The Directors have pleasure in presenting their 33rd Annual Report on
the business and operations of the Company and the accounts for the
Financial Year ended March 31, 2016.
1. FINANCIAL SUMMARY OR HIGHLIGHTS
The Board''''s Report is prepared based on the standalone financial
statements of the Company. The Company''''s financial performance for the
year under review along with previous year''''s figures are given hereunder:
(Rs. in Crores)
Particulars Consolidated Standalone
2015-16 2014-15 2015-16 2014-15
Net Sales 7,714.18 8,569.43 5,436.88 5,238.69
Other Income 86.25 50.46 68.74 52.21
Operating Profit before
Finance Costs, Depreciation,
Tax 886.46 771.59 816.62 751.33
and Extraordinary items Less:
Depreciation and amortization
expenses 126.67 138.66 92.22 87.51
Finance Costs 44.94 63.96 12.60 17.57
Profit before Tax and
Exceptional Expenses 714.85 568.97 711.80 646.25
Add: Exceptional Items 724.02 - 202.39 -
Less: Tax 229.96 183.55 198.84 181.31
Net Profit for the year 1,208.91 385.42 715.35 464.94
Add: Balance brought forward
from previous year 1,070.70 960.69 1,618.57 1,429.04
Less: Adjustment related to
transitional provision as per - 3.42 - 3.42
Schedule II to the Companies
Less: Share of Profit transfer
to minority 0.13 - - -
Profit available for
appropriation 2,279.48 1,342.69 2,333.92 1,890.56
Appropriation of Profits
Transfer to General Reserve 71.55 46.50 71.55 46.50
Interim (Special) Dividend 187.38 - 187.38 -
Proposed Dividend 187.38 187.35 187.38 187.35
Dividend for previous year 0.03 - 0.03 -
Corporate Dividend Tax 76.30 38.14 76.30 38.14
Balance carried over to
Balance Sheet 1,756.84 1,070.70 1,811.28 1,618.57
2,279.48 1,342.69 2,333.92 1,890.56
Havells, on a standalone basis achieved 4% growth in its net sales to Rs.
5,437 crores in 2015-16 as against Rs. 5,239 crores in 2014-15 with
improvement in growth visible in second half at 8.6%. The sale growth
in value terms was impacted by drop in commodity prices during the year
2015-16 offsetting higher volume growth in cable business.
The financial year 2015-16 embarked upon visible improvement in
operating profit margins due to focused cost efficiency measures, price
discipline and low commodity prices. Havells sustained its investment
in brand and manpower to prepare for next growth phase. The operating
profit before finance costs, depreciation and tax grew by 8.8% to Rs. 817
crores in financial year 2015-16 as compared to Rs. 751 crores in
financial year 2014-15.
Profit after tax was Rs. 715 crores in year 2015-16 as compared to Rs.
465 crores of preceding year. Profit after tax includes exceptional item
of Rs. 202 crores due to profit on stake sale of Sylvania, during
financial year 2015-16. Increase in other income is due to interest
earned on fund received from redemption/ sale of investment.
Each business segment shows growth over last year. Higher volume
growth in cable division offset by drop in commodity prices. In
lighting and fixture division new technology lighting i.e. LED grew by
100% during financial year 2015-16 as compared to financial year 2014-15
and comprised 51% of the total lighting segment. Havells has been able
to capture the transition in lighting market from conventional lighting
to LED by introducing leading products. Although drop in conventional
lighting slowed down overall growth in lighting and fixture division.
2. BRIEF DESCRIPTION OF THE COMPANY''''S WORKING DURING THE YEAR/ STATE OF
Towards the end of the calendar year 2015, your Company, divested 80%
stake in Sylvania to Shanghai Feilo Acoustics Co Ltd. The divestment is
optimal for each stakeholder. Havells post divestment would realign its
focus on domestic markets and growth.
Havells continues to invest in the future technology, products and
people. During the year we launched smarter products that not only
helped us connect better with the gen-next but also adhere to our core
philosophy of providing energy efficient products. The Company launched
some award winning products in the switchgear, LED and also marked its
entry into air cooler and air purifiers thus strengthening its consumer
In the switchgear segment the Company launched award winning Euro II
series of switchgear including super premium distribution boards. The
new range has been designed, developed and manufactured entirely in the
country. The Company strengthened its range of LED products like colour
changing LED''''s, ambient dual colour LED''''s, Solar LED street lights to
name a few. As we get ready for our next phase of growth, we intend to
make our conventional products smarter using technologies such as
''''Internet of Things''''.
In the fiscal 15-16, we equipped our dealers with new technologies so
that they are ready to take full advantage of upcoming products and
solutions from the Company. We launched ''''M-Connect'''' a mobile
application for dealers helping them conduct business even on the go.
