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Kapil Raj Finance Ltd.

BSE: 539679 Sector: Financials
NSE: N.A. ISIN Code: INE332Q01015
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OPEN 6.86
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VOLUME 481
52-Week high 48.60
52-Week low 3.43
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kapil Raj Finance Ltd. (KAPILRAJFINANC) - Director Report

Company director report

To

The Members

Kapil Raj Finance Limited

Your Directors have pleasure in presenting their 32nd Annual Report and the Auditedfinancial statement for the financial year ended March 31 2018.

OPERATION AND FINANCIAL RESULTS:

The summary of operation and financial results of the company for the year withcomparative figures for last year is as under:

Particulars 2017-2018 2016-2017
(Rs.) (Rs.)
Net Revenue from Operations 13463735 17449969.70
Other Income 5237511 2931626
Profit before Exceptional and Extra ordinary items and tax 3452599 2855881.85
Extra Ordinary Items - -
Profit after Exceptional and Extra ordinary items and tax 3452599 2855881.85
Profit before tax 3452599 2855881.85
Profit after tax 2433589.89 1593569.80
Amount Transferred to Reserves 6343679.02 3910089

REVIEW OF OPERATIONS AND FUTURE PROSPECTS:

The Company has during the financial year under review has generated 13463735 revenuefrom operations. And the revenue from other income activity of Rs. 5237511 (previousyear 2931626) resulting in net profit of Rs. 2433589.89/- (previous year Rs.1593569.80/-)

TRANSFER TO RESERVES:

The credit balance of Profit and Loss account is transferred to reserves in Balancesheet.

DIVIDEND:

Your Directors decided to plough back the profit and therefore it was decided dividendis not declared.

DIRECTORS:

Pursuant to Sections 149 152 and other applicable provisions of the Companies Act2013 one-third of such of the Directors as are liable to retire by rotation shall retireevery year and if eligible offer themselves for re-appointment at every Annual GeneralMeeting. Consecutively Mr. Shyam Singh Director will retire by rotation at the ensuingAnnual General Meeting and being eligible offer himself for re-appointment in accordancewith the provisions of the Companies Act 2013.

Following Are the Details of Directors on the Board of the Company

Name of Directors DIN DATE OF APPOINTMENT
1. Umesh Pravinchandra Parekh 06827077 01/03/2014
2. Shyam Asharam Singh 07798831 Appointed w.e.f 31/01/2018
3. Hirankumar Mukherjee 08115395 Appointed w.e.f 19/05/2018
4. Pradip Panachand Shah 08126828 Appointed w.e.f 19/05/2018
5. Falguni Rawal 07197547 Resigned w.e.f 19/05/2018
6. Atul Doshi 06826992 Resigned w.e.f 31/01/2018
7. Heera Lal Jaiswar 06827029 Resigned w.e.f 19/05/2018

Further during the year under review following are the Key managerial Personnel in theCompany as per Section 2(51) and 203 of the Companies Act 2013 are as follows:

Name of Directors DIN / PAN DATE OF APPOINTMENT DESIGNATION
1. Shyam Asharam Singh 07798831 Appointed w.e.f 31/01/2018 Managing Director
2.Atul Doshi 06826992 Resigned w.e.f 31/01/2018 Managing Director
3. Falguni Rawal 07197547 Resigned w.e.f 19/05/2018 Whole Time Director

# the Company is in process to appoint the Company Secretary Women director & CFOon the Board of the Company.

DECLARATION BY INDEPENDENT DIRECTOR: (SECTION 134 (3)(D)

Declaration by an Independent Director(s) that they meet the criteria of independenceas provided in sub-section (6) of Section 149 of the Companies Act 2013 is enclosed.

An independent director shall hold office for a term up to five consecutive years onthe Board of a Company and shall not be eligible for reappointment for next five years onpassing of a special resolution by the Company.

PARTICULARS OF REMUNERATION OF DIRECTORS/KMP/EMPLOYEES

The remuneration policy is directed towards rewarding performance based on review ofachievements. It is aimed at attracting and retaining high caliber talent. Theremuneration policy is in consonance with the existing practice in the Industry.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act 2013 and as per SEBI (LODR) 2015during the year under review the Board carried out the annual evaluation of its ownperformance. A structured questionnaire covering various aspects of the Board sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligation and governance wasdistributed to each member of the Board and inputs were received. The performanceevaluation of the Independent Directors who will be appointed at the ensuing AnnualGeneral Meeting was carried out by the entire Board. The performance evaluation ofNon-Independent Directors and the Board as a whole was carried out by the IndependentDirectors. The Directors expressed their satisfaction with the evaluation process

SHARE CAPITAL:

During the year under review the Company is having Authorized Share Capital as10000000 Equity Shares of Rs. 10/- each amounting to Rs. 100000000/- SubscribedIssued and Paid up Capital as 5140000 Equity Shares of Rs.10/- amounting to Rs.51400000/-. There is no change in the share capital of the Company during the year underreview.

