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Faze Three Ltd.

BSE: 530079 Sector: Industrials
NSE: FAZETHREE ISIN Code: INE963C01033
BSE 10:58 | 18 Jan 380.15 -20.00
(-5.00%)
OPEN

409.45

HIGH

409.45

LOW

380.15

NSE 05:30 | 01 Jan Faze Three Ltd
OPEN 409.45
PREVIOUS CLOSE 400.15
VOLUME 10205
52-Week high 413.00
52-Week low 52.55
P/E 23.45
Mkt Cap.(Rs cr) 925
Buy Price 0.00
Buy Qty 0.00
Sell Price 380.15
Sell Qty 7439.00
OPEN 409.45
CLOSE 400.15
VOLUME 10205
52-Week high 413.00
52-Week low 52.55
P/E 23.45
Mkt Cap.(Rs cr) 925
Buy Price 0.00
Buy Qty 0.00
Sell Price 380.15
Sell Qty 7439.00

Faze Three Ltd. (FAZETHREE) - Director Report

Company director report

FOR THE FINANCIAL YEAR ENDED MARCH 31 2021

To

The members of Faze Three Limited

Your Directors are pleased to present the 36th Annual Report of your Company containingthe business performance and the Audited Financial Statements for the year ended on 31stMarch 2021.

1. FINANCIAL PERFORMANCE (Standalone & Consolidated):

(Rs. in Crores)

Particulars For the Year ended 31.03.2021 For the Year ended 31.03.2021 For the Year ended 31.03.2020 For the Year ended 31.03.2020
(Standalone) (Consolidated) (Standalone) (Consolidated)
Revenue from Operations 324.17 324.59 302.19 302.17
Other Income 2.13 2.13 4.12 4.12
Profit before tax 35.41 35.33 22.32 21.18
Provision for taxation (incl. deferred tax) 10.40 10.40 3.04 3.04
Profit for the year 25.01 24.93 19.28 18.84
Other comprehensive income for the year (0.14) (0.14) (0.25) (0.25)
Total comprehensive income for the year 24.87 24.82 19.03 17.89

The standalone and consolidated financial statements for the financial year ended March31 2021 forming part of this Annual Report have been prepared in accordance with theIndian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs.

2. KEY HIGHLIGHTS OF THE FINANCIAL PERFORMANCE/ STATE OF THE COMPANY'S AFFAIRS:

During the year under review the Company achieved consolidated revenue from operationsof INR 324.59 Crores as against INR 302.17 Crores in the previous year. Total Income forApr-June quarter of FY 21 was affected owing to COVID lockdown. The Revenue for the saidQ1 was ~INR 40 Crores versus INR 95 Crores being average quarterly revenue for last 3quarters for FY 21. Revenue for 01 July 2020 to 31 March 2021 (9 months) was ~INR 285 Cr.

Total Income for the Quarter ended (QE) March 2021 stood at INR 108.67 Crores versusINR 73.91 Crores for QE March 2020. Growth of 47% q-o-q. (Results for March 2021 quarterwere the highest ever quarterly Total Income and Net Profit in the company sinceinception. The capex undertaken in last 4 years has enabled company to service highervolumes)

The Company earned Standalone Net Profit after Tax for year ended 31 March 2021 at INR25.01 Crores vs INR 19.28 Crores for year ended 31 March 2020. Growth of ~29.7% y-o-y. TheConsolidated Net Profit of INR 24.82 crores as against Net Profit of INR 17.89 Croresduring previous year.

There was no change in the nature of the business of the Company during the period.

3. DIVIDEND:

During the year under review your Directors have decided to retain the resources tofuel the growth and objectives of the Company. The Directors are confident to deriveoptimum utilization out of the same which shall be in the best interest of thestakeholders.

4. SHARE CAPITAL:

The Authorised Share Capital of the Company is Rs. 260000000/- divided into26000000 equity shares of face value of Rs. 10/- each. The paid up share capital of theCompany is Rs. 243190000/- divided into 24319000 equity shares of face value of Rs.10/- each.

During the F.Y. 2020-21 there was no change in the share capital of the Company.

