Industry Analysis Report of Electrical Industry

CHAPTER- I Introduction INDIAN ELECTRICAL INDUSTRY PROSPECTS OF THE INDIAN ELECTRICAL INDUSTRY Like every other industrial sector in India, the Indian Electrical/Electronics Industry too is slowly emerging from out of its “protective cover”. For far too long has Indian Industry remained shackled and consequently inward looking. Over the past fifty years there was no exposure to global players and competition, with the result that the Industry grew up in a sheltered environment, dependent on the Government for everything, from licenses to protection to tariffs.

Each one of these interventions was aimed at securing protection for oneself and ensuring growth of one’s own organization at the cost of industry and the nation at large. Lack of global competition encouraged a “cost plus” approach, where every conceivable cost increase was passed on to the customer. There was thus no motivation to reduce costs. With delicensing, decontrol and deregulation, Indian Industry has suddenly been exposed to global competition. Since last decade, India has witnessed what global players have achieved and what they are capable of achieving.

We are becoming aware of competition on our turf. In this scenario, every company complains of increased competition, lower order books and shrinking margins. The Indian Electrical/Electronics Industry is of course further besieged by the fact that there is a dearth of business on account of lack of investment in the power infrastructure. Many organizations in this industry are looking overseas to develop the export markets owing to reduced demand at home. At the outset, it must be stated that the reduced domestic demand is at best a temporary phenomenon.

The power sector in India is bound to grow and this will undoubtedly boost demand from the Utilities, quite apart from the industrial demand which will continue to grow with increased industrial output. The poor financial health of the SEBs is however a damper that cannot be wished away in the short term. This will continue to plague corporates in the Electrical Industry, until the SEB restructuring and unbundling brings a turnaround in the medium term. SEGMENTS OF ELECTRICAL AND ELECTRONICS INDUSTRY The global electrical and electronics industry centres around various adjunct sectors.

Few of them are Electronic Components, Computer & Office Equipments, Telecommunications, Consumer Electronics as well as Industrial Electronics. ELECTRONIC COMPONENTS INDUSTRY This particular industry is engaged in designing, manufacturing, marketing, supporting, selling and distributing of broad range of electronic components such as bolts, clamps, fasteners, lighting, semi conductors, integrated circuits, microprocessors, cables and wires, switches, sensors, keyboards, sockets, sonar devices, test and inspection equipment etc.

Worldwide market leaders electronic components are United States of America, European, Asian countries like Japan, China, India, Taiwan, and Hong Kong. FUTURE PROSPECTS The domestic market in India is itself large, and one must firstly satisfy this market with products that meet international quality standards. With increasing globalisation, every international player is now operating in India, providing goods and services complying with international quality. Once we deliver high quality products and services within the domestic market, accessing the international market for exports should not pose a serious challenge.

The Electrical/Electronics Industry in India is growing to its full potential in the coming years and no doubt that India will soon come to be recognized for quality products and services which in turn, will bring this industry to a position of true leadership. Indian electrical industry has grown because of government’s thrust on it and also due to overall economic growth. It has also reached a stage where the industry has demonstrated its capabilities. The industry has seen a growth of 20% and should continue at the same level for the next few years.

FACTORS GOVERNING THE GROWTH OF THIS INDUSTRY Every industry thrives on some supporting factors. In this connection, there are few factors governing the growth of electrical and electronics industry: * Research & development played an important role to the increased productivity and higher-value added electrical and electronics products. * Foreign investments accelerated growth in production and export as well. To expand their business, foreign companies have done huge investment which lead developing countries in establishing production units. Global industries like Medical, Telecommunications, Industrial & Automotive industries have been cordially supported by electrical & electronics industry. * Increase in income changed living standards of the common mass. As a result, it increased the demand of electronics especially consumer electronics products globally. * Electric & Electrical industry is highly fragmented which comprises of many small and medium size enterprises resulting into a huge industry. Asia Pacific region is emerging as the most spinning place for the consumer electronics industry, as the markets remain still unbroached. * Innovation has played importantly in this industry. It led to a consistent demand for newer and faster products and applications. NEED FOR THE STUDY: The company’s in this industry are producing wide range of products such as power & industrial transformers, Ceiling fans, Switches, Home appliances, lighting products, fans, pumps and public switching, transmission and access products and many other electrical items.

All these products are used for developing other areas. This industry is producing many employment opportunities and other industries like railways, power generation corporations, engineering industry etc are depending on this industry. National economy is developing and backward areas are developing through this industry. So we need to study the performance of this industry. OBJECTIVES 1. To analyze the performance of Electrical Industry by using Ratio analysis. 2. To examine the performance of the companies BAJAJ ELECTRICALS LTD, KHAITAN ELECTRICALS LTD, TOYAMA ELECTRICS LTD. 3.

