A Project Report on

HAVELLS INDIA

Subject:

Accounting for Manager

Submitted to:

Dhaval patel

Global Institute of Management

Batch:2011-13

Prepared by:Jayesh Chauhan

Vishal mishraBhavesh patel

Acknowledgement

I would like to express my gratitude to my guide Mr. Dhaval Patel of Global Institute of Management Gandhinagar for his cooperation and valuable suggestion during the study process. And during my analysis.

Message from Chairman

“If your mind can conceive it,and your heart can believe it,you can achieve it.”

Chairman & Managing Director :Qimat Rai Gupta

Board Of Directors

Qimat Rai Gupta Chairman & Managing Director

Anil Gupta joint Surjit Gupta Rajesh Gupta Managing director Director Director (Finance)

Other Details:

Company Secretary Sanjay GuptaAuditors M/s V.R. Bansal & Associates Chartered Accountants

B-11, Sector-2, NoidaBankers Canara Bank, PCB-II, Barakhamba Lane, New Delhi-110 001

IDBI Bank Ltd., Red Cross Building, New Delhi-110 001Corporation Bank, G-28-29, Sector 18, NoidaState Bank of India, IFB, New Delhi-110 001

Yes Bank Ltd., South Extn., Part-II, New Delhi-110 049Standard Chartered Bank, 23, Barakhamba Road, New Delhi-110 001

Union Bank of India, IFB, New Delhi-110 001Share Transfer Agent MCS Limited (Unit Havells India Ltd.)

F-65, Okhla Industrial Area, Phase-INew Delhi-110 020

Tel: 011-41406149, Website: www.mcsind.comListed on The National Stock Exchange of India Limited

The Bombay Stock Exchange LimitedRegistered Office 1/7, Ram Kishore Road, Civil Lines, Delhi-110 054

Corporate Office QRG Towers, 2D, Sector - 126, Expressway, Noida - 201 304, U.P.

Tel: +91-120-4771000, 4772000www.havells.com

Company History - Havells India

YEAR 1983 - The Company was originally incorporatd as Havell's India Private Limited on 8th August, under the Companies Act, 1956 and subsequetly the name was changed to Havell's India Limitd vide certificate dated 31st March, 1992. - The Company was promoted by S/Shri Qimat Rai Gupta and Surjit Kumar Gupta. - It has facilities for manufacture of switchgear items viz. Miniature Circuit Breakers (MCB), MCB Distribution Boards (DB) and HRC fuses at Samepur Badli, Delhi. - The Company also entered into a Technical Collaboration with M/s Christian Geyer GmbH & Co., Germany for the manufacture of Miniature Circuit Breakers in India. 1989 - The company undertook addition to its tool room facilities by going in for manufacturing of sheet metal and moulding tools in-house. 1991 - The company amalgamated with itself Elymer Havbell's Pvt. Ltd. which had facilities for manufacture of HRC fuses with an installed capacity of 2,50,000 pcs. 1992 - For the manufacture of ELCBs, the Company signed another Technical Collaboration with M/s Schiele Industrieworke,

Germany. 1994 - The company successfully launched the latest IEC design contractors, relays, and motor starters for the first time in India which have been well received in the market. - The company has finalized tie-ups in UAE, Oman, Kuwait and Egypt for marketing its vast range of products in these countries. 1995 - The Company has introduced Product Managers and Industrial Teams to emphasize the product mix and to strengthen its presence in all market segments. 1996 - Schiele industriwerke, Germany, who have been our collaborators for ELCBs, have entered into a new technical collaboration with the company for quality upgradation for its products in the controlgear division. - The company decided to enter into the manufacture of Three Phase Energy Meters for industrial applications. - Keeping in view business synergy's with the Cable Industry, the Company has entered into the manufacture of low tension power cables. - Havell's group signed a Joint Venture Agreement with Hanson Electrical, a group company of the UK Pound 11 Billion Anglo-American conglomerate, Hanson Plc., one of the top ten Companies of UK. 1997 - One of the biggest achievements during the year is that the JV partners have tested the MCBs and have entered into an agreement with the Company to exclusively market the MCBs in the world wide markets.

