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Directors Report of Fedders Lloyd Corporation Ltd.

Jun 30, 2014

Dear Shareowners,

The Directors have pleasure in presenting the 58thAnnual Report along with the Audited Annual Accounts for the financial year ended June 30, 2014.

FINANCIAL RESULTS

(Rs. in Million) Particulars Current year Previous year 2013-14 2012-13

Gross Revenue from opertations 11,719.39 10,294.47

EBITDA 1,512.13 1,335.54

Profit before Tax 649.20 618.72 Tax Expenses:

Current Tax 160.00 125.00

Deferred Tax 41.07 (2.78)

Profit after Tax 448.13 496.51

Balance brought forward from previous year 264.03 153.28

Total available for appropriations 712.15 649.79 (Less) Appropriations:

Proposed Dividend 30.77 30.77

Provision for Tax on dividend 5.23 4.99

Provision for Tax on dividend for previous year 0.24 -

Depreciation adjustment 7.37 -

Transfer to General Reserve 400.00 350.00

Balance Carried forward to Balance Sheet 268.54 264.03

Earnings per Share (Rs.) 14.56 16.14

FINANCIAL PERFORMANCE

The Gross revenue from operations of your Company for the year ended June 30, 2014 stood at Rs. 11,719.39 Million as against Rs. 10,294.47 Million for the year ended June 30, 2013, registering a growth of 13.84%. The EBITDA increased by 13.22% from Rs. 1,335.54 Million in the previous year to Rs. 1,512.13 Million during this year. The Profit before tax stood at Rs. 649.20 Million as compared to Rs. 618.72 Million in the previous year, registering the increase by 4.93%. The Profit after tax for the year ended June 30, 2014 stood at Rs. 448.13 Million as compared to Rs. 496.51 Million in the previous year ended June 30, 2013. The decline in profit after tax by 9.74% is due to increase in interest cost and higher provision of taxes during the year under review.

Your Company operates under three business segments, viz., Steel Structures & Engineering, Power Projects and Environmental Control Systems. During the year under review, the total revenue generated from Steel Structures & Engineering business of the Company was Rs. 6233.66 Million, the Power Projects business was Rs. 5044.62 Million and Environmental Control System was Rs. 351.69 Million. A detailed discussion on the operation and performance for the year is given in the "Management Discussion and Analysis" included as a separate section to this report.

DIVIDEND

For the year ended June 30, 2014, the directors of your Company recommend for your consideration a dividend of Re. 1/- per equity share of Rs. 10/- each (10% on the paid-up equity share capital of the Company). The dividend, if approved would involve a cash outflow of Rs. 30.77 Million (exclusive of dividend distribution tax of Rs. 5.23 Million).

Last year also, the Shareholders in last Annual General Meeting declared a dividend of 10% on the paid-up equity share capital of the Company.

SUBSIDIARY

The wholly owned subsidiary of the Company namely, Fedders Lloyd Trading FZE is located in Ras Al Khaimah Free Trade Zone, U.A.E.

In terms of the General Circular No. 2/2011 dated February 8, 2011, issued by Ministry of Corporate Affairs, Government of India under Section 212(8) of the Companies Act, 1956, granting general exemption to companies from attaching financial statements of subsidiaries, subject to fulfillment of conditions stated in the Circular, Financial Statement of the Subsidiary is not attached to the Balance Sheet of the Company.

The Company will make available the Annual Accounts of the subsidiary to any of the member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary will also be kept open for inspection at the Registered Office of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

As required by Clause 41 of the Listing Agreement executed with the Stock Exchanges, Consolidated Financial Statements of the Company and its subsidiary as prepared in accordance with Accounting Standard AS-21 on ''Consolidated Financial Statements,'' as issued by the Institute of Chartered Accountants of India, is attached herewith and the same together with Auditors'' Report thereon forms part of the Annual Report of the Company.

FIXED DEPOSITS

During the year under review, your Company has not invited or accepted / renewed any fixed deposits from public pursuant to the provisions of Section 58A or 58AA of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975.

DIRECTORS

In compliance with the requirements of Clause 49 of the listing agreement entered with the Stock Exchanges, where the Company is listed, the Company had appointed Mr. Arun Kumar Joshi, Mrs. Ritushri Sharma and Mrs. Bindu Dogra as Independent Directors of the Company.

