MIRA INFORM REPORT

Report Date :

18.01.2008

IDENTIFICATION DETAILS

Name :	BHARAT HEAVY ELECTRICALS LIMITED
Registered Office :	BHEL House, Siri Fort, Asian Games Village, New Delhi – 110 049
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	13.11.1964
Com. Reg. No.:	55-4281
CIN No.: [Company Identification No.]	L74899DL1964GOI004281
TAN No.: [Tax Deduction & Collection Account No.]	DELB06995C
PAN No.: [Permanent Account No.]	AAACB4146P
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing and sale of Boilers, Hydro Turbines, Gas Turbines etc.

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 350000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is the largest engineering Company in India. It was a wholly owned Government of India Company, but now Government’s equity stake is 68%. The Company is making steady progress in its performance. Trade relations are fair. Payments are correct and as per commitments. It can be considered good for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	BHEL House, Siri Fort, Asian Games Village, New Delhi – 110 049, India
Tel. No.:	91-11-26001010 (15 Lines) / 26493031 / 24368996 / 7550
Fax No.:	91-11-26493021 / 26492534 / 24367130 / 8837
E-Mail :	cmdbs@asiad.bhel.co.in bhel@bhel.com csynks@bhel.co.in
Website :	http://www.bhel.com
Factory 1 :	v Heavy Electrical Equipment Plant, Hardwar v Central Foundry Forge Plant, Hardwar v Heavy Power Equipment Plant, Hyderabad v High Pressure Boiler Plant, Trichy v Heavy Electricals Plant, Bhopal v Transformer Plant, Jhansi v Electronics Division, Bangalore v Boiler Auxiliaries Plant, Ranipet v Industrial Valves Plant, Goindwal v Electro-Porcelains Division, Bangalore v Insulator Plant, Jagdishpur v Component Fabrication Plant, Rudrapur v Heavy Equipment Repair Plant, Varanasi v Electrical Machine Repair Plant, Mumbai

DIRECTORS

Name :	Mr. Ashok K. Puri
Designation :	Chairman & Managing Director
Name :	Mr. Naresh Chaturvedi
Designation :	Director
Name :	Mr. Surajit Mitra
Designation :	Director
Name :	Mr. Vineet Nayyar
Designation :	Director
Name :	Mr. Sanjay M. Dadlika
Designation :	Director
Date of Appointment :	16.11.2005
Name :	Mr. Ashok K. Aggarwal
Designation :	Director
Date of Appointment :	16.11.2005
Name :	Mr. Manish Gupta
Designation :	Director
Date of Appointment :	16.11.2005
Name :	Mr. Shekhar Datta
Designation :	Director
Date of Appointment :	16.11.2005
Name :	Mr. Raman Singh Sidhu
Designation :	Director
Date of Appointment :	04.01.2006
Name :	Mr. Madhukar
Designation :	Director
Date of Appointment :	05.07.2006
Name :	Mr. Ramji Rai
Designation :	Director
Name :	Mr. S.K. Jain
Designation :	Director
Name :	Mr. A. K. Mathur
Designation :	Director
Name :	Mr. K. Ravi Kumar
Designation :	Director (Power)
Name :	Mr. C.S. Verma
Designation :	Director (Finance)
Name :	Mr. N.K. Sinha
Designation :	Company Secretary
Name :	Mr. N. Gokulram
Designation :	Director
Name :	Mr. C. P. Singh
Designation :	Director [E R&D]

KEY EXECUTIVES

OTHER PERSONNEL :
Mr. Ashok K. Puri	Chairman and Managing Director
Mr. Ramji Rai	Engg. Research & Development Corporate Research & Development Corporate Monitoring, Materials Management Investment Planning, Manufacturing Technology
Mr. S.K. Jain	Human Resources Human Resource Development Institute Corporate Information Technology Corporate Communication
Mr. K. Ravi Kumar	Power Business Power Sector Regions-North, East, South & West Spares & Services Business
Mr. A.K. Mathur	Industrial Systems including Captive Power Plants & Products Business Transmission Business Transportation Business Ceramics Business Unit Component Fabrication Plant
Mr. C.S. Verma	Finance Internal Audit & Taxation Financial Services
Mr A. Bhattacharya	Corporate Planning & Development
Mr P.T.Deo	Heavy Electrical Equipment Plant Electrical Machines Repair Plant
Mr. R.K. Belapurkar	International Operations Business
Mr. C.P. Singh	Heavy Power Equipment Plant
Mr. S.K. Gupta	Heavy Electrical Equipment Plant Central Foundry Forge Plant Pollution Control Research Institute
Dr. V. Gopalakrishnan	High Pressure Boiler Plant Seamless Steel Tube Plant Industrial Valves Plant Piping Centre Welding Research Institute
Mr. V.K. Pande	Transmission Business
Mr. S.C. Vig	Power Sector - Marketing
Mr. R.K. Singh	Power Sector- Western Region
Mr. V. Viswanathan	Electronics Division Electronics Systems Division Industrial Systems Group
Mr. D. Indran	Power Sector-Southern Region
Mr. M.L. Sah	Power Sector-Eastern Region
Mr P.S. Kulshrestha	Corporate Human Resource Corporate Communication Corporate Productivity Health, Safety & Environment
Mr. R.K. Bhattacharya	Corporate Engg. & Product Development Advance Research Project Technology IJ censing & Joint Ventures
Mr. S. Sathyanarayanan	Boiler Auxiliaries Plant
Dr. V.K. Jain	Transformer Plant
Mr. Pankaj Sharma	Power Sector-Northern Region
Mr. B.P. Rao	Secretary, Management Committee

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31^st December, 2007

Category of Shareholder	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group^2
Indian
Central Government/ State Government(s)	331510400	67.72
Directors	3000	0.00
Public shareholding
Institutions
Mutual Funds/ UTI	23778739	4.86
Financial Institutions ^/Banks	557498	0.11
Insurance Companies	13536840	2.77
Foreign Institutional Investors	95659421	19.54
Non-institutions
Bodies Corporate	14500607	2.96
Individuals
Individuals -i. Individual shareholders holding nominal share capital up to Rs 0.100 Million	8273959	1.69
ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	1017815	0.21
Any Other (specify)
Non-Resident Indians	511314	0.10
Independent Directors	20	0.00
Overseas Corporate Bodies	235	0.00
Trusts	11143	0.00
Clearing Members	159009	0.03
GRAND TOTAL	489520000	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing and sale of Boilers, Hydro Turbines, Gas Turbines etc.

Products :

Item Code No.	Product Description
840210	Boilers other than parts
85023902	Complete generating sets including hydro turbines
84118206	Gas Turbine of thrust exceeding 115000 KW

PRODUCTION STATUS

BHOPAL

Particulars	Unit	Installed Capacity	Actual Production
Turbo Sets n Steam Turbines n Marine Turbine n Nuclear Turbine n Industrial Turbine	Nos. MW Nos. MW Nos. MW Nos. MW	30 3600 20 240 10 2360 00 00	0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Hydro Sets n Hydro Turbine n Hydro Generator	Nos. MW Nos. MW	120 7200 120 7200	120 6490 90 4970
Large Electrical Machine	Nos.	1000	2800
Traction Machine	Nos.	28500	25560
Power Transformers	Nos. MVA	650 120000	840 126720
Instrument Transformers	Nos.	2000	9490
Electrical Machines	Nos.	5500	856
Switchgear	Nos.	30000	3721
Capacitor	MVAR	32000	23360
Industrial Controlgear	Nos.	2500	0
Traction Controlgear	Set	2200	2280
Control Equipment	Nos.	6000	10060
Heat Exchangers	Nos. MT	520 11000	260 0
Control Panels	Nos.	6000	6010
Cathodic Protection System	Tonne	27000	0.00

JHANSI

Particulars	Unit	Installed Capacity	Actual Production
Power Transformers 33kv/ 132kv	Nos. MVA	1050 / 55000	960 / 61110
Other Transformers n Special Purpose Transformers n Traction Transformers n Instrument Transformers n ESP Transformers	Nos. Nos. Nos. Nos.	1400 1400 10000 5000	1610 1380 9370 7100
Bus Duct	Set	@
Diesel Shunters	Nos.	100	150
AC Locomotives	Nos.	300	0.00

HEEP HARDWAR

Particulars	Unit	Installed Capacity	Actual Production
Turbo Sets	MW	3500	48300
Hydro Sets	MW	6250	--
Electrical Machines	MW	450	1020
Gas Turbines	MW	@	--
Super Rapid Guns	Nos.	30	20

CFFP HARDWAR

Particulars	Unit	Installed Capacity	Actual Production
Steel Castings	MT	6000	40350
Steel Forging n Heavy Forgings n Medium Forgings	MT MT	2410 3000	7170 21140
Billets and Blooms	MT	4000	6010
N F Casting	MT	250	670

EDN – BANGALORE

Particulars	Unit	Installed Capacity	Actual Production
Energy Meters	Nos.	6000000	786960
Control Equipments	Cubicle	25000	26880
Power Devices	Nos.	120000	150160
Photovoltaics	KWS	20000	21040
Simulators	Sets	0.000	0.000

TRICHY

Particulars	Unit	Installed Capacity	Actual Production
Boilers	MT	1080000	2551560
Valves	MT Nos.	2712 0.000	27120 0.000
Nuclear Steam Generating Equipments	MW	382/500	XX
Armoured Recorvery Vehicles	Nos.	250	0.000

BAP – RANIPET

Particulars	Unit	Installed Capacity	Actual Production
Boiler Auxiliaries	MT	1180000	1299030

