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BSE: 517518 | NSE: LEEL | Series: NA | ISIN: INE245C01019 | SECTOR: Consumer Goods - White Goods

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Annual Report

For Year :
2016 2015 2014 2013 2012 2011 2010 2002

Chairman's Speech

Dear Shareholders

Before I take up the Company''s performance during the year 2015-16, let me frst touch upon the industry scenario and the emerging
market dynamics so that there is beter evaluaton of the performance and strategic pursuits of the Company.

In 2015, global economic actvity remained subdued. Growth in emerging market and developing economies declined for the ffh
consecutve year, while a modest recovery contnued in advanced economies. Three key transitons contnue to infuence the global
outlook- the gradual slowdown and rebalancing of economic actvity in China away from investment and manufacturing towards
consumpton and services; lower prices for energy and other commodites and a gradual tghtening in monetary policy in the United
States in the context of a resilient U.S. recovery as several other major advanced economy central banks contnue to ease monetary
policy. Amidst, Indian economy is expected to grow at 7-7.75 percent during FY 2016-17, despite the uncertaintes in the global

Despite the somewhat unstable economic conditons, your Company is optmistc about the business prospects and about its capabilites
to leverage them for the beneft of your Company. Your Company contnued its growth momentum during 2015-16, registering 25% growth
in consolidated revenue to Rs. 2715 crores. While the domestc business grew at a healthy rate of 30%, the internatonal business
declined marginally owing to general slowdown in economic conditons in Europe and uncertain business environment. The Operatng
margins was impacted due to the currency volatlity and grew marginally by 7% to Rs. 263 crores .

On the operatonal front, we have made signifcant progress during the last year. Lloyd has emerged as a prominent brand in the
Indian Consumer Durables Market with well entrenched distributon network with pan India footprint supported by an efcient afer
sales service network. The Consumer Durable Segment contributed signifcantly with revenue growth of 60% over the previous year.
This was primarily as a result of extensive marketng initatves undertaken by the Company, expansion in dealer network and
customer delight by ofering quality products with afer sales services. All this factors resulted in Lloyd brand enjoying 13%
market share in Indian Room AC market during the year under review and ranking amongst top 5 players in Indian Room
Air-Conditoning Market in India.In 2015, the Company has also launched air purifers and refrigerators under Lloyd brand in Indian
market. The Company is planning to promote its new line of product category more aggressively in the years to come.

Over the years, Lloyd has expanded its air conditoning product oferings by investng in new product development, manufacturing,
marketng, brand building and distributon reach and afer sales service. We manufacture wide range of room air-conditoners and area
premier supplier of quality products to the original equipment manufacturers (OEMs) in Domestc and Export market.

Your Company is v e rtcally integrated across HVAC value chain and provides solutons beginning from manufacturing components, air
conditoners to selling to OEM and to the end customers, resultng in beter control on cost, reduced volatlity in margins and hedge
against demand volatlity. With constant improvement in performance of our products and services, augmented with quality and
recogniton of our brand, we believe that we enjoy brand equity and reliability in the market. This has even helped us in
understanding the changing needs and demand of the customers in India.

The year was a signifcant year when the Company closed its third overseas acquisiton in the HVAC space by acquiring the Rail &
Vehicle business of Noske Kaeser group based in four contnents- Germany, New Zealand, Australia, Brazil and United States. NK R&V
has supplied and serviced the HVAC systems for the world''s leading rolling stock companies and military vehicle builders in
Germany. It has also been actvely involved in armoured vehicle air-conditoning projects in India and has also delivered state of
the art HVAC systems multple High Speed Rail (HSR) projects in Germany including the priced Maglev (Mangnetc Levitaton)
trains. We hope that NK R&V will play a crucial role in strengthening Lloyd''s engineering and designing capabilites.

With these powerful synergies that Noske Kaeser Rail & Vehicle brings to Lloyd, we will be uniquely positoned to ofer superior
quality HVAC solutons for upcoming High Speed Rail projects in India and other internatonal markets. We are combining our
group-wide strengths to ensure sustainable growth and realize our long term strategic vision of developing Lloyd as a trusted
brand in the global HVAC industry.

