Notes to Accounts of Fedders Electric and Engineering Ltd.

Mar 31, 2016

Terms/rights attached to equity shares

The company has only one class of equity shares having par value of '' 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.

(b) Details of shareholders holding more than 5% shares in the Company

As per the records of the company, including its register of shareholders/members and other declaration received from the shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

Money received against Share Warrants represents the amount received towards warrants which entitles the warrant holders to convert the warrants into equal number of equity shares of the face value of '' 10/- each.

During the Period under review, the Company has issued and allotted 50,00,000 convertible warrants on preferential basis at '' 75 each convertible into equal number of equity shares to Promoter/Promoter group entities.

The Warrant holders are entitled to exercise the option of conversion upon payment of balance amount i.e. 75% of total consideration before the expiry of 18 months from the date of allotment.

Note:-

1. Foreign Currency Loan (ECB )-1 of USD 7.32 Million from ICICI BANK carries interest @ 6 mths LIBOR plus 4%. The loan is repayable in 22 quarterly installments starting from 18 months from the date of first draw-down i.e. 3^rd Oct''11.

2. Foreign Currency Loan (ECB)-2 of USD 3.3 Million from ICICI BANK carries interest @ 6 mths LIBOR plus 4 %. The loan is repayable in 22 quarterly Installment starting from 18 months from the date of first draw-down i.e. 1^st June''11.

3. Foreign Currency Loan (ECB)-3 of USD 4 Million from ICICI BANK carries interest @ 6 mths LIBOR plus 4 %. The loan is repayable in 22 quarterly Installment starting from 18 months from the date of first draw-down i.e. 29^th April''11.

4. Foreign Currency Loan (ECB) of USD 5.5 Million from Standard Chartered Bank carries interest @ LIBOR plus 2.90%. The loan is repayable in 16 equal quarterly instalments beginning from 15^th month from the date of first draw-down i.e. 3^rd Oct''11.

5. Indian ruppee loan from State Bank of India carries interest @ 12.50%. The loan is repayable in 16 quarterly installments of Rs.1.5625 crores each after moratorium of 1 year from the date of loan i.e. 28.09.2012.

The working capital loans, fund based as well as non fund based from banks are secured by way of first hypothecation charge on the stocks/book debts, both present and future and second charge on pari-passu basis on the fixed assets of the Company.

NOTE 6 : Company, as policy, obtains balance confirmation from Sundry Debtors, Sundry Creditors and other advances on monthly/quarterly/half yearly basis depending upon quantum of transactions made with the parties. Considering the same, the Company does not have all balance confirmation as at 31^st March, 2016 the effect of the same, if any which is not likely to be material will be adjusted at the time of confirmation.

NOTE 7 : Excise duty of Rs. 10.84 Crores charged on Sales.

NOTE 8 : The Company has made a provision of doubtful debts for Rs.4.95 Crores.

NOTE 9 : SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED

NOTE 10 : i n the opinion of the Board the current assets are approximately of the value stated, if realized in the ordinary course of business. The provision of all known liabilities is adequate and not in excess of the amount reasonably necessary.

NOTE 11 : DISCLOSURE UNDER MICRO, SMALL & MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME) which came into force from 2^nd October, 2006, certain disclosures are required to be made relating to MSME. On the basis of information and record available with the Company, the following disclosures are made for the amounts due to Micro, Small and Medium Enterprises:

NOTE 12 : CONTINGENT LIABILITIES

13. Bank Guarantees: Rs.335.25 Crores (Previous year Rs.261.76 Crores) includes the bank guarantees amounting to USD 54,25,915 (INR 35.99 Crores) invoked by the beneficiaries in respects of certain contracts in Ethiopia under execution, against which the Company has got permanent injunction from Ethiopian court. The matter is under arbitration proceedings on direction of Ethiopian court. During the year, the Company has made a provision for Rs.4.95 Crores in the Financial Statement.

14. Sales Tax Assessment demand for Financial Year 2011-12 of Rs.0.09 Crore was raised by the UP Sales Tax Department and the Company has filed the appeal and the tribunal has granted stay against the demand.

