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Havells India

BSE: 517354|NSE: HAVELLS|ISIN: INE176B01034|SECTOR: Electric Equipment
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Directors Report Year End : Mar '19    Mar 16

To

The Members

The Directors take pleasure in presenting their 36th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended 31st March, 2019.

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 alongwith previous year’s figures are given hereunder:

(Rs. in Crores)

Particulars

Standalone

Consolidated

2018-19

2017-18

2018-19

2017-18

Revenue from Operations

10,057.62

8,260.27

10,073.43

8,269.01

Other Income

127.55

116.99

128.65

117.90

Operating Profit before Finance Costs, Depreciation, Tax and Extraordinary items

1,319.74

1,166.28

1,313.00

1,161.30

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

1,155.26

1,002.79

1,144.14

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 up for general elections leading to slowing down of government spend. Implementation of GST, which was rolled out in 2017, was a complex exercise involving overhauling the existing systems to align with the new tax regime. Things are now stabilized. GST is a great reform as 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 rise has been kept in check. However, the banking and NBFC sector also witnessed a major downsizing of their balance sheet impacting the liquidity in the trade.

The year has been encouraging for Havells, registering year on year 24% revenue growth across 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 last year. Water Purifier, as a new category launch, has been well accepted by trade and consumers.

The Company posted profit before exceptional items and tax (PBT) of Rs. 1,155.26 Crores in financial year 2018-19 as against Rs. 1,002.79 Crores in financial year 2017-18, a growth of 15.20% on year to year basis.

2. Brief Description of the Company’s Working During the Year/ State of Company’s Affairs

The year 2018-19 has been a year of revival despite transitional impact of GST, fluctuation in commodity prices & foreign exchange rates, hike in custom duty and liquidity shortage due to NBFC crisis. Your Company registered robust revenue growth across product verticals, gained market share and achieved stable profits. Acceptance of new product segments from trade and consumers has been motivating.

The Company continues to enhance its larger focus of optimum growth with profitability backed by numerous small steps for an overall improvement in its strength and brand salience. This is evident from the massive investment that your Company made in air conditioner manufacturing facility at Ghiloth, Rajasthan alongside the expansion of its brand shops and progressive positioning in newer channels like organized retail (MFR) and E-commerce (online). Added to this, the Company targets to create positive foot prints in the semi urban and rural markets too.

The switchgear segment experienced a reasonable market growth in both, domestic and industrial switchgears resulting from a strategic planning of focusing on government’s rural electrification and low-cost housing program. Contrarily, some of the segment’s operationally efficient products like Surge Protection Devices, PV Switchgear range, Industrial Plug and Socket and Modular Contactor have received excellent response owing to a strong and continuous investment in R&D.

Huge investments in power and infrastructure sector and implementation of GST, helped Cable business grow in revenues and margins. Government led investments in transmission and distribution segment, renewable energy, urban infrastructure especially smart cities and metro networks, digitalization as well as in telecommunication infrastructure would further propel growth momentum.

Introduction of multiple new products and buoyancy in the consumer segment led the growth in electrical consumer durable segment. The newly launched technologically superior premium fans, LED light changing water heaters, latest models under the small domestic appliances category and the much-appreciated products category of water purifiers and personal grooming were well accepted and applauded by consumers and trade partners alike.

Growth in the consumer durable industry was affected by modest summer, unseasonal rainfall and increase in import duties. Lloyd retained its focus on enhancing its reach and brand salience amidst its first air conditioner plant commencing commercial production. The latest campaign from Lloyd - ‘Khayal Rakhenge, Khush Rakhenge’ featuring Deepika Padukone and Ranveer Singh has positively impacted the brand and gained over 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 of the Company. Continuous investment in the cutting-edge technology and innovation has helped the organization to stay ahead in the highly competitive landscape. Various tools like Service App for consumers, Distribution Management System, Dealer Portal, Retailer App and Sales Force Automation has helped the Company delight its customers, achieve better channel partner relationship and improve engagement with employees. The investments in the artificial intelligence, natural language processing, IOT and IIOT ensures that the Company is building future ready products and services.

During the year we were awarded with India’s buzziest brand and were part of top 75 brands of the country by BrandZ. We came out with 15 advertising campaigns across 10 product categories ensuring visibility across the year. We launched focused campaign for rural areas and added regional flavour to all our campaigns. Our presence on social and digital media was also enhanced targeting younger audience. We continue to participate in various industry exhibitions from Solar to LED Lighting, IEEMA and IIID showcasing our latest product range and innovative designs.

In line with our commitment to enhancing green cover we planted over 1 lac trees each in Madhya Pradesh and Neemrana thereby developing 100 hectares of forest area. We even extended our green footprint to marketing collaterals by using bio-degradable material and energy efficient LED lights. We continue to enhance our renewable energy coverage at our plants. 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 31st March, 2019:

1. Mr. Anil Rai Gupta was honored with 2019 AACSB Influential Leader Award in recognition of his outstanding achievements, entrepreneurial success and his contribution towards 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 fan campaign in Durables category.

