	02^nd March, 1973

KEY EXECUTIVES

Name :	Mr. K. S. Nagesh
Designation :	Company Secretary
Name :	Mrs. Rita Menon
Designation :	Joint Secretary (SY), Ministry of Defence
Address :	Ministry of Defence, Department of Defence Production, New Delhi-110011, India
Name :	Shri Mohanmad Haleem Khan
Designation :	Joint Secretary and Finance Adviser Government of India
Address :	Ministry of Defence, Department of Defence Production South Block, New Delhi-110011, India
Name :	Shri K. U. Limaye
Designation :	Director Electronics and Radar Development Establishment
Address :	C. V. Raman Nagar Post, Bangalore-560093, Karnataka, India
OTHER PERSONNEL:
At Corporate Office
Mr. Ramchandra Murthy R.	Executive Directors
Eswara Rao M.	Executive Directors
Mr. Prasad T. R.	Executive Directors
Surinder Dewan Col. (Retired)
Mr. Krishna Gopal D.
Mr. Prakash K.
Mr. Raghuveer M G	General Managers
Mr. Chandra Prakash
Mr. G D Gupta
Mr. V S Radhakrishnan
AT Bangalore Office
Mr. Bhadoria H. S.
Mr. Datta A K
Mr. G. S. Dayakar
Mr. Mohan D A	Executive Directors / General Managers
Mr. Muthuswamy V.
Mr. Raghavendra R. R.
Mr. Sastry P. R. K. L. N.
Mr. Sharma S C
Mr. Sastry V. V. R.	Executive Directors / General Managers
Mr. M S Sreedhara
Mr. Vishnumurthy U
Mr. C. M. Bhat, IPS	Chief Vigilance Officer
Mr. Lakshmanaprasad S.	Executive Director
Khurana N K	Chief Scientist
Chennai	Mr. Anil Kumar
Ghaziabad	Mr. N. K. Sharma
Hyderabad	Mr. I. V. Sarma
Kotdwara	Mr. Ramesh Kumar Marthatha
Machilipatnam	Mr. V Sundaraman
Panchkula	Mr. Anand Kumar
Pune	Cdr. S. Roy Choudhury
Navi Mumbai	Mr. M V Narayanan

MAJOR SHAREHOLDERS

Category	No. of shares	% of shareholding
Indian Promoters	60,689,600	75.86%
Mutual Funds and UTI	6090442	7.61%
Banks, Financial Institutions and Insurance Companies	386849	0.48%
Foreign Institutional Investors	7278893	9.10%
Private Corporate Bodies	2027315	2.53%
NRIs / OCBs	86215	0.11%
Others (Indian Public)	3440686	4.30%
Total	80,000,000	100.00

BUSINESS DETAILS

Line of Business :	Engaged in manufacturing, importing and exporting of Radars and Communication Equipments for the defence services communication including Satcom Systems, Optical & Opto Electronics and Telecommunications, Broadcast (Radio and TV) for I & B Ministry and Electronic Components I.E. Semiconductors Electron Tubes and X-Ray Tubes.Z
Products :	Radar Communication Transmitters cum Receivers Hand Held Thermal Magers
Imports from :	France, Germany, Japan, Netherlands, Singapore, Sweden, Switzerland, UK and USA.

GENERAL INFORMATION

No. of Employees :

13572

Bankers :

¶ State Bank of Patiala, Bangalore, Karnataka, India

¶ Bank of Baroda, Bangalore, Karnataka, India

¶ State Bank of Mysore, Bangalore, Karnataka, India

¶ State Bank of India, Bangalore, Karnataka, India

¶ State Bank of Hyderabad, Bangalore, Karnataka, India

¶ State Bank of Travancore, Bangalore, Karnataka, India

¶ State Bank of Bikaner & Jaipur, Bangalore, Karnataka, India

¶ Canara Bank, Bangalore, Karnataka, India

¶ Syndicate Bank, Bangalore, Karnataka, India

¶ Vijaya Bank, Bangalore, Karnataka, India

¶ Andhra Bank, Bangalore, Karnataka, India

¶ HDFC Bank Limited, Bangalore, Karnataka, India

Facilities :