To access the overall liquidity, profitability and solvency of the companies BAJAJ ELECTRICALS LTD, KHAITAN ELECTRICALS LTD, TOYAMA ELECTRICS LTD. METHODOLOGY AND DATABASE This adopts the normal methodology of collecting secondary data relevant for this analysis and to draw inferences which through light about the subject. The primary sources of secondary data for the study of annual reports of the company founds or units, available published material in the form of books and reports relevant to the study TOOLA AND TECHNIQUES Using Ratio analysis, Charts and Graphs process the data to unable to draw effective inferences. LIMITATIONS . This study is limited to three companies BAJAJ ELECTRICALS LTD, KHAITAN ELECTRICALS LTD, TOYAMA ELECTRICS LTD. 2. This study is limited to four years (2005-2006 to 2008-2009) balance sheets of the above companies. CHAPTER -II Profile COMPANY -I BAJAJ ELECTRICALS LTD WELCOME TO BAJAJ ELECTRICALS Bajaj Electricals Limited (BEL) is a part of the Rs. 20000 crore “Bajaj Group” who are in the business of steel, sugar, two wheelers & three wheelers besides an impressive range of consumer electrical products. We are a 70 year old company with a turnover of over Rs. 1750 crores aiming to be a Rs. 2001 crore company in the next couple of years.

Bajaj Electricals has 19 branch offices, a chain of 600 distributors, 3000 authorised dealers, over 2,50,000 retail outlets and over 230 service franchises spread across the country. BEL today has five major strategic business units comprising of home appliances, fans, lighting, luminaires and engineering & projects. We are also in the business of manufacturing, erection and commissioning of Transmission Line Towers, Telecom Towers, Mobile Telecom Towers and Wind Energy Towers. Export of all BEL’s products except of its engineering and projects business unit is taken care of by group company Bajaj International Pvt. Ltd

HISTORY OF BAJAJ ELECTRICALS 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 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 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 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 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) BUSINESS DESCRIPTION PROFILE BAJAJ ELECTRICALS. The Group’s principal activity is to manufacture and market consumer household and industrial goods. The Group operates through four segments namely Lighting; Consumer Durables; Engineering and Projects and Others. Lighting includes lamps, tubes and luminaries.

Consumer durables include appliances and fans. Consumer Durables include domestic appliances like fans, air-coolers, pressure cookers, ovens, toasters, heaters, geysers and mixer grinders. Engineering and Projects includes transmission line towers, telecommunications towers, highmast, poles and special projects and others includes die-casting and wind energy CORPORATE VISION OF BAJAJ ELECTRICALS We aim to bring greater happiness to our customers by improving their quality of life, while enhancing stakeholder value BUSINESS OBJECTIVES OF BAJAJ ELECTRICALS Improve forecasting, sales planning and distribution to dealers * Enhance production planning, scheduling and vendor performance * Reduce inventory levels across the supply chain PRODUCTS |GLS lamps |Switches |Fresh Air Fans | |Torches |Switch Boards |Water Heaters | |Consumer Luminaries |Ceiling Fans |Immersion Heater | BOARD OF DIRECTROS S NO |NAME | | | | |Designation | | | | | |1 |MR. SHEKHAR BAJAJ |CHAIRMAN AND MANAGING DIRECTOR | |2 |MR.

HARSH VARDHAN GOENKA |DIRECTOR | |3 |DR. RAJENDRA PRASAD SINGH |DIRECTOR | |4 |MR. V B HARIBHAKTI |DIRECTOR | |5 |MR. A K JALAN |DIRECTOR | |6 |MR.

MADHUR BAJAJ |Director | |7 |DR. (MRS. )INDU SHAHANI |DIRECTOR | |8 |MR. R RAMAKRISHNAN |DIRECTOR | |9 |MR. ANANT BAJAJ |EXECUTIVE DIRECTOR | |10 |MR. AJIT GULABCHAND |EXECUTIVE DIRECTOR |

COMPANY -II KHAITAN ELECTRICALS LTD HISTORY OF KHAITAN YEAR EVENTS 1975 – The Company was Incorporated on 27th October, as a private limited company and then converted into public limited company on 14th August, 1982. The Company was promoted by Shri S. K. Khaitan, the chairman of the Khaitan group of companies. – The Company’s object is to manufacture electric fans, industrial and ventilating fans, electrical household appliances electric motors, cables, electric lamps, electrical meters etc. – The Company entered into an agreement with Khaitan Fans Pvt. Ltd. or obtaining “technical know-how” for the manufacture of electric fans and regulators and for using their trade mark “Khaitan”. Since then the Company is engaged in the manufacture of various types of elctric fans and regulators. – The Company started its first plant at Faridabad to manufacture a wide range of ceiling, exhaust, portable, industrial and ventilating fans, FHP motor and power driven pumps. To cater to the growing demand in Western India and overseas markets, a second plant was started at Tarapur near Mumbai in January 1983 to manufacutre ceiling and portable fans.

The first plant was set up at the Company’s own land at Faridabad while an industrial plant was acquired on lease at Tarapur for the setting up of the second project. A third plant was set up at Noida in 1985. 1981 – 3,70,000 No. of equity and 3,000 pref. shares taken up by promoters, etc. In November, 1983, 8,80,000 No. of equity shares issued of which 1,30,000 shares were allotted to promoters, etc. The balance 7,50,000 shares offered to the public. 1983 – The Company undertook to set up a new unit at Faridabad to manufacture a wider range of F.

H. P motors and electrical household appliances. The necessary technical know-how and R&D facilities were available with the Company and the prototypes were under development. Negotiations were at an advanced stage for procuring plant and machinery needed for the project. The plant went on stream during 1984. – The object of the public issue of capital during March, was to augment the Company’s working capital and to provide funds for normal capital expenditure other than for substantial expansion and diversification. The Company undertook an expansion and diversification programme. A second plant was put up at Bachepalli in the Medak district of Andhra Pradesh to manufacture a wide range of portable and other fans and household electrical appliances. – 1,77,500 shares issued at par of which 27,500 shares reserved and allotted to promoters, directors, etc. The balance 1,50,000 shares offered to the public in March. 1984 – Pref. dividend raised to 15% from 1. 1. 1985. 12,50,000 rights equity shares offered at par (linked to 15% debentures) in the ratio 1:1 in Oct. 1985.

