Dear Shareholders,
Your Directors present the 66 Report of Board of Directors on the business and operations of Fedders Electric and Engineering Limited ("Company") together with its Audited financial statements for the financial year ended 315t March, 2022.
Fedders Electric and Engineering Limited went into Corporate Insolvency Resolution Process under the provisions of the Insolvency and Bankruptcy Code, 2016 (“Code”) in terms of order passed by the Hon'ble National Company Law Tribunal (“NCLT”), Allahabad Bench with effect from 14t August, 2019. Its affairs, business, and assets were being managed by the Insolvency Professional, Mr. Ashok Kumar Gulla, appointed as Interim Resolution Professional by the NCLT, Allahabad vide order dated 14th August, 2019 and continued as Resolution Professional by the approval of Committee of Creditors in its meeting held on 12‘ September, 2019 under provisions of the Code. Further, the Hon'ble NCLT, Allahabad bench vide its order dated 06t* October, 2021 has approved the Resolution Plan submitted by IM Plus Capitals Ltd. (Successful Resolution Applicant or SRA or RA).
. FINANCIALPERFORMANCE
The financial performance of the Company during the year under review is summarized below: (Amount in crores)
The consolidated performance of the Company as per consolidated financial statements is as under:
(Amount in crores)
2. STATE OF AFFAIRS AND OPERATIONAL HIGHLIGHTS
During the year under review, the total revenue from operations of your Company for the financial year ended 31st March, 2022 stood at Rs. 46.48 Crore as against the revenue of Rs. 17.43 Crore earned in the previous year ended on 31%t March, 2021. The Company earned Profit of Rs. 748.73 (including Rs. 720.85 Crores from exceptional items) Crores for the year ended 315t March, 2022 in comparison with the loss on Rs. 54.01 Crore in the previous year ended on 315t March, 2021. At present, Company is completing its existing projects only and most of its plants are non operational, the new Management is making best endeavors to re-start the operations of the Company.
3. SHARE CAPITAL
The Pre CIRP paid up capital Rs. 33.97 Crore of the Company has been extinguished in pursuance of the Resolution Plan by Hon'ble NCLT, Allahabad bench vide its order dated 06% October, 2021 and the Company has allotted 3 Crores equity shares of Rs. 10/- each at par on 03" December, 2021 as per the Resolution Plan approved by the Hon'ble NCLT, Allahabad bench. The Capital Structure of the Company as follows:-e The Authorised Share Capital of the Company is 70 Crores/- (Seventy Crores) divided into 7,00,00,000 (Seven Crore) Equity shares of Re. 10- par value. e The Issued, Subscribed and Paid up Capital is 30 Crores/- (Thirty Crores) divided into 3,00,00,000 (Three Crore) Equity shares, Re. 10- par value.
4. DIVIDEND
In view of conservation of profits, the Board of Directors does not recommend any dividend for the financial year 2021-22.
5. DEPOSITS
During the year under review, your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under.
The aforementioned information based on the fact that RP during his tenure did not receive any claims from the deposit holders, if any, against the Company, and, further the entire liabilities of the Company settled as per the approved resolution plan upto date of order dated 06" October, 2021.
6. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
Pursuant to the provisions of Section 17 of the Insolvency and Bankruptcy Code, 2016 (“Code”) on commencement of the Corporate Insolvency Resolution Process (CIRP) the powers of the Board of Directors of Fedders Electric and Engineering Limited (FEEL) stands suspended and the same are being exercised by the Resolution Professional. The management of the affairs of Company has been vested with Resolution Professional. The Hon'ble NCLT, Allahabad bench vide its order dated 06th October, 2021 has approved the Resolution Plan submitted by IM Plus Capitals Ltd (Successful Resolution Applicant or SRA or RA) and the Company has reconstitute the Board as per the approved Resolution Plan. After the approval of Resolution Plan on 06 October, 2021, the Company held 4 (Four) Board Meetings as per section 173 of Companies Act, 2013 which is summarized below;
The provisions of Companies Act, 2013 were adhered while considering the time gap between two such meetings.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per order of Hon'ble NCLT Allahabad, Bench dated 14ttAugust, 2019, the Company went in to CIRP and Mr. Ashok Kumar Gulla was appointed as a Resolution Professional and the affairs of the Company being managed by RP. As Resolution Plan was submitted by IM+ Capitals Limited has been approved by Hon'ble NCLT vide its order dated 06.10.2021 and the Company was taken over by IM+ Capitals Limited, as per approved resolution Plan, the Board was reconstituted on 06%October, 2021 and following Directors were appointed: - Mr. Vishal Singhal, Director, (DIN: 03518795) Ms. Tanya Singhal, Director (DIN: 08930315) Mr. Anil Kumar Kaushik, Independent Director (DIN: 09131927)
Furthermore, Ms. Kirti Jain was appointed as Company Secretary & Compliance Officer and Mr. Narender Kumar Mishra appointed as Chief Financial Officer (CFO) of the Company w.e.f. 20 October, 2021, and Ms. Kirti Jain resigned from the said post w.e.f. 30% April, 2022. After the year ended 315* March 2022, the designation of Mr. Vishal Singhal changed from Director to Managing Director w.e.f 04 August, 2022, Ms. Sonal Singhal was appointed as Director of the Company w.e.f 23' September 2022 and Ms. Tanya Singhal resigned from the Directorship w.e.f. 23" September, 2022. Ms. Sakshi Goel was appointed as Company Secretary & Compliance Officer and Mr. Sanjeev Kumar Singhal was appointed as Independent Director W.e.f 09% June 2022.
