FOR THE FINANCIAL YEAR ENDED MARCH 31, 2024
To,
The members of Faze Three Limited
The Board of Directors are pleased to present the 39th Annual Report of your Company containing the business performance and the Audited Financial Statements for the year ended on March 31, 2024.
1. FINANCIAL PERFORMANCE (STANDALONE & CONSOLIDATED)
(INR in Crores)
Particulars
Total Income
Profit before tax
Tax expense (incl. deferred tax)
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
The standalone and consolidated financial statements for the financial year ended March 31, 2024, forming part of this Annual Report, have been prepared in accordance with the Indian 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 operations of INR 564.52 Crores as against INR 558.18 Crores in the previous year. The total Standalone Income for the Quarter ended (QE) March 31, 2024 stood at INR 152.63 Crores versus INR 134.34 Crores for QE March 2023. The Company's Standalone Net Profit after Tax (NPAT) for year ended March 31, 2024 stood at 42.11 INR Crores versus INR 57.44 Crores for year ended March 31, 2023 and the Consolidated NPAT for year ended March 31, 2024 stood at INR 46.59 Crores as against NPAT of INR 58.30 Crores for year ended March 31, 2023.
3. DIVIDEND
The Board of Directors have decided to retain the resources to fuel the growth and objectives of the Company and therefore do not recommend dividend for the financial year ended March 31, 2024. The
Directors are confident to derive optimum utilization out of the same, which shall be in the best interest of the stakeholders.
4. SHARE CAPITAL
The Authorised Share Capital of the Company is INR 26,00,00,000/- divided into 2,60,00,000 equity shares of face value of INR 10/- each. The paid-up share capital of the Company is INR 24,31,90,000/- divided into 2,43 19 , ,000 equity shares of face value of INR 10/- each. During the F.Y. 2023-24 there was no change in the share capital of the Company.
5. RESERVES
There were no appropriations to reserves/ general reserves during the year under review. The closing balance of the retained earnings of the Company for the FY 2023-24 is INR. 175.71 Crores on standalone basis and INR on 178.13 Crores consolidated basis.
6. DEPOSITS/ LOANS FROM DIRECTORS
The Company has not accepted any deposits from the public falling within the ambit of Section 73 and 76 of the Companies Act, 2013 (‘the Act') and the Companies (Acceptance of Deposits) Rules, 2014, or under Chapter V of the Act. The Company has not accepted any deposit or any loan from the directors during the year under review.
7. SUBSIDIARY OR ASSOCIATE OR JOINT VENTURE COMPANY
The Company has two wholly owned subsidiaries as on March 31, 2024, namely:
i. Faze Three US LLC
The Company has a wholly owned subsidiary (WOS) in USA viz. Faze Three US LLC which is a front office of the Company in USA and is actively engaged in sourcing local business within USA for supplying the Company's range of products to stores/ retailers. The Total Income of WOS for FY 2023-24 stood at USD 1.17 MN (INR 9.72 Crores) vs USD 1.84 MN (INR 14.92 Crores) for FY 2022-23. The PAT for FY 2023-24 stood at USD 0.15 MN (INR 1.32 Crores) as against PAT USD 0.039 MN (INR 0.79 Crores) during previous year.
ii. Mats and More Private Limited
The Company has a wholly owned subsidiary (WOS) incorporated in India viz. Mats and More Private Limited. The WOS is engaged in the business of manufacturing, import, export and dealing in patio mats, floor covering, indoor and outdoor furnishing products including other furnishing products. The Total Income of WOS for FY 2023-24 stood at INR 21.69 Crores vs INR 2.61 Crores for FY 2022-23. The PBT for FY 2023-24 stood at INR 3.85 Crores vs INR 0.05 Crores for FY 2023-24. Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of financial statements of the WOS in Form AOC-1 forms part of this Annual Report as ANNEXURE 1. Copies of the financial statements of the subsidiary companies are available on the Company's website at https://www.fazethree.com/financial-result/.
During the period under review, no company has become or ceased to be Subsidiary, Associate or Joint Venture of the Company.
8. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(3)(c) of the Act, with respect to the Director's Responsibility Statement, the Directors hereby confirm that: (i) in the preparation of the Annual Financial Statements for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (ii) such accounting policies as mentioned in Notes to Financial Statements have been selected and applied consistently and judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the Profit of the Company for the year ended on that date; (iii) proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) the Annual Financial Statements have been prepared on a going concern basis; (v) proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; (vi) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
9. NUMBER OF MEETINGS OF THE BOARD AND ITS COMMITTEES
The Board and Committees of the Board meet at regular intervals to discuss and decide on Company/ Business policy and strategy apart from other Board business. In case of any urgent business need, where the meeting of the Board of Directors is not envisaged, the Board's approval is taken by passing resolutions by circulation, as permitted 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 the Corporate Governance Report, which forms part of this Report.
10. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED
DURING THE YEAR
As on March 31, 2024, the Board of Directors of the Company comprised of the following:
During the year under review, there was no change in the composition of the Board.
On the basis of the written representations received from the Directors, none of the above Directors is disqualified under Section 164 of the Act. During the year under review, the following changes took place in the position of Key Managerial Personnel:
i. Ms. Samruddhi Varadkar who resigned from the position of Company Secretary & Compliance Officer with effect from the closure of business hours of October 05, 2023. ii. Mr. Akram Sati was appointed as the Company Secretary & Compliance Officer of the Company with effect from January 05, 2024 in place of Ms. Samruddhi. Accordingly, following are the Key Managerial Personnel of the Company as on March 31, 2024:
The Company has complied with the requirements of having Key Managerial Personnel as per the provisions of Section 203 of the Act.
11. PERFORMANCE EVALUATION OF BOARD
Pursuant to Section 178 of the Act read with Schedule IV thereto and Regulation 17 of the Securities and Exchange Board of India ("SEBI") (Listing Obligations and Disclosure Requirements), Regulations 2015 ("Listing Regulations"), a formal evaluation of Board's performance and that of its Committees and individual directors has been carried out by the Board. The evaluation of all the directors including independent directors was carried out by the entire Board, except for the director being evaluated. The performance is evaluated after seeking inputs from all the Directors, through a structured questionnaire, on the basis of the criteria such as the Board composition and structure, experience and competencies, attendance, effectiveness of board processes, information and functioning, independent approach, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the SEBI on January 05, 2017. The performance of the Committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, attendance of the members, recommendations to the Board and their implementation, effectiveness of committee meetings, etc. The Independent Directors at their separate meeting held on March 26, 2024 evaluated the performance of the Non-Independent Directors and the Board as a whole, the Chairman of the Board after considering the views of other Directors and assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The Board of Directors expressed their satisfaction to the outcome of the aforesaid evaluations.
12. DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors have submitted requisite declarations confirming that they (i) meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and are independent; (ii) have complied with the Code of Conduct laid down under Schedule IV of the Act and (iii) they have registered themselves with the Independent Director's Database maintained by the Indian Institute of Corporate Affairs. In the opinion of the Board, the independent directors possess the requisite integrity, experience, expertise required under all applicable laws and the policies of the Bank.
13. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
The Board members are provided with necessary documents, reports and internal policies to enable them to familiarize with the Company's procedures and practices. Pursuant to the SEBI regulations, the Company organizes Familiarization Programme periodically for the Independent Directors, with a view to familiarize them with their role, rights and responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. The Board familiarization process comprises of the induction programme for new Independent Directors, sessions on business and functional issues and strategy making. Periodic presentations are made at the Board and Committee meetings on business and performance updates of the Company including finance, sales, and overview of business operations, business strategy and risks involved. During the year under review, the Independent Directors were familiarized on business model, key updates on business performance, and legal/ regulatory updates at Board Meetings as well as through periodic reports. The policy for Familiarization Programme for the Independent Directors is available on website of the Company at https://www.fazethree.com/corporate-governance/.
14. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND
EMPLOYEES
In accordance with the provisions of Section 134(3)(e) read with Section 178(2) of the Companies Act, 2013 and Regulation 19(4) read with Part D of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has adopted a Policy on Nomination & Remuneration which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, and remuneration for the directors, key managerial personnel and other employees. The said policy can be accessed on the website of the Company at https://www.fazethree.com/policies/
15. DISCLOSURE RELATING TO REMUNERATION TO DIRECTORS, KEY MANAGERIAL PERSONNEL AND
PARTICULARS OF EMPLOYEES
Disclosure pertaining to remuneration of employees as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to the Report as ANNEXURE II. The information pursuant to Section 197 of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided on request. In terms of Section 136 of the Act, the reports and accounts are being sent to the shareholders and others entitled thereto, excluding the said information, which will be made available for inspection by the shareholders in electronic mode, up to the date of AGM. Members can inspect the same by sending an email to the Company Secretary in advance at cs@fazethree.com . Further, as on March 31, 2024, the Company has no employee who: (i) if employed throughout the financial year, was in receipt of remuneration, in aggregate of INR 102.00 Lakhs or more, per annum or
(ii) if employed for part of the financial year, was in receipt of remuneration, in aggregate of INR 8.50 lakhs or more, per month
(iii) if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.
16. RECEIPT OF ANY COMMISSION BY MD / WTD FROM COMPANY OR FOR RECEIPT OF
COMMISSION/REMUNERATION FROM ITS HOLDING OR SUBSIDIARY COMPANY
During the year under review, the Company has not paid any commission to any of its Directors. Further, the Company does not have a holding company and none of the Directors of the Company have received any commission/ remuneration from its subsidiary companies.
17. ANNUAL RETURN
Pursuant to the provisions of Sections 134(3)(a) and 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the draft Annual Return as of March 31, 2024, is placed on the website of the Company at https://www.fazethree.com/corporate-governance/
18. AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company is duly constituted pursuant to Section 177 of the Act and Regulation 18 of Listing Regulations.
As on March 31, 2024, the Audit Committee comprises of 3 (three) members namely Mr. Vinit Rathod (Chairman), Mr. Ajay Anand (Member) and Mr. Manan Shah (Member). Other details pertaining to the Audit Committee are included in the Corporate Governance Report, which forms part of this report. All the Members of the Committee are adequately literate to understand the financial and other aspects. All the recommendations made by the Committee during the period were accepted by the Board.
19. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Board of Directors of the Company is duly constituted pursuant to Section 178(1) of the Act and Regulation 19 of Listing Regulations. The Nomination and Remuneration Committee is responsible for evaluating the balance of skills, experience, independence, diversity and knowledge on the Board and for drawing up selection criteria. The Board of Directors of the Company has defined a policy on Director's appointment and payment of remuneration including criteria for determining qualifications, positive attributes and independence of Directors and terms of reference of the Committee which is available on the website of the Company at https://www.fazethree.com/policies/.
As on March 31, 2024, the Nomination & Remuneration Committee comprised of 3 (three) members all being Non-Executive Directors namely Mr. Vinit Rathod (Chairman), Mrs. Rashmi Anand (Member) and Mr. Manan Shah (Member). All the recommendations made by the Committee during the period were accepted by the Board.
20. STAKEHOLDERS' RELATIONSHIP COMMITTEE
The Stakeholders' Relationship Committee of the Board of Directors of the Company is duly constituted pursuant to Section 178(5) of the Act and Regulation 20 of the Listing Regulations. As on March 31, 2024, the Stakeholders Relationship Committee comprises of 3 (three) members namely Mr. Vinit Rathod (Chairman), Mr. Ajay Anand (Member) and Mr. Manan Shah (Member). Other details pertaining to the Committee are included in the Corporate Governance Report, which forms part of this report.
21. CORPORATE SOCIAL RESPONSIBILITY STATEMENT (CSR)
The business cannot exist in isolation and for a business to be profitable, it needs to consider the Social Responsibility in order to build a positive synergy between the two. The Company has always considered Social Responsibility as an integral part of sustainable 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 natural resources which are essential for overall economic growth. During the FY 2023-24, the Company's CSR obligation was INR 1,21,69,306/- (One Crore Twenty-One Lakhs and Sixty-Nine Thousand Three Hundred and Six Only), being 2% of the average net profit during the preceding 3 year, towards the CSR contribution pursuant to the Rule 7(3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014. However, post set-off of INR 11,35,539/- (Eleven Lakhs Thirty-Five Thousand and Five Hundred and Thirty-Nine Only), being excess amount spent in previous financial years, the Company was required to spend INR 1,10,33,767/- (One Crore Ten Lakhs and Thirty-Three Thousand Seven Hundred and Sixty-Seven Only) during FY 23-24. However, on recommendation of CSR Committee, the Company made total CSR contribution of INR 1,33,50,000/- (One Crore Thirty Three Lakhs and Fifty Thousand Only) during FY 2023-24, towards CSR activities by way of donations to Trusts/Society working for the betterment and upliftment of the Blind, Deaf, Widow, Helpless women, mentally challenged, orphans, specially-abled people and Eco–Socio backward part of the Society by providing facilities for their Health, affordable Medical Treatment, Education, affordable Housing and Self-Employment. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the annual report on Corporate Social Responsibility (CSR) activities as per format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed as ANNEXURE III to this report.