Additional 3,12,500 No. of equity shares allotted to retain oversubscription. 62,500 No. of equity shares also offered at par to employees (only 2,200 shares taken up). – In Sept. , 12,60,000 shares issued (prem. Rs 1 per share) of which 5,04,000 shares reserved and allotted to promoters, directors, etc. The balance 7,56,000 shares offered to the public. 1985 – A new factory was set up at NOIDA, Expansion of the Tarapur factory was undertaken. – M/s. Khaitan Lefin Ltd. , is a subsidiary of the Company. It ceased to be a subsidiary to the Company during 1994-95. In October, in order to part finance the expansion programme and to augment long-term resources, the Company made a rights issue of 12,50,000 No. of equity shares of Rs. 10 each, both at par, in the ratio 1 equity share for every equity share held and 1 debenture for every 10 equity shares held. Each debenture offered was linked to 10 equity shares. – In Feb. /Mar. , 15,00,000 right shares offered (prem. Re. 1 per share; prop. 1:1). 3,75,000 additional shares allotted to retain oversubscription. 75,000 shares were also offered (prem. Re. 1 per share) to the employees of the Company.

Only 15,700 shares taken up. The remaining 59,300 shares allowed to lapse. 1987 – The oscillating type air circulators was launched during the period and washing machines were under final stage of development. – Jhunjhunu Holdings Limited became a wholly owned subsidiary of the Company during the year. 1991 – The Window type air cooler was launched during the year and the company had decided to manufacture both floor and window type coolers in a big way. – Lock-out at the Faridabad plant for 71 days and reduced activities at Noida and Tarapur plants led to the poor performance. 992 – For better utilisation of resources, the operations of Noida works were closed and its machinery shifted and commissioned at Faridabad factory. 1993 – The company proposed to diversify into sugar/agro based industry. – 16,95,350 rights shares issued (prem. Rs 20 per share; prop. 1:2) only 9,82,956 share taken up. Another 6,76,344 shares devolved on the underwriters. The balance 36,050 shares remained unsubscribed. – 2,000 preference shares are redeemable during 31st March, 1993/96, 500 preference shares are redeemable during 29th March 1995/98 and 500 preference shares are redeemable during 23rd May 1995/98. 994 – With effect from 1st April, Khaitan Fans (I) Ltd. amalgamated with the Company. – 1000 pref. shares redeemed. 30,00,000 shares issued as fully paid up to the shareholders of Khaitan Fan India Ltd. (KFIL) without payment being received in cash and 14,700 No. of equity shares of Rs. 10 each of the company held by KFIL were cancelled. 1996 – 1,56,470 secured non-convertible debentures of Rs. 100 each were issued to be redeemable at par in three equal annual instalments commencing from 21st April. As per the scheme of arrangement Rs 2. 5 lakhs of NCD were received and redeemed during the year, making to date redemption of Rs 56. 82 lakhs. 2001 – The Company equity shareholders is proposed to be held on March 10 to consider the scheme of arrangement of amalgamation between Jhunjhunu Electricals & Finance Ltd and Khaitan Electricals Ltd. 2005 -Dlist from The Hyderabad stock Exchange Ltd(HSE) with effect from January 19, 2005. 2009 – Khaitan Electricals Limited has informed that a meeting of the Board of Directors has been held on January 30, 2009 and discuss the following agenda : 1) Resignation of Sri O.

Swaminatha Reddy as a Independent Director. 2) Resignation of Sri P. R. Agarwala as a Independent Director. 3) Appointment of Mr. A. K. Bhattacharya as Additional Director (Independent Director). ORGANISATION PROFILE KHAITAN ELECTRICALS LIMITED. The Company’s principal activity is to manufacture and market electrical goods. It’s products include ceiling fan, light products and home appliances, pumps, cooler kits, circuit breakers, wires and cables. The Company’s plants are located at Andhra Pradesh, Kolkata, Faridabad and Himachal Pradesh.

The Company exports it’s products to Middle East countries, Nigeria, Ghana, Tanzania, Sudan, Jordan, Egypt, Kenya, Maldives, Italy, Yeman, Uganda, Iraq, Nepal, Bangladesh and Sri Lanka. A NEVER-ENDING VISION As a young entrepreneur in the early 60’s, I was possessed by a burning desire to push the limits and create new goals for myself. Men like Henry Ford, Thomas Bata, Soichairo Honda and J N Tata who had the guts to build great brands with their own names, deeply moved me. And I was all set to turn “Khaitan” my family name into a household word as well.

In my mind’s eye I saw Khaitan fans in homes, offices, shops, factories and godowns. Today, Khaitan is already a household name and a leading brand throughout the country. But my vision continues to grow. Because everyday there is a new horizon to conquer, a new goal to reach. MISSION—QUALITY WITHOUT COMPROMISE Our products are testaments to our belief in excellence and are duly subject to the most stringent quality standards in the world. And as proof of our mettle and faith in our own quality, we took what may be regarded as the boldest-ever step in the fan industry: the introduction of the Replacement Bond.