IVP –GOINDWAL

Particulars	Unit	Installed Capacity	Actual Production
Industrial Valves	MT Nos.	7880 0.000	9474.200 64260.000

EPD - BANGALORE

Particulars	Unit	Installed Capacity	Actual Production
Insulators and Bushings	CMT	62500	68760
Assembled Production	MT	0.000	99600
Ceralin	CMT	7450	10400
Ceralin (Assembled)	MT	0.000	22720

IP - JAGDISHPUR

Particulars	Unit	Installed Capacity	Actual Production
Insulators	CMT	60000	65897.000
Ceralin	MT	3300	6550.000
Ceralin (Assembled)	MT	0.000	16283.700

CFP - RUDRAPUR

Particulars	Unit	Installed Capacity	Actual Production
S W H S	Nos.	40000	16390
Solar Lanterns	Nos.	100000	45890
Bus Duct	MT	1000	--

GENERAL INFORMATION

Suppliers :

• Adarsh Electro Plating Works
• Aliasons Industries
• Arya Transformers Private Limited
• B.R. Associates Private Limited
• Bundel Khand Industries
• Copper Strips Private Limited
• Cyanides & Chemical Company
• Dynamic Process, Chennai
• Elephenta Engineering Works
• Emjay Industries
• Flxican Bellos & Hoses Private Limited
• G.T.I. Electroplating and Gultech Fabricators
• Heating Engineers
• Indian Metals & Alloy Mfg. Company
• Ishaan Industrial Corporation
• Jayashree Electron Private Limited
• King Fab.Viralimalai
• Madhya Pradesh Cupro Metals Private Limited
• Mahesh Welding Works
• Muthukumar Engineering Works
• Salem National Carbon Brush Products
• NKM Cables & Strips Private Limited
• Oriental Engg Works Private Limited
• Pooja Cables (P) Limited
• R. lndustries
• Rajshi Engineers
• Rajalakshmi Engineering Industries
• Rajni Fab
• Rakesh Engineering Industries
• Rakesh Engineering Works
• S. Dayal & Sons
• Saras Precision Tool (P) Limited
• Shree Cables & Conductors (Private) Limited
• St. Fathima Engineering Works
• Sugo Industries, Super Galvanizing Industries
• Surendra Engineering Works
• Union Prestress Private Limited
• Vanguard Industries
• Vankos & Company
• Wood & Insulation Products
• Yesha Electriclas Private Limited
• Yogya Enterprises

No. of Employees :

42124

Bankers :

• State Bank of India
• ABN AMRO Bank N. V.
• Bank of Baroda
• Canara Bank
• CITI Bank N.A.
• Corporation Bank
• Deutsche Bank AG
• HDFC Bank Limited
• ICICI Bank Limited
• IDBI Limited
• Punjab National Bank
• Standard Chartered Bank
• State Bank of Hyderabad
• State Bank of Travancore
• Syndicate Bank
• The Hongkong and Shanghai
• Banking Corporation Limited

Facilities :

Unsecured Loans
Credits for Assets taken on lease	859.600
Interest accrued and due on :
- State Government Loans	23.300
- Credits for Assets taken on lease	10.400
Total	893.300

Banking Relations :	Good
Auditors :
Name :	J C Bhalla & Company Chartered Accountants
Statutory Auditors :	· M.L. Purl & Company Chartered Accountants New Delhi · Alok Sharma & Company Chartered Accountants Varanasi · Arora & Choudhary Associates Chartered Accountants New Delhi · B.K. Ramdhyani & Company Chartered Accountants Bangalore · Demble Ramani & Company Chartered Accountants Nagpur · O.K. Rao & Company Chartered Accountants Hyderabad · Ghosh Khanna & Company Chartered Accountants New Delhi · Ghoshal & Ghosal Chartered Accountants Kolkata · HDSG & Associates Chartered Accountants New Delhi · Kalyanasundram & Company Chartered Accountants Ranipet · M. Sun & Company Chartered Accountants Chennai · R.L. Mehra & Company Chartered Accountants Amritsar · S. Daga & Company Chartered Accountants Hyderabad · S.P. Chopra & Company Chartered Accountants New Delhi · SKG & Company Chartered Accountants Mumbai · Sridhar & Santhanam Chartered Accountants Chennai · Tasky Associates Chartered Accountants Bhopal
Memberships :	Confederation of Indian Industry
Associates/Subsidiaries :	v All the Government of India Undertaking Companies v Power Plant Performance Improvement Limited v BHEL-GE Gas Turbine Services Limited v SWIL Limited v Tata Refractories Limited v Spectrum Power Generation Limited

CAPITAL STRUCTURE

As on 17.09.2007

Authorised Capital :

No. of Shares	Type	Value	Amount
2,000,000,000	Equity Shares	Rs.10/- each	Rs. 20000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
244760000	Equity Shares	Rs.10/- each	Rs. 2447.600 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		2447.600	2447.600	2447.600
3] Reserves & Surplus		85435.000	70566.176	57821.300
NETWORTH		87882.600	73013.776	60268.900
LOAN FUNDS
1] Secured Loans		0.000	5000.000	5000.000
2] Unsecured Loans		893.300	582.404	369.800
TOTAL BORROWING		893.300	5582.404	5369.800
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		88775.900	78596.180	65638.700
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		9887.400	9822.765	10442.400
Capital work-in-progress		3025.400	1845.718	953.200
INVESTMENT		82.900	82.926	89.500
Deferred tax assets		9351.600	6737.204	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	42176.700	37443.706	2961.100
	Sundry Debtors	96958.200	71680.649	59721.400
	Cash & Bank Balances	58089.100	41339.754	31778.600
	Other Current Assets	1997.000	844.951	0.000
	Loans & Advances	11408.700	11998.730	33991.500
Total Current Assets		210629.700	163307.790	128452.600
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	118978.700	88077.480	72489.900
	Provisions	25222.400	15122.743	28009.100
Total Current Liabilities		144201.100	103200.223	100499.000
Net Current Assets		66428.600	60107.567	54153.600
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		88775.900	78596.180	65638.700

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		172375.300	133740.300	107226.093
Other Income		10047.500	9329.300	--
Total Income		182422.800	143069.600	107226.093
Profit/(Loss) Before Tax		37360.700	25643.520	15816.356
Provision for Taxation		13213.700	8851.912	6282.309
Profit/(Loss) After Tax		24147.000	16791.608	9534.047
Earnings in Foreign Currency :
	Export of Goods	8606.500	5687.100
	Interest	3.600	0.200	7643.383
	Erection and other services	2207.400	1408.500
	Miscellaneous	141.600	0.500
Total Earnings		10959.100	7096.300	7643.383
Imports :
	Raw Materials	14198.800	12818.700
	Stores & Spares	8647.400	10052.100	17259.653
	Capital Goods	1595.500	701.000
Total Imports		24441.700	23571.800	17259.653
Expenditures :
	Consumption of stores and spares parts	101818.600	81465.200
	Salaries, Wages, Bonus, etc.	23689.500	18785.100
	Administrative, Selling and Distribution Expenses	14961.100	11700.500
	Interest	1718.600	2827.500	91209.526
	Depreciation & Amortization	433.300	587.500
	Other Expenditure	2729.700	2459.300
	Cost of Jobs done for Internal use	[283.600]	[363.800]
Total Expenditure		145067.200	117461.300	91209.526

QUARTERLY RESULTS

PARTICULARS	30.06.2007 (1^st Quarter)	30.09.2007 (2^nd Quarter)
Sales Turnover	32339.200	39653.600
Other Income	2063.200	5008.900
Total Income	34402.400	44662.500
Total Expenditure	29232.500	32701.600
Operating Profit	5169.900	11960.900
Interest	21.600	192.700
Gross Profit	5148.300	11768.200
Depreciation	689.100	694.400
Tax	1570.100	4197.200
Reported PAT	2889.100	6876.600

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt Equity Ratio	0.04	0.08	0.10
Long Term Debt Equity Ratio	0.04	0.08	0.10
Current Ratio	1.47	1.54	1.57
TURNOVER RATIOS
Fixed Assets	4.78	3.96	2.98
Inventory	4.78	4.43	4.21
Debtors	2.26	2.24	2.00
Interest Cover Ratio	87.22	44.65	20.43
Operating Profit Margin (%)	21.31	19.46	17.82
Profit Before Interest and Tax Margin (%)	19.87	17.79	15.75
Cash Profit Margin (%)	14.13	13.06	11.10
Adjusted Net Profit Margin (%)	12.70	11.39	9.03
Return on Capital Employed (%)	45.16	36.37	26.86
Return on Net Worth (%)	30.02	25.20	16.84

LOCAL AGENCY FURTHER INFORMATION

HISTORY :

Subject was wholly owned by the Government of India. On liberalisation, the government disinvested a portion of its share holding in December 1991 and February, 1992. Unit Trust of India, Bank of India, LIC and some insurance companies had purchased these shares. At present Government of India’s equity stake is 68%.

This company is the largest engineering enterprise of India. Its first plant was set up at Bhopal in 1956 under technical collaboration with AEI, UK followed by three more major plants at Hardwar, Hyderabad and Tiruchirapalli with Russian and Czechoslovak assistance.

The plants have been at the core of the company’s efforts to grow and diversify and become India’s leading engineering company. The company now has 14 manufacturing divisions, 8 service centres and 4 power sector regional centres, besides project sites spread all over India and abroad and also regional operations divisions in various state capitals in India for providing quick service to customers. The company manufactures over 180 products and meets the needs of core-sectors like power, industry, transmission, transportation (including railways), defense, telecommunications, oil business, etc. The Products of the company have established an enviable reputation for high quality and reliability.

