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Notes to Accounts of Monarch Networth Capital Ltd.

Mar 31, 2015

1. CORPORATE INFORMATION

Networth Stock Broking Limited (’the company’) has emerged as a leading provider of financial sevices and information provider primarily to Instititional and Retail clients in India for more than a decade.The company is a member of the National Stock Exchange of India Ltd. (NSE) Metropolitan Stock Exchange of India Limited (formerly know n as MCX-Stock Exchange Limited) and BSE Ltd. (BSE) in the Capital Market and Derivatives (Futures & Options) segment. It is Depositary Participant with Central Depository Services India (CDSL) and National Securities Depository (India) Limited (NSDL). The company also provides Merchant Banking and Market Maker Services.

Pursuant to the scheme of Amalgamation approved by the Hon’ble High Court of Gujarat on May 03, 2013 for Monarch Research and Brokerage Private Limited (’MRBPL’) and susequently by the Hon’ble High Court Mumbai on August 07, 2014, for Monarch Project and Finmarkets Limited (’MPFL’), MRBPL and MPFL have been amalgamated with the company from the appointed date i.e. 1st April, 2010. The scheme of amalgamation became effective as on October 15, 2014. The Amalgamation has enabled appropriate consolidation of the activities of NSBL, MRBPL and MPFL, with pooling and more efficient utilization of resources, greater economies of scale, reduction in overheads and expenses and improvement in various operating parameters.

Pursuant to the Scheme of amalagamation al the assets and liabilities of the Transferor companies has been vested in the Company which includes Security Deposits as Member of various Exchanges under various segments, Intermediaries and Secured Term liabilities etc. The Company is in the process of initiating the Scheme of Amalgamation for transfering all assets/ liabilities in the name of the Company which are presently in the name of the respective Transferor Companies.

2. Terms / Rights attached to equity shares

The company has only one class of equity shares having par value of ' 10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees

During the year ended March 31St, 2015 the company had not declared any dividend (Previous Year Nil)

3. During the year no share was reserved for issue under options and contracts/commitments for the sale of shares / disinvestment.1,90,80,000 Equity shares of Rs. 10/- each were issued and allotted to the shareholders of the transferor companies during the year on the basis of consideration other than cash pursuant to the scheme of Amalgamation between the Monarch Research and Brokerage Private Limited (MRBPL) and Monarch Project and Finmarkets Limited (MPFL) (Transferor Companies) with the Company (Transferee Company) as approved by the Hon'ble High Court of Gujarat vide its order dated 3rdMay, 2013 & by the Hon'ble High Court of Bombay vide its order dated 07th August, 2014.

** 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 consti- tutes 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 ' 1,16,80,000.

4. Scheme of Amalgamation

The Scheme of Amalgamation between Monarch Research and Brokerage Private Limited (‘MRBPL') and Networth Stock Broking Limited was approved by the Hon'ble High Court of Gujarat on May 03, 2013 and the scheme of Amalgamation between Monarch Projects and Finmarkets Limited (MPFL) and Networth Stock Broking Limited was approved by the Hon'ble High Court Mumbai on August 07, 2014.

Pursuant to the scheme of Amalgamation between Monarch Research and Brokerage Private Limited (‘MRBPL') and Monarch Projects and Finmarkets Limited (MPFL) with Networth Stock Broking Limited the assets and liabilities of the erstwhile transferor companies was transferred to and vested in the company with effect from the 1st April, 2010 being the appointed date, the scheme has been given effect to these accounts in current financial year.

As per the Scheme of Amalgamation the Company was required to issue 1,90,80,000 equity shares of face value of Rs. 10/- per share aggregating Rs.19,08,00,000/- to the shareholders of the erstwhile Tranferor Companies MRBPL and MPFL. The Company has allotted 1,90,80,000 equity shares aggregating to Rs. 19,08,00,000/- to the shareholders of the erstwhile MRBPL and MPFL on October 27, 2014. Hence, as on the date of Balance Sheet, the same has been shown as Share Capital to be issued pursuant to the Scheme of Amalagamation of previous year ending.

5. ACCOUNTING TREATMENT ON AMALGAMATION

The accounting for Amalgamation has been done in accordance to the approved Scheme of Amalgamation clause no 14 - "Accounting

Treatment". Accordingly, the Company has accounted for the Scheme in its book of Accounts as under:

1. The reserves in the books of account of the Tranferor Companies have been credited by the Transferee Company to its reserves in the same form in which they appear in the books of the Transferor Companies.

2. The amount lying to the balance of "Profit and Loss Account" in the books of account of the Transferor Companies has been adjusted by the Transferee Company to its Profit and Loss Account.

