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Lloyds Metals & Energy Ltd.

BSE: 512455 Sector: Metals & Mining
NSE: LLOYDMETAL ISIN Code: INE281B01032
BSE 00:00 | 06 Dec 175.00 3.40
(1.98%)
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171.25

HIGH

175.95

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NSE 05:30 | 01 Jan Lloyds Metals & Energy Ltd
OPEN 171.25
PREVIOUS CLOSE 171.60
VOLUME 93641
52-Week high 232.00
52-Week low 71.60
P/E 14.02
Mkt Cap.(Rs cr) 7,784
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 171.25
CLOSE 171.60
VOLUME 93641
52-Week high 232.00
52-Week low 71.60
P/E 14.02
Mkt Cap.(Rs cr) 7,784
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Lloyds Metals & Energy Ltd. (LLOYDMETAL) - Director Report

Company director report

Dear Members

Your Director's are pleased to present the Company's FortyFifth Annual Report on the business and operations of Lloyds Metals and Energy Limitedalong with the summary of the Audited Standalone and Consolidated Financial Statements forthe financial year ended 31st March 2022.

FINANCIAL PERFORMANCE AND THE STATE OF THE COMPANY'S AFFAIRS

(Figures in Rs Lakhs)

Particulars Standalone Consolidated
Current Year Previous Year Current Year Previous Year
2021-22 2020-21 2021-22 2020-21
Revenue from operations 69749.94 25340.67 69749.94 25340.67
Other Income 2975.36 1990.25 2975.36 1990.25
Total Income 72725.30 27330.92 72725.30 27330.92
Profit before Finance Cost Depreciation Amortisation Expenses and Tax Expenses 17528.64 3077.43 17528.64 3077.43
Less: Finance Cost 1814.08 1682.22 1814.08 1682.22
Depreciation 1798.49 1382.53 1798.49 1382.53
Exceptional Items 5136.39 5136.39
Profit/(Loss) before tax 8779.68 12.68 8779.68 12.68
Less: Deferred Tax 950.68 950.68
Profit/(Loss) after tax 9730.36 12.68 9730.36 12.68
Share of Profit/(Loss) of associate - 7.33
Profit/(Loss) for the Period 9730.36 12.68 9737.68 12.68
Other comprehensive income (net of tax) 72.78 52.33 72.78 52.33
Total Comprehensive Income of the Year (net of tax) 9803.14 65.01 9810.46 65.01

Review of Operations

The Company during the year has entered into Strategic Partnership withThriveni Earthmovers Private Limited (Co- promoter) India's biggest MiningDevelopment Operators Contractors ("MDO"). The Company was awarded a lease foriron ore mines in 2007 at Surjagarh Village Gadchiroli district initially for a periodof 20 years & extended to a total period of 50 years under MMDR Act 2018. Thisdistrict has Maharashtra's richest iron ore reserve.

Due to instability in the region the Company's mines facedvarious challenges in operations. In 2021 the Company entered into a strategicpartnership with one of the largest MDO contractor Thriveni Earthmovers Private Limited(Co- promoter) and from September 2021 the mine recommenced operations in full capacitywith the assistance of Thriveni Earthmovers Private Limited.

The Company during the year had 03 (three) separate business segments -mining of iron ore manufacturing of sponge iron and generation of power. The Segment wiseperformances are as below:

Iron Ore Mining Activities

The Iron ore mining activities are in full swing at the Surjagarh areaof Gadchiroli district. With the assistance of Thriveni Earthmovers Private Limited theCompany during the year was able to re-commence the mining activities.

The iron ore production for the F.Y. 2021-22 is Qty 2759870 MT asagainst NIL production for the F.Y. 2020-21. The Company was also able to sell Qty305994.14 MT of iron ore during the F.Y. 2021-22.

The total income of the mining division during the year was Rs23796.64 Lakhs as against NIL in the previous year.

Sponge Iron Division

The production of Sponge Iron Division during the year under review was117030 MT against 90956 MT in the previous year showing increase of 28.67%. The totalincome of the division was Rs 44542.11 Lakhs as against Rs 24187.30 Lakhs during theprevious year showing increase of 84.15%.

Power Division

The production of the division was 17.41 MWH during the year underreview as compared to 12.37 MWH for the previous year. The total income of the divisionwas Rs 4972.94 Lakhs during the year under review as against Rs 3640.86 Lakhs during theprevious year showing an increase of 36.59% due to less production.

On Standalone Basis

The total income of the Company was Rs 72725.30 Lakhs during the yearas against Rs 27330.92 Lakhs in the previous year. The Company has reported net profit ofRs 9730.36 Lakhs during the year under review as against profit of Rs 12.68 Lakhs in theprevious year.

On Consolidated Basis

The consolidated total income of the Company was Rs 72725.30 Lakhsduring the year as against Rs 27330.92 Lakhs in the previous year. The Company hasreported consolidated net profit of Rs 9737.68 Lakhs during the year under review asagainst profit of Rs 12.68 Lakhs in the previous year.

Iron Ore Mining Activities

During the year under review there was an Equity and Debt infusion byThriveni Earthmovers Private Limited ("TEMPL") and the Company designated themas a Co-Promoter of the Company.

TEMPL is an expert in mining with their highly qualified team and areoperating training centers while ensuring full compliance with all laws and regulationspertaining to mining.

They are the India's biggest MDO contractor and have mined morethan 30 million MT of iron ore consistently over the last few years. Being the MDOcontractor to the various lease owners in Odisha makes them India's largest Privatesector Miner for Iron Ore.

With their investment in the Company TEMPL became a Co-Promoter. Themining activities at the mine started from 25th September 2021 and are beingcarried out by them directly. The Company could mine 2.9 million tons in 6 months ofoperation against an allowed capacity of 3 million tons per annum. TEMPL has deployed allthe machinery required for carrying out the mining activities.

