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Fiem Industries Ltd.

BSE: 532768 Sector: Auto
NSE: FIEMIND ISIN Code: INE737H01014
BSE 00:00 | 28 Jan 1166.40 7.05
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NSE 00:00 | 28 Jan 1167.35 10.45
(0.90%)
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OPEN 1140.10
PREVIOUS CLOSE 1159.35
VOLUME 3168
52-Week high 1377.70
52-Week low 524.95
P/E 17.99
Mkt Cap.(Rs cr) 1,535
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1140.10
CLOSE 1159.35
VOLUME 3168
52-Week high 1377.70
52-Week low 524.95
P/E 17.99
Mkt Cap.(Rs cr) 1,535
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Fiem Industries Ltd. (FIEMIND) - Director Report

Company director report

Dear Members

The Directors of your Company have the pleasure in presenting the 32nd Annual Report ofthe Company along with standalone and consolidated audited financial statements for thefinancial year ended March 31 2021. The standalone and consolidated financial statementshave been prepared in accordance with Indian Accounting Standards (Ind AS) as notified bythe Ministry of Corporate Affairs and as amended from time to time.

Financial Results: Standalone & Consolidated

The Directors' Report is prepared on the basis of Standalone Financial Statements ofthe Company pursuant to Rule 8(1) of the Companies (Accounts) Rules 2014. However thisreport also contains highlights of performance of subsidiaries and joint venture companiesand their contribution to the overall performance of the Company during the period underreview. Financials of following Wholly-owned Subsidiaries (WOS) and Joint VentureCompanies (JVs) are consolidated in Consolidated Financial Statements.

Sr Name of Entities Country of Incorporation WOS/JV
1. Aisan Fiem Automotives India Private Limited (AFI) India 69:26:5 JV
2. Fiem Kyowa (HK) Mould Company Limited. Hong Kong 50:50 JV
3. Centro Ricerche Fiem Horustech S.r.l Italy 50:50 JV
4. Fiem Industries Japan Co. Ltd. Japan WOS
5. Fiem Research and Technology S.r.l (FRT) Italy WOS

The key financial highlights of standalone and consolidated financials of your Companyare as under:

(Amount Rs In Lakhs)

Particulars Standalone Consolidated
FY 2020-21 FY 2019-20 FY 2020-21 FY 2019-20
1 Income from Operations
a) Net Sales 120749.99 136624.87 120764.67 136870.92
b) Other Operating Income 1342.32 1073.11 1350.95 1073.20
Total Income from operations (Net) 122092.31 137697.98 122115.62 137944.12
2 Total Expenses (excluding depreciation and finance cost) 108713.89 122032.24 108734.71 122255.62
3 Profit from operations before other income finance costs depreciation and exceptional items (1-2) 13378.42 15665.74 13380.91 15688.50
4 Add:- Other income 336.98 173.30 318.98 172.03
5 Profit from ordinary activities before finance costs depreciation and exceptional items (3+4) 13715.40 15839.04 13699.89 15860.53
6 Less :- Finance costs 1163.65 1766.66 1163.66 1766.66
Less :-Depreciation 5709.33 5272.14 5723.40 5320.28
7 Profit from ordinary activities after finance costs depreciation but before exceptional items (5-6) 6842.42 8800.24 6812.83 8773.59
8 Exceptional Items (318.40) (88.23) (318.40) (88.23)
9 Profit/(Loss) from Ordinary Activities Before Tax (7-8) 6524.02 8712.01 6494.43 8685.36
10 Tax expense 1812.06 819.16 1803.18 816.81
11 Net Profit/(Loss) from Ordinary Activities After Tax (9-10) 4711.96 7892.85 4691.25 7868.55
12 Share of profit/(loss) of associates - - (22.29) (412.06)
13 Profit after tax for the year after share of profit/loss of associate 4711.96 7892.85 4668.96 7456.49
14 Other comprehensive income/(loss) (net of tax) 133.64 (63.78) 133.64 (63.78)
15 Total other comprehensive income (net of tax) 4845.60 7829.07 4802.60 7392.71
16 Weighted Earnings Per Share (EPS) 35.81 59.98 35.48 56.66

