Mar 31, 2018
Report on the Financial Statements
We have audited the accompanying financial statements of MONARCH NETWORTH CAPITAL LIMITED (''the Company''), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows 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 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 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 Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rule, 2015, as amended, and other accounting principles generally accepted in India.
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 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 and the Order issued under Section 143(11) of the Act.
We conducted our audit of the financial statements 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 obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
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, of the state of affairs of the Company as at March 31, 2018, and its profit/loss, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (''the Order'') issued by the Central Government in terms of Section 143(11) 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, based on our audit, 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, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) in our opinion, the aforesaid financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
e) on the basis of the written representations received from the directors of the Company as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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''. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
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, as amended, 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 the pending litigations, if any on its financial position in the financial statements- Please refer Note 33 to the Financial Statements.
II. The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise
III. There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.
ANNEXURE A TO AUDITORS'' REPORT
[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditors Report of even date]
On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:
1. In respect of its fixed assets
a) The Company has maintained the proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.
b) As explained to us, fixed assets have been physically verified by the management at regular intervals; as informed to us no material discrepancies were noticed on such verification;
c) As explained to us, the title deeds of all the immovable properties are held in the name of the company.
2. In respect of its inventories
Inventory represents securities held as stock-in-trade in course of acting as a merchant banker and market maker for the acquired equity shares and on account of error in execution of transaction. As explained to us, inventories have been verified and reconciled during the year by the management at reasonable intervals. As informed to us, no material discrepancies were noticed on verification of inventories by the management as compared to book records.
3. The company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013:
a) the terms and conditions of the grant of such interest free loans are not otherwise prejudicial to the company''s interest;
b) According to the information and explanations given to us, the loans given by the company are repayable on demand. As informed, repayment of Principal amount and interest (if agreed) has been received during the year whenever demanded by the company.
c) There is no overdue amount for more than ninety days in respect of loans to the parties covered in the above register.
4. According to the information and explanations given to us and based on our examination of the records of the Company, in respect of loans, investments, guarantees and security given/ made by the company, during the year, the company has complied with the provisions of section 185 & 186 of the Companies Act, 2013.
5. The Company has not accepted any deposits from the public covered under the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder. Further no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal on the company. Hence, Paragraph 3(v) of the Order is not applicable.
6. The Central Government of India has not prescribed the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013 for any of the products of the Company.
7. In respect of Statutory Dues:
a) According to the information and explanations given to us and based on the records of the company examined by us, the company is generally regular in depositing the 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 any other statutory dues to the appropriate authorities in India. According to the information and explanation given to us, there was no outstanding statutory dues as on the last day of the financial year concerned 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 based on the records of the company examined by us, there are no dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax which have not been deposited on account of any disputes, except the followings.
Sr No |
Name of Statue |
Amount (Rs. in Lakh) |
Period to which the amount related |
Forum where dispute Pending |
1 |
Service Tax |
15.14 |
01.04.2002 to 31.03.2007 |
Pending With Service tax Tribunal With Joint Commissioner of Service Tax |
Service Tax |
29.03 |
F.Y.2007-08 |
Pending With Commissioner (Appeals) of Service Tax |
|
Service Tax |
10.78 |
F.Y.2007-08 |
Pending With Commissioner (Appeals) of Service Tax |
|
Service Tax |
3.01 |
F.Y.2006-07 |
Superintendent, Service tax, Range XI, Ahmedabad |
|
Service Tax |
6.76 |
F.Y.2005-07 |
Pending With Commissioner (Appeals) of Service Tax |
|
2 |
Income Tax |
8.54 |
A.Y. 2002-03 |
First Appellate Authority |
Income Tax |
82.67 |
A.Y. 2009-10 |
First Appellate Authority |
|
Income Tax |
30.48 |
A.Y. 2010-11 |
Pending with CIT (Appeals); Original Demand Rs 75,69,110/- |
|
Rectification Applied: Rs 45,20,903/- |
||||
Income Tax |
4.91 |
A.Y. 2006-07 |
Assessing Officer |
There are no dues of Sales tax, Customs tax/Wealth tax, Excise duty/cess, which have not been deposited on account of any dispute.
8. According to the records of the company examined by us and as per the information and explanations given to us, the company has not defaulted in repayment of loans or borrowings to any financial institution, banks or government. The company has also not issued debentures. Hence Paragraph 3 (viii) of the Order is not applicable.
9. According to the records of the company examined by us and as per the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year and the term loans raised during the year were applied for the purpose for which those were raised.
10. During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.
11. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Sec 197 read with Schedule V to the Act.
12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
13. According to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards
14. The company has not made preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.
15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) is not applicable.
16. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
ANNEXURE B TO AUDITORS'' REPORT
[Referred to in Clause (f) in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditors Report of even date]
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of MONARCH NETWORTH CAPITAL LIMITED (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s 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 issued by the Institute of Chartered Accountants of India (ICAI). 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 company''s 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 Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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 auditor''s judgment, including the assessment of the risks of material misstatement of the 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 Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the 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 general, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were found operating effectively as at March 31, 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 on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For PAREKH SHAH & LODHA
Chartered Accountants
Firm Reg.: 107487W
CA Ashutosh Dwivedi
(Partner) M. No. : 410227
Place: Mumbai
Date : 30th May 2018
Mar 31, 2016
To the Members of
MONARCH NET WORTH CAPITAL LIMITED
(Formerly known as NET WORTH STOCK BROKING LIMITED)
Report on the Standalone Financial Statements
We have audited the accompanying financial statements of M/s. MONARCH NET WORTH CAPITAL LIMITED (Formerly known as NET WORTH STOCK BROKING LIMITED)(âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe act'') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flow 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 Companies (Accounts) Rules, 2014. This responsibility 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; design, implementation and maintenance of adequate internal financial controls, that are 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these 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 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 accounting policies used and the reasonableness of the accounting estimates made by the Company''s management and Board of 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 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 of the state of affairs of the Company as at 31st March 2016,its profit and cash flow for the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section
(11) of section143 of the Act, we give in the Annexure A, a statement on the matters Specified in paragraphs 3 and 4 of the Order.
As required by section 143(3) of the Act, we further 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 purpose of our audit;
b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c) the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended dealt with by this Report are in agreement with the books of account;
d) in our opinion, the aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014 ;
e) on the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 operative effectiveness of such controls, refer to our separate report in Annexure B; and
g) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:
I. The Company has disclosed the impact of the pending litigations on its financial position in the financial statements- Please refer Note 33, 36 & 37 to the Financial Statements.
II. The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise
III. There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.
[Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirements'' in the Independent Auditors Report of even date]
On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:
1. In respect of its fixed assets
a) The Company has maintained the proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.
b) As explained to us, fixed assets have been physically verified by the management at regular intervals; as informed to us no material discrepancies were noticed on such verification;
c) As explained to us, the title deeds of all the immovable properties are held in the name of the company.
2. In respect of its inventories
Inventory represents securities held as stock-in-trade in course of acting as a merchant banker and market maker for the acquired equity shares and on account of error in execution of transaction. As explained to us, inventories have been verified and reconciled during the year by the management at reasonable intervals. As informed to us, no material discrepancies were noticed on verification of inventories by the management as compared to book records.
3. The company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013:
a) the terms and conditions of the grant of such interest free loans are not otherwise prejudicial to the company''s interest;
b) According to the information and explanations given to us, the loans given by the company are repayable on demand. As informed, repayment of Principal amount and interest (if agreed) has been received during the year whenever demanded by the company.
c) There is no overdue amount for more than ninety days in respect of loans to the parties covered in the above register.