Pursuant to provisions of Section 149 of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement which will be effective from October 01, 2014 and on the recommendation of the Nomination and Remuneration Committee, the Board has subject to the approval of the members approved the appointment of Mr. Arun Kumar Joshi, Mrs. Ritushri Sharma and Mrs. Bindu Dogra as Independent Directors of the Company for a term of five years from the date of this Annual General Meeting i.e. October 30, 2014 to October 29, 2019. The requisite notices from members alongwith the deposit of requisite amount under Section 160 of the Act, proposing the candidature of each of them as Directors have been received by the Company. The Board recommends their respective appointments.

In compliance with the provisions of Section 149 of the Act, read with Schedule IV of the Act, the appointment of these Directors as Independent Directors is being placed before the Members for their approval.

Further, in terms of the Articles of Association of the Company, Mr. S. S. Dhawan, Whole Time Director of the Company will retire at the ensuing Annual General Meeting and being eligible, has offered himself for reappointment. The Board recommends his re-appointment.

A brief resume of the above directors including their expertise, shareholding in the Company and details of other directorships of these directors as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Notice of the ensuing Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956 and save as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors'' Report thereon, it is hereby confirmed that:

a. in the preparation of the annual accounts for the year under review, the applicable accounting standards had been followed.

b. 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 profit or loss of the Company for that year.

c. 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 irregularities.

d. that the directors had prepared the annual accounts on a going concern basis. AUDITORS AND AUDITORS'' REPORT

M/s. Suresh C. Mathur & Co., Chartered Accountants (ICAI Firm Registration No: 000891N and Membership No. 083540) retire at the conclusion of ensuing Annual General Meeting of the Company. Being eligible, they have offered themselves for re-appointment for a further term. The Board recommends their re-appointment from the conclusion of this Annual General Meeting ("AGM") until the conclusion of the third consecutive AGM held after this AGM (subject to ratification of appointment by the members at every AGM held after this AGM) at such remuneration as may be agreed by the Board of Directors of the Company/Audit Committee thereof in consultation with the auditors. The Company has received letter from the said auditors to the effect that their appointment, if made, would be valid within the limits prescribed under the Companies Act, 2013.

The observations made in the Auditors'' Report are self-explanatory and do not call for any further comments under Section 217(3) of the Companies Act, 1956.

CORPORATE GOVERNANCE

Your Company continues to be committed to good corporate governance and ethical corporate practices as prescribed under Clause 49 of the Listing Agreement and the Companies Act, 2013. A separate section on Corporate Governance along with Certificate from the Auditors of the Company on compliance with the conditions of corporate governance as per Clause 49 of the Listing Agreement with Stock Exchange(s) is provided as part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) activities of Fedders Lloyd reflect its philosophy of implementing sound business practices and assisting communities in which it operates; helping shape a better, more sustainable society. The Company undertakes its CSR activities through Pandit Kanahaya Lal Punj Trust (PKLP Trust), the philanthropic arm within the Lloyd Group.

In terms of requirement of Section 135 of the Companies Act, 2013 read with rules made thereunder, your Company has constituted a CSR Committee comprising of Mr. Nemichandra D. Jain as Chairman of the Committee and Mr. Sham Sunder Dhawan and Mrs. Ritushri Sharma as Members of the Committee.

FORMATION OF VARIOUS COMMITTEES

The Board of Directors of the Company has constituted various Committees to support its functioning as envisaged under the Companies Act, 2013 and the Listing Agreements entered with the Stock Exchange(s). The details of the Committees are given in the Corporate Governance Report, which forms part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed Management Discussion and Analysis Report on financial conditions and results of operations for the year under review forms part of the Annual Report and is presented in a separate section forming part of the Annual Report.

DISCLOSURE OF INFORMATION WITH REGARD TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO AND RESEARCH & DEVELOPMENT

In accordance with the requirement of 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, statement showing particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo and Research & Development activities undertaken by the Company are annexed here to and form part of this report.

DISCLOSURE OF PARTICULARS OF EMPLOYEES

In accordance with the requirement of Section 217(2A) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars of Employees) Rules, 1975 the names and other particulars of employees are to be set out in the Directors'' Report as an addendum thereto.