State of the Company's affairs and Business Review

During this COVID-19 pandemic domestic two-wheeler industry in Financial Year (FY)2020-21 went through a tough time and overall domestic industry declined by 3.2% from 17.4million units to 15.1 million units. The Company was also significantly hit with the plantshutdown in Quarter-1 of FY 2020-21. However Company has been able to recover fromQuarter-2 onwards which are reflected in the strong Quarter-4 i.e. Quarter ended March2021 results. During FY 2020-21 the Company has been able to achieve net sales ofRs.120749.99 lacs as against the sale of Rs.136624.87 lacs during the Financial Year2019-20. This represent a decline of 11.62% on yearly basis. The decline in sales is dueto lockdown because of COVID-19 pandemic in Quarter-1 of FY 2020-21. The Company has beenable to earn an EBITDA of Rs.13060.02 lacs being 10.82% during FY 2020-21 as againstEBITDA of Rs.15577.51 lacs being 11.4% during the FY 2019-20. The marginal fall in EBITDAwas due to effect of lockdown because of COVID-19 pandemic in Quarter-1 of FY 2020-21. PATof the Company for FY 2020-21 was Rs.4711.96 lacs as against Rs.7892.85 lacs during FY2019-20. The decline in PAT is because of lockdown due to COVID-19 pandemic and resultantlower sale for the year. Moreover the PAT of FY 2019-20 included a reversal of deferredtax expense of Rs.1452.00 lacs on account of the Company exercised option of payment oflower income tax as per amended provisions. If the effect of lower income taxes excludedfrom the PAT of FY 2019-20 then a net decline in the PAT on year-on-year basis will workout to Rs.1728.89 lacs only.

Impact of the COVID-19 on the business of the Company

Due to outbreak of COVID-19 in March 2020 and the consequent lockdown(s) operationsof the Company remain suspended for part of Quarter-1 of FY 2020-21. Accordingly there isresultant lower sales during FY 2020-21 in comparison to previous year. Situation startingnormalizing from 2nd Quarter of FY 2020-21 onwards and 4th Quarter of FY 2020-21registered highest ever sales. While Company registered its highest quarterly sales inQuarter ended March 2021 the onset of more deadly second wave of COVID-19 has impactedmarket demand as well as Company's business in April-May-June 2021 months. Though therewere lockdown imposed by the state governments however running of the factories remainallowed hence all factories of the Company remained open during the COVID-19 second wave.Management is taking all due care and precautions across all locations to contain thespread of COVID-19. Further the future impact of COVID-19 on operations supply chaindemand for its products/services will depend upon the impact on overall automobileindustry however the Management is fully prepared and geared-up for running theoperations smoothly.

SAP Implementation

Company is in the process of implementation of SAP system across its all units andoffices - SAP S/4HANA Enterprise Management.

Dividend

The Board in its meeting held on June 30 2021 had recommended a Final Dividend at therate of 160% i.e. Rs. 16 /- per equity share of Rs. 10/- each for the financial year endedon March 31 2021.

The Final Dividend payout is subject to approval of members at the ensuing AnnualGeneral Meeting of the Company. The final dividend if approved by the members wouldinvolve a cash outflow of Rs. 2105.57 lacs. Further pursuant to Regulation 43A of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 as amended(“Listing Regulations”) the Board of Directors has approved and adopted aDividend Distribution Policy in its meeting held on 30th June 2021. The DividendDistribution Policy is available on the Company's website at link:

https://www.fiemindustries.com/wp-content/uploads/DDP_FIEM_F_30-06-21.pdf

Statutory disclosures as per provisions of Section 134 of the Companies Act 2013 (the“Act”)

1. Annual Return

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act 2013 the Companyhas placed a copy of the Annual Return on website of the Company which can be seen atfollowing link:

https://fiemindustries.com/wp-content/uploads/Annual%20Return%2020-21.pdf

2. Number of meetings of the Board

Meetings of the Board are held on regular intervals to discuss and decide on variousbusiness policies strategies operational financial and other matters. Due to businessexigencies the Board also approve some proposals through resolution passed by circulationfrom time to time.

