Notes to Accounts of Faze Three Ltd.

Mar 31, 2025

2.12 Provisions, contingent liabilities and contingent assets

Provisions :- Provisions are recognized when there is a present obligation (legal or constructive) as a result
of a past event, and it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and there is a reliable estimate of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the
obligation. These estimates are reviewed at each reporting date and adjusted to reflect the current best
estimates. If the effect of the time value of money is material, provisions are discounted. The discount rate
used to determine the present value is a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The increase in the provision due to the passage of time is
recognised as interest expense.

Contingent liabilities :- Contingent liabilities are disclosed when there is a possible obligation arising from
past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the control of the Company or a present obligation that arises
from past events where it is either not probable that an outflow of resources will be required to settle or a
reliable estimate of the amount cannot be made.

Contingent Asset :- A contingent asset is a possible asset arising from past events, the existence of which
will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of the Company. Contingent assets are not recognised till the realisation of the income is
virtually certain. However, the same are disclosed in the financial statements where an inflow of economic
benefit is possible.

2.13 Cash and cash equivalents & bank balances

Cash and cash equivalent in the balance sheet comprise cash at banks, cash on hand and fixed deposits with
an original maturity of less than three months, which are subject to an insignificant risk of changes in value.

Bank Balances other than cash and cash equivalents in the balance sheet comprise of unpaid dividend
accounts and fixed deposits with an original maturity of more than three months and less than twelve months,
which are subject to an insignificant risk of changes in value.

For the purposes of the cash flow statement, cash and cash equivalents include balance with banks, cash on
hand, cheques/ draft on hand and short-term deposits net of bank overdraft.

2.14 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.

(A) Financial assets

(i) Initial recognition and measurement

At initial recognition, the Company measures a financial assets at its fair value and in the case of
financial assets not recorded at fair value through profit or loss at transaction costs that are
attributable to the acquisition of the financial asset. Transaction cost of financial assets carried at fair
value through profit or loss is expensed in the Statement of Profit or Loss.

(ii) Classification and subsequent measurement

For purposes of subsequent measurement, financial assets are classified in following categories:

a) at amortized cost; or

b) at fair value through other comprehensive income; or

c) at fair value through profit or loss.

The classification depends on the entity''s business model for managing the financial assets and the
contractual terms of the cash flows.

Debt Instruments: Subsequent measurement of debt instruments depends on the Company''s
business model for managing the asset and the cash flow characteristics of the asset. There are
three measurement categories into which the Company classifies its debt instruments.

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortized cost. Interest income
from these financial assets is included in finance income using the effective interest rate method
(EIR).

Fair value through other comprehensive income (FVOCI): Assets that are held for collection of
contractual cash flows and for selling the financial assets, where the assets'' cash flows represent
solely payments of principal and interest, are measured at fair value through other comprehensive
income (FVOCI). Movements in the carrying amount are taken through OCI, except for the
recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses
which are recognized in Statement of Profit and Loss. When the financial asset is derecognized, the
cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit
and Loss and recognized in other gains/ (losses). Interest income from these financial assets is
included in other income using the effective interest rate method.

Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOCI are
measured at fair value through profit or loss. Interest income from these financial assets is included in
other income.

Equity investments: All equity investments in scope of Ind AS 109 are measured at fair value. Equity
instruments which are held for trading and contingent consideration recognised by an acquirer in a
business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity
instruments, the Company may make an irrevocable election to present in other comprehensive
income subsequent changes in the fair value. The Company makes such election on an instrument-
by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on
the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts
from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative
gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the profit and loss.

(iii) Impairment of financial assets

In accordance with Ind AS 109, Financial Instruments, the Company applies expected credit loss
(ECL) model for measurement and recognition of impairment loss on financial assets that are
measured at amortized cost and FVTOCI.

For recognition of impairment loss on financial assets and risk exposure, the Company determines
that whether there has been a significant increase in the credit risk since initial recognition. If credit
risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if
credit risk has increased significantly, lifetime ECL is used. If in subsequent years, credit quality of the
instrument improves such that there is no longer a significant increase in credit risk since initial
recognition, then the entity reverts to recognizing impairment loss allowance based on 12 month
ECL.

Life time ECLs are the expected credit losses resulting from all possible default events over the
expected life of a financial instrument. The 12 month ECL is a portion of the lifetime ECL which results
from default events that are possible within 12 months after the year end.

ECL is the difference between all contractual cash flows that are due to the Company in accordance
with the contract and all the cash flows that the entity expects to receive (i.e. all shortfalls), discounted
at the original EIR. When estimating the cash flows, an entity is required to consider all contractual
terms of the financial instrument (including prepayment, extension etc.) over the expected life of the
financial instrument. However, in rare cases when the expected life of the financial instrument cannot
be estimated reliably, then the entity is required to use the remaining contractual term of the financial
instrument.

In general, it is presumed that credit risk has significantly increased since initial recognition if the
payment is more than 30 days past due.

ECL impairment loss allowance (or reversal) recognized during the year is recognized as
income/expense in the statement of profit and loss. In balance sheet ECL for financial assets
measured at amortized cost is presented as an allowance, i.e. as an integral part of the measurement
of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset
meets write off criteria, the Company does not reduce impairment allowance from the gross carrying
amount.

(iv) Derecognition of financial assets

A financial asset is derecognized only when

a) the rights to receive cash flows from the financial asset is transferred or

b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to one or more recipients.

Where the financial asset is transferred then in that case financial asset is derecognized only if
substantially all risks and rewards of ownership of the financial asset is transferred. Where the entity
has not transferred substantially all risks and rewards of ownership of the financial asset, the financial
asset is not derecognized.

(B) Financial liabilities

(i) Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss and at amortized cost, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of borrowings and payables,
net of directly attributable transaction costs.

(ii) Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and
financial liabilities designated upon initial recognition as at fair value through profit or loss. Separated
embedded derivatives are also classified as held for trading unless they are designated as effective
hedging instruments. Gains or losses on liabilities held for trading are recognized in the Statement of
Profit and Loss.

Borrowings at amortised cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized
cost using the EIR method. Gains and losses are recognized in Statement of Profit and Loss when the
liabilities are derecognized as well as through the EIR amortization process. Amortized cost is
calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortization is included as finance costs in the Statement of Profit and
Loss.

(iii) Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss as
finance costs.

(C) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a
legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or
realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent
on future events and must be enforceable in the normal course of business and in the event of default,
insolvency or bankruptcy of the Company or the counterparty.

2.15 Employee benefits

Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly

within 12 months after the end of the year in which the employees render the related service are recognized in
respect of employees'' services up to the end of the year and are measured at the amounts expected to be
paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the
balance sheet.

Defined Contribution Plan

Provident Fund: Contribution towards provident fund is made to the regulatory authorities, where the
Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the
Company does not carry any further obligations, apart from the contributions made on a monthly basis which
are charged to the Statement of Profit and Loss.

Employee''s State Insurance Scheme: Contribution towards employees'' state insurance scheme is made to
the regulatory authorities, where the Company has no further obligations. Such benefits are classified as
Defined Contribution Schemes as the Company does not carry any further obligations, apart from the
contributions made on a monthly basis which are charged to the Statement of Profit and Loss.

Defined benefit plans

Gratuity: The Company provides for gratuity, a defined benefit plan (the ''Gratuity Plan") covering eligible
employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum
payment to vested employees at retirement, death, incapacitation or termination of employment, of an
amount based on the respective employee''s salary. The Company''s liability is actuarially determined (using
the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognized in the other
comprehensive income in the year in which they arise.

The present value of the defined benefit obligation denominated in INR is determined by discounting the
estimated future cash outflows by reference to market yields at the end of the reporting period on government
bonds that have terms approximating to the terms of the related obligation. The estimated future payments
which are denominated in a currency other than INR, are discounted using market yields determined by
reference to high-quality corporate bonds that are denominated in the currency in which the benefits will be
paid, and that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement
of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognized in the period in which they occur, directly in other comprehensive income. They
are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or
curtailments are recognized immediately in profit or loss as past service cost.

2.16 Current Asset and Current Liability

Current Asset - “An entity shall classify an asset as current when:

(a) it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;

(b) it holds the asset primarily for the purpose of trading;

(c) it expects to realise the asset within twelve months after the reporting period;

(d) the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to
settle a liability for at least twelve months after the reporting period. An entity shall classify all other
assets as non-current.

