MIRA INFORM REPORT

Report Date :

2^ND May, 2006

IDENTIFICATION DETAILS

Name :	BAJAJ ELECTRICALS LIMITED
Registered Office :	45 – 47, Veer Nariman Road, Mumbai – 400 023, Maharashtra, India.
Country :	India
Financials (as on) :	31.03.2005
Date of Incorporation :	1^st January 1901
CIN. No.:	U31500MH1956PTC009887
Com. Reg. No.:	11-9887
TAN No.: (Tax Deduction & Collection Account No.)	MUMB01798G
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer of steel, sugar, two wheelers and three wheelers

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 3000000
Status :	Satisfactory
Payment Behaviour :	Slow but Correct
Litigation :	Clear
Comments :	Subject is a well-established and reputed consumer products company having satisfactory track records. The company can be considered normal for business dealings at usual trade terms and conditions. Payments are reported as slow but correct.

LOCATIONS

Registered Office :	45 – 47, Veer Nariman Road, Mumbai – 400 023, Maharashtra, India.
Tel. No.:	91 – 22 – 22823090 / 2204 3842 / 2204 3843
Fax No.:	91 – 22 – 22851279
E-Mail :	message@bajajelectricals.com
Website :	http://www.bajajelectricals.com
Head Office :	51, Mahatma Gandhi Road, Mumbai – 400 023
Tel. No.:	91-22-22043780 / 22875135
Fax No.:	91-22-22828250
Corporate Office :	45 – 47, Veer Nariman Road, Mumbai – 400 023, Maharashtra, India
Tel. No.:	91 – 22 – 204 3842 / 204 3843 / 204 3841 / 204 5341 / 204 5046
Fax No.:	91 – 22 – 2851279
E-Mail :	message@bajajelectricals.com
Website :	http://www.bajajelectricals.com
Plant Locations :	Matchwel Unit Off Nagar Road, Pune – 411 014, Maharashtra Chakan Unit Mahalunge, Chakan Talegaon Road, Khed, Pune – 410 501, Maharashtra Wind farm Village Vankusawade, Taluka Patan, District Satara - 415 206, Maharashtra Ranjangaon unit Village Dhoksanghvi, Taluka Shirur, Ranjangaon, District Pune - 412 210, Maharashtra
Depots :	Located at: Daman, Faridabad, Jabalpur, Jalandhar, Ranchi and Roorkee
Branches :	SCO 52, Sector – 26, Madhya Marg, Chandigarh 160026 Tele No. 91-172-791414 Fax No. 91-172-792832 Email: chd_cic@bajajelectricals.com 1/10, Asaf Ali Road, New Delhi – 110 002 Tele No. 91-11-23236055 Fax No. 91-11-23230214 Email: cic@bajajelectricals.com A-1. 1^st Floor Sector 19, Dist. Gautam Budh Nagar, Noida – 201 301, Uttar Pradesh Tele No. 91-120-2441887 Fax No. 91-120-2441779 Email: d12_cic@bajajelectricals.com Raghukamal Niwas, M. I. Road, Jaipur – 302 001, Rajasthan Tele No. 91-141-377364 Fax No. 91-141-374261 Email: jai_cic@bajajelectricals.com Bajaj Bhavan, 21/32 A, Tilak Marg, Lucknow – 226 001 Tele No. 91-522-281391 Fax No. 91-522-275513 Email: luc_cic@bajajelectricals.com Eastern Region Kharvela Nagar, Janpath, Bhubaneshwar – 751 001 Tele No. 91-674-2400697 Fax No. 91-674-2400294 10, Ganesh Chandra Avenue, Kolkata – 700 013, West Bengal Tele No. 91-33-22379270 Fax No. 91-33-22259111 Email: cal_cic@bajajelectricals.com Agarwal House, Christian Basti, G. S. Road, Guwahati - 781 005 Tele NO. 91-361-2346497 Fax No. 91-361-2346496 Email: guw_cic@bajajelectricals.com Kashi Palace 5^th Floor, Dak Bungalow Road, Patna – 800 001 Tele No. 91-612-2231978 Fax No. 91-612-2231978 Email: pat_cic@bajajelectricals.com Western Region 106, Sarkar III, Near Income Tax Char Rasta, Off Ashram Road, Navrangpura, Ahmedabad – 380 014, Gujarat Tele No. 91-79-7543964 Fax No. 91-79-7543950 Email: ahm_cic@bajajelectricals.com 15/17 Sant Savta Marg, Reay Road, Mumbai – 400 010, Maharashtra Tele No. 91-22-23724192 Fax No. 91-22-23730505 / 23730504 Email: mum_cic@bajajelectricals.com Basant Mansion,165, R.N. Tagore Marg, Indore – 452 001 Tele No. 91-731-2527317 Fax No. 91-731-2514818 Email: ind_cic@bajajelectricals.com Manek Hall, 2, General Thimmayya Road, Pune – 411 001, Maharashtra Tele No. 91-20-26360801 Fax No. 91-20-26360698 Email: pun_cic@bajajelectricals.com Bajaj Bhavan, Doongaji Colony, G. E. Road, Near Anupam Udayan, Raipur – 492 001 Tele No. 91-771-2263986 Fax No. 91-771-2263310 Email: rai_cic@bajajelectricals.com 1, Bachhraj Road, Wardha – 442 001 Tele No. 91-7152-243841 Fax No. 91-7152-244025 Email: war_cic@bajajelectricals.com Southern Region Bajaj Bhavan, No.16, Residency Road, Bangalore – 560 025, Karnataka Tele No. 91-80-2235486 Fax No. 91-80-2214878 Email: ban_cic@bajajelectricals.com Bajaj Bhavan, XL/11/877ABC, Power House Road, Ernakulam – 682 018, Kerala Tele No. 91-484-2391119 Fax No. 91-484-2391744 Email: ccn_cic@bajajelectricals.com 1-2-2/1, Domalguda, Hyderabad – 560029, Andhra Pradesh Tele No. 91-40-23223371 Fax No. 91-40-23220081 Email: hyd_cic@bajajelectricals.com 142 (New No. 195), Anna Salai, Chennai – 600 002, Tamil Nadu Tele No. 91-44-28570969 Fax No. 91-44-28544813 Email: che_cic@bajajelectricals.com Ahmedabad, Bangalore, Bhubaneshwar, Chandigarh, Chennai, Cochin, Coimbatore, Delhi, Guwahati, Hyderabad, Indore, Jaipur, Kolkata, Lucknow, Mumbai, Noida, Patna, Pune, Raipur and Wardha.