4. According to the information and explanations given to us and based on our examination of the records of the Company, in respect of loans, investments, guarantees and security given/ made by the company, during the year, the company has complied with the provisions of section 185 & 186 of the Companies Act, 2013.
5. The Company has not accepted any deposits from the public covered under the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. Further no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal on the company. Hence, Paragraph 3(v) of the Order is not applicable.
6. The Central Government of India has not prescribed the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013 for any of the products of the Company.
7. In respect of Statutory Dues:
a) According to the information and explanations given to us and based on the records of the company examined by us, the company is generally regular in depositing the 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 any other statutory dues to the appropriate authorities in India. According to the information and explanation given to us, there was no outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable, except the followings:
Nature of Liability |
Relevant Financial Year |
Amount |
Professional Tax - Madhya Pradesh |
Till 2014-2015 |
18,430 |
Professional Tax - Tamil Nadu |
Till 2014-2015 |
1,77,713 |
Professional Tax - Tamil Nadu |
2015-2016 |
37,320 |
Professional Tax - Orissa |
Till 2014-2015 |
10,621 |
Professional Tax - Orissa |
2015-2016 |
875 |
b) According to the information and explanations given to us and based on the records of the company examined by us, there are no dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax which have not been deposited on account of any disputes except stated below:
Sr No |
Name of Statue |
Name of Due |
Amount (Rs.in Lakh) |
Period to which the amount related |
Forum where dispute Pending |
1 |
Income Tax |
Income Tax |
3.43 |
A.Y. 2011-12 |
First Appellate Authority |
Income Tax |
82.67 |
A.Y. 2009-10 |
First Appellate Authority |
||
Income Tax |
8.54 |
A.Y. 2002-03 |
First Appellate Authority |
According to the records of MNCL (Merged Entities) and During P.Y. Monarch Project and Fin markets Limited (MPFL).
Sr No |
Name of Statue |
Name of Due |
Amount (Rs.in Lakh) |
Period to which the amount related |
Forum where dispute Pending |
2 |
Service Tax |
Service Tax |
15.14 |
01.04.2002 to 31.03.2007 |
Pending With Service tax Tribunal With Joint Commissioner of Service Tax |
Service Tax |
29.03 |
F.Y.2007-08 |
Pending With Commissioner (Appeals) of Service Tax |
||
Service Tax |
10.78 |
F.Y.2007-08 |
Pending With Commissioner (Appeals) of Service Tax |
||
Service Tax |
3.01 |
F.Y.2006-07 |
Superintendent, Service tax, Range XI, Ahmadabad |
||
3 |
Income Tax |
Income Tax |
30.48 |
A.Y. 2010-11 |
Pending with CIT (Appeals); Original Demand Rs 75,69,110/Rectification Applied: Rs 45,20,903/- |
Income Tax |
4.91 |
A.Y. 2006-07 |
Assessing Officer |
||
Income Tax |
47.29 |
A.Y.2007-08 |
Assessing Officer |
||
Income Tax |
0.19 |
A.Y.2009-10 |
Assessing Officer |
||
Income Tax |
52.71 |
A.Y.2009-10 |
Assessing Officer |
||
Income Tax |
4.94 |
A.Y.2011-12 |
Assessing Officer |
||
Income Tax |
7.19 |
A.Y.2013-14 |
Assessing Officer |
According to the records of MNCL (Merged Entities) and During P.Y. Monarch Research and Brokerage Limited (MRBPL).
Sr No |
Name of Statue |
Name of Due |
Amount (Rs. in Lakh) |
Period to which the amount related |
Forum where dispute Pending |
Income Tax |
0.09 |
A.Y 2006-07 |
Assessing Officer |
||
4 |
Income Tax |
Income Tax |
21.13 |
A.Y.2007-08 |
Assessing Officer |
Income Tax |
5.80 |
A.Y.2007-08 |
Assessing Officer |
||
Income Tax |
0.45 |
A.Y.2010-11 |
Assessing Officer |
According to the records of MNCL (Merged Entities), there are income tax dues for A.Y.2009-10, Rs. 1,37,444 (Appeal Against Order contingent liability) and for A.Y.2010-11 Rs. 11,45,500 (Appeal Against Order Contingent Liability) which have not been deposited on account of any dispute. There are no dues of Sales tax, Customs tax/Wealth tax, Excise duty/cess, which have not been deposited on account of any dispute.
8. According to the records of the company examined by us and as per the information and explanations given to us, the company has not defaulted in repayment of loans or borrowings to any financial institution, banks or government. The company has also not issued debentures. Hence Paragraph 3 (viii) of the Order is not applicable.
9. According to the records of the company examined by us and as per the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year and the term loans raised during the year were applied for the purpose for which those were raised.
10. During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.
11. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Sec 197 read with Schedule V to the Act.
12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
13. According to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards
14. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) is not applicable.
16. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of MONARCH NET WORTH CAPITAL LIMITED (Formerly known as NET WORTH STOCK BROKING LIMITED)(âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s 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 issued by the Institute of Chartered Accountants of India (ICAI). 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 company''s 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 Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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 auditor''s judgment, including the assessment of the risks of material misstatement of the 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 Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the 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 March 31, 2016, 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 issued by the Institute of Chartered Accountants of India.
For PAREKH SHAH & LODHA
Chartered Accountants
Firm Reg.: 107487W
Ashutosh Dwivedi
Place: Mumbai (Partner)
Date: 30th May 2016 M. No. : 410227
Mar 31, 2015
1. We have audited the accompanying Standalone Financial Statements of
NETWORTH STOCK BROKING LIMITED ("the Company") which comprise the
Balance Sheet as at 31st March 2015 and the Statement of Profit and
Loss, Cash Flow Statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
2. The CompanyÂs Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these Standalone Financial Statements
that give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes mainte- nance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets
of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
3. Our responsibility is to express an opinion on these Standalone
Financial Statements based on our audit.
4. We conducted our audit in accordance with the provision of the Act,
the Accounting and Auditing Standards and matter which are required to
be included in the audit report under the provision of the Act and Rule
made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the Financial Statements
are free from material misstatements.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the Financial Statements. The
proce- dures selected depend on the auditorÂs 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 CompanyÂs preparation of the Financial Statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circum- stances, but not for the purpose of
expressing an opinion on whether the Company has in place an adequate
internal financial controls system over financial reporting and the
operating effectiveness of such controls. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by the CompanyÂs
directors, as well as evaluating the overall presen- tation of the
financial statements
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Basis for Qualified Opinion
7. The CompanyÂs has provided in its Statement of Profit and Loss
the Provision for Taxation at Rs. 1,16,80,000. However, the actual tax
liability of the Company for the year as computed in accordance with
the Accounting Standard - 22 (AS-22) works out to Nil. This constitutes
a departure from the requirements of the said AS-22. As a result of the
above, the tax expense for the year has been provided in excess by Rs.
1,16,80,000 and the Profit after Tax has been understated by Rs.
1,16,80,000 in the Statement of Profit and Loss. Had the company
provided the tax expense as per the said AS-22, the Reserves of the
Company would have been higher by Rs. 1,16,80,000 and Short Term
Provisions would have been lower by Rs. 1,16,80,000.
Opinion
8. In our opinion and to the best of our information and according to
the explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the aforesaid
standalone financial statements give the information required by the
Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India,
of the state of affairs of the Company as at 31st March 2015 and its
profit and its cash flows for the year ended on that date.
Report on other Legal and Regulatory Requirements
9. As required by the Companies (AuditorÂs Report) Order, 2015,
issued by the Central Government of India in terms of sub-section (11)
of Section 143 of the Act, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order.
10. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
e) On the basis of written representations received from the directors
as on 31s1 March, 2015, taken on record by the Board of Directors, none
of the directors is disqualified as on 31st March, 2015, from being
appointed as a director in terms of Section 164(2) of the Act;
f) With respect to the other matters included in the AuditorÂs Report
in accordance with Rule 11 of the Companies( Audit and Auditors) Rule,
2014 in our opinion and to best of our information and according to the
explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements -Note No 35;
ii. The Company has not made provision, since the company has not
entered into any long term Derivative Contract as required under the
applicable law or accounting standards, for material foreseeable
losses;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
(Referred to paragraph (1) under "Report on other legal and regulatory
requirement" of our report of even date)
(i) . a. The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. We are informed that the fixed assets have been physically verified
by the Management at phase manner over a period of three year. In
accordance with this programme, certain fixed assets were verified
during the year and no material discrepancies were noticed on such
verification. In our opinion, the frequency of verification is
reasonable with regard to the size of the company and nature of assets.
(ii) In respect of Inventories:
a. Inventory represents securities held as stock-in-trade in course of
Market activities and on account of error in execution of transaction.
Verification and reconciliation of the same is conducted at reasonable
interval by the management.
b. As per the information given to us the procedures of physically
verification and reconciliation of inventory following by the
management are, in our opinion, reasonable and adequate in relation to
size of the company and the nature of its business.
c. In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) The Company has granted loans, secured or unsecured, to
companies, firms or other parties covered in the Register maintained
under Section 189 of the Companies Act, 2013:
a. The receipts of principal amounts and interest have been regular /
as per stipulations.
b. The principal amounts of such loans are on demand and there is no
repayment schedule. Interest, if any is payable or demand.
(iv) In our opinion, according to the information and explanation given
to us, having regard to the explanation that the company's service
income depends on large volume of transactions executed daily on behalf
of several clients, where there is a probability that certain
transactions may be disputed by clients resulting in consequential cost
to the company, there is an adequate internal control procedure
commensurate with the size of the company and the nature of its
business with regard to service income, purchase of inventory and
purchase of fixed Assets and sale of services. During the course of our
audit neither we have come across nor we have been informed of any
continuing failure to correct major weakness in the internal control.
(v) According to the information and explanation given to us, the
company has not accepted the any deposits from the public. Therefore
provision of clause (v) of paragraph companies (auditorÂs Report)
order 2015 is not applicable to the entities to the Company
(vi) According to the information and explanation given to us,
maintenance of cost records under sub-section (1) of Section 148 of the
Companies Act, 2013 in respect of the product dealt with by the Company
as prescribed by central government is not applicable to the Company.
(vii) In respect of statutory dues:-
a) According to record of company, the undisputed statutory dues
including provident fund, employees state insurance, income-tax,
sales- tax, wealth tax, service tax, duty of customs, duty of excise,
value added tax, cess and any other statutory dues with the appropriate
authorities have been generally regularly deposited with the
appropriate authorities. According to the information and explanations
given to us, no undisputed amounts payable in respect of the aforesaid
dues were outstanding as at 31st March, 2015 for a period of more than
six months from the date of becoming payable.
b) According to the information and explanation given to us and the
record of the Company examined by us, the particulars of Income tax and
Service tax as on 31st March, 2015 which have not been deposited on
account of a dispute pending are as under:-
Sr. Name of Statue Nature of Due Amount
No Rs. in Lakhs)
Income 3.43
Tax
1 Income Tax Income 82.67
Tax
Income 8.54
Tax
According to the records of NSBL (Merged Entities) and During P.Y.
Monarch Project and Finmarkets Limited (MPFL).
(Amount in Lakhs)
Sr Name of Statue Nature of Due Amount
No Rs.in Lakhs)
Service Tax 15.14
2 Service Service Tax 29.03
Tax
Service Tax 10.78
Service Tax 3.01
Income Tax 30.48
3 Income Tax Income Tax 4.91
Income Tax 47.29
Income Tax 0.19
Income Tax
Income Tax 4.94
Income Tax 7.19
According to the records of NSBL (Merged Entities) and During P.Y.
Monarch Research & Brokerage Private Limited (MRBPL).
Sr Name of Statue Nature of Due Amount
No
Income Tax 0.09
Income Tax 21.13
4 Income Tax Income Tax 5.80
Income Tax 0.45
Sr. Period to which Forum where dispute is
No the amount related Pending
A.Y. 2011-12 First appellate Authority
1 A.Y.2009-10 First appellate Authority
A.Y. 2002-03 Assessing Officer
1.04.2002 to Pending With Service Tax
31.03.2007 Tribunal with Joint Commissioner of
Service Tax
2
F.Y. 2007-08 Pending With Commissioner
(Appeals) of Service Tax
F.Y. 2007-08 Pending With Commissioner
(Appeals) of Service Tax
F.Y. 2006-07 Superintendent, Service
tax, Range XI, Ahmedabad
A.Y.2010-11 Pending with Commissioner
of Income Tax (Appeals)
Original Demand - Rs. 75,69,110/-
Rectification applied - Rs. 45,20,903
3
A.Y.2006-07 Assessing Officer
A.Y.2007-08 Assessing Officer
A.Y.2009-10 Assessing Officer
A.Y.2011-12 Assessing Officer
A.Y.2013-14 Assessing Officer
A.Y. 2006-07 Assessing Officer
4 A.Y.2007-08 Assessing Officer
A.Y. 2007-08 Assessing Officer
A.Y. 2010-11 Assessing Officer
According to the records of NSBL (Merged Entities), there are income
tax dues for A.Y.2009-10'1,37,444 (Appeal Against Order contin- gent
liability) and for A.Y.2010- Rs.11,45,500 (Appeal Against Order
Contingent Liability) which have not been deposited on account of any
dispute. There are no dues of Sales tax, Customs tax/Wealth tax, Excise
duty/cess, which have not been deposited on account of any dispute.
(MRBPL during P.Y).
(c) According to the information and explanation given to us there is
no any amount required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956
(viii) The Company has accumulated losses at the end of the financial
year which is less than fifty percent of its net worth. The company has
not incurred any cash losses for the financial year covered by our
audit and in immediately preceding financial year.
(ix) According to record of the company examined by us and the
information and explanations given to us, the company has not defaulted
in repayment of dues to any Financial Institutions or Banks or
Debenture holders.
(x) The company has given corporate guarantee of Rs. 5 crore to
Bank/Financial Institution in respect of loan availed by its subsidiary
company. As per the information and explanation provided to us and
considering overall transactions, its object and implication, the terms
and conditions of such guarantee, in our opinion, prima facie not
prejudicial to the interest of the company.
(xi) As per information and records provided before us, the company has
not accepted any term loan. Therefore provision of clause (xi) of
paragraph 3 companies (auditorÂs Report) order 2015 is not applicable
to the company.
(xii) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit
For Yogesh Thakker & Co
Chartered Accountants
Firm Reg. No. 111763W
Yogesh Thakker
Proprietor
M. No. 039631
Date: 29th May, 2015
Mar 31, 2014
1. We have audited the accompanying financial statements of NETWORTH
STOCK BROKING LIMITED ("the Company") which comprise the Balance Sheet
as at 31st March 2014 and the Statement of Profit and Loss and Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards notified under the Companies
Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th
September, 2013 of the Ministry of Corporate affairs in respect of
Section 133 of the Companies Act, 2013 and in accordance with
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
5. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements
together with the notes thereon, give the information required by the
Companies Act, 1956 in the manner so required and gives true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014;
(b) In the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter on event occurring after the balance sheet date:
(a) We draw attention to Note No 31 to the financial statements. As
referred to the said note, the financial statements of the Company for
the year ended March 31, 2014 were earlier approved by the Board of
Directors at their meeting held on June 05, 2014 which were subject to
revision by the Management of the Company so as to give effect to the
Scheme of Amalgamation between the Company and Monarch Research and
Brokerage Private Limited (''MRBPL'') & Monarch Project and Finmarkets
Limited (''MPFL'') (collectively referred to as "Transferor Companies").
