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Auditor Report of Monarch Networth Capital Ltd.

Mar 31, 2015

1. We have audited the accompanying Standalone Financial Statements of NETWORTH STOCK BROKING LIMITED ("the Company") which comprise the Balance Sheet as at 31st March 2015 and the Statement of Profit and Loss, Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. 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 mainte- nance 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

3. Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit.

4. We conducted our audit in accordance with the provision of the Act, the Accounting and Auditing Standards and matter which are required to be included in the audit report under the provision of the Act and Rule made thereunder.

5. 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 misstatements.

6. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. The proce- dures 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 circum- stances, 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 accounting policies used and the reasonableness of the accounting estimates made by the Company’s directors, as well as evaluating the overall presen- tation 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 on the standalone financial statements.

Basis for Qualified Opinion

7. The Company’s has provided in its Statement of Profit and Loss the Provision for Taxation at Rs. 1,16,80,000. However, the actual tax liability of the Company for the year as computed in accordance with the Accounting Standard - 22 (AS-22) works out to Nil. This constitutes a departure from the requirements of the said AS-22. As a result of the above, the tax expense for the year has been provided in excess by Rs. 1,16,80,000 and the Profit after Tax has been understated by Rs. 1,16,80,000 in the Statement of Profit and Loss. Had the company provided the tax expense as per the said AS-22, the Reserves of the Company would have been higher by Rs. 1,16,80,000 and Short Term Provisions would have been lower by Rs. 1,16,80,000.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the 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 31st March 2015 and its profit and its cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

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

10. 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 appears from our examination of those books;

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

d) In our opinion, the aforesaid 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 written representations received from the directors as on 31s1 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of Section 164(2) of the Act;

f) With respect to the other matters included in the Auditor’s Report in accordance with Rule 11 of the Companies( Audit and Auditors) Rule, 2014 in our opinion and to 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 financial statements -Note No 35;

ii. The Company has not made provision, since the company has not entered into any long term Derivative Contract as required under the applicable law or accounting standards, for material foreseeable losses;

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

(Referred to paragraph (1) under "Report on other legal and regulatory requirement" of our report of even date)

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

b. We are informed that the fixed assets have been physically verified by the Management at phase manner over a period of three year. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable with regard to the size of the company and nature of assets.

(ii) In respect of Inventories:

a. Inventory represents securities held as stock-in-trade in course of Market activities and on account of error in execution of transaction. Verification and reconciliation of the same is conducted at reasonable interval by the management.

b. As per the information given to us the procedures of physically verification and reconciliation of inventory following by the management are, in our opinion, reasonable and adequate in relation to 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.

(iii) The Company has granted loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013:

a. The receipts of principal amounts and interest have been regular / as per stipulations.

b. The principal amounts of such loans are on demand and there is no repayment schedule. Interest, if any is payable or demand.

(iv) In our opinion, according to the information and explanation given to us, having regard to the explanation that the company's service income depends on large volume of transactions executed daily on behalf of several clients, where there is a probability that certain transactions may be disputed by clients resulting in consequential cost to the company, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to service income, purchase of inventory and purchase of fixed Assets and sale of services. During the course of our audit neither we have come across nor we have been informed of any continuing failure to correct major weakness in the internal control.

(v) According to the information and explanation given to us, the company has not accepted the any deposits from the public. Therefore provision of clause (v) of paragraph companies (auditor’s Report) order 2015 is not applicable to the entities to the Company

(vi) According to the information and explanation given to us, maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013 in respect of the product dealt with by the Company as prescribed by central government is not applicable to the Company.

(vii) In respect of statutory dues:-

a) According to record of company, the undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales- tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2015 for a period of more than six months from the date of becoming payable.

b) According to the information and explanation given to us and the record of the Company examined by us, the particulars of Income tax and Service tax as on 31st March, 2015 which have not been deposited on account of a dispute pending are as under:-

Sr. Name of Statue Nature of Due Amount No Rs. in Lakhs)

Income 3.43 Tax

1 Income Tax Income 82.67 Tax

Income 8.54 Tax

According to the records of NSBL (Merged Entities) and During P.Y. Monarch Project and Finmarkets Limited (MPFL).

(Amount in Lakhs)

Sr Name of Statue Nature of Due Amount No Rs.in Lakhs)

Service Tax 15.14

2 Service Service Tax 29.03 Tax

Service Tax 10.78

Service Tax 3.01

Income Tax 30.48



3 Income Tax Income Tax 4.91

Income Tax 47.29

Income Tax 0.19

Income Tax

Income Tax 4.94

Income Tax 7.19

According to the records of NSBL (Merged Entities) and During P.Y. Monarch Research & Brokerage Private Limited (MRBPL).