- Havell's Dorman Smith Pvt. Ltd., U.K. JV company, wherein Havell's India Ltd is a 25% shareholder, with Electrium Ltd. UK with the introduction of state-of-the-art `DORMAN SMITH' brand Moulded Case Circuit Breakers in India. - Havell's group, has signed a new JV agreement with Ampy Automation Digilog Ltd., UK. 1998 - Cable division at Alwar is now ISO-9001 certified. - Havell's group has signed a new JV agreement with the Deutsche Zahiergesellschaft (DZG), Germany. - The 50:50 JV company Havell's Dorman Smith Ltd. in which Havell's India Ltd. is a 25% shareholder had launched Moulded Case Circuit Breakers last year in the Indian market. - The Company also launched Crabtree brand modularplate switches which is being perceived as the best available product in the market. 1999 - Electrical switchgear makers Havell's India has entered into a strategic partnership with Cambridge Technology Partners India for implementing ERP on a fast-track. - The company has a 50:50 joint venture with DZG of Germany for manufacture of high-end electromechanical and electronic energy meters. 2000 - Havell's entered into a technical collaboration with Geyer in 1998 to manufacture miniature circuit-breakers. - For MCBs, the company has a technical collaboration with Geyer AG of Germany, with Schiele Industriewerke of Germany for RCCBs and with Peterriens Schaltechik Gmbh for changeover switches.

- The Company has entered into a joint venture agreement with Standard Electricals Ltd., an unlisted company wherein the company hold 60% shareholding. - Havell's India Ltd has acquired a 60 per cent stake in Hyderabad-based Duke Arnics Electronics Ltd. 2001 - The Company has been awarded the highest revenue payer award for the year 2000 in the organised sector category. Havell`s India Ltd has informed BSE that the company had earlier acquired 60% shareholding of Standard Electricals Ltd., Jalandhar, an unlisted company. - The company has acquired the entire 100% shareholding of Standard Electricals Ltd., by purchasing balance 40% shareholding of the company. The Standard Electricals Ltd., has thus become a 100% subsidiary of company w.e.f. December 31,2001. 2004 -Forays into the luxury bathroom fittings and accessories segment under the Crabtree Frattini brand name -Havells India Limited has sold out its entire shareholding of Standard Electricals Limited, an un-listed public limited company which was a 100% subsidiary of the Company. Consequently, with effect from such transfer, Standard Electricals Limited is no longer a subsidiary of the Company. -Havell's India Ltd has acquired a Sri Lankan company engaged in energy efficient lighting - compact fluorescent lamps (CFLs). 2005 -Set up manufacturing plant in Haridwar, Uttaranchal for manufacturing Fans. -Awarded the KEMA certification by The Dutch Council for Accreditation, making QRG the only group to attain this

certification. -Set up of R&D Center in Noida H.O. 2006 -Havells India Ltd has informed that Ms Sabina Geyer has resigned from the Directorship of the Company with immediate effect. -Crabtree India merged with Havells India. -First Company to get the ISI Certification for complete range of CFLs. -Expansion at Alwar manufacturing plant for increase of production capacity. 2007 -Havells India Limited has appointed Mr.N Balasubramanian as additional director of the Company who shall hold office upto the date of next Annual General Meeting. -Acquired the Lighting business of a Frankfurt based company Sylvania, a global leader in lighting business and now the company's turnover crosses US$ 1 Billion. -Warburg Pincus, a global private equity firm and one of the largest investors in India, invested US 0 million in Havells India Ltd. Havells issued fresh shares to Warburg Pincus, representing approximately 11.2% of the fully diluted share capital of the company. -QRG Group entered healthcare business by acquiring a majority stake in Central Hospital and Research Centre, Faridabad. 2008 -Havells India Limited has appointed Mr Sanjay Johri as the Company Secretary of the Company w.e.f August 25, 2008. -Set up of fully automatic plant for Havells Lafert Motors at Neemrana -Change in Corporate BRAND identity -First Indian CFL manufacturers to have adopted RoHS, European norms on Restriction of Hazardous Substances in CFLs.

