The Members of
FAZE THREE Autofab Limited
Your Directors are pleased to present the 23rd Annual Report of your Companycontaining the business performance and the Audited Financial Statements for the yearended on 31st March 2020.
1. FINANCIAL HIGHLIGHTS
The performance of the Company for the financial year ended 31st March 2020is summarized below:
| || ||(Rs. In Cr.) |
|Particulars ||For the year ended 31.03.2020 ||For the year ended 31.03.2019 |
|Revenue from operations ||165.85 ||141.48 |
|Expenses ||(148.94) ||(145.96) |
|Other Income ||0.95 ||0.08 |
|Profit before Interest Tax Depreciation & Amortization finance cost and exceptional items ||17.85 ||(4.39) |
|Less: || || |
|Finance Cost/ Interest ||4.64 ||4.81 |
|Depreciation & amortization expense ||4.78 ||4.41 |
|Profit / (Loss) before taxation ||8.44 ||(13.62) |
|Less : Provision for taxation ||(0.58) ||(2.30) |
|Profit / (Loss) for the year carried to Balance Sheet ||9.02 ||(11.32) |
2. KEY HIGHLIGHTS OF THE FINANCIAL PERFORMANCE
During the year under review the Company has earned revenue from operations of Rs.165.85 Cr as against Rs. Rs. 141.48 Cr in the previous year. The Company earned Net Profitof Rs. 9.02 Cr as against Net Loss of Rs. 11.32 Cr in the previous year.
3. CHANGE IN THE NATURE OF THE BUSINESS
There were no changes in the nature of business during the year under review asprescribed in Rule 8 of the Companies (Accounts) Rules 2014.
Your Board of Directors has not recommended any dividend for the Financial Year. Interms of the provisions of Investor Education and Protection Fund Authority (AccountingAudit Transfer and Refund) Rules 2016 there is no unpaid / unclaimed dividend which arepending to be transferred during the year to the Investor Education and Protection Fund.
The Company has not transferred any amount to reserves in current financial year.
6. CHANGE IN SHARE CAPITAL:
There has been no change in the capital structure of the Company.
7. CREDIT RATING:
The Company has obtained its credit rating from CRISIL Limited. CRISIL has allotted"CRISIL BB/Stable" for Long Term and "CRISIL A4+" for Short Term bankfacilities of the Company vide its report dtd. 27th February 2020. The ratingrationale for the same is available on the website of the company atwww.fazethreeautofab.com.
8. DISCLOSURE ON ACCOUNTING TREATMENT:
The Company has not used any differential treatment which is not in compliance withaccounting standards and the financials of the Company depict a true and fair view of thestate of affairs of the Company.
9. DIRECTORS & KEY MANAGERIAL PERSONNEL:
During the year under review Mr. Ajay Anand (DIN: 00373248) was re-appointed asManaging Director of the Company for further period of 3 years w.e.f. 1stApril 2019.
Mrs. Rashmi Anand (DIN: 00366258) was appointed as Non-Executive Director of theCompany w.e.f. 21st August 2019.
The above appointment/ re-appointment were approved by the members at 22ndAnnual General Meeting of the Company held on 30th September 2019.
Ms. Shweta Jain (DIN: 07589768) Independent Director and Mr. Rolf Konigs (DIN:06500166) Non-Executive Director tendered their resignation w.e.f. 21stAugust 2019 respectively. Further upon their resignation in terms of Regulation 30 ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 they have confirmed that there is no material reason otherthan stated in their resignation letter.
The following persons have been designated as Key Managerial Personnel of the Companypursuant to Section 2 (51) and Section 203 of the Companies Act 2013 read with the Rulesframed thereunder.