Sr Name of Statue Nature of Due Amount No

Income Tax 0.09

Income Tax 21.13

4 Income Tax Income Tax 5.80

Income Tax 0.45



Sr. Period to which Forum where dispute is No the amount related Pending

A.Y. 2011-12 First appellate Authority

1 A.Y.2009-10 First appellate Authority

A.Y. 2002-03 Assessing Officer



1.04.2002 to Pending With Service Tax 31.03.2007 Tribunal with Joint Commissioner of Service Tax 2 F.Y. 2007-08 Pending With Commissioner (Appeals) of Service Tax

F.Y. 2007-08 Pending With Commissioner (Appeals) of Service Tax

F.Y. 2006-07 Superintendent, Service tax, Range XI, Ahmedabad

A.Y.2010-11 Pending with Commissioner of Income Tax (Appeals) Original Demand - Rs. 75,69,110/- Rectification applied - Rs. 45,20,903 3 A.Y.2006-07 Assessing Officer

A.Y.2007-08 Assessing Officer

A.Y.2009-10 Assessing Officer

A.Y.2011-12 Assessing Officer

A.Y.2013-14 Assessing Officer

A.Y. 2006-07 Assessing Officer

4 A.Y.2007-08 Assessing Officer

A.Y. 2007-08 Assessing Officer

A.Y. 2010-11 Assessing Officer

According to the records of NSBL (Merged Entities), there are income tax dues for A.Y.2009-10'1,37,444 (Appeal Against Order contin- gent liability) and for A.Y.2010- Rs.11,45,500 (Appeal Against Order Contingent Liability) which have not been deposited on account of any dispute. There are no dues of Sales tax, Customs tax/Wealth tax, Excise duty/cess, which have not been deposited on account of any dispute. (MRBPL during P.Y).

(c) According to the information and explanation given to us there is no any amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956

(viii) The Company has accumulated losses at the end of the financial year which is less than fifty percent of its net worth. The company has not incurred any cash losses for the financial year covered by our audit and in immediately preceding financial year.

(ix) According to record of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any Financial Institutions or Banks or Debenture holders.

(x) The company has given corporate guarantee of Rs. 5 crore to Bank/Financial Institution in respect of loan availed by its subsidiary company. As per the information and explanation provided to us and considering overall transactions, its object and implication, the terms and conditions of such guarantee, in our opinion, prima facie not prejudicial to the interest of the company.

(xi) As per information and records provided before us, the company has not accepted any term loan. Therefore provision of clause (xi) of paragraph 3 companies (auditor’s Report) order 2015 is not applicable to the company.

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit

For Yogesh Thakker & Co Chartered Accountants Firm Reg. No. 111763W

Yogesh Thakker Proprietor M. No. 039631

Date: 29th May, 2015


Mar 31, 2014

1. We have audited the accompanying financial statements of NETWORTH STOCK BROKING LIMITED ("the Company") which comprise the Balance Sheet as at 31st March 2014 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

2. 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") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with 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.

Auditor''s Responsibility

3. 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.

4. 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, 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 accounting policies used and the reasonableness of the accounting estimates made by 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

5. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and gives 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 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.

Emphasis of Matter on event occurring after the balance sheet date:

(a) We draw attention to Note No 31 to the financial statements. As referred to the said note, the financial statements of the Company for the year ended March 31, 2014 were earlier approved by the Board of Directors at their meeting held on June 05, 2014 which were subject to revision by the Management of the Company so as to give effect to the Scheme of Amalgamation between the Company and Monarch Research and Brokerage Private Limited (''MRBPL'') & Monarch Project and Finmarkets Limited (''MPFL'') (collectively referred to as "Transferor Companies"). The financial statements of the Company were audited by us and our report dated June 05, 2014, addressed to the members of the Company, expressed an opinion on those financial statements. The financial statements of the "Transferor Companies" were audited by other Auditors & have been relied upon by us while expressing our opinion on the revised financial statements.

(b) We draw attention to Note No 35 of the financial statements, wherein we are unable to quantify the effects on the aforesaid revised financial statements for any difference in accounting policies, if any, between the Company and the Transferor Companies (MRBPL and MPFL).

(c) Apart from the foregoing matters, the attached financial statements do not take into account any events subsequent to the date on which the financial statements referred to in (a) above were earlier approved by the Board of Directors and reported by us as aforesaid.

Report on Other Legal and Regulatory Requirements

6. 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 Companies Act, we give in the Annexure a statements on the matters specified in the Paragraph 4 and 5 of the Order:

7. 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 audit;

(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 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 notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate affairs in respect of Section 133 of the Companies Act, 2013.

(e) On the basis of written representations received from the directors as on March 31, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, 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 INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 6 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

1) In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. How- ever, the Company is under process of updating fixed assets register showing full particulars of the fixed assets of the transferor Companies including quantitative details and situation of its fixed assets to give effect of scheme of amalgamation.

b. We have been informed that, the fixed assets have been physically verified by the Management at reasonable intervals. In our opinion, the frequency of verification is reasonable with regard to the size of the company and nature of assets. According to information and explanations given to us by the management, no material discrepancy was noticed on such verification.

c. During the year the company has disposed off certain part of its fixed assets. However, according to information and explanation given to us and records examined by us, in our opinion, such disposal has not affected the going concern status of the company.

2) In respect of Inventories:

a. Inventory represents securities held as stock-in-trade in course of Market Making activities and on account of error in execution of transaction. Verification and reconciliation of the same is conducted at reasonable interval by the management.

b. In our opinion verification and reconciliation of inventory followed by the management is reasonable and adequate in relation to size of the company and the nature of business.

c. The company is maintaining proper records of stock in error account and discrepancies were properly dealt with in the books of accounts.

