fedders lloyd corporation ltd. · the hvac&r business of your company provides extensive range...
TRANSCRIPT
HVAC&R
SteelStructurals
Power
GlobalInfrastructureDevelopment
IndustrialProjects
FEDDERS LLOYD CORPORATION LTD.rd53 Annual Report 2008-2009
Financial Highlights2008-2009
Total Income
Rs. 46,085.76 Lacs
Earnings before Interest
Depreciation & Tax
Rs. 2,948.82 Lacs
Profit before Tax
Rs. 1,403.40 Lacs
Profit after Tax
Rs. 1,131.57 Lacs
Earnings per Share
Rs. 3.68
Fedders Lloyd - Global in Vision
Rooted in Indian Values
Registered OfficeC-4, Phase – II, Noida
Distt. Gautam Budh Nagar
U.P. - 201 305
Corporate Office159, Okhla Industrial Estate
Phase-III, New Delhi - 110 020
Phone: 011- 40627200-300
Fax: 011- 41609909
WEB SITE: www.fedderslloyd.com
Board of DirectorsMr. Brij Raj Punj
Chairman & Managing Director
Mr. S.S. DhawanWhole Time Director
Mr. T.V.P. Punj
Mr. K. Lall
Mr. S.S. Kumar
A.V.M. S.K. Sharma (retd.)
Mr. Ajay Dogra
Company SecretaryMs. Purnima Sharma
Statutory AuditorsM/s Suresh C. Mathur & Co.
Chartered Accountants
New Delhi
BankersState Bank of IndiaState Bank of PatialaState Bank of HyderabadState Bank of MysoreAxis Bank Ltd.
Share Transfer AgentSkyline Financial Services Private Limited
st246, 1 Floor, Sant Nagar
Main ISKCON Temple Road
East of Kailash
New Delhi - 110065
Telephone: 011 - 26292682, 83
Fax: 011 - 26292681
Existing Facilities:I. C-4, Phase-II, Noida II. Saketi Road Industrial Area
Distt. Gautam Budh Nagar Kala-amb, Tehsil NahanU.P. - 201 305 Distt. sirmor, Himachal Pradesh
III. Shed No. 77, Annai Anjugam Nagar IV. Plot No. 5, Industrial AreaKundrathur-Somangallam Road, Sikandarabad,Nandapallam, Post, Chennai - 600 069 Distt. Bulandshahar (U.P.)
V. Plot No. 24, Sector 2, IIE PantnagarDisst. Udham Singh NagarUttarakhand
Overseas Subsidiary:Fedders Lloyd Trading FZE
P.O. 10055, Ras Al Khaimah, United Arab Emirates
Warehouse No. WH 11, Shed No. 18, Industrial Park,
Ras Al Khaimah Free Trade Zone Authority
From the desk of the Chairman
Ladies & Gentlemen,
It's the time of the year when I look ahead to speak to you all about your Company's performance. Our principles
and values continue to impel us towards the growth in various dimensions. During the year under review, we have
experienced both change as well as continuity. What remained unchanged are the traits of Fedders Lloyd -
commitment to innovation, consistency and integrity. As recent global events have shown, markets on their own
can not be expected to deliver the imperatives of sustainable developments. Therefore, your Company crafted a
new path to place a premium on sustainable development. During the year 2009, your Company achieved a
significant mile stone by its foray into power sector and thereby seeks out the synergies from the business potential
of the sector and from the increasing benefits and incentives from the Government.
Your Company continues to seek profitable avenues of growth in consonance with its quality benchmarks.
Throughout the year, initiating of major and highly innovative projects highlighted our team's ability to carry
ambitious projects to successful completion.
THE ECONOMY
Indian economy has been witnessing a phenomenal growth since the last decade. The country is still holding its
ground in the midst of the current global financial crisis. The cataclysmic events that shook the very foundations of
the American financial system and subsequently the rest of the world have impacted business across the globe. The
brunt of melt down was felt in Indian economy as well, with growth in Industrial production plummeting to 2.6% in
2008-09 versus 8.5% in the corresponding previous year. However, in the overall context, India has navigated the
turbulence admirably, thanks to regulatory prudence and foresight. A number of leading indicators, such as
increase in hiring and encouraging data from a number of key manufacturing segments such as steel and cement
indicate that the downturn has bottomed out and highlight the Indian economy's resilience. Meanwhile, foreign
institutional investors (FIIs) turned net buyers in the Indian market in the year 2009. GDP growth of 6.7% bettered
earlier estimates-helped in part by the stimulus packages announced by the Union Government- making India the
second fastest growing economy in the world.
FINANCIAL PERFORMANCE
Despite the very difficult external economic environment, your Company delivered another year of steady performance and growth. During the year under review, the total income of your Company grew by 3.15% to Rs. 46085.76 Lacs. The total income generated from HVAC&R Business stood at Rs. 36158.88 Lacs while Steel Structurals business contributed to Rs. 9926.88 Lacs in the total income of your Company. The post-tax profit of your Company during the year under review stood at Rs. 1131.57 Lacs as compared to Rs. 1926.48 Lacs during the previous corresponding year with a decline of 41.26%. The decline in profitability was due to overall slow down in the economy which impacted the demand coupled with soaring raw material prices for major part of the year. However, with the strong presence in the market, your Company was able to response to the changes in the market conditions adequately.
Strengthened by strong engineering capabilities, your Company made a move with the times and diversified into Structural Steel Segment during the year 2008 comprising of Steel Fabrication, Design & Erection, Pre-Engineered Building and Scaffolding & Form Works items. The year 2009 was proved yet another benchmark for your Company by its diversification into Power sector.
With the latest diversifications, your Company has become a conglomerate of following intensified business segments:
HVAC&R BUSINESS
The HVAC&R business of your Company provides extensive range of air-conditioning comprising of Window Air Conditioners, Split/Ductable Air Conditioners, Package Air Conditioners, Chillers, Transport Air Conditioners and Heat Exchangers, etc. serving Railways, Defense, mining, Commercial and corporate customers.
Roof Mounted Package AC Units for Railways
Besides, your Company provides the most extensive range of products
like Air Handling Units, Fan Coil Units, Ventilation Units, Exhaust Air
Units, Air Washers and Heat Transfer Coils catering to Air Conditioning
Industry with its varied applications in Commercial Spaces like Office
buildings, theaters, auditoriums; Industrial manufacturing like
automotive, Chemical, Petrochemical, Aerospace, etc; Hygienic
systems like clean rooms for Hospitals, R&D Centers, Food Processing;
IT industry, etc.
Your Company's HVAC&R Business has yet another feather in the cap-
HVAC Contract Division, which provides the specialized and turnkey
solutions for the Air Conditioning for buildings, industries,
multiplexes, malls, pharmaceuticals units, Retail outlets, IT centres,
hospitals, business establishments, etc. The renowned customers
include Hotel Radisson, BHEL, BSNL, HAL.
Further, your Company has been meticulously working on various innovative projects in the niche segments for
the past few years as a counter onslaught of MNC competition in the conventional retail segments. During the
year under review, your Company has rationalized the retail business segment by focusing on Fedders Lloyd's
core competence in Air Conditioning. The complete Air Conditioner range was upgraded with Star Rating in the
period which is being appreciated widely by the trade partners as well as the customers.
With the success in Air Conditioners sale, your Company has launched LCD TVs which is the fastest growing
category in the consumer durable space. Your Company's ideology is utterly driven by “Total Customer
Satisfaction”. As, after sale services are the key differentiator in the overcrowded retail market of several global
brands, your Company has developed customized Customer Relationship Management (CRM) Software which
registers the customers' complaints on a Nation wide Toll free number and thereafter the entire process is tracked
online till customer satisfaction is achieved in entirety. Lot of emphasizes have been put in the design and development
of Fedders Lloyd's products which is reflected in the features of products introduced by your Company.
Lloyd Range of star rated Air Conditioners Lloyd's LCD TV with latest features & Technology
Ruggedised Trolley Mounted Mobile Air Conditioners specially designed for ground cooling, spot cooling in hot zones in steel plants, boundaries and for temporary installation at construction sites, camping tents, tunnels etc. with 100% fresh air
STEEL STRUCTURALS
With more than fifty years of firm existence in the Industry having most modern & automised production facilities with world class quality to its credit, your Company endeavored in structural steel segment in the year 2008 gratifying Steel Fabrication, Design & Erection catering to structural steel building having focus on turn key solutions meeting the demand of modern industrial construction & maintenance requirements, not only in India but across the globe as well. Your Company has in-house technical capabilities in terms of design, engineering marketing and estimation which provide huge dimensional flexibility in design aspects of the steel structures ranging from cycle stand to big buildings & shopping malls, hangers as well as for large power plants and industrial projects.
The Steel Structurals business segment has various accomplishments in its forte during the year 2008-09. Some of the prestigious successful executions are:
Design, fabrication, supply & erection of pre-fabricated steel roof structure including roof portals, purlins, sheeting etc. for stations at Noida, Anand Vihar & Akshardham Station for Delhi Metro Rail Corporation Ltd.
Fabrication and erection services for execution of Structural Steel for the coal handling plant for BGR Energy Systems Ltd. at Warrangal.
Supply of general fabricated structures for BHEL for different power projects at various locations
Wall & Column shuttering arrangements- Scaffolding works
POWER SECTOR
In the gigantic effort to provide affordable, high quality power transmission and distribution systems, your Company has recently forayed into this field endeavoring to spread and entrench Industrialized Power Engineering Technology not only in domestic markets but in International markets as well under multilateral and bilateral funding agencies. Fedders Lloyd is geared up with latest design software to the Indian and International acceptable standards to provide turnkey solutions of Engineering, Procurement & Construction (EPC) on Power transmission and distribution. The outdoor/indoor substations both Air & Gas insulated are also undertaken on turnkey basis.
Power generation needs to be increased to fulfill India's development requirements. At the global level, Governmental efforts are focused on securing clean energy, strengthening carbon market mechanisms and exploring funding options for adaptation and mitigation. All the nations aspires to be the energy efficient nation, hence your Company foresees tremendous business potential in the Power Sector across the globe.
WORKING APPROACH - Live the future
Continuous innovation in technology, processes, products and business models makes your Company a “Progressive Organization”. It is justifiable pride that by embedding larger sustainability goals in business strategies, your Company has consciously invested in the future by creating competitive and sustainable businesses of tomorrow that will continue to enhance the Stakeholders' Value. By its working approach, your Company is at the commanding heights of India's Air Conditioning system providers with diversification in civil, mechanical and power engineering fields.
PROSPECTS & OUTLOOK
With such productive years behind, the coming years outlook is generating great anticipations. With an exciting future on the anvil, encompassing launch of new products, foray into new segments and forging of strategic projects, we aim to achieve the huge success.
On behalf of the Board of Directors, my sincere thanks to every member and employee of Fedders Lloyd for their commitment, enthusiasm and unstinting efforts, to our bankers, regulatory and Government bodies for their support & co-operation, to the shareholders and customers for their continued patronage over the years as well as to all our partners and associates for their encouragement & support, which we continue to count on as forge ahead who have made the success possible that I look back at the year gone by as one of marked progress in your Company's growth trajectory.
With Best Wishes,
Brij Raj PunjChairman & Managing DirectorPlace: New DelhiDate: November 20, 2009
Having varied engineering capabilities, your Company aspires to become Infrastructure Development Company distinguished by quality work.
CONTENTS
Directors’ Report 1
Management Discussion & Analysis 6
Corporate Governance Report 11
Auditors’ Report 23
Balance Sheet 26
Profit & Loss Account 27
Schedules & Accounts 28
Cash Flow Statement 43
Financial Statements of Subsidiary Company 44
Consolidated Financial Statements 57
Balance Sheet Abstract 76
1
DIRECTORS’ REPORT
Dear Shareholders,
Your Directors have pleasure in presenting the 53rd Annual Report along with the Audited Annual Accounts for
the year ended June 30, 2009.
Financial Results
(Rupees in Lacs)
Particulars Current year Previous year
2008-09 2007-08
Net Sales 46021.75 44601.52
Other Income 64.02 75.77
Total Income 46085.77 44677.29
Earnings before Interest, Depreciation and Tax 2948.82 3082.86
Profit before Taxes 1403.40 2063.68
Provision for Taxation 271.83 137.20
Profit after Tax 1131.57 1926.48
Balance brought forward from the previous year 89.52 63.04
Amount available for appropriation 1221.09 1989.52
Appropriations:
Proposed Dividend 307.70 -
Tax on proposed dividend 52.29 -
Transferred to General Reserve 800.00 1900.00
Balance Carried forward to Balance Sheet 61.10 89.52
Earning Per Share (Rs.) 3.68 6.26
Operating Results and Business Performance
The year 2008-09 witnessed an unforeseen economic crisis; however your Company has successfully navigated
through this economic turbulence.
During the year ended June 30, 2009, your Company registered net turnover of Rs. 46021.75 Lacs as against Rs.
44601.52 Lacs during the corresponding year ended June 30, 2008 registering an increase of 3.18%. The profit after
tax stood at Rs. 1131.57 Lacs during the year under review as compared to Rs. 1926.48 Lacs during the corresponding
previous year registering a decline of 41.26%. The revenue and profitability was impacted by the overall slowdown
in the economy coupled with soaring raw material prices for major part of the year under review.
Your Company continues to focus on sustaining growth in emerging markets, cost optimization and efficient
management of working capital.
Dividend
Your Directors are pleased to recommend a dividend of 10% (Re. 1/- per equity shares of Rs. 10/- each) on the
paid-up equity share capital for the year ended June 30, 2009 as against nil dividend in the previous year. The
dividend, if approved at the ensuing Annual general Meeting, shall absorb a sum of Rs. 307,69,700 exclusive of
dividend distribution tax.
2
Annual Report 2008- 09Fedders Lloyd Corporation Limited
Subsidiary
During the previous year ended June 30, 2008, your Company established a wholly owned subsidiary namely-
Fedders Lloyd Trading FZE in Ras Al Khaimah Free Trade Zone, U.A.E. for carrying out the imports, exports,
trading in electric goods, consumer durable goods, Air Conditioners & components, steel fabrication items, etc.
The operations of the subsidiary were started during the year under review. In terms of the provisions of Section
212 of the Companies Act, 1956, audited Financial Statements of the subsidiary are attached hereto and forms
part of the Annual Report.
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.
Commissioning of plant at Pant Nagar, Uttarakhand
In the month of October 2009, your Company has successfully commissioned the plant at Pant Nagar, Uttarakhand,
where various packages of incentives have been provided by the Government of India including 100% outright
excise duty exemption for a period of 10 years from the date of commercial production and 100% income tax
exemption for initial period of 5 years and thereafter 30% for a further period of five years from the date of
commercial production. The plant is meant for production of air conditioners, electronic items, sheet metal
components and other engineering items.
Fixed Deposits
During the year under review, your Company has not invited or accepted / renewed any fixed deposits from
public pursuant to the provisions of Clause 58A or 58AA of the Companies Act 1956 read with Companies
(Acceptance of Deposits) Rules, 1975.
Directors
There was no change in the composition of the Board of Directors of the Company during the year under review.
In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr.
Tulsi Vansh Prakash Punj and Mr. Sham Sundar Kumar retire from office by rotation, and being eligible, offer
themselves for re-appointment.
A brief resume including their expertise, shareholding in the Company and details of other directorships of these
directors as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the
Notice of the ensuing Annual General Meeting.
The Board of Directors recommends the aforesaid appointments 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 confirmed that:
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 irregularities.
d. that the directors had prepared the annual accounts on a going concern basis.
3
Auditors and Auditors’ Report
M/s Suresh C. Mathur & Co., Chartered Accountants, Statutory Auditors of the Company retire at the conclusionof ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company hasreceived letter from the said auditors to the effect that their appointment, if made, would be with in the limitsprescribed under Section 224(1B) of the Companies Act, 1956. Based on the recommendations of the AuditCommittee, the Board of Directors of the Company proposes their re-appointment for approval of Shareholdersin the ensuing Annual General Meeting.
The observations made in the Auditors’ Report are self-explanatory and do not call for any further commentsunder Section 217 (3) of the Companies Act, 1956.
Corporate Governance
Your Company has duly complied with the provisions of the Corporate Governance Code as prescribed underClause 49 of the Listing Agreement with the Stock Exchanges. A separate Section on Corporate Governancetogether with a certificate from the Auditors of the Company regarding full compliance of conditions of CorporateGovernance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of theAnnual Report.
Management Discussion and Analysis
As required by Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed Management Discussionand Analysis Report on financial conditions and results of operations for the year under review forms part of theAnnual 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 ExchangeEarnings and Outgo
Information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo interms of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in theReport of Board of Directors) Rules, 1988 is given as annexure to this report.
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’ Report.
Listing of Equity Shares
The Equity Shares of your Company continue to be listed on The National Stock Exchange of India Ltd. (NSE) andThe Bombay Stock Exchange Ltd. (BSE). The Annual Listing Fees for the year 2009-10 have been paid to theseStock Exchanges.
Human resource and Industrial Relations
Your Company has created a favourable work environment which encourages innovation and meritocracy amongstthe employees. Your Company ensures attracting best talents and provides for fostering of talents. HR initiativesprovide continuous learning, sharpening the skills and talents of the people and leadership development throughtraining programs, HR processes and systems. Industrial Relations were maintained cordial through out the year.
Acknowledgements
Your Directors place on record their gratitude to the Government, other statutory bodies, strategic partners ofthe Company, business associates, banks, financial institutions and shareholders for their assistance, co-operationand encouragement they extended to the Company.
Your Directors place on record the sincere appreciation for significant contribution made by the employees at alllevels through their dedication, hard work and commitment and look forward to their continued support and
unstinting efforts in ensuring an excellent all round operational performance in years ahead.
For and on behalf of the Board of Directors
Place: New Delhi Brij Raj Punj
Date: November 20, 2009 Chairman & Managing Director
4
Annual Report 2008- 09Fedders Lloyd Corporation Limited
ANNEXURE TO THE DIRECTORS’ REPORT
Disclosure of Information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo:
a. Conservation of Energy
As a part of Company’s endeavor towards conservation of energy and prevention of energy wastage,
constant improvements are undertaken in order to conserve energy on an ongoing basis. A multi pronged
approach is deployed in plants as well as products to infuse the concept of energy conservation addressing
the issues of “Environment Friendliness” and “Global Warming/Green House Effect”. Continuous Energy
Conservation measures are being taken on all locations and sites of the Company to reduce the expenditure
on power & fuel.
The energy conservation measure indicated above helped the Company to restrict the impact of increase in
the cost of energy thereby reducing the cost of production of goods to that extent.
b. Technology Absorption, Adaptation and Innovation
Your Company believes that sustained competitiveness for the future requires a deeper focus on Research &
Development. The Company has adapted the technology to develop products in line with the huge potential
opening up in these segments for several applications, also addressing the current issues in the Global
scenario for energy efficiency, eco friendliness and global warming. Your Company has built a strong R&D
base to support its business segments and products. The Company has developed indigenous technologies
in respect of various products being manufactured by it and at present working on several novel products
and technologies. Your Company is well equipped with state-of-art machineries & infrastructure at all plants
and sites for smooth operations with effective automation thereat.
