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Faze Three Ltd.

BSE: 530079 Sector: Industrials
NSE: FAZETHREE ISIN Code: INE963C01033
BSE 00:00 | 21 Jan 354.10 -16.35
(-4.41%)
OPEN

361.20

HIGH

383.00

LOW

352.00

NSE 05:30 | 01 Jan Faze Three Ltd
OPEN 361.20
PREVIOUS CLOSE 370.45
VOLUME 25178
52-Week high 413.00
52-Week low 52.55
P/E 21.84
Mkt Cap.(Rs cr) 861
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 361.20
CLOSE 370.45
VOLUME 25178
52-Week high 413.00
52-Week low 52.55
P/E 21.84
Mkt Cap.(Rs cr) 861
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Faze Three Ltd. (FAZETHREE) - Auditors Report

Company auditors report

To the Members of Faze Three Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the Standalone Financial Statements of Faze Three Limited ("theCompany") which comprise the Balance Sheet as at March 31 2021 and the Statement ofProfit and Loss (including Other Comprehensive Income) Statement of Changes in Equity andStatement of Cash Flows for the year then ended and notes to the Standalone FinancialStatements including a summary of significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amendedand other accounting principles generally accepted in India of the state of affairs ofthe Company as at March 31 2021 and profit (including Other Comprehensive Income)changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India(ICAI) together with the ethical requirements that are relevant to our audit of theStandalone Financial Statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note 42 to the Standalone Financial Statements which states thatthe management has made an assessment of the impact of COVID-19 on the Company'soperations financial performance and position as at and for the year ended March 31 2021and has concluded that there is no impact which is required to be recognised in theStandalone Financial Statements. Accordingly no adjustments have been made to theStandalone Financial Statements.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements of the current year.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Utilisation of MAT Credit

Refer note 31 to the Standalone Financial Statements.

The Company has unutilised MAT Credit of Rs. 5.36 crores as on March 31 2021. MinimumAlternate Tax (MAT) credit is recognised only when and to the extent there is convincingevidence that the Company will pay normal income tax during the specified period. Suchasset is reviewed at each Balance Sheet date and the carrying amount of the MAT creditasset is written down to the extent there is no longer a convincing evidence to the effectthat the Company will pay normal income tax during the specified period.

There is inherent uncertainty and management estimation involved in forecasting futuretaxable profits which determines the extent to which MAT credit asset is recognised andcarried forward.

We have considered this as Key Audit Matter due to the uncertainty and managementestimation involved in assessing the future taxable profits.

Our Audit Procedures in respect of this area included:

a. Evaluated whether controls over management assumptions and key estimates forutilisation of MAT Credit in the future years are appropriately designed implemented andoperating effectively by performing combination of procedures involving enquiryreperformance and verification of evidence.

b. Evaluated management's assumptions and key estimates with respect to the projectionssupporting sufficient future taxable profit in order to support the carry forward of MATcredit asset.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Director's report ManagementDiscussion and Analysis Report and Corporate Governance Report but does not include theStandalone Financial Statements and our auditor's report thereon.

Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Financial Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

We give in "Annexure A" a detailed description of Auditor's responsibilitiesfor Audit of the Standalone Financial Statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss the Statement of Changes inEquity and the Statement of Cash Flows dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors are disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls with reference toStandalone Financial Statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure C".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financialposition.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

3. As required by The Companies (Amendment) Act 2017 in our opinion according toinformation explanations given to us the remuneration paid by the Company to itsdirectors is within the limits laid prescribed under Section 197 of the Act and the rulesthereunder.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Place: Mumbai
Date: June 30 2021
Amrish Vaidya
Partner
Membership No.101739
UDIN: 21101739AAAAEG9978

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF FAZE THREE LIMITED

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasinternal financial controls with reference to Standalone Financial Statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Standalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Place: Mumbai
Date: June 30 2021
Amrish Vaidya
Partner
Membership No. 101739
UDIN: 21101739AAAAEG9978