Post induction of TEMPL the Company during the year was able tore-commence the mining activities. The Iron ore mining activities are in full swing at theSurjagarh area of Gadchiroli district.

Setting-Up of Proposed Mineral Based Steel Plant at Konsari

The Company has started with two modules of 95 TPD Sponge iron plantalong with 4 MW waste heat recovery power plant. The Company has started studying for a 3MTPA flat product ISP at Konsari. The proposed plant will have the Blast FCE - BOF- LF/RHCSP/ESP Route. The Company has been allotted 124 acres of land.

The Company is working on 8 MTPA capacity underground Iron ore slurrypipeline from Surjagad Mines to Konsari Steel plant using state of art environmentfriendly technology from AUSACO USA. The Slurry generated will be in a Beneficiation planton a land located at downhill of mines outside the mines lease hold land and the slurrywill be dewatered to produce Beneficiated Iron ore filter cake. This filter-cake will beused as a raw material for two modules of Pellet Plants of 2.5 MTPA capacity each.

These pellets will become feed of two modules of Sponge iron plants of600 TPD sponge iron along with waste heat recovery power plants. These pellets will alsobe feed material for ISP blast furnace.

Road ahead

Surjagarh (Wooria hills) located in Surjagarh hill range is the mostimportant and well-known major iron ore reserves in the Gadchiroli district ofMaharashtra due to its good quality of iron ore.

The proven reserves at the mine are estimated to be at 73.6 MMTwhereas the extraction from the mines as on FY22 is at 3MMTPA. Exploration highlights arebeing done and the JORC report is awaited.

In next few months in line with UNFCC guidelines for JORC standard ofResource reporting the Company will drill 215 holes with a total of nearly 40000meters. As a part of the exploration drilling the Company has mobilized 6 core drill rigsand 2 Reverse Circulation ("RC") drill rigs. The total exploration program isexpected to be completed in a period of 4-5 months.

Preliminary indication is for a much higher availability of reserve.The mining activities restarted from 2021 and are being carried out by ThriveniEarthmovers Private Limited the production capacity is expected to significantly enhancefrom F.Y. 23 onwards.

Double lane road is being constructed from Mines to Allapalli which isexpected to be completed in the coming 3-6 months' time frame.

The Company has also developed a "Stockyard" near Allapalliwith a truck weighment facility using Government approved weighbridges capable of handling5 MMT of Iron Ore material per annum.

The Company is also expecting to get approval to sell iron ore PANIndia. In F.Y. 23 the Company plans to dispatch approximately 5.5 MMT by reducing thestock at the Pithead. The Company has also got the Mining Plan approved for 10 MMTPA andEnvironment Clearance for the same is awaited.

The proposed Konsari DRI plant will benefit the people of naxalaffected Gadchiroli district which will provide employment to minimum of 1100 localpeople directly and about 2000 indirectly leading to overall development of the regionaffected by Naxalites. The current status of the Konsari Plant is that the land has beenprocured and Environmental Clearance for the first phase and Government Subsidy Letter areyet to be received.

Going forward all future investments will be from internal accruals& Net Debt target will be kept at zero.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report for the year underreview as stipulated under Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is set out in this Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and itsAssociate/Joint venture prepared in accordance with the Companies Act 2013 andapplicable Indian Accounting Standards along with all relevant documents and theAuditors' Report form part of this Annual Report. The Consolidated FinancialStatements presented by the Company include the financial results of its Joint Venture.

The Financial Statements as stated above are also available on thewebsite of the Company at www.lloyds.in.

SUBSIDIARIES ASSOCIATES AND JOINT VENTURES

As on 31st March 2022 the Company has 01 (one) JointVenture Company "Thriveni Lloyds Mining Private Limited."

Pursuant to Rule 8(5)(iv) of the Companies (Accounts) Rules 2014 thenames of the Companies which have become and ceased to be associates/subsidiary/jointventure companies during the year are provided below.

Sr. No. Companies which became associates/subsidiary/ joint venture during the year under review
NIL
Sr. No. Companies which ceased to be associates/ subsidiary/joint venture during the year under review
NIL

In accordance with Section 129(3) of the Companies Act 2013 we haveprepared the consolidated financial statements of the Company which forms part of thisAnnual Report. Further a statement containing the salient features of the financialstatement of our Joint Venture/ Associate in the prescribed format AOC-1 is appended as "AnnexureI" to the Board's report. The statement also provides details of theperformance and financial position of the Associate.

DIVIDEND

Your Company has recommended a Final Dividend of Rs 0.50/- per equityshare of face value of Rs 1/- each.

TRANSFER TO RESERVES

During the year under review no amount was transferred to generalreserves.

SHARE CAPITAL

Conversion of preferentially allotted Optionally Fully ConvertibleDebentures ("OFCD")

The Committee of Board of Directors in their meeting held on 23rdJune 2021 has converted 26650000 Optionally Fully Convertible Debentures("OFCD's") of the Company into Equity Shares of face value of Rs 1/- eachat a premium of Rs 6.50/- each issued at par via Preferential Allotment to Clover MediaPrivate Limited. The said allottee is not a Promoter of the Company.

Preferential issue of Equity Shares & Optionally Fully ConvertibleDebentures ("OFCD")

The Committee of Board of Directors in their meeting held on 28thJune 2021 has allotted 90000000 Equity Shares of face value of Rs 1/- each at apremium of Rs 19/- each and 10000000 Optionally Fully Convertible Debentures("OFCD's") at a face of Rs 20/- each issued at par via PreferentialAllotment to Thriveni Earthmovers Private Limited ("TEMPL" /"allottee"). The said issuance was approved by the Shareholders of the Companyin its 44th Annual General Meeting held on 14th June 2021.

Pursuant the Preferential Allotment to the TEMPL an obligation on theTEMPL to make an open offer to the Equity Shareholders of the Company (including theNon-Promoter Non-Public Shareholder of the Company) but excluding the Shareholders formingpart of the Promoter and Promoter group of the Company in terms of Regulations 3 and 4 ofSEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011 ("OpenOffer") was triggered.

