To the Members of FAZE THREE AUTOFAB LIMITED
Report on the Audit of the Ind AS Financial Statements
Opinion
We have audited the accompanying Ind AS financial statements of FAZE
THREE AUTOFAB LIMITED (‘the Company), which comprise the balance sheet as at 31st
March 2023, and the statement of profit and loss (including other comprehensive income),
the statement of changes in equity and the cash flow statement for the year then ended,
and notes to the Ind AS financial statements, including a summary of the significant
accounting policies and other explanatory information (herein after referred to as
‘Ind AS financial statements).
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid Ind AS financial statements give the information
required by the Companies Act, 2013 (‘the Act) in the manner so required and give a
true and fair view in conformity with the accounting principles generally accepted in
India, of the state of affairs of the Company as at 31st March 2023, its 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) specified under Section 143(10) of the Act. Our responsibilities under those SAs are
further described in the Auditors Responsibilities for the Audit of the Ind AS financial
Statements section of our report. We are independent of the Company in accordance with 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 the Ind AS financial
statements under the provisions of the Act and the Rules thereunder, and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the Code of
Ethics.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the Ind AS financial statements of the current
year. These matters were addressed in the context of our audit of the Ind AS financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Description of Key Audit Matters:
| Sr. Key Audit Matters |
Auditors Response |
| 1 The Company has unutilized Minimum Alternate Tax (MAT)
credit of Rs. 4.54 Crores as on 31st March, 2023. Minimum Alternate Tax (MAT)
credit is recognized only when and to the extent there is convincing evidence that the
Company will pay normal income tax during the specified period. |
Our procedures included: |
| There is inherent uncertainty and management estimation
involved in forecasting future taxable profits, which determines the extent to which MAT
credit asset is recognized and carried forward. |
Evaluated whether the controls over management assumptions
and key estimates for utilization of MAT credit in the future years are appropriately
designed, implemented and operating effectively by performing combination of procedures
involving enquiry, re performance and verification of evidences. |
|
Evaluated managements assumptions and key estimates
with respect to the projections supporting sufficient future taxable profit in order to
support the carry forward of MAT credit asset. |
Other Information
The Companys management and Board of Directors are responsible for the
other information. The other information comprises the information included in the
Companys report, but does not include the financial statements and our auditors
report thereon.
Our opinion on the Ind AS financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Ind AS financial statements, our
responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the Ind AS financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is no
material misstatement of this other information, we are required to report that fact. We
have nothing to report in this regard.
Managements Responsibility for the Ind AS Financial Statements
The Companys management and Board of Directors are responsible for the
matters stated in Section 134(5) of the Act with respect to the preparation of these Ind
AS financial statements that give a true and fair view of the state of affairs, profit and
other comprehensive income, changes in equity and cash flows of the Company in accordance
with the accounting principles generally accepted in India, including the Indian
Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility
also includes maintenance of adequate accounting records in accordance with the provisions
of the Act for safeguarding of the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls that were operating
effectively for ensuring the accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the Ind AS financial statements that give a true
and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Ind AS financial statements, management and Board of
Directors are responsible for assessing the Companys ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companys
financial reporting process.
Auditors Responsibilities for the Audit of the Ind AS financial
statements
Our objectives are to obtain reasonable assurance about whether the Ind
AS financial statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditors report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Ind AS
financial statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit in
order to design 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 has adequate internal financial controls with reference to financial statements in
place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going
concern basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the
Companys ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors report to the
related disclosures in the Ind AS financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditors report. However future events or conditions may
cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the Ind AS
financial statements, including the disclosures, and whether the Ind AS financial
statements represent the underlying transactions and events in a manner that achieves fair
presentation.
We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we
have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we
determine those matters that were of most significance in the audit of the Ind AS
financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditors report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditors Report) Order, 2020
(‘the Order) issued by the Central Government in terms of Section 143 (11) of the
Act, we give in the ‘Annexure A a statement on the matters specified in paragraphs 3
and 4 of the Order, to the extent applicable.
