Session 5, Havel's case study
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Questions and Answers

What does 'others receivables' include?

  • Deferred financing costs
  • Restructuring costs
  • VAT recoverable (correct)
  • Accrued income taxes

    • Which of the following is classified as 'accrued expenses'?

  • Brazil sales tax
  • Average currency rates
  • Deferred financing costs
  • Payroll and related costs (correct)

    • Which year had the highest average Indian rupee to US dollar exchange rate?

  • 2000
  • 1997
  • 2005
  • 2006 (correct)

    • Which of the following is NOT included in 'accrued income taxes'?

    <p>Restructuring costs</p> Signup and view all the answers

    What is included in 'other assets'?

    <p>Excess reorganization value</p> Signup and view all the answers

    Who holds the position of Chief Executive Officer at SLI Sylvania?

    <p>Paul J. Griswold</p> Signup and view all the answers

    Which individual is listed as COO/CFO at SLI Sylvania?

    <p>Mark T. Becker</p> Signup and view all the answers

    What is the primary role of Carlos Pietri in the organization?

    <p>President of SLI Latin America</p> Signup and view all the answers

    Which title is associated with Per Langholz at SLI Sylvania?

    <p>President of SLI Sylvania Europe</p> Signup and view all the answers

    Who oversees Sales & Marketing at SLI Sylvania?

    <p>John Smith</p> Signup and view all the answers

    What were the main channels for distributing electrical and lighting products?

    <p>Institutional buyers, wholesalers, and retail stores</p> Signup and view all the answers

    Which retailers primarily distributed lighting products in emerging markets like India?

    <p>Specialized small retail shops</p> Signup and view all the answers

    What was one strategy Anil used to transition into his senior executive role?

    <p>He visited the plants and interacted with managers one on one.</p> Signup and view all the answers

    What factor prompted Havells to pursue an initial public offering (IPO)?

    <p>Need for resources and reputation of a listed company.</p> Signup and view all the answers

    What was the approximate margin for wholesalers in the distribution of electrical products?

    <p>15 per cent</p> Signup and view all the answers

    Which of the following describes the market challenges Havells faced in the mid-1990s?

    <p>Competition from both Chinese imports and European imports.</p> Signup and view all the answers

    Which aspect posed challenges for foreign firms in emerging markets?

    <p>Time-consuming local standards approval</p> Signup and view all the answers

    What significant achievement did Havells accomplish in 1997?

    <p>Crossed an annual sales volume of Rs50 crores.</p> Signup and view all the answers

    What position did Havells India hold in the miniature circuit breaker market by the early 2000s?

    <p>Largest manufacturer in India</p> Signup and view all the answers

    What was Havells' overall market share in India by the early 2000s?

    <p>35 per cent</p> Signup and view all the answers

    Which joint venture did Havells initiate in 1996?

    <p>With Electrium of the United Kingdom.</p> Signup and view all the answers

    What was one of the reasons Anil believed going public was beneficial?

    <p>It offered access to additional capital for expansion.</p> Signup and view all the answers

    Which of the following channels was rarely used for sales transactions?

    <p>Online channels</p> Signup and view all the answers

    How did Havells respond to the competitive pressures in the market?

    <p>By entering into international collaborations.</p> Signup and view all the answers

    What are two of the stock exchanges where Havells shares were listed?

    <p>National Stock Exchange and Delhi Stock Exchange</p> Signup and view all the answers

    What was one outcome of the IPO for Havells?

    <p>Investment in setting up new manufacturing plants.</p> Signup and view all the answers

    What was the name of the company formed after Siemens sold Sylvania’s European and Latin American operations?

    <p>Sylvania Lighting International B.V.</p> Signup and view all the answers

    Which company acquired SLI in 1997?

    <p>Frank Ward's Chicago Miniature Lamp, Inc.</p> Signup and view all the answers

    By the end of 1996, what was SLI's annual sales figure?

    <p>US$600 million</p> Signup and view all the answers

    How many countries did SLI operate in by the end of 1996?

    <p>30</p> Signup and view all the answers

    After filing for bankruptcy, which consortium purchased SLI in March 2003?

    <p>DDJ, Cerebrus, and JP Morgan</p> Signup and view all the answers

    What significant action did Paul Griswold's management team take in 2004?

    <p>Rationalized manufacturing capacity</p> Signup and view all the answers

    What was the primary cause of SLI filing for bankruptcy?

    <p>Failed acquisitions and economic slowdown</p> Signup and view all the answers

    By December 30, 2001, how many employees did SLI Inc. have globally?

    <p>8,400</p> Signup and view all the answers

    What was the total sales amount for the year ended March 31, 2006?

    <p>11,151 million rupees</p> Signup and view all the answers

    Which expenditure category had the highest amount in the year ended March 31, 2006?