MANAGEMENT DISCUSSION AND ANALYSIS

A separate report on the Management Discussion and Analysis is attached as a separatepart of this Annual Report.

CORPORATE GOVERNANCE

In accordance with SEBI (LODR) Regulations 2015 as entered with the Stock Exchange andsome of the best practices followed internationally on Corporate Governance the reportcontaining the details of corporate governance systems and processes is as follows: AtKapil Raj Finance Limited Corporate Governance is all about maintaining a valuablerelationship and trust with all stakeholders. We consider stakeholders are playing veryimportant role in our success and we remain committed to maximizing stakeholder value beit shareholders employees suppliers customers investors communities or policy makers.This approach to value creation emanates from our belief that sound governance systembased on relationship and trust is integral to creating enduring value for all. We have adefined policy framework for ethical conduct of businesses. We believe that any businessconduct can be ethical only when it rests on the nine core values of Honesty IntegrityRespect Fairness Purposefulness Trust Responsibility Citizenship and Courage. Thecorporate governance is an important tool for the protection of shareholder andmaximization of their long term values. The objective of Corporate Governance is toachieve excellence in business thereby increasing stakeholders worth in the long termwhich can be achieved keeping the interest of stakeholders and comply with all rulesregulations and laws. The principal characteristics of Corporate Governance areTransparency Independence Accountability Responsibility Fairness and SocialResponsibility along with efficient performance and respecting interests of thestakeholders and the society as a whole.

COMPANY of PHILOSOPHY ON CORPORATE GOVERNANCE

The Company's philosophy on corporate governance is been founded on the fundamentalideologies of the group viz. Trust Value and Service. Obeying the law both in letterand in spirit is the foundation on which the Company's ethical standards are built. Onadopting corporate governance the Company shall make a constant endeavor to achieveexcellence in Corporate Governance on continuing basis by following the principles oftransparency accountability and integrity in functioning so as to constantly striving toenhance value for all stakeholders and the society in general. As a good corporatecitizen the Company will maintain sound corporate practices based on conscienceopenness fairness professionalism and accountability in building confidence of itsvarious stakeholders in it thereby paving the way for its long term success. We are makingcontinuous efforts to adopt the best practices in corporate governance and we believe thatthe practices we are putting into place for the company shall go beyond adherence toregulatory framework. The Company's corporate governance philosophy has been furtherstrengthened by adopting a Code of Fair Practice in accordance with the guidelines issuedby Reserve Bank of India from time to time.

APPLICABILITY

As per the amendment made in the provisions of the Regulation 27 of SEBI (ListingObligation And Disclosure Requirement) Regulation 2015 with equity share capital of lessthan Rs 10 crores

(ii) companies having net worth not exceeding of Rs 25 crores and

(iii) companies listed on SME and SME-ITP platforms of the stock exchanges has tocomply with the provision of SEBI (LODR) Regulation 2015. Since the Paid Share Capital ofthe Company is below the Limit specified under the SEBI (LODR) Regulations 2015 theprovision / requirements of Corporate Governance as laid down under the SEBI (LODR)Regulations 2015 is not applicable to the Company. However the Company itself followthe standards of Corporate Governance but the disclosures required to be done underRegulation 27 (2) of SEBI (LODR) Regulations 2015 is not applicable to the Company.

DIRECTORSof RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement:

i. That in the presentation of the annual accounts for the year ended March 312018 applicable accounting standards have been followed and that there are no materialdepartures;

ii. That they have in the selection of the accounting policies consulted thestatutory auditors and have applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company for the year ended March 31 2018 and of the profit of the Company for theyear ended on that date;

iii. That they have taken proper and sufficient care to the best of theirknowledge and ability for the maintenance of adequate accounting records in accordancewith the provisions of the Companies Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;

iv. That the annual accounts have been prepared on a going concern basis.

v. That internal financial controls followed by the Company are adequate and wereoperating effectively

vi. That the systems to ensure compliance with the provisions of all applicablelaws were adequate and operating effectively.

HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES

The Company does not have any Holding/ Subsidiary/ Associate Company during the periodunder review.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION RESEARCH &DEVELOPMENT AND FOREIGNEXCHANGE EARNINGS AND OUTGO

Particulars Remarks
1 Energy conservation measures taken NIL
2 Additional investments and proposals if any being implemented for reduction of consumption of energy NIL
3 Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods NIL
4 Total energy consumption and energy consumption per unit of production NIL

FORM-A: FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

Particulars Remarks
A. Power and fuel consumption NIL
B. Consumption per unit of production NIL

TECHNOLOGY ABSORPTION

FORM-B: FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION ETC.

I Research and Development : Nil II Technology Absorption Adaptation and Innovation:Nil

FOREIGN EXCHANGE EARNINGS AND OUTGO

I. Earnings in Foreign Exchange during the year : Nil

II. Foreign Exchange outgo during the year :Nil

PARTICULARS OF EMPLOYEES

Particulars of employees as required to be disclosed in terms of Section 134 of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are made available at the registered office of theCompany. The members desirous of obtaining the same may write to Mr. Shyam Singh (DIN:07798831) Managing Director at the registered office of the Company.

CLARIFICATION FOR OBSERVATIONS AS REPORTED BY STATUTORY AUDITOR IN THEIR AUDIT REPORT

Pursuant to Section 139 of the Act the Auditor s report for the financial year 2017-18contains qualifications remarks the clarification for the same are as follows:

1. The Company is in process to get itself registered with the RBI as a NBFC.

2. With respect to the qualifications raised by the Auditor for the Principal businessactivities and Business activity transactions we wish to state that the management of theCompany has taken appropriate steps during previous year annual general meeting of theCompany for making necessary application with the relevant Authorities.

DEPOSITS

During the period under review your Company has not accepted or invited any depositsfrom public.

SIGNFICANT / MATERIAL ORDERS PASSED IMPACTING ON GOING CONCERN STATUS AND COMPANY ofOPERATIONS

There have been no significant and material orders passed by any regulators or courtsor tribunals impacting the going concern status and company s operations in future.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013

The Company has made transactions which are within the limit of Loans Guarantees orInvestments under Section 186 of the Companies Act 2013

BOARD MEETINGS

The Board meets at regular intervals to discuss and decide on Company / business policyand strategy apart from other Board business. The Board / Committee Meetings arepre-scheduled and a tentative annual calendar of the Board and Committee Meetings iscirculated to the Directors in advance to facilitate them to plan their schedule and toensure meaningful participation in the meetings. However in case of a special and urgentbusiness need the Board s approval is taken by passing resolutions through circulationas permitted by law which are confirmed in the subsequent Board meeting.

The Board met 6(Six) times during the financial year. The intervening gap between anytwo meetings was within the period prescribed by the Companies Act 2013. The maximuminterval between any two meetings did not exceed 120 days as prescribed under theCompanies Act 2013. None of the directors is a member in more than ten committees or actsas a Chairman in more than five committees across all companies in which he is a director.

The Composition of the Board and the number of directorships memberships andchairmanship of committees as on March 31 2018 are given below:

Name of the Directors DIN Designation / category *No. of Directorship in Boards of other Co. Committee Membership in all Companies Chairmanship in committees where they are members
Mr. Umesh Pravinchandra Parekh 06827077 Non-Executive Director 1 NIL NIL
Mr. Heeralal Rambaratram Jaiswar 06827029 Non-Executive Director 0 NIL NIL
Mr. Atul Chimanlal Doshi (resigned on January 31 2018) 06826992 Chairman & Managing Director 1 NIL NIL
Ms. Falguni Chintan Raval 07197547 Executive Director NIL NIL NIL
Mr. Shyam Singh (appointed w.e.f January 31 2018) 07798831 Chairman & Managing Director 2 NIL NIL

BOARD MEETINGS AND ATTENDANCE

The dates on which the said meetings were held are 6 times on

30/05/2017 11/08/2017 24/08/2017 14/11/2017 31/01/2018 14/02/2018

 

Name of director No. of meetings held No. of meetings Attended Last AGM Attended
Mr. Umesh Pravinchandra Parekh 6 6 Yes
Mr. Heeralal Rambaratram Jaiswar 6 6 Yes
Mr. Atul Chimanlal Doshi (Resigned on January 31 2018) 6 5 Yes
Ms. Falguni Chintan Raval* 6 6 Yes
Mr. Shyam Singh (Appointed w.e.f January 31 2018) 6 2 No

EXTRACT OF THE ANNUAL RETURN

An extract of the Annual Return for the year ended March 31 2018 as provided undersub-section (3) of Section 92 and prescribed under Rule 12 of Companies (Management &Administration) Rules 2014 in the prescribed form MGT-9 is provided on the websiteof the Company..

