The Members of
FAZE THREE Autofab Limited
Your Directors are pleased to present the 24th Annual Report of your Companycontaining the business performance and the Audited Financial Statements for the yearended on March 31 2021.
1. FINANCIAL HIGHLIGHTS:
The performance of the Company for the financial year ended March 31 2021 issummarized below:
(Rs. In Cr.)
|Particulars ||For the year ended 31.03.2021 ||For the year ended 31.03.2020 |
|Revenue from operations ||134.14 ||165.85 |
|Expenses ||(111.54) ||(148.94) |
|Other Income ||0.72 ||0.95 |
|Profit before Interest Tax Depreciation & Amortization finance cost and exceptional items ||23.32 ||17.86 |
|Less: || || |
|Finance Cost/ Interest ||4.04 ||4.64 |
|Depreciation & amortization expense ||5.17 ||4.78 |
|Profit / (Loss) before taxation ||14.11 ||8.44 |
|Less : Provision for taxation ||3.00 ||(0.58) |
|Profit / (Loss) for the year carried to Balance Sheet ||11.11 ||9.02 |
2. KEY HIGHLIGHTS OF THE FINANCIAL PERFORMANCE:
During the year under review the Company has earned revenue from operations of Rs.134.14 Cr as against Rs. 165.85 Cr in the previous year. The Company earned Net Profit ofRs. 11.11 Cr as against Rs. 9.02 Cr in the previous year. FTAL was able to sustain itsoverall business risk profile in F.Y. 2020-21 marked by improvement in operating margindespite drop in revenues of around 19% due to COVID induced lockdown in Q1 F.Y.21.
3. WEB ADDRESS OF ANNUAL RETURN:
The Annual Return of the Company as referred in sub-section (3) of Section 92 has beenplaced on the Company's website athttp://www.fazethreeautofab.com/aunde/investor/4corporategovernance.html
4. 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 ispending to be transferred during the year to the Investor Education and Protection Fund.
There were no appropriations to reserves/ general reserves during the year underreview. The closing balance of the retained earnings of the Company for F.Y. 2020-21 wasINR 1.81 Crores.
7. CHANGE IN SHARE CAPITAL:
The Paid up Share Capital as on 31st March 2021 is INR 107232070comprising 10723207 Equity Shares of Rs.10/- each. There has been no change in thecapital structure of the Company during the year.
8. CREDIT RATING:
As per request of the Company and based on No Objection received from Lender of theCompany CRISIL Ratings has withdrawn the rating assigned to our various Bank loanfacilities.
The latest outstanding Rating of CRISIL BB+/Stable (Upgraded from 'CRISIL BB/ Stable')for Long Term Rating and rating of CRISIL A4+ (Re-affirmed) for Short Term Rating wasassigned on May 31 2021 by the CRISIL Limited.
9. 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.
10. DIRECTORS & KEY MANAGERIAL PERSONNEL:
During the year under review there were no changes in the composition of the Board ofDirectors of the Company.
In accordance with Section 152 of the Companies Act 2013 and the rules framedthereunder Mr. Ajay Anand Managing Director (DIN: 00373248) retires by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment.
The Members of the Company at their 22nd Annual General Meeting had passedspecial resolution for reappointment of Mr. Ajay Anand (DIN: 00373248) as the ManagingDirector for a period of three (3) years with effect from April 1 2019 upto March 312022. The Board of Directors of the Company at its meeting held on June 25 2021 on therecommendations of the Nomination and Remuneration Committee approved the re-appointmentof Mr. Ajay Anand as the Managing Director for a period of 3 years commencing from April01 2022 subject to approval of members by passing a Special Resolution. Thereforeapproval of members for the re-appointment of Mr. Ajay Anand is proposed at the ensuingAnnual General Meeting of the Company.