In a short span of time this has not only added to the convenience but
has become a great tool to enhance their productivity. The Company
offered similar application with augment reality features to customers
to enhance their experience with Havells products and make an informed
Advertising has been one of the core differentiators for Havells. The
Company came up with some of the most memorable yet relevant campaigns
that helped it connect with the audience effectively. The brand
Standard took the young bollywood actress, Alia Bhat as its brand
ambassador positioning itself as a youthful and energetic brand. During
the year the Company came up with some award winning campaigns for
fans, domestic cables, Crabtree switches, LED and Standard fans. The
Company spent Rs. 179 crores in advertising and brand initiatives during
SUBSIDIARY COMPANIES, JOINT VENTURE AND CONSOLIDATED FINANCIAL
During financial year 2015-16, the Company divested its international
operations. Havells Holdings Limited, wholly owned subsidiary of the
Company, completed 80% stake sale in its subsidiary Havells Malta
Limited (excluding its subsidiaries based in United States, Brazil,
Chile and Thailand) to INESA UK Limited, an affiliate of Shanghai Feilo
Acoustics Co. Limited, a China based listed company at an agreed
consideration of Euro 138.40 million (equivalent to Rs. 1,011.05 crores).
Also the Company had sold its 80% stake in Havells Exim Limited, Hong
Kong, a wholly owned subsidiary, to Shanghai Feilo Investment Ltd (a
subsidiary of Shanghai Feilo Acoustics Co. Limited), at an agreed
consideration of Euro 10.40 million (equivalent to Rs. 75.89 crores). The
combined equity value for 100% stake for both the companies were Euro
The profit on Divestment in stake as stated above has been disclosed as
exceptional items in the financial statement.
(Rs. in crores)
i) On account of Profit 126.58 702.65
on disposal of stake
in Havells Malta Limited
ii) On account of Profit 75.81 55.07
on the disposal of
stake in Havells Exim Limited
iii) Restructuring cost - (33.70)
Total 202.39 724.02
The consolidated profit and loss account for the period ended 31st
March, 2016 includes profit and loss account for all of these sold out
subsidiaries and their further subsidiaries for the nine months ended
31st December, 2015.
As on 31st March, 2016, your Company has 8 (Eight) subsidiary
companies, 2 (Two) being direct subsidiaries and the rest 6 (Six)
step-down subsidiaries, all except 1 (One) of which are registered
outside India. The consolidated profit and loss account for the period
ended 31st March, 2016 includes the profit and loss account for these 8
(Eight) subsidiaries and the joint venture company for the complete
financial year ended 31st March, 2016. The 2 (Two) Direct subsidiaries
1. Havells Holdings Limited based at Isle of Man. This entity is an
SPV formed for the purpose of holding investments and mobilizing funds
for the 6 (Six) step-down subsidiaries of the Company.
2. Prompted Renewable Energy Solutions Pvt. Ltd. based at Bangalore.
This entity is engaged in marketing and manufacturing of LED products
including street lighting, office lighting and Solar lighting.
The Board of Directors of the Company has, by Resolution passed in its
Meeting held on 11th May, 2016, given consent for not attaching the
Balance Sheets of the subsidiaries concerned.
The consolidated financial statements of the Company including all
subsidiaries duly audited by the statutory auditors are presented in
the Annual Report. The consolidated financial statements have been
prepared in strict compliance with applicable Accounting Standards and,
where applicable, Listing Agreement and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, as prescribed by the
Securities and Exchange Board of India.
A report on performance and financial position of each of the
subsidiaries, associates and joint venture companies included in the
consolidated financial statement is presented in a separate section in
this Annual Report. Please refer (AOC-1) annexed to the financial
statements in the Annual Report.
The annual accounts of the subsidiary companies and the related
detailed information shall be made available to Shareholders of the
Company and its subsidiary companies upon request and it shall also be
made available on the website of the Company i.e. www. havells.com.
The annual accounts of the subsidiary companies shall also be kept for
inspection by any shareholder in the head office of the Company and the
respective offices of its subsidiary companies.
Your Company has a 50:50 joint venture in People''''s Republic of China
with Shanghai Yaming Lighting Co. Ltd. under the name of Jiangsu
Havells Sylvania Lighting Co. Ltd. (JV). This Joint Venture Company is
created with an objective to use advanced technology, know-how and
scientific management techniques for production of lighting lamps and
fixtures and to sell it to Havells and its other affiliates.
Both the partners have made full investment in JV (USD 5.3 mn by each
partner) as required by Joint Venture contract for its registered
In Financial Year 2015-16, JV achieved sales of US$ 18.9 mn against US$
19.9 mn in 2014-15 and the net profit for the year was 2.9% as against
4% in 2014-15.
3. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS
SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
Consequent to the divestment of 80% stake in Havells Malta Limited by
Havells Holdings Limited, a wholly- owned subsidiary of the Company and
divestment of 80% stake in Havells Exim Limited, a wholly-owned
subsidiary of the Company, the following entities ceased to be
subsidiaries of the Company:
Sr. Name of the entity which ceased to be
1 Havells Sylvania Argentina S.A.
2 Havells Sylvania Colombia S.A.
3 Havells Sylvania Venezuela C.A.
4 Havells Sylvania N.V. (Ecuador)
5 Havells Sylvania El Salvador S.A. de C.V.
6 Havells Sylvania Guatemala S.A.
7 Havells Mexico S.A. de C.V.
8 Panama Americas Trading Hub SA
9 Havells Sylvania Panama S.A.
10 Havells Sylvania Peru S.A.C.
11 Havells Sylvania Europe Ltd.
12 Havells Sylvania Spain S.A.
13 Havells Sylvania Portugal Lda.
14 Havells Sylvania Italy S.p.A.
15 Havells Sylvania Greece A.E.E.E.
16 Havells Sylvania Sweden A.B.
17 Havells Sylvania Norway A.S.
18 Havells Sylvania Finland OY
19 Havells Sylvania Tunisia S.A.R.L.
20 Havells Sylvania UK Ltd.
21 Havells Sylvania Fixtures UK Ltd.
22 Havells Sylvania Lighting Belgium N.V.
23 Havells Sylvania Poland S.p.z.o.o
24 Havells Sylvania Belgium B.V.B.A.
25 Havells Sylvania Germany GmbH
26 Havells Sylvania Fixtures Netherlands B.V.
27 Havells Sylvania Lighting France S.A.S.
28 Havells Sylvania France S.A.S.
29 Havells Sylvania Switzerland A.G.
30 SLI Europe B.V.
31 Sylvania Lighting International B.V.
32 Flowil International Lighting (Holding) B.V.
33 Guangzhou Havells Sylvania Enterprise Ltd.
34 Havells Sylvania Asia Pacifc Ltd.
35 Havells Sylvania (Shanghai) Ltd
36 Havells Sylvania (Malaysia) Sdn. Bhd
37 Havells Sylvania Dubai FZCO
38 Havells Malta Ltd
39 Havell''''s Netherlands Holdings B.V.
40 Havell''''s Netherlands B.V.
41 Havells Sylvania Costa Rica S.A.
42 Havells Sylvania TR Elektrik Urunleri Ticaret Limited Sirketi
43 PT Havells Sylvania Indonesia
44 Havells Sylvania South Africa Proprietary Limited
45 Havells Mexico Services Generals SA De CV
46 Havells Sylvania Export N.V.
47 Havells Sylvania Holdings BVI-1 Limited
48 Havells Sylvania Holdings BVI-2 Limited
49 Havells Exim Limited
After the divestment, Havells Malta Limited and Havells Exim Limited
became Associate Companies of the Company.
During the financial year ended 31st March, 2016,
1. Prompted Renewable Energy Solutions Pvt. Ltd. became a subsidiary
of the Company, with a majority stake of 51% held by the Company in it.
Prompted is a Bangalore based company engaged in marketing and
manufacturing of LED products including street lighting, office lighting
and solar lighting.
2. Havells International Limited was incorporated in Malta during the
financial year 2015-16 as a wholly owned subsidiary of Havells Holdings
Limited. This entity was incorporated to hold the shares of
subsidiaries carved out from the Sylvania divestment in January, 2016.
It holds the shares of Havells Sylvania (Thailand) Limited, Thai
Lighting Assets Co Ltd and Havells Sylvania Brasil Illuminacao Ltda.
Your Company proposes to carry Rs. 71.55 crores to the general reserve
and retain Rs. 1,811.28 crores in the profit and loss account.
INTERIM (SPECIAL) DIVIDEND
Post the divestments carried out in January, 2016, as a balancing act
of rewarding shareholders and preserving resources for further growth
of the Company, both organically and inorganically, an Interim
(Special) Dividend at the rate of Rs. 3/- per Equity Share of the face
value of Rs. 1/- each was declared for the year 2015-16, resulting in an
outflow of Rs. 225.53 crores (including Corporate Dividend Tax of
Rs. 38.15 crores). The dividend amount was disbursed to all the
Shareholders whose names were appearing in the Register of Members as
on the Record date i.e. 11th February, 2016, fixed for the aforesaid
In addition to the Interim (Special) Dividend declared during the year,
your Directors are pleased to recommend a Final Dividend @ Rs. 3/- per
equity share for the year 2015-16. The proposed dividend, subject to
approval of Shareholders in the ensuing Annual General Meeting of the
Company, would result in appropriation of Rs. 225.53 crores (including
Corporate Dividend Tax of Rs. 38.15 crores). The dividend would be
payable to all Shareholders whose names appear in the Register of
Members as on the Book Closure Date.
The Register of Members and Share Transfer books shall remain closed
from 1st July, 2016, Friday, to 8th July, 2016, Friday (both days
6. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE
FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE
AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of
the Company occurred between the end of the financial year to which this
financial statements relate and the date of this Report.
However, in terms of the "Part B - Havells Employees Stock Purchase
Plan 2014" of the Havells Employees Long Term Incentive Plan 2014,
which is administered by Havells Employees Welfare Trust, 1,17,562
Equity Shares of Rs. 1/- each, were approved for grant on 11th May, 2016
to the eligible employees, which, if exercised, shall result in an
equivalent no. of Equity Shares of Rs. 1/- to be allotted to Eligible
Employees of the Company under the Plan.
