The Directors are pleased to present the 56th Annual Report of your
Company together with the Audited Annual Accounts for the year ended
June 30, 2012.
Your Company''s standalone operating performance for the year ended June
30, 2012 as compared to the previous year ended June 30, 2011 is
summarized herein below:
(Rupees in Million)
Particulars Current year Previous year
Net Sales 8828.57 8458.73
Other Income 233.22 25.00
Total Revenue 9061.79 8483.73
EBITDA 1088.30 966.29
Profit before Taxes 557.00 577.49
Tax Expenses 110.35 112.43
Profit after Tax 446.65 465.06
Proposed Dividend 30.77 46.15
Corporate dividend Tax 4.99 7.49
Reserves & Surplus 2424.52 2015.16
Equity Share Capital 307.70 307.70
Earnings per Share (Rs.) 14.52 15.11
During the year ended June 30, 2012, total revenue of the Company has
been increased from Rs. 8483.73 Million during the previous year to Rs.
9061.79 Million, registering a growth of 6.81%. The EBITDA was recorded
at Rs. 1088.30 Million during the year under review; however, it was
Rs. 966.29 Million during the previous year ended June 30, 2011,
registering an increase of 12%. Due to the increased finance cost,
inflationary pressure and depreciation cost, the Profit after tax has
been declined by 3.96% from Rs. 465.06 Million during the previous year
against Rs. 446.65 Million during the year under review.
STRATEGIC FOCUS ON EXECUTING TURNKEY PROJECTS & DISTINGUISHING ITSELF
FROM RETAIL BUSINESS
Your Company has successfully established and is further strengthening
its business operations for turnkey projects in the areas of
Infrastructure, Energy Sector and Environmental Control Systems for
Industrial and Customized applications. Considering various aspects
and strategic view point to put greater focus on the business of
executing turnkey projects in the areas of Infrastructure, Energy
Sector and Environmental Control Systems for Industrial and Customized
applications and distinguishing itself from the retail business of
Consumer Durable Products, your Company has strategically assigned the
Intangible Rights, Title and Interest in the ''LLOYD'' Blue Logo and
Distribution Network pertaining to Consumer Durable Products including
other HVAC Products to M/s Lloyd Electric and Engineering Limited
w.e.f. September 08, 2011. The rights, title and interest in the said
''LLOYD'' Blue Logo in respect of all other goods/business and services
except for the assigned products have been retained by the Company.
Your Company has taken approval of shareholders by way of an Ordinary
Resolution through Postal Ballot process.
SCALING UP OF BUSINESS:
GRAND INAUGURATION OF WIND TOWER MANUFACTURING FACILITY AT BHARUCH,
GUJARAT BY HON''BLE CHIEF MINISTER OF GUJARAT, SHRI NARENDRA MODI AND
COMMENCEMENT OF OPERATIONS
Your Company has achieved a major milestone forward in the Company''s
presence in the State of Gujarat by establishing its integrated
state-of-art manufacturing facility for manufacture of Wind Turbine
Towers and Heavy Precision Fabrication and machining facility in
Bharuch District, Gujarat. The new facility was inaugurated on April
13, 2012 by the Humble Chief Minister of Gujarat, Shri Narendra Modi
in the presence of guest of honor, Humble Minister, Forest &
Environment, Gujarat, Shri Kiritsinh Rana. The initial annual
production capacity of plant to manufacture is up to 250 nos. of Wind
Turbine Towers up to 3 MW and Heavy Precision Fabrication of components
up to 80 MT weight and is one of the biggest Precision Machine Shop
equipped with floor boring (21 mtrs travel) and vertical turret lathe
(8.5 Mtrs diameter) sourced from UK and USA. The new facility is
equipped with high end CNC plate cutting and CNC plate rolling machine
(75 mm thick) imported from Germany & Italy and the facility is
designed to meet with international specifications and produce
components meeting with highest world-wide quality standards. The new
facility is a testament to Fedders Lloyd''s commitment to contribute
towards India''s Growing Energy revolution and empowered nation.
Your Company has three business segments viz., Environment Control
Systems, Steel Structure & Engineering and Power Projects. During the
year under review, the total revenue generated from Environment Control
Systems was Rs. 1286.71 Million, while during the previous year, the
revenue from Environment Control Systems was Rs. 4731.53 Million. For
Environment Control Systems business, both these years are not
comparable as Consumer Durable business was shifted to Lloyd Electric &
Engineering Limited during the year under review. Under this segment,
your company focuses on executing turnkey projects for customized
applications, where during the year, your Company has maintained its
pace of growth.
During the year, the total revenue generated from Steel Structure
&Engineering business was Rs. 4255.81 Million as compared to Rs.
1705.37Million during the previous year registering a growth of 150%.
