Faze Three Autofab Ltd Directors Report.

To,

The Members of

FAZE THREE Autofab Limited

Your Directors are pleased to present the 24th Annual Report of your Company containing the business performance and the Audited Financial Statements for the year ended on March 31, 2021.

1. FINANCIAL HIGHLIGHTS:

The performance of the Company for the financial year ended March 31, 2021 is summarized below:

(Rs. In Cr.)

Particulars For the year ended 31.03.2021 For the year ended 31.03.2020
Revenue from operations 134.14 165.85
Expenses (111.54) (148.94)
Other Income 0.72 0.95
Profit before Interest, Tax, Depreciation & Amortization, finance cost and exceptional items 23.32 17.86
Less:
Finance Cost/ Interest 4.04 4.64
Depreciation & amortization expense 5.17 4.78
Profit / (Loss) before taxation 14.11 8.44
Less : Provision for taxation 3.00 (0.58)
Profit / (Loss) for the year carried to Balance Sheet 11.11 9.02

2. KEY HIGHLIGHTS OF THE FINANCIAL PERFORMANCE:

During the year under review, the Company has earned revenue from operations of Rs. 134.14 Cr as against Rs. 165.85 Cr in the previous year. The Company earned Net Profit of Rs. 11.11 Cr as against Rs. 9.02 Cr in the previous year. FTAL was able to sustain its overall business risk profile in F.Y. 2020-21 marked by improvement in operating margin despite drop in revenues of around 19% due to COVID induced lockdown in Q1 F.Y.21.

3. WEB ADDRESS OF ANNUAL RETURN:

The Annual Return of the Company as referred in sub-section (3) of Section 92 has been placed on the Companys website at http://www.fazethreeautofab.com/aunde/investor/4corporategovernance.html

4. CHANGE IN THE NATURE OF THE BUSINESS:

There were no changes in the nature of business during the year under review as prescribed in Rule 8 of the Companies (Accounts) Rules, 2014.

5. DIVIDEND:

Your Board of Directors has 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 pending to be transferred during the year 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 F.Y. 2020-21 was INR 1.81 Crores.

7. CHANGE IN SHARE CAPITAL:

The Paid up Share Capital as on 31st March, 2021 is INR 10,72,32,070 comprising 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.

8. CREDIT RATING:

As per request of the Company and based on No Objection received from Lender of the Company, CRISIL Ratings has withdrawn the rating assigned to our various Bank loan facilities.

The latest outstanding Rating of CRISIL BB+/Stable (Upgraded from CRISIL BB/ Stable) for Long Term Rating and rating of CRISIL A4+ (Re-affirmed) for Short Term Rating was assigned on May 31, 2021 by the CRISIL Limited.

9. DISCLOSURE ON ACCOUNTING TREATMENT:

The Company has not used any differential treatment which is not in compliance with accounting standards and the financials of the Company depict a true and fair view of the state of affairs of the Company.

10. DIRECTORS & KEY MANAGERIAL PERSONNEL:

During the year under review, there were no changes in the composition of the Board of Directors of the Company.

In accordance with Section 152 of the Companies Act 2013 and the rules framed thereunder, Mr. Ajay Anand, Managing Director (DIN: 00373248) retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

The Members of the Company at their 22nd Annual General Meeting had passed special resolution for reappointment of Mr. Ajay Anand (DIN: 00373248) as the Managing Director for a period of three (3) years with effect from April 1, 2019 upto March 31, 2022. The Board of Directors of the Company at its meeting held on June 25, 2021, on the recommendations of the Nomination and Remuneration Committee, approved the re-appointment of Mr. Ajay Anand as the Managing Director for a period of 3 years commencing from April 01, 2022, subject to approval of members by passing a Special Resolution. Therefore approval of members for the re-appointment of Mr. Ajay Anand is proposed at the ensuing Annual General Meeting of the Company.

The Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, in its meeting held on June 25, 2021 appointed Mr. V Sivakumar, CFO and Mr. Kartik Jethwa as Additional Directors designated as Executive Director and Independent Director respectively, who shall hold office upto the ensuing Annual General Meeting. Their appointments shall be further regularised on such terms and conditions proposed to be put before the members in the forthcoming Annual General Meeting for their approval.

Mr. Vinit Rathod (DIN: 07589863) and Mr. Manan Shah (DIN: 07589737) were appointed as independent directors for the first term of 5 (Five) years effective September 09, 2016 and February 13, 2017 respectively. Their office of directorship is due for retirement on September 08, 2021 and February 12, 2022 respectively. After taking into account their performance evaluation and considering the knowledge, acumen, expertise, experience and the substantial contribution, the Nomination and Remuneration Committee has recommended the re-appointment of Mr. Vinit Rathod and Mr. Manan Shah to the Board for a second term of 5 (Five) years. The Board, at its meeting held on June 25, 2021, approved the re-appointment of Mr. Vinit Rathod and Mr. Manan Shah as independent directors of the Company for second term of 5 years with effect from September 09, 2021 to September 08, 2026 and February 13, 2022 to February 12, 2027 respectively, whose office shall not be liable to retire by rotation, subject to members approval. The Board therefore proposes their re-appointment to the Members at the ensuing Annual General Meeting of the Company by passing a Special Resolution.

Mr. Roshan Gupta was appointed as the Company Secretary of the Company in place of Mr. Akram Sati erstwhile Company Secretary of the Company with effect from March 08, 2021.

The following persons have been designated as Key Managerial Personnel of the Company as on March 31, 2021 pursuant to Section 2 (51) and Section 203 of the Companies Act, 2013 read with the Rules framed thereunder:

1. Mr. Ajay Anand – Managing Director

2. Mr. V Sivakumar – Chief Financial Officer

3. Mr. Akram Sati – Company Secretary and Compliance officer (upto 7th March, 2021)

4. Mr. Roshan Gupta – Company Secretary and Compliance Officer (appointed w.e.f. 8th March, 2021)

11. DECLARATION FROM INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

12. CONFIRMATION AND CERTIFICATION:

On an annual basis, the Company obtains from each Director, details of the Board and Board Committee positions he / she occupies in other Companies, and changes if any regarding their Directorships. The Company has obtained a certificate from M/s. Sanjay Dholakia & Associates, Company Secretaries, under Regulation 34(3) and Schedule V Para C Clause (10)(i) of Listing Regulations confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of the Company by the SEBI and Ministry of Corporate Affairs or any such authority and the same forms part of this Report.

13. FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:

Pursuant to the SEBI (LODR) Regulations, the Company has worked out a Familiarisation Programme for the Independent Directors, with a view to familiarise 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 policy for Familiarisation Programme for the Independent Directors is available on the website of the Company at http://www.fazethreeautofab.com

14. DETAILS OF BOARD MEETINGS:

The Board of Directors of your Company met 7 (Seven) times during the Financial Year ended 31st March, 2021. The details of Board Meetings and the attendance of the Directors thereat are provided in the Corporate Governance Report. The intervening time gap between two consecutive Meetings were within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations.

15. DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief according to the information and explanations obtained by them, Board of Directors of the Company makes the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

(i) that in the preparation of the Annual Financial Statements for the year ended March 31, 2021, 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, 2021 and of the profit and loss of the Company for the year ended on that date;

(iii) that proper and sufficient care 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 internal financial controls were in place and that the financial controls were adequate and were operating effectively;

(vi) that proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

16. ANNUAL PERFORMANCE EVALUATION OF BOARD:

Pursuant to the provisions of the Companies Act, 2013, and the corporate governance requirements as prescribed by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (‘SEBI Listing Regulations); 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, effectiveness of board processes, information and functioning, etc. Performance evaluation of independent directors was done by the entire Board, excluding the independent 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, 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, taking into account the views of executive directors and non-executive directors.