The Board of Directors based on the recommendation of the Nomination and RemunerationCommittee in its meeting held on June 25 2021 appointed Mr. V Sivakumar CFO and Mr.Kartik Jethwa as Additional Directors designated as Executive Director and IndependentDirector respectively who shall hold office upto the ensuing Annual General Meeting.Their appointments shall be further regularised on such terms and conditions proposed tobe put before the members in the forthcoming Annual General Meeting for their approval.
Mr. Vinit Rathod (DIN: 07589863) and Mr. Manan Shah (DIN: 07589737) were appointed asindependent directors for the first term of 5 (Five) years effective September 09 2016and February 13 2017 respectively. Their office of directorship is due for retirement onSeptember 08 2021 and February 12 2022 respectively. 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 25 2021 approved there-appointment of Mr. Vinit Rathod and Mr. Manan Shah as independent directors of theCompany for second term of 5 years with effect from September 09 2021 to September 082026 and February 13 2022 to February 12 2027 respectively whose office shall not beliable to retire by rotation subject to member's approval. The Board therefore proposestheir re-appointment to the Members at the ensuing Annual General Meeting of the Companyby passing a Special Resolution.
Mr. Roshan Gupta was appointed as the Company Secretary of the Company in place of Mr.Akram Sati erstwhile Company Secretary of the Company with effect from March 08 2021.
The following persons have been designated as Key Managerial Personnel of the Companyas on March 31 2021 pursuant to Section 2 (51) and Section 203 of the Companies Act 2013read with the Rules framed thereunder:
1. Mr. Ajay Anand Managing Director
2. Mr. V Sivakumar Chief Financial Officer
3. Mr. Akram Sati Company Secretary and Compliance officer (upto 7thMarch 2021)
4. Mr. Roshan Gupta Company Secretary and Compliance Officer (appointed w.e.f. 8thMarch 2021)
11. 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.
12. 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 asDirectors of the Company by the SEBI and Ministry of Corporate Affairs or any suchauthority and the same forms part of this Report.
13. 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 http://www.fazethreeautofab.com
14. DETAILS OF BOARD MEETINGS:
The Board of Directors of your Company met 7 (Seven) times during the Financial Yearended 31st March 2021. 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 were within the period prescribed under the CompaniesAct 2013 and SEBI (LODR) Regulations.
15. 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 2021 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 2021 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.
16. 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 whole the directors individually as well as the evaluation of theworking of its Committees.
The performance of the board was evaluated by the Board after seeking inputs from allthe directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc. Performance evaluationof independent directors was done by the entire Board excluding the independent directorbeing evaluated.
The performance of the committees was 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 the Board as a whole and Chairman of the Company was evaluated taking intoaccount the views of executive directors and non-executive directors.
The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution of the individualdirector to the board and committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc.
The Board of Directors expressed their satisfaction with the evaluation process.
17. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDPARTICULARS OF
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 in receipt of remuneration for thatyear in the aggregate more than Rs 102 Lacs or
(ii) If employed for part of the financial year was in receipt of remuneration for anypart of that year at a rate which in aggregate more than Rs 8.50 Lacs per month.
(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. Hence the informationrequired to be given pursuant to the provisions of Section 197(12) of the Companies Act2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended from time to time is not applicable to the Company.
Details as required under the provisions of section 197(12) of the Companies Act 2013read with rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 as amended which forms part of the Directors' Report will be made availableto any shareholder on request as per provisions of section 136(1) of the said Act.
18. 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 unauthorised 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.
19. DETAILS OF SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES:
As on date the Company does not have any Subsidiary/ Associates/ Joint Venture company.
20. 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.
22. 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 2021 and the date of the Directors' report.
23. CORPORATE SOCIAL RESPONSIBILITY STATEMENT (CSR):
The provisions of Section 135 of the Companies Act 2013 though being applicable to theCompany pursuant to net profits being above Rs. 5 Crores in the previous financial year2019-20 there was no CSR obligation for the said financial year on account of negativethree year average net profits of the Company as mentioned in CSR Annual
Report set out in Annexure A of this report in the format prescribed in theCompanies (Corporate Social Responsibility Policy) Amendment Rules 2021.