The CSR policy has been posted on the website of the Company at https://www.fazethree.com/policies/.
22. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
The information as required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 with respect to conservation of energy, technology absorption and foreign exchange earnings and outgoings is annexed to this report as ANNEXURE IV.
23. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All Related Party Transactions are approved by the Audit Committee. Prior omnibus approval is obtained from the Audit Committee in respect of the transactions which are repetitive in nature. The transactions entered into pursuant to omnibus approval so granted are reviewed on a quarterly basis by the Audit Committee. During the financial year, the Company has entered into transactions with related parties as defined under Section 2(76) of the Act and Listing Regulations. All related party transactions were carried out at arm's length price and in the ordinary course of business.
Further, as per the SEBI Listing Regulations, if any related party transaction exceeds Rs 1,000 crore or 10% of the annual consolidated turnover as per the last audited financial statement whichever is lower, would be considered as material and require Members approval. In this regard, during the year under review, the Company had taken necessary Members approval for Material Related Party Transactions proposed to be undertaken with Faze Three Autofab Limited for FY 2023-24. However, there were no material transactions of the Company with any of its related parties as per the Act. Therefore, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY24 and, hence, the same is not required to be provided.
Suitable disclosure as required by the Indian Accounting Standards (IND AS 24) has been made in the notes to the Financial Statements. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is available at https://www.fazethree.com/policies/ .
24. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes or commitments, affecting the financial position of the Company occurred between the end of the financial year of the Company i.e. March 31, 2024 and the date of the Directors' report.
25. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy and has established the necessary vigil mechanism for directors and employees in confirmation with Section 177(9) of the Act and Regulation 22 of Listing Regulations, to report concerns about unethical behavior and provide appropriate avenues to the Directors and employees to bring to the attention of the management any issue which is perceived to be in violation of or in conflict with the Code of Conduct of the Company and to report concerns about unethical behavior. No person has been denied access to the Chairman of the Audit Committee. The said policy has been posted on the website of the Company at https://www.fazethree.com/policies/. During the year under review, no complaint or adverse reporting was received by the designated officer of the Company.
26. DISCLOSURE AS PER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION
AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment at the workplace. The Company has adopted Prevention of Sexual Harassment Policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The Company has complied with the provisions relating to the constitution of the Internal Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No complaints were received during the year.
27. RISK MANAGEMENT
The Company has in place a mechanism to inform Board of Directors about the Risk assessment and risk minimization procedures and periodical reviews to ensure that risk is controlled by the management through the means of a properly laid-out framework. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
28. INTERNAL FINANCIAL CONTROLS
The Company has adequate internal control systems, commensurate with the size, scale and complexity of its operations, which monitors business processes, financial reporting and compliance with applicable regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels.
29. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is enclosed as ANNEXURE V.
30. CORPORATE GOVERNANCE
The Company believes in transparency and adhering to good corporate governance practices in every sphere of its operations. The Company has taken adequate steps to comply with the applicable provisions of Corporate Governance as stipulated in the Regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance is annexed to this report as ANNEXURE VI.
31. AUDITORS AND THEIR REPORT
A. STATUTORY AUDITORS AND AUDITORS' REPORT
M/s. MSKA & Associates Chartered Accountants (Firm Registration No. 105047W), were appointed as the Statutory Auditor by the Members of the Company at the 37th Annual General Meeting of the Company, for a period of 5 years and shall hold the office till the conclusion of the 42nd Annual General Meeting of the Company, to be held in the calendar year 2027. The Auditor's Report on IND AS financial statements (standalone and consolidated) of the Company for the FY 2023-24, as submitted by M/s. MSKA & Associates, Chartered Accountants, did not contain any qualifications, reservations or adverse remarks and are self-explanatory. There have been no instances of fraud reported by the Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Company or to the Central Government.
B. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has undertaken Secretarial Audit for the FY 2023-24 by appointing M/s. Sanjay Dholakia & Associates, Practicing Company Secretary, which, inter alia, includes audit of compliance with the Companies Act, 2013, and the Rules made thereunder, SEBI Listing Regulations and other Regulations and Acts applicable to the Company. The Secretarial Audit Report is annexed to this report as ANNEXURE VII. The Secretarial Auditors' Report for the financial year ended March 31, 2024, does not contain any reservation, qualification or adverse remark. The Board of Directors at their meeting held on May 23, 2024, has re-appointed M/s. Sanjay Dholakia & Associates, Practicing Company Secretaries (Certificate of Practice No. 1798), as the Secretarial Auditor for FY 2024-25.
32. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of loans, guarantees and investments covered under Section 186 of the Act, are provided at Note No. 6 & 7 in the notes to the financial statements.
33. DISCLOSURE ON ACCOUNTING TREATMENT
The Company has not used any differential treatment which is not in compliance with Accounting Standards and the financials of the Company depict a true and fair view of the state of affairs of the Company.
34. COST AUDIT AND RECORDS
The Company maintains the cost records of its products as per the provisions of sub-section (1) of Section 148 of the Act. Pursuant to the provisions of sub-section (2) of Section 148 of the Act read with Rule 4(3)(i) of the Companies (Cost Records and Audit) Rules, 2014, the requirement of Cost Audit is not applicable to the Company.
35. SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
36. SIGNIFICANT MATERIAL ORDERS PASSED BY COURTS, IF ANY
There are no significant material orders passed by the Regulators/ Courts against the Company which would impact the going concern status of the Company and its future operations.
37. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT ("BRSR")
Pursuant to Regulation 34(2)(f) of the Listing Regulations, the initiatives taken by the Company from an environmental, social and governance perspective, are provided in the Business Responsibility and Sustainability Report ("BRSR") for the financial year 2023-24 which is included as a separate section in the Annual Report. The Company has prepared the BRSR report on a voluntary basis.
38. POLICIES UNDER LISTING REGULATIONS
The SEBI Listing Regulations mandated the formulation of certain policies for all listed Companies which are as under. a. Documents Retention & Archival Policy' as per Regulation 9 and Regulation 30 which may be viewed at https://www.fazethree.com/policies/ b. Policy for determining Materiality of events / information' as per Regulation 30 which may be viewed at https://www.fazethree.com/policies/ c. Policy for determining material subsidiary' as per Regulation 16(1)(c) of the Listing Regulations which may be viewed at https://www.fazethree.com/policies/
39. OTHER DISCLOSURES
There was no change in the nature of the business of the Company during the year under review.
The Company has not issued any shares with differential voting during the year under review.
There were no revisions in the financial statements from the end of the Financial Year to date of the Director Report.
The Company has neither issued any shares nor granted any Stock Options nor any Sweat Equity Shares during the year.
No application has been made under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) ("the IBC, 2016"), hence, the requirement to disclose the details of application made or any proceeding pending under the IBC, 2016 during the year along with their status as at the end of the financial year is not applicable.
The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable during the year under review.
There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as on March 31, 2024.
40. ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation for the co-operation extended by all the employees, Bankers, Financial Institutions, various State and Central Government authorities and Stakeholders.
FORM NO. AOC – 1
STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES/ ASSOCIATE COMPANIES/ JOINT VENTURES
(Pursuant to First proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Part "A": Subsidiaries:
The date since when the subsidiary was acquired
Reporting period for the subsidiary concerned, if different from the holding company's reporting period
Reporting currency and Exchange rate as on the last date of the relevant financial year in case of foreign subsidiaries.
Note:
1. Names of subsidiaries which are yet to commence operations: None
2. Names of subsidiaries which have been liquidated or sold during the year: None 3. Information under Part B is not applicable to the Company.
STATEMENT OF DISCLOSURE OF REMUNERATION UNDER SECTION 197 OF COMPANIES ACT, 2013 AND RULE 5(1) OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.
1. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year:
Name of Director
Note: Since Non-Executive and Independent Directors received no remuneration, except sitting fees for attending Board / Committee meetings, the required details are not applicable.
2. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:
Name
Designation
Ms. Samruddhi Varadkar
Company Secretary (Tenure from February 03, 2023 to October 05, 2023)
Mr. Akram Sati
Company Secretary* (Appointed w.e.f. January 05, 2024)
*Appointed as Company Secretary and Compliance Officer during FY 2023-24, hence not comparable with FY 2022-23.
3. The percentage increase in median remuneration of employees in the financial year 6.2 %
4. There were 707 permanent employees except employees on the rolls of the Company as on March 31, 2024.
5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
The median percentage increase made in the salaries of employees other than managerial remuneration was in the range of 10- 13 % whereas the increase in the remuneration of Managerial personnel was Nil.
6. We hereby affirm that the remuneration paid during the year ended March 31, 2024 is as per the Remuneration Policy of the Company.
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
1. Brief outline on CSR Policy of the Company
The Company has always recognized that its business is a part of the community where it operates. The CSR activities/projects are aligned to assist weaker and underprivileged sections of the society. The Company strives to implement its CSR programmes directly or in collaboration with other associations/trusts/NGO registered with concerned regulatory authorities who has expertise as well as establish presence in area for effective implementation of projects / use of funds.
The Company has undertaken various CSR initiatives so far including promoting skill and education among children and the down trodden especially scheduled castes, scheduled tribes, minorities, BPL's and other backward communities etc. The Company will continue to contribute in these areas and will simultaneously explore the opportunities to contribute towards other social causes through its CSR program.
2. Composition of CSR Committee:
Sr. No. Name of the Director
Designation/ Nature of Directorship
Number of meetings of
Committee during the
1. Mr. Ajay Anand
2
2. Mr. Manan Shah
3. Mr. Sanjay Anand
3. The web-link where Composition of CSR : committee, CSR Policy and CSR projects approved by the board are disclosed on the website of the company.
Committee Composition: https://www.fazethree.com/board-committees/ CSR Policy: https://www.fazethree.com/policies/
Not Applicable
Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social responsibility Policy) Rules, 2014, if applicable.
5. (a) Average net profit of the company as per section 135(5) : INR 60,84,65,306 /-
(b) Two percent of average net profit of the company as per section 135(5) : INR 1,21,69,306 /-
(c) Surplus arising out of the CSR projects or programmes or activities of the previous financial years : NIL (d) Amount required to be set off for the financial year, if any : INR 11,35,539/- (e) Total CSR obligation for the financial year (b+c-d) : INR 1,10,33,767/-
6. (a) Amount spent on CSR Projects (both Ongoing Project and other than Ongoing Project) : INR 1,33,50,000/- (b) Amount spent in Administrative Overheads : Nil (c) Amount spent on Impact Assessment, if applicable : Not Applicable (d) Total amount spent for the Financial Year (a+b+c) : INR 1,33,50,000/- (e) CSR amount spent or unspent for the financial year:
Total Amount
Amount Unspent (in INR)
Spent for the Financial Year (in INR)
Total Amount transferred to Unspent CSR Account as per Section 135(6)
Amount transferred to any fund specified under Schedule VII as per second proviso to Section 135(5)
(f) Excess amount for set off, if any:
Sr. No. Particular
(i) Two percent of average net profit of the company as per Section 135(5)*
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any
*The amount 1,10,33,767/- is the CSR obligation for FY 23-24 after set off of excess amount spent in previous financial years. Please refer point 5 of this report for clarification.
7. Details of Unspent CSR amount for the preceding three financial years:
Sr. No. Preceding Financial Year(s)
Amount Spent in the Financial Year
Amount transferred to a Fund as specified under Schedule VII as per second proviso to subsection (5) of section 135, if any
8. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the Financial Year: No
If Yes, enter the number of Capital assets created/ acquired: Not Applicable
Furnish the details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount spent in the Financial Year:
Sl. No. Short particulars of the property or asset(s)
Details of entity/ Authority/ beneficiary of the registered owner
[including address and the property]
9. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per section 135(5) - Not Applicable
STATEMENT PURSUANT TO SECTION 134 (3) OF THE COMPANIES ACT, 2013 READ WITH RULE 8(3) OF CHAPTER IX OF COMPANIES (ACCOUNTS) RULES, 2014.