*As per Notification dated May 7 2018 issued by Ministry of Corporate Affairsdisclosure with respect to Section 92(3) Extract of Annual Report.

SECRETARIAL AUDITORS AND THEIR REPORT

Mr. Amit R. Dadheech Company Secretaries was appointed as Secretarial Auditors of theCompany for the financial year 2017-18 Pursuant to Section 204 of the Companies Act 2013.The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached asRs.Annexure ARs. and forms part of this report.

There are qualifications observations and other remarks of the Secretarial Auditors inthe Report issued by them for the financial year 2017-18 which are self explanatory innature and does not call for any explanation from the Board of Directors. However themanagement of the company is taking all the necessary actions to make good thenon-compliance pointed by the secretarial auditor.

RELATED PARTIES TRANSACTIONS

All the transactions with related parties are in the ordinary course of business and onarm s length basis. The details of the transactions entered into between the Company andthe related parties are given in AOC-2 attached as Annexure B .

BOARD COMMITTEES

The Company has the following Committees of the Board: Audit Committee StakeholdersRelationship Committee Nomination & Remuneration Committee

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atunder investors/policy documents/Vigil Mechanism Policy link.

INTERNAL FINANCIAL CONTROL

The Company believes that internal control necessarily follows the principle of prudentbusiness governance that freedom of management should be exercised within a framework ofappropriate checks and balances. The Company remains committed to ensuring an effectiveinternal control environment that inter alia provides assurance on orderly and efficientconduct of operations security of assets prevention and detection of frauds/errorsaccuracy and completeness of accounting records and the timely preparation of reliablefinancial information.

The Company's independent and Internal Audit processes both at the Business andCorporate levels provide assurance on the adequacy and effectiveness of internalcontrols compliance with operating systems internal policies and regulatoryrequirements.

The Financial Statements of the Company are prepared on the basis of the SignificantAccounting Policies that are carefully selected by management and approved by the Board.These in turn are supported by a set of divisional Delegation Manual & StandardOperating Procedures (SOPs) that have been established for individual units/ areas ofoperations.

The Company has in place adequate internal financial controls with reference to theFinancial Statements. Such controls have been tested during the year and no reportablematerial weakness in the design or operation was observed. Nonetheless the Companyrecognizes that any internal financial control framework no matter how well designed hasinherent limitations and accordingly regular audit and review processes ensure that suchsystems are reinforced on an ongoing basis.

RISK & MITIGATION

The Company has identified various risks faced by the Company from different areas. Asper the provision of the Companies Act 2013 and listing agreements the the Board hadadopted a risks management policy whereby a proper framework is set up. Appropriatestructures are present so that risks are inherently monitored and controlled. Acombination of policies and procedures attempts to counter risks as and when they evolve.

COST AUDITORS

As the Company is operating in the service industry cost audit is not applicable tothe Company and hence no reporting is required.

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company is committed to provide a protective environment at workplace for all itswomen employees. To ensure that every woman employee is treated with dignity and respectand as mandated under "The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013" the Company has in place a formal policy forprevention of sexual harassment of its women employees.

The following is the summary of sexual harassment complaints received and disposed offduring the current financial year.

Number of Complaints received : NIL

Number of Complaints disposed of : NIL

INDUSTRIAL RELATIONS:

The company maintained healthy cordial and harmonious industrial relations at alllevels the enthusiasm and unstinting efforts of employees have enabled the company toremain at the leadership position in the industry it has taken various steps to improveproductivity across organization.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:

Mr. Atul Chimanlal Doshi * Resigned w.e.f 01/31/2018 Chairman & Managing Director
Mr. Shyam Singh #Appointed w.e.f 01/31/2018 Chairman & Managing Director
Ms. Falguni Raval Whole Time Director

ACKNOWLEDGEMENT

Your Directors wish to acknowledge all their stakeholders and are grateful for theexcellent support received from the shareholders Bankers Financial InstitutionsGovernment authorities esteemed corporate clients customers and other businessassociates. Your Directors recognize and appreciate the hard work and efforts put in byall the employees of the Company and their contribution to the growth of the Company in avery challenging environment.