The financial statements of the Company were audited by us and our
report dated June 05, 2014, addressed to the members of the Company,
expressed an opinion on those financial statements. The financial
statements of the "Transferor Companies" were audited by other Auditors
& have been relied upon by us while expressing our opinion on the
revised financial statements.
(b) We draw attention to Note No 35 of the financial statements,
wherein we are unable to quantify the effects on the aforesaid revised
financial statements for any difference in accounting policies, if any,
between the Company and the Transferor Companies (MRBPL and MPFL).
(c) Apart from the foregoing matters, the attached financial statements
do not take into account any events subsequent to the date on which the
financial statements referred to in (a) above were earlier approved by
the Board of Directors and reported by us as aforesaid.
Report on Other Legal and Regulatory Requirements
6. As required by the Companies (Auditor''s Report) Order, 2003 (the
"order") issued by the Central Government in Terms of Section 227 (4A)
of the Companies Act, we give in the Annexure a statements on the
matters specified in the Paragraph 4 and 5 of the Order:
7. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notified under the Act read with the General Circular 15/2013 dated
13th September, 2013 of the Ministry of Corporate affairs in respect of
Section 133 of the Companies Act, 2013.
(e) On the basis of written representations received from the directors
as on March 31, 2014 taken on record by the Board of Directors, none of
the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 6 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
1) In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets. How-
ever, the Company is under process of updating fixed assets register
showing full particulars of the fixed assets of the transferor
Companies including quantitative details and situation of its fixed
assets to give effect of scheme of amalgamation.
b. We have been informed that, the fixed assets have been physically
verified by the Management at reasonable intervals. In our opinion, the
frequency of verification is reasonable with regard to the size of the
company and nature of assets. According to information and explanations
given to us by the management, no material discrepancy was noticed on
such verification.
c. During the year the company has disposed off certain part of its
fixed assets. However, according to information and explanation given
to us and records examined by us, in our opinion, such disposal has not
affected the going concern status of the company.
2) In respect of Inventories:
a. Inventory represents securities held as stock-in-trade in course of
Market Making activities and on account of error in execution of
transaction. Verification and reconciliation of the same is conducted
at reasonable interval by the management.
b. In our opinion verification and reconciliation of inventory followed
by the management is reasonable and adequate in relation to size of the
company and the nature of business.
c. The company is maintaining proper records of stock in error account
and discrepancies were properly dealt with in the books of accounts.
3) In respect of loans, secured or unsecured, granted by the company to
companies, firms or other parties covered in the Register under section
301 of the Companies Act, 1956, according to the information and
explanation given to us and records furnished before us for
verification:
a. The company has granted interest free unsecured loans to (three)
parties during the year. At the year-end, the maximum amount involved
during the year was Rs. 7,90,51,562/- and the outstanding balance as on
balance sheet date of such loans was Nil.
With respect to the erstwhile Monarch Project and Finmarkets Limited
(MPFL):
As per the information and explanations given to us, MPFL has granted
running loans, secured or unsecured, amounting to Rs. 204.59 crores to
six companies, firms or other parties covered in the Register
maintained under Section 301 of the Companies Act, 1956. Amount
outstanding at the year end is Rs. 25.64 lacs only.
b. Considering overall transactions, its object and implication, the
rate of interest and other terms and conditions of such loans, in our
opinion, prima facie not prejudicial to the interest of the company.
c. The principal amounts of such loans are on demand and there is no
repayment schedule. Interest, if any, is payable on demand.
d. In respect of the said loans, the same are repayable on demand and
therefore the question of overdue amount does not arise. In respect of
interest, there are no overdue amounts.
e. The Company has taken unsecured loans from parties (three) during
the year. The maximum amount involved during the year was Rs.
2,64,56,580/- and the year-end balance of loans taken from such parties
was Rs. 36,94,796/-.
With respect to the erstwhile Monarch Project and Finmarkets Limited
(MPFL):
As per the information and explanations given to us, MPFL has taken
loans, secured or unsecured, amounting to Rs. 99.08 crores from six
companies, firms or other parties covered in the Register maintained
under Section 301 of the Companies Act, 1956. Amount outstanding at the
year end is Rs. 69.19 lacs.
With respect to the erstwhile Monarch Research and Brokerage Private
Limited (MRBPL):
MRBPL has taken loan from the party covered in the register maintained
u/s.301 of the Companies Act, 1956. The maximum amount involved during
the year was Rs. 65.77 crores and the year end balance of loans taken
from such parties was Nil.
f. Considering overall transactions, its object and implication, the
rate of interest and other terms and conditions of such loans, in our
opinion, prima facie not prejudicial to the interest of the company.
g. The principal amount of loans taken by the Company from the party
listed in the register maintained under section 301 of the Companies
Act, 1956, are repayable as and when requested by the lenders.
Accordingly, there are no overdue amounts with respect to such loans
due since there is no stipulation of repayments.
4) In our opinion, according to the information and explanation given
to us, having regard to the explanation that the company''s service
income depends on large volume of transactions executed daily on behalf
of several clients, where there is a probability that certain
transactions may be disputed by clients resulting in consequential cost
to the company, there is an adequate internal control procedure
commensurate with the size of the company and the nature of its
business with regard to service income, purchase of inventory and
purchase of fixed Assets and services. During the course our audit,
neither we have come across nor we have been informed of any continuing
failure to correct major weakness in the internal control.
5) In respect of contracts or arrangements entered in the Register in
pursuance of section 301 of the Companies Act, 1956, to the best of our
knowledge and belief, and according to the information and explanation
given to us and records furnished before us for verification:
a. The particulars of contract or arrangements that needed to be
entered in the register maintained under Section 301 of the Companies
Act 1956 have been so entered in the said register.
b. Where each of such transactions is in excess of rupees five Lacs in
respect of any party, the transactions have been made at prices which
are appear reasonable as per information available with the company.
However, in respect of transactions with the subsidiaries companies
which are unique and specialized in nature involved and in absence of
any comparable prices, we are unable to comment whether the
transactions are made at prevailing market prices at the relevant time.
6) The company has not accepted any deposits from the public hence,
Clause 4 (vi) of Companies (Auditor''s Report) Order, 2003 is not
applicable.
7) In our opinion, the internal audit functions carried out during the
year by firm of Chartered Accountants appointed by the management and
internal audit department of the company have been commensurate with
the size of the Company and the nature of its business.
8) The Central Government has not prescribed maintenance of cost
records under section 209(1)(d) of the Companies Act, 1956 in respect
of the services dealt with by the company.
9) According to information and explanations given to us in respect of
statutory dues:
a. The undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income tax,
sales tax, wealth tax, custom duty, excise duty cess and other dues
have generally been regularly deposited with the appropriate
authorities except (i) the unpaid stamp duty of current financial year
for state other than Maharashtra, Andhra Pradesh and Rajasthan has been
offered for taxation during the year due to practical difficulties of
depositing the same.
b. There were no undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income tax, sales tax, wealth tax, custom duty, excise duty, cess and
other dues were outstanding for a period of more than six months at
year end.
c. There are no disputes pending before the authorities in respect of
sales tax, Income tax, custom duty, service tax and cess except stated
below:
Particulars Pending at Demand Remarks
Income Tax First Appellate Rs. 3.43 Lacs Half of said demand has
A.Y. 2011-12 Authority been paid
Income Tax First Appellate Rs. 82.67 Lacs Demand is for penalty
A.Y. 2009-10 Authority U/s. 271 (1)(c) of the
Income Tax Act, 1961.