Further, pursuant to Havells Employees Stock Purchase Scheme 2015,
which was instituted during the year, 1,50,000 Equity Shares of Rs. 1/-
each, were approved for grant to the Eligible Employees which, if
exercised, shall result in an equivalent no. of Equity shares of Rs. 1/-
to be alloted to Eligible Employees of the Company under the scheme.
Further, the Board of Directors upon the recommendation of the
Nomination and Remuneration Committee approved the Havells Employees
Stock Purchase Scheme 2016 framed in accordance with SEBI (Share Based
Employee Benefits) Regulations, 2014. The Board recommends the same for
Shareholders approval at the forthcoming Annual General Meeting. The
details of the Scheme are contained in the Explanatory Statement to the
Notice of AGM.
7. CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company during the
financial year ended 31st March, 2016.
8. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL INCLUDING THOSE
WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR
Pursuant to the provisions of Section 152 of the Companies Act, 2013,
Shri Surjit Kumar Gupta, Non- Executive Director and Shri Anil Rai
Gupta, Chairman and Managing Director, are due to retire by rotation at
the ensuing Annual General Meeting, and being eligible, offers
themselves for re-appointment.
The details of Directors being recommended for re-appointment as
required under the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 are contained in the accompanying
Notice convening the ensuing Annual General Meeting of the Company.
Further, Shri A. P. Gandhi, Shri V. K. Chopra, Shri S. B. Mathur, Shri
S. K. Tuteja and Dr. Adarsh Kishore, whose first term as Independent
Directors of the Company shall be expiring on 31st March, 2017 are
proposed to be re-appointed as Independent Directors for a second term
of 3 (Three) years w.e.f. 1st April, 2017.
Due notices under section 160 of the Companies Act, 2013 have been
received from Members of the Company proposing the appointment of Shri
A. P. Gandhi, Shri V. K. Chopra, Shri S. B. Mathur, Shri S. K. Tuteja
and Dr. Adarsh Kishore as Independent Directors of the Company at this
Annual General Meeting.
Appropriate Resolution(s) seeking your approval to the appointment/
re-appointment of Directors are also included in the Notice.
9. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the financial year 2015-2016, the Board of Directors of the
Company, met 9 (Nine) times on 20th April, 2015, 11th May, 2015, 25th
July, 2015, 23rd September, 2015, 9th November, 2015, 10th December,
2015, 27th January, 2016, 3rd February, 2016 and 21st March, 2016.
Further, a separate Meeting of the Independent Directors of the Company
was also held on 21st March, 2016, whereat the prescribed items
enumerated under Schedule IV to the Companies Act, 2013 and the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015,
10. DIRECTORS'''' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors
to the best of their knowledge hereby state and confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
b) the directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the company at the end of the financial year and of the profit of the
company for that period;
c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern
e) the internal financial controls to be followed by the company were
laid down and such internal financial controls were adequate and were
operating effectively; and
f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
11. DECLARATION BY INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT, IF ANY
All the Independent Directors have submitted their disclosures to the
Board that they fulfill all the requirements as stipulated in Section
149(6) of the Companies Act, 2013 so as to qualify themselves to be
appointed as Independent Directors under the provisions of the
Companies Act, 2013 and the relevant rules.
12. NOMINATION AND REMUNERATION POLICY OF DIRECTORS, KEY MANAGERIAL
PERSONNEL AND OTHER EMPLOYEES
In adherence of section 178(1) of the Companies Act, 2013, the Board of
Directors of the Company in its Meeting held on 22nd December, 2014,
approved a policy on directors'''' appointment and remuneration including
criteria for determining qualifications, positive attributes,
independence of a director and other matters provided u/s 178(3), based
on the recommendations of the Nomination and Remuneration Committee.
The broad parameters covered under the Policy are ? Company Philosophy,
Guiding Principles, Nomination of Directors, Remuneration of Directors,
Nomination and Remuneration of the Key Managerial Personnel (Other than
Managing/ Whole-time Directors), Key-Executives and Senior Management
and the Remuneration of Other Employees.
The Company''''s Policy relating to appointment of Directors, payment of
Managerial remuneration, Directors'''' qualifications, positive attributes,
independence of Directors and other related matters as provided under
Section 178(3) of the Companies Act, 2013 is furnished in ANNEXURE ? 1
and forms part of this Report.
13. FORMAL ANNUAL EVALUATION
In line with the statutory requirements enshrined under the Companies
Act, 2013 and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Board carried out a performance
evaluation of itself, its Committees, the Chairman and each of the
other Directors. As in previous year, this was carried out on the basis
of framework approved by the Nomination and Remuneration Committee.