However, in line with the provision of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors'' Report is being sent to all the members of the Company excluding the aforesaid information. Any member interested in obtaining such particulars may write to the Company Secretary at the Corporate Office of the Company.

LISTING OF EQUITY SHARES

The Equity Shares of your Company continue to be listed at National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Ltd. (BSE). The Annual Listing Fees for the year 2014-15 have been paid to these stock exchanges.

HEALTH, SAFETY AND ENVIRONMENT (HSE)

Your Company has always placed Health, Safety and Environment (HSE) at the very heart of the way of doing its business. Adhering to the highest standards of HSE performance is fundamental to protect the business and our people. During the year, the Company continued its efforts toward preventing incidents and injuries from its business activities by providing a safe and healthy working environment at all manufacturing units/sites owned and / or operated by the Company. The Company achieved this by eliminating or minimizing, so far as is reasonably practicable, the causes of health and safety hazards inherent in its working environment.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

Your Company believes that its people are its most valuable resources. The Company provides an excellent working environment for them to deliver to their best potential. The Company encourages its employees to upgrade their skills through both internal and external workshops and trainings. The Company believes in providing equal opportunity to everyone and the work-culture is based on merit and performance. During the year, there were no disputes with the employees and the Company. Your Company continues to enjoy cordial relationships with the work force across all units and operations.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for assistance and co-operation received from various ministries and department of Government of India and other State Governments, financial institutions, banks, shareholders, directors, executives, officers of the Company etc. The management would also like to express great appreciation for the commitment and contribution of its employees at all locations for their tremendous personal efforts, committed services and contribution to the Company''s performance.

For and on behalf of the Board of Directors

Place : New Delhi Brij Raj Punj Date : August 27, 2014 Chairman & Managing Director


Jun 30, 2009

The Directors have pleasure in presenting the 53rd Annual Report along with the Audited Annual Accounts for the year ended June 30, 2009.

Financial Results

(Rupees in Lacs)

Particulars Current year Previous year

2008-09 2007-08

Net Sales 46021.75 44601.52 Other Income 64.02 75.77 Total Income 46085.77 44677.29 Earnings before Interest, Depreciation and Tax 2948.82 3082.86 Profit before Taxes 1403.40 2063.68 Provision for Taxation 271.83 137.20 Profit after Tax 1131.57 1926.48 Balance brought forward from the previous year 89.52 63.04 Amount available for appropriation 1221.09 1989.52 Appropriations: Proposed Dividend 307.70 Tax on proposed dividend 52.29 Transferred to General Reserve 800.00 1900.00 Balance Carried forward to Balance Sheet 61.10 89.52 Earning Per Share (Rs.) 3.68 6.26

Operating Results and Business Performance

The year 2008-09 witnessed an unforeseen economic crisis; however your Company has successfully navigated through this economic turbulence.

During the year ended June 30, 2009, your Company registered net turnover of Rs. 46021.75 Lacs as against Rs. 44601.52 Lacs during the corresponding year ended June 30, 2008 registering an increase of 3.18%. The profit after tax stood at Rs. 1131.57 Lacs during the year under review as compared to Rs. 1926.48 Lacs during the corresponding previous year registering a decline of 41.26%. The revenue and profitability was impacted by the overall slowdown in the economy coupled with soaring raw material prices for major part of the year under review.

Your Company continues to focus on sustaining growth in emerging markets, cost optimization and efficient management of working capital.

Dividend

Your Directors are pleased to recommend a dividend of 10% (Re. 1/- per equity shares of Rs. 10/- each) on the paid-up equity share capital for the year ended June 30, 2009 as against nil dividend in the previous year. The dividend, if approved at the ensuing Annual general Meeting, shall absorb a sum of Rs. 307,69,700 exclusive of dividend distribution tax.

Subsidiary

During the previous year ended June 30, 2008, your Company established a wholly owned subsidiary namely- Fedders Lloyd Trading FZE in Ras Al Khaimah Free Trade Zone, U.A.E. for carrying out the imports, exports, trading in electric goods, consumer durable goods. Air Conditioners & components, steel fabrication items, etc. The operations of the subsidiary were started during the year under review. In terms of the provisions of Section 212 of the Companies Act, 1956, audited Financial Statements of the subsidiary are attached hereto and forms part of the Annual Report.