Current Liability - “An entity shall classify a liability as current when:

(a) it expects to settle the liability in its normal operating cycle;

(b) it holds the liability primarily for the purpose of trading;

(c) trie naDiiity is due to be settled witnin twelve months after trie reporting period; or

(d) it does not have an unconditional right to defer settlement of the liability for at least twelve months
after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its
settlement by the issue of equity instruments do not affect its classification. An entity shall classify all
other liabilities as non-current.”

2.17 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year. Earnings
considered in ascertaining the Company''s earnings per share is the net profit or loss for the year after
deducting preference dividends and any attributable tax thereto for the year. The weighted average number
of equity shares outstanding during the year and for all the years presented is adjusted for events, such as
bonus shares, other than the conversion of potential equity shares, that have changed the number of equity
shares outstanding, without a corresponding change in resources, excluding treasury shares.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to
equity shareholders and the weighted average number of shares outstanding during the year is adjusted for
the effects of all dilutive potential equity shares.

2.18 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker (CODM)(Managing Director) of the Company. The Managing Director is
responsible for allocating resources and assessing performance of the operating segments of the company.

During the period, entity was engaged in the business of home textile products, which is the only operating
segment as per Ind AS 108.

2.19 Rounding off amounts

All amounts disclosed in standalone financial statements and notes have been rounded off to the nearest
crores as per requirement of Schedule III of the Act, unless otherwise stated.

2.20 New Standards and amendments issued but not effective

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. During the year, MCA vide
notification dated September 9, 2024 and September 20, 2024 notified the Companies (Indian Accounting
Standard) Second Amendment Rules, 2024 and Companies (Indian Accounting Standards) Third
amendment Rule, 2024 respectively which amended / notified certain accounting standards and are effective
for annual reporting periods beginning on or after April 01, 2024: - Insurance Contract - Ind AS 117 and -
Lease Liability in Sale and Leaseback - Amendment to Ind AS 116. These amendments did not have any
impact on the amount recognised in prior periods and are not expected to significantly affect the current or
future periods

Revaluation Note:

Freehold and leasehold land classified as property, plant and equipment were valued on 31 March 2024 using sale
comparison technique carried out by external independent qualified valuers who are registered valuers as defined
under Rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017

The fair value of freehold land and leasehold land is a level 3 recurring fair value measurement. A reconciliation of the
opening and closing fair value balance is provided above

The valuation techniques and significant unobservable inputs used in determining the fair value measurement of
freehold land and leasehold land, as well as the inter relationship between key unobservable inputs and fair value, are
set out below.

Significant unobservable inputs

Freehold and leasehold land - Price per square metre (range) - March 31,2025''4,000 to '' 11,000 (March 31,2024
'' 4,000 to '' 11,000)

Significant increases/(decreases) in estimated price per square metre in isolation would result in a significantly
higher/(lower) fair value on a linear basis.

There were no valuation carried out during the period. The fair value measurement is based on the above items''
highest and best use, which does not differ from their actual use. Had the revalued items been measured on a
historical cost basis, the net book value of freehold and leasehold land would have been '' 6.21 (31 March 2024:
'' 6.22). The revaluation surplus (gross of tax) amounted to '' 51.71 (31 March 2024: '' 56.09) for freehold and
leasehold land. Further, adjustment of '' 4.26 relates to sale of land in the current year.

Terms and conditions of loans

(i) Packing Credit in Rupee Scheme (PCRS) is secured by way of hypothecation of Inventories meant for
exports and book debts as prime security and collaterally secured by extension of the charge on the
Property, plant and equipment (excluding Immovable property of Panipat Plant) of the Company.

The Company has interest rate subvention of 2% till Jun 2024 (previous year 2%), Interest rates for PCRS
Scheme(post subvention) ranges from 6.56% to 8.15% (March 31,2024 5.00% to 6.75%)

The above mentioned PCRS is secured by way of lien over Fixed Deposits amounting to '' NIL (March 31,
2024''47.31) to be excercised at the time of release of funds.

(ii) The Company has obtained PCFC Loans from Standard Chartered Bank carry interest rate of 6.56% which
are secured by way of hypothecation of Inventories meant for exports and book debts as prime security and
collaterally secured by extension of the charge on the Property, plant and equipment (excluding Immovable
property of Panipat Plant) of the Company.

(B) Defined benefit plans

The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The amount of gratuity
shall be payable to an employee on the termination of employment after rendering continuous service for not less
than five years, or on their superannuation or resignation. However, in case of death of an employee, the minimum
period of five years shall not be required. The amount of gratuity payable on retirement / termination is the
employee''s last drawn basic salary per month computed proportionately for 15 days salary multiplied by the
number of years of service completed. The gratuity plan is a funded plan administered by a Life Insurance
Corporation of India that is legally separated from the entity,. The Company does not fully fund the liability and
maintains the funding from time to time based on estimations of expected gratuity payments.

These plans typically expose the Company to the following actuarial risks:

Investment risk - The present value of the defined benefit plan liability is calculated using a discount rate which is
determined by reference to market yields at the end of the reporting period on government bonds. If the return on
plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced
mix of investments in government securities, and other debt instruments.

Interest risk - A fall in the discount rate, which is linked, to the G-Sec rate will increase the present value of the
liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the
assets depending on the duration of asset.

Salary risk - The present value of the defined benefit plan liability is calculated by reference to the future salaries of
members. As such, an increase in the salary of the members more than assumed level will increase the plan''s
liability.

Asset Liability matching risk - The plan faces the ALM risk as to the matching cash flow. Since the plan is invested
in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality risk - Since the benefits under the plan is not payable for life time and payable till retirement age only, plan
does not have any longevity risk.

Concentration risk - Plan is having a concentration risk as all the assets are invested with the insurance company
and a default will wipe out all the assets. Although probability of this is very low as insurance companies have to
follow stringent regulatory guidelines which mitigate risk.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were
carried out at 31 March 2025 by M/S K. A. Pandit Consultants & Actuaries. The present value of the defined benefit
obligation, and the related current service cost and past service cost, were measured using the projected unit
credit method.

Fair value hierarchy

The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique:

• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

38 Financial risk management objectives and policies

The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and
liquidity risk. The Company''s risk management is coordinated by the Board of Directors and focuses on securing
long term and short term cash flows. The Company does not engage in trading of financial assets for speculative
purposes.

(A) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. The Company is exposed to market risk primarily related to interest rate risk and
Foreign currency risk. Financial instruments affected by market risk include borrowings and derivative financial
instruments.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company exposure to the risk of changes in market
interest rates relates primarily to the Company''s short-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of variable rate loans and
borrowings.

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because
of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange
rates relates primarily to the Company operating activities.

The Company is exposed to foreign currency risk arising mainly on export of finished goods and import of
raw material. Foreign currency exposures are managed within approved policy parameters utilising forward
contracts.

The carrying amounts of Company''s foreign currency denominated financial assets and financial liabilities
at the end of the reporting period are as follows:

(B) Credit risk

Credit risk is the risk that counterparty will not meet its obligations leading to a financial loss. The Company is
exposed to credit risk arising from its operating (primarily trade receivables) and investing activities including
deposits placed with banks, financial institutions and other corporate deposits. The Company establishes an
allowance for impairment that represents its estimate of expected losses in respect of financial assets. Financial
assets are classified into performing, under-performing and non-performing. All financial assets are initially
considered performing and evaluated periodically for expected credit loss. A default on a financial asset is when
there is a significant increase in the credit risk which is evaluated based on the business environment. The
assets are written off when the Company is certain about the non-recovery.

Trade Receivables: The Company has an established credit policy and a credit review mechanism. The
Company also covers certain category of its debtors through a credit insurance policy. In such case the
insurance provider sets an individual credit limit and also monitors the credit risk. Management believes that the
unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical
payment behavior and analysis of customer credit risk.

Before accepting new customer, the Company has appropriate level of control procedures to assess the
potential customer''s credit quality. The credit-worthiness of its customers are reviewed based on their financial
position, past experience and other relevant factors. The credit period provided by the Company to its
customers generally ranges from 0-60 days. Outstanding customer receivables are reviewed periodically.
Provision is made based on expected credit loss method or specific identification method. The credit risk related
to the trade receivables is mitigated by taking security deposits / bank guarantee / letter of credit - as and where
considered necessary, setting appropriate credit terms and by setting and monitoring internal limits on exposure
to individual customers.

Financial instruments and cash deposits: The credit risk from balances / deposits with banks, other financial
assets and current investments are managed in accordance with the Company''s approved policy. Investments
of surplus funds are made only with approved counterparties and within the limits assigned to each
counterparties. The limits are assigned to mitigate the concentration risks. These limits are actively monitored
by the Company.

