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Directors Report of Leel Electricals Ltd.

Mar 31, 2018

Dear Members,

The Directors have pleasure in presenting the 31st Annual Report on the business and operations of the Company along with the Standalone and Consolidated Audited Accounts for the Financial Year ended on March 31, 2018.

SUMMARISED FINANCIAL RESULTS

(Rs. in crore, except per share data)

STANDALONE for the year ended

CONSOLIDATED for the year ended

Particulars

March 31, 2018 March 31, 2017

March 31, 2018 March 31, 2017

Revenue from Operations

1962.57

3,022.43

2,342.36

3,373.25

Other Income

40.74

1.98

40.43

2.53

Earnings before Interest, Depreciation & Tax (EBIDTA)

145.97

273.83

134.40

273.19

Finance Cost

66.55

118.89

68.73

119.95

Depreciation

33.35

35.97

45.17

48.96

Profit from ordinary activities but before exceptional items

46.07

118.97

20.50

104.28

Exceptional Items

645.23

-

657.44

-

Profit before tax

691.30

118.97

677.94

104.28

Less: Current Tax

167.37

36.20

167.53

36.93

Deferred Tax

1.70

(2.37)

0.38

(2.65)

Profit for the year

522.23

85.14

510.03

70.00

Add: Other Comprehensive Income

0.90

0.35

0.90

0.35

Total Comprehensive Income

523.12

85.48

510.92

70.34

Earnings Per Share (EPS) for continuing operations including exceptional items (Rs.)

127.76

22.28

124.73

18.25

Earnings Per Share (EPS) for discontinued business (Rs.)

1.94

-

1.94

-

PERFORMANCE OF THE COMPANY

For the financial year ended March 31, 2018, on standalone basis, the revenue from the operations stood at Rs. 1,963 Crores as compared to Rs. 3,023 Crores during the previous year. EBIDTA for the year was Rs.146 Crores as compared to Rs.274 Crores in the previous year. The profit before exceptional item and the tax stood at Rs.46 Crores as compared to Rs.119 Crores during the last year and the finance cost during the year was Rs. 67 Crores as against Rs. 119 Crores during the previous year. The profit after exceptional item and tax stood at Rs. 522 Crores as against Rs. 85 Crores during the previous year. The total comprehensive income for the year stood at Rs. 523 Crores as compared to Rs. 85 Crores during the previous year. Figures of the year under review are not comparable with the corresponding year, due to the sale of Consumer Durable Business w.e.f. May 08, 2017.

On the consolidated basis, the revenue from the operations for the year ended March 31, 2018 was Rs. 2,342 Crores as compared to Rs. 3,373 Crores during the previous year. EBIDTA for the year stood at Rs. 134 Crores as compared to Rs. 273 Crores in the previous year. The consolidated profit before exceptional item and tax stood at Rs. 20 Crores and after exceptional items and tax was Rs. 510 Crores as compared to Rs. 104 Crores and Rs. 70 Crores respectively during the previous year. The total comprehensive income for the year stood at Rs. 511 Crores as compared to Rs. 70 Crores during the previous year. For detailed review, please refer Management Discussion and Analysis Report as attached and forms part of Annual Report.

SLUMP SALE OF CONSUMER DURABLE BUSINESS

During the year under review, the company sold its consumer durable business as a going concern to Havells India Ltd, on a slump sale basis on May 8, 2017 for an enterprise value of Rs. 1550 crores, on debt free cash free basis.

The company received upfront consideration of Rs. 1458 crores and balance as per the terms of the agreement, would be released upon finalization of the closing financials which is under process as on the date of this report.

The proceeds from the disinvestment has been utilized by the company partially towards deleveraging the balance sheet by repaying the long term and short term borrowings and partially towards capital investment in view of strategic expansion by increasing capacity at existing plants, setting up new plants at various locations to tap up with the increased demand of customers in the Heating Vantalion and Air Conditioning industry.

OPERATION

During the year under review, your Company organized its revenue stream primarily into the following three reportable business segments:

a) Consumer Durable Business (discontinued w.e.f. May 8, 2017);

b) OEM & Packaged Air conditioning Segment; and

c) Heat Exchangers & Components Segments.

Consumer Durable Segment: During the year under review, the Company had sold its Consumer Durables business to Havells India Limited on May 08, 2017. The Company has classified this business as discontinued business. Till May 08, 2017, the Consumer Durable Business reported revenue of Rs. 424 Crores.

The air conditioning industry had witnessed tough time during the financial year under review. Output took a hit because of a host of disruptions such as GST transition, a modest festive season, change in rating standards and a subdued summer of 2017. The AC production volumes grew a minuscule 7 per cent in Financial Year 2017-18. Major brands reported a subdued volume growth during the year 2018. A major factor that impacted RAC volumes in FY18 was the change in energy efficiency ratings. The Bureau of Energy Efficiency (BEE) introduced a new star rating methodology called Indian Seasonal Energy Efficiency Ratio (ISEER) for air conditioners in 2016, which came into effect in January 2018.

Your Company being an OEM supplier to various brands in India witnessed the downside too, yet the sales from this segment grew from Rs.936 crores to Rs.964 crores.

Heat exchangers and the component segment caters to the manufacturing of heat exchangers and the evaporator coil for the heating ventilation and the air conditioning industry and copper and brass heat exchangers for the railways, heavy automobiles and other industrial applications and the component business of sheet metal. During the year, the revenue of the segment stood at Rs.640 Crores as compared to Rs. 604 Crores during the previous year.

For detailed performance review, please refer Management Discussion and Analysis Report as attached herewith and forms part of the Annual Report.

DIVIDEND

The Board of Directors had, in its meeting held on May 30, 2017, declared a special dividend (one time dividend) of Rs.20 per equity shares of the face value of Rs.10 each (200%) out of proceeds of sale of Consumer Durable Business, aggregating to Rs.97.08 Crores (including dividend distribution tax) which was duly paid on 15.06.2017.

The Board of Directors had, in its meeting held on May 30, 2018 decided to treat the special dividend declared and paid during the financial year 2017-18 as the final dividend.

TRANSFER TO RESERVES

The Company does not propose to transfer any amount to the Reserves and Surplus account.

SHARE CAPITAL

During the period under review, there was no change in the share capital of the Company. The authorized share capital of the Company stood at Rs.70 Crore, divided into 7 Crore equity shares of Rs.10 each and issued and subscribed capital of the Company stood at Rs. 40.35 Crore and the paid-up share capital stood at Rs. 40.34 Crore as at March 31, 2018.

INDIAN ACCOUNTING STANDARD (IND AS)

The financial statements are prepared in accordance with the new Indian Accounting Standards notified by the Ministry of Corporate Affairs vide its notification dated February 16, 2015.

SUBSIDIARY COMPANIES

As of the beginning of the financial Year, the Company had five direct wholly owned subsidiaries (WOS) viz; LEEL Coils Europe s.r.o. (formerly Lloyd Coils Europe s.r.o.), Janka Engineering s.r.o., Noske Kaeser Rail & Vehicle Germany GmbH, Noske Kaeser US Rail & Vehicle LLC, Noske Kaeser Rail & Vehicles New Zealand Ltd. and two Indirect WOS through Noske Kaeser Rail & Vehicles New Zealand Ltd. (NKNZ) viz; Noske-Kaeser Rail & Vehicle Australia Pty Ltd. and Noske-Kaeser Equipamentos de Aquecimento, Ventilagao e Ar Condicionado Ltda (formerly Noske Kaeser Empreendimentos e Participacoes Do Brasil Ltd.) (liquidated).

During the period under review, the Board of Directors of the Company had, in its meeting held on November 14, 2017, approved the restructuring of LEEL Coils Europe s.r.o. and Janka Engineering s.r.o. which involved spinning off certain common assets and liabilities including employees and amalgamate with a new entity set up as a wholly owned subsidiary of the Company in the Czech Republic to provide the common services to them. The appointed date for the restructuring was January 1, 2018.

In pursuant to the above, the new entity LEEL Services s.r.o., became the WOS of the Company w.e.f. 18.11.2017 and the spin off process was duly approved by the competent authorities of the Czech Republic effective as on the appointed date i.e. January 01, 2018.

The aforesaid restructuring has consolidated the selected assets and resources into a new entity and enabled the better management and control over the resources without any change in ultimate ownership over the existing aforesaid WOS(s). Further, there was no impact of said restructuring on the existence of restructured WOSs and they continued to operate in their respective business segments during the period under review.

After the balance sheet date following events have occurred with respect to subsidiaries.

Voluntary Insolvency of Noske Kaeser Rail & Vehicle Germany GmbH (''NKG''): NKG was acquired in March 2016 from an insolvency administrator with an intention that this acquisition would open up immense opportunity for the Company in providing technical and engineering solutions in the highly specialized segment of Rail HVAC and expand its business globally. However, inspite of the financial contributions and various measures undertaken to turnaround the subsidiary since the date of its acquisition, it continued to lose mainly on account of legacy orders which were executed by the subsidiary at significant losses and thus, couldn''t run the operations in a self-sustainable mode and leaving no option but to file for insolvency. The Tribunal of Hamburg has appointed the insolvency administrator to manage the operations and to find an investor for taking over of NKG or put it into bankruptcy.

Sale of Janka Engineering s.r.o. (''Janka''): Janka also continued to deliver weak results and hence, the Company decided to explore the possibility of divesting its stake in it and appointed foreign consultant to look out for the prospective buyer. On the date of this report, the Company had approved the disinvestment of its 100% shareholding in Janka including all assets, liabilities, trademarks and employees to Multicraft Group for a total consideration of 45 Million Czech Crowns (equivalent to approximately Euro 1.75 Million). The closing shall take place before the end of August 2018 subject to the customary closing conditions including regulatory approvals.

Incorporation of new India Subsidiary: The new Indian subsidiary was incorporated viz; ''LEEL Engineering Private Limited'' in the state of Delhi on April 03, 2018 with an object to do business in the field of all types of engineering and electricals equipment and machinery. The Company holds 99% of the total share capital of the Company.

Dissolution of Noske-Kaeser Equipamentos de Aquecimento, Ventilacao e Ar Condicionado Ltda. (Indirect subsidiary through NK NZ): As there was no operation in the subsidiary the same has been voluntary dissolved and as on the date of approval, the applicable authority had also approved the dissolution and now this entity ceased to exist.

There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (Act). There has been no material change in the nature of the business of the subsidiaries.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements of the Company and its subsidiaries existing as on March 31, 2018, which form part of the Annual Report except Noske Kaeser US Rail & Vehicle LLC, which is yet to commence its operation and is in dormant state.

Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC 1 is attached to the financial statements of the Company.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and accounts of each of its subsidiaries, are available on our website www.leelelectric.com .These documents will also be available for inspection during business hours at our corporate office situated at 159, Okhla Industrial Estate, Phase III, New Delhi 110020.

For detailed performance review of subsidiaries, please refer the Management Discussion and Analysis Report, attached herewith and forms part of the Annual Report.

GLOBAL DEPOSITORY RECEIPTS

During the year under review, the Board of Directors in its meeting held on November 14, 2017, decided to terminate the Global Depository Facility and Deposit Agreement with the Bank of New York Mellon (''the BNY'') in view of cost involved in maintaining the small number of outstanding Global Depository Receipts (GDR) (i.e. 8,000 GDR''s underlying 16,000 equity shares) which were also listed on London Stock Exchange.

In view of the above, the BNY had issued 90 days'' notice to GDR holders on December 8, 2017 regarding termination of the GDR facility and Deposit Agreement between the BNY and the Company and had also given an opportunity to the GDR holders to convert their GDRs into underlying equity shares subject to the terms of the Deposit Agreement and applicable laws or regulations.

Upon the completion of 90 days'' notice, all the outstanding GDRs have been converted and / or cancelled and there were no GDR pending as on 31.03.2018. Further, as the security ceases to exist, the Company also went for voluntary delisting of its GDRs from London Stock Exchange (LSE), which was duly approved and got effected w.e.f. April 05, 2018.

FIXED DEPOSITS

During the year under review, the Company has not accepted any deposits from the public under Section 73 of the Companies Act, 2013 and rules made thereunder.

CORPORATE GOVERNANCE

Your Company has always laid a strong emphasis on transparency, accountability and integrity and believes that good governance is the basis for sustainable growth of the business and for enhancement of shareholder value. We keep our governance practices under continuous review and benchmark ourselves to the best governed Companies across the globe.

The report on corporate governance forms an integral part of this report and is set out as separate section to this annual report. The certificate of Mr. Sanjay Chugh, Practicing Company Secretary, acting as the Secretarial Auditors'' of the Company certifying compliance with the conditions of corporate governance as stipulated in Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed with the report on corporate governance.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

As required pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed Management Discussion and Analysis Report is attached herewith and forms a part of the Annual Report.

LISTING AGREEMENT

The equity shares of the Company are listed at BSE Ltd. and National Stock Exchange of India Ltd.

The Annual Listing fees to the above Exchanges for the Financial Year 2018-19, as applicable have been paid well before the due date.

CORPORATE SOCIAL RESPONSIBILTY (CSR)

The Company believes that CSR is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all the stakeholders. The Company has always endeavored to promote education and well-being of weaker sections of society.

In recognition of this, the Company concentrates most of its sustainability / CSR efforts by actively supporting the education and social causes through its philanthropic arm "Pandit Kanahaya Lal Punj Trust".

In accordance with the requirements of Section 135 of Companies Act, 2013, your Company has constituted a CSR Committee. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report.

Further, details about the CSR policy and initiatives taken by the Company on CSR during the year are available in our website. The annual report on our CSR activities is appended as Annexure 1 to the Board''s Report.

EXTRACT OF THE ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, as amended by the Companies (Amendment) Act, 2017 effective from July 31, 2018, an extract of the annual return in the prescribed format is available on the website of the Company viz. www.leelelectric.com

SECRETARIAL STANDARDS

The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

NUMBER OF MEETINGS OF THE BOARD

The Board met four times during the financial year viz; on May 30, 2017; August 10, 2017; November 14, 2017 and February 14, 2018. The necessary quorum was present at all the meetings. The intervening gap between any two meetings was not more than one hundred and twenty days as prescribed by the Companies Act, 2013. For composition, category and attendance of directors please refer the Corporate Governance Report which forms part of the Board''s Report.

