14th Annual Report 2008 - Transwarranty · 2013. 6. 13. · Annual General Meeting and to fix their...

14th Annual Report 2008

Mr. N. R. AchanDirector

Mr. Jay ChandranDirector

Mr. Pravin KhatauDirector

Mr. Suresh N. TalwarChairman

BOARD OF DIRECTORS

Raghu R. PalatDirector

Mr. Kumar NairManaging Director

1

14TH ANNUAL REPORT 2008

ContentsCorporate Information ........................................ 1

Notice ............................................................ 2

Directors’ Report ............................................... 3

Corporate Governance ........................................ 6

Management Discussion and Analysis ......................13

Auditors’ Report ...............................................16

Balance Sheet .................................................20

Profit & Loss Account .........................................21

Cash Flow Statement .........................................22

Schedules to Accounts ........................................24

Subsidiary Companies’ Accounts ............................37

Consolidated Financial Statements ........................81

Statement Persuant to Section 212 of the Companies Act 1956 ....................................... 102

Board of Directors

Mr. Suresh N. Talwar Chairman

Mr. Kumar Nair Managing Director

Mr. Raghu R. Palat

Mr. Pravin Khatau

Mr. N. R. Achan

Mr. K. Jay Chandran

Company Secretary

Mr. G. K. Prem Kumar

Auditors

M/s Haridas Associates, Chartered Accountants, 3, Air View Society, Off. Nanda Parkat Road, Opp. Rane Hospital, Vile - Parle (E), Mumbai - 400 057.

Solicitors & Advocates

Talwar Thakore & Associates Hague Building, 9, Sprott Road, Ballard Estate, Mumbai - 400 001.

Bankers

ICICI Bank Limited

The Catholic Syrian Bank Ltd.

The Federal Bank Limited

Registered and Corporate Office

403, Regent Chambers, Nariman Point, Mumbai – 400021. Tel. No. : 91-022-22047965/66 Fax No. : 91-022-66306655 Website : www.transwarranty.com e-mail id : [email protected]

Registrar & Share Transfer Agent

Intime Spectrum Registry limited, C-13, Pannalal Silk Mills Compound, L B S Marg, Bhandup (West), Mumbai – 400 078. Tel. No. 91-022-25963838 Fax No. 91-022-25946969 e-mail : [email protected]

Corporate information

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TRANSWARRANTY FINANCE LIMITED

NOTICE is hereby given that, the 14th Annual General Meeting of the members of Transwarranty Finance Limited will be held on Thursday, the 7th August 2008 at 11.00 a.m at M C Ghia Hall, Bhogilal Hargovindas Building, 2nd Floor, 18/20, Kaikhushru Dubbash Marg, Mumbai 400001 to transact the following business.

Ordinary Business :

1. To receive, consider, and adopt the Balance Sheet as at 31.03.2008 and the Profit and Loss account for the year ended as on that date and the Report of the Directors and the Auditors thereon.

2. To declare dividend for the financial year ended 31.03.2008.

3. To appoint a Director in place of Mr. K. Jay Chandran who retires by rotation and being eligible offers himself for reappointment.

4. To appoint a Director in place of Mr. Pravin Khatau who retires by rotation and being eligible offers himself for reappointment.

5. To appoint auditors to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to fix their remuneration.

Mumbai By the Order of the BoardJune 26, 2008 Sd/-Registered Office G K Prem Kumar 403, Regent Chambers Company Secretary Nariman Point, Mumbai 400021

NOTES :

1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself on a poll only and the proxy need not be a member.

2. Proxies in order to be effective must be received by the Company not less than forty eight hours before the commencement of the meeting. Proxy Form is enclosed.

3. Members / Proxies should bring duly filled Attendance Slips sent herewith to attend the meeting.

4. All documents referred to in the Notice will be available for inspection by the members at the Registered Office of the company between 10.30 a.m to 12.30 p.m. on all working days up to the date of Annual General Meeting.

5. Members who are holding Company’s shares in dematerialized form are requested to bring details of their Depository Account Number for identification.

6. The Register of members and share transfer books of the Company will remain closed from 30.07.2007 to 7.08.2008. (both days inclusive)

7. Members requiring further information on accounts at the meeting are requested to send the queries in writing so as to reach at the Registered Office of the company at Mumbai at least 10 days before the meeting.

8. Members holding shares in physical form are requested to notify any change in their address to the Company’s Registrar and Transfer Agents, Intime Spectrum Registry Ltd. Members holding shares in electronic form may intimate any such change to their respective Depository Participants (DPs).

9. Members are informed that, an amount of Rs. 44,130 being the dividend declared for the period 2006-07 is outstanding as unclaimed and there are no unclaimed dividends transferable to Central Government under Section 205 A of the Companies Act, 1956.

10. Members are requested to address all correspondences, including dividend matters to the Registrars & Transfer Agents of the Company.

11. Reappointment of Directors: (Item No. 3 & 4 of the Notice)

i) Mr. K. Jay Chandran has been appointed as a Director of the Company on 21.03.1995 and retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for reappointment. The information/details pertaining to Mr. Jay Chandran in terms of clause 49 of the Listing Agreement with the Stock Exchanges are furnished hereunder:

Mr. K. Jay Chandran has post Graduate Honours Diploma in Systems Management. He has about 8 years experience in the field of Information & Technology and about 12 years experience in the field of manufacturing and international commodities trading. He is a Director of United American Engineers Pte Ltd., Singapore.

ii) Mr. Pravin Khatau has been appointed as a Director of the Company on 13.04.2006 and retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for reappointment. The information/details pertaining to Mr. Pravin Khatau in terms of clause 49 of the Listing Agreement with the Stock Exchanges are furnished hereunder:

Mr. Pravin Khatau is MBA from Wharton. He had occupied senior positions in Goldman Sachs & Co., one of the prestigious international investment bank in the world and ING Barings. Presently he is a private equity investor based in Monaco through his Company LRM Holdings, Monaco.

NOTICE

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DIRECTORS’ REPORTYour Directors have pleasure in presenting the 14th Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2008.

To,

The Members ofTranswarranty Finance Ltd.

Your Directors have pleasure in presenting the 14th Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2008.

Financial Results

2007-08(Rs.)

2006-07(Rs.)

Total Income 65,952,752 57,099,941

Gross Profit 38,016,417 39,533,601

Less Interest and Finance Charges 1,014,745 10,93,243

Depreciation 787,430 590,048

Profit/(Loss) before Tax 36,214,242 37,850,311

Less Provision for tax 12,450,000 12,600,000

Provision for Fringe Benefit Tax 301,450 220,000

Deferred Tax Liability/(Assets) (16,720) (56,549)

Profit/(Loss) after Tax 23,479,512 25,086,860

Balance brought forward 13,385,443 10,695,255

Profit available for appropriation 36,864,955 35,782,115

Appropriations

Reserves u/s 45 1C of RBI Act 4,695,902 5,017,372

Proposed Dividend 14,000,000 14,000,000

Corporate Dividend Tax 2,379,300 2,379,300

General Reserve 1,000,000 1,000,000

Profit/(Loss) carried to Balance Sheet

14,789,753 13,385,443

Business :

The performance of the Company during the year under review is as follows.

The total income was Rs.65.95 million compared to previous year income of Rs.57.10 million. Gross profit was at Rs.38.02million as against Rs. 39.53 million in the previous year. The profit after tax was Rs.23.48 million as against Rs.25.09 million in the previous year. During the year Rs.4.70 million was appropriated to reserves u/s 45 1C of RBI Act 1935 and Rs.1.00 million to General Reserves. Earning per share is Rs.1.68 as against Rs.2.79 in the previous year on a weighted overage basis as per accounting Standard 20 issued by the Institute of Chartered Accountants of India.

Dividend during the year

Your Directors recommend dividend of Re. 1/- per share for the financial year 2007-08. The dividend will absorb Rs.14,000,000/- and corporate tax on dividend amounting to Rs. 2,379,300/-

Future Outlook :

Though the Indian economy is showing signs of a slow down, your Directors are confident of improving the performance in the coming year due to diverse product portfolio and strong client relationship of the Company.

Since the activities are diverse and governed by different regulatory authorities, the businesses are structured under Transwarranty Finance Limited as the flagship company and its subsidiary companies. A detailed note of this is provided in the Management Discussion and Analysis, annexure to this report.

Employees’ Stock Option Plan 2008.

In order to attract, retain and motivate talent in the organization with a view to achieving long term business goals, the Board of Directors at its meeting held on 10th March, 2008 introduced employees’ Stock Option Plan, 2008 to Directors, Employees of the Company and its Subsidiary Companies by reserving 10,00,000 Equity shares of Rs.10/- each for the said purpose. Accordingly, the shareholders at their Extra Ordinary General Meeting held on 4th April, 2008 approved the Employees’ Stock Option Plan 2008 as recommended by the Board of Directors. The Board has also constituted Compensation Committee comprising the following Directors to formulate detailed terms and conditions of the scheme and also to administer and implement the said scheme in accordance with the SEBI Guidelines.

1) Mr. Raghu R. Palat - Chairman

2) Mr. Suresh N. Talwar - Member

3) Mr. N. R. Achan - Member

4) Mr. Kumar Nair - Member

The Compensation Committee at its meeting held on 4th April 2008 approved a detailed ESOP Scheme and granted 6,41,500 Options. Each Option entitles on vesting, one equity share of face value of Rs. 10/- each of the Company at a price of Rs. 20/- per share. The Options granted under the Scheme would vest over a period of 5 years from the date of grant.

No employee or Director has been granted Options in excess of 1% of the issued equity share capital of the Company.

The particulars with regard to the Stock Options as required to be disclosed pursuant to the Regulation 12 of the SEBI Guidelines (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, as amended, are set out in the Annexure 1 to this Report.

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Subsidiary Companies:

Transwarranty Capital Pvt Ltd: The Company is a SEBI registered Merchant Banker rendering various services such as IPO, FPO, Rights Issue, advisory for FCCB,GDR/ADR, ESOPs etc.,

During the year under review, the company has handled Open Offers under the Takeover Code Regulations of SEBI, Employees Stock Option Plans, Issued Valuation Certificates for listing of equity shares of the companies and Direct Listing. During the financial year 2008-09, the Company expects to do more such activities in addition to handling of Rights/Public/Follow on issues.

The number of empanelment with various Financial Institutions for secondary market investments has gone up from 6 to 15 and the process of empanelment is continuing. During the year 2008 – 09, the broking business would focus only on Institutional business and would endeavor to increase the number of empanelment.

Transwarranty Forex & Commodities Pvt. Ltd: The inter-bank foreign exchange broking business depends entirely on the empanelment awarded by the banks, which is a time consuming process. Though this business may not contribute significantly in the year 2007-08, it is an extremely strategically important business. In future, when the foreign exchange controls are liberalized and the country move towards full convertibility, the foreign exchange broking business shall emerge as an extremely profitable and valuable business.

During the year 2007-08, the Company was awarded empanelment by 9 banks. The Company is expecting to secure empanelment from about 28 banks during the financial year 2008-09.

We shall continue to review the performance of Dubai Gold and Commodities Exchange (DGCX) and shall commence our International operations only on being satisfied of a profitable business model.

Transwarranty Credit Care Pvt Ltd: The Company is positioned as the institutional wealth management vehicle in the form of private equity /venture fund.

