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Notes to Accounts of Lloyd Electric and Engineering Ltd.

Mar 31, 2015

1. CORPORATE INFORMATION

Lloyd Electric & Engineering Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on National Stock Exchange of India Limited (NSE) & Bombay Stock Exchange Limited (BSE) in India. The company is the largest manufacturer of heat exchangers coils in India. It manufactures air conditioners for various brands as OEM / ODM including its own brand of LLOYD. It is also engaged in the consumer durable business under " Lloyd" brand which includes product portfolio like Air Conditioner, LED TV, Washing Machines, Chest Freezers and other small home appliances. The company caters to both domestic and international markets.

2. BASIS OF PREPARATION

The Financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards the relevant provision of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for land acquired before 1st April, 1993 which are carried at revalued amounts.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

(b) Terms/rights attached to equity shares

The company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(d) Money Received Against Share Warrants

Money received against Share Warrants represents amounts received towards warrants which entitles the warrant holders, the option to apply for and be alloted equivalent number of equity shares of the face value of Rs. 10/- Each.

During the Current Financial Year, the Company has issued to its Promoter/Promoters Group 60,00,000 Warrants 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. The holder of the warrants would need to exercise the option to subscribe to equity shares before the expirty of 18 months from the date of allotment made on 13th March, 2015 upon payment of the balance 75% of the consideration of warrants.

29. Contingent liability not provided for:

Particulars Current Year Previous Year (` in Crore) (`in Crore)

2014-15 2013-14

A. Claims against the Company / disputed liabilities not acknowledged as debts*

a) Income Tax matters - 1.11

b) Excise Duty matters 21.75 21.75

c) HP State Electricity Board 10.55 10.55

B. Guarantees

i) Bank Guarantees 5.95 5.94

ii) Stand by Line of Credit of Euro 3.785 million from IndusInd Bank 19.51 31.17 Limited given by the Company for Euro 4.00 million Term Loan facility availed by Lloyd Coils Europe s.r.o. a wholly owned subsidiary from SBI Paris (Euro 2.89 million as at March 31, 2015.)

iii) Stand by Line of Credit of euro 2 Million from ING Vysya Bank NIL 16.47 given by the company for working capital facility availed by Janka Engineering s.r.o. a wholly owned subsidiary from ING Czech Republic. (Euro 2.00 Million as at March 31, 2014)

(iv) Stand by Line of Credit of Euro 1.25 Million from Standard 8.44 10.25 Chartered Bank given by the company for Euro 1 million working capital facility availed by Janka Engineering s.r.o. a wholly owned subsidiary from Komercni Bank Czech Republic.(Euro 1.25 Million as at March 31, 2014)

(v) Corporate Guarantee of Euro 4.3 Million issued by the Company NIL 35.26 in favour of ING Bank, Prague, Czech Republic to secure the working capital facility extended to Lloyd Coils Europe s.r.o.

(vi) Corporate Guarantee of Euro 3 Million issued by the Company in 20.25 NIL favour of GE Money Bank, a.s. for credit facility availed by Lloyd Coils Europe s.r.o.

* the Company has received show cause notices from custom department post the balance sheet date. The total demand under show cause notices received is Rs.46.23 Crore

30. Contracts remaining to be executed NIL NIL on capital account and not provided for

31. Micro and Small Scale Business Entities:

This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. Accordingly, there were no interest due on the principal amount, not there was necessity to pay interest for delayed payment in terms of section 16 of the Micro, Small and Medium Enterprises Development Act.

3) Investment in Subsidiary Company:

During the year under review, the wholly owned subsidiary, Janka Engineering s.r.o has repaid shareholders loan of Euro 0.02 million (equivalent to INR 0.16 crores).

4. Unquoted investment in subsidiary Company:

Unquote investment in subsidiary companies is of long-term strategic value. In the opinion of the management, the current diminution in the value of these investments is temporary in nature considering the inherent value and nature of investee's business proposal and hence no provision is required.

