Havells AR2014

Annual Report 2013-14 Business Review Directors’ Report Management Discussion and Analysis Corporate Governance Report Financial Statements (B) transactions during the year (` in Crores) 2013-14 2012-13 (i) Purchase of traded goods and stores and spares enterprises in which directors exercise significant influence QRG Enterprises Limited 0.00 0.01 (ii) Sale of products enterprises in which directors exercise significant influence QRG Medicare Limited 0.43 1.53 (iii) commission on sales enterprises in which directors exercise significant influence Guptajee & Company 6.89 6.59 (iv) Purchase of tangible fixed assets enterprises in which directors exercise significant influence QRG Enterprises Limited 0.02 0.03 (v) Sale of fixed assets enterprises in which directors exercise significant influence QRG Medicare Limited 0.22 - QRG Central Hospital & Research Centre Limited - 0.00 (vi) Rent/usage charges Paid enterprises in which directors exercise significant influence QRG Enterprises Limited 19.34 19.34 (vii) miscellaneous income (Service charges received) enterprises in which directors exercise significant influence QRG Enterprises Limited - 0.04 (viii) trade mark fees and Royalty enterprises in which directors exercise significant influence QRG Enterprises Limited 40.56 42.25 (ix) donation paid enterprises in which directors exercise significant influence QRG Foundation 2.50 4.50 The Vivekananda Ashrama 0.11 - 2.61 4.50 (x) Reimbursement of expenses received enterprises in which directors exercise significant influence Guptajee & Company 0.72 1.40 QRG Enterprises Limited 0.01 0.01 0.73 1.41 (xi) Reimbursement of expenses paid enterprises in which directors exercise significant influence QRG Central Hospital & Research Centre Limited - 0.00 (xii) managerial remuneration Key management Personnel Shri Qimat Rai Gupta 6.34 4.69 Shri Anil Rai Gupta 4.83 3.23 Shri Rajesh Gupta 4.57 3.70 15.74 11.62 (xiii) Rent received enterprises in which directors exercise significant influence QRG Enterprises Limited 0.03 0.03 149

Havells India Limited (` in Crores) 2013-14 2012-13 (xiv) dividend paid enterprises in which directors exercise significant influence QRG Enterprises Limited 47.46 24.68 Guptajee & Company 4.72 2.45 Ajanta Mercantile Limited 16.21 8.04 Key management Personnel Shri Qimat Rai Gupta 8.59 4.47 Shri Surjit Gupta 8.16 4.24 Shri Anil Rai Gupta 2.95 1.53 Shri Rajesh Gupta 0.30 0.16 88.39 45.57 (c) Balances at the year end amount Payables enterprises in which directors exercise significant influence Guptajee & Company 1.58 0.69 Key management Personnel Shri Qimat Rai Gupta 0.07 0.13 Shri Anil Rai Gupta 0.05 0.13 Shri Rajesh Gupta 0.05 0.05 1.75 1.00 14 a) The Group has taken various residential/commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases. b) The Group has also taken few commercial premises under non-cancellable operating leases. There are no restrictions placed upon the Company by entering into these leases. Normally there are renewal and escalation clauses in these contracts. The total of future minimum lease payments in respect of such leases as on March 31, 2014 is as follows: (` in Crores) 2013-14 2012-13 (i) Not later than one year 30.19 24.95 (ii) later than one year and not later than five year 53.68 43.24 (iii) later than five years 57.39 47.30 141.26 115.49 Lease payments recognised in the statement of profit and loss as rent expense for 92.54 82.44 the year (including share of joint venture ` 0.65 crores) During the previous year, the sale/ leaseback agreement for a distribution facility located in France terminated and the group purchased the assets at terminal value of ` 39.85 crores (Euro 5.7 millions). The Group also has building on lease in Germany. c) The Group company has taken land and building on finance lease in Germany. The Lease have terms of renewal and bargain purchase option. The future Minimum Lease Payments (MLP) under finance lease together with the present value of the net MLP are as follows: (` in Crores) 2013-14 2012-13 mlP Present mlP Present Value of mlP Value of mlP Not later than one year 2.87 2.16 3.02 2.30 Later than one year but not more than five years 7.11 6.58 10.47 9.44 Later than five years - - - - total minimum lease Payments 9.98 8.74 13.49 11.74 Less: amounts representing finance charges 1.24 - 1.75 - Present value of minimum lease Payments 8.74 8.74 11.74 11.74 d) During the current year, the sublease of Germany empty warehouse is extended. The sublease will expire on 28 February, 2016. Annual amount receivable under sublease are as follows: th 150