Vertex Securities Ltd:

During the year the company and Mr. Kumar Nair, Promoter of the company had entered into a share purchase agreement with the Promoters of “Vertex Securities Ltd” (VSL), a listed share broking company with its Registered office at Kochi, Kerala, for acquisition of 28,50,343 Equity Shares comprising 55.05% (includes acquisition of 200000 shares comprising 3.86% by Mr. Kumar Nair) of the paid up capital of the Company at a price of Rs.25/- per share on 2nd November, 2007. The Company had to seek approvals from Securities and Exchange Board of India (SEBI) as per SEBI (substantial acquisition of shares and takeover) Regulation 1997 and Stock Exchanges under their guidlines. All the required approvals from SEBI and the Stock Exchange have been received and the open offer to the Public Shareholders as per SEBI guidlines was opened on June 18, 2008 and the process is expected to be completed in July 2008. On completion of the acquisition formalities, VSL would become a subsidiary company of Transwarranty Finance Limited.

Auditors’ Report:

The Auditors report to the shareholders does not contain any qualifications.

A company, whose securities are listed on the Stock Exchanges, is compulsorily required to follow the accounting standards prescribed by the Institute of Chartered Accountants of India. In accordance with the Accounting Standards AS 21 on consolidated financial statement read with Accounting Standard 23 on Accounting for Investments in Associates, the Directors have provided the Audited consolidated financial statements in the Annual Report. During the year under review provisions have been made for deferred tax liabilities/ (assets).

Pursuant to Section 212 of the Companies Act, 1956 Directors Report, Balance Sheet and Profit & Loss account of the Subsidiary companies are attached with this Report. These documents are also available for inspection during business hours at the Registered Office of the Company.

Directors :

Mr. K. Jay Chandran and Mr. Pravin Khatau retire by rotation and being eligible, offer themselves for re-appointment, pursuant to clause 49(g)(1) of the Listing Agreement with the Stock Exchanges, brief resume of the Directors being reappointed has been provided in the Notice convening the Annual General Meeting.

Directors’ Responsibility statement :

As required under Section 217(2AA) of the Companies Act, 1956, your directors hereby confirm that,

In the preparation of the Annual Accounts for the year 2007-08, the applicable Accounting Standards have been followed and there are no material departures

The accounting policies selected and applied are consistent and the judgment and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year

Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

The annual accounts have been prepared on a going concern basis.

Particulars of employees u/s 217 (2A) of the Companies Act, 1956 :

None of the employees of the Company employed throughout the financial year/part of the year were in receipt of remuneration in excess of the limits as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and hence no particulars are required to be given.

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Auditors :

The auditors, M/s Haridas Associates, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to be reappointed.

Corporate Governance Report:

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, a Report on Corporate Governance with Auditors Certificate on Compliance with the conditions of Corporate Governance and a Management Discussion & Analysis Report has been attached and form part of the Annual Report.

Annexure to Directors’ Report showing particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo.

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are not applicable to the Company. The Company has not carried out any specific research and development activities. The information related to Technology absorptions, adaptation and innovation is reported to be Nil.

a) Option granted The Company granted 6,41,500 Stock Options on April 4, 2008 (each option carrying entitlement for the equity share of the face value of Rs. 10/- each at a price of Rs. 20/- per equity share.

b) The Pricing formula

Exercise price of the Plan shall be 20% below the market price or the face value of the share whichever is higher.

c) Options Vested N. A. since the Options shall not be Vested before the expiry of 1 to 5 years from the date of grant of Options i.e, April 4, 2008

d) Options exercised N.A.

e) Total No. of shares arising as a result of Options

N.A.

f) Options lapsed N.A.

Acknowledgments:

The Management of your Company is grateful to the Regulatory Authorities, Share holders, Company’s Bankers, Financial Institutions, Banks, Insurance Companies, Mutual Funds, Foreign Institutional Investors, Clients, Business Associates etc for their continued support and co-operation.

The Directors also wish to place on record their appreciation of the co-operation, active involvement and dedication of the employees, which enabled the Management to contribute to the growth of the Company.

For and on behalf of the Board of Directors

Sd/-

Mumbai Suresh N TalwarJune 26, 2008 Chairman

Registered Office 403, Regent Chambers, Nariman Point, Mumbai 400 021.

g) Variation of terms of Options

N.A.

h) Money realized by exercisable Options

N.A.

i) Total No. of Options in force

6,41,500

j) Details of Options granted to Directors and Senior level personnel

Sl. No

Name No. Options granted

Designation

1 Mr. S. N. Talwar 50,000 Chairman

2 Mr. Raghu R Palat 50,000 Director

3 Mr. N. R. Achan 50,000 Director

4 Mr. Pravin Khatau 50,000 Director

5 Mr. K. Unnikrishnan 10,000 Senior level personnel

ANNEXURE-I

Annexure to the Directors’ Report:

Disclosure pursuant to the Regulation 12 of Securities and Exchange Board of India, (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999.

Employees Stock Option Plan

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CORPORaTE GOvERnanCE REPORTMandatory Requirements

1. Company’s Philosophy on Code of Corporate Governance:

Corporate Governance reflects the commitment to values, about ethical business conduct and acceptance of management principles in the best and larger interest of stakeholders of the company. It is a key element in improving the economic efficiency. It is about openness, integrity and accountability. Within this realm, the Company lays great emphasis on regulatory compliances and strives to ensure that high standards of professionalism and ethical conduct are maintained in the organization. The Company continues to give high priority to the principles of practice of Corporate Governance and has accordingly benchmarked its practices with the existing guidelines of Corporate Governance as laid down in the Listing Agreement.

2. Board of Directors:

The Board is headed by the Non-Executive Chairman, and comprises eminent persons with considerable professional experience in varied fields. The present strength of the Board is six Directors including one Alternate Director. Among them, one is the Managing Director and five are Non-Executive Directors. More than half of the Board consists of Independent Directors. The size and composition of the Board therefore conforms with the requirements of Corporate Governance Report under the Listing Agreement with the Stock Exchanges.

3. Meetings of the Board:

During the year, the Board met 6 times on 12.06.2007, 30.07.2007, 23.10.2007, 02.11.2007, 24.01.2008, and 10.03.2008.

No Director of the Company is a member in more than 10 specified committees or Chairman of more than 5 committees across all the companies in which he is a Director.

The Composition of the Board of Directors, number of outside Directorship, Chairman/Membership of Committees, attendance at the Board Meetings during the financial year and attendance at the last Annual General Meeting are as under:

Name of Director Category No. of Board meetings attended

Last AGM attendance

No of other Directorships

Membership/ Chairmanship

of Board Committees *

Mr. Suresh N Talwar Chairman, Non-Executive Director Alternate Director to Mr. K. Jay Chandran

6 Yes 56 5/4**

Mr. Kumar Nair Managing Director Executive 6 Yes 7 2

Mr. Raghu R. Palat Director- Independent 6 Yes 1 2

Mr. Pravin Khatau Director – Independent NIL No 1 —

Mr. N. R. Achan Director – Independent 6 Yes NIL 2

Mr. K. Jay Chandran Director Non-Executive NIL No NIL NIL

* Includes only Audit & Shareholder’s Committee

** Includes 3 companies where he is an Alternate Director

4. Appointment/Reappointment of Directors:

Mr. K. Jay Chandran holds Post Graduate Honors in Systems Management. He is a Non Executive Director of our company and is currently Director of United American Engineers Pvt Ltd, Singapore with 8 years experience in the field of Information Technology and 12 years in the field of manufacturing and international commodities trading.

He is a shareholder of the Company holding 12900 Equity Shares.

Mr. Pravin Khatau is MBA from Wharton. He had occupied senior positions in Goldman Sachs & Co, one of the prestigious international investment banks in the world and ING Barings. He is a private equity investor based in Monaco through his company LRM Holdings, Monaco Mr. Pravin Khatau does not hold any shares in the Company

5. Audit Committee:

The Audit Committee at present comprises of 4 members of which 3 are Independent Directors. Mr. Raghu R. Palat is the Chairman of Audit Committee. All are financially literate. Mr. Raghu R. Palat and Mr. Kumar Nair are Chartered Accountants, and Mr. Pravin Khatau is in Financial Services.

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During the year under review, Mr. N. R. Achan, Independent Director, was appointed in the Committee as an additional member. Mr. N. R. Achan is an eminent Banker.

During the financial year, he Committee met 4 times on 12.06.2007, 30.07.2007, 23.10.2007 and 24.01.2008 and the gap between 2 meetings was less than 4 months.

Attendance at the Audit Committee Meeting is as under:

Name Designation Category Attendance out of 4 meetings held

Mr. Raghu R. Palat Chairman Independent 4

Mr. Pravin Khatau Member Independent —

Mr. N. R. Achan Member Independent 4

Mr. Kumar Nair Member Executive 4

Terms of reference to Audit Committee:

The terms of reference to the Audit Committee cover the matter specified for Audit Committees under Clause 49 of the Listing Agreement with Stock Exchanges and also as required under Section 292A of the Companies Act, 1956.

Power of Audit Committee:

The Audit Committee has the following powers:

(i) To investigate any activity within its terms of reference(ii) To seek any information from any employee(iii) To obtain outside legal or other professional advice.(iv) To secure attendance of outsiders with relevant expertise, if it considers necessary

Review of information by Audit Committee:

The Audit Committee shall mandatorily review the following information:

(i) Management discussion and analysis of financial condition and results of operations(ii) Statement of significant related party transactions (as defined by the audit committee), submitted by management(iii) Management letter / letters of internal control weaknesses issued by the statutory auditors(iv) Internal audit reports relating to internal control weaknesses(v) The appointment, removal and terms of remuneration of the Chief Internal Auditor shall be subject to review by the Audit

Committee.

• Internal Auditors of the Company were invited to the meetings of the Audit Committee. Mr. G K Prem Kumar, Company Secretary & Associate Vice President (Corporate & Legal Affairs) acts as Secretary to the Committee.

• The Chairman of the Audit Committee was present at the last Annual General Meeting.• The Board of Directors note the minutes of the Audit Committee meetings at their meetings.

6. Shareholders’ Grievance Committee:

The committee comprises of:

Name Designation Category Attendance in the meetings held

Mr. Raghu R. Palat Chairman Independent 2

Mr. N. R. Achan Member Independent 1

Mr. Kumar Nair Member Executive 2

• Mr. G K Prem Kumar, Company Secretary & Associate Vice President (Corporate & Legal Affairs) has been designated as Compliance Officer. The investors may register their complaints at the email-id [email protected]

• During the year under review, the Investors’ / Shareholders’ Grievance Committee held 2 meetings on 12th June, 2007 and 23rd October, 2007.

• The Board of Directors note the minutes of the Shareholders’ Grievance Committee meetings at their meetings

During the year the Company had received 136 letters relating to non-receipt of Balance Sheet, non-receipt of Refund Order etc. The Company has attended all of them and unresolved complaints at the end of the financial year were nil.

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7. Compensation Committee:

The Board constituted a Compensation Committee on 10.03.2008 comprising the following members:

1. Mr. Raghu R. Palat — Chairman

2. Mr. Suresh N. Talwar — Member

3. Mr. N. R. Achan — Member

4. Mr. Kumar Nair — Member

During the year the Committee has not conducted any meeting.

The terms of reference to the Committee comprises

• Fixation of suitable remuneration package to Directors and Non Executive Directors, Senior employees and officers i.e., salary, bonus, pension etc.