DIRECTORS

Name :	Mr. Shekhar Bajaj
Designation :	Chairman & Managing Director
Date of Birth/Age :	53 years
Qualification :	B.Sc. (Hons.), M.B.A.
Experience :	31 years
Date of Appointment :	01.04.80
Name :	Mr. Harsh Vardhan Goenka
Designation :	Director
Name :	Mr. A. K. Jalan
Designation :	Director
Name :	Mr. Ajit Gulabchand
Designation :	Director
Name :	Mr. M. R. Pai
Designation :	Director
Name :	Mr. V. B. Haribhakti
Designation :	Director
Name :	Mr. Madhur Bajaj
Designation :	Director
Name :	Mr. S. C. Batra
Designation :	Director
Name :	Mr. Dakshesh B. Dhruv
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Mangesh Patil
Designation :	Company Secretary

MAJOR SHAREHOLDERS

CATEGORY	NO. OF SHARES	% OF SHAREHOLDING
Promoters	5,833,195	67.49%
Financial Institutions, Banks, etc.	961,528	11.13%
General Public	1,848,157	21.38%
TOTAL	8,642,880	100.00%

BUSINESS DETAILS

Line of Business :

Manufacturer of steel, sugar, two wheelers and three wheelers

PRODUCTION STATUS

Class of goods	Unit	Licensed Capacity	Installed Capacity	Production
Fans	Nos.	800,000	1,000,000	517,560
Parts & Accessories of Fans	Nos.	50,000	---	--
Fractional horse power motors	Nos.	--	--	--
Magneto assemblies	Nos.	500,000	300,000	--
Parts & Accessories for Magneto	Nos.	25,000	25,000	--
Electric Motors	Nos.	25,000	--	--
Parts & Accessories for electric motors	Nos.	5,000	--	--
Dies made of Steel	Nos.	90	24	--
Parts & Accessories for Dies	Nos.	--	50	--
Power Generated		--	2.8 MW	4,279,980 KWH
Highmast Shafts	Nos.	--	3,000	1,345
Swaged / Octogonal Poles Lattice Mast / Transmission	Nos.	--	10,000	18,465
Line Towers/ Others (Galvanising Job Work etc.)	M. Tons	--	22,525	23,705

GENERAL INFORMATION

No. of Employees :	1500
Bankers :	Ø State Bank of Bikaner & Jaipur, Mumbai Ø Bank of Rajasthan Limited, Mumbai Ø Bank of India, Mumbai
Facilities :	--