8. DECLARATION BY INDEPENDENT DIRECTORS
The Company was under CIRP and accordingly, power of the Board has been suspended and Pursuant to the order of Hon'ble NCLT dated 14*tAugust, 2019, Mr. Ashok Kumar Gulla, appointed Interim Resolution Professional.
As Resolution Plan was submitted by IM+ Capitals Limited has been approved by Hon'ble NCLT vide its order dated 06.10.2021 and the Company was taken over by IM+ Capitals Limited, as per approved resolution Plan, the Board was reconstituted on 06 October, 2021 & the Company has received the Declarations from the Independent Director confirming that he meet the criteria of Independence as prescribed under the provisions of Section 149 of the Companies Act, 2013 read with the schedules and Rules issued thereunder as well as Regulations 16 of SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
9, DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act 2013, the Directors hereby confirms that:
i. in preparation of Annual Accounts the applicable Accounting Standards have been followed and there has been no material departure.
ii. they have selected accounting policies which were applied consistently and the directors/IRP 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 as at 315t March 2022 and of the profits/losses for the year ended on that date.
iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv. they have prepared the annual accounts on a going concern basis.
v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.
vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
10. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:
During the period under review, there are no companies which have become or ceased to be its Subsidiary, Associates & Joint Venture. The detail of existing subsidiary Companies are given in Form AOC-1 as per Annexure 1.
Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of Fedders Lloyd Trading FZE, are available on the website of the Company i.e www.imcapitals.com/fedders-electric-engineering/,The Company will make these documents available upon request made by any shareholder of the Company.
11. STATUTORY AUDITORS
In terms of the Section 139 of the Companies Act, 2013, M/s Rajiv Malhotra & Associates Co., Chartered Accountants, having ICAI Registration No. 021479N were re-appointed as Auditors for a period of 5 years from the conclusion of 64 Annual General Meeting up to the conclusion of the 69% Annual General Meeting to be held for the financial year 2024-25.
12.AUDITORS' REPORT
The Auditor Report for the financial year ended 31t March, 2022 contains various qualifications and observation, Audit Report attached herewith which forms part of the Annual Report.
Management Reply
Fedders Electric and Engineering Limited went into Corporate Insolvency Resolution Process under the provisions of the Insolvency and Bankruptcy Code, 2016 (“Code”) in terms of order passed by the Hon'ble National Company Law Tribunal (“NCLT”), Allahabad Bench with effect from 14‘August, 2019. Its affairs, business, and assets were being managed by the Insolvency Professional, Mr. Ashok Kumar Gulla, appointed as Interim Resolution Professional by the NCLT, Allahabad vide order dated 14tAugust, 2019 and continued as Resolution Professional by the approval of Committee of Creditors in its meeting held on 12tSeptember, 2019 under provisions of the Code. Further, the Hon'ble NCLT, Allahabad bench vide its order dated 06.10.2021 has approved the Resolution Plan submitted by IM Plus Capitals Ltd. (Successful Resolution Applicant or SRA or RA).
The Board ofthe Company was reconstituted in terms of the Resolution Plan. The present management acknowledges the qualifications observed by Auditors in the Audit Report on Financial Statements for the financial year ended 31:tMarch 2022 and ensures the applicable compliances in the upcoming years.