The Replacement Bond ensures that the customer always comes first. It is a bond signed by the Chairman of the Company, promising to replace any Khaitan fan with a manufacturing defect, discovered within one year of its purchase,with a new one. Till today, the idea goes unmatched by any competitor. This confidence in our fans is a result of dedicated service, commitment to quality and careful attention to detail. A LANDMARK ACHIEVEMENT Khaitan carved a niche for itself in the fan industry by creating a new market for exhaust fans with its unique Khaitan Freshair fans.

It resegmented the category by positioning Khaitan Freshair fans as the modern-day answer to kitchen ventilation and bathroom hygiene. With bathrooms and kitchens becoming more and more compact, Khaitan Freshair fans have become an essential accessory for living well. What’s more, backed by modern, streamlined looks Khaitan Freshair fans also add style to bathrooms and kitchens. LAURELS FOR QUALITY The untiring quest for superlative quality and innovative design has brought some laurels both at home and abroad.

They represent our commitment to quality and service. * ISO 9001 for the Kolkata and Hyderabad factories (including design) * Awards from Export Promotion Council, Govt. of India * CE Marking for our ceiling fan * The CSA certification marking, with the adjacent * Indicator: NRTL/C – Canada BUSINESS OBJECTIVES OF KHAITAN ELECTRICALS : * Improve forecasting, sales planning and distribution to dealers * Enhance production planning, scheduling and vendor performance * Reduce inventory levels across the supply chain PRODUCTS: Products | |Fans | |Switches | |Sockets | |Kitchen Appliances | |Electric Iron | |Switch Boards | |Cooler Kit | |Circuit Breaker | |Wires & Cables |

BOARD OF DIRECTORS |S. No |Name |Designation | |1 |Mr. S K Khaitan |Chairman / Chair Person | |2 |Mr. Sajjan Dabriwal |Deputy Managing Director | |3 |Mr. M G Todi |Director | |4 |Mr.

Jyoti P Tibrewala |Director | |5 |Mr. A K Kajaria |Director | |6 |Mr. Sunil K Khaitan |Vice Chairman & Mng. Director | COMPANY- III TOYAMA ELECTRICS LTD INTRODUCTION TO TOYAMA ELECTRIC LTD Toyama started operations in 1989, to make relays for enabling electronic switching in telecom sector.

Commitment and Passion to switching led to entry into modular switches in 1997. Today Toyama has a team of 120 employees working in 15,000 sq. ft. of manufacturing area with a network of commited Trade Partners in over 80 cities. R & D wing launched successfully two series of most wanted switching devices and innovate digital switching & control products aimed at providing smart lighting solutions. All Toyama products including Wall art switches are designed for maximum reliability, keeping versatility and safety of the users in mind

Manufacturing facilities include state-of-the-art tool room, excellent molding shop, sheet metal shop, and assembly line. Quality control with extensive testing facilities compliments the set up which is ISO 9001:2000 complient. State-of-the-Art-Tool-Room with best tool making machines sourced from all over the world be it wire EDMs, spark EDMs or High speed Milling machines or the conventional machines make the product design a reality. Processes like high speed milling of the hardened steel avoids heat treatment process.

Molding shop is equipped with machines of high efficiency capable of delivering components of consistent quality. Assembly line is automated with online test equipment to ensure fast and quality output of final products ready to occupy pride of place on walls all over. Quality control ensures products are designed, manufactured and tested in accordance with present upgraded Bureau of Indian Standard (BIS) IS 1293:1988 and IS 3854:1997 which are in line with stringent IEC Standards.

Testing done in-house and certified and marked by external independent agencies put the stamp of Quality on these Wall-art Pride on the Wall Products VISION To be a globally recognized corporation that provides best electrical & lighting solutions, delivered by best-in-class people. MISSION To achieve our vision through fairness, business ethics, global reach, technological expertise, building long term relationships with all our associates, customers, partners, and employees. OBJECTIVES OF TOYAMA * Faster development of desired products at target costs and volumes. Improve product quality. * Improve forecasting, sales planning and distribution to dealers. |S. No |Name |Designation | |1 |Mr. Mustafa Kamal Basha |Chairman | |2 |Mr. Akmal Hasan Razvi |Directo | |3 |Mr.

A S Lakshmanan |Director | |4 |Mr. S M M Azeez |Director | |5 |Mrs. Farah Kamal |Director | |6 |Dr. Mohammed Taha Matheen |Director | PRODUCTS Switches | |Sockets | |SI Touch | |Circuit Breakers | |Pocket Switches | |Wall Art | |Accura Plus | BOARD OF DIRECTORS Chapter-III Ratio Analysis Theory RATIO ANALYSIS: Ratio analysis is a powerful tool of financial analysis. A ratio is defined s “the indicated quotient of two mathematical expressions “and “the relationship between two or more things”. In financial analysis, a ratio is used as a benchmark for evaluating the financial position and performance of a firm. The absolute figures reported in the financial statements do not provide a meaningful understanding of the performance and financial position of a firm. An accounting figure conveys meaning when it is related to some other relevant information. The relationship between two accounting figures, expressed mathematically, is known as a financial ratio (or simply as a ratio).