5. Disclosure as per clause 32 of the Listing Agreement:

a) Loan given to Subsidiary and outstanding as on 31.03.2015

6. Capital work in progress:

Capital work in progress amounting to Rs. 7.69 Crores

7. Related Party Disclosures: (in which some Directors are interested)

A. Names of related parties and related Party relationships: -

i. Wholly Owned Subsidiaries

a. Lloyd Coils Europe s.r.o. Czech Republic

b. Janka Engineering s.r.o. Czech Republic

ii. List of Key management personnel as defined under Accounting Standard (AS) 18, 'Related party disclosures':

a. Mr. Brij Raj Punj Chairman and Managing Director

b. Mr. Bharat Raj Punj Executive Director

c. Mr. A. K. Roy Whole Time Director

d. Mr. Mukat B. Sharma Chief Financial Officer cum Whole Time Director

e. Mr. Nipun Singhal Whole Time Director

iii. Enterprises owned or significantly influenced by key management personnel or their relatives;

a. Fedders Lloyd Corporation Ltd

b. Fedders Lloyd Trading FZE

c. Airserco Pvt. Ltd.

d. Perfect Radiators & Oil Coolers Pvt. Ltd.

e. PSL Engineering Pvt. Ltd.

f. Regal Information Technology Pvt. Ltd.

g. Lloyd Aircon Pvt. Ltd.

h. Lloyd Credits Ltd.

i. Lloyd IT Technology Pvt. Ltd.

j. Lloyd Sales Pvt. Ltd.

k. Lloyd Manufacturing Pvt. Ltd.

l. Lloyd Infotech (India) Pvt. Ltd.

m. Lloyd Stock & Investments Pvt. Ltd.

n. Himalayan Mineral Waters Pvt. Ltd.

o. Punj Engineering Pvt. Ltd.

p. Punj Services Pvt. Ltd.

q. Pandit Kanahaya Lal Punj Pvt. Ltd.

r. PSL Wolfe JV Pvt. Ltd.

s. Pandit Kanahaya Lal Punj Trust

8. Segment Information

A. Primary Segment Reporting (By Business Segment)

The Company has following Business segments as its primary reportable segments:- a. Consumer Durables

b. OEM & Packaged Air-conditioning

c. Heat Exchangers & Components

Fixed Assets as per Geographical Locations

The Company has common fixed assets, other assets and liabilities for domestic as well as overseas market. Hence, separate figures for assets and liabilities have not been furnished.

9. During the Financial Year 2013-14 on 24th August 2013, fire broke out at the adjoining warehouse at Gate No. 3, Plot No-2, Kalkaji Industrial Area, New Delhi-110019 and soon spread burning down the Company's warehouse, resulting in loss of stocks and warehouse. However, was no casualty arising out of the fire. The Company had filed the claim of Rs. 46.44 Crores with the United India Insurance Co. Ltd. The matter is pending with Insurance Company.

Derivative Contracts entered into by the Company and Outstanding as on 31st March, 2015 i) For Hedging Currency and Interest rate related risks:

ii) For hedging Commodity related risks: the company held open commodity derivatives in the total positive fair value of USD 308780 (Previous Year NIL)

10. Previous year figures have been regrouped and rearranged wherever necessary.

11. Notes "1" to "41" form an integral part of accounts and are duly authorized.


Mar 31, 2013

1. CORPORATE INFORMATION

Lloyd Electric & Engineering Limited is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on National Stock Exchange of India Limited (NSE) & Bombay Stock Exchange Limited (BSE) in India. The Company has also issued GDR''s, which are listed on London Stock Exchange. The Company is the largest manufacturer of heat exchanger coils in India. It manufactures air conditioners for various brands as OEM / ODM including its own brand of LLOYD . It is also engaged in trading of Air-conditioner and consumer durable products like LCD / LED ,Chest freezers etc under "LLOYD" Brand. The Company caters to both domestic and international markets.