The Committee had unanimously consented for an ''''in-house'''' review built
on suggestive parameters. Based on the suggestive parameters approved
by the Nomination and Remuneration Committee, the following evaluations
were carried out:
- Review of Board as a whole by all the Members of the Board
- Review of all Board Committees by all the Members of the Board
- Review of Individual Directors by rest of the Board Members except
the Director being evaluated
At the conclusion of the evaluation exercise, the Members of the Board
assessed that the Board as a whole together with each of its Committees
was working effectively in performance of its key functions. The peer
review concluded on the note that each of the individual directors was
performing efficiently and effectively contributing to a well performing
Board and shared a common vision to turning organization goals into
14. EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return in Form No. MGT ? 9 forms part of the
Board''''s Report and is annexed herewith as ANNEXURE - 2.
1. STATUTORY AUDITORS
The Statutory Auditors, M/s V. R. Bansal & Associates, Chartered
Accountants, (Registration No. 016534N) and M/s S. R. Batliboi & Co.
LLP (Registration No. 301003E/ E300005) hold office till the conclusion
of the ensuing Annual General Meeting. The Company has received their
written consent and a certificate that they satisfy the criteria
provided under Section 141 of the Companies Act, 2013 and that the
appointment, if made, shall be in accordance with the applicable
provisions of the Act and rules framed there under.
The Audit Committee and the Board of Directors recommends the
re-appointment of M/s V. R. Bansal & Associates, Chartered Accountants
as the Statutory Auditors of the Company in relation to the financial
year 2016-17 till the conclusion of the next Annual General Meeting.
The Audit Committee and the Board of Directors recommends the
re-appointment of M/s S. R. Batliboi & Co. LLP as the Statutory
Auditors of the Company till the conclusion of the Annual General
Meeting of the Company to be held in the calendar year 2021.
The re-appointments proposed are within the time frame for transition
under the third proviso to sub-section (2) of Section 139 of the
Companies Act, 2013.
STATUTORY AUDITORS'''' REPORT
The observations of Statutory Auditors in their reports on standalone
and consolidated financials are self-explanatory and therefore do not
call for any further comments.
2. COST AUDITORS
Pursuant to the provisions of Section 141 read with Section 148 of the
Companies Act, 2013 and Rules made there under, M/s Sanjay Gupta &
Associates, Cost Accountants (Firm Regn. No. 000212) were appointed as
the cost auditors of the Company for the year ending 31st March, 2016.
In terms of the Cost Audit Order notified by the Ministry of Corporate
Affairs dated 31st December, 2014, the Company is covered under the
purview of Cost Audit w.e.f. the financial year 2015-16.
3. SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013
read with corresponding Rules framed there under, M/s MZ & Associates
were appointed as the Secretarial Auditors of the Company to carry out
the secretarial audit for the year ending 31st March, 2016.
SECRETARIAL AUDIT REPORT
A Secretarial Audit Report given by the Secretarial Auditors in Form
No. MR-3 is annexed with this Report as ANNEXURE ? 3.
There are no qualifications, reservations or adverse remarks made by
Secretarial Auditors in their Report.
16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
During the financial year ended 31st March, 2016, no Loan u/s 186 of the
Companies Act, 2013 was made by the Company.
The particulars of investments and guarantees made/ given by the
Company, under Section 186 is furnished in ANNEXURE ? 4 and forms part
of this Report.
17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of every contract and arrangement entered into by the
Company with related parties referred to in sub-section (1) of section
188 of the Companies Act, 2013 including certain arm''''s length
transactions under third proviso thereto are disclosed in Form No.
AOC-2 in ANNEXURE ? 5 and form part of this Report.
18. CONTRIBUTION TO EXCHEQUER
The Company is a regular payer of taxes and other duties to the
Government. During the year under review your Company paid Rs. 222.71
crores towards Income Tax as compared to Rs. 150.99 crores paid during
the last financial year. The Company also paid Excise Duty of Rs. 397.10
crores, Custom Duty, Sales Tax & Service Tax of Rs. 547.84 crores,
totaling Rs. 944.94 crores during financial year 2015-16 as compared to
Rs. 842.64 crores paid during last financial year.
19. DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE ACT
The Shareholders vide their Special Resolution dated 9th June, 2014,
passed by way of Postal Ballot, have approved inviting/ accepting/
renewing deposits, in terms of the provisions of Companies Act, 2013
making the Company eligible for the same.
However, the Company has not accepted any deposits during the year
20. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has been actively contributing to the overall growth of
the society through various CSR initiatives undertaken either by itself
or through QRG Foundation, a trust instituted by the group. The fagship
program of providing mid-day meal to school children in Alwar district
started from 1,500 students during the year 2005. It has now expanded
its wings to 57,000 students every day in 672 schools in financial year
2015-16. Inculcating good hygiene habits and enhance the lives of the
students and future citizens has been another important pillar for your
Company. In this regard it has taken a step forward to include
sanitation under Swachh Bharat Abhiyaan. The Company in the current
fiscal has built 800 environment friendly bio toilets in 108 schools in
the Alwar district of Rajasthan.
Your Company believes in Sustainable CSR that can help improve lives of
students around the country. One such noble idea was implemented at
its plant in Haridwar where the plant manufactured benches made out of
waste wood used in the packaging of aluminum blades of its fans.