Ratios help to summarize large quantities of financial performance. The point to note is that ratio reflecting quantitative relationship, help to form a qualitative judgment. IMPORTANCE: Ratios are useful for the following reasons: • The ratios can be used by financial managers for future financial planning. Ratios calculated for a number of years work as a guide for the future. • Ratios are useful in co-ordination which is very needed in business. The efficiency and weakness of an enterprise if communicated properly will establish a better co-ordination among areas of appreciation and control. Ratios should be shown the better financial position of the firm. For example, better solvency ratio speaks out good financial position. The ratios are economic barometer useful to all mentioned above as they can know the good and bad position of a company by making a comparative study of financial statement. LIMITATIONS: Ratio can be useful only when they are computed in a sufficient target number. A single ratio would not be able to covey anything. At the same time, if too many ratios are calculated, they are likely to confuse instead of revealing any meaningful conclusion.

Ratios Analysis gives only a good basis for quantitative analysis of financial problems. But it suffers from qualitative aspects. Because ratios are computed from historical accounting records possess. In ratio analysis arithmetical window dressing is possible and firms may be successful in concealing the real position . It is not always possible to make future estimates on the basis of the past as it always does not come true. Ratio analysis is not a substitute for second judgments rather is a helpful tool to aid in applying judgment too.

Therefore, conclusions drawn with the ratios should be verified with other techniques also. CLASSIFICATION OF RATIOS There are different parties interested in the ratio analyses for knowing thefinancial position of a firm for different purposes. In view of various users of ratios, there can any number of ratios and the can be classified in a number of ways. However , the classification of ratios depends upon the objectives for which they are calculated. By one broad classification, ratios can be grouped into following four categories. 1). Liquidity ratios 2). Solvency ratios ). Turnover ratios 4). Profitability ratios |LIQUIDITY RATIOS |SOLVENCY RATIOS |PROFITABILITY RATIOS |TURNOVER RATIOS | |1. Current ratios |1. Interest coverage |1. Gross profit ratio |1. Capital turnover ratio | |2. Quick ratio |2. Debt – Equity ratio |2. Net profit ratio |2. Fixed assets turnover ratio | |3. Absolute quick ratio |3. Debt to Total fund ratio |3. Return on investment ratio |3.

Working capital ratio | | | |4. Return on equity |4. Stock turnover ratio | | | | |5. Debts turnover ratio | Chapter-IV Analysis and Interpretation CURRENT RATIO: It is a relationship between current assets and current liabilities. Current assets are assets which can be converted into cash within one year. Current liabilities are liabilities which can be repaid within a period of one year.

It is calculated as Current Assets Current ratio = ——————— Current Liabilities |COMPANY/YEAR |2006 |2007 |2008 |2009 | |Bajaj |1. 63 |1. 73 |1. 67 |1. 53 | |Khaitan |1. 87 |2. 42 |2. 66 |2. 98 | |Toyama |3. 13 |2. 7 |3. 85 |4. 43 | [pic] INTERPRETATION:In Bajaj company the current ratio is increased upto 2007, but decreased from 2008. In Khaitan company the current ratio is increased from 2006 to 2009. In Toyama company the current ratio in increased continuously from 2006 to 2009. QUICK RATIO : Quick Ratio is an improvement over current ratio. Distinction is made between ‘quick current assets’ also called quick assets and current assets. Quick current assets are those current assets which are convertible into cash rather early.

Quick ratio is calculated as under: Quick Assets Quick Ratio = ———————– Current Liabiliteds |COMPANY/YEAR |2006 |2007 |2008 |2009 | |Bajaj |1. 23 |1. 35 |1. 26 |1. 21 | |Khaitan |1. 09 |1. 65 |1. 81 |1. 94 | |Toyama |2. 96 |2. |3. 36 |3. 59 | [pic] INTERPRETATION:In the Bajaj company the quick ratio is constant up to 2006 to 2009. In the Khaitan company the quick ratio is increased from 2006 to 2009. In the Toyama company is also increased quick ratio from 2006 to 2009. GROSS PROFIT RATIO: This ratio relates gross profit to sales to indicate gross margin on sales and expressed as a percentage. This ratio is also known as Gross profit Margin. It is calculated as Gross Profit Gross profit ratio = ——————— X 100 Net Sales COMPANY/YEAR |2006 |2007 |2008 |2009 | |Bajaj |7. 56 |7. 49 |9. 92 |10. 3 | |Khaitan |6. 01 |6. 3 |6. 83 |2. 77 | |Toyama |12. 62 |9. 23 |9. 24 |1. 2 | [pic] INTERPRETATION:In the Bajaj company gross profit ratio is increasing up to 009. In the Khaitan company the gross profit is increasing, But it is decreased in 2009. In the Toyama Company it was good in 2006, But it was decreased upto 2009. NET PROFIT RATIO: This ratio relates net profit to sales and indicates net margin on sales. This is also expressed in percentages, and is also known as net profit margin. It is calculated as Net Profit Net profit Ratio = ——————X 100 Sales |COMPANY/YEAR |2006 |2007 |2008 |2009 | |Bajaj |3. 49 |3. 4 |5. 27 |5. 01 | |Khaitan |3. 62 |4. 11 |4. 21 |-1. 67 | |Toyama |7. 95 |6. 82 |5. 89 |1. 72 | [pic] INTERPRETATION:In the bajaj company net profit increased from 2006 to 2009. In the Khaitan company the net profit ratio is increased up to 2008, But it is decreased in the year 2009. In the Toyama company the net profit is decreased from 2006 to 2009.