The company has installed equipment for over 62,000 MW of power generation – for Utilities, Captive and Industrial users. It has supplied 2,00,000 MVA transformer capacity and sustained equipment operating in Transmission and Distribution network upto 400 KV-AC & DC.

This is due to the emphasis placed all along on designing, engineering and manufacturing to international standards by acquiring and assimilating some of the best technologies in the world from leading companies in USA, Europe and Japan together with technologies from its-own Research and Development Centres. The company has acquired ISO 9000 certification for its operations and has also adopted the concepts of Total Quality Management. Company’s major clients are State Electricity Boards, NTPC, World Bank aided projects, the Railways and a host of private companies. Its products are exported mainly to the Middle East and the far-east countries.

Recently the company’s performance has been affected due to long delays in placement of orders by the clients (on account of paucity of funds and industrial slowdown) and large VRS outgo.

Corporate profile: 

Subject is the largest engineering and manufacturing enterprise of its kind in India and is one of the leading international companies in the field of power equipment manufacture. The first plant of BHEL, set up at Bhopal in 1956, signalled the dawn of the Heavy Electrical Industry in India. In the sixties, three more major plants were set up at Haridwar, Hyderabad and Tiruchirapalli that form the core of the diversified product range, systems and services that BHEL offers today.

Subject’s range of services extends from project feasibility studies to after-sales-service, successfully meeting diverse needs through turnkey capability. The company has 14 manufacturing units, 4 power sector regions, 8 service centers and 15 regional offices, besides project sites spread all over India and abroad. BHEL has a well recognised track record of performance, making profits continuously since 1971-72 and paying dividends since 1976-77. 

Subject manufactures over 180 products under 30 major product groups and caters to core sectors of the Indian economy viz., Power Generation and Transmission, Industry, Transportation, Renewable Energy etc. The quality and reliability of its products is due to the emphasis on design, engineering and manufacturing to international standards by acquiring and adapting some of the best technologies from leading companies in the world, together with technologies developed in its own R&D centers. The Company has been constantly adapting itself to face the challenges thrown-up by the business environment. 

Subject has already attained ISO 9000 certification for quality management and all the manufacturing units /divisions have been upgraded to the latest ISO 9001-2000 version. BHEL has also secured ISO 14001 certification for environmental management systems & OHSAS -18001 certification for occupational health and safety management systems for all its units/divisions. BHEL is continuing its journey towards Business Excellence. 

Subject has committed to support the Global Compact & the set of core values enshrined in its ten principles in the areas of human rights, labour standards and environment. 

Subject's VISION: 

Subject's vision is to become 'a world-class engineering enterprise committed to enhancing stakeholder value'. 

BUSINESS SECTORS: 

Subject's operations are organised around three business sectors, namely Power, Industry including Transmission, Transportation & Renewable Energy, and International Operations. This enables BHEL to have a strong customer orientation and respond quickly to the changes in the market. 

POWER SECTOR: 

Power is the focal area 'or BHEL and comprises thermal, nuclear, gas, diesel and hydro businesses. BHEL has taken India from a position of total dependence on overseas sources to complete self-reliance in power plant equipment. Today, BHEL sets account for nearly 65% of the total installed power generating capacity in the country. Significantly these sets contribute 73% of the total power generated in the country. 

Subject has contracted for boilers and auxiliaries, turbo generator sets and associated controls, piping and station Control & Instrumentation of up to 500 MW unit rating and has the technology and capability to produce thermal sets of higher unit ratings including 1000 MW. 

Subject has access to technology for higher size gas turbines and can supply gas turbines of up to 279 MW unit size. It engineers and constructs custom built combined cycle power plants, Hydro sets of Francis, Pelton, Kaplan and bulb types for different head - discharge combinations, with matching generators, are also designed and manufactured by subject. 

To give a thrust to refurbishing and modernisation for plant performance improvement of old fossil fuel power plants and provide repair and service for GE design gas turbines, two joint venture companies have been floated with Siemens and GE respectively, which have completed nine full financial years of commercial operation. 

With a focus to provide a single window facility to the customers for services & spares of power generation equipments, a 'Spares & Services Business Group' has been created. 

INDUSTRY SECTOR INDUSTRIES: 

Subject manufactures and supplies major capital equipment and systems like captive power plants, centrifugal compressors, drive turbines, industrial boilers and auxiliaries, waste heat recovery boilers, gas turbines, pumps, heat exchangers, electric machines, valves, heavy castings and forgings, electrostatic precipitators, ID/FD fans, seamless pipes etc. These serve a number of industries like metallurgical, mining, cement, paper, fertilizers, refineries and petro-chemicals, etc. in addition to power utilities. BHEL has also emerged as a major supplier of controls and instrumentation systems, especially distributed digital control systems for various power plants and industries. 

OIL & GAS: 

Subject has the capability to supply complete onshore drilling rigs, super deep drilling rigs, desert rigs, mobile rigs, workover rigs and sub sea well heads. It supplies equipment / sub-assemblies for onshore drilling rigs viz. drawworks, rotary-table, travelling block, swivel, mast & sub structure, mud systems and rig electrics, BHEL also supplies X'mas tree valves & well heads up to a rating of 10,000 psi for onshore / offshore service and Casing Support System, Mudline Suspension System & Block Valves for offshore applications. 

TRANSMISSION: 

Subject supplies a wide range of products and systems for transmission & distribution applications. The products manufactured by BHEL include power transformers, instrument transformers, dry type transformers, shunt reactors, capacitors, vacuum and SF6 switchgear, gas insulated switchgear, ceramic insulators, etc. BHEL has developed and commercialized the country's first indigenous 36 kV Gas Insulated Substation (GIS) and has also bagged first order for its indigenously developed 145 kV GIS. 

For enhancing the power transfer capability and reducing transmission losses in 400 kV lines, Subject has indigenously developed and executed fixed series compensation schemes and has developed thyristor controlled series compensation scheme, involving thyristor controlled reactors, popularly known as Flexible AC Transmission System (FACTS). Subject has indigenously developed state of the art controlled shunt reactor for reactive power management of long transmission lines. With a strong engineering base, the company undertakes turnkey execution of substations upto 400 kV and has capability to execute 765 kV substations. High Voltage Direct Current (HVDC) systems have been supplied for economic transmission of bulk power over long distances. During the year, BHEL successfully bagged another order for installation of Balia-Bhiwadi HVDC link of 2500 MW capacity. 

TRANSPORTATION: 

Most of the trains in the Indian Railways, whether electric or diesel powered are equipped with BHEL's traction propulsion systems and controls.

The systems supplied are both with conventional DC drives and state of the art AC drives. India's first underground metro at Kolkata runs on drives and controls supplied by BHEL. The company also manufactures complete rolling stock i.e. electric locomotives up to -5000 HP, diesel electric locomotives from 350 HP to 3100 HP for both mainline and shunting duty applications. Further, BHEL undertakes retrofitting and overhauling of rolling stock. In the area of Urban transportation, BHEL is geared up for turnkey execution of electric trolley bus systems, light rail systems and metro systems. BHEL is contributing to the supply of electrics for EMUs for 1500V DC & 25 kV AC to Indian Railways. Almost all the EMUs in service are with electrics manufactured and supplied by BHEL. The company has also diversified into the area of track maintenance machines. BHEL is well poised to meet the emerging requirements of Indian Railways for higher horsepower locos for freight and passenger applications. 

RENEWABLE ENERGY: 

BHEL has been manufacturing & supplying various Renewable Energy systems and products. It includes Solar Energy systems namely PV modules, PV power plants, solar lanterns, street lighting, solar pumps and solar water heating systems. The Wind power generation business based on higher rating WEGs is being explored. 

INTERNATIONAL OPERATIONS: 

Subject has over the years established its references in 68 countries of the world spanning across all the six-inhabited continents. These references encompass almost the entire range of subject products and services covering turnkey Power projects of Thermal, Hydro, and Gas-based, Transmission Substation projects, Rehabilitation projects for Boilers, Power Stations etc., besides a wide variety of products, like Transformers, Reactors, Compressors, Valves and Oil field equipment, Electrostatic Precipitators, Photo Voltaic equipments, Insulators, Switchgears, Heat Exchangers, Castings & Forgings . Some of the major successes achieved by Subject have been in Gas based power projects in Oman, Saudi Arabia, Iraq, Libya, Bangladesh, Malaysia, Sri Lanka, China, Kazakhstan; Thermal power projects in Cyprus, Malta, Egypt, Malaysia, Sudan, Indonesia, Thailand; Hydro power plants in New Zealand, Azerbaijan, Bhutan, Nepal, Taiwan, Malaysia, Afghanistan, Tajikistan and Substation Projects & equipment in various countries of Africa, Europe, South & South East Asia. 

The company is taking a number of strategic business initiatives to fuel further growth in overseas business. This includes firmly establishing itself in target export markets, positioning of BHEL as a regular EPC Contractor in the global market and, exploring various opportunities for setting up overseas joint ventures etc. 

RESEARCH & DEVELOPMENT: 

The Corporate R&D Division at Hyderabad leads BHEL's research and development efforts, suitably supported by Engineering and R&D groups at the manufacturing divisions, BHEL's technology policy promotes a judicious mix of indigenous efforts and selective collaboration in essential areas.

The company continuously upgrades its technology and products to contemporary standards. 

