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Auditor Report of Financial Technologies (India) Ltd. Company
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Auditor Report of Financial Technologies (India) Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Financial Technologies (India) Limited ('the Company'), which comprise the balance sheet as at March 31, 2015, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's responsibility for the standalone financial statements

The Company's board of directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation of these standalone 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 principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. 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 the 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 financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.

Basis for Qualified Opinion

As stated by the Management of the Company in Note 57 to the standalone financial Statement, Writ Petitions (WP), Public Interest Litigation (PIL), Civil Suits have been fled against the Company in relation to NSEL event, wherein the Company has been made a party in the WP and Civil Suits. These matters are pending at various stages of adjudication. As stated in the said note, based on legal advice, the management of the Company does not foresee that the parties who have fled the W P, PIL, Civil Suits would be able to sustain any claim against the Company. In addition, as stated by the management in note 57 and 59 to the standalone financial Statement, there are First Information Reports registered against various parties including the Company with the Economic Offences Wing of the Mumbai Police (EOW), Central Bureau of Investigation (CBI) and MIDC, Police Station, Mumbai District.

In this regard, the Management and those charged with Governance have represented to us that other than as stated in the said note to the Statement, there are no claims, litigations, potential settlements involving the Company directly or indirectly which require adjustments to/disclosures in the Statement.

In the light of the above representations regarding the ongoing investigations and matters, the outcome of which is not known and is uncertain at this stage, we are unable to comment on the consequential impact in respect of the same on the results for the year ended March 31, 2015.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter specified under 'Basis for Qualified Opinion' paragraph, the aforesaid standalone 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 India, of the state of affairs of the Company as at March 31, 2015, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

1. We draw attention to Note 61 to the standalone financial statements, regarding utilisation of unexpired MAT credit entitlement by the Company. The Company has a total MAT credit entitlement of Rs. 19,270.02 Lakhs as at March 31, 2015 including recognition of Rs. 10,081.20 Lakhs during the year ended March 31, 2015. Based on the projections as made by the Company's management regarding income-tax liability of the Company, Management is of the view that the Company will be able to utilise the unexpired MAT credit entitlement in projected years.

2. We draw attention to Note 55 to the standalone financial statements, which describe the receipt of the draft order proposing amalgamation of National Spot Exchange Limited with the Company. The Company has fled a Writ Petition before the Honourable Bombay High Court challenging the said order.

3. We draw attention to Note 56 to the standalone financial statements. Government of India has fled a petition with Company Law Board under the Companies Act, 1956 seeking inter alia removal and supersession of the Board of Directors of the Company, which has been protested by the Company and the matter is pending before CLB for consideration.

Our opinion is not qualified in respect of these matters of emphasis.

Other Matters

The financial statements of the Company for the year ended March 31, 2014, were audited by another auditor whose report dated May 30, 2014 expressed modified opinion on those statements.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order, 2015 (the 'Order') issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The balance sheet, the statement of profit and loss, and the cash fow statement dealt with by this report are in agreement with the books of account.

d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the board of directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of section 164 (2) of the Act.

f) With respect to the other matters to be included in the Auditor's Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements (refer note 29);

ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in 'other matters' and paragraph 1 under 'Report on other legal and regulatory requirements' of our report of even date)

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management in accordance with a phased programme of verification which in our opinion, is reasonable, having regard to the size of the Company and nature of its assets. The frequency of physical verification is reasonable and no material discrepancies were noticed on such verification.

(ii) According to the process explained to us as followed by the Company, the Company's inventory items are directly delivered to its customers on their procurement. Therefore the Company does not carry any inventory on a regular basis. Accordingly reporting on Paragraph 3 (ii) (a), (b) and (c) is not required. On the basis of our examination, in our opinion, the Company has maintained proper records of its inventories.

(iii) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the Paragraph 3 (iii) (a) and (b) of the Order are not applicable.

(iv) On the basis of verification of transactions carried out by us, we report that there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and the sale of goods and services. Further, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in internal control system.

(v) According to the information and explanations given to us and records verified by us, the Company has not accepted any deposits during the year from the public to which the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 and any other relevant provisions of the Act and the rules framed there under apply. Accordingly, the Paragraph 3 (v) of the Order is not applicable.

(vi) The Central Government has not prescribed maintenance of cost records under Section 148(1) of the Act. Accordingly, the Paragraph 3 (vi) of the Order is not applicable.