13.SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 the Board of Director the Company has appointed M/s DR Associates, Company Secretaries, as Secretarial Auditors of the Company in the Board Meeting held on 05 September, 2022 to conduct Secretarial Audit for the financial year 2021-22. The Secretarial Audit Report submitted by them for the financial year 2021-22 in the prescribed form MR-3 is attached as Annexure-2 and forms part of this Report. There were certain qualifications, observations, reservation or comments or other remarks in the Secretarial Audit Reports which are self-explanatory.
14.CORPORATE GOVERNANCE
The Company is committed towards maintaining the highest standards of Corporate Governance and adhering to the disclosure norms as set out by the Securities and Exchange Board of India and other Regulatory Authorities. In compliance with Regulation 34 of Listing Regulations, a detailed Corporate Governance Report is annexed herewith marked as Annexure-3 to and forms part of this Report.
15. BOARD EVALUATION
Since the Company was under Corporate Insolvency Resolution Process (CIRP) and the entire Board was suspended, no formal evaluation of the Board has taken place up to date of order.
16.MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of the Company, as required under the Companies Act, 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is marked as Annexure-4 and forms part of this report.
17.COMMITTEES OF THE BOARD OF DIRECTORS
The provisions as specified in Regulations 18 (Audit Committee), Regulation 19 (Nomination and Remuneration Committee), Regulation 20 (Stakeholder's Relationship Committee) as per SEBI (LODR) Regulations, 2015 shall not be applicable during the Corporate Insolvency Resolution Process of the Company as the powers of the Board of Directors (including its committees) remains suspended during CIRP process and be exercised by Interim Resolution Professional/ Resolution Professional. Thereafter, the Hon'ble NCLT, Allahabad bench vide its order dated 06tOctober, 2021 has approved the Resolution Plan submitted by IM Plus Capitals Ltd. (Successful Resolution Applicant or SRA or RA) and the thereafter, Board accordingly reconstituted the Committees of the Board of Directors on 09? June, 2022.
18.CHANGES IN THE NATURE OF THE BUSINESS
There has been no change in the nature of business of the Company during the financial year 2021- 22.
19.MATERIAL AND SIGNIFICANT CHANGES
Fedders Electric and Engineering Limited went into Corporate Insolvency Resolution Process under the provisions of the Insolvency and Bankruptcy Code, 2016 (“Code”) in terms of order passed by the Hon'ble National Company Law Tribunal (“NCLT”), Allahabad Bench with effect from 14t August, 2019. The affairs, business, and assets were being managed by the Insolvency Professional, Mr.
Ashok Kumar Gulla, appointed as Interim Resolution Professional by the NCLT, Allahabad vide order dated 14th August, 2019 and continued as Resolution Professional by the approval of Committee of Creditors in its meeting held on 12% September, 2019 under provisions of the Code. Further, the Hon'ble NCLT, Allahabad bench vide its order dated 06.10.2021 has approved the Resolution Plan submitted by IM Plus Capitals Ltd. (Successful Resolution Applicant or SRA or RA).
The takeover of the Company by the RA has been completed and the Board of Directors has been constituted to take over the management of the Company.
20.RELATED PARTY TRANSACTIONS
This is to share that there were no related party transactions entered during the financial year. Since there was no contract or arrangement with related parties falling within the purview of Section 188(1) of the Companies Act, 2013, during the financial year ended on 31‘t March 2022, therefore, the disclosure in Form AOC-2 was not required.
21.INTERNAL CONTROL SYSTEM AND ADEQUACY
The Company has maintaining effective and reliable Internal Control System commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is well defined in the organization and is aligned with the statutory requirements. The efficacy of the internal checks and control systems are validated by Statutory Auditors, Auditor has disclaimer opinion on Internal Control system and Adequacy.
22.CORPORATE SOCIAL RESPONSIBILITY
Pursuant to provisions of Section 135(1) of the Companies Act, 2013, the Company incurred losses during the financial year 2020-21, hence section 135 is not applicable on the Company and the Company is not required to spend any CSR expenditure during the financial year 2021-22.
23.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO AND RESEARCH & DEVELOPMENT
In accordance with the requirements of Section 134(3) (m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, a statement showing particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are annexed hereto as Annexure-5 and forms part of this Report.
24. VIGIL MECHANISM
In accordance with the provisions of the Act and Listing Regulations, the Company has adopted a Whistle Blower Policy, as part of Vigil Mechanism to provide appropriate avenues to the employees to bring to the attention of the management any issue which is an actual or suspected fraud or perceived to be in violation of or in conflict with the Code of Conduct of the Company. During the year ended 31*t March, 2022, no complaints pertaining to sexual harassment were received.