5. Havells - “School of Grooming campaign” was awarded “The Best Content marketing launch/ Relaunch award” by the Audacity e4m Indian Content Marketing Awards.

6. Havells got “Best Incentive program in the Middle East” award at MALT Excellence 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. Havells has featured as a new comer at Rank #41, with a Brand Value of ,510 Million.

8. Havells won the Gold award for Buzziest brand in the building segment by Afaqs.

9. Bhamashah Award.

10. Shiksha Vibhushan Award.

11. Indywood 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 companies whereby 4 (Four) entities are registered in India and remaining 5 (Five) are registered outside India. 7 (Seven) of these are direct subsidiaries and rest 2 (Two) are step-down subsidiaries.

Three direct overseas subsidiaries:

1. Havells Holdings Limited based at Isle of Man. This entity is a holding company for the 2 (Two) step-down subsidiaries of the Company viz., Havells International Limited and Havells Sylvania Illuminacion (Chile) Limited.

2. Havells Guangzhou International Limited based at China. The entity acts as a procurement and trading Company for the Group.

3. Havells Exim Limited based at Hong Kong. This entity acts as a facilitator for sourcing of material from China. The company closed its operations with effect from 31st August, 2018. Thereafter, all the requisite procedures for closure of the entity have been completed.

Two Indirect (step-down) overseas subsidiaries:

1. Havells International Limited at Malta, as a 100% subsidiary of Havells Holdings Limited. The Company initiated process for winding up with concerned authorities on 12th November, 2018. Thereafter, all the requisite procedures for closure of the entity have been completed.

2. Havells Sylvania Illuminacion (Chile) Limited at Chile, as a 100% subsidiary of Havells Holdings Limited. The process of winding up of the entity was initiated during the year.

Four direct domestic subsidiaries:

1. Promptec Renewable Energy Solutions Pvt. Ltd. based at Bengaluru. This entity is engaged in marketing and manufacturing of LED products including Street lighting, Office lighting 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 of the Company in their Meetings held on 28th January, 2019, approved the Scheme of Amalgamation for merger of all the 4 (Four) wholly-owned domestic subsidiaries, viz. Havells Global Limited, Standard Electrical Limited, Lloyd Consumer Private Limited and Promptec Renewable Energy Solutions Private Limited with Havells India Limited. The Hon’ble National Company Law Tribunal (“NCLT”) has fixed the next date of hearing in the matter as 3rd June, 2019.

The Appointed Date for the Scheme of Amalgamation is 1st April, 2018. As a result of the implementation of the aforesaid amalgamation, the four domestic subsidiaries as aforesaid will be dissolved without winding up.

The consolidated profit and loss account for the period ended 31st March, 2019, includes the profit and loss account for the subsidiaries and the joint venture company for the complete financial year ended 31st March, 2019.

The Board of Directors of theCompany has, by Resolution passed in its Meeting held on 29th May, 2019, 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, 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 (Form No. 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. https:// www.havells.com/en/discover-havells/investor-relation/ financials/balance-sheet.html. 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.

Joint Venture

Your Company had formed a 50:50 joint venture in People’s Republic of China with Shanghai Yaming Lighting Co. Limited under the name of Jiangsu Havells Sylvania Lighting Co. Limited (JV). This Joint Venture Company was created with an objective to produce energy efficient lighting lamps.

I n financial year 2017-18, owing to the technological changes in the lighting Industry, the Company along with its JV partner had decided to close down the business and liquidate 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, Joint Ventures or Associate Companies during the year

During the Financial Year 2018-19, Thai Lighting Assets Company Limited, a subsidiary of Havells International Limited, was liquidated on 29th June, 2018.

Havells USA Inc., a 100% subsidiary of Havells Holdings Limited, was dissolved on 31st October, 2017 and after completion of necessary procedures the same ceased to be a subsidiary during the year.

During the financial year ended 31st March, 2019, no company became a subsidiary of the Company or Joint Venture or Associate Company.

4. Reserves

Your Directors do not propose to transfer any amount to the general reserve and entire amount of profit for the year forms part of the ‘Retained Earnings’.

5. Dividend

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 can be accessed at https://havells.com/en/aboutus/ corporate-governance.html, Your Directors are pleased to recommend a Final Dividend @ Rs. 4.50/- per equity share for the year 2018-19.

The proposed dividend, subject to approval of Shareholders in the ensuing Annual General Meeting of the Company, would result in appropriation of Rs. 339.32 crores (including Dividend Distribution Tax of Rs. 57.86 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 20th July, 2019, Saturday, to 26th July, 2019, Friday (both days inclusive).