• Determination of the fixed components and performance linked incentives along with the performance criteria to all employees of the Company.

• Service contracts, notice period, severance fees of Director and employees.

• Grant of Stock Options, whether to be issued at a discount as well as the period over which to be accrued and over which to be exercisable.

Details of the remuneration to the Directors (In Rupees)

Directors Salary (including Performance Incentive, if

any and other allowance)

Perquisites Contribution to P.F

Superannuation and Gratuity

Sitting Fees Commission Total

2006-07 2007-08

Mr. Kumar Nair 11,56,900 NIL 60508 NIL NIL NIL 12,17,408

Mr. Suresh N Talwar NIL NIL NIL 1,20,000 2,00,000 1,88,000 5,08,000

Mr. Raghu R. Palat NIL NIL NIL 2,04,000 1,85,000 1,00,000 4,89,000

Mr. Pravin Khatau NIL NIL NIL NIL — — NIL

Mr. N R Achan NIL NIL NIL 2,02,000 — 1,00,000 3,02,000

Mr. Jay Chandran NIL NIL NIL NIL NIL — NIL

8. General Body Meetings:

(i) Details of Annual General Meetings held during the last three years

Financial Year Day, Date & Time Venue Special Resolution passed

2004-05 Friday, September 30, 2005 11:00 a.m

403, Regent Chambers, Nariman Point, Mumbai – 400 021

No

2005-06 Thursday, May 11, 2006May 11, 2006

403, Regent Chambers, Nariman Point, Mumbai – 400 021

Yes

2006-07 Wednesday, August 1, 2007 11:00 a.m

M C Ghia Hall, Kala Ghoda, Fort, Mumbai– 400 001

Yes

(ii) Whether any special resolution passed last year : No

through postal ballot

(iii) Whether any special resolution is proposed to : No

be conducted through postal ballot

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9. Disclosures:

i. There were no transactions of material nature with its Promoters, Directors or the Management, their subsidiaries or relatives during the period that may have potential conflict with the interest of the company at large.

ii. Transactions with the related parties are disclosed in Note No. 9 of Schedule M to the accounts in the Annual Report as required by Accounting Standards under AS 18 issued by Institute of Chartered Accountants of India.

iii. There were no non-complainces by the Company during the year. No penalties or strictures have been imposed on the Company by Stock Exchanges or SEBI or any Statutory Authority on any matter related to the capital markets, during the previous three financial years.

iv. The Company does not follow Whistle Blower Policy.

v. The Board has adopted a Code of Conduct including Business Ethics Policy for its Directors and Senior Management. This is available on the Company’s web-site.

vi. The Managing Director has submitted before the Board a declaration of compliance with the Code of Conduct by the Directors during the financial year ended March 31, 2008.

vii. The Company follows the Accounting Standards issued by the institute of Chartered Accountants of India and in the preparation of the financial statement, the Company has not adopted a treatment different from that prescribed by any Accounting Standard.

viii. Risk assessment and minimization procedures are periodically reviewed by the Audit Committee and the Board of Directors of the Company.

ix. The Chief Executive Officer and the Chief Financial Officer have certified to the Board of Directors as per the format prescribed in compliance Clause 49(V) of the Listing Agreement with the Stock Exchanges. This has been reviewed by the Audit Committee and taken on record by the Board of Directors of the Company.

x. The Company has complied with all mandatory requirements under Clause 49 of the Listing Agreement with the Stock Exchanges. The adoption of non-mandatory requirements has been dealt with in this Report.

10. Means of Communication:

Quarterly unaudited financial results are published in Financial Express/Business Standard and Navshakti newspapers. The half yearly report is not sent separately to the shareholders. Annual Reports are sent to the shareholders at their registered address with the company and also put up on Company’s web site www.transwarranty.com.

11. General Shareholders’ Information: Annual General Meeting

Date : 07.08.2008

Time : 11 .00 a.m

Venue : M C Ghia Hall, Bhogilal Hargovindas Building,

2nd Floor, 18/20, Kaikhushru Dubash Marg, Mumbai 400 001

Financial Calendar (Tentative)

Financial reporting for the quarter ending June 30, 2008 : Last week of July 2008

Financial reporting for the quarter ending Sept. 30, 2008 : Last week of October 2008

Financial reporting for the quarter ending Dec. 31, 2008 : Last week of Janurary 2009

Financial reporting for the quarter ending Mar. 31, 2009 : Last week of June 2009

Annual General Meeting for the year ended Mar. 31, 2009 : August-September, 2009

Date of Book Closure : 30.07.2008 to 07.08.2009

(Both days inclusive)

Dividend Payment : On or after 8th August, 2008

Listing on Stock Exchanges : Bombay Stock Exchange Ltd

: National Stock Exchange of India Ltd

Stock Code : Bombay Stock Exchange Ltd, - 532812

: National Stock Exchange of India Ltd –TFL

Payment of Annual Listing fees : Listing fees for the financial year 2008-09 have been paid to both the Stock Exchanges, BSE & NSE

Demat ISIN for NSDL& CDSL : INE 804H01012

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Market Price Data during the year ended 31.03.2008

BSE

Month High Low BSE Sensex (High)

Apr-2007 41.90 35.00 14384May-2007 38.40 33.85 14576June-2007 35.80 30.80 14683July-2007 34.85 29.65 15869Aug-2007 37.20 24.65 15542Sept-2007 32.00 27.50 17361Oct-2007 28.95 24.55 20238Nov-2007 40.40 24.05 20204Dec-2007 44.05 32.70 20498Jan-2008 56.20 30.35 21207Feb-2008 31.90 25.00 18895Mar-2008 26.10 18.05 17228

NSE

Month High LowApr-2007 41.70 34.70May-2007 41.70 33.65June-2007 36.50 31.00July-2007 35.00 31.10Aug-2007 37.00 24.10Sept-2007 30.65 25.00Oct-2007 29.00 24.25Nov-2007 40.00 24.55Dec-2007 44.00 32.50Jan-2008 56.25 29.75Feb-2008 32.00 24.40Mar-2008 26.25 17.50

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Registrars & Transfer Agents : Intime Spectrum Registry limited, C-13, Pannalal Silk Mills Compound, L B S Marg, Bhandup (West), Mumbai – 400 078 Contact person : Shri. Suresh Kadam

Share Transfer System

• Securities lodged for transfer at the Registrar’s Office are normally processed with in 15 days from the date of lodgment, if the documents are clear in all respects. All requests for dematerialization of securities are processed and the confirmation is given to the depositories within 15 days. Mr. G. K. Prem Kumar Company Secretary & Associate Vice President is empowered to approve transfer of shares and other investor related matters. Grievances received from investors and other miscellaneous correspondence on change of address, mandates, etc are processed by the Registrars with in 30 days

• Pursuant to Clause 47 (c) of the Listing Agreement with the Stock Exchanges, certificates, on half-yearly basis, have been issued by a Company Secretary-in-Practice for due compliance of share transfer formalities by the Company. Pursuant to Regulation 55A of SEBI (Depositories and Participants) Regulations, 1996, certificates have also been received from a Company Secretary-in-Practice for timely dematerialization of the shares of the Company and for conducting a Secretarial Audit on a quarterly basis for reconciliation of the Share Capital of the Company.

Distribution of Shareholding as on 31-03-2008

No of equity shares held No. of Shareholders % of Shareholders Total no of shares held

% of shares held

1 - 500 6064 85.60 11,20,233 8.00

501 - 1000 630 8.89 5,13,619 3.67

1001 - 2000 178 2.51 2,73,550 1.95

2001 - 3000 71 1.00 1,84,636 1.32

3001 - 4000 28 0.40 99,893 0.71

4001 - 5000 28 0.40 1,30,834 0.94

5001 - 10000 44 0.62 3,13,126 2.24

10001 and above 41 0.58 1,13,64,109 81.17

Total 7084 100.00 1,40,00,000 100.00

Shareholding Pattern as on 31.03.2008

Sl. No. Category No. of Shares % of Holding

1 Promoters & Persons acting in Concert 7,865,650 56.18

2 Mutual funds / UTI / Banks / FIs 32,328 0.23

3 Private Corporate Bodies 18,92,610 13.52

4 NRIs / OCBs 14,55,898 10.40

5 Indian Public 27,53,514 19.67

Grand Total 14,000,000 100.00

Dematerialization of shares : 43% of the shares have been dematerialized by the members so far

Outstanding GDRs/ADRs/Warrants or any convertible/

instruments, conversion data and likely impact on equity : N.A.

Plant location : Not applicable

Address for correspondence : Transwarranty Finance Limited, 403, Regent Chambers, Nariman Point, Mumbai 400 021. Phone : 022 – 6630 6090/91

Contact person : Shri. G K Prem Kumar, Company Secretary

E-mail : [email protected]

Members holding shares in Demat mode should address all their correspondence to their respective Depository Participant

12


14. Postal Ballot :

The provisions relating to Postal Ballot will be complied with in respect of matters wherever applicable.

Non-mandatory requirements:

1 Chairman of the Board –No separate office is maintained for the Non-Executive Chairman. Company does not reimburse expenses incurred by him in performance of his duties.

Mr. Suresh N. Talwar, Mr. Raghu R. Palat, Mr. Pravin Khatau and Mr. N R Achan are independent Directors on the Board of the Company. No specific period has been specified for these Directors. All of them have requisite qualification and experience and in the opinion of the Company this would enable them to contribute effectively to the Company in their capacity as Independent Directors.

2 Compensation Committee - Details are already given under the heading Compensation Committee.

3 Shareholder Right – The Company has not sent half yearly financial performance including summary of the significant events to each household of the shareholders, since the results were published in 2 news papers, one in Vernacular and one in English newspaper.

4 Audit Qualifications – During the year under review, there was no audit qualification in the Company’s financial statements. The Company continues to adopt best practices to ensure a regime of unqualified financial statements.

5 Training of Board Members – The Directors interact with the management in a very free and open manner on information that may be required by them.

6 Mechanism for evaluation of Non-Executive Board Members – The evaluation process is yet to be formulated by the Board.

CEO/ CFO Certification:

We hereby certify to the Board that:

a) We have reviewed the financial statements and the cash flow statements for the year and to the best of our knowledge and belief:

(i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading

(ii) These statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

b) There are to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violate the Company’s Code of Conduct.

c) We accept the responsibility for establishing and maintaining internal controls for financial reporting and that, we have evaluated the effectiveness of the internal control systems of the Company pertaining to the financial reporting and have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any of which we are aware and the steps we have taken or propose to take steps to rectify these deficiencies.

d) We further certify that:

i) There have been no significant changes in internal control during the year;

ii) There have been no significant changes in accounting policies during the year, except the Company has adopted Accounting Standard 15 Employees Benefits (Revised 2005) issued by the Institute of Chartered Accountants of India

iii) To the best of our knowledge, there have been no instances of fraud, involving management or an employee having a significant role in the Company’s internal control systems.

Mumbai For Transwarranty Finance Ltd For Transwarranty Finance Ltd

June 26, 2008 Sd/- Sd/- Kumar Nair U. Ramchandran

(Chief Executive Officer) (Chief Financial Officer)

13


Revenue from Corporate Finance was Rs.24.70 mn registering a growth of 62% as compared to previous year. The company could service all our client’s Corporate Finance needs by leveraging on its core strengths of financial structuring and relationship with Banks and Financial Institutions.