NOTE 15:

Current period figures are for 9 Months, hence not comparable with previous year figures of 12 Months.

The previous year figures have been regrouped or reclassified as and where found necessary.

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Jun 30, 2015

1. CORPORATE INFORMATION

Fedders Lloyd Corporation 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 and well diversified in the field of Environment Control Systems (ECS), fabrication of steel structures for Power, commercial and industrial construction projects and implementation of high power transmission lines. The Company has also been into exports of power equipments / components to various funded projects by multilateral agencies like World Bank etc. in African countries.

The Company has been generating revenues mainly from three segments:-

1. Environmental Control Systems

2. Steel structures & Engineering

3. Power Transmission & Distribution and Overhead Electrification (OHE)

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 specified under section 133 of the Companies act, 2013 read with Companies (Accounts) rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention.

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. 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.

4. Allotment of Warrants

Pursuant to approval granted by shareholders through Postal Ballot results dated 17 July 2015 and in-principal approval granted by Stock Exchanges dated 30 July 2015, the Company has allotted 50,00,000 convertible Preferential Warrants to the promoter group entities on 03 August 2015 at the rate of Rs. 75 per warrant (Warrant Price) on receiving the upfront consideration of 25% of total Warrant Price amounting to Rs. 9.375 Crores from the allottees by complying with the guidelines prescribed by the Companies Act, 2013 read with the Rules framed thereunder, the procedures prescribed by the Listing Agreement entered with the Stock Exchanges, Regulations of SEBI (ICDR) Regulations, 2009 or all other provisions for the time being in force. The warrants are convertible into equal number of equity shares by 2 February 2017 at the option of warrant holders.

5. RELATED PARTY DISCLOSURES:- (In which some directors are interested)

a) Related Companies Nature of relationship (Associated co./subsidiary co./directors interested)

Airseco Pvt. Ltd Directors Interested

Lloyd Electric & Engineering Ltd. Directors Interested

Perfect Radiators & Oil Coolers Pvt. Ltd. Directors Interested

PSL Engineering Pvt. Ltd. Directors Interested

Regal Information Technology Pvt. Ltd. Directors Interested

Lloyd Credits Ltd. Directors Interested

Lloyd Sales Pvt. Ltd. Directors Interested

Lloyd Manufacturing Pvt. Ltd. Directors Interested

Himalayan Mineral Waters Pvt. Ltd Directors Interested

6. Company as policy obtains balance confirmation from Sundry Debtors, Sundry Creditors and other advances on monthly / quarterly/ half yearly basis depending upon quantum of transactions made with the parties. Considering the same, the Company does not have all balance confirmation as at 30 June 2015 the effect of the same, if any which is not likely to be material will be adjusted at the time of confirmation.

7. Excise duty of Rs.16.12 Crores includes charged on Sales and Stock transfer.

8. In the opinion of the Board the current assets are approximately of the value stated, if realized in the ordinary course of business. The provision of all known liabilities is adequate and not in excess of the amount reasonably necessary.

9. MEDIUM SMALL SCALE BUSINESS ENTITIES

Disclosure under Micro, Small & Medium Enterprises Development Act, 2006 (MSMED)

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from October 2 2006, certain disclosures are required to be made relating to MSME. On the basis of information and record available with the Company, the following disclosures are made for the amounts due to Micro, Small and Medium Enterprises.

a) Principal amount due to any supplier as at the year end : Rs. 0.03 (in Crores)

b) Interest due on the principal amount unpaid at the year end to any supplier : Rs. 0.03 (in Crores)

10. CONTINGENT LIABILITIES

1. Bank Guarantees: Rs. 261.75 Crores* (Previous year Rs. 300.31 Crores)

*includes the bank guarantees amounting to USD 5,425,915 (INR 33.81 crore) invoked by the beneficiaries in respect of certain contracts in Ethiopia under execution, against which the Company has got permanent injunction from Ethiopian court. The matter is under arbitration proceedings on direction of Ethiopian court. The Company expects the matter to be decided in its favour and therefore has made no provision in the Accounts.