In respect of the erstwhile Monarch Project and Finmarkets Limited
(MPFL).
Name of the Statute Nature of Dues
Service Tax Service tax on NSE transaction charges
(Period - 01.04.2002 to 31.03.2007)
Service Tax Service tax on NSE transaction charges
(Period - 01.04.2007 to 31.03.2008)
Service Tax Service tax on 08
account of misclassification of payment of
service tax (For FY: 2007)
Service Tax Service tax as per audit para for FY 2006-07
Income Tax Income Tax payable as per order of AO for
the AY: 2010-11
Name of the Statute Amount (Rs.) Forum where dispute is pending
Service Tax 15,14,474/- Pending With Service tax Tribunal
With Joint Commissioner of
Service Tax
Service Tax 29,03,936/- Pending With Commissioner
(Appeals) of Service Tax
Service Tax 10,78,274/- Pending With Commissioner
(Appeals) of Service Tax
Service Tax 3,01,007/- Superintendent, Service tax,
Range XI, Ahmedabad
Income Tax 30,48,207/- Pending with Commissioner of
Income Tax (Appeals) Original
Demand - 5,69,110/-
Rectification applied - 45,20,903
In respect to the erstwhile Monarch Research and Brokerage Private
Limited (MRBPL):
According to the records of MRBPL, there are income tax dues for
A.Y.2009-10 Rs. 1,37,444 (Appeal Against Order contingent liability)
and for A.Y. 2010-11 Rs. 45,500 (Appeal Against Order Contingent
Liability) which have not been deposited on account of any dispute.
There are no dues of Sales tax, Customs tax/Wealth tax, Excise
duty/cess, which have not been deposited on account of any dispute.
10) The company has accumulated losses at the end of financial year
which are less than fifty percent of its net worth. The company has not
incurred any cash losses for the financial year covered by our audit
and in immediately preceding financial year.
11) According to information and explanations given to us and the
records made available to us by the management, in our opinion, the
company has not defaulted in repayment of dues to banks or Financial
Institutions.
12) According to information and explanations given to us, the company
has not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13) In our opinion, company is not chit fund, nidhi, mutual fund,
societies accordingly clause 4(xiii) of Companies (Auditor''s Report)
Order, 2003 is not applicable.
14) According to the information and explanations given to us, during
the year under consideration the Company has maintained proper records
of transactions and contracts in respect of dealing or trading in
shares, securities, debentures and other investments, as applicable,
and timely entries have been made therein. The aforesaid shares,
securities, debentures and other investments have been held by the
company in its own name, except to the extent of the exemption, if any,
granted under Section 49 of the Companies Act, 1956.
15) The company has given Corporate Guarantee of Rs. 5 crores to
Bank/Financial Institution in respect of loan availed by its Subsidiary
Company. As per the information and explanation provided to us and
considering overall transactions, its object and implication, the terms
and conditions of such guarantee, in our opinion, prima facie not
prejudicial to the interest of the company.
In respect of the erstwhile Monarch Project and Finmarkets Limited
(MPFL).
The company has given guarantee for loan taken by related parties
aggregating to Rs. 13 crores.
With respect to the erstwhile Monarch Research and Brokerage Private
Limited (MRBPL):
The company has given guarantee for loan taken by related parties
aggregating to Rs. 3 crores.
16) As per information and records furnished before us, the company has
not accepted any money in the nature of term loans except, MPFL who has
taken term loan and the said loans have been applied for the purpose
for which they were obtained.
17) According to information and explanations given to us and overall
examination of records furnished before us, funds raised on short term
basis have not been prima-facie, used for long term investment.
18) During the period, the company has not made allotment of shares on
preferential basis. Accordingly Clause 4(xviii) of Companies (Auditor''s
Report) Order, 2003 is not applicable.
19) During the period, the Company has not issued any debentures.
Accordingly Clause 4(xix) of Companies (Auditor''s Report) Order, 2003
is not applicable.
20) The company has not raised any money by public issue during the
year under audit. Accordingly Clause 4(xx) of Companies (Auditor''s
Report) Order, 2003 is not applicable.
21) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to information and
explanations given to us, we have neither come across any instance of
material fraud on or by the company, noticed or reported during the
period nor have we been informed of such instances by the management.
For, Dileep & Prithvi
Chartered Accountants,
Firm Reg. No. 122290W
By the hand of
Pankaj Jain
Partner
M. No. 139559
Place: Mumbai.
Date: 5th June, 2014 , [30th November 2014 as to effect the matters
discussed under the Emphasis Matters section above]
Mar 31, 2013
Report on the Financial Statements
1. We have audited the accompanying ''financial statements of NETWORTH
STOCK BROKING LIMITED ("the Company") which comprise the Balance Sheet
as at 31st March 2013 and the Statement of Profit and Loss and Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. The Company''s Management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company
in accordance with the Accounting Standards referred to in Sub-Section
(3C) of Section 211 of the Companies Act, 1956 ("the Act") in
accordance with accounting principles generally accepted in India.
This responsibility includes the design, implementation and maintenance
of internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
5. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements
together with the notes thereon, give the information required by the
Companies Act, 1956 in the manner so required and gives true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2013;
(b) In the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
6. As required by the Companies (Auditor''s Report) Order, 2003 (the
"order") issued by the Central Government in terms of Section 227 (4A)
of the Companies Act, 1956 we give in the Annexure a statement on the
matters specified in the Paragraph 4 and 5 of the Order.
7. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
referred to in Sub-Section (3C) of Section 211 of the Companies Act,
1956; and
(e) On the basis of written representations received from the directors
as on March 31, 2013 taken on record by the Board of Directors, none of
the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of Clause (g) of Sub-Section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 6 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
1) In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b. We have been informed that, the fixed assets have been physically
verified by the Management at reasonable intervals. In our opinion, the
frequency of verification is reasonable with regard to the size of the
Company and nature of assets. According to information and explanations
given to us by the management, no material discrepancy was noticed on
such verification.
c. During the year the Company has disposed off certain part of its
fixed assets. However, according to information and explanation given
to us and records examined by us, in our opinion, such disposal has not
affected the going concern status of the Company.
2) In respect of Inventories:
a. Inventory represents securities held as stock-in-trade in course of
merchant banking activities and on account of error in execution of
transaction. Verification and reconciliation of the same is conducted
at reasonable interval by the management.
b. In our opinion verification and reconciliation of inventory
followed by the management is reasonable and adequate in relation to
size of the Company and the nature of business.
c. The Company is maintaining proper records of stock in error account
and discrepancies were properly dealt with in the books of accounts.
3) In respect of loans, secured or unsecured, granted by the Company to
companies, firms or other parties covered in the Register under Section
301 of the Companies Act, 1956, according to the information and
explanation given to us and records furnished before us for
verification:
a. The Company has granted interest free unsecured loans to (three)
parties during the year. At the year-end, the maximum amount involved
during the year was ? 3,76,07,214/- and the outstanding balance as on
balance sheet date of such loans was ? 90,914/-.
b. Considering overall transactions, its object and implication, the
rate of interest and other terms and conditions of such loans, in our
opinion, prima facie not prejudicial to the interest of the Company.
c. The principal amounts of such loans are on demand and there is no
repayment schedule. Interest, if any, is payable on demand.
d. In respect of the said loans, the same are repayable on demand and
therefore the question of overdue amount does not arise. In respect of
interest, there are no overdue amounts.
e. The Company has taken unsecured loans from parties (two) during the
year. The maximum amount involved during the year was ? 10,50,000/- and
the year-end balance of loans taken from such parties was ? 2,12,260/-.
f. Considering overall transactions, its object and implication, the
rate of interest and other terms and conditions of such loans, in our
opinion, prima facie not prejudicial to the interest of the Company.
g. The principal amount of loans taken by the Company from the party
listed in the register maintained under Section 301 of the Companies
Act, 1956, are repayable as and when requested by the lenders.
