Mar 31, 2018
REPORT ON THE STANDALONE INDIAN ACCOUNTING STANDARDS (IND AS) FINANCIAL STATEMENTS
We have audited the accompanying standalone Ind AS financial statements of 63 moons technologies limited [formerly Financial Technologies (India) Limited] (âthe Companyâ), which comprise the balance sheet as at 31 March 2018, the statement of profit and loss, (including other comprehensive income), the cash flow statement, the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as âstandalone Ind AS financial statementsâ)
MANAGEMENTâS RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS
The Companyâs board of directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under section 133 of the Act read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone Ind AS financial statements.
BASIS FOR QUALIFIED OPINION
Note no. 51, 55, 56, 57 and 58 form basis for our qualified opinion. As stated by the Management of the Company in Note 55 to the standalone Ind AS financial statements, Civil Suits have been filed against the Company in relation to event occurred on NSELâs trading platform. These matters are pending at various stages of adjudication. As stated in the said note, the management of the Company does not foresee that the parties who have filed Civil Suits would be able to sustain any claim against the Company. In addition, as stated by the management in note 51,55,56,57 and 58 to the standalone Ind AS financial statements, there are First Information Reports / complaints / letters / orders / notices registered / received against various parties including the Company from/ with the Economic Offences Wing of the Mumbai Police (EOW), Central Bureau of Investigation (CBI), Government of Maharashtra under MPID Act the Directorate of Enforcement and the Serious Fraud Investigation Office (SFIO). Above matters are pending at various stages of adjudication/investigation.
In this regard, the Management and those charged with Governance have represented to us that other than as stated in the said notes to the standalone Ind AS financial statements, there are no claims, litigations, potential settlements involving the Company directly or indirectly which require adjustments to/ disclosures in the standalone Ind AS financial statements and that the ability of the Company to carry out its day-to-day operations/activities is not seriously affected due to any such letters / orders / notices as aforesaid.
In the light of the above representations regarding the ongoing investigations and matters, the outcome of which is not known and is uncertain at this stage, we are unable to comment on the consequential impact in respect of the same on the standalone Ind AS financial statements for the year ended 31 March 2018.
QUALIFIED OPINION
Except for the possible effects of the matter specified under âBasis for Qualified Opinionâ and based on our audit conducted as stated above, in our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the financial position of the company as at 31 March 2018, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
EMPHASIS OF MATTER
1. We draw attention to Note 53 to the standalone Ind AS financial statements, which describes the passing of the final order of amalgamation of National Spot Exchange Limited with the Company, by Ministry of Corporate Affairs, Government of India. The Honourable Bombay High Court in due course has dismissed the Writ Petition challenging the said order filed by the Company. The Company has filed a Special Leave Petition against the said order of Honourable Bombay High Court before the Honourable Supreme Court of India and the matter is sub-judice. In future, any unfavorable outcome may impact companyâs ability to function as a going concern.
2. We draw attention to Note 54 to the standalone Ind AS financial statements. Government of India has filed the Company Petition before the Principal Bench of the Company Law Board, under the Companies Act, 1956, now pending with the National Company Law Tribunal (âNCLTâ) under the Act, seeking inter alia removal and supersession of the Board of Directors of the Company, which has been protested by the Company and the matter is pending before NCLT for consideration and the matter is currently sub-judice.
3. We draw attention to Note 46 to the standalone Ind AS financial statements, regarding utilisation of unexpired MAT credit entitlement by the Company. The Company has a total MAT credit entitlement of Rs. 9,115.62 Lakhs as at 31 March 2018. Based on the projections made by the Companyâs management regarding income-tax liability of the Company, Management is of the view that the Company will be able to utilise the unexpired MAT credit entitlement in eligible projected years.
Our opinion is not qualified in respect these matters of emphasis.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1 As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of section 143(11) of the Act, we give in Annexure âAâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2 As required by section 143 (3) of the Act, we report that:
a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) the balance sheet, the statement of profit and loss (including other comprehensive income), the cash flow statement and statement of changes in equity dealt with by this report are in agreement with the books of account;
d) in our opinion the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act, read with relevant rule issued thereunder;
e) on the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of section 164 (2) of the Act;
f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure B; and
g) with respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements, to the extent it is ascertainable; [Refer Note 31 and âBasis for Qualified Opinionâ above]
ii. the Company has made provision, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and
iii. there has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.
i) In respect of the Companyâs property, plant & equipment (fixed assets):
a) the Company is maintaining proper records showing full particulars, including quantitative details and situation of all fixed assets.
b) as explained to us, fixed assets have been physically verified by the management, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. The frequency of physical verification is reasonable and no material discrepancies were noticed on such verification.
c) the title deeds of immovable properties are held in the name of the Company.
ii) According to the process explained to us and as followed by the Company, the Companyâs inventory items are directly delivered to its customers on their procurement. Accordingly, reporting on paragraph 3 (ii) of the Order is not applicable.
iii) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships and other parties covered in the register maintained under section 189 of the Act. Accordingly, reporting on paragraph 3 (iii) of the Order is not applicable.
iv) In respect of loans, investments, guarantees and security, provisions of section 185 and 186 of the Act, have been complied with, to the extent applicable.
v) According to the information and explanations given to us, the Company has not accepted deposits from the public and accordingly, reporting on paragraph 3 (v) of the Order is not applicable.
vi) Maintenance of cost records has not been specified by the Central government under section 148(1) of the Act. Accordingly, reporting on paragraph
3 (vi) of the Order is not applicable.
vii) a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, goods and service tax, cess and other material statutory dues as applicable with the appropriate authorities. According to the information and explanation given to us, there were no undisputed amounts payable in respect of provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, goods and service tax, cess and other material statutory dues outstanding as at 31 March 2018 for a period of more than six months from the date they became payable.
b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of service tax, excise duty and sales tax as at 31 March 2018 which have not been deposited on account of dispute pending are as under:
Name of the Statue |
Nature of the disputed dues |
Amount (Rs. in lakhs) |
Period to which the amount relates |
Forum where disputes are pending |
Finance Act, 1994 |
Tax, penalty and interest |
165.92 |
2007-08 |
Commissioner of Service Tax |
Central Excise Act, 1944 |
Tax, penalty and interest |
248.48 |
2005-06 |
Superintendent Central Excise |
viii) According to the records of the Company examined by us and the information and explanations given to us, during the year the Company has not defaulted in repayment of loans or borrowings to any bank. The Company has not availed any loans or borrowings from financial institution, government and debenture holder.
ix) In our opinion and according to the information and explanations given to us, no moneys have been raised by way of further public offer (including debt instruments) however term loan being external commercial borrowing has been applied for the purposes for which they were raised.
x) Except for the matters(s) referred in the âBasis for Qualified Opinionâ of our audit report which are subjudice and hence are inconclusive, to the best of our knowledge and information and explanations given to us, no fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year.
xi) Managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Act.
xii) The Company is not a Nidhi Company. Accordingly, reporting on paragraph 3 (xii) of the Order is not applicable.
xiii) All transactions with related parties are in compliance with sections 177 and 188 of the Act and the details have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.
xiv) The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review, accordingly, reporting on paragraph 3 (xiv) of the Order is not applicable.
xv) The Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, reporting on paragraph 3 (xv) of the Order is not applicable.
xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting on paragraph 3 (xvi) of the Order is not applicable.
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION (3) OF SECTION 143 OF THE COMPANIES ACT, 2013 (THE âACTâ)
We have audited the internal financial controls over financial reporting of 63 moons technologies limited [formerly Financial Technologies (India) Limited] (âthe Companyâ) as of 31 March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
MANAGEMENTâS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (âthe Guidance Noteâ) issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable, to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the standalone Ind AS financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.