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.

17. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF

EMPLOYEES:

As required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, details of Remuneration to Directors and Key Managerial Personnel is provided in Form MGT-9 annexed to this Report.

The Company has no employee who-

(i) if employed throughout the financial year, was in receipt of remuneration for 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. Hence, the information required to be given pursuant to the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is not applicable to the Company.

Details as required under the provisions of section 197(12) of the Companies Act, 2013, read with rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which forms part of the Directors Report, will be made available to any shareholder on request, as per provisions of section 136(1) of the said Act.

18. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY:

The Companys 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.

19. DETAILS OF SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES:

As on date the Company does not have any Subsidiary/ Associates/ Joint Venture company.

20. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The particulars of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form a part of the Notes to Financial Statements provided in this Annual Report.

21. DEPOSITS:

During the year under review, your Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, or under Chapter V of the Companies Act, 2013.

22. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY:

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company i.e. March 31, 2021 and the date of the Directors report.

23. CORPORATE SOCIAL RESPONSIBILITY STATEMENT (CSR):

The provisions of Section 135 of the Companies Act, 2013 though being applicable to the Company, pursuant to net profits being above Rs. 5 Crores in the previous financial year 2019-20, there was no CSR obligation for the said financial year on account of negative three year average net profits of the Company as mentioned in CSR Annual

Report set out in Annexure A of this report, in the format prescribed in the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. The CSR Policy is available on the Companys website at http://www.fazethreeautofab.com/aunde/investor/5policies.html

24. 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.

25. 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.

26. SIGNIFICANT MATERIAL ORDER PASSED BY REGULATORS/ COURTS/ TRIBUNALS:

There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.

27. STATUTORY AUDITORS:

In terms of the provisions of Section 139(2) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, Members of the Company at its 20th (Twentieth) AGM have approved the appointment of M/s. Thakur Vaidyanath Aiyar & Co., Chartered Accountants, Mumbai (Firm Rgn. No. 000038N) as the Statutory Auditors of the Company to hold office for a term of 5 (five) years until the conclusion of 25th (Twenty Fifth) AGM to be held for the financial year ended March 31, 2022.

M/s. Thakur Vaidyanath Aiyar & Co. has confirmed that their appointment is within the prescribed limits specified in Section 139 of the Companies Act, 2013.

28. FRAUD REPORTED BY THE AUDITOR, IF ANY:

There is no fraud reported by the Statutory Auditor during the year under review as per Section 143(12) of the Companies Act, 2013.

29. COST RECORDS & COST AUDIT:

The cost records are maintained by the Company however, Cost Audit is not applicable to the Company for the F.Y. 2020-21.

30. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Sanjay Dholakia & Associates, Practicing Company Secretaries to undertake Secretarial Audit for the financial year 2020-21 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 C.

During the year, the Secretarial Auditor has not reported any matter under Section 143(12) of the Companies Act, 2013. Therefore, no detail is required to be disclosed under Section 134(3) (ca) of the Companies Act, 2013.

31. OBSERVATIONS – AUDITOR & SECRETARIAL AUDITOR:

Secretarial Auditor:

There are no observation or adverse remarks in Secretarial auditors report.

Statutory Auditor:

There are no observation or adverse remarks in statutory auditors report.

32. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

In compliance with Regulation 34 read with Schedule V of the Listing Obligations and Disclosure Requirements) Regulations, 2015, Companys Corporate Governance Report forms part of this Annual Report as Annexure D.

Further all the Board members and Senior Management personnel have affirmed compliance with the Code of Conduct for the financial year 2020-21. A declaration to this effect signed by the Managing Director of the Company also forms part of this Annual Report.

A Certificate from Practicing Company Secretary regarding the compliance with the conditions of Corporate Governance as stipulated under Regulation 34 read with Schedule V of the SEBI Listing Regulations is annexed to this Report.