3) In respect of loans, secured or unsecured, granted by the company to companies, firms or other parties covered in the Register under section 301 of the Companies Act, 1956, according to the information and explanation given to us and records furnished before us for verification:

a. The company has granted interest free unsecured loans to (three) parties during the year. At the year-end, the maximum amount involved during the year was Rs. 7,90,51,562/- and the outstanding balance as on balance sheet date of such loans was Nil.

With respect to the erstwhile Monarch Project and Finmarkets Limited (MPFL):

As per the information and explanations given to us, MPFL has granted running loans, secured or unsecured, amounting to Rs. 204.59 crores to six companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Amount outstanding at the year end is Rs. 25.64 lacs only.

b. Considering overall transactions, its object and implication, the rate of interest and other terms and conditions of such loans, in our opinion, prima facie not prejudicial to the interest of the company.

c. The principal amounts of such loans are on demand and there is no repayment schedule. Interest, if any, is payable on demand.

d. In respect of the said loans, the same are repayable on demand and therefore the question of overdue amount does not arise. In respect of interest, there are no overdue amounts.

e. The Company has taken unsecured loans from parties (three) during the year. The maximum amount involved during the year was Rs. 2,64,56,580/- and the year-end balance of loans taken from such parties was Rs. 36,94,796/-.

With respect to the erstwhile Monarch Project and Finmarkets Limited (MPFL):

As per the information and explanations given to us, MPFL has taken loans, secured or unsecured, amounting to Rs. 99.08 crores from six companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Amount outstanding at the year end is Rs. 69.19 lacs.

With respect to the erstwhile Monarch Research and Brokerage Private Limited (MRBPL):

MRBPL has taken loan from the party covered in the register maintained u/s.301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 65.77 crores and the year end balance of loans taken from such parties was Nil.

f. Considering overall transactions, its object and implication, the rate of interest and other terms and conditions of such loans, in our opinion, prima facie not prejudicial to the interest of the company.

g. The principal amount of loans taken by the Company from the party listed in the register maintained under section 301 of the Companies Act, 1956, are repayable as and when requested by the lenders. Accordingly, there are no overdue amounts with respect to such loans due since there is no stipulation of repayments.

4) In our opinion, according to the information and explanation given to us, having regard to the explanation that the company''s service income depends on large volume of transactions executed daily on behalf of several clients, where there is a probability that certain transactions may be disputed by clients resulting in consequential cost to the company, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to service income, purchase of inventory and purchase of fixed Assets and services. During the course our audit, neither we have come across nor we have been informed of any continuing failure to correct major weakness in the internal control.

5) In respect of contracts or arrangements entered in the Register in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief, and according to the information and explanation given to us and records furnished before us for verification:

a. The particulars of contract or arrangements that needed to be entered in the register maintained under Section 301 of the Companies Act 1956 have been so entered in the said register.

b. Where each of such transactions is in excess of rupees five Lacs in respect of any party, the transactions have been made at prices which are appear reasonable as per information available with the company. However, in respect of transactions with the subsidiaries companies which are unique and specialized in nature involved and in absence of any comparable prices, we are unable to comment whether the transactions are made at prevailing market prices at the relevant time.

6) The company has not accepted any deposits from the public hence, Clause 4 (vi) of Companies (Auditor''s Report) Order, 2003 is not applicable.

7) In our opinion, the internal audit functions carried out during the year by firm of Chartered Accountants appointed by the management and internal audit department of the company have been commensurate with the size of the Company and the nature of its business.

8) The Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the services dealt with by the company.

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

a. The undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, custom duty, excise duty cess and other dues have generally been regularly deposited with the appropriate authorities except (i) the unpaid stamp duty of current financial year for state other than Maharashtra, Andhra Pradesh and Rajasthan has been offered for taxation during the year due to practical difficulties of depositing the same.

b. There were no undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other dues were outstanding for a period of more than six months at year end.

c. There are no disputes pending before the authorities in respect of sales tax, Income tax, custom duty, service tax and cess except stated below:

Particulars Pending at Demand Remarks

Income Tax First Appellate Rs. 3.43 Lacs Half of said demand has A.Y. 2011-12 Authority been paid

Income Tax First Appellate Rs. 82.67 Lacs Demand is for penalty A.Y. 2009-10 Authority U/s. 271 (1)(c) of the Income Tax Act, 1961.

In respect of the erstwhile Monarch Project and Finmarkets Limited (MPFL).