Subject is one of the few companies worldwide involved in the development of Integrated Gasification Combined Cycle (IGCC) technology which will usher it in clean coal technology. BHEL has set up Asia's first 6.2 MW IGCC power plant with a indigenously designed pressurised fluidised bed gasifier.

Presently, development efforts are underway to set up a 125 MW IGCC power plant. 

Four Centres of Excellence for Computational Fluid Dynamics, Simulators, Permanent Magnet Machines and Surface Engineering have been established at BHEL's Corporate R&D Division, which has led to enhancement of BHEL's design and analysis capability and also enabled development of new and improved products. 

 Subject's R&D efforts have produced several new products. Some of the recent successful R&D products are:, advanced software package for Performance Analysis, Diagnostics and Optimisation (PADO) of power plants to optimize power plant operations during varying operating conditions; High Velocity Oxy Fuel coating process to increase life of hydro turbine an indigenously designed Bowl Mill of 91 tons per hour capacity for pulverising coal in thermal power stations; the largest size 60 MWe Bubbling Fluidised Bed Boiler for power generation; a new eco- friendly, cost effective and less hazardous chemical cleaning system process for boilers using an organic chemical 'Ethylene Diamine Tetra Acetic Acid; a six jet Pelton hydro turbine with a head of 789 metres for the 4x200 Parbati hydro electric project; the first totally impregnated turbo generator stator for a 250 MW turbo generator; a 260 MW steam turbine designed to suit combined cycle power plant application; Smart wall blowing system for cleaning of boiler tubes during operation-, Sonic system for detecting tube leaks in boilers,- a By-pass Over Fire Air (BOFA) system which reduces NOx emission from coal fired power stations by upto 50%. 

HUMAN RESOURCE DEVELOPMENT: 

The greatest strength of BHEL is its highly skilled and committed manpower.

Every employee is given an equal opportunity to develop himself and improve his position. Continuous training & retraining, career planning, a positive work culture and participative style of management have engendered development of a committed and motivated work force ready to take up the challenge of making BHEL a competitive world-class organization. 

As a process of linking HRM to market forces / stakeholder driven policies, an e-enabled Performance Management System has been established for executives - a new benchmark in promoting performance-led growth, To encourage individuals for capability building and for continuous improvement through creativity & innovation in every sphere of activity, an e-network based 'improvement Projects Rewards Scheme' (IMPRESS) has been introduced company wide. 

FINANCIAL HIGHLIGHTS: 

During the year the turnover increased by 29.01% to Rs. 18738950 Millions from Rs.145254.900 Millions in the previous year. Profit after tax registered an increase of 43.80% to Rs. 24147 Millions as against Re. 16791.600 Millions in the previous year. The increase in profit is driven by the higher volume of operations. Net worth of the company has gone up from Rs. 73013.800 Millions in  

2005-06 to Rs. 87882.600 Millions in 2006-07 registering an increase of 20.36%.

NAV per share has increased from Rs. 298.31 in 2005-06 to Rs. 359.06 in 2006-07. The company has also redeemed the bonds of Rs. 5000 Millions, on its maturity during the year. 

PERFORMANCE OF BUSINESS SEGMENTS: 

POWER SECTOR 

Orders worth Rs. 277300 Millions were booked by the Power Sector for supply and installation of 9724 MW for supply of generating equipment and also for spares & services. This is the highest ever orders booked by Power Sector, in any financial year, in financial and physical terms. 

The above includes orders for supply & installation of 12 Nos of 500 MW sets and 12 Nos of 1951250 MW sets and orders worth Rs. 32180 Millions towards Spare & Services business, highest ever in any financial year, in financial and physical terms. 

Following are the significant orders for main equipment: 

COAL (8925 MW): 

(a) Turnkey Orders: 

* 2x500 MW Mejia Phase II of Damodar Valley Corporation (DVC) 

* 1x250 MW Budge-Budge Unit-3 (Civil without Chimney & Switch Yard) of Calcutta Electricity Supply Company (CESC) 

 * 1x250 MW Santaldih from West Bengal Power Development Corporation Limited

(WBPDCL) 

(b) EPC Orders: 

* 1x500 MW Bellary Unit 2 of Karnataka Power Corporation Limited (KPCL) 

(c) Power Plant Packages: 

* 2x490 MW NCTPP Stage II, 1x500 MW Farakka Stage III and 2x500 MW Simhadri of National Thermal Power Corporation (NTPC) 

 * 250 MW each New Parli & Paras Expansion (BTG with electricals) of Maharashtra State Power Generation Corporation Limited (MSPGCL). 

* 1x500 MW Khaperkheda Expansion & 2X500 MW Bhusawal Expansion (BTG with Electricals) of MSPGCL. 

 * 2x250 MW Paricha Expansion & 2X250 MW Harduaganj Expansion (Including Civil) of Uttar Pradesh Rajya Vidyut Utpadan Nigam (UPRVUN). 

* 1x250 MW Raichur of KPCL. 

* 1x250 MW Trombay of TATA Power Company. 

* 1x250 MW Suratgarh & 1X195 MW Kota of Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL) 

* 1x500 MW Kothagudem Stg VI of Andhra Pradesh Power Generation Corporation (APGENCO) 

Other Thermal Orders: 

In addition to above, order for restart of Block II (740 MW) of Ramagiri Gas & Power Private Limited (RGPPL) was received during the year. 

HYDRO (799 MW Excluding pump motor sets of 180 MW): 

* 4x130 MW Parbati-III of National Hydro Power Corporation Limited (NHPC) 

 * 2x25 MW Nagarjunasagar TP Dam, 1x9 MW Pochampad and 4x30 MW Pulichintala of APGENCO. 

 * 3x33.3 MW UHL-III of Himachal Pradesh State Electricity Board (HPSEB) 

(Other Hydro Orders: Pump Motor Sets for Irrigation Canal Lift System) 

* 5x30 MW Kalwakurthy St. III Pump-Motor Sets from Gammon India 

* 4x7.5 MW Koil Sagar St. I & II Pump-motor sets from IVRCL Infrastructure Limited for Irrigation Schemes of Andhra Pradesh Irrigation Deptt. 

SSBG: 

Orders worth Rs. 28340 Millions for supply of Operation & Maintenance (O&M) spares and R&M Equipment as well as Rs 3840 Millions orders for services works including PPIB were received. This is the highest ever order received in SAS area in a year. 

PLANT PERFORMANCE IMPROVEMENT AND RENOVATION & MODERNISATION ORDERS: 

Plant Performance Improvement (PPI) orders for uprating of 5 units of Obra of 200 MW to 216 MW each, 2 units of Bhatinda TPS from 110 MW to 120 MW each, 5 units of Rihand HEP from 50 MW to 55 MW each were received during the year. 

Order for uprating of 5 units of Obra of 200 MW each to 216 MW was not only the largest Renovation & Modernisation (R&M) in the country but also the first order for uprating of 200 MW sets. 

Orders for Renovation & Modernisation (R&M) of 2x120 MW units at Gandhinagar TPS was also received during the year. 

COMMISSIONING: 

Power sector commissioned a record 49 sets totaling 7593 MW during the year within the country and abroad. This includes 20 domestic BHEL utility sets totaling 4041 MW. With this, BHEL built sets now account for 80781 MW, which is nearly 65% of Country's total installed capacity. Thermal sets commissioned during the year were Paricha - 4 (210 MW) & Unchahar-5 (210 MW) in Uttar Pradesh, Vindhyachal9 &10 (2x500 MW) in Madhya Pradesh, Korba (E)-1 (250 MW) in Chattisgarh, Rayalseema - 3 (210 MW) in Andhra Pradesh, Parli-1(250 MW) & a Nuclear set TAPP-3 (540 MW) in Maharashtra, Giral (125 MW) & Dholpur GT-1(110 MIN) in Rajasthan, Mejia - 5 (250 MW) in West Bengal and Kahalgaon - 5 (500 MW) in Bihar. Hydra sets namely Larji HEP (3x42 MW) in Himachal Pradesh, Bansagar HEP (2x-10 MW) & Madhikheda HEP (2x2O MW) in Madhya Pradesh and Sadar Sarovar - 6 HEP(200 MW) in Gujarat were also commissioned. 

In addition to above BHEL commissioned 8 sets totaling 1332 MW abroad Viz Gas based sets of (2x156 MW) at Western Mountain in Libya & 6 Hydro sets of 170 MW each at Tala in Bhutan. 14 Industrial sets of 480 MW were commissioned by Power Sector during the year, BHEL also erected & commissioned 7 Non BHEL make sets i.e. Ratnagiri Block II (740 MIN) and 4 sets of 250 MW each at Tend Hydro, Plant. 

PERFORMANCE OF BHEL UTILITY SETS: 

Performance of BHEL thermal sets during the year was best ever and better than the national average: 

* BHEL Thermal sets achieved the highest ever Plant Load Factor (PLF) of 78.3% an increase of 3.4% over last year and 1.5% higher than National Average of 76.8%.

* 195/200/210/250 and 500 MW BHEL thermal Sets which jointly form the backbone of Country's Thermal Power Generation generated 330635 MUs with pea performance and achieved highest ever PLF of 83.5%. The combined O.A. of these sets at 88.7% was also highest ever. 

 * 500 MW and 250 MW BHEL thermal sets recorded PLF of 83.9% and 92%, highest ever respectively during the year. 