Secured Loans	2005
Cash Credit from Banks secured by Hypothecation of Inventories and Book debt	--
Liability on leased Assets – Vehicles	Rs 5.987 millions
Total	R. 5.987 millions
Unsecured Loans
Fixed Deposit	Rs. 147.070 millions
Total	Rs. 147.070 millions

Banking Relations :	Good
Auditors :	STATUTORY AUDITORS ¶ Suri and Company Chartered Accountants BRANCH AUDITORS ¶ Bubber Jindal and Company Chartered Accountants ¶ Joshi and Sahney Chartered Accountants ¶ N. V. Sarma & Company ¶ Bora Kasat & Company Chartered Accountants
Associates/Subsidiaries :	¶ All Government of India Undertaking Companies ¶ BEL Optronic Devices Limited This company is a subsidiary company of the subject for conducting research, development and manufacture of Image Intensifier Tubes and associated high voltage power supply units for use in military, security and commercial systems. 1440 I series, GEN II, 18 mm Microchannel Wafer Image Intensifiers are high gain, minimum volume, proximity focussed devices, designed to produce high resolution, intensified images. These devices are used in applications where ambient illumination levels are low and auxiliary lighting is inadvisable or not available. Its applications are :- Night vision goggles and binoculars Night vision weapon sights Low light level input applications

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
100,000,000	Equity Shares	Rs.10/- each	Rs. 1000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
80,000,000	Equity Shares	Rs.10/- each	Rs. 800.000 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2005	31.03.2004	31.03.2003
SHAREHOLDERS FUNDS
1] Share Capital		800.000	800.000	800.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		15000.755	11558.164	9299.682
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		15800.755	12358.164	10099.682
LOAN FUNDS
1] Secured Loans		5.987	6.752	4.208
2] Unsecured Loans		147.070	322.740	403.245
TOTAL BORROWING		153.057	329.492	407.453
DEFERRED TAX LIABILITIES		132.424	127.884	117.662
TOTAL		16086.236	12815.540	10624.797
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		3193.393	2879.784	2322.153
Capital work-in-progress		473.585	337.046	348.626
INVESTMENT		122.801	122.801	122.801
DEFERREX TAX ASSETS		1169.647	913.334	436.049
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	10649.567	10152.879	9479.471
	Sundry Debtors	6991.177	6675.412	7122.423
	Cash & Bank Balances	13158.673	14345.157	6774.666
	Loans & Advances	7419.872	5516.737	5229.235
Total Current Assets		38219.289	36690.185	28605.795
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	20116.341	24172.001	18035.405
	Provisions	7013.195	4022.963	3526.325
Total Current Liabilities		27129.536	28194.964	21561.730
Net Current Assets		11089.753	8495.221	7044.065
MISCELLANEOUS EXPENSES		37.057	67.354	351.103
TOTAL		16086.236	12815.540	10624.797

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2004	31.03.2003
Sales Turnover [including other income]	33304.900	28408.151	25493.902
Profit/(Loss) Before Tax	6859.607	4690.159	3861.623
Provision for Taxation	2396.362	1529.177	1255.500
Profit/(Loss) After Tax	4463.245	3160.982	2606.123
Export Value	562.500	284.621	387.637
Total Expenditure	26140.528	23142.498	21539.959

QUARTERLY

Particulars	31.03.2006 [Full Year]
Sales Turnover	35608.200
Other Income	1107.900
Total Income	36716.100
Total Expenditure	27184.400
Operating Profit	9531.700
Interest	272.900
Gross Profit	9258.800
Depreciation	778.100
Tax	2668.900
Reported PAT	5811.800
Dividend (%)	0.000

200506 Quarter 1: Expenditure Includes (Increase) / Decrease in Stock in Trade & WIP Rs (45.90) million Consumption of Raw Materials Rs 2701.20 million Staff Cost Rs 1058.40 million Other Expenditure Rs 326.70 million Tax includes Provision for Taxation (including Deferred tax & FBT) EPS is Basic and Diluted Status of Investor Complaints for the quarter ended June 30, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 02 Complaints disposed off during the quarter 02 Complaints unresolved at the end of the quarter Nil 1. Company has obtained exemption from SEBI regarding Segment Reporting. 2. The quarterly results of Subsidiary Company viz, BEL Optronic Devices Ltd and Joint Venture Companies viz. GE BE Pvt Ltd and BEL-Multitone Ltd, are not included above. 3. Sales and Production are expected to pick up in the subsequent quarters, considering the orders on hand / expected executable orders during the remaining period of the year. 4. The Board of Directors at their meeting held on June 21, 2005 has recommended a final dividend of 72% (Rs 7.20 per share of Rs 10) for the year 2004-05 in addition to an interim Dividend of 40% paid in December 2004. 5. The Limited Review as required under clause 41 of listing agreement has been completed by the Statutory Auditors. 6. The above statement of financial results was taken on record by the Board of Directors at the meeting held on July 25, 2005.