Sharp & Tannan Associates
Chartered Accountants
Firmâs registration no. 109983W
by the hand of
Tirtharaj Khot
Partner
Mumbai, 21 May 2018 Membership No. (F) 037457
Mar 31, 2016
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of 63 moons technologies limited (formerly Financial Technologies (India) Limited) (''the Company''), which comprise the balance sheet as at 31 March, 2016, the statement of profit and loss, the cash flow statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Company''s board of directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (''the Act'') with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.
BASIS FOR QUALIFIED OPINION
As stated by the Management of the Company in Note 56 to the financial statement, Writ Petitions (WP), Public Interest Litigation (PIL) and Civil Suits have been filed against the Company in relation to event occurred on NSEL''s trading platform, wherein the Company has been made a party in the WP and Civil Suits. These matters are pending at various stages of adjudication. As stated in the said note, the management of the Company does not foresee that the parties who have filed the WP, PIL, Civil Suits would be able to sustain any claim against the Company. In addition, as stated by the management in note 46, 56 and 57 to the financial statement, there are First Information Reports/complaints/notice registered/received against various parties including the Company with the Economic Offences Wing of the Mumbai Police (EOW), Central Bureau of Investigation (CBI) and MIDC Police Station, Mumbai District. Above matters are pending at various stages of adjudication/investigation.
In this regard, the Management and those charged with Governance have represented to us that other than as stated in the said note to the financial statement, there are no claims, litigations, potential settlements involving the Company directly or indirectly which require adjustments to/disclosures in the financial statement.
In the light of the above representations regarding the ongoing investigations and matters, the outcome of which is not known and is uncertain at this stage, we are unable to comment on the consequential impact in respect of the same on the results for the year ended 31 March, 2016.
QUALIFIED OPINION
Except for the possible effects of the matter specified under ''Basis for Qualified Opinion'' and based on our audit conducted as stated above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the applicable accounting standards as specified under section 133 of the Companies Act, 2013 and other recognised accounting practices and policies generally accepted in India has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 including the manner in which it is to be disclosed, or that it contains any material misstatement.
EMPHASIS OF MATTER
1. We draw attention to Note 54 to the financial statement, which describes the passing of the final order of amalgamation of National Spot Exchange Limited with the Company, by Ministry of Corporate Affairs, Government of India. The Company has filed a Writ Petition before the Honourable Bombay High Court challenging the said order and the Honourable Bombay High Court has stayed the notification of the said order.
2. We draw attention to Note 55 to the financial statement. Government of India has filed the Company Petition before the Principal Bench of the Company Law Board, under the Companies Act, 1956, seeking inter alia removal and supersession of the Board of Directors of the Company, which has been protested by the Company and the matter is pending before CLB for consideration.
3. We draw attention to Note 59 to the financial statement, regarding utilization of unexpired MAT credit entitlement by the Company. The Company has a total MAT credit entitlement of Rs. 17,681.31 Lacs as at 31 March, 2016. Based on the projections made by the Company''s management regarding income-tax liability of the Company, Management is of the view that the Company will be able to utilize the unexpired MAT credit entitlement in eligible projected years.
Our opinion is not qualified in respect these matters of emphasis.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor''s Report) Order, 2016 (''the Order'') issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in Annexure ''A'' a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) the balance sheet, the statement of profit and loss, and the cash flow statement dealt with by this report are in agreement with the books of account;
d) in our opinion the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014;
e) on the basis of the written representations received from the directors as on 31 March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2016 from being appointed as a director in terms of section 164 (2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure B; and
g) with respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements, to the extent it is ascertainable; [Refer note 29 and ''Basis for Qualified Opinion'' above]
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and
iii. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.
(Referred to paragraph (1) under ''Report on other legal and regulatory requirements'' of our report of even date)
i) a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of all fixed assets.
b) The physical verification of the fixed assets has been carried out by management at reasonable intervals and no material discrepancies were noticed on such verification.
c) The title deeds of immovable properties are held in the name of the Company.
ii) According to the process explained to us as followed by the Company, the Company''s inventory items are directly delivered to its customers on their procurement. Accordingly, reporting on paragraph 3 (ii) of the Order is not applicable.
iii) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships and other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, reporting on paragraphs 3 (iii) (a), (b) and (c) of the Order are not applicable.
iv) In respect of loans, investments, guarantees and security, provisions of section 185 and 186 of the Companies Act, 2013 have been complied with, to the extent applicable.
v) According to the information and explanations given to us, the Company has not accepted deposits from the public and accordingly, reporting on paragraph 3 (v) of the Order is not applicable.
vi) Maintenance of cost records has not been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013. Accordingly, reporting on paragraph 3 (vi) of the Order is not applicable.
vii) a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues as applicable with the appropriate authorities.
b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of income tax, service tax, excise duty and sales tax as at 31 March, 2016 which have not been deposited on account of dispute pending are as under:
Name of the Statue |
Name of the disputed dues |
Amount in Rs. Lacs |
Period to which the amount relates |
Forum where disputes are pending |
Income Tax Act, 1961 |
Income tax |
677.42 |
2009-10 |
Commissioner of Income Tax (Appeals) |
Finance Act, 1994 |
Service Tax |
165.92 |
2007-08 |
Commissioner of Service Tax |
Central Excise Act, 1944 |
Excise duty |
230.57 |
2005-06 |
Superintendent Central Excise |
Maharashtra Value Added Tax Act, 2002 |
Value Added Tax |
119.21 |
2007-08, 2009-10, 2010-11 & 2012-13 |
Joint Commissioner of Sales Tax (Appeals) |
viii) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to any bank. The Company has not availed any loans or borrowings from financial institution, government and debenture holder.
ix) In our opinion and according to the information and explanations given to us, no moneys have been raised by way of further public offer (including debt instruments) however term loan being external commercial borrowing has been applied for the purposes for which they were raised.
x) Except for the matters(s) referred in the ''Basis for Qualified Opinion'' of our audit report which was subjudice and hence are inconclusive, to the best of our knowledge and information and explanations given to us, no fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year.
xi) Managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
xii) The Company is not a Nidhi Company. Accordingly, reporting on paragraph 3 (xii) of the Order is not applicable.
xiii) All transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 and the details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
xiv) The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, reporting on paragraph 3 (xiv) of the Order is not applicable.
(xv) The company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, reporting on paragraph 3 (xv) of the Order is not applicable.
(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting on paragraph 3 (xvi) of the Order is not applicable.
Sharp & Tannan Associates
Chartered Accountants
Firm''s registration no. 109983W
by the hand of
Tirtharaj Khot
Mumbai, 30 May, 2016 Partner
Membership No. (F) 037457
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Financial Technologies (India) Limited ('the Company'), which comprise
the balance sheet as at March 31, 2015, the statement of profit and loss
and the cash flow statement for the year then ended, and a summary of
the significant accounting policies and other explanatory information.
Management's responsibility for the standalone financial statements
The Company's board of directors is responsible for the matters stated
in section 134(5) of the Companies Act, 2013 ('the Act') with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under section 133 of the Act, read with rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. Those Standards require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion on the
standalone financial statements.