Banking Relations :	Satisfactory
Auditors :	Dalal & Shah Chartered Accountants
Associates/Subsidiaries :	Ø Bajaj International Private Limited Ø Hercules Hoist Limited Ø Bajaj Auto Limited Ø Hind Lamps Limited Ø Konark Fixtures Limited Ø Utkal Electricals Limited Ø Mayank Electro Limited Ø M. P. Lamps Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1,00,00,000	Equity Shares	Rs.10/-each	Rs.100.000 millions
1,00,00,000	Preference Shares	Rs.10/-each	Rs.100.000 millions
	TOTAL		Rs.200.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
8642880	Equity Shares	Rs.10/-each	Rs.86.429 millions
100,00,000	10% Cumulative Redeemable Preference Shares	Rs.10/-each	Rs. 100.000 millions
	TOTAL		Rs.186.429 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		186.429	186.429
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		632.702	566.696
4] (Accumulated Losses)		0.000	0.000
NETWORTH		819.131	753.125
LOAN FUNDS
1] Secured Loans		1215.311	1000.383
2] Unsecured Loans		466.503	400.268
TOTAL BORROWING		1681.814	1400.651
DEFERRED TAX LIABILITIES		77.544	15.526
TOTAL		2578.489	2169.302
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		862.957	960.633
Capital work-in-progress		13.017	12.699
INVESTMENT		149.662	49.585
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	874.044	552.047
	Sundry Debtors	1850.321	1488.563
	Cash & Bank Balances	167.079	163.536
	Other Current Assets	1.469	6.231
	Loans & Advances	306.585	425.735
Total Current Assets		3199.498	2636.112
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	1573.484	1464.328
	Provisions	85.518	44.264
Total Current Liabilities		1659.002	1508.592
Net Current Assets		1540.496	1127.520
MISCELLANEOUS EXPENSES		12.357	18.865
TOTAL		2578.489	2169.302

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2004
Sales Turnover [including other income]	6517.262	5220.095
Profit/(Loss) Before Tax	225.745	167.233
Provision for Taxation	87.337	53.632
Profit/(Loss) After Tax	138.408	113.601
Export Value	37.130	19.211
Import Value	246.260	174.160
Total Expenditure	6296.212	5041.811

QUARTERLY

Particulars	30.06.2005 [1^st Quarter]	30.09.2005 [2^nd Quarter]	31.12.2003 [3^RD Quarter]
Sales Turnover	1374.500	1798.500	2350.700
Other Income	36.700	01.800	9.400
Total Income	1411.200	1800.300	2360.100
Total Expenditure	1274.100	1675.700	2217.300
Operating Profit	137.100	124.600	142.800
Interest	41.300	45.400	41.200
Gross Profit	95.800	79.200	101.600
Depreciation	15.100	14.900	15.800
Tax	10.500	03.400	63.700
Reported PAT	51.400	48.500	46.300

200506 Quarter 1 - Extraordinary items Indicates Impact of Discontinued Operations EPS is Basic & 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 05 Complaints disposed off during the quarter 05 Complaints unresolved at the end of the quarter Nil 1. The staff cost is inclusive of Rs 1.50 million for the quarter ended June 30, 2005 (Previous Period Rs 1.50 million) on account of amortisation of expenditure in respect of Voluntary Retirement Schemes. 2. The Company has identified its Business Segments as its Primary reportable segments, which comprise of Lighting, Consumer Durables, Galvanised Structures and Others. 'Lighting' includes Lamps, Tubes, Luminaires & Projects, 'Consumer Durables' includes Appliances & Fans and 'Others' includes Die-casting and Wind Energy. 3. Figures for previous year / periods have been regrouped wherever necessary. 4. The above results have been taken on record by the Board of Directors of the Company at their meeting held on July 28, 2005 and have been subjected to a Limited Review by the Auditors.

200509 Quarter 2 - Expenditure Includes (Increase) / Decrease in Stock in Trade Rs (55.60) million Purchase of Finished Goods Rs 1080.50 million Consumption of Raw Materials Rs 285.40 million Staff Cost Rs 98.70 million Other Expenditure Rs 229.40 million Tax Includes Provision for Current Tax Rs (1.60) million Deferred Tax Rs 12.40 million Fringe Benefit Tax Rs 5.00 million Extraordinary Items Includes Loss on account of damaged goods Rs 36.90 million Impact of Discontinued Operations Rs 0.20 million EPS is Basic & 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 12 Complaints disposed off during the quarter 12 Complaints unresolved at the end of the quarter Nil 1. Loss of Rs 36.90 million, shown as extra ordinary item, is on account of goods damaged in the flood caused by torrential rains in Western Maharashtra, net of insurance claim. 2. The staff cost is inclusive of Rs 1.50 million for the quarter ended September 30, 2005 (Previous Period Rs 1.50 million) and Rs 3.00 million for the six months period ended September 30, 2004 (Previous Period Rs 3.00 million) on account of amortisation of expenditure in respect of Voluntary Retirement Schemes. 3. The Company has identified its Business Segments as its Primary reportable segments, which comprise of Lighting, Consumer Durables, Galvanised Structures and Others, 'Lighting' Includes Lamps, Tubes, Luminaires & Projects, 'Consumer Durables' includes Appliances & Fans and 'Others' includes Die-casting and Wind Energy.' 4. Figures for previous years / periods have been regrouped wherever necessary. 5. The above results have been taken on record by the Board of Directors of the Company at their meeting held on October 27, 2005 and have been subjected to a ''Limited Review'' by the Auditors.