(vii) (a) According to the records verified by us, the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues, as applicable to the Company, with the appropriate authorities. There are no arrears of outstanding statutory dues as at the last day of the financial year for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the details of dues of income tax, sales tax, service tax and excise duty as at March 31, 2015 which have not been deposited on account of a dispute pending, are as under:

Name of Statute Nature of Dues Amount involved* Period to which the Forum where dispute (Rs. Lakhs) amount relates is pending

Finance Act, 1994 Service Tax 165.92 2007-2008 Commissioner of Service Tax

Central Excise Act,1944 Excise duty #221.60 2005-2006 Superintendent Central Excise

Maharashtra Value Added Tax Act, 2002 Value Added Tax 124.90 2005-2006 to 2010- Joint Commissioner 2011 of Sales Tax (Appeal)

Central Sales Tax Act, 1956 Central Sales Tax 3.12 2006-2007 Joint Commissioner of Sales Tax (Appeal)

Income-Tax Act, 1961 Income-tax 592.17 AY 2009 - 2010 Commissioner of Income Tax (Appeals)

*Amounts are net of pre-deposit paid in getting the stay/ appeal admitted, if any; #amount is including interest.

(c) During the year, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 1956 and the rules made there under.

(viii) Without considering the possible effects of our audit qualification reported in the 'Basis for Qualified Opinion' in our accompanying Audit Report which is not quantifiable, the Company does not have accumulated losses as at March 31, 2015 and it has not incurred cash losses during current financial year and in the immediately preceding financial year.

(ix) According to the information and explanations given to us and as per the records of the Company examined by us, the Company has not defaulted in repayment of dues to banks. The Company has neither availed any assistance from financial institutions nor has issued any debentures. Accordingly, the additional reporting under Paragraph 3 (ix) of the Order is not applicable.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in 'other matters' and paragraph 1 under 'Report on other legal and regulatory requirements' of our report of even date)

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by its subsidiary companies from banks and fnancial institutions are not, prima facie, prejudicial to the interests of the Company.

(xi) During the year, the Company has not availed any additional term loan. As per the records of the Company examined by us, there has been no additional utilization of the term loan, being external commercial borrowing by the Company during the year.

(xii) Except for the matter(s) referred in the 'Basis for Qualified Opinion' of our audit report which are subjudice and hence are inconclusive, to the best of our knowledge and according to the information and explanations gives to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Sharp & Tannan Associates

Chartered Accountants

Firm's Registration no. 109983W

by the hand of



Tirtharaj Khot

Partner

Mumbai, May 22, 2015 Membership No. (F) 037457


Mar 31, 2014

1. We have audited the accompanying financial statements of FINANCIAL TECHNOLOGIES (INDIA) LIMITED ("the Company") which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. National Spot Exchange Limited (NSEL) is a subsidiary of the Company in which it holds 99.99% equity share capital. In the light of the investment of the Company in NSEL and the transactions between the Company and NSEL, the financial statements of NSEL for the year ended 31st March, 2013, which were audited by other auditors, had a direct and material impact and bearing on the financial statements of the Company for the year ended 31st March, 2013.

Pursuant to the developments relating to NSEL, the management of NSEL, by their letter dated 20th September 2013, had communicated to its auditors and the Company that it was not possible for NSEL to immediately ascertain the financial implications (with respect to, inter alia, the various irregularities in the operations of NSEL coming to light, agencies looking at the legality of contracts and warehouse receipts and income booked by NSEL therefrom, ongoing investigations and forensic audit) and whether its books and records presented as of 31st March, 2013 were true and fair and what adjustments were needed to be carried out with a view to present a correct financial position. Consequently, the auditors of NSEL and its subsidiary, Indian Bullion Market Association Limited (IBMA), in which NSEL has 60.88% equity ownership, citing various developments, investigations and audits relating to NSEL, had communicated to NSEL and IBMA, by their letters dated 21st September, 2013, that the standalone and consolidated financial statements of NSEL and the standalone financial statements of IBMA for the year ended 31st March, 2013 and their audit reports dated 17th May, 2013 and 16th May, 2013 on the said financial statements of NSEL and IBMA, respectively, are no longer to be relied upon.

3. In view of the aforesaid communications dated 20th September, 2013 and 21st September, 2013 from the management and the auditors of NSEL, respectively, provided to us by the Management of the Company, in accordance with the provisions of Standard on Auditing (SA) 560 - Subsequent Events, issued by the Institute of Chartered Accountants of India (ICAI), we communicated to the Management and those charged with Governance of the Company on 23rd September, 2013 that our audit report dated 30th May, 2013 on the financial statements of the Company for the year ended 31st March, 2013 should no longer be relied upon. Subsequently, by our audit report dated 29th November, 2013, we issued a qualified opinion on the financial statements (as amended) of the Company for the year ended 31st March, 2013 which comprised the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, and the supplementary notes which are an addendum to the accompanying notes 1 to 48 to the financial statements for the year ended 31st March, 2013 and which have been approved by the Board of Directors of the Company at their meeting held on 29th November, 2013 [together "the financial statements (as amended)"].

