We have audited the attached Balance Sheet of Fortune Financial
Services (India) Limited as at 31st March 2007 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 the companys 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 the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
1) As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004,
(together the Order) issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we
enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order to the extent applicable
2) Further to our comments in the Annexure referred to above, we report
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
ii. In our opinion, proper books of account and records as specified in
Rule 15 of the Securities Contracts (Regulation) Rules, 1957 have been
kept so far as appears from our examination of such books. The Company
has four branches, however the books of account are maintained at the
head office, which has been reviewed by us;
iii. The Company as a stock broker has complied with the requirements
of the stock exchange so far as they relate to maintenance of accounts
and was regular in submitting the required accounting information to
the stock exchange;
iv. The Balance Sheet, Profit and Loss Account and Cash Flow statement
dealt with by this report are in agreement with the books of account.
v. In our opinion, the Balance Sheet, Profit and Loss Account 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.
vi. On the basis of written representations received from the
directors, as on March 31 2007 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as-on
March 31 2007 from being appointed as a director in terms of clause (g)
of sub-section (1) of section 274 of the Companies Act, 1956.
vii. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the 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:
a) in the case of Balance Sheet, of the state of affairs of the Company
as at March 31 2007;
b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date;
c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH (1) OF THE AUDITORS REPORT TO THE
MEMBERS OF FORTUNE FINANCIAL SERVICES (INDIA) LIMITED FOR THE YEAR
ENDED MARCH 31, 2007.
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets. As
explained to us, the Company has a system of physical verification of
fixed assets once in a period of three years.
2. The Management has not physically verified its fixed assets during
3. Based on the information and explanations given by the management
and on the basis of audit procedures performed by us, we are of the
opinion that the assets sold by the Company during the year does not
form a substantial part of its fixed assets and has not affected its
4. In our opinion and according to the explanations given to us, the
Company has not granted or taken any loans, secured or unsecured
to/from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956, accordingly,
clauses 4 (iii)(b) to (g) of the Order are not applicable to the
5. In our opinion and according to the information and explanations
given to us, 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 for the sale of
its services. Further on the basis of our examination and according to
the information and explanations given to us, neither have we noticed
nor have we been informed of any major weaknesses in the internal
6. a) Based on the audit procedures applied by us and according to the
information and explanations provided by the Management, we are of the
opinion that the transactions that need to be entered into the register
maintained under Section 301 of the Companies Act, 1956 have been so
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the registers maintained under Section 301 and
exceeding the value of rupees five lacs in respect of the party during
the year have been made at prices which are reasonable having regard to
market prices prevailing at the relevant time.
7. In our opinion and according to the information and explanations
given to us the Company has not accepted any deposits from the public.
As per the information and explanations given to us, the Company Law
Board or National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal has not passed any order relating to public
deposits on the Company.
8. The Company has a concurrent audit process for its depository
operations, however there is no internal audit system for the other
9. In our opinion and according to the explanations given to us, the
Company is not required to maintain cost records prescribed by the
Central Government under Section 209 (1) (d) of the Companies Act,
10. a) According to the records of the company and the information and
explanations given to us, the Company has been generally regular in
depositing with the appropriate authorities undisputed statutory dues
including provident fund, investor education and protection fund,
employees state insurance, income tax, cess and other statutory dues,
if applicable to it.
b) According to the information and explanations given to us, there are
no undisputed statutory dues as referred to above as on March 31, 2007
outstanding for a period of more than six months from the date they
became payable other than stamp duty amounting to Rs.3,02,007/-.
c) According to the information and explanations provided to us, there
were no disputed dues payable in respect of the statutory dues referred
to in (a) above.
11. The Company does not have any accumulated loss as at March 31,
2007 and it has not incurred any cash loss during the financial year
covered by our audit and the immediately preceding financial year.
12. Based on our audit procedures and on the information and
explanations given by the Management, we are of the opinion that the
Company has not defaulted in repayment of dues to financial
institutions or banks.
13. Based on our examination of documents and records, and as
confirmed by the Management, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
14. Based on our examination of the records and evaluation of the
related internal controls, we are of the opinion that proper records
have been maintained of the transactions and contracts in respect of
its dealing in shares and timely entries have been made in those
records. We also report that the Company has held the shares, in its
own name except those that are intended to be contracted or sold
immediately and those to the extent of the exemption granted under
section 49 of the Companies Act, 1956.
15. The Company has given guarantee for a loan taken by its subsidiary
company from a bank, the terms of which are not prima facie prejudicial
to the interests of the Company.
16. The Company has not taken any term loans during the year.
17. According to the information and explanations given to us and on
an overall examination of the financial statements of the Company, we
are of the opinion that as at the close of the year, no funds raised on
a short term basis has been used for long term investments and vice
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956.
19. The Company has not issued any debentures during the year.
20. The Company has not made any public issue of any of its securities
during the year.
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 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 period nor
have we been informed of such case by the Management.
For NIPUN SUDHIR & ASSOCIATES
Sudhir V. Nair
Mumbai, May 26, 2007 Patner
(Membership No. 45893)