200512 Quarter - Expenditure Includes (Increase) / Decrease in Stock in Trade Rs 92.20 million Purchase of Finished Goods Rs 1370.50 million Consumption of Raw Materials Rs 303.50 million Staff Cost Rs 131.20 million Other Expenditure Rs 304.50 million Tax Includes Provision for Current Tax Rs 59.20 million Deferred Tax Rs (24.20) million Fringe Benefit Tax Rs 4.50 million Extraordinary Items Indicates Impact of Discontinued Operations EPS is Basic & 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 03 Complaints disposed off during the quarter 03 Complaints unresolved at the end of the quarter Nil 1. The Company has provided for Rs 32.60 million towards gratuity liability, pending final computation of liability, payable to LIC in respect of accumulated benefits obligation for past services. 2. The staff cost is inclusive of Rs 1.50 million for the quarter ended December 31, 2005 (Previous Period Rs 1.50 million) and Rs 4.50 million for the nine months period ended December 31, 2005 (Previous Period Rs 4.50 million) on account of amortisation of expenditure in respect of Voluntary Retirement Schemes. 3. Extra-ordinary income for the quarter includes reversal of provision for loss of goods damaged by floods provided in previous quarter, on final determination of claims by insurers, where the amount received is in excess of claims earlier estimated by Rs 7.40 million. 4. Prior period adjustment for the quarter and nine months ended December 31, 2005 includes adjustment made to deferred tax assets consequent to changes in the estimated total taxable income on filing of return in respect of previous year. 5. The Company has redeemed 20% of the face value of 1,00,00,000 - 10% Non-convertible Cumulative Redeemable Preference Shares in the month of January, 2006. 6. The Company has approved pre-mature redemption of 80,00,000 preference shares, amounting to Rs 64 million alongwith dividend @ 10% on pro-rata basis, amounting to Rs 6.192 million and an interim dividend @ 10% on the remaining 20,00,000 preference shares, which have not been redeemed, amounting to Rs 2.00 million. 7. Impact of Discontinued Operations includes Profit on sale of factory land at Matchwel Unit amounting to Rs Nil for the quarter ended December 31, 2005 (Previous Period - Loss of Rs 2.00 million) and Profit of Rs 35.20 million for the nine months period ended December 31, 2005 (Previous Period - Profit of Rs 24.70 million). 8. The Company has identified its Business Segments as its Primary reportable segments, which comprise of Lighting, Consumer Durables, Galvanised Structures and Others. 'Lighting' includes Lamps, Tubes, Luminaries & Projects, Consumer Durables includes Appliances & Fans and 'Others' includes Die-casting and Wind Energy. 9. Figures for previous years / periods have been regrouped wherever necessary. 10. The above results have been taken on record by the Board of Directors of the Company at their meeting held on January 30, 2006 and have been subjected to a Limited Review by the Auditors.

KEY RATIOS

PARTICULARS	31.03.2005	31.03.2004
Debt Equity Ratio	2.34	2.70
Long Term Debt Equity Ratio	1.30	1.35
Current Ratio	1.25	1.12
TURNOVER RATIOS
Fixed Assets	5.98	4.47
Inventory	9.46	9.13
Debtors	4.04	3.64
Interest Cover Ratio	2.19	1.22
Operating Profit Margin (%)	6.83	6.14
Profit Before Interest and Tax Margin (%)	5.94	4.98
Cash Profit Margin (%)	2.94	1.78
Adjusted Net Profit Margin (%)	2.05	0.62
Return on Capital Employed (%)	18.35	13.33
Return on Net Worth (%)	23.02	4.92

STOCK PRICES

Face Value	Rs. 10/-
High	Rs. 530/-
Low	Rs. 502/-

LOCAL AGENCY FURTHER INFORMATION

History:

Subject was incorporated on 1^st January 1901 at Mumbai in Maharashtra having Company Registration Number 9887.

The company has been in existence for the last 60 years and has steadily grown and expanding its business in both domestic and international market.

Incorporated in 1938, Bajaj Electricals commenced its operations as Radio Lamp Works and changed its name to the present one in 1960.

Subject offered a rights issues in April 1995 at a premium of Rs. 190 per share to part-finance its project to implement a joint venture, Black and Decker Bajaj Private Limited with the Black and Decker Corporation, USA, for the manufacture of power tools and houseware and to expand the capacity of die-casting components from 25,000 p.a. to 40,000 p.a.

In 1996, the company's Matchwel unit had been accredited with ISO 9002 Certification by TUV, Bayan, Germany, in respect of fans, die-castings and magneto assemblies manufactured at Matchwel unit.

During the year 1998-99, the company entered an agreement with the Black & Decker Corporation, USA to purchase their 50% holding in the Black & Decker Bajaj, thus making it a 100% subsidiary. Subsequently, the company had been renamed Bajaj Ventures Limited.

It is currently setting up facilities for manufacture of highmast and other related products along with galvanising plant at an approximate cost of Rs. 450.000 millions. The plant located at Ranjangaon near Pune commenced its commercial production from April 2001.

The company has introduced two models of nature switches, which turn on/off depending upon the ambient lux level. The switches being automatic, will contain the waste in use of electricity due to human errors.