2009 - Havells India opened its second exclusive showroom Havells Galaxy in Chennai. -Launch of India's 1st HPF CFL -Launch of India's 1st BEE 5* Rated Fan -Global consolidation of CFL manufacturing plant at Neemrana for domestic and export purposes. 2010 - Havells India Ltd has appointed Mr. S. K. Tuteja as an Additional Director.

Products Of Havells

FANS

Summers are cool with Havells fans.Havells fans are manufactured at Haridwar, which is the largest integrated fan manufacturing plant inIndia. The plant employs state-of-the-art CNC winding machines, CNC Machining Centre and also has afully automized Paint Shop. All fans go through a number of in-house quality control tests at the fully automated test lab. Havells fans are known for their wide range, energy-efficiency and superior finish.

CFLs

Save more with India's greenest CFLs.Havells is one of the dominant players in the CFL segment. Its Neemrana Plant is a Global ManufacturingHub with a current capacity of 4 million per month, slated to go up to 10 million per month. It boasts of anautomated assembly line to deliver world class products. This plant prides itself over the revolutionary PillDozing Technology, the ROHS Certificate and the individual testing of every single CFL. The CFLsmanufactured here are India’s first truly green CFLs.Save more with India's greenest CFLs.

LIGHTING

Lighting up the world.

Havells offers a wide range of energy-efficient lighting solutions. These lights and fixtures are made withthe utmost accuracy to get right reflections. Be it the range of LED lights or Havells CMI lamps, they are allaesthetically designed and technologically superior. Havells lighting solutions include lights for domestic,commercial, industrial, street, landscape, malls and museums.Lighting up the world.

SWITCHES

Switches - blending aesthetics with perfection.

Crabtree, the premium range of switches from Havells, is proud of being fire-retardant, dust-free,shock-proof and child tamper-proof. Made of superior quality raw materials, these switches come with aguarantee of I Lakh operations.Havells also manufactures Coral and Pearlz modular switches which are known for their durability andsuperior finish.

Havells Strategy

Globalisation :Globalisation at Havells is a term for the horizontal andvertical integration of manufacturing and trade on aninternational level. In addition to the expanding businessin India, Havells was looking to expand the geographicalfootprint. To remain competitive in today's scenario ofconsolidation and to have sustainable development,aggressive measures should be implemented to expandbusiness. Starting business internationally is as defensive

as an offensive play. Changing slowly to economicalterations in today's world could ultimately harm thebusiness in long run.Through international acquisition, Havells is vying for areasonable share in the high entry barrier markets ofdeveloped countries and is capturing buoyant growthprospects in the developing countries. The key strategybehind Sylvania acquisition was to acquire a brand withglobal presence over last 100 years in the electricalspace and to get access to strong distribution networkspread across Europe and Latin America. Alsoglobalization is necessitated due to competition withlowest cost producers across geographies.While modern trade is ushering in the 'global village',very significant national differences remain in culture,consumer preferences, and business practices. Havellsstrategy is to keep local preferences intact and to leverageon the key strength of each cluster.Your Directors present the Company's 28th Annual Report and Audited Accounts for the financial year ended 31stMarch, 2011.

RESULTS FOR THE YEAR

AWARDS AND RECOGNITION

National Energy Conservation Award for CeilingFans :In appreciation of the achievements in Energy

Conservation in the manufacturing of BEE star labeledappliances (Ceiling Fans) sector for the year 2010, yourCompany has been awarded the "National EnergyConservation Award for Ceiling Fans" on 14th Dec 2010by Minister of Power, Government of India.

Award for Beacon Lighting :

Concord, the premium brand of Havells Sylvania washonoured with the Best Interior Luminaire crown for the2nd year in succession at the Lighting Design Awards,the heart of the architectural lighting industry. The newConcord Beacon LED range includes the Beacon MuseLED which uses cutting edge technology and ancientlens principles to create a fully adjustable spotlight.