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 Employee Stock Purchase Schemes of the Company, which are administered by Havells Employees Welfare Trust, 3,32,102 Equity Shares of Rs. 1/- each, were approved for Grant on 29th May, 2019 and Vested (pursuant to the respective Employee Stock Purchase Plan as hereunder) to the eligible employees, which, if exercised, shall result in an equivalent no. of Equity Shares of Rs. 1/- each to be allotted/ transferred to the eligible employees under the respective schemes. A summary is given below:

No. of shares Granted

No. of shares Vested

Havells Employees Stock Purchase Plan 2014

1,69,597

1,69,597

Havells Employees Stock Purchase Scheme 2015

1,50,000

1,50,000

Havells Employees Stock Purchase Scheme 2016

16,273

10,729*

* 5,424 Shares vested as 1st tranche out of a total of 16,273 Shares Granted for financial year 2018-19, 2,937 Shares vested as 2nd tranche out of a total of 11,533 Shares Granted for financial year 2017-18 and 2,368 Shares vested as 3rd tranche out of a total of 10,377 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 year ended 31st March, 2019.

8. Details of directors or key managerial personnel including those who were appointed or 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 Rai Gupta (DIN: 00011892) and Shri Rajesh Kumar Gupta (DIN: 00002842), are due to retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment. The Board recommends their appointment.

Shri Anil Rai Gupta (DIN: 00011892), was last reappointed by the Shareholders of the Company 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 31st March, 2019.

Accordingly, the Board of Directors, upon the recommendation of the Nomination and Remuneration Committee, in its Meeting held on 20th March, 2019, approved the re-appointment of Shri Anil Rai Gupta, as the Chairman and Managing Director and the CEO of the Company for a period of another 5 (Five) years with effect from 1st April, 2019 to 31st March, 2024. The reappointment is subject to approval of the shareholders in General Meeting.

Further, Shri Ameet Kumar Gupta (DIN: 00002838), was last appointed as a Whole-time Director by the Shareholders of the Company in the Annual General Meeting held on 13th July, 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. The Board of Directors, upon the recommendation of the Nomination and Remuneration Committee, in its Meeting held on 29th May, 2019, approved the reappointment of Shri Ameet Kumar 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. The re-appointment is subject to approval of the shareholders in General Meeting.

Also, Shri Rajesh Kumar Gupta (DIN: 00002842), was last appointed as the Whole-time Director (Finance) and Group CFO by the Shareholders of the Company in the Annual General Meeting held on 13th July, 2015 for a period of 5 (Five) years with effect from 1st April, 2015. Accordingly, his prevailing term will be expiring on 31st March, 2020. The Board of Directors, upon the recommendation of the Nomination and Remuneration Committee, in its Meeting held on 29th May, 2019, approved the re-appointment of Shri Rajesh Kumar Gupta, as the Whole-time Director (Finance) and Group CFO for a period of another 5 (Five) years with effect from 1st April, 2020 to 31st March, 2025. The re-appointment is subject to approval of the shareholders in General Meeting.

Further, the Board of Directors upon the recommendation of the Nomination and Remuneration Committee, in its Meeting held on 29th May, 2019, and subject to the 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-time Director 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 the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are contained in the accompanying Notice convening the ensuing Annual General Meeting of the Company.

Appropriate Resolution(s) seeking your approval to the re-appointment of Directors are also 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 October, 2018, 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 of the Independent Directors of the Company was also held on 22nd January, 2019, without the presence of non-independent directors and members of the management, to review the performance of non-independent directors and the Board as a whole, the performance of the Chairperson of the Company, taking into account the views of Executive Directors, Non-Executive Non-Independent Directors and also to assess the quality, quantity and timeliness 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 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 material departures;

(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 and loss 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) 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 the Company and that such internal financial controls are 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.

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 they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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. During the financial year 2018-19 the Policy was reviewed by the Board of Directors on 20th March, 2019.

The Company’s Policy relating to appointment of Directors, payment of 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. The Policy is also available in the Investor Relations section, under the “Codes & Policies” tab, on the website of the Company and can be accessed at the weblink https://havells.com/en/aboutus/corporate-governance.html

13. Formal Annual Evaluation

Having a formalised board evaluation gives board members an opportunity of assessing their own performance and brings out the importance of the contributions of individual directors. It is a mechanism by which the board members candidly reflect on how well the board is meeting its responsibilities.

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Companies Act 2013 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 all the Directors covering aspects like:

- Board composition (size, diversity, skill set);

- Board processes, structure and communication (frequency of meetings, attendance thereof, flow of information, accessibility to product heads, senior management for informed decision making);

- Board responsibilities (disclosure of information and other key functions like monitoring effectiveness of Company’s governance practices, ensuring integrity of Company’s accounting and financial reporting systems, including independent audit, adequacy of controls for risk management, compliance with statutory laws).

The performance of the committees was evaluated by the Board after seeking inputs from the 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 its responsibilities.

Performance Evaluation of Individual Directors

The performance evaluation of the Chairman and the Non-Independent Directors were carried out by the Independent Directors, considering aspects such as:

- Effectiveness as Chairman, in developing and articulating the strategic vision of the Company;

- Displays efficient leadership, displaying and promoting throughout the Company a behaviour consistent with the culture and values of the organisation;

- Contribution to discussion and debate through thoughtful and clearly stated observations and opinions;

- Creation of a performance culture that drives value creation without exposing the Company to excessive risk;

- demonstrates highest level of integrity (including conflict of interest disclosures, maintenance of confidentiality, etc.).