The installed Capacity of fan produced during the year 2001 was 1600000 when compare to 850000 fans in 2000.

The Rajangaon unit, a division of Engineering & Projects, has received the coveted ISO – 9001 certification and from the year 2002 it is actively working on ISO – 14001 certification.

Business:

Subject is a part of "Bajaj Group"

The company's product range includes:

Appliances

Electric Irons, Immersion Heaters, Immersion Heaters (Fixed Type), Toasters, Room Toasters, Ovens, Mixers-Juicers, Storage Water Heaters (ISI Models), Instant Water Heaters, Gas Appliances, Water Filters & Filter Candles, Water Purifiers, Air Coolers and Kettles.

Lamps

General Lighting Service, Special Incandescent Lamps, H. W. Lamps, Fluorescent Tubes, Miniture Lamps, Compact Fluroscent Tubes (Cool White), Special, H. P. Mercury Vapour, L. P. Sodium Vapour, H. P. Sodium Vapour, Metal Halide

Luminaries & Accessories

Industrial Lighting, Commercial Decorative Lighting, Street & Public Lighting and Accessories.

Engineering & projects services

Turnkey Illumination and power projects including high mast systems, telecommunication towers, wind energy towers, sub-station towers and hot dip galvanising

Fans

Ceiling fans with lighting arrangements

Ceiling fans

Freshair fans

Bajaj Media fans

Table fans

Wall fans

Pedestal fans

The company has six major business divisions comprising of lighting luminaries, electric fans, home appliances, pressure die casting unit, turnkey engineering projects besides power tools. The company's export activities are well supported through its International division.

The company undertakes export of the following products manufactured / marketed:

Ø Electrical Fans : Ceiling, Pedestal, Table, Exhaust etc.

Ø Lamps : GLS / FTL / Halogen Lamps

Ø HID Lamps : HPSV /HPMV /Metal Halide

Ø Electrical Fittings : Decorative, Industrial, Outdoor, Aviation, General Purpose Economy Luminaries, HID Street Lighting etc.

Ø Home Appliances : Iron Toasters, Water Filters, Mixers, Microwave Ovens, OTGs, Geysers, Room Heaters, Storage Water Heaters, etc.

The company has 20 branch offices and 4 regional offices spread in different parts of the country besides supported by a chain of about 600 distributors, 2500 authorised dealers, over 60,000 retail outlets and over 200 service franchises.

Generic Name of the Principal Products of the company is:

Item Code No.	Product Description
841451.02	Ceiling Fans
853910.00	Filament Lamps excluding Ultra Violet or Infra Red Lamps
851640.00	Electric Iron

The company exports spectrum of electrical products suited around the globe. Currently the company supplies its products to more than 20 countries, which include Panama, Brazil, Vietnam, Kenya, Sudan, Qatar, Bahrain, Chile, U.A.E., South Africa, Oman, Ghana, Botswana, Yemen, Muscat, Malta, Jordan Iraq, Bangladesh Nigeria, Sri Lanka and Myanmar.

Market conditions

The Company has strived to improve its top line, reduce operational costs besides capitalizing on the strong brand name of "bajaj". The Management's ability to turn around the Company's performance by following clear and relevant strategies, coupled with effective implementation and teamwork has stood it in good stead. These along with favourable market conditions have helped the company in achieving a satisfactory growth in sales of 28.2% from Rs.5050.700 millions last year to Rs.6478.900 millions in the current year. 

 All major business units have shown a good top line growth. The improved focus on brand development across products has resulted in better consumer pull and stronger dealer network resulting in improvement in margin and higher turnover. 

Lighting and industrial products

The turnover of lighting and industrial products viz Lamps, Tubes, Luminaires, Highmasts and Projects increased by over 25% at Rs.3117.600 millions during the year under review from Rs.2487.100 millions in the previous year. 

 During the year, the Company has initiated a distribution agreement with a leading European Luminaries brand named `Trilux' to promote and sell its products in India. The Company has also introduced two new ranges of luminaires, `Ambience' and 'Le Magique', which are targeted at the retail and landscape segment of the market respectively. 

Consumer durables

The turnover of consumer durables, which include fans and small appliances, increased by over 15% at Rs.2591.000 millions during the year under review from Rs.2241.400 millions in the previous year. The Company's Morphy Richard brand products like Ovens, Mixers, Irons, Toasters, etc. introduced in the premium segment have been well received in the market. The contribution from this product range is expected to grow significantly in the coming years. The Company has continued to introduce new products and different models in the existing range of products and improve the technology and quality wherever possible, in order to have a competitive advantage. In order to take advantage of Excise Duty benefits in Himachal Pradesh, a number of Company's vendors of Appliances and Fans have started manufacturing activities in Himachal Pradesh. 

Matchwel unit

In pursuance of the Memorandum of Understanding entered into by the Company with M/s. Bramha Builders, the Company had entered into an agreement with the said M/s. Bramha Builders for Sale of Development Rights of part of the land for a total consideration of Rs.55.000 millions and has received the said amount. The Company has also received a sum of Rs.25.000 millions as advance against the sale of development rights for part of the balance land. 