200509 Quarter 2 : Expenditure Includes (Increase) / Decrease in Stock in Trade & WIP Rs 58.20 million Consumption of Raw Materials Rs 4648.00 million Staff Cost Rs 999.20 million Other Expenditure Rs 530.20 million Tax Includes Provision for Taxation (Including Deferred tax & FBT) EPS is Basic and Diluted Status of Investor Complaints for the quarter ended September 30, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. Company has obtained exemption from SEBI regarding Segment Reporting. 2. The half-yearly results of Subsidiary Company, viz, BEL Optronic Devices Ltd. and Joint Venture Companies viz. GE BE Pvt Ltd. and BEL Multitone Ltd, are not included above. 3. Sales and Production are expected to improve further in the subsequent quarters, considering the Orders on hand/expected executable orders during the remaining period of the year. 4. Other expenditure in the Corresponding quarter of the previous year includes Extra-Ordinary item - VRS Payments amounting to Rs 311.30 million. 5. Interim Dividend for the year 2005-06 @ Rs 4 per share has been declared by the Board in the meeting held on October 27, 2005 and record date for the purpose has been fixed as November 03, 2005. 6. The Limited Review as required under clause 41 of Listing Agreement has been completed by the Statutory Auditors. 7. The above statement of financial results was reviewed by the Audit Committee and approved by the Board of Directors at the meeting held on October 27, 2005.

200512 Quarter 3 - Expenditure Includes (Increase) / Decrease in Stock in Trade & WIP Rs (1547.80) million Consumption of Raw Materials Rs 4717.00 million Staff Cost Rs 1048.20 million Other Expenditure Rs 1108.30 million Tax Includes Provision for Taxation (Including Deferred tax & FBT) EPS is Basic and Diluted Status of Investor Complaints for the quarter ended December 31, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 12 Complaints disposed off during the quarter 12 Complaints unresolved at the end of the quarter Nil 1. Company has obtained exemption from SEBI regarding Segment Reporting. 2. The quarterly results of Subsidiary Company, viz, BEL Optronic Devices Ltd and Joint Venture Companies viz. GE BE Pvt Ltd. and BEL Multitone Ltd, are not included above. 3. Sales and Production are expected to improve further in next quarter, considering the orders on hand/expected executable orders during the remaining period of the year. 4. The Limited Review as required under clause 41 of Listing Agreement has been completed by the Statutory Auditors. 5. Other Expenditure of previous years nine months includes Extra-Ordinary item - VRS Payments amounting to Rs 312.70 million. 6. The above statement of financial results was reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on January 27, 2006.

200603 - Expenditure Includes (Increase) / Decrease in Stock in Trade & WIP Rs 2466.20 million Consumption of Raw Materials Rs 6743.70 million Staff Cost Rs 1139.70 million Other Expenditure Rs 1233.10 million Tax Includes Provision for Taxation (Including Deferred tax & FBT) EPS is Basic and Diluted Status of Investor Complaints for the quarter ended March 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 01 Complaints disposed off during the quarter 01 Complaints unresolved at the end of the quarter Nil 1. Company has obtained exemption from SEBI regarding Segment Reporting. 2. The unaudited annual results of Subsidiary Company viz. BEL Optronic Devices Ltd. (92.79 % shareholding) and joint Venture Companies viz. GE BE Pvt. Ltd., (26 % Shareholding) and BEL Multitone Ltd.(49 % Shareholding) are included in Consolidated Financial results. The consolidated financial results have been prepared following Accounting Standards - AS 21 and AS 27. 3. There is no extraordinary item _ VRS in the current year and this has resulted in reduction of Other Expenditure. The reduction in manpower due to previous year's VRS has resulted in lower staff cost in the current year. 4. The Limited Review as required under clause 41 of Listing agreement has been completed by the Statutory Auditors. 5. The above statement of financial results was reviewed by the Audit Committee and approved by the Board of Directors at the meeting held on April 20, 2006.