The performance evaluation of the Independent Directors was carried out by the entire Board, other than the Independent Director concerned, taking into account parameters such as:

- refrain from any action that may lead to loss of independence;

- refrain from disclosing confidential information, including, unpublished price sensitive information, etc.;

- support to CMD and executive directors in instilling appropriate culture, values and behaviour in the boardroom;

- well informed about the Company and the external environment in which it operates;

- moderate and arbitrate in the interest of the Company as a whole, in situations of conflict between management and shareholders’ interest etc.

Evaluation Outcome

Based on the evaluation carried out, it was reaffirmed that the Board of Directors as a whole and each of the individual directors continued to work effectively and efficiently in fulfilling their advisory role through indepth discussion and exchange of ideas about specific topics, strategic subjects, leadership development and succession planning.

The Board is continually kept informed on the financial reporting, risk & audit, HR, marketing, legal and governance related affairs of the Company. The management had been vigilant of the expected changes notified under various statutes that need to be brought 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 due compliance.

The Board continues to operate through an appropriate Committee structure with 7 (Seven) Committees, namely, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship/ Grievance Redressal Committee, Enterprises Risk Management Committee, Corporate Social Responsibility Committee, Executive Committee and the Share Allotment and Transfer Committee. The Directors expressed their satisfaction at the overall engagement and effectiveness in the working of all the Committees of the Board.

The Directors were satisfied on the peer review conducted. The performance criteria items were assessed positively. Team spirit was considered strong, which encouraged mutual trust and open discussions among the Board members.

I t was affirmed that the Company being a conscious corporate citizen is working on both business succession planning and executive succession planning. A sustainable hierarchy and leadership are the prime focus for the planning outlay and due recognition to principles 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 92 of the Companies Act, 2013, as they stood on the close of the financial year i.e. 31st March, 2019 is furnished in ANNEXURE - 2 and forms part of this Report.

15. Auditors

1. Statutory Auditors

As per provisions of Section 139(1) of the Companies Act, 2013, the Company has appointed 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 Company held on 13th July, 2016.

Statutory Auditors’ Report

The observations of Statutory Auditor in its reports on standalone and consolidated financials 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 the audit 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 Act, 2013 and Rules made thereunder, M/s Sanjay Gupta & Associates, Cost Accountants (Firm Regn. No. 000212) were appointed as the Cost Auditor of the Company for the year ending 31st March, 2019.

The due date for filing the Cost Audit Report of the Company for the financial year ended 31st March, 2018 was 9th June, 2018 and the same was filed in XBRL 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 Companies Act, 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 with corresponding Rules framed thereunder, 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, 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 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.

Annual secretarial Compliance Report

A Secretarial Compliance Report for the financial year ended 31st March, 2019 on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder, was obtained from M/s MZ & Associates Secretarial Auditors, and submitted to 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 the Company, under Section 186 of the Companies Act, 2013, as at 31st March, 2019, are furnished 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 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. 301.44 crores towards Corporate Income Tax (including Dividend Distribution Tax) as Compared to Rs. 295.59 Crores paid during the last financial year. The Company has also paid an amount of Rs. 2,203.14 crores on account of GST and Custom duty and claimed a government assistance and support of Rs. 50.65 Crores during financial year 2018-19 as compared to Rs.1,934.62 Crores paid and claimed a government assistance and support of Rs. 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, 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 under review.

20. Corporate Social Responsibility (CSR)

Your Company has always believed in the concept of ‘Shubh-Laabh’ that suggests doing good deeds and profits would follow. Since 2005, Havells has set out on a journey of social change dedicated to the cause of Children- the future of the country. To support this journey, the company has identified eight strong pillars of health & nutrition, sanitation, education, environment, skill development, heritage conservation, healthcare and humanitarian causes. Most of these initiatives are not only aligned with the ones envisioned 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 do not even get three meals a day. The Company not only realized the consequences of not having enough - or the wrong - food cause suffering and poor health, but also slow the progress in many other areas of development like education and employment.

To counter malnutrition, eradicate hunger and promote education, Havells decided to provide mid-day meal in Alwar district in Rajasthan. A humble beginning in this direction that started with serving just 1,500 children across 5 schools has grown to serving over 60,000 students across 693 schools daily in the district. Since then there has been a constant rise in school enrolments, reduction in dropout rates, better BMI amongst children, interest in going to school and better academic performance. You would be happy to know that your Company has served close to 1 billion meals so far. The fresh, hygienic and nutritious food is prepared in the state-of-the-art kitchen in accordance with government-approved diet charts.

Ownership of the entire mid-day meal value chain from procurement of food materials to food preparation, storage and transportation to school, gives Havells complete control over the quality and hygiene of the meals. This goes in line with your Company’s philosophy of providing the best quality in all its offerings.