Name of the Statute Nature of Dues

Service Tax Service tax on NSE transaction charges (Period - 01.04.2002 to 31.03.2007)

Service Tax Service tax on NSE transaction charges (Period - 01.04.2007 to 31.03.2008)

Service Tax Service tax on 08 account of misclassification of payment of service tax (For FY: 2007)

Service Tax Service tax as per audit para for FY 2006-07

Income Tax Income Tax payable as per order of AO for the AY: 2010-11

Name of the Statute Amount (Rs.) Forum where dispute is pending

Service Tax 15,14,474/- Pending With Service tax Tribunal With Joint Commissioner of Service Tax

Service Tax 29,03,936/- Pending With Commissioner (Appeals) of Service Tax

Service Tax 10,78,274/- Pending With Commissioner (Appeals) of Service Tax

Service Tax 3,01,007/- Superintendent, Service tax, Range XI, Ahmedabad

Income Tax 30,48,207/- Pending with Commissioner of Income Tax (Appeals) Original Demand - 5,69,110/- Rectification applied - 45,20,903

In respect to the erstwhile Monarch Research and Brokerage Private Limited (MRBPL):

According to the records of MRBPL, there are income tax dues for A.Y.2009-10 Rs. 1,37,444 (Appeal Against Order contingent liability) and for A.Y. 2010-11 Rs. 45,500 (Appeal Against Order Contingent Liability) which have not been deposited on account of any dispute. There are no dues of Sales tax, Customs tax/Wealth tax, Excise duty/cess, which have not been deposited on account of any dispute.

10) The company has accumulated losses at the end of financial year which are less than fifty percent of its net worth. The company has not incurred any cash losses for the financial year covered by our audit and in immediately preceding financial year.

11) According to information and explanations given to us and the records made available to us by the management, in our opinion, the company has not defaulted in repayment of dues to banks or Financial Institutions.

12) According to information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, company is not chit fund, nidhi, mutual fund, societies accordingly clause 4(xiii) of Companies (Auditor''s Report) Order, 2003 is not applicable.

14) According to the information and explanations given to us, during the year under consideration the Company has maintained proper records of transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments, as applicable, and timely entries have been made therein. The aforesaid shares, securities, debentures and other investments have been held by the company in its own name, except to the extent of the exemption, if any, granted under Section 49 of the Companies Act, 1956.

15) The company has given Corporate Guarantee of Rs. 5 crores to Bank/Financial Institution in respect of loan availed by its Subsidiary Company. As per the information and explanation provided to us and considering overall transactions, its object and implication, the terms and conditions of such guarantee, in our opinion, prima facie not prejudicial to the interest of the company.

In respect of the erstwhile Monarch Project and Finmarkets Limited (MPFL).

The company has given guarantee for loan taken by related parties aggregating to Rs. 13 crores.

With respect to the erstwhile Monarch Research and Brokerage Private Limited (MRBPL):

The company has given guarantee for loan taken by related parties aggregating to Rs. 3 crores.

16) As per information and records furnished before us, the company has not accepted any money in the nature of term loans except, MPFL who has taken term loan and the said loans have been applied for the purpose for which they were obtained.

17) According to information and explanations given to us and overall examination of records furnished before us, funds raised on short term basis have not been prima-facie, used for long term investment.

18) During the period, the company has not made allotment of shares on preferential basis. Accordingly Clause 4(xviii) of Companies (Auditor''s Report) Order, 2003 is not applicable.

19) During the period, the Company has not issued any debentures. Accordingly Clause 4(xix) of Companies (Auditor''s Report) Order, 2003 is not applicable.

20) The company has not raised any money by public issue during the year under audit. Accordingly Clause 4(xx) of Companies (Auditor''s Report) Order, 2003 is not applicable.

21) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to information and explanations given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the period nor have we been informed of such instances by the management.

For, Dileep & Prithvi Chartered Accountants, Firm Reg. No. 122290W By the hand of

Pankaj Jain Partner M. No. 139559 Place: Mumbai.

Date: 5th June, 2014 , [30th November 2014 as to effect the matters discussed under the Emphasis Matters section above]


Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying ''financial statements of NETWORTH STOCK BROKING LIMITED ("the Company") which comprise the Balance Sheet as at 31st March 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

2. 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 Sub-Section (3C) of Section 211 of the Companies Act, 1956 ("the Act") in accordance with 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

3. 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.

4. 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, 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 accounting policies used and the reasonableness of the accounting estimates made by 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

5. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and gives 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 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

6. 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 Companies Act, 1956 we give in the Annexure a statement on the matters specified in the Paragraph 4 and 5 of the Order.

7. 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 audit;

(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 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 Sub-Section (3C) of Section 211 of the Companies Act, 1956; and

(e) On the basis of written representations received from the directors as on March 31, 2013 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.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 6 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

1) 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. We have been informed that, the fixed assets have been physically verified by the Management at reasonable intervals. In our opinion, the frequency of verification is reasonable with regard to the size of the Company and nature of assets. According to information and explanations given to us by the management, no material discrepancy was noticed on such verification.

c. During the year the Company has disposed off certain part of its fixed assets. However, according to information and explanation given to us and records examined by us, in our opinion, such disposal has not affected the going concern status of the Company.

2) In respect of Inventories:

a. Inventory represents securities held as stock-in-trade in course of merchant banking activities and on account of error in execution of transaction. Verification and reconciliation of the same is conducted at reasonable interval by the management.

b. In our opinion verification and reconciliation of inventory followed by the management is reasonable and adequate in relation to size of the Company and the nature of business.

c. The Company is maintaining proper records of stock in error account and discrepancies were properly dealt with in the books of accounts.

3) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956, according to the information and explanation given to us and records furnished before us for verification:

a. The Company has granted interest free unsecured loans to (three) parties during the year. At the year-end, the maximum amount involved during the year was ? 3,76,07,214/- and the outstanding balance as on balance sheet date of such loans was ? 90,914/-.

b. Considering overall transactions, its object and implication, the rate of interest and other terms and conditions of such loans, in our opinion, prima facie not prejudicial to the interest of the Company.

c. The principal amounts of such loans are on demand and there is no repayment schedule. Interest, if any, is payable on demand.

d. In respect of the said loans, the same are repayable on demand and therefore the question of overdue amount does not arise. In respect of interest, there are no overdue amounts.

e. The Company has taken unsecured loans from parties (two) during the year. The maximum amount involved during the year was ? 10,50,000/- and the year-end balance of loans taken from such parties was ? 2,12,260/-.

f. Considering overall transactions, its object and implication, the rate of interest and other terms and conditions of such loans, in our opinion, prima facie not prejudicial to the interest of the Company.

g. The principal amount of loans taken by the Company from the party listed in the register maintained under Section 301 of the Companies Act, 1956, are repayable as and when requested by the lenders. Accordingly, there are no overdue amounts with respect to such loans due since there is no stipulation of repayments.

4) In our opinion, according to the information and explanation given to us, having regard to the explanation that the Company''s service income depends on large volume of transactions executed daily on behalf of several clients, where there is a probability that certain transactions may be disputed by clients resulting in consequential cost to the Company, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to service income, purchase of inventory and purchase of fixed Assets and services. During the course our audit, neither we have come across nor we have been informed of any continuing failure to correct major weakness in the internal control.

5) In respect of contracts or arrangements entered in the Register in pursuance of Section 301 of the Companies Act, 1956,to the best of our knowledge and belief, and according to the information and explanation given to us and records furnished before us for verification:

a. The particulars of contract or arrangements that needed to be entered in the register maintained under Section 301 of the Companies Act 1956 have been so entered in the said register.

b. Where each of such transactions is in excess of ? Five Lacs in respect of any party, the transactions have been made at prices which are prima-facie reasonable having regard to prevailing market prices at the relevant time. However, in respect of transactions with the subsidiaries companies which are unique and specialized in nature involved and in absence of any comparable prices, we are unable to comment whether the transactions are made at prevailing market prices at the relevant time.

6) The Company has not accepted any deposits from the public hence, Clause 4 (vi) of Companies (Auditor''s Report) Order, 2003 is not applicable.

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

8) The Central Government has not prescribed maintenance of cost records under Section 209(l)(d) of the Companies Act, 1956 in respect of the services dealt with by the Company.

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

a. The undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, custom duty, excise duty cess and other dues have generally been regularly deposited with the appropriate authorities except (i) the unpaid stamp duty from August 2010 for state other than Maharashtra, Andhra Pradesh and Rajasthan has been offered for taxation during the year due to practical difficulties of depositing the same, (ii) non-depositing of unpaid dividend to Investor Education and Protection Fund after 7 years of its declaration.

b. There were no undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other dues were outstanding for a period of more than six months at year end except nbn-depositing of unpaid dividend to be transferred to Investor Education and Protection Fund after 7 years of its declaration for ? 84,349/-

c. There are no disputes pending before the authorities in respect of sales tax, Income tax, custom duty, service tax and cess except stated below:

Particulars Pending at Demand Remarks Income Tax

A.Y. 2005-06 Second Appellate Authority ? 34 Lacs Demand is after adjusting refund of ? 1.78 Lacs

A.Y. 2006-07 First Appellate Authority ? 49 Lacs Demand is after adjusting refund of ? 44.75 Lacs

10) The Company has accumulated losses at the end of financial year which are not less than fifty percent of its networth. The Company has not incurred any cash losses for the financial year covered by our audit. However, the Company had incurred cash losses in immediately preceding financial year.

11) According to information and explanations given to us and the records made available to us by the management, in our opinion, the Company has not defaulted in repayment of dues to banks or Financial Institutions.

12) According to information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, Company is not chit fund, nidhi, mutual fund, societies accordingly Clause 4(xiii) of Companies (Auditor''s Report) Order, 2003 is not applicable.

14) According to the information and explanations given to us, during the year under consideration the Company has maintained proper records of transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments, as applicable, and timely entries have been made therein. The aforesaid shares, securities, debentures and other investments have been held by the Company in its own name, except to the extent of the exemption, if any, granted under Section 49 of the Companies Act, 1956.

15) The Company has granted Corporate Guarantee of ? 5 Crores to Bank/Financial Institution in respect of loan availed by its Subsidiary Company. As per the information and explanation provided to us and considering overall transactions, its object and implication, the terms and conditions of such guarantee, in our opinion, prima facie not prejudicial to the interest of the Company.

16) As per information and records furnished before us, the Company has not accepted any money in the nature of term loans. Accordingly Clause 4(xvi) of Companies (Auditor''s Report) Order, 2003 is not applicable.

17) According to information and explanations given to us and overall examination of records furnished before us, funds raised on short term basis have not been prima-facie, used for long term investment.