The R&D activities have lead to improved product quality, cost reduction, product development, import
substitution, competitive products leading to customer satisfaction, enhanced global presence and export
of quality products. New Product development helped in improving market share and to satisfy customers’
requirements. By the benefits derived due to R&D activities, the Company will be able to commercialize these
products in domestic and international markets. The Company is continuously focusing on development of
products to meet the specialized demands of customers.
c. Expenditure incurred for Research & Development:
Capital Expenditure : NIL
Revenue Expenditure : Charged out as expenses through the respective heads of accounts.
d. Foreign exchange earning and outgo:
Foreign Exchange earned : Rs. 3344.53 Lacs
Foreign Exchange outgo : Rs. 2129.93 Lacs
5
e. Statement of Particulars of Employees pursuant to the provisions of Section 217 (2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 for the financial year ended
June 30, 2009
S. No. Name of Age Designation Gross Qualification Experience Date of Last
Employee Remuneration (Rs.) Joining Employment
1. Mr. Brij Raj Punj 64 Chairman & 36,00,000 B.E. 38 years 02.06.1980 -
Managing Director
2. Mr. S.S. Dhawan 54 Whole Time Director 41,19,500 M B A 36 years 10.02.2000 Western Foods Ltd.
6
Annual Report 2008- 09Fedders Lloyd Corporation Limited
MANAGEMENT DISCUSSION AND ANALYSIS
THE ECONOMY
The structure of India’s Economy has changed in the last ten years. International trade and External Capital
flows, being an important part, largely influence the economy. The growing integration of the Indian Economy
with the rest of the world has brought new opportunities and also new challenges to the Country. The influence
and changes in the global economy have its impact on the Indian economy too. However, the fundamentals of
the Indian Economy are so strong and stable which proved its strength and resilience, when there have been
global economic crisis. The Indian Economy too had been adversely affected due to the global economic meltdown
resulting into drastic reduction in demand and weakening of Indian Currency. The GDP numbers especially with
manufacturing sector has recorded adverse impact in global economic scenario with 2.4% growth in the year
2008-09 as compared with 8.2% growth recorded in the last year. The Government of India has responded with
various fiscal stimulus packages to boost up the demand, creating employment and creating public assets, etc.
India’s Engineering Industry is highly competitive with a number of players in each segment. The engineering
sector has been growing, driven by growth in end user industries and the new projects being taken up in the
power, railways, infrastructure development and private sector investments field amongst others. In such a
scenario, India, driven by the engineering sector, will emerge as a key global manufacturing hub.
OVERALL COMPANY’S OVERVIEW
Fedders Lloyd Corporation Ltd. is a well known name amongst Indian Corporate with 53 years of its firm existence
in HVAC&R Industry. Of late, Fedders Lloyd has emerged as a global and dynamic entity with its diversification and
involvement in Structural Steel in the year 2008 and in Power Sector in the year 2009. By its diversifications,
Fedders Lloyd has become a multi-disciplinary civil, mechanical and power engineering Company with global
presence. The Company has its existing state-of-the-art manufacturing facilities at NOIDA (U.P.), Sikandarabad
(U.P.), Kala-Amb (Himachal Pradesh), Pant Nagar (Uttarakhand) and at Chennai. Your Company prides itself as
being one Company, which sees its business in developing the people by providing quality to their lives. Your
Company sustains this unique culture by remaining true to its three core values:
1. Fedders Lloyd - A relationship based Company
This core value is the fundamental business strategy of your Company by which it focuses on forging strong,
long-term relationships with its customers, as it considers sound client relationships, the most important
contributor to its success. It cements relationships providing superior customer value and continuously
improving the performances at all levels.
2. Growth - An Imperative
The customer needs, drive Fedders Lloyd’s business; its progress is linked with their growth. Its principles
and values continue to impel towards the growth in various dimensions. Fedders Lloyd’s goal is to grow its
business by delivering the best. Your Company continues to seek profitable avenues of growth in consonance
with its quality benchmarks.
3. People - The Greatest Asset
Employee-talent is the cornerstone of its success. Their expertise and capabilities win the work, perform the
work, create value for the customers and generate loyalty. Your Company creates an environment where its
employees meet fresh, exciting challenges and experience the satisfaction. Fedders Lloyd has an environment
that is flexible to change and open to innovation.
7
The year 2008-09 was indeed a challenging year for the Industry. The tough market situations have led your
Company to see opportunities and where your Company has not only raised its bar but also greatly enhanced
the quality of talent and learning. The year 2008-09 was proved as yet another benchmark for your Company
by its foray into Power Transmission & Distribution Sector.
Presently, the business segments of your Company are:
� Heating, Ventilation, Air Conditioning & Refrigeration (HVAC&R)
� Steel Structurals
� Power Transmission & Distribution
INDUSTRY STRUCTURE, DEVELOPMENTS AND PERFORMANCE
HVAC&R
Customized AC
The ongoing economic buoyancy in India despite global economic melt down has offered opportunities for rapid
growth of Air Conditioning & Refrigeration Industry. In general, there are different types of air conditioners, but
its broader classification includes room air conditioners and commercial range of air conditioners. The room air
conditioners category consists of both the window and split ACs for the use in residential and commercial spaces.
The commercial air conditioning comprises of the ductable split ACs to large sized chillers. This segment comprises
of retail chains, MNCs, IT/ITeS sectors, BPOs, call centres, institutes, malls, etc. The market is of around Rs 3,600
crore, and is growing at the rate of approximately 25 per cent annually. Given the fall in real-estate market,
liquidity crunch in the marketplace coupled with declining demand has adversely affected the segment. Owing
to uncertainties due to US recession, IT/ITeS Industry noticed delay in project expansion plans. However,
infrastructure segments such as airports, telecom, power plants and metro rail as well as other projects of the
Government and public sector undertakings are largely unaffected by the economic downturn and project
expansion plans in these segments are on track.
The air conditioning and refrigeration industry is on a high growth trajectory. Since manufacturing activity of
this industry is mostly in the organized sector, the Government collects a good amount of excise duty, sales tax
and service tax from this sector. The market penetration of air conditioners is a very low around 2 per cent. Even
refrigerator, which is a relatively mature product, has achieved a penetration of 15 per cent only. Hence there is
a huge potential for growth for all the segments of the HVAC&R Industry.
Consumer Durable
Although, consumer durable Industry is facing the heat in the wake of the economic slowdown, the Industry
continues to widen its scope and is adopting lot of innovative and new technology advancements. Market
growth of the Consumer durable Industry slowed down in the year 2008-09 as compared to the previous year.
The primary reasons for the lesser demand in consumer durable Industry was a brief and a mild summer in many
parts of the Country, adversely impacting sales of refrigerators and air conditioners; rise in prices of consumer
durable goods due to escalation of commodity costs following the economic melt down.
HVAC Contracts and Air system Business
The HVAC systems traditionally include the set-up of air-conditioning plants and equipment comprising chillers
with pumps, cooling towers, unitary ducted split or package units and air distribution systems along with associated
piping and electric work. However, the exact scope of work is generally project-specific depending on the
requirements of the customer. HVAC Contracts cover everything related to indoor air quality. Apart from air
temperature and humidity, this includes uniform distribution of air at proper velocities, maintaining positive
8
Annual Report 2008- 09Fedders Lloyd Corporation Limited
pressure to avoid leakage of outside air, adequate oxygen levels and reduction of VOCs (volatile organic compounds)
emitted by carpets, curtains, furniture, paints, etc. The accelerating pace of development of the commercial and
industrial segment has expanded the scope of work of HVAC contractors.
Your Company has been meticulously working on various innovative projects and continued development of
several new products for the niche segments of telecom, defense, railways, corporate, industrial and retail
customers.
During the year ended June 30, 2009, the total revenue generated from HVAC&R business was Rs. 36158.88 Lacs
while total profit before tax and intrest generated from the HVAC&R business of the Company was Rs. 2413.36
Lacs.
Opportunities, risks and outlook
The Government’s renewed focus on National infrastructure development, especially in the area of up-gradation
and modernization of airports, establishment of SEZ and medical tourism, will lead to tremendous scope for
expansion in the business. With the penetration of air conditioners remaining low and as greater thrust on
infrastructure will also add to demand for centralized ACs etc, on an overall basis, these offer an opportunity to
demonstrate the engineering capabilities of the Company and move up the value chain. The Union Budget 2009-
10 can turn positive for air conditioners. But, if the Government hikes customs duty on steel, aluminium etc, it
will lead to rise in costs and can turn negative for the air conditioner producers.
STEEL STRUCTURALS
The Steel Structurals business of the Company belongs to Construction & Infrastructure Industry. Construction
Industry plays a major role in the economic growth of a nation and occupies a pivotal position in the nation’s
development. Despite the global downturn, India is exhibiting enviable growth compared to many other countries
around the world. This is illustrated through the number of projects recorded in the construction Industry’s sub
sectors in late 2008 and thus far in 2009. The construction Industry in India is worth over USD 51 bn. and
accounts for more than 20 per cent of the GDP. It is the largest employer as well as largest contributor to the GDP
after agriculture.
The steel structural business of the Company includes the following:
Steel Fabrication Design & Erection: In this domain, your Company caters to Structural Steel Buildings having
focus on turn key solutions, i.e., design, fabrication, erection, supply & maintenance of general steel structures
as per the project technical specifications of the customers such as power plants, refineries, multi-storied buildings,
metro stations, etc.
Scaffolding & Form Works: Your Company provides its specialized services in design, manufacturing, supervision
in manufacture, erection and supply of scaffolding items and fittings including kwicklock system, kwickstage
system, H-frame, APU system metriforms special shuttering, etc in domestic as well as overseas market.
Pre-Engineered Building: The areas of operation of Steel Structural business of your Company includes catering
to manufacturing of world class Pre Engineered Buildings providing customized turnkey solutions depending
upon specific requirements of customers such as power plants, refineries, industrial sheds, ware houses, high rise
buildings, cold storages, commercial complexes, residential complexes, metro stations, etc.
During the year ended June 30, 2009, the total revenue generated from Steel Structurals business of your
Company was Rs. 9926.88 Lacs and total profit before tax and interest generated from the segment was Rs.
602.09 Lacs.
9
Opportunities, risks and outlook
The Construction & Infrastructure Industry reflects a mixture of optimizing and apprehension. However, with
continuous migration of people into urban areas, the construction sector is likely to continue to generate lot of
opportunities. The infrastructure projects ought to continue to get focus from both Government and private
sectors, supported by policy initiatives aimed at infrastructure development. The risks and concerns for the Steel
Structural business of the Company include the severe volatility in the metal market, particularly for steel, copper
and aluminium, with unpredictable forward movements causing difficulty in factoring them for pricing purposes.
However, your Company believes that there are strong fundamentals to growth in the Industry. Growing demand
from a fast-expanding population will continue the need for increased capacity in the country’s Construction &
Infrastructure sector.
POWER TRANSMISSION & DISTRIBUTION
Over the XI and XII five year plans, India targets to add 180 GW of additional Power generation capacity. Government
through its programs like Rajiv Gandhi Grameen Vidyutikaran Yojna and Accelerated Power Development and
Reform Programme targets providing electricity to all by the year 2012. Through these two programs, it plans to
invest Rs. 610 bn. to strengthen the distribution network and reduce transmission & distribution losses. All
countries across the globe aspire to become energy efficient nation. Recently, your Company has forayed into
this field endeavoring to spread and entrench Industrialized Power Engineering Technology not only in domestic
markets but in International markets as well, under multilateral and bilateral funding agencies. Your Company
provides turnkey solutions of Engineering, Procurement & Construction (EPC) on Power Transmission and Power
Distribution. The outdoor/indoor substations both Air & Gas insulated are also undertaken on turnkey basis. Your
Company is utilizing the latest design software and all component drawings with Bocade software to the Indian
and International acceptable standard.
Opportunities, risks and outlook
Braced with modern technology foundation, infrastructure and 53 years of multiple manufacturing experience
and expertise, your Company is well equipped in all means to execute the projects and getting benefited from
the huge opportunities available in the sector. The key concerns in this sector are the huge time lag in completion
and delay in generation capacity addition. However, your Company is utilizing latest technologies which can
reduce the time involved.
OVERALL FINANCIAL PERFORMANCE
During the year, the net sales of your Company stood at Rs. 46021.75 Lacs as against Rs. 44601.52 Lacs in the
previous year ended June 30, 2008. The profit for the year after tax was Rs. 1131.57 Lacs as against Rs. 1926.48
Lacs in the previous year ended June 30, 2008.
The growth in revenue was effected due to the slowdown in the economy and also causing decline in profitability
during the year under review.
Internal Control Systems and their adequacy
The Company has an adequate internal control system which aims at achieving efficiency in operations, optimum
utilization of resources and compliance with all applicable laws, rules and regulations. The Management Audit
and Internal Control System undertake extensive checks and reviews the system processes with qualified
Professional Team.
A qualified and Independent Audit Committee of the Board reviews the Internal Audit Reports, and the adequacy
of the Internal Control System. The Audit Committee has the authority to investigate any matter relating to the
Internal Control System and to review the scope of Internal Audit.
10
Annual Report 2008- 09Fedders Lloyd Corporation Limited
The Going Green outlook
“Green” is the buzzword today. Along with the use of energy-efficient equipment with a focus on conserving
energy, your Company gives priority to use green materials and equipments that significantly contribute to the
sustainable design of products. Recognizing the advantages, your Company has been developing environment-
friendly air-conditioning and refrigeration systems and products to help in eradicating the use of harmful ozone
depleting substances (ODS).
Human Capital and Industrial Relation
Your Company believes in the culture of trust and continuous learning for its growing human capital so as to
ensure a continuous enhancement in business value and thereby enhancement in shareholder value. Various
training programmes are offered to the employees with a view to nurture their knowledge, skills, behaviour and
overall organizational development. The atmosphere in the organization is performance driven where HR puts its
efforts to identify potential performers. The Company maintains sound and cordial relations with employees at
all levels.
Cautionary Statement:
Statements in Management Discussion and Analysis describing Company’s objectives, projections, estimates and
expectations may be “forward-looking statements” within the meaning of applicable securities laws and regulations.
These statements describe our objectives, plans and goals and are subject to certain risks and uncertainties,
which are already, mentioned in the report itself. Actual results could therefore differ materially from those
expressed or implied.
11
CORPORATE GOVERNANCE REPORT
Company’s philosophy on Corporate Governance
Your Company’s philosophy on Corporate Governance originates from its belief that attainment of the highest
levels of transparency, disclosure, financial controls, accountability and equity are the pillars of any good system
of Corporate Governance. Your Company desires for and continuously strives towards evolving and adopting
Corporate Governance’s best practices in all facets of its operations and in all communications with its stake
holders which has driven the Company’s philosophy to enhance overall enterprise value and retain shareholders’
trust over a period of time. The commitment of your Company to practice sound governance principles,
commitment to values, ethical business conduct that go a long way in maximizing business values.
Report on compliances with Clause 49 of the Listing Agreement
I BOARD OF DIRECTORS
a) Composition of the Board:
As on June 30, 2009, the Board consisted of seven Board Members. The composition of the Board
including category of the Board members as on June 30, 2009 is as follows:
Particulars of Directors Composition
Mr. Brij Raj Punj Executive Chairman & Managing Director
Mr. S.S. Dhawan Whole Time Director
Mr. T.V.P. Punj Non Executive, Non Independent Director
Mr. K. Lall Non Executive, Independent Director
Mr. S.S. Kumar Non Executive, Independent Director
Mr. S.K. Sharma Non Executive, Independent Director
Mr. Ajay Dogra* Non Executive, Independent Director
*Mr. Ajay Dogra was appointed as a Non Executive Independent Director by the Board of Directors
w.e.f. November 25, 2008.
Fedders Lloyd’s Board consists of an optimal combination of Executive Directors and Independent
Non-executive Directors which ensures the independence in functioning and decision making. All the
directors possess relevant experiences and expertise in their fields. The Board provides leadership, strategic
guidance and independent view to the Company’s management while discharging its fiduciary
responsibilities, thereby ensuring that the management adheres to high standards of ethics, transparency
and disclosure.
The Board meets the requirements relating to its composition as per the provisions of the Companies
Act, 1956 and the Listing Agreements with the Stock Exchanges.
b) Board Functioning & Procedure
The Board is committed to ensure good governance. The decisions are taken on the basis of consensus
arrived at after detailed discussion. The Board meets at least once in every quarter to discuss and
review the quarterly results and other agenda items including the information required to be placed
before the Board as required under Annexure 1A of Clause 49 of the Listing Agreement and additional
12
Annual Report 2008- 09Fedders Lloyd Corporation Limited
meetings are held as and when required. The Chairman of the Board and Company Secretary discuss
the items to be included in the agenda and the agenda is sent well in advance to the directors along
with the draft of relevant documents and explanatory notes. During the year 2008-09, 5 (Five) Board
Meetings were held on July 29, 2008, October 31, 2008, November 25, 2008, January 30, 2009 and April
29, 2009. The gap between two Board Meetings did not exceed four months and hence was as per
requirement of Clause 49 of the Listing Agreement.
The attendance of directors at the Board meetings held during the year 2008-09 and at the Annual
General Meeting last held is given below:
Director No. of meetings held Board Meetings Presence
attended at last AGM
Mr. Brij Raj Punj 5 5 Yes
Mr. S.S. Dhawan 5 4 No
Mr. T.V.P. Punj# 5 1 No
Mr. K. Lall 5 5 Yes
Mr. S.S. Kumar 5 5 No
Mr. S.K. Sharma 5 5 No
Mr. Ajay Dogra 3 2 No
# Being out of India
Other Directorships
The detail of other directorships (excluding private limited companies, foreign companies and Section
25 companies), memberships and chairmanships held by the directors in other Company’s Audit
Committee and Investors/Shareholders’ Grievance Committee as on June 30, 2009 is as follows:
Name of Directors Number of other Other Company’s Other Company’s
directorships held Committee Committee
memberships Chairmanship
Mr. Brij Raj Punj 2 1 Nil
Mr. S.S. Dhawan 3 Nil Nil
Mr. T.V.P. Punj Nil Nil Nil
Mr. K. Lall 3 2 2
Mr. S.S. Kumar 2 Nil Nil
Mr. S.K. Sharma 2 2 Nil
Mr. Ajay Dogra Nil Nil Nil
The no. of directorships, committee memberships and chairmanships of directors of the Company are
with conformity of Clause 49 of the Listing Agreement.
c) Code of Conduct for Board Members and Senior Management Personnel
The Board has laid down a code of conduct for all Board Members and Senior Management Personnel
of the Company. The code has been communicated to the Directors and Senior Management Personnel
and is also posted on the Company’s website www.fedderslloyd.com. They have affirmed their compliance
with the code of conduct.
13
The declaration regarding compliance with code of conduct as required under Clause 49 of the Listing
Agreement with Stock Exchanges is annexed to this report.
