The Directors have pleasure in presenting the 24th Annual Report and
audited financial accounts for the year ended 31st March, 2007:
Financial Results (Rs. in Millions)
Gross Sales 16,810.58 11,151.37
Less Excise 1,338.39 1,116.11
Net Sales 15,472.19 10,035.26
Other Income 54.23 35.29
Total Expenditure 14,062.14 9,040.47
Interest 161.45 179.62
Net profit after interest but before
Depreciation and Taxation 1,302.83 850.46
Less Depreciation 97.42 65.38
Profit before Taxation 1,205.41 785.08
Less Taxation 183.88 153.01
Net Profit 1,021.53 632.07
Add Balance brought forward from previous year 1,178.02 632.01
Add Balance in pursuance of Scheme of Amalgamation - 54.84
Profit available for appropriation 2,199.55 1,318.92
Appropriation of Profits
Transfer to General Reserve 110.00 64.00
Proposed Dividend 134.40 67.20
Corporate Dividend Tax 22.84 9.70
Balance carried over to Balance Sheet 1,932.31 1,178.02
Performance of the Company
The Company had another good year 2006-07 with a reasonable
performance. The turnover of your Company has increased by more than
50% from Rs.11,151.37 million in the last Financial Year to Rs.
16,810.58 million in current financial year. This year, your Company
has crossed the Net Profit figure of Rs. 1000 million. The Net Profit
of the Company has increased by more than 60% from Rs.632 million in
previous year to Rs. 1022 million in Current Year.
The Directors of your Company are pleased to recommend a final dividend
@50% for the year 2006-07 i.e. Rs.2.50 per equity share on fully paid
up equity shares of Rs.5/- each. The proposed dividend, if approved at
the ensuing Annual General Meeting, would result in appropriation of
Rs. 157.24 million (including Corporate Dividend Tax of Rs. 22.84
million) out of the profits. The Company has made transfer of Rs.110
million to the General Reserve. The total appropriation of dividend of
Rs.157.24 million gives 15.39% payout on net profit of the Company.
The Register of member and share transfer books shall remain closed
from Friday, 22nd June, 2007 to Friday, 29th June, 2007, both days
inclusive, for the purpose of Annual General Meeting and payment of
The Company operates in three main business segments viz. Switchgear,
Cables & Wires and Electrical Consumer Durables.
Havell's India Limited has established itself as a major player in
Industrial Switchgear segment in India with a very comprehensive range
including ACBs, MCCBs, Fuse Switches, Fuses, Changeover Switches,
Contactors, Starters, etc. The Company has been upgrading its range by
adding new products and new features in the existing products. Havells
is setting up a second plant for industrial switchgear at Baddi in
addition to its existing plant in Faridabad. It will be absolutely
world class and highly automated employing all latest manufacturing
Havells is already the market leader for Domestic Switchgear products
in India with world class plants at Baddi & Badli. The Company is
expanding capacity and upgrading the facilities with a regular
investment in manufacturing. The Company has launched various
innovative products in this segment during the year with higher rating
MCBs, RCCBs, RCBOs, new distribution boards, etc.
The Company is a leading player in the Electrical Wiring Accessories
with premium positioning of brand `Crabtree'. In order to cater to a
much larger mass of the market the Company has decided to introduce
Havells branded Wiring Accessories in the current year. This move is
expected to add substantial volume this year. The Company has entered
the intelligent product segment by launching a Digital Dimming and
Energy Management System called `Crabtree -Aura'. The system empowers a
user to bring all the surrounding artificial lighting under his control
in a modern way through remote/digital equipment. Be it commercial
applications like bars, hotels, auditoriums, etc. or domestic areas
like living-cum-dining rooms, master bedrooms, Crabtree AURA can meet
the most varied lighting application and transform it at a click of a
button making our lives more productive, more comfortable and vastly
100% Export Oriented Unit
The Company has set up a 100% Export Oriented Unit (EOU) at Baddi for
Switchgear products with a total installed capacity of 12 million MCBs
per annum. The Company has invested an amount of approx Rs.80 million
in Plant & Machinery for this Unit. The Commercial production at this
unit was commenced in November, 2006. Being an EOU, this unit will get
the benefits of excise and custom duties exemptions. Further the sales
tax paid at the time of purchases is also reimbursable to the unit from
During the year under review, Switchgear Division has registered a
turnover of Rs.4289 million from the previous year Rs.3299 million
posting the growth of 30%.