5. RESERVES:

There were no appropriations to reserves/ general reserves during the year underreview. The closing balance of the retained earnings of the Company for FY 2020-21 was INR119.08 Crores.

6. DEPOSITS:

The Company has not accepted any deposits from the public falling within the ambit ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 or under Chapter V of the Companies Act 2013.

7. SUBSIDIARY OR ASSOCIATE OR JOINT VENTURE COMPANY:

The Company has a wholly owned subsidiary (WOS) in USA namely Faze Three US LLC whichis a front office of the Company in USA and is actively engaged in sourcing local businesswithin USA for supplying the Company's range of products to stores/ retailers. Pursuant tothe provisions of Section 129(3) of the Companies Act 2013 a statement containingsalient features of financial statements of the WOS in Form AOC-1 is attached to theConsolidated Financial Statements. The separate audited financial statements in respect ofthe WOS are also available on the website of the Company.

The Total Income for FY 2020-21 stood at USD 1.03 MN vs USD 0.29 MN for FY 2019-20. ThePBT was positive at USD 0.003 MN vs loss of USD 0.169 MN during FY 2019-20.

There were no other Companies which have become or ceased to be Subsidiary Associateor Joint Venture of the Company during the period under review.

8. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirements of Section 134(3)(c) of the Companies Act 2013 withrespect to the Director's Responsibility Statement the Directors hereby confirm that:

(i) in the preparation of the Annual Financial Statements for the year ended 31st March2021 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;

(ii) such accounting policies as mentioned in Notes to Financial Statements have beenselected and applied consistently and judgements and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2021 and of the Profit of the Company for the year ended on thatdate;

(iii) proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(iv) the Annual Financial Statements have been prepared on a going concern basis;

(v) proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively;

(vi) systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.

9. NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE:

The Board and Committees of the Board meets at regular intervals to discuss and decideon Company / Business policy and strategy apart from other Board business. In case of aspecial and urgent business need where the meeting of the Board of Directors is notenvisaged the Board's approval is taken by passing resolutions by circulation aspermitted by law which are noted and confirmed in the subsequent Board Meeting.

The details of number of Board and Committee meetings of the Company are set out in theCorporate Governance Report which forms part of this Report.

10. CHANGES IN DIRECTORS AND/ OR KEY MANAGERIAL PERSONNEL:

During the year under review there were no changes that took place in the constitutionof the Board of Directors and the Board Committees.

In accordance with Section 152 of the Companies Act 2013 and the rules framedthereunder Mrs. Rashmi Anand - Non-Executive Director (DIN: 00366258) retires by rotationat the ensuing Annual General Meeting and being eligible offers herself forre-appointment.

The Members of the Company at 34th Annual General Meeting had passed special resolutionfor re-appointment of Mr. Ajay Anand (DIN: 00373248) as the Managing Director and Mr.Sanjay Anand (DIN: 01367853) as the Whole -time Director of the Company for a period ofthree (3) years with effect from April 1 2019 upto March 31 2022. The Board of Directorsof the Company at its meeting held on June 30 2021 on recommendation of the Nominationand Remuneration Committee approved the re-appointment of Mr. Ajay Anand as the ManagingDirector for a period of 3 years and Mr. Sanjay Anand as the Whole-time Director for theperiod of 3 years subject to approval of members by passing a Special Resolution. Theapproval of members for the re-appointment of Mr. Ajay Anand and Mr. Sanjay Anand isproposed at the ensuing Annual General Meeting of the Company. Mr. Vinit Rathod (DIN:07589863) and Mr. Manan Shah (DIN: 07589737) were appointed as an independent directorsfor the first term of 5 (Five) years effective August 12 2016. Their office ofdirectorship is due for retirement on August 11 2021. After taking into account theirperformance evaluation and considering the knowledge acumen expertise experience andthe substantial contribution the Nomination and Remuneration Committee has recommendedthe re-appointment of Mr. Vinit Rathod and Mr. Manan Shah to the Board for a second termof 5 (Five) years. The Board at its meeting held on June 30 2021 approved there-appointment of Mr. Vinit Rathod and Mr. Manan Shah as independent directors of theCompany with effect from August 12 2021 to August 11 2026 whose office shall not beliable to retire by rotation subject to members approval. The Board proposes theirre-appointment to the Members at the ensuing Annual General Meeting of the Company bypassing a Special Resolution.