During the financial year 2020-21 five (5) Board Meetings and one separate meeting ofIndependent Directors of the Company were held.

Detailed information on the meetings of the Board is included in the CorporateGovernance Report which forms an integral part of this Annual Report.

3. Directors' Responsibility Statement

In terms of Section 134(3)(c) of the Companies Act 2013 Your Directors state that:

a) in the preparation of the Annual Accounts for the year ended March 31 2021 theapplicable accounting standards (Ind As) have been followed along with proper explanationrelating to material departures if any.

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at end of Financial Year ended March31 2021 and of the Profit and Loss of the Company for that period.

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.

d) the Directors have prepared the Annual Financial Statements on a ‘goingconcern' basis.

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingefficiently and

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors including review of internal financial controls over financialreporting by the statutory auditors and the reviews performed by management and therelevant board committees including the audit committee the board is of the opinion thatthe Company's internal financial controls were adequate and effective during financialyear 2020-21.

4. Independent Directors' Declaration

The Company has received necessary declaration from each of Independent Director of theCompany under Section 149(7) of the Companies Act 2013 read with SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (‘Listing Regulations')as amended that they meet the criteria of independence as laid down under Section 149(6)of the Companies Act 2013 and Regulation 16(1)(b) of the Listing Regulations.

The Board took on record the declaration and confirmation submitted by the IndependentDirectors regarding their meeting the prescribed criteria of independence afterundertaking due assessment of the veracity of the same as required under Regulation 25 ofthe Listing Regulations.

5. Directors' Appointment Criteria and Remuneration Policy etc.

The Nomination & Remuneration Committee has formulated criteria for determiningqualifications positive attributes and independence of the Directors as well asRemuneration Policy for the Company as mandated under Section 178(3)/(4) of the Act andRegulation 19 read with Part D of Schedule II of the Listing Regulations.

There has been no change in the Remuneration Policy of the Company during the year. TheRemuneration Policy is enclosed as Annexure - I. This Policy is also availableunder Investor section of website of the Company and can be viewed at the following link:

https://fiemindustries.com/wp-content/uploads/Remuneration%20Policy_LODR.pdf

6. Auditors & Auditor's Reports (a) Statutory Auditors

Pursuant to Section 139 of the Companies Act 2013 M/s. V. Sachdeva & AssociatesChartered Accountants (Firm Registration No-004417N) were appointed as Statutory Auditorsof the Company at 28th AGM of the Company held on August 21 2017 for a term of 5 (five)years starting from the conclusion of 28th Annual General Meeting till the conclusion of33rd Annual General Meeting of the Company to be held in the year 2022 subject toratification by the shareholders at every Annual General Meeting. However Ministry ofCorporate A_airs vide its Notification No. S.O. 1833(E) dated May 7 2018 dispensed withthe requirement of ratification of appointment of Statutory Auditors at every AnnualGeneral Meeting.

Accordingly no shareholders resolution required for ratification of appointment ofM/s. V. Sachdeva & Associates Chartered Accountants as the Statutory Auditors of theCompany. Hence no such resolution is moved at the ensuing Annual General Meeting.

(b) Statutory Auditor's Reports

The Auditor's Reports given by M/s. V. Sachdeva & Associates Statutory Auditors onthe financial statements of the Company both standalone and consolidated for thefinancial year 2020-21 is part of the Annual Report. There has been no qualificationreservation or adverse remark or disclaimer in their Reports. Further during the yearunder review the Auditors has not reported any matter of offience of fraud under Section143 (12) of the Act therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

(c) Secretarial Auditor

In terms of Section 204 of the Companies Act 2013 the Audit Committee recommended andthe Board of Directors in their meeting held on June 30 2021 has appointed M/s RanjanaGupta & Associates a firm of Company Secretaries in Practice (C.P. No. 9920) as theSecretarial Auditors of the Company to conduct the secretarial audit for the financialyear 2021-22. The Company has received their consent for appointment.