Cable & Wire Segment
The Company's cable and wire division has registered a sales growth of
67%. This division is scaling up to new heights on YOY basis as
turnover of it has increased to Rs.7780 million from the previous
year figure of Rs.4655 million.
The Company is renowned for its superior quality for the complete range
of high and low voltage PVC and XLPE cables, FR/FRLS wires, Co-Axial
TV and Telephone Cables.
During the year the division enhanced its production capacity by
installing high technology machinery and by adding floor space to its
production area. The division through its CCV Lines has successfully
started manufacturing 66KV high voltage cables.
Electrical Consumer Durables Segment
The Company has maintained its growth momentum in the segment by
posting a sales figure of Rs.4086 million as compared to Rs. 2745
million in the previous year, i.e. growth of around 49% The Company has
fully utilized the opportunities thrown by the booming construction
sector in India. The Company is performing exceedingly well in all the
three categories in this segment, i.e. CFLs, Lighting Fixtures and
Burgeoning electricity bills, increased awareness amongst the
consumers, promotional schemes, environment protection movements,
lackluster variety and performance of local and Chinese brands has set
the stage for Indians to shift to Branded energy saving Compact
Fluorescent Lamps (CFLs). Havells is already one of the largest
manufacturers of Compact Fluorescent Lamps (CFLs) in India with
installed capacity of 2.2 millions CFLs per month at two state of art
manufacturing plants at Faridabad and Haridwar.
The worldwide demand for CFLs is about to explode as the world is
waking up to the global warming issues and many countries are
contemplating a defined time period for phasing out GLS lamps and
banning them which will result in demand shifting in favour of more
energy efficient products like LEDs and CFLs. The Company has made a
comprehensive plan of expanding its manufacturing facility multifold in
a new location at Neemrana to create a possibility to grab the
opportunity that will be generated in terms of CFL demand worldwide
which shall be catered through Havells and Sylvania's marketing and
distribution network all across the globe.
Havells entered the business of lighting fixtures 3 years back and has
established a strong market presence in the category with the turnover
increasing at the pace of almost 100% for the past two years.The focus
has been to provide complete lighting solutions with primary emphasis
on energy efficient systems for the required ambience or lighting
application with aesthetically designed fixtures. With access to
technology available with Sylvania the Company shall be launching many
innovative products in the Indian market in the near future.
Havells has captured a high premium position in the fan segment, by
providing the market with innovative designs, premium finishes and
energy efficient performance. The Company is expanding at the rate of
60% plus in fans every year. The fully integrated state of art
manufacturing plant set up last year at Haridwar, is being further
augmented to expand capacity to cater to the fast growth of Havells
The Company has successfully demonstrated in past its capability to
achieve fast success in all its new projects. We have always expanded
in fields that are synergistic to our current business and where we can
leverage our strengths in marketing, distribution, and customer
relations. The Company has decided to enter two new product segments,
Power Capacitors and Electric Motors, for which the plants and the
marketing infrastructure are already being set up.
The Company has set up a new plant at Noida for Power Capacitors with
an initial investment of Rs.80 million in plant and machinery. The land
and building were already available with the Company and were idle for
past couple of years. The Plant has an initial installed capacity of
600000 KVAR per month, and has commenced commercial production in
February, 2007. We expect to achieve good market position in this
product segment in quick time using the leverage of our existing market
strength for industrial switchgears.
Havells has decided to enter the fast growing Electric Motors business
for which a completely integrated plant is being set up at a greenfield
site at Neemrana, Rajasthan. Once the project is completely implemented
by end of the current financial year, the Company shall have the
capacity to manufacture 15,000 motors in combination of various sizes
from frame 56 to 315, or 0.25 HP to 500 HP which comprise the complete
range of LT three phase motors.The capex plan for the full project is
Rs.600 million and initial production for the smaller sizes motors is
expected in the third quarter of this year.