Your directors would like to confirm that all the Independent Directors of the Companymeet the required levels of integrity expertise and experience for discharging theirduties efficiently.

Mr. Akram Sati (M No. 50020) was appointed as Company Secretary and Compliance Officerof the Company with effect from March 08 2021 in place of Mr. Ankit Parekh erstwhileCompany Secretary of the Company who served upto March 07 2021.

11. PERFORMANCE EVALUATION OF BOARD:

The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the Companies Act2013 and the Corporate Governance requirements as prescribed by Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015.

The performance evaluation of the non-executive directors is done by the Boardannually. The performance evaluation of the Executive Directors is carried out by theIndependent Directors annually. The performance is evaluated after seeking inputs from allthe Directors on the basis of the criteria such as the Board composition and structureexperience and competencies attendance effectiveness of board processes information andfunctioning independent approach etc. The above criteria are broadly based on theGuidance Note on Board Evaluation issued by the Securities and Exchange Board of India onJanuary 5 2017. The Board of Directors expressed their satisfaction with the evaluationprocess.

The performance of the Committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeesattendance of the members recommendations to the Board and their implementationeffectiveness of committee meetings etc.

12. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he / she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The Board is ofthe opinion that the Independent Directors of the Company hold highest standards ofintegrity and possess requisite expertise and experience required to fulfill their dutiesas Independent Directors.

13. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:

The Board members are provided with necessary documents reports and internal policiesto enable them to familiarise with the Company's procedures and practices.

Pursuant to the SEBI regulations the Company organises Familiarization Programmeperiodically for the independent Directors with a view to familiarize them with theirrole rights and responsibilities in the Company nature of industry in which the Companyoperates business model of the Company etc. The Board familiarization process comprisesof the Induction programme for new independent Directors sessions on business andfunctional issues and strategy making. Periodic presentations are made at the Board andCommittee meetings on business and performance updates of the Company including FinanceSales and Overview of business operations business strategy and risks involved.

During the year under review apart from regular briefing at various meetings as wellas periodical reports one separate familiarization programme was held on 05.02.2021. Thepolicy for Familiarization Programme for the Independent Directors is available on websiteof the Company at https://www.fazethree.com/corporate-governance/.

14. DISCLOSURE RELATING TO REMUNERATION TO DIRECTORS KEY MANAGERIAL PERSONNEL ANDPARTICULARS OF EMPLOYEES:

As required under Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedfrom time to time details of Remuneration to Directors and Key Managerial Personnel isprovided in Form MGT-9 annexed to this Report.

As on 31st March 2021 the Company has no employee who- (i) if employed throughout thefinancial year was in receipt of remuneration in aggregate more than Rs. 102.00 Lacsor (ii) If employed for part of the financial year was in receipt of remuneration inaggregate more than Rs 8.50 lacs per month.

15. AUDIT COMMITTEE:

As on 31st March 2021 the Audit Committee comprises of three members namely Mr. VinitRathod (Chairman) Mr. Ajay Anand and Mr. Manan Shah. Other details pertaining to theAudit Committee are included in the Corporate Governance Report which forms part of thisreport. All the Members of the Committee are adequately literate to understand thefinancial and other aspects.

16. NOMINATION & REMUNERATION COMMITTEE:

The Nomination & Remuneration Committee of the Board of Directors of the Company isduly constituted pursuant to Section 178(1) of the Companies Act 2013 and Regulation 19of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. TheNomination and Remuneration Committee is responsible for evaluating the balance of skillsexperience independence diversity and knowledge on the Board and for drawing upselection criteria. The Board of Directors of the Company has defined a policy onDirector's appointment and payment of remuneration including criteria for determiningqualifications positive attributes and independence of Directors and terms of referenceof the Committee which is available on the website of the Company athttps://www.fazethree.com/policies/.