Instead of selling the wood to scrap dealer the plant created furniture
for school children and donated them to the government primary school
Environment is another major area where your Company plans to
contribute its bit. This year your Company planted 1,000 trees in
Baddi, Himachal Pradesh and would take care of them for another few
years until they can grow on their own. Your company also has
undertaken the task of managing few parks in the Baddi area that could
help maintain greenery, save environment and are appealing to eye.
Further, the Board of Directors of your Company has also adopted the
CSR Policy of the Company as approved by the Corporate Social
Responsibility Committee which is also available on the website of the
Company at www.havells.com.
The disclosures as per Rule 9 of Companies (Corporate Social
Responsibility Policy) Rules, 2014 are annexed herewith as ANNEXURE ? 6
to this Report in the prescribed format.
21. AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company, comprises
4 (Four) Members, namely Shri S. B. Mathur, Shri V. K. Chopra, Shri A.
P. Gandhi and Shri Surjit Kumar Gupta, majority of them being
Independent Directors except Shri Surjit Kumar Gupta, who is a
Non-Independent Non-Executive Director. Shri S. B. Mathur, an
Independent Director, is the Chairperson of the Audit Committee.
The Board accepted the recommendations of the Audit Committee whenever
made by the Committee during the year.
22. RISK MANAGEMENT POLICY
Havells understands controlling risks through a formal programme is
necessary for the well-being of the Company. To this end, the Board has
formed an Enterprises Risk Management Committee to identify the risks
impacting the business and formulate strategies/ policies aimed at risk
mitigation as part of risk management. Further, a core Committee
comprising senior management, has also been formed to identify and
assess key risks and formulate strategies for mitigation of risks
identified in consultation with process owners.
The Board of Directors has also adopted a formal Risk Management policy
for the Company, whereby, risks are broadly categorized into Strategic,
Operational, Compliance and Financial & Reporting Risks, outlining the
parameters of identification, assessment, monitoring and mitigation of
23. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH
REFERENCE TO THE FINANCIAL STATEMENTS
The Risk Management and Governance Department of the Company have
assured the existence of various risk-based controls in the Company and
also tested the key controls towards assurance for compliance for the
Further, the testing of such controls was also carried out
independently by the Statutory Auditors of the Company as mandated
under the provisions of the Companies Act, 2013.
In the opinion of the Board, the existing internal control framework is
adequate and commensurate to the size and nature of the business of the
24. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND
Prior to the statutory mandate, the Company has had in place a
composite Policy "Idea & Satark", whereby "Idea" seeks to promote a
culture of innovative thinking and creativity in all aspects of
business ? technical, non-technical, commercial, administrative,
processes, cost saving etc. that may benefit the Company; and "Satark"
(alert/ vigilant) functions as a Whistle Blowing mechanism, empowering
any person associated with the organization to bring to the attention
of the management any irregularity that he/ she may notice. Under the
- is a forum available to the employees and any person associated with
the organization, allowing him/ her to blow the whistle/ highlight any
fraud, irregularity, wrongdoing etc.
- ensures confidentiality of the whistle-blower subject to the rights of
the person against whom the grievance is made
- provides whistle-blower access to the Chairman of the Audit Committee
25. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS
AND COMPANY''''S OPERATIONS IN FUTURE
There was no significant and material order passed by the regulators or
courts or tribunals impacting the going concern status and Company''''s
operations in future.
26. EMPLOYEE RELATIONS
Havells has always maintained that human capital is one of the critical
factors towards achieving success. Therefore, the Company''''s
comprehensive Human resource strategy takes into cognizance the key
aspects of people development such as employee engagement, talent
management, performance management capability development and
progressive industrial relations. The endeavour is to build and
strengthen organizational capabilities thereby enabling the
Organization to sustain attractive growth in a dynamic business
We have established a Leadership Competency Framework that drives our
leadership culture. We plan to utilize this framework in our core HR
processes of Performance Management, Talent Development though
development centers and 360O Feedback. The Company has established
"Training Model" that focusses on improving capabilities in Sales and
Operations and will be a key driver towards enhancing our operating
At Havells, we ensure that there is full adherence to the code of
ethics and fair business practices. Havells is an equal opportunities
employer and employees are evaluated solely on the basis of their
qualifications and performance. We provide equal opportunity in all
aspects of employment, including recruitment, training, work
conditions, career progression, etc. that reconfirms our commitment that
equal employment opportunity is a component of our growth and
competitiveness. Further, Havells is committed to maintaining a
workplace where each employee''''s privacy and personal dignity is
respected and protected from offensive or threatening behaviour
At Havells, the Human Resource function is a business partner that
focusses on improving the way of life, work culture, employee
engagement, productivity, effectiveness and efficiency. The Company
believes in developing an engaged, efficient and committed employee base
that is aware and empowered. Employees are involved in inculcating
business efficiencies through policies like "Idea" thereby making them
partners in the wealth created at Havells.