The customers and market expects Havells to introduce the latest
technology and high quality for any new product it launches. For this
the Company entered into technical collaboration with a leading
European manufacturer of Electric Motors, Lafert S.P.A., Italy. Havells
shall be manufacturing only high energy efficient motors in line with
its philosophy of doing its bit to bring energy consciousness to the
The turnover from other segments (including Bath Fittings and Meters)
is Rs.656 million as compared to previous year turnover of Rs.453
During the financial Year 2006-07 our Exports have grown by more than
30% to Rs.960 million as compared to previous year figure of Rs.728
million due to increase in awareness of Havells brand globally with the
Company putting focus on international market.
The Company has started exports to Russia, Romania, Latin America,
Australia in the previous year. It has its offices in Dubai, Colombo
and Lagos for developing the local markets. Other countries are being
catered by the highly motivated team in our International Business
Division (IBD). We would continue our quest for developing new products
as per market/customer demand. Internally we have increased our team
strength by almost 100% to increase our focus in each & every targeted
More international brand promotion activities are planned to increase
Havells brand awareness, which would eventually result in multiplying
Centre for Research and Innovation
Havells has developed a Centre for Research & Innovation (CRI)
comprising of a team of over 100 highly qualified engineers who are
working continuously on developing newer technologies which creates new
products for Havells based on its internally developed and fully owned
intellectual property. The centre is the nerve center of the
organization set up with a long term vision of Havells standing in
front of multinational companies with its own technology. Besides the
new products the team is persistently working on the upgradation of the
existing products with added innovations and on improving the
manufacturing processes in terms of automation and setting up systems
to ensure manufacturing consistency and quality. It is a matter of
pride for Havells that the in house CRI got recognized from Department
of Scientific & Industrial Research, Ministry of Science & Technology.
Acquisition of SLI Sylvania business
During the year under review, your Company has taken a leap of faith,
demonstrating its commitment to growth and an ambition to expand its
footprint globally, by deciding to acquire SLI Sylavania business
worldwide. The Company approved the acquisition of SLI Sylvania
business by approving the acquisition of 100% shares of three
companies; i) SLI Lighting Products, Inc.; ii)SLI Europe BV; and iii)
Lighthouse Investment Holdings Limited through its subsidiaries based
in Isle of Man, Malta and Netherlands. This is the largest foreign
acquisition by an Indian Company in the electrical industry. The
Transaction is completed in last week of April, 2007.
SLI-Sylvania headquartered in Frankfurt, is a leading world player in
the field of lighting with a very comprehensive range of lamps and
fixtures. SLI Sylvania clocked a turnover of $594 million in the
calendar year 2006. The Company goes to the market with brand Sylavania
in Europe, Latin America, Asia and Africa and SLI in USA, Canada and
Mexico. The Company also owns other renowned brands Concord marlin,
Luminance, Claude and Linolite.
The Company has 10 manufacturing plants in UK, Belgium, Netherland,
Germany, France, Tunisia, Brazil, Colombia and Costa Rica. The total
employee strength for the Company is around 4000.
The acquisition gives Havells a huge global presence with a proper
organizational presence in over 40 countries. There are huge
synergistic benefits of bringing the two companies together. It gives
an access to Havells to over 10,000 distributor spread in Latin
America, Europe, Africa and Asia which can be used to launch Havells
products like switchgear, etc. in these markets. There are huge
potential synergies in manufacturing and sourcing of lighting products
for the two companies. There is a huge potential in joining the R&D
activities as well.
SLI Sylvania has been acquired with a total consideration of Euro
227.50 million. The acquisition is funded by a non-recourse debt of
Euro 120 million based on SLI Sylvania's balance sheet and recourse
funding of Euro 80 million. The remaining amount is balanced by taking
over other long term liabilities like pensions, etc.
As on March 31st 2007, your Company has five subsidiaries namely, i)
Havells Cyprus Limited, Cyprus; ii) Havell's Holding Limited, Isle of
Man; iii) Havell's Malta Limited, Malta; iv) Havell's Netherlands
Holding B.V, the Netherlands; v) Havell's Netherlands B.V., the
Netherlands. The Ministry of Company Affairs, Government of India vide
its letter no. 47/195/2007-CL-III dated April 16,2007 granted an
exemption to the Company from the provisions of Section 212 (1) of the
Companies Act, 1956, with regard to attachment of the Balance Sheet,
Profit & Loss Account etc. of the subsidiary companies with the Annual
Accounts of the Company for the financial year 2006-07.
