Dear Fellow Shareowners
The Fiscal Year 2013 was another challenging year for the Indian economy as theslowdowns continued with expected recovery not materializing. While the global economyshowed some signs of stabilization most of the emerging economies including India facedmultiple challenges of capital outflows rising current account deficit and depreciationof the local currency. Stabilizing these parameters was one of the key challenges for theIndian economy.
Amidst this slowdown your Company was able to effectively navigate the domesticturmoil through its sound business strategies and robust business model. This enabled yourCompany to deliver a sound performance in a difficult business environment. TheConsolidated Revenue of the Group grew by 20% over the previous year to Rs. 1776 croreswhileprofits (PBT) expanded by 35% to touch at record high of Rs. 97 crores.
Positioning itself for long term success your Company continued to expand itscapabilities in technology expanding existing product portfolio by developing new rangeof environment friendly air conditioners meeting with new star rating norms rolled out byBEE (Bureau of energy efficiency). New products developed includes inverter split airconditioners for the OEM market Heat and Cool products for export market with R-410Arefrigerant development of commercial AC -24K & 48K Cassette/ Floor standing amongothers.
Our strong distribution network and differentiated manufacturing process make us thepreferred supplier to key players across industries we cater to enabling us to capturevalue from healthy demand in the domestic and international markets.
The year also saw the exponential rise in exports with increasing market presence inMiddle-East Africa and CIS countries indicating growing acceptability of our value-addedproducts meeting with international quality standards and certifications.
In the Commercial Air-conditioning business your company has developed Roof MountedHVAC unit for Metro Rail using eco-friendly refrigerants. Being IRIS compliant yourcompany has bagged its first prestigious order from Bombardier Transportation for thesupply of Roof Mounted Ventilation Units for EMU coaches. This has opened avenues for thecompany to bid for international jobs in Railways.
With the integration of the heat exchanger business with the existing line of coilbusiness your company has expanded its existing product base by offering wide range ofheat exchangers including copper and aluminium brazed radiators charge air coolers andcondensers for railways automobiles and industrial application.
We have expanded our "LLOYD" brand portfolio to include products likestar-rated Air-Conditioners Washing Machines LED television Chest Freezers includingothers. Our endeavor is to lead the transformation in the Consumer goods industry in Indiaby launching products with cutting edge technology so as to position the brand as a oneamongst the top players in the fast growing Consumer Durable sector. Lloyd is committed tofulfilling the vision of every Home everywhere by marketing well-differentiated productsnot only of high quality technology or service but also giving consumers the ultimatesatisfaction guarantee phrased as-"Khushiyon ki Guarantee"!
We have the expertise in leveraging our ever expanding capacities to face challengestransform them into opportunities and ultimately evolve as a market leader. We arepositive and confident of making further strides even in the current challenging economicenvironment & sustain the growth momentum demonstrated over the last decade.
In Europe Operations of the subsidiaries were significantly impacted by the flood thathit Prague Czech Republic in June 2013 causing total damage of Euro 6 Million which wasfully 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 focuson new product segment like heat pumps display cabinets and large bespoke coils withbetter quality and value additions. At Janka Engineering the year was a turnaround insales and profitability. Although Janka too was affected by the flood the volume loss hasbeen more than compensated by additional revenue generated from the new segment of RailwayHVAC unit and supply of special coolers to Nuclear power plant Mochovce. This resulted inpushing the sales to all time high of Euro 12 Million up by 16% over the previous yearwith EBITDA margin touching to all time high of Euro 0.40 Million as against previousyear loss of Euro-1 Million.Janka has also developed condensing unit for retro-fittedcoaches of local train operator Regiojet and is in advanced talks to provide similarsolutions to Czech Railways.
The Indian HVAC&R market is poised for rapid growth due to a number of changes thatare taking place in the Indian economy as well as easier availability of A/C productswhich constitutes the bulk of the HVAC&R segment in the market. The potential demandfrom the construction sector (both conventional and green buildings) coupled with thepotential to save energy from air-conditioning (especially through efficienttechnologies) will usher a boom period for the HVAC&R market with support from theGovernment to promote energy-efficient standards practices and technologies.
Going forward your Company is well placed to capitalize on the opportunities arisingout of this improved market conditions.We are investing in augmenting our manufacturingresearch and marketing base in order to pursue strong and sustained growth.
Caring for the community has always been a cornerstone of your company. Whiledelivering value to our clients we make sure that we do not lose focus of the need togive back to society.Under the aegis of Pandit Kanahya Lal Punj Trust we continue toexpand our reach and make difference to society by empowering people and communities atthe bottom of the pyramid and providing opportunities in the field of education healthand community development. I am glad to inform you that under the flagship of PKLP Trustwe have set-up a school in Tauru Haryana for imparting education to the under-privilegedsection of our society.
Over the past year Lloyd has built on its core strengths and leveraged its growthdrivers to ensure a profitable future for your Company. As we move forward we willcontinue 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 weundertook various activities that assisted in enhancing leadership capabilities throughspecially designed programs.
It is with great sadness that I share with you the news of the demise of Mr. KrishanLall NonExecutive Director and Chairman of the Audit Committee who left for hisheavenly abode on 9 March 2014. Mr. Lall joined the Board in 2002 and played a key role inbuilding high standards of Corporate Governance for your Company. His contribution andcommitment to Lloydwill be cherished for years to come. On behalf of my Board and all mycolleagues we express our deepest condolences to his wife and family.
We are confident that Lloyds pace of growth will continue on its strong path aswe derive benefits from the strategic foundation we haveput in place. As we enter into thenext fiscal year we stay committed to improving operational efficiencies building andstrengthening alliances deriving value from group synergies and continuing to rewardstakeholders with a shared commitment towards profitability and sustainability.
We hope that the new Government at the Centre with clear majority will push reforms andspur economic growth of India. We look forward to implementation of growth orientedpolicies particularly in the areas of infrastructure and manufacturing sectors. YourCompany is well placed to capitalize on the opportunities arising out of the improvedmarket conditions.
Lastly I would like to express my appreciation to all our colleagues for theircommitment and contribution towards the growth of your company. I would like to thank eachand every one of our customers business associates vendors supporters and theshareholders for their continued trust in building Lloyd for this exciting future.
Brij Raj Punj
Chairman & Managing Director