To,
The Members of
FAZE THREE Autofab Limited
Your Directors are pleased to present the 27th Annual Report of your Company containing the business performance and the Audited Financial Statements for the year ended on March 31, 2024.
1. FINANCIAL HIGHLIGHTS:
The performance of the Company for the financial year ended March 31, 2024 is summarized below:
(Rs. in Cr.)
Particulars
Total Income
Profit before Depreciation, Interest and Tax (PBDIT)
Less:
Profit before taxation
Profit for the year
The above figures are extracted from the financial statements prepared in compliance with Indian Accounting Standards (‘Ind AS'). The Financial Statements of the Company complied with all aspects of Ind AS notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time and other relevant provisions of the Companies Act, 2013.
2. STATE OF THE COMPANY'S AFFAIRS:
The Revenue from Operations for the year ended March 2024 stood at Rs. 198.93 Cr. versus Rs 168.47 Cr. for the year ended March 2023. The Net Profit for the year ended March 2024 stood at Rs. 3.39 Cr. as compared to net profit of Rs. 4.40 Cr. for the year ended March 2023.
3. WEB ADDRESS OF ANNUAL RETURN:
Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the copy of the Annual Return as on March 31, 2024 (excluding the details pertaining to the Annual General Meeting of the Company for the Financial Year 2023-2024 i.e. Attendance of Directors at the Annual General Meeting as same is not available as on the date of this Report) is available on the Company's website at http://www.fazethreeautofab.com/web/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 as prescribed in Rule 8 of the Companies (Accounts) Rules, 2014.
5. DIVIDEND:
Your Board of Directors have not recommended any dividend for the Financial Year. In terms of the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, there is no unpaid / unclaimed dividend which is lying in the Unpaid Dividend Account of the company or is pending to be transferred to the Investor Education and Protection Fund.
6. 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 Rs. 18.44 Crores.
7. SHARE CAPITAL:
The Paid-up Share Capital as on March 31, 2024 is Rs. 10,72,32,070 comprising of 1,07,23,207 Equity Shares of Rs. 10/- each. There has been no change in the capital structure of the Company during the year.
The Company has neither issued any shares with differential voting nor any Sweat Equity Shares during the year under review. Further, the Company does not have any Employee Stock Option Scheme as on the date of this Report.
Mr. Ajay Anand Promoter of the Company had given exit offer to public shareholders pursuant to SEBI (Delisting of Equity Shares) Regulations, 2021 ("Delisting Regulations"), and on successfully acquiring the shares as required under the Delisting Regulations by Mr. Ajay Anand and subsequent to notice dated October 31, 2023 issued by BSE Limited, the trading in the shares of the Company was discontinued with effect from November 7, 2023 and the shares of the Company were delisted from the Stock Exchange with effect from November 15, 2023. Accordingly, the Company at present is an unlisted Public Limited Company.
The exit offer window has been kept open for the residual shareholders to tender their shares to the Promoter/ Acquirer at the Exit Price (Rs. 65/- per share) at any time from November 15, 2023 till November 14, 2024.
8. 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.
9. DIRECTORS & KEY MANAGERIAL PERSONNEL:
As on March 31, 2024, the Board of Directors of the Company comprised of the following:
Further, as on March 31, 2024 following were the Key Managerial Personnels of the Company:
During the year under review, following changes took place in the composition of the Board & position of Key Managerial Personnel:
i. Mr. Viswanathan Sivakumar Anand (DIN: 09211111), Whole time Director & CFO of the Company was re-appointed at the 26th AGM held on September 20, 2023 for a period of 3 years with effect from June 25, 2024;
ii. Mr. Akram Sati (ACS: 50020), Company Secretary and Compliance Officer of the Company tendered his resignation from the position with effect from the closing hours of December 4, 2023.
Further, post closure of the Financial Year till the date of this Report, the following changes took place in the composition of the Board & position of Key Managerial Personnel:
i. Mr. Kartik Jethwa (DIN: 08587759), Independent Director resigned from the Directorship with effect from July 23, 2024.
ii. Mr. Vishnu Anand (DIN: 06949617) has been appointed as an Additional Director (Non-Executive) of the Company with effect from August 19, 2024 till the ensuing AGM.
iii. Mr. Viswanathan Sivakumar (DIN: 09211111), Whole time Director & CFO of the Company resigned from the post of CFO with effect from the closing hours of August 19, 2024.
iv. Mrs. Sangita Yadav has been appointed as the CFO of the Company with effect from August 20, 2024.
v. Ms. Shagufta Sadikot (ACS: 72982) has been appointed as the Company Secretary of the Company with effect from August 19, 2024.
The Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, have recommended for the approval of members at their ensuing AGM:
i. Appointment of Mr. Vishnu Anand (DIN: 06949617) as the Non-Executive Non-Independent Director of the Company
ii. Re-appointment of Mr. Ajay Anand (DIN: 00373248) as the Managing Director for a period of 5 (Five) years with effect from April 1, 2025 to March 31, 2030.