During the year, Scheme of arrangement under Section 391 to 394 of the Companies Act, 1956 was sanctioned by the Hon''ble High courts of Delhi and Rajasthan which became effective of 11th June, 2013 with appointed date as 1st April, 2011. The said scheme approved by the respective courts and has been given effect to in these financial statements. (Please refer note no. 32)

2. BASIS OF PREPARATION

The Financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for land acquired before 1st April, 1993 which are carried at revalued amounts.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

3) Contingent liability not provided for:

Particulars Current Year Previous Year (Rs. In Crores) (Rs. In Crores) 2012-13 2011-12

a) Bank Guarantees 5.80 15.78

b) Corporate Guarantee of Euro 15 million given by the Company for Euro 10.50 38.21 12 million Loan availed by Lloyd Coils Europe s.r.o. a wholly owned Subsidiary from SBI , London . Balance Outstanding as at March 31, 2013 is Euro 1.50 million (Euro 4.50 Million as at March 31, 2012)

c) (i) Stand by Line of Credit of Euro 1.00 million from ING Vysya Bank 7.00 16.98 given by the Company for Euro 2.00 million working capital facility availed by Lloyd Coils Europe s.r.o. a wholly owned subsidiary from ING Czech Republic (Euro 2 million as at March 31, 2012)

(ii) Stand by Line of Credit of Euro 1.50 Million from ING Vysya Bank 10.50 13.58 given by the Company for Euro 2 million working capital facility availed by Janka Engineering s.r.o.a wholly owned subsidiary from ING Czech Republic.(Euro 2.00 Millions as at March 31, 2012)

(iii) Stand by Line of Credit of Euro 1.50 Million from Standard 10.50 10.19 Chartered Bank given by the Company for Euro 1 million working capital facility availed by Janka Engineering s.r.o.a wholly owned subsidiary from Komercni Bank Czech Republic. (Euro 1.50 Millions as at March 31, 2012)

4) Contracts remaining to be executed NIL 2.79 On capital account and not provided for

5) Micro and Small Scale Business Entities:

This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. Accordingly, there were no interest due on the principal amount, nor there was necessity to pay interest for delayed payment in terms of section 16 of the Micro, Small and Medium Enterprises Development Act.

6) Disclosure in respect of "Acquisition of Demerged business of Perfect Radiator & Oil Coolers Private Limited (PROC)":

I. A scheme of arrangement under section 391 to 394 of the Companies Act, 1956 was filed with an appointed date of 1st April, 2011 with the Hon''ble High Courts of Delhi and Rajasthan which has been approved by the shareholders in the Court convened meeting held on 24th November 2012. The said scheme duly approved by the Hon''ble High Courts became effective on 11th June, 2013 and has been given effect to in these financial statements as the Scheme became effective with retrospective effect i.e. 1st April, 2011.

II. As per the scheme, the Company has recorded the assets and liabilities forming part of the demerged undertaking vested in it at their respective book value as appearing in the books of accounts of PROC at the close of the business immediately preceding the appointed date at Net Asset Value for Rs. 27,10,05,440/- for Total Consideration of Rs. 36,11,52,000 by issuing 43,20,000 equity shares (swap ratio of 54:100) of Rs. 10 each based on the valuation of Rs. 83.60 per share arrived by independent Valuer Ernst & Young. Further Rs. 4,32,00,000 has been transferred to Share capital Suspense Account and Rs.31,79,52,000 to Share Premium Account. As on 31st March, 2013, 43,20,000 number of equity share of Rs.10/- each are poised for allotment for consideration other than cash in favor of shareholders of PROC and the same has been shown as Share Capital Suspense Account.

III. The Difference in accounting policy with regard to depreciation on fixed assets between Perfect Radiators & Oil Coolers Private Limited (PROC) and the Company aggregating to Rs.1,22,48,519/- has been adjusted to the Share Premium Account.