Further pursuant to the approval of the Shareholders at the 44thAnnual General Meeting of the Company held on 14th June 2021 for thePreferential Allotment of the Equity Shares and OFCD's and upon completion of theOpen Offer TEMPL acquired joint control in the Company and was classified as the Promoteralong with the existing members of the Promoter and Promoter group of the Company.

Upon completion of the Open Offer and in accordance with applicablelaw including the SEBI (Substantial Acquisition of Shares and Takeover) Regulations2011 TEMPL nominated Mr. Balasubramanian. Prabhakaran for appointment as a director onthe Board of Directors of the Company and hence Mr. Balasubramanian. Prabhakaran (DIN:01428366) was appointed as an Additional Non-Executive Promoter Director in the Companyw.e.f. 07th October 2021.

Issue of Equity Shares to ESOP Trust

The Nomination and Remuneration Committee in its meeting held on 08thSeptember 2021 has allotted 320000 Equity Shares to the Lloyds Employees Welfare Trustunder Lloyds Metals and Energy Limited Employee Stock Option Plan - 2017.

Conversion of preferentially allotted securities

The Company in their Board Meeting held on 29th April 2022has converted 66000000 Convertible Warrants issued to the Promoters of the Company onpreferential basis on 31st October 2020.

The warrants were allotted to the below listed promoters:

Sr. No. Name of the Allottee Nos. of Warrants allotted
1. Plutus Trade & Interchange LLP 26400000
2. Teamwork Properities Developments LLP 13200000
3. Sky United LLP 13200000
4. Blossom Trade & Interchange LLP 13200000
Total 66000000

On 14th March 2022 the said warrants held by Plutus Trade& Interchange LLP and Teamwork Properities Developments LLP were transferred to SkyUnited LLP. And hence as on 14th March 2022 Sky United LLP held 52800000convertible warrants and Plutus Trade & Interchange LLP and Teamwork ProperitiesDevelopments LLP did not hold any warrants of the Company.

The Company in its same Board Meeting has also converted 10000000Optionally Fully Convertible Debentures ("OFCD's") allotted to ThriveniEarthmovers Private Limited ("TEMPL" / "allottee") on preferentialbasis on 28th June 2021 into 10000000 Equity Shares in the ratio of 1:1 atface value of Rs 1/- each and premium of Rs 19/- each.

An Open Offer was triggered due to the above -mentioned events anddetailed as below pursuant to Regulation 3(2) Regulation 3(3) and Regulation 5(1) of theSEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011:

1. Indirect acquisition of further voting rights in the Company byThriveni Earthmovers Private Limited ("TEMPL") on 29th April 2022pursuant to the acquisition of controlling interest in Sky United LLP by TEMPL.

TEMPL has also acquired rights and 76% partnership interest andtherefore acquired controlling interest in Sky United LLP on 29th April 2022which held 13154638 Equity Shares and 52800000 Warrants of the Company (at the timeof acquisition of rights and 76% partnership interest in Sky United LLP); and

2. Acquisition of 62800000 Equity Shares collectively by ThriveniEarthmovers Private Limited and Sky United LLP pursuant to the conversion of OptionallyFully Convertible Debentures ("OFCD's") and Warrants by ThriveniEarthmovers Private Limited and Sky United LLP respectively into Equity Shares on 29thApril 2022:

i) Thriveni Earthmovers Private Limited exercised its option to convertthe Optionally Fully Convertible Debentures ("OFCD's") into Equity Shareson 29th April 2022. Subsequently the Board of Directors of the Target Companyin their meeting held on 29th April 2022 approved the issuance and allotmentof 10000000 Equity Shares to Thriveni Earthmovers Private Limited pursuant to suchconversion of Optionally Fully Convertible Debentures. Accordingly Thriveni EarthmoversPrivate Limited has acquired 10000000 Equity Shares representing 2.25% of the VotingShare Capital on 29th April 2022; and

ii) Sky United LLP has exercised its option to convert the Warrantsinto Equity Shares on 29th April 2022. Subsequently the Board of Directors ofthe Target Company in their meeting held on 29th April 2022 approved theissuance and allotment of 52800000 Equity Shares to Sky United LLP pursuant to suchconversion of Warrants. Accordingly Sky United LLP has acquired 52800000 Equity Shareson 29th April 2022.

Blossom Trade & Interchange LLP a Promoter of the Company has alsoconverted their 13200000 warrants in to Equity Shares of the Company in the ratio of1:1 in the same Board Meeting of the Company held on 29th April 2022 issued onpreferential basis.

During the year under review there is no change in Authorized ShareCapital of the Company which is Rs 1000000000 (Rupees One hundred Crores only)divided into 750000000 Equity Shares of Rs 1/- each amounting to Rs 750000000/-(Rupees Seventy-Five Crores only) and 25000000 Preference Shares of Rs 10/- eachamounting to Rs 250000000/- (Rupees Twenty-Five Crores only).

Further to the above conversion of securities and allotments thepaid-up share capital of the Company has increased from Rs 253471505 as on 31stMarch 2021 to Rs 368719220 as on 31st March 2022 and to 444719220 as onthe date of this report (i.e. as on 29th April 2022).

Issuance of Optionally Fully Convertible Debentures ("OFCD")

An Arbitration Award was passed by the Sole Arbitrator Mr. Justice A.R.Joshi (Retd.) Former Judge Bombay High Court under the Arbitration and Conciliation Act1996 on 22nd April 2022 in the matter of arbitration between Sunflag Iron& Steel Company Limited ("Sunflag") and Lloyds Metals and Energy Limited("Company").

The matter in nutshell is that the Company and Sunflag from the year2004 have been entering into various understandings and contracts to have joint and equalcontrol on the iron ore mine of the Company and sharing of the iron ore extracted in theratio of 60% and 40% respectively in return Sunflag assisting the Company with therequired funding for capital and operational expenditure.