(d) Secretarial Audit Report

The Secretarial Audit under section 204 of Companies Act 2013 read with Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as well as incompliance of Regulation 24A of the Listing Regulations was conducted by M/s Ranjana Gupta& Associates Company Secretaries (C.P. No. 9920) for the financial year 2020-21. TheReport in Form No MR-3 given by the Secretarial Auditors is annexed as Annexure - IIand forms integral part of this Report.

There has been no qualification reservation or adverse remark or disclaimer in theirReport; hence no explanation by Directors is warranted.

In addition to above ‘Annual Secretarial Compliance Report' in compliance withRegulation 24A of Listing Regulations and as per format prescribed under SEBI Circular No.CIR/CFD/ CMD1/27/2019 dated February 8 2019 was also obtained from M/s Ranjana Gupta& Associates Company Secretaries (C.P. No. 9920) and submitted to stock exchangesi.e. BSE and NSE with in stipulated (extended) period.

During the year under review the Secretarial Auditors has not reported any matter ofo_ence of fraud under Section 143 (12) of the Act therefore no detail is required to bedisclosed under Section 134 (3)(ca) of the Act.

(e) Cost Auditor

As per Section 148 of the Act read with Companies (Cost Records and Audit) Rules 2014on the recommendation of the Audit Committee the Board of Directors in their meeting heldon June 30 2020 had appointed Mr. Krishan Singh Berk Cost Accountants (Membership No.2724) as Cost Auditor of the Company to conduct the Cost Audit for the financial year2020-21 at a remuneration of Rs. 210000/-. This remuneration was also ratified by theshareholders in the Annual General Meeting held on September 21 2020.

However Mr. Krishan Singh Berk has tendered his resignation on December 24 2020through e-mail. In his letter he cited personal and health reasons for his resignation.To fill this casual vacancy on recommendation of Audit Committee the Board of Directorsin its meeting held on January 23 2021 appointed M/s H. Tara & Co. CostAccountants (FRN 100265) (Proprietor Mr. Harkesh Tara Memb. No. 17321) as the CostAuditor to conduct Cost Audit for the Financial Year 2020-21 at a remuneration of Rs.290000/-. Further in terms of Section 148 of the Act read with Companies (Cost Recordsand Audit) Rules 2014 on the recommendation of the Audit Committee the Board ofDirectors in their meeting held on June 30 2021 has also re-appointed M/s H. Tara &Co. Cost Accountants (FRN 100265) as the Cost Auditor to conduct Cost Audit for theFinancial Year 2021-22 at a remuneration of Rs. 290000/-.

The Company had received his consent that the appointment / reappointment is inaccordance with the applicable provisions of the Act and rules framed there under and heis not disqualified to be appointed as Cost Auditor. The above remuneration of new CostAuditors for both years need to be ratified by the shareholders. The Notice of theensuing Annual General Meeting of the Company has requisite resolution for ratification ofremuneration of Cost Auditors by the members of the Company.

The Cost Audit Report for Financial Year 2019-20 was filed to Registrar of Companies onSeptember 26 2020. Further the Cost Audit Report for Financial Year 2020-21 will befiled with the Registrar of Companies in due course.

7. Particulars of Loans Guarantees or Investments under Section 186

Details of the loans given guarantees or securities provided (if any) and investmentsmade by the Company along with their purposes have been disclosed in the financialstatements. Please refer to Note No.5 in the standalone financial statement.

8. Contracts and Arrangements with Related Parties

All contracts/ arrangement/ transactions entered with Related Parties during the yearunder review were on arm's length basis and in the ordinary course of business. Dueapprovals from Audit Committee were taken under the provisions of Section 177 of theCompanies Act 2013 and the Rules made there under read with applicable ListingRegulations. As all the transactions with Related Parties during the year under reviewwere on arm's length basis and in the ordinary course of business so no approval fromBoard was applicable. During the year under review the Company has not entered into anycontract/arrangement/transaction with related parties which could be considered‘material' in accordance with Related Party Transactions Policy of the Company.Hence no approval from shareholder required for any related party transaction during theyear under review. As all the transactions with Related Parties were on arm's length basisand there was no ‘material' transaction during the year hence disclosure in formAOC-2 in terms of Section 134(3)(h) of the Companies Act 2013 are not required.