3. The Excess amount of Rs. 3,31,91,490/- resulting on account of amalgamation has been transferred to "Amalgamation Reserve Account". The said account has not been considered as a free reserve as provided u/s 2(29A) of the Companies Act, 1956 as directed by the Honourable Hight Court, Mumbai.

5. The difference between the book value of net assets taken over and the value of shares issued after accounting for the cancellation if any have been adjusted to the Securities Premium Account.

6. The application and reduction of the Share Premium Account has been effected as an integral part of the Scheme without having to follow the process under the provisions of Section 78 and Section 100, 102 and 103 of the Act. Such application/ reduction of the Share Premium account does not involve either diminution of liability in respect of unpaid share capital or payment to any share- holder of any paid up share capital. The order of the Court sanctioning the Scheme under Section 394 of the Act is deemed to be an order under Section 102 of the Act confirming the reduction and the compliance by the Transferee Company of the provisions of Section 391-394 of the Act shall be deemed to be the sufficient compliance of the provisions of Section 100 to 103 of the Companies Act, 1956, Rule 85 of the Companies (Court) Rules, 1959, and other applicable provisions, if any, relating to the reduction of share capital.

6. The Company provides for the use by its subsidiaries certain facilities like use of premises infrastructure and other facilities / services and the same are termed as ‘Shared Services'. The cost of such Shared Services are recovered from subsidiaries either on actual basis or on reasonable management estimates which are constantly refined in the light of additional knowledge gained relevant to such estimation.



7. Contingent Liability & Commitments (to the extent not provided for)

The management of the Company does not anticipate any contingent liability having material effect on the position stated in the Balance

Sheet at the year end except as stated below:

a. The Income tax demand outstanding upto the assessment years 2011-12 is Rs. 63.70 Lacs (previous year Rs. 63.70 Lacs). Based on the information available, the company expects that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

b. There are certain claims aggregating to Rs. 318 lacs (previous year Rs. 318 lacs) against the company for which the company has taken suitable legal recourse. Hence the same has not been recognized as a debt and no provision has been made thereof.

c. The company has given guarantee of Rs. 5 crores (previous year 5 crores) for loan taken by its Subsidiary Company Ravisha Financial Services Private Limited from financial institutions.

Contingent Liabilities of erstwhile Transferor companies:

MRBPL:

a. Bank Gurantee : NIL

b. The Commissioner of Service tax, Ahmedabad has issued show cause for claiming wrong exemption/exclusion of NSE/BSE transac- tion charges,SEBI fees etc. The total demand for the said show cause notice is Rs. 6,76,405/- No liability has been provided as the liabilities is contingent in nature.

c. The Assistant Commissioner of Income Tax,Ahmedabad has issued order dated 13/03/2013,disallowed Bad Debts of Rs. 3,80,037/- for A. Y 2009-10. The total demand for the said order u/s 143(3) is Rs. 1,37,444/- and the company has filed appealed against the said order. no liabilities has been provided as the liabilities is contingent in nature

d. The Assistant Commissioner of Income Tax,Ahmedabad has issued order dated 21/12/2011,disallowed Bad Debts of Rs. 11,27,093/- for A. Y. 2010-11. The total demand for the said order u/s 143(3) is Rs. 45,500/-And the assessee has filed appealed against the said order. no liabilities has been provided as the liabilities is contingent in nature.

NSBL (MergedEntities) (Figures in Rs.

Particulars As at 31St March, 2015

Service Tax matters pending with various authorities 5,797,691

Income Tax matters under appeal 3,048,207

Inter Corporate Guarantee 31,165,643

Total 40,011,541

8. Related Party Disclosure of NSBL

(a) List of Related Parties and Relationship

NAME OF THE RELATED PARTY NATURE OF RELATIONSHIP

Networth Commodities & Investments Ltd. Subsidiary Company

Monarch Insurance Broking Private Limited Subsidiary Company

Networth Wealth Solutions Ltd. 100% Subsidiary Company

Ravisha Financial Services Private Ltd. 100% Subsidiary Company

Networth Insurance Broking Private Ltd. 100% Subsidiary Company

Networth Financial Services Ltd. Associate Concern

Key Management Personnel

Manish Ajmera Chief Executive Officer/ Director (Resigned on 23rd June, 2014)

Randhir Sisodiya "Executive Director (Appointment on 23rd June 2014, “upto 1st December, 2014)"

Vaibhav Shah Managing Director (Appointment From 1st December, 2014)