2. Sales Tax Assessment demand for Financial Year 2011-12 of Rs0.61 Crores was raised by the UP sales tax department. The Company has filed the appeal and the tribunal has granted stay against the demand.

3. Recovery suits filed by the parties in different court but not acknowledged as debts/ liabilities: Rs. 6.01 Crores.

11. The previous year figures have been regrouped or reclassified as and where found necessary.

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Jun 30, 2014

NOTE : 1

1.1 CORPORATE INFORMATION

Fedders Lloyd Corporation 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) and Bombay Stock Exchange Limited (BSE) in India and well diversified in the field of Environment Control Systems, fabrication of steel structures for Power, commercial and industrial construction projects and implementation of high power transmission lines. The Company has also been into exports of power equipments / components to various funded projects by multilateral agencies like World Bank etc. in African countries.

The Company has been generating revenues mainly from three segments

1. Environmental Control Systems

2. Steel structures & Engineering

3. Power Transmission & Distribution and Overhead Electrification (OHE)

NOTE 2 : RELATED PARTY DISCLOSURES:- (In which some directors are interested)

a) Related Companies Nature of relationship

(Associated co./subsidiary co./directors interested)

Airseco Pvt. Ltd Directors Interested

Lloyd Electric &Engg.Ltd. Directors Interested

Perfect Radiators & Oil Coolers Pvt. Ltd. Directors Interested

PSL Engineering Pvt. Ltd. Directors Interested

Regal Information Technology Pvt Ltd Directors Interested

Lloyd Credit Ltd. Directors Interested

Lloyd Sales Pvt. Ltd. Directors Interested

Lloyd Manufacturing Pvt. Ltd. Directors Interested

Himalayan Mineral Waters Pvt. Ltd Directors Interested

NOTE 3 : Company as policy obtains balance confirmation from Sundry Debtors, Sundry Creditors and other advances on monthly / quarterly/ half yearly basis depending upon quantum of transactions made with the parties. Considering the same, the Company does not have all balance confirmation as at June 30, 2014 the effect of the same, if any which is not likely to be material will be adjusted at the time of confirmation.

NOTE 4 : Excise duty of Rs.115.95 Million includes charged on Sales and Stock transfer.

NOTE 5 : In the opinion of the Board the current assets are approximately of the value stated, if realized in the ordinary course of business. The provision of all known liabilities is adequate and not in excess of the amount reasonably necessary.

NOTE 6 : The payment against the supplies from small scale industrial and ancillary undertaking are generally made in accordance with agreed terms and to the extent ascertained from available information. 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 bases 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 as per Act.

NOTE 7 : CONTINGENT LIABILITIES (Rs. in Million)

Bank Guarantees 3003.10

NOTE 8 : The previous year figures have been regrouped or reclassified as and where found necessary.

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Jun 30, 2013

1.1 CORPORATE INFORMATION

Fedders Lloyd Corporation 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 and well diversified in the field of Environment Control Systems (ECS), Fabrication of steel structures for Power, commercial and industrial construction projects and implementation of high power transmission lines. The Company has also been into export of power equipment''s / components to various funded projects by multilateral agencies like World Bank etc. in African countries.

The Company has been generating revenues mainly from three segments:- 1. Environmental Control Systems

2. Steel structures & Engineering

3. Power Transmission & Distribution and Overhead Electrification (OHE)

1.2 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 provision of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

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.

NOTE - 2

Company as policy obtains balance confirmation from Sundry Debtors, Sundry Creditors and other advances on monthly/ quarterly/ half yearly basis depending upon quantum of transactions made with the parties. Considering the same, the Company does not have all balance confirmation as at June 30, 2013 the effect of the same, if any which is not likely to be material will be adjusted at the time of confirmation.

NOTE - 3

Excise duty of Rs. 1384.89 includes charged on Sales and Stock transfer.

NOTE – 4

In the opinion of the Board the current assets are approximately of the value stated, if realized in the ordinary course of business. The provision of all known liabilities is adequate and not in excess of the amount reasonably necessary.