Basis for Qualified Opinion
As stated by the Management of the Company in Note 57 to the standalone
financial Statement, Writ Petitions (WP), Public Interest Litigation
(PIL), Civil Suits have been fled against the Company in relation to
NSEL event, wherein the Company has been made a party in the WP and
Civil Suits. These matters are pending at various stages of
adjudication. As stated in the said note, based on legal advice, the
management of the Company does not foresee that the parties who have
fled the W P, PIL, Civil Suits would be able to sustain any claim
against the Company. In addition, as stated by the management in note
57 and 59 to the standalone financial Statement, there are First
Information Reports registered against various parties including the
Company with the Economic Offences Wing of the Mumbai Police (EOW),
Central Bureau of Investigation (CBI) and MIDC, Police Station, Mumbai
District.
In this regard, the Management and those charged with Governance have
represented to us that other than as stated in the said note to the
Statement, there are no claims, litigations, potential settlements
involving the Company directly or indirectly which require adjustments
to/disclosures in the Statement.
In the light of the above representations regarding the ongoing
investigations and matters, the outcome of which is not known and is
uncertain at this stage, we are unable to comment on the consequential
impact in respect of the same on the results for the year ended March
31, 2015.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the matter
specified under 'Basis for Qualified Opinion' paragraph, the aforesaid
standalone financial statements give the information required by the Act
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31, 2015, and its profit and
its cash flows for the year ended on that date.
Emphasis of Matter
1. We draw attention to Note 61 to the standalone financial statements,
regarding utilisation of unexpired MAT credit entitlement by the
Company. The Company has a total MAT credit entitlement of Rs.
19,270.02 Lakhs as at March 31, 2015 including recognition of Rs.
10,081.20 Lakhs during the year ended March 31, 2015. Based on the
projections as made by the Company's management regarding income-tax
liability of the Company, Management is of the view that the Company
will be able to utilise the unexpired MAT credit entitlement in
projected years.
2. We draw attention to Note 55 to the standalone financial statements,
which describe the receipt of the draft order proposing amalgamation of
National Spot Exchange Limited with the Company. The Company has fled a
Writ Petition before the Honourable Bombay High Court challenging the
said order.
3. We draw attention to Note 56 to the standalone financial statements.
Government of India has fled a petition with Company Law Board under
the Companies Act, 1956 seeking inter alia removal and supersession of
the Board of Directors of the Company, which has been protested by the
Company and the matter is pending before CLB for consideration.
Our opinion is not qualified in respect of these matters of emphasis.
Other Matters
The financial statements of the Company for the year ended March 31,
2014, were audited by another auditor whose report dated May 30, 2014
expressed modified opinion on those statements.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's Report) Order, 2015 (the
'Order') issued by the Central Government of India in terms of Section
143(11) of the Act, we give in the Annexure, a statement on the matters
specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
a) we have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b) in our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
c) The balance sheet, the statement of profit and loss, and the cash fow
statement dealt with by this report are in agreement with the books of
account.
d) in our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under section 133 of the Act,
read with rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the
directors as on March 31, 2015 taken on record by the board of
directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of section 164 (2) of the
Act.
f) With respect to the other matters to be included in the Auditor's
Report in accordance with rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its
financial position in its standalone financial statements (refer note
29);
ii. the Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts; and
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in 'other matters' and paragraph 1 under 'Report on other
legal and regulatory requirements' of our report of even date)
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management in
accordance with a phased programme of verification which in our opinion,
is reasonable, having regard to the size of the Company and nature of
its assets. The frequency of physical verification is reasonable and no
material discrepancies were noticed on such verification.
(ii) According to the process explained to us as followed by the
Company, the Company's inventory items are directly delivered to its
customers on their procurement. Therefore the Company does not carry
any inventory on a regular basis. Accordingly reporting on Paragraph 3
(ii) (a), (b) and (c) is not required. On the basis of our examination,
in our opinion, the Company has maintained proper records of its
inventories.
(iii) The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act. Accordingly, the Paragraph 3 (iii) (a)
and (b) of the Order are not applicable.
(iv) On the basis of verification of transactions carried out by us, we
report that there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and the sale of goods and
services. Further, we have neither come across nor have been informed
of any continuing failure to correct major weaknesses in internal
control system.
(v) According to the information and explanations given to us and
records verified by us, the Company has not accepted any deposits during
the year from the public to which the directives issued by the Reserve
Bank of India and the provisions of Sections 73 to 76 and any other
relevant provisions of the Act and the rules framed there under apply.
Accordingly, the Paragraph 3 (v) of the Order is not applicable.
(vi) The Central Government has not prescribed maintenance of cost
records under Section 148(1) of the Act. Accordingly, the Paragraph 3
(vi) of the Order is not applicable.
(vii) (a) According to the records verified by us, the Company is
generally regular in depositing undisputed statutory dues including
provident fund, investor education and protection fund, employees'
state insurance, income tax, sales tax, wealth tax, service tax,
customs duty, excise duty, value added tax, cess and other material
statutory dues, as applicable to the Company, with the appropriate
authorities. There are no arrears of outstanding statutory dues as at
the last day of the financial year for a period of more than six months
from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, the details of dues of income
tax, sales tax, service tax and excise duty as at March 31, 2015 which
have not been deposited on account of a dispute pending, are as under:
Name of
Statute Nature of
Dues Amount
involved* Period to
which the Forum where
dispute
(Rs.
Lakhs) amount
relates is pending
Finance Act,
1994 Service Tax 165.92 2007-2008 Commissioner of
Service Tax
Central
Excise
Act,1944 Excise duty #221.60 2005-2006 Superintendent
Central Excise
Maharashtra
Value Added
Tax Act,
2002 Value Added
Tax 124.90 2005-2006
to 2010- Joint Commissioner
2011 of Sales Tax
(Appeal)
Central
Sales Tax
Act, 1956 Central Sales
Tax 3.12 2006-2007 Joint Commissioner
of Sales Tax
(Appeal)
Income-Tax
Act, 1961 Income-tax 592.17 AY 2009 -
2010 Commissioner
of Income Tax
(Appeals)
*Amounts are net of pre-deposit paid in getting the stay/ appeal
admitted, if any; #amount is including interest.
(c) During the year, there has been no delay in transferring amounts,
required to be transferred, to the Investor Education and Protection
Fund by the Company in accordance with the relevant provisions of the
Companies Act, 1956 and the rules made there under.
(viii) Without considering the possible effects of our audit
qualification reported in the 'Basis for Qualified Opinion' in our
accompanying Audit Report which is not quantifiable, the Company does
not have accumulated losses as at March 31, 2015 and it has not
incurred cash losses during current financial year and in the
immediately preceding financial year.
(ix) According to the information and explanations given to us and as
per the records of the Company examined by us, the Company has not
defaulted in repayment of dues to banks. The Company has neither
availed any assistance from financial institutions nor has issued any
debentures. Accordingly, the additional reporting under Paragraph 3
(ix) of the Order is not applicable.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in 'other matters' and paragraph 1 under 'Report on other
legal and regulatory requirements' of our report of even date)
(x) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by its subsidiary companies from banks and
fnancial institutions are not, prima facie, prejudicial to the
interests of the Company.
(xi) During the year, the Company has not availed any additional term
loan. As per the records of the Company examined by us, there has been
no additional utilization of the term loan, being external commercial
borrowing by the Company during the year.
(xii) Except for the matter(s) referred in the 'Basis for Qualified
Opinion' of our audit report which are subjudice and hence are
inconclusive, to the best of our knowledge and according to the
information and explanations gives to us, no fraud by the Company and
no material fraud on the Company has been noticed or reported during
the year.