KEY RATIOS

PARTICULARS	31.03.2005	31.03.2004	31.03.2003
Debt Equity Ratio	0.02	0.03	0.07
Long Term Debt Equity Ratio	0.02	0.03	0.07
Current Ratio	1.38	1.33	1.33
TURNOVER RATIOS
Fixed Assets	2.96	2.82	2.79
Inventory	2.95	2.74	2.59
Debtors	4.70	4.06	3.74
Interest Cover Ratio	60.29	64.21	25.49
Operating Profit Margin (%)	23.94	19.25	18.23
Profit Before Interest and Tax Margin (%)	21.72	17.02	16.03
Cash Profit Margin (%)	16.12	13.52	12.60
Adjusted Net Profit Margin (%)	13.90	11.29	10.39
Return on Capital Employed (%)	48.44	41.39	42.65
Return on Net Worth (%)	31.41	27.85	28.39

STOCK PRICES

Face Value	Rs.10/-
High	Rs.1032/-
Low	Rs.995/-

LOCAL AGENCY FURTHER INFORMATION

History:

Subject was established to meet the Defence needs of the Government of India. Since then, it has grown to a multi-product, multi-unit and technology driven company.

Subject is a public sector giant and one of the largest manufacturers of radars, wireless communication systems and other technical equipments for the defence forces in the country. Until recently, the company’s performance was under strain due to the post-Pokhran nuclear blast sanctions by the USA. However, post Kargil, the government has realised the need to increase its focus on acquiring strategic technical equipment for defence forces which had dramatically changed the fortunes of the company.

Subject was incorporated at Bangalore and wholly owned by the Government of India, till disinvestment took place in 1991-92.

In 1989-90, the company diversified into consumer and entertainment electronics and telecommunications. In 1991-92, it entered into a joint venture with Delft Instruments, Holland, under the name BE-Delft Electronics to manufacture second generation image intensifier tubes at Pune. Another joint venture was formed with the HMT and the Karnataka Government to manufacture quartz watch crystals. In addition to the Defence department, Department of Telecommunications, Doordarshan and Videsh Sanchar Nigam are the major clients of the company.

During 2001-02, the company became the first Defence Public Sector Enterprise to acquire operational Mini Ratna Category – I Status. The company has also been awarded Satellite Network contract by Andhra Pradesh Beverages Corporation Limited. The main application is for consolidating the sales transactions on-line by 31 remote centres with APBCL HQ at Hyderabad. These projects were being executed under B-O-O-T model.

Significant landmark

Year	Achievements
1954	Incorporation
1956	Production of First Communication Equipment
1961	Production of Receiving Value
1963	In-house R and D established
1964	Manufacture of Radio Transmitter for All India Radio
1966	Military Radar Manufacturing
1967	Manufacture of Transmitting, Tubes, Silicon, Devices and Integrated Circuits
1972	TV Transmitters for Doordarshan
1974	Second Unit at Ghaziabad for Air Defence Ground Environment Systems
1976	First SFM Radar exported
1979	Third Unit set up at Pune
1980	First Overseas office at New York

Business:

The company is engaged in manufacturing, importing and exporting of radars and communication equipments for the defence services communication including satcom systems, optical & opto electronics and telecommunications, broadcast (radio and TV) for I & B ministry and electronic components i.e. semiconductors electron tubes and X-ray tubes.

It also offers services such as contract manufacturing, telecom consultancy and semiconductor device packaging.

The company meets the bulk of electronic equipment needs of Indian Defence Services, Parliamentary Forces and other Government users like All India Radio, Doordarshan, Department of Telecommunication, Police Wireless, Airport Authority of India, Meteorological Department, Railways, etc. It has a very wide product range and makes over 350 different products.

The company is also taking export promotional efforts like appointment of overseas agents, participation in foreign exhibitions, etc. The company has 9 operating units.

The company is setting up a subsidiary in the IT sector and is in the process of arranging venture capital and is also forging venture capital alliances.