The annual accounts of the subsidiary companies along with reports of
the Directors and Auditors thereon and all related detailed information
are open for inspection by any investor at the Head Office of the
Company and of the subsidiary companies concerned. The Company will
make available these documents to investors including investors of the
subsidiary companies upon receipt of a request from them. The
investors, if they desire, may write to the Company to obtain a copy of
the financials of the subsidiary companies.
A statement giving information on the financials of the subsidiaries
for the year ended March 31, 2007 and the consolidated financial
statements prepared by the Company in accordance with the Accounting
Standard 21 are given in the Annual Report for the reference of
By virtue of acquisition of SLI Sylvania business through above
subsidiary companies and as per the provisions of section 4 of the
Companies Act, 1956, 42 other companies, which comprise SLI Sylvania
businesses worldwide, have become subsidiaries of Havells India Limited
during the current financial year 2007-08.
At the Annual General Meeting of the Company held on 27th1 June, 2006
members of the Company approved the allotment of Bonus Shares in the
ratio of 1:1, i.e. one fully paid up Bonus Share for every one equity
share of Rs. 5/- each. Consequently, on 22nd July, 2006, the Company
allotted 26879203 equity shares of Rs.5/- each to all the shareholders,
whose names appeared on the register of members as on 21st July, 2006.
After the Bonus Shares allotment, the paid up capital of the Company
increased to Rs.268.79 million.
Increase in Authorised Share Capital
Pursuant to the resolution passed by the members of the Company at the
Annual General Meeting of the Company held on 27th June, 2006 resulting
from the issue and allotment of Bonus Shares, the Company increased its
Authroised Share Capital from Rs. 150 million to Rs.300 million.
Subsequently the same is increased to Rs.400 million at the extra
ordinary general meeting held on January 20,2007.
The Company believes that great companies are built on the foundation
of good governance practices. Corporate Governance is all about the
effective management of relationships among constituents of the
system-shareholders, management, employees, customers, vendors,
regulatory and the community at large. Your Company strongly believes
that this relationship can be strengthened through corporate fairness,
transparency and accountability. Your Company places prime importance
on reliable financial information, integrity, transparency, empowerment
and compliance with the law in letter and spirit.
We take pride in informing you that your Company has implemented the
revised clause 49 of listing agreement. Your Company takes proactive
approach and revisits its governance and practices from time to time to
meet the business and regulatory needs. Therefore, the Company has
appointed professional firm, Ernst & Young for the Risk Management,
Internal Control part to advise on a proper implementation of risk
management practices in the Company. This is expected to be completed
by end of first quarter of the current year.
Compliance with clause 49 for the year 2006-07 has been given in the
Corporate Governance report, which is attached and forms part of this
report. The Auditors' certificate on compliance with Corporate
Governance norms is also attached thereto.
Directors' Responsibility Statement
Pursuant to sub-section (2AA) of Section 217 of the Companies Act,
1956, the Board of Directors of the Company hereby state and confirm
(i) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanations
relating to material departures;
(ii) 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 profits of
the Company for that period;
(iii) the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
(iv) the Directors had prepared the annual accounts on a going concern
During the year under review, Mr. N.Balasubramanian was co-opted as
Additional Director of the Company. As per section 260 of the Companies
Act, 1956, he will cease to hold office at the ensuing Annual General
Meeting. Further, the Board of Directors at their meeting held on May
15, 2007 also appointed Ms. Josephine Price as additional director of
the Company, who shall hold office only upto the date of ensuing Annual
The requisite notices along with the prescribed fees have been received
from members under section 257 of the Companies. Act, 1956 proposing
the appointment of Mr. N. Balasubramanian and Ms. Josephine Price as
Directors, liable to retire by rotation at the ensuing Annual General
During the year, Ms. Sabine Geyer resigned from the Directorship of the
Company. Further, Mr. Richard Owen Pyvis also resigned from the
Directorship of the Company with effect from 15th May, 2007. The Board
places on record its appreciation for their invaluable contribution
during their tenure as Directors of the Company.