Revenue from Investment Banking was Rs.19.80 mn, which was 28% lower than the previous year. The company’s Financial Engineering capabilities were put to optimal use for its clients by successfully executing Private Equity, M&A, Real Estate & Infrastructure transaction. Revenue of Rs.25 mn, which would accrue to the company only on achievement of certain milestones, has not been considered. During the year a few advisory transactions in Real Estate & Infrastructure sector with signed term sheets have been deferred.

Revenue from the Financial Services BPO was Rs.3.50 mn as compared to Rs.6.30 mn in the previous year. The above revenue was for part of the year since the business was discontinued on account of the reduced focus on retail lending business by our principals, foreign banks.

Subsidiaries:

Transwarranty Capital Pvt. Ltd. (TCPL)

The company continued to build its Merchant Banking business offering the entire suite of Services and successfully executed open offers under SEBI Takeover code regulations, ESOPs, Valuation of shares, direct listing of companies in BSE, valuation of companies for Mergers & Acquisition, buy back of shares, reverse mergers etc. and has also secured more mandates including for Initial Public Offers (IPO’s) and Rights Issues, which shall be executed in the following year.

Since the company had decided to transfer all retail stock broking business to Vertex Securities Ltd. (VSL), it did not aggressively expand its branch / franchisee network. The number of empanelment with various Financial Institutions for secondary market investments has gone up from 6 to 15 and the process of empanelment is continuing.

The brokerage revenue for the year was Rs.18 million as compared to Rs.7 million the previous year registering a growth in excess of 150%.

Transwarranty Forex & Commodities Pvt. Ltd.

On account of the acquisition of Vertex Securities Ltd, (VSL) the commodities business was not activated to avoid duplication of activities.

A. Healthy, Vibrant Financial Sector

The financial sector in India is characterized by liberal and progressive policies, vibrant equity and debt markets and prudent banking norms.

India’s healthy banking system with a network of 70,000 branches is among the largest in the world. Aggregate deposits of commercial banks were about $520 billion in (67% of the GDP) in March 2006 and the total bank credit stood at $355 billion (49% of the GDP). NPA levels of banks in India are under 3%, one of the lowest among emerging nations. The Banking system is Basel I compliant and moving towards Basel II norms. The Reserve Bank of India (RBI), the country’s central bank has effectively managed the country’s monetary policy over the last five decades.

India’s financial sector has been one of the fastest growing sectors in the economy. It has also witnessed increased private sector activity including an explosion of foreign banks, insurance companies, mutual funds, Venture Capital and investment institutions.

India has a transparent, highly technology-enabled and well-regulated stock market defined by the most modern, nationwide, on-line Screen Based Trading System (SBTS), a T+2 rolling settlement system and a market cap of over $1 trillion in mid 2007. With the largest number of listed companies 10,000 across 23 Stock Exchanges, India also has the third largest investor base in the world.

India also has a vibrant and modern commodities exchange market ranking among the top 3 global markets in terms of traded volumes and trades totaling over $650 billion in 2006-07. NCDEX, MCX and NMCEI are the major national exchanges with a diversified portfolio of commodities including agri-products, bullion, metals and energy. The exchanges offer future contracts and India was the first to provide trading in steel futures.

B. Business review and analysis

The Company has three major focus areas of operations consisting of Trade Finance, Corporate Finance and Investment Banking. During the year 2007-08, the total revenue from operations was Rs.59 mn registering a growth of nearly 10% over previous year.

Revenue from Trade Finance was Rs.11.20 mn registering a growth of 75% as compared to previous year. This business experienced excellent growth due to the increased requirement of working capital by client companies and our ability to meet those increased demands.

ManaGEMEnT DISCuSSIOn anD analySIS

14


The number of empanelment for Forex Broking with various Banks has gone up from 5 to 9 and the process of empanelment is continuing.

The brokerage revenue for the year was Rs.1.2 million as compared to Rs.84,000 in the previous year registering impressive growth.

C. Business Outlook

Though the Indian economy is showing signs of a slow down, we are confident of improving our performance in the coming year due to our diverse product portfolio and strong client relationship. Our company along with its subsidiaries is present in a wide gamut of financial services.

Transwarranty Finance Limited is a RBI registered Non Banking Finance Company (NBFC) with active business in Investment Banking, Project Finance, Trade Finance and Corporate Finance. These business are likely to offer growth opportunities even with subdued economic activity.

Our business mission is to be the preferred provider of financial services, investment banking and wealth management including broking services to corporate, retail and institutional clients across various cities and towns in India.

Over the past 14 years, we have developed a strong client base comprising of majority of the large and mid cap companies, most of the Banks and Financial Institutions, Mutual Funds and Asset Management Companies and thousands of retail clients.

Strategic Acquisition:

As per the objectives set out in the Initial Public Offer document, the company has entered into a Share Purchase Agreement to acquire controlling interest in a listed, retails stock broking company, Vertex Securities Limited (VSL) with close to 175 branches / franchisees across the country.

All the required approvals from SEBI and the Stock Exchanges have been received and the open offer to the public shareholders of VSL was opened on June 18, 2008 and the process is expected to be completed in July 2008.

On completion of the takeover formalities, VSL shall become a subsidiary company of Transwarranty Finance Limited and thereafter the retail stock broking business in Transwarranty Capital Pvt. Ltd shall be transferred to VSL to consolidate all the retail broking business of the group under one banner.

With this acquisition, Transwarranty Group would have pan Indian presence with offices in most of the cities and towns, which would result in increased visibility, business and valuation.

Subsidiaries:

TRANSWARRANTY CAPITAL PVT LTD

The Company shall continue to build its Merchant Banking Business offering the entire suite of services consisting of open offers under SEBI takeover code regulations, ESOPs, Valuation of shares, direct listing of companies in BSE, valuation of companies for Mergers & Acquisition, buy back of shares, reverse mergers, Initial Public offers (IPO’s), Right issues etc.. There are already good mandates awarded to the Company, most of which should fructify in the coming year.

During the year 2008-09, the broking business would focus only on Institutional business and would endeavor to increase the number of empanelment.

TRANSWARRANTY FOREX & COMMODITIES PVT LTD

During the year 2008-09, the forex broking business would focus on increasing the number of empanelment and consequent increase in the volume of business.

We shall continue to review the performance of Dubai Gold and Commodities Exchange (DGCX) and shall commence our International Operations only on being satisfied of a profitable business model.

D. Opportunities and Threats

Infrastructure Finance: Even in case of an economic slow down, huge amount if investment is expected in Priority sectors like Roads, Shipping, port development, Aviation, Power & Rail providing opportunities of the Company.

Corporate Finance & Investment Banking: Even though an economic slow down is expected, most of the Indian companies are optimistic and the business confidence index continues to be high. These companies continue to have huge appetite for Capital, Structure Finance and allied Investment Banking services like Mergers & Acquisitions and private Equity Advisory Services. We shall utilize our strong corporate relationship with large Indian Business groups, companies and institutions to originate and execute Corporate Finance & Investment Banking mandates.

15


Talent attraction and retention: Since the company is in the realm of knowledge based business, attraction and retention of talent is very crucial. The company has introduced attractive ESOP scheme for sharing of wealth with employees.

Differentiate our service: Traswarranty provides customers a unique experience by providing customized & diversified service through innovation. The Unique Selling Proposition of the company is Quality, Timeliness, Performance, Service and Cost. The company meets the customers’ need in the most effective and efficient way. This is achieved by maintaining the service standards of the highest level at a very competitive cost to ensure Value Addition.

Continue to maintain a diversified service portfolio to cater to most of the customer needs & demands: Transwarranty intends to continue the strategy of maintaining a diversified service portfolio to preserve the uniqueness and competitive advantage of the Group. Having different services not only allows the group to mitigate the risk associated with over dependence on a few sources of revenue it but also allows the group to cross sell the services to the customers.

Further strengthen the brand name: Transwarranty proposes to increase the brand recognition through brand building efforts, communication and various promotional initiatives like participation in industry events, public relations and investor relations efforts. This would enhance the visibility of the brand name and strengthen its recognition as a leader in the Indian Financial Services Industry. This would be further strengthened with the acquisition of Vertex with pan Indian presence.

Maximize revenues through efficient use of technology, focused marketing and optimization of resources: Transwarranty intends to continue to maximize revenues through efficient use of technology, focused marketing and optimization of resources.

Focus on other metro / mini metro cities: Transwarranty intends to further penetrate key markets in India by increasing the number of branch / franchise office in VSL.

Capital Market: The subdued capital market would pose challenges in the Capital Market Group for the Merchant Banking and Stock Exchange businesses.

E. Internal control systems and their adequacy

The CEO/CFO certification provided in the report discusses the adequacy of our internal control systems and procedures.

F. Human Resource Development

The most important asset of the company is its Human Resources. The company has introduced attractive ESOP scheme for sharing of wealth with employees.

G. Cautionary statements

Statements in the Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectation may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

16


auDITORS’ CERTIFICaTE

To

The Members of

Transwarranty Finance Limited

We have reviewed the relevant records of Transwarranty Finance Limited for the period ended 31 March 2008 relating to compliance of

conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered into, by the company, with the stock

exchanges.

The compliance of conditions of corporate governance is the responsibility of the management. Our review was limited to procedures

and implementation thereof, adopted by the company for ensuring the compliance of the conditions of the corporate governance; It

is neither an audit nor an expression of opinion on the financial statements of the company.

In our opinion and according to the information and explanations given to us, we have to state that, to the best of our knowledge

the company has complied with the conditions of corporate governance stipulated in clause 49 of the above mentioned listing

agreement.

We state that, in respect of investors grievances received during the period ended 31.03.2008, no investor grievances are pending without

a reply from the company for a period exceeding one month as per the records maintained by the share transfer and shareholders’ /

investors’ grievance committee.

We further state that, such compliance is neither an assurance as to the future viability of the company, nor as to the efficiency or

effectiveness with which the management has conducted affairs of the company.

For M/s Haridas Associates Chartered Accountants

Sd/-Mumbai Vasant ShahJune 26, 2008 Proprietor

Declaration

In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, I hereby confirm

that, all Board Members and Senior Management personnel of the Company have affirmed compliance

with the Code of Conduct and Ethics during the financial year ended March 31, 2008.

Sd/- Mumbai Kumar NairJune 26, 2008 Managing Director

17


To,The Members of Transwarranty Finance Limited,

1) We have audited the attached Balance Sheet of Transwarranty Finance Limited as on 31st March, 2008, the Profit and Loss Account 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 statements based on our audit.

2) We conducted our audit in accordance with the 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 our opinion.

3) As required by the Non Banking Financial Companies Auditors(Reserve Bank) Directions, 1998 we further states that

i) The Company, Incorporated prior to January 9, 1997 has applied for registration as provided in Section 56 IA of the Reserve Bank of India Act, 1934 ( 2 of 1934) and the Company has been granted certificate of registration dated 6th August, 1998 from Reserve Bank as a NBFC.

ii) The Board of Directors of the Company has passed a resolution for non acceptance of any public deposits.

iii) The company has not accepted any public deposits during the year under reference.

iv) The company has complied with prudential norms relating to the income recognition, Accounting Standards, asset classification and provision of bad and doubtful debts as applicable to it.

4) As required by the Companies (Auditors Report) Order, 2003 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.