NOTE - 5

The payment against the supplies from small scale industrial and ancillary undertaking are generally made in accordance with agree terms and to the extent ascertained from available information. 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 as per the act.

NOTE - 6

The previous year figures have been regrouped or reclassified as and where found necessary.

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Jun 30, 2011

1 CONTINGENT LIABILITIES NOT PROVIDED FOR

Sl. No. Particulars Amount (Rs. In Lacs)

1 Bank Guarantees 26642.94

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, 2006.

3 DEFERRED REVENUE EXPENDITURE

In December 2000, the company was compelled to close its manufacturing unit situated at 2 Industrial Area, Kalkaji, New Delhi under the order of Hon'ble Supreme Court of India for closure of polluting factories in the state of Delhi under Group F. As a consequential effect of aforesaid closure, the manufacturing facilities related to production of Air-conditioners Packages Unit were kept idle which resulted into non-productive costs of Rs.1,75.03 Lacs had provided as deferred revenue expenditure.

During the year the company has written off Rs.35.01Lacs of the Deferred Revenue Expenditure.

4 INVESTMENT OF SUBSIDIARY COMPANY

The company has invested of Rs.54.45 Lacs (i.e. 5 shares @ 1,00,000/- AED each) in M/s Fedders Lloyd Trading FZE, Dubai which is subsidiary company of M/s Fedders Lloyd Corporation Limited.

5 PROJECT UNDER DEVELOPMENT

The Company has invested Rs.2460.71 Lacs for expansion plan and implementing projects at Sikandrabad (UP), Ranipet (Chennai), Vrindavan (UP) and Bharuch (Gujrat).

6 DIVIDEND

During the year, Company has proposed dividend of Rs.461.55 Lacs to shareholders.

7 SEGMENT REPORTING

As per Accounting Standard 17 on segment reporting of ICAI, the Company has reportable segments viz., Environmental Control Systems, Steel Structural & Engineering and Power Projects during the year under review. Accordingly the reporting is done segment wise.

Segment revenue, results and capital employed include the respective amount identifiable to each of the segments. Other unallocable expenditure includes expenses incurred on common services provided to the segments, which are not directly identifiable.

8 Previous years figures have been re-grouped/re-arranged as and wherever found necessary.

9 The balance of Intra –Group companies & Sister Units are subject to confirmation.

10 In the opinion of the Board the current assets are approximately of the value stated, if realized in the ordinary course of business. The provision of all known liabilities is adequate and not in excess of the amount reasonably necessary.

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Jun 30, 2010

1 CONTINGENT LIABILITIES

Sl. No. Particulars Amount (Rs. in Lacs)

1 Bank Guarantees 18,515.51

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 identifed 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 6 of the Micro, Small and Medium Enterprises Development Act, 2006.

3 RELATED PARTY DISCLOSURES: (In which some directors are interested)

Related Companies Nature of Relationship

(Associate Co. /Subsidiary Co./Directors Interested)

Airserco Pvt. Ltd. Directors Interested

Lloyd Electric & Engineering Ltd. Directors Interested

Perfect Radiators & Oil Coolers Pvt. Ltd. Directors Interested

PSL Engineering Pvt. Ltd. Directors Interested

Fedders Lloyd Trading FZE, Dubai, U.AE Subsidiary Company

Key Management Personnel

Mr. Brij Raj Punj Managing Director

Mr. Sham Sunder Dhawan Whole Time Director

4 DEFERRED REVENUE EXPENDITURE

In December 2000, the Company was compelled to close its manufacturing unit situated at 2 Industrial Area, Kalkaji, New Delhi under the order of Honble Supreme Court of India for closure of polluting factories in the state of Delhi under Group F. As a consequential effect of aforesaid closure, the manufacturing facilities related to production of Air-conditioners packages unit were kept idle which resulted into non-productive costs of Rs. ,75,03,500/- had provided as deferred revenue expenditure.

During the year, the Company has written off Rs.35,00,700/- of the Deferred Revenue Expenditure.