Consolidated Financial Statements

As required by Clause 41 of the Listing Agreement with the Stock Exchanges, Consolidated Financial Statements of the Company and its subsidiary as prepared in accordance with Accounting Standard AS-21 on Consolidated Financial Statements, as issued by the Institute of Chartered Accountants of India, is attached herewith and the same together with Auditors Report thereon forms part of the Annual Report of the Company.

Commissioning of plant at Pant Nagar, Uttarakhand

In the month of October 2009, your Company has successfully commissioned the plant at Pant Nagar, Uttarakhand, where various packages of incentives have been provided by the Government of India including 100% outright excise duty exemption for a period of 10 years from the date of commercial production and 100% income tax exemption for initial period of 5 years and thereafter 30% for a further period of five years from the date of commercial production. The plant is meant for production of air conditioners, electronic items, sheet metal components and other engineering items

Fixed Deposits

During the year under review, your Company has not invited or accepted / renewed any fixed deposits from public pursuant to the provisions of Clause 58A or 58AA of the Companies Act 1956 read with Companies (Acceptance of Deposits) Rules, 1975.

Directors

There was no change in the composition of the Board of Directors of the Company during the year under review. In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Tulsi Vansh Prakash Punj and Mr. Sham Sundar Kumar retire from office by rotation, and being eligible, offer themselves for re-appointment.

A brief resume including their expertise, shareholding in the Company and details of other directorships of these directors as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Notice of the ensuing Annual General Meeting.

The Board of Directors recommends the aforesaid appointments for approval of Shareholders in the ensuing Annual General Meeting.

Directors Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956 and save as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors Report thereon, it is hereby confirmed that:

a. in the preparation of the annual accounts for the year under review, the applicable accounting standards had been followed.

b. 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 profit or loss of the Company for that year.

c. 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 irregularities.

d. that the directors had prepared the annual accounts on a going concern basis.

Auditors and Auditors Report

M/s Suresh C. Mathur & Co., Chartered Accountants, Statutory Auditors of the Company retire at the conclusion of ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received letter from the said auditors to the effect that their appointment, if made, would be with in the limits prescribed under Section 224(1 B) of the Companies Act, 1956. Based on the recommendations of the Audit Committee, the Board of Directors of the Company proposes their re-appointment for approval of Shareholders in the ensuing Annual General Meeting.

The observations made in the Auditors Report are self-explanatory and do not call for any further comments under Section 217 (3) of the Companies Act, 1956.

Corporate Governance

Your Company has duly complied with the provisions of the Corporate Governance Code as prescribed under Clause 49 of the Listing Agreement with the Stock Exchanges. A separate Section on Corporate Governance together with a certificate from the Auditors of the Company regarding full compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report.

Management Discussion and Analysis

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed Management Discussion and Analysis Report on financial conditions and results of operations for the year under review forms part of the Annual Report and is presented in a separate section forming part of the Annual Report.

Disclosure of Information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo in terms of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given as annexure to this report.

Disclosure of Particulars of Employees

Information as per the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars of Employees) Rules, 1975 is set out in the Annexure to the Directors Report.

Listing of Equity Shares

The Equity Shares of your Company continue to be listed on The National Stock Exchange of India Ltd. (NSE) and The Bombay Stock Exchange Ltd. (BSE). The Annual Listing Fees for the year 2009-10 have been paid to these Stock Exchanges.

Human resource and Industrial Relations

Your Company has created a favourable work environment which encourages innovation and meritocracy amongst the employees. Your Company ensures attracting best talents and provides for fostering of talents. HR initiatives provide continuous learning, sharpening the skills and talents of the people and leadership development through training programs, HR processes and systems. Industrial Relations were maintained cordial through out the year.

Acknowledgements

Your Directors place on record their gratitude to the Government, other statutory bodies, strategic partners of the Company, business associates, banks, financial institutions and shareholders for their assistance, co-operation and encouragement they extended to the Company.

Your Directors place on record the sincere appreciation for significant contribution made by the employees at all levels through their dedication, hard work and commitment and look forward to their continued support and unstinting efforts in ensuring an excellent all round operational performance in years ahead.

For and on behalf of the Board of Directors Place: New Delhi Brij Raj Punj Date: November 20, 2009 Chairman & Managing Director

 
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