18) During the period, the Company has not made allotment of shares on preferential basis. Accordingly Clause 4(xviii) of Companies (Auditor''s Report) Order, 2003 is not applicable.

19) During the period, the Company has not issued any debentures. Accordingly Clause 4(xix) of Companies (Auditor''s Report) Order, 2003 is not applicable.

20) The Company has not raised any money by public issue during the year under audit. Accordingly Clause 4(xx) of Companies (Auditor''s Report) Order, 2003 is not applicable

21) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the period nor have we been informed of such instances by the management.

For Dileep & Prithvi

Chartered Accountants (FRN 122290W)

Pankaj Jain

Place: Mumbai Partner

Date : 17th June, 2013 M. No. 139559


Mar 31, 2012

1. We have audited the attached Balance Sheet of NETWORTH STOCK BROKING LIMITED ("the Company") as at 31st March 2012, Statement of Profit and Loss and 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 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 disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by 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, as amended, issued by the Central Government in Terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks and verification as were considered necessary, we report, in the Annexure hereto on the matters specified in the Paragraph 4 and 5 of the said Order.

4. 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 purpose of our audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as 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 accounts;

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 standard referred to in Section 211 (3C) of the Companies Act, 1956;

e) On the basis of written representations received by the Company from its Directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Director is disqualified as on 31st March, 2012 from being appointed as a Director in terms of the clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and gives 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 Loss for the year ended on that date and

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

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date)

1) 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. We have been informed that, the fixed assets have been physically verified by the Management at reasonable intervals. In our opinion, the frequency of verification is reasonable with regard to the size of the Company and nature of assets. According to information and explanations given to us by the management, no material discrepancy was noticed on such verification.

c. During the year the Company has disposed off certain part of its fixed assets. However, according to information and explanation given to us and records examined by us, in our opinion, such disposal not affected the going concern status of the Company.

2) In respect of Inventories:

a. Inventory represents securities lying on account of error in execution of transaction. Verification and reconciliation of the same is conducted at reasonable interval by the management.

b. In our opinion verification and reconciliation of inventory followed by the management is reasonable and adequate in relation to size of the Company and the nature of business.

c. The Company is maintaining proper records of stock in error account and discrepancies were properly dealt with in the books of accounts.

3) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under section 301 of the Companies Act, 1956, according to the information and explanation given to us and records furnished before us for verification:

a. The Company has granted interest free unsecured loans to three parties during the year. At the year-end, the maximum amount involved during the year was Rs. 14,88,50,000/- and the outstanding balance as on balance sheet date of such loans was nil.

b. Considering overall transactions, its object and implication, the rate of interest and other terms and conditions of such loans, in our opinion, prima facie not prejudicial to the interest of the Company.

c. The principal amounts of such loans are on demand and there is no repayment schedule. Interest is payable on demand.

d. In respect of the said loans, the same are repayable on demand and therefore the question of overdue amount does not arise. In respect of interest, there are no overdue amounts.

e. The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the Register under section 301 of the Companies Act, 1956. Accordingly clause (iii) (e), (f) & (g) of Companies (Auditor's Report) Order, 2003 is not applicable.

4) In our opinion, according to the information and explanation given to us, having regard to the explanation that the Company's service income depends on large volume of transactions executed daily on behalf of several clients, where there is a probability that certain transactions may be disputed by clients resulting in consequential cost to the Company, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of fixed Assets and sale of goods and services. During the course our audit, neither we have come across nor we have been informed of any continuing failure to correct major weakness in the internal control.

5) In respect of contracts or arrangements entered in the Register in pursuance of section 301 of the Companies Act, 1956,to the best of our knowledge and belief, and according to the information and explanation given to us and records furnished before us for verification:

a. The particulars of contract or arrangements that needed to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered in the said register.

b. Where each of such transactions is in excess of Rs. five Lacs in respect of any party, the transactions have been made at prices which are prima-facie reasonable having regard to prevailing market prices at the relevant time. However, in respect of transactions with the subsidiaries companies which are unique and specialized in nature involved and in absence of any comparable prices, we are unable to comment whether the transactions are made at prevailing market prices at the relevant time.

6) The Company has not accepted any deposits from the public hence, Clause 4 (vi) of Companies (Auditor's Report) Order, 2003 is not applicable.

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

8) The Central Government has not prescribed maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 in respect of the services dealt with by the Company.

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

a. The undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty Cess and other dues have generally been regularly deposited with the appropriate authorities except non depositing of stamp duty from August 2010 for state other than Maharashtra, Andhra Pradesh and Rajasthan due to practical difficulties for which Company is in process of taking adequate measures.

b. There were no undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other dues were outstanding for a period of more than six months at year end except nonpayment of stamp duty for state other than Maharashtra, Andhra Pradesh and Rajasthan amounting to Rs. 40.38 Lacs.

c. There are no disputes pending before the authorities in respect of sales tax, Income tax, custom duty, service tax and cess except stated below:

Particulars Pending at Demand Remarks Income Tax

A.Y. 2005 - 06 Second Appellate Authority Rs. 34 Lacs Demand is after adjusting refund of Rs. 1.78 Lacs

A.Y. 2006-07 First Appellate Authority Rs. 49 Lacs Demand is after adjusting refund of Rs. 44.75 Lacs

10) The Company has accumulated losses at the end of financial year which are not less than fifty percent of its Networth. The Company has incurred cash losses for the financial year covered by our audit and in immediately preceding financial year.