COMMITTEES OF THE BOARD

The Board has five committees viz; the Sub-Committee of the Board, Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders'' Relationship Committee.

The details pertaining to composition of above committees are included in the Corporate Governance Report, which forms part of the board''s report.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The policy of the Company on directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub section (3) of Section 178 of the Companies Act, 2013, adopted by the Board, has been disclosed in the corporate governance report, which forms part of the Board''s Report.

BOARD EVALUATION

In pursuance to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of committees. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, board meetings and effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the compliance with the terms of reference of the committees, composition of committees, functions and duties, committee meetings & procedures, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings, attendance, independent judgment etc. During the year, Mr. Brij Raj Punj, Chairman and MD of the Company passed away and the Board Members selected the Chairman of the each meeting amongst them. Hence, the evaluation of the Chairman of the Board was not conducted during the year.

In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the Board, its committees and individual directors was discussed.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPS)

During the year under review, Mr. Brij Raj Punj, Chairman & Managing Director of the Company passed away on December 05, 2017. The Company have achieved so much with his vision, courage, tenacity and the leadership. The Board pays homage to its Chairman.

Mr. Bharat Raj Punj (DIN: 01432035), Deputy Managing Director and son of Late Mr. Brij Raj Punj, was elevated as Managing Director of the Company w.e.f. May 30, 2018 by the Board in its meeting held on May 30, 2018.

Mr. Achin Kumar Roy (DIN: 01475456) Whole Time Director of the Company was re-appointed for a further period of two years w.e.f. April 28, 2018 by the Board of Directors in the meeting held on February 14, 2018. Further, pursuant to provisions of section 152 of the Companies Act, 2013 and Articles of Association of the Company, he will also retire by rotation at the 31st Annual General Meeting and being eligible, has offered himself for re-appointment.

During the financial year under review, Mr. Nipun Singhal (DIN:02026825), who was the business head of the Consumer Durable Business segment, had stepped down and resigned from the Directorship of the Company w.e.f. May 08, 2017, pursuant to the sale of aforesaid segment to Havells India Ltd.

As at the end of financial year, the Company is having five KMPs viz. Mr. Bharat Raj Punj, Managing Director (w.e.f. 30.05.2018), Mr. Achin Kumar Roy, Whole Time Director, Mr. Mukat B. Sharma, Whole Time Director & Chief Financial Officer and Ms. Anita K. Sharma, Company Secretary & VP Finance.

The appointments / re-appointments as aforesaid are placed before the shareholders for their approval alongwith the brief profile in the notice of 31st Annual General Meeting (''AGM"). The Board recommends the appointment /re-appointments of above said directors.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each independent director that he/she meets the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Audited Accounts for the financial year ended March 31, 2018 are in conformity with the requirements of the Companies Act, 2013. Pursuant to Section 134(5) of the Companies Act, 2013, your directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures;

(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 and loss of the Company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS & AUDITORS'' REPORT

STATUTORY AUDITORS

The provision of section 139 of the Companies Act, 2013 requires that the statutory auditor may be appointed by the shareholders for a period of five consecutive years; however, the said appointment needs to be placed for ratification by the members in each AGM. Now, with effect from May 07, 2018, the aforesaid requirement related to annual ratification of appointment of statutory auditors by the members has been omitted by the Companies (Amendment) Act, 2017. Hence, the resolution for ratification of appointment of M/s Goel Garg & Co. Chartered Accountants (Firm Regn. No. 000397N) as the statutory auditor, whose appointment was approved by the members in the 30th AGM for a term of five consecutive years, has not been put for motion as an ordinary business in the 31st AGM.

Auditors'' Report and the Notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.

COST AUDITORS

The Board has re-appointed M/s Jain Sharma & Associates, Cost accountants, as cost auditors of the Company for the financial year 2018-19 at a fee of Rs. 2,06,250/- (including out of pocket expenses) plus applicable taxes, subject to the ratification of the said fees by the shareholders at the ensuing 31st AGM.

The Company has also received a certificate from M/s Jain Sharma & Associates confirming that their appointment is in accordance with provisions of section 139, 141 & 148 of the Companies Act, 2013.

The cost audit report of the financial year 2017-18 would be filed with the Central Government within the prescribed time.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Mr. Sanjay Chugh Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report (in prescribed Form MR-3) for the financial year ended March 31, 2018 is appended as Annexure 2 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The Board has re-appointed Mr. Sanjay Chugh, Practicing Company Secretary, as secretarial auditor’s of the Company for the financial year 2018-19 also.

PARTICULARS OF LOANS AND GUARANTEES

The particulars of loans, guarantees and investments have been disclosed in the notes to the financial statements.

PARTIULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year under review, no material transactions, contracts or arrangements as defined under the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 or which were above the threshold limits mentioned under Rule 15 of the Companies (Meetings of Board & its Powers) Rules, 2014 were entered with the related parties by the Company.

Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is not applicable and hence, not annexed.

For details on related party transactions entered during the year, members may refer to the notes to the standalone financial statement.

RISK MANAGEMENT

The Audit Committee in supervision of Board of Directors is responsible for identifying, evaluating and managing all significant risks faced by the Company. The detailed statement indicating the development and implementation of risk management policy including identification therein of elements of risk has been covered in the management discussion and analysis, which forms part of this report.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to financial statement, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.

The detailed information about internal controls is set out in the Management Discussion & Analysis report which is attached and forms part of this Report.

VIGIL MECHANISM

The Company has implemented a Whistle Blower Policy and has established a vigil mechanism for employees and directors to report their genuine concerns. The Policy provides for a mechanism to report genuine concerns to Whistle Counselor or the Whistle Blower Committee and in exceptional cases, the Chairman of the Audit Committee of the Company. The functioning of the Vigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistle Blowers have been denied access to the Audit Committee of the Board. The Whistle Blower Policy complies with the requirements of Vigil mechanism as stipulated under Section 177 of the Companies Act, 2013. The details of establishment of the Whistle Blower Policy/ Vigil mechanism have been disclosed on the website of the Company.

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY AND MATERIAL EVENTS OCCURRED AFTER BALANCE SHEET DATE

Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments/events, affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are given in Annexure 3 to this Report.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Act and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Rules) have been appended as Annexure 4 to the this report. Details of employee remuneration as required under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) and 5(3) of Rules are available at the Corporate Office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any shareholder upon request.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has a policy against sexual harassment and a formal process for dealing with complaints of harassment or discrimination. The said policy is in line with Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder. The Company, through the policy ensures that all such complaints are resolved within defined timelines. During the year, no case was reported.

ACKNOWLEDGEMENT

We thank our shareholders, customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation for the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We also place on record deep appreciation to various statutory authorities, Central and State Governments and Government of various countries where we operate for their continued assistance, co-operation and encouragement they have extended to the Company and look forward to their continued support in future.

For and on behalf of the Board of Directors

LEEL Electricals Limited

Bharat Raj Punj

Managing Director &

Date: August 13, 2018 Chairman of the Meeting

Place: New Delhi DIN: 01432035


Mar 31, 2017

Dear Shareholders,

The Directors have pleasure in presenting the 30th Annual Report on the business and operations of the Company alongwith the Standalone and Consolidated Audited Accounts for the Financial Year ended on March 31, 2017.

SUMMARISED FINANCIAL RESULTS

(Rs. in crore, except per share data)

STANDALONE for the year ended

CONSOLIDATED for the year ended

Particulars

March 31, 2017

March 31, 2016

March 31, 2017

March 31, 2016

Revenue from Operations

3,022.43

2,387.63

3,366.85

2,720.32

Other Income

1.98

1.05

8.93

9.09

Earnings before Interest, Depreciation & Tax (EBIDTA)

273.84

263.77

273.18

262.09

Finance Cost

118.89

105.30

119.95

106.15

Depreciation

35.98

33.20

48.95

45.35

Profit from ordinary activities but before exceptional items

118.97

125.27

104.28

110.59

Exceptional Items

-

(45.80)

-

(45.80)

Profit before tax

118.97

79.47

104.28

64.78

Less: Current Tax

36.20

17.00

36.93

17.65

Deferred Tax

(2.37)

(0.30)

(2.64)

(1.51)

MAT Credit Entitlement

-

6.94

-

6.94

Profit for the year

85.14

55.82

69.99

41.70

Add: Other Comprehensive Income

0.35

0.71

0.35

0.71

Total Comprehensive Income

85.49

56.53

70.34

42.41

Basic Earnings Per Share (EPS) (Rs.)

21.19

15.61

17.44

11.71

PERFORMANCE OF THE COMPANY

For the financial year ended March 31, 2017, on standalone basis, the revenue from the operations grew by 27% to Rs.3,024 Crores as compared to Rs.2,389 Crores during the previous year. Operating profit for the year was higher by 4% to Rs.274 Crores as compared to Rs.264 Crores in the previous year. The profit before exceptional item and the tax stood at Rs.119 Crores as compared to Rs.125 Crores during the last year mainly due to increase in finance cost to Rs.118 Crores as against Rs.105 Crores during the previous year as a result of the working capital borrowings. The profit after exceptional item and tax stood at Rs.85 Crores as against Rs.56 Crores during the previous year thereby registering growth of 52%. The total comprehensive income for the year stood at Rs.85 Crores as compared to Rs.56 Crores during the previous year.

On the consolidated basis, the revenue from the operations for the year ended March 31, 2017 was Rs.3,376 Crores as compared to Rs.2,729 Crores during the previous year registering a growth of 24%. Operating profit for the year was marginally higher to Rs.273 Crores as compared to Rs.262 Crores in the previous year. The consolidated profit before exceptional item and tax stood at Rs.104 Crores and after tax was Rs.70 Crores as compared to Rs.111 Crores and Rs.42 Crores respectively during the previous year. The total comprehensive income for the year stood at Rs.70 Crores as compared to Rs.42 Crores during the previous year. The decline in profitability was on account of difficult market conditions which prevailed in France and Spain where subsidiaries observed lower sales volume.

OPERATIONS

During the year under review, your Company organized its revenue stream into three reportable business segments:

a) Consumer Durable Segment

b) OEM & Packaged Air conditioning Segment

c) Heat Exchangers & Components Segments

Your company has delivered a consistent performance during the financial year with standalone revenue registering a growth of 27% to Rs.3,024 Crores. The consumer durable segment revenue and the results from this segment stood at Rs.1,885 Crores and Rs.121 Crores during the year as against Rs.1,337 Crores and Rs.106 Crores during the previous year.

The OEM and the packaged air conditioning segment revenue and the results stood at Rs.936 Crores and Rs.60 Crores as against Rs.880 Crores and Rs.50 Crores respectively during the last year. During the year, the Company has developed and launched new range of highly efficient Eco-friendly inverter ACs meeting with 2018 energy efficiency norms for residential segment.

Heat Exchangers and the Component Segment caters to the manufacturing of heat exchangers and the evaporator coil for the heating ventilation and the air conditioning industry and copper & brass heat exchangers for the railways, heavy automobiles and other industrial applications and the component business of sheet metal. During the year, the revenue of the segment stood at Rs.604 Crores as compared to Rs. 611 Crores during the previous year and the segment results stood at Rs.66 Crores as compared to Rs.82 Crores during the previous year.

For detailed review, please refer Management Discussion and Analysis Report as attached and forms part of the Annual Report.

MATERIAL EVENTS OCCURRED AFTER BALANCE SHEET DATE

The Company had sold its Consumer Durable Business comprising of business of importing,trading, marketing, exporting, distribution, sale of air conditioners, televisions, washing machines and other household appliances and assembling of televisions under the brand “LLOYD” and all of the rights, title, interest, licensees, contracts, assets,continuing employees, intellectual property including the brand, logo, trade mark “LLOYD”as a going concern on slump sale basis to Havells India Ltd. (‘Havells’) on May 8, 2017 at an enterprise value of Rs.1,550 Crores on a debt free cash free basis. With effect from the closing date all assets/interest/rights etc. including continuing employees of the consumer durable business got transferred to Havells closing date pursuant to the agreement entered with Havells.

The sale of the consumer durable business will not have any impact on the Company’s existing B2B air conditioning business as the Company has not sold any of its manufacturing facility as the part of the aforesaid transaction and the Company shall continue with its existing business of manufacturing of air conditioners as OEM suppliers for other brands, packaged air conditioning for railways and heat exchanger business which are its core competencies.

Pursuant to the transaction, the Company has also changed its name to ‘LEEL Electricals Ltd.’ which was duly approved by the Central Government on May 23, 2017.

DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs.1.50 per equity share of face value Rs.10 each i.e. @ 15% for the year ended March 31, 2017, subject to approval of shareholders of the Company (previous year Rs.1.30 per equity share of Rs.10 each i.e. @13 %). The total dividend payout would be Rs.7.28 Crores, including dividend distribution tax.

Further, the Board of Directors had, in its meeting held on May 30, 2017, declared a special dividend (one time dividend) of Rs.20 per equity shares of the face value of Rs.10 each (200%) out of proceeds of sale of Consumer Durable Business, aggregating to Rs.97.08 Crores (including dividend distribution tax). The said dividend was paid on 15.06.2017.

TRANSFER TO RESERVES

The Company proposes to transfer Rs.30 Crores to the general reserve out of the amount available for appropriation and an amount of Rs.346.87 Crores is proposed to be retained in the profit and loss account.

SHARE CAPITAL

During the period under review, the authorized share capital of the Company stood at Rs.70 Crore, divided into 7 Crore equity shares of Rs.10 each.

During the year under review the Company has issued and allotted 41,27,000 Equity Shares to promoter group companies upon conversion of equivalent number of Share Warrants allotted on preferential basis.

