Your Directors take pleasure in presenting their 36th Annual Report on thebusiness and operations of the Company and the accounts for the Financial Year ended 31stMarch 2019.
1. Financial Summary or Highlights
The Board's Report is prepared based on the standalone financial statements of theCompany. The Company's financial performance for the year under review along with previousyear's figures are given hereunder:
|Particulars || |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue from Operations ||1005762 ||8260.27 ||10073.43 ||8269.01 |
|Other Income ||12755 ||116.99 ||128.65 ||117.90 |
|Operating Profit before Finance Costs Depreciation Tax and Extraordinary items ||1319.74 ||1166.28 ||1313.00 ||1161.30 |
|Less: Depreciation and amortisation expenses ||148.57 ||139.52 ||152.61 ||140.49 |
|Finance Cost ||15.91 ||23.97 ||16.25 ||24.83 |
|Profit before Tax and Exceptional Expenses ||1155.26 ||1002.79 ||1144.14 ||995.98 |
|Add: Exceptional items ||- ||11.91 ||- ||(18.67) |
|Less: Tax ||363.74 ||302.18 ||358.27 ||303.83 |
|Net Profit for the Year from Continuing operations ||791.52 ||712.52 ||785.87 ||673.48 |
|Net Profit for the Year from Discontinued Operations ||- ||- ||(0.33) ||(12.51) |
|Profit for the year ||791.52 ||712.52 ||785.54 ||660.97 |
|Other Comprehensive Income ||(4.77) ||1.68 ||(4.77) ||8.62 |
|Total comprehensive income for the year net of tax ||786.75 ||714.20 ||780.77 ||669.59 |
|Profit for the year attributable to || || || || |
|Equity holders of the parent company ||791.52 ||712.52 ||785.98 ||662.37 |
|Non-controlling interest ||- ||- ||(0.44) ||(1.40) |
|Total comprehensive income for the year attributable to: || || || || |
|Equity holders of the parent company ||786.75 ||714.20 ||781.21 ||670.99 |
|Non-controlling interest ||- ||- ||(0.44) ||(1.40) |
The year that went by was quite eventful as all major political parties were warming upfor general elections leading to slowing down of government spend. Implementation of GSTwhich was rolled out in 2017 was a complex exercise involving overhauling the existingsystems to align with the new tax regime. Things are now stabilized. GST is a great reformas there are no hidden taxes and the complex labyrinth of taxes has been simplified.Thanks to the Input Tax credit the cascading effect of taxes has reduced and price risehas been kept in check. However the banking and NBFC sector also witnessed a majordownsizing of their balance sheet impacting the liquidity in the trade.
The year has been encouraging for Havells registering year on year 24% revenue growthacross product verticals with market share gains and stable profits. Water Heaters SDA(Small Domestic Appliances)
Motors and Industrial Switchgears have been trailblazers with growth >40% over lastyear. Water Purifier as a new category launch has been well accepted by trade andconsumers.
The Company posted profit before exceptional items and tax (PBT) of ' 1155.26Crores in financial year 2018-19 as against ' 1002.79 Crores in financial year2017-18 a growth of 15.20% on year to year basis.
2. Brief Description of the Company's Working During the Year/ State of Company'sAffairs
The year 2018-19 has been a year of revival despite transitional impact of GSTfluctuation in commodity prices & foreign exchange rates hike in custom duty andliquidity shortage due to NBFC crisis. Your Company registered robust revenue growthacross product verticals gained market share and achieved stable profits. Acceptance ofnew product segments from trade and consumers has been motivating.
The Company continues to enhance its larger focus of optimum growth with profitabilitybacked by numerous small steps for an overall improvement in its strength and brandsalience. This is evident from the massive investment that your Company made in airconditioner manufacturing facility at Ghiloth Rajasthan alongside the expansion of itsbrand shops and progressive positioning in newer channels like organized retail (MFR) andE-commerce (online). Added to this the Company targets to create positive foot prints inthe semi urban and rural markets too.
The switchgear segment experienced a reasonable market growth in both domestic andindustrial switchgears resulting from a strategic planning of focusing on government'srural electrification and low- cost housing program. Contrarily some of the segment'soperationally efficient products like Surge Protection Devices PV Switchgear rangeIndustrial Plug and Socket and Modular Contactor have received excellent response owing toa strong and continuous investment in R&D.
Huge investments in power and infrastructure sector and implementation of GST helpedCable business grow in revenues and margins. Government led investments in transmissionand distribution segment renewable energy urban infrastructure especially smart citiesand metro networks digitalization as well as in telecommunication infrastructure wouldfurther propel growth momentum.
I ntroduction of multiple new products and buoyancy in the consumer segment led thegrowth in electrical consumer durable segment. The newly launched technologically superiorpremium fans LED light changing water heaters latest models under the small domesticappliances category and the much- appreciated products category of water purifiers andpersonal grooming were well accepted and applauded by consumers and trade partners alike.
Growth in the consumer durable industry was affected by modest summer unseasonalrainfall and increase in import duties. Lloyd retained its focus on enhancing its reachand brand salience amidst its first air conditioner plant commencing commercialproduction. The latest campaign from Lloyd - Khayal Rakhenge Khush Rakhenge'featuring Deepika Padukone and Ranveer Singh has positively impacted the brand and gainedover 75 million views on various digital platforms since its launch in April this year.
Since beginning Information Technology has played an important role in the success ofthe Company. Continuous investment in the cutting-edge technology and innovation hashelped the organization to stay ahead in the highly competitive landscape. Various toolslike Service App for consumers Distribution Management System Dealer Portal RetailerApp and Sales Force Automation has helped the Company delight its customers achievebetter channel partner relationship and improve engagement with employees. The investmentsin the artificial intelligence natural language processing IOT and IIOT ensures that theCompany is building future ready products and services.
During the year we were awarded with India's buzziest brand and were part of top 75brands of the country by BrandZ. We came out with 15 advertising campaigns across 10product categories ensuring visibility across the year. We launched focused campaign forrural areas and added regional flavour to all our campaigns. Our presence on social anddigital media was also enhanced targeting younger audience. We continue to participate invarious industry exhibitions from Solar to LED Lighting IEEMA and IIID showcasing ourlatest product range and innovative designs.
In line with our commitment to enhancing green cover we planted over 1 lac trees eachin Madhya Pradesh and Neemrana thereby developing 100 hectares of forest area. We evenextended our green footprint to marketing collaterals by using bio-degradable material andenergy efficient LED lights. We continue to enhance our renewable energy coverage at ourplants. Today over 6% of our total energy used is from renewable sources.
Awards and Accolades
Your Company has received the following awards during the financial year ended 31stMarch 2019:
1. Mr. Anil Rai Gupta was honored with 2019 AACSB Influential Leader Award inrecognition of his outstanding achievements entrepreneurial success and his contributiontowards the industry & the society.