11) According to information and explanations given to us and the records made available to us by the management, in our opinion, the Company has not defaulted in repayment of dues to banks or Financial Institutions.

12) According to information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, Company is not chit fund, nidhi, mutual fund, societies accordingly clause 4(xiii) of Companies (Auditor's Report) Order, 2003 is not applicable.

14) According to the information and explanations given to us, during the year under consideration the Company has not done any dealing or trading in shares, securities, debentures and other investments. Securities, debentures and other investments have been held by the Company in its own name except to the extent of the exemption granted under Section 49 of the Act.

15) The Company has given guarantee of Rs. 5 crores for loan taken by a Subsidiary Company from financial institutions. As per the information and explanation provided to us and considering overall transactions, its object and implication, the terms and conditions of such loans, in our opinion, prima facie not prejudicial to the interest of the Company.

16) As per information and records furnished before us, the Company has not accepted any term loans. Accordingly Clause 4(xvi) of Companies (Auditor's Report) Order, 2003 is not applicable.

17) According to information and explanations given to us and overall examination of records furnished before us, funds raised on short term basis have not been prima-facie, used for long term investment.

18) During the period, the Company has not made allotment of shares on preferential basis. Accordingly Clause 4(xviii) of Companies (Auditor's Report) Order, 2003 is not applicable.

19) During the period, the Company has not issued any debentures. Accordingly Clause 4(xix) of Companies (Auditor's Report) Order, 2003 is not applicable.

20) The Company has not raised any money by public issue during the year under audit. Accordingly Clause 4(xx) of Companies (Auditor's Report) Order, 2003 is not applicable

21) On the basis of examination of records and representation received from management, we have not come across any instance of fraud on or by the Company noticed or reported during the period nor have we been informed of such instances by the management.

For Dileep & Prithvi Chartered Accountants (FRN: 122290W)

Dileep Kumar Shah

Place: Mumbai Partner

Date : 22nd September, 2012 M. No. 046848


Mar 31, 2010

We have audited the attached Balance Sheet of NETWORTH STOCK BROKING LIMITED as at 31st March 2010, and Profit and Loss Account and Cash FlowStatement for theyearended on that date annexed thereto. These financial statements are the responsibility ofthe Companys Management. Our responsibility is to express an opinion on these financial statements based on ouraudit.

We conducted ouraudit in accordance with auditing standards generally acceptedin India.ThoseStandards require that we planand perform theaudit 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 disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basisforouropinion.

As required by the Companies (Auditors Report) Order, 2003, as amended, issued by the Central Government in Terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks and verification as were considered necessary, we report, in the Annexure hereto on the matters specified in the Paragraph 4 ofthe said order.

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 purpose of ouraudit;

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

c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts.

d) In our opinion,the Balance Sheet and Profit and Loss Account dealt with by this report are incompliance with the Accounting standard referred to in Section 211 (3C) ofthe Companies Act, 1956.

e) On the basis of written representations received from the Directors ofthe Company as at March 31, 2010 and taken on record by the Board of Directors, we report that no director is disqualified from being appointed as a Director of the Company under clause (g) of subsection (1) of section 274oftheCompaniesAct, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and gives true and fair view in conformity with theaccountingprinciplesgenerallyacceptedinlndia:

i) In the case of BalanceSheet, ofthe state of affairs ofthe Company as at March 31,2010

ii) In the case of Profit and Loss Account of the Results for the year ended on that date;and

lii) Inthe case of Cash FlowStatement, ofthe cashflows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT ON THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010

1. a. The Company has maintained proper records showingfull particulars, including quantitative details and situation of fixed assets.

b. We have been informed that, the fixed assets have been physically verified by the Management at reasonable intervals. In our opinion, the frequency of verification is reasonable with regard to the size of the company and nature of assets. According to information and explanations given to us by the management, no material discrepancy was noticed on such verification.

c. During the year the Company has not disposed off substantial part of its fixed assets and accordingly it has no effect on the going concern of theCompany.

2. a. According to information and explanation given to us, inventory represents securities lying on account of error in execution of transaction.

Verification and reconciliation of the same is conducted at reasonable interval by the management.

b. According to information and explanation given to us,in our opinion verification and reconciliation of inventory followed by the management is reasonable and adequate in relation to size of the company and the nature of business.

c. The Company is maintaining proper records of stock in error account and discrepancies were properly dealt with in the books of accounts.