II BOARD COMMITTEES
AUDIT COMMITTEE
a) Composition and Attendance
The Audit Committee of the Company has been constituted as per the guidelines set out in the Listing
Agreements with the Stock Exchanges and Section 292A of the Companies Act, 1956. Audit Committee
of the Company comprises of five non-executive directors, majority of them being independent directors.
Mr. K. Lall is the Chairman of the Committee who is a non executive independent director on the Board
of the Company. All the members are financially literate and the Chairman of the Committee has
related accounting, financial and management expertise. The Composition of Audit Committee meets
the requirement of Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956.
The terms of reference and scope of the activities of the Audit Committee is as set out in Clause 49 of
the Listing Agreements with the Stock Exchanges and Section 292A of the Companies Act, 1956, which
is as follows:
i. Overseeing of the Company’s financial reporting process and disclosure of financial information
to ensure that the financial statement is correct, sufficient and credible.
ii. Recommending the appointment, re-appointment of statutory auditors and fixation of audit
fees including approval of payment to auditors for their any other services.
iii. Reviewing with management, the annual, quarterly financial statements before submission to
the Board for approval, focusing primarily on;
� Any changes in accounting policies and practices.
� Major accounting entries based on exercise of judgment by management.
� Qualifications in draft statutory audit report.
� Significant adjustments arising out of audit.
� Compliance with listing and other statutory requirements including accounting standards
concerning financial statements of the Company.
� Any related party transactions.
iv. Internal audit functions and adequacy of internal control systems.
v. Reviewing the Company’s financial and risk management policies.
vi. Reviewing statements of significant transactions, submitted by the management.
vii. Reviewing Management discussion and analysis of financial condition and results of operations
The Audit Committee has the power to investigate any activity within its terms of reference; to seek
any information from any employee, to obtain outside legal and professional advice and to secure the
attendance of outsiders with relevant expertise, if considered necessary.
During the year, 5 (five) Audit Committee meetings were held on July 29, 2008, October 31, 2008,
November 25, 2008, January 30, 2009 and April 29, 2009.
As on June 30, 2009, the Composition of the Audit Committee and their attendance at the meeting is
as follows:
Name of the Member Designation No. of meetings attended
Mr. K. Lall Chairman 5
Mr. S.S. Kumar Member 5
Mr. T.V.P. Punj Member 1
The Company Secretary is acting as Secretary to the Audit Committee.
14
Annual Report 2008- 09Fedders Lloyd Corporation Limited
The Chairman of the Audit Committee, Mr. K. Lall, was present at the Annual General Meeting of the
Company held on December 26, 2008.
REMUNERATION COMMITTEE
The Company has constituted a Remuneration Committee. The Committee formulates the compensation
structure to the executive directors of the Company. It recommends to the Board the elements of
remuneration package of executive directors from time to time. The Directors’ Remuneration policy of
the Company is in conformity with the provisions under the Companies Act, 1956. Subject to the approval
of the Company’s shareholders in General Meeting and such other approvals as may be necessary, the
Managing Director and the Whole Time Director are paid remuneration as per the terms of remuneration
decided by the Board/Remuneration Committee and approved by the Shareholders. The remuneration
payable to the executive Directors is decided from time to time keeping in view the overall performance
of the Company, the performance of the concerned Director and the industry trends. During the year
2008-09, the Remuneration Committee held its meetings on November 25, 2008.
As on June 30, 2009, the Composition of the Remuneration Committee and their attendance at the
meeting is as follows:
Name of the Member Designation No. of meetings attended
Mr. K. Lall Chairman 1
Mr. S.S. Kumar Member 1
Mr. T.V.P. Punj Member NIL
Mr. S.K. Sharma Member 1
The Company Secretary is acting as Secretary to the Remuneration Committee.
Directors’ Remuneration (including salary, bonus and perquisites) and Sitting Fees paid during the
year 2008-09
The details of remuneration (including salary, bonus and perquisites) and sitting fees paid to directors
during the year 2008-09 are as under:
Name Gross Remuneration Sitting fees Total
(Rs.) (Rs.) (Rs.)
Mr. Brij Raj Punj 36,00,000 - 36,00,000
Mr. S.S. Dhawan 40,20,000 - 40,20,000
Mr. T.V.P. Punj - 5,000 5,000
Mr. K. Lall - 25,000 25,000
Mr. S.S. Kumar - 25,000 25,000
Mr. S.K. Sharma - 25,000 25,000
Mr. Ajay Dogra* - 10,000 10,000
*Mr. Ajay Dogra was appointed as non executive independent director by the Board of Directors
w.e.f. November 25, 2008.
15
SHARE TRANSFER CUM INVESTORS’ GRIEVANCE COMMITTEE
The Share Transfer cum Investors’ Grievance Committee ensures expeditious transfer/transmission of shares,
issue of duplicate share certificates, split, consolidation, replacement of share certificates, review and redressal
of Investors’ grievances, compliance of dividend payments and other allied matters of investor service.
Composition
As on June 30, 2009, Share Transfer cum Investors’ Grievance Committee comprises of Mr. K. Lall as Chairman
and Mr. S.S. Dhawan and Mr. Brij Raj Punj as members of the Committee.
The Company Secretary is acting as the Secretary to the Committee as well as the Compliance Officer
pursuant to Clause 47(a) of the Listing Agreement with the Stock Exchanges.
During the year under review, the Company received 41 complaints from the investors pertaining to non
receipt of dividend warrants, non receipt of share certificate(s) lodged for transfer/sub-division/duplicate
etc., and all were resolved. The complaints were duly attended by the Company. As on June 30, 2009, no
investor complaint is pending.
SUB-COMMITTEE OF DIRECTORS
The Board has constituted a sub-committee of Board of Directors for taking the decisions of routine nature
confirming the smooth functioning with respect to day to day affairs of the Company. As on June 30, 2009,
the Committee comprised of 5 (five) directors namely, Mr. Brij Raj Punj - Chairman & Managing Director,
Mr. S.S. Dhawan - Whole Time Director, Mr. K. Lall - Independent Non-Executive Director, Mr. S.S. Kumar-
Independent Non-Executive Director, and Mr. Ajay Dogra - Independent Non-Executive Director. The sub-
committee of the Board of Directors meets at the regular intervals to support the functioning of the Board
of Directors to decide upon the urgent and routine matters. The minutes of the sub committee of Board of
Directors are placed before the Board in their next meeting for their consideration and ratification.
Detail of General Body Meetings
The detail of General Body Meetings held during the last three years is as under:
Year Type of Date, time and venue Special Resolution passed thereat
Meeting
2007-08 AGM December 26, 2008 at 9.00 A.M. at the NIL
Regd. Office at C-4, Phase-II, NOIDA,
Distt. Gautam Budh Nagar, U.P.- 201305.
2006-07 AGM December 29, 2007 at 9.00 A.M. at the NIL
Regd. Office at C-4, Phase-II, NOIDA,
Distt. Gautam Budh Nagar, U.P.- 201305.
2006-07 EGM February 3, 2007 at 9.00 A.M. at the Increase in investment limit of Foreign
Regd. Office at C-4, Phase-II, NOIDA, Institutional Investors including their
Distt. Gautam Budh Nagar, U.P.- 201305. sub-accounts to 74% of the paid-up
share capital of the Company.
2006 AGM December 30, 2006 at 9.00 A.M. at the NIL
Regd. Office : C-4, Phase-II, NOIDA,
Distt. Gautam Budh Nagar, U.P.
2006 EGM November 15, 2006 at 9.00 A.M. at the Approval u/s 81(1A) of the Companies Act,
Regd. Office : C-4, Phase-II, NOIDA, 1956, for the issue of FCCBs/GDRs/ADRs and
Distt. Gautam Budh Nagar, U.P. other securities.
2006 EGM June 16, 2006 at 9.00 A.M. at the -Alteration of Articles of Association of the
Regd. Office : C-4, Phase-II, NOIDA, Company.
Distt. Gautam Budh Nagar, U.P. -Approval u/s 81(1A) of the Companies
Act, 1956, for the issue of FCCBs/GDRs/ADRs
and other securities.
16
Annual Report 2008- 09Fedders Lloyd Corporation Limited
III DISCLOSURES
i) During the year under review, the Company has entered into related party transaction as set out in the
notes to accounts, which in the opinion of the management are not likely to have a conflict with the
interest of the Company. Besides these, there were no materially significant pecuniary transactions or
relationships between the Company and its Promoters, Directors, the management, or relatives, etc.
that may have potential conflict with the interest of the Company at large.
ii) There were no penalties or strictures imposed on the Company by the Stock Exchange or SEBI or any
other statutory authority for non-compliance of any matter related to capital markets during the last
three years.
iii) In preparation of financial statements, the Company has followed the Accounting Standards issued by
the Institute of Chartered Accountants of India to the extent applicable.
iv) The Company has formulated and laid down procedures for the risk assessment and its minimization.
These procedures are reviewed from time to time to ensure that executive management controls risk
through properly defined framework and procedures.
IV. MEANS OF COMMUNICATION
Half yearly report sent to each household of No. Company is publishing the results in One National
shareholders & Regional newspapers.
Quarterly results are normally published in Quarterly Results are published in Pioneer (English)
and Rashtriya Sahara (Hindi). Apart from that the
quarterly results are also being published in Economic
Times (Mumbai & Pune edition).
Any web-site, where results are displayed Results are uploaded on www.sebiedifar.nic.in and
also promptly sent to all the Stock Exchanges where
the shares of the Company are listed, for uploading
on their own web site.
Whether it also displays official news releases Not Applicable
and the presentations made to Institutional
Investors or to the analysts
Whether Management Discussion & Analysis Yes
report is a part of Annual Report or Not
Whether Shareholder Information Section Yes
forms part of the Annual Report.
The Company also intimates to the Stock Exchanges all price sensitive matters or such matters which in its
opinion are material and of relevance to the shareholders. The Annual Report is posted to every shareholder
of the Company.
SEBI EDIFAR FILING
Pursuant to Clause 51 of the Listing Agreement with the stock Exchanges, all the data related to quarterly
financial results, segment-wise results, shareholding pattern, annual report, etc., are being electronically
filled on the SEBI’s EDIFAR website www.sebiedifar.nic.in.
17
V GENERAL SHAREHOLDERS’ INFORMATION
Annual General Meeting
Day & Date Tuesday, December 29, 2009
Time 9.00 A.M.
Venue Regd. Office at C – 4, Phase – II, NOIDA, Distt. Gautam Budh Nagar, U.P.- 201305.
Financial Calendar 2009-10 (Tentative)
Financial Reporting for the first quarter ending October 31, 2009 (actual)
September 30, 2009
Financial Reporting for the second quarter Before the end of January 2010
ending December 31, 2009
Financial Reporting for the third quarter ending Before the end of April 2010
March 31, 2010
Financial Reporting for the fourth quarter Before the end of July 2010
ending June 30, 2010
Financial Reporting for the year ending Before the end of November 2010
June 30, 2010
Annual General meeting for the year ended Before the end of December 2010
June 30, 2010
Date of Book Closure
Thursday, the 24th day of December 2009 to Tuesday, the 29th day of December 2009 (both days inclusive).
Listing on Stock Exchanges
The Equity Shares of the Company are listed at the following Stock Exchanges:
Name of the Stock Bombay Stock Exchange Ltd.(BSE) National Stock Exchange of India Ltd. (NSE)
Exchanges Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor,
Dalal Street, MUMBAI – 400 001, Plot No. C/1, G Block,
Maharashtra Bandra Kurla Complex,
Ph. No : 91 - 22 - 22721233 / 34 Bandra (E),
Fax : 91- 22 - 22723677 / 22722082 MUMBAI – 400 051, Maharashtra
Ph. No : 91 -22 - 26598235/36
Fax : 91 - 22 - 26598237/ 38
Scrip Code BSE – 500139 NSE – FEDDERLOYD
The Listing Fees for the year 2009-10 have been paid to both the above Stock Exchanges.
Dematerialization of shares and liquidity
As on June 30, 2009, 1,88,13,971 Equity Shares, constituting 61.14% of the paid up Equity Share Capital of
the Company were held in dematerialized mode in National Securities Depository Limited (NSDL) & Central
Depository Services (India) Limited (CDSL). The International Securities Identification Number (ISIN) of the
shares of the Company is INE249C01011.
Custodial Fees to Depositories
The Company has paid custodial fees for the year 2009-10 to NSDL and CDSL on the basis of number of
beneficiary-accounts maintained by them as on March 31, 2009.
18
Annual Report 2008- 09Fedders Lloyd Corporation Limited
Dividend
For the year 2008-09, the Board of Directors of the Company has recommended dividend of 10% on the
paid-up equity share capital of the Company (Re 1/- per equity share of Face Value Rs. 10/- each). The
payment of dividend is subject to approval of shareholders in the ensuing Annual General Meeting.
Unclaimed Dividend
Pursuant to the provisions of the Companies Act, 1956, dividends unclaimed for a period of seven years
statutorily gets transferred to the Investor Education and Protection Fund (IEPF) administered by the Central
Government, and therefore can not be claimed by the investors. Hence, the dividend for the following years
remaining unclaimed for seven years will be transferred by the Company to IEPF according to the schedule
given below. Shareholders who have not so far encashed their dividend warrant(s) or have not received the
same are requested to seek issue of duplicate warrants(s) to the Company confirming non encashment/ non
receipt of dividend warrants(s). Once the unclaimed dividend is transferred to IEPF, no claim shall lie in
respect of the same.
Financial Year Date of declaration Due date for transfer
2005-06 (Interim Dividend) February 10, 2006 February, 2013
2005-06 (Final Dividend) December 30, 2006 December, 2013
2006-07 (Final Dividend) December 29, 2007 December, 2014
Share Transfer System
The Company’s equity shares are compulsorily traded in demat mode at the Stock Exchanges.
Shares in physical form lodged for transfer are processed by Share Transfer Agent of the Company-
M/s. Skyline Financial Services Private Limited. Shares lodged for transfers/ transmissions are registered and
returned within stipulated time period.
Market Price Data
Monthly high & low of the equity shares of the Company at BSE and NSE for the year ended June 30, 2009
are as follows:
Particulars BSE NSE
Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
July’ 08 53.50 41.00 53.25 41.60
August’ 08 52.20 43.50 55.00 41.10
September’ 08 47.00 32.05 46.15 36.30
October’ 08 36.90 16.30 35.95 17.00
November’ 08 25.00 16.00 25.00 16.75
December’ 08 26.70 16.55 25.75 15.50
January’ 09 26.00 16.00 26.30 16.25
February’ 09 21.00 16.10 19.30 15.55
March’ 09 21.00 15.35 20.75 15.30
April’ 09 30.80 19.25 30.45 18.90
May’ 09 43.40 20.30 44.10 20.40
June’ 09 43.80 32.00 43.60 31.30
19
Comparison of Fedders Lloyd Corporation Limited scrip movement with Bombay Stock Exchange Limited
(BSE) Index
Market Capitalization
The market capitalization of the Company as on June 30, 2009 was Rs. 9938.61 Lacs and Rs. 14615.61 Lacs on
June 30, 2008 on the Bombay Stock Exchange Limited.
Distribution of Shareholding as on June 30, 2009 is as follows:
Range of Shares No. of % of No. of %
Shareholders Shareholders shares held of shareholding
Upto - 500 18098 93.00% 2452520 7.97%
501 - 1000 752 3.92% 637398 2.07%
1001 - 2000 327 1.68% 488226 1.59%
2001 - 3000 99 0.51% 252484 0.82%
3001 - 4000 40 0.21% 143661 0.47%
4001 - 5000 33 0.17% 152792 0.50%
5001 - 10000 52 0.27% 354964 1.15%
10001 and above 50 0.26% 26287655 85.43%
TOTAL 19451 100.00% 30769700 100.00%
Shareholding Pattern as on June 30, 2009
Category No. of shares Percentage
Promoter and Promoter Group
a. Individual/HUF 3310453 10.76
b. Bodies Corporate 8117921 26.38
0
1500
3000
4500
6000
7500
9000
10500
12000
13500
15000
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00FEDDERS LLOYD SENSEX
Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09
20
Annual Report 2008- 09Fedders Lloyd Corporation Limited
Public Shareholding
Institutions
a. Mutual Funds/UTI 396445 1.29
b. Foreign Institutional Investors 9352565 30.40
Non-Institutions
a. Bodies Corporate 5246920 17.05
b. Individual Shareholders holding nominal share capital up to Rs. 1 Lakh. 3820162 12.42
c. Individual Shareholders holding nominal share
capital in excess of Rs. 1 Lakh. 281137 0.91
d. Other 244097 0.79
Total 30769700 100
Plant Locations
The Company’s plants are located at:
1. C-4, Phase – II, NOIDA,
Distt. Gautam Budh Nagar,
U.P. - 201305
2. Saketi Road, Industrial Area,
Kala Amb, Tehsil Nahan,
Distt. Sirmor, Himachal Pradesh.
3. Shed No.77,
Annai Anjugam Nagar
Kundrathur Somangallam Road
Nandambakkam post, Chennai - 600 069
4. Plot No. 5, Industrial Area
Sikandarabad,
Distt. Bulandshahar (U.P.)
5. Plot no. 24, Sector 2
IIE Pantnagar
Distt. Udham Singh Nagar
Uttarakhand
Subsidiary Company
Fedders Lloyd Trading FZE
P.O.: 10055, Ras Al Khaimah, United Arab Emirates
Warehouse No. WH 11, Shed No. 18
Industrial Park, Ras Al Khaimah Free Trade Zone Authority
Address of the Registrar & Share Transfer Agent
Skyline Financial Services Private Limited
246, 1st Floor, Sant Nagar
Main ISKCON Temple Road
East of Kailash
New Delhi - 110065
Telephone: 011-26292682/83
Fax: 011 - 26292681
Email: [email protected]
Address of Correspondence
The Company Secretary
Fedders Lloyd Corporation Limited
159, OKhla Industrial Estate
Phase-III, New Delhi - 110 020
Phone: 011 - 40627200 - 300
Fax: 011 - 41609909
The Company has designated an email id exclusively for the shareholders and investors. They may communicate
their queries/grievances through the email id- [email protected].
Certification by the Auditors
As required under Clause 49 of the Listing Agreement, the Statutory Auditors of the Company have verified
the compliance of the conditions of Corporate Governance by the Company. Their Certificate is annexed
hereinafter.
21
CEO/CFO Certification
The Board of Directors
Fedders Lloyd Corporation Limited
New Delhi
Sub: CEO/CFO Certification
We hereby certify that for the financial year 2008-09 we have reviewed the financial statements and the cash
flow statement and that to the best of our knowledge and belief:
1. These statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading.
2. These statements together present a true and fair view of the Company’s affairs and are in compliance with
existing accounting standards, applicable laws and regulations.
3. There are, to the best of our knowledge and belief, no transactions entered into by the Company during
the year 2008-2009 which are fraudulent, illegal or violate the Company’s code of conduct.
4. We accept responsibilities for establishing and maintaining internal controls and that we have evaluated
the effectiveness of the internal control systems of the Company and we have disclosed to the auditors and
the Audit Committee those deficiencies, of which we are aware, in the design or operation of the internal
control systems and that we have taken the required steps to rectify these deficiencies.