However for reasons not attributable to both the parties the saidarrangements could not take place and the mining operations could not be commenced. Duringthis period Sunflag had advanced funds to the Company towards the operation andcommencement of the mine. In the year 2016 the Company started mining operations withminimal production; however the Company could not share the iron ore extracted withSunflag for various reasons.

The Company and Sunflag were engaged in discussions to resolve theissue amicably but the same could not be resolved. Sunflag then invoked the arbitrationclause and initiated the arbitration proceedings. The claim(s) made by Sunflag were asfollows:

1. Repayment of the amount paid by Sunflag along with the interest @4%+ SBI PLR compounded annually amounting to Rs 312 crores;

2. A demand of Rs 1433 crores towards Sunflag's right of 40%mineral extracted at cost over the life of entire mining lease period i.e. 40% of 75million tonnes i.e. 30 million tonnes with a margin of Rs 2000 per tonne amounting toRs 6000 crores and when discounted to the present value the same worked out to Rs 1433crores; and

3. 32% of the equity share of the Company considering the net worthattributable to the mine being 80% of net worth of the Company and Sunflag having theright of 40 % of the mine.

All the above claims of Sunflag were refuted by the Company and variouscounter claims were also made. After hearing the arguments of both the parties thelearned Arbitrator has passed an Arbitration Award dated 22nd April 2022 andan Additional Arbitration Award dated 28th April 2022. The gist of the Awardis as follows:

The Company was liable to pay Rs 900 crores to Sunflag (i.e. Rs 312crores on account of refund of advance along with accrued interest and the balance Rs 588crores as full settlement of all other claims).

Given the amount being large the Company proposed to settle the saidliability subject to the approval of the Shareholders and in accordance with applicablelaws by issuing six crores (60000000) 0% interest Optionally Fully ConvertibleDebentures ("OFCD") which will settle entire liability of the Company on thebasis of proposed issue price of Rs 150/- (Rupees One Hundred and Fifty only).

The OFCD would be converted not before 9 months but not later than 18months at a conversion ratio of 1:1. This proposal has also been agreed by Sunflag andthey will be termed as the Non-Promoter of the Company.

Further the Company is liable to pay an interest at the rate of 9%p.a. on the face value of the OFCD's if the Company fails to convert the OFCD'sand in the event the proposed allottee does not exercise the conversion right within the18 months conversion period then the OFCD's will be redeemed by the Company within48 months from the date of allotment and interest will accrue at 9% p.a. on the face valueof OFCD's from the expiry of the conversion period of 18 months until redemption ofthe OFCD's.

The Company shall commence the process of the proposed issuance ofOFCD's and obtain necessary approvals and compliances with respect to the same.

UTILIZATION OF FUNDS

During the year under review the Company raised the funds throughbelow mode:

1. Issue and allotment of 90000000 Equity Shares allotted topromoter entity on preferential basis at face value of Rs 1/- each and premium of Rs 19/-each.

2. Issue and allotment of 10000000 Optionally Fully ConvertibleDebentures ("OFCD's") allotted to promoter entity on preferential basis atface value of Rs 20/- each issued at par.

The funds raised through the respective issues were utilized for thepurpose for which it was raised and in accordance with the objectives of the saidpreferential issue stated in the explanatory statement to the notice of 44thAnnual General Meeting.

DEMATERIALIZATION OF SHARES

As on 31st March 2022 there were approximately364491070 Equity Shares dematerialized through depositories viz. National SecuritiesDepository Limited and Central Depository Services (India) Limited which represents about98.85% of the total issued subscribed and paid-up capital of the Company.

EMPLOYEE STOCK OPTION SCHEME 2017

The Company with the objective of introducing a long-term incentivetool to attract motivate retain talent and reward loyalty formulated "LloydsMetals and Energy Limited

Employee Stock Option Plan - 2017" ("LMEL ESOP 2017")for grant of a maximum of 11129129 stock options to the eligible employees of theCompany. During the year 2018- 19 the Nomination and Remuneration Committee of theCompany has granted 6666640 stock options to the eligible employees of the Company.During the financial year under review the Nomination and Remuneration Committee hasallotted 320000 Equity Shares to the Lloyds Employees Welfare Trust under Lloyds Metalsand Energy Limited Employee Stock Option Plan - 2017.

The Company has received a certificate from the auditors of the Companythat the "LMEL ESOP 2017" have been implemented in accordance with the SEBIregulations and as per the resolution passed by the Members of the Company.

The necessary disclosure pursuant to section 62 of the Companies Act2013 read with Rule 12 of the Companies (Share Capital and Debentures) Rules 2014 andRegulation 14 of the SEBI (Share Based Employee Benefits) with regard to Employee StockOption Scheme of the Company is available at Company's website i.e.http://www.lloyds.in/wp- content/uploads/2022/07/ESOP-Disclosure.pdf

CHANGE IN THE NATURE OF BUSINESS ACTIVITIES

During the year under review there has been no change in the nature ofthe business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY

There have been no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear of the Company to which the financial statements relate and the date of this report.

BOARD OF DIRECTORS

The year under review saw the following changes to the Board ofDirectors ("Board").

Inductions to the Board

1. Based on the recommendations of the Nomination and RemunerationCommittee the Board of Directors in their Meeting held on 07th October 2021in terms of the provisions of the Companies Act 2013 appointed Mr. BalasubramanianPrabhakaran (DIN: 01428366) as an Additional Non-Executive Director of the Company.

2. Further based on the recommendations of the Nomination andRemuneration Committee the Board of Directors in accordance with the provisions ofSection 149 read with Schedule IV to the Act and applicable SEBI Listing Regulationsappointed Mr. Ramesh Luharuka (DIN: 00001380) as an Additional Independent Director of theCompany not liable to retire by rotation for a period of 05 (five) years (i.e. onetenure) commencing from 07th October 2021 to 06th October 2026.