A) 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 best of 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 the Company so far as it appears from our examination of those books;
c) The balance sheet, the statement of profit and loss (including other
comprehensive income), the statement of changes in equity and the cash flow statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the aforesaid Ind AS financial statements comply
with the Ind AS specified under Section 133 of the Act;
e) On the basis of the written representations received from the
directors as on 31st March 2023 and taken on record by the Board of Directors, none of the
directors is disqualified as on 31st March 2023 from being appointed as a
director in terms of Section 164(2) of the Act; and
f) With respect to the adequacy of the internal financial controls with
reference to financial statements of the Company and the operating effectiveness of such
controls, refer to our separate Report in ‘Annexure B.
B) With respect to the other matters to be included in the Auditors
Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in
our opinion and to the best of our information and according to the explanations given to
us:
i). As informed to us, the Company does not have any pending litigation
which would impact its financial position, as on 31st March, 2023.
ii). The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable losses.
iii). There were no amounts that were required to be transferred, to
the Investor Education and Protection Fund by the Company; and
C) Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014
requires all companies which use accounting software for maintaining their books of
account, to use such an accounting software which has a feature of audit trail, with
effect from the financial year beginning on 1st April 2023 and accordingly,
reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 (as amended) is
not applicable for the financial year ended March 31st, 2023.
D) With respect to the matter to be included in the Auditors Report
under Section 197(16) of the Act, in our opinion and according to the information and
explanations given to us, the remuneration paid by the Company to its directors during the
current year is in accordance with the provisions of Section 197 of the Act. The
remuneration paid to any director is not in excess of the limit laid down under Section
197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under
Section 197(16) which are required to be commented upon by us.
Annexure A to the Independent Auditors Report
Referred to in paragraph 1 under the heading ‘Report on Other
Legal & Regulatory Requirements of our report of even date to the financial statements
of the Company for the year ended March 31, 2023:
(i) (a)(A) The Company has maintained proper records showing full
particulars, including quantitative details and situation of Property Plant &
Equipment (‘PPE);
(a) (B) The company is maintaining proper records showing full
particulars of Intangible assets;
(b) The Property Plant & Equipment we are informed have been
physically verified by the management during the year which in our opinion is reasonable
having regard to the size of the Company and nature of its business. As per the
information given to us no material discrepancy has been noticed on such verification.
(c) According to the information and explanations given to us, the
records examined by us and based on the examination of the registered sale deed provided
to us, we report that the title deeds comprising the properties of building which are free
holds are held in the name of the Company.
(d) According to the information and explanations given to us and on
the basis of records examined by us, the Company has neither revalued any of its Property,
Plant and Equipment (including Right-of-use Assets) nor its Intangible Assets during
the year. Accordingly, reporting under clause 3(i)(d) of the Order is not applicable.
(e) According to the information and explanations given to us, no
proceedings have been initiated or are pending against the Company for holding any Benami
property under the Benami Transactions (Prohibitions) Act, 1988 (as amended in 2016) and
Rules made there under. Accordingly, reporting under clause 3(i) (e) of the Order is not
applicable.
(ii) (a) As informed to us physical verification of finished goods
(excluding stock with Third parties) has been conducted by the management at the end of
the year. In respect of stock lying with Third parties, these have been confirmed by them.
In our opinion the frequency of verification is reasonable. As explained to us there were
no material discrepancies noticed between the physical stock and book records
(b) The Company has been sanctioned working capital limits in excess of
five crore rupees, in aggregate, from banks on the basis of security of current assets;
according to the information and explanations given to us and on the basis of records
examined by us, the quarterly returns and statements comprising stock and creditors
statements, book debt statements and other stipulated financial information filed by the
Company with such bank are not having material difference with the unaudited books of
account of the Company, of the respective quarters and those differences are of
explainable items and nature.
(iii) According to the information and explanations given to us,
the Company has not made any investment in, provided any guarantee or security or granted
any loans or advances in the nature of loans, secured or unsecured, to companies, firms,
Limited Liability Partnerships or any other parties. Hence, the requirements under
paragraph 3 (iii) of the Order are not applicable to the Company.
(iv) The Company has not granted any loan, made investments,
provide guarantees, and security, to which provisions of sections 185 and 186 of the
Companies Act are applicable. Accordingly, reporting under clause 3(iv) of the Order is
not applicable.