5. We further certify that:
there have been no significant changes in internal control during this year.
There have been no significant changes in accounting policies during the year
There have been no instances of significant fraud of which we have become aware and the involvement
therein, of management or an employee having a significant role in the Company’s internal control
system.
Place : New Delhi A.A. Siddiqui Brij Raj Punj
Dated : November 20, 2009 GM (Finance) Chairman & Managing Director
Declaration under Clause 49 of the Listing Agreement regarding
adherence to the Code of Conduct
I hereby declare that the Board of Directors has laid down the Code of Conduct for its Board Members and
Senior Management Personnel of the Company and the Board Members and Senior Management personnel
have affirmed compliance with the said code of conduct.
Place : New Delhi Brij Raj Punj
Dated : November 20, 2009 Chairman & Managing Director
22
Annual Report 2008- 09Fedders Lloyd Corporation Limited
Auditors’ Certificate on Compliance of Conditions of Corporate Governance
To
The Members
Fedders Lloyd Corporation Limited
We have examined the compliance of conditions of Corporate Governance by Fedders Lloyd Corporation Limited
for the year ended on June 30, 2009 as stipulated in Clause 49 of the Listing Agreement of the said Company with
the Stock Exchanges.
The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination
was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of
the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial
statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that
the Company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned
Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the
efficiency of effectiveness with which the management has conducted the affairs of the Company.
For Suresh C. Mathur & Co.
Chartered Accountants
Place : New Delhi Brijesh C. Mathur
Dated : November 20, 2009 Partner
M.No. : 83540
23
AUDITORS' REPORT
To the Members,
Fedders Lloyd Corporation Ltd.
We have audited the attached Balance Sheet of FEDDERS LLOYD CORPORATION LIMITED as at 30th June, 2009
and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
1. We conducted our audit in accordance with the auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from any material mis-statement. An audit includes, examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing
the accounting principles used and significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that our audit provides a reasonable basis for
our opinion.
2. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
3. Further to our comments in the Annexure referred to in the Paragraph 2 above we report that -
a) We have obtained all the information and explanations, which to the best of our knowledge and belief
were necessary for the purpose of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as
it appears from our examination of those books;
c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in
agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this
report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
e) On the basis of written representations received from the directors, as on 30th June, 2009, and taken
on record by the Board of Directors, we report that none of the Directors is disqualified as on 30th
June, 2009 from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274
of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to the explanations given to us, the
said accounts read together with the significant accounting policies in Schedule “P” and notes appearing
thereon give the information required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles generally accepted in India.
i) in the case of the Balance Sheet, of the state of affairs of the Company as at 30th June, 2009;
ii) in the case of the Profit & Loss Account, of the profit for the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.
For Suresh C. Mathur & Co.
Chartered Accountants
Place : New Delhi Brijesh C. Mathur
Dated : November 20, 2009 Partner
M.No. : 83540
24
Annual Report 2008- 09Fedders Lloyd Corporation Limited
ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITOR’S REPORT OF EVEN DATE ON THE ACCOUNTS
FOR THE YEAR ENDED 30TH JUNE, 2009 OF FEDDERS LLOYD CORPORATION LIMITED
On the basis of such checks as we considered appropriate and in terms on the information and explanations
given to us, we state that
1.1 The Company has maintained records showing full particulars including quantitative details and situation of
the Fixed Assets.
1.2 A substantial portion of the Fixed Assets have been physically verified by the management during the year.
In our opinion the frequency of verification is reasonable having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such physical verification.
1.3 According to the information and explanation given to us and in our opinion that the disposal of the fixed
assets has not affected the going concern status of the Company.
2. The inventory has been physically verified during the year by the management and in our opinion the
frequency of verification is reasonable. According to the information and explanations given to us, in our
opinion, the procedures of physical verification of stock followed by the management are reasonable and
adequate in relation to the size of the Company and the nature of its business. The Company is maintaining
proper records of inventory. The discrepancies noticed on physical verification of stocks as compared to the
book records were not material and have been properly dealt with in the books of account.
3. According to the informations given to us, the Company has not taken any loans, secured or unsecured
from Companies, firms, or other parties listed in the Register maintained under Section 301 of the Companies
Act, 1956.
4. In our opinion and according to the information and explanations given to us, there are adequate internal
control procedure commensurate with the size of the Company and the nature of its business with regard
to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course
of our audit, no major weakness has been noticed in the internal controls.
5. In our opinion and according to the information and explanations given to us, the transactions made in
pursuance of contracts of arrangements entered in the register maintained under Section 301 of the Companies
Act, 1956 and exceeding the value of rupees five lakh in respect of any party during the year have been made
at prices which are reasonable having regard to prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public therefore the provision of Section 58A and
58AA of the Companies Act, 1956 are not applicable to the company.
7. In our opinion, the Company has internal audit system, commensurate with the size of the Company and
the nature of its business.
8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed
by the Central Government for its maintenance of cost records u/s 209(1) (d) of the Companies Act, 1956
and are of the opinion that prime-facie, the prescribed accounts and records have been maintained. However,
we have not made a detailed examination of the records.
9. (a) According to the records of the Company and information and explanations given to us, the Company
has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education
and Protection Fund, Employees’ State Insurance, Income-tax, Fringe Benefit-tax, Sales-tax, Wealth-tax,
Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities
during the year.
25
9. (b) According to the information and explanation given to us and the record of the Company examined
by us, the particulars of dues of excise duty as at 30th June, 2009 which have not been deposited
on account of dispute.
Name of Dues Period of dispute Amount Forum where the
Relates to dispute is pending
Excise duty 2006-07 3.34 Lacs Excise Tribunal New Delhi
10. The Company does not have accumulated Losses at the end of the financial year and has not incurred any
cash loss during the financial year covered by our audit and the immediate preceding financial year.
11. According to the records examined by us and the information and explanation given to us, the company
has not defaulted in repayment of dues of financial institution or bank or debenture holders.
12. According to the information and explanations given to us and based on the documents and records
produced to us, the Company has not granted loans or advances on the basis of security by way of pledge
of shares, debentures and other securities
13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the
provisions of Clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other
investments. Accordingly, the provisions of Clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 are
not applicable to the Company.
15. In our opinion and according to the information and explanation given to us, the terms & conditions of the
guarantees given by the Company for loan taken by the associate companies from bank are prime facie not
prejudicial to the interest of the Company.
16. According to the information and explanations given to us and on an overall examination of the Balance
Sheet of the Company, we report that no funds raised on short-term basis have been used for long term
investment and no long-term funds have been used to finance short term assets.
17. According to the Cash Flow Statement and records examined by us and according to the information and
explanations given to us, on overall basis, fund raised on short-term basis have, prima facie, not been used
during the year for long-term investment and vice versa.
18 The Company has not raised any moneys by way of issue of debentures.
19. The Company has not made any preferential allotment of shares to parties and Companies covered in the
Register maintained under Section 301 of the Companies Act, 1956 during the year.
20. The Company has not raised any money during the year by way of public issue.
21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the
financial statements and as per the information and explanations given by the management, we report that
no fraud on or by the Company has been noticed or reported during the course of our audit.
For Suresh C. Mathur & Co.Chartered Accountants
Place : New Delhi Brijesh C. Mathur
Dated : November 20, 2009 Partner
M.No. : 83540
26
Annual Report 2008- 09Fedders Lloyd Corporation Limited
BALANCE SHEET AS AT 30TH JUNE, 2009(Amount in Rs.)
Particulars Schedule As at As at30.06.2009 30.06.2008
SOURCES OF FUNDS:SHAREHOLDERS FUNDS:
Share Capital A 307,697,000 307,697,000
Reserves & Surplus B 1,242,467,046 1,550,164,046 1,167,406,895 1,475,103,895
LOAN FUNDS:
Secured Loans C 1,164,275,830 748,903,659
DEFERRED TAX LIABILITY 14,912,042 6,499,042
TOTAL 2,729,351,918 2,230,506,596
APPLICATIONS OF FUNDS:FIXED ASSETS: D
Gross Block 1,280,831,430 754,726,774
Less: Depreciation 390,496,389 890,335,041 346,460,856 408,265,918
Capital Work in Progress 16,116,985 134,943,140
Project Under Development 78,245,305 94,362,290 60,745,305 195,688,445
INVESTMENTS (At Cost) E 8,650,250 8,650,250
CURRENT ASSETS, LOAN & ADVANCES: F
Inventories 955,795,230 956,336,079
Sundry Debtors 738,397,070 712,392,089
Cash and Bank Balances 63,851,434 75,012,682
Loan and Advances 462,324,506 314,833,612
2,220,368,240 2,058,574,462
Less :
CURRENT LIABILITIES & PROVISIONS: G
Current Liabilities 339,561,314 353,683,580
Provisions 155,304,689 100,991,699
494,866,003 454,675,279
NET CURRENT ASSETS 1,725,502,237 1,603,899,183
MISCELLANEOUS EXPENDITURE H 10,502,100 14,002,800
(To the extent not written off or adjusted)
TOTAL 2,729,351,918 2,230,506,596
NOTES TO ACCOUNTS P - -
Schedules A to P annexed form an integral part
of accounts & are duly authenticated
As per our Report Attached For and on behalf of the Board of Directors
For Suresh C. Mathur & Co.
Chartered Accountants
Brijesh C. Mathur A. A. Siddiqui Purnima Sharma S. S. Dhawan K.Lall Brij Raj Punj
Partner G. M. Finance Company Secretary Whole Time Director Director Chairman & Managing Director
M. No.: 83540
Place : New Delhi
Date : November 20, 2009
27
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 30TH JUNE, 2009(Amount in Rs.)
Particulars Schedule Year ended Year ended30.06.2009 30.06.2008
INCOME:
Sales 4,686,757,200 4,519,228,904
Less: Excise Duty 84,582,553 4,602,174,647 59,077,118 4,460,151,786
Other Income I 6,401,951 7,576,867
TOTAL 4,608,576,598 4,467,728,653
EXPENDITURE:
Cost of Goods Consumed J 4,050,720,290 3,988,424,268
Increase/decrease in Finished Stock K 39,702,064 4,090,422,354 (59,843,983) 3,928,580,285
Manufacturing Expenses L 32,286,389 27,223,217
Administrative Expenses M 143,276,071 103,921,018
Selling Expenses N 37,785,694 91,102,987
Finance Charges O 119,027,696 67,763,047
Misc. Expenditure Written off 3,500,700 3,500,700
Depreciation 44,035,533 41,600,344
Less: Re-valuation reserve written back 2,097,965 41,937,568 2,331,072 39,269,272
TOTAL 4,468,236,472 4,261,360,526
Profit before Taxation 140,340,126 206,368,127
Less:Provision for Taxation
Current Taxation 17,960,000 23,500,000
Deferred Tax Liability for the year 8,413,000 (10,550,000)
Fringe Benefit Tax 810,000 27,183,000 770,000 13,720,000
Profit for the year after Tax 113,157,126 192,648,127
Balance brought forward from previous year 8,951,684 6,303,557
Amount Available for Appropriation 122,108,810 198,951,684
APPROPRIATIONS:
Proposed Dividend 30,769,700 -
Tax on Proposed Dividend 5,229,310 -
Transfer to General Reserve 80,000,000 190,000,000
Balance carried to Balance Sheet 6,109,800 8,951,684
Basic & Diluted Earnings Per Share 3.68 6.26
Notes forming part of the Accounts P
Schedules A to P annexed form an integral part
of accounts & are duly authenticated.
As per our Report Attached For and on behalf of the Board of Directors
For Suresh C. Mathur & Co.
Chartered Accountants
Brijesh C. Mathur A. A. Siddiqui Purnima Sharma S. S. Dhawan K.Lall Brij Raj Punj
Partner G. M. Finance Company Secretary Whole Time Director Director Chairman & Managing Director
M. No.: 83540
Place : New Delhi
Date : November 20, 2009
28
Annual Report 2008- 09Fedders Lloyd Corporation Limited
SCHEDULES TO THE BALANCE SHEET AS AT 30TH JUNE, 2009(Amount in Rs.)
Particulars As at As at30.06.2009 30.06.2008
SCHEDULE - A
SHARE CAPITAL:
Authorised Capital:
5,00,00,000 Equity Shares of Rs.10/- each 500,000,000 500,000,000
Issued, Subscribed & Paid up Capital:
3,07,69,700 equity shares of Rs. 10/- each fully paid up 307,697,000 307,697,000
TOTAL 307,697,000 307,697,000
SCHEDULE - B
RESERVES AND SURPLUS:
1) Capital Reserve:
Revaluation Reserve (Not available for Dividend)
Office Premises 12,740,045 12,740,045
Factory Land & Building 103,785,709 106,116,781
116,525,754 118,856,826
Less: Amount Utilised to set-off Dep. 2,097,965 114,427,789 2,331,072 116,525,754
2) Securities Premium Account 256,398,500 256,398,500
3) General Reserve:
Opening balance 785,530,957 595,530,957
Add: Transfer from Profit & Loss a/c 80,000,000 865,530,957 190,000,000 785,530,957
4) Profit & Loss Account
As per Profit & Loss Appropriation A/c 6,109,800 8,951,684
TOTAL 1,242,467,046 1,167,406,895
SCHEDULE - C
SECURED LOANS:
From Schedule Banks:
Term Loans 418,743,210 243,750,000
Working Capital Loans 745,532,620 505,153,659
TOTAL 1,164,275,830 748,903,659
Note: Working Capital Loans are secured by way of hypothecation of whole of current assets and second charge
on Fixed assets of the Company. Term Loans are secured by way of first pari pasu charge on all exiting and future
fixed assets of the Company.
29
SC
HED
ULES T
O T
HE B
ALA
NC
E S
HEET A
S A
T 3
0TH
JU
NE, 2009
SC
HED
ULE-
D
FIX
ED
ASSETS:
(Am
ount in
Rs.
)
Gro
ss B
lock
Dep
reci
atio
nN
et B
lock
Par
ticu
lars
As A
tAd
ditio
nsTr
ansfe
r/As
At
Up To
For
the
year
Adju
stm
ent
Tota
lAs
At
As A
t
01.0
7.20
08Ad
just
men
t30
.06.2
009
30.0
6.20
0830
.06.2
009
30.0
6.20
08
Land
107,
582,
977
263
,702
,149
-37
1,28
5,12
6 -
--
-37
1,28
5,12
610
7,58
2,97
7
Fact
ory B
uilid
ing
149,
354,
138
1,57
4,30
4-
150
,928
,442
69,9
39,2
097,
984,
412
-77
,923
,621
73,0
04,8
2179
,414
,929
Offic
e Pre
mise
s 2
4,25
5,30
4-
- 2
4,2
55,3
04
14,2
53,5
3251
8,4
26-
14,7
71,9
58 9
,483,
346
10,0
01,7
72
Tem
pora
ry Sh
ed -
28,
256,
265
- 2
8,2
56,2
65
- 1
,881,
171
- 1,
881,
171
26,3
75,0
94
-
Furn
iture
& Fi
xtur
es 5
,159
,233
2,2
16,7
43-
7,3
75,9
763,
243,
927
522,
344
- 3
,766
,271
3,609,7
05
1,9
15,3
06
Plan
t & M
achi
nery
248
,447
,306
221,
969,
326
- 4
70,4
16,6
32 1
33,8
93,0
4016
,924
,043
- 1
50,8
17,0
8331
9,5
99,5
49 1
14,5
54,2
66
Dies
171
,689
,589
93,
356
-17
1,78
2,945
94,3
53,5
6810
,743,
285
-10
5,09
6,85
3 6
6,6
86,0
92
77,3
36,0
21
Gene
rato
r 2
,983
,559
1,14
1,79
0-
4,1
25,3
49
2,01
6,71
520
7,77
0-
2,22
4,48
5 1,
900,8
64
966
,844
Com
pute
r 1
5,92
1,95
9 2
,524
,753
- 18,4
46,7
1211
,963
,064
2,10
2,27
7 -
14,
065,
341
4,3
81,
371
3,95
8,89
5
Offic
e Eq
uipm
ents
4,3
12,4
4088
8,00
7-
5,2
00
,447
2,47
1,57
231
5,421
-2,
786,
993
2,413
,454
1,84
0,86
8
Elec
tric
Equ
ipm
ents
4,7
86,4
58 7
74,9
94-
5,56
1,452
1,93
6,12
447
7,44
8-
2,4
13,5
723,
147,
880
2,8
50,3
34
Air-
cond
ition
ers
3,14
7,14
816
2,06
1-
3,3
09,2
09
2,31
0,50
612
4,35
8-
2,4
34,8
64 8
74,3
4583
6,64
2
Refri
gera
tors
258
,423
--
258,4
2324
8,28
81,
410
-24
9,69
8 8
,725
10,1
35
Fan
580,
465
45,
208
- 6
25,6
7347
1,588
16,8
58-
488
,446
137,
227
108,
877
Moto
r Car
13,
057,
906
2,66
7,97
1-
15,7
25,8
776,
745,
568
2,12
7,40
2-
8,87
2,97
06,8
52,9
07
6,31
2,33
8
Scoo
ter &
Mot
or Cy
cle47
,992
--
47,
992
31,
975
4,14
7-
36,
122
11,8
7016
,017
Fork
Lifte
r 5
59,3
05-
- 5
59,3
05
531,
100
3,92
4-
535
,024
24,2
81
28,
205
Tools
2,4
30,1
4987
,729
- 2
,517
,878
1,9
12,5
7278
,054
- 1
,990
,626
527
,252
517,
577
Flat
152,
423
--
152,
423
138,
508
2,78
3-
141,
291
11,1
3213
,915
TOTA
L75
4,7
26,7
7452
6,104,6
56-
1,28
0,8
31,4
3034
6,4
60,8
5644
,035
,533
-39
0,4
96,3
89890,3
35,0
4140
8,2
65,
918
(Pre
viou
s Yea
r) 7
42,9
50,2
5460
,766
,136
48,9
89,6
1675
4,72
6,77
430
5,61
1,30
941
,600
,344
750,
797
346
,460
,856
408
,265
,918
Tota
l Dep
recia
tion
durin
g the
year
44,0
35,5
33
Less
: Rev
alua
tion
Rese
rve W
/bac
k to
the e
xten
t of d
ep. o
n ad
ditio
n on
a/c
of R
eval
uatio
n 2
,097
,965
Depr
ecia
tion
char
ged
to P
rofit
& Lo
ss A
ccou
nt41
,937
,568
30
Annual Report 2008- 09Fedders Lloyd Corporation Limited
SCHEDULES TO THE BALANCE SHEET AS AT 30TH JUNE, 2009(Amount in Rs.)