Others

Mr. S. P. Jain Chairman & Dominant Promoter Group

Mrs. Kanta Jain Dominant Promoter Group

Mr. Suresh Bafna Dominant Promoter Group

Mrs. Manju Bafna Dominant Promoter Group

"S.P. Jain - HUF Enterprises over which Director/ Key Managerial

“Sun Capital Advisory Services Personnel/DPG are able to Private Limited” exercise

Premjayanti Properties- significant influence Partnership Firm

(Mr. Vaibhav Shah & Mr. Himanshu Shah- being partners

Networth Softech Limited (Associate Enterprises over which Director/ Company) Key Managerial Personnel/DPG are able to exercise significant influence

9. The company has taken suitable legal action for recovering deposits of ' 40 lacs (previous year Rs. 40 lacs) for premises at Bangalore. The management expects favorable order for the same, hence no provisions have been made thereof.

10. The company has taken suitable legal action for recovering debts of Rs. 239 lacs (previous year Rs. 239 lacs) for fraudulent transaction done by client in the year 2008-09. SEBI has passed the interim order withholding the payout which is kept with Bombay Stock Exchange till completion of investigation. The management expects favorable order for the same, hence no provisions have been made thereof.

11. In the opinion of the Directors of the Company, the Current Assets and loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet.

12. There are no Capital commitments which is outstanding as on Balance Sheet date (previous year Nil).

13. Events Occurring After the Balance Sheet Date

To the best of knowledge of the management, apart from the Accounting for Scheme of Amalgamation there are no events occurring after the Balance Sheet date that provide additional information materially affecting the determination of the amounts relating to the conditions existing at the Balance Sheet Date that requires adjustment to the Assets or Liabilities of the Company.

14 Previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/ disclosure.


Mar 31, 2014

1. Share Capital

a. Terms/Rights attached to equity shares

The company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees.

During the year ended March 31, 2014 the company had not declared any dividend (Previous Year Nil).

b. During the year no share was reserved for issue under options and contracts/commitments for the sale of shares/disinvestment.

c. The company had not issued any bonus share for consideration other than cash and no share had bought back during the period of five years immediately preceding the reporting date.

2. Share Capital to be issued pursuant to the Scheme of Amalagamation

As per the Scheme of Amalgamation the Company was required to issue 1,90,80,000 equity shares of face value of Rs. 10/- per share aggregating Rs. 19,08,00,000/- to the shareholders of the erstwhile Tranferor Companies MRBPL and MPFL. The Company has allotted 1,90,80,000 equity shares aggregating to Rs. 19,08,00,000/- to the shareholders of the erstwhile MRBPL and MPFL on October 27, 2014. Hence, as on the date of Balance Sheet, the same has been shown as Share Capital to be issued pursuant to the Scheme of Amalagamation.

3. Reserves & Surplus

Refer Note 33 for Accounting Treatment in the books pursuant to the Approved Scheme of Amalgamation.

4. Long-Term Borrowings

(a) Loan from NBFC of Rs. 4,80,867/- of the erstwhile Monarch Projects and Finmarkets Limited has been taken from Kotak Mahindra Prime Ltd. The loan has been secured by way of Hypothecation of Vehicles.

Aforesaid loan is classified as long Term Borrowings to the Extent to which it is not of current nature i.e. which are due to be settled after 12 months and current maturities of long term borrowings is classified as other current liabilities.

5. Short-Term Borrowings

* Loan from NBFC of Rs. 9,15,44,969/- of the erstwhile Monarch Research and Brokerage Private Limited has been taken from Aditya Birla Finance Limited .The loan has been secured by Equity shares.

6. Trade Payables

a. In absence of information regarding vendors covered under Micro, Small & Medium Enterprises Development Act, 2006. disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act has not been given.

b. Sundry creditors - others includes an amount of Rs. 5,66,164/- payable to subsidiary.

7. Non-current Investments

Note:

a. During the year the Company has not invested in any subsidiaries.

b. During the year Networth Softech Ltd. Increased their equity share capital by inviting capital from investors not part of the group. Subsequent to increase in capital the shareholding of our company was reduced to less than 5 percent, Hence, Networth Softech Ltd. ceased to be subsidiary of our company.

8. Deferred Tax Assets (Net)

* The Company has recognized deferred tax assets as at March 31, 2014 of Rs. 4,75,21,028/- taking into consideration individual DTA/DTL calculations of the Transferor Companies. Since the management is reasonably certain of its profitable operations in future. As per Accounting Standard 22 ''Accounting for Taxes on Income'' the timing differences mainly relates to items as shown herein above that results in a net deferred tax asset.