    <p>Materials</p> Signup and view all the answers

    What was the profit after tax for the year ended March 31, 2004?

    <p>210 million rupees</p> Signup and view all the answers

    What was the amount of other income for the year ended March 31, 2005?

    <p>29 million rupees</p> Signup and view all the answers

    Which asset category showed a positive increase from 2003 to 2006?

    <p>Total current assets</p> Signup and view all the answers

    How much did the total current liabilities amount to in the year ended March 31, 2006?

    <p>2,336 million rupees</p> Signup and view all the answers

    What was the total assets reported for the year ended March 31, 2005?

    <p>4,016 million rupees</p> Signup and view all the answers

    What was the amount for managerial remuneration in the year 2006?

    <p>6 million rupees</p> Signup and view all the answers

    Which year had the lowest income tax expense among the years reported?

    <p>2003</p> Signup and view all the answers

    Which of the following was a component of total liabilities in 2006?

    <p>Secured loans</p> Signup and view all the answers

    What was the change in cash and bank balances from 2003 to 2006?

    <p>Increased by 27 million rupees</p> Signup and view all the answers

    What was the total costs and expenses for the year ended March 31, 2005?

    <p>6,382 million rupees</p> Signup and view all the answers

    What was the total stockholders' equity reported for the year ended March 31, 2004?

    <p>594 million rupees</p> Signup and view all the answers

    Study Notes

    Havells India: The Sylvania Acquisition Decision

    • Havells India, a leading electrical manufacturer, received an offer to acquire Sylvania Lighting International (SLI) in early 2006.
    • Havells was positioned to emerge as a dominant player in India's electrical market.
    • SLI, headquartered in Frankfurt, was a major global lighting company with substantial European and Latin American operations.
    • The board had to make a decision within a week about taking over the offer to purchase SLI.

    Electrical and Lighting Industry

    • The electrical and lighting industry encompasses various businesses involved in the production, transmission, and distribution of electricity.
    • Key segments include building systems, electronics, emerging technologies, industrial automation, insulating materials, lighting systems, medical imaging, and technology, power equipment, security imaging and communications, and cable and wire.
    • Both segments in the industry (electricals and lighting) are sold globally through common distributors and retailers.
    • Global and national standards impacted consumer choices and safety requirements.
    • The leading companies included Siemens, ABB, GE, and Philips.

    Electrical Components

    • Electrical components, including circuit breakers, switches, and cables, are key products in the industry.
    • Safety and quality are crucial for these products, adhering to international standards such as IEC and CE Marking, and sometimes local country-specific standards.
    • Industry growth mirrored GDP growth; Asian markets experiencing quicker growth than the European and American markets.

    Lighting Industry

    • The lighting segment comprises light sources (bulbs) and lighting fixtures.
    • Products like fluorescent lamps (CFLs) and solid-state lighting (LEDs) were gaining popularity as replacements for traditional incandescent lamps.
    • Global and national standards for lighting safety affected the performance of the industry and consumer preferences.

    Havells India Background

    • Havells started as a small trading business in Delhi in 1958.
    • It gradually expanded its product portfolios and manufacturing capacity.
    • The company's board consisted of QRG (founder), Anil Gupta (joint managing director) and relatives/other professional managers.
    • Havells India emerged as a dominant player in the circuit breaker market in India.
    • Key competitors existed within the industry like Larsen & Toubro and Siemens in industrial switchgear, Legrand and Indo Asian in domestic switchgear, Polycab, Finolex, CCI and Universal Cables (cable business).

    Havells Growth Strategies

    • Havells focused on expanding within the wider electrical and lighting market through acquiring other companies.
    • Havells pursued a combination of internal growth, strategic acquisitions, and global market expansion strategies.
    • Havells made collaborations with multinational companies such as German companies and UK companies.

    SLI Sylvania Background

    • SLI Sylvania was a global lighting company with sales exceeding €473 million.
    • They had eleven manufacturing facilities in multiple countries across Europe, South America, and the Middle East.
    • SLI focused extensively in the industrial, architectural and residential lighting markets.

    Challenges of the SLI Acquisition for Havells India

    • The acquisition was estimated to cost over $200 million, potentially demanding a major investment from Havells India.
    • Integrating SLI's predominantly European management team with the Indian workforce posed an integration challenge.
    • Sylvania's marketing networks and product assortment extended their presence in Europe and the Americas, creating potential growth opportunities for Havells India.

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    Havells India: The Sylvania Acquisition Decision PDF 2011

    Description

    Test your knowledge on corporate finance topics, including accrued expenses, exchange rates, and organizational roles. This quiz also covers aspects of SLI Sylvania's management and distribution strategies in the electrical products sector. Perfect for students and professionals in finance and business management.

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