7) Investment in Subsidiary Company:

During the year under review, the Company extended shareholders loan of Euro 1.5 million (equivalent to INR 1044.45 lacs) to its wholly owned subsidiary, Lloyd Coils Europe, the Company has received interest of Rs. 289.56 lacs on the loan extended by the Company . Loan of Euro 0.2 million (equivalent to INR 139.84 Lacs) to its wholly owned subsidiary, Janka Engineering s.r.o., the Company has received interest of Rs. 4.22 lacs on the loan extended by the Company .

8) Unquoted investment in subsidiary Company:

Unquote investment in subsidiary companies is of long-term strategic value. In the opinion of the management, the current diminution in the value of these investments is temporary in nature considering the inherent value and nature of investee''s business proposal and hence no provision is required.

9) Previous year figures have been regrouped and rearranged wherever necessary.


Mar 31, 2011

1) Contingent liability not provided for:

Particulars Current Year Previous Year (Rs.Inlacs) (Rs.In lacs)

a) BankGuarantees 740.70 200.14

b) Corporate Guarantees given against loan taken by related parties. Nil 5000.00

c) Corporate Guarantee of 15 million Euro given by the Company for 12million 5906.25 9600.00 Euro Loan availed by Lloyd Coils Europe s.r.o.a wholly owned subsidiary. Out standing as at March31,2011 is Euro 7.50 million.

d)

(i) Stand by Line of Credit of Euro 2.5 million given by the Company for 1575.00 - Euro 2.25 million working capital facility availed by Lloyd Coils Europe s.r.o.a wholly owned subsidiary.

(ii) Stand by Line of Credit of Euro 2.34 million given by the Company for 1474.00 - Euro 1.90 million working capital facility availedbyJanka Engineering s.r.o a wholly owned subsidiary.

(iii) LetterofComfortofEuro1.61 million hasbeen issued on behalf of 1014.30 - foreign wholly owned subsidiaries.

2) Contracts remaining to be executed Rs.282.58lacs Rs.2500.00 lacs on capital account and not provided for

3) Micro and Small Scale Business Entities:

This information as required to be disclosed under the Micro,Small and Medium Enterprises Development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. Accordingly, there were no interest due on the principal amount, not there was necessity to pay interest for delayed payment in terms of section 16 of the Micro,Small and Medium Enterprises Development Act.

4) Investment in Subsidiary Company:

During the year,the Company, Lloyd Electric & Engineering Ltd. Invested Euro 1.2 Million (equivalent to INR716.47 lacs) towards capital contribution of Lloyd Coils Europe s.r.o.

During the year under review,the Company extended shareholders loan of Euro 1.5 million (equivalent to INR 944.36 lacs) to its wholly owned subsidiary, Lloyd Coils Europe.On loan outstanding interest is INR 33.31 lacs at 31 st March 2011. The loan of EURO 0.15 million (equivalent to INR 89.25 lacs) given to Janka Engg.s.r.o.and interest is INR 6.34 Lacs as on 31st March,2011.

5) Unquoted investment in subsidiary Company:

Unquote investment in subsidiary companies is of long-term strategic value. In the opinion of the management, the current diminution in the value of these investments is temporary in nature considering the inherent value and nature of investee's business proposal and hence no provision is required.

7) Capital work in progress:

Capital workin progress amounting to Rs.2233.67 Lacs.

8) Related Party Disclosures: (in which some Directors are interested)

A. Related Companies:-

Name of Company Nature of Relationship (Associate Co/ Subsidiary Co/Directors Interested)

Airserco Pvt.Ltd. Director Interested

Fedders Lloyd Corporation Ltd Director Interested

Perfect Radiators &Oil Coolers Pvt.Ltd. Director Interested

PSL Engineering Pvt.Ltd. Director Interested

Regal InformationTechnology Pvt.Ltd. Director Interested

Fedders Lloyd Trading FZE Director Interested

Foreign Subsidiary Company:

Lloyd Coils Europe s.r.o. 100% Subsidiary

Lloyd Electric FZE 100%Subsidiary

Janka Engineering s.r.o. 100% Subsidiary

B. Key Management Personnel- Mr. Br ij Raj Punj Chairman and Managing Director Mr.A.K.Roy WholeTime Director Mr.MukutSharma Chief Financial Officer cum WholeTime Director

11) Previousyear figures have been regrouped and recast wherever necessary.