25. ANNUAL RETURN
As required pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an annual return is uploaded on website of the Company www.imcapitals.com/fedders-electric-engineering/.
26. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
There were no guarantees or security given and investments made by the Company however; the Company has given Loans as per Section 186 of the Companies Act, 2013. The details of the transactions are disclosed in the Note no. 10 to the financial statements.
27.PARTICULARS OF EMPLOYEES
The Statement pertaining to provision of Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 requiring the names of top ten employees in terms of remuneration drawn forms part of this Board Report. However, as per Section 136(1) of the Act and proviso of Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Report and Financial Statements are being sent to the Members of the Company excluding the said statement. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company. It is also stated here that there were no employee during the year who were in receipt of remuneration mention in Rule 5 (2) (1), (II) and (II) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.
28. RISK MANAGEMENT
The Board of the Directors are of the view that there is no such risk element which may threaten the existence of the Company. However, the Company has well-defined Risk Management Systems and procedures for the businesses of the Company, which are periodically reviewed to ensure that the risks can be mitigated to the extent possible.
29.DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has always provided a congenial atmosphere for work to all the employees, that is free from discrimination and harassment including sexual harassment. There were no cases/complaints pertaining to the sexual harassment reported to the Board during the year under review.
30.LISTING OF EQUITY SHARES
The Equity Shares of your Company are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) and the trading of the shares are suspended on both exchanges.
31.SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
The National Company Law Tribunal (NCLT), Allahabad Bench has ordered the initiation of CIRP against the Company on 14 August, 2019, pursuant to the application filed by the State Bank of India ("Financial Creditor") of the Company. Vide said order, Mr. Ashok Kumar Gulla with IP Registration No. IBBI/IPA-003/IP-N00024/2017-2018/10174 was appointed as an Interim Resolution Professional. Further, he was confirmed as the Resolution Professional by the COC of the Company in its meeting held on 12‘ September, 2019. Further, the Hon'ble NCLT, Allahabad bench vide its order dated 06 October, 2021 has approved the Resolution Plan submitted by IM Plus Capitals Ltd. (Successful Resolution Applicant or SRA or RA).
Thereafter, the Board of Directors has been duly constituted to take over the management of the Company.
32.INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Sections 124 and 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), during the year under review, the dividend declared for the financial year 2014-15 which was remained unclaimed from seven consecutive years was not transferred to Investor Education and Protection Fund. Further, shares of the Company, in respect of which dividend has not been claimed from seven consecutive years from the date of transfer to unpaid dividend account, have also not been transferred to the demat account of IEPF Authority.
33.DISCLOSURE WITH RESPECT TO MAINTENANCE OF COST RECORDS
Pursuant to the provisions of Section 148(1) of the Act and rules made thereunder, the Company is required to maintain Cost records and accordingly, such accounts and records are maintained by the Company.
34.RATIO OF REMUNERATION
The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in the Statement annexed herewith as Annexure-6.
35.HEALTH, SAFETY AND ENVIRONMENT
Your Company has complied with all the applicable Health & Safety Standards, Environment Laws and Labour laws and has been taking all necessary measures to protect the environment and provide workers a safe work environment. Your Company is committed towards improvement in Health & Safety as well as Environmental performance by providing a safe & healthy work environment to all its employees and co-workers.
36. HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Your Company considers people as its biggest assets and "Believing in People" is at the heart of its human resource strategy. Lot of efforts are put in for talent management, strong performance management, learning and training initiatives in order to ensure that your Company consistently develops inspiring strong and credible leadership. During the year under review, your Company continued to have cordial relationship with all its employees and maintained healthy, cordial and harmonious industrial relations at all levels.
37. REPORTING OF FRAUDS BY AUDITORS
During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the company by its officers or employees, the details of which would need to be mentioned in the board's report.
38.ACKNOWLEDGMENTS
Your Directors would like to express their sincere appreciation to the Customers, Employees, Financial Institutions, Banks, Central and State Government Authorities, Regulatory Authorities, Stock Exchanges and all the various stakeholders for their continued co- operation and support to the Company who all made our consistent growth possible.
Your Directors also wish to record their appreciation for the continued co-operation and support extended by the governments of various countries where we have our operations.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS FEDDERS ELECTRIC AND ENGINEERING LIMITED