2. Digital Marketing of the Year 2018 - Consumer Durable Category.
3. Best Digital Display Campaigns 2018 - Gold.
4. Havells Fan won Effies bronze award for 5th Wall - Ceiling Art fancampaign in Durables category.
5. Havells - "School of Grooming campaign" was awarded "The Best Contentmarketing launch/ Relaunch award" by the Audacity e4m Indian Content MarketingAwards.
6. Havells got "Best Incentive program in the Middle East" award at MALTExcellence Award 2019 at Dubai for exemplary role played in the field of MICE business& luxury travel.
7. Havells won BrandZ India rankings of the Most Valuable Indian Brands 2018. Havellshas featured as a new comer at Rank #41 with a Brand Value of $1510 Million.
8. Havells won the Gold award for Buzziest brand in the building segment by Afaqs.
9. Bhamashah Award.
10. Shiksha Vibhushan Award.
11. I ndywood Award for excellence in CSR in Child health and education.
Subsidiary Companies Joint Venture and Consolidated Financial Statements
As on 31st March 2019 your Company had 9 (Nine) subsidiary companieswhereby 4 (Four) entities are registered in India and remaining 5 (Five) are registeredoutside India. 7 (Seven) of these are direct subsidiaries and rest 2 (Two) are step-downsubsidiaries.
Three direct overseas subsidiaries:
1. Havells Holdings Limited based at Isle of Man. This entity is a holding company forthe 2 (Two) step-down subsidiaries of the Company viz. Havells International Limited andHavells Sylvania Illuminacion (Chile) Limited.
2. Havells Guangzhou International Limited based at China. The entity acts as aprocurement and trading Company for the Group.
3. Havells Exim Limited based at Hong Kong. This entity acts as a facilitator forsourcing of material from China. The company closed its operations with effect from 31stAugust 2018. Thereafter all the requisite procedures for closure of the entity have beencompleted.
Two Indirect (step-down) overseas subsidiaries:
1. Havells International Limited at Malta as a 100% subsidiary of Havells HoldingsLimited. The Company initiated process for winding up with concerned authorities on 12thNovember 2018. Thereafter all the requisite procedures for closure of the entity havebeen completed.
2. Havells Sylvania Illuminacion (Chile) Limited at Chile as a 100% subsidiary ofHavells Holdings Limited. The process of winding up of the entity was initiated during theyear.
Four direct domestic subsidiaries:
1. Promptec Renewable Energy Solutions Pvt. Ltd. based at Bengaluru. This entity isengaged in marketing and manufacturing of LED products including Street lighting Officelighting and Solar lighting.
2. Standard Electrical Limited based at New Delhi.
3. Havells Global Limited based at New Delhi.
4. Lloyd Consumer Private Limited based at New Delhi.
scheme of Amalgamation
As part of the group restructuring during the year the Shareholders and Creditors ofthe Company in their Meetings held on 28th January 2019 approved the Schemeof Amalgamation for merger of all the 4 (Four) wholly-owned domestic subsidiaries viz.Havells Global Limited Standard Electrical Limited Lloyd Consumer Private Limited andPromptec Renewable Energy Solutions Private Limited with Havells India Limited. TheHon'ble National Company Law Tribunal ("NCLT") has fixed the next date ofhearing in the matter as 3rd June 2019.
The Appointed Date for the Scheme of Amalgamation is 1st April 2018. As aresult of the implementation of the aforesaid amalgamation the four domestic subsidiariesas aforesaid will be dissolved without winding up.
The consolidated profit and loss account for the period ended 31st March2019 includes the profit and loss account for the subsidiaries and the joint venturecompany for the complete financial year ended 31st March 2019.
The Board of Directors of theCompany has by Resolution passed in its Meeting held on29th May 2019 given consent for not attaching the Balance Sheets of thesubsidiaries concerned.
The consolidated financial statements of the Company including all subsidiaries dulyaudited by the statutory auditors are presented in the Annual Report. The consolidatedfinancial statements have been prepared in strict compliance with applicable AccountingStandards and where applicable 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 associatesand joint venture companies included in the consolidated financial statement is presentedin a separate section in this Annual Report. Please refer (Form No. AOC-1) annexed to thefinancial statements in the Annual Report.
The annual accounts of the subsidiary companies and the related detailed informationshall be made available to Shareholders of the Company and its subsidiary companies uponrequest and it shall also be made available on the website of the Company i.e. https://www.havells.com/en/discover-havells/investor-relation/ financials/balance-sheet.html. Theannual accounts of the subsidiary companies shall also be kept for inspection by anyshareholder in the head office of the Company and the respective offices of its subsidiarycompanies.
Your Company had formed a 50:50 joint venture in People's Republic of China withShanghai Yaming Lighting Co. Limited under the name of Jiangsu Havells Sylvania LightingCo. Limited (JV). This Joint Venture Company was created with an objective to produceenergy efficient lighting lamps.
I n financial year 2017-18 owing to the technological changes in the lightingIndustry the Company along with its JV partner had decided to close down the business andliquidate the JV. Accordingly the regular operations were fully closed in October 2017.Liquidation of the company is under process.
3. Names of Companies which have become or ceased to be its subsidiaries JointVentures or Associate Companies during the year
During the Financial Year 2018-19 Thai Lighting Assets Company Limited a subsidiaryof Havells International Limited was liquidated on 29th June 2018.
Havells USA Inc. a 100% subsidiary of Havells Holdings Limited was dissolved on 31stOctober 2017 and after completion of necessary procedures the same ceased to be asubsidiary during the year.
During the financial year ended 31st March 2019 no company became asubsidiary of the Company or Joint Venture or Associate Company.
Your Directors do not propose to transfer any amount to the general reserve and entireamount of profit for the year forms part of the Retained Earnings'.
I n line with the Dividend Policy of the Company which is available in the "Codes& Policies" section in the Investor section on the website of the Company and canbe accessed at https://havells.com/en/aboutus/ corporate-governance.html Your Directorsare pleased to recommend a Final Dividend @ ' 4.50/- per equity share for the year2018-19.
The proposed dividend subject to approval of Shareholders in the ensuing AnnualGeneral Meeting of the Company would result in appropriation of ' 339.32 crores(including Dividend Distribution Tax of ' 57.86 crores). The dividend would be payable toall Shareholders whose names appear in the Register of Members as on the Book ClosureDate.
The Register of Members and Share Transfer books shall remain closed from 20thJuly 2019 Saturday to 26th July 2019 Friday (both days inclusive).
6. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the Report
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateand the date of this Report.