Accordingly, there are no overdue amounts with respect to such loans
due since there is no stipulation of repayments.
4) In our opinion, according to the information and explanation given
to us, having regard to the explanation that the Company''s service
income depends on large volume of transactions executed daily on behalf
of several clients, where there is a probability that certain
transactions may be disputed by clients resulting in consequential cost
to the Company, there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business with regard to service income, purchase of inventory and
purchase of fixed Assets and services. During the course our audit,
neither we have come across nor we have been informed of any continuing
failure to correct major weakness in the internal control.
5) In respect of contracts or arrangements entered in the Register in
pursuance of Section 301 of the Companies Act, 1956,to the best of our
knowledge and belief, and according to the information and explanation
given to us and records furnished before us for verification:
a. The particulars of contract or arrangements that needed to be
entered in the register maintained under Section 301 of the Companies
Act 1956 have been so entered in the said register.
b. Where each of such transactions is in excess of ? Five Lacs in
respect of any party, the transactions have been made at prices which
are prima-facie reasonable having regard to prevailing market prices at
the relevant time. However, in respect of transactions with the
subsidiaries companies which are unique and specialized in nature
involved and in absence of any comparable prices, we are unable to
comment whether the transactions are made at prevailing market prices
at the relevant time.
6) The Company has not accepted any deposits from the public hence,
Clause 4 (vi) of Companies (Auditor''s Report) Order, 2003 is not
applicable.
7) In our opinion, the internal audit functions carried out during the
year by firm of Chartered Accountants appointed by the management and
internal audit department of the Company have been commensurate with
the size of the Company and the nature of its business.
8) The Central Government has not prescribed maintenance of cost
records under Section 209(l)(d) of the Companies Act, 1956 in respect
of the services dealt with by the Company.
9) According to information and explanations given to us in respect of
statutory dues:
a. The undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income tax,
sales tax, wealth tax, custom duty, excise duty cess and other dues
have generally been regularly deposited with the appropriate
authorities except (i) the unpaid stamp duty from August 2010 for state
other than Maharashtra, Andhra Pradesh and Rajasthan has been offered
for taxation during the year due to practical difficulties of
depositing the same, (ii) non-depositing of unpaid dividend to Investor
Education and Protection Fund after 7 years of its declaration.
b. There were no undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income tax, sales tax, wealth tax, custom duty, excise duty, cess and
other dues were outstanding for a period of more than six months at
year end except nbn-depositing of unpaid dividend to be transferred to
Investor Education and Protection Fund after 7 years of its declaration
for ? 84,349/-
c. There are no disputes pending before the authorities in respect of
sales tax, Income tax, custom duty, service tax and cess except stated
below:
Particulars Pending at Demand Remarks Income Tax
A.Y. 2005-06 Second Appellate Authority ? 34 Lacs Demand is after
adjusting refund of ? 1.78 Lacs
A.Y. 2006-07 First Appellate Authority ? 49 Lacs Demand is after
adjusting refund of ? 44.75 Lacs
10) The Company has accumulated losses at the end of financial year
which are not less than fifty percent of its networth. The Company has
not incurred any cash losses for the financial year covered by our
audit. However, the Company had incurred cash losses in immediately
preceding financial year.
11) According to information and explanations given to us and the
records made available to us by the management, in our opinion, the
Company has not defaulted in repayment of dues to banks or Financial
Institutions.
12) According to information and explanations given to us, the Company
has not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13) In our opinion, Company is not chit fund, nidhi, mutual fund,
societies accordingly Clause 4(xiii) of Companies (Auditor''s Report)
Order, 2003 is not applicable.
14) According to the information and explanations given to us, during
the year under consideration the Company has maintained proper records
of transactions and contracts in respect of dealing or trading in
shares, securities, debentures and other investments, as applicable,
and timely entries have been made therein. The aforesaid shares,
securities, debentures and other investments have been held by the
Company in its own name, except to the extent of the exemption, if any,
granted under Section 49 of the Companies Act, 1956.
15) The Company has granted Corporate Guarantee of ? 5 Crores to
Bank/Financial Institution in respect of loan availed by its Subsidiary
Company. As per the information and explanation provided to us and
considering overall transactions, its object and implication, the terms
and conditions of such guarantee, in our opinion, prima facie not
prejudicial to the interest of the Company.
16) As per information and records furnished before us, the Company has
not accepted any money in the nature of term loans. Accordingly Clause
4(xvi) of Companies (Auditor''s Report) Order, 2003 is not applicable.
17) According to information and explanations given to us and overall
examination of records furnished before us, funds raised on short term
basis have not been prima-facie, used for long term investment.
18) During the period, the Company has not made allotment of shares on
preferential basis. Accordingly Clause 4(xviii) of Companies (Auditor''s
Report) Order, 2003 is not applicable.
19) During the period, the Company has not issued any debentures.
Accordingly Clause 4(xix) of Companies (Auditor''s Report) Order, 2003
is not applicable.
20) The Company has not raised any money by public issue during the
year under audit. Accordingly Clause 4(xx) of Companies (Auditor''s
Report) Order, 2003 is not applicable
21) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
period nor have we been informed of such instances by the management.
For Dileep & Prithvi
Chartered Accountants (FRN 122290W)
Pankaj Jain
Place: Mumbai Partner
Date : 17th June, 2013 M. No. 139559
Mar 31, 2012
1. We have audited the attached Balance Sheet of NETWORTH STOCK
BROKING LIMITED ("the Company") as at 31st March 2012, Statement of
Profit and Loss and Cash Flow Statement of the Company for the year
ended on that date, both annexed thereto. These financial statements
are the responsibility of the Company's Management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, as
amended, issued by the Central Government in Terms of Section 227 (4A)
of the Companies Act, 1956 and on the basis of such checks and
verification as were considered necessary, we report, in the Annexure
hereto on the matters specified in the Paragraph 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit;
b) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of accounts;
d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report are in compliance
with the Accounting standard referred to in Section 211 (3C) of the
Companies Act, 1956;
e) On the basis of written representations received by the Company from
its Directors as on 31st March, 2012 and taken on record by the Board
of Directors, we report that none of the Director is disqualified as on
31st March, 2012 from being appointed as a Director in terms of the
clause (g) of sub-section (1) of section 274 of the Companies Act,
1956;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts together with the notes
thereon, give the information required by the Companies Act, 1956 in
the manner so required and gives true and fair view in conformity with
the accounting principles generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
ii) In the case of the Statement of Profit and Loss, of the Loss for
the year ended on that date and
iii) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of our report of even date)
1) In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b. We have been informed that, the fixed assets have been physically
verified by the Management at reasonable intervals. In our opinion, the
frequency of verification is reasonable with regard to the size of the
Company and nature of assets. According to information and explanations
given to us by the management, no material discrepancy was noticed on
such verification.
c. During the year the Company has disposed off certain part of its
fixed assets. However, according to information and explanation given
to us and records examined by us, in our opinion, such disposal not
affected the going concern status of the Company.
2) In respect of Inventories:
a. Inventory represents securities lying on account of error in
execution of transaction. Verification and reconciliation of the same
is conducted at reasonable interval by the management.
b. In our opinion verification and reconciliation of inventory
followed by the management is reasonable and adequate in relation to
size of the Company and the nature of business.
c. The Company is maintaining proper records of stock in error account
and discrepancies were properly dealt with in the books of accounts.