It also introduced new and upgraded products based on in-house technology. Many of the products like decoy radars, upgraded air defence weapon control radars, coastal surveillance systems, lower power transmitters, telemedicine systems, PC motherboard-based chipsets, etc. have been inducted into services or are under final stages of evaluation by various customer groups.

Generic Names of the Principal Products of the company are:

Item Code No.	Product Description
85261000	Radar
85252000	Communication Transmitters cum Receivers
90058090	Hand Held Thermal Magers

The list of products and services being exported to several countries is given below:

Products	Countries
Defence Communication	Algeria, Botswana, Brazil, France, Germany, Malaysia, Mauritius, Russia, Sweden, Switzerland and UK
Civilian Communication	Brazil, Iran, Italy, Kenya, Malaysia, Netherlands, Philippines, Germany, South Korea, Singapore, Spain, Taiwan, Turkey, UAE, UK and USA
Electron Tubes, Magnetrons, Transmitting Tubes, TV Picture Tubes and parts	Algeria, Armenia, Bangladesh, Brazil Egypt, France, Greece, Hong Kong, Italy, Nepal, UK, USA and Zambia
Otpo Electronic Products and parts	Australia, Egypt, France, Germany, Israel, Malaysia, Netherlands, New Zealand, Saudi Arabia, Singapore, UAE, UK and USA
Sound and Vision Broadcast Equipments	Vietnam, Brazil and Middle East
Radar and Sub-systems	Switzerland and Ukraine
Contract Manufacturing	USA, Australia, Japan, Brazil and Canada
Batteries, Energy Saver and other products	Australia, Bahrain, Kuwait, Mauritius, Nepal, Oman, Philippines, Saudi Arabia, UAE and USA

Performance against mou

As a Government Company, subject has been signing every year a Memorandum of Understanding (MoU) with the Government of India, which sets out the targets for sales, profits, etc., against which performance of the company is evaluated and rated. The company’s performance under the MoU for the year 2003-2004 based on internal evaluation is “Excellent”. This is the sixth consecutive year, subject has been getting “Excellent” rating.

Order book position

The Company has orders on hand of Rs. 67398.900 millions as on 1^st April, 2004 as against an order book position of Rs. 69440 millions as on 1^st April, 2003.

Golden jubilee year

The year 2003-04 was the Golden Jubilee year of subject and an occasion to highlight the significant points in the company’s growth to its present position. Subject started with a mandate of meeting the defence electronic equipment requirements of the country, initially with a few foreign collaborations. From, a humble beginning in 1954, subject has grown over the years to be a feader electronics in India, with 9 manufacturing units. During the last 50 years, the company developed indigenously a number of products with the active support of the customers and DRDO laboratories. The indigenously developed product sales during 2003-04 reached 63% of the total sales. The active product range of subject extends to more than 350 products. Subject has also diversified into non-defence products. Subject has played a very significant role in meeting the requirements of the Defence Services for electronic communication and radar equipment. Subject was the pioneer in establishing components industry in indua. During the 1980’s subject installed a number of TV Transmitters all over the country almost at the rate of one per day under the project code-named “Project Hurry”. The firsts major export to its collaborators, which met quality and price standards, related to exports of Radars to Contraves, Switzerland which is another milestone worth remembering.

New business initiatives

Important achievements and new business initiatives during the year 2003-04 include :

v Execution of a large order of VHF Manpack/Vehicular Stars ‘V’ 5W/25W Radios, Completing supplies ahead of the delivery schedules.

v Handling over of the first block of SAMYUKTA (a Joint DRDO-Army-BEL Programme for development, production and integration of ground based Integrated Electronic Warfare System for the Indian Army) to the Chief of Army Staff by the President of India at ELSEC, Hyderabad, in January 19, 2004. subject has been the head of the consortium partners and prime production agency.

v Successful completion of the 2^nd phase of APNET for the Government of Andhra Pradesh. With this success, orders for similar projects are expected from many other state Goverments.