Pursuant to allotment of 41,27,000 equity shares, the issued, subscribed capital of the Company stood at Rs.40.35 Crore and paid-up capital stood at Rs.40.34 Crore as at March 31, 2017. For further details please refer note 17 of the standalone financial statements.

FIRST TIME ADOPTION OF INDIAN ACCOUNTING STANDARD (IND AS)

The financial statements are prepared in accordance with the new Indian Accounting Standards notified by the Ministry of Corporate Affairs vide its notification dated February 16, 2015. These financial statements are the first financial statements of the Company under IND AS. Detailed information on the impact of the transition from previous GAAP to IND AS is provided in the annexed financial statements.

SUBSIDIARY COMPANIES

As at financial Year ended March 31, 2017, your Company has five direct wholly owned subsidiaries (WOS) viz; Lloyd Coils Europe s.r.o., Janka Engineering s.r.o., Noske Kaeser Rail & Vehicle Germany GmbH, Noske Kaeser US Rail & Vehicle LLC, Noske Kaeser Rail & Vehicles new Zealand Ltd. and two Indirect WOS through Noske Kaeser Rail & Vehicles new Zealand Ltd. viz; Noske-Kaeser Rail & Vehicle Australia Pty Ltd. and Noske-Kaeser Empreendimentos e Participates do Brasil Ltda.

There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (Act). There has been no material change in the nature of the business of the subsidiaries.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements of the Company and its subsidiaries, which form part of the Annual Report. For details please refer Note 2.4 and 51 of the Consolidated Financial Statements.

Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC 1 is attached to the financial statements of the Company.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website www.leelelectric.com. These documents will also be available for inspection during business hours at our corporate office.

For detailed performance review of subsidiaries, please refer Management Discussion and Analysis Report as attached and forms part of the Annual Report.

GLOBAL DEPOSITORY RECEIPTS (GDRs)

The Company has 8,000 GDRs underlying 16,000 equity shares outstanding for conversion as on 31st March, 2017. The GDRs are listed on the Professional Securities Market of London Stock Exchange. The Bank of New York acts as the Depository and ICICI Bank as the domestic custodian in respect of GDRs issued.

FIXED DEPOSITS

During the year under review, the Company has not accepted any deposits from the public under Section 73 of the Companies Act, 2013 and rules made thereunder.

CORPORATE GOVERNANCE

Your Company has always laid a strong emphasis on transparency, accountability and integrity and believes that good governance is the basis for sustainable growth of the business and enhancement of shareholder value. We keep our governance practices under continuous review and benchmark ourselves to the best governed companies across the globe.

The report on corporate governance forms an integral part of this report and is set out as separate section to this annual report. The certificate of M/s. Suresh C. Mathur & Co., Chartered Accountants, the statutory auditors of the Company certifying compliance with the conditions of corporate governance as stipulated in Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed with the report on corporate governance.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

As required pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed Management Discussion and Analysis Report is attached herewith and forms a part of the Annual Report.

LISTING AGREEMENT

The equity shares of the company are listed at BSE Ltd. and National Stock Exchange of India Ltd. The GDR’s are listed on London Stock Exchange.

Annual Listing fees to above exchanges for the Financial Year 2017-18, as applicable have been paid well before the due date.

CORPORATE SOCIAL RESPONSIBILTY (CSR)

The Company believes that CSR is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders. LEEL has always endeavored to promote education and well-being of weaker sections of society.

In recognition of this, LEEL concentrates most of its sustainability / CSR efforts by actively supporting the education and social causes through its philanthropic arm “Pandit Kanahaya Lal Punj Trust”.

In accordance with the requirements of Section 135 of Companies Act, 2013, your Company has constituted a CSR Committee. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report.

Further, details about the CSR policy and initiatives taken by the Company on CSR during the year are available in our website. The annual report on our CSR activities is appended as Annexure 1 to the Board’s Report.

EXTRACT OF THE ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure 2 to the Board’s report.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the financial year viz; on May 30, 2016; August 31, 2016; November 23, 2016; February 9, 2017; and February 18, 2017. The necessary quorum was present at all the meetings. The intervening gap between any two meetings was not more than one hundred and twenty days as prescribed by the Companies Act, 2013.

COMMITTEES OF THE BOARD

The Board has six committees viz; the Sub-Committee of the Board, Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders’ Relationship Committee and Special Committee for issue and allotment of shares.

The details pertaining to composition of above committees are included in the Corporate Governance Report, which forms part of the board’s report.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The policy of the Company on directors’ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub section (3) of Section 178 of the Companies Act, 2013, adopted by the Board, has been disclosed in the corporate governance report, which forms part of the Board’s Report.

BOARD EVALUATION

In pursuance to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out annual performance evaluation of its own performance, of Directors individually as well the evaluation of the working of committees. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, board meetings and effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the compliance with the terms of reference of the committees, composition of committees, functions and duties, committee meetings & procedures, etc.

The Board and the Nomination and Remuneration Committee (“NRC”) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings, attendance, independent judgment etc. In addition, the Chairman was also evaluated on the basis of criteria such as leadership, managing relationship, conducting board meetings etc.

In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the Board, its committees and individual directors was discussed.

The Board had, in its meeting held on May 30, 2017, upon recommendation of NRC and on the basis of performance evaluation of Non-executive Independent Directors, increased the sitting fees to be paid to them from Rs.15,000 to Rs.20,000 for attending each meeting of the Board. The said increase in sitting fees is under the limits as prescribed under the Companies Act, 2013.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPs)

During the financial year under review and pursuant to the provisions of Section 203 of the Act, the Company was having six KMPs viz. Mr. Brij Raj Punj, Chairman & Managing Director, Mr. Bharat Raj Punj, Deputy Managing Director, Mr. Achin Kumar Roy, Whole Time Director, Mr. Nipun Singhal, Whole Time Director, Mr. Mukat B. Sharma, Whole Time Director & Chief Financial Officer and Ms. Anita K. Sharma, Company Secretary & VP Finance.

During the period under review, Mr. Gopal Kacker Non-Executive Independent Director had resigned from the directorship of the Company w.e.f. May 30, 2016. The Board of Directors had, in its meeting held on May 30, 2016, appointed Ms. Deepti Sahai as NonExecutive Independent Director (Additional) for a period of three years w.e.f. May 30, 2016, subject to the approval of shareholders. Her appointment was duly approved by the members at the 29th Annual General Meeting (AGM) held on August 26, 2016.

Mr. Mukat B. Sharma (DIN:02942036) Whole Time Director& CFO of the Company was re-appointed as such for a further period of two years w.e.f. January 28, 2017 by the Board of Directors in the meeting held on November 23, 2016 and Mr. Bharat Raj Punj (DIN:01432035), Deputy Managing Director of the Company was re-appointed as Deputy Managing Director by the Board in its meeting held on May 30, 2017 for a further period of 5 years w.e.f. August 8, 2017. The said appointments are placed before the shareholders for their approval in the ensuing 30th AGM.

Pursuant to the sale of Consumer Durable Business to Havells India Limited, Mr. Nipun Singhal (DIN:02026825), who was the business head of the said business segment, designated as Whole Time Director of the Company, had stepped down from the Directorship of the Company w.e.f. May 08, 2017.

The Board places its sincere appreciation towards the valuable contribution received from Mr. Kacker and Mr. Singhal during their tenure as the Directors of the Company.

Pursuant to provisions of section 152 of the Companies Act., 2013 and Articles of Association of the Company, Mr. Mukat B. Sharma (DIN: 02942036) will retire by rotation at the 30th AGM and being eligible, has offered himself for re-appointment.

The brief profile of the Directors who are proposed to be appointed / re-appointed, are furnished in the notice of 30th AGM. The Board recommends appointment /re-appointments of above said directors.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each independent director that he/she meets the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Audited Accounts for the financial year ended March 31, 2017 are in conformity with the requirements of the Companies Act, 2013. Pursuant to Section 134(5) of the Companies Act, 2013, your directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures;

(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 and loss of the Company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems and operating effectively.

AUDITORS & AUDITORS’ REPORT

Statutory Auditor

Pursuant to the provisions of section 139 of the Companies Act, 2013 (‘Act”) the shareholders of the Company had, in its 27th AGM held on July 21, 2014, appointed M/s Suresh C. Mathur & Co., Chartered Accountants as Statutory Auditors of the Company for a period of 3 years from the conclusion of 27th AGM till the conclusion of 30th AGM.

As per the provisions of Section 139 of the Act, the maximum tenure of an audit firm shall be two terms of five consecutive years. The recent changes in the Companies Act 2013, has made rotation of Statutory Auditors mandatory after 10 years. As per second proviso to Section 139(2) of the Companies Act, 2013, a transition period of three years from the commencement of the Act was provided to appoint a new auditor if the existing auditor’s firm has completed two terms of five consecutive years.

This is to further inform that M/s Suresh C. Mathur & Co., Chartered Accountants, existing Statutory Auditors, has completed a transition period of three years from the commencement of the Act, therefore, their term will expire upon conclusion of the forthcoming AGM.

The Board of Directors at its meeting held on May 30 2017, based on the recommendation of the Audit Committee has recommended the appointment of M/s Goel Garg & Co. Chartered Accountants, as statutory auditors of the Company in place of M/s Suresh C. Mathur & Co., Chartered Accountants, retiring auditors, for a period of 5 years commencing from the conclusion of 30th AGM till the conclusion of the 35th AGM, subject to ratification by shareholders every year.

M/s Goel Garg & Co. Chartered Accountants have consented to the said appointment and provided a certificate to the effect that if they are re-appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Auditors’ Report and the Notes on financial statements referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark. With regard to emphasis of matter as referred in Standalone and Consolidated Auditors’ Report regarding the sale of consumer durable business, please refer ‘events occurring after Balance Sheet date’ section under Board’s Report and note no. 49 of the standalone financial statements for suitable explanation.

Cost Auditor

The Board has re-appointed M/s Jain Sharma & Associates, Cost accountants, as cost auditors of the Company for the financial year 2017-18 at a fee of Rs.2,06,250 (including out of pocket expenses) plus applicable taxes, subject to the ratification of the said fees by the shareholders at the ensuing 30th Annual General Meeting.

The Company has also received a certificate from M/s Jain Sharma & Associates confirming that their appointment is in accordance with provisions of section 139, 141 & 148 of the Companies Act, 2013.

The cost audit report of the financial year 2016-17 would be filed with the Central Government within the prescribed time.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Mr. Sanjay Chugh Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2017 is appended as Annexure 3 to this Report.

The Board has re-appointed Mr. Sanjay Chugh, Practicing Company Secretary, as secretarial auditor of the Company for the financial year 2017-18.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

PARTICULARS OF LOANS AND GUARANTEES

The particulars of loans, guarantees and investments have been disclosed in the notes to the financial statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis. The Company has not entered in any material related party transaction during the year.

Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure 4 in Form AOC-2 and the same forms part of this report.

Please refer Note 40 to the financial statement which sets out related party disclosures.

RISK MANAGEMENT

The Audit Committee in supervision of Board of Directors is responsible for identifying, evaluating and managing all significant risks faced by the Company. The detailed statement indicating the development and implementation of risk management policy including identification therein of elements of risk has been covered in the management discussion and analysis, which forms part of this report.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to financial statement, including adherence to the Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.

The detailed information about internal controls is set out in the Management Discussion & Analysis report which is attached and forms part of this Report.

VIGIL MECHANISM

The Company has implemented a Whistle Blower Policy and has established a vigil mechanism for employees and directors to report their genuine concerns. The Policy provides for a mechanism to report genuine concerns to Whistle Counselor or the Whistle Blower Committee and in exceptional cases, Chairman of the Audit Committee of the Company. The functioning of the Vigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistle Blowers have been denied access to the Audit Committee of the Board. The Whistle Blower Policy complies with the requirements of Vigil mechanism as stipulated under Section 177 of the Companies Act, 2013. The details of establishment of the Whistle Blower Policy/ Vigil mechanism have been disclosed on the website of the Company.

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments, affecting the financial position of the Company which occurred during between the end of the financial year to which the financial statements relate and the date of this report.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are given in Annexure 5 to this Report.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Act and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Rules) have been appended as Annexure - 6 to this report. Details of employee remuneration as required under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) and 5(3) of the Rules are available at the Corporate Office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any shareholder on request.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has a policy against sexual harassment and a formal process for dealing with complaints of harassment or discrimination. The said policy is in line with Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder. The Company, through the policy ensures that all such complaints are resolved within defined timelines. During the year, no case was reported.

ACKNOWLEDGEMENT

We thank our shareholders, customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation for the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We also place on record deep appreciation to various statutory authorities, Central and State Governments and Government of various countries where we operate for their continued assistance, co-operation and encouragement they have extended to the Company and look forward to their continued support in future.

For and on behalf of the Board of Directors

Date: August 10, 2017. Achin Kumar Roy

Place: New Delhi Wholetime Director &

Chairman of the Meeting

DIN:01475456


Mar 31, 2016

To ,

The Members,

The Directors have pleasure in presenting the 29th Annual Report on the business and operations of the Company alongwith the
Standalone and Consolidated Audited Accounts for the Financial Year ended on March 31, 2016.