5) Further to our comments in the Annexure referred to above, we report that:

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 audit;

ii) 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 books;

iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv) 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 to the extent applicable;

v) On the basis of representations received from the directors as on 31st March, 2008 and taken on record by the Board of Directors, we report that no director is disqualified from being appointed as a director of the company as on 31st March, 2008 under clause (g) of sub section (1) of 274 of the Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts together 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 the Balance Sheet, of the state of affairs of the Company as at 31st March, 2008

b) in the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For Haridas AssociatesChartered Accountants

Vasant M. ShahMumbai PropreitorJune 26, 2008 Membership No. 37523

auDITORS’ REPORT

18


(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 register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 Lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us the company has not accepted deposits from the public.

(vii) In our opinion and according to the information and explanation given to us, the company has an internal audit system commensurate with the size and nature of its business.

(viii) The maintenance of cost records have not been prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 for the year under report.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income tax, sales tax and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arriers as at 31st March, 2008 for a 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 sales Tax and income tax, which have not been deposited on account of any dispute, except the following

Name of the statute

Nature of the Dues

Amount (Rs)

Period to which the amount relates

Forum where dispute is pending

Income Tax Act,

1961

Tax and Interest

Rs. 2,29,993/-

A.Y. 2005-06

Commissioner of Income Tax

(Appeals)

(x) In our opinion the company has no accumulated losses at the end of the financial year. The company has not incurred any cash losses during the financial year and the immediately preceding the financial year.

ANNEXURE TO AUDITOR’S REPORT

(Referred to in paragraph 3 of our Report of even date)

i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have been physically verified by the management at the end of the year and, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

ii) The company had no inventory during the year. Since the company has no inventory, clauses 4 (ii) (a), (b) & (c) of the order are not applicable.

iii) a) The company had taken unsecured loans from two parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1,59,08,825/-and the year end balance of loans taken from such parties was Rs. 55,37,000/-. The company had granted interest-free unsecured loans and deposits to subsidiary companies and others covered under section 301 of the Companies Act during the year. The maximum amount involved during the year was Rs.10,54,88,337/- and the year end balance of the loans granted is Rs. 8,24,50,245/-.

b) In our opinion the rate of interest and other terms and conditions of said interest- free unsecured loans were not, prima facie, prejudicial to the interest of the company.

c) The company was regular in getting the principal amount.

d) There is no overdue amount of loans granted by the company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of fixed assets. During the course of our audit, no major weakness has been noticed in the internal control in this area.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the companies Act, have been so entered.

19


(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) In our opinion the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the year.

(xiii) In our opinion, the company is not a chit fund or nidhi mutual fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Audit Report) Order, 2003 are not applicable to the company.

(xiv) In respect of shares, securities etc. held as investments by the company, proper records have been maintained of the transactions and contracts and timely entries have been made by the company therein and the said investment have been held by the company in its own name except shares of the value of Rs. 93,09,459/- which have not been transferred in the name of the company on the Balance Sheet date.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company had given guarantees for loans taken by its subsidiary company and others from banks were not prejudicial to the interest of the company. However there is no outstanding guarantees at the end of the year.

(xvi) In our opinion, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and an overall examination of the Balance Sheet of the company, we report that the no funds raised on short term basis have been used for long term investment. No long term funds have been used to finance short term assets except permanent working capital.

(xviii) According to the information and explanations given to us, 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.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

(xx) We have verified the end-use of money raised by public issue as disclosed in the notes to the financial statements.

(xxi) To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.


Vasant M. ShahMumbai PropreitorJune 26, 2008 Membership No. 37523

20


BalanCE SHEET aS aT 31ST MaRCH, 2008Schedule 31.03.2008

(Rs.)31.03.2007

(Rs.)

SOURCES OF FUNDS

(1) Shareholders Funds

(a) Share Capital A 140,000,000 140,000,000

(b) Reserves and Surplus B 248,002,356 284,611,000

388,002,356 424,611,000

(2) Loan Funds

(a) Secured Loans C 1,186,143 14,631,659

(b) Unsecured Loans D 5,537,000 7,222,000

(3) Deferred Tax Liability 142,830 159,550

Total Funds Employed 394,868,329 446,624,209

APPLICATION OF FUNDS

(1) Fixed Assets E

(a) Gross Block 5,045,398 5,119,751

(b) Less : Depreciation 2,695,264 3,678,743

(c) Net Block 2,350,134 1,441,008

(2) Investments F 212,476,983 303,607,802

(3) Current Assets, Loans & Advances G

(a) Current Assets

Sundry Debtors 26,142,897 22,836,592

Cash and Bank Balances 17,097,086 26,273,832

(b) Loans and Advances 196,445,009 106,925,922

239,684,992 156,036,346

Less : Current Liabilities & Provisions H

(a) Current Liabilities 20,634,571 25,320,205

(b) Provisions 40,580,689 27,932,078

61,215,260 53,252,283

Net Current Assets 178,469,732 102,784,063

(4) Miscellaneous Expenditure I 1,571,480 38,791,336

Total Utilisation of Funds 394,868,329 446,624,209

NOTES TO THE ACCOUNTS M

BALANCE SHEET ABSTRACT N

As per our attached report of even date

For Haridas Associates For and on behalf of Board of Directors Chartered Accountants

Vasant M. Shah Suresh N. Talwar Kumar Nair Raghu R. Palat Proprietor Chairman Managing Director Director Membership No:-37523

Mumbai U. Ramchandran G.K. Prem KumarJune 26, 2008 Chief Financial Officer Company Secretary

21


Schedule 31.03.2008(Rs.)

31.03.2007(Rs.)

INCOME

Income From Operations J 59,135,551 55,523,814

Other Income K 6,817,201 1,576,127

TOTAL INCOME 65,952,752 57,099,941

EXPENDITURE

Operational Expenses 400,312 484,261

Personnel Expenses 15,849,392 10,603,962

Interest and Bank Charges 1,014,745 1,093,242

Other Expenses L 11,686,631 6,478,117

TOTAL EXPENDITURE 28,951,080 18,659,582

Profit before depreciation and tax 37,001,672 38,440,359


Profit before tax 36,214,242 37,850,311

Provision for Taxation:-

Current Tax 12,450,000 12,600,000

Fringe Benefit Tax 301,450 220,000

Deferred Tax Liability/(Assets) (16,720) (56,549)

Profit after Tax 23,479,512 25,086,860

Net Profit Brought forward 13,385,443 10,695,255


APPROPRIATION

Reserve u/s 45 IC of RBI Act 4,695,902 5,017,372




Net Profit carried to Balance Sheet 14,789,753 13,385,443

36,864,955 35,782,115





PROFIT anD lOSS aCCOunT FOR THE yEaR EnDED 31ST MaRCH, 2008

22


Particulars 2007-08Amount (Rs.)

2006-07Amount (Rs.)

CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before Tax and Extraordinary items 36,214,242 37,850,311

Add : Non Operating Expenses/ Non Cash Expenses

Depreciation & Amortisation 787,430 590,048

Provision for diminution in value of quoted investments 25,239 128,078

Loss in Commodity Trading 400,053 55,543

Loss on Sale of Fixed Assets 43,153 —

Interest Paid 1,014,745 1,093,243

2,270,619 1,866,912

Less : Interest / Dividend/ Other Non Operating Income Adjustments

Interest & Dividend Received 6,653,703 1,203,646

Profit on share trading 35,420 114,192

Profit on Futures & Options — 22,389

Profit On Sales of Investments — —

Provisions no longer required 128,078 113,538

6,817,201 1,453,765

Operating Profit before Working Capital Changes 31,667,661 38,263,458

Adjusted for:

(Increase)/Decrease in Sundry Debtors (3,306,305) 18,746,643

(Increase)/Decrease in Loans & Advances (1,641,546) (5,039,943)

Increase /(Decrease) in Current Liabilities (4,685,634) (14,023,760)

Increase /(Decrease) in Provisions (102,839) 14,540

Cash Generated from Operation 21,931,336 37,960,938

CaSH FlOw STaTEMEnT FOR THE yEaR EnDED 31ST MaRCH, 2008

23



2006-07Amount (Rs.)

Income Tax Paid (27,215,088) (14,850,813)

Net Cash From Operating Activities (5,283,752) 23,110,125

CASH FLOW FROM INVESTING ACTIVITY

Purchase of Fixed Assets (1,899,909) (50,913,556)

Sale of Fixed Assets 160,200 —

(Purchase)/ Sale of Investments (Net) 97,522,728 (199,098,818)

(Increase)/ Decrease in Miscellaneous Expenditure (4,917,520) (38,791,336)

Inter Corporate Deposits received / (Given) (60,662,453) (21,787,792)

(Increase)/ Decrease in Miscellaneous Expenditure (1,571,480)

Net Cash used in Investing Activities 28,631,565 (310,591,502)

CASH FLOW FROM FINANCING ACTIVITIES

Issue of Equity Shares at par — 60,000,000

Increase in Share Premium — 252,000,000

Increase/ (Decrease) in Secured Loans (13,445,516) 13,961,659

Increase/ (Decrease) in Unsecured Loans (1,685,000) 5,121,435

Dividend Paid ( including tax thereon) (16,379,300) (16,379,300)

Interest Paid (1,014,745) (1,093,243)

Net Cash from / (used in) Financing Activities (32,524,561) 313,610,551

Net Increase / (Decrease) in Cash & Cash Equivalent (9,176,746) 26,129,174

Opening Balance of Cash and Cash Equivalent 26,273,832 144,658

Closing Balance of Cash and Cash Equivalent 17,097,086 26,273,832





24


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — A

SHARE CAPITAL

Authorised Share Capital

1,50,00,000 Equity Shares of Rs.10/- each 150,000,000 150,000,000

Issued, Subscribed and Paid up Share Capital

1,40,00,000 Equity Shares of Rs.10/- each fully paid up 140,000,000 140,000,000

140,000,000 140,000,000

SCHEDULE — B

RESERVES AND SURPLUS

Share Premium Account

Balance as per last Balance Sheet 252,000,000

Less:- IPO Expenses adjusted 43,708,856 208,291,144 252,000,000

(Refer Note No. 5 of Schedule No. M)

Reserve U/S 45 IC of RBI Act


Transferred from Profit & Loss Account 4,695,902 15,532,431 10,836,529

General Reserve


Add:-Transferred from Profit & Loss Account 1,000,000 9,389,028 8,389,028

Profit & Loss Account

Balance as per the annexed Profit & Loss Account 14,789,753 13,385,443

248,002,356 284,611,000

SCHEDULE — C

SECURED LOANS

From Bank :

Car Loan 1,186,143 564,263

(Secured against hypothecation of Motor Car)

Over Draft Account — 14,067,396

(Secured against office premises

owned by Transwarranty Pvt Ltd and

Guarantee given by the Managing Director)

1,186,143 14,631,659

SCHEDULE — D

UNSECURED LOANS

Loan from Director 5,537,000 7,222,000

5,537,000 7,222,000

SCHEDulES FORMInG PaRT OF BalanCE SHEET aS On 31ST MaRCH, 2008

25


SCH

EDU

LE —

E

FIXE

D A

SSET

S

Sr.

No.

Des

crip

tion

GRO

SS B

LOCK

DEP

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ET B

LOCK

As o

n 1.

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007

(Rs.

)

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tion

s D

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g th

e ye

ar(R

s.)