(C) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due.
The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available
for use as and when required. The Company manages the liquidity risk by maintaining adequate cash reserves,
banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows,
and by matching the maturity profiles of financial assets and liabilities. The Company invests its surplus funds in
bank fixed deposit and liquid schemes of mutual funds, which carry no/negligible mark to market risks.

39 Reconciliation of quarterly returns or statements of current assets filed with banks or financial
institutions

The Company has obtained borrowings from bank on basis of security of current assets wherein the quarterly
returns/ statements of current assets as filed with bank are in agreement with the books.

40 Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of
Companies Act, 1956,

The company does not have any transaction with companies struck off under section 248 of the Companies Act,
2013 or section 560 of Companies Act, 1956, during the current year and in the previous year.

41 Registration of charges or satisfaction with Registrar of Companies

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

42 Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read
with the Companies (Restriction on number of Layers) Rules, 2017.

44 Utilisation of Borrowed funds

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

45 Undisclosed income

The Company does not have any undisclosed income which is not recorded in the books of account that has
been surrendered or disclosed as income during the year (and previous year) in the tax assessments under the
Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

46 Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend
at least 2% of its average net profit for the immediately preceding three financial years on corporate social
responsibility (CSR) activities. The areas for CSR activities are mainly for environmental sustainability,
promotion of education, health care, etc. A CSR committee has been formed by the company as per the Act. The
funds are utilized through the year on these activities which are specified in Schedule VII of the Companies Act,
2013.

49 Details of Benami Property held

There are no proceedings initiated or are pending against the Company for holding any benami property under
the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

50 Wilful Defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or government or any
government authority.

51 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium
and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital
management is to maximize the shareholder value and to ensure the Company''s ability to continue as a going
concern.

The Company has not distributed any dividend to its shareholders. The Company monitors gearing ratio i.e.
total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt mainly comprises of
current liabilities which represents - Packing Credit. The Company manages the capital structure and makes
adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying
assets.

56 The Code on Social Security 2020 (‘the Code'') relating to employee benefits, during the employment and post¬
employment, has received Presidential assent on September 28, 2020. The Code has been published in the
Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on
November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and
rules for quantifying the financial impact are also not yet issued.

The Company will assess the impact of the Code and will give appropriate impact in the standalone financial
statements in the period in which, the Code becomes effective and the related rules to determine the financial
impact are published. Based on a preliminary assessment, the entity believes the impact of the change will not
be significant.

57 Events after the reporting period

There are no significant subsequent events between the year ended 31 March 2025 and signing of standalone
financial statements as on 23 May 2025 which have material impact on the financials of the Company.

58 Approval of standalone financial statements

The financial statements were approved for issue by the board of directors on 23 May 2025.

59 Previous year figures have been regrouped/ reclassified to conform presentation as per Ind AS as required by
Schedule III of the Act.

As per our report of even date

For M S K A & Associates For and on behalf of Board of Directors of

Chartered Accountants Faze Three Limited

ICAI Firm Registration No.:105047W CIN: L99999DN1985PLC000197

Rajesh Murarka Ajay Anand Sanjay Anand

Partner Managing Director Whole-time Director

Membership No: 120521 DIN: 00373248 DIN: 01367853

Place : Mumbai Ankit Madhwani Akram Sati

Date : May 23, 2025 Chief Financial Officer Company Secretary

M No: A50020

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Mar 31, 2024

2.12 Provisions, contingent liabilities and contingent assets

Provisions :- Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. If the effect of the time value of money is material, provisions are discounted. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

Contingent liabilities :- Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

Contingent Asset :- A contingent asset is a possible asset arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are not recognised till the realisation of the income is virtually certain. However, the same are disclosed in the financial statements where an inflow of economic benefit is possible.

2.13 Cash and cash equivalents & bank balances

Cash and cash equivalent in the balance sheet comprise cash at banks, cash on hand and fixed deposits with an original maturity of less than three months, which are subject to an insignificant risk of changes in value.

Bank Balances other than cash and cash equivalents in the balance sheet comprise of unpaid dividend accounts and fixed deposits with an original maturity of more than three months and less than twelve months, which are subject to an insignificant risk of changes in value.

For the purposes of the cash flow statement, cash and cash equivalents include balance with banks, cash on hand, cheques/ draft on hand and short-term deposits net of bank overdraft.

2.14 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(A) Financial assets

(i) Initial recognition and measurement

At initial recognition, the Company measures a financial assets at its fair value and in the case of financial assets not recorded at fair value through profit or loss at transaction costs that are attributable to the acquisition of the financial asset. Transaction cost of financial assets carried at fair value through profit or loss is expensed in the Statement of Profit or Loss.

(ii) Classification and subsequent measurement

For purposes of subsequent measurement, financial assets are classified in following categories:

a) at amortized cost; or

b) at fair value through other comprehensive income; or

c) at fair value through profit or loss.

The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.

Debt Instruments: Subsequent measurement of debt instruments depends on the Company''s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments.

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method (EIR).

Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit and Loss and recognized in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.

Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. Interest income from these financial assets is included in other income.

Equity investments: All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.

(iii) Impairment of financial assets

In accordance with Ind AS 109, Financial Instruments, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on financial assets that are measured at amortized cost and FVTOCI.

For recognition of impairment loss on financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent years, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12 month ECL.

Life time ECLs are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12 month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the year end.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider all contractual terms of the financial instrument (including prepayment, extension etc.) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.

In general, it is presumed that credit risk has significantly increased since initial recognition if the payment is more than 30 days past due.

ECL impairment loss allowance (or reversal) recognized during the year is recognized as income/expense in the statement of profit and loss. In balance sheet ECL for financial assets measured at amortized cost is presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write off criteria, the Company does not reduce impairment allowance from the gross carrying amount.

(iv) Derecognition of financial assets

A financial asset is derecognized only when

a) the rights to receive cash flows from the financial asset is transferred or

b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the financial asset is transferred then in that case financial asset is derecognized only if substantially all risks and rewards of ownership of the financial asset is transferred. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.

(B) Financial liabilities

(i) Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss and at amortized cost, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction costs.

(ii) Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the Statement of Profit and Loss.

Borrowings at amortised cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in Statement of Profit and Loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the Statement of Profit and Loss.

(iii) Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss as finance costs.

(C) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

2.15 Employee benefits

Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the year in which the employees render the related service are recognized in respect of employees'' services up to the end of the year and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

Defined Contribution Plan

Provident Fund: Contribution towards provident fund is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the

Company does not carry any further obligations, apart from the contributions made on a monthly basis which are charged to the Statement of Profit and Loss.

Employee''s State Insurance Scheme: Contribution towards employees'' state insurance scheme is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis which are charged to the Statement of Profit and Loss.

Defined benefit plans

Gratuity: The Company provides for gratuity, a defined benefit plan (the ''Gratuity Plan") covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognized in the other comprehensive income in the year in which they arise.

The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. The estimated future payments which are denominated in a currency other than INR, are discounted using market yields determined by reference to high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service cost.

2.16 Current Asset and Current Liability

Current Asset - “An entity shall classify an asset as current when:

(a) it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;

(b) it holds the asset primarily for the purpose of trading;

(c) it expects to realise the asset within twelve months after the reporting period;

(d) the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. An entity shall classify all other assets as non-current.

Current Liability - “An entity shall classify a liability as current when:

(a) it expects to settle the liability in its normal operating cycle;

(b) it holds the liability primarily for the purpose of trading;

(c) the liability is due to be settled within twelve months after the reporting period; or

(d) it does not have an unconditional right to defer settlement of the liability for at least twelve months

after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. An entity shall classify all other liabilities as non-current.”

2.17 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Earnings considered in ascertaining the Company''s earnings per share is the net profit or loss for the year after deducting preference dividends and any attributable tax thereto for the year. The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

2.18 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM)(Managing Director) of the Company. The Managing Director is responsible for allocating resources and assessing performance of the operating segments of the company.

During the period, entity was engaged in the business of home textile products, which is the only operating segment as per Ind AS 108.

2.19 Rounding off amounts

All amounts disclosed in standalone financial statements and notes have been rounded off to the nearest crores as per requirement of Schedule III of the Act, unless otherwise stated.