OPERATING PROFIT RATIO: It express the relationship between expences incurred for running the business and the resultant net sales. It is calculated as Operating Profit Operating Profit Ratio = —————————– X 100 Net Sales |COMPANY/YEAR |2006 |2007 |2008 |2009 | |Bajaj |8. 31 |8. 16 |10. 46 |10. 78 | |Khaitan |6. 82 |6. 89 |7. 33 |3. 8 | |Toyama |15. 82 |12. 6 |12. 3 |4. 29 | [pic] INTERPRETATION:In Bajaj company the operating profit ratio is increased from 2006. In the khaitan company the operating profit ratio is constand but in the year 2009 it war decreased. In the Toyama company operating profit ratio is higher in 2006 but it war decreased from 2007 to 2009. FIXED ASSETS TURNOVER RATIO: The ratio of sales to fixed assets measures the turnover of fixed assets. ( fixed assets are used in business for producing goods. This ratio is a measure of efficiency or use of fixed assets. The ratio would be calculated as : Sales Fixed assets Turnover Ratio = ——————- Fixed Assets |COMPANY/YEAR |2006 |2007 |2008 |2009 | |Bajaj |6. 42 |7. 96 |9. 58 |11. 49 | |Khaitan |7. 05 |9. 12 |9. 5 |8. 04 | |Toyama |1. 1 |1. 22 |1. 29 |0. 97 | [pic] INTERPRETATION:In the Bajaj company the fixed assets turnover ratio is increased from 2006 to 2009. In the Khaitan company the fixed assets turnover ratio is increased up to 2008, But it is decreased in 2009. In the Toyama company the fixed assets turnover ratio is increased upto 2008, but in the year 2009 it war decreased. INVENTORY TURNOVER RATIO: Inventory turnover ratio, also known as stock turnover ratio is normall calculated As sales / average inventory or cost or goods sold / average inventory.

It would indicate whither inventory has been efficiently used or not. This ratio is calculated as follows: Cost of Goods Sold Inventory Turnover ratio = —————————- Average Stock |COMPANY/YEAR |2006 |2007 |2008 |2009 | |Bajaj |8. 58 |9. 39 |8. 75 |10. 21 | |Khaitan |3. 36 |3. 3 |3. 11 |2. 61 | |Toyama |23. 72 |14. 18 |10. 3 |7. 57 | [pic] INTERPRETATION:In the Bajaj company the inventory turnover ratio is constant from 2006 to 2008, But in the year 2009 it was increased. In the Khaitan company the inventory turnover ratio is constant from 2006 to 2009. In the Toyama company the inventory turnover ratio is constant for all the years. DIVIDEND PER SHARE: It is amount of dividend payable to the share holder of one equity share it s calculated as from the investers point of view, the higher the dividend per share, the happier he is. |COMPANY/YEAR |2006 |2007 |2008 |2009 | |Bajaj |6 |8 |8 |10 | |Khaitan |1. 8 |2 |2 |0 | |Toyama |0. 75 |0. 75 |0. 5 |0 | [pic] INTERPRETATION:In the Bajaj company the dividend is increased from 2006 to 2009. In the Khaitan company the dividend war increased from 2006 to 2008, But in 2009 the dividend is decreased. In the Toyama company the dividend is constant, But in the year 2009 it war decreased. CHAPTER V Findings, Conclusions & Suggestions FINDINGS: • Based on the above interpretation the current ratio in Bajaj electricals is less than the idle current ratio i. e. 2:1. But Quick Ratio in 3 companies is nearly equal and above idle quick ratio i. e. 1:1.

Therefore the liquidity position is satisfactory but the liquidity position of the company Bajaj is not satisfactory because of Current Ratio. • The use of Fixed assets position of the companies is known by Fixed assets Turnover Ratio. In general higher the ratio reflects the better utilization of fixed assets. In this 3 companies the Bajaj and Khaitan’s fixed assets turnover ratio is higher, But in the Toyama company the ratio is less than 2 means the company not investing sufficient money in fixed assets. • The profitability position of these companies good because the Gross Profit and Net Profit Ratio increased form 2006 to 2009.