Further during the year under review there were no materially significant relatedparty transactions entered into by your Company with the Promoters Directors KeyManagerial Personnel or other senior management personnel which might have potentialconflict with the interest of the Company at large.

Members may refer Note No. 45 to the financial statements which sets out relatedparty disclosures pursuant to Ind AS. Your Company has formulated a policy on relatedparty transactions. The policy is available on Company's website at https://www.fiemindustries.com.This policy provides the governing framework for review and approval of related partytransactions.

The web-link of the same has been provided in the Corporate Governance Report.

9. Transfer to Reserves

Your Company has transferred Rs. 500.00 lacs to the General Reserve from the profits ofthe Company.

10. Material changes and commitment affecting financial position of the Company /Change in the Nature of the Business

There is no material change and/or commitment affecting the financial position of yourCompany has occurred between April 1 2021 and the date of signing of this report. Thoughin general COVID-19 continue to be a cause of concern throughout the world.

11. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo

Details of Energy Conservation Technology Absorption Research and Development andForeign Exchange Earnings and outgo as required under Section 134(3)(m) of the Act readwith Rule 8(3) of Companies (Accounts) Rules 2014 are given in Annexure - III tothis Report.

12. Risk Management

Risk management remained an important function of the management especially duringCOVID-19 pandemic. Though risk management is an ongoing activity considering the dynamicbusiness environment in which Company operates. Risk management is an area of continuousfocus across all functions and operations so that risk mitigation can be implemented onimmediate basis to minimize adverse effect of any risk. Company's approach to addressbusiness risks is comprehensive and includes periodic review of such risks and a frameworkfor mitigating controls and reporting mechanism of such risks. As per ListingRegulations the Board of Directors of the Company are responsible for framingimplementing and monitoring the risk management plans of the Company. The Company hasdefined a “Risk Management Policy” which comprises the risk management frameworkand the same has been approved by the Board of Directors of the Company. The frameworkcovers various categories of risks including cyber security risks market risks naturalcalamities etc. and measures & controls that have been implemented to prevent suchrisks and continuous improvement of such systems and processes. A brief about the risk andconcern is also given in the Management Discussion and Analysis Report.

13. Corporate Social Responsibility (CSR)

CSR Policy of the Company is based on the premise of helping the underprivileged in thehour of need. Towards this cause we have selected ‘healthcare' as one of the majorareas of intervention under Corporate Social Responsibility (CSR) and way of serving thehumanity. The underlying reason for selecting this as a major area under CSR is that inIndia a_ordable medical treatment to the poor in disease like cancer and other lifethreatening is scarcely available hence poor sufficer a lot and at times not able to bearthe burden of treatment. Therefore we want to stand with poor and underprivileged byextending them the financial-aid for treatment when patient and their family are in direnecessity of such support.

During the year under review the Company continued its collaboration with SocialWelfare Unit of AIIMS New Delhi and provided financial aid to poor and needy patientssu_ering from cancer and other life threatening diseases for getting their treatment donein ‘All India Institute of Medical Sciences' New Delhi (AIIMS). Though most of thehelp is done through Social Welfare Unit of AIIMS New Delhi however in acute andemergent situation direct financial-aid is also extended to needy patients for gettingtreatment in other hospitals. Company also extended full support and financial help tolocal administration to fight against COVID-19 pandemic besides undertaking all measureson its own and through ‘Firm Foundation' - the trust set-up by the Companydedicatedly for undertaking CSR activities.

Among other initiatives during the year under review Company also engaged NGOs /implementation agencies for undertaking projects on promoting education organizing freeeye operation camp helping the cancer patients and supported one shelter home which iscaring the abandoned senior citizens deprived mentally disabled bedridden HIVInfected patients on death bed people dying with hunger on roads and patients sufferingwith incurable disease.

During the year under review the CSR Policy has not been amended. The salient featuresand brief outline of the Corporate Social Responsibility (CSR) Policy of the Company andthe CSR initiatives undertaken by the Company during the year are set out in Annexure -IV of this report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014 as amended. For details regarding the CSR Committeeplease refer the Corporate Governance Report which forms part of Annual Report.