CONSERVATION OF ENERGY
A. Steps taken for Conservation of energy and for utilizing alternate sources of energy:
ESG is now integral to our overall strategy of the Company. The Company regularly undertakes required steps for conservation of energy leading to sustainability. The team implements the latest trends, developments & technologies available in conserving energy across all the units.
The Company has also transitioned its dyeing operation in North India from Coal Based Boilers to Gas Based Boiler and has signed agreement for supply of Gas with Indian Oil Adani Gas Private Limited. These efforts have also helped improve environment in surrounding area as well as reduced reliance on Coal Import for India.
The Company has invested over INR 12 Cr in aggregate for Rooftop Solar energy 2.1 MW (captive) which provides for ~35% of electricity consumption at Silvassa units comes from Rooftop Solar.
The newly setup Warehouse in West India is powered by Li-ion (Electric) Material Handling Equipment. The Company has also continued its effort for rain water harvesting at all units in west & north India, the water collected from water harvesting is helping recharge the ground water levels as well as stored for future use.
The Company endeavors to impact the environment positively with sustainable production methods, use of energy efficient and environment friendly technologies, use of recycled and ecofriendly raw materials, etc. The Company is also shipping complete range of home products in organic cotton and recycled polyester.
All manufacturing processes and products are designed for minimizing carbon footprints are being continuously upgraded to consistently accomplish this goal. The company has continued its quest to make its process and product environment friendly and energy efficient. The Company is also actively contributing to the Sustainability projects initiated by its customers for conservation of resources.
The Company has also continued its efforts to save energy through various initiatives of increase in use of LED lamps in vicinity of factory as well as installation of LED lights at factories. Installation of transparent sheets around warehouse and at the roof top of factory to save the energy. The newly built expanded capacity at Silvassa consists of lithium Ion MHE (warehouse truck & forklifts) leading to efficiency, energy saving and further additions towards ESG goals.
B. Capital investment on energy conservation equipments:
During the year, the Company has invested INR 12 Cr in Rooftop Solar energy 2.1 MW (captive), Clean Energy for processing (PNG) & Li-ion (Electric) Material Handling Equipment keeping company's ESG goals.
The Company has also made Investments for transitioning its dyeing operation in North India from Coal Based Boilers to Gas Based Boiler.
The Company is always reviewing its process to make them more sustainable. The new machines are reviewed from the point of view of energy consumption as well along-with production efficiency and output while making purchase decisions. Energy consumption and sustainability were at the core of new expansions of various units.
The newly built expanded capacities at Western India consist of lithium Ion MHE (warehouse truck & forklifts) leading to efficiency, energy saving.
RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION
Faze3 strives to adopt new technologies to improve its processes. The company strives to focus on creating new products for our customers. Faze3 has dedicated in house design, R&D, new development team at each location to create new products for our customers. The company has added new Design team at Head office which works closely with product development and Marketing team to increase its efforts to reach into new product lines. FTL has continued its pursuit for creative ideas, innovative designs and value additions to stay ahead of the curve.
Faze3's product development and deployment capability helped the business meet pressing consumer needs and helping develop new products. Faze3 has made investments in its subsidiary, Mats and More Pvt. Limited in Aurangabad, to cater to a new category of floor coverings, specifically patio mats for outdoor use. The Company has achieved total revenue of INR 21.69 Crores and PBT of INR 3.85 Crores in 2nd year of its operations. The goal of this investment is to generate a minimum revenue potential of USD 10 million in phase 1 within a period of 3-4 years. The partner closely with its customers and leverage strengths of its global affiliates to meet the needs of the local market.
The Company continued to work with major global retailers to develop products tailor made for their requirement in global market. Your Company is always exploring the new ideas/ suggestions for developing new products by continuously engage with existing customers to understand their requirements as well as market dynamic to stay prepared for changing environment in market and stay ahead of the curve. Faze3 has strong pipeline of various products and it continue to develop new product lines to attract new customers and meet new demands of its existing customers.
Faze3 has always recognized technology's strategic importance as critical component in this changing environment. Faze3 has regularly upgraded its existing infrastructure, machines, technologies, manufacturing processes etc. considering latest market trends. Company has taken various initiative during expansion process to upgrade its existing process. These initiatives result in benefits in various forms such as product improvement, cost reduction, increase in efficiency, sustainability etc.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of the foreign exchange earnings and outgo of the Company during the year in terms of INR (Crores) is as below:
Particular