In accordance with the requirement of the Companies Act, 1956, Maj.
Gen. D.N. Khurana and Shri Avinash P Gandhi, Directors retiring by
rotation at the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment.
M/s V. P. Bansal & Co., Chartered Accountants, the present Auditors of
the Company, retiring at the forthcoming Twenty Fourth Annual General
Meeting and being eligible, offer themselves for re-appointment. They
have furnished a certificate to the effect that their re-appointment,
if made, will be within the limits prescribed under Section 224(1)(B)
of the Companies Act, 1956.
Comments on Auditors Report
All observations made in the Auditors' Report and notes to the accounts
are self explanatory and do not call for any further comments under
section 217 of the Companies Act, 1956.
During the year, the Company did not accept any fixed deposit as per
the provisions of Section 58A of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975.
Investors Education and Protection Fund
Pursuant to the provisions of section 205A & 205C of the Companies Act,
1956, your Company has deposited Rs.1,11,9207-lying unclaimed/unpaid
dividend for the Financial Year 1998-99 during the current year in the
Investors Education and Protection Fund.
Listing of shares
The shares of the Company are listed on National Stock Exchange of
India Limited (NSE) and The Bombay Stock Exchange Limited, (BSE). NSE
has been defined as the Designated Stock Exchange of the Company. The
listing fees in respect thereof, for the year 2007-08, has already been
paid to both the Stock Exchanges.
Particulars of Employees required under section 217(2A) of the
Companies Act, 1956 and the Companies (Particulars of Employees) Rules,
1975 as amended forms part of this report and attached herewith as
Particulars regarding Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo
Particulars as required to be disclosed as per the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are set out in the statement attached hereto under Annexure Band
forms part of this report.
Havells is an ISO 9001:2000 certified Company following the best
practices to lead the organization towards improved performance.
Customer Focus, Leadership, Involvement of People, Process Approach,
System Approach to Management, Continual Improvement, Factual Approach
to Decision Making and Mutually Beneficial Suppliers Relationship are
the 8 quality management principles used as a basis for all the
operating systems of the Company - leading to all its plants being ISO
To highlight high quality standards, Havells also has prestigious
international approvals like KEMA, AENOR etc. for its products.
Environment, Health and Safety
Havells is firmly committed to managing its operations with utmost
responsibility, protecting the environment and safeguarding the health
of its stakeholders.Our Environment, Health and Safety (EHS) policy
provides the underlying principle for the implementation of the best
EHS practice at all our units.
Environment, Health & Safety (EHS) excellence has been extensively
promoted as a corporate culture within Havells. It is our endeavour
therefore, to ensure that the workplace is safe and the environment is
protected at all times. Havells aims to lead, not only in terms of
innovation and quality, but also in the areas of safety and environment
protection. As a result, the very foundations of our EHS Management
System are based on a continuous improvement approach.
Havells is concerned not only to comply with only regulatory norms for
prevention and control of pollution, but also to go beyond this by
adopting clean technologies and improvement in management practices.
The employees are also made conscious of their responsibilities towards
protecting the environment and add its beauty.
The security of employees and staff is one of the prime concerns of the
Management. Employees have been adequately covered under the various
insurance policies against risk of health and life disasters. The
Company ensures Mediclaim Insurance policy for its every employee.
Accidental policies are also taken by the Company to secure their life.
Contribution to Exchequer
Corresponding to the increase in turnover, there is an increase in
contribution made to exchequer through taxes. During the financial year
ended March 31,2007, the Company has paid Rs. 183.88 million towards
Income Tax as compared to Rs. 153.01 million paid during the last
financial year. This payment along with an Excise Duty of Rs. 1338.39
million, Sales Tax of Rs. 1095.11 million, Contribution to PF, ESI
etc. of Rs. 38.21 million totaling Rs. 2655.59 million indicates that
your Company is a regular payer of taxes and other duties to the
Government and is contributing fully to the growth of our nation as a
responsible corporate citizen.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) at Havells portrays the deep
symbiotic relationship that the Company enjoys with the communities it
is engaged with. As a responsible corporate citizen, we try to
contribute for social and environmental causes on a regular basis.