As represented to us by the Management of the Company, the audited financial statements of NSEL for the years ended 31st March, 2013 and 31st March, 2014 are not yet available.

Management''s Responsibility for the Financial Statements

4. The Company''s 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 notified under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. 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.

Auditors'' Responsibility

5. 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 ICAI. 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

7. Except as indicated in the Basis for Qualified Opinion paragraphs below, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

8. The following matters were qualified in our audit report dated 29th November, 2013, on the financial statements (as amended) for the year ended 31st March, 2013 and continue to be subject matters of qualification:

(a) As stated in Note 52 to the financial statements, the Company had recognised income of Rs. 3,452.00 lacs during the year ended 31st March, 2013 from rendering of various services to NSEL, which included a variable component of Rs. 2,927.60 lacs. As on 31st March, 2013, the total amount receivable from NSEL on this account was Rs. 2,489.27 lacs, which has been realised subsequently during the current financial year.

The above variable component comprised:

(i) revenue of Rs. 2,841.46 lacs towards software maintenance and support services derived on the basis of the underlying revenue recognised by NSEL on account of "transaction fees, delivery charges, warehouse receipt transfer charges for trading, settlement and delivery activities" for the year ended 31st March, 2013, pursuant to agreements/contracts; and

(ii) revenue of Rs. 86.14 lacs towards business support services derived on the basis of the underlying gross profits earned on the merchandising activities by NSEL for the year ended 31st March, 2013.

However, as stated in paragraph 2 above, the management of NSEL had communicated that they were not in a position to determine whether its books and records presented as of 31st March, 2013 were true and fair and what adjustments were needed to be carried out with a view to present a correct financial position due to, inter alia, the various irregularities in the operations of NSEL coming to light, agencies looking at the legality of contracts and warehouse receipts and income booked by NSEL therefrom, ongoing investigations and forensic audit. Consequently, the auditors of NSEL, citing various developments, investigations and audits relating to NSEL, had also communicated that the financial statements of NSEL for the year ended 31st March, 2013 and their audit reports thereon were no longer to be relied upon. Further, as represented to us by the Management of the Company, the audited financial statements of NSEL for the year ended 31st March, 2013 are not yet available.

In view of our aforesaid comments and in the absence of sufficient appropriate audit evidence, particularly, in the absence of the audited financial statements of NSEL for the year ended 31st March, 2013, which we could have placed reliance on to validate the underlying elements of revenue and gross profits of NSEL based on which the above mentioned variable component of revenue were derived and accounted for by the Company, significant uncertainty exists regarding the amount of the consideration that could be derived from rendering the service and, hence, we are unable to determine the extent to which the above mentioned revenue aggregating Rs. 2,927.60 lacs should be de-recognised in the Statement of Profit and Loss for the year ended 31st March, 2014 and postponed by the Company, in compliance with the recognition and measurement principles stated in Accounting Standard (AS) 9, ''Revenue Recognition''.

(b) As stated by the Management of the Company in Note 55 to the financial statements, Writ Petitions, Public Interest Litigations, Civil Suits have been filed against the Company in relation to the NSEL event, wherein the Company has been made a party in the Writ Petitions and Civil Suits, and these matters are pending adjudication. In addition, there is a First Information Report registered, inter alia, against the Company with the Economic Offences Wing. Further, as stated in the said Note 55 to the financial statements, based on legal advice, the Management of the Company does not foresee that the parties who have filed the Writ Petitions, Public Interest Litigations, Civil Suits would be able to sustain any claim against the Company. In this regard, the Management and those charged with Governance have represented to us that other than as stated in the said Note 55 to the financial statements, there are no claims, litigations, potential settlements involving the Company directly or indirectly which require adjustments to/disclosures in the financial statements.

In the light of the above representations regarding the ongoing investigations and matters, the outcome of which is not known and is uncertain as on date, we are unable to comment on the consequential impact in respect of the same on these financial statements.

(c) No provision was considered necessary by the Management of the Company for diminution in the value of the Company''s long-term investment in NSEL of Rs. 4,499.99 lacs as at 31st March, 2013.

In view of the aforesaid developments relating to NSEL, which represented a subsequent discovery of facts existing on the date of the Balance Sheet as at 31st March, 2013, in our opinion, there were indications of ''other than temporary'' diminution in the carrying amount of the Company''s investment in NSEL as at 31st March, 2013. However, in the absence of the audited financial statements of NSEL for the year ended 31st March, 2013 (refer paragraph 2 above), non-availability of estimation of future cash flows and earning capacity of NSEL and suspension of NSEL''s operations, we were not able to obtain sufficient appropriate audit evidence to determine the amount of provision that would have been needed to be made for diminution in the carrying amount of the Company''s investment in NSEL of Rs. 4,499.99 lacs as at 31st March, 2013, in accordance with Accounting Standard (AS) 13, ''Accounting for Investments''.