9. Inventories

* Stock in trade represents shares held as on balance sheet date at valued at cost being shares held by virtue of acting as a merchant banker and market maker for the acquired equity shares. Balance in vandha & trading error A/c. are basically shares held as a result of Trading Error or Vandha Accounts of clients. In absence of information, disclosure relating quantity has not been given.

10. Trade Receivables

# In erstwhile MPFL - Outstanding more than six months figure cannot be determined exactly as client has been continuously trading and maintaining running account therefore,the same has not been separately presented.

None of the director either severally or jointly are included in Trade Receivables stated above.

11. Employee Benefit expense

Note : The above calculation of Employee Benefits has been done by an independent Actuary and it does not include the calculations of the Transferor Companies, if any.

12. Administrative Selling and Distribution Expenses

** This represents recovery of expenses in agreed proportion towards utilization of common facilities including staff cost from subsidiaries and associate concerns.

13. Earning Per Share

Due to impact of the scheme of merger between Company & amalgamating Companies, there is share capital of 1,90,80,000 number of equity shares which are to be allotted to amalgamating Companies. If these shares would have been allotted, it results in total equity capital of 3,03,11,600 no. of Equity shares and resultant fully diluted EPS would have been Rs. -0.22.

14. Additional Information pursuant to the provisions of paragraphs 4, 4B, 4C and 4D of part II of Schedule VI to the Companies Act, 1956, to the extent applicable.

Computation of net profit u/s 349 of the Companies Act, 1956 is not furnished as no commission is payable/paid to the Directors. The reimbursement or payment of expenses as per the contractual appointment, are not in the nature of personal expenses, as the same are accepted/incurred under contractual obligation as per the business practices. Also the expenditure incurred in the normal course of business, in accordance with the generally accepted business practices, on employees and directors, is not considered as expenditure of personal nature. There for the same has not been considered for the above purpose.

15. Pursuant to the scheme of Amalgamation in the nature of merger between the Company and Monarch Research and Brokerage Private Limited (''MRBPL'') & Monarch Project & Finmarkets Limited on a going concern basis consisting of all the assets and liabilities pertaining to the transferor companies being approved by shareholders of both the companies and subsequently approved by the Hon''ble High Courts, the scheme has been given effect to, in this financial statements and accordingly:

(i) The Financial Statements for the year ended 31st March, 2014 which were earlier approved by the Board of the Directors on 5th June, 2014 and audited by the Statutory Auditors of the company have been revised.

(ii) All assets and liabilities pertaining to the transferor companies stand transferred to and vested in the company as a going concern at carrying values as disclosed in the financial statements of transferor companies.

16. Scheme of Amalgamation

The scheme of Amalgamation between Monarch Research and Brokerage Private Limited (''MRBPL'') and Networth Stock Broking Limited was approved by the Hon''ble High Court of Gujarat on May 03, 2013 and the scheme of Amalgamation between Monarch Projects and Finmarkets Limited (MPFL) and Networth Stock Broking Limited was approved by the Hon''ble High Court Mumbai on August 07, 2014.

Pursuant to the scheme of Amalgamation between Monarch Research and Brokerage Private Limited (''MRBPL'') and Monarch Projects and Finmarkets Limited (MPFL) with Networth Stock Broking Limited the assets and liabilities of the erstwhile transferor companies was transferred to and vested in the company with effect from the 1st April, 2010 being the appointed date, the scheme has been given effect to these accounts in current financial year.

As per the Scheme of Amalgamation the Company was required to issue 1,90,80,000 equity shares of face value of Rs. 10/- per share aggregating Rs. 19,08,00,000/- to the shareholders of the erstwhile Transfer or Companies MRBPL and MPFL. The Company has allotted 1,90,80,000 equity shares aggregating to Rs. 19,08,00,000/- to the shareholders of the erstwhile MRBPL and MPFL on October 27, 2014. Hence, as on the date of Balance Sheet, the same has been shown as Share Capital to be issued pursuant to the Scheme of Amalagamation.

17. Disclosures in accordance with Accounting Standard-14

(a) Name and Nature of Business of Amalgamation Companies:

Name of the Company Nature of Business

Networth Stock Broking Limited Stock Broking, Depository and Merchant Banking Services

Monarch Research and Brokerage Stock Broking and Portfolio Private Limited (MRBPL) Management Services

Monarch Projects and Finmarkets Stock Broking and Depository Limited (MPFL) Participant

(b) Method of accounting used to reflect the amalgamation The Pooling of Interests Method

(c) Particulars of the scheme sanctioned under a statute

(d) The scheme has envisaged an exchange ratio as under:

* MPFL-201 (Two Hundred and One) Equity Shares of Rs. 10/- each of NSBL for every 100 (One Hundred) Equity Share of Rs. 10/- each held in MPFL.