 * 184 BHEL supplied Thermal sets (65% of total BHEL supplied sets in the country) achieved PLF of over 70%. Of these. 77 sets registered PLF of over 90%, 62 sets achieved PLF between 80%-90% and 45 sets achieved PLF between 70%-80%. 

 * 6 thermal sets achieved PLF above 100% viz. Dahanu 2, Vindhyachal-8, Sabarmati Ext.-1, Korba STPS-4, Unchahar-2, Dadn-4. 

 * Subject Coal Sets registered the Operating Availability (O.A.) of 847%. 

 * 124 Thermal Sets of BHEL make achieved O.A. higher than or equal to 90%, 4 sets had O,A, of 100%. 

 * 151 BHEL Thermal Sets clocked uninterrupted operation for more than 90 days during the year, out of which: - 44 sets ran twice continuously for more than 90 days. - 30 sets ran continuously for more than 200 days - Talcher 3 (500 MW) and Vindhyachal 8 (500 MW) ran continuously for one year without break. 

Subject continued its endeavour to render efficient customer service aimed at facilitating uninterrupted power supply and keeping power plants in good running condition. During the yea, Power Sector overhauled 126 thermal utilities and industrial sets including 3 non BHEL sets covering various products e.g. Boilers, TGs and Auxiliaries. 29 Hydro sets were also overhauled during the year. 

Industry Sector: 

Industry Sector achieved the highest ever order-booking of Rs 60100 Millions in FY 2006-07 against Rs 47280 Millions recorded in the previous year. 

 * The major orders for Captive power plants include: 

- 99 MW CPP from Bharat Oman Refinery, Bina (MP), on LSTK basis which is the single largest order secured by CPP group. This is for the first time in India that a power plant based on 100% pet coke is being set up. BHEL has now become a proud member along with only two other international companies with the capability to engineer and supply 100% pet coke fired CFBC boilers by securing this prestigious order. 

- 21 MW Cogeneration plant comprising Fr 5 Gas Turbine and 80 TPH HRSG for Bongaigon Refinery. 

- 1xFr5 GTG based Cogeneration plant on LSTIK basis for IOCL Haldia Refinery-Phase III in West Bengal. 

- 1x80 MW BTO Package from Hindustan Zinc Limited in Rajasthan. 

- Fr. 9E GTG set from Essar Group at Hazira, Gujarat. 

- 3x36.8 MW STG for CPP at IOCL Panipat, for L&T. 

- 1x120 MW BTG set for Tata Jojobera Unit 5 and for 1x-120 MW STG set for TISCO's phase 6 expansion at Jamshedpur from Tata Power Company Limited 

- 1x150TPH AFBC Boiler for Jai Prakash Industry Limited for their Chunar Plant in Uttar Pradesh. 

 - 1x48 MW STG set for Shriram Alkalies and Chemicals in Gujarat. 

- 2x15 MW STG set for AGO Limited, Bargarh in Orissa. 

 - 135 TPH CFBC Boiler for Gujarat Ambuja Cements Limited, Ambujanagar in  

Gujarat. 

- 1x-125 TPH AFBC Boiler for Jaiprakash Associated Limited for their Dalla Cement Plant in Uttar Pradesh. 

- 1x25 MW STG set for ACC Limited, Wadi in Karnataka  

- 1x40 MW STG set for Thermax Limited for Crescent Power Limited West Bengal. 

* Transportation business: 

Major Orders Secured: 

* Traction electrics for 3-phase 6000 HIP electric Locos. 

* 91 sets of traction electrics for EMU/MEMU. 

* Traction electrics for Diesel Electric Locos. 

* 17 nos. Shunting Locomotives. 

* Industrial products business: 

The major orders secured are: 

* Industrial Products (Electrical): 

- All time high order for 1301 nos motors booked. This includes orders for HT motors from major Cement manufacturers like Grasim, JP, ACC, GACL etc., and special large sized slow speed pressurized synchronous motors (3450kW/18P) for refineries. 

- New H Compact series energy efficient HT motors introduced. Orders for 25 nos procured and commercial production started by Bhopal. 

 * Industrial Products (Mechanical): - Order for Recycle Gas compressor from Bharat Oman Refinery at Bina in Madhya Pradesh. 

- Order for BCL406B+ST Recycle gas compressor from IOCL Haldia, West Bengal through M/s. Punj Lloyd. 

- All time high order-booking of Well Heads and X-Mas tree valves. 

* Transmission Business: 

The major orders won against competition from national/ international players are as follows: 

* Secured order for +/-500 KV 2500 MW Balia- Bhiwadi HVDC Project from POWERGRID. 

* Major orders for EHV Substations/Switchyards: 

- Orders secured from PGCIL 400/220 kV Wardha Substation (New) and extensions of 400 kV Substations at Sochi, Akola and Aurangabad under Sipat Stage-II Supplementary Transmission System. 

 - An order from WBSEB for extension/refurbishment of 400 kV Substation at Durgapur. 

- An order secured from Power Grid Corporation of India Limited for 400 kV Agra, Bhiwadi & Moga substation extensions with shunt reactors associated with NR System Strengthening Scheme-V. 

- UPPCL: an order for setting up 220 kV Substations at Rampur and Gajraula. 

Following Orders received in the area of new indigenous technologies in Transmission: 

* First commercial Order for 145 kV GIS from APTRANSCO. 

* First commercial Order for 1x80 MVAr Controlled Shunt Reactor at Karad from MAHATRANSCO. 

Major Orders received for transformers are: 

 * 15 nos. 100 MVA, 220 kV Auto Transformers to KPTCL. 

* 2 nos. 315 MVA Generator Transformers, 1 No. 315 MVA Auto Transformer, 2 Nos. 50 MVAr Shunt Reactors, 2 Nos. 50 MVA Station Transformers & 4 Nos. 20 MVA Unit Auxiliary Transformers from Punj Llyod's for RRVUNL, Chhabra project. 

* 12 nos. Power transformers and Reactors to PGCIL. 

 * 3 nos. Power transformers to NTPC. 

* 1070 nos. 11 KV VCB Kiosks to various Rajasthan State Govt Distribution companies. 

* PM&CR - CPP Project Commissioning Highlights: 

- 750 MW CPPs commissioned in 2006-07 as against 523 MW in the previous year, a growth of 43%. 

 International Business: 

 * In International Business, BHEL secured physical export orders of Rs.19030 Millions during the year in comparison to an average yearly order book of Rs.12750 Millions of the last five years. 

 * The year witnessed significant steps towards globalization with the receipt of orders for Power Equipment for over 900 MW of power projects and 5600 MVA of transformer capacity, highest ever, in the Transmission sector overseas, spread over ten countries besides successful forays in host of new market segments. 

* Major Achievements during 2006-07: 

* During the year BHEL secured following prestigious orders: 

 * Second export order for Gas Turbine based power plant secured for 240 MW Gas Turbine Power Plant at Siddhirganj, Bangladesh from Electricity Generation Company of Bangladesh on EPC basis. This project is funded by the Asian Development Bank. The earlier order for a 120 MW Gas Turbine Power Plant at Baghabari was successfully executed by BHEL and the plant is giving excellent performance for the last five years. 

* A major breakthrough in IPP segment was achieved by securing an order from MJI, Jordan for 500 MW Gas Turbine based Power Plant on EPC basis. 

 * BHEL secured its first overseas order for Gas Turbines for Co-generation application with capacity of 2x26 MW, for Oman Refinery Company, Oman. 

 * First-ever export order from Tajikistan for R&M & upgrading of 2x3.7 MW Varzob Hydro Project secured from Barji Tajik, Tajikistan. This is a maiden order from Tajikistan. 

 * First-ever order for Compressors from France secured from Grande Paroisse, France (a Total Group Company); this is the first order for compressors from a European company for a Urea Plant in France and will help BHEL in creating a reference for compressors in Europe. 

* Largest export order for Transformers - 14 nos. 220 kV, 125 MVA & 9 nos.

220kV, 125 MVA Transformers secured from EETC, Egypt. This is the single-largest transformer order secured by BHEL and also the first order for transformers from Egypt. 

 * First-ever export order for a Substation from Afghanistan for 220kV Kabul Substation secured from Power Grid Corporation of India Limited 

 * First-ever export order for Substations from Bangladesh for 220 kV Baghabari & Ishurdi Substations order secured from Power Grid Corporation of Bangladesh Limited The project is funded by Asian Development Bank. 

 * Second consecutive export order from Ethiopia for 220kV substations secured from EEPCO Ethiopia strengthening BHEL's presence in Ethiopia. This project is being financed through Kuwait-fund. 

 * First export order for transformers from Sudan-6 nos. 220 kV, 100 MVA transformers and 2 nos. 15 MVAR Reactors for NEC Sudan's Singa Gadaref Transmission line project.  

 * First export order for Solar Systems received from Sweden - the order from PV Enterprise, Sweden is the maiden order for PV modules from Sweden.

Also, largest export order for Solar Systems secured from S.E. Projects, Italy. 

 * First export order from Oman for Wellheads secured for Daleel Petroleum Company. 

* Other notable export orders include rehabilitation of Devighat Hydro Power Plant (3x4.7 MW), Nepal and repeat orders for Shunt Reactors & Instrument Transformers from Greece. 

* Continued focus on After-Sales Services led to orders for spares & services from Oman, Indonesia, Kazakhstan, Germany, Libya, Philippines, Surinam, Malaysia and Sri Lanka. 

Execution of Major overseas orders: 

* In the area of overseas project execution, a significant landmark was achieved with the commissioning of the remaining two Gas Turbine generating units at the 600 MW Western Mountain Power Project in Libya. With this, the Western Mountain Project has become the highest capacity Gas-based power station, erected and commissioned by BHEL. Significantly, the Turbines exceeded the guaranteed performance in the performance tests. 