Particulars As at As at30.06.2009 30.06.2008
SCHEDULE - E
INVESTMENTS:
Long Term Investments: Non tradable
Quoted Shares
Lloyd Electric & Engineering Ltd. 1,500 1,500(100 Equity Shares of Rs. 10/- each at a premium
of Rs. 5/- per Share)
(Market Value as on 30.06.2009: Rs. 37.05 Per Share)
State Bank of Bikaner & Jaipur:(375 Equity Shares of Rs. 100 each fully paid up
at a premium of Rs. 440/- per Share)
(Market Value as on 30.06.2009: Rs. 384.45 Per Share) 202,500 202,500
Sub-Total (A) 204,000 204,000
Unquoted Shares:
(Market Value not known)
M/s Lloyd Credits Ltd. 3,000,000 3,000,000
(3,00,000 Equity Shares of Rs. 10/- each)
Wholly owned Subsidiary Company
M/s Fedders Lloyd Trading FZE 5,446,250 5,446,250
(5 Shares @ 1,00,000/- AED each)
Sub-Total (B) 8,446,250 8,446,250
TOTAL (A+B) 8,650,250 8,650,250
31
SCHEDULES TO THE BALANCE SHEET AS AT 30TH JUNE, 2009(Amount in Rs.)
Particulars As at As at30.06.2009 30.06.2008
SCHEDULE - F
CURRENT ASSETS, LOAN AND ADVANCES:
INVENTORIES
(As certified by the Management)
Stock in hand:at cost net of modvate
Raw-materials 389,184,396 333,706,085
Finished Goods 259,442,713 308,874,697
Work in Progress 178,252,147 119,510,988
Semi Finished Goods 96,823,960 87,094,040
923,703,216 849,185,810
Stock at Warehouse 32,092,014 107,150,269
TOTAL (A) 955,795,230 956,336,079
SUNDRY DEBTORS:
(Unsecured considered good by the Management)
More than six months 121,558,020 258,661,241
Others 616,839,050 453,730,848
TOTAL (B) 738,397,070 712,392,089
CASH AND BANK BALANCES:
Cash balance in hand 6,333,090 5,396,558
Balances with scheduled banks:
in current accounts 24,411,489 21,580,909
in Margin Money 19,800,311 42,682,686
in Fixed Deposit 13,306,544 5,352,529
TOTAL (C) 63,851,434 75,012,682
LOAN & ADVANCES :
(Unsecured- considered good)
Earnest Money & Security Deposits 38,469,448 23,875,444
Staff and other advances 3,545,569 2,619,251
Advances for goods and expenses to be recovered
in cash or in kind or for value to be received 388,322,248 268,705,017
SAD 4% Refundable 5,316,317 -
Balance in Excise PLA & PCA A/c 7,016,331 10,425,279
Advance Income Tax & T.D.S. 19,654,593 9,208,621
TOTAL (D) 462,324,506 314,833,612
Grand Total(A+B+C+D) 2,220,368,240 2,058,574,462
32
Annual Report 2008- 09Fedders Lloyd Corporation Limited
SCHEDULES TO THE BALANCE SHEET AS AT 30TH JUNE, 2009(Amount in Rs.)
Particulars As at As at30.06.2009 30.06.2008
SCHEDULE - G
CURRENT LIABILITIES & PROVISIONS:
CURRENT LIABILITIES:
Sundry creditors for goods and expenses 319,857,858 324,050,134
Unclaimed Dividend 1,896,280 1,899,812
Other Liabilities 14,647,930 27,733,634
Interest accured but not due 3,159,246 -
TOTAL 339,561,314 353,683,580
PROVISIONS:
for Income Tax 99,985,323 86,430,360
for Fringe Benefit Tax 1,580,000 770,000
for proposed dividend 30,769,700 -
for tax on proposed dividend 5,229,310 -
for gratuity & leave encashment 17,740,356 13,791,339
TOTAL 155,304,689 100,991,699
SCHEDULE - H
MISCELLANEOUS EXPENDITURE:
(to the extent not written off or adjusted)
Deferred Revenue Expenditure 14,002,800 17,503,500
Less:1/5th written off during the year 3,500,700 10,502,100 3,500,700 14,002,800
TOTAL 10,502,100 14,002,800
33
SCHEDULES TO THE PROFIT & LOSS ACCOUNT FOR THE YEAR
ENDED ON 30TH JUNE, 2009(Amount in Rs.)
Particulars Year ended Year ended30.06.2009 30.06.2008
SCHEDULE - IOTHER INCOME:
Other Income 2,400,763 2,488,012
Interest Received 4,001,088 2,242,615
Dividend Gross 100 37,700
Profit on Sale of Assets - 8,540
Profit on Sale of Share - 2,800,000
TOTAL 6,401,951 7,576,867
SCHEDULE - JCOST OF GOODS CONSUMED:
Opening Stocks:
Raw materials, Stores & Spares 333,706,084 180,893,536
Work in progress 119,510,988 111,550,042
453,217,072 292,443,578
Add: Purchases and Expenses 4,164,939,761 4,618,156,833 4,149,197,762 4,441,641,340
Less: Closing stocks
(Valued at cost or net realiseable whichever
is less as certified by the directors)
Raw materials, Stores & Spares 389,184,396 333,706,084
Work in progress 178,252,147 567,436,543 119,510,988 453,217,072
TOTAL (A) 4,050,720,290 3,988,424,268
SCHEDULE - KIncrease/Decrease in Finished Stock
Opening stock:
Air-conditioners 250,340,071 186,436,955
Refrigerators 300,752 300,752
Semifinished 87,094,040 93,619,658
Appliances 58,233,874 395,968,737 55,767,389 336,124,754
Less: Closing stock
Air-conditioners 245,405,538 250,340,071
Refrigerators 300,752 300,752
Semifinished 96,823,960 87,094,040
Appliances 13,736,423 356,266,673 58,233,874 395,968,737
TOTAL (B) 39,702,064 (59,843,983)
Grand Total (A + B) 4,090,422,354 3,928,580,285
34
Annual Report 2008- 09Fedders Lloyd Corporation Limited
SCHEDULES TO THE PROFIT & LOSS ACCOUNT FOR THE YEAR
ENDED ON 30TH JUNE, 2009(Amount in Rs.)
Particulars Year ended Year ended30.06.2009 30.06.2008
SCHEDULE - LMANUFACTURING EXPENSES:
Labour, Wages & Perquisities 14,748,092 14,093,139
Repair to Plant & Machinery 19,353 76,254
Provident Fund Contribution 7,948,702 4,669,505
Employee State Insurance 1,078,862 713,941
Staff Amenities 750,703 759,195
Bonus 102,927 85,800
Factory Licence Fee 13,500 13,500
Power & Fuel & Other Mfg. Exp. 7,624,250 6,811,883
TOTAL 32,286,389 27,223,217
SCHEDULE- MADMINISTRATIVE EXPENSES:
Staff Salaries 87,362,513 57,191,776
Bonus 1,586,758 1,002,044
Remuneration to Directors 7,719,500 2,321,961
Rent 7,423,900 3,785,397
Travelling 4,944,460 4,123,439
Printing and stationery 1,823,566 1,684,676
Legal and Consultancy Fee 11,024,314 9,342,045
Audit Fee 550,000 370,000
Tax Audit Fee 50,000 30,000
Service Tax 61,800 661,800 49,440 449,440
Postage, Telegrams & Telephone 3,637,084 2,791,248
Director Sitting Fee 90,000 75,000
Gratuity 5,977,381 13,842,214
Leave Encashment 674,322 65,973
General Charges 710,933 595,994
Motor Car Expenses 1,342,609 780,999
Subscription 354,754 379,271
Conveyance 4,501,717 2,956,884
Newspapers & Periodicals 108,132 42,962
Custodial fee - 33,708
Assets written off - 5,684
Licence fee 98,728 17,280
Computer Expenses 730,876 488,144
Research & Development 2,502,724 1,944,879
TOTAL 143,276,071 103,921,018
35
SCHEDULES TO THE PROFIT & LOSS ACCOUNT FOR THE YEAR
ENDED ON 30TH JUNE, 2009(Amount in Rs.)
Particulars Year ended Year ended30.06.2009 30.06.2008
SCHEDULE - N
SELLING EXPENSES:
Advertisement 28,993,198 85,428,357
Sales Promotion 5,097,099 5,674,630
Work Contract Tax Paid 3,695,397 -
TOTAL 37,785,694 91,102,987
SCHEDULE - O
FINANCE CHARGES:
Bank Charges 6,422,944 5,114,708
Interest 112,604,752 62,648,339
TOTAL 119,027,696 67,763,047
36
Annual Report 2008- 09Fedders Lloyd Corporation Limited
SCHEDULE-‘P’
Notes to Accounts for the year ended on 30th June, 2009
I. SIGNIFICANT ACCOUNTING POLICES
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
a) The financial statements have been prepared under the historical cost convention in accordance with
generally accepted accounting principles, accounting standards and the provisions of the Companies
Act, 1956 as adopted consistently by the Board.
b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally
accepted accounting principles followed by the Company.
2. REVENUE RECOGNITION:
a) All income and expenditure are recognized on accrual basis.
b) The sales is recognized on the dispatch of goods inclusive of excise duty wherever applicable and are
net of trade discount.
c) Sales tax is not passed through Profit & Loss Account and is therefore not included in sales.
d) Excise Duty & Custom duty are passed through Profit & Loss A/c.
e) Modvat availed on purchases of raw material and other inputs are reduced from its purchase and
accordingly purchases of raw material are stated at net of cost.
3. FIXED ASSETS:
a) Fixed Assets are stated at their original cost including freight and other incidental expenses related to
acquisition and installation, less accumulated depreciation.
b) In case of land and building market value has been substituted for cost based on the valuation report
adopted in the meeting of Board of Director on 24-04-99
c) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on
addition to fixed assets on account of revaluation of assets.
4. DEPRECIATION:
a) Depreciation on fixed assets (other than land) is charged on written down value method at the rates
and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
b) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on
addition to fixed assets on account of revaluation of assets.
c) Depreciation on addition to assets or on sale of assets is calculated on pro-rata basis.
5. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS:
a) Foreign currency transactions other than Fixed Assets are recorded at exchange rate prevailing at the
time of transaction and realized gains and losses on this account are recognized in Profit & Loss Account.
b) There is no foreign currency liability against acquisition of fixed assets at the year end.
37
6. INVESTMENTS:
Long term investments are stated at cost. Provision for diminution in the value of long-term investment is
made only if such decline is other than temporary in the opinion of the management.
Investments in subsidiary company are of long term strategic value and the diminution, if any in the value of
these investments is temporary in nature.
7. INVENTORIES:
a) Raw materials, stores and spares and stock-in-transit are valued at cost net of MODVAT as per the First
in First out (FIFO) method after providing for cost of obsolescence value.
b) Work in progress is valued at cost including related overheads.
c) Finished goods are valued at lower of cost or net realizable value.
d) Stock in transit lying in warehouse is valued at cost and does not include custom duty payable. However,
non-provision of duty does not affect profit for the year.
8. EMPLOYEES RETIREMENT BENEFITS
a) The Company’s contribution to the provident fund is charged to profit and loss account.
b) The Company’s liability in respect of payment of gratuity and leave encashment is provided on accrual
basis. During the year, Company has made the provision of gratuity and leave encashment of Rs. 39.49
Lacs upto 30th June, 2009.
9. RESEARCH AND DEVELOPMENTS
Revenue expenditure is charged to profit & loss account of the year in which they incurred.
10. EXCISE DUTY
Excise duty is accounted for as and when the same is paid on the dispatch of goods from factory premises.
No provision has been made for excise duty in respect of finished products lying in the factory premises.
11. MANAGEMENT ESTIMATION
The financial statements are prepared in conformity with generally accepted accounting principles and
applicable accounting standards, which may require management to make estimates and assumptions.
These may affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the
date of financial statements and the reported amount of the revenue and expenses during the reporting
period. Actual report later could differ from these estimates.
12. IMPAIRMENT OF ASSETS
In the opinion of the Company's management, there is no impairment to the assets to which Accounting
Standard-28 “Impairment of Assets” applied requiring any revenue recognition.
13. TAXATION
Current Tax:
The tax expenses for the year, comprising current tax and fringe benefit tax is included in determining the
net profit for the year.
A Provision is made for the current tax and fringe benefit tax based on tax liability computed in accordance
with relevant tax rates and tax laws.
38
Annual Report 2008- 09Fedders Lloyd Corporation Limited
Deferred Tax:
The Deferred Tax Liability / Asset is Provided for timing difference between book profit and taxable profits
is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the
balance sheet date.
14. BORROWING COST
Borrowing cost that are directly attributable to the acquisition, construction or production of qualifying
assets are capitalized as a part of the cost of that asset. Other borrowing costs are recognized as an expense
in the period in which they are incurred.
15. EARNING PER SHARE
The earnings considered in ascertaining the Company’s Earnings per Share (EPS) comprise the net profits
after tax. The number of shares used in computing basic EPS is the weighted average number of shares
outstanding during the year.
The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential
dilutive equity shares.
16. CASH FLOW STATEMENT
The Cash Flow statement is prepared by the indirect method set out in Accounting Standard –3 issued by
the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents
cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents
presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the
Balance Sheet date.
17. SUNDRY DEBTORS/LOANS & ADVANCES
Sundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any
which is not likely to be material, will be adjusted at the time of conformation.
18. PROVISIONS /CONTINGENCIES
A provision is recognized when there is a present obligation as a result of past event and it is probable that
an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can
be made. Provisions are determined based on best estimate of the amount required to settle the obligation
at the Balance Sheet date.
Contingent liabilities are not recognized and are disclosed in the Notes on Accounts.
19. DERIVATIVE INSTRUMENTS
The Company has not entered into the derivative instruments. Forward Contract other than those entered
into, to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast
transactions are treated as foreign currency transactions and accounted accordingly. Exchange difference
arising on such contracts are recognized in the period in which they arise and premium paid/received is
accounted as expenses/income over the period of the contract.
39
II. NOTES TO ACCOUNTS
1. Contingent Liabilties
Sl. 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 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 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 goods 5,190,0217
Sales of goods 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 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. 1,75,03,500/- 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. Project Under Development
The Company has a land at Vrindaban. The cost of project as at the Balance Sheet date is as under:
Amount (Rs. )
Cost of Land 52,039,200
Technical Consultancy Charges 314,105
Interest 23,500,000
Other cost 2,392,000
Total 78,245,305
40
Annual Report 2008- 09Fedders Lloyd Corporation Limited
7. Dividend
During the year, the Company has proposed dividend of Rs. 30,769,700/- to shareholders.
8. The break-up of deferred tax assets and liabilities into major components at the year ended as below:
Amount (Rs.)
Deferred Tax Liability:
Depreciation Difference 15,862,700
Deferred Tax Assets
Gratuity & Other Provisions 7,449,700
Net Deferred Liability 8,413,000
9. Basic & Diluted Earning per Share
Earnings per share has been computed as under: Amount (Rs.)
Profit after Taxation 113,157,126
Number of Ordinary Shares 30,769,700
Basic and Diluted Earnings per share (Face Value Rs.10/-per share) 3.68
10. 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.
Sr. No. Particulars Amount (Rs. In lacs)
30.06.2009
1 Segment Revenue (Net Sale/Income from each Segment
a) HVACR 36,158.88
b) Steel Structurals 9,926.88
Total 46,085.76
Less: Inter Segment Revenue 0.00
Net Sales/Income form Operations 46,085.76
2 Segment Results(Profit (+)/Loss(-) Before Tax and Interest from each Segment)
a) HVACR 2,413.36
b) Steel Structurals 602.09
Total 3,015.45
Less:
i) Interest 1,126.05
ii) Other Un-allocable expenditure net off 486.00
iii) Un-allocable Income 0.00
Total Profit Before Tax 1,403.40
3 Capital Employed (Segment Assets – Segment Liabilities)
a) HVACR 16,664.00
b) Steel Structurals 2,109.00
c) Unallocated 811.00
Total 19,584.00
41
11. Additional information pursuant to the provisions of paragraphs 3,4C and 4D of part II of the Schedule
VI of the Companies Act, 1956.
Number of persons drawing remuneration aggregating to Rs. 24,00,000/-
or more for the year of Rs. 2,00,000/- per month when employed for part of the year: 2
Employed whole of the year 2
Employed part of the year Nil
12. Licenced , Installed Capacity & Actual Production
AIR-CONDITIONERS REFRIGERATORS STEEL STRUCTURALS
Licenced Capacity 80000 Nos. 20000 Nos. 72000 MT* and 8 Lacs No.
Installed Capacity 40000 Nos. 20000 Nos. 72000 MT* and 8 Lacs No.
Actual Production/Purchases 39791 TR. NIL 21079 MT
*on Triple shift basis
13. Raw Materials and Stores Consumed for Production/ Replacement:-
Sl. No. Items Amount(Rs.)
1 Compressors Nos. 1401 21,496,772
2 Electric Motors Nos. 2239 7,221,881
3 Condensing/Evaporator Coils Nos. 2330 63,162,819
4 Thermostat Nos. 1628 1,317,264
5 Control Pressure Switch 388,950
6 Running and Start Capacitor 1,534,670
7 Sheet Metal / Plate/Pipes 3,706,521,176
8 Copper 1,560,967
9 Control Electrical 275,988
10 Plastic Material 703,488
11 Brazing/Welding Material 702,365
12 Packing Material 678,698
13 Consumable 1,750,368
14 Others (Including Expenses Net) 243,404,884
Total 4,050,720,290
14. Quantitative Details :
ITEMS Nos./Tr. Opening Stock Closing Stock Turnover
Qty. Value Qty. Value Qty. Value
(Rs.) (Rs. ) (Rs. )
Air-conditioner TR 22567 250,340,071 20933 245,405,538 41425 712,637,457
Refrigerator Nos. 45 300,752 45 300,752 - -
Appliances Nos 37677 58,233,874 1416 13,736,423 46312 193,827,452
Semi Finished - 87,094,040 - 96,823,960 - -
Project, components
& proceed Steel Sheet - 333,706,084 - 389,184,396 - 3,625,144,264
Misc. sales - - - - - 8,459,050
Work in Progress - 119,510,988 - 178,252,147 - -
Work contract - - - - - 146,688,977
Total (Rs.) 849,185,810 923,703,216 4,686,757,200
42
Annual Report 2008- 09Fedders Lloyd Corporation Limited
Opening Stock Closing Stock
15. Stock in Transit / Warehouse 107,150,269 32,092,014
16. Value of Import (C.I.F) Value :- (Amount in Rs. )
i) Raw Materials Nil
ii) Components and Spares 212,043,707
iii) Capital items Nil
17. Expenditure in Foreign Currency :-
(Excluding value of imports)
Travelling Expenses Rs. 949,706/-
18. Value of Raw Materials consumed during the year:
Particulars Percentage (%) Total (Rs.)
Imported 0.14 5,740,909
Indegenous 99.86 4,044,979,381
Total 100 4,050,720,290
19. Earnings in Foreign Exchange:
Export Sales Rs. 334,452,563/-
20. Payment to Auditors : (Amount in Rs. )
Audit Fee 550,000
Tax Audit Fee 50,000
Add: Service Tax 61,800
Total 661,800
21. Directors Remuneration paid during the year:
Remuneration & Perks 7,719,500
Provident Fund 513,000
22. Previous years figures have been re-grouped/re-arranged as and wherever found necessary.
23. The balance of Intra –Group companies & Sister Units are subject to confirmation.
24. 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.