However in terms of the Employee Stock Purchase Schemes of the Company which areadministered by Havells Employees Welfare Trust 332102 Equity Shares of ' 1/- eachwere approved for Grant on 29th May 2019 and Vested (pursuant to therespective Employee Stock Purchase Plan as hereunder) to the eligible employees which ifexercised shall result in an equivalent no. of Equity Shares of ' 1/- each to beallotted/ transferred to the eligible employees under the respective schemes. A summary isgiven below:
| ||No. of shares Granted ||No. of shares Vested |
|Havells Employees Stock Purchase Plan 2014 ||169597 ||169597 |
|Havells Employees Stock Purchase Scheme 2015 ||150000 ||150000 |
|Havells Employees Stock Purchase Scheme 2016 ||16273 ||10729* |
* 5424 Shares vested as 1st tranche out of a total of 16273 Shares Granted forfinancial year 2018-19 2937 Shares vested as 2nd tranche out of a total of11533 Shares Granted for financial year 2017-18 and 2368 Shares vested as 3rdtranche out of a total of 10377 Shares Granted for financial year 2016-17
7. Change in the nature of business if any
There was no change in the nature of business of the Company during the financial yearended 31st March 2019.
8. Details of directors or key managerial personnel including those who were appointedor have resigned during the year
There was no change in the composition of the Board during the financial year 2018-19.
Pursuant to the provisions of Section 152 of the Companies Act 2013 Shri Anil RaiGupta (DIN: 00011892) and Shri Rajesh Kumar Gupta (DIN: 00002842) are due to retire byrotation at the ensuing Annual General Meeting and being eligible offer themselves forre-appointment. The Board recommends their appointment.
Shri Anil Rai Gupta (DIN: 00011892) was last reappointed by the Shareholders of theCompany in the Annual General Meeting held on 5th July 2013 for a period of 5(Five) years with effect from 1st April 2014. His term expired on 31stMarch 2019.
Accordingly the Board of Directors upon the recommendation of the Nomination andRemuneration Committee in its Meeting held on 20th March 2019 approved there-appointment of Shri Anil Rai Gupta as the Chairman and Managing Director and the CEOof the Company for a period of another 5 (Five) years with effect from 1stApril 2019 to 31st March 2024. The reappointment is subject to approval ofthe shareholders in General Meeting.
Further Shri Ameet Kumar Gupta (DIN: 00002838) was last appointed as a Whole-timeDirector by the Shareholders of the Company in the Annual General Meeting held on 13thJuly 2015 for a period of 5 (Five) years with effect from 1st January 2015.Accordingly his prevailing term will be expiring on 31st December 2019. TheBoard of Directors upon the recommendation of the Nomination and Remuneration Committeein its Meeting held on 29th May 2019 approved the reappointment of Shri AmeetKumar Gupta as the Wholetime Director of the Company for a period of another 5 (Five)years with effect from 1st January 2020 to 31st December 2024. There-appointment is subject to approval of the shareholders in General Meeting.
Also Shri Rajesh Kumar Gupta (DIN: 00002842) was last appointed as the Whole-timeDirector (Finance) and Group CFO by the Shareholders of the Company in the Annual GeneralMeeting held on 13th July 2015 for a period of 5 (Five) years with effect from1st April 2015. Accordingly his prevailing term will be expiring on 31stMarch 2020. The Board of Directors upon the recommendation of the Nomination andRemuneration Committee in its Meeting held on 29th May 2019 approved there-appointment of Shri Rajesh Kumar Gupta as the Whole-time Director (Finance) and GroupCFO for a period of another 5 (Five) years with effect from 1st April 2020 to31st March 2025. The re-appointment is subject to approval of the shareholdersin General Meeting.
Further the Board of Directors upon the recommendation of the Nomination andRemuneration Committee in its Meeting held on 29th May 2019 and subject tothe approval of members of the Company also appointed Mr Siddhartha Pandit (DIN: 03562264)as an Additional Director on the Board of Directors of the Company and also a Whole-timeDirector for a period of 3 (Three) years with effect from 29th May 2019.
The details of Directors being recommended for re-appointment as required under theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are contained inthe accompanying Notice convening the ensuing Annual General Meeting of the Company.
Appropriate Resolution(s) seeking your approval to the re-appointment of Directors arealso included in the Notice.
9. Number of Meetings of the Board of Directors
During the financial year 2018-19 the Board of Directors of the Company met 5 (Five)times on 11th May 2018 20th July 2018 17th October2018 22nd January 2019 and 20th March 2019.
Pursuant to the requirements of Schedule IV to the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a separate Meeting ofthe Independent Directors of the Company was also held on 22nd January 2019without the presence of non-independent directors and members of the management to reviewthe performance of non-independent directors and the Board as a whole the performance ofthe Chairperson of the Company taking into account the views of Executive DirectorsNon-Executive Non-Independent Directors and also to assess the quality quantity andtimeliness of flow of information between the Company management and the Board.
10. Directors' Responsibility statement
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors to the best oftheir knowledge hereby state and confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) t he directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Details in respect of frauds reported by auditors
There were no instances of fraud reported by the auditors.
11. Declaration by Independent Director(s) and re-appointment if any
All the Independent Directors have submitted their disclosures to the Board that theyfulfil all the requirements as stipulated in Section 149(6) of the Companies Act 2013 andRegulation 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 so as to qualify themselves to be appointed as Independent Directorsunder the provisions of the Companies Act 2013 and the relevant rules.
12. Nomination and Remuneration policy of directors Key Managerial Personnel and otheremployees
In adherence of Section 178(1) of the Companies Act 2013 the Board of Directors ofthe Company in its Meeting held on 22nd December 2014 approved a policy ondirectors' appointment and remuneration including criteria for determining qualificationspositive attributes independence of a director and other matters provided u/s 178(3)based on the recommendations of the Nomination and Remuneration Committee. The broadparameters covered under the Policy are - Company Philosophy Guiding PrinciplesNomination of Directors Remuneration of Directors Nomination and Remuneration of the KeyManagerial Personnel (Other than Managing/ Whole-time Directors) Key-Executives andSenior Management and the Remuneration of Other Employees. During the financial year2018-19 the Policy was reviewed by the Board of Directors on 20th March 2019.
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished in ANNEXURE - 1 and forms part of this Report. The Policy is alsoavailable in the Investor Relations section under the "Codes & Policies"tab on the website of the Company and can be accessed at the weblinkhttps://havells.com/en/aboutus/corporate- governance.html
13. Formal Annual Evaluation
Having a formalised board evaluation gives board members an opportunity of assessingtheir own performance and brings out the importance of the contributions of individualdirectors. It is a mechanism by which the board members candidly reflect on how well theboard is meeting its responsibilities.