* Successfully supplied and commissioned 1x25 MVA & 1x15MVA transformer for NVEBS Suriname, creating maiden reference in South America. 

 * Commissioned largest single phase transformer bank of 405 MVA capacity overseas with 3 x 135 MVA single phase transformers in Zambia for generation. Supply of all 1 0x1 35 MVA Transformers successfully completed. 

 * 6th Unit of 120 MW Tripoli West Power Station, Libya successfully overhauled. The unit supplied by BHEL in 1970s' is giving excellent performance even today. 

Capital Investment: 

C. CAPITAL INVESTMENT: 

* CAPITAL INVESTMENT FOR THE YEAR 2006-07: 

BHEL has incurred a capital investment of Rs. 3620 Millions during the year 2006-07 towards augmentation of manufacturing capacity and modernisation of the facilities, in manufacturing units and at power project sites. Out of this, an investment of Rs. 3250 Millions was made towards acquiring latest 'state of the art' manufacturing facilities for increasing production capacity and upgrading the process technology of various products in various manufacturing units and Rs. 370 Millions was for modernizing and upgrading tools & plants at various power project sites towards capability building for the enhanced erection load & shorter commissioning schedules.

In addition, an amount of Rs. 420 Millions was spent on re-building of existing assets to enhance their life, accuracy and productivity. 

 * CAPITAL INVESTMENT DURING 10th PLAN: 

During the 10th plan period (Ended on 31.03.07), BHEL has geared up to meet the anticipated market growth and accordingly manufacturing capacity expansion programme from existing 6000 MW to 10000 MW / Annum was taken up with a total capital expenditure of Rs 9160 Millions. Various capital schemes of major thermal, Gas and Hydro products have completed / under advance stage of completion. With this expansion BHEL is fully geared up to supply Steam Turbine/ Generator sets upto 800 / 1000 MW and matching sub critical / supercritical boilers and associated equipments etc. 

* CAPITAL INVESTMENT PLANNED DURING 11th PLAN: 

During the 11th plan, BHEL has embarked upon a very ambitious plan of enhancing manufacturing capacity from 10000 MW to 15000 MW / Annum with a total investment of Rs 32000 Millions. Of this, Rs. 24140 Millions will be spent to upgrade facilities and augment capacities of manufacturing units and Rs. 7860 Millions for addition of power plant site facilities, Besides capacity augmentation of existing products in the areas of Thermal, Gas, Hydro and Nuclear, other major areas of investment include the facilities for Nuclear Turbines up to 700/1000 MW, Advance Class Gas turbines (9FB), 765 KV transformers and other associated distribution and transmission equipments, Capacity augmentation of transformers from 20500 MVA to 38500 MVA etc. 

D. JOINT VENTURES: 

The two Joint Venture Companies prornoted by BHEL viz, 'BHEL-GE Gas Turbine Services Limited,' (BGGTS) with GE, USA for repair & servicing of GE designed Gas Turbines and 'Powerplant Performance Improvement Limited' (PPIL) with Siemens AG, Germany for plant performance improvement of old fossil fuel power plants, have now completed nine full financial years of operation. 

a) BGGTS: 

BGGTS achieved a sales turnover of Rs. 2940 Millions during the year 2006-07 with a profit after tax of Rs, 370 Millions. Orders for Rs 2970 Millions were booked by BGGTS during the year. BGGTS successfully completed gas turbine servicing comprising of a total of 58 nos Major Inspections, Hot Gas Path Inspection and Combustion Inspection for various customers like Pragati Power, NTPC-Kawas, TNEB, RIL-Jamnagar, ONGC-Hazira, GIPCL-Baroda etc., besides supplying spare parts to various customers. BGGTS also secured export orders for repair of FR 6 and Fr 9 gas turbine components and an order from BPDB, Bangladesh to rehabilitate Fr 9 gas turbine unit. During the year 2006-07, BGGTS paid two interim dividends totaling to 510%. BGGTS has also successfully completed re-certification audit done by DNV and the ISO 9001, ISO 14001 & OHSAS 18001 certification has been extended till 2009 for the repair facility. 

b) PPIL: 

After completing the refurbishment of the 5 units at DPL, Durgapur, PPIL has achieved closure of the contract during the year. Settlement of outstanding issues and collection of withheld payments for other contracts like KTPS/ Kothagudem and CSEB, Korba have also progressed. Inspite of various programmes initiated by Govt. of India encouraging R&M of old thermal power plants, the business in this area has not materialized in the country, to the extent envisaged at the time of formation of PPIL. This has resulted in the declining performance of PPIL over the years. 

Awards won by BHEL Units and Employees: 

* Prime Minister's Shram Awards (2004) (given by Ministry of Labour): 

Prime Minister's Shram Awards are given to workmen in Private and Public Sector of central & state Govts. in recognition of their distinguished performances, innovative abilities, outstanding contribution in the field of Productivity and exhibition of exceptional courage and presence of mind. 

Among Public & Private Sector companies in the country, BHEL employees have won maximum number of Prime Minister's Shram Awards (2004). Significantly, the only 'Shram Bhushan' awarded for the year has been won by BHEL employee. In addition, seven Shram awards have been won by 13 employees of BHEL from its units located at Trichy, Hyderabad, Haridwar and Bhopal. 

* Vishwakarma Rashtriya Puraskar (given by Ministry of Labour):  

Vishwakarma Rashtriya Puraskars are given to recognise outstanding contribution made by a worker or a group of workers in an organization through his/ her/their suggestions to improve Productivity.  

Eight employees of BHEL Haridwar unit have won three awards during 2006-07.

A total of 28 Vishwakarma Rashtriya Puraskars were declared by Ministry of Labour.  

 * National Safety Awards (given by Ministry of Labour): 

National Safety Awards are given to recognise good safety performance on the part of Industrial understanding and to stimulate and maintain interest of both the management and the workers in accident prevention programmes. 

National Safety Awards in the winner category (Tiruchy-1 & EPD-1) have been won by BHEL during 2006-07. 

* Energy Awards: 

Confederation of Indian Industries (CII) has awarded the prestigious 'National Award for Excellence in Energy Management 2006' to SSTP-Trichy for the energy conservation initiatives undertaken. 

CFFP-Haridwar was honoured with 'Best Energy Conservation Implementation Gold Award' under 'Indira Gandhi Memorial National Award Series for Excellence in Indian Industries'. 

* Excel Awards: 

Excel Awards are given in-house to recognize, reward & place on record the outstanding contribution made by the employees towards growth & profitability of the company & to the society. 

* IMPRESS Scheme: 

The 'IMPRESS' scheme was given special thrust to harness untapped potential in the organization for achieving higher efficiency in conversion of basic inputs like material and capital into saleable products and services.

During the year, about 9500 improvement projects have been registered taking the total number to 23,700 since introduction of the scheme. Out of these, about 63% of the projects have been completed and implemented realising a savings of Rs. 1770 Millions during 2006-07 taking the total savings to Rs. 3980 Millions since inception. 4885 Improvement Projects have been rewarded under IMPRESS during the year in various units. 

MERGERS & ACQUISITIONS: 

BHEL has been actively pursuing an M&A strategy within the Navaratna guidelines. The company is looking at companies which offer access to new technologies and/or markets and also at opportunities to rapidly ramp up capacities to take advantage of the huge growth potential in its target markets. The company had modified the articles of association to equip itself to address such opportunities. A high level committee has been tormed to appraise the Board on the subject. 

The company has provided management support to BPCL (Bharat Pumps & Compressors Limited) and also discussing with GOI on takeover of BHPV (Bharat Heavy Plates & Vessels). 

Power Sector: 

The Indian economy witnessed robust growth during 200607 for the fourth year in succession. According to the advance estimates by the Central Statistical Organisation (CSO), real Gross Domestic Product (GDP) growth is expected to accelerate from 9.0 per cent in 2005-06 to 9.2 per cent in 2006-07. The acceleration in growth during 2006-07 was driven by the continued momentum in the services and manufacturing sectors. 

To ensure that Indian economy marches at an accelerated pace and is not hindered by infrastructural constraints especially from the power sector, the Government has accorded a high priority to the development of infrastructure including power sector in the country and capacity addition in generation, distribution reforms and rural electrification are the top most priorities of the Government of India. 

The country is planning to add 78,000 MW in XI Plan and over 85,000 MW in XII plan period. This is going to provide continued growth opportunities for the company as power equipment is the major business of BHEL, As per the Report of the Expert Committee on Integrated Energy Policy, the projected requirement of installed capacity may go up to 9,60,000 MW by 2031-32 under a 9% GDP scenario. 

 All segments of power sector are experiencing positive movements. While Coal is likely to continue to be the dominant fuel for the next 20-25 years, Ministry of Power is also working on strategies to improve hydro- thermal mix and developing hydro power at a faster pace, The Nuclear energy generation is also likely to get a boost after signing of the Indo-US Nuclear Agreement. 

T&D is now receiving a greater focus than ever before, as this sector has traditionally lagged behind the generation sector. Open access policy articulated in the Electricity Act would facilitate development of secure and economic national and regional grids, and also build in redundancy levels and margins based on international standards and practices. 

The emergence of Services sector, both in Generation and T&D areas, would provide a number of opportunities for BHEL in EPC, R&M, O&M, Overhauling, Power Plant Improvement Services etc. 