Chakan unit

The production at this Unit showed marginal increase during the year under review with production of 5,17,560 nos. of fans as against 5,02,250 nos. of fans in the previous year. This Unit continues to show an improvement in its operations. 

Ranjangaon unit

The Ranjangaon Unit has increased its capacity utilisation to 90% as compared to 78% in the previous year and achieved a turnover of Rs.884.900 millions as compared to Rs.386.900 millions in the previous year, registering a growth of over 129%. The Unit produced 1345 nos. of Highmast shafts and 18465 nos. of Poles as against 1059 nos. and 7579 nos. respectively in the previous year. The Unit also manufactured 19841 MT of lattice masts / transmission line towers as against 14013 MT in the previous year. 

 The Unit continues to enjoy dominance in Highmast business with over 60% market share. The Unit has sufficient orders to utilise the installed capacity and with better prices the Unit is expected to continue its growth trajectory. The Ranjangaon unit has turned around and has achieved significant success in the Power Transmission Tower business. The E&P BU has also started executing turnkey power transmission tower contracts, which includes erection and commissioning. The major customers include Powergrid Corporation and various State Electricity Boards

Wind energy

The 2.8 MW Wind Farm at Village Vankusawade in Maharashtra generated 42,79,980 electrical units during the year under review (previous year 44,07,462 units). The Company has transferred sales tax incentive available for Rs.16.540 millions (previous year Rs. 16.696 millions). 

Overall Review

Bajaj Electricals Limited is a 66-year-old diversified Company, with interests in Lighting, Luminaires, Appliances, Fans and Engineering & Projects. In the fiscal year 2004-05, the net turnover of the Company has increased to Rs.6496.300 millions as against Rs.5069.200 millions last year, registering a growth of over 28.2%. The costs of inputs in key raw materials like Steel, Copper, Plastics & Alluminium continued to escalate, thereby affecting the material costs adversely. The industry witnessed intense competition for market share and significant pressures on margins and profits. 

 The Company continued its focus on enhancing revenue growth through introduction of new products, expansion of the dealer and retailer network along with good brand building efforts. Various actions in terms of cost reduction, value engineering, competitive sourcing and improving credit discipline have been undertaken. There has been a significant progress in the Power Transmission Tower business as also in the Luminaires and Appliances businesses. 

Financial Review

The Company achieved a PBT before extra ordinary items of Rs.225.700 millions as against Rs.50.200 millions in the previous year. This is an increase of 350%. The interest burden has reduced to Rs. 163.800 millions as against Rs.186.500 millions in the previous year, which is a reduction of 12.2%. The net profit stands at Rs. 136.600 millions as against Rs.103.100 millions in the previous year, which is a growth of 32.5%. The previous years financials include profit on sale of development rights of land of Rs.117.000 millions as against Rs.23.700 millions in the current year. 

 The Company continues to find ways and means to reduce its cost of borrowings and replacing its high cost debt with lower cost debt. 

Opportunities

The Indian economy is growing very well and the growth is also sustainable. With greater focus on industrial development, infrastructure sector, rural development and poverty alleviation programmes, we believe that the opportunities for the Company will remain positive in the foreseeable future. It is expected that consumer spending will continue to rise with rising income levels and higher aspirations of the people of India. The spurt in the industrial activity in sectors like manufacturing, capacity expansion, infrastructure, retail, BPO/I.T. etc. will result in a higher demand for the Company's industrially oriented business of Luminaires and Engineering & Projects. The housing boom augurs well for businesses such as Fans, Appliances and Lighting. 

 All the business units have structured their operations appropriately to take advantage of the opportunities presented by the environment. With an improvement in the Company's corporate image as well as the brand image, coupled with a clear strategy supported by effective implementation, the Company can look to the future with confidence. 

Challenges

 Catering to the continuously evolving higher order needs of the Indian consumer, by offering innovative products that are differentiated from competition is a continuous challenge. With the reduction in customs duty, there has been an increase in the flow of imported products into the country and the Company has responded with an appropriate sourcing strategy. The unorganized sector in the Fans, Appliances and Lighting businesses offer a significant price challenge due to lower overheads and weaker product standards. Meeting the requirements of Power Transmission Towers by augmenting the production capacities and preparing for significant growth in the future will also be an important challenge. The Company needs to persevere with its efforts to improve revenues along with higher operating margins, while reducing working capital and fixed costs in order to improve the profitability in the future also. However, all the challenges are in fact an opportunity for the Company to take advantage of. 

Future Outlook

The Company has a good business portfolio with both consumer facing and industry facing businesses. The higher propensity to spend by the Indian consumer augurs well for the consumer facing businesses of Appliances, Fans and Lighting. With increasing industrial activity, growing investments, higher capacity creation and greater infrastructure focus, the Luminaires and Engineering & Projects businesses are likely to do well. The Company has internally become stronger in terms of its organization structure, process and systems which will enable it to take advantage of the opportunities available for business. The outlook for the future is likely to be positive and the Company is confident about the prospects for the F.Y 2005-06. 