(B) Defined benefit plans

The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The amount of gratuity shall be payable to an employee on the termination of employment after rendering continuous service for not less than five years, or on their superannuation or resignation. However, in case of death of an employee, the minimum period of five years shall not be required. The amount of gratuity payable on retirement / termination is the employee''s last drawn basic salary per month computed proportionately for 15 days salary multiplied by the number of years of service completed. The gratuity plan is a funded plan administered by a Life Insurance Corporation of India that is legally separated from the entity. The Company does not fully fund the liability and maintains the funding from time to time based on estimations of expected gratuity payments. These plans typically expose the Company to the following actuarial risks:

Investment risk - The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Interest risk - A fall in the discount rate, which is linked, to the G-Sec rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

Salary risk - The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

Asset Liability matching risk - The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality risk - Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

Concentration risk - Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very low as insurance companies have to follow stringent regulatory guidelines which mitigate risk.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31 March 2024 by M/S K. A. Pandit Consultants & Actuaries. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the proiected unit credit method.

Fair value hierarchy

The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

38 Financial risk management objectives and policies

The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and liquidity risk. The Company''s risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.

(A) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company is exposed to market risk primarily related to interest rate risk and Foreign currency risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company''s short-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of variable rate loans and borrowings.

(B) Credit risk

Credit risk is the risk that counterparty will not meet its obligations leading to a financial loss. The Company is exposed to credit risk arising from its operating (primarily trade receivables) and investing activities including deposits placed with banks, financial institutions and other corporate deposits. The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of financial assets. Financial assets are classified into performing, under-performing and non-performing. All financial assets are initially considered performing and evaluated periodically for expected credit loss. A default on a financial asset is when there is a significant increase in the credit risk which is evaluated based on the business environment. The assets are written off when the Company is certain about the non-recovery.

Trade Receivables: The Company has an established credit policy and a credit review mechanism. The Company also covers certain category of its debtors through a credit insurance policy. In such case the insurance provider sets an individual credit limit and also monitors the credit risk. Management believes that the unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical payment behaviour and analysis of customer credit risk.

Before accepting new customer, the Company has appropriate level of control procedures to assess the potential customer''s credit quality. The credit-worthiness of its customers are reviewed based on their financial position, past experience and other relevant factors. The credit period provided by the Company to its customers generally ranges from 0-60 days. Outstanding customer receivables are reviewed periodically. Provision is made based on expected credit loss method or specific identification method. The credit risk related to the trade receivables is mitigated by taking security deposits / bank guarantee / letter of credit - as and where considered necessary, setting appropriate credit terms and by setting and monitoring internal limits on exposure to individual customers.

Financial instruments and cash deposits: The credit risk from balances / deposits with banks, other financial assets and current investments are managed in accordance with the Company''s approved policy. Investments of surplus funds are made only with approved counterparties and within the limits assigned to each counterparties. The limits are assigned to mitigate the concentration risks. These limits are actively monitored by the Company.

(C) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as and when required. The Company manages the liquidity risk by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company invests its surplus funds in bank fixed deposit and liquid schemes of mutual funds, which carry no/negligible mark to market risks.

39 Reconciliation of quarterly returns or statements of current assets filed with banks or financial institutions

The Company has obtained borrowings from bank on basis of security of current assets wherein the quarterly returns/ statements of current assets as filed with bank are in agreement with the books.

40 Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956,

The company does not have any transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956, during the current year and in the previous year.

41 Registration of charges or satisfaction with Registrar of Companies

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

42 Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

56 The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and postemployment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.

The Company will assess the impact of the Code and will give appropriate impact in the standalone financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published. Based on a preliminary assessment, the entity believes the impact of the change will not be significant.

57 Events after the reporting period

There are no significant subsequent events between the year ended 31 March 2024 and signing of standalone financial statements as on 23 May 2024 which have material impact on the financials of the Company.

58 Approval of standalone financial statements

The standalone financial statements were approved for issue by the board of directors on 23 May 2024.

59 Previous year figures have been regrouped/ reclassified to conform presentation as per Ind AS as required by Schedule III of the Act.

As per our report of even date

For MSKA & Associates For and on behalf of Board of Directors of

Chartered Accountants Faze Three Limited

ICAI Firm Registration No.:105047W CIN: L99999DN1985PLC000197

Amrish Vaidya Ajay Anand Sanjay Anand

Partner Managing Director Whole-time Director

Membership No: 101739 DIN: 00373248 DIN: 01367853

Place : Mumbai Ankit Madhwani Akram Sati

Date : 23 May 2024 Chief Financial Officer Company Secretary

M No:A50020

---

Mar 31, 2023

Defined benefit plans

The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The amount of gratuity shall be payable to an employee on the termination of employment after rendering continuous service for not less than five years, or on their superannuation or resignation. However, in case of death of an employee, the minimum period of five years shall not be required. The amount of gratuity payable on retirement / termination is the employee''s last drawn basic salary per month computed proportionately for 15 days salary multiplied by the number of years of service completed. The gratuity plan is a funded plan administered by a separate fund that is legally separated from the entity,. The Company does not fully fund the liability and maintains the funding from time to time based on estimations of expected gratuity payments.

These plans typically expose the Company to the following actuarial risks:

Investment risk - The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Interest risk - A fall in the discount rate, which is linked, to the G-Sec rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

Salary risk - The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

Asset Liability matching risk - The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality risk - Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

Concentration risk - Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and liquidity risk. The Company''s risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company''s short-term debt obligations with floating interest rates.

(B) Credit risk

Credit risk is the risk that counterparty will not meet its obligations leading to a financial loss. The Company is exposed to credit risk arising from its operating (primarily trade receivables) and investing activities including deposits placed with banks, financial institutions and other corporate deposits. The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of financial assets. Financial assets are classified into performing, under-performing and non-performing. All financial assets are initially considered performing and evaluated periodically for expected credit loss. A default on a financial asset is when there is a significant increase in the credit risk which is evaluated based on the business environment. The assets are written off when the Company is certain about the non-recovery.

Trade Receivables: The Company has an established credit policy and a credit review mechanism. The Company also covers certain category of its debtors through a credit insurance policy. In such case the insurance provider sets an individual credit limit and also monitors the credit risk. Management believes that the unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical payment behavior and analysis of customer credit risk.

Before accepting new customer, the Company has appropriate level of control procedures to assess the potential customer''s credit quality. The credit-worthiness of its customers are reviewed based on their financial position, past experience and other relevant factors. The credit period provided by the Company to its customers generally ranges from 0-60 days. Outstanding customer receivables are reviewed periodically. Provision is made based on expected credit loss method or specific identification method. The credit risk related to the trade receivables is mitigated by taking security deposits / bank guarantee / letter of credit - as and where considered necessary, setting appropriate credit terms and by setting and monitoring internal limits on exposure to individual customers.

Financial instruments and cash deposits: The credit risk from balances / deposits with banks, other financial assets and current investments are managed in accordance with the Company''s approved policy. Investments of surplus funds are made only with approved counterparties and within the limits assigned to each counterparties. The limits are assigned to mitigate the concentration risks. These limits are actively monitored by the Company.

(C) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as and when required. The Company manages the liquidity risk by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company invests its surplus funds in bank fixed deposit and liquid schemes of mutual funds, which carry no/negligible mark to market risks.

40 Reconciliation of quarterly returns or statements of current assets filed with banks or financial institutions

The Company has obtained borrowings from bank on basis of security of current assets wherein the quarterly returns/ statements of current assets as filed with bank are in agreement with the books.

41 Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956,

The company does not have any transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956, during the current year and in the previous year.

42 Registration of charges or satisfaction with Registrar of Companies

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

43 Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

45 Utilisation of Borrowed funds

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

46 Undisclosed income

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (and previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

47 Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are mainly for environmental sustainability, promotion of education, health care, etc. A CSR committee has been formed by the company as per the Act. The funds are utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

48 Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

49 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)

The outstanding dues to small and medium enterprises as defined under MSMED Act, 2006 are as under

50 Details of Benami Property held

There are no proceedings initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

51 Wilful Defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

52 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value and to ensure the Company''s ability to continue as a going concern.

The Company has not distributed any dividend to its shareholders. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt mainly comprises of current liabilities which represents - Packing Credit. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

55 The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.

The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published. Based on a preliminary assessment, the entity believes the impact of the change will not be significant.

56 Events after the reporting period

There are no significant subsequent events between the year ended 31 March 2023 and signing of financial statements as on 23 May 2023 which have material impact on the financials of the Company.

57 Approval of financial statements

The financial statements were approved for issue by the board of directors on 23 May 2023.