3) In respect of loans, secured or unsecured, granted by the Company to
companies, firms or other parties covered in the Register under section
301 of the Companies Act, 1956, according to the information and
explanation given to us and records furnished before us for
verification:
a. The Company has granted interest free unsecured loans to three
parties during the year. At the year-end, the maximum amount involved
during the year was Rs. 14,88,50,000/- and the outstanding balance as on
balance sheet date of such loans was nil.
b. Considering overall transactions, its object and implication, the
rate of interest and other terms and conditions of such loans, in our
opinion, prima facie not prejudicial to the interest of the Company.
c. The principal amounts of such loans are on demand and there is no
repayment schedule. Interest is payable on demand.
d. In respect of the said loans, the same are repayable on demand and
therefore the question of overdue amount does not arise. In respect of
interest, there are no overdue amounts.
e. The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the Register under section
301 of the Companies Act, 1956. Accordingly clause (iii) (e), (f) & (g)
of Companies (Auditor's Report) Order, 2003 is not applicable.
4) In our opinion, according to the information and explanation given
to us, having regard to the explanation that the Company's service
income depends on large volume of transactions executed daily on behalf
of several clients, where there is a probability that certain
transactions may be disputed by clients resulting in consequential cost
to the Company, there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business with regard to purchase of fixed Assets and sale of goods and
services. During the course our audit, neither we have come across nor
we have been informed of any continuing failure to correct major
weakness in the internal control.
5) In respect of contracts or arrangements entered in the Register in
pursuance of section 301 of the Companies Act, 1956,to the best of our
knowledge and belief, and according to the information and explanation
given to us and records furnished before us for verification:
a. The particulars of contract or arrangements that needed to be
entered in the register maintained under Section 301 of the Companies
Act, 1956 have been so entered in the said register.
b. Where each of such transactions is in excess of Rs. five Lacs in
respect of any party, the transactions have been made at prices which
are prima-facie reasonable having regard to prevailing market prices at
the relevant time. However, in respect of transactions with the
subsidiaries companies which are unique and specialized in nature
involved and in absence of any comparable prices, we are unable to
comment whether the transactions are made at prevailing market prices
at the relevant time.
6) The Company has not accepted any deposits from the public hence,
Clause 4 (vi) of Companies (Auditor's Report) Order, 2003 is not
applicable.
7) In our opinion, the internal audit functions carried out during the
year by firm of Chartered Accountants appointed by the management and
internal audit department of the Company have been commensurate with
the size of the Company and the nature of its business.
8) The Central Government has not prescribed maintenance of cost
records under section 209(l)(d) of the Companies Act, 1956 in respect
of the services dealt with by the Company.
9) According to information and explanations given to us in respect of
statutory dues:
a. The undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees' State Insurance, Income Tax,
Sales Tax, Wealth Tax, Custom Duty, Excise Duty Cess and other dues
have generally been regularly deposited with the appropriate
authorities except non depositing of stamp duty from August 2010 for
state other than Maharashtra, Andhra Pradesh and Rajasthan due to
practical difficulties for which Company is in process of taking
adequate measures.
b. There were no undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and
other dues were outstanding for a period of more than six months at
year end except nonpayment of stamp duty for state other than
Maharashtra, Andhra Pradesh and Rajasthan amounting to Rs. 40.38 Lacs.
c. There are no disputes pending before the authorities in respect of
sales tax, Income tax, custom duty, service tax and cess except stated
below:
Particulars Pending at Demand Remarks Income Tax
A.Y. 2005 - 06 Second Appellate Authority Rs. 34 Lacs Demand is after
adjusting refund of Rs. 1.78 Lacs
A.Y. 2006-07 First Appellate Authority Rs. 49 Lacs Demand is after
adjusting refund of Rs. 44.75 Lacs
10) The Company has accumulated losses at the end of financial year
which are not less than fifty percent of its Networth. The Company has
incurred cash losses for the financial year covered by our audit and in
immediately preceding financial year.
11) According to information and explanations given to us and the
records made available to us by the management, in our opinion, the
Company has not defaulted in repayment of dues to banks or Financial
Institutions.
12) According to information and explanations given to us, the Company
has not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13) In our opinion, Company is not chit fund, nidhi, mutual fund,
societies accordingly clause 4(xiii) of Companies (Auditor's Report)
Order, 2003 is not applicable.
14) According to the information and explanations given to us, during
the year under consideration the Company has not done any dealing or
trading in shares, securities, debentures and other investments.
Securities, debentures and other investments have been held by the
Company in its own name except to the extent of the exemption granted
under Section 49 of the Act.
15) The Company has given guarantee of Rs. 5 crores for loan taken by a
Subsidiary Company from financial institutions. As per the information
and explanation provided to us and considering overall transactions,
its object and implication, the terms and conditions of such loans, in
our opinion, prima facie not prejudicial to the interest of the
Company.
16) As per information and records furnished before us, the Company has
not accepted any term loans. Accordingly Clause 4(xvi) of Companies
(Auditor's Report) Order, 2003 is not applicable.
17) According to information and explanations given to us and overall
examination of records furnished before us, funds raised on short term
basis have not been prima-facie, used for long term investment.
18) During the period, the Company has not made allotment of shares on
preferential basis. Accordingly Clause 4(xviii) of Companies (Auditor's
Report) Order, 2003 is not applicable.
19) During the period, the Company has not issued any debentures.
Accordingly Clause 4(xix) of Companies (Auditor's Report) Order, 2003
is not applicable.
20) The Company has not raised any money by public issue during the
year under audit. Accordingly Clause 4(xx) of Companies (Auditor's
Report) Order, 2003 is not applicable
21) On the basis of examination of records and representation received
from management, we have not come across any instance of fraud on or by
the Company noticed or reported during the period nor have we been
informed of such instances by the management.
For Dileep & Prithvi
Chartered Accountants
(FRN: 122290W)
Dileep Kumar Shah
Place: Mumbai Partner
Date : 22nd September, 2012
M. No. 046848
Mar 31, 2010
We have audited the attached Balance Sheet of NETWORTH STOCK BROKING
LIMITED as at 31st March 2010, and Profit and Loss Account and Cash
FlowStatement for theyearended on that date annexed thereto. These
financial statements are the responsibility ofthe Companys Management.
Our responsibility is to express an opinion on these financial
statements based on ouraudit.
We conducted ouraudit in accordance with auditing standards generally
acceptedin India.ThoseStandards require that we planand perform
theaudit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basisforouropinion.
As required by the Companies (Auditors Report) Order, 2003, as
amended, issued by the Central Government in Terms of Section 227 (4A)
of the Companies Act, 1956 and on the basis of such checks and
verification as were considered necessary, we report, in the Annexure
hereto on the matters specified in the Paragraph 4 ofthe said order.
Further to our comments in the Annexure referred to above, we report
that:
a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of
ouraudit;
b) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
c) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of accounts.
d) In our opinion,the Balance Sheet and Profit and Loss Account dealt
with by this report are incompliance with the Accounting standard
referred to in Section 211 (3C) ofthe Companies Act, 1956.
e) On the basis of written representations received from the Directors
ofthe Company as at March 31, 2010 and taken on record by the Board of
Directors, we report that no director is disqualified from being
appointed as a Director of the Company under clause (g) of subsection
(1) of section 274oftheCompaniesAct, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts together with the notes
thereon, give the information required by the Companies Act, 1956 in
the manner so required and gives true and fair view in conformity with
theaccountingprinciplesgenerallyacceptedinlndia:
i) In the case of BalanceSheet, ofthe state of affairs ofthe Company as
at March 31,2010
ii) In the case of Profit and Loss Account of the Results for the year
ended on that date;and
lii) Inthe case of Cash FlowStatement, ofthe cashflows for
the year ended on that date.