Annual Report 2013-14 Business Review Directors’ Report Management Discussion and Analysis Corporate Governance Report Financial Statements (` in Crores) 2013-14 2012-13 Not later than one year 2.71 1.58 Later than one year but not more than five years 2.49 - Later than five years - - 5.20 1.58 Amount recognised in income statement for the year ended March 31, 2014 is ` 2.67crores (previous year ` 1.53 crores). 15 earnings Per Share (` in Crores) 2013-14 2012-13 a) Basic earnings per share numerator for earnings per share Profit after taxation (before adjustment of minority interest) 446.33 581.43 adjustment to net earnings: Less: Share of profit transferred to minority 0.00 0.00 Profit after taxation 446.33 581.43 denominator for earnings per share Weighted number of equity shares outstanding during the period Nos. 12,47,74,955 12,47,74,812 Earnings per share-Basic (one equity share of ` 5/- each) ` 35.77 46.60 b) diluted earnings per share numerator for earnings per share Profit after taxation (before adjustment of minority interest) 446.33 581.43 adjustment to net earnings: Less: Share of profit transferred to minority 0.00 0.00 Profit after taxation 446.33 581.43 denominator for earnings per share Weighted number of equity shares outstanding during the period Nos. 12,47,94,297 12,47,74,812 Earnings per share-Diluted (one equity share of ` 5/- each) ` 35.77 46.60 Weighted average number of equity shares outstanding in calculating basic EPS 12,47,74,955 12,47,74,812 effect of dilution: Stock Option granted under ESOP 19,342 - Weighted average number of equity shares in calculating diluted ePS 12,47,94,297 12,47,74,812 16 The figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than ` 50000/-. 17 Previous year figures has been regrouped /reclassified wherever necessary to make them comparable with the current year figures. 18 Note No.1 to 30 form integral part of the balance sheet and statement of profit and loss. The accompanying notes are an integral part of the financial statements. As per our report of even date For and on behalf of Board of directors For S.R. Batliboi & co. llP For V.R. Bansal & associates Qimat Rai Gupta Surjit Gupta Rajesh Gupta Chartered Accountants Chartered Accountants Chairman and Director Director (Finance) ICAI Registration No. 301003E ICAI Registration No. 016534N Managing Director and Group CFO Per manoj Kumar Gupta Per V.P. Bansal Sanjay Gupta Sanjay Johri Partner Partner Company Associate Vice President Membership No. 83906 Membership No. 8843 Secretary (Finance) Noida, May 28, 2014 151

Havells India Limited (` in Crores) Proposed dividend - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Profit after tax (10.63) (18.59) 4.41 (3.93) 14.03 1.19 (2.84) (0.76) 3.70 13.20 (0.48) 20.54 0.67 0.23 (0.61) (0.23) (6.26) 0.02 0.46 (3.72) 6.72 10.69 6.19 (0.76) 0.09 16.06 1.32 3.52 3.76 0.82 (1.34) 24.20 Provision for taxation - - 4.34 0.70 5.25 0.87 1.34 1.57 1.51 - - (2.75) 0.16 0.11 1.04 0.13 - - 0.09 - 0.20 - - - 1.18 0.40 - (2.52) 2.78 0.30 - 1.77 Profit before tax (10.63) (18.59) 8.75 (3.23) 19.28 2.06 (1.50) 0.81 5.21 13.20 (0.48) 17.79 0.83 0.34 0.43 (0.10) (6.26) 0.02 0.55 (3.72) 6.92 10.69 6.19 (0.76) 1.27 16.46 1.32 1.00 6.54 1.12 (1.34) 25.97 Statement pursuant to Section 212(8) of the companies act, 1956, relating to Subsidiaries for the year ended 31 st march, 2014 turnover 80.03 228.42 245.24 29.57 153.51 30.76 25.14 159.53 50.56 346.21 6.38 2,060.17 - - - 19.44 - - 0.12 17.56 0.03 215.47 174.15 - - 273.27 - 137.37 3.45 - - - investment other than investment in subsidiaries - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - total liabilities 33.50 216.20 218.30 27.53 79.18 26.11 33.43 93.89 34.02 174.22 6.51 2,150.91 69.48 13.73 45.96 9.39 3.10 0.23 4.83 8.48 18.43 125.47 228.58 0.39 11.30 390.32 47.37 271.61 129.13 15.61 802.27 976.53 total assets 33.50 216.20 218.30 27.53 79.18 26.11 33.43 93.89 34.02 174.22 6.51 2,150.91 69.48 13.73 45.96 9.39 3.10 0.23 4.83 8.48 18.43 125.47 228.58 0.39 11.30 390.32 47.37 271.61 129.13 15.61 802.27 976.53 Reserves (33.12) (371.77) 87.22 11.33 41.44 10.02 6.00 9.17 18.35 28.77 (4.16) (62.06) 49.70 8.07 3.97 (9.86) (44.10) (66.44) 3.00 (132.90) (244.79) (154.22) (288.98) (4.00) 0.84 (218.55) 16.13 (55.25) 37.97 5.15 (1,502.11) 588.24 47.34 340.64 58.96 0.28 2.81 2.99 0.01 58.27 0.05 0.06 4.14 569.93 8.08 4.53 28.15 3.39 44.56 66.49 0.02 0.69 252.34 185.36 408.90 0.01 0.30 296.98 26.84 144.35 64.41 0.53 1,696.60 201.43 capital country Argentina Brazil Colombia Venezuela Ecuador El Salvador Guatemala Mexico Panama Panama Peru UK Spain Portugal Italy Greece Sweden Norway Finland Tunisia UK UK Belgium Poland Belgium Germany Netherlands France France Switzerland Netherlands Netherlands name of Subsidiary company Havells Sylvania Argentina S.A. Havells Sylvania Brasil Iluminacao Havells Sylvania Colombia S.A. Havells Sylvania Venezuela C.A. Havells Sylvania N.V. (Ecuador) Havells Sylvania El Salvador S.A. Havells Sylvania Guatemala S.A. Havells Mexico S.A. de C.V. Panama Americas Trading Hub SA Havells Sylvania Panama S.A. Havells Sylvania Peru S.A.C. Havells Sylvania Europe Ltd. Havells Sylvania Spain S.A. Havells Sylvania Port Sl. no. 1 2 Ltda. 3 4 5 6 de C.V. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 N.V. 24 25 26 27 28 S.A.S. 29 30 31 32 152

Annual Report 2013-14 Business Review Directors’ Report Management Discussion and Analysis Corporate Governance Report Financial Statements (` in Crores) Proposed dividend - - - - - - - - - - - - - - - - - - - - - - - Profit after tax 11.95 (3.23) (1.29) 0.51 (0.04) (1.52) 0.68 (0.32) 1.12 (17.49) 7.20 (11.23) (2.26) (3.10) (5.15) (0.01) (0.19) 0.64 (0.12) - - 6.95 (3.73) Provision for taxation 0.50 (0.21) - - - 0.05 - - - - 5.03 1.60 - - - - - - - - - - - Profit before tax 12.45 (3.44) (1.29) 0.51 (0.04) (1.47) 0.68 (0.32) 1.12 (17.49) 12.23 (9.63) (2.26) (3.10) (5.15) (0.01) (0.19) 0.64 (0.12) - - 6.95 (3.73) Statement pursuant to Section 212(8) of the companies act, 1956, relating to Subsidiaries for the year ended 31 st march, 2014 - 144.98 8.74 31.75 - 8.66 36.85 - - - 183.18 105.35 25.69 9.81 2.03 - 13.76 - - - - 975.18 - turnover investment other than investment in subsidiaries - - - - - - - - - - - - - - - - - - - - - - - total liabilities 1,445.23 119.62 0.00 40.15 11.38 2.21 31.78 1,165.10 1,264.16 1,605.36 152.61 58.28 16.52 1.50 3.97 0.17 8.86 25.46 15.03 154.78 44.58 238.85 1,166.56 total assets 1,445.23 119.62 0.00 40.15 11.38 2.21 31.78 1,165.10 1,264.16 1,605.36 152.61 58.28 16.52 1.50 3.97 0.17 8.86 25.46 15.03 154.78 44.58 238.85 1,166.56 Reserves (188.63) 39.35 (17.21) 19.07 (9.63) (2.56) 21.74 (1.41) 0.11 (234.33) 50.28 (127.70) (4.10) (14.89) (12.38) (0.07) (1.64) 9.46 2.95 - - 15.10 45.85 capital 784.32 0.14 11.71 10.66 8.45 0.45 0.86 1,166.46 1,164.67 1,114.95 13.42 13.32 4.57 16.29 0.58 0.21 0.04 0.30 12.08 154.78 44.58 0.00 1,069.07 country Netherlands Thailand China Hongkong Shanghai Malaysia Dubai Malta Netherlands Netherlands Costa Rica United States Chile Turkey Indonesia Thailand South Africa Mexico Dutch Antilies British Virgin Islands British Virgin Islands Hongkong Isle of Man name of Subsidiary company Flowil International Lighting Havells Sylvania (Thailand) Ltd. Guangzhou Havells Sylvania Enterprise Ltd. Havells Sylvania Asia Pacific Ltd. Havells Sylvania (Shanghai) Ltd. Havells Sylvania (Malaysia) Sdn. Havells Sylvania Dubai FZCO Havells Malta Limited Havell's Netherlands Holdings B.V. Havell's Netherlands B.V. Havells Sylvania Costa Rica S.A. Havells USA Inc. Havells Sylvania Iluminacion (Chile) Havells Sylvan Sl. no. 33 (Holding) B.V. 34 35 36 37 38 Bhd 39 40 41 42 43 44 45 Ltda. 46 47 48 49 50 SA De CV 51 52 Limited 53 Limited 54 55 153

Havells India Limited Progress at a Glance of last 10 Years - Havells india limited (Standalone) (` in Crores) 2014 5,031.11* 311.42 4,719.69 641.60 595.10 478.69 62.39 2,067.46 195.52 1,020.99 1,188.23 934.06 882.52 626.16 955.36 38.36 38.36 4,506.37* 4,224.99 1,807.83 1,108.91 2013 281.38 534.86 457.18 371.39 62.39 108.78 817.38 913.54 791.92 246.54 906.28 29.76 29.76 3,830.56* 3,615.61 1,545.93 2012 214.95 459.07 373.81 305.43 62.39 128.58 854.44 975.32 833.95 775.07 136.21 901.72 24.48 24.48 3,045.60* 2,881.65 1,278.42 2011 163.95 337.30 309.87 242.05 62.39 133.62 642.13 829.91 730.30 715.47 49.18 675.23 19.40 19.40 2,476.18* 2,371.41 1,104.00 2010 104.77 305.48 290.31 228.16 31.19 115.81 416.17 673.64 601.23 531.71 68.23 509.79 36.57 18.29 2009 2,333.82 135.46 2,198.36 196.82 167.27 145.23 30.08 901.83 70.28 385.47 523.41 465.48 387.87 157.37 394.00 24.93 12.46 2008 2,231.89 176.32 2,055.57 185.42 166.25 143.54 28.96 620.07 35.80 474.05 427.88 385.25 164.79 64.91 575.39 26.00 13.00 2007 1,681.06 133.84 1,547.22 141.00 120.54 102.15 26.88 235.55 56.06 281.69 273.61 242.25 3.47 33.17 332.99 19.00 9.50 2006 1,115.14 111.61 1,003.53 99.48 78.51 63.21 13.44 162.57 109.84 232.61 175.65 153.20 3.17 8.33 363.26 24.26 6.06 2005 665.88 83.42 582.46 57.92 43.23 30.53 5.79 80.82 174.22 131.12 108.24 92.33 3.17 8.18 295.69 26.34 3.29 * Turnover gross is after deducting turnover discount, incentive and rebates. Performance for the Year Turnover (Gross) Less: Excise Duty Turnover (Net) Profitability Earnings Before Interest, Depreciation Taxes and Amortization Profit Before Tax Profit After Tax Financial Position Share Capital Reserves and Surplus Loan Funds Current Liabilities Gross Block Net Block Total investments Cash and Bank Balance Current Assets earning per share EPS-as reported EPS-adjusted for bonus issue/split 154

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CONTENTS 1 Corporate Information 2 The Board of Directors 4 About Us 6 Chairman’s Letter 20 Directors’ Report 34 Management Discussion & Analysis 44 Corporate Governance Report 62 Standalone Financial Statements 105 Consolidated Financial Statements 154 Progress at a Glance of Last 10 Years

The Evolution of a Unique Brand Living green ethos. Innovating new efficiencies. Driving consumer satisfaction. Havells India Limited Regd. Office: 1, Raj Narain Marg, Civil Lines, Delhi - 110 054 (India) Corp. Office: QRG Towers, 2D, Sector 126, Expressway, Noida-201304(U.P) Ph.: +91-120-4771000, Fax: +91-120-4772000 Havells India Limited Email: [email protected], www.havells.com Consumer Care No.: 1800 11 0303, 1800 103 1313 (All Connections), 011-41660303 (Landline) 31 Annual Report st Join us on Facebook at www.facebook.com/havells and share your ways to save the planet! CIN: L31900DL1983PLC016304 2013-14