Mr. Luharuka brings to the Board his extensive knowledge and experienceof over 40 years in the areas of Corporate Finance Capital market Investment Banking andother related activities.

3. Mr. B. R. Singh (DIN: 02843001) an Independent Director of theCompany passed away on 05th January 2022 and hence ceased to be anIndependent Director of the Company w.e.f. 05th January 2022.

The Company has immensely benefited from his vision and leadershipduring his tenure.

4. Further based on the recommendations of the Nomination andRemuneration Committee the Board of Directors in accordance with the provisions ofSection 149 read with Schedule IV to the Act and applicable SEBI Listing Regulationsappointed Dr. Seema Saini (DIN: 09539941) as an Additional Independent Director of theCompany not liable to retire by rotation for a period of 05 (five) years (i.e. onetenure) commencing from 30th March 2022 to 29th March 2027.

Dr. Saini brings to the Board her extensive knowledge and experience ofover 30 years in the areas of Management Strategic Leadership Social Welfare Growth andother related activities

5. In accordance with the provisions of Companies Act 2013 and theArticles of Association of the Company Mr. Rajesh Gupta (DIN: 00028379) Director of theCompany retires by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re- appointment.

KEY MANAGERIAL PERSONNEL

In terms of section 203 of the Companies Act 2013 the Key ManagerialPersonnel of the Company are Mr. Babulal Agarwal Managing Director Mr. Riyaz ShaikhChief Financial Officer and Ms. Trushali Shah Company Secretary & Compliance Officer.

During the under review there was a following change in the

Key Managerial Personnel of the Company:

1. Ms. Sneha Yezarkar (ACS: 43338) erstwhile Company Secretary &Compliance Officer of the Company resigned w.e.f. closure of business hours of 21stAugust 2021.

2. Ms. Trushali Shah (ACS: 61489) was appointed as the CompanySecretary and Compliance Officer of the Company w.e.f. 07th October 2021.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Director's state that:

1. in the preparation of the annual accounts for the year ended 31stMarch 2022 the applicable accounting standards have been followed and there are nomaterial departures from the same;

2. the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at 31stMarch 2022 and of the profit of the Company for the year ended on that date;

3. the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

4. the Directors have prepared the annual accounts on a "goingconcern basis";

5. the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and

6. the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

DISCLOSURE RELATED TO BOARD AND COMMITTEES

Board Meetings

The Board met 10 (ten) times during the financial year 2021- 22 on 12thApril 2021 14th May 2021 08th June 2021 13thAugust 202108th September 2021 07th October 2021 11thNovember 2021 27th December 2021 11th February 2022 and 30thMarch 2022. The Meeting details are provided in the Corporate Governance Report thatforms part of this Annual Report. The maximum interval between any two meetings did notexceed 120 days as prescribed in the Companies Act 2013.

Committees of the Board

As on March 31 2022 the Board had 07 (seven) Committees viz: AuditCommittee Nomination and Remuneration Committee Stakeholder Relationship CommitteeCorporate Social Responsibility Committee Share Transfer andShareholder's/Investor's Grievance Committee Committee of Board of Directorsand Risk Management Committee. A detailed note on the composition of the Board and itscommittees is provided in the Corporate Governance Report that forms part of this AnnualReport.

Board Evaluation

Pursuant to the corporate governance requirements as prescribed in theCompanies Act 2013 and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board of Directors has carried out anannual evaluation of its own performance Board Committees and of individual directors. Ina separate meeting of independent directors performance of non-independent directorsperformance of the Board as a whole performance of the Committee(s) of the Board andperformance of the Chairman was evaluated taking into account the views of otherdirectors. Performance evaluation of independent directors was done by the entire Boardexcluding the independent director being evaluated.

Declaration by Independent Directors

The Company has received a declaration from the Independent Directorsconfirming that they meet the criteria of independence as prescribed under Section 149(6)of the Companies Act 2013 read with Regulation 16(1)(b) of the Listing Regulations. Interms of Regulation 25(8) of the Listing Regulations the Independent Directors haveconfirmed that they are not aware of any circumstances or situations which exist or may bereasonably anticipated that could impair or impact their ability to discharge theirduties.

In the opinion of the Board there has been no change in thecircumstances which may affect their status as the Independent Directors of the Companyand the Board is satisfied of the integrity expertise and experience (includingproficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of allIndependent Directors on the Board. In terms of Section 150 of the Act read with Rule 6of the Companies (Appointment and Qualification of Directors) Rules 2014 IndependentDirectors of the Company have confirmed about their enrollment in the data bank ofIndependent Directors maintained with the Indian Institute of Corporate affairs.

Familiarization Programme for Independent Directors

The Company has formulated a programme for Familiarization ofIndependent Directors with regard to their roles rights responsibilities in the Companynature of the industry in which the Company operates etc. The detail of suchFamiliarization programme conducted during the financial year 2021-22 can be accessed onthe Company's website at http://www.lloyds.in/wp-content/uploads/2022/04/Familarisation-Programme- for-ID-2021-22.pdf

During the year under review the Independent Directors met 02 times(two) on 03rd August 2021 and 11th February 2022. The Meeting heldon 11th February 2022 was held inter alia to:

a. Review the performance of Non-Independent Directors and the Boardof Directors as a whole;

b. Review the performance of the Chairman of the Company taking intoaccount the views of the Executive and Non-Executive Directors.

c. Assess the quality content and timeliness of flow of informationbetween the Company management and the Board that is necessary for the Board toeffectively and reasonably perform its duties.

All the Independent Directors were present at the said meeting. Theobservations made by the Independent Directors have been adopted and put into force.

COMPANY'S VARIOUS POLICIES

In accordance with the provisions of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and the Companies Act 2013 the Company hasformulated and implemented the following policies. All the Policies are available onCompany's website (www.lloyds.in) under the heading "Policies". Thepolicies are reviewed periodically by the Board and updated based on need andrequirements.