However, as stated in Note 51 to the financial statements, during the year ended 31st March, 2014, on a conservative basis, the Company has made a provision, towards diminution, other than temporary, in the value of the entire amount of its long term investment of Rs. 4,499.99 lacs in NSEL and has charged the same to the Statement of Profit and Loss for the year ended 31st March, 2014.

9. We are informed that, on the directions of the Forward Markets Commission, a special audit was carried out by an external agency in respect of Multi Commodity Exchange of India Limited (MCX) covering, inter alia, the agreements and transactions between MCX and the Company. MCX has, on 26th May, 2014, submitted the scanned copy of the special audit report dated 21st April, 2014 for dissemination on the website of BSE Limited (Refer Note 59 to the financial statements).

We are unable to comment on the consequential impact, if any, in respect of the above matter on these financial statements.

10. As stated in Note 50 to the financial statements, the Company has investments in certain subsidiaries and a jointly controlled entity, aggregating Rs. 12,590.95 lacs and has granted loans and advances to / receivables from these entities, aggregating Rs. 90,758.89 lacs [which exclude NSEL and its subsidiaries - refer paragraph 8 (c) above]. The net worth of most of these entities has been eroded/substantially eroded. A provision / adjustment of Rs. 8,681.71 lacs (including Rs. 6,944.45 lacs during the year) has been made, inter alia, for diminution, other than temporary, in the value of investments and a provision of Rs. 15,150.00 lacs has been made during the year for doubtful loans and advances, which the Management of the Company considers to be adequate.

In the absence of sufficient appropriate audit evidence, particularly, in the absence of a fair valuation of the aforesaid investments at the balance sheet date being provided to us, we are unable to determine the adequacy of the provisions made.

11. As stated in Note 45 to the financial statements, the directives of the Securities and Exchange Board of India (SEBI) by its Order dated 19th March, 2014 requires the Company to divest its investments referred therein within ninety days from the date of the Order. These include 27,165,000 Equity Shares of Re 1 each and 562,460,000 Warrants of Re 1 each (each Warrant will entitle the holder to one Equity Share) both in MCX Stock Exchange Limited and 5,750,000 Equity Shares of Rs 10 each in MCX-SX Clearing Corporation Limited which are being carried at an aggregate amount of Rs. 6,471.25 lacs. The Management of the Company is of the view that the aggregate carrying amount of the aforesaid investments at Rs. 6,471.25 lacs represents the lower of cost and fair value of these investments as on the balance sheet date.

In the absence of sufficient appropriate audit evidence, particularly, in the absence of a fair valuation of the aforesaid investments at the balance sheet date being provided to us, and having regard to the time limit for divestment prescribed in the aforesaid Order, we have not been able to validate whether the carrying amount of these investments is the lower of cost and fair value, as required by Accounting Standard (AS) 13, ''Accounting for Investments''.

12. The Company has recognised MAT Credit of Rs. 9,188.82 lacs as at the year end, including Rs. 960.51 lacs during the year. In accordance with the recommendations contained in the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax (MAT) under the Income - tax Act, 1961 issued by the ICAI, MAT Credit can be created by way of credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement in the Balance Sheet, to the extent there is convincing evidence to the effect that the Company will pay normal income tax during the specified period. As per the aforesaid Guidance Note, where MAT Credit is recognised as an asset, the same should be reviewed at each balance sheet date and a company should write down the carrying amount of MAT Credit asset to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

In the absence of sufficient appropriate audit evidence, we are unable to independently assess whether any write down is required in respect of the aforesaid carrying amount of MAT Credit asset.

13. As disclosed in Note 4 "Reserves and Surplus" an amount of Rs. 2,764.71 lacs has been paid as interim dividends for the year 2013-14 and the tax paid on these dividends is Rs. 469.86 lacs. However, the Company has made a loss for the year ended 31st March, 2014. Further, the consequential transfer of the stipulated minimum amounts of profits to General Reserves in accordance with the Companies (Transfer of Profits to Reserves Rules), 1975, has not been effected due to loss for the year.

14. The matters stated above could also have a consequential impact on the measurement and disclosures of information provided under, but not limited to, managerial remuneration, provision for tax, earnings per share, segment information and related parties for the year ended 31st March, 2014, in the financial statements.

