We have audited the attached Balance Sheet of MOTILAL OSWAL FINANCIAL
SERVICES LIMITED as at 31st March, 2009, 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.
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.
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 4 and 5 of
the said Order, to the extent they are applicable to the Company.
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 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 31st March, 2009 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, 2009 from being appointed as a director
in terms of 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 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 2009,
(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 TO AUDITORS REPORT
ANNEXURE REFERRED TO IN PARAGRAPH I 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, 2009
i) a) The Company has maintained proper records showing full
particulars including guantitative details and situation of fixed
b) All the fixed assets were physically verified by the management in
the previous year in accordance with a planned Programme of verifying
them once in three years which, in our opinion, is reasonable having
regard to the size of the company and nature of its assets. As informed
to us, no material discrepancies were noticed on such verification.
c) 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.
ii) a) 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 freguency of
verification is reasonable.
b) The procedures of verification of inventory (shares) followed by the
management are reasonable and adeguate in relation to size of the
company and the nature of its business.
c) 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
iii) a) As informed to us, the Company has granted unsecured loans to
its four Subsidiary Companies listed in the register maintained under
Section 301 of Companies Act, 1956. The maximum amount involved during
the year is Rs.7063.17 lakhs and the year-end balance of loan granted
to subsidiaries was Rs.5.88 lacs.
b) In our opinion and according to the information and explanation
given to us, the rate of interest and other terms and condition for
such loans are not prima facie prejudicial to the interest of the
c) The loans given are repayable on demand and company has received the
principal amount and interest accordingly.
d) Since there is no stipulation as regards repayment schedules clause
4 (iii) (d) is not applicable.
e) As informed to us, the Company has not taken any loan, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Consequently sub clause (f) and (g) of clause (iii) are not applicable.
iv) In our opinion and according the information and explanation given
to us, there are adeguate internal control procedures commensurate with
the size of the Company and nature of its business with regard to
purchase of fixed asset and inventory (securities) and sales of
services. During the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal controls.
v) a) According to the information and explanation given to us, we are
of the opinion that the particulars of contract or arrangement referred
to in section 301 of the Companies Act 1956 that need to be entered
into the register maintained under that section have been so entered.
b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of such contracts or
arrangement exceeding value of rupee five lakhs have been entered into
during the financial year at prices which are reasonable having regard
to the prevailing market price at the relevant time.
vi) During the year the Company has not accepted any public deposit
conseguently clause 4 (vi) is not applicable.
vii) In our opinion, the Company has an adeguate internal audit system
commensurate with the size of the Company and nature of its business.
viii) The company belongs to the service sectors industry therefore
clause 4(viii) is not applicable.
ix) a) 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, Employee state insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Cess and other material
statutory dues applicable to it, with the appropriate authorities.
b) According to the information and explanations given to us, there are
no undisputed amounts payable in respect of Provident Fund, Investor
Education Protection Fund, Employee state insurance, Income tax, Wealth
Tax, Service Tax, Sales Tax, Cess and other material statutory dues
which are outstanding as at March 31, 2009 for the period of more than
six months from the date they become payable
c) According to the information and explanations given to us, there are
no dues of Income tax, Sales tax, Wealth tax, Service tax, cess which
have not been deposited on account of any disputes.
x) The Company has been registered for less than five years.
Consequently clause 4(x) is not applicable.
xi) Based on our audit procedures and as per the information and
explanation given to us we are of the opinion that company has not
defaulted in the repayment of dues to a financial institution, banks,
or debenture holder.
xii) Based on our examination of documents and records, 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 nidhi/ mutual
benefit fund/ society therefore clause 4(xiii) is not applicable.
xiv) 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.
xv) According to the information and explanations given to us, the
Company has given guarantee of Rs. 4.7 crores for bank guarantee taken
by one of the subsidiary companies, from banks, the terms and
conditions thereof, in our opinion, are not prejudicial to the interest
of the Company.
xvi) The company has not raised any term loan during the year therefore
clause 4 (xvi) is not applicable.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet and cash flow of the
company, prima facie no fund raised on short term basis have been used
for long term investment.
xviii) The company has not made any preferential allotment of shares to
parties and companies covered in the registers maintain under section
301 of the Companies Act, 1956.
xix) According to the information and explanations given to us, during
the period covered by our audit report, the company had issued 75
debentures of Rs.1 crore each. Debentures issued were unsecured. All
the above debentures have been redeemed during the year.
xx) During the year company had not raised any money by way of Public
xxi) 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
For HARIBHAKTI & CO.,
Membership No. 045228
Date: 11th May, 2009