It is our continued commitment to contribute towards improving the
quality of life of not only our employees and their families, but also
the local community and society we operate in. The Company donated
Rs.3.50 million to .QRG Foundation, a Trust who is providing healthcare
services through mobile healthcare van for the Slum areas of Delhi
region and provides free medical check-ups and medicines to about
150-200 people every day.
Being a responsible and concerned corporate citizen, Havells through
QRG Foundation also undertakes other welfare activities in and around
its plant locations. In Alwar region alone the Company is providing mid
day meal close to 10000 students of primary schools. The Company is
also negotiating with the Government of Rajasthan to acquire land for
constructing a large kitchen with all the modern facilities to serve
the meal to around 40000 to 50000 students. The Company is also
planning to start these kind of noble activities in other areas as
The Company believes that the employee is the first customer an
organization has to win, and to fulfill this purpose it is important to
have a team whose members are well conversant with both technical and
Being a manufacturing Company, workers form an important link in the
chain of growth. A congenial atmosphere has been created at shop floor
level and all facilities required for a secure and cordial environment
are provided. Management at all level takes care of the interest of the
work force and frequent interactive sessions are conducted through out
The Company continuously evolves policies and processes to attract and
retain its substantial pool of scientific, technical and managerial
resources through friendly work environment that encourages initiatives
by individuals and recognizes their performance. We try to continuously
focus on giving every member of the team a challenging and happy
working environment. We encourage them to pursue their education while
they work. The Company continues to take new initiatives to further
align its HR policies to meet the growing needs of the business.
The Directors wish to express their grateful appreciation for the
cooperation and support received from vendors, customers, banks,
financial institutions, Central and State Government bodies, Auditors,
Legal Advisors, consultants, shareholders and the society at large.
Your directors also take on record the appreciation for the
contribution and hard work of employees across all levels, without
their commitment, inspiration and hard work, your Company's consistent
growth would not have been possible.
For Havell's India Limited
(Qimat Rai Gupta)
Chairman & Managing Director
Noida, May 15, 2007
ANNEXURE - B TO THE DIRECTORS' REPORT
CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information under Section 217(1)(e) of the Companies Act, 1956 read
with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules 1988 and forming part of the Directors'
Report for the year ended March 31, 2007 is as follows.
A. CONSERVATION OF ENERGY
a) Energy conservation measures taken
Your Company gives priority to energy conservation. It regularly
reviews measures to be taken for energy conservation, consumption and
its effective utilization. The energy conservation measures taken at
different location are:
2 nos. of 300 kva U.P.S. installed to replace D.G. Sets to drive the
Furnace oil fired boilers are installed in place of diesel fired
Slip ring motors and resistance starters are replaced with A.C. drives
and squarell cage induction motors. BADDI
Installation of AMF panel for automatic switching of DG sets.
Implemented level sensors in water tanks.
Utilization of STP treated water for watering lawns.
Rain water harvesting for recharging sub soil water level.
Replaced pneumatic screw drivers with electric screw drivers.
Used MS fabricated pipeline for compressed air system instead of GI
threaded pipe to avoid any leakage.
Implemented solenoids in power presses for ejecting components.
Air ventilators in place of exhaust fans in shop floors.
Multi-operation single tools introduced in M/c Shop.
Multi-cavity core-boxes introduced to increase productivity and save
Heat recovery from the Flue Gases of Ovens of CFL Plant in Paint Shop
Oven thereby doing saving in diesel consumption.
Reduction in Compressed Air leakage by 50% by replacement of G.I. pipe
line with M.S. pipe for distribution of compressed Air and proper
distribution of air.
Earlier plant was running on DG set. Now it is running on power supply
by State Electricity Board of Uttaranchal. There by saving in fuel
cost converting in electrical energy.
Implementation of new technology winding machines from China to save on
b) Additional Investment and proposals for Energy Conservation
4 nos. of 180 h.p. slip ring motors and resistance starters to be
replaced with squarrell motors and A.C. drives.