Refer to our Report of even date For and on behalf of the Board of Directors
For Suresh C. Mathur & Co.
Chartered Accountants
Brijesh C. Mathur A. A. Siddiqui Purnima Sharma S. S. Dhawan K.Lall Brij Raj Punj
Partner G. M. Finance Company Secretary Whole Time Director Director Chairman & Managing Director
M. No.: 83540
Place : New Delhi
Date : November 20, 2009
43
CASH FLOW STATEMENT FOR THE YEAR ENDED ON 30TH JUNE 2009(Rs. in Lacs)
Particulars Year ended Year ended30.06.2009 30.06.2008
A. Cash Flow from Operating Activities:
Net Profit before tax 1,403.40 2,063.68
Adjustments for :
Add: Depreciation 419.38 392.69
Preliminary Expenses written off 35.01 35.01
Interest Paid 1,126.05 1,580.43 626.48 1,054.18
Less: Profit on sale of fixed assets - (0.09)
Profit on sale of Investments - (28.00)
Interest Income (40.01) (22.43)
Dividend Income (0.00) (40.01) (0.38) (50.90)
Operating profit before working capital changes 2,943.82 3,066.96
Trade & other receivables (260.05) (781.41)
Inventories 5.41 (3,262.87)
Loans & Advances (1,370.45) 1,170.71
Trade & other payable (101.73) (1,726.82) 1,484.73 (1,388.84)
Cash generated from operations 1,217.00 1,678.12
Direct tax paid (148.51) (148.51) (41.90) (41.90)
Net Cash Flow from Operating Activities 1,068.49 1,636.22
B Cash Flow from Investing Activities:
Purhase of fixed assets (4,247.79) (759.83)
Sale of fixed assets - 0.21
Purchase of Investment - (54.46)
Interest Received 40.01 22.43
Profit on sale of fixed assets - 0.09
Profit on sale of Investments - 28.00
Dividend received 0.00 (4,207.77) 0.38 (763.18)
Net Cash Flow from Investing Activities (4,207.77) (763.18)
C Cash Flow from Financial Activities:
Proceeds from Long Term Borrowing 4,153.72 548.61
Dividend Paid - (307.70)
Dividend Tax - (52.28)
Interest paid (1,126.05) 3,027.67 (626.48) (437.85)
Net Cash Flow from Financing Activities 3,027.67 (437.85)
Net increase/decrease in Cash and Cash Equivalents (A+B+C) (111.61) 435.19
Opening Balance of Cash and Cash Equivalents 750.13 314.94
Closing Balance of Cash and Cash Equivalents 638.51 750.13
Net increase/ decrease in Cash and Cash Equivalents (111.61) 435.19
Refer to our Report of even date For and on behalf of the Board of DirectorsFor Suresh C. Mathur & Co.Chartered AccountantsBrijesh C. Mathur A. A. Siddiqui Purnima Sharma S. S. Dhawan K.Lall Brij Raj PunjPartner G. M. Finance Company Secretary Whole Time Director Director Chairman & Managing DirectorM. No.: 83540
Place : New DelhiDate : November 20, 2009
AUDITORS' REPORT
We have examined the above Cash Flow Statement of Fedders Lloyd Corporation Limited for the year ended 30th June, 2009. The statement has been prepared by
the Company in accordance with the requirements-of Clause 32 of the Listing Agreement entered into with Stock Exchanges and is based on and is in agreement
with the corresponding Profit & Loss Account and Balance Sheet of the Company.For Suresh C. Mathur & Co.
Chartered Accountants,Brijesh C. Mathur
Place : New Delhi Partner,Dated : November 20, 2009 M. No.: 83540
44
Annual Report 2008- 09Fedders Lloyd Corporation Limited
INDEPENDENT AUDITORS’ REPORT
Ref: SHJ/2260/AM/TA/2009
To
The Shareholder
Fedders Lloyd Trading FZE,
PO Box- 10559
RAK Free Trade Zone
Ras Al Khaimah – United Arab Emirates.
Report on the Financial Statements
We have audited the accompanying financial statements of Fedders Lloyd Trading FZE (“the Establishment”)
which comprise the balance sheet as at June 30, 2009 and the profit and loss account, statement of changes in
equity, cash flow statement for the period from February 11, 2008 (Inception) to June 30, 2009 and a summary of
significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with International Financial Reporting Standards and the Implementing regulations of RAK Free Trade Zone
pursuant to the Emiri decree dated 1/5/2000 of H.H.Sheikh Saqr Bin Mohammed Bin Salem Al Qassimi, the ruler
of Ras al Khaimah; concerning the entities in RAK Free Zone. This responsibility includes: designing, implementing
and maintaining internal control relevant to the preparation and fair presentation of financial statements that
are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies and making accounting estimates that are reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with International Standards on Auditing. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance, whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on our judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
FEDDERS LLOYD TRADING FZE
RAK TRADE FREE ZONE- RAS AL KHAIMAH
UNITED ARAB EMIRATES
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS’ REPORT
FOR THE PERIOD FROM FEBRUARY 11, 2008 (INCEPTION)
TO JUNE 30, 2009
45
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies & principles used and reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
The Establishment has incurred a loss amounting to AED 119,504 during the period. The management has
represented that the Establishment would continue to operate despite the losses. The capital adequacy as required
under the Implementing regulations of RAK Free Trade Zone pursuant to the Emiri decree dated 1/5/2000 of
H.H.Sheikh Saqr Bin Mohammed Bin Salem Al Qassimi, the ruler of Ras al Khaimah; concerning the entities in
RAK Free Zone, U.A.E. is not maintained during the period. However the management has represented that the
same will be maintained by introduction of further capital subsequently.
Inventories have been stated in these financial statements as per the valuation of the management. We did not
attend the physical inventory count at the period end.
Trade receivables amounting to AED 7,500 is subject to independent confirmation and subsequent realization.
In our opinion; except for the effects of above; which may require financial adjustments; the financial statements
present fairly, in all material respects, the financial position of the Establishment as of June 30, 2009 and its
financial performance and its cash flows for the period from February 11, 2008 (Inception) to June 30, 2009 in
accordance with International Financial Reporting Standards and comply with the Implementing regulations of
RAK Free Trade Zone pursuant to the Emiri decree dated 1/5/2000 of H.H.Sheikh Saqr Bin Mohammed Bin Salem
Al Qassimi, the ruler of Ras al Khaimah; concerning the entities in RAK Free Zone.
Report on other legal and regulatory requirements
As required by the implementing regulations of RAK Free Trade Zone pursuant to the Emiri decree
dated 1/5/2000 of H.H.Sheikh Saqr Bin Mohammed Bin Salem Al Qassimi, the ruler of Ras al Khaimah; concerning
the entities in RAK Free Zone, we further confirm that,
1. We have obtained all the information and explanations necessary for our audit,
2. Proper books of accounts have been maintained by the Establishment,
3. A physical count of inventories was carried out by the Management in accordance with established principles,
however it has not been independently verified.
4. We are not aware of any contraventions during the period of the above mentioned law; which may have
material effect on the financial position of the company or the result of its operations for the period.
Atik Munshi
Partner
Registration No.483
Horwath MAK – Chartered Accountants & Business Advisors
RAS AL KHAIMAH – U.A.E
November 02, 2009
46
Annual Report 2008- 09Fedders Lloyd Corporation Limited
FEDDERS LLOYD TRADING FZE
RAK FREE TRADE ZONE-RAS AL KHAIMAH
BALANCE SHEET AS OF JUNE 30, 2009
(In Arab Emirates Dirhams)
Note 2009
Assets
Current assets
Cash and bank balances 4 128,200
Trade receivables 5 27,340
Other receivables and prepayments 6 50,267
Inventories 7 394,541
Due from related parties 8 283,688
Total current assets 884,036
Total Assets 884,036
Liabilities and Shareholders’ Equity
Current liabilities
Sundry payables & accruals 9 8,964
Due to related parties 8 494,576
Total current liabilities 503,540
Total Liabilities 503,540
Shareholders’ Equity
Share Capital 2 500,000
Accumulated loss 10 (119,504)
Total Shareholders’ Equity 380,496
Total Liabilities and Shareholders’ Equity 884,036
The accompanying notes form an integral part of these financial statements.
The Report of the Auditors is set out on pages 1 and 2.
The financial statements on pages 3 to 14 were approved by the Board of Directors on November 02, 2009 and
signed on its behalf by:
Brij Raj Punj Krishan Lal
Director Director
Fedders Lloyd Trading FZE
47
FEDDERS LLOYD TRADING FZE
RAK FREE TRADE ZONE-RAS AL KHAIMAH
PROFIT AND LOSS ACCOUNT
For the Period from February 11, 2008 (Inception) to June 30, 2009
(In Arab Emirates Dirhams)
Note 2009
Revenue 11 599,480
Cost of sales 12 (598,837)
Gross Profit 643
Deduct
General and administrative expenses 13 (112,063)
Selling and distribution expenses 14 (3,880)
Total Operating Expenses (115,943)
Loss from operating activities (115,300)
Financial expenses (4,204)
Net Loss for the period (119,504)
The accompanying notes form an integral part of these financial statements.
The Report of the Auditors is set out on pages 1 and 2.
The financial statements on pages 3 to 14 were approved by the Board of Directors on November 02, 2009 and
signed on its behalf by:
Brij Raj Punj Krishan Lal
Director Director
Fedders Lloyd Trading FZE
48
Annual Report 2008- 09Fedders Lloyd Corporation Limited
FEDDERS LLOYD TRADING FZE
RAK FREE TRADE ZONE-RAS AL KHAIMAH
Statement of Changes in Shareholders’ Equity
For the period from February 11, 2008 (Inception) to June 30, 2009(In Arab Emirates Dirhams)
Share Capital Accumulated Loss Total
Changes in Shareholders’ Equity:
a. Capital introduced 500,000 - 500,000
b. Net loss for the period - (119,504) (119,504)
Balance at June 30, 2009 500,000 (119,504) 380,496
The accompanying notes form an integral part of these financial statements.
The Report of the Auditors is set out on pages 1 and 2.
49
FEDDERS LLOYD TRADING FZE
RAK FREE TRADE ZONE-RAS AL KHAIMAH
STATEMENT OF CASH FLOWS
For the period from February 11, 2008 (Inception) to June 30, 2009
(In Arab Emirates Dirhams)
2009
Cash flows from operating activities:
Net loss for the period (119,504)
Adjustments for:
Financial Cost 4,204
Operating loss before changes in operating assets and liabilities (115,300)
(Increase)/Decrease in Current Asset
Trade receivables (27,340)
Other receivables & prepayments (50,267)
Inventory (394,541)
Increase/(Decrease) in Current Liability
Provision and accrued expenses 8,964
(463,184)
Net Cash used in operating activities (578,484)
Cash flows from financing activities:
Capital introduced 500,000
(Increase)/decrease in due from related party (283,688)
Increase/(decrease) in due to related party 494,576
Finance Cost paid (4,204)
Net cash used in financing activities 706,684
Net Increase in cash and cash equivalents 128,200
Cash and cash equivalents, beginning of the period -
Cash and cash equivalents, end of the period 128,200
Represented by:
Cash at Bank 128,200
128,200
The accompanying notes form an integral part of these financial statements.
The Report of the Auditors is set out on pages 1 and 2.
50
Annual Report 2008- 09Fedders Lloyd Corporation Limited
FEDDDERS LLOYD TRADING FZE
RAK TRADE FREE ZONE-RAS AL KHAIMAH
United Arab EmiratesNotes to the Financial Statements
For the period from February 11, 2008 (Inception) to June 30, 2009
1 Legal status and business activity:
1.1 Fedders Lloyd Trading FZE, (‘the Establishment”) was incorporated on February 11, 2008 as a Free Zone
Establishment with Limited Liability and registered with RAK Trade Free Zone Authority, Ras Al Khaimah –
United Arab Emirates. The Establishment operates under a Trade license issued by RAK Free Trade Zone
authority.
1.2 The principal activity as per the Trade license of the Establishment is General Trading.
1.3 The registered office of the Establishment is located at RAK Trade Free Zone, PO Box- 10559, Ras Al Khaimah,
United Arab Emirates.
1.4 The management and control are vested with the Board of Directors.
1.5 These financial statements incorporate the operating results of the trade license No.# 7000188 .
2 Share Capital:
Authorised, issued and paid up capital of the Establishment is AED 500,000 divided in to 5 shares of 100,000 each.
The details of the shareholding at June 30, 2009 are as follows:
Name of Shareholder Registered Shareholding % AED
a) Fedders Lloyd Corporation Limited India 100% 500,000
100% 500,000
3 Summary of significant accounting policies:
Basis of preparation:
The financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) issued by the International Accounting Standards Board (IASB), interpretations issued by International
Financial Reporting Interpretations Committee (IFRIC), and applicable requirements of the U.A.E. Law. A
summary of the significant accounting policies, which have been applied consistently, are set out below:
a) Accounting convention
These financial statements have been prepared under historical cost convention basis.
b) Inventories
Inventories are stated at the lower of cost and net realisable value using First in First out Method. Costs
comprise direct materials and, where applicable, direct labour costs and the overheads that have been
51
incurred in bringing the inventories to their present location and condition. Net realisable value represents
the estimated selling price less all estimated costs to completion and costs to disposal.
c) Revenue recognition
Revenue from sale of goods shall be recognised when all the following conditions have been satisfied:
i. The entity has transferred to the buyer the significant risks and rewards of ownership of the
goods;
ii. The entity retains neither continuing managerial involvement to the degree usually associated
with ownership nor effective control over the goods sold;
iii. The amount of revenue can be measured reliably;
iv. It is probable that the economic benefit associated with the transaction will flow to the entity; and
v. The cost incurred or to be incurred in respect of the transaction can be measured reliably.
d) Financial expenses
Financial expenses are accounted in the Profit & Loss Account in the period in which they are incurred.
e) Employees’ terminal benefits
Amounts required to cover end of service indemnity at the balance sheet date are computed pursuant
to the United Arab Emirates Federal Labour Law based on the employees’ accumulated period of
service and current basic remuneration at the balance sheet date.
These are accounted for on cash payment basis.
f) Provisions
Provisions are recognised when the Establishment has a present obligation as a result of a past event,
which it is probable, will result in an outflow of economic benefits that can be reasonably estimated.
g) Foreign currencies
Transactions denominated in foreign currencies are initially recorded at the rates of exchange prevailing
on the dates of the transactions.
Monetary items denominated in foreign currencies are translated at the rates prevailing on the balance
sheet date. Gains and losses arising are included in the Profit & Loss account.
Non-monetary items that are measured in a foreign currency are translated using the exchange rate at
the date when the fair value was determined.
h) Financial instruments
Financial instruments comprise financial assets and financial liabilities. Financial assets and financial
liabilities are recognised on the entity’s balance sheet when the entity has become a party to the
contractual provisions of the instrument. A financial asset is any asset that is cash, a contractual right
to receive cash or other financial asset, a contractual right to exchange financial instruments under
conditions that are potentially favourable or an equity instrument. A financial liability is any liability
52
Annual Report 2008- 09Fedders Lloyd Corporation Limited
that is a contractual obligation to deliver cash or another financial asset, or to exchange financial
instruments under conditions that are potentially unfavourable.
Trade receivables
Sales made on credit are included in trade receivables at the balance sheet date, and reduced by
appropriate allowances for estimated doubtful amounts. Bad debts are written off as they arise.
Trade payables
Trade payables are stated at their nominal value.
i) Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand,
balances with bank and deposits with banks, within a maturity date of three months or less from the
date of deposit, free of encumbrances.
4 Cash and bank balances
June 30, 2009
AED
Bank balances:
HSBC 128,200
128,200
5 Trade receivables
June 30, 2009
AED
Trade receivables 27,340
27,340
a) Aging of trade receivables are as follows:
June 30, 2009
AED
Due for 6 months or less 7,500
Due for 6-12 months 19,840
27,340
b) Geographical Analysis:
June 30, 2009
AED
Within U.A.E. 27,340
27,340
The fair value of trade receivables is not materially different from their balances shown in the balance sheet.
c) Credit risk:
At the balance sheet date, 2 customers accounted for 100% of the total outstanding trade receivables
and as such, the Establishment has significant concentration of credit risk to that extent.
53
6 Other receivables and prepayments
June 30, 2009
AED
Deposits 3,417
Prepayments 41,043
Other receivables and advances 5,807
50,267
7 Inventories
June 30, 2009
AED
Trading material 394,541
394,541
Stocks were mainly kept in the warehouse at Warehouse No.- 11, Shed No- 18, Industrial Park, Ras Al
Khaimah Free Zone, Ras Al Khaimah, U.A.E. Management has represented that nature of the stock is such
that aging does not impact value of the inventory in a substantial manner, hence ageing of the same is not
given.
8 Related parties transactions
The Establishment enters into transactions with companies and entities that fall within the definition of a
related party as contained in IAS 24, International Financial Reporting Standards (IFRS). Related parties
comprise companies and entities under common ownership and/or common management and control;
their partners and key management personnel.
The management decides on the terms and conditions of the transactions and services received/rendered
from/to related parties as well as other charges.
At the balance sheet date, trade and nontrade balances with related parties were as follows:
Due from related parties
Average balance June 30, 2009
AED AED
Fedders Lloyd Corporation Limited-India 269,197 281,988
Lloyd Electric FZE 100 1,700
283,688
Similarly, at the balance sheet date, due to related parties were as follows:
Average balance June 30, 2009
AED AED
Fedders Lloyd Corporation Limited-India 283,809 492,176
Lloyd Infotech (India) Pvt. Ltd- India 141 2,400
494,576
54
Annual Report 2008- 09Fedders Lloyd Corporation Limited
The nature of significant related-party transactions during the Period and the amounts involved were as
follows:
June 30, 2009
AED
Purchases 905,767
The Establishment provides/receives funds to/from related parties as and when required as working capital
facilities.
9 Sundry payables & accruals
June 30, 2009
AED
Accrued Expenses 8,964
8,964
10 Accumulated loss
June 30, 2009
AED
Net loss (119,504)
Closing balance (119,504)
11 Revenue
For the period from February 11
(Inception) to June 30, 2009
AED
Income from Sale of goods Within U.A.E. 599,480
599,480
12 Cost of sales
For the period from February 11
(Inception) to June 30, 2009
AED
Purchases (including direct expenses) 993,378
Less: Inventories, end of the period (394,541)
598,837
13 General and administrative expenses
For the period from February 11
(Inception) to June 30, 2009
AED
Rent expense 54,173
Travelling expense 5,718
Legal, visa and Professional Expenses 46,500
Office expenses 2,313
Miscellaneous expense 3,359
112,063
55
14 Selling and distribution expenses
For the period from February 11
(Inception) to June 30, 2009
AED
Selling expense 3,880
3,880
15 Financial instruments
Financial instruments of the Establishment comprises of cash at bank, trade receivables, other assets and
other liabilities.
Credit risk
Financial assets which potentially expose the Establishment to concentration of credit risk comprise principally
bank account, trade receivables & other receivables.