ANNEXURE TO THE AUDITORS REPORT ON THE ACCOUNTS FOR THE YEAR ENDED
MARCH 31, 2010
1. a. The Company has maintained proper records showingfull
particulars, including quantitative details and situation of fixed
assets.
b. We have been informed that, the fixed assets have been physically
verified by the Management at reasonable intervals. In our opinion, the
frequency of verification is reasonable with regard to the size of the
company and nature of assets. According to information and explanations
given to us by the management, no material discrepancy was noticed on
such verification.
c. During the year the Company has not disposed off substantial part
of its fixed assets and accordingly it has no effect on the going
concern of theCompany.
2. a. According to information and explanation given to us, inventory
represents securities lying on account of error in execution of
transaction.
Verification and reconciliation of the same is conducted at reasonable
interval by the management.
b. According to information and explanation given to us,in our opinion
verification and reconciliation of inventory followed by the management
is reasonable and adequate in relation to size of the company and the
nature of business.
c. The Company is maintaining proper records of stock in error account
and discrepancies were properly dealt with in the books of accounts.
3. a. According to the information and explanation given to us and on
the basis of records furnished before us, the Company has granted loans
to three companies covered in the register maintained under section 301
of the Companies Act, 1956 in the nature of current account transaction
and interest free unsecured loans.The maximum amount outstanding during
the year was Rs.1146.75 Lacs and the year end balance is 30.05 Lacs.
b. According to information and explanation given to us and
considering overall transactions, its object and implication in our
opinion the above transactions with subsidiaries are not prejudicial to
the interest of the Company.
c. With respect to current account transaction with subsidiaries the
amount is regularly repaid in short duration and with respect to
interest free unsecured loanstosubsidiarywhicharerepayableon demand has
been repaid as and when demanded.
d. With respect to current account transaction with subsidiaries the
amount is regularly repaid in short duration therefore in our opinion
there is no overdue amount. With respect to interest free unsecured
loans to subsidiary which are repayable on demand has been repaid as
and when demanded in our opinion there is no over due amount.
e. According to the information and explanation given to us and
records furnished before us for verification, the Company has taken
loan from one Company covered in the register maintained under section
301 of the Companies Act, 1956 in the nature of current account
transaction. The maximum amount outstanding during the year was Rs.45
Lacs and the year end balance is Nil
f. There is no stipulation regarding rate of interest and other terms
and conditions in respect of above transaction with subsidiary.
However, considering overall transaction, its object and implication in
our opinion the transaction is not prejudicial to the interest of the
Company.
g. As this transaction is in the nature of current account
transaction, the amount is regularly repaid in short duration.
4. According to the information and explanation given to us, in our
opinion there is an adequate internal control procedure commensurate
with the size of the Company and the nature of its business, for the
purchase of fixed assets and sale of goods and services. On the basis
of our examination of books and records of the Company, neither we have
come across nor have we been informed of any continuing failure to
correct major weakness in the internal control.
5. a. In our opinion and according to the information and explanation
given to us, the particulars of contract or arrangements that were
required to be entered in the register maintained under Section 301 of
the Companies Act 1956 have been so entered in the said register.
b. In respect of transactions entered exceeding the value of five lacs
in the register maintained in pursuance of Section 301 of the Companies
Act 1956, according to information and explanation given to us, the
transactions made pursuance of such contracts or arrangements have been
made at prices which are prima-facie reasonable having regard to
prevailing market prices at the relevant time.
6. The Company has not accepted any depositsfrom the public hence
Clause 4{vi) of Companies (Auditors Report) Order, 2003 is not
applicable.
7. According to information and explanation given to us by the
management, we are of the opinion that the Internal Audit is
commensurate with the size of the Company and the nature of its
business.
8. According to information and explanations given to us, the Central
Government has not prescribed maintenance of cost records under section
209(l)(d)of the Companies Act,1956 in respect of the services dealt
with bythe Company.
9. a. According to information and explanations given to us and
records examined by us, the undisputed statutory dues including
provident fund,
investor education and protection fund, employees state insurance,
income tax, sales tax, wealth tax, custom duty, excise duty cess and
other dues have generally been regularly deposited with the appropnate
authormes except few delays in depositing service tax & professional
tax.
b. According to information and explanations given to us and records
examined by us, no undisputed statutory dues including provident fund,
investor education and protection fund, employees state insurance,
income tax, sales tax, wealth tax, custom duty, excise duty, cess and
other dues were out standing for a period of more than six months at
year end.
c. According to information and explanation given to us there are no
disputes pending before the authorities in respect of sales tax, income
tax, custom duty, service tax and cess except stated below
Particulars Pending at Demand Remarks
IncomeTax
A.Y.2005-06 Second Appellate
Authority Rs. 33.74 Lacs Demand is after
adjusting refund
of Rs. 1.78 Lacs
Income Tax
A.Y.2006-07 First Appellate
Authority Rs. 47.83 Lacs Demand is after
adjusting refund
of Rs.44.75 Lacs
Income Tax
A.Y.2007-08 First Appellate
Authority Rs. 761.46 Lacs After adjusting
PaymentofRs. 50 Lacs
IncomeTax
A.Y. 2005-06 First Appellate
Authority Rs.9.44Lacs
10. The Company has accumulated losses at the end of financial year
which are less than 50% of its networth. The Company has incurred cash
losses for the financial year covered by our audit and in immediately
preceding financial year.
11. According to information and explanations given to us and the
records made available to us by the management, in our opinion, the
Company has not defaulted in repayment of dues to banks or Financial
Institutions.
12. According to information and explanations given to us, the Company
has not granted loans and advances on the basis of security by way of
pledge ofshares,debentures and other securities.
13. In our opinion, Company is not chit fund, nidhi, mutual fund,
societies accordingly clause 4(xiii) of Companies (Auditors Report)
Order, 2003 is not applicable.
14. According to the information and explanations given to us, during
the year under consideration the Company has not done any dealing or
trading in shares, securities, debentures and other investments.
Securities, debentures and other investments have been held by the
Company in its own name except to the extent of the exemption granted
under Section 49 of the Act.
15. As per the information and explanations provided to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions. Accordingly Clause 4(xv) of Companies
(Auditors Report) Order, 2003 is not applicable.
16. As per information and records furnished before us, the Company
has not accepted any term loans. Accordingly Clause 4(xvi) of Companies
(Auditors Report) Order, 2003 is not applicable.
17. According to information and explanations given to us and overall
examination of records furnished before us, funds raised on short term
basis have not been prima-facie, used for long term investment.
18. During the period, the Company has not made allotment of shares on
preferential basis. Accordingly Clause 4(xviii) of Companies (Auditors
Report) Order, 2003 is not applicable.
19. During the period, the Company has not issued any debentures.
Accordingly Clause 4(xix) of Companies (Auditors Report) Order, 2003
is not applicable.
20. The Company has not raised any money by public issue during the
year under audit. Accordingly Clause 4(xx) of Companies (Auditors
Report) Order, 2003 is not applicable
21. On the basis of examination of records and representation received
from management, we have not come across any instance of fraud on or by
the Company noticed or reported during the period nor have we been
informed of such instances by the management.
ForA.R.Sodha&Co.
Chartered Accountants
(Firm registration no. 110324W)
Place :Mumbai A. R. Sodha
Date: May 28, 2010 Partner
M.No.31878