Qualified Opinion

15. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraphs above, the aforesaid 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 India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(b) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

16. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

17. As required by Section 227(3) of the Act, we report that:

(a) Except for the matters described in the Basis for Qualified Opinion paragraphs above, we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) Except for the possible effects of the matters described in the Basis for Qualified Opinion paragraphs above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) Except for the possible effects of the matters described in the Basis for Qualified Opinion paragraphs above, in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

(e) On the basis of the written representations received from the directors as on 31st March, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of Section 274(1)(g) of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 16 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

(i) Having regard to the nature of the Company''s business / activities / results during the year, clauses (vi), (viii), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of Paragraph 4 of the Order are not applicable to the Company.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management of the Company in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) According to the information and explanations given to us, the Company does not have any inventories as at the balance sheet date since they are being directly delivered to the customers on procurement and therefore, the question of reporting on whether: physical verification has been carried out at reasonable intervals; procedures of physical verification of inventories were reasonable and adequate; and discrepancies noticed on physical verification were material, does not arise. On the basis of our examination, in our opinion, the Company has maintained proper records of its inventories.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the nature of the Company''s business and the explanations that the services sold and some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) To the best of our knowledge and belief and according to the information and explanations given to us, there are no contracts or arrangements that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vii) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management of the Company have been commensurate with the size of the Company and the nature of its business.

(viii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other material statutory dues in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Service Tax and Excise Duty which have not been deposited as on 31st March, 2014 on account of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending

Finance Act, 1994 Service Tax Commissioner of Service Tax

Central Excise Act,1944 Excise duty (including Central Excise and Service interest and Tax Appellate Tribunal penalty)

Maharashtra Value Added Value Added Tax (including Joint Commissioner of Tax Act, 2002 interest and Sales Tax (Appeal) penalty)

Central Sales Tax Act, 1956 Central Sales Tax Joint Commissioner of Sales Tax (Appeal)

Income - tax, Act, 1961 Income-tax Deputy Commissioner of Income Tax (Appeals)



Name of Statute Period to which the Amount Involved Amount Relates (Rs. Lacs

inance Act, 1994 July 9, 2004 to October 165.92 6, 2005; and December, 2004 to March, 2007

Central Excise Act, 1944 March 1, 2006 to 212.64 December 20, 2006

Maharashtra Value Added Tax Act, 2002 2005-2006 to 2009-2010 74.35

Central Sales Tax Act, 1956 2006 -2007 3.12

Income - tax, Assessment year 2009- 592.17 Act, 1961 2010

There were no unpaid disputed dues in respect of Wealth Tax and Customs Duty as on 31st March, 2014.

(ix) Without considering the possible effects of our audit qualifications reported in paragraphs 8 (a), 8 (b) and 9 to 14 of the Basis of Qualified Opinion of our Audit Report which is not quantifiable, the Company does not have accumulated losses at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(x) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company does not have any dues to financial institutions and has not issued any debentures.

(xi) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by its subsidiary companies from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xii) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained.

(xiii) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

(xiv) We are unable to comment on the matters arising from the special audit carried out by an external agency in respect of Multi Commodity Exchange of India Limited on the directions of the Forward Markets Commission as described in Note 59 to the financial statements (Also see paragraph 9 of the Basis for Qualified Opinion of our Audit Report) and the enquiries from certain investigating authoirties as described in Notes 57 and 58 to the financial statements, for the purposes of reporting on clause (xxi) of Paragraph 4 of the Order.

Further to the above, and except for the matters arising from NSEL as described in Note 55 to the financial statements (Also see paragraph 8

(b) of the Basis for Qualified Opinion of our Audit Report) on which also we are unable to comment, to the best of our knowledge and according to the information and explanations gives to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Deloitte Haskins & Sells LLP Chartered Accountants (Firm''s Registration No. 117366W/W-100018)

(Rajesh K. Hiranandani) (Partner)

Mumbai: 30th May, 2014 (Membership No. 36920)


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of FINANCIAL TECHNOLOGIES (INDIA) LIMITED ("the Company") which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s 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 Section 211(3C) of the Companies Act, 1956 ("the Act") and in accordance with the accounting principles generally accepted in India. 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.

Auditors'' Responsibility

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 the disclosures in the financial statements. The procedures selected depend on the auditors'' judgement, including 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Emphasis of Matter

We draw attention to Note 37 to the financial statements regarding investments made in certain subsidiaries and a joint venture which have accumulated losses and the loans and advances/receivables from these entities, where the provision made for diminution, other than temporary, in the value of investments is considered to be adequate, for the reasons stated in the said Note.

Our opinion is not qualified in respect of this matter.

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 in terms of Section 227(4A) 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 under provisions of 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 purposes of our audit.