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and Individual Directors pursuant to the provisions of the Companies Act2013 and Regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
Performance evaluation of the Board and Committees
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors covering aspects like:
Board composition (size diversity skill set);
Board processes structure and communication (frequency of meetings attendancethereof flow of information accessibility to product heads senior management forinformed decision making);
Board responsibilities (disclosure of information and other key functions likemonitoring effectiveness of Company's governance practices ensuring integrity ofCompany's accounting and financial reporting systems including independent auditadequacy of controls for risk management compliance with statutory laws).
The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members covering aspects like:
appropriateness of size basis the complexity and operations of the organisation;
encouraging a tone at the top that conveys basic values of ethical integrity;
legal compliance and strong financial reporting and control;
reports after each Meeting to the Board on the Committee's activities;
major issues discussed and recommendations for Board actions;
effectively performing support functions to the Board in fulfilling itsresponsibilities.
Performance Evaluation of Individual Directors
The performance evaluation of the Chairman and the Non-Independent Directors werecarried out by the Independent Directors considering aspects such as:
Effectiveness as Chairman in developing and articulating the strategic visionof the Company;
Displays efficient leadership displaying and promoting throughout the Company abehaviour consistent with the culture and values of the organisation;
Contribution to discussion and debate through thoughtful and clearly statedobservations and opinions;
Creation of a performance culture that drives value creation without exposingthe Company to excessive risk;
demonstrates highest level of integrity (including conflict of interestdisclosures maintenance of confidentiality etc.).
The performance evaluation of the Independent Directors was carried out by the entireBoard other than the Independent Director concerned taking into account parameters suchas:
refrain from any action that may lead to loss of independence;
refrain from disclosing confidential information including unpublished pricesensitive information etc.;
support to CMD and executive directors in instilling appropriate culture valuesand behaviour in the boardroom;
well informed about the Company and the external environment in which itoperates;
moderate and arbitrate in the interest of the Company as a whole in situationsof conflict between management and shareholders' interest etc.
Based on the evaluation carried out it was reaffirmed that the Board of Directors as awhole and each of the individual directors continued to work effectively and efficientlyin fulfilling their advisory role through indepth discussion and exchange of ideas aboutspecific topics strategic subjects leadership development and succession planning.
The Board is continually kept informed on the financial reporting risk & auditHR marketing legal and governance related affairs of the Company. The management hadbeen vigilant of the expected changes notified under various statutes that need to bebrought in and is working cohesively to concur and decide on the respective norms.Further the deadlines have been well mapped in the respective departments to ensure duecompliance.
The Board continues to operate through an appropriate Committee structure with 7(Seven) Committees namely Audit Committee Nomination and Remuneration CommitteeStakeholders Relationship/ Grievance Redressal Committee Enterprises Risk ManagementCommittee Corporate Social Responsibility Committee Executive Committee and the ShareAllotment and Transfer Committee. The Directors expressed their satisfaction at theoverall engagement and effectiveness in the working of all the Committees of the Board.
The Directors were satisfied on the peer review conducted. The performance criteriaitems were assessed positively. Team spirit was considered strong which encouraged mutualtrust and open discussions among the Board members.
It was affirmed that the Company being a conscious corporate citizen is working on bothbusiness succession planning and executive succession planning. A sustainable hierarchyand leadership are the prime focus for the planning outlay and due recognition toprinciples of law and management are being considered.
14. Annual Return
A copy of the Annual Return of the Company containing the particulars prescribed u/s 92of the Companies Act 2013 as they stood on the close of the financial year i.e. 31stMarch 2019 is furnished in ANNEXURE - 2 and forms part of this Report.
1. Statutory Auditors
As per provisions of Section 139(1) of the Companies Act 2013 the Company hasappointed M/s S.R. Batliboi & Co. LLP Chartered Accountant (Regn. No. 301003E/E300005) as Statutory Auditors for a period of 5 (Five) years in the AGM of the Companyheld on 13th July 2016.
Statutory Auditors' Report
The observations of Statutory Auditor in its reports on standalone and consolidatedfinancials are self-explanatory and therefore do not call for any further comments.
2. Cost Auditors
As per Section 148 of the Companies Act 2013 the Company is required to have theaudit of its cost records conducted by a Cost Accountant in practice.
Pursuant to the provisions of Section 141 read with Section 148 of the Companies Act2013 and Rules made thereunder M/s Sanjay Gupta & Associates Cost Accountants (FirmRegn. No. 000212) were appointed as the Cost Auditor of the Company for the year ending 31stMarch 2019.
The due date for filing the Cost Audit Report of the Company for the financial yearended 31st March 2018 was 9th June 2018 and the same was filed inXBRL mode by the Cost Auditor within due date.
Disclosure on maintenance of Cost Records
The Company made and maintained the Cost Records under Section 148 of the CompaniesAct 2013 (18 of 2013) for the financial year 2018-19.
3. secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act 2013 read withcorresponding Rules framed thereunder M/s MZ & Associates were appointed as theSecretarial Auditors of the Company to carry out the secretarial audit for the year ending31st March 2019.
Annual secretarial Audit Report
In terms of Section 204 of the Companies Act 2013 and Regulation 24A of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a Secretarial AuditReport 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 SecretarialAuditors in their Report.
Annual secretarial Compliance Report
A Secretarial Compliance Report for the financial year ended 31st March2019 on compliance of all applicable SEBI Regulations and circulars/ guidelines issuedthereunder was obtained from M/s MZ & Associates Secretarial Auditors and submittedto both the stock exchanges.
16. Particulars of Loans Guarantees or Investments under section 186
The particulars of loans given investments made and guarantees provided by theCompany under Section 186 of the Companies Act 2013 as at 31st March 2019 arefurnished in ANNEXURE - 4 and form part of this Report.
17. Particulars of contracts or arrangements with Related Parties
The particulars of every contract and arrangement if entered into by the Company withrelated parties referred to in sub-section (1) of Section 188 of the Companies Act 2013including certain arm's length transactions under third proviso thereto are disclosed inForm 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 theyear under review your Company paid ' 301.44 crores towards Corporate Income Tax(including Dividend Distribution Tax) as Compared to ' 295.59 Crores paid duringthe last financial year. The Company has also paid an amount of ' 2203.14 croreson account of GST and Custom duty and claimed a government assistance and support of '50.65 Crores during financial year 2018-19 as compared to '1934.62 Crores paid andclaimed a government assistance and support of ' 29.94 Crores during last Financial Year.
19. Details relating to deposits covered under Chapter V of the Companies Act 2013
The Shareholders vide their Special Resolution dated 9th June 2014 passedby way of Postal Ballot have approved inviting/ accepting/ renewing deposits in terms ofthe provisions of Companies Act 2013 making the Company eligible for the same. Howeverthe Company has not accepted any deposits during the year under review.