Industry Sector: 

Industrial production continued its growth momentum during April-February 2006-07, with growth accelerating to 11.1 per cent from 8.1 per cent an year ago. Growth during April-February 2006-07 was the highest since 1995-96. The manufacturing sector remained the key driver of industrial growth.

The robust performance of the manufacturing sector was largely led by 'Machinery and Equipments', 'Basic metal and alloy industries' etc. 

The envisaged healthy GDP growth will promote growth in industry sector with increased activity in infrastructure sectors such as, Oil & Gas, Steel, Petrochemicals, refineries etc. These developments provide ample opportunities for capital equipment manufacturers like BHEL.  

K. POSITIONING FOR THE FUTURE: 

* BHEL has crafted a 'Strategic Plan 2012' that will enable it's turnover to grow from US $4 billion to 10 billion by 2011-12. The plan focuses on ensuring a sustainable profitable growth for the company over the next five years. The growth plans for the company in the next five years are expected to be driven by capacity and capability enhancement that will leverage the company's efforts in its core area of power, supported by industry, transportation, transmission, exports and spares & services businesses.  

* The company is taking long strides to become a major global player by further enhancing its presence in international markets and it has identified overseas business as one of its future thrust areas. The company is looking at exports as one of the key growth-drivers and is targeting a six-fold increase in physical exports from the current levels. Mergers & Acquisitions (M&A) route would be pursued to avail inorganic growth opportunities in order to enlarge the company's operations both in domestic as well as export markets. 

 * With the establishment of 10,000 MW p.a. manufacturing capacity by the end of 2007, BHEL has factored into its plan an enhancement to 15,000 MW p.a. by Dec 2009 at an investment of around Rs. 32000 Millions. Having already tied up technology to produce higher rating super-critical thermal sets, this will further strengthen the position of the company in the domestic market. 

* Subject has put in place necessary technology tie-ups for next generation thermal power plants base on supercritical technologies in the range of 800-1000 MW unit ratings having higher efficiencies and reduced emissions.

Subject is also ready with introduction of Advanced class Gas Turbines as Power projects based on higher rating large size Gas Turbines are expected in the market place. Further, introduction of higher rating hydro turbine generator sets have also been planned. 

* Spares & services business is expected to be the next growth opportunity for the company where revenues are expected to increase four-fold from present levels. The marketing activities of spares & services have already been consolidated and systems capability is being strengthened to address various market segments. BHEL is well positioned to undertake Renovation & Modernisation in view of the fact that it has supplied nearly 65% of India's total installed power generating capacity. Another significant advantage for BHEL is its established service network, spread across the country, Proximity of service centers, which helps in reducing plant downtime, is a major structural advantage.  

* The engineering & technology character of the organization shall be enhanced with focus on innovation and R&D, where R&D spend will be increased by at least six times. 

 * In order to retain competitiveness, various capability-building initiatives like Design-to-cost, Purchase and Supply Management, Lean Manufacturing taken up at Bhopal and Hyderabad plants will be put in place across the company. 

* The business model being adopted will give BHEL the ability to cope with complexities, risks and continual change while defending market share in the core business of power sector. 

The company is in trade terms with:-

v 2M Company

v 21^st Century Fabricators

v A Bond Strands Private Limited

v A-1 Industries

v AB Metal Formers (Private) Limited

v Acme Forgings Private Limited

v Aerovent Projects Private Limited

v Ag Measurematics Private Limited

v Agile Heavy Engineering Private Limited

v Ahsanali Engineering Workshop

v Aishu Castings Private Limited

v Ajantha Fabrication Works

v Ajmer Minerals & Grinding Company

v Alert Engineering Enterprises

v Aliasons Industries

v Allied Rubber Products

v Altec Fabricators

v Alcoat Aplicators Private Limited

v Browns Hitech Structures Private Limited

v Aishyu Castings Private Limited

v G. S. Alloys Castings Private Limited

v GEI Godavari Engineering Limited

v Hyderabad Heavy Engineering Private Limited

v T. M. Private Limited

v Krishna Engineering Company (Private) Limited

v SOL Engineers Limited

v Patny Systems Private Limited

v Rama Ferro Alloys & Finance Private Limited

v Thermopads Private Limited

v Vikas Machino Fabs (Private) Limited

v Voltamp Transformers Private Limited

v Vansanti Heavy Machining (Private) Limited

v Trimech Engineering Private Limited

v Uppar Ferrocast Private Limited

v Sri Balamurgan Engineering Works Private Limited

v G. B. Engineering Enterprises Private Limited

v Ghaziabad Ispat Udyog (Private) Limited

v Chhari Electricals (Private) Limited

v Hydropack (India) Private Limited

v Acme Forgings (Private) Limited

v Popular Swichtgear (Private) Limited

v M. P. Electricals Limited

v M. J. Patel (India) Limited

v Pearl Insulations Limited

v Rajasthan Coach Builders Private Limited

v Super Forgings & Steels Limited

v Benchmark Electronics Systems Limited

v Associated Cables Limited

v V. Valves Limited

v Reva Industries Limited

v Techno Electric & Engineering Company Limited

v Techno Fab Engineering Limited

v Spirax Marshall Limited

Subject has been accredited with ISO 9001 and ISO 9002 Certifications.

The company’s fixed assets of important value includes freehold land, leasehold land, roads, bridges and culverts, buildings, railway siding, plant and machinery, construction equipment, electrical installations, vehicles, furniture and fixtures, office and other equipments, trade marks, patents and designs, electronic data processing equipments, etc.

AS PER WEBSITE

Profile

BHEL is the largest engineering and manufacturing enterprise in India in the energy-related/infrastructure sector, today. BHEL was established more than 40 years ago, ushering in the indigenous Heavy Electrical Equipment industry in India - a dream that has been more than realized with a well-recognized track record of performance. The company has been earning profits continuously since 1971-72 and paying dividends since 1976-77. 

BHEL manufactures over 180 products under 30 major product groups and caters to core sectors of the Indian Economy viz., Power Generation & Transmission, Industry, Transportation, Telecommunication, Renewable Energy, etc. The wide network of BHEL's 14 manufacturing divisions, four Power Sector regional centres, over 100 project sites, eight service centres and 18 regional offices, enables the Company to promptly serve its customers and provide them with suitable products, systems and services -- efficiently and at competitive prices. The high level of quality & reliability of its products is due to the emphasis on design, engineering and manufacturing to international standards by acquiring and adapting some of the best technologies from leading companies in the world, together with technologies developed in its own R&D centres.

BHEL has acquired certifications to Quality Management Systems (ISO 9001), Environmental Management Systems (ISO 14001) and Occupational Health & Safety Management Systems (OHSAS 18001) and is also well on its journey towards Total Quality Management.

  BHEL has

Installed equipment for over 90,000 MW of power generation -- for Utilities, Captive and Industrial users.

Supplied over 2,25,000 MVA transformer capacity and other equipment operating in Transmission & Distribution network up to 400 kV (AC & DC).

Supplied over 25,000 Motors with Drive Control System to Power projects, Petrochemicals, Refineries, Steel, Aluminum, Fertilizer, Cement plants, etc.

Supplied Traction electrics and AC/DC locos to power over 12,000 kms Railway network.

Supplied over one million Valves to Power Plants and other Industries.

BHEL's operations are organised around three business sectors, namely Power, Industry - including Transmission, Transportation, Telecommunication & Renewable Energy - and Overseas Business. This enables BHEL to have a strong customer orientation, to be sensitive to his needs and respond quickly to the changes in the market.

BHEL's vision is to become a world-class engineering enterprise, committed to enhancing stakeholder value. The company is striving to give shape to its aspirations and fulfill the expectations of the country to become a global player.

The greatest strength of BHEL is its highly skilled and committed 42,600 employees. Every employee is given an equal opportunity to develop himself and grow in his career. Continuous training and retraining, career planning, a positive work culture and participative style of management – all these have engendered development of a committed and motivated workforce setting new benchmarks in terms of productivity, quality and responsiveness.

Press Release

4-Jan-2008

BHEL demonstrates International Competitiveness, Bags World Bank funded export order for transformers from Azerbaijan

Bharat Heavy Electricals Limited, BHEL, has achieved another breakthrough in the CIS region by securing a prestigious export order for transformers from Azerbaijan.

Won in the face of stiff international competitive bidding, ICB, the World Bank funded contract has been placed on BHEL by Azerenerji. BHEL has earlier successfully executed several contracts in Azerbaijan including rehabilitation and supply of a hydrogenerator package for Mingechaur Hydro Power Plant and supply of substation equipment and electrics for the steel plant of Baku Steel Company.

BHELs scope in the contract envisages manufacture, supply and supervision of erection and commissioning of 330 kV class 240 MVA and 110 kV class, 75 MVA and 63 MVA rating transformers to be installed in Azerenerjis Power Transmission project. The company has already supplied transformers to more than 20 countries around the world including Greece, Egypt, Libya, Oman, Malaysia, Saudi Arabia and Zambia.

BHEL has also executed and is presently executing contracts in Russia, Kazakhstan and Tajikistan. The CIS region has been identified by BHEL as one of the potential regions for enhancing overseas business.

Riding high on its dominant domestic position, BHEL is taking long strides to become a major global player by enhancing its presence in international markets. It has identified overseas business as one of its thrust areas as part of its Strategic Plan 2012. The company is targeting a six fold increase in its physical exports from the current levels by 2012.