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

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

(e) On the basis of the written representations received from the directors as on 31st March, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of Section 274(1)(g) of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) Having regard to the nature of the Company''s business/activities/results during the year, clauses (vi), (viii), (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of Paragraph 4 of the Order are not applicable to the Company.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) According to the information and explanations given to us, the Company does not have any inventories as at the balance sheet date since they are being directly delivered to the customers on procurement and therefore, the question of reporting on whether: physical verification has been carried out at reasonable intervals; procedures of physical verification of inventories were reasonable and adequate; and discrepancies noticed on physical verification were material, does not arise. On the basis of our examination, in our opinion, the Company has maintained proper records of its inventories.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us and having regard to the nature of the Company''s business, a comparison of prices could not be made, in respect of income from software products and software services and in respect of some of the items purchased being of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and income from software products and software services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) In our opinion and according to the information and explanations given to us, there are no contracts or arrangements that need to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vii) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(viii)According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other material statutory dues in arrears as at 31st March, 2013 for a period of more than six months from the date they became payable.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company does not have any dues to financial institutions and has not issued any debentures.

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by its subsidiary companies from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xi) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(xii) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

(xiii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 117366W)

Rajesh K Hiranandani

Partner

MUMBAI, 30th May, 2013 (Membership No. 36920)


Mar 31, 2012

1. We have audited the attached Balance Sheet of FINANCIAL TECHNOLOGIES (INDIA) LIMITED ("the Company") as at 31 March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. Without qualifying our opinion, we continue to draw attention to: (a) Note 39 to the financial statements regarding investments made in certain subsidiaries and a joint venture which have accumulated losses and the loans and advances / receivables from these entities, where the provision made for diminution, other than temporary, in the value of investments is considered to be adequate, for the reasons stated in the said Note; and (b) Note 42 to the financia statements regarding the Company's stand that no tax liability is expected as a consequence to a court approved reduction-cum arrangement scheme of MCX Stock Exchange Limited based on independent legal / tax counsel's opinion obtained by the Company as stated in the said Note.

4. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

5. Further to our comments in the Annexure referred to in paragraph 4 above and read with paragraph 3 above, 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 purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

[ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

On the basis of written representations received from the Directors as on 31 March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March, 2012 from being appointed as a director in terms of Section 274(1 )(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS' REPORT

(REFERRED TO IN PARAGRAPH 4 OF OUR REPORT OF EVEN DATE)

i) Having regard to the nature of the Company's business / activities / result, clauses (vi), (viii), (x), (xii), (xiii), (xviii) and (xix) of CARO are not applicable.

ii) According to the information and explanations given to us, in respect of its fixed assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

iii) According to the information and explanations given to us, the Company does not have any inventories as at the balance sheet date since they are being directly delivered to the customers on procurement and therefore, the question of reporting on whether: physical verification has been carried out at reasonable intervals; procedures of physica verification of inventories were reasonable and adequate; and discrepancies noticed on physical verification were material, does not arise. On the basis of our examination, in our opinion, the Company has maintained proper records of its inventories.

iv) The Company has neither granted nor taken any loans, secured or unsecured, to / from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

v) In our opinion and according to the information and explanations given to us and having regard to the nature of the Company's business, a comparison of prices is not possible, in respect of income from software products and software services and in respect of some of the items purchased being of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and income from software products and software services. During the course of our audit, we have not observed any major weakness in such internal control system.

vi) In our opinion and according to the information and explanations given to us, there are no contracts or arrangements that need to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

vii) In our opinion, the internal audit function carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

viii) According to the information and explanations given to us in respect of statutory dues:

a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues applicable to it with the appropriate authorities.

b) There were no undisputed amounts payable in respect of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues in arrears as at 31 March, 2012 for a period of more than six months from the date they became payable.

c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty and Excise Duty which have not been deposited as on 31 March, 2012 on account of any dispute are given below:

Forum where Statute Nature of Dues Dispute is pending

Finance Act, 1994 Service Tax Commissioner of Service Tax

Central Excise Act, Excise duty (including Central Excise and Service 1944 interest and penalty) Tax Appellate Tribunal

Maharashtra Value Value Added Tax (including Joint Commissioner of Added Tax Act, 2002 interest and penalty) Sales Tax (Appeal)

Central Sales Tax Act, Central Sales Tax Joint Commissioner of 1956 Sales Tax (Appeal)

Income - tax, Act, Income-tax Commissioner of Income 1961 Tax (Appeals)

Statue Amount Period to which involved the amount relates (Rs. lacs)

Finance Act, 1994 9th July, 2004 to 6th October, 2005; 244.50 and December, 2004 to March, 2007

Central Excise Act, 1944 1st March, 2006 to 20th December, 184.88 2006

Maharashtra Value Added Tax Act, 2002 2005-2006 to 2008-2009 65.17

Central Sales Tax Act, 1956 2006-2007 3.12

Income - tax, Act, 1961 Assessment years: 2002-2003 and 6.14 2006-2007

ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks.

x) Based on our examination of the records and evaluation of the related internal controls, the Company has maintained proper records of the transactions and contracts in respect of its dealing in shares, securities, debentures and other investments and timely entries have been made therein. The aforesaid securities have been held by the Company in its own name.