Solar water heaterforguest house, pantriesand kitchens of workers
Replace oil fired furnace with Electric - Induction furnace
Installation of solar water heater to evaporate treated waste water
from Effluent treatment plant (E.T.P.).
Use of Energy efficient Compressor by replacing of existing ELGI
Compressed Air leakage reduction by replacement of remaining G.I. line
with M.S. piping.
Cover & Blade baking oven planned to operate on LPG instead of LDO.
C) Impact of the measure at (a) and (b) above for reduction of Energy
Consumption and consequent impact on the cost of production of goods
The overall expenses of power were approx. 1.25% of the turn over which
is reduced to appropx. 1 % of turn over.
Reduced changeover and breakdown time
Reduced wastage of water and electricity (extra running of motor
Less power consumption in electric screw drivers
Reduced wastage of compressed air for ejecting components.
- Energy saved by following measures
Air Ventilator 13440 kwp.a.
Multi Operation tool 1000 kwp.a.
Multi Carroty Core 200 kwp.a
Achieved total annual savings of Rs.1.07 million by taking various
Reduction in per fan cost of production.
B. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION
a) Research & Development
Specific Areas in which R & D carried out by the Company
(i) Import Substitution
The Company has developed a vide range of switchgear products through R
& D division to substitute the imports.
Indigenous manufacturing of Table, Pedestral, Wall fans to reduce
dependency on imports.
In-house Development of the PCB for RCBO; which was being imported
(ii) Technology upgradation
The in house R& D team is persistently working on the upgradation of
the existing products and employing the state of the art technology to
develop the new products.
Inhouse development of Auto calibration bench for accurately
calibrating MCB. -Incorporation of Nl Labview system in the short
circuit lab and the test lab at R & D centre.
Procurement of test equipments with latest technological advancements.
Method of cross-linking of XLPE compound upgraded by imported CCV line.
Manufacturing infrastructure upgraded up to 66KV XLPE cables.
Testing infrastructure upgraded up to 66 KV xlpe cables.
Testing facility for Lightning Impulse test for XLPE cable imported.
Auto CT selection in all SPM riveting machines.
In house designed and manufactured auto calibration benches with
individual power supplies and complete data acquisition system
implemented. These calibration benches have closed loop control system
with temperature compensation.
SCADA implemented on all SPM riveting machines.
Robotic arm implemented in molding for auto ejection of chassis from
mould and place it on conveyor by separating it from runner.
Implemented (Grub screw- Bimetal carrier) continuity principle on all
calibration benches. Centralized SCADAsystem in moulding.
In house designed and manufactured new test benches for thermal test
with data acquisition system implemented.- Separate marking stage
eliminated by marking of spot welded assembly on line at SPM
Fanuc wire cut CNC machine and Charmilles EDM CNC machines implemented
in tool room which can produce the tools with in the accuracy of 5
Hand made core making system replaced with mult-icavity m/c core boxes.
Multi-operation single tools to replace 3 to 4 tools.
Implementation of `lean production system' in the assembly lines.
Introduction of Japanese Work Practices such as 5-S, Quality assurance
techniques and some of `Total Quality Management' systems on the shop
floor such as `Daily work Management', Visualisatio & Kanban.
Installation of additional layering winding Machine to improve the coil
winding finish. This will avoid the additional operation of thread
binding and copper saving.
(iii) Quality Improvement -
Process improvement to reduce the rejection rate of sub-assemblies.
Stringent Quality checks incorporated to assure the quality product.
Value engineering to achieve cost reduction of various components and
to make the products more competitive in the market.
Product processed through better machines with inline control of
Process improvement to improve quality and productivity of multi-pole
Designed new fixtures to improve quality and productivity of spot
Change the shape of spot welding electrodes to improve the strength and
quality of joints.
Auto calibration benches motors changed from 30 rpm to 15 rpm.
MCB testing capacity of test lab increased to 10 times.
Open ink well pad printing machines replaced with close cup pad
Completed seven CIP projects on productivity, quality and process
Conventional technology in taps and fitting is being replaced with
O ring are used in place of asbestors packaging.
Sheet Metal as replacing casted parts.
Improvement in Assembly Line.
Improvement of Euroload Changeovers to substantially reduce market
Introduction of better packaging.