As on March 31 2021 the Nomination & Remuneration Committee comprised of 3members all being Non-Executive Directors namely Mr. Vinit Rathod (Chairman) Mrs. RashmiAnand and Mr. Manan Shah. All the recommendations made by the Committee during the periodwere accepted by the Board.

17. STAKEHOLDERS RELATIONSHIP COMMITTEE

As on March 31 2021 the Stakeholders Relationship Committee comprises of threemembers namely Mr. Vinit Rathod (Chairman) Mr. Ajay Anand and Mr. Manan Shah. Otherdetails pertaining to the Committee are included in the Corporate Governance Report whichforms part of this report.

18. CORPORATE SOCIAL RESPONSIBILITY STATEMENT (CSR):

The Company has always considered Social Responsibility as an integral part ofsustainable growth and has been over the years contributing towards it in various ways.The management of the Company endeavors for the upliftment of the society and the naturalresources which are essential for overall economic growth. The Company was entitled tospend Rs. 3780847/- (Thirty Seven Lacs eighty thousand eight hundred and forty sevenonly) towards the CSR activities and the Company has honored its complete obligationtowards the same.

The Company has spent Rs. 3800000/- (Thirty Eight lacs only) towards CSR activitiesby way of donations for promoting education including special education and employmentenhancing vocation skills especially among children women elderly and the differentlyabled and livelihood enhancement projects and promoting health care including preventivehealth care and sanitation during the F.Y. 2020-21 after consultation with the CSRCommittee.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure I of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules 2014.

During the financial year ended March 31 2021 the Committee had recommended to theBoard to approve the amendments to its CSR Policy in view of the recent changes/amendments to CSR provisions in Companies Act 2013 which was duly approved by the Board.The said policy is placed on its website of the Company athttps://www.fazethree.com/policies/.

19. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

The information as required under Section 134(3)(m) of The Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 with respect to conservation ofenergy technology absorption and foreign exchange earnings and outgoings is annexed tothis report as Annexure II.

20. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Company has entered into transactions with related parties as defined under Section2(76) during the financial year. All related party transactions were carried on at arm'slength price and/ or in the ordinary course of business. The approval of the AuditCommittee has been obtained for all the transactions and the approval of the Board ofDirectors has been obtained wherever necessary at the beginning of the year or beforeentering into the transaction. The said transactions are subject to review by the AuditCommittee every quarter. There were no material related party transactions with relatedparties during the financial year. The Company doesn't foresee material related partytransactions in financial year 2021-22 requiring members approval under Section 188 of theCompanies Act 2013 read with Rule 15 of the Companies (Meetings of Board and its Powers)Rules 2014 and Regulation 23 of the SEBI (LODR) Regulations 2015.

The policy on Related Party Transactions as approved by the Board is available on thewebsite of the Company at https://www.fazethree.com/policies/.

Information on transactions with related parties pursuant to Section 134(3)(h) of theAct read with rule 8(2) of the Companies (Accounts) Rules 2014 are given in Form AOC-2and the same forms part of this report as Annexure III.

21. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY:

There are no material changes or commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company i.e. March31 2021 and the date of the Directors' report.

22. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy and has established the necessary vigilmechanism for directors and employees in confirmation with Section 177(9) of the Act andRegulation 22 of Listing Regulations to report concerns about unethical behavior andprovide appropriate avenues to the Directors and employees to bring to the attention ofthe management any issue which is perceived to be in violation of or in conflict with theCode of Conduct of the Company and to report concerns about unethical behavior. The saidpolicy has been posted on the website of the Company athttps://www.fazethree.com/policies/.

During the year under review no complaint or adverse reporting was received by thedesignated officer of the Company.

23. DISCLOSURE AS PER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:

The Company has a Prevention of Sexual Harassment Policy and an Internal ComplaintsCommittee in place as per the requirements of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. The Company has not received anycomplaint or adverse reporting during the year.

24. RISK MANAGEMENT:

The Company has in place a mechanism to inform Board of Directors about the Riskassessment and risk minimization procedures and periodical reviews to ensure that risk iscontrolled by the management through the means of a properly laid-out framework. The AuditCommittee has additional oversight in the area of financial risks and controls. The majorrisks identified by the businesses and functions are systematically addressed throughmitigating actions on a continuing basis.