Whistle Blower & Vigil Mechanism Policy

Whistle Blower Policy of the Company includes in its scope anyinstances related to Insider Trading and also provides access to the Employees of theCompany to report the instances of leak of Unpublished Price Sensitive Information orsuspected leak of Unpublished Price Sensitive Information. The Company has establishedVigil Mechanism for the Directors and Employees of the Company to report serious andgenuine unethical behavior actual or suspected fraud and violation of the Company'scode of conduct or ethics policy. It also provides adequate safeguards againstvictimization of persons who use such mechanism and makes provision for direct access tothe Chairperson of the Audit Committee in appropriate or exceptional cases. None of theemployees of the Company has been denied access to the Audit Committee.

Ms. Trushali Shah Company Secretary and Compliance Officer of theCompany has been designated as Vigilance and Ethics Officer for various matters relatedto Vigil Mechanism.

The Whistle Blower & Vigil Mechanism policy can be accessed on theCompany's website on at http://www.lloyds.in/wp-content/uploads/2022/07/Whistle-Blower-Policy.pdf

Policy for Related Party Transactions

In line with the requirements of Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasformulated a Policy on Related Party Transactions. The policy regulates all transactionstaking place between the Company and its related parties in accordance with the applicableprovisions.

The policy on Related Party Transaction can be accessed on thecompany's website at http://www.lloyds.in/wp-content/uploads/2021/08/Policy-on-Materiality-of-Related-Party- Transaction.pdf

Code of conduct for Director(s) and Senior Management Personnel

The Company has adopted a Code of Conduct for the Senior ManagementPersonnel Directors (Executive / Non-Executive) including a Code of Conduct forIndependent Directors which suitably incorporates the duties of Independent Directors aslaid down in the Act.

The above code can be accessed on the Company's website athttp://www.lloyds.in/wp-content/uploads/2021/02/Code_of_ conduct.pdf

Risk Management Policy

The Risk Management policy is formulated and implemented by the Companyin compliance with the provisions of the Companies Act 2013 and Regulation 21 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

The policy helps to identify the various elements of risks faced by theCompany which in the opinion of the Board threatens the existence of the Company.

The Risk Management Policy can be accessed on the Company'swebsite at http://www.lloyds.in/wp-content/uploads/2022/02/Risk-Management-Policy-Procedure.pdf

The Policy has been formed by the Board in their Meeting held on 11thFebruary 2022.

Risk Management Committee

The Company has formed its Risk Management Committee. The constitutionof the Committee is as below:

a. Mr. Rajesh Gupta Non-Executive Promoter Director Chairman

b. Mr. Madhur Gupta Non-Executive Promoter Director Member

c. Mr. Devidas Kambale Independent Director Member

d. Mr. Jagannath Dange Independent Director Member

As per Regulation 21 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the requirements and compliances of Risk ManagementCommittee were not applicable to the Company for the F.Y. 2021-22. However pursuant tothe increased ranking of the Company by Market Capitalization as released by the BSE as on31st March 2022 the requirements and compliances for the same are applicablefor the F.Y. 2022-23. The Company will follow due compliances as required in the currentfinancial year i.e. 2022-23

Nomination and Remuneration Policy

In line with the requirements of Section 178 Companies Act 2013 andRegulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Company has formulated a Nomination & Remuneration Policy.

The Nomination & Remuneration policy provides guidelines to theNomination & Remuneration Committee relating to the Appointment Removal &Remuneration of Directors Key Managerial Personnel and Senior Management. This policyformulates the criteria for determining qualifications competencies positive attributesand independence for the appointment of a director (Executive / Non-Executive) and alsothe criteria for determining the remuneration of the Directors Key Managerial PersonnelSenior Management and other employees. It also provides the manner for effectiveevaluation of performance of Board its committees and individual directors.

The Nomination and Remuneration Policy can be accessed on thecompany's website at http://www.lloyds.in/wp-content/uploads/2021/02/Remuneration_Policy.pdf

Nomination and Remuneration Committee

The Company has re-constituted its Nomination and RemunerationManagement Committee in accordance with Section 178 of the Companies Act 2013 andRegulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The current constitution of the Committee is as below:

a. Mr. Jagannath Dange Independent Director Chairman

b. Mr. Rajesh Gupta Non-Executive Promoter Director Member

c. Mr. Devidas Kambale Independent Director Member

Policy for Determination of Materiality of an Event or Information

In line with the requirements of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has formulated a policy fordetermination of materiality-based events.

The Policy for Determination of materiality of an event or informationpolicy can be accessed on the Company's website athttp://www.lloyds.in/wp-content/uploads/2022/07/Policy- for-materiality-of-event.pdf

Policy on Preservation of Documents

In pursuant to Regulation 9 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has adopted the policy onpreservation of the documents.

The policy on preservation of documents can be accessed on theCompany's website at http://www.lloyds.in/wp-content/uploads/2021/03/Policy-for-preservation-of-Documents.pdf

Insider Trading -Code of Conduct

In pursuant to SEBI (Prohibition of Insider Trading)

Regulations 2015 the Company has adopted an Insider Trading Code. TheCode provides framework for dealing with the securities of Company in mandated manner.

The above Insider Trading-code of conduct can be accessed on theCompany's website at http://www.lloyds.in/wp-content/uploads/2021/02/Insider_Trading%E2%80%93Code_of_ Conduct_Effective_from_April_12019.pdf

Policy for Procedure of Inquiry in Case of Leak of Unpublished PriceSensitive Information ("UPSI")

In pursuant to SEBI (Prohibition of Insider Trading)

Regulations 2015 the Company has formulated a written policy andprocedures for inquiry in case of leak of unpublished price sensitive information andinitiate appropriate action on becoming aware of leak of unpublished price sensitiveinformation and inform the Board promptly of such leaks inquiries and results of suchinquiries. In pursuant to this regulation the Company has adopted the Policy forProcedure of Inquiry in Case of Leak of Unpublished Price Sensitive Information("UPSI").