10. DECLARATION FROM INDEPENDENT DIRECTORS:
The Company has received necessary declaration from each Independent Director that they
(i) meet the criteria of independence laid down under Section 149(6) of the Companies Act, 2013,
(ii) have complied with the Code of Conduct laid down under Schedule IV of the Act and
(iii) have registered themselves with the Independent Director's Database maintained by the Indian Institute of Corporate Affairs.
The Board is of the opinion that the Independent Directors holding office, during the year, possess integrity and requisite expertise and experience required to fulfill their duties as Independent Directors.
11. DETAILS OF BOARD MEETINGS:
The Board of Directors of your Company met 10 (Ten) times during the Financial Year ended March 31, 2024. The intervening time gap between two consecutive Meetings was within the period prescribed under the Companies Act, 2013.
12. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013, the Directors hereby confirm and state:
i. that 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. that such accounting policies as mentioned in Notes to Financial Statements have been selected and applied consistently and made judgments and estimates 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 and loss of the Company for the year ended on that date;
iii. that proper and sufficient care exists 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. that the Annual Financial Statements have been prepared on a going concern basis; and
v. that proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
13. ANNUAL PERFORMANCE EVALUATION OF BOARD:
Pursuant to the provisions of the Companies Act, 2013, the Board of Directors have carried out an annual evaluation of its own performance as a whole, the directors individually as well as the evaluation of the working of its Committees.
The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, experience and competencies, attendance, effectiveness of board processes, information and functioning, etc. Performance evaluation of all the directors including independent directors was done by the entire Board, excluding the director being evaluated.
The performance of the Committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, attendance, recommendations to the Board and their implementation, effectiveness of committee meetings, etc.
In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and Chairman of the Company was evaluated, considering the views of other directors. Further, they also assessed the quality, quantity and timeliness of flow of information between the Company's management and the Board that is necessary for the Board to effectively and reasonably perform their duties
The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.
The Board of Directors expressed their satisfaction with the evaluation process.
14. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES:
Disclosure of particulars of remuneration of employees as stipulated by section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not applicable to the Company.
However, the information required 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@fazethreeautofab.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 for that year, in the aggregate, more than Rs. 102 Lacs, or
ii. If employed for part of the financial year, was in receipt of remuneration for any part 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 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.
15. 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 or any subsidiary company.
16. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY:
The Company's management is responsible for establishing and maintaining an adequate system of internal financial control over financial reporting. The Company has in place adequate systems of internal control commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use or losses, excluding transaction with proper authorization and ensuring compliance of corporate policies. Your Company remains committed to improve the effectiveness of internal control systems for business processes with regard to its operations, financial reporting and compliance with applicable laws and regulations.
17. DETAILS OF SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES:
As on date, the Company does not have any Subsidiary/ Associates/ Joint Venture company.
18. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:
The particulars of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form a part of the Notes to Financial Statements provided in this Annual Report.
19. DEPOSITS/LOAN FROM DIRECTORS:
During the year under review, your Company has not accepted any deposits within the meaning of Sections 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. The Company has not accepted any deposit or any loan from the directors during the year under review.
20. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
There were no material changes and commitments affecting the financial position of the Company, which has occurred between the end of the financial year of the Company, i.e., March 31, 2024 till the date of this Report.
21. AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company is duly constituted pursuant to Section 177 of the Companies Act, 2013.
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). 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.
22. CORPORATE SOCIAL RESPONSIBILITY (CSR):
In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility) Rules, 2014, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee. The composition of the Committee are detailed in the in the annual report on CSR activities which forms a part of this Report.
During the FY 2023-24, the Company was required to spend Rs 25,88,376 /- towards CSR activities, being 2% of the average net profit during the preceding 3 year pursuant to the Rule 7(3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014.However, post set off of Rs. 1,68,647/-, being excess amount spent in previous financial years, the Company was required to spend Rs. 24,19,729/- during FY 23-24.
However, on recommendation of CSR Committee, the Company made total CSR contribution of Rs. 30,00,000/- (Thirty Lakhs Only) during FY 2023-24, towards CSR activities by way of donation to Charitable Trust/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 annual report on Corporate Social Responsibility activities, as required under Sections 134 and 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014, is annexed herewith and marked as ‘Annexure A' to this Report.
The CSR Policy of the Company has been posted on the website of the Company at: https://www.fazethreeautofab.com/web/investor/5policies.html
23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION ETC. & FOREIGN EXCHANGE EARNINGS AND OUTGOINGS:
The information as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed to this report as ‘Annexure B'.
24. RISK MANAGEMENT POLICY:
There is a continuous process for identifying, evaluating and managing significant risks faced through a risk management process designed to identify the key risks faced by the Company to ensure that risk is controlled by the management through the means of a properly laid-out framework.
25. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES:
Pursuant to the provisions of the Companies Act, 2013, the Company has in place Nomination and Remuneration Policy (‘Policy'), which sets out the criteria for appointment, removal and remuneration of the Directors, Key Managerial Personnel (KMP) and Senior Management Personal (SMP). The policy also lays down the evaluation criteria for performance evaluation of Board, its Committees and individual directors.