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the

year

(Rs.

)

As

on

31.3

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8(R

s.)

As o

n 31

.3.2

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(Rs.

)

For

the

Year

(Rs.

)

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Sale

D

urin

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ar(R

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(Rs.

)

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on

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(Rs.

)

1Fu

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ure

523

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3

02,9

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268,

266

558,

264

312,

349

86,

906

230,

884

168,

371

389,

893

211,

268

2Co

mpu

ters

632

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1

12,7

58

351,

625

393,

365

371,

975

143

,144

32

5,89

418

9,22

520

4,14

026

0,25

7

3O

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Equ

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ents

241

,494

3

13,0

96

31,0

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3,54

618

8,05

1 5

0,13

3 24

,561

213,

623

309,

923

53,4

43

4Ve

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es 2

,522

,408

1

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,742

1,

323,

327

2,33

3,82

31,

692,

768

463

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1,

189,

570

967,

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1,36

6,75

482

9,64

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e 1

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6,40

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1,

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1,11

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976

79,4

2486

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Tota

l5,

119,

751

1,8

99,9

09

1,9

74,2

62

5,04

5,39

83,

678,

743

787,

430

1,7

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5,26

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134

1,44

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8

Prev

ious

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353

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—

5,

119,

751

3,08

8,69

559

0,04

8 —

3,

678,

743

1,44

1,00

8

26


SCHEDULE — F

INVESTMENTS FaceValue(Rs.)

Quantity31.03.2008

Value(Rs.)

Quantity31.03.2007

Value(Rs.)

1 LONG TERM INVESTMENTS

(a) In Government Securities

National Savings Certificate VIII issue 5,000 1 5,000 1 5,000

(b) In Equity Shares

1 Unquoted and fully paid up

i In Subsidiary Companies

Transwarranty Capital Pvt. Ltd. 10 5,200,000 52,000,000 5,200,000 52,000,000

Transwarranty Forex & Commodities Pvt. Ltd. 10 2,385,540 23,855,400 2,385,540 23,855,400

Transwarranty Credit Care Pvt Ltd 10 2,562,500 25,625,000 2,562,500 25,625,000

ii Others

Catholic Syrian Bank Ltd. 10 500 16,000 500 16,000

(c) In Preference Shares

In Subsidiary Companies

15% Non Cumulative Redeemable 100 6,863 1,372,600 6,863 1,372,600

Preference Shares of Transwarranty-

Capital Pvt Ltd.

Total - (A) 102,874,000 102,874,000

2 SHORT TERM INVESTMENTS

(a) In Equity Shares

(Quoted and fully paid up)

South Indian Bank (Right Share) 10 1 40 1 40

(Market Value Rs.139/-)

NEPC Micon 10 2,000 85,156 2,000 85,156

(Market Value Rs.72,250/-)

Rama Newsprints 10 5,000 86,838 5,000 86,838

(Market Value Rs.1,49,000/-)

Anil Products Ltd 10 34,000 680,000


27


INVESTMENTS FaceValue(Rs.)

Quantity31.03.2008

Value(Rs.)

Quantity31.03.2007

Value(Rs.)

Nitco Tiles 10 — 500 98,077

Reliance Petroleum 10 — 5,000 449,746

b) In Mutual Funds

SBI Mutual Fund 93,546,013 —

UTI Mutual Fund 6,053,527 —

(c) Others

ICICI Bank CD 100,000 — — 2,000 200,000,000

UTI Master Share — 1,000 13,945 1,000 13,945

Total - (B) 100,465,518 200,733,802

3 INVESTMENTS HELD AS STOCK IN TRADE

Reliance Petroleum 10 13,400 2,096,429


Reliance Industries 10 1,500 3,404,100


BHEL 10 375 772,013


Essar Oil 10 4,236 860,120


HDFC 10 75 179,378


TATA Consultancy 1 2,250 1,825,425


Total - (C) 9,137,465 —

Grand Total -(A) + (B) + (C) 212,476,983 303,607,802

Market Value of Quoted Investments 13,041,457 708,899

Note : Provision for diminution in the value of Quoted Investments amounted to Rs. 25,239/- (P.Y. Rs. 1,28,078/-)

28


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — G

CURRENT ASSETS, LOANS AND ADVANCES

a) Current Assets

Debtors (Unsecured considered good)

Outstanding for a period exceeding six months 19,248,153 Nil

Other Debts 6,894,744 22,836,592

(Due from Companies under the same management

Rs.Nil/- (P.Y. Rs.10,53,197/-). Maximum amount outstanding

during the year Rs.15,11,613/- (P.Y. Rs.10,53,197/-)

26,142,897 22,836,592

Cash and Bank Balances

Cash Balance 589,786 1,085,849

Balance with Scheduled Banks in Current Account 6,447,661 22,687,984

Fixed Deposit with Banks 10,059,639 2,500,000

(Fixed Deposit of Rs. 1,00,59,639/- is kept in the Escrow Account with Federal Bank Ltd in compliance of SEBI Takeover Code Guidelines in respect of acquisition of promoters stake of Vertex Securities Ltd)

17,097,086 26,273,832

b) Loans and Advances (Unsecured considered good)

Advances recoverable in cash or kind or for value to be received 392,506 1,912,459

Inter Corporate Deposits 82,450,245 21,787,792

Advance against Capital Expenditure 43,300,000 50,607,592

Staff Loans 1,030,500 1,009,950

Deposits 23,648,551 13,200,010

Advance Income Tax ( Including Tax Deducted at Source) 45,623,207 18,408,119

196,445,009 106,925,922

Notes:-

1. The loans and advances in the nature of loans to subsidiaries and companies under the same management are interest free

2. Inter Corporate Deposits paid to subsidiaries and companies under the same management.

31.03.2008 (Rs.)

31.03.2007 (Rs.)

Transwarranty Capital Pvt. Ltd 77,072,095 12,957,372

Transwarranty Forex & Commodities Pvt Ltd 5,378,150 3,111,045

Transwarranty Credit Care Pvt. Ltd — 5,719,375

82,450,245 21,787,792

3. Maximum amount outstanding at any time during the year 2007-08 2006-07

Subsidiaries and Companies under same management 105,488,337 51,828,661

29


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — H

CURRENT LIABILITIES AND PROVISIONS

a) Current Liabilities

Other Liabilities 31,643 52,297

Sundry Creditors 4,099,969 8,739,198

(Due to small scale industrial undertakings Rs. Nil (P.Y. Rs.Nil)



Bank Overdraft 123,659 149,410

20,634,571 25,320,205

b) Provisions

Provision for taxation 40,555,450 27,804,000

Provision for Depreciation in the value of Quoted Investments 25,239 128,078

40,580,689 27,932,078

SCHEDULE — I

A) PRELIMINARY EXPENSES

(To the extent not written off or adjusted)

Public Issue Expenses 43,708,856 38,791,336

Less:- Adjusted against Share Preemium 43,708,856 —

Account

B) MISCELLANEOUS EXPENDITURE 1,571,480

1,571,480 38,791,336

30


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — JINCOME FROM OPERATIONSTrade Finance 11,165,988 6,350,645

Corporate Finance 24,674,973 15,262,500

Investment Banking 19,813,990 27,591,429

Financial Services-BPO 3,480,600 6,319,240

59,135,551 55,523,814

SCHEDULE — KOTHER INCOMEInterest & Dividend Income 6,653,703 1,326,009


Profits on Share Trading 35,420 114,192

Provision for Quoted Investments written back 128,078 113,538

6,817,201 1,576,127

SCHEDULE — LOTHER EXPENSESAdvertisement Expenses 381,476 139,678

Auditors Remuneration 100,000 55,000

Business Promotion 683,285 804,092

Conveyance 342,768 374,744

Directors Commission

2006-07 385,000 —

2007-08 388,000 —

Directors Sitting Fees 526,000 60,000

Electricity 512,138 493,369

Legal & Professional Charges 2,117,428 519,828

Office Expenses 1,496,569 1,205,692

Printing & Stationery 417,002 308,661

Rent 1,422,800 64,817

Rates & Taxes 100,970 87,909

Repairs & Maintenance 339,483 96,026

Subscription & Membership 8,500 6,500

Telephone Expenses 1,427,499 1,648,860

Traveling Expenses 569,269 429,320

Loss in Commodities Trading 400,053 55,543

Loss on sale of Fixed Assets 43,153 —

Provision for Quoted Investments 25,239 128,078

11,686,631 6,478,117

SCHEDulES FORMInG PaRT OF PROFIT & lOSS aCCOunT FOR THE yEaR EnDED 31ST MaRCH, 2008

31


SCHEDULE — M

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH, 2008

I SIGNIFICANT ACCOUNTING POLICIES

(A) Basis of Preparation of Financial Statements

The Financial Statements are prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and relevant provisions of Companies Act, 1956 to the extent applicable.

(B) Fixed Assets

(i) All the fixed assets have been stated at cost less depreciation. Cost includes cost of purchase and other costs attributable to bringing the assets to working condition for intended use.

(ii) Fixed assets are adequately depreciated on written down value basis in accordance with the provisions of Section 205(2)(a) and at the rates specified in Schedule XIV to the Companies Act,1956

(C) Current Assets

(i) Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business.

(ii) Debit and Credit balances are subject to confirmation of parties.

(D) Leases

Disclosures as required by Accounting Standard 19, “Leases” issued by the Institute of Chartered Accountants of India, are given below :

(i) The company has taken various offices and a godown premises under leave and license agreements. These are generally not non-cancelable and range between 11 months and 3 years and are renewable by mutual consent on mutually agreeable terms.

(ii) Lease payments are recognized in the Profit and Loss Account under ‘Rent’.

(E) Revenue Recognition

(I) The company’s income from operations is accounted for on accrual basis.

(ii) Service Income is recognized as per the term of the contract/ agreements entered into with the customer when the related services are performed.

(iii) Dividend income is recognized when the right to receive the dividend is established.

(iv) Interest income is recognized on the time proportion basis.

(v) Profit or loss arising on account of sale of trade investments in forward contract in respect of firm commitment were booked as income or expenditure as on the date of such contract entered.

(F) Retirement Benefits

(i) Gratuity is accounted for on accrual basis by way of contribution to Group Gratuity Scheme of Life Insurance Corporation of India.

(ii) The company contributes the employers share of the Provident Fund and the Employees Pension Scheme with the Regional Provident Fund Commissioner and the charges all such amounts to the Profit and Loss Account on an accrual basis

(G) Taxation

(i) Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961

(ii) The deferred tax charge or credit reflects the tax effect of timing differences between the book and the tax profits accounted for using the tax rates and laws that have been substantially enacted as on the Balance Sheet date.

(iii) Deferred Tax Assets arising from timing differences are recognized to the extent there is virtual certainty that these would be realized in future.

32


(H) Fringe Benefit Tax Provision for fringe Benefit Tax (FBT) has been recognized on the basis of harmonious contextual interpretation of the provisions

of Income Tax Act, 1961.

(I) Investments

(i) Long term investments are valued at cost.

(ii) Short Term Investments are valued at cost or fair value whichever is lower determined on an individual investment basis.

(iii) Trade investments are valued at cost or fair value whichever is lower determined on an individual investment basis.

(J) Earning per Share Basic and diluted earnings per share is computed by dividing the net profit attributable to equity shareholders for the year,

by the weighted average number of equity shares outstanding during the year.