Policy for procedure of Inquiry in case of Leak of Unpublished PriceSensitive information ("UPSI") can be accessed on the Company's website athttp://www.lloyds.in/wp-content/uploads/2021/02/Policy_for_Procedure_of_Inquiry_in_case_of_Leak_of_Unpublished_Price_Sensitive_Information.pdf

Code of Practices and Procedures for Fair Disclosure of UnpublishedPrice Sensitive Information

In pursuant to SEBI (Prohibition of Insider Trading) Regulations 2015the Company has formulated a Code of Practices and Procedures for Fair Disclosure ofUnpublished Price Sensitive Information which includes therein the policy fordetermination of "Legitimate purposes for sharing UPSI"

The Code of Practices and Procedures for Fair Disclosure of theUnpublished Price Sensitive Information can be accessed on the Company's website athttp://www.lloyds.in/wp-content/ uploads/2021/02/Code_of_Practices_and_Procedures_for_Fair_Disclosure_of_UPSI-Effective_from_April_1_2019.pdf

Corporate Social Responsibility Policy

The Corporate Social Responsibility Policy (hereinafter "CSRPolicy") of the Company has been prepared pursuant to Section 135 of the CompaniesAct 2013 and the Company (Corporate Social Responsibilities) Rules 2014. The CSR policyserves as the referral document for all CSR related activities of the Company. The CSRPolicy relates to the activities to be undertaken by the Company as specified in ScheduleVII and other amendments / circulars thereon of the Companies Act 2013.

The CSR Policy can be accessed on the Company's website athttp://www.lloyds.in/wp-content/uploads/2022/07/Corporate-Social-Responsibility-Policy.pdf

Corporate Social Responsibility Committee

The Company has re-constituted its Corporate Social ResponsibilityCommittee in accordance with Section 135 of the Companies Act 2013 the currentconstitution of the Committee is as below:

a. Mr. Devidas Kambale Independent Director Chairman

b. Mr. Rajesh R. Gupta Non-Executive Promoter Director Member

c. Mr. Ramesh Luharuka Additional Independent Director Member

The disclosures with respect to CSR activities are given in "AnnexureII".

CORPORATE GOVERNANCE

The Company has taken adequate steps to ensure that all mandatoryprovisions of Corporate Governance as prescribed under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 are complied with. As per

Regulation 34(3) Read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancetogether with a certificate from the Company's Statutory Auditors forms part of thisReport.

AUDITORS

Statutory Auditor

Pursuant to Section 139 of the Companies Act 2013 and the Rules madethere under the tenure of the current Statutory Auditor of the Company M/s. VSS &Associates Chartered Accountants (Firm Registration No. 105787W) has expired w.e.f. 01stApril 2022. Further the current Statutory Auditor of the Company has shown theirinability to continue as the Statutory Auditor of the Company for the second term.

And hence the Board of Directors of the Company recommends the name ofthe M/s. Todarwal & Todarwal LLP Chartered Accountants (FRN: 111009W/W100231). Theappointment of M/s. Todarwal & Todarwal LLP Chartered Accountants has beenrecommended by the Audit Committee in their meeting held on 29th April 2022.

The appointment will be for a period of 05 (five) years i.e. one termpursuant to Section 139 of the Companies Act 2013. The tenure will commence from theconclusion of the 45th Annual General Meeting till the conclusion of 50thAnnual General Meeting (for one term of five years) at a remuneration as may be mutuallydecided between the Board of Directors and the Auditors.

Further provision of ratification of appointment of statutory auditorevery year has been omitted by the Companies (Amendment) Act 2017 effective from 07thMay 2018.

Statutory Audit Report

During the F.Y. 2021-22 there was no fraud occurred noticed and/orreported by the Statutory Auditors under Section 143(12) of the Companies Act 2013 readwith the Companies (Audit and Auditors) Rules 2014 (as amended from time to time).

The observations made by the Statutory Auditor in their Audit Reportread with the relevant notes thereof as stated in the Notes to the Audited FinancialStatements of Company for the Financial Year ended 31st March 2022 areself-explanatory and being devoid of any reservation(s) qualification(s) or adverseremark(s) etc. do not call for any further information(s)/ explanation(s) or comments fromthe Board under Section 134(3)(f)(i) of the Companies Act 2013.

Secretarial Auditor

Pursuant to Section 204 of the Companies Act 2013 and the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 the Board hasappointed M/s. Maharshi Ganatra & Associates Practicing Company Secretary (MembershipNo.: 11332 CP No.: 14520) as the Secretarial Auditor of the Company to conductSecretarial Audit for the F.Y. 2022-23.

Secretarial Audit Report

As required under provisions of Section 204 of the Companies Act 2013the report in respect of the Secretarial Audit carried out by M/s. B. R. Gupta & Co.Practicing Company Secretary (Membership No. 43021 CP No. 20863) in Form MR-3 for theF.Y. 2021-22 is annexed hereto marked as "Annexure VI" and forms part ofthis Report. The said Secretarial Audit Report being devoid of any reservation(s) adverseremark(s) and qualification(s) etc. does not call for any further explanation(s)/information or comment(s) from the Board under Section 134(3) (f)(ii) of the CompaniesAct 2013.

Cost Auditor

As per the requirement of Central Government and pursuant to Section148 of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules2014 as amended from time to time your Company has been carrying out audit of costrecords of the Company.

The Board of Directors on the recommendation of Audit Committee hasappointed M/s Singh M K & Associates Cost Accountants as Cost Auditor to audit thecost accounts of the Company for the F.Y. 2022-23 at a remuneration of Rs 30000/- (RupeesThirty Thousand only) per annum. As required under the Companies Act 2013 a resolutionseeking members approval for the remuneration payable to the Cost Auditors forms part ofthe Notice convening the Annual General Meeting.