CONCLUSION • Based on the above findings the profitability, liquidity and solvency position of these 3 companies is satisfactory. • The performance of these 3 companies is good because profitability position is good. • The overall performance of this industry is good. SUGGESTIONS • Develop Research and Development strategies. • Use innovative ideas to develop products. • Enter into global markets and global production. BIBILIOGRAPHY: • MY Khan and Jain: Financial Management – text and problems, Tata McGraw Hill, New Delhi. • I. M pandey – Financial Management , 9/e Vikas Publications 2007 www. Google. om www. moneycontrol. com www. money. rediff. com www. sify. com www. bajaj. com www. toyama. com www. khaitan. com ANNEXURES: Financial Statements |INCOME |AMOUNT |AMOUNT |AMOUNT |AMOUNT | |Operating income |850. 17 |1,085. 16 |1,379. 11 |1,775. 06 | |EXPENSES | | | |  | |Material consumed |625. 7 |818. 28 |998. 24 |1,321. 19 | |Manufacturing expenses  |15. 54 |15. 15 |22. 26 |5. 69 | |Personnel expenses |36. 38 |43. 73 |63. 68 |77. 19 | |Selling expenses |53. 98 |76. 39 |88. 38 |109. 54 | |Adminstrative expenses |48. 06 |43. 8 |62. 19 |70 | |Expenses capitalised |- |-0. 49 |- |- | |Cost of sales |779. 44 |996. 54 |1,234. 75 |1,583. 61 | |Operating profit |70. 73 |88. 62 |144. 36 |191. 45 | |Other recurring income |3. 8 |4. 46 |6. 8 |7. 3 | |Adjusted PBDIT |74. 53 |93. 08 |150. 43 |198. 75 | |Financial expenses |20. 74 |26. 33 |34. 79 |42. 2 | |Depreciation  |6. 38 |7. 29 |7. 45 |8. 55 | |Other write offs |- |- |- |4. 2 | |Adjusted PBT |47. 41 |59. 46 |108. 19 |143. 18 | |Tax charges  |17. 15 |21. 68 |38. 31 |50. 67 | |Adjusted PAT |30. 26 |37. 79 |69. 88 |92. 51 | |Non recurring items |-1. 37 |0. 17 |1. 97 |-5. 6 | |Other non cash adjustments |-0. 68 |0. 57 |1. 25 |2. 48 | |Reported net profit |28. 21 |38. 53 |73. 1 |89. 13 | |Earnigs before appropriation |33. 27 |45. 53 |84 |106. 95 | |Equity dividend |5. 19 |6. 91 |13. 83 |17. 9 | |Preference dividend |0. 87 |0. 12 |- |- | |Dividend tax |0. 85 |0. 99 |2. 35 |2. 94 | |Retained earnings |26. 36 |37. 5 |67. 82 |86. 73 | Profit & Loss Account of Bajaj Electrical Limited For the year ended 31st March, 2006 to 2009. Rs in crors