14. Annual Evaluation of the Performance of the Board its Committees and IndividualDirectors

Performance Evaluation is aimed to use constructively as a mechanism to improve Board'seffectiveness maximize strengths and tackle weaknesses of Board members. It involvesquestionnaires to be filled by every Director about his own performance (self-assessment)performance of Board as whole performance of Chairman and performance of respectiveCommittee(s) where he/she is a Member. At the time of individual performance evaluation ofthe respective director he himself remains outside the evaluation process.

Initially Nomination & Remuneration Committee (NRC) carry out the primaryevaluation of every Director's performance which is subject to next level of evaluation bythe Board and Independent Directors. As per Section 178(2) of the Act the NRC conduct theperformance evaluation of every Individual Director. As per Performance Evaluationframework of the Company the evaluation process consists of evaluation on the basis offilled questionaries' received from all directors and opinions inputs from NRC membersand any other information as may be required by the NRC.

The outcome of NRC in respect of Independent Directors is subject to final evaluationby the Board. Outcome of NRC in respect of Non-Independent Directors is subject to finalevaluation by the Independent Directors. Performance evaluation of Board as a whole aswell as Chairman of the Board is also conducted by the Independent Directors. Theperformance evaluation of the Committees is conducted by the Board.

The final outcome is collated and presented before the NRC in its next meeting for itsconsideration as well as before the Board for noting and future reference.

15. Highlights of performance of subsidiaries associates and joint venture companiesand their contribution to the overall performance of the company during the period underreview.

At present there are 3 JV Companies (JVC) and 2 Wholly-owned subsidiaries (WOS) aslisted in initial paragraph of this report. The highlights of performance of each of thesecompanies are as under:

a) Aisan Fiem Automotives India Pvt. Ltd. (AFI):

This JV Company was incorporated on 7th June 2018 in India. Total equity investmentin the JV Company is Rs. 100 Crore wherein Fiem Industries hold 26% Aisan hold 69% andToyota Tsusho hold 5%. The JV Company has established its factory in ELCINA ElectronicManufacturing Cluster in Tapukara Rajasthan for production of Fuel Pump Module. Thecompany has incurred losses during the year hence consolidated profits of Fiem IndustriesLimited has accordingly impacted.

The Financial highlights of AFI is as under:

(Amount Rs In Lakhs)

Particulars FY 2020-21 FY 2019-20
% of shareholding 26% 26%
Total Income 2680.50 920.96
Total Expenses 2722.40 1342.69
Profit or (Loss) after tax (41.90) (421.59)
Total comprehensive income (41.07) (421.73)

b) Fiem Kyowa (HK) Mould Company Limited:

This JV Company was formed in Hong Kong as 50:50 joint venture company with Kyowa Co.Ltd. of Japan. The purpose of setting-up of JV was to engage in the business of high classmoulds / tools for Automotive and other applications. The Company has started itsoperations during FY 2018-19. There is no major investment in this company and thiscompany is providing support for mould development for OEMs. The contribution / or impacton performance of Fiem Industries is very small.

The Financial highlights of Fiem Kyowa (HK) Mould Company is as under:

(Amount Rs In Lakhs)

Particulars FY 2020-21 FY 2019-20
% of shareholding 50% 50%
Total Income 139.98 540.72
Total Expenses 142.19 528.90
Profit or (loss) after tax (2.21) 11.82
Total comprehensive income (2.21) 11.82

c) Centro Ricerche Fiem HorustecH S.r.l. (CRFH) (Joint venture in Italy):

The Company was set-up in Italy as a 50:50 JV with Horustech Lighting of Italy whichis a Designing Company. The purpose of setting-up of JV was to strengthen R&D andDesigning capabilities of the Company. However due to some financial problems inHorustech group companies the management of both companies i.e. Horustech Lighting andFiem Industries Limited has mutually decided to move ahead to liquidate the CRFH.Currently this company is under liquidation. There is no major investment in this companyand this company was providing Design Services to Fiem Industries and other customers. Thecontribution or impact on performance of Fiem Industries is nil or negligible.