25. INTERNAL FINANCIAL CONTROLS:

The Company has adequate internal control systems commensurate with the size scaleand complexity of its operations which monitors business processes financial reportingand compliance with applicable regulations. The systems are periodically reviewed foridentification of control deficiencies and formulation of time bound action plans toimprove efficiency at all the levels.

26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report as required under SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 is enclosed as Annexure IV.

27. CORPORATE GOVERNANCE:

The Company believes in transparency and adhering to good corporate governancepractices in every sphere of its operations. The Company has taken adequate steps tocomply with the applicable provisions of Corporate Governance as stipulated in SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. A report on CorporateGovernance is annexed to this report as Annexure V.

28. STATUTORY AUDITOR:

M/s. MSKA & Associates Chartered Accountants (Firm Registration No. 105047W) wereappointed as the Statutory Auditor by the members of the Company in the 32nd AnnualGeneral Meeting for a period of 5 years i.e. till the conclusion of the 37th AnnualGeneral Meeting. In accordance with the Companies (Amendment) Act 2017 implemented on7th May 2018 by Ministry of Corporate Affairs the appointment of Statutory Auditors isnot required to be ratified at every AGM. As recommended by the Audit Committee theappointment of M/s. MSKA & Associates as the Statutory Auditor of the Company shallcontinue for the F.Y. 2021-22. M/s. MSKA & Associates has confirmed that theirappointment is within the prescribed limits specified in Section 139 of the Companies Act2013.

29. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

Details of loans guarantees and investments covered under Section 186 of the CompaniesAct 2013 is given in the notes to the financial statements.

30. FRAUD REPORTED BY THE AUDITOR IF ANY

There is no fraud reported by the Statutory Auditor during the year under review as perSection 143(12) of the Companies Act 2013.

31. SECRETARIAL AUDITOR:

Pursuant to the provisions of Section 204 of Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasundertaken Secretarial Audit for the financial year 2020-21 by appointing M/s. SanjayDholakia & Associates Practicing Company Secretary which inter alia includes auditof compliance with the Companies Act 2013 and the Rules made thereunder SEBI ListingRegulations and other Regulations and Acts applicable to the Company. The SecretarialAudit Report is annexed to this report as

Annexure VI.

There is no fraud reported by the Secretarial Auditor during the year under review asper Section 143(12) of the Companies Act 2013.

32. OBSERVATIONS – STATUTORY AUDITOR & SECRETARIAL AUDITOR:

Statutory Auditor:

The Statutory Auditors' Report to the Members does not contain any reservationqualification or adverse remark.

Secretarial Auditor:

The Secretarial Audit Report to the Members does not contain any reservationqualification or adverse remark.

33. COST AUDIT AND RECORDS:

The Company maintains the cost records of its products as applicable under theCompanies (Cost Records and Audit) Rules 2014. Under Rule 4(3) (i) of the Companies (CostRecords and Audit) Rules 2014 the requirement of Cost Audit is not applicable to theCompany.

34. WEB ADDRESS AND EXTRACT OF ANNUAL RETURN:

The details forming part of extract of the annual return in Form MGT-9 is annexed tothis report as Annexure VII. The same is also placed on the website of the Company atwww.fazethree.com as a part of the Directors Report.

The Annual Return of the Company as referred in sub-section (3) of Section 92 has beenplaced on the Company's website viz. www.fazethree.com.

35. SIGNIFICANT MATERIAL ORDERS PASSED BY COURTS IF ANY:

There are no significant material orders passed by the Regulators/ Courts against theCompany which would impact the going concern status of the Company and its futureoperations.

36. ACKNOWLEDGEMENT:

Your Directors wish to place on record their appreciation for the co-operation extendedby all the employees Bankers Financial Institutions various State and CentralGovernment authorities and Stakeholders.

For and on behalf of the Board
Date: June 30 2021
Place: Mumbai
Ajay Anand
Chairman & Managing Director

.