SUMMARISED FINANCIAL RESULTS

(Rs, in crore, except per Share data)

PARTICULARS STANDALONE CONSOLIDATED
for the year ended for the year ended

March
31, 2016 March
31, 2015 March
31, 2016 March
31, 2015

Revenue from
Operations (net
of excise) 2,382.53 1,834.96 2,715.22 2,172.67

Other Income 0.95 4.57 9.00 12.74

Earnings before
Interest, Depre
ciation & Tax (EBIDTA) 264.48 229.84 262.81 245.59

Finance Expenses 104.67 92.85 105.52 94.31

Depreciation 34.22 33.96 46.38 40.18

Proft from ordinary
activities but before
exceptional items 125.59 103.02 110.90 111.11

Exceptional Items 45.80 - 45.80 -

Proft before tax 79.78 103.02 65.10 111.11

Less: Current Tax 17.00 21.60 17.65 22.20

MAT Credit Adjustment 6.94 - 6.94 -

Deferred Tax (0.23) (0.22) (1.44) 0.50

Proft for the year 56.06 81.64 41.94 88.41

Add: Balance brought
forward 266.72 205.65 274.94 206.10

MAT credit adjustment
for previous year (11.09) 3.61 (11.09) 3.61

Depreciation Adjustment - 1.33 - 2.33

Amount available for
appropriation 311.69 292.23 305.80 300.43

Less: Proposed Dividend 4.71 4.59 4.71 4.59

Tax on proposed dividend 0.96 0.92 0.96 0.92

Transfer to General
Reserve 15.00 20.00 15.00 20.00

Balance Carried Forward 291.03 266.72 285.13 274.92

Basic Earnings
Per Share (EPS) 15.48 23.11 11.58 25.03

PERFORMANCE OF THE COMPANY

For the year ended March 31, 2016 the revenue from the operations grew by 30% to Rs. 2,383 crores as compared to Rs. 1,835 crores
during the previous year. Other expenses include the loss on the foreign currency fuctuations of Rs. 26 crores incurred during the year
as against the gain of Rs. 4 crores during the last year. Operating proft for the year was higher by 15% to Rs. 264 crores as compared to
Rs. 229 crores in the previous year. The proft before exceptional item and the tax stood at Rs. 125 crores as compared to Rs. 103 crores
during the last year thereby registering an increase of 21%. The proft after exceptional item arising out of write off of insurance claim and
tax stood at Rs. 56 Crores as against Rs. 82 crores during the previous year.

On the consolidated basis, the revenue from the operations for the year ended March 31, 2016 was Rs. 2,715 crores as compared to
Rs. 2,173 crores during the previous year registering a growth of 25%. Operating proft for the year was marginally higher to
Rs. 263 crores as compared to Rs. 240 crores in the previous year. Due to the losses incurred by LCE and Janka the consolidated proft
before exceptional item and tax stood at Rs. 110 crores and after tax was Rs. 42 crores as compared to Rs. 111 crores and Rs. 88 crores
respectively during the previous year.

Due to the volatilities and the uncertainties in the foreign exchange market company is exposed to currency risk arising out of
trade exposures. Due to the diverse currency movements in FY 2015-2016 the Company reported fuctuation loss of approximately

Rs 26 crores during the year under review which affected the EBITDA margin to decline by 1.28% over the previous year. The company
is taking effective measures to mitigate the risk arising out of adverse exchange rate fuctuation through various hedging options and an
effective risk management policy has been redefned to mitigate the risk arising out of the exchange fuctuations.

During the year the company has provided for the fre insurance claim of Rs. 45.80 crores as an exceptional item while pursuing it legally
as well.

OPERATIONS

Your Company has organized its revenue stream into three reportable business segments a) Consumer Durable Segment b) OEM &
Packaged Air conditioning Segment c) Heat Exchangers & Components Segments.

Your Company has delivered a strong performance during the fnancial year with standalone revenue registering a growth of 30% to
Rs. 2383 crores. The growth was mainly led by the consumer durable business, which reported outstanding revenue growth of 59% over
the last year. This was primarily as a result of extensive marketing initiative undertaken by the company, expansion in dealer networks and
customer delight by offering quality products with best after sales services.

The Company has also launched "Service Request App" through Mylloyd App which enables the customers to register for service request
in less than 10 seconds, being frst of a kind in India.

All these factors resulted in Lloyd band enjoying about 13% market share in the Indian room AC market during the year under review and
ranking amongst the top fve players in the Indian RAC market.

On standalone basis the Company derived 24%of its total revenue from sales of evaporators, heat exchangers and components and 17%
of its total revenue from the sales of air conditioners to OEM, retail customers and packed air conditioning. In the Railway segment the
Company has also signed the transfer technology agreement with Toshiba Japan for the supply of HVAC unit for the Delhi Metro RS-10
project. For detailed performance review, please refer Management Discussion and Analysis Report is attached herewith and forms a
part of the Annual Report.

DIVIDEND

Your Directors are pleased to recommend a fnal dividend of Rs. 1.3 per equity share of face value Rs.10 each i.e. @ 13% for the year
ended March 31, 2016, subject to approval of shareholders of the Company (previous year Rs.1.30 per equity share of Rs.10 each i.e.
@13 %).

The total dividend payout would be Rs. 5.67 crore, including dividend distribution tax of Rs. 0.96 crore.

TRANSFER TO RESEERVES

The Company proposes to transfer Rs. 15 crore to the general reserve out of the amount available for appropriation and an amount of
Rs. 291.03 crore is proposed to be retained in the proft and loss account.

SHARE CAPITAL

During the period under review, the authorized share capital of the Company stood at Rs.70 crore, divided into 7 crore equity shares of
Rs. 10 each.

During the year under review the Company has issued and allotted 8,85,000 Equity Shares of Rs. 10 each at a premium of Rs.142 each
on January 29, 2016 to promoter group entities upon conversion of equivalent number of warrants allotted on preferential basis on
March 13, 2015.

Pursuant to aforesaid allotment, the issued and subscribed capital of the Company stood at Rs. 36.22 crore and paid-up capital stood
at Rs. 36.21 crore as at March 31, 2016.

SUBSIDIARY COMPANIES

Your Company has two wholly owned subsidiaries as of the beginning of fnancial year viz; Lloyd Coils Europe s.r.o. ("LCE") and Janka
Engineering s.r.o. ("Janka).

During the year under review the Company has acquired the global business of Noske Kaeser Rail & Vehicle ("NK R&V") based in
Germany, New Zealand, Australia, Brazil, and USA by acquiring 100% ownership interest in Noske Kaeser Rail & Vehicle Germany GmbH

(NK G), NoskeKaeser Rail & Vehicles New Zealand Ltd. ("NK NZ") (alongwith its two step-down subsidiaries in Australia & Brazilviz;
Noske-Kaeser Rail & Vehicle Australia Pty Ltd. and Noske-Kaeser Empreendimentos e Participaçôes do Brasil Ltda.) and Noske Kaeser
US Rail & Vehicle LLC (NK US). As a result of the acquisition, NKG has w.e.f. August 26, 2015 and NKNZ (alongwith its subsidiaries) and
NK US w.e.f Match 23, 2016 become wholly owned subsidiaries.

There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (Act). There has been no material
change in the nature of the business of the subsidiaries.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated fnancial statements of the
Company and all its subsidiaries, which form part of the Annual Report. Further, a statement containing the salient features of the fnancial
statement of our subsidiaries in the prescribed format AOC 1 is attached to the fnancial statements of the Company.

In accordance with Section 136 of the Companies Act, 2013, the audited fnancial statements, including the consolidated fnancial
statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website
www.lloydengg.com.These documents will also be available for inspection during business hours at our registered offce.

For detailed performance review of subsidiaries, please refer Management Discussion and Analysis Report is attached herewith and
forms a part of the Annual Report.

GLOBAL DEPOSITORY RECEIPTS (GDRs)

The Company has 8,000 GDRs underlying 16,000 equity shares outstanding for conversion as on March 31, 2016.The GDRs are listed
on the Professional Securities Market of London Stock Exchange. The Bank of New York acts as the Depository and ICICI Bank as the
domestic custodian in respect of GDRs issued.

FIXED DEPOSITS

During the year under review, the Company has not accepted any deposits from the public under Section 73 of the Companies Act, 2013
and rules made thereunder.

CORPORATE GOVERNANCE

Your Company has always laid a strong emphasis on transparency, accountability and integrity and believes that good governance is
the basis for sustainable growth of the business and for enhancement of shareholder value. We keep our governance practices under
continuous review and benchmark ourselves to the best governed Companies across the globe.

The report on corporate governance forms an integral part of this report and is set out as separate section to this annual report. The
certifcate of M/s. Suresh C. Mathur & Co., Chartered Accountants, the statutory auditors of the Company certifying compliance with
the conditions of corporate governance as stipulated in Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements
Regulations) 2015 is annexed with the report on corporate governance.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements Regulations) 2015, a detailed Management
Discussion and Analysis Report is attached herewith and forms a part of the Annual Report.

LISTING AGREEMENT

The equity shares of the company are listed at Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE).The
GDR''S are listed on London Stock Exchange.

Annual Listing fees to above Exchanges for the Financial Year 2016-17, as applicable have been paid well before the due date.

CORPORATE SOCIAL RESPONSIBILTY (CSR)

Lloyd has always endeavored to promote education. Your Company believes that education is a basic human right that must be provided
to all. The vision is the force behind the group''s involvement in a number of educational programs. Well rounded holistic development
of children today is essential for building the leaders of the next generation.We are also promoting and encouraging the formation of
self-help group program which aims at empowering rural women through fnancial independence

In recognition of this, Lloyd concentrates most of its sustainability / CSR efforts by actively supporting the education and social initiatives
of the "Pandit Kanahaya Lal Punj Trust", the philanthropic arm of the Lloyd Group.

In accordance with the requirements of Section 135 of Companies Act, 2013, your Company has constituted a CSR Committee. The
composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report.

Further, details about the CSR policy and initiatives taken by the Company on CSR during the year are available in our website. The annual
report on our CSR activities is appended as Annexure 1 to the Board''s Report.

EXTRACT OF THE ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended
as Annexure 2 to the Board''s report.

NUMBER OF MEETINGS OF THE BOARD

The Board met four times during the fnancial year viz; on May 28, 2015, August 13, 2015, November 09, 2015, and February12, 2016.
The necessary quorum was present at all the meetings. The intervening gap between any two meetings was not more than one hundred
and twenty days as prescribed by the Companies Act, 2013.

COMMITTEES OF THE BOARD

The Board has six committees viz; the Sub-Committee, Audit Committee, Nomination and Remuneration Committee, Corporate Social
Responsibility Committee, Stakeholders'' Relationship Committee and Special Committee for issue and allotment of shares.

For details of Board Meeting and Committees thereof in terms of secretarial standard -2 as issued by Institute of Company Secretaries of
India, please refer corporate governance report, which forms part of the Board''s Report.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The policy of the Company on directors'' appointment and remuneration, including criteria for determining qualifcations, positive attributes,
independence of a director and other matters provided under Sub section (3) of Section 178 of the Companies Act, 2013, adopted by the
Board, has been disclosed in the corporate governance report, which forms part of the Board''s Report.

BOARD EVALUATION

In pursuance to the provisions of the Companies Act,2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations
2015, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation
of the working of committees. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the
basis of the criteria such as the Board composition and structure, board meetings and effectiveness of board processes, information and
functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on
the basis of the criteria such as the compliance with the terms of reference of the committees, composition of committees, functions and
duties, committee meetings & procedures, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis
of the criteria such as the contribution of the individual director to the Board and committee meetings, attendance, independent judgment
etc. In addition, the Chairman was also evaluated on the basis of criteria such as leadership, managing relationship, conducting board
meetings etc.

In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and
performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same
was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the Board, its
committees and individual directors was discussed.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to recommendation of Nomination & Remuneration Committee, the Board of Directors at its meeting held on November 10, 2014,
had re-appointed Mr. Mukat B. Sharma as Whole Time Director & Chief Financial Offcer of the Company for a further period of two years
from January 28, 2015, subject to the approval of the members. The said appointment was duly approved by shareholders in 28th Annual
General Meeting held on July 10, 2015.

Further, Mr. Achin Kumar Roy (DIN: 01475456) was re-appointed as Whole Time Director of the Company by the Board of Directors held
on February 12, 2016 for a further period of two years w.e.f. April 28, 2016, subject to the approval of the members in the ensuing 29th
Annual General Meeting.

Mr. Gopal Kacker (DIN: 01047554), Non-Executive Independent Director has tendered his resignation w.e.f. May 30, 2016 due to his
pre-occupations. The Board places its sincere appreciation towards the valuable contribution received from Mr. Kacker during his tenure
as the Director of the Company.

In order to fll the vacancy caused by resignation of Mr. Gopal Kacker, the Board of Directors had, upon recommendation of Nomination
& Remuneration Committee, in its Meeting held on May 30, 2016, appointed Ms. Deepti Sahai (DIN:07529738) as an Additional Director
in the category of Non-Executive Independent Director for a term of 3 (three) consecutive years w.e.f. May 30, 2016 to 29th May, 2019
subject to the approval of the shareholders in the ensuing 29th Annual General Meeting.

Pursuant to provisions of section 152 of the Companies Act., 2013 and Articles of Association of the Company, Mr. Bharat Raj Punj (DIN:
01432035) will retire by rotation at the 29th Annual General Meeting and being eligible, has offered himself for re-appointment.

The brief profle of the Directors who are proposed to be appointed / re-appointed, are furnished in the notice of 29th Annual General
Meeting. The Board recommends appointment /re-appointments of above said directors.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each independent director that he/she meets the criteria of independence as laid
down in Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Audited Accounts for the fnancial year ended March 31, 2016 are in conformity with the requirements of the Companies Act, 2013.
Pursuant to Section 134(5) of the Companies Act, 2013, your directors hereby confrm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation
relating to material departures;

(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 fnancial year
and of the proft and loss of the Company for that period;

(c) the directors had taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal fnancial controls to be followed by the Company and that such internal fnancial controls
are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such
systems were adequate and operating effectively.

AUDITORS & AUDITORS'' REPORT

STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. Suresh C. Mathur& Co., Chartered Accountants,
were appointed as statutory auditors of the Company from the conclusion of the 27th Annual General Meeting (AGM) of the Company
held on July 21, 2014 till the conclusion of the 30th AGM, subject to ratifcation of their appointment at every AGM. Accordingly, the
appointment of M/s. Suresh C. Mathur & Co., Chartered Accountants, as statutory auditors of the Company, is placed for ratifcation by
the shareholders. In this regard, the Company has received a certifcate from the auditors to the effect that if they are reappointed, it would
be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Auditors'' Report and the Notes on fnancial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further
comments. The Auditors'' Report does not contain any qualifcation, reservation or adverse remark. With regard to emphasis of matter
as referred in Standalone and Consolidated Auditors'' Report w.r.t. writing off the fre insurance claim of Rs.45.80 crores after insurance
company declined to admit the same as an exceptional item. The Company as a matter of prudence has written off the claim. However, the
Company has initiated the appropriate legal recourse. For further details please refer note no. 40 of the standalone fnancial statements.