Sanitation

Sanitation is one of the most basic amenities but continues to be neglected in the Country. Government schools are no different. In most government schools, either there are no 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 and encouraging changes in the society and that WaSH (Water, Sanitation and Health) are critical for ensuring overall development of children and their families. It therefore adopted a 360 degrees approach towards sanitation.

Since 2014, your Company has built over 4,000 biotoilets in 400 government schools in the Alwar district of Rajasthan and continues to sensitize students as well as the teachers about the importance of sanitation and inculcating good hygiene habits amongst children from tender age. To further improve sanitation facilities, the Company contributed equal amount of money as given by the government for maintenance. This step perfectly amalgamates with the ambitious ‘Swachh Bharat Mission’ advocated by the Government of India and dovetails with United Nations Sustainable Development Goal No-3 & 6.

Continuing with its mission to empower adolescent girls, Havells provided reusable sanitary napkins to over 22,000 girls in the Financial Year 2018-19. This not only saves girls from various diseases due to unhygienic clothes used during menstruation but also reduces waste to landfills.

All these initiatives helped improve attendance, health and cognitive development, increased girls’ participation, established positive hygiene behaviour and offers the opportunity to introduce better WaSH practices in families and communities and addresses issues of inequity and exclusion.

Conserving Heritage

Your Company has always thought of future generations when it comes to being socially responsible. The Company realizes the need to preserve country’s rich heritage and pass it on to the future generations in the best possible condition.

Keeping this in mind, your Company tied-up with Aga Khan Trust for Culture (AKTC) for contributing towards building Humayun’s Tomb Interpretation Centre. The 10,000 sqm facility will be the largest public cultural facility built since the National Museum and is expected to receive 2 million visitors annually. Your Company has also contributed towards conserving the 15th century monument of National importance called the “Sabz Burj” situated at Nizamuddin, New Delhi. We are committed to keep contributing towards preserving our wonderful heritage.

School infrastructure

With an objective to strengthen the school infrastructure, your Company has built two classrooms for ITI in Kangra, Himachal Pradesh and has also donated tables and benches made from waste wood to needy government schools in Alwar, Neemrana and Haridwar. During the year, the Company donated over 2,000 tables and benches.

An Environment Friendly Company

Forests are important in regulating climate, sustaining communities and supporting biodiversity. 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 Pradesh and Neemrana, Rajasthan. It also planted over 50,000 trees across other plant locations in Alwar, Rajasthan and Baddi, Himachal Pradesh over last few years.

Healthcare

During the year, your Company supported two children with the life-threatening blood disorder- Thalassemia. Both the kids are undergoing treatment in a specialty hospital in Jaipur. One of the kids has fully recovered and is ready to live a normal life.

Humanitarian cause

The company contributed Rs. 5 crore (Rupees Five Crors) to the Chief Minister’s Distress and Relief Fund (CMDRF) in order to support the State Government’s efforts of providing relief and rehabilitation work in the flood affected areas of the state. All the employees 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 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

As at 31st March, 2019, the Audit Committee of the Board of Directors of the Company comprised of 4 (Four) Members, namely Shri Surender Kumar Tuteja, Shri Vijay Kumar Chopra, Smt. Pratima Ram and Shri Surjit Kumar Gupta, majority of them being Independent Directors except Shri Surjit Kumar Gupta, who is a Non-Independent NonExecutive Director. Shri Surender Kumar Tuteja, an Independent Director, is the Chairman of the Audit Committee.

The Board accepted the recommendations of the Audit Committee whenever made by the Committee during the year.

22. Enterprises Risk Management Framework

Havells is committed for global benchmarking in good Corporate Governance, which promotes the longterm interests of all stakeholders, strengthens Board, create self-accountability and helps in building trust in the Company.

A robust internal financial control system forms the backbone for our risk management and governance. Havells continues to strengthen its robust Enterprises Risk Management Framework based on the internationally accepted COSO Framework.

A structured risk management system permits the management to take calibrated risks, which provides a holistic view of the business, wherein risks are identified in a structured manner from Top down to Bottom up approach. The bottom-up approach is conducted through workshops with respective team at Branch, Factory and Corporate functions. The top-down approach enables discussion of all risks and opportunities at the management level.

The twin purpose of Enterprises Risk Management at Havells is to minimize adverse impacts and to leverage market opportunities effectively & efficiently. The objective is to sustain and enhance shortterm and long-term competitive advantage to the Company.

23. Details in respect of adequacy of internal financial controls with reference to the Financial statements

The Company has robust internal financial controls systems, which facilitates efficiency, reliability and completeness of accounting records, and timely preparation of financial statements and management information. The internal control system ensures compliance with all applicable laws and regulations, facilitates in optimum utilisation of resources 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 for its business functions and verticals to ensure orderly and efficient conduct of its business across the organisation. Our ERP system supports in process standardization, access 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 taken status is presented before the Audit Committee on a periodical interval.