Cost Audit Report

The Cost audit report for the F.Y. 2020-21 was filed with the Ministryof Corporate Affairs.

MAINTENANCE OF COST RECORDS

The Company has maintained required cost accounts and records asprescribed under Section 148(1) of the Companies Act 2013.

INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls with reference to financial statementsas designed and implemented by the Company are adequate. During the year under review nomaterial or serious observation has been received from the Statutory Auditors and theInternal Auditors of the Company on the inefficiency or inadequacy of such controls.

PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEE GIVEN ANDSECURITIES PROVIDED

The Company has not given any loan to any person or other BodyCorporate or given any guarantee or provided any security in connection with a loan to anyother person or body corporate pursuant to Section 186 of the Companies Act 2013.

PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

Particulars of contracts or arrangements or transactions with therelated parties referred to in Section 188 of the Companies Act 2013 in the prescribedform AOC-2 are enclosed with this report as "Annexure III".

There were no materially significant Related Party Transactions enteredby the Company which may have a potential conflict with the interest of Company. Allrelated party transaction(s) are first placed before Audit Committee for approval andthereafter such transactions are also placed before the Board for seeking their approval.The details of Related Party Transactions as required pursuant to respective IndianAccounting Standards have been stated in Note No. 32 to the Audited Financial Statementof Company forming part of this Annual Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act 2013 read with Rule 5(1) 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedare annexed hereto marked as "Annexure IV" and forms part of this report.

DISCLOSURE RELATING TO EQUITY SHARES WITH DIFFERENTIAL RIGHTS

The Company has not issued any equity shares with differential rightsduring the year under review and hence no information as per provisions of Rule 4(4) ofthe Companies (Share Capital and Debenture) Rules 2014 is furnished.

DISCLOSURE RELATING TO SWEAT EQUITY SHARES

The Company has not issued any sweat equity shares during the yearunder review and hence no information as per provisions of Rule 8(13) of the Companies(Share Capital and Debenture) Rules 2014 is furnished.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company confirms compliance with the applicable requirements ofSecretarial Standards 1 and 2.

DEPOSITS

During the year under review the Company has neither accepted anydeposits nor there were any amounts outstanding at the beginning of the year which wereclassified as "Deposits" in terms of Section 73 of the Companies Act 2013 readwith the Companies (Acceptance of Deposit) Rules 2014 and hence the requirement forfurnishing of details of deposits which are not in compliance with the Chapter V of theCompanies Act 2013 is not applicable.

DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

No significant and material orders have been passed by any Regulator orCourt or Tribunal which can have impact on the going concern status and the Company'soperations in future.

PREVENTION OF SEXUAL HARASSMENT

Disclosures in relation to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 have been provided in the Report onCorporate Governance.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGAND OUTGO

The Information on conservation of energy technology absorptionforeign exchange earnings and out go which is required to be given pursuant to theprovisions of Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of Companies(Account) Rules 2014 is annexed hereto marked as "Annexure V" and formspart of this report.

BUSINESS RESPONSIBILITY REPORT

The Company is committed to pursuing its business objectives ethicallytransparently and with accountability to all its stakeholders. It believes indemonstrating responsible behaviour while adding value to the society and the communityas well as ensuring environmental well-being from a long-term perspective The BusinessResponsibility Report ("BRR") of the Company is being presented to theStakeholders as per the requirements of Regulation 34 of the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 describingthe environmental social and governance initiatives taken by the Company.

In its circular dated February 6 2017 SEBI has made the BusinessResponsibility and Sustainability Report ("BRSR") applicable to the top 1000listed entities (by market capitalisation) for reporting on a voluntary basis for F.Y.2021- 22 and on a mandatory basis from F.Y. 2022-23.

The current financial year marks the first year of the Company'stransition towards Business Responsibility Reporting ("BRR"). The Company hasprovided the requisite mapping of principles of the National Guidelines on ResponsibleBusiness Conduct to fulfil the requirements of the BRR as per SEBI's directive. TheReport which forms a part of the Annual Report as "Annexure VII" canalong with all the related policies be also viewed on the Company's websitehttp://www.lloyds.in/

ANNUAL RETURN

Pursuant to Section 92(3) read with section 134(3)(a) of the CompaniesAct 2013 copies of the Annual Returns of the Company prepared in accordance with Section92(1) of the Companies Act 2013 read with Rule 11 of the Companies (Management andAdministration) Rules 2014 are placed on the website of the Company and is accessible atthe weblink http://www.lloyds.in/

LISTING FEES

The listing fees payable for the F.Y. 2022-23 has been paid to BSELimited and Metropolitan Stock Exchange of India Limited within due date.

CREDIT RATING

Your Company's credit ratings as on March 31 2022 obtained fromBrickwork Ratings are as follows:

Facility

Amount (Rs In crores)

Tenure

Rating*

Previous Present Previous (May 2020)A Present
Fund Based 95 100 Long Term BWR BBB- / Stable (Re-affirmed) BWR BBB / Stable
Non-Fund Based 5 - Short Term BWR A3 (Re-affirmed) BWR A3 (Withdrawn)
Total 100 100

Rupees One hundred crores Only

 

*Please refer to BWR website www.brickworkratings.com for definition ofthe rating assigned ARating was moved to the Not Reviewed Category in May 2021

ACKNOWLEDGEMENT

Your Directors' place on record their sincere appreciation andgratitude for the assistance and generous support extended by all Government authoritiesFinancial Institutions Banks Customers and Vendors during the year under review. YourDirectors' wish to express their immense appreciation for the devotion commitmentand contribution shown by the employees of the company while discharging their duties.

For and on behalf of the Board of Directors Lloyds Metals and Energy Limited
Mukesh Gupta
Date: 29thApril 2022 Chairman
Place: Mumbai DIN:00028347

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