Improvement in handling system for semi-finished & finished components
to reduce the rework and rejection.
Benefits derived as a result of above
Usage and Design Improvement
New Product Introduction
Improvement of productivity and accuracy of testing
Reduced consumption of consumables items.
Reduction in scrap generation
Future plan of action
To produce electronics RCCB with the state of art technology To produce
MCB with higher rating 80-125 A.
To produce MCB Single pole with switched neutral.
To produce auxiliaries of MCB as Under Voltage Release and Auxiliary
To produce ACBs in higher frame (5000-6300) frame.
To introduce the Motorized change over switches
Introduction of various new models of Ceiling fans/Pedestral/Wall fans
and light duty ventilating fans.
Introducing various new design of lighting systems to conserve power
consumption and provide better lighting.
Development of production/testing infrastructure for 132/220kv grade
Expenditure on R&D (Rs. in Million)
Capital 4.60 25.99
Recurring 37.43 16.49
Total 42.03 42.48
Total R & D expenditure as a percentage of
total turnover 0.25% 0.38%
Technology Absorption, Adaptation and Innovation
1. Efforts, in brief, made towards technology absorption, adaptation
The Company is continuously involved in development of new products and
upgradation of technology in existing products. The Company is keeping
a close eye on the latest developments in the field of
electrical/electronics and incorporating those advancements in the
processes engrossed. The Company is in line to achieve six sigma. The
updation in the plant and machinery is persistently carried out and
automation of the processes in plant is in progress.
2. Benefits derived as a result of above efforts.
Improvement in quality of the products, enhancement of the product
range and improvement in manufacturing processes which results in cost
reduction, consumer satisfaction and wider acceptance of the product
and grant of various certifications.
3. Information on imported technology (imported during the last 5
years) reckoned from the beginning of the financial year, if any:
Technology Imported Year of Import Has
Complete CFL plant & technology 2003-04 Yes
Continuous catiniery vulcanizing
extrusion machine 2005-06 Yes
54 bobbin Stranding machine 2005-06 Yes
Cable print machine 2005-06 Yes
Automated Capacitor Winder 2006-07 Yes
CFL machine to manufacture Ginni Lamp 2006-07 Yes
Technology Imported If not fully absorbed, areas
where this has not taken
place, reasons therefore and
future plans of action.
Complete CFL plant & technology N.A
Continuous catiniery vulcanizing
extrusion machine N.A.
54 bobbin Stranding machine N.A.
Cable print machine N.A.
Automated Capacitor Winder N.A.
CFL machine to manufacture Ginni Lamp N.A.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
(a) Activities relating to Exports, initiatives taken to increase
exports, development of new export markets for products and services
and export plans
The Company has started exports in Russia, Romania, Latin America,
Australia also. It has its offices in Dubai, Dhaka, Colombo and Lagos
for developing the local markets. Other countries are being catered by
the highly motivated team in our International Business Division (IBD).
We would continue our quest for developing new products as per
market/customer demand. Internally we have increased our team strength
by almost 100% to increase our focus and go in-depth in each & every
targeted market/region.The Company has acquired SLI Sylvania business
and owns the right of the Sylvania brand in the international market
(excluding Australia, Canada, Mexico, New Zealand and the United
States), which is one of the most globally recognized brands in the
industry for over a century. The SLI group has a leading presence in
selected markets across Europe and Latin America with a focus on.
growth in Asia, the Middle East and North America. The Group markets
fixtures, lamps and other lighting products to targeted, high value
customers, including architects, designers, electrical distributors and
wholesalers, select retailers, installers/end-users, original equipment
manufacturers and other lighting manufacturers (together OEMs). The
combination of its portfolio of lighting technology and its Sylvania
brand positions the Group to compete effectively with all other global
and local lighting companies. Moreover, we would continue our quest for
developing new products as per tfiarket/customer demand with the strong
distribution network of SLI Sylvania Group.
(b) Total Foreign exchange used and earned
(Rs. in Millions)
Foreign exchange earned 960.42 728.08
Foreign exchange used 1,248.32 1,000.38
For Havell's India Limited
(Qimat Rai Gupta)
Chairman & Managing Director
Noida, May 15, 2007