COST AUDITOR

The Board appointed M/s. Jain Sharma & Associates, Cost accountants, as cost auditors of the Company for the fnancial year 2016-17
at a fee of Rs. 2,06,250/- (including out of pocket expenses) plus applicable taxes and subject to the ratifcation of the said fees by the
shareholders at the ensuing Annual General Meeting.

The cost audit report of the fnancial year 2015-16 would be fled with the Central Government within the prescribed time.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Board had appointed Mr. Sanjay Chugh Practicing Company Secretary, to conduct Secretarial Audit for
the fnancial year 2015-16. The Secretarial Audit Report for the fnancial year ended March 31, 2016 is appended as Annexure 3 to this
Report.

The Board has appointed Mr. Sanjay Chugh, Practicing Company Secretary, as secretarial auditor of the Company for the fnancial year
2016-17 also.

The Secretarial Audit Report does not contain any qualifcation, reservation or adverse remark.

PARTICULARS OF LOANS AND GUARANTEES

The particulars of loans, guarantees and investments have been disclosed in the notes to the fnancial statements.

PARTIULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the fnancial year with related parties were in the ordinary
course of business and on an arm''s length basis. The Company has not entered in any material related party transaction during the year.

Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts)
Rules, 2014 are given in Annexure 4 in Form AOC-2 and the same forms part of this report.

Please refer Note 37 to the fnancial statement which sets out related party disclosures as prescribed under Accounting Standard 18.

RISK MANAGEMENT

The Audit Committee in supervision of Board of Directors is responsible for identifying, evaluating and managing all signifcant risks
faced by the Company. The detailed statement indicating the development and implementation of risk management policy including
identifcation therein of elements of risk has been covered in the management discussion and analysis, which forms part of this report.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal fnancial controls with reference to fnancial statement, including adherence to the Company''s
policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records
and timely preparation of reliable fnancial disclosures.

The detailed information about internal controls is set out in the Management Discussion & Analysis report which is attached and forms
part of this Report.

VIGIL MECHANISM

The Company has implemented a Whistle Blower Policy and has established a vigil mechanism for employees and directors to report
their genuine concerns. The Policy provides for a mechanism to report genuine concerns to Whistle Counselor or the Whistle Blower
Committee and in exceptional cases, Chairman of the Audit Committee of the Company. The functioning of the Vigil mechanism is
reviewed by the Audit Committee from time to time. None of the Whistle Blowers have been denied access to the Audit Committee of the
Board. The Whistle Blower Policy complies with the requirements of Vigil mechanism as stipulated under Section 177 of the Companies
Act, 2013. The details of establishment of the Whistle Blower Policy/ Vigil mechanism have been disclosed on the website of the Company.

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

Except as disclosed elsewhere in the Annual Report,there have been no material changes and commitments, affecting the fnancial
position of the Company which occurred during between the end of the fnancial year to which the fnancial statements relate and the
date of this report.

SIGNIFICANT AND MATERIAL ORDERS

There are no signifcant and material orders passed by the regulators or courts or tribunals impacting the going concern status and
Company''s operations in future.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be
disclosed under the Act, are given in Annexure 5 to this Report.

PARTICULARS OF EMPLOYEES

The information required under section 197 of the Act Rule 5(1) & (2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, in respect of employees of the Company is appended as Annexure 6 to the Board''s report.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has a policy against sexual harassment and a formal process for dealing with complaints of harassment or discrimination.
The said policy is in line with Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made
thereunder. The Company, through the policy ensures that all such complaints are resolved within defned timelines. During the year, no
case was reported.

ACKNOWLEDGEMENT

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation
for the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity,
cooperation and support.

We also place on record deep appreciation to various Statutory Authorities, Central and State Governments and Government of various
countries where we operate for their continued assistance, co-operation and encouragement they have extended to the Company and
look forward to their continued support in future.

For and on behalf of the Board of Directors

Brij Raj Punj

Date: May 30, 2016 Chairman & Managing Director

Place: New Delhi (DIN:00080956)


Mar 31, 2015

The Members,

The Directors have pleasure in presenting the 28th annual report on the business and operations of the Company along with the Standalone and Consolidated Audited Accounts for the Financial Year ended on March 31, 2015.

SUMMARISED FINANCIAL RESULTS

` in crores except per share data

PARTICULARS STANDALONE CONSOLIDATED for the year ended for the year ended March 31, 2015 March 31, 2014 March 31, 2015 March 31, 2014

Revenue from Operations (net of excise) 1834.96 1439.69 2172.67 1775.96

Other Income 4.57 12.03 12.73 49.05

Earnings before Interest, Depreciation & Tax (EBIDTA) 229.83 189.58 245.59 214.29

Finance Expenses 92.85 84.02 94.31 85.50

Depreciation 33.96 23.79 40.17 31.76

Profit before tax 103.02 81.77 111.11 97.03

Less: Current Tax 21.60 17.50 22.20 21.40

Deferred Tax (0.22) (11.82) 0.50 (13.49)

Profit for the year 81.64 76.09 88.41 89.12

Add: Balance brought forward 205.65 155.32 206.10 142.74

MAT credit receivable 3.61 1.36 3.61 1.35

Depreciation Adjustment 1.33 - 2.33 -

Excess FBT provision adjusted - 0.02 - 0.02

Amount available for appropriation 292.23 232.79 300.43 233.23

Less: Proposed Dividend 4.59 3.53 4.59 3.53

Tax on proposed dividend 0.92 0.60 0.92 0.60

Transfer to General Reserve 20.00 23.00 20.00 23.00

Balance Carried Forward 266.72 205.66 274.92 206.10

Basic Earning Per Share (EPS) 23.11 21.54 25.03 25.23

PERFORMANCE OF THE COMPANY

On the standalone basis, revenue of your Company stood at Rs.1837.96 crore as against Rs.1439.69 crore during the previous year, registering an increase of 27%. Earnings before Interest, tax, depreciation and amortization (EBITDA) were Rs.229.83 crore as against Rs.189.58 crore, higher by 21%. The Profit before tax(PBT) was Rs.103.02 crore as against Rs.81.77 crore in the previous year, registering a growth of 26%.Profit after tax (PAT ) for the year was Rs.81.64 crore registered a growth of 7.3% over the PAT of ' Rs.76.09 crore in previous year.

On consolidated basis, revenue from operations for the financial year 2014-15 at Rs.2172.67 crore as against Rs. 1775.96 crore for FY 2013-14, registering an increase of 22 %. EBITDA was Rs.245.59 crore as against Rs.214.29 crore, higher by 14.6%. The PBT was Rs.111.11 crore as against Rs.97.03 crore in the previous year, registering a growth of 14.5%.However, the PAT for the year was Rs.88.41 crore as against Rs.89.12 crore in previous year. The marginally lower PAT was mainly on account of extra tax provisioning as against the previous year, wherein due to deferred tax credit, the aggregate tax expense was reduced.

OPERATIONS

The Indian air conditioners market is projected to grow at a CAGR of around 15% during 2014-19. The market for air conditioners in India has been on a steady growth ever since, apart from certain exceptions. The perception of people towards the category of this product has witnessed a paradigm shift over the years from a luxury product to becoming a necessity in hot humid weather conditions of India. With extremely low penetration, rising per capita income and hot and humid climatic conditions in most part of the country are boosting the sales of air conditioners. In addition to the growing demand for room air conditioners on account of the improving lifestyle of expanding middle-class households, the central air conditioning systems are also anticipated to grow due to the growing construction market in the country.

During the year, your Company organized its revenue stream into three reportable business segments a) Consumer Durable Segment b) OEM & Packaged Air conditioning Segment c) Heat Exchangers & Components Segments

The Consumer Durable Segment catering to the branded product portfolio reported robust growth of 37% in revenue over the previous year. During the year, Company has invested approx. Rs. 35 crores on marketing, advertisement and brand building exercise, which has helped the company to gain considerable market share in Lloyd branded air conditioners and other consumer products. As part of our brand building strategy, the company has also launched a sub-ordinate brand "Lloyd Luxury" which offers products in the premium market. During the year, company has increased its market penetration in Tier-2 and Tier-3 towns and is aggressively focusing in larger cities. Your Company is constantly strengthening its service network and operating through 307 authorised service centers and 81 company owned service centers. We have developed an integrated after sales service solution, which includes three customers touch points a) Regional Multi-language in house call centers b) interaction through company's portal c) through an SMS to a pan India number and call back facility.

Your Company is vertically integrated across HVAC value chain, right from manufacturing physical components, to Air Conditioners , to selling to OEM suppliers as well as under own Brand.

As on March 31, 2015, a) Consumer Durable Segment accounted to 47% of the Standalone Revenue, whereas b) OEM & Packaged Air conditioners accounted to 23% and c) Heat Exchangers & Components accounted to 30% of the standalone revenue.

To bolster our service quality, we have started ad campaign with "Khushiyon Ki Guarantee" which is in sync with Company's focus on customer's satisfaction. We are also developing our own website www.mylloyd.com for online selling of our products.

In the OEM segment, your company has developed room air conditioners with CB certifications for UAE market. New products have been developed for T3 conditions for Saudi Arabia Market with SASO certification.

DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs.1.3 per equity share of face value Rs.10 each i.e. @ 13% for the year ended March 31, 2015, subject to approval of shareholders of the Company (previous year Re.1 per equity share of Rs.10 each i.e. @10 %).

The total dividend payout would be Rs.5.51 Crore, including dividend distribution tax of Rs.0.92 Crore.

TRANSFER TO RESEERVES

The Company proposes to transfer Rs.20 crore to the general reserve out of the amount available for appropriation and an amount of Rs.266.72 crore is proposed to be retained in the profit and loss account.

SHARE CAPITAL

During the period under review, the Company has increased its authorized share capital from Rs.50 crore to Rs.70 crore, divided into 7crore equity shares of Rs. 10 each. The issued, subscribed capital of the Company stood at Rs.35.33 Crore and paid-up capital stood at Rs.35.32 Crore as at March 31, 2015.

During the year, the Company has issued 60 lac warrants to Promoters /Promoters Group on 13.03.2015 at a price of Rs.152/- each entitling them for subscription of equivalent number of Equity Shares of Rs.10/- each (including premium of Rs.142/- each Share) in accordance with chapter VII of SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009.

SUBSIDIARY COMPANIES

The Company has two overseas wholly owned subsidiaries viz; Lloyd Coils Europe s.r.o. ("LCE") and Janka Engineering s.r.o. ("Janka"), both incorporated in Prague, Czech Republic. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (Act). There has been no material change in the nature of the business of the subsidiaries and there is no company which have become or ceased to become subsidiary, joint-venture or associate company during the year.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC 1 is attached to the financial statements of the Company.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website www.lloydengg.com.These documents will also be available for inspection during business hours at our registered office.

During the current year, LCE contributed to impressive EBITDA at Euro 3.4 million and PAT of Euro 2.62 million as against Euro 1.6 million and Euro 1.82 million respectively. During the year LCE has substantially increased market shares in the segment of close control air-conditioning and became a key partner to customers like Emerson, carrier and Stulz, which are top leaders in this segment.

Whereas, Janka suffered a loss of Euro 1 million at EBITDA level, mainly because of low margin level on Air handling Units (AHUs), reduced share of Industrial cooling segment (ICL), as well as increased cost for sales and marketing activities across the AHU range, which is effective for all new projects. In the segment of Rail HVAC, Janka has secured two prestigious projects from Skoda Transportation and will deliver HVAC units to Skoda's trams for city Bratislava and Prague, Czeh Republic.

The total Revenue from overseas wholly owned subsidiaries was euro 50 million for the FY 2014-15 and profit after tax of Euro 0.90 million.

GLOBAL DEPOSITORY RECEIPTS (GDRs)

The Company has 8,000 GDRs underlying 16,000 equity shares outstanding for conversion as on March 31, 2015.The GDRs are listed on the Professional Securities Market of London Stock Exchange. The Bank of New York acts as the Depository and ICICI Bank as the domestic custodian in respect of GDRs issued.

FIXED DEPOSITS

During the year under review, the Company has not accepted any deposits from the public under Section 73 of the Companies Act, 2013 and rules made thereunder.

CORPORATE GOVERNANCE

Your Company has always laid a strong emphasis on transparency, accountability and integrity and believes that good governance is the basis for sustainable growth of the business and for enhancement of shareholder value. We keep our governance practices under continuous review and benchmark ourselves to the best governed Companies across the globe.

The report on corporate governance forms an integral part of this report and is set out as separate section to this annual report. The certificate of M/s. Suresh C. Mathur & Co., Chartered Accountants, the statutory auditors of the Company certifying compliance with the conditions of corporate governance as stipulated in clause 49 of the listing agreement is annexed with the report on corporate governance.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

As required pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed Management Discussion and Analysis Report is attached herewith and forms a part of the Annual Report.

LISTING AGREEMENT

The equity shares of the company are listed at Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE) The GDR's are listed on London Stock Exchange.

Annual Listing fees to above Exchanges for the Financial Year 2015-16, as applicable have been paid well before the due date.

CORPORATE SOCIAL RESPONSIBILTY (CSR)

Lloyd has always endeavored to promote education. Your Company believes that education is a basic human right that must be provided to all. The vision is the force behind the group's involvement in a number of educational programs. Well rounded holistic development of children today is essential for building the leaders of the next generation. In recognition of this, Lloyd concentrates most of its sustainability / CSR efforts by actively supporting the education and social initiatives of the "Pandit Kanahaya Lal Punj Trust", the philanthropic arm of the Lloyd Group.

In accordance with the requirements of Section 135 of Companies Act, 2013, your Company has constituted a CSR Committee. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report.