(K) Foreign Currency Transactions Transaction in foreign currencies pertaining to revenue accounts are accounted at approximate exchange rate prevalent on

the transaction date. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment / realization in Profit & Loss Account. The amount outstanding at the year end are translated at exchange rate prevailing at year end and the profits / loss so determined are recognized in the Profit & Loss Account.

(L) Provisions

A provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewers at each Balance Sheet date and adjusted to reflect the best current estimate.

(M) Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the asset’s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the assets overits remaining useful life. Previously recognized impairment loss is further provided or reversed depending on changes in circumstances.

(N) Intangible Assets

Goodwill is considered as an intangible asset. No depreciation or write off has been provided on the same.

II NOTES ON ACCOUNTS 1) CONTINGENT LIABILITIES

a) Guarantees issued by the company on behalf of its subsidiaries and associates is Rs. 4,06,00,000/-

(P.Y. Rs. 3,50,00,000/-)

b) As per the Assessment Order issued by the Joint Commissioner of Income Tax, (OSD) Range 3 (3) Mumbai, balance amount of tax payable for the Assessment Year 2005-06 was Rs.4,59,986/-. The company had paid tax amount of Rs. 2,29,993/- against this liability and had filed an Appeal before the Commissioner of Income Tax (Appeals) against the Order. Proceedings of the said Appeal has not yet been started.

2) AUDITORS REMUNERATION

31.03.2008(Rs.)

31.03.2007(Rs.)

(I) As Auditors 50,000 30,000

(II) In other capacities

— Taxation matters 20,000 10,000

— Tax Audit fees 20,000 10,000

— For Other Matters 10,000 5,000

100,000 55,000

33


3) EARNING / EXPENDITURE IN FOREIGN CURRENCY

Earnings in Foreign Exchange as fees for Professional Services rendered Nil 572,728

Earning incurred in Foreign Currency Nil 112,437

4) The Deferred Tax liability/(Assets) at the year end comprises of timing differences arising on account of :-

31.3.2008(Rs.)

31.3.2007(Rs.)

Depreciation (16,720) (56,549)

5) The company had written off Share Issue Expenses of Rs. 4,37,08,856/- against Share Premium Account as per the Provisions of Section 78 of The Companies Act, 1956.

6) During the year the company and Mr. Kumar Nair, Promoter of the company had entered into a share purchase agreement with the Promoters of “Vertex Securities Ltd” (VSL), a listed share broking company with its Registered office at Kochi, Kerala, for acquisition of 28,50,343 Equity Shares comprising 55.05% (includes acquisition of 200000 shares comprising 3.86% by Mr. Kumar Nair) of the paid up capital of the Company at a price of Rs.25/- per share on 2nd November, 2007. The Company had to seek approvals from Securities and Exchange Board of India (SEBI) as per SEBI (substantial acquisition of shares and takeover) Regulation 1997 and Stock Exchanges under their guidlines. All the required approvals from SEBI and the Stock Exchange have been received and the open offer to the Public Shareholders as per SEBI guidlines was opened on June 18, 2008 and the process is expected to be completed in July 2008. On completion of the acquisition formalities, VSL would become a subsidiary company of Transwarranty Finance Limited.

7) The Company had Deferred the expenditure incurred for Advertisement and Other expenditures of Rs. 15,71,480/- for acquisition of Equity Shares of Vertex Securities Ltd. (P.Y. Rs. Nil)

8) the company is primarily engaged In a single segment viz. Financial Services and related activites, therefore the Accounting Standard (AS-17) on Segment Reporting issued by ICAI is not applicable.

9) Related Party Disclosures

As per Accounting Standard (AS-18) on Related Party Disclosures issued by the Institute of Chartered Accountants of India, the disclosure of transactions with the related party as defined in the Accounting Standard are given

below:- (I) List of Related parties

(a) Subsidiary of the company : Transwarranty Capital Pvt Ltd, Transwarranty Credit Care

Pvt Ltd, Transwarranty Forex & Commodities Pvt Ltd

(b) Key Management Personnel : Mr. Kumar Nair (Managing Director)

(c) Companies controlled by Directors/ : Transwarranty Advisors Pvt Ltd , Transwarranty Pvt Ltd

Relatives

(II) Summary of Transactions (Rs in Lakhs)

S. No.

Particulars Subsidiary Company

Associates/ Joint Ventures

Key Management

Personnel

Companies controlled by

Directors/ Relatives

1 Salary and other Allowances to Key Management Personnel

Nil Nil 12.00 Nil

2 Inter Corporate Deposits 824.50 Nil Nil Nil

34


10) The status of utilization of IPO proceeds up to 31.03.2008 is as under:

(Rs. In Lakhs)

Sr. Proposed utilization Estimated Expenditure

1 Capital expenditure on different projects 2,230.00 1,118.44

2 Working Capital Requirement 560.00 560.00

3 Public Issue Expenses 330.00 437.09

Total 3,120.00 2,115.53

The unutilized amount of IPO proceeds has been kept in Bank Deposits & Mutual Funds

11) Earnings per Share (EPS)

2007-08 2006-07

(a) Net Profit as per Profit & Loss Account (Rs. In Lakhs) 234.80 250.87

(b) Weighted average number of Equity Shares used as a denominator for calculating EPS

14,000,000 9,000,000

(c) Basic earnings per share of face value of Rs.10/- each 1.68 2.79

12) (a) Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business.

(b) Debit and Credit balances are subject to confirmation of parties.

13) Previous Year figures are regrouped or rearranged wherever necessary to correspond with the current year figures

14) a) MANAGING DIRECTOR’S REMUNERATION UNDER SECTION 198 OF THE COMPANIES ACT, 1956.

31.03.2008(Rs.)

31.03.2007(Rs.)

Salary 1,016,400 732,000

Contribution to Provident Fund 43,200 72,000

Other Allowances 140,500 25,000

1,200,100 829,000

b) Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956, and calculation of commission payable to Non Executive Directors

2007-08 2006-07

S. No.

Particulars Amount (Rs) Amount (Rs) Amount (Rs) Amount (Rs)

Net Profit for the year Before Tax 36,214,242 37,850,311

Add:-

1 Depreciation provided in the Accounts 787,430 590,048

2 Remuneration to Managing Director (Section 198)

1,200,100 829,000

3 Directors Fees (Section 198) — 100,000

35






4 Commission to Non Executive Directors (2006-07)

385,000 —

5 Commission to Non Executive Directors (2007-08)

388,000 —

6 Directors Sitting Fees (Section 309 (2) ) 526,000 60,000

7 Loss on Sale of Fixed Assets 43,153 —

3,329,683 1,579,048

39,543,925 39,429,359

Less:-

1 Depreciation Under Section 350 of the Act

639,223 590,048

2 Profit on Sale of Investments ( Section 349 (3) © )

35,420 114,192

674,643 704,240

Net Profit for Section 198 of the Act 38,869,282 38,725,119

Maximum remuneration payable to Non Executive

388,693 387,251

Directors @1%

Commission Expense in Profit & Loss Account in respect of Non Executive Directors

388,000 385,000

Note:- During the year the company has accounted commission of Rs. 7,73,000/- to non executive Directors for the year 2006-07 and 2007-08 for which approval was obtained from the share holders in the Annual General Meeting held on 1st August, 2007.

15) Open interest in Equity Index / Stock Futures as at the Balance Sheet date

S. No. Name of the Future Series of Future No. of. Contracts Number of Units involved

1 BHEL 24-Apr-08 5 375

2 Essar Oil 24-Apr-08 3 4,236

3 HDFC 24-Apr-08 1 75

4 Reliance 24-Apr-08 20 1,500

5 Reliance Petroleum 24-Apr-08 8 13,400

6 TCS 24-Apr-08 9 2,250

36


SCHEDULE—N

Addition Information Pursuant to the provisions of Part-IV of Shcedule VI of Companies Act, 1956

BALANCE SHEET ABSTRACT & COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS

Registration No. State Code : Balance Sheet Date : Date Month Year

II. CAPITAL RAISED DURING THE YEAR : (Amount in Rs. Thousands)

Public Issue : NIL Right Issue : NIL Bonus Issue NIL Private Placement : NILIII. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS : (Amount in Rs.Thousands)

Total Liabilities 4564 Total Assets : 4564 SOURCE OF FUNDS :

Paid-Up Capital 4 Reserves & Surplus: 4 Share Application Money NIL Secured Loans : 6 Unsecured Loans : 557 APPLICATION OF FUNDS :

Net Fixed Assets : 5 Investments : 477 Net Current Assets : 747 Misc.Expenditure : 57 Accumulated Losses : NIL Deferred Tax Liability: -4IV. PERFORMANCE OF THE COMPANY: (Amount in Rs.Thousands)

Total Income 6595 Total Expenditure : 979 Profit before Tax : 64 Profit / Loss after Tax : 479 Basic Earnings Per Share in Rs. .6 Dividend Rate (%) %V. GENERIC NAME OF THE THREE PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY

Item Code No. N. Product Description INNIL I





37


To,

The Members ofTranswarranty Capital Pvt. Ltd.

Your Directors take pleasure in presenting 16th Annual Report together with audited statement of accounts for the financial year ended 31st March, 2008.

Financial Results:The performance of the Company during financial year is as under.

(Rs. in Lacs)Particulars Current Year Previous YearTotal Income 2,02,14,486 78,76,480Expenditure 1,76,46,615 87,68,639Profit before depreciation and tax 25,67,870 (8,92,159)Provision for depreciation 15,02,738 7,13,972Profit before Tax 10,65,132 (16,06,131)Provision for Tax 1,57,040 48,000Profit after Tax 9,08,092 (16,54,131)Profit / Loss Brought Forward (18,35,133) (1,81,002)Profit available for appropriation (9,27,041) (18,35,133)

Operations and Outlook:

The total income of the Company during the year under report was Rs. 2,02,14,486/- as against Rs. 78,76,480/- in the previous year. The profit after providing for depreciation and tax was Rs.9,08,092/- as against loss of Rs.16,54,131/- in the previous year.

The Company is a member of both Bombay Stock Exchange Ltd (BSE) and National Stock Exchange of India Ltd (NSEIL) and actively trading on both the Stock Exchanges.

The Company is on the enrollment/empanelment with 12 financial institutions as business associate/agent for marketing shares/mutual funds. The Company has at present 6 branches and 7 franchisees. The Company proposes to increase the number of franchisees and branches during the financial year 2008-09.

The Company is a SEBI registered Merchant Banker rendering various services such as IPO, FPO, Rights Issue, advisory for FCCB, GDR/ADR, ESOPs etc.

During the year under review, the company has handled Open Offers under Takeover Code Regulations of SEBI, issued Valuation Certificates to equity shares and advised and handled Employees Stock Option Plans. During the financial year 2008-09, the directors expect to do more business in these lines.

Dividend:

The Directors have not recommended any dividend for the financial year 2007-08.

Fixed Deposits:

During the year under report the Company has not accepted any fixed deposits attracting the provisions of Sec. 58A of the Companies Act, 1956.

Auditors:

M/s. Haridas Associates, statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a certificate from the retiring auditors U/s. 224(1)(B) of the Companies Act, 1956 confirming their eligibility for reappointment. Members are requested to appoint the auditors and fix their remuneration

Directors responsibility statement:

As required under Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

(i) In the preparation of the Annual Accounts for the year 2007-08, the applicable Accounting Standards have been followed and there are no material departures;

(ii) The accounting policies selected and applied are consistent and the judgment and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the financial year;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The annual accounts have been prepared on a going concern basis.