For Sharp & Tannan Associates
Chartered Accountants
Firm's Registration no. 109983W
by the hand of
Tirtharaj Khot
Partner
Mumbai, May 22, 2015 Membership No. (F) 037457
Mar 31, 2014
1. We have audited the accompanying financial statements of FINANCIAL
TECHNOLOGIES (INDIA) LIMITED ("the Company") which comprise the Balance
Sheet as at 31st March, 2014, the Statement of Profit and Loss and the
Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
2. National Spot Exchange Limited (NSEL) is a subsidiary of the Company
in which it holds 99.99% equity share capital. In the light of the
investment of the Company in NSEL and the transactions between the
Company and NSEL, the financial statements of NSEL for the year ended
31st March, 2013, which were audited by other auditors, had a direct
and material impact and bearing on the financial statements of the
Company for the year ended 31st March, 2013.
Pursuant to the developments relating to NSEL, the management of NSEL,
by their letter dated 20th September 2013, had communicated to its
auditors and the Company that it was not possible for NSEL to
immediately ascertain the financial implications (with respect to,
inter alia, the various irregularities in the operations of NSEL coming
to light, agencies looking at the legality of contracts and warehouse
receipts and income booked by NSEL therefrom, ongoing investigations
and forensic audit) and whether its books and records presented as of
31st March, 2013 were true and fair and what adjustments were needed to
be carried out with a view to present a correct financial position.
Consequently, the auditors of NSEL and its subsidiary, Indian Bullion
Market Association Limited (IBMA), in which NSEL has 60.88% equity
ownership, citing various developments, investigations and audits
relating to NSEL, had communicated to NSEL and IBMA, by their letters
dated 21st September, 2013, that the standalone and consolidated
financial statements of NSEL and the standalone financial statements of
IBMA for the year ended 31st March, 2013 and their audit reports dated
17th May, 2013 and 16th May, 2013 on the said financial statements of
NSEL and IBMA, respectively, are no longer to be relied upon.
3. In view of the aforesaid communications dated 20th September, 2013
and 21st September, 2013 from the management and the auditors of NSEL,
respectively, provided to us by the Management of the Company, in
accordance with the provisions of Standard on Auditing (SA) 560 -
Subsequent Events, issued by the Institute of Chartered Accountants of
India (ICAI), we communicated to the Management and those charged with
Governance of the Company on 23rd September, 2013 that our audit report
dated 30th May, 2013 on the financial statements of the Company for the
year ended 31st March, 2013 should no longer be relied upon.
Subsequently, by our audit report dated 29th November, 2013, we issued
a qualified opinion on the financial statements (as amended) of the
Company for the year ended 31st March, 2013 which comprised the Balance
Sheet as at 31st March, 2013, the Statement of Profit and Loss and the
Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information, and
the supplementary notes which are an addendum to the accompanying notes
1 to 48 to the financial statements for the year ended 31st March, 2013
and which have been approved by the Board of Directors of the Company
at their meeting held on 29th November, 2013 [together "the financial
statements (as amended)"].
As represented to us by the Management of the Company, the audited
financial statements of NSEL for the years ended 31st March, 2013 and
31st March, 2014 are not yet available.
Management''s Responsibility for the Financial Statements
4. The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards notified under the Companies
Act, 1956 ("the Act") (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate
Affairs) and in accordance with the accounting principles generally
accepted in India. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors'' Responsibility
5. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the ICAI. Those Standards
require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements.
7. Except as indicated in the Basis for Qualified Opinion paragraphs
below, we believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our qualified audit
opinion.
Basis for Qualified Opinion
8. The following matters were qualified in our audit report dated 29th
November, 2013, on the financial statements (as amended) for the year
ended 31st March, 2013 and continue to be subject matters of
qualification:
(a) As stated in Note 52 to the financial statements, the Company had
recognised income of Rs. 3,452.00 lacs during the year ended 31st
March, 2013 from rendering of various services to NSEL, which included
a variable component of Rs. 2,927.60 lacs. As on 31st March, 2013, the
total amount receivable from NSEL on this account was Rs. 2,489.27
lacs, which has been realised subsequently during the current financial
year.
The above variable component comprised:
(i) revenue of Rs. 2,841.46 lacs towards software maintenance and
support services derived on the basis of the underlying revenue
recognised by NSEL on account of "transaction fees, delivery charges,
warehouse receipt transfer charges for trading, settlement and delivery
activities" for the year ended 31st March, 2013, pursuant to
agreements/contracts; and
(ii) revenue of Rs. 86.14 lacs towards business support services
derived on the basis of the underlying gross profits earned on the
merchandising activities by NSEL for the year ended 31st March, 2013.
However, as stated in paragraph 2 above, the management of NSEL had
communicated that they were not in a position to determine whether its
books and records presented as of 31st March, 2013 were true and fair
and what adjustments were needed to be carried out with a view to
present a correct financial position due to, inter alia, the various
irregularities in the operations of NSEL coming to light, agencies
looking at the legality of contracts and warehouse receipts and income
booked by NSEL therefrom, ongoing investigations and forensic audit.
Consequently, the auditors of NSEL, citing various developments,
investigations and audits relating to NSEL, had also communicated that
the financial statements of NSEL for the year ended 31st March, 2013
and their audit reports thereon were no longer to be relied upon.
Further, as represented to us by the Management of the Company, the
audited financial statements of NSEL for the year ended 31st March,
2013 are not yet available.
In view of our aforesaid comments and in the absence of sufficient
appropriate audit evidence, particularly, in the absence of the audited
financial statements of NSEL for the year ended 31st March, 2013, which
we could have placed reliance on to validate the underlying elements of
revenue and gross profits of NSEL based on which the above mentioned
variable component of revenue were derived and accounted for by the
Company, significant uncertainty exists regarding the amount of the
consideration that could be derived from rendering the service and,
hence, we are unable to determine the extent to which the above
mentioned revenue aggregating Rs. 2,927.60 lacs should be de-recognised
in the Statement of Profit and Loss for the year ended 31st March, 2014
and postponed by the Company, in compliance with the recognition and
measurement principles stated in Accounting Standard (AS) 9, ''Revenue
Recognition''.
(b) As stated by the Management of the Company in Note 55 to the
financial statements, Writ Petitions, Public Interest Litigations,
Civil Suits have been filed against the Company in relation to the NSEL
event, wherein the Company has been made a party in the Writ Petitions
and Civil Suits, and these matters are pending adjudication. In
addition, there is a First Information Report registered, inter alia,
against the Company with the Economic Offences Wing. Further, as stated
in the said Note 55 to the financial statements, based on legal advice,
the Management of the Company does not foresee that the parties who
have filed the Writ Petitions, Public Interest Litigations, Civil Suits
would be able to sustain any claim against the Company. In this regard,
the Management and those charged with Governance have represented to us
that other than as stated in the said Note 55 to the financial
statements, there are no claims, litigations, potential settlements
involving the Company directly or indirectly which require adjustments
to/disclosures in the financial statements.
In the light of the above representations regarding the ongoing
investigations and matters, the outcome of which is not known and is
uncertain as on date, we are unable to comment on the consequential
impact in respect of the same on these financial statements.
(c) No provision was considered necessary by the Management of the
Company for diminution in the value of the Company''s long-term
investment in NSEL of Rs. 4,499.99 lacs as at 31st March, 2013.
In view of the aforesaid developments relating to NSEL, which
represented a subsequent discovery of facts existing on the date of the
Balance Sheet as at 31st March, 2013, in our opinion, there were
indications of ''other than temporary'' diminution in the carrying amount
of the Company''s investment in NSEL as at 31st March, 2013. However, in
the absence of the audited financial statements of NSEL for the year
ended 31st March, 2013 (refer paragraph 2 above), non-availability of
estimation of future cash flows and earning capacity of NSEL and
suspension of NSEL''s operations, we were not able to obtain sufficient
appropriate audit evidence to determine the amount of provision that
would have been needed to be made for diminution in the carrying amount
of the Company''s investment in NSEL of Rs. 4,499.99 lacs as at 31st
March, 2013, in accordance with Accounting Standard (AS) 13,
''Accounting for Investments''.