Risk Control Matrix (RCM) has been prepared with respect to each Business functions and their mapping are being done with Functional Dashboard/ Compliance management system/ GRC Process 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 the Company who can report any fraud, irregularity, wrong doing and unethical behaviour. The Policy provides that the Company investigates such reported matters in an impartial manner and takes appropriate action to ensure that requisite standards of confidentiality, professional and ethical conduct are always upheld. Any complaint received under Satark policy are even mapped to the Chairman of the Audit Committee.

This Satark policy is available on the website https:// havells.com/en/aboutus/corporate-governance.html

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

At Havells, we consider our employees as valuable asset and ensure strategic alignment of Human Resource practices with business objectives. We constantly strive to establish strong systems and processes to build capabilities, drive performance and increase employee engagement to support organizational growth.

Building a highly engaged workforce, developing internal talent, hiring leadership capabilities will continue to be our strategic imperative to support our growth plans.

In Building Leadership Capabilities, we have hired around 35 lateral talent at various leadership roles, from similar/diversified industries to support us in Business, CRI (R&D) & Manufacturing.

Our Performance Management Process and discussion at various levels has helped employees get developmental feedback. To encourage performance dialogue, a Training program covering over 400 Branch Product Heads across branches was conducted focusing on handling better performance and development discussion with the Frontline.

On Skill enhancement, 285 Frontline Sales teams have been trained on Essential Selling Skills with special focus on KAM (Key Account Management) Working. Strengthening technical capabilities within the sales team was another initiative by the Company wherein an online product training portal was introduced. Around 80% (1,800 sales employees) have gone through these modules, taken the test and got certified on various product categories.

Second batch of General Management Program that started last year was conducted at IIM-Bengaluru in which a team of 24 potential leaders had gone through a 7 days residential program which focused on developing them for larger roles.

In continuation to improvement on the GALLUP Survey conducted in 2016, a Sample Survey was conducted in Q3 2018-19 to get employee feedback to assess overall engagement levels in the Company. There has been an improvement in the “Overall Engagement” score from 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 fair business practices. Havells is an equal opportunity employer and employees are evaluated solely on the basis of their qualification and performance. We provide equal opportunity in all aspects of employment, including retirement, training, work conditions, career progression etc. that reconfirms our commitment that equal employment opportunity is 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 including violence.

Nirbhaya

Prevention and control of sexual harassment at workplace constitutes an important part of corporate culture while aligning with international best practices and improving management processes. As part of the legal responsibility and zero tolerance towards sexual harassment at the workplace Havells has implemented the “Nirbhaya” policy for women employees and other workplace participants.

As statutorily required an Internal Complaints Committee has been constituted under the policy 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, mobile applications, media excerpts, interactive sessions, etc. that enhance security of female employees.

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 financial year.

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 this Report 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 Term Incentive Plan 2014 (LTIP 2014), Havells Stock Purchase Scheme 2015 (ESPS 2015) and Havells Stock Purchase Scheme 2016 (ESPS 2016).

All these benefit schemes are 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 NonResident Indians (NRIs) are not 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 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, 4th December, 2015 and 13th July, 2016 in respect of LTIP 2014, ESPS 2015 and ESPS 2016 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 except for the revision in threshold of basic salary approved by the Nomination and Remuneration Committee with effect from 1st April, 2019, as a criteria for determining eligible employees under the LTIP 2014. Disclosures pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014, in respect of LTIP 2014, ESPS 2015 and ESPS 2016 as at 31st March, 2019 are available on the website of the Company at https://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 Corporate Governance opted to go for a Corporate Governance Rating from CARE. For a third year in a row, CARE has re-affirmed CARE CGR 2 [Two Plus] Rating to the Corporate Governance practices of the Company. The Corporate Governance Rating reflects the Company’s transparent ownership structure, qualified and experienced Board of Directors, satisfactory functioning of various Committees of the Board, presence of prudent risk management policies and elaborate internal audit function. Furthermore, the rating derives comfort from elaborate communications and disclosures to shareholders, effective financial management and the Company’s compliance with statutory and regulatory requirements.

- CARE has yet again assigned an AAA [Triple A] rating to the long-term facilities of your Company during the current Financial Year. 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 obligations.

- 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 upto one year. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations.

30. Global Certifications

The Company augmented its global certifications armory from its existing bucket like BASEC, KEMA, TIS, TUV Rheinland and CB, for its various products to expand its reach in international 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 but also ethically. Corporate Governance is all about faith and faith leads to long term relationship with stakeholder like our Bankers, Customers to name a few.

The contribution that the culture of governance has on a Company is evident from our growth trajectory. From indigenous products to creating synergy with another trusted brand like Lloyds, reinforces the strong credentials that your Company has earned over the years. The goodwill that your Company demands in the global market has been greatly reinforced by the transparency it strongly believes in.

It may also be emphasized that the recent changes in the corporate governance landscape in India has ushered a new revolution. Your Company has been on the forefront in adopting such changes and creating a sustainable environment. The changes in law are integrated in our operations so that compliance is in true spirit.

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 Annual Report.

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 Annual Report.