20. Corporate Social Responsibility (CSR)
Your Company has always believed in the concept of Shubh-Laabh' that suggestsdoing good deeds and profits would follow. Since 2005 Havells has set out on a journey ofsocial change dedicated to the cause of Children- the future of the country. To supportthis journey the company has identified eight strong pillars of health & nutritionsanitation education environment skill development heritage conservation healthcareand humanitarian causes. Most of these initiatives are not only aligned with the onesenvisioned by the government but also with United Nations Sustainable Development Goals.
Havells Mid-Day Meal Program
A lot of Children especially from the economically weaker sections of the society donot even get three meals a day. The Company not only realized the consequences of nothaving enough - or the wrong - food cause suffering and poor health but also slow theprogress in many other areas of development like education and employment.
To counter malnutrition eradicate hunger and promote education Havells decided toprovide mid-day meal in Alwar district in Rajasthan. A humble beginning in this directionthat started with serving just 1500 children across 5 schools has grown to serving over60000 students across 693 schools daily in the district. Since then there has been aconstant rise in school enrolments reduction in dropout rates better BMI amongstchildren interest in going to school and better academic performance. You would be happyto know that your Company has served close to 1 billion meals so far. The fresh hygienicand nutritious food is prepared in the state-of-the-art kitchen in accordance withgovernment-approved diet charts.
Ownership of the entire mid-day meal value chain from procurement of food materials tofood preparation storage and transportation to school gives Havells complete controlover the quality and hygiene of the meals. This goes in line with your Company'sphilosophy of providing the best quality in all its offerings.
Sanitation is one of the most basic amenities but continues to be neglected in theCountry. Government schools are no different. In most government schools either there areno toilets or they are not usable due to lack of upkeep and proper usage.
Your Company realizes that schools are a powerful agent of change for enabling andencouraging changes in the society and that WaSH (Water Sanitation and Health) arecritical for ensuring overall development of children and their families. It thereforeadopted a 360 degrees approach towards sanitation.
Since 2014 your Company has built over 4000 biotoilets in 400 government schools inthe Alwar district of Rajasthan and continues to sensitize students as well as theteachers about the importance of sanitation and inculcating good hygiene habits amongstchildren from tender age. To further improve sanitation facilities the Companycontributed equal amount of money as given by the government for maintenance. This stepperfectly amalgamates with the ambitious Swachh Bharat Mission' advocated by theGovernment of India and dovetails with United Nations Sustainable Development Goal No-3& 6.
Continuing with its mission to empower adolescent girls Havells provided reusablesanitary napkins to over 22000 girls in the Financial Year 2018-19. This not only savesgirls from various diseases due to unhygienic clothes used during menstruation but alsoreduces waste to landfills.
All these initiatives helped improve attendance health and cognitive developmentincreased girls' participation established positive hygiene behaviour and offers theopportunity to introduce better WaSH practices in families and communities and addressesissues of inequity and exclusion.
Your Company has always thought of future generations when it comes to being sociallyresponsible. The Company realizes the need to preserve country's rich heritage and pass iton to the future generations in the best possible condition.
Keeping this in mind your Company tied-up with Aga Khan Trust for Culture (AKTC) forcontributing towards building Humayun's Tomb Interpretation Centre. The 10000 sqmfacility will be the largest public cultural facility built since the National Museum andis expected to receive 2 million visitors annually. Your Company has also contributedtowards conserving the 15th century monument of National importance called the "SabzBurj" situated at Nizamuddin New Delhi. We are committed to keep contributingtowards preserving our wonderful heritage.
With an objective to strengthen the school infrastructure your Company has built twoclassrooms for ITI in Kangra Himachal Pradesh and has also donated tables and benchesmade from waste wood to needy government schools in Alwar Neemrana and Haridwar. Duringthe year the Company donated over 2000 tables and benches.
An Environment Friendly Company
Forests are important in regulating climate sustaining communities and supportingbiodiversity. Conserving nature is the best gift we can provide to our future generations.With this thought the Company planted over one lakh trees each in Bhopal Madhya Pradeshand Neemrana Rajasthan. It also planted over 50000 trees across other plant locations inAlwar Rajasthan and Baddi Himachal Pradesh over last few years.
During the year your Company supported two children with the life-threatening blooddisorder- Thalassemia. Both the kids are undergoing treatment in a specialty hospital inJaipur. One of the kids has fully recovered and is ready to live a normal life.
The company contributed ' 5 crore (Rupees Five Crors) to the Chief Minister'sDistress and Relief Fund (CMDRF) in order to support the State Government's efforts ofproviding relief and rehabilitation work in the flood affected areas of the state. All theemployees of Havells pledged their one day salary for the noble cause.
Further the Board of Directors have also adopted the CSR Policy of the Company asapproved by the Corporate Social Responsibility Committee which is also available on thewebsite 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
As at 31st March 2019 the Audit Committee of the Board of Directors of theCompany comprised of 4 (Four) Members namely Shri Surender Kumar Tuteja Shri Vijay KumarChopra Smt. Pratima Ram and Shri Surjit Kumar Gupta majority of them being IndependentDirectors except Shri Surjit Kumar Gupta who is a Non-Independent NonExecutive Director.Shri Surender Kumar Tuteja an Independent Director is the Chairman of the AuditCommittee.
The Board accepted the recommendations of the Audit Committee whenever made by theCommittee during the year.
22. Enterprises Risk Management Framework
Havells is committed for global benchmarking in good Corporate Governance whichpromotes the longterm interests of all stakeholders strengthens Board createself-accountability and helps in building trust in the Company.
A robust internal financial control system forms the backbone for our risk managementand governance. Havells continues to strengthen its robust Enterprises Risk ManagementFramework based on the internationally accepted COSO Framework.
A structured risk management system permits the management to take calibrated riskswhich provides a holistic view of the business wherein risks are identified in astructured manner from Top down to Bottom up approach. The bottom-up approach is conductedthrough workshops with respective team at Branch Factory and Corporate functions. Thetop-down approach enables discussion of all risks and opportunities at the managementlevel.
The twin purpose of Enterprises Risk Management at Havells is to minimize adverseimpacts and to leverage market opportunities effectively & efficiently. The objectiveis to sustain and enhance short-term and long-term competitive advantage to the Company.
23. Details in respect of adequacy of internal financial controls with reference to theFinancial statements
The Company has robust internal financial controls systems which facilitatesefficiency reliability and completeness of accounting records and timely preparation offinancial statements and management information. The internal control system ensurescompliance with all applicable laws and regulations facilitates in optimum utilisation ofresources and protect the Company's assets and the interests of all its stakeholders.
The Company has a clearly defined Policies Standard Operating Procedures (SOP)Financial & Operational Delegation of Authority (DOA) and Organisational structure forits business functions and verticals to ensure orderly and efficient conduct of itsbusiness across the organisation. Our ERP system supports in process standardizationaccess control to users and also to mitigate Segregation of Duties (SOD) conflicts.