Adequacy of Internal controls

The Company believes that good Corporate governance is the adoption of best business practices which ensure that the Company operates not only within the regulatory framework but is also guided by ethics and a strong belief in the tradition of trust. The following committees are in place to ensure effective corporate governance: 

 * Board of Directors 

 * Audit Committee 

 * Project Management Committee 

 * Share Transfer Committee 

 * Remuneration Committee 

 * Shareholders Grievance Committee 

 * Management Committee 

 * Human Resource Development 

 The Company believes that its human resource has played the most important role in enabling the Company to turn around and embark upon a more prosperous future. The Company has invested on its human resource by providing appropriate training and developmental inputs along with career progress opportunities to deserving employees. During the year 32 training programmes were conducted by faculty drawn from both within and outside the Company and around 745 people were trained. The Company's focus on having good people related processes in terms of recruitment, training, performance appraisal and performance rewards have been well received by all the employees. The Company has also achieved an award for "Best HR Practices for Employee Motivation" in the Asia Pacific HR Outsourcing Conference" held in February 2005 in Mumbai. Earlier the Company was awarded a trophy for "HR Excellence - Organization that Creates Fun and Joy at Work Award 2004" in November 2004. Our President & C.O.O., Mr. R. Ramakrishnan was awarded the "Indira Super Achiever Award" by the Indira Group of Institutes, Pune in August 2004. 

The company has been accredited with ISO 9002 Certification from TUV Germany.

The company is in trade terms with:

* Prakash Corrugated

* KSP Electricals Private Limited

* Jaysri Industries

* Decpro Paints

* Pramuk Stampings Private Limited

* Goa Precision Stampings (Private) Limited

* Spotwell Engineering Works Private Limited

* Paradise Industries

* Gild Packaging

* Shree Plastics

The company is currently setting up facilities for manufacture of highmast and other related products along with galvanising plant at an approximate cost of Rs. 450 millions. The plant located at Ranjangaon near Pune was completed and commenced its commercial production from 1^st April 2001.

The company has introduced two models of nature switches, which turn on/off depending upon the ambient lux level. The switches being automatic would contain the waste in use of electricity due to human errors.

The company is planning to introduce new models of ceiling fan and to re-engineer fan components to reduce the costs.

The company's fixed assets of important value include goodwill, freehold & leasehold land, roads and culverts, buildings, ownership premises, dies, jigs & patterns, trade marks, vehicles and temporary structures.

Memberships

• Confederation of Indian Industry

Website Details Attached:

About Us:

Bajaj Electricals Keeps on Shining
Bajaj Electricals Limited (BEL) is a part of the "Bajaj Group" of India who are in the business of steel, sugar, two wheelers & three wheelers. Bajaj Electricals is well established in their range of products such as lamps & tube lights, luminaires, small household appliances, ceiling fans & table fans and turnkey engineering services. The company has been in existence for the last 60 years and has steadily grown and expanded its business both in domestic and international markets.

Bajaj Electricals has 20 branch offices and 4 regional offices spread in different parts of the country besides being supported by a chain of about 600 distributors, 2500 authorised dealers, over 60,000 retail outlets and over 200 service franchisees.

The ' bajaj ' group of India owes immense gratitude to their founding fathers whose vision and dedication over the years has greatly helped to build a business house that can set standards in Indian Industry.

Jamnalal Bajaj was the founding father of the Bajaj Group. The adopted ‘fifth’ son of Mahatma Gandhi, and the 'merchant prince' who held the wealth he created in trust for the people of his country. Trust - a simple word that contains a whole philosophy handed down by Jamnalal Bajaj to his successors. He valued honesty over profit, actions over words and common good over individual gain.

Kamalnayan Bajaj, elder son of Jamnalal Bajaj, followed footsteps of his illustrious father and consolidated the bajaj foundation. With characteristic foresight and pragmatic vision, he launched a steady diversification programme which gave the current name "Bajaj" both its shape and size. His unique management style created a work culture that matched well with the national spirit he had inherited.

Ramkrishna Bajaj took over the reins of the "bajaj group" in 1972 after Kamalnayan Bajaj and steered the Group from strength to strength for over 22 years. He had also actively participated in the freedom struggle of the country. In post independent India, he had led the youth movement. All along, he actively strengthened the foundations of business through ethics and practices both within the group and amongst the business community as well.

Shekhar Bajaj, Chairman & Managing Director of Bajaj Electricals Ltd., started his career with Bajaj Sevashram after which he worked at Bajaj International, the group's export company. Mr. Shekhar Bajaj joined Bajaj Electricals in 1980, became the Managing Director in 1987 and took over as the Chairman and Managing Director in 1994.
Mr. Bajaj is the Chairman of Bajaj Group companies Bajaj International and Hercules Hoist Pvt. Ltd. and on the Board of Directors of Bajaj Auto and IDBI Bank. He was the President of ASSOCHAM, former President of Indian Merchant Chambers (IMC) and Council for Fair Business Practices (CFBP)

News

Bajaj Electricals plans licensing pact for luminaire business
Financial Express
February 3, 2005

Bajaj Electricals Ltd is planning to enter into a licensing agreement for its luminaire business. 

