MOTILAL OSWAL FINANCIAL SERVICES LIMITED
ANNUAL REPORT 2011-2012
AUDITORS` REPORT
To
The Members of
MOTILAL OSWAL FINANCIAL SERVICES LIMITED
1. We have audited the attached Balance Sheet of MOTILAL OSWAL FINANCIAL
SERVICES LIMITED (`the Company`) as at March 31, 2012 and also the
Statement of Profit and Loss and the Cash Flow Statement for the year ended
on that date 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 of India in terms of sub-section
(4A) of Section 227 of `the Companies Act, 1956` of India (the `Act`), we
give in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the paragraph 3 above, we report that:
i. We have obtained all the information and explanations, which to the best
of our knowledge and belief were necessary for the purposes of our audit;
ii. 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;
iii. The balance sheet, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, statement of profit and loss and
cash flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the Companies
Act, 1956.
v. On the basis of the written representations received from the directors,
as on March 31, 2012, and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 2012 from
being appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to the
explanations given to us, the said accounts give the information required
by the Companies Act, 1956, in the manner so required and give a true and
fair view in conformity with the accounting principles generally accepted
in India;
a) in the case of the balance sheet, of the state of affairs of the Company
as at March 31, 2012;
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 cash flow statement, of the cash flows for the year ended
on that date.
For HARIBHAKTI & CO.
Chartered Accountants
Firm`s Registration No.103523W
Rakesh Rathi
Partner
Membership No. 45228
Place: Mumbai
Date : April 25, 2012
Annexure of Auditors` Report
Referred to in paragraph 3 of the Auditors` Report of even date to the
members of MOTILAL OSWAL FINANCIAL SERVICES LIMITED on the financial
statements for the year ended March 31, 2012
(i)(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets of the company have been physically verified by the
management during the year and no material discrepancies between the book
records and the physical inventory have been noticed. In our opinion, the
frequency of verification is reasonable.
(c) In our opinion and according to the information and explanations given
to us, a substantial part of fixed assets has not been disposed of by the
Company during the year.
(ii)(a) As informed to us, the inventories (securities) which are held in
dematerialized form, have been verified by the management. In our opinion,
the frequency of verification is reasonable.
(b) The procedures of verification of inventories (securities) followed by
the management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The Company is maintaining proper records of inventory (securities) and
no material discrepancies were noticed on physical verification between the
dematerialized stocks and the book records carried out at the end of the
year.
(iii)(a) The Company has granted unsecured loan to six subsidiary companies
covered in the register maintained under section 301 of the Companies Act,
1956. The maximum amount involved during the year was Rs.1,182.57 millions
and the year-end balance of loans granted to such parties was Rs.454.45
millions.
(b) In our opinion and according to the information and explanations given
to us, the rate of interest and other terms and conditions for such loans
are not, prima facie, prejudicial to the interest of the Company.
(c) The loans are repayable on demand and whenever the loans are called
for, the Company has received the principal amount and interest
accordingly.
(d) Since there is no stipulation as regards repayment schedule, clause
4(iii)(d) is not applicable.
(e) The Company had taken loan from its subsidiary company covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs.1268.49 millions and the
year-end balance of loans taken from such party was Rs.Nil.
(f) In our opinion, the rate of interest and other terms and conditions for
such loans are not, prima facie, prejudicial to the interest of the
Company.
(g) The loans are repayable on demand and whenever the loans are called
for, the Company has paid the principal amount and interest accordingly.
(iv) In our opinion and according to the information and explanations given
to us, there exists an adequate internal control system commensurate with
the size of the Company and the nature of its business with regard to
purchase of inventory (securities), fixed assets and with regard to
provision of services. During the course of our audit, we have not observed
any continuing failure to correct major weakness in internal control system
of the Company.
(v)(a) According to the information and explanations given to us, we are of
the opinion that the particulars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956 that need to be entered into the
register maintained under section 301 have been so entered.
(b) In respect of transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs entered into during the
financial year, because of the unique and specialized nature of the items
involved and absence of any comparable prices, we are unable to comment
whether the transactions were made at prevailing market prices at the
relevant time.
(vi) In our opinion and according to the information and explanations given
to us, the Company has not accepted any deposits from the public within the
meaning of Sections 58A and 58AA of the Act and the rules framed
thereunder.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
(viii) The Central Government of India has not prescribed the maintenance
of cost records under clause (d) of sub-section (1) of Section 209 of the
Act for any of the products of the company.
(ix)(a) The Company is regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education and
protection fund, employees` state insurance, income-tax, wealth-tax,
service tax, customs duty, cess and other material statutory dues
applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor education
and protection fund, employees` state insurance, income-tax, wealth-tax,
service tax, customs duty, cess and other undisputed statutory dues were
outstanding, at the year end, for a period of more than six months from the
date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, wealth-tax, service tax, customs duty, and cess on account of
any dispute, are as follows:
Name of the Nature of Amount Period to Forum where dispute
statute dues (Rs. in which the is pending
millions) amount
relates
The Income Tax Income Tax 0.66 AY 2007-08 Income Tax Appellate
Act, 1961 Tribunal
The Income Tax Income Tax 0.16 AY 2008-09 Income Tax Appellate
Act, 1961 Tribunal
The Income Tax Income Tax 1.30 AY 2009-10 Commissioner of
Act, 1961 Income Tax (Appeal)
(x) The company has no accumulated losses at the end of the financial year
and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) In our opinion and according to the information and explanations given
to us, the Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
(xii) We are of the opinion that the Company has maintained adequate
records where the Company has granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, the provisions of clause 4(xiii) of the
Companies (Auditor`s Report) Order, 2003 (as amended) are not applicable to
the Company.
(xiv) In respect of dealing/trading in shares, securities, debentures and
other investments, in our opinion and according to the information and
explanations given to us, proper records have been maintained of the
transactions and contracts and timely entries have been made therein. The
shares, securities, debentures and other investments have been held by the
Company, in its own name.
(xv) In our opinion and according to the information and explanations given
to us, the company has not given any guarantee for loans taken by others
from banks or financial institutions during the year.
(xvi) The Company has not obtained any term loans.
(xvii) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that no
funds raised on short-term basis have been used for long-term investment.
(xviii) According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties and
companies covered in the register maintained under section 301 of the Act.
(xix) According to the information and explanations given to us, no
debentures have been issued by the company during the year.
(xx) The Company has not raised any money by way of public issue during the
year.
(xxi) 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 the information and explanations given
to us, we have neither come across any instance of fraud on or by the
Company, noticed or reported during the year, nor have we been informed of
such case by the management.
For HARIBHAKTI & CO.
Chartered Accountants
Firm`s Registration No.103523W
Rakesh Rathi
Partner
Membership No. 45228
Place: Mumbai
Date : April 25, 2012 |