Further, details about the CSR policy and initiatives taken by the Company on CSR during the year are available in our website. The annual report on our CSR activities is appended as Annexure 1 to the Board's Report.

EXTRACT OF THE ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure 2 to the Board's Report.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the financial year viz; on May 29, 2014, August 8, 2014, November 10, 2014, December 22, 2014, and January 28, 2015.The necessary quorum was present in all the meetings. The intervening gap between any two meetings was not more than one hundred and twenty days as prescribed by the Companies Act, 2013.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub section (3) of Section 178 of the Companies Act, 2013, adopted by the Board, has been disclosed in the corporate governance report, which forms part of the Board's Report.

BOARD EVALUATION

In pursuance to the provisions of the Companies Act,2013 and clause 49 of the Listing Agreement, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of committees. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, board meetings and effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the compliance with the terms of reference of the committees, composition of committees, functions and duties, committee meetings & procedures, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings, attendance, independent judgement etc. In addition, the Chairman was also evaluated on the basis of criteria such as leadership, managing relationship, conducting board meetings etc.

In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the Board, its committees and individual directors was discussed.

COMMITTEES OF THE BOARD

The Board has six committees viz;the sub-committee, audit committee, nomination and remuneration committee, corporate social responsibility committee, stakeholders' relationship committee and Special Committee for issueand allotment of shares.

The details pertaining to composition of above committees are included in the Corporate Governance Report, which forms part of this report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the period under review, Mr. Gopal Kacker was appointed as an additional Director in the category of non-executive independent director by the Board of Directors in its meeting held on May 29, 2014 after the sad demise of Mr. Krishan Lall on March 09, 2014. The appointment of Mr. Kacker was confirmed by shareholders in the 27th AGM held on July 21, 2014.

Further, pursuant to the provisions of Section 149 of the Act, which came into effect from April 1, 2014, independent directors shall hold office for a term of up to 5 consecutive years on the board of a company and shall be eligible for re-appointment on passing a special resolution by the shareholders of the Company. Accordingly, all existing independent directors previously appointed in terms of listing agreement were confirmed by the shareholders through postal ballot.

Also, pursuant to the provisions of Section 203 of the Act, effective from April 1, 2014, the appointments of Mr. Brij Raj Punj, Chairman & Managing Director, Mr. Bharat Raj Punj, Executive Director, Mr. Achin Kumar Roy, Whole Time Director, Mr. Nipun Singhal, Whole Time Director, Mr. Mukat Behari Sharma, Whole Time Director & Chief Financial Officer and Ms. Anita K. Sharma, Company Secertary as key managerial personnel of the Company were formalised.

As per the provisions of the Companies Act 2013, Mr. Achin Kumar Roy (DIN: 01475456), retires at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board recommends his re appointment.

Mr. Mukat Behari Sharma (DIN:02942036) was appointed whole time director of the Company for a period of five years with effect from January 28, 2010. He is also acting as Chief financial Officer of the Company. The Board of Directors at its Meeting held on November 10, 2014, has re-appointed him as Whole time & Chief Financial Officer of the Company for a further period of two years from January 28, 2015, subject to the approval of the members.

The brief profile of the Directors who are to be re-appointed / appointed, are furnished in the notice of annual general meeting. The Board recommends re-appointments of above said directors.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each independent director that he/she meets the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

DIRECTORS' RESPONSIBILITY STATEMENT

The Audited Accounts for the financial year ended March 31, 2015 are in conformity with the requirements of the Companies Act, 2013. Pursuant to Section 134(5) of the Companies Act, 2013, your directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures;

(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 and loss of the Company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; 'and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS & AUDITORS' REPORT

STATUTORY AUDITOR

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. Suresh C. Mathur& Co., Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the 27th Annual General Meeting (AGM) of the Company held on July 21, 2014 till the conclusion of the 30th AGM, subject to ratification of their appointment at every AGM. Accordingly, the appointment of M/s. Suresh C. Mathur& Co., Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Auditors' Report and the Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

COST AUDITOR

The Board appointed M/s. Jain Sharma & Associates, Cost accountants, as cost auditors of the Company for thefinancial year 2015-16 at a fee of Rs.50,000 plus applicable taxes and out of pocket expenses subject to the ratification of the said fees by the shareholders at the ensuing annual general meeting.

The cost audit report of the financial year 2014-15 would be filed with the Central Government within the prescribed time.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Mr. Sanjay Chugh Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is appended as Annexure 3 to this Report.

The Board has appointed Mr. Sanjay Chugh, Practising Company Secretary, as secretarial auditor of the Company for the financial year 2015-16.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

PARTICULARS OF LOANS AND GUARANTEES

The particulars of loans, guarantees and investments have been disclosed in the notes to the financial statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. The Company has not entered in any material related party transaction during the year.

Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure 4 in Form AOC-2 and the same forms part of this report.

Please refer Note No. 36 to the financial statement which sets out related party disclosures as prescribed under Accounting Standard 18.

RISK MANAGEMENT

The Audit Committee in supervision of Board of Directors is responsible for identifying, evaluating and managing all significant risks faced by the Company. The detailed statement indicating the development and implementation of risk management policy including identification therein of elements of risk has been covered in the management discussion and analysis, which forms part of this report.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to financial statement, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.

The detailed information about internal controls is set out in the Management Discussion & Analysis report which is attached and forms part of this Report.

VIGIL MECHANISM

The Company has implemented a Whistle Blower Policy and has established a vigil mechanism for employees and directors to report their genuine concerns. The Policy provides for a mechanism to report genuine concerns to Whistle Counselor or the Whistle Blower Committee and in exceptional cases, Chairman of the Audit Committee of the Company. The functioning of the Vigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistle Blowers have been denied access to the Audit Committee of the Board. The Whistle Blower Policy complies with the requirements of Vigil mechanism as stipulated under Section 177 of the Companies Act, 2013. The details of establishment of the Whistle Blower Policy/ Vigil mechanism have been disclosed on the website of the Company.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are given in Annexure 5 to this Report.

PARTICULARS OF EMPLOYEES

The information required under section 197 of the Act Rule 5(1) &(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company is appended as Annexure 6 to the Board's report.

ACKNOWLEDGEMENT

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation for the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We also place on record deep appreciation to various statutory authorities, Central and State Governments and Government of various countries where we operate for their continued assistance, co-operation and encouragement they have extended to the Company and look forward to their continued support in future.

For and on behalf of the Board of Directors

Date: May 28, 2015 Brij Raj Punj

Place: New Delhi Chairman & Managing Director


Mar 31, 2012

The Directors present herewith the Twenty Fifth Annual Report on the Business and Operations of the Company together with the Audited Statement of Accounts for the financial year ended 31st March, 2012.

FINANCIAL PERFORMANCE

Rs. in Million

PARTICULARS STANDALONE CONSOLIDATED for the Year ended for the Year ended March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011

Total Income 9050.56 7836.36 12060.67 10158.39

Operating Profit (EBIDTA) 934.69 841.91 1048.17 934.57

Interest & Finance Charges 291.26 205.00 338.31 231.66

Depreciation 190.67 150.34 284.06 230.46

Profit before tax 452.76 486.56 425.80 472.45

Provision for taxation 116.90 126.00 132.06 96.75

Profit after taxation 335.86 360.56 293.74 375.70

Add: Balance brought forward 767.49 433.52 717.40 368.29

MAT Credit receivable booked in 14.72 97.45 14.72 97.45 current year

Total available for appropriation 1118.07 891.53 1025.86 841.45

Less: General Reserve 10.00 45.00 10.00 45.00

Debenture Redemption Reserve 25.00 25.00 25.00 25.00

Proposed Dividend 31.00 46.50 31.00 46.50

Corporate Dividend Tax 5.03 7.54 5.03 7.54

Balance carried forward 1047.04 767.49 954.83 717.40

DIVIDEND

Based on the Company’s performance, your Directors are pleased to recommend for the approval of the members, a dividend of Re 1 per equity share (i.e. 10 %) of the face value of Rs. 10/- each to be appropriated from the profits for the year 2011-12. (Previous year Re. 1.5/- per equity share of Rs. 10/- each).

The total dividend payout would be Rs. 36.03 Million, including dividend distribution tax of Rs. 5.03 Million.

PERFORMANCE HIGHLIGHTS

The year 2011- 2012 was a challenging year, arising from a host of macro economic factors. The Global economic crisis continues to adversely impact all aspects of business and the economy. Volatile foreign exchange rate, high interest rates and inflation continued to be an enormous challenge. In the view of this challenging environment, on stand alone basis, during the year under review, the total income of the Company stood at Rs. 9050.56 Million as against Rs. 7836.36 Million during the last corresponding year 2010-2011 registering an increase of 15%. Profit after tax was Rs. 335.86 Million as against Rs. 360.56 Million during the previous year. Profit after tax was marginally lower by 6.85%, primarily due to the volatile foreign exchange rate and high interest rates.

On consolidation basis, the total income of the Company together with subsidiaries was Rs. 12060.67 Million as against Rs. 10158.39 Million during the previous year, registering an increase of 18% as compared to the previous year’s. The consolidated Profit after tax was Rs. 293.74 Million as against Rs. 375.70 Million, down by 21%. The significant decline in the consolidated Profit after Tax was due to high interest rates and currency depreciation coupled with economic uncertainty in Europe, which has squeezed the margins of Company’s subsidiary Janka Engineering s.r.o.

OPERATIONS

Over the year, your Company has undertaken extensive market research, the findings of which were used to revitalize the Lloyd Brand. As part of mitigation efforts, the Company has put in place various measures to reduce operational and administrative costs. During the year, the state of art manufacturing facility at Haridwar, Uttarakhand, setup in 2010, commenced the commercial production. The plant caters to the demand of packaged Air-conditioning units for Railways, Metros and Commercial Refrigeration. Your Company has been awarded the prestigious IRIS (International Railway Industry Standard) certification which recognizes compliance with International standards in railway industry for the design and manufacture of Heating, Ventilation, Air-conditioning and Refrigerant (HVAC&R) based cooling system including condenser and evaporators. This certification makes the Company eligible for global bidding in Railway/ Metro business in (HVAC&R) segment.

SCHEME OF ARRANGEMENT

During the year under review, the Board of Directors of your Company has approved the Scheme of Arrangement amongst M/s. Perfect Radiators & Oil Coolers Pvt. Ltd. (group company, herein after referred to as transferor company)"PROC" and Lloyd Electric & Engineering Ltd. (transferee company referred as LEEL) and their respective shareholders at their meeting held on 29th March 2012 under Section 391-394 of the Companies Act, 1956.

As per the scheme of arrangement, the ‘Heat Exchangers Business’ of PROC would be demerged and transferred to LEEL with effect from 1st April 2011, the appointed date for the said scheme. The Valuation of the heat exchangers business of Perfect Radiators has been valued by Ernst & Young at Rs. 36 crores and Valuation of per equity share of LEEL has been valued at Rs. 84 per equity share of Rs. 10/- each. Basis, the valuation report of Ernst & Young, the share swap ratio has been fixed at 54:100 i.e. 54 equity shares of LEEL shall be issued for every 100 equity shares held in PROC. Pursuant to the same, LEEL would issue and allot 43,20,000 equity shares of Rs. 10/- each to the shareholders of transferor company in proportion of the shares held by them in the transferor company.

The product range of PROC has strong synergies with the existing product range of LEEL in heat exchangers line of business. The said acquisition of Heat Exchanger business of PROC would add significant value by integrating and consolidating the heat exchangers business of LEEL globally thereby adding more product range to its existing and new customers. The shareholders will benefit not only from unlocking of value of the Heat Exchangers businesses embedded within Lloyd Group but also from the future value creation of Lloyd Electric & Engineering Ltd.

The Company has recently obtained in-principle approval to the said scheme of arrangement from the stock exchanges where it is listed under clause 24(f) of the listing agreement. The scheme of arrangement will be subject to necessary approvals and consents including those of Hon’ble High Court at New Delhi & Rajasthan.

STRATEGIC RESTRUCTURING- ACQUISITION OF INTANGIBLE RIGHTS, TITLE AND INTEREST IN BRAND‘LLOYD’

Based on the Strategic restructuring plan conceptualized for the ‘Lloyd Group of Companies’, a diversified conglomerate on the advisory of IDFC Limited, your Company acquired through assignment, the intangible rights, title and interest in ‘Lloyd’ blue logo and wide distribution network of Consumer Products Division from its associate company, M/s. Fedders Lloyd Corporation Limited for a total consideration of Rs. 138.93 Million, arrived by Ernst & Young Ltd. This brand acquisition marks the entry of your Company into the rapidly growing Consumer Durable Industry.

The present product portfolio of Consumer Product Division includes:

- Residential and Light Commercial Air-conditioning (Window type, Hi-Wall Splits, Cassettes , Tower AC) ranging from 0.8 tonne upto 4 tonne Capacity.

- In the Flat Panel display category we have screen sizes from 22 inch to 55 inch including state of the art features like Full HD, LED & 3D TV technology.

- In Chest freezers the range starts from 128 ltr and goes upto 548ltr. capacity with Hard top/Glass Top/Curved top variants in single door and double door design with the highest insulation standards in the industry.

- There are also a host of unique lifestyle products like garment steamers, hot and cold aircoolers ,100% clothes dryers which create a distinctive positioning for brand LLOYD.

Lloyd has been innovative in addressing the wide gap in India for delivering after sales service and fulfilling its success Mantra of Service Chaihyetoh Lloyd Laiye"

Lloyd has established multi language inhouse call centres at five locations across India ,Unique CRM software which is a web based tool that help’s track and deliver the highest satisfaction to customer ‘s with complete transparency, ON demand free service and the facility to register and track complaints online on the brand website: www.mylloyd.com.

