1. We have audited the attached Balance Sheet of Motilal Oswal
Financial Services Limited as at 31st March, 2008, and also the Profit
and Loss Account and the Cash Flow Statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of
financial statements. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report] Order, 2003 and
amended by the Companies (Auditors Report] (Amendment] Order, 2004,
issued by the Central Government of India in terms of Section 227(4A]
of the Companies Act, 1956, on the basis of such checks of the books
and records as we considered appropriate and the information and
explanations given to us during the course of the audit, we annex
hereto a statement on the matters specified in paragraphs A and 5 of
the said Order, to the extent they are applicable to the Company.
A. Further to our comments in the Annexure referred to above, we
We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes 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 examinations of those
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, the Profit and Loss Account and
Cash Flow Statement comply, in all material respect, with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956 to the extent they are applicable to the
e) On the basis of the written representations received from the
directors as on 31 st March, 2008 and taken on record by the Board of
Directors of the Company, we report that none of the directors are
disqualified as on 31st March, 2008 from being appointed as a director
in terms of clause (g) of sub-section (1j 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 read together with the
significant accounting policies and the other notes thereon give the
information required by the Companies Act, 1956, in the manner so
required, and give a true and fair view in conformity with the
accounting principles generally accepted in India;
(i) in so far it relates to the Balance Sheet, of the state of affairs
of the company as at 31st March, 2008;
(ii) in so far it relates to Profit and Loss Account, of the profit of
the company for the year ended on that date.
(iii) in so far it relates to the Cash Flow Statement, of the cash
flows for the year ended on that date.
Annexure referred to in paragraph 3 of our report of even date to the
members of Motilal Oswal Financial Services limited on the financial
statement for the year ended March 31, 2008
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
2. The Company has carried out physical verification of all its fixed
assets, which in our opinion is reasonable having regard to the size of
the Company and nature of its assets. We have been informed that no
material discrepancies were noticed on such verification as compared to
3-. Based on the information and explanation given by the management
and on the basis of audit procedures performed by us, we are of the
opinion that the Company has not disposed off substantial part of its
fixed assets during the year.
4. As informed to us, the inventories (shares), which are held in
dematerialized form, have been verified by the management with the
supporting evidence during the year. In our opinion, the frequency of
verification is reasonable.
5. The procedures of verification of inventory (shares) followed by
the management are reasonable and adequate in relation to size of the
company and the nature of its business.
6. On the basis of our examination of the records of inventory
(shares), we are of the opinion that the Company is maintaining proper
records of inventory (shares). We are informed that no discrepancies
were noticed on verification between the dematerialized stocks and the
7. As informed to us, the Company has granted unsecured loans to
Subsidiary Companies listed in the register maintained under Section
301 of Companies Act, 1956. The amount of transaction involved during
the year was Rs.61176.89 lacs. The maximum amount outstanding during
the year is Rs.6765.62 lacs and the year-end balance of loan obtained
from such parties was Rs.31.00 lacs. The Company has not taken any loan
covered in the register maintained under Section 301 of the Companies
Act, 1956. The rate of interest and other terms and conditions of loan
given by the Company, are prima facie not prejudicial to the interest
of the Company.
8. As informed to us, the Company is regular in receiving the
principal and interest of the loan granted as per the stipulations.
9. As informed to us there are adequate internal control procedures
commensurate with the size of the Company and nature of its business,
for the purchase and sale of inventory and fixed assets. During the
course of audit, we have not observed any continuing failure to correct
major weaknesses in internal controls.
10. On the basis of our examination of relevant records, and on the
basis of representation received from the management, that the
transactions that need to be entered into register maintained under
Section 301 of the Companies Act, 1956 have been so entered. The
transactions made in pursuance of such contracts or arrangements have
been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
11. As informed to us, the Company has not accepted any deposit from
the public attracting the provisions of Sections 58A and 58AA of the
Companies Act, 1956 or the rules framed thereunder.
12. As informed to us, the Company has an adequate internal audit
system commensurate with the size of the Company and nature of its
business. During the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal controls.
13. According to the records of the Company and according to the
information and explanations provided to us, the company has been
regular in depositing undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, cess and any other statutory dues with the appropriate
authorities as applicable.
14. There are no undisputed amounts payable in respect of Provident
Fund, Investor Education Protection Fund, Sales Tax, Wealth Tax, Income
Tax, Custom Duty, Excise Duty, Service Tax, cess and other statutory
dues which are outstanding as at March 31, 2008 for the period of more
than six months from the date they become payable.
15. As informed to us there are no disputed amount payable in respect
of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty and cess as on March 31, 2008.
16. The Company has been registered for less than five years.
Consequently clause 4(x) is not applicable to the Company.
17. As informed to us the Company has not defaulted in repayment of
dues to financial Institutions, banks and debenture holders during the
18. As informed to us, the Company maintained adequacy of documents
and records in respect of loans and advances granted on the basis of
security by way of pledge of shares, debentures and other securities.
19. Based on our audit procedures and according to the information and
explanation provided to us by the management, we are of the opinion
that the Company has maintained proper records in respect of the
trading transactions and contracts of shares, securities, debentures
and other investment. Also, the Company has accounted such transaction
on date of transactions. Further, the investments have been held by the
Company in its own name.
20. As informed to us, the company has given guarantees of Rs.4.7
crores for loan taken by other from banks or financial institutions.
21. During the year no fresh term loan has been obtained by the
22. On the basis of overall examination of the Balance Sheet of the
Company and the information & explanation provided to us, prima facie
no fund raised on short term basis have been used for long term
23. As informed to us, the company has not made any preferential
allotment of shares.
24. During the year the company has issued unsecured debentures.
25. The management has disclosed the end use of money raised by way of
public issue and the same has been verified during the year.
26. Based upon the audit procedures performed and the information and
explanations provided to us by the management, we report that no fraud
on or by the company has been noticed or reported during the course of
The following clause of Order are not applicable to the company and
hence are not reported upon :
4(viii] & 4(xiii).
For HARIBHAKTI & CO.,
Place : Mumbai Partner
Dated 21st April, 2008 Membership No. 048523