Risk based internal audit is performed and root cause analysis along with action takenstatus is presented before the Audit Committee on a periodical interval.
Risk Control Matrix (RCM) has been prepared with respect to each Business functions andtheir mapping are being done with Functional Dashboard/ Compliance management system/ GRCProcess Control.
24. Details of establishment of Vigil Mechanism for Directors and Employees
The Company has a very strong Whistle Blower policy under the name "Satark"where by a forum is available for all Employee(s) business associate(s) engaged with theCompany who can report any fraud irregularity wrong doing and unethical behaviour. ThePolicy provides that the Company investigates such reported matters in an impartial mannerand takes appropriate action to ensure that requisite standards of confidentialityprofessional and ethical conduct are always upheld. Any complaint received under Satarkpolicy are even mapped to the Chairman of the Audit Committee.
This Satark policy is available on the website https://havells.com/en/aboutus/corporate-aovernance.html
25. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future
There was no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
26. Employee Relations
At Havells we consider our employees as valuable asset and ensure strategic alignmentof Human Resource practices with business objectives. We constantly strive to establishstrong systems and processes to build capabilities drive performance and increaseemployee engagement to support organizational growth.
Building a highly engaged workforce developing internal talent hiring leadershipcapabilities will continue to be our strategic imperative to support our growth plans.
In Building Leadership Capabilities we have hired around 35 lateral talent at variousleadership roles from similar/diversified industries to support us in Business CRI(R&D) & Manufacturing.
Our Performance Management Process and discussion at various levels has helpedemployees get developmental feedback. To encourage performance dialogue a Trainingprogram covering over 400 Branch Product Heads across branches was conducted focusing onhandling better performance and development discussion with the Frontline.
On Skill enhancement 285 Frontline Sales teams have been trained on Essential SellingSkills with special focus on KAM (Key Account Management) Working. Strengthening technicalcapabilities within the sales team was another initiative by the Company wherein an onlineproduct training portal was introduced. Around 80% (1800 sales employees) have gonethrough these modules taken the test and got certified on various product categories.
Second batch of General Management Program that started last year was conducted atIIM-Bengaluru in which a team of 24 potential leaders had gone through a 7 daysresidential program which focused on developing them for larger roles.
In continuation to improvement on the GALLUP Survey conducted in 2016 a Sample Surveywas conducted in Q3 2018-19 to get employee feedback to assess overall engagement levelsin the Company. There has been an improvement in the "Overall Engagement" scorefrom 3.91 to 4.09 on a scale of 5.0.
At Havells we ensure that there is full adherence to the Code of Ethics and fairbusiness practices. Havells is an equal opportunity employer and employees are evaluatedsolely on the basis of their qualification and performance. We provide equal opportunityin all aspects of employment including retirement training work conditions careerprogression etc. that reconfirms our commitment that equal employment opportunity iscomponent of our growth and competitiveness. Further Havells is committed to maintaininga workplace where each employee's privacy and personal dignity is respected and protectedfrom offensive or threatening behaviour including violence.
Prevention and control of sexual harassment at workplace constitutes an important partof corporate culture while aligning with international best practices and improvingmanagement processes. As part of the legal responsibility and zero tolerance towardssexual harassment at the workplace Havells has implemented the "Nirbhaya" policyfor women employees and other workplace participants.
As statutorily required an Internal Complaints Committee has been constituted under thepolicy which provides a forum to all female personnel to lodge complaints (if any)therewith. The Committee meets at specified intervals to take note of useful tools mobileapplications media excerpts interactive sessions etc. that enhance security of femaleemployees.
The Committee submits an Annual Report to the Audit Committee of the Board of Directorsof your Company on the complaints received and action taken by it during the financialyear.
During the year no complaint was lodged with the Internal Complaints Committee (ICC)formed under Nirbhaya Policy.
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 thisReport and are annexed herewith as ANNEXURE - 7.
28. Employees Stock Option Plans
The Company has in place 3 (Three) employee benefit schemes namely Havells Long TermIncentive Plan 2014 (LTIP 2014) Havells Stock Purchase Scheme 2015 (ESPS 2015) andHavells Stock Purchase Scheme 2016 (ESPS 2016).
All these benefit schemes are administered by Havells Employees Welfare Trust under thesupervision of the Nomination and Remuneration Committee. Promoters IndependentDirectors Directors directly or indirectly holding 10% or above of the equity sharecapital of the Company Employees not residing in India or NonResident Indians (NRIs) arenot eligible for the grant of options/ issue of shares under any of the Schemes.
The Company has received a certificate dated 29th May 2019 from theAuditors of the Company that the Schemes have been implemented in accordance with theapplicable SEBI Guidelines and the Resolutions passed by the shareholders dated 9thJune 2014 4th December 2015 and 13th July 2016 in respect ofLTIP 2014 ESPS 2015 and ESPS 2016 respectively. The Certificates would be placed at theAnnual General Meeting for inspection by Members.
There has been no material change in any of the subsisting Schemes except for therevision in threshold of basic salary approved by the Nomination and RemunerationCommittee with effect from 1st April 2019 as a criteria for determiningeligible employees under the LTIP 2014. Disclosures pursuant to SEBI (Share Based EmployeeBenefits) Regulations 2014 in respect of LTIP 2014 ESPS 2015 and ESPS 2016 as at 31stMarch 2019 are available on the website of the Company athttps://www.havells.com/en/discover- havells/investor-relation/disclosures.html.
29. Credit Ratings CARE Ratings
Corporate Governance Rating
Havells has in its endeavour to reinforce and test its commitment for CorporateGovernance opted to go for a Corporate Governance Rating from CARE. For a third year in arow CARE has re-affirmed CARE CGR 2+ [Two Plus] Rating to the Corporate Governancepractices of the Company. The Corporate Governance Rating reflects the Company'stransparent ownership structure qualified and experienced Board of Directorssatisfactory functioning of various Committees of the Board presence of prudent riskmanagement policies and elaborate internal audit function. Furthermore the rating derivescomfort from elaborate communications and disclosures to shareholders effective financialmanagement and the Company's compliance with statutory and regulatory requirements.
CARE has yet again assigned an AAA [Triple A] rating to the long-termfacilities of your Company during the current Financial Year. This rating is applicable tofacilities having a tenure of more than one year. Instruments with this rating areconsidered to have the highest degree of safety regarding timely servicing of financialobligations.
CARE has also reaffirmed the CARE A1+ [A One Plus] rating assigned to theshort-term facilities of your Company. This rating is applicable to facilities having atenure upto one year. Instruments with this rating are considered to have very strongdegree of safety regarding timely payment of financial obligations.
30. Global Certifications
The Company augmented its global certifications armory from its existing bucket likeBASEC KEMA TIS TUV Rheinland and CB for its various products to expand its reach ininternational arena.