However, as stated in Note 51 to the financial statements, during the
year ended 31st March, 2014, on a conservative basis, the Company has
made a provision, towards diminution, other than temporary, in the
value of the entire amount of its long term investment of Rs. 4,499.99
lacs in NSEL and has charged the same to the Statement of Profit and
Loss for the year ended 31st March, 2014.
9. We are informed that, on the directions of the Forward Markets
Commission, a special audit was carried out by an external agency in
respect of Multi Commodity Exchange of India Limited (MCX) covering,
inter alia, the agreements and transactions between MCX and the
Company. MCX has, on 26th May, 2014, submitted the scanned copy of the
special audit report dated 21st April, 2014 for dissemination on the
website of BSE Limited (Refer Note 59 to the financial statements).
We are unable to comment on the consequential impact, if any, in
respect of the above matter on these financial statements.
10. As stated in Note 50 to the financial statements, the Company has
investments in certain subsidiaries and a jointly controlled entity,
aggregating Rs. 12,590.95 lacs and has granted loans and advances to /
receivables from these entities, aggregating Rs. 90,758.89 lacs [which
exclude NSEL and its subsidiaries - refer paragraph 8 (c) above]. The
net worth of most of these entities has been eroded/substantially
eroded. A provision / adjustment of Rs. 8,681.71 lacs (including Rs.
6,944.45 lacs during the year) has been made, inter alia, for
diminution, other than temporary, in the value of investments and a
provision of Rs. 15,150.00 lacs has been made during the year for
doubtful loans and advances, which the Management of the Company
considers to be adequate.
In the absence of sufficient appropriate audit evidence, particularly,
in the absence of a fair valuation of the aforesaid investments at the
balance sheet date being provided to us, we are unable to determine the
adequacy of the provisions made.
11. As stated in Note 45 to the financial statements, the directives of
the Securities and Exchange Board of India (SEBI) by its Order dated
19th March, 2014 requires the Company to divest its investments
referred therein within ninety days from the date of the Order. These
include 27,165,000 Equity Shares of Re 1 each and 562,460,000 Warrants
of Re 1 each (each Warrant will entitle the holder to one Equity Share)
both in MCX Stock Exchange Limited and 5,750,000 Equity Shares of Rs 10
each in MCX-SX Clearing Corporation Limited which are being carried at
an aggregate amount of Rs. 6,471.25 lacs. The Management of the Company
is of the view that the aggregate carrying amount of the aforesaid
investments at Rs. 6,471.25 lacs represents the lower of cost and fair
value of these investments as on the balance sheet date.
In the absence of sufficient appropriate audit evidence, particularly,
in the absence of a fair valuation of the aforesaid investments at the
balance sheet date being provided to us, and having regard to the time
limit for divestment prescribed in the aforesaid Order, we have not
been able to validate whether the carrying amount of these investments
is the lower of cost and fair value, as required by Accounting Standard
(AS) 13, ''Accounting for Investments''.
12. The Company has recognised MAT Credit of Rs. 9,188.82 lacs as at
the year end, including Rs. 960.51 lacs during the year. In accordance
with the recommendations contained in the Guidance Note on Accounting
for Credit Available in respect of Minimum Alternative Tax (MAT) under
the Income - tax Act, 1961 issued by the ICAI, MAT Credit can be
created by way of credit to the Statement of Profit and Loss and shown
as MAT Credit Entitlement in the Balance Sheet, to the extent there is
convincing evidence to the effect that the Company will pay normal
income tax during the specified period. As per the aforesaid Guidance
Note, where MAT Credit is recognised as an asset, the same should be
reviewed at each balance sheet date and a company should write down the
carrying amount of MAT Credit asset to the extent there is no longer a
convincing evidence to the effect that the company will pay normal
income tax during the specified period.
In the absence of sufficient appropriate audit evidence, we are unable
to independently assess whether any write down is required in respect
of the aforesaid carrying amount of MAT Credit asset.
13. As disclosed in Note 4 "Reserves and Surplus" an amount of Rs.
2,764.71 lacs has been paid as interim dividends for the year 2013-14
and the tax paid on these dividends is Rs. 469.86 lacs. However, the
Company has made a loss for the year ended 31st March, 2014. Further,
the consequential transfer of the stipulated minimum amounts of profits
to General Reserves in accordance with the Companies (Transfer of
Profits to Reserves Rules), 1975, has not been effected due to loss for
the year.
14. The matters stated above could also have a consequential impact on
the measurement and disclosures of information provided under, but not
limited to, managerial remuneration, provision for tax, earnings per
share, segment information and related parties for the year ended 31st
March, 2014, in the financial statements.
Qualified Opinion
15. In our opinion and to the best of our information and according to
the explanations given to us, except for the possible effects of the
matters described in the Basis for Qualified Opinion paragraphs above,
the aforesaid financial statements give the information required by the
Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014;
(b) in the case of the Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
16. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
17. As required by Section 227(3) of the Act, we report that:
(a) Except for the matters described in the Basis for Qualified Opinion
paragraphs above, we have obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) Except for the possible effects of the matters described in the
Basis for Qualified Opinion paragraphs above, in our opinion, proper
books of account as required by law have been kept by the Company so
far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) Except for the possible effects of the matters described in the
Basis for Qualified Opinion paragraphs above, in our opinion, the
Balance Sheet, the Statement of Profit and Loss and the Cash Flow
Statement comply with the Accounting Standards notified under the Act
(which continue to be applicable in respect of Section 133 of the
Companies Act, 2013 in terms of General Circular 15/2013 dated 13th
September, 2013 of the Ministry of Corporate Affairs).
(e) On the basis of the written representations received from the
directors as on 31st March, 2014 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2014
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
ANNEXURE TO THE INDEPENDENT AUDITORSÂ REPORT
(Referred to in paragraph 16 under ÂReport on Other Legal and
Regulatory Requirements section of our report of even date)
(i) Having regard to the nature of the Company''s business / activities
/ results during the year, clauses (vi), (viii), (xii), (xiii), (xiv),
(xviii), (xix) and (xx) of Paragraph 4 of the Order are not applicable
to the Company.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the
Management of the Company in accordance with a regular programme of
verification which, in our opinion, provides for physical verification
of all the fixed assets at reasonable intervals. According to the
information and explanations given to us, no material discrepancies
were noticed on such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) According to the information and explanations given to us, the
Company does not have any inventories as at the balance sheet date
since they are being directly delivered to the customers on procurement
and therefore, the question of reporting on whether: physical
verification has been carried out at reasonable intervals; procedures
of physical verification of inventories were reasonable and adequate;
and discrepancies noticed on physical verification were material, does
not arise. On the basis of our examination, in our opinion, the Company
has maintained proper records of its inventories.
(iv) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(v) In our opinion and according to the information and explanations
given to us, having regard to the nature of the Company''s business and
the explanations that the services sold and some of the items purchased
are of special nature and suitable alternative sources are not readily
available for obtaining comparable quotations, there is an adequate
internal control system commensurate with the size of the Company and
the nature of its business with regard to purchases of inventory and
fixed assets and the sale of goods and services. During the course of
our audit, we have not observed any major weakness in such internal
control system.
(vi) To the best of our knowledge and belief and according to the
information and explanations given to us, there are no contracts or
arrangements that needed to be entered in the Register maintained in
pursuance of Section 301 of the Companies Act, 1956.