New products

Important new products introduced by the company during the year were :

v VPS Mk, III, a hand held Radio operating in the UHF band, with built-in high-grade speech encryption capability. This has been successfully trial evaluated by the Indian Army.

v Battle field surveillance Radar, Short-Range Radars : Subject has recently bagged the first commercial order for this Radar from the Indian Army. This is a completely indigenous Radar designed by DROO at LRDE, Bangalore in which subject was closely associated. Subject has already received several export enquiries for this product and is in the process of offering the product for demo-field evaluations.

v Intelligent Message Terminal : It is a computer-based communication terminal for transmission and reception of messages simultaneously through data, fax, telex and teleprinter circuits and is semi-ruggedised for military use.

v Battle Management System-It is designed to greatly improve the combat effectiveness of a tank by depicting its position using Global Positioning System (GPS), communicating it to other tanks/Commander’s tank in real time and providing a comprehensive view of the battlefield to senior officers.

Awards

During the year subject has received a number if prestigious awards in recognition of its performance and achievements, including :

v First Prize for Excellence in Professional Electronics Industry for 2001-02 conferred by the Union Ministry of Communication and Information Technology-covers the Communication and Strategic Electronics Industry.

v Certificate of Appreciation from the Institute of Cost and Works Accountants of India for excellence in cost reduction for 2003.

The company has joint ventures with :

* GE BE Limited

It has been giving technology for manufacture of products to the JVC.

GEBE Limited is joint venture between Bharat Electronics and General Electric Medical Systems. The facility based at Whitefield, Bangalore, India, Manufactures X-ray Tubes, for RAD and Foreign Institutional Investors and CT systems, as well as components such as High Voltage Tanks and Detector modules for CT system. The products are exported worldwide and meet the safety and regulatory standards specified by FDA, CE, MHW, AERA and the facility has been accredited with ISO 9001 certification. GEBE Limited also markets the conventional X-ray tubes made at Pune Unit of the Subject.

* BE Delft Electronics Limited

* BEL Multitone Limited

This company offers state-of-the-art mobile communication products for the workplace. Multitone invented paging in 1956 when it developed the world’s first system to serve the “life or death” environment of St. Thomas Hospital, London. With the strength of the subject in the radio communication field and the technology of Multitone in the field of Radio Paging, the joint venture company is in a position to offer tailor made solutions to the mobile communication needs at workplaces in various market segments.

This company offers one of the most comprehensive on site product ranges-from small, easy to use pagers to practical, durable private mobile radios and the latest technology, digital cordless communication systems. Brief details of the products are :-

· Access 700 one-way speech paging system which support 100 pagers.

· Access 1000/3000 radio paging system which supports 1500/1500 users.

· Computer radio integration units.

· Digital cordless communication systems.

* BEL Optronic Devices Limited

It achieved a turnover of Rs. 283.13 million and made a loss of Rs. 28.05 million.

The list of products and services with some of its major customers are as under :-

Products and Services	Customers
Defence Communication	Indian Defence Services, Para-military forces
Radars and Sonars	Indian Defence Services, Civil Aviation, Meteorological Department, Space Department.
Telecommunication	Department of Telecommunication, Para-Military Forces, Powers Sector, Oil Industry, Railways.
Broadcasting Equipments and Studio Systems	All India. Radio, Doordarshan (National Radio and TV Broadcasters)
Electronic Voting Machine	Election Commission of India
Solar Products and Systems	Individuals, Private and Government Organisations.
Turnkey Systems, E-Governance Networks	Police, State Governments, Public Sector Undertakings.
Components	All India Radio and Doordarshan the National Radio and TV Broadcasters, Instrumentation Industry, Switching Industry, Entertainment Industry, Telephone Industry.

The company is in trade terms with the following :

* Agis Industries

* Allied Electronic Corporation

* Arien Inc.

* Balhara Industrial Corporation

* Borate Plastic

* Carter Hydraulic Powers Private Limited

* Dass Electronics

* Gilard Electronics Private Limited

* Kadevi Engineering Company Private Limited

* MACR Precision Components

* Mahip Iron Company

* MCE Products Sales Services Private Limited

* Microfine Bushing Private Limited

* Rajshi Processors

* Shashi Packing Products

* Southern Machine Tools

* Spare Age Auto Industries

* Unique Punch Systems Private Limited

* Victory Heat Treaters

* Yoshma and Company Private Limited

* Unisys

The company has been accredited with ISO 9000 and ISO 9002 Certifications.