xi) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by its subsidiary companies from banks, are not prima facie prejudicia to the interests of the Company.

xii) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

xiii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short term basis have not, prima facie, been used during the year for long-term investment.

xiv) The Management has disclosed in Note 37 to the financial statements, the end use of money raised by public issue of Zero Coupon Convertible Bonds and we have verified the same.

xv) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Registration No: 11 7366W)

Rajesh K Hiranandani

Partner (Membership No. 36920)

MUMBAI, 30th May, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of Financial Technologies (India) Limited ("the Company") as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our opinion, we continue to draw attention to Note 5 on Schedule 15 regarding the Company's stand that no tax liability is expected as a consequence to a court approved reduction-cum arrangement scheme of MCX Stock Exchange Limited based on independent legal / tax counsel's opinion as stated in the said Note and Note 23 on Schedule 15 regarding investments made in certain subsidiaries and a joint venture which have continuing losses and the loans and advances / debts due from these entities, where the provision made for diminution, other than temporary, in the value of investments is considered to be adequate, for the reasons stated in the said Note.

5. Further to our comments in the Annexure referred to in paragraph 3 above, 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 purposes of our audit;

b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

6. On the basis of the written representations received from the Directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

Annexure To The Auditors' Report (Referred to in Paragraph 3 of our report of even date)

I) Having regard to the nature of the Company's business/activities/result, clauses (v), (vi), (viii), (xi), (xii), (xiii), (xvi), (xviii) and (xix) of CARO are not applicable.

ii) In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

iii) According to the information and explanations given to us, the Company does not have any inventories as at the balance sheet date since they are being directly delivered to the customers on procurement and therefore, the question of reporting on whether: physical verification has been carried out at reasonable intervals; procedures of physical verification of inventories were reasonable and adequate; and discrepancies noticed on physical verification were material, does not arise. On the basis of our examination of records of inventories, in our opinion, the Company has maintained proper records of its inventories.

iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

v) In our opinion and according to the information and explanations given to us and having regard to the nature of the Company's business, a comparison of prices is not possible, in respect of sale of products and services and in respect of some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and the sale of products and services. During the course of our audit, we have not observed any major weakness in such internal control system.

vi) In our opinion, the internal audit function carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

vii) According to the information and explanations given to us in respect of statutory dues:

a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2011 for a period of more than six months from the date they became payable.

c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2011 on account of disputes are given below:

Forum where Statute Nature of Dues Dispute is pending

Finance Act, 1994 Service Tax Commissioner of Service Tax

Finance Act, 1994 Service Tax Commissioner of Service Tax

Central Excise Act, 1944 Excise duty Central Excise and Service Tax Appellate Tribunal

Maharashtra Value Added Value Added Tax Joint Commissioner Tax Act, 2002 of Sales Tax (Appeal)

Maharashtra Value Added Value Added Tax Joint Commissioner Tax Act, 2002 of Sales Tax (Appeal)

Income Tax Act, 1961 Income Tax - penalty Commissioner of Income Tax (Appeals)

Statute Period to which Amount the amount relates involved (Rs)

Finance Act, 1994 July 9, 2004 to 7,857,994 October 6, 2005

Finance Act, 1994 December, 2004 to 16,592,020 March, 2007

Central Excise Act, 1944 March 1, 2006 to 18,487,671 December 20, 2006

Maharashtra Value Added Tax Act, 2002 April 1, 2005 to 1,765,293 March 31, 2006

Maharashtra Value Added Tax Act, 2002 April 1, 2008 to 2,806,504 March 31, 2009

Income Tax Act, 1961 Assessment years 20,500,000 2003-04, 2004-05, 2005-06 & 2006-07

viii) The Company does not have any accumulated losses as at the end of the year. The Company has not incurred cash losses in the financial year and in the immediately preceding financial year.

ix) Based on our examination of the records and evaluations of the related internal controls, the Company has maintained proper records of the transactions and contracts in respect of its dealing in shares, securities, debentures and other investments and timely entries have been made therein. The aforesaid securities have been held by the Company in its own name.

x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by its subsidiary companies from banks, are not prima facie prejudicial to the interests of the Company.

xi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short term basis have not, prima facie, been used during the year for long-term investment.

xii) The Management has disclosed in note 15(c) on Schedule 15-II, the end use of money raised by public issue of Zero Coupon Convertible Bonds and we have verified the same.

xiii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No: 117366W)

Rajesh K Hiranandani

Partner

Mumbai, 27th May, 2011 (Membership No. 36920)












Mar 31, 2010

1. We have audited the attached Balance Sheet of Financial Technologies (India) Limited as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our report, we invite attention to the following notes to Schedule 15-11 of the financial statements:

1. Note 5 regarding the treatment of (a) cancellation of investments in 562,460,000 equity shares of MCX-Stock Exchange Limited (MCX-SX) aggregating Rs. 562,460,000/- and (b) issuance of 562,460,000 transferable warrants to the Company, both pursuant to a court approved composite scheme of Reduction cum Arrangement1 between MCX-SX and its shareholders (including the Company). As stated in the note, the Company has obtained independent legal / tax counsels opinion that no tax liability arises on the reduction cum arrangement and has accordingly not quantified the same. On that basis no tax liability is recognised in respect thereof.