The Establishment’s bank accounts are placed with high credit quality financial institutions.
Trade and other receivables are stated net of allowance for doubtful recoveries.
At the balance sheet date, 2 customers accounted for 100% of the total outstanding trade receivables and
as such, the Establishment has significant concentration of credit risk to that extent.
Currency risk
There are no significant exchange rate risks as substantially all financial assets and financial liabilities are
denominated in Arab Emirates Dirhams or US Dollars to which the conversion of Dirhams into US Dollar is
fixed.
Interest rate risk
The Establishment is not exposed to any significant interest rate risk.
Fair values
At the balance sheet date, the fair values of financial assets and liabilities at period end appropriate their
carrying amounts.
16 Contingent liability
Except for the ongoing business obligations which are under normal course of business against which no
loss is expected, there has been no other known contingent liability on Establishment’s account as of
balance sheet date.
17 Comparative amounts
Since the reported period is from February 11, 2008 (inception) to June 30, 2009, no comparative figures
could be drawn.
56
Annual Report 2008- 09Fedders Lloyd Corporation Limited
FEDDERS LLOYD CORPORATION LIMITED
Statement Pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Company
As on June 30, 2009
1 Name of Subsidiary Fedders Lloyd Trading FZE(Ras
Al khaimah, United Arab Emirates)
2 Financial year of the Subsidiary Company* 30.06.2009
3 Holding Company’s Interest as on 30th June 2009
a) Number 5 shares
b) Face Value AED 100,000/-
c) Extent of share holdings in the subsidiary company 100%
(as on 30.06.2009)
4 Net aggregate amount of the Subsidiary’s Profit/ Loss
so far as it concerns members of Holding Company and
not dealt with in the Holding Company’s Accounts:
i) For Subsidiary’s financial year ended as above AED (119,504)
ii) For Subsidiary’s previous financial years since it Nil*
became Subsidiary
5 Net aggregate amount of the Subsidiary’s Profit/ Loss
so far as it concerns members of Holding Company
and dealt with in the Holding Company’s Accounts:
i) For Subsidiary’s financial year ended as above Nil
ii) For Subsidiary’s previous financial years since it Nil
became subsidiary.
6 Additional information u/s 212(5) N.A.
* Note: The wholly owned subsidiary, namely M/s. Fedders Lloyd Trading FZE was incorporated as a free trade
zone establishment in Ras Al Khaimah, UAE on February 11, 2008. During the period ended June 30, 2008, the
subsidiary has no significant reportable transactions. The subsidiary changed its financial year from December
ending every year to June ending every year. The subsidiary commenced its business during the year ended June
30, 2009.
As per our Report Attached For and on behalf of the Board of Directors
For Suresh C. Mathur & Co.
Chartered Accountants
Brijesh C. Mathur A. A. Siddiqui Purnima Sharma S. S. Dhawan K.Lall Brij Raj PunjPartner G. M. Finance Company Secretary Whole Time Director Director Chairman & Managing DirectorM. No.: 83540
Place : New Delhi
Date : November 20, 2009
57
AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
To The Board of Directors
Fedders Lloyd Corporation Limited
We have audited the attached Consolidated Balance Sheet of Fedders Lloyd Corporation Limited (“the Company”)
and its subsidiary as at 30th June, 2009, and also the Consolidated Profit & Loss Account and the Consolidated
Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the
responsibility of the Company’s management and have been prepared by the management on the basis of
separate financial statements and other financial information regarding components. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards
require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are
free of material mis-statements. An audit includes, examining on a test basis, evidence supporting the amounts
and disclosures in the financial statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
We did not audit the financial statements of Fedders Lloyd Trading FZE (100% subsidiary of Fedders Lloyd
Corporation Limited). These financial statements and other financial information have been audited by other
auditors whose reports have been furnished to us, and our opinion is based solely on the report of other auditor.
We report that the consolidated financial statements have been prepared by the Company in accordance with
the requirements of Accounting Standard (AS) 21 on Consolidated Financial Statements, issued by the Institute
of Chartered Accountants of India and on the basis of the separate audited financial statements of the Company
and its subsidiary included in the consolidated financial statements.
On the basis of the information and explanations given to us and on the consideration of the separate audit
reports on subsidiary, we are of the opinion that the said consolidated financial statements give a true and fair
view in conformity with the accounting principles generally accepted in India:
(a) in the case of the Consolidated Balance Sheet, of the Consolidated state of affairs of the Company and its
subsidiary as at 30th June, 2009;
(b) in the case of the Consolidated Profit and Loss Account, of the consolidated results of operations of the
Company and its subsidiary for the year then ended and
(c) in the case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the Company and
its subsidiary for the year then ended.
For Suresh C. Mathur & Co.
Chartered Accountants
Place : New Delhi Brijesh C. Mathur
Dated : November 20, 2009 Partner
M.No. : 83540
58
Annual Report 2008- 09Fedders Lloyd Corporation Limited
CONSOLIDATED BALANCE SHEET AS AT 30TH JUNE, 2009(Amount in Rs.)
Particulars Schedule As at30.06.2009
SOURCES OF FUNDS:SHAREHOLDERS FUNDS:
Share Capital A 307,697,000
Reserves & Surplus B 1,242,294,497 1,549,991,497
LOAN FUNDS:
Secured Loans C 1,164,275,830
DEFERRED TAX LIABILITY 14,912,042
TOTAL 2,729,179,369
APPLICATIONS OF FUNDS:FIXED ASSETS: D
Gross Block 1,280,831,430
Less: Depreciation 390,496,389 890,335,041
Capital Work in Progress 16,116,985
Project Under Development 78,245,305 94,362,290
INVESTMENTS (At Cost) E 3,204,000
CURRENT ASSETS, LOAN & ADVANCES: F
Inventories 961,022,859
Sundry Debtors 732,336,025
Cash and Bank Balances 65,550,071
Loan and Advances 463,013,063
2,221,922,019
Less : CURRENT LIABILITIES & PROVISIONS: G
Current Liabilities 335,841,392
Provisions 155,304,689
491,146,081
NET CURRENT ASSETS 1,730,775,938
MISCELLANEOUS EXPENDITURE H
(To the extent not written off or adjusted) 10,502,100
TOTAL 2,729,179,369
NOTES TO ACCOUNTS P -
Schedules A to P annexed form an integral part
of accounts & are duly authenticated
As per our Report Attached For and on behalf of the Board of Directors
For Suresh C. Mathur & Co.
Chartered Accountants
Brijesh C. Mathur A. A. Siddiqui Purnima Sharma S. S. Dhawan K.Lall Brij Raj Punj
Partner G. M. Finance Company Secretary Whole Time Director Director Chairman & Managing Director
M. No.: 83540
Place : New Delhi
Date : November 20, 2009
59
CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 30TH JUNE, 2009
(Amount in Rs.)
Particulars Schedule Year ended30.06.2009
INCOME:Sales 4,687,871,571
Less:Excise Duty 84,582,553 4,603,289,018
Other Income I 6,401,951
TOTAL 4,609,690,969
EXPENDITURE:Cost of Goods Consumed J 4,046,653,498
Increase/decrease in Finished Stock K 39,702,064 4,086,355,562
Manufacturing Expenses L 32,286,389
Administrative Expenses M 144,760,895
Selling Expenses N 37,843,066
Finance Charges O 119,077,436
Misc. Expenditure Written off 3,500,700
Depreciation 44,035,533
Less: Re-valuation reserve written back 2,097,965 41,937,568
TOTAL 4,465,761,616
Profit before Taxation 143,929,353
Less: Provision for Taxation
Current Taxation 17,960,000
Deferred Tax Assets for the year 8,413,000
Fringe Benefit Tax 810,000
Profit for the year after Tax 116,746,353
Balance brought forward from previous year 8,951,684
Amount Available for Appropriation 125,698,037
APPROPRIATIONS:
Proposed Dividend 30,769,700
Tax on Proposed Dividend 5,229,310
Transfer to General Reserve 80,000,000
Balance carried to Balance Sheet 9,699,027
Basic & Diluted Earnings Per Share 3.79
Notes forming part of the Accounts P
Schedules A to P annexed form an integral part
of accounts & are duly authenticated.
As per our Report Attached For and on behalf of the Board of Directors
For Suresh C. Mathur & Co.
Chartered Accountants
Brijesh C. Mathur A. A. Siddiqui Purnima Sharma S. S. Dhawan K.Lall Brij Raj Punj
Partner G. M. Finance Company Secretary Whole Time Director Director Chairman & Managing Director
M. No.: 83540
Place : New Delhi
Date : November 20, 2009
60
Annual Report 2008- 09Fedders Lloyd Corporation Limited
CONSOLIDATED SCHEDULES TO THE BALANCE SHEET AS AT 30TH JUNE, 2009
(Amount in Rs.)
Particulars As at30.06.2009
SCHEDULE - A
SHARE CAPITAL:
Authorised Capital:
5,00,00,000 Equity Shares of Rs.10/- each 500,000,000
Issued, Subscribed & Paid up Capital:
3,07,69,700 equity shares of Rs. 10/- each fully paid up 307,697,000
TOTAL 307,697,000
SCHEDULE - B
RESERVES AND SURPLUS:
1) Capital Reserve:
Revaluation Reserve (Not available for Dividend)
Office Premises 12,740,045
Factory Land & Building 103,785,709
116,525,754
Less: Amount Utilised to set-off Dep. 2,097,965 114,427,789
2) Securities Premium Account 256,398,500
3) General Reserve:
Opening balance 785,530,957
Add: Transfer from Profit & Loss a/c 80,000,000 865,530,957
4) Exchange Difference on Consolidation (3,761,776)
5) Profit & Loss Account
As per Profit & Loss Appropriation A/c 9,699,027
TOTAL 1,242,294,497
SCHEDULE - C
SECURED LOANS:
From Schedule Banks:
Term Loans 418,743,210
Working Capital Loans 745,532,620
TOTAL 1,164,275,830
Note: Working Capital Loans are secured by way of hypothecation of whole of current assets and second charge
on Fixed Assets of the Company. Term Loans are secured by way of first pari pasu charge on all exiting and future
Fixed Assets of the Company.
61
CO
NSO
LID
ATED
SC
HED
ULES T
O T
HE B
ALA
NC
E S
HEET A
S A
T 3
0TH
JU
NE, 2009
SC
HED
ULE-
D
FIX
ED
ASSETS:
(Am
ount in
Rs.
)
Gro
ss B
lock
Dep
reci
atio
nN
et B
lock
Par
ticu
lars
As A
tAd
ditio
nsTr
ansfe
r/As
At
Up To
For
the
year
Adju
stm
ent
Tota
lAs
At
01.0
7.20
08Ad
just
men
t30
.06.2
009
30.0
6.20
0830
.06.2
009
Land
107,
582,
977
263,
702,
149
-37
1,28
5,12
6-
--
-37
1,28
5,12
6
Fact
ory B
uilid
ing
149,
354,
138
1,57
4,30
4 -
150
,928
,442
6
9,93
9,20
97,
984,
412
-
77,
923,
621
73,0
04,8
21
Offic
e Pre
mise
s
24
,255
,304
-
-24
,255
,304
14,2
53,5
3251
8,4
26
-14
,771
,958
9,4
83,3
46
Tem
pora
ry Sh
ed -
28,2
56,2
65-
28,2
56,2
65
-1,
881,
171
- 1
,881
,171
26,3
75,0
94
Furn
iture
& Fi
xtur
es5,
159,
233
2
,216
,743
-7,
375,
976
3
,243
,927
522,
344
-
3
,766
,271
3,609,7
05
Plan
t & M
achi
nery
24
8,44
7,30
6 2
21,9
69,3
26 -
470,4
16,6
3213
3,89
3,04
016
,924
,043
-15
0,81
7,08
331
9,5
99,5
49
Dies
171,
689,
589
93,3
56-
171,
782,
945
94,3
53,5
6810
,743,
285
-
105
,096
,853
66,6
86,0
92
Gene
rato
r
2
,983
,559
1,1
41,7
90
-
4,12
5,34
9
2,
016,
715
20
7,77
0
-
2
,224
,485
1,900,8
64
Com
pute
r
1
5,92
1,95
9
2,5
24,7
53
-18
,446,7
12
11,9
63,0
64 2
,10
2,27
7
-
14
,065
,341
4,3
81,
371
Offic
e Eq
uipm
ents
4,3
12,4
40
8
88,0
07
-
5,20
0,4
47
2,47
1,57
231
5,421
-
2,
786,
993
2,413
,454
Elec
tric
Equ
ipm
ents
4,
786,
458
774
,994
-5,
561,
452
1
,936
,124
477,
448
-
2
,413
,572
3,14
7,880
Air-
cond
ition
ers
3
,147
,148
162
,061
-
3,30
9,2
09
2
,310
,506
124,
358
-
2,4
34,8
6487
4,34
5
Refri
gera
tors
2
58,4
23
-
-
258,4
23
2
48,2
881,
410
-
2
49,6
988,7
25
Fan
580,
465
45
,208
-
625
,673
471
,588
16,8
58
-
488
,446
137,
227
Moto
r Car
13
,057
,906
2,6
67,9
71-
15,7
25,8
77
6,7
45,5
682,
127,
40
2
-
8,87
2,97
06,8
52,9
07
Scoo
ter &
Mot
or Cy
cle
4
7,99
2
-
-
47,
992
3
1,97
54,
147
-
36,
122
11,8
70
Fork
Lifte
r
55
9,30
5
-
-
559,3
05
531
,100
3,92
4
-53
5,02
424
,281
Tools
2,4
30,1
49
87,
729
-2,
517,
878
1,
912,
572
78,0
54
-
1
,990
,626
527,
252
Flat
152,
423
-
-15
2,42
3
13
8,50
82,
783
-
141,
291
11,1
32
TOTA
L
7
54,7
26,7
74
526,1
04,6
56
- 1
,280,8
31,4
30 3
46,4
60,8
56 4
4,0
35,5
33
-
3
90,4
96,3
89
890,3
35,0
41
Tota
l Dep
recia
tion
durin
g the
year
44,0
35,5
33
Less
: Rev
alua
tion
Rese
rve W
/bac
k to
the e
xten
t of d
ep. o
n ad
ditio
n on
a/c
of R
eval
uatio
n 2
,097
,965
Depr
ecia
tion
char
ged
to P
rofit
& Lo
ss A
ccou
nt41
,937
,568
62
Annual Report 2008- 09Fedders Lloyd Corporation Limited
CONSOLIDATED SCHEDULES TO THE BALANCE SHEET AS AT 30TH JUNE, 2009
(Amount in Rs.)
Particulars As at30.06.2009
SCHEDULE - E
INVESTMENTS:
Long Term Investments: Non tradable
Quoted Shares
Lloyd Electric & Engineering Ltd. 1,500
(100 Equity Shares of Rs. 10/- each at a premium
of Rs. 5/- per Share)
(Market Value as on 30.06.2009: Rs. 37.05 Per Share)
State Bank of Bikaner & Jaipur:
(375 Equity Shares of Rs. 100 each fully paid up
at a premium of Rs. 440/- per Share)
(Market Value as on 30.06.2009: Rs. 384.45 Per Share) 202,500
Sub-Total (A) 204,000
Unquoted Shares:
(Market Value not known)
M/s Lloyd Credits Ltd. 3,000,000
(3,00,000 Equity Shares of Rs. 10/- each)
Sub-Total (B) 3,000,000
TOTAL (A+B) 3,204,000
63
CONSOLIDATED SCHEDULES TO THE BALANCE SHEET AS AT 30TH JUNE, 2009
(Amount in Rs.)
Particulars As at30.06.2009
SCHEDULE - F
CURRENT ASSETS, LOAN & ADVANCES:
INVENTORIES:
(As certified by the Management)
Stock in hand:at cost net of modvate
Raw-materials 389,184,396
Finished Goods 264,670,342
Work in Progress 178,252,147
Semi Finished Goods 96,823,960
928,930,845
Stock at Warehouse 32,092,014
TOTAL (A) 961,022,859
SUNDRY DEBTORS:
(Unsecured considered good by the Management)
More than six months 121,820,898
Others 610,515,127
TOTAL (B) 732,336,025
CASH AND BANK BALANCES:
Cash balance in hand 6,333,090
Balances with scheduled banks:
in current accounts 26,110,126
in Margin Money 19,800,311
in Fixed Deposit 13,306,544
TOTAL (C) 65,550,071
LOAN & ADVANCES :
(Unsecured- considered good)
Earnest Money & Security Deposits 38,514,723
Staff and other advances 3,568,094
Advances for goods and expenses to be recovered
in cash or in kind or for value to be received 388,943,006
SAD 4% Refundable 5,316,317
Balance in Excise PLA & PCA A/c 7,016,331
Advance Income Tax & T.D.S. 19,654,593
TOTAL (D) 463,013,063
Grand Total (A+B+C+D) 2,221,922,019
64
Annual Report 2008- 09Fedders Lloyd Corporation Limited
CONSOLIDATED SCHEDULES TO THE BALANCE SHEET AS AT 30TH JUNE, 2009
(Amount in Rs.)
Particulars As at30.06.2009
SCHEDULE - G
CURRENT LIABILITIES & PROVISIONS:
CURRENT LIABILITIES:
Sundry creditors for goods and expenses 316,137,936
Unclaimed Dividend 1,896,280
Other Liabilities 14,647,930
Interest accured but not due 3,159,246
TOTAL 335,841,392
PROVISIONS:
for Income Tax 99,985,323
for Fringe Benefit Tax 1,580,000
for proposed dividend 30,769,700
for tax on proposed dividend 5,229,310
for gratuity & leave encashment 17,740,356
TOTAL 155,304,689
SCHEDULE - H
MISCELLANEOUS EXPENDITURE:
(to the extent not written off or adjusted)
Deferred Revenue Expenditure 14,002,800
Less:1/5th written off during the year 3,500,700 10,502,100
TOTAL 10,502,100
65
CONSOLIDATED SCHEDULES TO THE PROFIT & LOSS ACCOUNT FOR THE YEAR
ENDED ON 30TH JUNE, 2009
(Amount in Rs.)
Particulars As at30.06.2009
SCHEDULE - I
OTHER INCOME:
Other Income 2,400,763
Interest Received 4,001,088
Dividend Gross 100
TOTAL 6,401,951
SCHEDULE - J
COST OF GOODS CONSUMED:
Opening Stocks:
Raw materials, Stores & Spares 333,706,084
Work in progress 119,510,988
453,217,072
Add:Purchases and Expenses 4,166,100,598 4,619,317,670
Less: Closing stocks
(Valued at cost or net realiseable whichever
is less as certified by the directors)
Raw materials, Stores & Spares 394,412,025
Work in progress 178,252,147 572,664,172
TOTAL (A) 4,046,653,498
SCHEDULE - K
Increase/Decrease in Finished Stock
Opening stock:
Air-conditioners 250,340,071
Refrigerators 300,752
Semifinished 87,094,040
Appliances 58,233,874 395,968,737
Less : Closing stock
Air-conditioners 245,405,538
Refrigerators 300,752
Semifinished 96,823,960
Appliances 13,736,423 356,266,673
TOTAL (B) 39,702,064
Grand Total (A + B) 4,086,355,562
66
Annual Report 2008- 09Fedders Lloyd Corporation Limited
CONSOLIDATED SCHEDULES TO THE PROFIT & LOSS ACCOUNT FOR THE YEAR
ENDED ON 30TH JUNE, 2009
(Amount in Rs.)