(v) In our opinion and according to the information and
explanations given to us, the Company has not accepted any deposits or amounts which are
deemed to be deposits, to which directives issued by Reserve Bank of India and the
provision of Sections 73 to 76, or any other relevant provisions of the Companies Act and
rules made there under, are applicable According to the information. and explanations
given to us, no order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal. Accordingly, reporting under clause 3(v) of the
Order is not applicable.
(vi) The requirement of maintenance of cost record under section
148(1) of the Companies Act 2013 is not applicable to the Company for the year.
(vii) (a) According to information and explanations given to us and
on the basis of our examination of the books of account and records, the Company has been
generally regular in depositing undisputed statutory dues including Provident Fund,
Employees, State Insurance, Income-Tax, Sales tax, Service Tax, Goods and Service Tax
(GST), Duty of Customs, Duty of Excise, Value added Tax, Cess and any other material
statutory dues with the appropriate authorities, wherever applicable. According to the
information and explanations given to us, no undisputed amounts payable in respect of the
above were in arrears as at March 31, 2023 for a period of more than six months from the
date on when they become payable.
(b)According to the information and explanations given to us and on the
basis of the books and records examined by us, there are no statutory dues referred to in
sub-clause (a) above, which have not been deposited on account of disputes as on March 31,
2023.
(viii) According to the information and explanations given to us,
the Company did not have any transactions relating to previously unrecorded income that
have been surrendered or disclosed as income during the year in the tax assessments under
the Income Tax Act, 1961.
(ix)(a) According to the records of the Company examined by us and
the information and explanations given to us, the Company has not defaulted in repayment
of loans or borrowings to a financial institution, bank, Government or dues to debenture
holders.
(b) According to the information and explanations given to us and on
the basis of our audit procedures, the Company is not declared wilful defaulter by any
bank or financial institution or other lender.
(c) According to the information and explanations given to us and on
the basis of the books and records examined by us, the loans taken during the year have
been applied for the purposes for which those were obtained.
(d) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that funds raised on
short-term basis have not been utilised for long-term purposes.
(e) & (f) Company does not have any subsidiaries or associate
companies. Accordingly, the provisions of clause 3(ix) (e) & (f) of the Order are not
applicable to the Company and hence not commented upon.
(x)(a)According to the information and explanations given to us and
on the basis of the books and records examined by us, the Company has not raised any money
by way of initial public offer or further public offer (including debt instruments) during
the year. Accordingly, reporting under clause 3 (x) (a) of the Order is not applicable.
(b) According to the information and explanations given to us and on
the basis of the books and records examined by us, the Company has not made any
preferential allotment or private placement of shares or convertible debentures (fully,
partially or optionally convertible) during the year. Accordingly, reporting under clause
3(x) (b) of the Order is not applicable.
(xi)(a) On the basis of books and records of the Company examined
by us and according to the information and explanations given to us, we report that no
material fraud by the Company or any fraud on the Company has been noticed or reported
during the year in the course of our audit.
(b) According to the information and explanations given to us, no
report under section 143(12) of the Act has been filed in Form ADT-4 as prescribed under
rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during
the year and upto the date of this report.
(c) As represented to us by the management, the Company has not
received any whistle-blower complaint during the year and up to the date of this report.
(xii) The Company is not a Nidhi Company. Accordingly, reporting
under clause 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us
and on the basis of records of the Company examined by us, transactions with the related
parties are in compliance with Sections 177 and 188 of the Act, where applicable, and the
details of such transactions have been disclosed in the financial statements as required
by the applicable accounting standards.
(xiv) (a) According to the information and explanations given to
us, in our opinion the Company has an adequate internal audit system commensurate with the
size and nature of its business.
(b) We have considered, the internal audit reports for the year under
audit, issued to the Company during the year and till date, in determining the nature,
timing and extent of our audit procedures.
(xv) According to the information and explanations given to us and
on the basis of the books and records examined by us, the Company has not entered into
non-cash transactions with directors or persons connected to its directors to which
provision of section 192 of Companies Act are applicable. Accordingly, reporting under
clause 3(xv) of the Order is not applicable.