32. Environment, Health and Safety

Your Company is committed to providing a safe working environment to all employees and protecting the nature in which it operates. Our leadership has an unswerving belief that no task or business objective can take priority over health and safety of our employees. We have incorporated globally acknowledged frameworks such as IIRC (International Integrated Reporting Council) framework, GRI standards, and UNGC principles for measuring, monitoring and reporting our Sustainability initiatives. Abiding by these frameworks helps us in maintaining high standards and strict compliance of Environment, Health and Safety parameters.

Our debut participation in Dow Jones Sustainability Index, in which we were ranked 7th globally in Electrical Components & Equipment Category and have scored 96 in both Environmental Reporting and Occupational Health & Safety section is a testimony to our commitment towards environment, health and safety of our employees.

We have had an excellent track record over the years with no fatalities or major injuries. To keep that track record alive, we share an embedded focus on continually improving our management systems, standards and approach by developing a culture where we proactively identify potential risks and hazards and eliminate, or if not possible, mitigate the risk to as low as reasonably attainable. We have implemented the systems, strategies, resources and structures necessary to meet our EHS goals. We constantly review and measure our systems, standards and behaviours to implement corrective and preventative actions for continuous improvement.

At each plant location, annual events were organized and commemorated like National Safety Week, World Environment Day and Road Safety Week. Mock-drills for electrical safety, fire safety, evacuation, earthquake, chemical spillage were conducted to strengthen the safety at workplace. During the year we provided extensive training to our people. In FY 2018-19 we recorded 48,181 man-hours of training.

Your Company has implemented ISO 14001 and ISO 50001 at most of its manufacturing sites. During the year, the Company not only optimized the use of energy by regularly conducting energy audits but also focused on enhancing our renewable energy footprint thus reducing Greenhouse gas emissions. Today, renewable power contributes close to 6% of the total energy consumed at all manufacturing facilities. The Company also intensified its drive to eliminate water wastage, efficiently managing our waste thereby reducing burden on landfills.

Committed to the vision of being wood, paper and carbon positive, your Company is continuously 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, Rajasthan and Himachal Pradesh. In the coming year, we have pledged to plant 4.5 lac trees to be closer to our vision.

To ensure the well-being of our employees, we have implemented some of the world’s best practices such as OHSAS and identified processes concerned with Critical to Health (CTH) and Critical to Safety (CTS). All our employees at plants regularly undergo medical check-ups for any occupational health hazard. We conduct ergonomics studies in our production process to enhance employee’s fitness and productivity. Numerous health camps aim 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 product portfolios which are characterized by rapid changes in consumer preferences and technological advances. The Company’s ability to compete successfully depends heavily upon its ability to ensure a continual and timely flow of competitive products, services and technologies to the marketplace. With a vision of being recognized as a Company with early mover advantage and as an early adopter of new technologies, our objective is to launch highly innovative products addressing explicit and latent needs of our customers. We do realize that early adoption of relevant technologies will be the cornerstone of our product innovation strategy. With this broader mission we have been investing in strengthening 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 all plant locations with a strong focus on in-house research & development thus promoting a strong culture for open and collaborative 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 (in-field) phases. As part of this mission, the Company has come up with a dedicated R&D Center at Sector-59, Noida Location. This R&D Center spans over a covered area of 1,00,000 square feet (including 50,000 square feet of world-class lab facilities) and houses great majority of the product development teams. 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 catering to niche premium segment with an objective of having clear product differentiation in our product portfolios 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 been extended to our varied stakeholders - including vendors and customers to further boost innovation. Our innovation focus has led to launch of smart connected products such as our digital wi-fi water heaters Adonia and Droid. The pH balancing and periodic disinfection technologies used by our water purifiers Max, Pro and UV Plus, is gaining favour with our customers. In line with smart city and smart office ecosystem initiatives, Havells launched “LitM” -our smart and connected platform for individual and group lighting control. We also launched a high end fully flat switch under our premium Crabtree brand. Our investments over the earlier years in specific technologies/design methodologies such as Design for Six Sigma (DFSS) and Multi-physics simulations is already having an impact in not just gaining stronger understanding of our products under harsh operating conditions (high temperature, unreliable power quality, to name a few) but also enhancing our capabilities to reduce time-to-market with enhanced product quality. For example, the recently launched digital mixer grinder Sonido used Taguchi methodologies to reduce noise by 50% compared to previous versions. Our product safety goals are to meet and exceed global standards and towards this, the Company is investing significantly in testing infrastructure and processes. Havells, in partnership with Hyundai, is launching power circuit protection products that comply with global standards.

These technology-based innovations complement several other aesthetically designed premium products by our in-house Industrial Design team. Our product designs have been widely acknowledged on national and international forums and the company is the recipient of numerous awards some of which are a) Red Dot Award for Stealth Dry Iron, b) CII Design Excellence Award and India Design Award for Stealth Air Fan c) 2018 Product of the Year Awards for Adonia -R water heater, Stilus Juicer Mixer Grinder, Enticer Fan.