“We are looking at a collaboration for their luminaire business through a licensing agreement as there is a need for technologically superior products which are state-of-the art. We are in advanced discussions. I cannot disclose anything further at this stage,” Bajaj Electricals chief operating officer and president R Ramakrishnan said. 

The luminaire business is one of the five special business units (SBUs) of the company. The others are appliances, fans, lighting and the engineering business. Bajaj Electricals luminaires find applications in the engineering, power, steel, cement, fertilizer, chemical and petrochemical sectors. 

Earlier, Bajaj Electricals had entered into a licensing agreement with Morphy Richards of the UK for its irons. This tie-up also entails a technology transfer. 

The company is targeting revenues of Rs 1,0000.000 Millions by the year 2007-08. 

“The biggest contributor to this will be the engineering business. Till recently, we were only into the manufacture of power transmission towers. Now, we will be installing them too,” Mr Ramakrishnan added. The engineering and projects busienss is also the fastest growing business. 

This business has an order book of over Rs 1500.000 Millions and has grown by over 85%, senior company executives said. The company clocked net sales of Rs 505.26 crore in the last fiscal and is expected to add around 25% to its topline this fiscal, he said. The company which had been facing tough times a few years back has bounced back after the implementation of a restructuring exercise.

This entailed the reorganisation in to five SBUs, reduction in interest rates, brand building, and a growth of revenues.

Last year, the company also came out with a rights issue at a premium of Rs 15 per share. Further, the company also got out of the die-casting business by giving a VRS at the plant, selling the development rights of the land and entering into a non-compete clause with a competitor.

Revamp helps Bajaj Electricals Turn Around
Hindu Business line
January 31, 2005
K. Giriprakash
V. K. Varadarajan

Bangalore Jan 30, 2005: BAJAJ Electricals has restructured its entire operations, including shutting down some of its loss-making ventures, as part of its plans to turnaround the company.

Bajaj Electricals' President and Chief Operating Officer, Mr R. Ramakrishnan, told Business Line that the restructuring has helped the company to turnaround and now it expects to double its revenues to about Rs 1,0000.000 Millions within three years. The company hopes to end the current fiscal with a revenue of around Rs 6300.000 Millions , an increase of 20 per cent over fiscal 2003-04. 

Mr Ramakrishnan said it had roped in Accenture Consulting to chart out a turnaround for the company. As per the new plan, Bajaj Electricals dropped its matrix structure for its organisation in favour of separate business units for each of its businesses. 
It now has five separate business units — engineering and projects, luminaire, appliances, fans and lighting. "Each of these units compete as separate businesses with its competitors," Mr Ramakrishnan said. The company also got rid of unviable businesses. 

For example, it shut down its diecast operations and offered VRS to 180 people. It also sold surplus land of the unit. 

He said the company also went in for financial restructuring by swapping high cost funds with low cost long-term debt. The banks too have lowered interest cost and increased the moratorium for another two years. 

The company plans to invest about Rs 200.000 Millions , spread over the next fiscal, to double the existing capacity in its engineering unit to execute its Rs 1600.000 Millions worth of fresh order from Powergrid Corporation for erection and commissioning of power transmission tower. 

Mr Ramakrishnan said the engineering unit, which registered a growth of 88 per cent over the last fiscal, is expected to outpace other business units. The company expects about 25 per cent of its revenues to come from its engineering business, he said. 

Mr Ramakrishnan said with the PowerGrid according them the status of approved EPC contractors, it expects bigger orders from the power company. He pointed out that with an estimated investment proposal of Rs 75,0000.000 Millions by Powergrid Corporation, there was a huge opportunity for the company. 

Mr Ramakrishnan said the company had entered into a licensing arrangement with Trilux, a leading European luminaries brand and a market leader in lighting in Germany. The tie-up, though is aimed to market the products to premium segments in the country, could lead to manufacturing Trilux products in the long term. Trilux would complement Bajaj's own products to provide full spectrum of lighting products, he said. Similarly, Bajaj's tie-up with UK's leading small appliances brand Morphy Richards had helped it to position itself in the premium end of the market. 

Mr Ramakrishnan said Bajaj Electricals has a market share of between 15 per cent and 20 per cent in the appliances segment, 20 per cent in luminaries and 10 per cent in lighting. The company has also been able to take on the unorganised sector by offering competitive pricing of its products in the lower end. "Their China sourcing strategy has helped us to buy from the world's best without compromising on the quality of the products," he said.

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 records 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. 44.90
UK Pound	1	Rs. 81.88
Euro	1	Rs. 56.47

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