The Financial highlights of CRFH is as under:

(Amount Rs In Lakhs)

Particulars FY 2020-21 FY 2019-20
% of shareholding 50% 50%
Total Income - 22.91
Total Expenses 3.70 25.06
Profit or (loss) after tax (3.70) (2.15)
Total comprehensive income (3.70) (2.15)

d) Fiem Industries Japan Co. Ltd. (Wholly-owned Subsidiary):

This WOS was set-up in Japan as an extended arm of the Company for liaison withJapanese customers like Honda Suzuki and Yamaha etc. support in Designing R&D andnew business development. While the parent Company (Fiem) is getting full support in aboveareas the financials of the subsidiary are at very small scale. There is no majorfinancial contribution or impact on performance of Fiem Industries.

Financial Highlights of Fiem Industries Japan Co. Ltd. (Japan):

(Amount Rs In lacs)

Particulars FY 2020-21 FY 2019-20
% of shareholding 100% 100%
Revenue 56.85 330.57
Total Income 57.30 327.68
Total expenses 81.29 324.93
Profit/(Loss) before taxation (23.99) 2.76
Provision for taxation 1.48 0.46
Profit/ (Loss) after taxation (25.47) 2.30

e) Fiem Research and Technology S.r.l. (Wholly-owned Subsidiary in Italy):

This Wholly-owned Subsidiary (WOS) was incorporated in Italy on December 17 2018 and aDesign Centre set-up under this Company in Turin Italy. Fiem Industries is getting DesignServices from this WOS on regular basis on Automotive LED and other Lamps for esteemed OEMcustomers. This is a wholly-owned subsidiary and providing Design Services to FiemIndustries only so working like an extended arm of Fiem Industries for Design Services.

Financial Highlights of Fiem Research and Technology S.r.l (Italy)

(Amount Rs In lacs)

Particulars FY 2020-21 FY 2019-20
% of shareholding 100% 100%
Revenue 374.28 415.95
Total expenses 379.89 445.35
Profit/(Loss) before taxation (5.61) (29.40)
Provision for taxation (10.37) (2.81)
Profit/ (Loss) after taxation 4.76 (26.60)

The financial position of the subsidiaries and Joint Venture Companies is also given inAOC-1 in the financial statements.

16. Other statutory disclosures as required under Rule 8(5) of the Companies (Accounts)Rules 2014

i) Financial summary/ highlights of the Company are already mentioned in thebeginning of the report.

ii) There is no change in the nature of business of the Company during the yearunder review.

iii) Change in Directors and Key Managerial Personnel:

• Pursuant to provisions of Section 152 of the Companies Act 2013 and inaccordance with provisions of Articles of Association of the Company Mr. Rahul Jain andMr. Kashi Ram Yadav Whole-time Directors of the Company are liable to retire by rotationat the ensuing Annual General Meeting and being eligible have offered themselves forre-appointment and they are not disqualified under Section 164(2) of the Companies Act2013.

• The Board of Directors in their Meeting held on June 30 2021 on recommendationof Nomination & Remuneration Committee and subject to approval by the members inensuing Annual General Meeting has re-appointed following Directors: o Mrs. Seema Jain(DIN 00013523) as Whole-time Director of the Company w.e.f. April 1 2022 for a term of 5years; o Ms. Aanchal Jain (DIN 00013350) as Whole-time Director of the Company w.e.f.April 1 2022 for a term of 5 years;

• In the ensuing Annual General Meeting the reappointments of Mrs. Seema Jain andMs. Aanchal Jain as Whole-time Directors are proposed. The details of Directors beingproposed for re-appointment as required under the Listing Regulations are provided in theNotice convening the ensuing Annual General Meeting of the Company. The Board recommendre-appointment of above Directors.

• Mr. J.K. Jain Chairman & Managing Director; Mr. O. P. Gupta ChiefFinancial O_cer and Mr. Arvind K. Chauhan Company Secretary are the Key ManagerialPersonnel of the Company within the meaning of Section 203 of the Act.

•None of the Key Managerial Personnel has resigned or appointed during the yearunder review.