* MRBPL-100 (One Hundred) Equity Shares of Rs. 10/- each of NSBL for every 100 (One Hundred) Equity Share of Rs. 10/- each held in MRBPL.

18. ACCOUNTING TREATMENT ON AMALGAMATION

The accounting for Amalgamation has been done in accordance to the approved Scheme of Amalgamation clause no 14 - "Accounting Treatment". Accordingly, the Company has accounted for the Scheme in its book of Accounts as under:

1. The reserves in the books of account of the Tranferor Companies have been credited by the Transferee Company to its reserves in the same form in which they appear in the books of the Transferor Companies.

2. The amount lying to the balance of "Profit and Loss Account" in the books of account of the Transferor Companies has been adjusted by the Transferee Company to its Profit and Loss Account.

3. The Excess amount of Rs. 3,31,91,490/- resulting on account of amalgamation has been transferred to "Amalgamation Reserve Account". The said account has not been considered as a free reserve as provided u/s 2(29A) of the Companies Act, 1956 as directed by the Honourable Hight Court, Mumbai.

4. As per the Scheme of Amalgamation the Company was required to issue 1,90,80,000 equity shares of face value of Rs. 10/- per share aggregating Rs. 19,08,00,000/- to the shareholders of the erstwhile Tranferor Companies MRBPL and MPFL. The Company has allotted 1,90,80,000 equity shares aggregating to Rs. 19,08,00,000/- to the shareholders of the erstwhile MRBPL and MPFL on October 27, 2014. Hence, as on the date of Balance Sheet, the same has been shown as Share Capital to be issued pursuant to the Scheme of Amalagamation.

5. The difference between the book value of net assets taken over and the value of shares issued after accounting for the cancella- tion if any have been adjusted to the Securities Premium Account.

6. The application and reduction of the Share Premium Account has been effected as an integral part of the Scheme without having to follow the process under the provisions of Section 78 and Section 100, 102 and 103 of the Act. Such application/reduction of the Share Premium account does not involve either diminution of liability in respect of unpaid share capital or payment to any shareholder of any paid up share capital. The order of the Court sanctioning the Scheme under Section 394 of the Act is deemed to be an order under Section 102 of the Act confirming the reduction and the compliance by the Transferee Company of the provisions of Section 391-394 of the Act shall be deemed to be the sufficient compliance of the provisions of Section 100 to 103 of the Companies Act, 1956, rule 85 of the Companies (Court) Rules, 1959, and other applicable provisions, if any, relating to the reduction of share capital.

19. The effects on the financial statements of the Amalgamated Company for any difference in accounting policies between the Transferee Company (NSBL) and the Transferor Companies (MRBPL and MPFL)have not been quantified.

20. The Company provides for the use by its subsidiaries certain facilities like use of premises infrastructure and other facilities/services and the same are termed as ''Shared Services''. The cost of such Shared Services are recovered from subsidiaries either on actual basis or on reasonable management estimates which are constantly refined in the light of additional knowledge gained relevant to such estimation.

21. Contingent Liability & Commitments (to the extent not provided for)

The management of the Company does not anticipate any contingent liability having material effect on the position stated in the

Balance Sheet at the year end except as stated below:

a. The Income tax demand outstanding upto the assessment years 2011-12 is Rs. 63.70 Lacs (previous year Rs. 83 Lacs). Based on the information available, the company expects that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

b. There are certain claims aggregating to Rs. 318 lacs (previous year Rs. 489 lacs) against the company for which the company has taken suitable legal recourse. Hence the same has not been recognized as a debt and no provision has been made thereof.

c. The company has given guarantee of Rs. 5 crores (previous year Nil) for loan taken by its Subsidiary Company Ravisha Financial Services Private Limited from financial institutions.

Contingent Liabilities of erstwhile Transferor companies:

MRBPL:

a. Bank Guarantee Rs. 300 Lacs.

b. The Commissioner of Service tax, Ahmedabad has issued show cause for claiming wrong exemption/exclusion of NSE/BSE transaction charges,SEBI fees etc. The total demand for the said show cause notice is Rs. 6,76,405/- No liability has been provided as the liabilities is contingent in nature.

c. The Assistant Commissioner of Income Tax,Ahmedabad has issued order dated 13/03/2013, disallowed Bad Debts of Rs. 3,80,037/- for A.Y. 2009-10. The total demand for the said order u/s 143(3) is Rs. 1,37,444/- and the company has filed appealed against the said order. No liabilities has been provided as the liabilities is contingent in nature.

d. The Assistant Commissioner of Income Tax,Ahmedabad has issued order dated 21/12/2011, disallowed Bad Debts of Rs. 11,27,093/- for A.Y. 2010-11. The total demand for the said order u/s 143(3) is Rs. 45,500/-And the assessee has filed appealed against the said order. no liabilities has been provided as the liabilities is contingent in nature.