This strategic move has poised ‘Lloyd’ for a long term play in consumer products with sustainable and competitive advantages such as cost control with vertical integration (heat exchangers & Residential Airconditioner manufacturing at multiple tax free locations)

OVERSEAS EXPANSION

With a view to expand its operations in Prague, Czech Republic, Janka Engineering s.r.o., wholly owned subsidiary of the Company executed a purchase agreement with Lindabs.r.o.for the purchase of Industrial Shed spread over an area of approx. 7092 sqmalongwith their parts and appurtenances including heating systems, compressors and other allied equipments located in the Cadastral Territory of Radotin, Prague. The total consideration for the assets purchased from Lindab s.ro., was Euro 0.8 Million and the said transaction was completed in November 2011.

SUBSIDIARY COMPANIES

Pursuant to the Accounting Standard AS-21 issued by ICAI, Consolidated Financial Statements presented by the Company includes the financial information of Subsidiary Companies. The Central Government vide Notification no.2/2011 dated 8th February, 2011 granted general exemption to Companies from dispensing with the requirement of attaching the accounts of the subsidiary companies, subject to certain conditions. As the Company has complied with all the conditions, the annual accounts and other documents of the subsidiary Companies are not attached with the Balance Sheet of the Company. The Annual Accounts of the subsidiary Companies are open for inspection by any member/investor and also available on the website of the Company- www.lloydengg.com. The Company will make the documents/details available, upon request by any member of the Company or its subsidiaries interested in obtaining the same.

Despite continuing stagnation of the European economy, the overseas subsidiary, Lloyd Coils Europe s.r.o. (LCE) , based at Czech Republic, engaged in the manufacture of coils and finned pack Heat Exchangers, with manufacturing facility at Prague, Czech Republic was able to deliver double digit growth. The Subsidiary’s revenue reached to record high of Euro 35.10 Million, registering an increase of 27% from the previous year. The EBITDA grew by almost double to Euro 2.38 Million, the best in the history of the plant. During the year under review, LCE has strengthen its partnership with top OEM’s like Carrier , GEA, Bosch and has undertaken development of All-aluminum coils

During the year under review, the Company extended shareholders loan of Euro 2.6 Million to Lloyd Coils Europe s.r.o.

Janka Engineering s.r.o (Janka), overseas subsidiary is engaged in the manufacture of air handling units, industrial fans and is having state of art manufacturing facility in Prague, Czech Republic. Janka is supplier of cooling units to nuclear power projects in Slovakia. Due to the poor situation of the domestic construction industry, market for the main product line of air handling units, the year was full of challenges with downsizing of new construction projects and increasing competitiveness on the market, which had negative impact to the price level pushing thus the margins of manufacturers down. For financial year 2011-12, Janka reported revenue of Euro 12.3 Million, thereby reporting a marginal increase of 10% over the previous year. However, due to adverse market conditions in Europe the subsidiary reported EBITDA of – 0.84 Million.

During the year under review, the Company extended shareholders loan of Euro 800,000 to Janka Engineering s.r.o. , being the consideration for the purchase of Industrial Shed from Lindab s.r.o.. The loan was subsequently converted into registered capital amounting to CZK 20,633,000 and thereupon the registered capital stands increased from CZK 44,300,000 to CZK 64,933,000 effective 14th December, 2011.

GLOBAL DEPOSITORY RECEIPTS (GDRs)

396000 Global Depository Receipts underlying 792000 equity shares are outstanding for conversion as on March 31, 2012. The GDRs are listed and traded at London Stock Exchange. The Bank of New York acts as the Depository and ICICI Bank as the domestic custodian in respect of GDRs issued.

FIXED DEPOSITS

During the year under review, your Company has not accepted any deposits from public as per section 58A of the Companies Act, 1956 and Rules made there under.

LISTING ARRANGEMENT

The equity shares of the company are listed at Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE)

The GDR’S are listed on London Stock Exchange.

The Secured Redeemable Non- Convertible Debentures (NCD) of Rs. 50 crores issued by the Company in two tranches is also listed at Bombay Stock Exchange Ltd., (BSE).

Annual Listing fees to above Exchanges for the Financial Year 2012-13, as applicable have been paid before the due date.

CORPORATE GOVERNANCE

Your Directors supports the concept that good governance practices stem from the culture and mindset of the organization. Lloyd not only adheres to the prescribed corporate practices as per Clause 49 of the Listing Agreement executed with the Stock Exchanges but is constantly striving to adopt emerging best practices worldwide.

A detailed report on Corporate Governance duly certified by the auditors with respect to compliance with the provisions of Clause 49 of the Listing Agreement forms a part of this Annual Report.

DIRECTORS

Mr. A. K. Roy was re-appointed as a Whole Time Director of the Company in the meeting of the committee of Board of Directors held on April 26, 2012 for a further period of 2 years w.e.f. April 28, 2012.

Mr. Mahesh Sreenivasan ceases to act as a Nominee Director on the Board of the Company w.e.f. 5th December, 2011 on the prepayment of the entire outstanding term loan availed from IFCI Ltd. The Directors place on record their sincere appreciation of the valuable services rendered and advice given by Mr. Sreenivasan during his tenure on the board of the Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. MukatBehari Sharma and Mr. KrishanLallretire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Brief profile of these Directors is given in the notice of the ensuing AGM.

Mr. Ramesh Kumar Vasudeva and Mr. Bharat Raj Punj were appointed as an additional director by the Board of Directors of the Company 8th August 2012. In accordance with the provisions of the Companies Act, 1956, they hold office upto the date of the forthcoming Annual General Meeting and notice under section 257 of the Act has been received from the members proposing their appointment as directors of the Company. The Resolution seeking approval of the members for appointment of Mr. Ramesh Kumar Vasudeva and Mr. Bharat Raj Punj as Directors of the Company has been incorporated in the Notice of the forthcoming Annual General Meeting.

AUDITORS & AUDITORS’ REPORT

M/s Suresh C. Mathur& Co., Chartered Accountants, retires as statutory Auditors at the forthcoming Annual general Meeting and has given their consent for re-appointment. As required under the provisions of Section 224 of the

Companies Act, 1956, the Company has obtained a certificate from M/s Suresh C. Mathur& Co., Chartered Accountants, to the effect that their appointment, if made, would be in conformity with the limits specified in the said section. The Board recommends their re-appointment as Statutory Auditors for the Financial Year 2012-13.

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

CORPORATE SOCIAL RESPONSIBILITY

We at Lloyd believe passionately that good corporate citizenship and good business performance go hand in hand and nurture each other through good times and bad. We endeavor at improving the quality of life of the communities we serve. Company has continuously encouraged its employees to volunteer for Corporate Social Responsibility (CSR) programmes as their responsibility towards society.

Detailed information on the initiatives of the Company towards CSR activities is provided in the Corporate Social Responsibility section of the Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

In accordance with the requirements 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 and Development activities undertaken by the Company are annexed hereto (Annexure A) and form part of this report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 217(2A) of the Act read with the Companies (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 provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors’ Report is being sent to all 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.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Audited Accounts for the financial year ended March 31, 2012 are in conformity with the requirements of the Companies Act, 1956. Pursuant to Section 217(2AA) of the Companies Act, 1956, your directors hereby confirm that:

1. In preparation of the annual accounts for the year ended March 31, 2012, the applicable accounting standards have been followed;

2. The accounting policies are consistently applied and reasonable, prudent judgment and estimates are made 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 profits of the Company for that period;

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company, and for providing and detecting frauds and other irregularities;

4. The Directors have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. Your Directors also take this opportunity to thank the customers, shareholders, business associates, banks, financial institutions, various statutory authorities and Central and State Governments for their continued assistance, co- operation and encouragement they have extended to the Company.

For and on behalf of the Board of Directors

Sd/- Date : August 8, 2012 Brij Raj Punj Place: New Delhi Chairman & Managing Director


Mar 31, 2011

Dear Members,

The Directors are pleased to present the 24th Annual Report along with the Audited Accounts for the financial year ended March 31,2011

FINANCIAL PERFORMANCE

Rs.in Million

PARTICULARS STANDALONE CONSOLIDATED for Year ended for Year ended

March31, 2011 March31, 2010 March31, 2011 March31, 2010

Total Income 7836.36 6795.28 10158.39 8190.56

Operating profit (EBIDTA) 822.77 731.19 915.43 830.78

Interests Finance Charges 205.00 158.36 231.66 184.38

Depreciation 131.21 120.05 211.32 197.36

Profit before Tax 486.56 452.78 472.45 449.04

Provision forTaxation 126.00 109.00 96.75 110.97

Profit afterTax 360.56 343.78 375.70 338.07

Add:Balance brought forward 433.52 173.90 258.13 4.20

Total available for appropriation 794.08 517.68 633.83 342.27

Less:General Reserve 45.00 48.00 45.00 48.00

Debenture Redemption Reserve 25.00 - 25.00 -

Proposed Dividend 46.50 31.00 46.50 31.00

Corporate Dividend Tax 7.54 5.15 7.54 5.15

Balance carried forward 670.04 433.53 509.79 258.12

MILESTONE ACHIEVED:

The business environment during the year under review was full of uncertainty both in domestic as well as in international markets. In India,the major concerns were high inflation and increase in commodity prices. Despite of this challenging scenario, at the consolidation level, the Group achieved another milestone in its history with total revenue reaching Rs. 10.15 Billion, thereby crossing Rs. 10 Billion mark.

DIVIDEND

Based on the Company's performance,, your Directors are pleased to recommend for the approval of the shareholders, a dividend of Rs. 1.5 per equity share (i.e.15%) of the face value of Rs. 10/- each as against Re. 1 per equity share (10%) paid during last financial year.

The dividend distribution would result in the cash outgo of Rs. 54.04 Million (including dividend distribution tax of Rs. 7.54 Million)

PERFORMANCE HIGHLIGHTS

On the Standalone basis, during the year under review, the total income of the Company stood at Rs. 7836.36 Million as against Rs. 6795.28 Million, up by 15.32%.The Profit before Interest and Depreciation recorded for the year was Rs. 822.77 Million as against Rs.731.19 Million in the preceding year, recording an increase of 12.52%.The Profit afterTaxgrew by a modest 4.88% to Rs.360.56 Million as against Rs.343.78 Million in the preceding year.

On Consolidation basis,theTotal income of the Group stood at Rs.10158.39 Million as against Rs.8190.56 Million,up by 24%.The Profit after tax was Rs.375.70 Million asagainst Rs.338.07Million,recording a growth of 11.11%.

Your Company is the only one among its peer group, to have multiple geographical diverse manufacturing locations which enables it to compete successfully on a regional basis.

During the year under review your Company continued to strengthen its brand equity through innovation, quality products and appropriate business promotion steps. During the year under review, the Company has set-up state of art manufacturing facility at Ranipet,Tamil Nadu and at Haridwar, Uttarakhand. This is in addition to the facility set-up at Pantnagar, Uttarakhand last year.The new facility at Ranipet, has been strategically located to cater to the demand of the Southern India and for export market.The said facility which has commenced commercial production in February, 2011, is engaged in the manufacture of room air-conditioners, Window as well as Spilt. The another plant at Haridwar, Uttarakhand is being set-up for catering to the demand of the packaged Airconditioning units RMPU for Railway applications, Metro and Commercial Refrigeration units like Air-chillers, air cooled condenser, cooling tower and heat exchanger coils.The plant at Haridwar, would commence commercial production in the current year.

TECHNOLOGY & PRODUCT DEVELOPMENT

Lloyd has always been pioneer in bringing new technology in the Indian market. In an innovative stride,the Company had set- up a state of art manufacturing units for its new ground breaking product, the environment -friendly Micro Channel Heat Exchangers used in Room Air-conditioning segment. Lloyd is pioneer in bringing Micro ChannelTechnology in Indian market.

SUBSIDIARY COMPANIES

Pursuant to Accounting Standard AS-21 issued by ICAI,Consolidated Financial Statements presented by the Company includes the financial information of subsidiary companies.The Central Government vide Notification no. 2/2011 dated 8th February, 2011 granted general exemption to Companies from dispensing with the requirement of attaching the accounts of the subsidiary companies, subject to certain conditions. As the Company has complied with all the conditions, the annual accounts and other documents of the subsidiary companies are not attached with the Balance Sheet of the Company. The Annual Accounts of the subsidiary companies are open for inspection by any member/investor and also available on the website of the Company-www.lloydengg.com.The Company will make the documents/details available, upon request by any member of the Company or its subsidiaries interested in obtaining the same.

The performance of the subsidiary companies are given below:

a) Lloyd Coils Europe s.r.o. (LCE) is engaged in the manufacture of coils and has its manufacturing facility in Prague, Czech Republic .The Operations of LCE during the last fiscal year have been strongly influenced by the market turnaround observed in Europe after years of recession.Total sales for the company increased by 50% from previous year and reached Euro 27.5 Million.The market demand boosted by more than 20% in the HVAC&R industry in Europe. Exceptional increase came from Russia and decent recovery has been experienced in large West-European countries - Germany, France and U.K. Among the segments, large growth came from commercial air-conditioning, especially on roof-tops which had become more popularin Europe.

During the year under review,the company made an additional investment of Euro 1.2 Million (Rs. 71.65 Million) towards capital contribution of Lloyd Coils Europe s.r.o.and extended shareholders loan of Euro 1.5 Million (Rs.94.44 Million).

b) Janka Engineering s.r.o.(Janka): In 2009, the Company acquired 'Janka', a 139 year old brand in Czech Republic.The year 2010-11 was the first full year for Janka Engieerings.r.o., a wholly owned subsidiary of the Company under the new ownership. Janka is engaged in the manufacture of air handling units, industrial fans and is having state-of-art manufacturing facility in Prague,Czech republic .The year under review was full of uncertainty as the subsidiary had to face many challenges due to continuing unfavorable conditions in the Czech and Slovak construction industry, which effected the performance of Janka, particularly the intake of new orders.The subsidiary reported sales of Euro 11.2 Million during the year under review.The profitability of the subsidiary was negatively impacted by bad debts for one of the largest customers that had to be written off due to the customers bankruptcy and unhealthy markets conditions.However, by the end of the fiscal year, the Company developed new products like Tram Ac units for Prague tramways and is expected to show improvements.