58 Previous year figures have been regrouped/ reclassified to conform presentation as per Ind AS as required by Schedule III of the Act.

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Mar 31, 2018

1. General Information

Faze Three Limited is engaged in manufacturing and exports of home furnishing items viz. bathmats, rugs, blankets, throws, cushions, etc. It has six manufacturing locations across India viz. Panipat (3), Vapi (1) and Dadra & Nagar Haveli (2). The company is a direct exporter to most retail giants mainly in US and Europe. The Company is a public company incorporated and domiciled in India and has its registered office in Dapada, Silvassa, UT of Dadra and Nagar Haveli. The company''s equity shares are listed on the Bombay Stock Exchange.

2. Reconciliations

The following reconciliations provides the effect of transition to Ind AS from previous GAAP in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards:

(f) Notes to first-time adoption

(i) Revaluation of land and building

The Company has valued the entire class of asset being Freehold and Leasehold Land as per accounting policy adopted by Company under IND AS for valuing such class of assets at fair value as deemed cost on the transition date & subsequent measurement. Consequent to this, freehold land, leasehold land and total equity has increased by Rs.55.41 crores as on 31 March, 2017 (Rs. 59.46 crores - 1 April, 2016).

(ii) Fair valuation of Investments

In previous GAAP, Investments in quoted mutual funds of the company were measured at lower of cost or fair value. Under Ind AS, these investments have been classified as fair value through profit and loss (FVTPL) on the date of transition. The fair value changes are recognised in the Statement of Profit and Loss. Consequent to this, investments and other income has increased by Rs.0.03 crores as on 31 March, 2017 (Rs.0.01 crores - 1 April, 2016).

(iii) Mark-to-market on Foreign Currency Derivatives

Under Ind AS, forward contracts on currency are recognised as financial assets / liabilities and measured at fair value through profit and loss (FVTPL) on the date of transition. Mark to market (MTM) arising on forward contracts on currency are recognised in profit or loss. Consequent to this, current assets and other income has increased by Rs.1.94 crores as on 31 March, 2017 (Rs.0.71 crores - 1 April, 2016).

(iv) Remeasurement of benefit plan

In the financial statements prepared under previous GAAP, remeasurement costs of defined benefit plans, arising primarily due to change in actuarial assumptions was recognised as Employee benefits expense in the Statement of Profit and Loss. Under Ind AS, such remeasurement costs relating to defined benefit plans is recognised in Other Comprehensive Income as per the requirements of Ind AS 19, Employee benefits. Consequently, the related tax effect of the same has also been recognised in Other Comprehensive Income. Consequent to this, actuarial loss of Rs.0.38 crores is reclassified from employee benefit expenses to OCI, resulting decrease in employee benefit expenses and profit after tax for the year ended 31 March, 2017 by Rs.0.26 crores as on 31 March, 2017 (Rs.0.11 crores - 1 April, 2016) net of taxes. There is no impact on the total equity as at 31 March, 2017.

(v) Deferred tax

Indian GAAP requires assessment of virtual certainty in case of losses for recognizing deferred tax asset, but under Ind AS deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses. Consequent to this, total equity has decreased by Rs.1.01 crores as on 31 March, 2017 (Rs.0.24 crores - 1 April, 2016) and profit for the year ended 31 March 2017 has increased by Rs.0.66 crores.

(vi) Equity Component of Compound Financial Instrument

As per Ind AS 32, Foreign Currency Convertible Bonds (FCCBs) are compound financial instruments which require split accounting into liability component and equity component. The instrument value of FCCBs as per Indian GAAP was Rs.103.29 Crs as on April 1, 2016, based on the fair valuation carried out by independent valuer, under Ind AS 32 & Ind AS 109 read with Ind AS 113, the fair value of the liability component of FCCBs is arrived at Rs.38.61 crores and classified under Current Financial liabilities. The residual amount of'' 64.68 crores has been classified as the value of Equity Component of FCCBs & classified under Other Equity in the opening Balance Sheet on the transition date. During FY 2017, the buyback of entire FCCBs was done at Rs.40.01 crores, therefore net amount of Rs. 1.40 crores has been debited to profit and loss account for FY 2017.

(vii) Other comprehensive income

The concept of Other Comprehensive Income (OCI) did not exist under Indian GAAP.

(viii) Statement of cash flows

No material impact on transition from Indian GAAP to Ind AS on the statement of cash flows.

3. Fair valuation of land

The fair value of land consists of lands containing the factories of the Company. Fair value of the properties was determined by estimating and arriving at the ''Prevailing Market value'' by N M Pai& Company an accredited independent valuer appointed by the Company for the said purpose. The valuation performed by the valuer is based on active market prices, significantly adjusted for difference in the nature, location or condition of the specific property.

The Company''s investment property consisted of commercial property at Worli (erstwhile corporate office of the company) given on lease to Bank of Maharashtra for a period of 10 years with effect from December 2016.

As at 31 March 2017 and 1 April 2016, the fair values of the property are Rs.6.94 crores and Rs.6.75 crores respectively. These valuations are based on valuations performed by Sigma Engineering Consultants, an accredited independent valuer. Sigma Engineering Consultants is a specialist in valuing these types of investment properties. A valuation model in accordance with that recommended by the International Valuation Standards Committee has been applied.

* The Company has received 25% upfront payment at the time of subscription of the warrants from the allotees and the Company will receive the balance 75% will be received within 18 months from the date of allotment. The above Convertible Warrants were issued on preferential basis at a price off 110 /- per warrant including a premium of Rs.100/- per share on face value of Rs.10/- per share.

(b) Rights, preferences and restrictions attached to shares

The Company has only one class of equity shares having par value of Rs.10/- per share. All the equity shares rank paripassu in all respect. Dividend if any declared is payable in Indian Rupees. Final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts in proportion of their shareholding.

(c) Rights, preferences and restrictions attached to warrants

The Company has issued convertible equity warrants on preferential basis to promoter/non promoter group. The equity shares to be so alloted on exercise of the warrants shall upon conversion rank pari-passu with the existing equity shares of the Company, in such form and manner and upon such terms and conditions as may be determined by the Board in accordance with the ICDR Regulations of other applicable laws as may be prevailing at the time. The warrants and equity shares alloted pursuant to exercise of such warrants shall be subject to lock-in for such period as specified under chapter VII of ICDR Regulations. In the event the warrant holders does not exercise the warrants within 18 months from the date of allotment, the warrant shall lapse and the amount paid shall stand forfeited by the Company.

* Equity Shares held by Ajay Anand (HUF) as on 6,62,500 shares 31 March, 2018 : 2.72% and 31 March 2017 : 2.84%

As per the records of the company, including its register of shareholders / members, the above shareholding represents both legal and beneficial ownership of shares.

(e) The Company has not issued bonus shares and shares for consideration other than cash.

The company has discounted the lease rentals and availed a term loan from Punjab National Bank. Lease Equalisation (Term Loan) is secured by primary charge of assignment of future lease rental receivable as aforesaid. Term Loan from Punjab National Bank carries interest rate of 10.90% p.a. i.e. MCLR (5year) 2.90% -0.75% as per L & ACir 26/2016 and 67/2016,5 year MCLR being 8.75% presently. The loan is repayable in monthly instalments of Rs.2.71 Lakhs from April 2017 for a period of 116 months. The said liability was repaid in the current year.

Terms and conditions of loans

(i) Packing Credit in Foreign Currency (PCFC) and Packing Credit in Rupee Scheme (PCRS) is secured by way of hypothecation of raw materials, work-in-progress, finished goods, spares & stores and goods meant for exports and book debts as prime security and collaterally secured by extension of the charge on the Fixed Assets of the Company to Canara Bank and Allahabad Bank jointly as a part of consortium till 31 July, 2017. PCFC and PCRS facilities from Canara Bank carry interest rate of (LIBOR 350 bps) and MCLR 0.75% respectively. PCRS facility from Allahabad Bank carry interest rate @ 10.70%.

PCRS facility from Yes Bank carry interest rate @ 10.25% w.e.f 1 August, 2017.

The company has interest rate subvention of 3% on the aforesaid rates for Packing Credit in Rupee Scheme (PCRS)

(ii) Loan from V R Woodart, the Associate Company, for 31 March, 2018 : Rs.0.26 crores, 31 March, 2017 : Rs.0.36 crores and 1 April, 2016 : Rs.0.39 crores is repayable on demand.

(iii) Loan from Mr. Ajay Anand, Managing Director, for 31 March, 2018 : Nil, 31 March, 2017 : Nil and 1 April, 2016 : Rs.0.21 crores is repayable on demand.