3. a. According to the information and explanation given to us and on the basis of records furnished before us, the Company has granted loans to three companies covered in the register maintained under section 301 of the Companies Act, 1956 in the nature of current account transaction and interest free unsecured loans.The maximum amount outstanding during the year was Rs.1146.75 Lacs and the year end balance is 30.05 Lacs.

b. According to information and explanation given to us and considering overall transactions, its object and implication in our opinion the above transactions with subsidiaries are not prejudicial to the interest of the Company.

c. With respect to current account transaction with subsidiaries the amount is regularly repaid in short duration and with respect to interest free unsecured loanstosubsidiarywhicharerepayableon demand has been repaid as and when demanded.

d. With respect to current account transaction with subsidiaries the amount is regularly repaid in short duration therefore in our opinion there is no overdue amount. With respect to interest free unsecured loans to subsidiary which are repayable on demand has been repaid as and when demanded in our opinion there is no over due amount.

e. According to the information and explanation given to us and records furnished before us for verification, the Company has taken loan from one Company covered in the register maintained under section 301 of the Companies Act, 1956 in the nature of current account transaction. The maximum amount outstanding during the year was Rs.45 Lacs and the year end balance is Nil

f. There is no stipulation regarding rate of interest and other terms and conditions in respect of above transaction with subsidiary. However, considering overall transaction, its object and implication in our opinion the transaction is not prejudicial to the interest of the Company.

g. As this transaction is in the nature of current account transaction, the amount is regularly repaid in short duration.

4. According to the information and explanation given to us, in our opinion there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and sale of goods and services. On the basis of our examination of books and records of the Company, neither we have come across nor have we been informed of any continuing failure to correct major weakness in the internal control.

5. a. In our opinion and according to the information and explanation given to us, the particulars of contract or arrangements that were required to be entered in the register maintained under Section 301 of the Companies Act 1956 have been so entered in the said register.

b. In respect of transactions entered exceeding the value of five lacs in the register maintained in pursuance of Section 301 of the Companies Act 1956, according to information and explanation given to us, the transactions made pursuance of such contracts or arrangements have been made at prices which are prima-facie reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any depositsfrom the public hence Clause 4{vi) of Companies (Auditors Report) Order, 2003 is not applicable.

7. According to information and explanation given to us by the management, we are of the opinion that the Internal Audit is commensurate with the size of the Company and the nature of its business.

8. According to information and explanations given to us, the Central Government has not prescribed maintenance of cost records under section 209(l)(d)of the Companies Act,1956 in respect of the services dealt with bythe Company.

9. a. According to information and explanations given to us and records examined by us, the undisputed statutory dues including provident fund,

investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty cess and other dues have generally been regularly deposited with the appropnate authormes except few delays in depositing service tax & professional tax.

b. According to information and explanations given to us and records examined by us, no undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other dues were out standing for a period of more than six months at year end.

c. According to information and explanation given to us there are no disputes pending before the authorities in respect of sales tax, income tax, custom duty, service tax and cess except stated below

Particulars Pending at Demand Remarks

IncomeTax A.Y.2005-06 Second Appellate Authority Rs. 33.74 Lacs Demand is after adjusting refund of Rs. 1.78 Lacs

Income Tax A.Y.2006-07 First Appellate Authority Rs. 47.83 Lacs Demand is after adjusting refund of Rs.44.75 Lacs

Income Tax A.Y.2007-08 First Appellate Authority Rs. 761.46 Lacs After adjusting PaymentofRs. 50 Lacs

IncomeTax A.Y. 2005-06 First Appellate Authority Rs.9.44Lacs

10. The Company has accumulated losses at the end of financial year which are less than 50% of its networth. The Company has incurred cash losses for the financial year covered by our audit and in immediately preceding financial year.

11. According to information and explanations given to us and the records made available to us by the management, in our opinion, the Company has not defaulted in repayment of dues to banks or Financial Institutions.

12. According to information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge ofshares,debentures and other securities.

13. In our opinion, Company is not chit fund, nidhi, mutual fund, societies accordingly clause 4(xiii) of Companies (Auditors Report) Order, 2003 is not applicable.

14. According to the information and explanations given to us, during the year under consideration the Company has not done any dealing or trading in shares, securities, debentures and other investments. Securities, debentures and other investments have been held by the Company in its own name except to the extent of the exemption granted under Section 49 of the Act.

15. As per the information and explanations provided to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. Accordingly Clause 4(xv) of Companies (Auditors Report) Order, 2003 is not applicable.

16. As per information and records furnished before us, the Company has not accepted any term loans. Accordingly Clause 4(xvi) of Companies (Auditors Report) Order, 2003 is not applicable.

17. According to information and explanations given to us and overall examination of records furnished before us, funds raised on short term basis have not been prima-facie, used for long term investment.

18. During the period, the Company has not made allotment of shares on preferential basis. Accordingly Clause 4(xviii) of Companies (Auditors Report) Order, 2003 is not applicable.

19. During the period, the Company has not issued any debentures. Accordingly Clause 4(xix) of Companies (Auditors Report) Order, 2003 is not applicable.

20. The Company has not raised any money by public issue during the year under audit. Accordingly Clause 4(xx) of Companies (Auditors Report) Order, 2003 is not applicable

21. On the basis of examination of records and representation received from management, we have not come across any instance of fraud on or by the Company noticed or reported during the period nor have we been informed of such instances by the management.

ForA.R.Sodha&Co.

Chartered Accountants (Firm registration no. 110324W)

Place :Mumbai A. R. Sodha

Date: May 28, 2010 Partner

M.No.31878

 
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