22. Related Party Disclosure of NSBL

(a) List of Related Parties and Relationship

NAME OF THE RELATED PARTY NATURE OF RELATIONSHIP

Networth Commodities & Investments Ltd. Subsidiary Company

Networth Wealth Solutions Ltd. 100% Subsidiary Company

Ravisha Financial Services Private Ltd. 100% Subsidiary Company

Networth Insurance Broking Private Ltd. 100% Subsidiary Company

Networth Financial Services Ltd. Associate Concern

Key Management Personnel

Manish Ajmera Chief Executive Officer/Director (Resigned on 23rd June, 2014)

Others

S. P. Jain Chairman & Dominant Promoter Group

Kanta Jain Dominant Promoter Group

S. P. Jain - HUF Enterprises over which Director/Key Mana

Sun Capital Advisory Services General Personnel/DPG are Private Limited able to exercise significant influence

23. The company has taken suitable legal action for recovering deposits of Rs. 40 lacs (previous year Rs. 40 lacs) for premises at Bangalore. The management expects favorable order for the same, hence no provisions have been made thereof.

24. The company has taken suitable legal action for recovering debts of Rs. 239 lacs (previous year Rs. 239 lacs) for fraudulent transaction done by client in the year 2008-09. SEBI has passed the interim order withholding the payout which is kept with Bombay Stock Exchange till completion of investigation. The management expects favorable order for the same, hence no provisions have been made thereof.

25. In the opinion of the Directors of the Company, the Current Assets and loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet.

26. There are no Capital commitments which is outstanding as on Balance Sheet date (previous year Nil).

27. Events Occurring After the Balance Sheet Date

To the best of knowledge of the management, apart from the Accounting for Scheme of Amalgamation there are no events occurring after the Balance Sheet date that provide additional information materially affecting the determination of the amounts relating to the conditions existing at the Balance Sheet Date that requires adjustment to the Assets or Liabilities of the Company.

28. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.

Previous Years figures are pre Amalagamation figures of Networth Stock Broking Limited and current years figures are post Amalagamation figures of Networth Stock Broking Limited, hence previous years figures are not comparable with current year figures.


Mar 31, 2013

1. CORPORATE INFORMATION

Networth Stock Broking Limited (''the Company'') has emerged as a leading provider of financial sevices and information provider primarily to Institutional and Retail clients in India for more than a decade.The Company is a member of the National Stock Exchange of India Ltd. (NSE) and BSE Limited (BSE) in the Capital Market and Dervatives (Futures & Options) segment. The Company has also acquired membership of the currency derivatives segment with NSE, BSE, USE & MCX-SX. It is Depositary Participant with Central Depository Services (India) Limited (CDSL) and National Securities Depository Limited (NSDL). The Company also provides Merchant Banking facilities and Market Maker Services.

Note 2 Scheme of Amalgamation

The Board of Directors of the Company at its meeting held on 9th April, 2011 approved the Scheme of Amalgamation under Section 391 to 394 of the Companies Act 1956 of Monarch Research and Brokerage Private Limited (MRBPL) and Monarch Project and Finmarkets Limited (MPFL) with the Company with effect from appointed date i.e 1st April 2010.

The said Scheme is further approved by the Equity Shareholders of the Company at the Court Conveyed Meeting held on 9th April 2012 as per the direction of Hon''ble high Court of the Judicature at Bombay vide its order dated 2nd March 2012.

NSBL and MPFL has filed petition on 30th April, 2012 with the Hon''ble High Court of Bombay at Mumbai and MRBPL on 27th June, 2012 with the Hon''ble High Court cff Gujarat at Ahmedabad and the same have been admitted by the respective High Courts.

The Company has also received no objection /Prior Approval from BSE, NSE, NSDL, CDSL, USE and SEBI- Portfolio Management Services (PMS) for the said scheme of amalgamation. The approval from SEBI, MCX-SX and SEBI- Merchant Banker''s divisions are awaited as on 17th June, 2013.

Note 3 The Company provides for the use by its subsidiaries certain facilities like use of premises infrastructure and other facilities / services and the same are termed as ''Shared Services''. The cost of such Shared Services are recovered from subsidiaries either on actual basis or on reasonable management estimates which are constantly refined in the light of additional knowledge gained relevant to such estimation.