33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report in accordance with Regulation 34 read with Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") forms part of this Annual Report as Annexure E.

34. PARTICULARS OF CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES :

During the year under review all contracts/arrangement/transactions entered by the Company with related parties were in compliance with the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations. All related party transactions entered during the year were on arms length basis and in the ordinary course of business of the Company.

All Related Party Transactions are approved by 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.

Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC-2 and the same forms part of this report as Annexure F.

Suitable disclosure as required by the Indian Accounting Standards (IND AS 24) has been made in the notes to the Financial Statements. The Company shall seek shareholders approval for material related party transactions entered and proposed to be entered during the current year in the forthcoming AGM.

The policy on Related Party Transactions as approved by the Board is available on the website of the Company: http://www.fazethreeautofab.com/aunde/investor/5policies.html

35. POLICIES OF THE COMPANY:

The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") mandated the formulation of certain policies for all listed Companies. All such Policies are available on the Companys website, viz., www.fazethreeautofab.com. The Policies are reviewed periodically by the Board and its Committees and are updated based on the need and new compliance requirement.

The key policies that have been adopted by the Company are as follows:

Related Party Transactions Policy This Policy deals with (a) the materiality thresholds for related party transactions and;
(b) the manner of dealing with the transactions between the Company and its related parties based on the Act, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and any other laws and regulations as may be applicable to the Company.
Nomination & Remuneration Policy This policy sets the criteria for the appointment, removal and remuneration of the directors, key managerial personnel and other employees. It also lays down the evaluation criteria for performance evaluation of Board, its Committees and individual directors.
Whistle Blower Policy / Vigil Mechanism This policy enables the employees direct access to the Chairman of the Audit Committee for notifying anything which in the view of such employee may be suspicious or unusual and may be detrimental to the affairs of the Company. It also ensures adequate safeguards against victimization of such employees who use this mechanism.
Code of Conduct for Insider Trading This Policy sets up an appropriate mechanism to curb Insider Trading. It provides Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and monitoring of trading by insiders.
Materiality Policy This Policy applies to disclosures of material events affecting the Company. This Policy warrants disclosure to investors upon occurrence of any material event and has been framed in compliance with the requirements of the Listing Regulations.
Document Retention and Archival Policy The purpose of this Policy is to specify the type of document(s) and time period for preservation thereof based on the classification mentioned under Regulation 9 of the Listing Regulations. This Policy covers all business records of the Company, including written, printed and recorded matter and electronic forms of records.
Prevention of Sexual Harassment Policy The Policy is lays a framework for ensuring protection against sexual harassment of women at workplace and the prevention and redressal of complaints of sexual harassment and matters related thereto.
Policy for Determination of Material Subsidiary Regulation 16(1)(c) of the Listing Regulations requires every listed Company to formulate a Policy for determining material subsidiary. This Policy provides the criteria for determination of the "Material Subsidiary(ies) of the Company" and to provide the Governance Framework for such Subsidiary(ies).
Corporate Social Responsibility Policy This policy is framed under the provisions of section 135 of the Companies Act, 2013 for conducting and allocating funds for Corporate Social Responsibility Activities on behalf of the Company. It decides about the Constitution of CSR Committee and its roles and responsibilities and the areas in which the Company shall allocate its funds towards the CSR Activity.

36. DISCLOSURE AS PER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION 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.

37. EXTRACT OF ANNUAL RETURN:

The extract of Annual Return in Form No. MGT-9, as provided under sub-section (3) of Section 92 of the Companies Act, 2013, is annexed herewith the Boards report as Annexure G.

38. COMPLIANCE OF SECRETARIAL STANDARDS:

The Company has complied with the Secretarial Standards issued by Institute of Company Secretaries of India on Meetings of Board of Directors and General Meetings.

39. 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 the Board of Directors
Ajay Anand Rashmi Anand
Place: Mumbai Managing Director Director
Date: July 22, 2021 DIN: 00373248 DIN: 00366258