Award for Product Design :

In recognition of its outstanding and innovative design,Concord's Stadium LED spotlight was awarded the "reddot award product design". The Concord Stadium is aninnovative low energy LED spotlight for a myriad oflighting applications, including museums, galleries andretail spaces. The Stadium portfolio introduces twoversions, Stadium EVO and Stadium PRO, both withexcellent colour rendering, low running temperatures,very long lamp life resulting in reduced maintenancecosts and energy saving efficient light source.

Best Stall Award in Electrical fair :

Havells Sylvania was awarded the Best Stall in ElectricalFair held at Kolkatta by Calcutta Electric TradersAssociation (CETA). This platform was used to launchSylvania in West Bengal. CETA's mission is to promotethe business profile of its members and to providecompanies who choose to do business with CETAmembers, whether as customers or suppliers, with anassurance of quality.

Power Brand Award :

Havells was chosen as Power Brand by the Indianconsumers as surveyed by ICMR (Indian Council forMarket Research) instituted by Power Brands India.This award is given on the basis of strong brandpresence in the minds and hearts of Indian consumers.

NOTES ON ACCOUNTS

The Company has the following subsidiaries as on 31st March 2011:Name of Subsidiary Country of Date of Nature Extent ofincorporation control control

1 Havell's Holdings Limited Isle of Man 09.03.2007 Wholly Owned Subsidiary 100%

2 Standard Electrical Limited India 02.02.2010 Wholly Owned Subsidiary 100%

(formerly: Seven WondersHolidays Limited)3 Havell's Cyprus Limited Cyprus 20.07.2006 Wholly Owned Subsidiary 100%

4 Havells Exim Limited Hong Kong 24.10.2010 Wholly Owned Subsidiary 100%

5 Havells Malta Limited Malta 13.03.2007 WOS of Havell's Holdings Limited 100%

6 Sylvania India Limited India 21.06.2010 WOS of Havells Malta Limited 100%

7 Havells Netherlands Holding B.V. Netherlands 13.03.2007 WOS of Havells Malta Limited 100%8 Havells Netherlands B.V. Netherlands 13.03.2007 WOS of Havells Netherlands 100%

Holding B.V.9 SLI Europe B.V. Netherlands 20.04.2007 WOS of Havells Netherlands B.V. 100%

10 Havells Sylvania British Virgin 20.04.2007 WOS of Havells Netherlands B.V. 100%

Holdings (BVI-1) Ltd Islands11 Flowil International Netherlands 20.04.2007 WOS of SLI Europe BV 100%

Lighting (Holding) B.V.12 Sylvania Lighting International B.V. Netherlands 20.04.2007 WOS of SLI Europe BV 100%

13 Havells Sylvania Thailand 20.04.2007 WOS of Flowil International *49%

(Thailand) Limited * Lighting (Holding) B.V.14 Guangzhou Havells Sylvania China 20.04.2007 WOS of Flowil International 100%

Enterprise Limited Lighting (Holding) B.V.15 Havells Sylvania Asia Hong Kong 20.04.2007 WOS of Flowil International 100%

Pacific Limited Lighting (Holding) B.V.16 Havells Sylvania Sweden A.B. Sweden 20.04.2007 WOS of Flowil International 100%

Lighting (Holding) B.V.17 Havells Sylvania Finland OY Finland 20.04.2007 WOS of Flowil International 100%

Lighting (Holding) B.V.18 Havells Sylvania Norway A.S. Norway 20.04.2007 WOS of Flowil International 100%

Lighting (Holding) B.V.19 Havells Sylvania Fixtures Netherlands 20.04.2007 WOS of Flowil International 100%

Netherlands B.V. Lighting (Holding) B.V.20 Havells Sylvania Lighting Belgium 20.04.2007 WOS of Flowil International 100%

Belgium N.V. Lighting (Holding) B.V.21 Havells Sylvania Belgium B.V.B.A. Belgium 20.04.2007 WOS of Flowil International 100%