5 INVESTMENT OF SUBSIDIARY COMPANY

The Company has invested Rs. 54.45 lacs (5 shares @ 1,00,000/- AED each) in M/s Fedders Lloyd Trading FZE, U.A.E which is subsidiary company of M/s Fedders Lloyd Corporation Limited.

6 DIVIDEND

During the year Company has proposed dividend of Rs. 307.70 lacs to shareholders.

7 BASIC & DILUTED EARNINGS PER SHARE

Earnings per share has been computed as under

Profit after Taxation : Rs. 4,007.43 Lacs Number of Ordinary Shares : 3,07,69,700 Basic and Diluted Earnings per share : Rs. 13.02 (Face Value Rs. 10/-per share)

8 SEGMENT REPORTING

As per Accounting Standard 17 on segment reporting of ICAI, the Company has reportable segments viz., HVAC&R, Steel Structures & Engineering and Power Projects during the year under review.Accordingly the reporting is done segment wise. Segment revenue, results and capital employed include the respective amount identifiable to each of the segments. Other unallocable expenditure includes expenses incurred on common services provided to the segments, which are not directly identifiable.

9 Previous years figures have been re-grouped/re-arranged as and wherever found necessary.

10 The balance of Intra -Group companies & Sister Units are subject to confrmation.

11 In the opinion of the Board the current assets are approximately of the value stated, if realized in the ordinary course of business. The provision of all known liabilities is adequate and not in excess of the amount reasonably necessary.

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Jun 30, 2009

1. Contingent Liabilties

SI. No. Particulars Amount (Rs.)

1. Bank Gurantees 557,714,043 2. Corporate Guarantees 81,102,610

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. Related Party Disclosures: (In which some directors are interested)

Related Companies Nature of Relationship

(Associate Co. /Subsidiary CoVDirectors Interested)

Airserco Pvt. Ltd. Directors Interested

Lloyd Electric & Engineering Ltd. Directors Interested

Perfect Radiators & Oil Coolers Pvt. Ltd. Directors Interested

PSL Engineering Pvt. Ltd. Directors Interested

Fedders Lloyd Trading FZE Dubai Subsidiary Company

Key Management Personnel

Mr. Brij Raj Punj Managing Director

Mr. S.S. Dhawan Whole Time Director

Transaction with Related Companies

Transaction Amount (Rs.)

Purchase of goods5,190,0217

Sales of goods j 696,317

4. Deferred Revenue Expenditure

In December 2000, the Company was compelled to close its manufacturing unit situated at 2, Industrial Area, Kalkaji, New Delhi under the order of Honble Supreme Court of India for closure of polluting factories in the state of Delhi under Group F. As a consequential effect of aforesaid closure, the manufacturing facilities related to production of Air-conditioners Packages Unit were kept idle which resulted into non- productive costs of Rs. 1,75,03,500/- had provided as deferred revenue expenditure.

During the year, the Company has written off Rs.35,00,700/- having 1/5 of the Deferred Revenue Expenditure.

5. Investment of Subsidiary Company

The Company has invested Rs. 54,45,250/- (i.e. 5 shares @ 1,00,000/- AED each) in M/s Fedders Lloyd Trading FZE, Dubai which is subsidiary Company of M/s Fedders Lloyd Corporation Limited.

6. Dividend

During the year, the Company has proposed dividend of Rs. 30,769,700/- to shareholders.

7. Segment Reporting:

As per Accounting Standard 17 on segment reporting of ICAI, the Company has two reportable segments viz., HVACR and Steel Structural during the year under review. Accordingly the reporting is done segment wise.

Segment revenue, results and capital employed include the respective amount identifiable to each of the segments. Other unallocable expenditure includes expenses incurred on common services provided to the segments, which are not directly identifiable.

8. Additional information pursuant to the provisions of paragraphs 3,4C and 4D of part II of the Schedule VI of the Companies Act, 1956.

9. Previous years figures have been re-grouped/re-arranged as and wherever found necessary.

10. The balance of Intra -Group companies & Sister Units are subject to confirmation.

11. In the opinion of the Board, the current assets are approximately of the value stated, if realized in the ordinary course of business. The provision of all known liabilities is adequate and not in excess of the amount reasonably necessary.