Note 4 Contingent Liability & Commitments (to the extent not provided for)

The Management of the Company does not anticipate any contingent liability having material effect on the position stated in the Balance Sheet at the year end except as stated below:

a. Income tax assessment of the Company has been completed upto assessment year 2008-09. The disputed demand outstanding upto the said assessment year is ? 83 Lacs (previous year ? 83 Lacs). Based on the decisions of the Appellate authorities and the interpretation of the other relevant provisions, the Company expects that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

b. There are certain claims aggregating to ? 489 Lacs (previous year ? 489 Lacs) against the Company for which the Company has taken suitable legal recourse. Hence the same has not been recognized as a debt and no provision has been made thereof.

c. The Company has given guarantee of ? 5 Crores (previous year ? 5 Crores) for loan taken by its Subsidiary Company Ravisha Financial Services Private Limited from financial institutions.

Note 5 The Company has taken suitable legal action for recovering deposits of? 40 Lacs (previous year? 40 Lacs) for premises at Bangalore. The Management expects favorable order for the same, hence no provisions have been made thereof. Note 33 The Company has taken suitable legal action for recovering debts of ? 239 Lacs (previous year ? 239 Lacs) for fraudulent transaction done by client in the year 2008-09. SEBI has passed the interim order withholding the payout which is kept with Bombay Stock Exchange till completion of investigation.

The Management expects favorable order for the same, hence no provisions have been made thereof. Note 34 In the opinion of the Directors of the Company, the Current Assets and loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet. Note 35 There are no Capital commitments which is outstanding as on Balance Sheet date (previous year Nil). Note 36 Events Occurring After the Balance Sheet Date

To the best of knowledge of the management, there are no events occurring after the Balance Sheet date that provide additional information materially affecting the determination of the amounts relating to the conditions existing at the Balance Sheet Date that requires adjustment to the Assets or Liabilities of the Company.

Note 6 Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.


Mar 31, 2012

1. CORPORATE INFORMATION

Networth Stock Broking Limited ('the Company') has emerged as a leading provider of financial services and information provider primarily to Instititional and Retail clients in India for more than a decade.The Company is a member of the National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE) in the Capital Market and Derivatives (Futures & Options) segment. It is Depository Participants with Central Depository Services India Limited (CDSL) and National Securities Depository (India) Limited (NSDL). The Company also provides Merchant Banking services.

Note: 2 Scheme of Amalgamation

The Board of Directors of the Company at its meeting held on 9th April, 2011 approved the scheme of Amalgamation under Section 391 to 394 of the Companies Act 1956 of Monarch Research and Brokerage Private Limited (MRBPL) and Monarch Project and Finmarkets Limited (MPFL) with the Company with effect from appointed date i.e 1st April, 2010.

The Said scheme is further approved by the Equity shareholders of the Company at the court conveyed meeting held on 9th April, 2012 as per the direction of Hon'ble high Court of the Judicature at Bombay vide its order dated 2nd March, 2012.

NSBL and MPFL has filed petition on 30th April, 2012 with the Hon'ble High Court of Gujarat at Ahmedabad and the same has been admitted by the respective High Courts.

The Company has also received no objection /Prior Approval from BSE, NSE, NSDL, CDSL, USE and SEBI- Portfolio Management Services (PMS) except from SEBI, MCX-SX and SEBI- Merchant Banker's Section for the said Scheme of Amalgamation as on dated on 21s' September, 2012.

Note: 3 The Company provides for the use by its subsidiaries certain facilities like use of premises infrastructure and other facilities / services and the same are termed as 'Shared Services'. The cost of such Shared Services are recovered from subsidiaries either on actual basis or on reasonable management estimates which are constantly refined in the light of additional knowledge gained relevant to such estimation.

Note: 4 Contingent Liability & Commitments (to the extent not provided for)

The management of the Company does not anticipate any contingent liability having material effect on the position stated in the Balance Sheet at the year end except as stated below:

a. Income tax assessment of the Company has been completed upto assessment year 2008-09. The disputed demand outstanding upto the said assessment year is Rs. 83 Lacs (previous year Rs. 1101 Lacs). Based on the decisions of the Appellate authorities and the interpretation of the other relevant provisions, the Company expects that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

b. There are certain claims aggregating to Rs. 489 lacs (previous year Rs. 125 lacs) against the Company for which the Company has taken suitable legal recourse. Hence the same has not been recognized as a debt and no provision has been made thereof.

c. The Company has given guarantee of Rs. 5 crores (previous year Nil) for loan taken by its Subsidiary Company Ravisha Financial Services Private Limited from financial institutions.