The company's fixed assets of important value include freehold land, leasehold land, roads and culverts, buildings, installations, plant & machinery, electronic equipment, equipment for R & D Lab, Vehicles, office equipment and furniture, fixtures & other equipment.

MEMBERSHIPS

¶ Confederation of Indian Industry

Share Holder

Continuing with its steady growth and good performance, the Company recorded its highest ever turnover of Rs. 32120.9 million for the year 2004-05, an increase of 14.78% over last

year's turnover of Rs. 27985.9 million. The Value of Production for 2004-05 is Rs.32349.7 million as against Rs.28078.3 million last year, an increase of 15.21 %. The Profit After Tax for 2004- 05 is Rs.4463.2 million as against Rs.3161 million last year. During the last five years, the Company has consistently maintained its growth. Turnover has grown from Rs.14941.5 million in 1999-2000 to Rs.32120.9 million in 2004-05 with Compounded Annual Growth Rate of 16.54%. The Profit After Tax during the same period has grown from Rs.1079.3 million to Rs.4463.2 million, i.e. from 7.22% of turnover to 13.90% of turnover. The net worth of the Company has increased from Rs.4912.5 million in 1999-2000 to Rs. 15763.7 million in 2004-05. During the same period the employee productivity has improved substantially, with the sales per employee increasing from Rs.1.01 million to Rs.2.59 million and value added per employee from Rs. 0.51 million to Rs. 1.19 million. Defence continues to be the dominant customer of theCompany with over 87% of the total turnover accruing from this sector.

Appropriations & Dividend

The Directors recommend the following appropriations of the

disposable surplus:- (Rs. in million)

(i) Interim Dividend on paid up capital

of Rs.800 million at 40% : 320.00

(ii) Final dividend on paid up capital at 72% : 576.00

(iii) Transfer to General Reserve : 1000.00

(iv) Balance retained in Profit & Loss Account : 5727.8

Order book position

The Company had booked orders worth Rs. 24660 million during the year 2004-05 and the order book position as on 1^st April, 2005 was Rs.61080 million.

New Products

Important new products introduced by the Company (some

in collaboration with DRDO Labs) during the year include: Battlefield Surveillance System (BSS) - BSS is an important component of Network Centric Warfare, improving combat effectiveness manifold. Multi Sensor Data Fusion, synthesising data and imagery from multiple

sensors, gives the Armed Forces not only information superiority but also speed in making vital command decisions. The product is required by the Army in large numbers and also has good export potential THD Update - the Company had supplied high power 3D Static Radars (THD 1955) to the Indian Air Force for long range air surveillance application during 1974-92,

which still continues to form the backbone of the Air Defence System of the country. the Company took up an Upgradation programme of these radars jointly with M/s Thales, France, to extend their life by another 15 to 20 years. The upgradation programme incorporates

induction of new generation components, improvementin reliability and performance, higher operational availability and reduction in maintenance costs. The supply of the first 3 Upgrades to the Indian Air Force has commenced during 2004-05.

Exports

The Company achieved an export turnover of US$ 12.5 million for the year 2004-05. The important export orders executed during the year are supply of Battle Field Surveillance Radar

- Short Range to Indonesia; Night Vision Devices and Solar Lantern to Suriname Armed Forces; Solar Powered Traffic Signaling System to the Ministry of Public Works, Suriname; spares of 3D Radar to Indonesia; Laser Range Finders to Israel; Vacuum Interrupters to Uganda, Malaysia, Turkey, Germany; Solar cells and panels to Germany and supply of medical electronic equipment parts to GE Medical Systems, USA. the Company is focusing on export as a major thrust area for growth and this approach has resulted in an export order book of US$ 38.28 million as on 1st April 2005, which includes orders from the Royal Army of Nepal for Night Vision products, contract with Russian Aircraft Corporation for Radar Warning Receivers, contract with Sudan for Communication and Night Vision equipment and contract with Suriname for Communication Equipment, Night Vision Devices and Solar products. Export market development activities continue with focus on SAARC countries, African continent, South East Asia region, in addition to work share / offset arrangements with

collaborators in Europe and Israel. The Company is aiming to achieve an export sale of US $ 15 Million for the year 2005-06.

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.98
UK Pound	1	Rs.84.54
Euro	1	Rs.57.82

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	9
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		72

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions