INTRODUCTION

Financial statements are prepared primarily for decision making. They play a dominant
role in setting the frame work of managerial decisions. But the information provided in the
financial statements is not an end in itself as no meaningful conclusions can be drawn from these
statements alone. How even the information provided in the financial statements is of immense
use in making decisions through analysis and interpretation of financial statements. Financial
analysis is “the process of identifying the financial strengths & weaknesses of the firm by
properly establishing relationship between the items of the balance sheet and the profit & loss
account. These are various methods (or) techniques used in analyzing financial statements such
as Comparative, Common size, Working Capital, Funds Flow Analysis, Cash Flow, Analysis,
Cost Volume Profit, Trend Analysis, Ratio Analysis.

Meaning & Concept of Financial Analysis:

The term Financial Analysis also known as analysis and interpretation of financial
analysis statements refers to the process of determining financial statements strengths and
weaknesses of the firm by establishing strategic relationship between the items of the balance
sheet profit and loss account and other operative data “Analyzing financial statements according
to Metcalf and tetrad is a process of evaluating the relationship between component parts of a
financial statement to obtain a better understanding of a firms position and performance.

In the words of Myers financial statement analysis is largely a study of relationship

among the various financial factors in a business as disclosed by a single set of statements and
study of the trend of these factors as shown is a series of statements.

The purpose of financial analysis to diagnose the information contained in financial

statements so as to judge the profitability and financial soundness of the firm.

The Ratio Analysis is most powerful tools of financial analysis. It is the process of
establishing and interpreting various (quantitative relationship between figures and groups of
figures). It is with the help of ratios that the financial statements can be analyzed more clearly
and decision made from such analysis.
 A Ratio is a simple arithmetical expression of the relationship of one number to another.
It may be defined as the indicated quotient of two mathematical expressions.

According to Kohler "A Ratio is the relation of the amount, A to another B expressed as
the ratio of A to B; A: b (A is to B); or a simple fraction, integer, decimal fraction or percentage?

NEED FOR THE STUDY

Financial analysis must require for a company in this cut though competition. Because of
that reason ratio analysis is used in analyzing the Finn's position. Known fact that the success of
an organization depends up on the financial management. This situation has created an interest to
study and analysis some of the financial aspects of this organization. Hence the study may be
undertaken of financial analysis through ratio in HAVELLS INDIA LIMITED.,

OBJECTIVE OF THE STUDY:

The Ratio analysis is one of the most powerful tools of financial analysis. It is the process
of establishing and interpreting various ratios (Quantitative relationship between figures and
groups of figures). The purpose of preparation of Ratio analysis it to optimize and facilitate
comparison with reference to periods, another organization or and industry organization.

To analyze the financial performance of the firm through calculation of various ratios.

 To study the financial strengths and weakness of the firm.

 To examine the short-term solvency of the firm.

 To study the techniques of Ratio analysis for decision-making.

SCOPE OF THE STUDY:

The scope of the study is spread over for a period of Four years, i.e., 2009-2013 for the
purpose of evaluating the financial position and data for the past five years, i.e., 2009-13 has
been used in order to understanding the overall performance of HAVELLS INDIA LIMITED
RESEARCH METHODOLOGY:-

To achieve a fore said objective the following methodology has been adopted. The
information for this report has been collected through the primary and secondary sources.

1. Primary Sources:-

It is also called as first handled information the data is collected through the observation in the
organization and interviews with officials. by asking questions with the accountants and other
persons in the financial department. A part from these some information is collected through the
seminars, which were held by HAVELLS INDIA LIMITED

2. Secondary Sources:-

These secondary data is existing data which is collected data by others that is sources are
financial journals, annual reports of the HAVELLS INDIA LIMITED website and other
publications of HAVELLS INDIA LIMITED,

LIMITATIONS OF THE STUDY:-

 Lack of awareness of power generating sets of HAVELLS INDIA LIMITED

 Lack of time is another limitation factor the schedule period of 6 weeks are not sufficient
to make the study independently regarding Ratio analysis in HAVELLS INDIA
LIMITED.,

 The busy schedule of the officials in the HAVELLS INDIA LIMITED., in another
limiting faction. Due to the busy schedule of officials restricted me to collect the
complete information about organization.

 The study is conducted in a short period, which was not detailed in all aspects.

 Lack of adequate standards.

 Inherent limitations of Accounting.

 Havells India Limited
Havells India Limited is a $1.3 Billion leading Fast Moving Electrical Goods (FMEG) Company
with a strong global footprint. Havells enjoys enviable market dominance across a wide spectrum
of products, including Industrial & Domestic Circuit Protection Devices, Cables & Wires,
Motors, Pumps, Fans, Modular Switches, Home Appliances, Electric Water Heaters, Power
Capacitors, CFL Lamps, Luminaires for Domestic, Commercial and industrial Applications.

Havells in 2007 created history by acquiring world’s renowned lighting company Sylvania thus
registering itself amongst top 4 lighting companies in the world. Today, Havells owns some of
the most prestigious global brands like Havells, Crabtree, Sylvania, Concord, Luminance and
Standard. Its global network constitutes of 6500 professionals across 91 branches &
representative offices in over 50 countries. Its 11 state-of-the-art manufacturing plants in India
located at Haridwar, Baddi, Noida, Sahibabad, Faridabad, Alwar, Neemrana and 7 world class
manufacturing plants located in Europe, Latin America, Africa & China are manufacturing
globally acclaimed products, synonymous with excellence and precision in the electrical
industry.
A 20000 strong global distribution network continuously strives to set new benchmarks in
prompt delivery and service to customers – powering their smiles like none other electrical brand
in the country. Further to this the company pioneered the concept of exclusive brand showroom
in the electrical industry with ‘Havells Galaxy’. Today over 210 Havells Galaxies across the
country are helping customers, both domestic and commercial, to choose from a wide variety of
products for different applications. Havells became the first FMEG Company to offer door step
service via its initiative ‘Havells Connect’. Thanks to the quality of products and quicker
service, it has minimum customer complaints and highest customer satisfaction.

Havells alongwith its brands, have earned the distinction of being the preferred choice of
electrical products for discerning individuals and industrial consumers both in India and abroad.
Havells offers same quality products for both Indian and international markets. Havells products
& processes have acquired a number of International quality certifications, like BASEC, CSA,
KEMA, CB, CE, ASTA, CPA, SEMKO, SIRIUM (Malaysia), SPRING (Singapore), TSE
(Turkey), SNI (Indonesia) and EDD (Bahrain) – thus complying with stringent quality norms at
even the most testing markets, worldwide. It is committed to keep powering the world with its
state-of-the-art innovations and energy-efficient solutions. Currently 70% of its product offering
is energy efficient.

Social and environmental responsibility has been at the forefront of Havells operating philosophy
and as a result the company consistently contributes to socially responsible activities. For
instance, the company is providing mid-day meal in government schools in Alwar district,
covering 35000 students per day. Besides this company has acquired land for constructing a
larger kitchen with all the modern facilities to serve freshly cooked food to 35000 students in the
area. The group company, QRG Healthcare runs a 140 bed hospital in Faridabad and will soon
launch another 450 bed hospital in Faridabad by end of the year. In the past, the company has
generously contributed to the society during various national calamities like the Bihar Flood,
Tsunami and Kargil National Relief Fund etc.

The essence of Havells’ success lies in the expertise of its fine team of professionals, strong
relationships with associates and the ability to adapt quickly and efficiently, coupled with the
vision to always think ahead.

Some of the ‘Firsts’ from Havells:

• Sets up India's First New Generation CMH Lamp Plant at Neemrana in the year 2010

• Launched India`s 1st HPF CFL in the year 2009

• Havells launched India's 1st BEE 5* Rated Fan in the year 2009

• First Indian CFL manufacturers to have adopted RoHS, European norms on Restriction of
Hazardous Substances in CFLs in the year 2008

• First Company to get the ISI Certification for complete range of CFLs in the year 2006

• Awarded the KEMA certification by The Dutch Council for Accreditation, making QRG the

only group to attain this certification in the year 2005

Vision
"To be a globally recognized corporation that provides best electrical & lighting solutions,
delivered by best-in-class people."
Mission
To achieve our vision through fairness, business ethics, global reach, technological expertise,
building long term relationships with all our associates, customers, partners, and employees
Values
 Customer Delight : A commitment to surpassing our customer expectations.
 Leadership by example. A commitment to set standards in our business and transactions
based on mutual trust.
 Integrity and Transparency : A commitment to be ethical, sincere and open in our
dealings.
 Pursuit of Excellence : A commitment to strive relentlessly, to constantly improve
ourselves, our teams, our services and products so as to become the best in class.
Chairman
The group's phenomenal success over the years has been due to Mr. Qimat Rai Gupta's mantra of
"growth through quality, innovation and market consolidation". His focus on research and
development has enabled the group to develop products for consumers that offer great value for
money. His constant emphasis on promoting energy conservation and environmental
preservation coupled with his philanthropic service to the economically weaker section of the
society is his way of giving back in return to the society that has helped this organization realize
its true potential.

Mr. Gupta has held various responsible positions in Trade and Commercial associations of the
Industry from time to time. He has, in his past, served as the President of Federation of All India
Electrical and Trade association. Mr.Qimat Rai Gupta has been recognized by various sections of
the industry for his path breaking work in this segment. Amongst the acknowledgments
bestowed upon him, Mr.Gupta received the Self-made Entrepreneur Award "Udyog Patra" in
1989, Distinguished Entrepreneurship Award 2004, from the PHD Chamber of Commerce and
Industry in 2004, Udyog Vibhushan from the Institute of Trade & Industrial Development, Delhi
in 2005 and Udyog Ratna from PHD Chamber of Commerce & Industry for Economic
Contribution to Uttaranchal State in 2005.
Research and Development

Innovation is the hallmark of every vital development at QRG Group. New ideas, inventions
deepen scientific knowledge and give its work force a new impetus towards technical progress.
QRG’s technological strengths and its endeavor towards continuous research & development
have allowed it to fulfill its responsibilities towards its customers. The responsibility of
providing its customers the best products and zero defect services to enable them to be
comfortable and secure in usage of electricity. Havells has recently invested 50 crores in the
QRG Center for Research and Innovation, set-up at the company's Head Office premises in
Noida, U.P.
The objective of this centre is to provide the theoretical & experimental foundations for all
segments of electrical engineering. The centre closely cooperates with the various departments
so as to provide the best and the latest in terms of technology and design.
Quality Control
The essence of quality is closely wrapped in the way we think, plan and work. It finds its true
expression when we extend beyond ourselves to exceed our customer’s expectations. To deliver
products those are safer, faster and simply better.
Each time, every time. Building customer confidence through teamwork is a top priority to
provide a wide variety of products and services.
Realising and respecting the basic needs of customers to feel more secure, we've committed
ourselves to make our products better, safer and smarter than what he or she is looking for. That's
a passion that began 30 years ago and that's how it continues to be even today. Our customers
rely on us and it is our responsibility to give them the very best. All our products are as per IEC
standards.
QRG has a simple rule on quality. If it doesn't exceed customer expectation, it's not quality
performance.
2014 : Introduced fans Category under the Standard Brand.
2013 : Entered the business of Self Priming Monoblock Pumps.
2012 : Launch Copper Flexible Cables under the Standard brand
Launch of Crabtree XPRO Switchgear
Set up of new Lighting Fixtures plant in Neemrana
Installed India’s first large scale lighting fixtures plant at Neemrana, Rajasthan.
2011 : Launch of new range of Control Gear Cosmic Star series
Set up of new Industrial Switchgear Plant in Sahibabad
Launch of Domestic Appliances
Standard Electrical merged with Havells
Entered into a Joint Venture with Shanghai Yaming Lighting,China
2010 : Sets up 2nd unit for Fan manufacturing at Haridwar.
Acquired 100% interest in Standard Electricals
Sets up World's First New Generation CMH Lamp Plant at Neemrana.
Enter into Electric Water Heaters business.
Launch of Havells brand in US & Mexico
2009 : Set up of fully automatic 2nd unit for switchgear manufacturing at Baddi.
Global consolidation of CFL manufacturing plant at Neemrana for domestic
and export purposes.
Launch of India's 1st HPF CFL
Launch of India's 1st BEE 5* Rated Fan
2008 : First Indian CFL manufacturers to have adopted RoHS, European norms on
Restriction of Hazardous Substances in CFLs.
Set up of Global Corporate office, QRG Towers at Expressway Noida
Investment of Rs.50 Crores in Global Center for Research and Innovation
(CRI)
Set up of fully automatic plant for Havells Lafert Motors at Neemrana
Change in Corporate BRAND identity
2007 :  Set-up of Capacitor manufacturing plant in Noida, UP with the capacity of 6,
00,000 kVAr per month.
 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 $110 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.
 DATA ANALYSIS
BalanceSheet - Rs (in Crores)

Rs (in Crores)
Particulars Mar'14 Mar'13 Mar'12 Mar'11 Mar'10
Liabilities 12 Months 12 Months 12 Months 12 Months 12 Months
Share Capital 62.39 62.39 62.39 62.39 31.19
Reserves & Surplus 2067.46 1807.83 1545.93 1278.42 1104.00
Net Worth 2129.85 1870.22 1608.32 1340.81 1135.19
Secured Loan 80.13 108.78 97.08 133.62 115.81
Unsecured Loan 75.32 .00 .00 .00 .00
TOTAL LIABILITIES 2285.30 1979.00 1705.40 1474.43 1251.00
Assets
Gross Block 1151.17 1093.08 918.93 808.22 643.95
(-) Acc. Depreciation 244.89 189.36 141.37 99.61 72.41
Net Block 906.28 903.72 777.56 708.61 571.54
Capital Work in Progress 27.78 9.82 57.76 21.69 29.69
Investments 882.52 791.92 775.07 715.47 531.71
Inventories 682.71 663.03 648.88 469.85 330.65
Sundry Debtors 136.49 130.17 160.05 112.07 79.47
Cash and Bank 626.16 246.54 136.21 49.18 68.31
Loans and Advances 136.16 113.08 101.81 99.62 104.29
Total Current Assets 1581.52 1152.82 1046.95 730.72 582.72
Current Liabilities 836.75 720.88 822.96 656.85 444.54
Provisions 276.05 158.40 128.98 45.21 20.14
Total Current Liabilities 1112.80 879.28 951.94 702.06 464.68
NET CURRENT ASSETS 468.72 273.54 95.01 28.66 118.04
Misc. Expenses .00 .00 .00 .00 .02
TOTAL ASSETS(A+B+C+D+E) 2285.30 1979.00 1705.40 1474.43 1251.00
Profit & Loss - Rs (in Crores)
Mar'14 Mar'13 Mar'12 Mar'11 Mar'10
12Months 12Months 12Months 12Months 12Months
INCOME:
Sales Turnover 4719.69 4224.99 4003.77 3178.89 2578.29
Excise Duty .00 .00 224.62 166.23 107.09
NET SALES 4719.69 4224.99 3779.15 3012.66 2471.20
Other Income 0 0 0 0 0
TOTAL INCOME 4763.75 4235.48 3784.54 3017.00 2474.42
EXPENDITURE:
Manufacturing Expenses 61.65 56.90 189.19 159.05 134.50
Material Consumed 2934.10 2678.02 2315.16 1917.99 1502.69
Personal Expenses 247.48 175.34 141.71 110.34 79.68
Selling Expenses .00 .00 515.34 374.29 346.33
Administrative Expenses 834.86 781.61 140.87 106.42 88.07
Expenses Capitalised .00 .00 .00 .00 .00
Provisions Made .00 .00 .00 .00 .00
TOTAL EXPENDITURE 4078.09 3691.87 3302.27 2668.09 2151.27
Operating Profit 641.60 533.12 476.88 344.57 319.93
EBITDA 685.66 543.61 482.27 348.91 323.15
Depreciation 63.63 57.88 44.66 29.34 23.27
Other Write-offs .00 .00 .00 .02 .03
EBIT 622.03 485.73 437.61 319.55 299.85
Interest 26.93 28.55 34.93 19.11 11.74
EBT 595.10 457.18 402.68 300.44 288.11
Taxes 116.41 85.79 73.56 67.89 62.15
Profit and Loss for the Year 478.69 371.39 329.12 232.55 225.96
Non Recurring Items .00 .00 -24.93 9.43 2.20
Other Non Cash Adjustments .00 .00 1.24 .07 .00
Other Adjustments .00 .00 .00 .00 .00
REPORTED PAT 478.69 371.39 305.43 242.05 228.16
KEY ITEMS
Preference Dividend .00 .00 .00 .00 .00
Equity Dividend 155.41 77.67 67.94 26.13 23.12
Equity Dividend (%) 249.09 124.49 108.89 41.88 76.86
Shares in Issue (Lakhs) 1248.21 1247.75 1247.75 1247.75 601.68
EPS - Annualised (Rs) 38.35 29.76 24.48 19.40 37.92