Shareholders loan of Euro 0.15 Million (Rs. 8.92 Million) was also extended to its wholly owned subsidiary Janka Engineering s.r.o.duringtheyear under review.

c) Lloyd Electric FZE, had not commenced operations since the date of its establishment due to the non-feasibility of the warehouse location,as the target customer base were centered in &around Dubai. In view there of the Company during the year under review applied for voluntary de-registration and cancellation of license of Lloyd Electric FZE with Ras Al Khaimah, Free Trade Zone Authority.The RAK Authority de-registred Lloyd Electric FZE effective 23rd May,2011,pursuant to which Lloyd Electric FZE ceased to be the subsidiary of the Company.

NON CONVERTIBLE DEBENTURES (NCD)

In March 2011, your Company has raised Rs. 50 crores through the issue of 500 no. Secured Redeemable Non-Convertible Debentures of the face value of Rs. 10,00,000/- each in two tranches aggregating to Rs.50 crores on private placement basis for augmenting long term resources of the Company for regular capex and long term working capital requirement of the Company.

The said NCD's has been listed on the Bombay Stock Exchange (BSE) in the list of securities of F Group-Debt Instrument w.e.f. 15thApril'2011.

The details of the issue are stated hereunder:

Date of Issue Number of Face Value Amount raised Interest Rate Debentures (Rs. in crores) (Payable Quarterly)

14th March, 2011 400 10,00,000/- 40 crores 11.25%

29th March, 2011 100 10,00,000/- 10 crores 11.25%

These NCD's will be redeemed at par, in six equal half yearly installments at the end of 30th month, 36th month, 42nd month, 48th month,54th month and 60th month from the date of allotment.

GLOBAL DEPOSITORY RECEIPTS (GDRs)

396000 Global Depository Receipts underlying 792000 equity shares are outstanding for conversion as on March 31, 2011. The GDRs are listed on London Stock Exchange. The Bank of New York acts as the Depository and ICICI Bank as the domestic custodian in respect of GDRs issued.

FIXED DEPOSITS

During the year under review, your Company has not accepted any deposits from public as per section 58A of the Companies Act, 1956 and Rules made there under.

LISTING ARRANGEMENT

The equity shares of the Company are listed at Bombay Stock Exchange of India Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE).

The GDR’s are listed on London Stock exchange.

The Secured Redeemable Non-Convertible Debentures (NCD) of Rs. 50 crores issued by the Company in two tranches is also listed at Bombay Stock Exchange Ltd., (BSE).

Annual Listing fees to above Exchanges for FY 2011-12, as applicable have been paid before the due date.

CORPORATE GOVERNANCE

Your Directors reaffirms their continued commitment to good Corporate Governance practices. Your Company has complied with the mandatory provisions of Corporate Governance as prescribed in the revised Clause 49 of the Listing Agreement with the Stock Exchanges.

The compliance report is provided in the Corporate Governance section of the Annual Report. The auditors’ certificate on compliance with the provisions of Clause 49 of the Listing Agreement is annexed to this Report.

AUDITORS & AUDITORS’ REPORT

M/s Suresh C. Mathur& Co., Chartered Accountants,retire as Auditors at the forthcoming Annual General Meeting and have given their consent for re-appointment. As required under the provisions of section 224 of the Companies Act, 1956, the Company has obtained a written certificate from M/s. Suresh C. Mathur& Co., Chartered Accountants, to the effect that their appointment, if made, would be in conformity with the limits specified in the said section. The Board recommends their re- appointment as Auditors for the Financial Year 2011-12.

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

CORPORATE SOCIAL RESPONSIBILITY

At Lloyd, Corporate Social Responsibility (CSR) encompasses much more than social outreach programmes and is an integral part of the way the Company conducts its business. Detailed information on the initiatives of the Company towards CSR activities is provided in the Corporate Social Responsibility section of the annual report.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. A. K. Roy and Dr. Geeta Ajit Tekchand retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment. Brief profile of these Directors is given in the notice of the ensuing AGM.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

In accordance with the requirements 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, Research & Development and Foreign Exchange Earnings and Outgo are annexed hereto (Annexure A) and form part of this report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 217 (2A) of the Act read with the Companies (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 provisions of Section 219 (1)(b) (iv) of the Companies Act, 1956, the Directors’ Report is being sent to all 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.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Audited Accounts for the year under review are in conformity with the requirements of the Companies Act, 1956 and the Accounting Standards. Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors further confirm that:

1) In preparation of the Annual Accounts for the year ended March 31, 2011, the applicable accounting standards have been followed;

2) The accounting policies are consistently applied and reasonable, prudent judgment and estimates are made 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 profits of the Company for that period.

3) The Directors have taken proper and sufficient care of the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for providing and detecting fraud and other irregularities.

4) The Directors have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENTS

Your Directors wish to take this opportunity to express their deep sense of gratitude to the Company’s bankers, financial institutions, stakeholders, business associates, Central and State Governments for the assistance, co-operation and encouragement they have extended to the Company and also to the employees for their continuing support and unstinting efforts in ensuring all round operational performance.

For and on behalf of the Board of Directors

Date: August 11, 2011 Brij Raj Punj

Place: New Delhi Chairman & Managing Director


Mar 31, 2010

The Directors have pleasure in presenting the 23rd Annual Report along with the Audited Accounts for the financial year ended March 31, 2010

FINANCIAL PERFORMANCE

Rs/Million

Current FY Previous FY

31.03.2010 31.03.2009

Total Income 6795.28 5879.02

Operating Profit (EBIDTA) 731.19 500.94

Interest & Finance Charges 158.36 144.74

Depreciation 120.05 108.50

Profit before tax 452.78 247.70

Provision for taxation 109.00 43.98

Fringe Benefit Tax NIL 1.28

Profit after taxation 343.78 203.72

Add: Balance brought forward 173.90 5.18

Total available for appropriation 517.68 208.90

Less: General Reserve 48.00 35.00

Proposed Dividend 31.00 NIL

Corporate Dividend Tax 5.15 NIL

Balance carried forward 433.53 173.90

DIVIDEND

Your Directors are pleased to recommend payment of a dividend of Re. 1/- per equity share of Rs. 10/- each for FY 2009-10 for your approval. (Previous year NIL). The dividend if approved at the ensuing Annual General Meeting will absorb Rs. 36.15 Million including Corporate Dividend Tax.

OPERATING RESULTS

The after effects of the Global slowdown of 2008, spilled over into the first half of the financial year 2009-10.

Against this back drop, the total income of the Company stood at Rs. 6795.28 Million as compared to Rs. 5879.02 Million last year, thereby registering a growth of 15.58%.

Operating Profit, before interest tax and depreciation (EBIDTA) of Rs. 731.19 Million and Profit after tax of Rs. 343.78 Million for the financial year under review as against Rs. 500.94 Million and Rs. 203.72 Million respectively for the previous financial year, improved by 46% and 68% respectively.

The growth of the Company was due to both external factors as well as efforts of the Management. On the external front, as the general outlook improved, the consumer resumed the spending, thereby resulting in the increased demand for the Companys products.

ASSETS ACQUISTION OF JANKA RADOTIN, CZECH REPUBLIC

On 23rd November 2009, your Company completed its second overseas acquisition of all corporeal and non corporeal assets, alongwith trade mark "JANKA" of Janka Radotin a.s., having a track record of 137 years and a leading Czech based manufacturer of Air Handling Units, blowers, industrial coolers, heating and cooling coils, a major component of HVAC system, with manufacturing facility spread over an area of 2,00,000 sq. ft. thus another step towards realizing its goal of becoming a "global player". The acquisition was done through a special purpose vehicle, which was renamed as Janka Engineering s.r.o., 100% subsidiary of the Company.

The said acquisition sets forth a major step forward in the Companys Global strategy leading to significant business synergies, arising from strong brand name of “JANKA” well positioned in Czech market, wide spread client portfolio, technology absorption and export potential to Central and Eastern Europe.

EXPANSION AND FUTURE PROSPECTS

Your Company considering the growth in AC sector and to economize on the product cost had set-up a fully integrated manufacturing facility with cutting edge technology in Pantnagar, Uttarakhand with backward integration of major components required for making the air conditioners. This facility has been created to meet the challenge of future by producing the air conditioners and its components under one roof.

A fully integrated condenser manufacturing facility with parallel flow technology is being installed in Pantnagar facility which will facilitate your Company to manufacture air conditioners with higher output capacity and lower power consumption.

Your Company is further expanding into transport air conditioning like Bus Air conditioning, Metro Rail Air conditioning and has developed new models for bus air conditioners and for regional metros.

SUBSIDIARY COMPANY

On 12th October 2009, your Company acquired 100% ownership interest in Janka Engineering s.r.o. Czech Republic (a special purpose vehicle) for taking over all corporeal and non corporeal property, trademarks and certificates of Janka Radotin a.s., a Czech based manufacturer of Air Handling units. Janka Engineering s.r.o. effectively became successor of Janka Radotin a.s. and took over the entire production portfolio. The acquisition was funded through internal accruals. Your Company contributed Euro 7870 towards 100% ownership interest and extended shareholders loan of Euro 4.5 Million to its special purpose vehicle , Janka Engineering s.r.o., for acquiring all assets (no liabilities) of Janka Radotin a.s.

During the year under review, your Company has converted the shareholders loan granted to its subsidiaries- Lloyd Coils Europe s.r.o. and Janka Engineeirng s.r.o., and outstanding alongwith interest as on February 2010 into "Capital funds".

Pursuant to the accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company includes the financial information of all subsidiary companies, namely Lloyd Coils Europe s.r.o., Lloyd Electric FZE and the newly acquired Janka Engineering s.r.o.

As required by Section 212 of the Companies Act, 1956 the reports and audited accounts of the Subsidiary Companies alongwith the statement pursuant to Section 212 of the Companies Act, 1956 form part of the Annual Report. The detailed copy of Annual Report of Subsidiary Companies will be made available to the shareholders on request and will also be kept for inspection by any shareholder at the registered/corporate office of your company.

GLOBAL DEPOSITORY RECEIPTS (GDRs)

396000 Global Depository Receipts underlying 792000 equity shares are outstanding for conversion as on March 31, 2010. The GDRs are listed and traded at London Stock Exchange. The Bank of New York acts as the Depository and ICICI Bank as the domestic custodian in respect of GDRs issued.

FIXED DEPOSITS

During the year under review, your Company has not accepted any deposits from public as per section 58A of the Companies Act, 1956 and Rules made there under.

CORPORATE GOVERNANCE

Your Board of Directors support the concept of Corporate Governance having regard to a belief that the Company’s business strategy and plans should be consistent with the welfare of all its stakeholders. Good Corporate Governance practices enable a company to attract financial and Human Capital. In turn these resources are leveraged to maximize long term shareholders value, while preserving the interests of multiple stakeholders, including society at large.

A detailed report on Corporate Governance, duly certified by the auditors, forms a part of the Annual Report.

DIRECTORS

Dr. Geeta Ajit Tekchand was appointed as an Additional Director on the Board of the Company w.e.f. 28th January, 2010. Accordingly, she hold office as additional director upto the date of the ensuing Annual General Meeting. A notice has been received under Section 257 of the Companies Act, 1956 together with a deposit of Rs. 500/- from a member of the Company signifying his intention to propose the candidature of Dr. Geeta Ajit Teckchand as Director of the Company at the ensuing Annual General Meeting.

Mr. Mahesh Sreenivasan was nominated as a director by IFCI on the Board of the Company in place of Ms. Rashmi Sachdev w.e.f. 30th October, 2009

Mr. Mukat Behari Sharma, Chief Financial Officer of the Company was appointed as Additional Director and thereby Whole Time Director of the Company w.e.f. on 28th January, 2010.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. S.K. Sharma and Mr. K. Lall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment. Brief profile of these Directors is given in the notice of the ensuing AGM.

INDUSTRIAL RELATIONS

Your Company has always maintained healthy, cordial and harmonious industrial relations at all levels. Despite severe competition, the enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors would like to inform the members that the Audited Accounts for the financial year ended March 31, 2010 are in full conformity with the requirements of the Companies Act, 1956. Pursuant to Section 217(2AA) of the Companies Act, 1956, your directors hereby confirm:

1. that in preparation of the annual accounts for the year ended March 31, 2010, the applicable accounting standards have been followed and that there are no material departures;

2. that, the directors have, in selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgments and estimates that are reasonable and prudent so as to give a

true and fair view of the affairs of the Company at the end of the financial year, and of the profits of the Company for that period;

3. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company, and for providing and detecting frauds and other irregularities.

4. that they have prepared the annual accounts on a going concern basis.

AUDITORS & AUDITORS REPORT

The Statutory Auditors M/s Suresh C. Mathur & Co., Chartered Accountants, New Delhi, who retire at the conclusion of the ensuing Annual General Meeting, being eligible offer themselves for re-appointment. Certificate from the Auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. Your Directors recommend their reappointment as Auditors for the Financial Year 2010-2011.

The notes to the accounts, referred to in the Auditors Report by the retiring auditor are self-explanatory.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Details of energy conservation, Technology Absorption, Foreign Exchange Earnings and Outgo and research and development activities undertaken by the Company along with the information in accordance with the provisions 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 are given in Annexure A forming part of this report.

PARTICULARS OF EMPLOYEES

Statement pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars of Employees) Rules, 1975 are set out in the Annexure B to this Report and forms part of the Report.

LISTING OF EQUITY SHARES/ GDR

The equity shares of your Company are listed at Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). The Annual Listing Fees for the 2010-11 have been paid to the above stock exchanges. The GDRs are listed & traded on the London Stock Exchange.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the support and assistance received from the customers, investors, dealers, suppliers, financial institution and banks, regulatory and governmental authorities.

The Board further wishes to record their sincere appreciation for significant contribution made by every member of the Lloyd family through their dedication, hard work and commitment towards the success and growth of the Company.

For and on behalf of the Board of Directors

Date: August 31, 2010 Brij Raj Punj

Place: New Delhi Chairman & Managing Director

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