In accordance with The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 to provide for the
effective enforcement of the basic human right of gender equality and
guarantee against sexual harassment and abuse, more particularly
against sexual harassment at work places, your Company has in place a
"Nirbhaya Policy", duly approved by the Board of Directors.
An Internal Complaints Committee has been constituted under the above
policy which provides a forum to all female personnel to lodge
complaints (if any) therewith for redressal. The Committee submits an
Annual Report to the Audit Committee of the Board of Directors of your
Company on the complaints received and action taken by it during the
During the year, no complaint was lodged with the Internal Complaints
Committee (ICC) formed under Nirbhaya Policy.
In order to fulfill the desired utility of the Committee and make the
Nirbhaya Policy meaningful, the Committee meets at specified intervals
to take note of useful tools, mobile applications, media excerpts etc.
that enhance security of female employees. The same are circulated
within the organization to encourage general awareness. In its
endeavour to ensure the spirit of law, during the financial year 2015-
16, the ICC undertook several interactive sessions at the head office
and various other plant locations. The interactions were primarily
aimed at understanding as to how comfortable female employees are
working in the organisation especially from safety point of view and
how forthcoming would they be, in raising their voice if they are put
in an undesirable situation.
27. DETAILS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013
Details pursuant to section 197(12) of the Companies Act, 2013 read
with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 form part of this Report and are annexed
herewith as ANNEXURE - 7.
28. EMPLOYEES STOCK OPTION PLANS
The Company has in place 2 (Two) employee benefit plans, namely, Havells
Long Term Incentive Plan 2014 (LTIP 2014) and the Havells Stock
Purchase Scheme 2015 (ESPS 2015). Besides, with the intent of rewarding
its senior management based on their performance and achievement of
KRAs, the Board upon the recommendation of Nomination and Remuneration
Committee has also approved the "Havells Employees Stock Purchase
Scheme 2016" and recommends the same for Shareholders approval in the
forthcoming AGM, details whereof are included in the Notice of AGM.
All the existing and proposed employee benefit schemes are/ shall be
administered by Havells Employees Welfare Trust under the supervision
of the Nomination and Remuneration Committee.
Promoters, Independent Directors, Directors directly or indirectly
holding 10% or above of the equity share capital of the company,
Employees not residing in India or Non-Resident Indians (NRIs) are not
eligible for the grant of options/ issue of shares under any of the
The Company has received a certificate dated 22nd April, 2016 from the
Auditors of the Company that the Schemes have been implemented in
accordance with the applicable SEBI Guidelines and the Resolutions
passed by the shareholders dated 9th June, 2014 and 4th December, 2015
in respect of LTIP 2014 and ESPS 2015 respectively.
The Certificates would be placed at the Annual General Meeting for
inspection by Members.
There has been no material change in any of the subsisting Schemes.
Disclosures pursuant to SEBI (Share Based Employee Benefits)
Regulations, 2014, in respect of LTIP 2014 and ESPS 2015, as at 31st
March, 2016, are available on the website of the Company at
29. CREDIT RATINGS
Credit Analysis & Research Limited (CARE) is a full service rating
company that offers a wide range of rating and grading services across
sectors. CARE''''s Credit rating is an opinion on the relative ability and
willingness of an issuer to make timely payments on specific debt or
related obligations over the life of the instrument. CARE rates rupee
denominated debt of Indian companies and Indian subsidiaries of
During the year, CARE has revised the rating assigned to the long-term
facilities of your Company from CARE AA [Double A Plus] to CARE AAA
[Triple A]. This rating is applicable to facilities having a tenure of
more than one year. Instruments with this rating are considered to have
the highest degree of safety regarding timely servicing of financial
CARE has also reaffirmed the CARE A1 [A One Plus] rating assigned to
the short-term facilities of your Company. This rating is applicable to
facilities having a tenure up to one year. Instruments with this rating
are considered to have very strong degree of safety regarding timely
payment of financial obligations.
During the year, ICRA assigned a long-term rating of [ICRA] AA (ICRA
double A plus) and a short-term rating of [ICRA] A1 (ICRA A one plus)
to the Line of Credit of the Company. The outlook on the long-term
rating is stable.
The Company has acquired a number of international certifications, like
BASEC, KEMA, T?V Rheinland and CB, for its various products to expand
its reach in international arena.
31. CORPORATE GOVERNANCE
Your Company upholds the standards of governance and is compliant with
the Corporate Governance provisions as stipulated under SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 in both
letter and spirit. The Company''''s core values of honesty and
transparency have since its inception been followed in every line of
decision making. Setting the tone at the top, your Directors
cumulatively at the Board level, advocate good governance standards at
Havells. Havells has been built on a strong foundation of good
corporate governance which is now a standard for all operations across
Parameters of Statutory compliances evidencing the standards expected
from a listed entity have been duly observed and a Report on Corporate
Governance as well as the Certificate from Statutory Auditors confirming
compliance with the requirements of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 forms part of the Annual
Further, the Management Discussion and Analysis Report and CEO / CFO
Certificate as prescribed under SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 are also presented in separate sections
forming part of the Annual Report.