(vii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the Management
of the Company have been commensurate with the size of the Company and
the nature of its business.
(viii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty and other material
statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty and other material statutory dues in arrears as at
31st March, 2014 for a period of more than six months from the date
they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax and Excise
Duty which have not been deposited as on 31st March, 2014 on account of
disputes are given below:
Name of Statute Nature of Dues Forum where Dispute is
Pending
Finance Act, 1994 Service Tax Commissioner of Service
Tax
Central Excise Act,1944 Excise duty
(including Central Excise and Service
interest and Tax Appellate Tribunal
penalty)
Maharashtra Value Added Value Added Tax
(including Joint Commissioner of
Tax Act, 2002 interest and Sales Tax (Appeal)
penalty)
Central Sales Tax Act,
1956 Central Sales Tax Joint Commissioner of
Sales Tax (Appeal)
Income - tax, Act, 1961 Income-tax Deputy Commissioner of
Income Tax (Appeals)
Name of Statute Period to which the Amount Involved
Amount Relates (Rs. Lacs
inance Act, 1994 July 9, 2004 to October 165.92
6, 2005; and December,
2004 to March, 2007
Central Excise Act,
1944 March 1, 2006 to 212.64
December 20, 2006
Maharashtra Value
Added Tax Act, 2002 2005-2006 to 2009-2010 74.35
Central Sales Tax
Act, 1956 2006 -2007 3.12
Income - tax, Assessment year 2009- 592.17
Act, 1961 2010
There were no unpaid disputed dues in respect of Wealth Tax and Customs
Duty as on 31st March, 2014.
(ix) Without considering the possible effects of our audit
qualifications reported in paragraphs 8 (a), 8 (b) and 9 to 14 of the
Basis of Qualified Opinion of our Audit Report which is not
quantifiable, the Company does not have accumulated losses at the end
of the financial year and the Company has not incurred cash losses
during the financial year covered by our audit and in the immediately
preceding financial year.
(x) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks. The Company does not have any dues to financial institutions
and has not issued any debentures.
(xi) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by its subsidiary companies from banks and
financial institutions are not, prima facie, prejudicial to the
interests of the Company.
(xii) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained.
(xiii) In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet of the
Company, we report that funds raised on short-term basis have, prima
facie, not been used during the year for long-term investment.
(xiv) We are unable to comment on the matters arising from the special
audit carried out by an external agency in respect of Multi Commodity
Exchange of India Limited on the directions of the Forward Markets
Commission as described in Note 59 to the financial statements (Also
see paragraph 9 of the Basis for Qualified Opinion of our Audit Report)
and the enquiries from certain investigating authoirties as described
in Notes 57 and 58 to the financial statements, for the purposes of
reporting on clause (xxi) of Paragraph 4 of the Order.
Further to the above, and except for the matters arising from NSEL as
described in Note 55 to the financial statements (Also see paragraph 8
(b) of the Basis for Qualified Opinion of our Audit Report) on which
also we are unable to comment, to the best of our knowledge and
according to the information and explanations gives to us, no fraud by
the Company and no material fraud on the Company has been noticed or
reported during the year.
For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm''s Registration No. 117366W/W-100018)
(Rajesh K. Hiranandani)
(Partner)
Mumbai: 30th May, 2014 (Membership No. 36920)
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of FINANCIAL
TECHNOLOGIES (INDIA) LIMITED ("the Company") which comprise the Balance
Sheet as at 31st March, 2013, the Statement of Profit and Loss and the
Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in Section 211(3C)
of the Companies Act, 1956 ("the Act") and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditors'' judgement, including
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Emphasis of Matter
We draw attention to Note 37 to the financial statements regarding
investments made in certain subsidiaries and a joint venture which have
accumulated losses and the loans and advances/receivables from these
entities, where the provision made for diminution, other than
temporary, in the value of investments is considered to be adequate,
for the reasons stated in the said Note.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
2. As required under provisions of Section 227(3) of the Act, we
report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211(3C) of the Act.
(e) On the basis of the written representations received from the
directors as on 31st March, 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2013
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under ÂReport on Other Legal and Regulatory
Requirements'' section of our report of even date)
(i) Having regard to the nature of the Company''s
business/activities/results during the year, clauses (vi), (viii), (x),
(xii), (xiii), (xiv), (xviii), (xix) and (xx) of Paragraph 4 of the
Order are not applicable to the Company.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) According to the information and explanations given to us, the
Company does not have any inventories as at the balance sheet date
since they are being directly delivered to the customers on procurement
and therefore, the question of reporting on whether: physical
verification has been carried out at reasonable intervals; procedures
of physical verification of inventories were reasonable and adequate;
and discrepancies noticed on physical verification were material, does
not arise. On the basis of our examination, in our opinion, the Company
has maintained proper records of its inventories.
(iv) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(v) In our opinion and according to the information and explanations
given to us and having regard to the nature of the Company''s business,
a comparison of prices could not be made, in respect of income from
software products and software services and in respect of some of the
items purchased being of special nature and suitable alternative
sources are not readily available for obtaining comparable quotations,
there is an adequate internal control system commensurate with the size
of the Company and the nature of its business with regard to purchases
of inventory and fixed assets and income from software products and
software services. During the course of our audit, we have not observed
any major weakness in such internal control system.
(vi) In our opinion and according to the information and explanations
given to us, there are no contracts or arrangements that need to be
entered in the Register maintained in pursuance of Section 301 of the
Companies Act, 1956.
(vii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
(viii)According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty and other material
statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty and other material statutory dues in arrears as at
31st March, 2013 for a period of more than six months from the date
they became payable.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks. The Company does not have any dues to financial institutions and
has not issued any debentures.
(x) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by its subsidiary companies from banks and
financial institutions are not, prima facie, prejudicial to the
interests of the Company.
(xi) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained, other than
temporary deployment pending application.
(xii) In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet of the
Company, we report that funds raised on short-term basis have, prima
facie, not been used during the year for long-term investment.
(xiii) To the best of our knowledge and according to the information
and explanations given to us, no fraud by the Company and no material
fraud on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117366W)
Rajesh K Hiranandani
Partner
MUMBAI, 30th May, 2013 (Membership No. 36920)
Mar 31, 2012
1. We have audited the attached Balance Sheet of FINANCIAL
TECHNOLOGIES (INDIA) LIMITED ("the Company") as at 31 March, 2012, the
Statement of Profit and Loss and the Cash Flow Statement of the Company
for the year ended on that date, both annexed thereto. These financial
statements are the responsibility of the Company's Management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. Without qualifying our opinion, we continue to draw attention to:
(a) Note 39 to the financial statements regarding investments made in
certain subsidiaries and a joint venture which have accumulated losses
and the loans and advances / receivables from these entities, where the
provision made for diminution, other than temporary, in the value of
investments is considered to be adequate, for the reasons stated in the
said Note; and (b) Note 42 to the financia statements regarding the
Company's stand that no tax liability is expected as a consequence to a
court approved reduction-cum arrangement scheme of MCX Stock Exchange
Limited based on independent legal / tax counsel's opinion obtained by
the Company as stated in the said Note.
4. As required by the Companies (Auditor's Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
5. Further to our comments in the Annexure referred to in paragraph 4
above and read with paragraph 3 above, we report that:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books;
(c) the Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
[ii) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
On the basis of written representations received from the Directors as
on 31 March, 2012 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31 March, 2012
from being appointed as a director in terms of Section 274(1 )(g) of
the Companies Act, 1956.