• During the financial year no company become Subsidiary Joint venture Companyor Associate of the Company. The details of subsidiary and joint venture companies alreadyprovided in the preceding paragraphs.

iv) Details relating to Deposits:

The Company has not accepted any Deposit from public within the meaning of theCompanies (Acceptance of Deposit) Rules 1975 or Chapter V of the Companies Act 2013 andas such there was no outstanding as on the date of the balance sheet on account ofprincipal or interest on deposits from public.

v) No significant and material orders were passed by any Regulator or Court orTribunal impacting the going concern status and Company's operations in future.

vi) Details in respect of adequacy of internal financial controls with reference to theFinancial Statement:

The Company has in place adequate internal financial controls which are commensurateto size and operations of the Company. During the year no area of concern continuingfailure or major weakness was observed.

vii) It is confirmed that maintenance of cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the Companies Act 2013 is required bythe Company and accordingly such accounts and records are made and maintained.

viii) It is confirmed that the Company has complied with provisions relating to theconstitution of Internal Complaints Committee(s) under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.

ix) It is confirmed that during the year under review no complaints were receivedunder the Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (Preventionand Control) Act 2017.

x) It is confirmed that there was no application made or any proceeding pendingunder the Insolvency and Bankruptcy Code 2016.

xi) It is confirmed that no settlements have been done with banks or financialinstitutions.

xii) Other disclosures required under provisions of the Companies Act 2013 and theListing Regulations as may be applicable:

• As per provisions of Section 177(8) of the Act composition of the AuditCommittee has been disclosed under Corporate Governance Report. The Board during the yearunder review had accepted all the recommendation made to it by the Audit Committee.

Establishment of vigil mechanism as per provision of Section 177(10) of theAct: Company has already in place a vigil mechanism namely ‘Whistle BlowerPolicy'. The details of the same are reported under Corporate Governance Report.

• The details about the ratio of remuneration of each director to the medianremuneration of the employees of the Company pursuant to Section 197(12) of the Act readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 as amended is provided in Annexure-V forming part of this report.

• The statement containing names and other details of top 10 employees in termsof remuneration drawn and the particulars of employees as required under Section 197(12)of the Act read with Rule 5(2)&(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended is provided in Annexure-VI formingpart of this report.

• Disclosure as required under Section 62(1)(b) of the Act read with Sub-rule 9 ofRule 12 of the Companies (Share and Capital Debentures) Rules 2014 are not applicableas during the year no shares were issued under ESOS / ESOP or under sweat equity scheme.

• Disclosure as required under Section 43(a)(ii) of the Act read with Sub-rule 4of Rule 4 of the Companies (Share and Capital Debentures) Rules 2014 are not applicableas during the year no equity shares with diffierential rights as to dividend voting orotherwise were issued.

• Neither the Managing Director nor any Whole-time Director of the Company receiveany remuneration or commission from any of its subsidiaries hence no such disclosureapplicable.

• The Company duly complied the applicable Secretarial Standards (SS) i.e. SS-1& SS-2 on Meetings of the Board of Directors and General Meetings respectively.

Corporate Governance Report and Management Discussion & Analysis Report

Pursuant to Listing Regulations Management Discussion & Analysis Report Report onCorporate Governance Certificate on Corporate Governance issued by Practicing CompanySecretary and the declaration by the Chairman & Managing Director regarding a_rmationfor compliance with the Company's Code of Conduct forms part of the Annual Report.

Business Responsibility Report

Pursuant to Regulation 34 of the Listing Regulations Business Responsibility Reportforms part of Annual Report.

Consolidated Financial Statements

In accordance with the Companies Act 2013 (“the Act”) read with IndAS theaudited consolidated financial statements are provided in the Annual Report. The accountsof Wholly-owned Subsidiary companies and JV Companies are consolidated with the accountsof the Company.

Acknowledgement

The Board of Directors sincerely acknowledge the patronage of valued OEM customers andwould like to place on record appreciation for employees of the Company for their sincereworking during these difficult times. Your Directors would like to express their sincerethanks to the shareholders and investors of the Company for the trust reposed in theCompany. Your Directors would also like to thank all the stakeholders banks dealers andvendors for their co-operation and support to the Company.

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