(xvi)(a) As per the information and explanations given to us and on
basis of books and records examined by us, the Company is not required to be registered
under Section 45-IA of the Reserve Bank of India Act, 1934; the Company has not conducted
any Non-banking Financial or Housing Finance activities during the year; the Company is
not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank
of India and company is not part of any group that has CIC as a part of the group
.Accordingly, reporting under clauses 3(xvi)(a), 3(xvi)(b) , 3(xvi)(c) and 3(xvi)(d) of
the Order are not applicable to the Company.
(xvii) Based upon the audit procedures performed and the
information and explanations given by the management, the Company has not incurred cash
losses in the financial year and in the immediately preceding financial year. Accordingly,
reporting under clause 3 (xvii) of the Order are not applicable to the Company
(xviii) There has been no resignation by the statutory auditors of
the Company during the year. Accordingly, clause 3(xviii) of the Order is not applicable.
(xix.) On the basis of financial ratios, ageing and expected dates
of realisation of financial assets and payment of financial liabilities, other information
accompanying the financial statements and more particularly, our knowledge of the Board of
Directors and Management plans and based on our examination of the evidence supporting the
assumptions, nothing has come to our attention, which causes us to believe that any
material uncertainty exists as on the date of the audit report indicating that Company is
not capable of meeting its liabilities existing at the date of balance sheet as and when
they fall due within a period of one year from the balance sheet date. We, however, state
that this is not an assurance as to the future viability of the Company. We further state
that our reporting is based on the facts up to the date of the audit report and we neither
give any guarantee nor any assurance that all liabilities falling due within a period of
one year from the balance sheet date, will get discharged by the Company as and when they
fall due.
(xx) As per the information and explanations given to us and on
basis of books and records examined by us, we report that the Company has no unspent
amount for ongoing projects and other than for ongoing projects, which is required to a
Fund specified in Schedule VII to the Companies Act in compliance with second proviso to
subsection (5) of section 135 of the said Act; and provision of subsection (6) of section
135 under clause (xx) of the Order is not applicable to the Company for the year.
(xxi) Since the company does not have any subsidiary, joint venture
or associate accordingly reporting under clause 3(xxi) of the Order is not applicable to
the Company for the year.
Annexure B to the Independent Auditors Report of even date on the
Ind AS Financial Statements FAZE THREE AUTOFAB LIMITED for the year ended 31st
March 2023
Report on the Internal Financial Controls over financial reporting
under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the
Act").
We have audited the internal financial controls over financial
reporting of FAZE THREE AUTOFAB LIMITED ("the Company") as of 31st
March, 2023 in conjunction with our audit of the Ind AS financial statements of the
Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and
maintaining internal financial controls based on the internal control over financial
reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls over
Financial Reporting issued by the Institute of Chartered Accountants of India
(‘ICAI).These responsibilities include the design, implementation and
maintenance of adequate internal financial controls that were operating effectively for
ensuring the orderly and efficient conduct of its business, including adherence to
companys policies, the safeguarding of its assets, the prevention and detection of
frauds and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal
financial controls over financial reporting based on our audit. We conducted our audit in
accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI
and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the
extent applicable to an audit of internal financial controls, both applicable to an audit
of Internal Financial Controls and, both issued by the Institute of Chartered Accountants
of India. Those Standards and the Guidance Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about
the adequacy of the internal financial controls system over financial reporting and their
operating effectiveness. Our audit of internal financial controls over financial reporting
included obtaining an understanding of internal financial controls over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditors judgement, including the assessment of
the risks of material misstatement of the Ind AS financial statements, whether due to
fraud or error.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the Companys internal
financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A companys internal financial control over
financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial
Reporting
Because of the inherent limitations of internal financial controls over
financial reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal financial controls over
financial reporting to future periods are subject to the risk that the internal financial
control over financial reporting may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate
internal financial controls system over financial reporting and such internal financial
controls over financial reporting were operating effectively as at 31st March,
2023, based on internal control over financial reporting criteria established by the
Company considering the essential components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting issued by the
Institute of Chartered Accountants of India.
| For Thakur, Vaidyanath Aiyar & Co. |
| Chartered Accountants |
| Firms Registration No. 000038N |
| Sd/- |
| C. V. Parameswar |
| Partner |
| Membership No. 11541 |
| UDIN No. 23011541BGWUSL1659 |
| Place: Mumbai |
| Date: 03.05.2023 |
+91-9892691696