Note: Where, CY= Current year's figures & PY= Previous year's figures

Note: 5 The Company has taken suitable legal action for recovering deposits of Rs. 40 lacs (previous year Rs. 340 lacs) for premises at Bangalore. The management expects favorable order for the same, hence no provisions have been made thereof.

Note: 6 The Company has taken suitable legal action for recovering debts of Rs. 239 lacs (previous year Rs. 239 lacs) for fraudulent transaction done by client in the year 2008-09. SEBI has passed the interim order withholding the payout which is kept with BSE till completion of investigation. The management expects favorable order for the same, hence no provisions have been made thereof.

Note: 7 In the opinion of the Directors of the Company, the Current Assets and loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet.

Note: 8 There are no Capital commitments which is outstanding as on Balance Sheet date (previous year Nil).

Note: 9 Events Occurring After the Balance Sheet Date

To the best of knowledge of the management, there are no events occurring after the Balance Sheet date that provide additional information materially affecting the determination of the amounts relating to the conditions existing at the Balance Sheet Date that requires adjustment to the Assets or Liabilities of the Company.

Note: 10 The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2010

1. In the previous year, a client of the Company along with set of clients transacted fraudulently in particular scrip with the company and other brokers for which SEBI has passedtheinterimorderwithholdingthe payout to the selling client till completion of investigation. Consideringthis fact, company has not provided for amount of Rs. 239 Lacs recoverable from this client.

2. The Company has taken suitable legal action for recovering deposits of Rs. 40 lacs for premises at Bangalore and expects favorable order for the same, hence no provisions have been made thereof.

3. Segment Reporting:-

During the year under consideration, the company has two operative segments namely, Capital Market (CM) Segment and Depository Participant (DP) segment. As the DP, does not fall within the parameters of "reportable segment" enunciated in Accounting Standard 17 "Segmental Reporting", the company has only one reportable segment i.e. CM. In view of above and considering Accounting Standard Interpretation 20"DisclosureofSegmentlnformation",thecompany has not furnishedtheSegmental Reporting.

4. Related Party Disclosures:

a) List of Related Partiesand Relationship:

Name Of The Related Party Nature Of Relationship

Networth Commodities & Investments Ltd. Subsidiary Company

Networth SoftTech Ltd. 100% Subsidiary Company

Networth Wealth Solutions Ltd. 100% Subsidiary Company

Ravisha Financial Services Private Ltd. 100% Subsidiary Company

Networth Insurance Broking Private Ltd. 100% Subsidiary Company

Networth Financial Services Ltd.Associate Company_

Key Management Personnel

Girish Dev Chief Executive Officer/Director

ManishAjmera Chief Financial Office

Others

S.P.Jain Dominant Promoter Group and

KantaJain

S.P. Jain HUF Enterprises over which Director/ Key Managerial Personnel/DPG Sun Capital Advisory Services Private Limited are able to exercise significant influence Sanjay & Vijay Associates

5. Events Occurring After the Balance Sheet Date:

To the best of knowledge of the management, there are no events occurring after the Balance Sheet date that provide additional information materially affecting the determination of the amounts relatingtothe conditions existing at the Balance Sheet Datethat requires adjustment to the Assets or Liabilities of the Company.

6. Capital Commitments:

There are outstanding Capital commitments amounting to Rs.l2,999,624 (previous year Rs.7,640,480) on account of development of software.

7. In the opinion of the Directors of the Company, the Current Assets and loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet.

8. Contingent Liability

The management of the Company does not anticipate any contingent liability having material effect on the position stated in the Balance Sheet at the year end except as stated below:

a. Income tax assessment of the company has been completed upto assessment year 2007-08. The disputed demand outstanding upto the said assessment year is Rs. 902 Lacs. Based on the decisions of the Appellate authorities and the interpretation of the other relevant provisions, the company expects that the demand is likely to bee it her deleted or substantially reduced and accordingly no provision hasbeen made.

b. There is a claim of Rs. 125 lacs against the company for which the company has taken suitable legal recourse. Hence the same has not been recognized as a debt and no provision has been made thereof.

9. Details about the Micro, Small and Medium Enterprises

In absence of information regarding vendors covered under the Micro, Small and Medium Enterprises Development Act, 2006, disclosure relating toamounts unpaid as attheyear end together with interest paid/ payable underthis Act has not been given.

10. Previousyearsfigure have been recastand rearranged whereverfound necessary.

 
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