12) In the opinion of the Board, the current assets are approximately of the value as stated, if realized in the ordinary course of business. The provision for depreciation and for all known liabilities is adequate and not in excess of the amount reasonably considered necessary. Income accrued has been accounted for in the books.

13) Schedules "A" to "S" form an integral part of accounts and are duly authorized.


Mar 31, 2010

1) Contracts remaining to be executed on capital account and not provided for

2) Micro and Small Scale Business Entities:

This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. Accordingly, there were no interest due on the principal amount, not there was necessity to pay interest for delayed payment in terms of section 16 of the Micro, Small and Medium Enterprises Development Act.

3) Investment in Subsidiary Company:

During the year, the Company, through its wholly owned subsidiary Janka Engineering s.r.o. (a special purpose vehicle) acquired all assets (no liabilities) of Janka Radotin a.s.. The acquisition cost was funded from internal accruals. Lloyd Electric & Engineering Ltd. Invested Euro 4.71 Million (equivalent to INR 3317.10 lacs ) towards capital contribution of Janka Engineering s.r.o. uptill March 31, 2010. Lloyd Electric & Engineering Ltd. hold 100% ownership interest in its overseas subsidiary, Janka Engineering s.r.o.

During the year under review, the Company extended shareholders loan of Euro 1.3 million to its wholly owned subsidiary, Lloyd Coils Europe, which together with the earlier loan outstanding with interest was converted into capital of Lloyd Coils Europe s.r.o. As at 31st March 2010, the company has contributed INR 3784.62 lacs in capital of Lloyd Coils Europe s.r.o.

4) Unquoted investment in subsidiary Company:

Unquote investment in subsidiary companies is of long-term strategic value. In the opinion of the management, the current diminution in the value of these investments is temporary in nature considering the inherent value and nature of investees business proposal and hence no provision is required.

5) Disclosure as per clause 32 of the Listing Agreement:

Loan given to Subsidiary:

Name of the Company Relationship Amount Outstanding

As on 31.03.2010

(Rs. In lacs)

Lloyd Coils Europe Subsidiary Loan 2189.62

s.r.o.

Transfer to 2189.62 Nil

Equity

(Investment)

Janka Engineering s.r.o Subsidiary Loan 3311.60

Transfer to Equity 3311.60 Nil

(Investment)

Lloyd Electric FZE Subsidiary Loan & Advances 60.70

6) Capital work in progress:

Capital work in progress amounting to Rs. 1812.92 Lacs.

7) Related Party Disclosures: (in which some Directors are interested)

A. Related Companies: -

Name of Company Nature of Relationship

(Associate Co/ Subsidiary

Co/Directors Interested)

Airserco Pvt. Ltd. Director Interested

Fedders Lloyd Corporation Ltd Director Interested

Perfect Radiators & Oil Coolers Director Interested

Pvt. Ltd.

PSL Engineering Pvt. Ltd. Director Interested

Regal Information Technology Director Interested

Pvt. Ltd.

Foreign Subsidiary Company:

Lloyd Coils Europe s.r.o. 100% Subsidiary

Lloyd Electric FZE 100% Subsidiary

Janka Engineering s.r.o. 100% Subsidiary

B. Key Management Personnel-

Mr. Brij Raj Punj Chairman and Managing Director

Mr. A. K. Roy Whole Time Director

Mr. Mukat Sharma Chief Financial Officer cum Whole Time Director



8) Previous year figures have been regrouped and recast wherever necessary.

9) In the opinion of the Board, the current assets are approximately of the value as stated, if realized in the ordinary course of business. The provision for depreciation and for all known liabilities is adequate and not in excess of the amount reasonably considered necessary. Income accrued has been accounted for in the books.

10) Schedules "A" to "S" form an integral part of accounts and are duly authorized.

 
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