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF FAZE THREE LIMITED

[Referred to in paragraph (1) under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report]

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

(b) All the Property Plant and Equipment were physically verified by the management inFY 18-19 in accordance with a planned programme of verifying them once in three yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

ii. All inventory (excluding stocks with third parties and stock lying at warehouse)has been physically verified by the management during the year. In respect of inventorylying with third parties and stock lying at warehouse these have substantially beenconfirmed by them. In our opinion the frequency of verification is reasonable. Nomaterial discrepancies were noticed on verification between the physical stocks and thebook records.

iii. The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships (LLP) or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 (‘the Act'). Accordingly the provisionsstated in paragraph 3 (iii) (a) to (c) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has not either directly or indirectly granted any loan to any of its directors orto any other person in whom the director is interested in accordance with the provisionsof section 185 of the Act and the Company has not made investments through more than twolayers of investment companies in accordance with the provisions of section 186 of theAct. Accordingly provisions stated in paragraph 3(iv) of the Order are not applicable tothe Company.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of Sections 7374 75 and 76 of the Act and the rules framed there under.

vi. We have broadly reviewed the books of account relating to materials labour andother items of cost maintained by the Company pursuant as specified by the CentralGovernment for the maintenance of cost records under sub-section (1) of section 148 of theAct and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have not however made a detailed examination of the recordswith a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is regular in depositing withappropriate authorities undisputed statutory dues including provident fund employees'state insurance income-tax goods and service tax duty of customs cess and any otherstatutory dues applicable to it.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance ncome i -tax goods andservices tax duty of custom Cess and other statutory dues were outstanding at the yearend for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income tax goods and service tax customsduty cess and any other statutory dues which have not been deposited on account of anydispute.

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to the financial institution bank ordebenture holders.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordingly theprovisions stated in paragraph 3 (ix) of the Order are not applicable to the Company.

x. During the course of our audit examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employees.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/ provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the provisions stated in paragraph 3(xii) ofthe Order are not applicable to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Financial Statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly the provisions stated in paragraph 3 (xiv) of the Order are notapplicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly provisions statedin paragraph 3(xv) of the Order are not applicable to the Company.

xvi. In our opinion the Company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions stated in paragraphclause 3 (xvi) of the Order are not applicable to the Company.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Place: Mumbai
Date: June 30 2021
Amrish Vaidya
Partner
Membership No. 101739
UDIN: 21101739AAAAEG9978

ANNEXURE C TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF FAZE THREE LIMITED

[Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to Standalone FinancialStatements of Faze Three Limited ("the Company") as of March 31 2021 inconjunction with our audit of the Standalone Financial Statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to Standalone FinancialStatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI) (the"Guidance Note"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to Standalone Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingissued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether internal financial controls with reference toStandalone Financial Statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to Standalone Financial Statements and their operatingeffectiveness. Our audit of internal financial controls with reference to StandaloneFinancial Statements included obtaining an understanding of internal financial controlswith reference to Standalone Financial Statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to Standalone Financial Statements.

Meaning of Internal Financial Controls with Reference to Standalone FinancialStatements

A Company's internal financial control with reference to Standalone FinancialStatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of Standalone Financial Statements for externalpurposes in accordance with generally accepted accounting principles. A Company's internalfinancial control with reference to Standalone Financial Statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe Company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of Standalone Financial Statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorizations of management and directors of theCompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the Standalone Financial Statements.

Inherent Limitations of Internal Financial Controls with Reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference toStandalone Financial Statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to Standalone Financial Statements to future periods are subjectto the risk that the internal financial control with reference to Standalone FinancialStatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects internal financial controlswith reference to Standalone Financial Statements and such internal financial controlswith reference to Standalone Financial Statements were operating effectively as at March31 2021 based on the internal control with reference to Standalone Financial Statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Place: Mumbai
Date: June 30 2021
Amrish Vaidya
Partner
Membership No. 101739
UDIN: 21101739AAAAEG9978

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