Particulars As at30.06.2009
SCHEDULE - L
MANUFACTURING EXPENSES:
Labour, Wages & Perquisities 14,748,092
Repair to Plant & Machinery 19,353
Provident Fund Contribution 7,948,702
Employee State Insurance 1,078,862
Staff Amenities 750,703
Bonus 102,927
Factory Licence Fee 13,500
Power & Fuel & Other Mfg. Exp. 7,624,250
TOTAL 32,286,389
SCHEDULE- M
ADMINISTRATIVE EXPENSES:
Staff Salaries 87,362,513
Bonus 1,586,758
Remuneration to Directors 7,719,500
Rent 8,141,687
Travelling 5,020,223
Printing and stationery 1,823,566
Legal and Consultancy Fee 11,640,434
Audit Fee 550,000
Tax Audit Fee 50,000
Service Tax 61,800 661,800
Postage, Telegrams & Telephone 3,637,084
Director Sitting Fee 90,000
Gratuity 5,977,381
Leave Encashment 674,322
General Charges 786,086
Motor Car Expenses 1,342,609
Subscription 354,754
Conveyance 4,501,717
Newspapers & Periodicals 108,132
Licence fee 98,728
Computer Expenses 730,876
Research & Development 2,502,724
TOTAL 144,760,895
67
CONSOLIDATED SCHEDULES TO THE PROFIT & LOSS ACCOUNT FOR THE YEAR
ENDED ON 30TH JUNE, 2009
(Amount in Rs.)
Particulars As at30.06.2009
SCHEDULE - N
SELLING EXPENSES:
Advertisement 28,993,198
Sales Promotion 5,154,471
Work Contract Tax Paid 3,695,397
TOTAL 37,843,066
SCHEDULE - O
FINANCE CHARGES:
Bank Charges 6,472,684
Interest 112,604,752
TOTAL 119,077,436
68
Annual Report 2008- 09Fedders Lloyd Corporation Limited
SCHEDULE-‘P’
CONSOLIDATED NOTES FORMING PART OF THE ACCOUNT FOR THE YEAR ENDED 30th JUNE 2009
I. SIGNIFICANT ACCOUNTING POLICIES:
1. BASIS OF PREPARTION OF FINANCIAL STATEMENTS:
i) The financial statements have been prepared under the historical cost convention in accordance with
generally accepted accounting principles, accounting standards and the provisions of the Companies
Act, 1956 as adopted consistently by the Company.
ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally
accepted accounting principles followed by the Company.
2. PRINCIPLES OF CONSOLIDATION:
The Consolidated financial statements relate to Fedders Lloyd Corporation Limited (‘the Company’) and its
subsidiary company. The consolidated financial statements have been prepared on the following basis:
The financial statements of the company and its subsidiary company have been combined on a line by line
basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully
eliminating intra group balances and intra-group transactions in accordance with Accounting Standard
(AS) 21 on “Consolidated Financial Statements”.
The Consolidated financial statements have been prepared using uniform accounting policies for like
transactions and other events in similar circumstances and are presented in the same manner as the Company’s
separate financial statements.
In case of foreign subsidiaries, being non-integral foreign operations, revenue items are consolidated at the
average rate prevailing during the year. All assets and liabilities are converted at rates prevailing at the end
of the year. Any exchange difference arising on consolidation is recognized in exchange fluctuation reserve.
The financial statements of the subsidiaries used in the consolidation are drawn upto the same reporting
date as that of the parent company i.e. year ended 30th June 2009.
All material inter-company balances and transactions are eliminated on consolidation.
3. Investment other than in subsidiaries have been accounted as per Accounting Standard (AS) Accounting for
Investment.
4. The Subsidiary Company considered in the preparation of these consolidated financial statements is:
Name of Subsidiary Country of incorporation Proportionof ownership
Interest as at 30.06.2009
Fedders Lloyd Trading FZE United Arab Emirates, 100%
License No.: 7000188 (Ras Al Khaimah)
5. Fedders Lloyd Trading FZE (“The Establishment”) was incorporated on February 11, 2008 as a Free Trade
Zone Establishment with Limited Liability and registered with RAK Trade Free Zone Authority, Ras Al Khaimah-
United Arab Emirates for undertaking general trading activities. The Company acquired 100% ownership
interest in the free trade zone establishment on February 11, 2008 by investing AED 500,000 in the equity
share capital of the establishment.
69
6. The consolidated financial results includes the results of the subsidiary company, Fedders Lloyd Trading FZE
for the period since inception i.e. 11th February 2008 till June 30, 2009 and hence results not comparable.
7. REVENUE RECOGNITION:
a) All income and expenditure are recognized on accrual basis.
b) The sales is recognized on the dispatch of goods inclusive of excise duty wherever applicable and are
net of trade discount.
c) Sales tax is not passed through Profit & Loss Account and is therefore not included in sales.
d) Excise Duty & Custom duty are passed through Profit & Loss A/c.
e) Modvat availed on purchases of raw material and other inputs are reduced from its purchase and
accordingly purchases of raw material are stated at net of cost.
8. FIXED ASSETS:
a) Fixed Assets are stated at their original cost including freight and other incidental expenses related to
acquisition and installation, less accumulated depreciation.
b) In case of land and building market value has been substituted for cost based on the valuation report
adopted in the meeting of Board of Director on 24-04-99.
c) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on
addition to fixed assets on account of revaluation of assets.
9. DEPRECIATION:
a) Depreciation on fixed assets (other than land) is charged on written down value method at the rates
and in the manner prescribed in schedule XIV of the Companies Act, 1956.
b) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on
addition to fixed assets on account of revaluation of assets.
Depreciation on addition to assets or on sale of assets is calculated on pro-rata basis.
10. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS:
a) Foreign currency transactions other than Fixed Assets are recorded at exchange rate prevailing at the
time of transaction and realized gains and losses on this account are recognized in Profit & Loss Account.
b) There is no foreign currency liability against acquisition of fixed assets at the year end.
11. INVESTMENTS:
Long term investments are stated at cost. Provision for diminution in the value of long-term investment is
made only if such decline is other than temporary in the opinion of the management.
12. INVENTORIES:
a) Raw materials, stores and spares and stock-in-transit are valued at cost net of MODVAT as per the First
in First out (FIFO) method after providing for cost of obsolescence value.
b) Work in progress is valued at cost including related overheads.
c) Finished goods are valued at lower of cost or net realizable value.
d) Stock in transit lying in warehouse is valued at cost and does not include custom duty payable. However,
non-provision of duty does not affect profit for the year.
70
Annual Report 2008- 09Fedders Lloyd Corporation Limited
13. EMPLOYEES RETIREMENT BENEFITS:
a) The Company’s contribution to the provident fund is charged to profit and loss account.
b) The Company’s liability in respect of payment of gratuity and leave encashment is provided on accrual
basis. During the year Company has made the provision of gratuity and leave encashment of Rs. 39.49
Lacs upto 30th June 2009.
14. RESEARCH AND DEVELOPMENTS:
Revenue expenditure is charged to profit & loss account of the year in which they are incurred.
15. EXCISE DUTY:
Excise duty is accounted for as and when the same is paid on the dispatch of goods from factory premises.
No provision has been made for excise duty in respect of finished products lying in the factory premises.
16. MANAGEMENT ESTIMATION:
The financial statements are prepared in conformity with generally accepted accounting principles and
applicable accounting standards, which may require management to make estimates and assumptions.
These may affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the
date of financial statements and the reported amount of the revenue and expenses during the reporting
period. Actual report later could differ from these estimates.
17. IMPAIRMENT OF ASSETS:
In the opinion of the Company's management, there is no impairment to the assets to which Accounting
Standard-28 “Impairment of Assets” applied requiring any revenue recognition.
18. TAXATION:
Current Tax:
The tax expenses for the year, comprising current tax and fringe benefit tax is included in determining the
net profit for the year.
A Provision is made for the current tax and fringe benefit tax based on tax liability computed in accordance
with relevant tax rates and tax laws.
Deferred Tax:
The Deferred Tax Liability / Asset is Provided for timing difference between book profit and taxable profits
is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the
balance sheet date.
19. BORROWING COST:
Borrowing cost that are directly attributable to the acquisition, construction or production of qualifying
assets are capitalized as a part of the cost of that asset. Other borrowing costs are recognized as an expense
in the period in which they are incurred.
20. EARNING PER SHARE:
The earnings considered in ascertaining the Company’s Earnings per Share (EPS) comprise the net profits
after tax. The number of shares used in computing basic EPS is the weighted average number of shares
outstanding during the year.
71
The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential
dilutive equity shares.
21. CASH FLOW STATEMENT:
The Cash Flow statement is prepared by the indirect method set out in Accounting Standard –3 issued by
the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents
cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents
presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the
Balance Sheet date.
22. SUNDRY DEBTORS/LOANS & ADVANCES:
Sundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any
which is not likely to be material, will be adjusted at the time of conformation.
23. PROVISIONS /CONTINGENCIES
A provision is recognized when there is a present obligation as a result of past event and it is probable that
an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can
be made. Provisions are determined based on best estimate of the amount required to settle the obligation
at the Balance Sheet date.
Contingent liabilities are not recognized and are disclosed in the Notes on Accounts.
24. DERIVATIVE INSTRUMENTS:
The Company has not entered into the derivative instruments. Forward Contract other than those entered
into, to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast
transactions are treated as foreign currency transactions and accounted accordingly. Exchange difference
arising on such contracts are recognized in the period in which they arise and premium paid/received is
accounted as expenses/income over the period of the contract.
II NOTES TO ACCOUNTS
1. The amount of Rs. 19,66,335 and Rs. 10,34,621 (Total Rs. 30,00,956) have been booked as export sales by
the parent company - Fedders Lloyd Corporation Ltd. to its subsidiary - Fedders Lloyd Trading FZE on 18.06.2008
and 20.06.2008, respectively, which has been altogether accounted for by the subsidiary company on
03.08.2008. On consolidation basis, it does not have any impact on financial statements.
2. Contingent Liabilties
Sl. No. Particulars Amount (Rs.)
1 Bank Gurantees 557,714,043
2 Corporate Gurantees 81,102,610
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.
72
Annual Report 2008- 09Fedders Lloyd Corporation Limited
4. 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 Subsidiary Company
Key Management Personnel:
Mr. Brij Raj Punj Managing Director
Mr. S.S. Dhawan Whole Time Director
Transaction with Related Companies
Transaction Amount in (Rs.)
Purchase of goods 51,900,217
Sales of goods 696,317
5. 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. 17,503,500/- had provided as deferred revenue expenditure.
During the year the Company has written off Rs.3,500,700/- having 1/5 of the Deferred Revenue Expenditure.
6. Investment in Subsidiary Company:
The Company has invested Rs. 5,445,250/- (i.e. 5 shares @ 1,00,000/- AED each) in M/s Fedders Lloyd Trading
FZE, UAE which is subsidiary company of M/s Fedders Lloyd Corporation Limited.
7. Project Under Development:
The Company has a land at Vrindaban. The cost of project at Balance Sheet date is as under:
Amount in (Rs.)
Cost of Land 52,039,200
Technical Consultancy Charges 314,105
Interest 23,500,000
Other cost 2,392,000
TOTAL 78,245,305
8. Dividend :
During the year, the Company has proposed dividend of Rs. 30,769,700/- to shareholders.
73
9. The break up of deferred tax assets and liabilities into major components at the year ended as below:
Amount in (Rs.)
Deferred Tax Liability:
Depreciation Difference 15,862,700
Deferred Tax Assets
Gratuity & Other Provisions 7,449,700
Net Deferred Liability 8,413,000
10. Basic & Diluted Earnings Per Share:
Earnings per share has been computed as under:
Amount in (Rs.)
Profit after Taxation 116,746,353
Number of Ordinary Shares 30,769,700
Basic and Diluted Earnings per share (Face Value Rs.10/-per share) 3.79
11. 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.
Sr. No. Particulars Amount (Rs. In lacs)
30.06.2009
1 Segment Revenue (Net Sale/Income from each Segment
a) HVACR 36,158.88
b) Steel Structurals 9,938.02
Total 46,096.90
Less: Inter Segment Revenue 0.00
Net Sales/Income form Operations 46,096.90
2 Segment Results(Profit (+)/Loss(-) Before Tax and Interest from each Segment)
a) HVACR 2,413.36
b) Steel Structurals 637.98
Total 3,051.34
Less:
i) Interest 1,126.05
ii) Other Un-allocable expenditure net off 486.00
iii) Un-allocable Income 0.00
Total Profit Before Tax 1,439.29
3 Capital Employed (Segment Assets – Segment Liabilities)
a) HVACR 16,664.00
b) Steel Structurals 2,109.00
c) Unallocated 813.00
Total 19,586.00
74
Annual Report 2008- 09Fedders Lloyd Corporation Limited
12. Directors Remuneration paid during the year:
Remuneration & Perks 7,719,500
Provident Fund 513,000
13. Previous years figures have been re-grouped/re-arranged as and wherever found necessary.
14. The balance of Intra –Group companies & Sister Units are subject to confirmation.
15. 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.
Refer to our Report of even date For and on behalf of the Board of Directors
For Suresh C. Mathur & Co.
Chartered Accountants
Brijesh C. Mathur A. A. Siddiqui Purnima Sharma S. S. Dhawan K.Lall Brij Raj Punj
Partner G. M. Finance Company Secretary Whole Time Director Director Chairman & Managing Director
M. No.: 83540
Place : New Delhi
Date : November 20, 2009
75
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED ON 30TH JUNE 2009
(Rs. in Lacs)
Particulars Year ended30.06.2009
A. Cash Flow from Operating Activities:
Net Profit before tax 1,439.29
Adjustments for :
Add: Depreciation 419.38
Preliminary Expenses written off 35.01
Interest Paid 1,126.05 1,580.44
Less: Interest Income (40.01)
Dividend Income (0.00) (40.01)
Operating profit before working capital changes 2,979.72
Trade & other receivables (199.44)
Inventories (46.87)
Loans & Advances (1,377.33)
Trade & other payable (138.93) (1,762.57)
Cash generated from operations 1,217.15
Exchange Fluctuation (37.62)
Direct tax paid (148.51)
Net Cash Flow from Operating Activities 1,031.02
B Cash Flow from Investing Activities:
Purhase of fixed assets (4,247.79)
Purchase of Business 54.46
Interest Received 40.01
Profit on sale of Fixed Assets -
Dividend received 0.00 (4,153.32)
Net Cash Flow from Investing Activities (4,153.32)
C Cash Flow from Financial Activities:
Proceeds from Long Term Borrowing 4,153.72
Dividend Paid -
Dividend Tax -
Interest paid (1,126.05) 3,027.67
Net Cash Flow from Financing Activities 3,027.67
Net increase/decrease in Cash and Cash Equivalents (A+B+C) (94.63)
Opening Balance of Cash and Cash Equivalents 750.13
Closing Balance of Cash and Cash Equivalents 655.50
Net increase/ decrease in Cash and Cash Equivalents (94.63)
Refer to our Report of even date For and on behalf of the Board of DirectorsFor Suresh C. Mathur & Co.Chartered AccountantsBrijesh C. Mathur A. A. Siddiqui Purnima Sharma S. S. Dhawan K.Lall Brij Raj PunjPartner G. M. Finance Company Secretary Whole Time Director Director Chairman & Managing DirectorM. No.: 83540
Place : New DelhiDate : November 20, 2009
AUDITORS' REPORT
We have examined the above consolidated Cash Flow Statement of Fedders Lloyd Corporation Limited for the year ended 30th June, 2009. The statement has been
prepared by the Company in accordance with the requirements-of Clause 32 of the Listing Agreement entered into with Stock Exchanges and is based on and is in
agreement with the corresponding consolidated Profit & Loss Account and consolidated Balance Sheet of the Company.For Suresh C. Mathur & Co.
Chartered Accountants,Brijesh C. Mathur
Place : New Delhi Partner,Dated : November 20, 2009 M. No.: 83540
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILEI. Registration Details
Registration No. State Code
Balance Sheet Date
II. Capital Raised during the year(Amounts in Rs.Thousands)
Public Issue Rights Issue
Bonus Issue Private Placement
III. Position of Mobilisation and Deployment of funds (Amount in Rs.Thousands)
TOTAL LIABILITIES TOTAL ASSETS
SOURCES OF FUNDSPaid-up Capital Share Warrant
Reserves & Surplus Secured Loans
Unsecured Loans Deferred Tax
APPLICATION OF FUNDSNet Fixed Assets (Incl.work in progress) Investments
Net Current Assets Misc. Expenditure
Accumulated Losses / Profit
IV. Performance of the Company(Amounts in Rs.Thousands) Turnover & Other Income Total Expenditure
Profit/Loss before Tax Profit/Loss after Tax
Earning per Share (in Rs.) Interim Dividend @ %
Final Dividend @ %
V. Generic Names of Three Principal Products / Services of the Company(As per Monetary Terms)
Item Code No. 8 4 . 1 5 Product Description AIRCONDITIONERS
8 4 . 1 8 REFRIGERATORS
STEEL STRUCTURALS
N I L N I L
2 0
3 0 0 6
N I L
3 0 7 6 9 7
3 . 6 8 N I L
2 7 2 9 3 5 2
2 1 1 1 8
N I L
2 7 2 9 3 5 2
2 0 0 9
N I L
1 2 4 2 4 6 7 1 1 6 4 2 7 6
9 8 4 6 9 8 8 6 5 0
1 7 2 5 5 0 2 1 0 5 0 2
N I L
4 6 0 8 5 7 6 4 4 6 8 2 3 6
1 4 0 3 4 0 1 1 3 1 5 7
N I L 1 4 9 1 2
1 0
As per our Report Attached For and on behalf of the Board of DirectorsFor Suresh C. Mathur & Co.Chartered AccountantsBrijesh C. Mathur A. A. Siddiqui Purnima Sharma S. S. Dhawan K.Lall Brij Raj PunjPartner G. M. Finance Company Secretary Whole Time Director Director Chairman & Managing DirectorM. No.: 83540
Place : New DelhiDate : November 20, 2009
76
Annual Report 2008- 09Fedders Lloyd Corporation Limited
2005 2006 2007 2008 2009
Financial Indicators
PAT (Rs. In Lacs)
1131.57
800.06
1216.45
1926.481824.71
0
500
1000
1500
2000
2005 2006 2007 2008 2009
EPS (Rs.)
159, Okhla Industrial Estate, Phase-III, New Delhi-110 020 (INDIA)
Ph. : 91-11-40627200 / 300 Fax : 91-11-41609909
E-mail : [email protected]
Website : www.fedderslloyd.com
FEDDERS LLOYD CORPORATION LTD.
Printe
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Mo
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