ANNEXURE TO THE AUDITORS' REPORT
(REFERRED TO IN PARAGRAPH 4 OF OUR REPORT OF EVEN DATE)
i) Having regard to the nature of the Company's business / activities /
result, clauses (vi), (viii), (x), (xii), (xiii), (xviii) and (xix) of
CARO are not applicable.
ii) According to the information and explanations given to us, in
respect of its fixed assets:
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
iii) According to the information and explanations given to us, the
Company does not have any inventories as at the balance sheet date
since they are being directly delivered to the customers on procurement
and therefore, the question of reporting on whether: physical
verification has been carried out at reasonable intervals; procedures
of physica verification of inventories were reasonable and adequate;
and discrepancies noticed on physical verification were material, does
not arise. On the basis of our examination, in our opinion, the Company
has maintained proper records of its inventories.
iv) The Company has neither granted nor taken any loans, secured or
unsecured, to / from companies, firms or other parties listed in the
Register maintained under Section 301 of the Companies Act, 1956.
v) In our opinion and according to the information and explanations
given to us and having regard to the nature of the Company's business,
a comparison of prices is not possible, in respect of income from
software products and software services and in respect of some of the
items purchased being of special nature and suitable alternative
sources are not readily available for obtaining comparable quotations,
there is an adequate internal control system commensurate with the size
of the Company and the nature of its business with regard to purchase
of inventory and fixed assets and income from software products and
software services. During the course of our audit, we have not observed
any major weakness in such internal control system.
vi) In our opinion and according to the information and explanations
given to us, there are no contracts or arrangements that need to be
entered in the Register maintained in pursuance of Section 301 of the
Companies Act, 1956.
vii) In our opinion, the internal audit function carried out during the
year by a firm of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
viii) According to the information and explanations given to us in
respect of statutory dues:
a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty and other material statutory dues
applicable to it with the appropriate authorities.
b) There were no undisputed amounts payable in respect of Income-tax,
Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other
material statutory dues in arrears as at 31 March, 2012 for a period of
more than six months from the date they became payable.
c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty and Excise Duty which have not been deposited as on 31
March, 2012 on account of any dispute are given below:
Forum where
Statute Nature of Dues Dispute is pending
Finance Act,
1994 Service Tax Commissioner of Service
Tax
Central
Excise Act, Excise duty (including Central Excise and Service
1944 interest and penalty) Tax Appellate Tribunal
Maharashtra
Value Value Added Tax (including Joint Commissioner of
Added Tax
Act, 2002 interest and penalty) Sales Tax (Appeal)
Central Sales
Tax Act, Central Sales Tax Joint Commissioner of
1956 Sales Tax (Appeal)
Income - tax,
Act, Income-tax Commissioner of Income
1961 Tax (Appeals)
Statue Amount
Period to which involved
the amount relates (Rs. lacs)
Finance Act, 1994 9th July, 2004 to 6th October,
2005; 244.50
and December, 2004 to March,
2007
Central Excise Act,
1944 1st March, 2006 to 20th
December, 184.88
2006
Maharashtra Value
Added Tax Act, 2002 2005-2006 to 2008-2009 65.17
Central Sales Tax Act,
1956 2006-2007 3.12
Income - tax, Act,
1961 Assessment years: 2002-2003 and 6.14
2006-2007
ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks.
x) Based on our examination of the records and evaluation of the
related internal controls, the Company has maintained proper records of
the transactions and contracts in respect of its dealing in shares,
securities, debentures and other investments and timely entries have
been made therein. The aforesaid securities have been held by the
Company in its own name.
xi) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by its subsidiary companies from banks, are not
prima facie prejudicia to the interests of the Company.
xii) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained, other than temporary deployment pending
application.
xiii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short term basis have not, prima facie,
been used during the year for long-term investment.
xiv) The Management has disclosed in Note 37 to the financial
statements, the end use of money raised by public issue of Zero Coupon
Convertible Bonds and we have verified the same.
xv) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No: 11 7366W)
Rajesh K Hiranandani
Partner
(Membership No. 36920)
MUMBAI, 30th May, 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of Financial
Technologies (India) Limited ("the Company") as at 31st March, 2011,
the Profit and Loss Account and the Cash Flow Statement of the Company
for the year ended on that date, both annexed thereto. These financial
statements are the responsibility of the Company's Management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Without qualifying our opinion, we continue to draw attention to
Note 5 on Schedule 15 regarding the Company's stand that no tax
liability is expected as a consequence to a court approved
reduction-cum arrangement scheme of MCX Stock Exchange Limited based on
independent legal / tax counsel's opinion as stated in the said Note
and Note 23 on Schedule 15 regarding investments made in certain
subsidiaries and a joint venture which have continuing losses and the
loans and advances / debts due from these entities, where the provision
made for diminution, other than temporary, in the value of investments
is considered to be adequate, for the reasons stated in the said Note.
5. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) in our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books;
c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
ii) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
6. On the basis of the written representations received from the
Directors as on 31st March, 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2011 from being appointed as a director in terms of Section
274(1)(g) of the Companies Act, 1956.
Annexure To The Auditors' Report
(Referred to in Paragraph 3 of our report of even date)
I) Having regard to the nature of the Company's
business/activities/result, clauses (v), (vi), (viii), (xi), (xii),
(xiii), (xvi), (xviii) and (xix) of CARO are not applicable.
ii) In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
iii) According to the information and explanations given to us, the
Company does not have any inventories as at the balance sheet date
since they are being directly delivered to the customers on procurement
and therefore, the question of reporting on whether: physical
verification has been carried out at reasonable intervals; procedures
of physical verification of inventories were reasonable and adequate;
and discrepancies noticed on physical verification were material, does
not arise. On the basis of our examination of records of inventories,
in our opinion, the Company has maintained proper records of its
inventories.
iv) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties listed in the
Register maintained under Section 301 of the Companies Act, 1956.
v) In our opinion and according to the information and explanations
given to us and having regard to the nature of the Company's business,
a comparison of prices is not possible, in respect of sale of products
and services and in respect of some of the items purchased are of
special nature and suitable alternative sources are not readily
available for obtaining comparable quotations, there is an adequate
internal control system commensurate with the size of the Company and
the nature of its business with regard to purchase of inventory and
fixed assets and the sale of products and services. During the course
of our audit, we have not observed any major weakness in such internal
control system.
vi) In our opinion, the internal audit function carried out during the
year by a firm of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
vii) According to the information and explanations given to us in
respect of statutory dues:
a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
applicable to it with the appropriate authorities.
b) There were no undisputed amounts payable in respect of Income-tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
dues in arrears as at 31st March, 2011 for a period of more than six
months from the date they became payable.
c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
31st March, 2011 on account of disputes are given below:
Forum where
Statute Nature of Dues Dispute is pending
Finance Act, 1994 Service Tax Commissioner of
Service Tax
Finance Act, 1994 Service Tax Commissioner of
Service Tax
Central Excise Act, 1944 Excise duty Central Excise and
Service Tax Appellate
Tribunal
Maharashtra Value Added Value Added
Tax Joint Commissioner
Tax Act, 2002 of Sales Tax (Appeal)
Maharashtra Value Added Value Added
Tax Joint Commissioner
Tax Act, 2002 of Sales Tax (Appeal)
Income Tax Act, 1961 Income Tax
- penalty Commissioner of
Income Tax (Appeals)
Statute Period to which Amount
the amount relates involved (Rs)
Finance Act, 1994 July 9, 2004 to 7,857,994
October 6, 2005
Finance Act, 1994 December, 2004 to 16,592,020
March, 2007
Central Excise Act, 1944
March 1, 2006 to 18,487,671
December 20, 2006
Maharashtra Value Added
Tax Act, 2002 April 1, 2005 to 1,765,293
March 31, 2006
Maharashtra Value Added
Tax Act, 2002 April 1, 2008 to 2,806,504
March 31, 2009
Income Tax Act, 1961 Assessment years 20,500,000
2003-04, 2004-05,
2005-06 & 2006-07
viii) The Company does not have any accumulated losses as at the end of
the year. The Company has not incurred cash losses in the financial
year and in the immediately preceding financial year.