32. ENVIRONMENT, HEALTH AND SAFETY
Your Company is continuously working towards laying a strong foundation
and creating a sustainable future for our organization, our people and
the society as a whole. Here, Environment Health and Safety (EHS)
management is a key pillar of our sustainable growth agenda. We are
committed to lead and excel in all aspects of environmental
stewardship, safety, health and social responsibility, always striving
to provide safe and healthy work environment to our employees and
efficient, safe and environmentally responsible products to our
Your Company''''s primary focus in this regard is on product innovation,
developing safe and efficient products which are environmentally
friendly, i.e. energy-efficient, safer to use, using non-toxic / eco-
friendly raw-materials, having long use life and those can be safely
disposed and dismantled at the end of their use life. Further, we are
actively working towards improving the EHS systems and practices within
our operations. From environment aspect, our efforts are directed
towards resource conservation and efficiency within our operations. We
have initiated an energy conservation drive within our plants with the
objective of monitoring our energy consumption at micro-level,
benchmarking our performance and implementing solutions for continuous
improvements. One of our plants now complies with the ISO 50001 Energy
Management Standard, with others also preparing for the same. On
similar note our plants are also working towards better materials,
water and waste management, including implementation of initiatives
such as integrated management system (i.e. ISO 9001, ISO 14001 and
OHSAS 18001), rainwater harvesting, and zero water discharge.
Similarly, we remain focused on our occupational health and safety
performance with an eye on our overall objective of "zero accidents"
operations. Relevant health, safety and fre trainings are provided to
all employees, with special trainings organized for employees working
with or around hazardous materials and processes. We offer our
employees, a working environment with high level of health and safety
protection. Our safety management is a combination of preventive and
remedial approaches. Apart from focusing on process related safety
procedures, the salient features of our safety management include
managing risks against fires, disaster management and effective health
management of the employees that reduce the inherent risk and build
capacities of the workforce.
Further, we continue to use the "Idea policy" to encourage employees to
share their ideas and contributions in making your Company an accident
free and sustainable business unit. This process is important for us as
we strongly believe that those on the shop floor who actually execute a
task are the best to judge the parameters involved for safety and
Overall, we believe we have worked hard to put in place management
systems, controls, objectives and targets, strategies and training that
uphold and honour national and international codes and standards on
health, safety and environment.
33. RESEARCH AND DEVELOPMENT
With the objective of enhancing in-house R&D capability, the Company is
investing in world class infrastructure and test laboratories at all
plant locations. The company has strong focus on in-house research &
development and promotes culture for innovation. Company''''s CRI (Centre
for Research and Innovation) team focusses on continuous and
sustainable product innovations, working across the product lifecycle
aspects including design, development, manufacturing and use phases.
During the year, the R&D activities continued to focus on developing
intelligent, eco-friendly and energy efficient products, as well as,
extending the range of existing products.
There is an increasing focus on improving the co-relation between
virtual (CAE - Computer Aided Engineering) and as manufactured so as to
reduce the number of iterations in the development cycle.
As a result Company has many products to its name in the FMEG sector,
such as being the first Company to offer 5-star energy efficient fans in
India, the green CFL of the country. The Company has 185 IPRs
registered including 18 patents for its innovations throughout the
years. With an eye on the future technology trends, many advanced
engineering study projects are being undertaken to further build on the
Company''''s engineering capabilities.
34. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 205C of the Companies Act, 1956,
your Company has transferred Rs. 4,49,588/- during the year to the
Investor Education and Protection Fund. This amount was lying
unclaimed/ unpaid with the Company for a period of seven years after
declaration of Dividend for the financial year ended 2007-08.
35. LISTING OF SHARES
The shares of the Company are listed on the National Stock Exchange of
India Limited (NSE) and BSE Limited (BSE).
Subsequent to the notification of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (Listing Regulations) during
the year, the Company has entered into "Uniform Listing Agreement" with
both the Stock Exchanges where its securities are listed, namely,
National Stock Exchange of India Limited and BSE Limited in order to
carry out a novation of the erstwhile Listing Agreement.
The listing fee for the year 2016-17 has already been paid to the
credit of both the Stock Exchanges.
36. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology
absorption, foreign exchange earnings and outgo as required under
Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the
Companies (Accounts) Rules, 2014 is furnished in ANNEXURE - 8 and forms
part of this Report.
The Board places on record its appreciation for the continued
co-operation and support extended to the Company by customers, vendors,
regulators, banks, financial institutions, rating agencies, stock
exchanges and depositories, auditors, legal advisors, consultants,
business associates and all the employees with whose help, cooperation
and hard work the Company is able to achieve the results.
The Board deeply acknowledges the trust and confidence placed by the
consumers of the Company and all its shareholders.
For and on behalf of
Board of Directors of Havells India Limited
Anil Rai Gupta
Noida, May 11, 2016 Chairman and Managing Director