* Based on the information available with the Company, there are no outstanding dues and payments made to any supplier of goods and services beyond the specified period under Micro, Small and Medium Enterprises Development Act, 2006 [MSMED Act]. There is no interest payable or paid to any suppliers under the said Act.

Note i : Foreign Currency Convertible Bonds

As per IND AS 32, FCCBs are compound financial instruments which require split accounting into liability component and equity component. On initial recognition, fair value of liability component arrived shall be reduced from the instrument value, to arrive at the residual value, which would be treated as equity component value of the instrument. If the value of liability component determined on initial recognition does not continue to represent the fair value on measurement date, the same is required to be valued to represent fair value as on that date.

The FCCBs of the company were due for redemption in December 2011 and were not redeemed until 1 April, 2016, being transition date to INDAS& measurement date. The instrument value of FCCBs as per Indian GAAP was Rs.103.29 Crs as on 1 April, 2016. Since the same would not represent fair value on measurement date, a valuation has been carried by the "M/S Bhandarkar& Kale, Chartered Accountants" Independent valuers appointed by the company to arrive at the fair value of FCCBs on measurement date. Based on the said report, under IND AS 32 & Ind AS 109 read with IND AS 113, the fair value of the liability component of FCCBs is arrived at'' 38.61 crores and classified under Current Financial liabilities. The residual amount of'' 64.68 crores has been classified as the value of Equity Component of FCCBs & clsssifed under Other Equity in the opening Balance Sheet on the transition date. During FY 2017, the buyback of entire FCCBs was done at Rs. 40.01 crores, therefore net amount of Rs. 1.40 crores has been debited to profit and loss account for FY 2017.

Note ii : Corporate Guarantee Liability

As per the approval from Canara Bank London, during the year, Rs.18.92 crores was paid to Canara Bank over and above accumulation in the fixed deposits ason31 March, 2016 being Rs.14.32 crores. The aggregate payment of Rs. 33.24 crores (Equivalent to Euro 4.4 Mln principal value) was made on account of corporate guarantee given by the company to Canara Bank London for working capital loan given by the Bank to the German subsidiary of the company. On payment of the full principal amount as approved, the Bank approved waiver of unapplied interest, penal interest and other charges levied, etc. An amount of Rs.13.47 crores has been written back and credited to Other Income during the year 2016-17 being difference of total outstanding as on 31 March, 2016 and aggregate amount paid.

* Revenue from operations for periods upto 30 June, 2017 includes excise duty, which is discontinued effective from 1 July, 2017 upon implementation of Goods and Service Tax (GST) in India. In accordance with Ind-AS 18 “Revenue", GST is not included in revenue from operations. In view of the aforesaid change, revenue from operations (domestic) for the year ended 31 March, 2018 are not completely comparable with previous periods.

* Fair valuation of investments represent fair valuation changes in mutual funds which has been restated to NAV as at reporting dates, which have not been recognized separately in financial statements.

(D) Tax losses of (31 March 2017: Rs.27.35 Crores, 1 April 2016: Rs.56.21 Crores are available for offsetting for a maximum period of eight years against future taxable profits of the Company.

4 Earnings per share

Basic earnings per share amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the profit attributable to equity holders (after adjusting for interest on the convertible preference shares) by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

* The weighted average number of shares takes into account the weighted average effect of changes in treasury share transactions during the year.

5 Leases

Operating leases where Company is a lessee:

The Company has entered into lease transactions mainly for leasing of office premise for a period of 5 years. The terms of lease include terms of renewal, increase in rents in future periods, which are in line with general inflation, and terms of cancellation. The operating lease payments recognized in the Statement of Profit and Loss in 31 March 2018: amounting to Rs.0.36 crores is included in Note 33.

*As on 31 March 2017 and 1 April 2016 there were no non-cancellable operating leases.

(D) Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

6 Fair values of financial assets and financial liabilities

The fair value of other current financial assets, cash and cash equivalents, trade receivables, investments, trade payables, short-term borrowings and other financial liabilities approximate the carrying amounts because of the short term nature of these financial instruments.

The amortized cost using effective interest rate (EIR) of non-current financial assets consisting of security and term deposits are not significantly different from the carrying amount.

Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.

The impact of fair value on non-current borrowing, non-current security deposits and non-current term deposits is not material and therefore not considered for above disclosure.

7 Fair value hierarchy

The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

- Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

No financial assets/liabilities have been valued using level 1 fair value measurements.

8 Financial risk management objectives and policies

The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and liquidity risk. The Company''s risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.

(A) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises threetypes of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings. With all other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:

(ii) Foreign currency risk

The Company is exposed to foreign currency risk arising mainly on export of finished goods and import of raw material. Foreign currency exposures are managed within approved policy parameters utilising forward contracts.

The carrying amounts of Company''s foreign currency denominated financial assets and financial liabilities at the end of the reporting period are as follows:

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in the US dollar exchange rate (or any other material currency), with all other variables held constant, of the Company''s profit before tax (due to changes in the fair value of monetary assets and liabilities).

The company realises 90% of its sales in USD, based on the hedging policy followed by the company in case of normal volatality in USD / INR, the following effect is estimated.

(B) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from the statutory deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions and retaining sufficient balances in bank accounts required to meet a month''s operational costs. The Management reviews the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts. The Company does not foresee any credit risks on deposits with regulatory authorities.

(C) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due.

9 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to achieve a strong capital base to sustain stability and plan future development of business.

The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt mainly comprises of current liabilities which represents - Packing Credit in INR (98% of Total Debt). The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018, 31 March 2017 and 1 April 2016.

10 Corporate social responsibility (CSR)

A) Gross amount required to be spent by the Company towards Corporate Social Responsibility is Rs.0.28 Crores (31 March 2017 Nil).

B) No expenditure has been paid to a related party, in relation to CSR expenditure as per Ind-AS 24, Related Party Disclosures.

11 Dividends

The dividends declared by the Company are based on the profits available for distribution as reported in the financial statements of the Company. Accordingly, the retained earnings reported in these financial statements may not be fully distributable. The Board of Directors declared an interim dividend of Rs.0.50 per share for the year ended 31 March, 2018.

12 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)

There are no outstanding dues to small and medium enterprises as defined under MSMED Act, 2006.

13 Previous year figures have been regrouped/ reclassified to confirm presentation as per Ind AS as required by Schedule III of the Act.

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Mar 31, 2016

Note No. 1 Foreign Currency Convertible Bonds

The principal outstanding of the Foreign Currency Convertible Bonds is USD 8 Min. The said bonds were convertible into Equity Shares of the company at 85 per share as per the terms of the offer on or prior to 27th December 2011 at the option of the holders. Since the said bonds were not converted / previously redeemed prior to the redemption date, they become due for redemption along with redemption premium and applicable interest thereon. The company has provided for the aforesaid premium and interest payable year on year and classified here along with principal value of FCCBs

outstanding.

Note No. 2 Corporate Guarantee Liability

The Company had given Corporate Guarantee to Canara Bank London for grant of credit facilities by the Bank to PANA Textil Gmbh (''PANA''), sub-subsidiary of the company for principal value 4.4 Min Euros. Due to the European crises and overall adverse economic scenario in 2009-10, PANA filed for bankruptcy in 2010. The bankruptcy court ruled that PANA to be wound up and appointed the official administrator during FY 2012. Owing to the liquidation, the entire principal liability along with applicable interest thereon and other charges devolved onto the company as per the terms of the corporate guarantee agreement with Canara Bank London. The Liabilities on account of the aforesaid as claimed by the Bank from time to time have been classified here. Pending conclusion of the terms and compliance for resolution of the said liability, the company has discontinued annual provision of accrued overdue interest on the said liability and the same is disclosed as contingent liability. As per the sanction of credit facilities from Canara Bank, a 5% retention (cut back) on every export bill discounted is kept as Fixed deposit (retention) for recovery of this liability. The balance in the retention account of 1211.15 Lacs was classified as non-current Cash and Cash equivalent in FY 2015 (Refer Note 19). The balance as on March 31,2015 along with additions during the year in the retention account amounting of 1431.83 Lacs has been paid to Canara Bank London during the year are classified under Other Current Assets (Refer Note 19).