The high growth momentum gained by the company in international business in the past two years is poised to further stimulate growth in its export business by consolidation in existing markets and widening its export base through expansion of its existing basket of products and services and by entering new markets in the current fiscal and future. BHEL has during the year already achieved major successes in overseas markets including, Captive power project in Indonesia, Gas Turbine Generating units in UAE, Rehabilitation Project in Libya, entry into a host of new market segments like Motors from Kuwait and UAE, Wellheads from Myanmar and Soot Blowers in Australia besides orders for Transmission equipment from Greece.

Over the years, BHEL has established its footprints in all the six inhabited continents of the world, spanning 70 countries and its technical competence has earned worldwide acclaim.

8-Oct-2007

BHEL employees win 3 Vishwakarma National Awards for 2006; Company’s cumulative awards reach the century figure; BHEL Units also bag 3 National Safety Awards

For their innovations, employees of Bharat Heavy Electricals Limited (BHEL) have once again bagged 3 'Vishwakarma Rashtriya Puraskars' for the year 2006, among a host of public and private sector companies in the country. With this, the total number of Vishwakarma awards won by BHEL employees has gone up to a 100 awards.

These Vishwakarma Rashtriya Puraskars have been shared by 8 employees from BHEL’s Haridwar, Bhopal and Trichy units, for innovative suggestions leading to cost reduction, higher productivity, safety and quality of products.

In addition, 3 'National Safety Awards' have been won by BHEL's Electronics Division and Electroporcelains Division, Bangalore for outstanding achievements in terms of the longest accident free period and lowest accident frequency rate at their works.

The awards were presented by Mr. Oscar Fernandes, Union Minister of State for Labour & Employment (Independent Charge) at a function in New Delhi.

Significantly, BHEL and its employees have been winning both these prestigious national awards, instituted by the Government of India, Ministry of Labour, consistently, since their inception.

BHEL has also achieved substantial savings of Rs.1,770 Million during fiscal 2006-07, as a result of the implementation of an Improvement Projects Rewards Scheme (IMPRESS). Aimed at encouraging individuals to take up improvement projects for capability building and for continuous improvement in every sphere of activity, the scheme was introduced company-wide in 2005-06. The scheme is e-network based and provides weightage for various aspects like relevance to the department, innovation/creativity, meeting targets, institutionalization, deployability and financial impact.

During 2006-07, the scheme was given special thrust to harness untapped potential in the organization for achieving higher efficiency in conversion of basic inputs like material and capital into saleable products and services. During the year, about 9,500 improvement projects were registered taking the total number to 23,700 since the introduction of the scheme. Out of these, about 63% of the projects have been completed and implemented. With this, the total savings from the scheme so far have risen to Rs.3,980 Million since its inception.

8-Oct-2007

BHEL wins Rs.3,940 Million Turnkey Contract for Captive Power Plant

Under international competitive bidding (ICB), engineering major Bharat Heavy Electricals Limited (BHEL) has won a turnkey contract for setting up a captive power plant at a steel plant in Andhra Pradesh.

The power plant will be equipped with a state-of-the-art multi-fuel fired Boiler, designed to utilise Blast Furnace gas, a waste gas emanating from the steel making process, as well as coal, resulting in appreciable saving of fuel.

Valued at around Rs.3,940 Million, the order has been placed on the company by Rashtriya Ispat Nigam Limted (RINL) for the expansion project of its Vizag Steel Plant in Andhra Pradesh.

The Vizag Steel Plant is already equipped with a BHEL supplied Captive Power Plant which has been operating successfully for over ten years. The customer has once again opted to source a captive power plant from BHEL reflecting its confidence in BHEL's capabilities.

The power plant will meet the power requirement of the upcoming expansion project of the steel plant and is slated for commissioning in a tight schedule of 26 months.

BHEL's scope of work in the project envisages design, engineering, manufacture, supply, erection and commissioning of the captive power plant, in addition to complete civil works. Major equipment to be supplied includes; one 67.5 MW Steam Turbine Generator set of extraction condensing type designed to suit the specific process requirement of the customer and a multi-fuel fired Boiler of 330 tons per hour capacity with Controls & Instrumentation (C&I) package on a unified platform (max dNA system) and other associated auxiliaries.

The state-of-the-art Boiler shall be manufactured at BHEL's Tiruchy plant, while the Steam Turbine Generator set shall be supplied by the company’s Hyderabad plant.

BHEL has emerged as the market leader in co-generation and captive power plants, offering units from 10 MW onwards for both steam turbine-based and gas-based combined cycle power projects for total power and process steam requirements of various industries. So far, the company has supplied and commissioned more than 700 steam turbine and gas turbine-based plants for a host of industries like metal, paper, sugar, cement and process industries like refineries, petrochemicals, fertiliser etc, in domestic and overseas markets.

29-Sep-2007

BHEL Pays Final Dividend; Total Payout for 2006-07 touches All-time High of around Rs.6,000 Million

Bharat Heavy Electricals Limited (BHEL) has paid a highest-ever dividend of 245% of equity for the year 2006-07, amounting to Rs.6,000 Million, including an interim dividend of 125% (Rs.3,060 Million) paid earlier. This is a sharp increase over the 145% (Rs.3,550 Million) dividend paid for 2005-06.

The dividend payout to the Government of India at Rs.4,060 Million, for 2006-07, is an all-time high, as against Rs.2,400 Million for 2005-06. A dividend cheque of Rs.1,989 Million, as the government share (67.72%) of the final dividend for the year 2006-07 (government share of interim dividend Rs.2,072 Million already paid earlier) was presented today to Mr. Sontosh Mohan Dev, Hon’ble Union minister for Heavy Industries & Public Enterprises by Mr. Ashok K. Puri, CMD, BHEL.

Senior officials of the Department of Heavy Industries & Public enterprises and BHEL were also present on this occasion.

In addition, BHEL has issued bonus shares to its shareholders during 2006-07 in the ratio of 1:1.

BHEL has been on a high trajectory of growth in the recent past and has achieved a growth rate of 29% in turnover and 44% in net profit during 2006-07. The turnover and PAT for 2006-07 stood at Rs.187,390 Million and Rs.24,150 Million, respectively. The Economic Value Added (EVA) of the company touched a record high of Rs.16,570 Million, surging more than 50% from Rs.1,0790 Million, achieved in the year 2005-06.

Notably, in the year 2006-07, BHEL secured the highest ever orders worth Rs.356,430 Million, in a single year. Further, in the current financial year (up to August 2007), BHEL has already secured orders worth more than Rs.200,000 Million. The outstanding order book of the company stands at over Rs.650,000 Million.

BHEL is building capacity and capability to contribute fully for meeting the power forecast for the 11th Plan and beyond. For this, the company is enhancing its manufacturing capacity in the next three years, from 6,000 MW to 15,000 MW.

Having demonstrated its track record in successfully establishing new technologies to serve the nation’s power sector, BHEL has equipped itself to produce thermal power equipments for 800 MW set with supercritical parameters, suited to Indian conditions, using Indian as well as imported coal. In addition, the company is shoring up its capability for higher rating Hydro sets and advanced-class Gas turbines to cater to upcoming market requirements.

23-Oct-2006

BHEL pays all-time high 145% dividend for fiscal 2005-06

Bharat Heavy Electricals Limited (BHEL) has paid the highest ever equity dividend of 145% for fiscal 2005-06 as against 80%, in the year before, maintaining its track record of paying dividends uninterruptedly for the last 30 years.

A cheque for the payment of the final dividend for the year, on the equity (67.72%) held by the Government of India, was presented here to Mr. Sontosh Mohan Dev, Hon’ble Union Minister for Heavy Industries & Public Enterprises by Mr. Ashok K. Puri, CMD, BHEL in New Delhi. With this, BHEL has made a total dividend payout of Rs.2403.4 Million for the year 2005-06, to the Government of India.

Senior officials of the Department of Heavy Industries & Public Enterprises and BHEL were also present on this occasion.

During the year 2005-06, BHEL recorded an all-time high turnover of Rs. 145250 Million, notching a growth of nearly 41% on top of 19% and 16% top line growth achieved in 2004-05 and 2003-04, respectively. This is also the highest year-on-year growth in the last three decades. In the same period, net profit soared over 76% to Rs. 16790 Million.

Significantly, in line with its vision -‘committed to enhancing stakeholder value‘, BHEL recorded a surge in Economic Value Addition (EVA), which catapulted to Rs. 10790 Million from Rs. 504 Million for the year before

BHEL is building Capacity and Capability for the future to contribute fully for meeting the power forecast for the 11^th Plan and beyond. For this, the company is investing more than Rs. 16000 Million for holistic modernization and capacity expansion of its facilities from 6,000 MW per annum at present to 10,000 MW per annum, which will be available in 2007. BHEL will be more than willing to enhance it further as required by the country’s power sector in future. These programmes are in the nature of brown field expansions and have strong economic rationale in terms of time and cost benefits. BHEL has large reserves in addition to leveraging its capacity and can fully meet the resource requirements for its expansion on its own.

BHEL has already taken necessary steps to cater to the likely demand for the next higher rating 800 MW Thermal sets and is actively looking at opportunities in Ultra Mega projects with various project developers. In addition, the company is shoring up its capability for higher rating Hydro sets and advanced class Gas Turbines to cater to upcoming market requirements.

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.39.27
UK Pound	1	Rs.77.33
Euro	1	Rs.57.51

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	9
PAID-UP CAPITAL	1~10	9
OPERATING SCALE	1~10	9
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	9
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	9
--RESERVES	1~10	9
--CREDIT LINES	1~10	9
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		81

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 EXPLANATIONS

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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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