Lighting (Holding) B.V.22 Havells Sylvania Lighting France 20.04.2007 WOS of Flowil International 100%

France S.A.S Lighting (Holding) B.V.23 Havells Sylvania France S.A.S. France 20.04.2007 WOS of Havells Sylvania 100%Lighting France SA24 Havells Sylvania Italy S.P.A. Italy 20.04.2007 WOS of Flowil International 100%

Lighting (Holding) B.V.25 Havells Sylvania Portugal Lda Portugal 20.04.2007 WOS of Flowil International 100%

Lighting (Holding) B.V.26 Havells Sylvania Greece A.E.E.E. Greece 20.04.2007 WOS of Flowil International 100%

Lighting (Holding) B.V.27 Havells Sylvania Spain S.A. Spain 20.04.2007 WOS of Flowil International 100%

Lighting (Holding) B.V.28 Havells Sylvania Germany Gmbh Germany 20.04.2007 WOS of Flowil International 100%

Lighting (Holding) B.V.29 Havells Sylvania Switzerland A.G Switzerland 20.04.2007 WOS of Flowil International 100%

Lighting (Holding) B.V.30 Havells Sylvania Brasil Brazil 20.04.2007 WOS of Sylvania Lighting 100%

Illuminacao Ltda. International B.V.Havells India Ltd.Annual Report 2010-1112231 Havells Sylvania Argentina S.A. Argentina 20.04.2007 WOS of Sylvania Lighting 100%

International B.V.32 Havells Sylvania N.V. Dutch Antilles 20.04.2007 WOS of Sylvania Lighting 100%

International B.V.

33 Havells Sylvania Colombia S.A. Colombia 20.04.2007 WOS of Havells Sylvania 100%

Holdings BVI-1 Limited34 Havells SLI de Mexico S.A. de C.V. Mexico 20.04.2007 WOS of Sylvania Lighting 100%

International B.V.35 Havells SLI Servicios Generales Mexico 20.04.2007 WOS of Havells SLI de 100%

Mexico S.A.de CV Mexico SA de CV36 Havells Sylvania EI Salvador EI Salvador 20.04.2007 WOS of Havells Sylvania 100%

S.A. de C.V. Export N.V.37 Havells Sylvania Guatemala S.A. Guatemala 20.04.2007 WOS of Havells Sylvania 100%

Export N.V.38 Havells Sylvania Costa Rica S.A. Costa Rica 20.04.2007 WOS of Havells Sylvania 100%

Export N.V.39 Havells Sylvania Panama S.A. Panama 20.04.2007 WOS of Havells Sylvania 100%

Export N.V.40 Havells Sylvania Venezuela C.A. Venezuela 20.04.2007 WOS of Havells Sylvania 100%

Colombia S.A.41 Havells Sylvania Europe Limited United 20.04.2007 WOS of Flowil International 100%

Kingdom Lighting (Holding) B.V.42 Havells Sylvania UK Limited United 20.04.2007 WOS of Havells Sylvania 100%

Kingdom Europe Limited43 Havells Sylvania Fixtures United 20.04.2007 WOS of Havells Sylvania 100%

UK Limited Kingdom Fixtures UK Limited44 Havells Sylvania Tunisia S.A.R.L. Tunisia 20.04.2007 WOS of Flowil International 100%

Lighting (Holding) B.V.45 Havells Sylvania Export N.V Dutch Antilles 20.04.2007 WOS of Sylvania Lighting 100%

International B.V.46 Havells Sylvania Holdings British Virgin 20.04.2007 WOS of Havells Sylvania 100%

(BVI-2) Ltd Islands Holdings BVI-1 Limited47 Havells Sylvania Dubai FZCO Dubai 07.01.2008 WOS of Havells Sylvania 100%

Europe Limited48 Havells Sylvania (Shanghai) Ltd China 14.01.2008 WOS of Havells Sylvania 100%

Asia Pacific Ltd.49 Havells Sylvania Peru S. A. C. Peru 18.01.2008 WOS of Havells Sylvania 100%

Colombia S.A.50 Havells Sylvania Chile 10.09.2008 WOS of Sylvania Lighting 100%Iluminacion (Chile) Ltda International B.V.51 Havells Sylvania (Malaysia) Malaysia 10.09.2008 WOS of Havells Sylvania 100%

Sdn. Bhd Asia Pacific Ltd.52 Havells USA Inc. Delaware 31.12.2010 WOS of Havells Netherlands B.V. 100%

53 Panama Americas Trading Panama 28.05.2010 WOS of Sylvania Lighting 100%

Hub SA International B.V.54 Havells Sylvania Poland Poland 29.05.2009 99% held by Flowil International 100%

S.P.Z.O.O Lighting (Holding) B.V. & 1% heldby Havells Sylvania Europe Limited

Notes:

i) WOS refers to 'Wholly Owned Subsidiary'ii) * In Havells Sylvania (Thailand) Limited minorities hold 51% of ordinary shares (representing 11000 Euro as at 31st

March,2011) but the majority of voting rights are held by Sylvania Group. The beneficial ownership of the entity lies withthe Sylvania Group.iii) During the year Sylvania Lighting International B.V. has acquired additional 1% shares in Havells Sylvania Argentina S.A.,consequently Havells Sylvania Argentina S.A. has become WOS of Sylvania Lighting International B.V.iv) Hamshire Holdings Ltd, Sylvania Geschaft mbh and Havells Sylvania Spain Logistics S.L., were closed during the year.v) Sylvania India Limited, Panama Americas Trading Hub SA and Havells Exim Limited were incorporated during the year.vi) SLI Lighting Products Inc. and Havells Holding Inc have been merged in a new entity Havells USA Inc during the year.

Revenue analysis - segment performance; The results achieved by major business segments of theCompany are as given below:

Total revenue breakup for each segment

(Rs crore)

Balance sheet

  Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Sources of fundsOwner's fundEquity share capital 62.39 30.08 30.08 28.96 26.88Share application money - 1.11 2.42 17.94 -Preference share capital - - - - -Reserves & surplus 1,278.42 1,104.00 901.83 620.07 235.56

Loan fundsSecured loans 133.62 115.81 24.36 31.48 56.06Unsecured loans - - 45.92 4.32 -Total 1,474.43 1,251.00 1,004.61 702.77 318.49

Uses of fundsFixed assetsGross block 808.22 643.95 507.62 344.52 244.35Less : revaluation reserve - - - - -Less : accumulated depreciation 99.61 72.41 57.93 42.63 31.36Net block 708.61 571.54 449.69 301.89 212.99Capital work-in-progress 21.69 29.69 15.79 83.36 29.26Investments 715.47 531.71 387.87 164.79 3.47

Net current assetsCurrent assets, loans & advances 730.72 582.72 575.44 647.32 370.04Less : current liabilities & provisions 702.06 464.68 424.23 494.69 297.40Total net current assets 28.66 118.04 151.21 152.63 72.63Miscellaneous expenses not written - 0.02 0.05 0.10 0.14Total 1,474.43 1,251.00 1,004.61 702.77 318.49

Rs crore)

Profit loss account

  Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

IncomeOperating income 3,012.66 2,471.20 2,203.11 2,054.45 1,545.40

ExpensesMaterial consumed 1,917.99 1,502.69 1,437.27 1,337.31 1,006.03Manufacturing expenses  159.05 134.50 96.30 99.83 60.48Personnel expenses 110.34 79.68 88.14 74.37 53.08Selling expenses 374.29 346.33 278.74 292.06 220.19Adminstrative expenses 106.42 88.07 98.04 59.38 60.46

  Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07Expenses capitalised - - - - -Cost of sales 2,668.09 2,151.27 1,998.49 1,862.95 1,400.24Operating profit 344.57 319.93 204.62 191.50 145.16Other recurring income 4.34 3.22 5.59 4.68 2.56Adjusted PBDIT 348.91 323.15 210.21 196.18 147.72Financial expenses 19.11 11.74 25.03 25.42 20.94Depreciation  29.34 23.27 17.86 13.06 9.74Other write offs 0.02 0.03 0.05 0.04 0.04Adjusted PBT 300.44 288.11 167.27 157.66 117.00Tax charges  67.89 62.15 22.04 22.71 18.39Adjusted PAT 232.55 225.96 145.23 134.95 98.62Non recurring items 9.43 2.20 -0.28 8.54 0.60Other non cash adjustments 0.07 - 0.28 0.05 0.32Reported net profit 242.05 228.16 145.23 143.54 99.53Earnigs before appropriation 838.87 646.57 450.56 336.77 217.34Equity dividend 31.19 23.12 15.04 14.48 13.44Preference dividend - - - - -Dividend tax 5.06 3.93 2.56 2.46 2.28Retained earnings 802.62 619.52 432.96 319.83 201.61

(Rs crore)

Cash flow

  Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07Profit before tax 309.87 290.31 167.27 166.25 120.54Net cashflow-operating activity 348.16 205.15 273.17 129.02 202.01Net cash used in investing activity -345.39 -309.45 -322.35 -315.00 -99.10Netcash used in fin. activity -21.60 16.55 140.39 223.59 -76.78Net inc/dec in cash and equivlnt -18.83 -87.75 91.21 37.61 26.13Cash and equivalnt begin of year 67.67 155.43 64.22 26.61 0.47Cash and equivalnt end of year 48.84 67.68 155.43 64.22 26.61

HAVELL'S INDIA LIMITED

PROGRESS AT A GLANCE OF LAST 10 YEARS

Management SummarySuccessful turnaround of Sylvania, the internationalsubsidiary acquired in 2007, has shown the ability of yourmanagement of getting the things in shape. The last twoyears bring challenging environment through globalrecession. We successfully implemented major

restructuring plans in Europe and Latin America, roundingout our transformation into a customer focused, agile,profitable, market driven health and well being company.We have moved our European headquarter to London soas to build our business on the more global platform.Havells has made good progress during financial year2010-11. Our business model is based on the consumerand dealer relationship which has contributed immenselyto the financial performance. A structural change isclearly visible in the Indian consumer favoring qualityproducts with strong brand. Keeping with the times Havellshas emerged as a premium quality & diversified productportfolio company with strong brand leadership and reliabledistribution channel.

Industry Overview; Indian industry overview :The acceleration in growth of Indian economy in the lastdecade is a well documented fact. Over last 10 years theper capita income has trebled, resulting in higherconsumption levels across products and services.Increasing urbanization, higher Government spending ininfrastructure and power, strong rural growth and higherpower generation has led the structural changes in theIndian Electrical Industry which has been appropriatelybacked by the transformation in social dynamics throughincreasing income and change in consumer preferences.With our understanding of new trends, people's needsand aspirations, as well as our strong brand, solid financialfoundation and engaged workforce, we will continue to

deliver structural growth and consistently healthy profitmargins.

Global industry overview :GDP has increased substantially in the Latin Americancountries during 2010. Sustained demand for commoditiesand positive internal factors improves the performance ofthe region's economies. Brazilian economy, for instance,has grown by a blistering 7.5% in 2010, a rate unmatchedsince 1986. Following a strong rebound in Latin Americancountries, Sylvania earmarked a strong year of growth,higher profitability and healthier brand recognition.However European economy is still stagnant. WithinEurope, there is a significant divergence in economictrends. Most of the countries in central and easternEurope are slowly recovering from the economic downturn,economies in some of the southern and western Europeancountries impacted by the sovereign debt crisis arestagnating or contracting. The Germany economy, forinstance, suffered from the sharp downturn in globaltrade in 2009, had benefited in 2010 from stronginternational demand for high quality capital equipment.Sylvania earmarked a stagnant sale but a strongturnaround in its profitability in Europe. Improvedrelationship with wholesalers in Europe and lower fixed cost will drive significant margin improvement over nextfew years.