Another signifcant development was at the front of the Railway business for the supply of packaged HVAC units (Heatng, Ventlaton
and Air- Conditoning) which further contributed to the growth. I am pleased to announce that your Company has signed Transfer of
Technology Agreement (TOT) with Toshiba, Japan for the supply of the HVAC units for Delhi Metro RS10 project.

In the internatonal market, economic situaton has been close to stagnaton in the major EU countries. Trade with Russia dropped
enormously and does not show any sign of turnaround in the near future. Russia is actvely pushing to substtute EU made goods by
local producton, which may change picture of the Russian market for several years. The recent politcal decisions within EU tend
to be rather protectonist, which does not support business growth. Domestc demand has been very fat across the whole EU.

as a result of this economic instability and sharp drop of demand in the Russian market, the sales of Janka dropped drastcally by
25% over previous year to Euro 11.2 Million. On the other hand, LCE reported slight decline in revenue by 3% due to metal price
efect and reached Euro 34.4 Million. Major sales loss has been reported in Russia and UK , both being markets with exceptonally
high margin levels. To compensate the loss, new business has been acquired primarily in Germany where the price level is much
more compettve. Moreover, new sales were targeted mainly in the strategic segment of close control AC, which is a new product
range for us with extremely demanding customer requirements. At the close of the year, Janka have initated larger revitalizaton
project consistng of three areas – design driven cost reducton; procurement; and headcount. Since February 2016 external
restructuring expert was hired and proposed main cost saving actons, which will be implemented within the frst half of the new
fnancial year.

As we look to the future, we believe that we will be operatng in a demanding and challenging environment. To remain compettve,
the benchmark has to be high in antcipaton of the stated and unstated need of the customers and markets.

Just like the four P''s of Marketng (product, place, price and promoton), Human resource can build a brand with four P''s of its
own — people, pay, process and promoton. Human resources are a key driver of growth of Lloyd Group and we will progressively
increase our emphasis on fostering human resource development going forward. Your Company''s brand is driven through its culture
and woven through all aspects of HR including recruitng, onboarding, training, development, rewards and performance evaluatons.
Our global footprint has expanded. Today, we are a global Group that is all about using technology and innovaton to empower
people everywhere to succeed. It has been an era of innovaton and growth and I feel incredibly fortunate to have been a
''''hands-on'''' part of it.

As we enter a new fnancial year, the global economy contnues to be fragile, now compounded by Brexit phenomenon. The
silver-lining is that India is regarded as the best-growing economy and is able to atract sizable foreign investments. The
fundamentals of the Indian economy are considered to be strong and the various policy initatves by the Government to broad-base
the economy can further strengthen the economic foundaton for a rewarding long-term growth. The implementaton of the 7th pay
commission recommendatons will give a much needed boost to the demand on the consumer durable sector as consumer spending is
expected to rise.

Lloyd''s commitment to contributng to building prosperous and sustainable societes in and around the places where we operate is
deeply embedded into our corporate culture based on our corporate philosophy. Our CSR initatves are carried under the aegis of
Pandit Kanhaya Lal Punj Trust, a philanthropic arm of Lloyd Group which undertakes all the actvites on behalf of the group. The
trust operates in the feld of educaton, healthcare, empowerment of rural women through vocatonal training etc. A detailed report
on the CSR initatves forms the part of the Annual Report.

We have always strived to enhance stakeholder''s value for investors. To sustain proftable growth by providing the best customer
experience and dealer support. Customer''s satsfacton is the guiding principle of your Company. With relentless commitment to
quality, consistent dedicaton to customer satsfacton and unparalleled standards of service. Lloyd Group is recognized as a
benchmark for new age technology, superior quality, concepts and personalized service that has ensured loyal customers and a wide
acclaim in the industry. We remain extremely well positoned to deliver strong results, grow our businesses, our people and unlock
opportunites that lie ahead of us.

I would like to thank all our stakeholders for their support and encouragement during the year. As we step into a new decade,
there are many reasons to be excited about the future of our business. There will be more opportunites to deliver something
meaningful and purposeful as we race ahead with our plans for your Company''s future in the years to come.

Warm Regards Yours Sincerely

Brij Raj Punj

Chairman & Managing Director