We have audited the attached Balance Sheet of JRG Securities Limited
(the Company) as at 31 March 2012, the Statement of Profit and Loss
and also 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.
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
As required by the Companies (Auditor's Report) Order, 2003 ('the
Order') as amended, issued by the Central Government of India in terms
of sub-section (4A) of Section 227 of the Companies Act, 1956 (the
Act), we enclose in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the said Order.
Further to our comments in the annexure referred to above, we report
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
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
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, statement of profit and loss and
the cash flow statement dealt with by this report comply with the
accounting standards referred to in sub- section (3C) of Section 211 of
e) on the basis of written representations received from the directors,
as at 31 March 2012 and taken on record by the Board of Directors, we
report that none of the directors are disqualified as on 31 March 2012
from being appointed as director in terms of clause (g) of sub-section
(1) of Section 274 of the Act; and
f) in our opinion and to the best of our information and according to
the explanations given to us, they said 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:
(i) in the case of the balance sheet, of the state of affairs of the
Company as at 31 March 2012; and
(ii) in the case of the statement of profit and loss, of the loss of
the Company for the year ended on that date.
(iii) in the case of the cash flow statement, of the cash flows of the
Company for the year ended on that date.
(Referred to our report of even date)
(i) (a) The Company has maintained proper records showing
full particulars including quantitative details and situation of fixed
assets. However the Company is in process of updating its records so as
to include quantitative details and situation of fixed assets in
relation to certain class of fixed assets.
(b) The Company has a regular program of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of three years. In our opinion, this periodicity of
physical verification is reasonable having regard to the size of the
Company and the nature of its assets. In accordance with this programme
certain fixed assets were verified during the year and no material
discrepancies were noticed on such verification.
(c) Fixed assets disposed of during the year were not substantial, as
to affect the going concern assumption.
(ii) The Company is a service company, primarily rendering services as
brokers to various stock exchanges. Accordingly it does not hold any
physical inventories. Thus, paragraph 4(ii) of the Order is not
(iii) According to the information and explanations given to us, we are
of the opinion that there are no companies, firms or other parties
covered in the register required under section 301 of the Companies
Act, 1956. Accordingly, paragraph 4(iii) of the Order is not
(iv) In our opinion and according to the information and explanations
given to us, and having regard to the explanation that the purchases of
certain items of fixed assets are for the Company's specialized
requirements and similarly services rendered are for the specialized
requirements of the buyers and suitable alternative sources are not
available to obtain comparable quotations, there is an adequate
internal control system commensurate with the size of the Company and
the nature of its business with regard to purchase of fixed assets and
sale of services. In our opinion and according to the information and
explanations given to us, there is no continuing failure to correct
major weaknesses in internal control system. The activities of the
Company do not involve purchase of inventory and sale of goods.
(v) In our opinion, and according to the information and explanations
given to us, there are no contracts and arrangements the particulars of
which need to be entered into the register maintained under section 301
of the Companies Act, 1956.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) The Central Government has not prescribed the maintenance of
cost records under section 209(1)(d) of the Companies Act, 1956 for any
of the services rendered by the Company.
(ix) a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including, Income-tax, Provident fund, Employees' State
Insurance, Wealth tax and other material statutory dues have generally
been regularly deposited during the year by the Company with the
appropriate authorities. However there have been delays ranging from 3
to 150 days in certain case towards payment of Service tax, Employees'
State Insurance and Stamp duty, to the appropriate authorities. As
explained to us, the Company did not have any dues on account of
Customs duty, Investor Education and Protection Fund, Sales tax and
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees'
State Insurance, Income tax, Service tax, wealth tax and other material
statutory dues were in arrears as at 31 March 2012 for a period of more
than six months from the date they became payable.
b) According to the information and explanations given to us, there are
no dues of Income tax, Sales tax, Wealth tax, Service tax, Customs
duty, Excise duty and Cess which have not been deposited with the
appropriate authorities on account of any dispute except for the
Name of the Nature of the Amount Financial Forum where
statute Dues (Rs.) year to dispute is
which the pending
Income Tax Act Disallowed
Expenditure 772,890* 2006-2007 Commissioner
Income Tax Act Disallowed
Expenditure 10,319,170 2007-2008 Commissioner
Income Tax Act Disallowed
Expenditure 1,946,600 2008-2009 Commissioner
*Net of Rs. 600,000 paid under dispute
(x) The Company does not have accumulated losses at the end of the
financial year which has exceeded fifty percent of its net worth. The
Company has incurred cash losses in the current financial year. The
Company has not incurred cash losses in the immediately preceding
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers or to any financial institutions. The Company did not have any
outstanding debentures during the year.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
(xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi / mutual benefit
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities, debentures or other instruments.
(xv) 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.
(xvi) The Company did not have any term loans outstanding during the
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we are of
the opinion that the funds raised on short-term basis have not been
used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
to companies covered in the register maintained under Section 301 of
the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
(xx) We have verified the end-use of money raised by public issues as
disclosed in the notes to the financial statements.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit during the current year.
for B S R & Associates
Firm registration no: 116231W
Date: 19 May 2012 Membership No: 203491