2. Note 24 regarding investments in certain subsidiaries and joint venture company aggregating Rs. 9,238,186,235/- and loans and advances / debtors aggregating Rs. 286,620,649/- due from some of these entities which have continuing losses (share of cumulative losses Rs. 2,519,229,714/-) against which provision for diminution of Rs. 569,026,000/- is considered adequate based on their business plans and other reasons as stated in the said note.

5. Further to our comments in the Annexure referred to above, 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 purposes of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion and read with paragraph 4 above, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956;

e. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

ii. in the case of the profit and loss account, of the profit of the Company for the year ended on that date; and

iii. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

6. On the basis of written representations received from the directors, as on 31* March, 2010 and taken on record by the board of directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT To the Shareholders of Financial Technologies (India) Ltd.

Re: Financial Technologies (India) Limited Referred to in Paragraph 3 of our report of even date

i) In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The fixed assets of the Company are physically verified by the Management according to a phased programme designed to cover all items over a period of two years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Pursuant to the programme, a portion of the fixed assets of the Company has been physically verified by the management during the year and no material discrepancies were noticed on such verification as compared with the records of fixed assets maintained by the Company.

c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

li) In respect of its inventory:

a) In our opinion, verification of inventories has been carried out at reasonable intervals by the management during the year.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification. There are no closing inventories.

lii) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

iv) In our opinion and according to the information and explanations given to us, there is an internal control system commensurate with the size of the Company and nature of its business for purchase of inventory and fixed assets and sale of goods and services.

v) In respect of contracts and arrangements entered in the register maintained in pursuance of Section 301 of the Companies Act 1956:

a) To the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements that needed to be entered into the register maintained under the said section have been so entered.

b) According to information and explanations given to us, where the transactions made in pursuance of such contracts or arrangements during the year are in excess of Rs. 500,000, they have been made at prices, which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time

vi) The Company has not accepted any deposits from the public.

vii) In our opinion, the internal audit function carried out during the year by a firm of Chartered Accountants appointed by the management is commensurate with the size of the Company and the nature of its business.

viii) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act. Accordingly, clause 4 (viii) of the Order is not applicable to the Company.

ix) According to the information and explanations given to us in respect of statutory and other dues:

a) The Company has generally been regular in depositing with the appropriate authorities, undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues applicable to it.

b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of the aforesaid statutory dues as at 31st March, 2010 outstanding for a period more than six months from the date they became payable.

c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2010 on account of disputes are given below:

Statement of Disputed Dues

Period to which Forum where

Name of the Nature statute of dues Amount (Rs.)

Finance Act, 1994 Service tax 7,857,994

Central Excise & Salt Act, 1944 Excise duty 7,448,968



Name of the Statute Period to Which Forum where dispute the amount relates dispute is pending

Finace Act, 1994 9th July, 2004 to Commissioner of Central Excise & Salt Act, 1944 6th October, 2005 Service tax

1st March, 2006 to Commissioner of

20th December, 2006

x) The Company has no accumulated losses as at the end of the financial year and it has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks, financial institutions and debenture holders.

xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and any other securities and accordingly, clause 4 (xii) of the Order is not applicable to the Company.

xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Accordingly, clause 4 (xiii) of the Order is not applicable to the Company.

xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, clause 4 (xiv) of the Order is not applicable to the Company.

xv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by its subsidiary companies from banks, are not prima facie prejudicial to the interests of the Company.

xvi) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the Company has not availed any term loans during the year and hence clause 4 (xvi) of the Order is not applicable to the Company.

xvii) According to information and explanations given to us, and on an overall examination of the balance sheet of the Company, funds raised on short term basis have not, prima facie, been used for long term investment.

x«) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4 (xviii) of the Order is not applicable to the Company.

xix) According to the information and explanations given to us, the Company has not issued any debentures during the year and hence, the question of creation of security or charge in respect of debentures issued, does not arise.

xx) We have verified the end use of monies raised by public issue of Global Deposit Receipts and Zero Coupon Convertible Bonds as disclosed in notes 7 and 16 (d) of Schedule 15-11 respectively.

xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For Deloitte Haskins & Sells Chartered Accountants [Firm Registration No: 117366W]

Ft. D. Kamat

Partner Mumbai, dated: 29th May, 2010 Membership No. 36822



 
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