For other details regarding the CSR Committee please refer to the Corporate GovernanceReport which is a part of this report. The CSR Policy is available on the Company'swebsite at http://www.fazethreeautofab.com/aunde/investor/5policies.html
24. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION ETC. & FOREIGN EXCHANGE EARNINGSAND
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 B.
25. 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.
26. 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.
27. 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 at its 20th(Twentieth) AGM have approved the appointment of M/s. Thakur Vaidyanath Aiyar & Co.Chartered Accountants Mumbai (Firm Rgn. No. 000038N) as the Statutory Auditors of theCompany to hold office for a term of 5 (five) years until the conclusion of 25th(Twenty Fifth) AGM to be held for the financial year ended March 31 2022.
M/s. Thakur Vaidyanath Aiyar & Co. has confirmed that their appointment is withinthe prescribed limits specified in Section 139 of the Companies Act 2013.
28. 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.
29. COST RECORDS & COST AUDIT:
The cost records are maintained by the Company however Cost Audit is not applicable tothe Company for the F.Y. 2020-21.
30. 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 hadappointed M/s. Sanjay Dholakia & Associates Practicing Company Secretaries toundertake Secretarial Audit for the financial year 2020-21 which inter alia includesaudit of compliance with the Companies Act 2013 and the Rules made thereunder SEBIListing Regulations and other Regulations and Acts applicable to the Company. TheSecretarial Audit Report is annexed to this Report as Annexure C.
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.
31. OBSERVATIONS AUDITOR & SECRETARIAL AUDITOR:
There are no observation or adverse remarks in Secretarial auditors report.
There are no observation or adverse remarks in statutory auditors report.
32. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:
In compliance with Regulation 34 read with Schedule V of the Listing Obligations andDisclosure Requirements) Regulations 2015 Company's Corporate Governance Report formspart of this Annual Report as Annexure D.
Further all the Board members and Senior Management personnel have affirmed compliancewith the Code of Conduct for the financial year 2020-21. A declaration to this effectsigned by the Managing Director of the Company also forms part of this Annual Report.
A Certificate from Practicing Company Secretary regarding the compliance with theconditions of Corporate Governance as stipulated under Regulation 34 read with Schedule Vof the SEBI Listing Regulations is annexed to this Report.
33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report in accordance with Regulation 34 readwith Schedule V of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("SEBI Listing Regulations") formspart of this Annual Report as Annexure E.
34. PARTICULARS OF CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES :
During the year under review all contracts/arrangement/transactions entered by theCompany with related parties were in compliance with the applicable provisions of theCompanies Act 2013 and SEBI Listing Regulations. All related party transactions enteredduring the year were on arm's length basis and in the ordinary course of business of theCompany.
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.
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 F.
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: http://www.fazethreeautofab.com/aunde/investor/5policies.html
35. 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 Act 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 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). |
|Corporate Social Responsibility Policy ||This policy is framed under the provisions of section 135 of the Companies Act 2013 for conducting and allocating funds for Corporate Social Responsibility Activities on behalf of the Company. It decides about the Constitution of CSR Committee and its roles and responsibilities and the areas in which the Company shall allocate its funds towards the CSR Activity. |
36. 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.
37. 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 is annexed herewith the Boards' report as AnnexureG.
38. COMPLIANCE OF SECRETARIAL 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 take this opportunity to place on record their sincere appreciation forthe excellent support provided by Bankers Government authorities all stakeholders andbusiness associates. The Board also express its sincere appreciation and support extendedby the Shareholders during the year under review and also acknowledges the dedicatedefforts put in by the employees at all levels.
| ||For and on behalf of the Board of Directors || |
| ||Ajay Anand ||Rashmi Anand |
|Place: Mumbai ||Managing Director ||Director |
|Date: July 22 2021 ||DIN: 00373248 ||DIN: 00366258 |