Report on the Financial Statement
We have audited the accompanying financial statements of FAZE THREE
LIMITED(the Company), which comprise the Balance Sheet as at March 31,
2013, and the Statement of Profit and Loss and Cash Flow Statement for
the year then ended, and a summary of significant accounting policies
and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 (the Act). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b) In the case of the Statement of Profit and Loss, of the loss for the
year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (the
Order) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor it has issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
Referred to in paragraph 1 under the heading of ''Report on other legal
and regulatory requirement'' of our report of even date
i. In respect of Fixed Assets
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of its Fixed Assets.
(b) As explained to us the major Fixed Assets have been physically
verified by the Management at reasonable intervals during the year. As
per the information given to us no material discrepancy has been
noticed on such verification.
(c) In our opinion, the Company has not disposed off substantial part
of fixed assets during the year and the going concern status of the
Company is not affected.
ii. In respect of Inventories
(a) As informed to us, physical verification of inventories has been
conducted by the Management at the end of the year.
(b) Based on the explanations given to us, in our opinion, the
procedure of physical verification of inventory followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) In our opinion, the Company is maintaining proper records of
inventory and as explained to us, there were no material discrepancies
noticed between the physical stocks and book record.
iii. In respect of loans, Secured or Unsecured, granted or taken by
the Company to / from Companies, firms or other parties listed in the
register maintained under Section 301 of the Companies Act, 1956:
(a) Based on the audit procedures applied by us and according to the
information and explanations given to us, the Company has taken loans
from 2 Companies, firms or other parties listed in the Register
maintained under Section 301 of the Companies Act, 1956. The maximum
amount outstanding at any time during the year was Rs..150 Lacs, and the
year end balance is Rs. 134 Lacs. The Company has granted loans to one
Company listed in the Register maintained under Sec 301 of the
Companies Act, 1956. The maximum amount outstanding at any time during
the year was Rs. 0.04 Lacs, and the year end balance is Rs. nil Lacs.
(b) As per the information and explanations given to us, the rate of
interest and the terms and conditions of the said loans wherever
stipulated, are not prima facie prejudicial to the interest of the
(c) As explained to us no amount of principal and interest has become
due during the year.
(d) In view of our comment in (c) above, Para 4(iii)(d) of the Order is
not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us there are adequate internal control procedures commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods.
During the course of our audit, we have not observed any continuing
failure to correct weaknesses in internal controls.
v. In respect of transactions covered under Section 301 of the
Companies Act, 1956
(a) In our opinion and according to the information and explanations
given to us, the transactions that need to be entered in the Register
maintained under section 301 of the Act have been so entered.
(b) In our opinion and according to the information & explanations
given to us, the transaction made in pursuance of such contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year, have been made at prices which
are reasonable having regard to the prevailing market prices at the
vi. The Company has not accepted any deposits from the public within
the meaning of Sec 58A and 58AA of the Act and the Rules framed there
vii. The Company has an Internal Audit System, which is commensurate
with the size of the Company and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have, however, not made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
ix. In respect of Statutory dues
(a) The company has been generally regular in depositing undisputed
statutory dues including Provident Fund, Investors Education and
Protection Fund, Employees State Insurance, Income- Tax, Sales-Tax,
Wealth- tax, Customs Duty, Excise Duty, Cess and other statutory dues
with the appropriate authorities. According to the information and
explanation given to us, no undisputed amounts payable in respect of
the aforesaid dues were outstanding as at 31st March 2013 for a period
of more than six months from the date they became payable.
(b) According to the information and explanation given to us, the
details of dues of income-tax which have not been deposited on account
of dispute are given below:-
Particulars Assessment years
to which Forum where Amount
pertains to dispute is
pending (Rs. In Lakhs)
Income tax 2003-2004 High Court 26.43
Income tax 2004-2005 ITAT (Mumbai) 20.99
Income tax 2007-2008 ITAT (Mumbai) 53.63
x. The accumulated loss at the end of the financial year exceeded the
Company''s net worth. The Company has incurred cash loss during the
year, and in the immediately preceding Financial year.
xi. Based on our audit procedures and according to the information and
explanations given to us we are of the opinion that the Company has not
defaulted in repayment of dues to the financial institutions, banks or
xii. In our opinion and according to the information and explanation
given to us no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
xiii. The Company is not a chit fund or a nidhi / mutual benefit fund/
society. Therefore Para 4 (xiii) is not applicable to the Company.
xiv. In our opinion, the company is not dealing or trading in shares,
securities, debentures and other investments and hence, the
requirements of para 4(xiv) of the Order are not applicable to the
xv. The Company had given a guarantee for loan taken by a subsidiary
from bank. In our opinion the terms and conditions of the guarantee are
not prejudicial to the interest of the Company.
xvi. According to information & explanation given to us, in our
opinion, term loans availed by the company were, prima facie, applied
by the company for the purpose for which the loans were obtained.
xvii. On the basis of our examination & according to the information &
explanations given to us, on an overall examination of the Balance
Sheet of the Company, Funds raised on short term basis have, prima
facie, not been used during the year for long term investments.
xviii. The Company has not made any preferential allotment of shares
during the year to parties and Companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
xix. The Company has not issued any debentures during the year and
therefore para 4(xix) of the Order is not applicable to the Company.
xx. The Company has not raised any money by way of public issue during
xxi. During the course of our examination of the books and records of
the Company carried out in accordance with generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any instance of fraud on or by
the Company, noticed or reported during the year, nor have we been
informed of any such case by the management.
For THAKUR VAIDYANATH AIYAR & CO.
Firm Registration No. 000038N
Dated: 30th May 2013