The Company currently holds a broad collection of intellectual property rights. This includes patents, copyrights, trademarks and other forms of intellectual property rights in India and a number of foreign countries. The Company continues to strengthen its Intellectual Property position with new 100 IPR’s during the year (includes Design Registrations and Patent Filings).

Year 2018-19 clearly stands out as the year where we have taken a quantum leap in our R&D focus to strengthen our competitive position. We are confident that these steps will make us future ready with relevant technology based and customer centric innovative products - paving the way for our future growth aspirations. We made a conscious decision to bring in new thinking into our R&D thought leadership by attracting talent from diverse 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 of India - Bengaluru with clear focus on select Centers of Excellence. The Bengaluru Innovation hub will also help us tap into a wider talent pool within the country and unfold opportunities for growing our external collaboration eco-space - targeting specific start-ups and academic partners. Our Bengaluru hub is already employing 40 R&D staff operating 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 Company has transferred Rs. 6,90,058 during the year to the Investor Education and Protection Fund. 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 Meeting held on 12th September, 2018, transmitted 28,758 Equity Shares of the Company into the DEMAT Account of the IEPF Authority held with NSDL (DPID/ Client ID IN300708/10656671) in terms of the provisions of Section 124(6) of the Companies Act, 2013 and the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended from time to time.

These Equity Shares were the Shares of such 28 Shareholders whose unclaimed/ unpaid dividend pertaining to Financial Year 2010-11 had been transferred into IEPF and who had not encashed their dividends for 7 (Seven) subsequent Financial Years.

Individual reminders were sent to concerned Shareholders advising them to encash their dividend and the complete List of such Shareholders whose Shares were due for transfer to the IEPF was also placed in the Unclaimed Dividend section of the Investor Section on the website of the Company at https://www.havells.com/en/discover.havells/ investor-relations/unclaimed-dividend.html

With the transfer of abovesaid shares into IEPF, as at 31st March, 2019, a total of 1,98,448 Shares of the Company were lying in the Demat A/c of the IEPF Authority, hereinabove mentioned.

Concerned Shareholders may still claim the shares or apply for refund to the IEPF Authority by making an application in the prescribed Form.

The voting rights on shares transferred to the IEPF Authority shall remain frozen until the rightful owner claims the shares. The shares held in such DEMAT account shall not be transferred or dealt with in any manner whatsoever except for the purposes of transferring the shares back to the claimant as and when he approaches the Authority. All benefits except rights issue accruing on such shares e.g. bonus shares, split, consolidation, fraction 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, 2,12,100 Shares were lying in the Unclaimed Suspense Account in dematerialised form in the Havells India Limited Unclaimed Suspense A/c held with IDBI Bank Limited (DP). The voting rights on the said shares shall remain frozen till the rightful owner of such shares claims the shares. The rightful owner can still claim his/ her shares from the suspense account after complying with the procedure laid down in the statute regarding the same.

Initially, during the Financial Year 2017-18, the Company had transferred 2,27,100 (Two Lakhs Twenty Seven Thousand and One Hundred Only) Equity Shares into Unclaimed Share Suspense Account in terms of Regulation 39(4) read with Schedule VI to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. These Equity Shares were lying with the Company as unclaimed since the sub-division of Company’s Equity Shares of the nominal value of Rs. 5/- each into 5 Equity Shares of the nominal value of Rs. 1/- each.

Subsequently, 15,000 Shares of Rs. 1/- each were transferred to the rightful owners as approved by the Share Transfer and Allotment Committee, in its Meeting held on 13th April, 2018. Further, the unpaid dividend for the last 7 (Seven) years was also paid to the said shareholders.

36. Listing of shares

The equity shares of the Company are listed on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The listing fee for the year 2019-20 has already been paid to the credit of both the Stock Exchanges.

37. 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.

38. Business Responsibility Report (BRR)

The BRR aims at describing the initiatives taken by the Company in discharging its responsibilities from an environmental, social and governance perspective. However SEBI, exempts Companies which have been submitting Sustainability Reports to overseas regulatory agencies/ stakeholders based on internationally accepted reporting frameworks from preparing a separate BRR and furnish the same report alongwith details of the framework under which Sustainability Report is prepared.

Our Company has been annually publishing its Sustainability Report as per GRI Standards of the Global Reporting Initiative. Our Sustainability Report has been assured by KPMG India. We have also provided the requisite mapping of principles between the Sustainability Report and the Business Responsibility Report as prescribed by SEBI. The same is also available on the website www.havells.com.

39. Acknowledgements

The Board places on record its appreciation for the continued co-operation and support extended to the Company by its customers which enables the Company to make every effort in understanding their unique needs and deliver maximum customer satisfaction. We place on record our appreciation of the contribution made by the employees at all levels, whose hard 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 of bankers, financial institutions, rating agencies, government agencies, stock exchanges and depositories, auditors, legal advisors, consultants, business associates and other stakeholders.

For and on behalf of

Board of Directors of Havells India Limited

Noida, May 29, 2019 Anil Rai Gupta

Chairman and Managing Director

Source : Dion Global Solutions Limited
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