1. Mr. Ajay Anand Managing Director
2. Mr. V Sivakumar Chief Financial Officer
3. Mr. Akram Sati Company Secretary and Compliance officer
10. DECLARATION FROM 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.
11. CONFIRMATION AND CERTIFICATION
On an annual basis the Company obtains from each Director details of the Board andBoard Committee positions he / she occupies in other Companies and changes if anyregarding their Directorships. The Company has obtained a certificate from M/s. SanjayDholakia & Associates Company Secretaries under Regulation 34(3) and Schedule V ParaC Clause (10)(i) of Listing Regulations confirming that none of the Directors on the Boardof the Company have been debarred or disqualified from being appointed or continuing asDirector of the Company by the SEBI and Ministry of Corporate Affairs or any suchauthority and the same forms part of this Report.
12. FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:
Pursuant to the SEBI (LODR) Regulations the Company has worked out a FamiliarisationProgramme for the Independent Directors with a view to familiarise them with their rolerights and responsibilities in the Company nature of Industry in which the Companyoperates business model of the Company etc.
The policy for Familiarisation Programme for the Independent Directors is available onthe website of the Company at www.fazethreeautofab.com.
13. DETAILS OF BOARD MEETINGS:
The Board of Directors of your Company met 7 (Seven) times during the Financial Yearended 31st March 2020. The details of Board Meetings and the attendance of theDirectors thereat are provided in the Corporate Governance Report. The intervening timegap between two consecutive Meetings was within the period prescribed under the CompaniesAct 2013 and SEBI (LODR) Regulations.
14. DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief according to the information and explanationsobtained by them Board of Directors of the Company makes the following statements interms of Section 134(3)(c) of the Companies Act 2013:
(i) that in the preparation of the Annual Financial Statements for the year ended March31 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
(ii) that such accounting policies as mentioned in Notes to Financial Statements havebeen selected and applied consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2020 and of the profit and loss of the Company for the year endedon that date;
(iii) that proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(iv) that the Annual Financial Statements have been prepared on a going concern basis;and
(v) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
(vi) that proper systems to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively.
15. ANNUAL PERFORMANCE EVALUATION OF BOARD:
Pursuant to the provisions of the Companies Act 2013 and the corporate governancerequirements as prescribed by the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (SEBI ListingRegulations'); the Board of Directors have carried out an annual evaluation of its ownperformance as a Board the Directors individually as well as the evaluation of theworking of its Committees.
The performance of the Board was evaluated after taking into consideration inputsreceived from the Directors covering various aspects of the Board's functioning such asadequacy of the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance effectiveness of boardprocesses information and functioning etc. as provided by the Guidance Note on BoardEvaluation issued by the Securities and Exchange Board of India on January 5 2017.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement the contribution of the individual director to the board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings independence of judgment safeguarding the interestof the Company and its minority shareholders etc.
The performance of the committees were evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc.
In a separate meeting of independent directors performance of non-independentdirectors and the Board as a whole was evaluated taking into account the views ofexecutive directors and non-executive directors. The same was discussed in the boardmeeting that followed the meeting of the independent directors at which the performanceof the board its committees and individual directors were also discussed. Performanceevaluation of independent directors was done by the entire board excluding theindependent director being evaluated.
The Board of Directors expressed their satisfaction with the evaluation process.
16. DISCLOSURE RELATING TO REMUNERATION OF 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.
The Company has no employee who- (i) if employed throughout the financial year was inreceipt of remuneration for that year in the aggregate more than Rs 102 Lacs or (ii) Ifemployed for part of the financial year was in receipt of remuneration for any part ofthat year at a rate which in aggregate more than Rs 8.50 Lacs per month. Hence theinformation required to be given pursuant to the provisions of Section 197(12) of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended from time to time is not applicable to theCompany;(iii) if employed throughout the financial year or part thereof was in receipt ofremuneration in that year which in the aggregate or as the case may be at a rate whichin the aggregate is in excess of that drawn by the managing director or whole-timedirector or manager and holds by himself or along with his spouse and dependent childrennot less than two percent of the equity shares of the company.
Details as required under the provisions of section 197(12) of the Companies Act 2013read with rule 5(2) and 5(3) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended which form part of the Directors' Report will be madeavailable to any shareholder on request as per provisions of section 136(1) of the saidAct.
17. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY:
The Company's management is responsible for establishing and maintaining an adequatesystem of internal financial control over financial reporting. The Company has in placeadequate systems of internal control commensurate with its size and the nature of itsoperations. These have been designed to provide reasonable assurance with regard torecording and providing reliable financial and operational information complying withapplicable statutes safeguarding assets from unauthorized use or losses excludingtransaction with proper authorization and ensuring compliance of corporate policies. YourCompany remains committed to improve the effectiveness of internal control systems forbusiness processes with regard to its operations financial reporting and compliance withapplicable laws and regulations.
18. DETAILS OF SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES:
M/s. Aunde Achter & Ebels GmbH Germany was the Promoter / JV partner of theCompany has transferred their entire stake of 42.82% shares of the Company to Mr. AjayAnand Promoter through Inter-se Transfer between the promoter and thereafter videapproval dated 5th February 2020 by BSE Limited M/s. Aunde Achter & EbelsGmbH has ceased to be Promoter /JV partner during the year.
19.PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
The particulars of loans guarantees and investments covered under Section 186 of theCompanies Act 2013 form a part of the Notes to Financial Statements provided in thisAnnual Report.
During the year under review your Company has not accepted any deposit from the publicfalling within the ambit of Section 73 of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014 or under Chapter V of the Companies Act 2013.
21. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY:
There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company i.e. March31 2020 and the date of the
22. CORPORATE SOCIAL RESPONSIBILITY STATEMENT (CSR):
The Company has met the criteria provided of Section 135 of the Companies Act 2013 inF.Y. 2019-20 as the Company as earned net profit of Rs. 9.02 crores. In terms with theapplicable provisions the Company has constituted the CSR Committee on 5thJune 2020 who shall be entrusted with the role and responsibilities to carry out the CSRactivities of the Company.
23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION ETC. & FOREIGN EXCHANGE EARNINGSAND OUTGOINGS:
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 outgo is annexed to thisreport as Annexure IV.
24. RISK MANAGEMENT POLICY:
There is a continuous process for identifying evaluating and managing significantrisks faced through a risk management process designed to identify the key risks faced bythe Company to ensure that risk is controlled by the management through the means of aproperly laid-out framework.
25. SIGNIFICANT MATERIAL ORDER PASSED BY REGULATORS/ COURTS/ TRIBUNALS:
There are no significant material orders passed by the Regulators/ Courts which wouldimpact the going concern status of the Company and its future operations.
26. STATUTORY AUDITORS:
In terms of the provisions of Section 139(2) of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 Members of the Company in the 20thAGM have approved appointment of M/s. Thakur Vaidyanath Aiyar & Co. CharteredAccountants Mumbai (Firm Rgn. No. 000038N) as the Statutory Auditors for a term of 5(five) years to hold office till the conclusion of 25th (Twenty Fifth) AGM.
27. FRAUD REPORTED BY THE AUDITOR IF ANY:
There is no fraud reported by the Statutory Auditor during the year.
28. COST AUDIT:
Pursuant to the provisions of the Companies (Cost Audit and Record) Rules 2014 asamended from time to time the Company is not required to conduct a Cost Audit for theyear ending March 31 2020.
29. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Sanjay Dholakia & Associates Practicing Company Secretaries toundertake Secretarial Audit. The Report is annexed to this Report as Annexure V.
During the year the Secretarial Auditor has not reported any matter under Section143(12) of the Companies Act 2013. Therefore no detail is required to be disclosed underSection 134(3) (ca) of the Companies Act 2013.
30. OBSERVATIONS AUDITOR & SECRETARIAL AUDITOR:
Secretarial Auditor: There are no observation or adverse remarks in SecretarialAuditors report.
Statutory Auditor: There are no observation or adverse remarks in StatutoryAuditors report.
31. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:
In compliance with the Regulation 34 read with Schedule V of the Listing Obligationsand Disclosure Requirements) Regulations 2015 A separate section on Corporate Governanceis included in the Annual Report and the Certificate from the Company's auditorsconfirming the compliance of conditions on Corporate Governance as stipulated in SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed to thisreport as Annexure I.
32. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
For the financial year under review as stipulated in SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Management Discussion and Analysis Report isAnnexed to this report as Annexure II.
33. CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES :
All transactions entered into with related party during the financial year as definedunder Section 188(3) of the Companies Act 2013 and Regulation 23 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 were in the ordinary course ofbusiness and on Arm's Length Price basis and do not attract the provisions of Section 188of the Companies Act 2013. There were no materially significant transactions with relatedparties during the financial year which were in conflict with the interest of the Company.
All Related Party Transactions are approved by Audit Committee. Prior omnibus approvalis obtained from the Audit Committee in respect of the transactions which are repetitivein nature. The transactions entered into pursuant to omnibus approval so granted arereviewed on a quarterly basis by the Audit Committee.
Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) has beenmade in the notes to the Financial Statements. The Company shall seek shareholders'approval for material related party transactions entered and proposed to be entered duringthe current year in the forthcoming AGM.
The policy on Related Party Transactions as approved by the Board is available on thewebsite of the Company. The same can be accessed on www.fazethreeautofab.com. Informationon transactions with related parties are given as Annexure III in Form AOC-2 to thisreport.
34. POLICIES OF THE COMPANY:
The Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") mandated the formulationof certain policies for all listed Companies. All such Policies are available on theCompany's website viz. www.fazethreeautofab.com. The Policies are reviewed periodicallyby the Board and its Committees and are updated based on the need and new compliancerequirement.
The key policies that have been adopted by the Company are as follows:
|Related Party Transactions Policy ||This Policy deals with (a) the materiality thresholds for related party transactions and; (b) the manner of dealing with the transactions between the Company and its related parties based on the Companies Act 2013 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and any other laws and regulations as may be applicable to the Company. |
|Nomination & Remuneration Policy ||This policy sets the criteria for the appointment removal and remuneration of the directors key managerial personnel and other employees. It also lays down the evaluation criteria for performance evaluation of Board its Committees and individual directors. |
|Whistle Blower Policy / Vigil Mechanism ||This policy enables the employees' direct access to the Chairman of the Audit Committee for notifying anything which in the view of such employee may be suspicious or unusual and may be detrimental to the affairs of the Company. It also and ensures adequate safeguards against victimization of such employees who use this mechanism. |
|Code of Conduct for Insider Trading ||This Policy sets up an appropriate mechanism to curb Insider Trading. It provides Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and monitoring of trading by insiders. |
|Materiality Policy ||This Policy applies to disclosures of material events affecting the Company. This Policy warrants disclosure to investors upon occurrence of any material event and has been framed in compliance with the requirements of the Listing Regulations. |
|Document Retention and Archival Policy ||The purpose of this Policy is to specify the type of document(s) and time period for preservation thereof based on the classification mentioned under Regulation 9 of the Listing Regulations. This Policy covers all business records of the Company including written printed and recorded matter and electronic forms of records. |
|Prevention of Sexual Harassment Policy ||The Policy is lays a framework for ensuring protection against sexual harassment of women at workplace and the prevention and redressal of complaints of sexual harassment and matters related thereto. |
|Policy for Determination of Material Subsidiary ||Regulation 16(1) (c) of the Listing Regulations requires every listed Company to formulate a Policy for determining material subsidiary. |
| ||This Policy provides the criteria for determination of the "Material Subsidiary (ies) of the Company" and to provide the Governance Framework for such Subsidiary (ies). |
35. DISCLOSURE AS PER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
Pursuant to sub-rule (x) of rule 8 of the Companies (Accounts) Amendment Rules 2018the Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. There were no complaints received during the year.
36. EXTRACT OF ANNUAL RETURN:
The extract of Annual Return in Form No. MGT-9 as provided under sub-section (3) ofSection 92 of the Companies Act 2013 annexed herewith the Boards' report as AnnexureVI.
37. COMPLIANCE OF SECRETAIAL STANDARDS:
The Company has complied with the Secretarial Standards issued by Institute of CompanySecretaries of India on Meetings of Board of Directors and General Meetings.
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.