Chairman
Dear Fellow Shareowners,
The Fiscal Year 2013 was another challenging year for the Indian economy as the
slowdowns continued with expected recovery not materializing. While the global economy
showed some signs of stabilization, most of the emerging economies, including India faced
multiple challenges of capital outflows, rising current account deficit and depreciation
of the local currency. Stabilizing these parameters was one of the key challenges for the
Indian economy.
Amidst this slowdown, your Company was able to effectively navigate the domestic
turmoil through its sound business strategies and robust business model. This enabled your
Company to deliver a sound performance in a difficult business environment. The
Consolidated Revenue of the Group grew by 20% over the previous year to Rs. 1776 crores,while
profits (PBT) expanded by 35% to touch at record high of Rs. 97 crores.
Positioning itself for long term success, your Company continued to expand its
capabilities in technology, expanding existing product portfolio by developing new range
of environment friendly air conditioners meeting with new star rating norms rolled out by
BEE (Bureau of energy efficiency). New products developed includes inverter split air
conditioners for the OEM market, Heat and Cool products for export market with R-410A
refrigerant , development of commercial AC -24K & 48K Cassette/ Floor standing , among
others.
Our strong distribution network and differentiated manufacturing process make us the
preferred supplier to key players across industries we cater to, enabling us to capture
value from healthy demand in the domestic and international markets.
The year also saw the exponential rise in exports with increasing market presence in
Middle-East, Africa and CIS countries indicating growing acceptability of our value-added
products meeting with international quality standards and certifications.
In the Commercial Air-conditioning business, your company has developed Roof Mounted
HVAC unit for Metro Rail using eco-friendly refrigerants. Being IRIS compliant, your
company has bagged its first prestigious order from Bombardier Transportation for the
supply of Roof Mounted Ventilation Units for EMU coaches. This has opened avenues for the
company to bid for international jobs in Railways.
With the integration of the heat exchanger business with the existing line of coil
business, your company has expanded its existing product base by offering wide range of
heat exchangers including copper and aluminium brazed radiators, charge air coolers and
condensers for railways, automobiles and industrial application.
We have expanded our "LLOYD" brand portfolio to include products like
star-rated Air-Conditioners, Washing Machines, LED television, Chest Freezers, including
others. Our endeavor is to lead the transformation in the Consumer goods industry in India
by launching products with cutting edge technology, so as to position the brand as a one
amongst the top players in the fast growing Consumer Durable sector. Lloyd is committed to
fulfilling the vision of every Home, everywhere by marketing well-differentiated products
not only of high quality, technology or service but also giving consumers the ultimate
satisfaction guarantee phrased as-"Khushiyon ki Guarantee"!
We have the expertise in leveraging our ever expanding capacities to face challenges,
transform them into opportunities and ultimately evolve as a market leader. We are
positive and confident of making further strides even in the current challenging economic
environment & sustain the growth momentum demonstrated over the last decade.
In Europe, Operations of the subsidiaries were significantly impacted by the flood that
hit Prague, Czech Republic in June 2013, causing total damage of Euro 6 Million, which was
fully indemnified by insurance. Though it impacted the sales of Lloyd Coils Europe (LCE)
by 10% down to Euro 33.37 Million, LCE reported all time high EBITDA of Euro 3.9 Million.
This was primarily the result of improved product portfolio, customer management and focus
on new product segment like heat pumps, display cabinets and large bespoke coils with
better quality and value additions. At Janka Engineering, the year was a turnaround in
sales and profitability. Although Janka too was affected by the flood, the volume loss has
been more than compensated by additional revenue generated from the new segment of Railway
HVAC unit and supply of special coolers to Nuclear power plant Mochovce. This resulted in
pushing the sales to all time high of Euro 12 Million, up by 16% over the previous year,
with EBITDA margin touching to all time high of Euro 0.40 Million, as against previous
year loss of Euro-1 Million.Janka has also developed condensing unit for retro-fitted
coaches of local train operator Regiojet and is in advanced talks to provide similar
solutions to Czech Railways.
The Indian HVAC&R market is poised for rapid growth due to a number of changes that
are taking place in the Indian economy as well as easier availability of A/C products,
which constitutes the bulk of the HVAC&R segment, in the market. The potential demand
from the construction sector (both conventional and green buildings), coupled with the
potential to save energy from air-conditioning (especially through efficient
technologies), will usher a boom period for the HVAC&R market, with support from the
Government to promote energy-efficient standards, practices, and technologies.
Going forward, your Company is well placed to capitalize on the opportunities arising
out of this improved market conditions.We are investing in augmenting our manufacturing,
research and marketing base in order to pursue strong and sustained growth.
Caring for the community has always been a cornerstone of your company. While
delivering value to our clients, we make sure that we do not lose focus of the need to
give back to society.Under the aegis of Pandit Kanahya Lal Punj Trust, we continue to
expand our reach and make difference to society by empowering people and communities at
the bottom of the pyramid and providing opportunities in the field of education, health
and community development. I am glad to inform you that under the flagship of PKLP Trust,
we have set-up a school in Tauru, Haryana for imparting education to the under-privileged
section of our society.
Over the past year, Lloyd has built on its core strengths and leveraged its growth
drivers to ensure a profitable future for your Company. As we move forward, we will
continue to enhance our brand equity in domestic markets and in select emerging markets.
Building on our human capital has always been a priority and during the year we
undertook various activities that assisted in enhancing leadership capabilities through
specially designed programs.
It is with great sadness that I share with you the news of the demise of Mr. Krishan
Lall, Non–Executive Director and Chairman of the Audit Committee, who left for his
heavenly abode on 9 March 2014. Mr. Lall joined the Board in 2002 and played a key role in
building high standards of Corporate Governance for your Company. His contribution and
commitment to Lloydwill be cherished for years to come. On behalf of my Board and all my
colleagues, we express our deepest condolences to his wife and family.
We are confident that Lloyd’s pace of growth will continue on its strong path as
we derive benefits from the strategic foundation we haveput in place. As we enter into the
next fiscal year, we stay committed to improving operational efficiencies, building and
strengthening alliances, deriving value from group synergies and continuing to reward
stakeholders with a shared commitment towards profitability and sustainability.
We hope that the new Government at the Centre with clear majority will push reforms and
spur economic growth of India. We look forward to implementation of growth oriented
policies particularly in the areas of infrastructure and manufacturing sectors. Your
Company is well placed to capitalize on the opportunities arising out of the improved
market conditions.
Lastly, I would like to express my appreciation to all our colleagues for their
commitment and contribution towards the growth of your company. I would like to thank each
and every one of our customers, business associates, vendors, supporters and the
shareholders for their continued trust in building Lloyd for this exciting future.
Very sincerely
Brij Raj Punj
Chairman & Managing Director