The salient features of the Policy are:
It acts as a guideline for matters relating to appointment, re-appointment and removal of Directors, KMP and SMP.
It contains guidelines for determining qualifications, positive attributes for Directors, KMP and SMP and independence of a Director.
It lays down the criteria for Board Membership.
It sets out the approach of the Company on Board diversity.
It lays down the criteria for determining independence of a Director, in case of appointment of an Independent Director.
The policy is available at https://www.fazethreeautofab.com/web/investor/5policies.html
26. VIGIL MECHANISM / WHISTLE-BLOWER POLICY:
Your Company has in place Whistle-Blower Policy (‘Policy'), to provide a formal mechanism to its employees for communicating instances of unethical behavior, actual or suspected fraud or violation of the company's code of conduct or ethics policies, improper practices or any other alleged wrongful conduct in the Company. The Policy provides for a mechanism to report such concerns to the Chairman of the Audit Committee through specified channels. It also ensures adequate safeguards against victimization of such employees who use this mechanism. During the year under review, no concern from any whistle-blower has been received by the Company. The whistle-blower policy is available at Company's website at https://www.fazethreeautofab.com/web/investor/5policies.html
27. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY AND ITS FUTURE OPERATIONS:
There were no significant and material orders passed by the regulators/ courts/ tribunals, which may impact the going concern status and the Company's operations in the future.
28. AUDITORS AND THEIR REPORT:
a. Statutory Auditors
M/s. Thakur Vaidyanath Aiyar & Co., Chartered Accountants, Mumbai (FRN: 000038N) were appointed as the Statutory Auditor of the Company at the 25th Annual General Meeting (AGM) of the Company held on September 20, 2022 for a period of 5 (Five) consecutive years and who shall be holding office up to the ensuing 30th Annual General Meeting of the Company, to be held in calendar year 2027.
The Auditor's Report on financial statements of the Company for the financial year 2023-24, as submitted by M/s. Thakur Vaidyanath Aiyar & Co., does not contain any qualifications, reservations or adverse remarks and are self-explanatory.
b. Secretarial Auditor
Pursuant to the provisions of Section 204 of Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. A. D. Parekh & Associates, Practicing Company Secretaries to undertake Secretarial Audit for the FY 2023-24 which, inter alia, includes audit of compliance with the Companies Act, 2013, and the Rules made thereunder. The Secretarial Audit Report for the financial year ended March 31, 2024 is annexed to this Report as ‘Annexure - C'. The said Report does not contain any qualifications, reservations or adverse remarks and are self-explanatory. However, the Report contains a remark that- there was a delay in filing certain e-forms required to be submitted to the Registrar of Companies.
Board's reply- There were delay in filing certain e-forms due to excess load on website of MCA as well as difficulties faced due to transition from V2 to V3 portal of MCA by all the stakeholders, however, the forms have been filed with additional fees. The delayed filings do not have any adverse effect on the functioning of the Company.
The Board of Directors at their meeting held on August 19, 2024 has re-appointed M/s. A. D. Parekh & Associates, Practicing Company Secretaries, as the Secretarial Auditor of the Company to carry out the secretarial audit for the financial year 2024-25.
29. FRAUD REPORTED BY THE AUDITORS, IF ANY:
Pursuant to the provision of Section 143(12) of the Companies Act, 2013, during the year under review, the Auditors of the Company have not reported to the audit committee, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in this Report.
30. PARTICULARS OF CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES:
All Related Party Transactions entered during the year under review were approved by the Audit Committee. Prior omnibus approval was obtained from the Audit Committee in respect of the transactions which are repetitive in nature.
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.
The Company had taken approval of Members as per the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, for the proposed Material Related Party Transactions with Faze Three Limited for FY 2023-24 and FY 2024-25 since as per SEBI LODR Regulations, if transaction with 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, it would be considered as material and requires Members approval. However, these transactions with related party were not material related party transactions as per the Companies Act, 2013 as all the transactions were at arm's length price and in the ordinary course of business. Thus, 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 FY2023-24 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 http://www.fazethreeautofab.com/web/investor/5policies.html
31. COMPLIANCE OF SECRETARIAL STANDARDS OF ICSI:
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
32. COST RECORDS & COST AUDIT:
The Company maintains the cost records of its products as per the provisions of sub-section (1) of Section 148 of the Act. However, Cost Audit was not applicable to the Company for the FY 2023-24.
33. DISCLOSURE AS PER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
Pursuant to sub-rule (x) of Rule 8 of the Companies (Accounts) Amendment Rules, 2018, the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There were no complaints received during the year.
34. OTHER DISCLOSURES:
a. 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.
b. 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.
35. ACKNOWLEDGEMENT:
Your Directors take this opportunity to place on record their sincere appreciation for the excellent support provided by Bankers, Government authorities, all stakeholders and business associates. The Board also express its sincere appreciation and support extended by the Shareholders during the year under review and also acknowledges the dedicated efforts put in by the employees at all levels.
For and on behalf of Board of Directors
Sd/-
Ajay Anand
Rashmi Anand
Managing Director
Director
DIN: 00373248