BALANCE SHEET OF BAJAJ ELECTRICALS LIMITED AS ON 31ST MARCH, 2006 TO 2009. |PARTICULARS |2006 |2007 |2008 |2009 | |SOURCES OF FUNDS | | |  |  | |Owner’s fund | | |  |  | |Equity share capital |8. 4 |8. 64 |17. 29 |17. 29 | |Share application money |- |- |- |- | |Preference share capital |1. 6 |- |- |- | |Reserves & surplus |69. 63 |98. 05 |147. 62 |218. 2 | |LOAN FUNDS | | |  |  | |Secured loans |112. 86 |169. 03 |155. 93 |148. 03 | |Unsecured loans |75. 42 |68. 14 |80. 77 |65. 82 | |TOTAL LIABILITES |268. 15 |343. 86 |401. 61 |449. 6 | |USES OF FUNDS | | |  |  | |Fixed assets | | |  |  | |Gross block |132. 42 |136. 36 |144 |154. 47 | |Less : revaluation reserve |10. 9 |10. 13 |9. 87 |9. 1 | |Less : accumulated depreciation |38. 39 |45. 5 |52. 38 |59. 87 | |Net block |83. 12 |80. 73 |81. 75 |84. 99 | |Capital work-in-progress |0. 04 |1. 05 |17. 23 |23. 96 | |Investments |14. 94 |22. 3 |22. 3 |31. 56 | |NET CURRENT ASSETS | | |  |  | |Current assets, loans & advances |437. 37 |569. 8 |699. 17 |890. 77 | |Less : current liabilities & provisions |267. 94 |330. 04 |418. 87 |582. 03 | |Total net current assets |169. 42 |239. 6 |280. 3 |308. 74 | |Miscellaneous expenses not written |0. 63 |0. 03 |- |- | |TOTAL ASSETS |268. 15 |343. 86 |401. 61 |449. 26 | RS. IN CRORS |INCOME |2006 |2007 |2008 |2009 | |Operating income |191. 3 |284. 75 |320. 03 |285. 11 | |EXPENSES | | | | | |Material consumed |120. 75 |188. 2 |206. 38 |185. 56 | |Manufacturing expenses  |14. 79 |19. 85 |21. 77 |19. 23 | |Personnel expenses |8. 2 |12. 61 |14. 88 |16. 4 | |Selling expenses |27. 11 |35. 02 |39. 48 |- | |Adminstrative expenses |6. 91 |9. 44 |14. 06 |54. 27 | |Expenses capitalised |- |- |- |- | |Cost of sales |178. 8 |265. 12 |296. 56 |275. 46 | |Operating profit |13. 04 |19. 62 |23. 47 |9. 65 | |Other recurring income |1. 56 |5. 06 |1. 16 |0. 86 | |Adjusted PBDIT |14. 6 |24. 69 |24. 63 |10. 5 | |Financial expenses |4. 9 |8. 28 |7. 14 |5. 91 | |Depreciation  |1. 55 |1. 66 |1. 58 |1. 74 | |Other write offs |- |- |- |- | |Adjusted PBT |8. 77 |14. 75 |15. 9 |2. 85 | |Tax charges  |1. 8 |2. 55 |2. 39 |-1. 36 | |Adjusted PAT |7. 29 |12. 2 |13. 51 |4. 21 | |Non recurring items |-0. 35 |-0. 3 |-0. 38 |-9. 02 | |Other non cash adjustments |0. 05 |0. 07 |0. 42 |0. 03 | |Reported net profit |6. 9 |11. 96 |13. 55 |-4. 78 | |Earnigs before appropriation |9. 86 |17. 34 |18. 2 |0. 73 | |Equity dividend |1. 3 |2. 3 |2. 3 |- | |Preference dividend |- |- |- |- | |Dividend tax |0. 8 |0. 39 |0. 39 |- | |Retained earnings |8. 38 |14. 65 |15. 51 |0. 73 | Profit & Loss Account of Khaitan Electrical Limited For the year ended 31st March, 2006 to 2009. RS. IN CRORS BALANCE SHEET OF KHAITAN ELECTRICAL LIMITED AS ON 31ST MARCH, 2006 TO 2009. PARTICULARS |2006 |2007 |2008 |2009 | |SOURCES OF FUNDS | | | |  | |Owner’s fund | | | |  | |Equity share capital |7. |11. 5 |11. 5 |11. 5 | |Share application money |0. 6 |0. 26 |0. 26 |- | |Preference share capital |- |- |- |- | |Reserves & surplus |39. 27 |104. 17 |104. 17 |99. 5 | |LOAN FUNDS | | | |  | |Secured loans |37 |107. 38 |107. 38 |112. 05 | |Unsecured loans |0. 27 |18. 56 |18. 56 |23. 31 | |TOTAL LIABILITIES |84. 4 |241. 87 |241. 87 |246. 51 | |USES OF FUNDS | | | |  | |Fixed assets | | | |  | |Gross block |27. 14 |33. 69 |33. 69 |35. 7 | |Less : revaluation reserve |- |- |- |- | |Less : accumulated depreciation |10. 77 |12. 32 |12. 32 |13. 52 | |Net block |16. 38 |21. 38 |21. 38 |21. 95 | |Capital work-in-progress |- |0. 61 |0. 1 |0. 61 | |Investments |- |6. 38 |6. 38 |6. 38 | |NET CURRENT ASSETS | | | |  | |Current assets, loans & advances |144. 97 |341. 64 |341. 64 |327. 56 | |Less : current liabilities & provisions |77. 48 |128. 1 |128. 31 |110. 03 | |Total net current assets |67. 49 |213. 32 |213. 32 |217. 53 | |Miscellaneous expenses not written |0. 48 |0. 18 |0. 18 |0. 04 | |TOTAL ASSETS |84. 34 |241. 87 |241. 87 |246. 51 | RS. IN CRORS |INCOME |2006 2007 |2008 |2009 | |Operating income |7. 46 |7. 97 |8. 57 |7. 89 | |EXPENSES | | | | | |Material consumed |2. 51 |3. 01 |3. 68 |3. 41 | |Manufacturing expenses  |0. 69 |0. 7 |0. 19 |0. 1 | |Personnel expenses |1. 46 |1. 91 |1. 52 |1. 54 | |Selling expenses |0. 78 |0. 62 |- |- | |Adminstrative expenses |0. 84 |0. 73 |2. 11 |2. 4 | |Expenses capitalized |- |- |- |- | |Cost of sales |6. 8 |6. 97 |7. 51 |7. 55 | |Operating profit |1. 18 |1 |1. 05 |0. 34 | |Other recurring income |0. 04 |0. 18 |0. 1 |0. 03 | |Adjusted PBDIT |1. 23 |1. 19 |1. 15 |0. 36 | |Financial expenses |0. 1 |0. 01 |0. 01 |0. 02 | |Depreciation  |0. 24 |0. 27 |0. 26 |0. 24 | |Other write offs |- |- |- |- | |Adjusted PBT |0. 97 |0. 91 |0. 88 |0. 1 | |Tax charges  |0. 7 |0. 33 |0. 37 |-0. 02 | |Adjusted PAT |0. 6 |0. 57 |0. 51 |0. 13 | |Non recurring items |- |- |- |- | |Other non cash adjustments |- |-0. 02 |- |0. 01 | |Reported net profit |0. |0. 56 |0. 51 |0. 14 | |Earnigs before appropriation |0. 86 |0. 91 |0. 91 |0. 53 | |Equity dividend |0. 22 |0. 22 |0. 22 |- | |Preference dividend |- |- |- |- | |Dividend tax |0. 3 |0. 04 |0. 04 |- | |Retained earnings |0. 6 |0. 65 |0. 64 |0. 53 | Profit & Loss Account of Toyama Electrics Limited For the year ended 31st March, 2009. RS. IN CRORS BALANCE SHEET OF TOYAMA ELECTRICS LIMITED AS ON 31ST MARCH, 2006 TO 2009 RS.

IN CRORS |PARTICULARS |2006 |2007 |2008 |2009 | |SOURCES OF FUNDS | | | | | |Owner’s fund | | | | | |Equity share capital |3 |3 |3 |3 | |Share application money |- |- |- |- | |Preference share capital |- |- |- |- | |Reserves & surplus |4. 76 |5. 06 |5. 51 |5. 63 | |LOAN FUNDS | | | | | |Secured loans |- |- |- |- | |Unsecured loans |- |- |- |- | |TOTAL LIABILITIES |7. 76 |8. 05 |8. 51 |8. 3 | |USES OF FUNDS | | | | | |Fixed assets | | | | | |Gross block |6. 23 |6. 59 |6. 66 |8. 06 | |Less : revaluation reserve |0. 25 |0. 23 |- |- | |Less : accumulated depreciation |3. 75 |3. 97 |4. 25 |4. | |Net block |2. 23 |2. 39 |2. 41 |3. 56 | |Capital work-in-progr