The profit before tax generated was Rs. 308.97 Million as compared to
Rs. 167.68 Million during the previous year registering a growth of
The total Revenue generated from Power Projects was Rs. 3380.55 Million
as compared to Rs. 2021.82 Million during the previous year registering
a growth of 67.20%. The profit before tax generated was Rs. 295.92
Million as compared to Rs. 181.10 Million during the previous year
registering growth of 63.40%.
A detailed discussion on the segmental review and performance and
future outlook is provided in Management Discussion and Analysis
Having due regard to the profit of the year and on careful review of
the Company''s ways and means position, the Directors had recommended a
dividend of Re. 1/- per equity share of Rs. 10/- each (i.e., 10% on the
paid-up equity share capital of the Company) for the year ended June
30, 2012. The dividend, if approved at the ensuing Annual general
Meeting, shall absorb a sum of Rs. 30.77 Million (exclusive of dividend
distribution tax of Rs. 4.99 Million). Last year, the Shareholders in
last Annual General Meeting declared a dividend of 15% on the paid-up
equity share capital of the Company.
The dividend payout for the year under review has been formulated in
accordance with the Company''s policy to pay, sustainable dividend
linked to long term growth objectives of the Company which includes
sustainable development of the Company along with maximization of
The Company has a subsidiary namely, Fedders Lloyd Trading FZE in Ras
Al Khaimah Free Trade Zone, U.A.E.. In terms of the General Circular
No. 2/2011dated February 8, 2011, issued by Ministry of Corporate
Affairs, Government of India under Section 212(8) of the Companies Act,
1956, granting general exemption to companies from attaching financial
statements of subsidiaries, subject to fulfillment of conditions stated
in the Circular, Financial Statement of the Subsidiary is not attached
to the Balance Sheet of the Company. The Company will make available
the Annual Accounts of the subsidiary to any of the member of the
Company who may be interested in obtaining the same. The annual
accounts of the subsidiary will also be kept open for inspection at the
Registered Office of the Company.
CONSOLIDATED FINANCIAL STATEMENTS
As required by Clause 41 of the Listing Agreement with the Stock
Exchanges, Consolidated Financial Statements of the Company and its
subsidiary as prepared in accordance with Accounting Standard AS-21 on
''Consolidated Financial Statements'', as issued by the Institute of
Chartered Accountants of India, is attached herewith and the same
together with Auditors'' Report thereon forms part of the Annual Report
of the Company.
During the year under review, your Company has not invited or accepted
/ renewed any fixed deposits from public pursuant to the provisions of
Section 58A or 58AA of the Companies Act 1956 read with Companies
(Acceptance of Deposits) Rules, 1975.
The Board comprises of Five (5) Directors with two (2) Executive
Directors one of whom is Managing Director and three (3) are Non
Executive Independent Directors.
During the year, there was change in composition of the Board. Mr.
Tulsi Vansh Prakash Punj, Non-Executive Non Independent Director has
resigned with effect from May 11, 2012 due to his health reasons and
Mr. Sham Sunder Kumar, Non-Executive Independent Director ceased to be
director with effect from June 06,2012 due to his sad demise. The
Directors place on record their sincere appreciation of the valuable
services rendered by Mr. TVP Punj and Late Mr. Kumar during their long
tenure on the Board.
In terms of Articles of Association of the Company read with Section
256 of the Companies Act, 1956, AVM (retd.) Surjit Krishan Sharma, will
retire by rotation at the ensuing Annual General Meeting and being
eligible, has offered himself for re-appointment. The Board of
Directors of the Company commends his re-appointment. His brief resume
including expertise, shareholding in the Company and details of other
directorships as stipulated under Clause 49 of the Listing Agreement
with the Stock Exchanges forms part of the Notice of the ensuing Annual
The Board of Directors recommends his re-appointment for approval of
Shareholders in the ensuing Annual General Meeting.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956 and save as mentioned elsewhere in this Report, the attached
Annual Accounts and the Auditors'' Report thereon, it is hereby
a. in the preparation of the annual accounts for the year under
review, the applicable accounting standards had been followed.
b. the directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit or
loss of the Company for that year.
c. the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
d. that the directors had prepared the annual accounts on a going
AUDITORS AND AUDITORS'' REPORT
M/s Suresh C. Mathur & Co., Chartered Accountants, Statutory Auditors
of the Company, hold office until the conclusion of the ensuing Annual
General Meeting and being eligible, offer themselves for reappointment.
The Company has received letter from the said auditors to the effect
that their appointment, if made, would be within the limits prescribed
under section 224(1B) of the Companies Act, 1956. Based on the
recommendations of the Audit Committee, the Board of Directors of the
Company proposes their re-appointment for approval of Shareholders in
the ensuing Annual General Meeting.
The observations made in the Auditors'' Report are self-explanatory and
do not call for any further comments under section 217 (3) of the
Companies Act, 1956.
Enhancing Corporate Governance is on highest priority of your Company.