ANNEXURE A TO DIRECTORS REPORT

Form No. MR-3

Secretarial Audit Report [Pursuant to section 204(1) of the Companies Act 2013 andrule no.9 of the Companies (Appointment and Remuneration Personnel) Rules 2014]Secretarial Audit Report For the Financial Year Ended 31st March 2018

To

The Members

Kapil Raj Finance Limited

D-50 E

3rd Floor

Kh. No. 299 Chhattarpur Enclave

New Delhi 110074.

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Kapil Raj Finance Limited(CIN: L65929DL1985PLC022788) (hereinafter called "the company"). SecretarialAudit was conducted in a manner that provided us a reasonable basis for evaluating thecorporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of Kapil Raj Finance Limited s books papers minute booksforms and returns filed and other records maintained by the company and also theinformation provided by the Company its officers agents and authorized representativesduring the conduct of the Secretarial Audit we hereby report that in our opinion theCompany has during the audit period covering the financial year ended on 31st March 2018complied with the statutory provisions listed hereunder and also that the Company hasproper Board processes and compliance mechanism in place to the extent in the manner andsubject to the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords maintained by Kapil Raj Finance Limited for the financial year ended on 31stMarch 2018 according to the provisions of:

1. The Companies Act 2013 (the Act) and the rules made thereunder;

2. The Securities Contracts (Regulation) Act 1956 ( SCRA ) and the rules madethereunder;

3. The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

4. Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings; - (During the period under review the Company has notentered into any transaction requiring compliances with the Foreign Exchange ManagementAct 1999 and rules made there under)

5. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ( SEBI Act ):-

a) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;

b) During the period under review the Company has not entered into any transactionrequiring compliances with the Securities and Exchange Board of India (SubstantialAcquisition of Shares and Takeovers) Regulations 2011;

c) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015;

d) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

e) The Securities and Exchange Board of India (Issue and Listing of DebtSecurities) Regulations 2008; (During the period under review the Company has notentered into any transaction requiring compliances with the Securities and Exchange Boardof India (Issue and Listing of Debt Securities) Regulations 2008)

f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993;

g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; (During the period under review the Company has not entered into anytransaction requiring compliances with the Securities and Exchange Board of India(Delisting of Equity Shares) Regulations 2009)

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998; (During the period under review the Company has not entered into any transactionrequiring compliances with the Securities and Exchange Board of India (Buyback ofSecurities) Regulations 1998)

OTHER APPLICABLE LAWS:

With respect to the compliance system prevailing in the Company and on examination ofthe relevant documents and records in pursuance thereof on test check basis the Companyhas complied with the following laws applicable to the Company

1. Income Tax Act 1961 and Indirect Tax Laws

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above.

We further report that:

We further report that the Board of Directors of the Company is duly constituted withproper balance of Executive Directors Non-Executive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Majority decision is carried unanimously however the dissenting members views if anyare captured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

We further report that during the audit period:

1. The Company is yet to appoint the Chief Financial Officer (CFO) during the periodunder review.

2. The Company is yet to appoint the Company Secretary during the period under review.

3. The overall revenue earned by the Company during the financial year was fromfinancial activities. As per the provision of Section 45I of Reserve Bank of India Act1934 and Reserve Bank of India Press Release 1998-99/1269 dated April 08 1999 a companywould be identified as a Non Banking Financial Company if its financial assets are morethan 50 percent of its total assets (netted off by intangible assets) and income fromfinancial assets are more than 50 percent of the gross income. The Company has filed theapplication with the RBI for getting registered as NBFC and it is pending with RBI.

4. The Business Activity transactions dealing in Trading Derivatives and SpeculationTransactions related to Equities Future and Options segment Foreign Exchange andCommodities are not accounted as per the generally accepted principles.

This Report is to be read with our letter of even date which is annexed as Annexure Aand forms an integral part of this Report.

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the Secretarial records. The verificationwas done on test check basis to ensure that correct facts are reflected in Secretarialrecords. We believe that the process and practices we followed provide a reasonable basisof our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Where ever required we have obtained the Management representation about theCompliance of laws rules and regulations and happening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedure on test check basis.

6. The Secretarial Audit report is neither an assurance as to the future viabilityof the Company nor of the efficacy or effectiveness with which the management hasconducted the affairs of the Company.