ix) Based on our examination of the records and evaluations of the
related internal controls, the Company has maintained proper records of
the transactions and contracts in respect of its dealing in shares,
securities, debentures and other investments and timely entries have
been made therein. The aforesaid securities have been held by the
Company in its own name.
x) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by its subsidiary companies from banks, are not
prima facie prejudicial to the interests of the Company.
xi) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short term basis have not, prima facie,
been used during the year for long-term investment.
xii) The Management has disclosed in note 15(c) on Schedule 15-II, the
end use of money raised by public issue of Zero Coupon Convertible
Bonds and we have verified the same.
xiii) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No: 117366W)
Rajesh K Hiranandani
Partner
Mumbai, 27th May, 2011 (Membership No. 36920)
Mar 31, 2010
1. We have audited the attached Balance Sheet of Financial
Technologies (India) Limited as at 31st March, 2010, the Profit and
Loss Account and the Cash Flow Statement of the Company for the year
ended on that date, both annexed thereto. These financial statements
are the responsibility of the Companys Management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, issued
by the Central Government in terms of Section 227 (4A) of the Companies
Act, 1956, we enclose in the Annexure, a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Without qualifying our report, we invite attention to the following
notes to Schedule 15-11 of the financial statements:
1. Note 5 regarding the treatment of (a) cancellation of investments
in 562,460,000 equity shares of MCX-Stock Exchange Limited (MCX-SX)
aggregating Rs. 562,460,000/- and (b) issuance of 562,460,000
transferable warrants to the Company, both pursuant to a court approved
composite scheme of Reduction cum Arrangement1 between MCX-SX and its
shareholders (including the Company). As stated in the note, the
Company has obtained independent legal / tax counsels opinion that no
tax liability arises on the reduction cum arrangement and has
accordingly not quantified the same. On that basis no tax liability is
recognised in respect thereof.
2. Note 24 regarding investments in certain subsidiaries and joint
venture company aggregating Rs. 9,238,186,235/- and loans and advances
/ debtors aggregating Rs. 286,620,649/- due from some of these entities
which have continuing losses (share of cumulative losses Rs.
2,519,229,714/-) against which provision for diminution of Rs.
569,026,000/- is considered adequate based on their business plans and
other reasons as stated in the said note.
5. Further to our comments in the Annexure referred to above, we
report that:
a. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books;
c. The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d. In our opinion and read with paragraph 4 above, the Balance Sheet,
the Profit and Loss Account and the Cash Flow Statement dealt with by
this report are in compliance with the Accounting Standards referred to
in Section 211 (3C) of the Companies Act, 1956;
e. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
ii. in the case of the profit and loss account, of the profit of the
Company for the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
6. On the basis of written representations received from the
directors, as on 31* March, 2010 and taken on record by the board of
directors, we report that none of the directors is disqualified as on
31st March, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITORS REPORT
To the Shareholders of Financial Technologies (India) Ltd.
Re: Financial Technologies (India) Limited
Referred to in Paragraph 3 of our report of even date
i) In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) The fixed assets of the Company are physically verified by the
Management according to a phased programme designed to cover all items
over a period of two years, which in our opinion, is reasonable having
regard to the size of the Company and nature of its assets. Pursuant to
the programme, a portion of the fixed assets of the Company has been
physically verified by the management during the year and no material
discrepancies were noticed on such verification as compared with the
records of fixed assets maintained by the Company.
c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
li) In respect of its inventory:
a) In our opinion, verification of inventories has been carried out at
reasonable intervals by the management during the year.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification. There are no closing inventories.
lii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties listed in the
Register maintained under Section 301 of the Companies Act, 1956.
iv) In our opinion and according to the information and explanations
given to us, there is an internal control system commensurate with the
size of the Company and nature of its business for purchase of
inventory and fixed assets and sale of goods and services.
v) In respect of contracts and arrangements entered in the register
maintained in pursuance of Section 301 of the Companies Act 1956:
a) To the best of our knowledge and belief and according to the
information and explanations given to us, particulars of contracts or
arrangements that needed to be entered into the register maintained
under the said section have been so entered.
b) According to information and explanations given to us, where the
transactions made in pursuance of such contracts or arrangements during
the year are in excess of Rs. 500,000, they have been made at prices,
which are, prima facie, reasonable having regard to the prevailing
market prices at the relevant time
vi) The Company has not accepted any deposits from the public.
vii) In our opinion, the internal audit function carried out during the
year by a firm of Chartered Accountants appointed by the management is
commensurate with the size of the Company and the nature of its
business.
viii) According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
clause (d) of sub-section (1) of Section 209 of the Act. Accordingly,
clause 4 (viii) of the Order is not applicable to the Company.
ix) According to the information and explanations given to us in
respect of statutory and other dues:
a) The Company has generally been regular in depositing with the
appropriate authorities, undisputed statutory dues including provident
fund, investor education and protection fund, employees state
insurance, income tax, sales tax, wealth tax, service tax, custom duty,
excise duty, cess and any other statutory dues applicable to it.
b) According to the information and explanations given to us, there are
no undisputed amounts payable in respect of the aforesaid statutory
dues as at 31st March, 2010 outstanding for a period more than six
months from the date they became payable.
c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
31st March, 2010 on account of disputes are given below:
Statement of Disputed Dues
Period to which Forum where
Name of the Nature
statute of dues Amount (Rs.)
Finance Act, 1994 Service tax 7,857,994
Central Excise & Salt
Act, 1944 Excise duty 7,448,968
Name of the Statute Period to Which Forum where dispute
the amount relates dispute is pending
Finace Act, 1994 9th July, 2004 to Commissioner of
Central Excise & Salt
Act, 1944 6th October, 2005 Service tax
1st March, 2006 to Commissioner of
20th December, 2006
x) The Company has no accumulated losses as at the end of the financial
year and it has not incurred cash losses during the financial year
covered by our audit and in the immediately preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks, financial institutions and debenture holders.
xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and any other securities and
accordingly, clause 4 (xii) of the Order is not applicable to the
Company.
xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi / mutual benefit
fund / society. Accordingly, clause 4 (xiii) of the Order is not
applicable to the Company.
xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, clause 4
(xiv) of the Order is not applicable to the Company.
xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by its subsidiary companies from banks, are
not prima facie prejudicial to the interests of the Company.
xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion, the Company
has not availed any term loans during the year and hence clause 4 (xvi)
of the Order is not applicable to the Company.
xvii) According to information and explanations given to us, and on an
overall examination of the balance sheet of the Company, funds raised
on short term basis have not, prima facie, been used for long term
investment.
xë) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Companies Act, 1956. Accordingly, clause 4 (xviii) of the Order is
not applicable to the Company.
xix) According to the information and explanations given to us, the
Company has not issued any debentures during the year and hence, the
question of creation of security or charge in respect of debentures
issued, does not arise.
xx) We have verified the end use of monies raised by public issue of
Global Deposit Receipts and Zero Coupon Convertible Bonds as disclosed
in notes 7 and 16 (d) of Schedule 15-11 respectively.
xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
[Firm Registration No: 117366W]
Ft. D. Kamat
Partner
Mumbai,
dated: 29th May, 2010 Membership No. 36822
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