3. Exceptional items

The company has given Corporate guarantee to Canara Bank London for grant of working capital facilities by the Bank to PANATextil Gmbh (‘PANA’), sub-subsidiary of the company for principal value 4.4 Million Euros. Due to the European crises and overall adverse economic scenario in 2009-2010, PANA filed for bankruptcy in 2010. The bankruptcy court ruled that PANA to be wound up and appointed the official administrator during FY 2012. Owing to the liquidation, the entire principal liability along with applicable interest thereon and other charges devolved onto the company as per the terms of the corporate guarantee agreement with Canara Bank London. The applicable annual charge & forex fluctuation on the said liability as claimed by the Bank from time to time have been provided.

4. Related Party Transactions

a. Related parties where control exists

Name of the related party Relationship

V R Woodart Limited Associate

Aunde India Limited Associate

Ajay Anand (HUF) Associate

Instyle Investments Private Limited Associate

Rohina Anand Khira Daughter of Managing Director

Ashok Anand Brother of Whole - time Director

Key Management Personnel (KMP)

Ajay Anand Managing Director

Sanjay Anand Whole-time Director

Martin Golla Sr. VP - Legal & Company Secretary (resigned w.e.f 26/03/2016)

Ankit Madhwani Chief Financial Officer (w.e.f 09/07/2015)

5 The Company does not have any current tax liability for the year

6 Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The management believes that it is appropriate to prepare these financial statements on ‘going concern’ basis, for the following reasons:

a) The company has not made operating losses during the year. Besides, there are sufficient orders on hand pending execution. The management is fully seized of the matter and is of the view that going concern assumption holds true and that the company will be able to discharge / resolve its liabilities in the normal course of business.

b) As the Net worth of the company was eroded in the previous years, it became mandatory under section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 to file a reference to BIFR for revival and rehabilitation of the company. Accordingly, the company has filed reference with BIFR on 2308-2012 which has been registered by BIFR on 04-09-2012.

7 There are no outstanding dues to small and medium enterprises as defined under MSMED Act, 2006.

8 Debit / Credit balances are subject to confirmation and reconciliation

9 Previous year figures have been regrouped / reclassified wherever necessary to correspond with the current period classification /disclosure

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Mar 31, 2015

1. Corporate Information

Faze Three Limited (the company) is a public company domiciled in India and incorporated under the provisions of Indian Companies Act, 1956. The company's equity shares are listed for trading on the Bombay Stock Exchange. The company is engaged in manufacturing of Home furnishing items.

2. Basis of Accounting

The Financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The company has prepared these financial statements to comply with all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014.

3. Exceptional items

The company has given Corporate guarantee to Canara Bank London for grant of working capital facilities by the Bank to PANA Textil Gmbh ('PANA'), sub-subsidiary of the company for principal value 4.4 Million Euros. Due to the European crises and overall adverse economic scenario in 2009-2010, PANA filed for bankruptcy in 2010. The bankruptcy court ruled that PANA to be wound up and appointed the official administrator during FY 2012. Owing to the liquidation, the entire principal liability along with applicable interest thereon and other charges devolved onto the company as per the terms of the corporate guarantee agreement with Canara Bank London. The applicable annual charge & forex fluctuation on the said liability as claimed by the Bank from time to time have been provided.

4. Miscellaneous expenses under Note 27 'Other Expenses' mainly includes net -write offs of Rs. 8.84 Mln (PY Rs. 12.18 Mln), Security expenses Rs. 7.70 Mln (PY Rs. 6.43 Mln), compensation to canara bank on invocation of corporate guarantee Rs. 17.43 Mln (PY Rs. 22.23 Mln) etc.

5. Depreciation on Tangible fixed assets

The Company has not ascertained the useful life of its Fixed Assets and not worked out depreciation as per Schedule II of the Companies Act 2013. The depreciation charged in the books is as per Schedule XIV of the Companies Act 1956.

6. Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The management believes that it is appropriate to prepare these financial statements on 'going concern' basis, for the following reasons:

a) The company has not made operating losses during the year. Besides, there are sufficient orders on hand pending execution. The management is fully seized of the matter and is of the view that going concern assumption holds true and that the company will be able to discharge / resolve its liabilities in the normal course of business.

b) As the Net worth of the company was eroded in the previous years, it became mandatory under section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 to file a reference to BIFR for revival and rehabilitation of the company. Accordingly, the company has filed reference with BIFR on 23-08-2012 which has been registered by BIFR on 04-09-2012.

7. There are no outstanding dues to small and medium enterprises as defined under MSMED Act, 2006.

8. Debit / Credit balances are subject to confirmation and reconciliation

9. Previous period figures

The Company has reclassified previous year figures to conform to this year's classification.

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Mar 31, 2014

1. Corporate Information

Faze Three Limited (the company) is a public company domiciled in India and incorporated under the provisions of Indian Companies Act, 1956. The company's equity shares are listed for trading on the Bombay Stock Exchange. The company is engaged in manufacturing of Home furnishing items.

2. Basis of Accounting

The Financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The financials are prepared under the historical cost convention on an accrual basis and to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006 (as amended) to the extent applicable and relevant provisions of the Companies Act, 1956.

3. Terms/rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs. 10/- per share. All the Equity Shares rank pari passu in all respect.

4. The company has not issued bonus shares and shares for consideration other than cash nor the company has bought back any shares during the period of five years immediately preceeding the reporting date.

5. Details of shareholders holding more than 5% shares in the Company

6. Foreign Curreny Convertible Bonds

The current outstanding of principal value of Foreign Currency Convertible Bonds have become due for redemption on 27th Demember, 2011 and were not redeemed on that date. These Bonds have redemption premium and interest payable which has been provided in the books of accounts.

7. Invocation of Corporate guarantee

The Company had given Corporate Guarantee to Canara Bank London in respect of its German subsidiary namely Pana Textil Gmbh to the extent of 4.4 Mln Euros. The said guarantee had been invoked and the liability payable to the Bank has been provided in the books of account. (Refer note 28)

8. Exceptional items

The Company had given Corporate Guarantee to Canara Bank, London in respect of its German subsidiary namely Pana Textil Gmbh ('Pana') to the extent of principal amount of 4.4 Mln Euros and further dues as may accrue on that account. This subsidiary is in the process of being wound up. The said liability being a foreign exchange liability is re-stated as on reporting date based on prevailing rate of Euros. The said corporate guarantee is invoked by the Bank on the company and the final amount is in the process of being crystallized which is subject to receipt of proceeds from the liquidator of Pana and discussions between the company and the bank.

9. Related party disclosures

A) Related parties where control exists

Relationship Name / Entity

Associates V R Woodart Limited

Aunde India Limited

Ajay Anand (HUF)

Instyle Investments Pvt. Ltd.

Key Management personnel (KMP) Ajay Anand (Additional Director w.e.f.1/10/13)

Rashmi Anand (Whole Time Director till 17.06.2013)

Sanjay Anand (Whole Time Director)

B) Related parties with whom transactions have taken place

Relationship Name / Entity

Son of Ajay Anand Vishnu Anand

Daughter of Ajay Anand Rohina Anand

10. Contingent Liabilities

Particulars 31st March 31st March 2014 2013 Rs. Rs.

(i) Contingent Liabilities

(a) Claims against the company not acknowledged as debt 2,729,559 1,961,016

(b) Guarantees and Letter of Credit 18,318,192 30,986,946

(c) Other money for which the company is contingently liable 21,532,908 39,954,813

(d) Legal charges and other expenses / dues on account of liquidation of Pana Textil Gmbh 60,000,000 Nil

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for - -

(b) Uncalled liability on shares and other investments partly paid - -

(c) Other commitments (specify nature) - -

11. Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The management believes that it is appropriate to prepare these financial statements on 'going concern' basis, for the following reasons:

a) The company has not made operating losses during the year. Besides, there are sufficient orders on hand pending execution. The management is fully seized of the matter and is of the view that going concern assumption holds true and that the company will be able to discharge / resolve its liabilities in the normal course of business.

b) As the Net worth of the company was eroded in the previous years, it became mandatory under section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 to file a reference to BIFR for revival and rehabilitation of the company. Accordingly, the company has filed reference with BIFR on 23- 08-2012 which has been registered by BIFR on 04-09-2012.

12. There are no outstanding dues to small and medium enterprises as defined under MSMED Act, 2006.

13. Debit / Credit balances are subject to confirmation and reconciliation

14. Previous period figures

The Company has reclassified previous year figures to conform to this year's classification.

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Mar 31, 2013

1. Corporate Information

Faze Three Limited (the company) is a public company domiciled in India and incorporated under the provisions of the Indian Companies Act, 1956. The company''s equity shares are listed for trading on Bombay Stock Exchange. The company is engaged in manufacturing of Home furnishing products.