The Company further obtained the following certifications during the year 2018-19:
IEC 60598 for LED Lighting products;
CB / ROHS certification for LED Lamps;
ESMA & ECAS for Middle East for LED Lamps;
KEMA for Offload Changeovers;
Dual certification for (EURO 2 Breakers);
KEMA for MCCB (HIM Series);
UL for Wires;
KEMA certification for MC (WIP stage).
31. Corporate Governance
Your Company has transformed over the years as a global brand not only commercially butalso ethically. Corporate Governance is all about faith and faith leads to long termrelationship with stakeholder like our Bankers Customers to name a few.
The contribution that the culture of governance has on a Company is evident from ourgrowth trajectory. From indigenous products to creating synergy with another trusted brandlike Lloyds reinforces the strong credentials that your Company has earned over theyears. The goodwill that your Company demands in the global market has been greatlyreinforced by the transparency it strongly believes in.
I t may also be emphasized that the recent changes in the corporate governancelandscape in India has ushered a new revolution. Your Company has been on the forefront inadopting such changes and creating a sustainable environment. The changes in law areintegrated in our operations so that compliance is in true spirit.
Parameters of Statutory compliances evidencing the standards expected from a listedentity have been duly observed and a Report on Corporate Governance as well as theCertificate from Statutory Auditors confirming compliance with the requirements of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 forms part of AnnualReport.
Further the Management Discussion and Analysis Report and CEO/ CFO Certificate asprescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015are also presented in separate sections forming part of Annual Report.
32. Environment Health and Safety
Your Company is committed to providing a safe working environment to all employees andprotecting the nature in which it operates. Our leadership has an unswerving belief thatno task or business objective can take priority over health and safety of our employees.We have incorporated globally acknowledged frameworks such as IIRC (InternationalIntegrated Reporting Council) framework GRI standards and UNGC principles for measuringmonitoring and reporting our Sustainability initiatives. Abiding by these frameworks helpsus in maintaining high standards and strict compliance of Environment Health and Safetyparameters.
Our debut participation in Dow Jones Sustainability Index in which we were ranked 7thglobally in Electrical Components & Equipment Category and have scored 96 in bothEnvironmental Reporting and Occupational Health & Safety section is a testimony to ourcommitment towards environment health and safety of our employees.
We have had an excellent track record over the years with no fatalities or majorinjuries. To keep that track record alive we share an embedded focus on continuallyimproving our management systems standards and approach by developing a culture where weproactively identify potential risks and hazards and eliminate or if not possiblemitigate the risk to as low as reasonably attainable. We have implemented the systemsstrategies resources and structures necessary to meet our EHS goals. We constantly reviewand measure our systems standards and behaviours to implement corrective and preventativeactions for continuous improvement.
At each plant location annual events were organized and commemorated like NationalSafety Week World Environment Day and Road Safety Week. Mock-drills for electricalsafety fire safety evacuation earthquake chemical spillage were conducted tostrengthen the safety at workplace. During the year we provided extensive training to ourpeople. In FY 2018-19 we recorded 48181 man-hours of training.
Your Company has implemented ISO 14001 and ISO 50001 at most of its manufacturingsites. During the year the Company not only optimized the use of energy by regularlyconducting energy audits but also focused on enhancing our renewable energy footprint thusreducing Greenhouse gas emissions. Today renewable power contributes close to 6% of thetotal energy consumed at all manufacturing facilities. The Company also intensified itsdrive to eliminate water wastage efficiently managing our waste thereby reducing burdenon landfills.
Committed to the vision of being wood paper and carbon positive your Company iscontinuously adopting new techniques to eliminate and minimize the environment impact.During the year we planted over 2 lac trees across the state of Madhya Pradesh Rajasthanand Himachal Pradesh. In the coming year we have pledged to plant 4.5 lac trees to becloser to our vision.
To ensure the well-being of our employees we have implemented some of the world's bestpractices such as OHSAS and identified processes concerned with Critical to Health (CTH)and Critical to Safety (CTS). All our employees at plants regularly undergo medicalcheck-ups for any occupational health hazard. We conduct ergonomics studies in ourproduction process to enhance employee's fitness and productivity. Numerous health campsaim to promote the general wellbeing of our employees were organized during the year.
33. Research and Development
Being a Fast-Moving Electrical Goods (FMEG) Company we are operating in productportfolios which are characterized by rapid changes in consumer preferences andtechnological advances. The Company's ability to compete successfully depends heavily uponits ability to ensure a continual and timely flow of competitive products services andtechnologies to the marketplace. With a vision of being recognized as a Company with earlymover advantage and as an early adopter of new technologies our objective is to launchhighly innovative products addressing explicit and latent needs of our customers. We dorealize that early adoption of relevant technologies will be the cornerstone of ourproduct innovation strategy. With this broader mission we have been investing instrengthening our in-house R&D capabilities which will form the foundation for future.The Company continues to invest in world class infrastructure and test laboratories at allplant locations with a strong focus on in-house research & development thus promotinga strong culture for open and collaborative innovation. Company's CRI (Centre for Researchand Innovation) team focusses on continuous and sustainable product innovations workingacross the product lifecycle aspects including design development manufacturing and use(in-field) phases. As part of this mission the Company has come up with a dedicatedR&D Center at Sector-59 Noida Location. This R&D Center spans over a covered areaof 100000 square feet (including 50000 square feet of world-class lab facilities) andhouses great majority of the product development teams. During the year the R&Dactivities continued to focus on developing intelligent eco-friendly and energy efficientproducts as well as extending the range of existing products catering to niche premiumsegment with an objective of having clear product differentiation in our productportfolios which are common across different brands of Havells group (Crabtree / Havells/Standard / Reo).
We enhanced our focus on open Innovations with wider proliferation of SOCH'platform - our in-house platform for crowd sourcing of novel ideas. This portal has beenextended to our varied stakeholders - including vendors and customers to further boostinnovation. Our innovation focus has led to launch of smart connected products such as ourdigital wi-fi water heaters Adonia and Droid. The pH balancing and periodic disinfectiontechnologies used by our water purifiers Max Pro and UV Plus is gaining favour with ourcustomers. In line with smart city and smart office ecosystem initiatives Havellslaunched "LitM" - our smart and connected platform for individual and grouplighting control. We also launched a high end fully flat switch under our premium Crabtreebrand. Our investments over the earlier years in specific technologies/designmethodologies such as Design for Six Sigma (DFSS) and Multi-physics simulations is alreadyhaving an impact in not just gaining stronger understanding of our products under harshoperating conditions (high temperature unreliable power quality to name a few) but alsoenhancing our capabilities to reduce time-to-market with enhanced product quality. Forexample the recently launched digital mixer grinder Sonido used Taguchi methodologies toreduce noise by 50% compared to previous versions. Our product safety goals are to meetand exceed global standards and towards this the Company is investing significantly intesting infrastructure and processes. Havells in partnership with Hyundai is launchingpower circuit protection products that comply with global standards.