Your Company is committed to maintain the high standard of Corporate
Governance requirements as prescribed under clause 49 of the Listing
Agreement. A separate section on Corporate Governance together with a
certificate from the Auditors of the Company regarding full compliance
of conditions of Corporate Governance as stipulated under clause 49 of
the Listing agreement with the Stock Exchange(s) forms part of the
CORPORATE SOCIAL RESPONSIBILITY
While the Government undertakes extensive developmental initiatives
through a series of sectorial programmers, the business sector also needs
to take the responsibility of exhibiting socially responsible business
practice that ensures the distribution of wealth and well-being of the
communities in which the business operates. Your Company is already
taking part in CSR activities through its various programmers through
Pandit Kanahaya Lal Punj Trust, a philanthropic organization of LLOYD
Group to lead the CSR initiatives. The detail on CSR measures taken at
Company''s end is provided in the Corporate Social Responsibility
Section of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
As required by Clause 49 of the Listing Agreement with the Stock
Exchanges, a detailed Management Discussion and Analysis Report on
financial conditions and results of operations for the year under
review forms part of the Annual Report and is presented in a separate
section forming part of the Annual Report.
DISCLOSURE OF INFORMATION WITH REGARD TO CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information relating to conservation of energy, technology absorption,
foreign exchange earnings and outgo in terms of Section 217(1)(e) of
the Companies Act, 1956 read with Companies (Disclosure of Particulars
in the Report Board of Directors) Rules, 1988 is given as annexure to
DISCLOSURE OF PARTICULARS OF EMPLOYEES
Information as per the provisions of Section 217(2A) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars of
Employees) Rules, 1975 is set out in the Annexure to the Directors''
LISTING OF EQUITY SHARES
The Equity Shares of your Company continue to be listed on National
Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Ltd.
(BSE). The Annual Listing Fees for the year 2011-12 have been paid to
these stock exchanges.
QUALITY, HEALTH, SAFETY AND ENVIRONMENT
At Fedders Lloyd, Quality, Health, Safety and Environmental(QHSE)
responsibilities are integral to operations as a part of its objective
to improve quality, health, safety and environment in the work place.
Successfully managing Health, Safety & Environment (HSE) issues is an
essential component of our operations. Through observance and
encouragement of this policy, your Company assist in protecting the
environment and the overall well-being of all stakeholders. To drive
performance improvement, make progress and contribute to sustainable
development, your Company works in an integrated manner across the
areas of HSE. To emphasize our continuing commitment to HSE issues, we
adhere to HSE Principles. These Principles are the cornerstone of HSE
culture and address issues such as accountability, training,
communication, resources, engineering design, performance measurement,
and sustainable development.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Committed to good Corporate Governance practices, your Company fully
conforms to the standards set out by the Securities and Exchange Board
of India and other regulatory authorities and has implemented and
complied with all the regulatory stipulations. The Report on Corporate
Governance along with the Compliance Certificate in line with Clause 49
of the Listing Agreement validating our claim and the Report on
Management Discussion and Analysis are annexed and forms part of this
Your Company in compliance with the requirements of the Listing
Agreement has also formulated and implemented a Code of Conduct for all
Board members and senior management personnel of the Company, who have
affirmed their compliance thereto.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
The Company has a proper, efficient & adequate internal control system.
It ensures that all the assets are safeguarded and protected against
loss from unauthorized use or disposition and the transactions are
authorized, recorded and reported correctly.
An effective programmer of internal audit and management review
supplements the process of internal control. Properly documented
policies, guidelines and procedures are laid down for this purpose. The
internal control system has been designed so as to ensure that the
financial and other records of the Company are reliable for preparing
the financial and other statements and for maintaining accountability
of assets of the Company.
The Company has also constituted an Audit Committee comprising of 3
(Three) directors having relevant experience and expertise, who
regularly interact with the Auditors in dealing with the matters
specified within its terms of reference. The Committee mainly deals
with accounting matters, financial reporting and internal controls.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Your Company enjoyed a cordial Human Resource and Industrial
relationship for the FY 11-12. The Company lays strong emphasis on
attracting and retaining the best talent. Personal developmental
initiatives including training, both technical and managerial, are
regularly conducted to enhance human potential. The management is
committed to providing an empowered, performance oriented and
stimulating work environment to its employee to enable them realize
their full potential.
Your Directors are highly grateful for all the guidance, support and
assistance received from the Government of India, Government of various
states, Financial Institutions and Banks. Your Directors thank all
shareholders, esteemed customers, suppliers, business associates and
employees of the Fedders Lloyd for their faith, trust and confidence
reposed in the Company. Your Directors wish to place on record their
sincere appreciation for the dedicated efforts and consistent
contribution made by the employees at all levels, to ensure that the
Company continues to grow and excel.
Your Directors would need this continued support to achieve the goals
they set for your Company in the years ahead.
For and on behalf of the Board of Directors
Place: New Delhi Brij Raj Punj
Date: November 28, 2012 Chairman & Managing Director