2. Basis of Accounting

The Financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The financials are prepared under the historical cost convention on an accrual basis and to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006 (as amended) to the extent applicable and relevant provisions of the Companies Act, 1956.

3. Exceptional items

The Company had given Corporate Guarantee to Canara Bank, London in respect of its German subsidiary namely Pana Textile Gmbh to the extent of 4 Mln Euros. This subsidiary is in the process of being wound up. Based on the status of the insolvency proceedings, the Company has during the year, provided a further sum of Rs. 54.21 Mln towards its liability. Apart from aforesaid it also includes foreign exchange loss on account of restatement of FCCB liability and diminution in value of investments made in an associate company in accordance with Accounting Standard – 13 (AS – 13).

a. Other transaction

Lease rent of Rs. 600,000 (PY Rs. 600,000) has been paid to Rohina Anand for rent of premises, salaries have been paid to Ajay Anand Rs. 864,000 for three months ( PY Rs. 3,456,000)and gratuity Rs. 1,000,000 ( PY Nil ) and to Ashok Anand Rs. 907,200 (PY Rs. 898,100). Apart from sale/purchase of goods and services Rs. 31,375 is paid to Aunde India Limited for reimbursement of expenses.

4. Contingent liabilities

Particulars 31st March 2013 31st March 2012

(i) Contingent Liabilities

Claims against the company not acknowledged as debt 1,961,016 -

Guarantees and Letter of Credit 30,986,946 23,976,300

Other money for which the company is contingently liable 39,954,813 43,103,420

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for - -

Uncalled liability on shares and other investments partly paid - -

Other commitments (specify nature) - -

5. Miscellaneous expenses under Note 26 ''Other Expenses'' mainly includes net w/offs of Rs. 61.04 Mln (PY Rs. 151.65 Mln), Security expenses Rs. 4.12 Mln (PY Rs. 5.14 Mln), Repairs-Others Rs. 6.31 Mln (PY Rs. 6.73 Mln), Loss on sale of Assets Rs. 0.43 Mln (PY Rs. 0.43 Mln), etc.

6. Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The management believes that it is appropriate to prepare these financial statements on ''going concern'' basis, for the following reasons:

a) The company has not made operating losses during the year. Besides, there are sufficient orders on hand pending execution. The management is fully seized of the matter and is of the view that going concern assumption holds true and that the company will be able to discharge its liabilities in the normal course of business.

b) As the Net worth of the company was eroded in the previous year, it became mandatory under section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 to file a reference to BIFR for revival and rehabilitation of the company. Accordingly, the company has filed reference with BIFR on 23-08-2012 which has been registered by BIFR on 04-09-2012.

7. There are no outstanding dues to small and medium enterprises as defined under MSMED Act, 2006.

8. Debit / Credit balances are subject to confirmation and reconciliation.

9. Previous period figures

The Company has reclassified previous year figures to conform to this year''s classification.

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Mar 31, 2012

1. Corporate Information

Faze Three Limited (the company) is a public company domiciled in India and incorporated underthe provisions of the Indian Companies Act, 1956. The company s equity shares are listed for trading on the Bombay Stock Exchange. The company is engaged in manufacturing of Home furnishing items.

2. Basis of Accounting

The Financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The financials are prepared under the historical cost convention on an accrual basis and to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006 (as amended) to the extent applicable and relevant provisions of the Companies Act, 1956.

a. Terms/rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs. 10/- per share. All the Equity Shares rank pari passu in all respect.

b. The company has not issued bonus shares and shares for consideration other than cash nor the company has bought back any shares during the period of five years immediately preceding the reporting date.

Note No.3.1

The term loan is secured by pari passu charge by way of EMT of Land & Building and Hypothecation of specific Plant & Machineries and other movable fixed assets in respect of the expansion / new projects as prime security and collaterally secured by way of extension of the first charge on the existing fixed assets of the company excluding office property at Worii. The office property at Worli is exclusively charged to Canara Bank. (Comprising built up area 1983 sq.ft)

Term loans from Canara bank included above carries interest of (BPLR 0.25 bps) to (BPLR 1.25 bps). The same Loan was taken from FY 2002 and is repayable in quarterly installments by FY 2015. Some of the loans included above fall under Technology Ungradation Fund Scheme of Ministry of Textiles (TUFS) which are eligible for a interest subsidy of 500 bps.

Term loans from Allahabad bank included above carries interest of (Base Rate 450 bps). The same Loan was taken from FY 2010 and is repayable in quarterly installments by 2016. Other Loans are repayable in monthly installments by 2014 There is no default in repayment of the term loans.

Note No.4.1

Packing Credit Foreign Currency (PCFC) and Packing Credit Rupees (PCRS) is secured by way of hypothecation of Current Assets (raw materials, WIP, finished goods, spares & stores and goods meant for exports, book debts etc) as prime security and collaterally secured by extension of the charge on the Fixed Assets of the company excluding Office property at Worli. The office property at Worii is exclusively charged to Canara Bank. (Comprising built up area 1983sq.ft).

PCFC and PCRS facilities are from Canara Bank carrying interest rate of (LIBOR 350 bps) for PCFC facility and 11.25 % for PCRS facility for Allahabad Bank. However, PCRS facility is eligible for interest subvention of 2 %.

Note No.5.1 Foreign Curreny Convertible Bonds

The current outstanding of principal value of Foreign Currency Convertible Bonds have become due for redemption on 27th Demember, 2011 and were not redeemed on that date. These Bonds have redemption premium and interest payable which has been provided in the books of accounts.

Note no. 5.2 - Invocation of Corporate guarantee

The Company had given Corporate Guarantee to Canara Bank London in respect of its German subsidiary namely Pana Textil GmbH to the extent of 4 Mln Euros. The said guarantee had been invoked in the last financial year and liability with respect to the same has been near crystallization as the completion of insolvency proceedings of Pana Textil GmbH is underway. Accordingly the liability has been provided in the books of accounts for the cunent year.

Note no. 5.3 - Includes an amount of Rs. 35.5 Mln received as advance against property and Rs. 44.61 Mln temporary book overdraft. There are no amounts due to be transferred to investor protection fund.

6. Exceptional items

The Company had given Corporate Guarantee to Canara Bank London in respect of its German subsidiary namely Pana Textil GmbH to the extent of 4 Min Euros. The said guarantee had been invoked in the previous year and liability with respect to the same has been near crystallization as the completion of insolvency proceedings of Pana Textil GmbH is underway. Apart from aforesaid it aiso includes write offs on account of the subsidiary. Further, it includes diminution in value of investments made in an associate company in accordance with Accounting Standard -13 (AS -13).

*The Company had given Corporate Guarantee to Canara Bank London in respect of its German subsidiary namely F ana Textil GmbH to the extent of 4 Mln Euros. The said guarantee had been invoked in the last financial year and the liability with respect to the same has been near crystallization during insolvency proceeding of Pana Textil GmbH, which are underway. Accordingly the liability has been provided in the books of accounts for the current year.

7. Miscellaneous expenses under note 26 Other Expenses mainly includes R & D - lab testing expenses of Rs. 3.87 Mln (PY Rs. 3.36 Mln), Repairs-others Rs.6.73 Mln (PY Rs. 4.31 Mln), Commission/ service charges Rs.2.22 Mln (PYRs.2.70 Mln), W/Offsof Rs. 151.65 Mfn(PYRs.nil), Security expenses Rs. 5.14 Mln (PYRs. 4.75 Mln), Printing & Stationery Rs.2.41 Mln (PY Rs.2.63 Mln), Loss on Sale of Assets Rs. 0.43 Mln (PY Rs.nil), etc.

8. Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The management believes that it is appropriate to prepare these financial statements on going concern basis, for the following reasons:

a) The company has not made operating losses during the year. Besides, there are sufficient orders on hand pending execution. The management is fully seized of the matter and is of the view that going concern assumption holds true and that the company will be able to discharge its liabilities in the normal course of business.

b) As the Networth of the company is eroded in the current year, it is a mandatory requirement under section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 to file a reference to BIFR for revival and rehabilitation of the company. Accordingly, the Board of directors of the company have resolved to file reference to BIFR based on this Audited balance sheet.

9. There are no outstanding dues to small and medium enterprises as defined under MSMED Act, 2006.

10. Debit / Credit balances are subject to confirmation and reconciliation.

11. Previous period figures

Till the year ended 31st March 2011, the company was using pre-revised schedule VI of the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended 31 st March 2012, the revised schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year s classification.