These technology-based innovations complement several other aesthetically designedpremium products by our in-house Industrial Design team. Our product designs have beenwidely acknowledged on national and international forums and the company is the recipientof numerous awards some of which are a) Red Dot Award for Stealth Dry Iron b) CII DesignExcellence Award and India Design Award for Stealth Air Fan c) 2018 Product of the YearAwards for Adonia - R water heater Stilus Juicer Mixer Grinder Enticer Fan.
The Company currently holds a broad collection of intellectual property rights. Thisincludes patents copyrights trademarks and other forms of intellectual property rightsin India and a number of foreign countries. The Company continues to strengthen itsIntellectual Property position with new 100+ IPR's during the year (includes DesignRegistrations and Patent Filings).
Year 2018-19 clearly stands out as the year where we have taken a quantum leap in ourR&D focus to strengthen our competitive position. We are confident that these stepswill make us future ready with relevant technology based and customer centric innovativeproducts - paving the way for our future growth aspirations. We made a conscious decisionto bring in new thinking into our R&D thought leadership by attracting talent fromdiverse set of acclaimed R&D organizations across all levels within CRI.
We also made a strategic decision to set up an Innovation hub in the Silicon Valley ofIndia - Bengaluru with clear focus on select Centers of Excellence. The BengaluruInnovation hub will also help us tap into a wider talent pool within the country andunfold opportunities for growing our external collaboration eco-space - targeting specificstart-ups and academic partners. Our Bengaluru hub is already employing 40+ R&D staffoperating out of a dedicated facility in central business district of Bengaluru.
34. Transfer to Investor Education and Protection Fund
(A) Transfer of Unpaid Dividend
Pursuant to the provisions of Section 124(5) of the Companies Act 2013 your Companyhas transferred ' 690058 during the year to the Investor Education and ProtectionFund. This amount was lying unclaimed/ unpaid with the Company for a period of 7 (Seven)years after declaration of Final Dividend for the Financial Year ended 2010-11.
(B) Transfer of shares underlying Unpaid Dividend
During the Financial Year the Share Allotment and Transfer Committee in its Meetingheld on 12th September 2018 transmitted 28758 Equity Shares of the Companyinto the DEMAT Account of the IEPF Authority held with NSDL (DPID/ Client IDIN300708/10656671) in terms of the provisions of Section 124(6) of the Companies Act 2013and the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 as amendedfrom time to time.
These Equity Shares were the Shares of such 28 Shareholders whose unclaimed/ unpaiddividend pertaining to Financial Year 2010-11 had been transferred into IEPF and who hadnot encashed their dividends for 7 (Seven) subsequent Financial Years.
Individual reminders were sent to concerned Shareholders advising them to encash theirdividend and the complete List of such Shareholders whose Shares were due for transfer tothe IEPF was also placed in the Unclaimed Dividend section of the Investor Section on thewebsite of the Company athttps://www.havells.com/en/discover.havells/investor-relations/unclaimed-dividend.html
With the transfer of abovesaid shares into IEPF as at 31st March 2019 atotal of 198448 Shares of the Company were lying in the Demat A/c of the IEPF Authorityhereinabove mentioned.
Concerned Shareholders may still claim the shares or apply for refund to the IEPFAuthority by making an application in the prescribed Form.
The voting rights on shares transferred to the IEPF Authority shall remain frozen untilthe rightful owner claims the shares. The shares held in such DEMAT account shall not betransferred or dealt with in any manner whatsoever except for the purposes of transferringthe shares back to the claimant as and when he approaches the Authority. All benefitsexcept rights issue accruing on such shares e.g. bonus shares split consolidationfraction shares etc. shall also be credited to such DEMAT account.
Any further dividend received on such shares shall be credited to the IEPF Fund.
35. Shares lying in unclaimed suspense account in electronic mode
As at 31st March 2019 212100 Shares were lying in the Unclaimed SuspenseAccount in dematerialised form in the Havells India Limited Unclaimed Suspense A/c heldwith IDBI Bank Limited (DP). The voting rights on the said shares shall remain frozen tillthe rightful owner of such shares claims the shares. The rightful owner can still claimhis/ her shares from the suspense account after complying with the procedure laid down inthe statute regarding the same.
Initially during the Financial Year 2017-18 the Company had transferred 227100 (TwoLakhs Twenty Seven Thousand and One Hundred Only) Equity Shares into Unclaimed ShareSuspense Account in terms of Regulation 39(4) read with Schedule VI to the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. These Equity Shares were lyingwith the Company as unclaimed since the sub-division of Company's Equity Shares of thenominal value of ' 5/- each into 5 Equity Shares of the nominal value of '1/- each.
Subsequently 15000 Shares of ' 1/- each were transferred to the rightfulowners as approved by the Share Transfer and Allotment Committee in its Meeting held on13th April 2018. Further the unpaid dividend for the last 7 (Seven) years wasalso paid to the said shareholders.
36. Listing of shares
The equity shares of the Company are listed on the National Stock Exchange of IndiaLimited (NSE) and BSE Limited (BSE). The listing fee for the year 2019-20 has already beenpaid to the credit of both the Stock Exchanges.
37 Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in ANNEXURE -8 and forms part of this Report.
38. Business Responsibility Report (BRR)
The BRR aims at describing the initiatives taken by the Company in discharging itsresponsibilities from an environmental social and governance perspective. However SEBIexempts Companies which have been submitting Sustainability Reports to overseas regulatoryagencies/ stakeholders based on internationally accepted reporting frameworks frompreparing a separate BRR and furnish the same report alongwith details of the frameworkunder which Sustainability Report is prepared.
Our Company has been annually publishing its Sustainability Report as per GRI Standardsof the Global Reporting Initiative. Our Sustainability Report has been assured by KPMGIndia. We have also provided the requisite mapping of principles between theSustainability Report and the Business Responsibility Report as prescribed by SEBI. Thesame is also available on the website www.havells.com.
The Board places on record its appreciation for the continued co-operation and supportextended to the Company by its customers which enables the Company to make every effort inunderstanding their unique needs and deliver maximum customer satisfaction. We place onrecord our appreciation of the contribution made by the employees at all levels whosehard work co-operation and support helped us face all challenges and deliver results.
We acknowledge the support of our vendors the regulators the esteemed league ofbankers financial institutions rating agencies government agencies stock exchanges anddepositories auditors legal advisors consultants business associates and otherstakeholders.
|For and on behalf of |
|Board of Directors of Havells India Limited |
|Noida May 29 2019 ||Anil Rai Gupta |
| ||Chairman and Managing Director |