Statutory information:

Particulars required under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1986:-

1. Information relating to Conservation of Energy, Technology, Absorption, Adaptation and Innovation - Not applicable.

2. Foreign Exchange earnings and outgoing during the year – Nil.

3. Particulars of employees:

None of the employees was drawing remuneration in excess of the limits specified in Sec. 217(2A) of the Companies Act, 1956.

Acknowledgements:

The Directors place on record their appreciation for the support and co-operation received from the Banks, financial institutions, business associates and dedicated and sincere services rendered by employees of the Company through out the year.


Mumbai Kumar Nair June 26, 2008 Chairman

Subsidiary Companies Accounts

DIRECTORS’ REPORT

38

TRANSWARRANTY CAPITAL PVT. LTD.

auDITORS’ REPORT

To,The Members of Transwarranty Capital Pvt. Ltd.,

1. We have audited the attached Balance Sheet of Transwarranty Capital Pvt. Ltd. as on 31st March, 2008, the Profit and Loss Account 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 statements based on our audit.

2. We conducted our audit in accordance with the 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 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 our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 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.

4. Further to our comments in the Annexure referred to above, we report that:

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 audit;

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 books;

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, 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 to the extent applicable;

e. On the basis of representations received from the directors as on 31st March, 2008 and taken on record by the Board of Directors, we report that no director is disqualified from being appointed as a director of the company as on 31st March, 2008 under clause (g) of sub section (1) of 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 together 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:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2008

ii. in the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

iii. In the case of Cash Flow Statement , of the cash flows for the year ended on that date.


Vasant M. ShahPlace : Mumbai. ProprietorDated : June 26, 2008 Membership No:- 37523




(b) All the assets have been physically verified by the management at the end of the year, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.


iii) a) The company has taken unsecured loans from companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 5,36,13,055/- and the year end balance of the loans taken is Rs.5,36,13,055/-.The company had granted interest-free unsecured loans to companies and directors covered under section 301 of the Companies Act during the year. The

39


maximum amount involved during the year was Rs.3,26,40,741/- and the year end balance of the loans granted is Rs.3,26,40,741/-.

b) In our opinion the rate of interest and other terms and conditions of said interest free unsecured loans were not, prima facie, prejudicial to the interest of the company.







(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.



(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax , customs duty, excise duty and cess were in arriers as at 31st March, 2007 for a 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 sales Tax and income tax,

which have not been deposited on account of any dispute.

(x) In our opinion the company has accumulated losses of Rs. 9,27,041/-at the end of the financial year (Previous Year Rs.18,35,133/-). The company has not incurred any cash losses during the financial year.




(xiv) In respect of shares, securities etc. held as investments by the company, proper records have been maintained of the transactions and contracts and timely entries have been made by the company therein and the said investment have been held by the company in its own name.

(xv) In our opinion, the company has not given any guarantees for loans taken by others from banks or financial institutions.





(xx) The company has not raised any money by public issues.



Mumbai Vasant M. ShahJune 26, 2008 Proprietor

Membership No. 37523

40



31.03.2007(Rs.)


(a) Share Capital A 97,492,450 97,492,450

(b) Reserves and Surplus B 5,482,149 4,574,057

102,974,599 102,066,507

(2) Loan Funds

(a) Secured Loans C 3,256,632 4,341,775

(b) Unsecured Loans D 56,125,129 15,319,446



(1) Fixed Assets E

(a) Gross Block 7,517,771 3,679,874

(b) Less : Depreciation 2,804,861 1,303,200

(c) Net Block 4,712,910 2,376,674

(2) Investments F 46,672,923 29,653,712

(3) Current Assets, Loans & Advances G

(a) Current Assets

Sundry Debtors 21,580,146 5,779,824



185,790,497 99,692,487

Less : Current Liabilities & Provisions

(a) Current Liabilities H 75,153,107 10,487,070

(b) Provisions 402,213 348,475

75,555,320 10,835,545


(4) Miscellaneous Expenditure I 735,350 840,400


NOTES TO THE ACCOUNTS M

BALANCE SHEET ABSTRACT N

BalanCE SHEET aS aT 31ST MaRCH, 2008



Vasant M. Shah Kumar Nair K. UnnikrishnanProprietor Director Director Membership No:-37523

Mumbai June 26, 2008

41



31.03.2007(Rs.)

Income From Operations J 17,974,713 7,068,030

Other Income K 2,239,773 808,450

TOTAL INCOME 20,214,486 7,876,480

EXPENDITURE

Operational Expenses 4,460,173 872,725


Other Expenses L 5,355,563 3,298,928

Interest & Bank Charges 1,547,794 1,041,366


Profit before depreciation and tax 2,567,870 (892,159)

Depreciation 1,502,738 713,972

Profit before tax and exceptional items 1,065,132 (1,606,131)

Provision for Taxation

Current Tax 60,300 —


Profit after Tax 908,092 (1,654,131)

Net Profit Brought forward (1,835,133) (181,002)

Profit available for appropriation (927,041) (1,835,133)






42


Particulars 2007-08Amount (Rs)

2006-07Amount (Rs)


Net Profit before Tax and Extraordinary items 1,065,132 (1,606,131)

Add:Non Operating Expenses/ Non Cash Expenses

Depreciation & Amortisation 1,502,738 713,972


Loss on Sale of Fixed Assets 925 —

Interest Paid 1,547,794 1,041,366

3,081,330 1,885,513


— —

Interest & Dividend Received 1,610,424 7,995

Profit on Share Trading 63,610 133,808


1,804,208 235,933

Operating Profit before Working Capital Changes 2,342,254 43,449

Adjusted for:

(Increase)/Decrease in Sundry Debtors (15,800,322) (3,252,000)

(Increase)/Decrease in Loans & Advances (806,450) 3,838,553

Increase /(Decrease) in Current Liabilities 64,666,037 3,775,515


Cash Generated from Operation 50,301,217 4,441,562

Income Tax Paid (754,669) (214,477)

Net Cash From Operating Activities 49,546,549 4,227,085


Purchase of Fixed Assets (3,840,397) (2,161,359)

Sale of Fixed Assets 500 —


43


Particulars 2007-08Amount (Rs)

2006-07Amount (Rs)

(Purchase)/ Sale of Investments (Net) (15,247,878) 19,808,576

Inter Corporate Deposits Received/(Given) (32,640,741) —

(Increase)/ Decrease in Miscellaneous Expenditure 105,050 105,050

Net Cash used in Investing Activities (51,623,466) 17,752,267


Increase/ (Decrease) in Secured Loans (1,085,144) (10,399,615)

Increase/ (Decrease) in Bank Borrowings (Unsecured) 40,805,683 8,134,446

Interest Paid (1,547,794) (1,041,366)

Net Cash from / (used in) Financing Activities 38,172,745 (3,306,535)

Net Increase / (Decrease) in Cash & Cash Equivalent 36,095,828 18,672,817

Opening Balance of Cash and Cash Equivalents 48,126,456 29,453,639

Closing Balance Cash and Cash Equivalents 84,222,284 48,126,456





44


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — A

SHARE CAPITAL



40,000,15% Non-Cumulative Redeemable Preference Shares of Rs. 100/- each 4,000,000 4,000,000

104,000,000 104,000,000


94,71,665 Equity Shares of Rs.10/- each fully paid up 94,716,650 94,716,650

27,758 , 5 Years, 15% Non-Cumulative Redeemable Preference 2,775,800 2,775,800

shares of Rs.100/- fully paid up.

97,492,450 97,492,450

SCHEDULE — B

RESERVES & SURPLUS

(a) Share Premium Account 6,409,190 6,409,190

(b) Profit & Loss Account

Balance as per last Balance Sheet (1,835,133)

Less:- Net Profit For the Period 908,092 (927,041) (1,835,133)

5,482,149 4,574,057

SCHEDULE — C

SECURED LOANS

From Banks

Term Loan Account 2,784,964 3,758,327

(Secured against Fixed Deposit of Rs.50,00,000/-)

Car Loan Account 471,668 583,448


3,256,632 4,341,775

SCHEDULE — D

UNSECURED LOANS



56,125,129 15,319,446

SCHEDulES FORMInG PaRT OF BalanCE SHEET aS On 31ST MaRCH 2008

45


SCH

EDU

LE —

E

FIXE

D A

SSET

S

Sr.

No.

Des

crip

tion

GRO

SS B

LOCK

DEP

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Sale

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As o

n 31

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.3.2

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.3.2

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As o

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.3.2

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RsRs

RsRs

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

1M

otor

Car

786

,376

—

7

86,3

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129

,466

11

8,90

1 2

48,3

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538

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6

56,9

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1,85

3,32

1 1

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,065

—

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,789

,386

93

6,81

7 8

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—

1,7

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1,9

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916

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Equ

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126

,844

5

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670

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1

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1 6

1,95

3 7

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4 5

98,6

03

116

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ter

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e 8

61,5

20

858

,608

1

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2

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400

,541

6

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02,8

40

644

,773

5Fu

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res

51,

813

501

,802

2

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5

51,1

15

9,9

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64,

975

1,0

75

73,

859

477

,256

4

1,85

4

Tota

l3,

679,

874

3,8

40,3

97

2,5

00

7,5

17,7

71

1,3

03,2

00

1,5

02,7

38

1,0

75

2,8

04,8

61

4,7

12,9

10

2,3

76,6

74

Prev

ious

Yea

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518,

515

2,1

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59

—

3,6

79,8

74

589

,228

7

13,9

72

—

1,3

03,2

00

2,3

76,6

74

46


SCHEDULE — F

INVESTMENTS

31.03.2008 31.03.2007

Face Value Quantity Value Quantity Value

(Rs.) (Nos) (Rs.) (Nos) (Rs.)

A LONG TERM INVESTMENTS


(Unquoted & Fully Paid)

i In Associates Companies

Transwarranty Credit Care Pvt.Ltd. 10 2,437,500 24,375,000 24,375,000

Transwarranty Forex & Commodities Pvt.Ltd. 10 201,960 2,019,600 2,019,600

ii Others

Cochin Stock Exchange 1 2,501,150 2,501,150

Cochin Stock Exchange- Right Shares 10 655 6,550 6,550

Nawani Corp (India) Ltd. 10 350,000 17,500,000 —

Total 46,402,300 28,902,300

B SHORT TERM INVESTMENTS


(Quoted and fully paid up)

Motul Mafatlal Ltd. 100 370 100 370

(Market Value not Available )

Satyam Computers 2 270 115,056 270 115,056

(Market Value Rs.1,06,528/- )

Pentamedia 10 294 3,207 294 3,207

(Market Value Rs.764/- )

Prudential Sugar 10 100 700 100 700


Usha India 10 1 304 1 304


Centurion Bank 1 30 120 30 120

(Market Value Rs.1,300/- )

Sanghvi Movers 10 200 45,849 200 45,849


Easun Reyrol 10 50 8,297 50 8,297


Lloyd Finance 10 500 1,632 500 1,632


JSW Steel 10 3 480 3 480


47


31.03.2008 31.03.2007

Face Value Quantity Value Quantity Value

(Rs.) (Nos) (Rs.) (Nos) (Rs.)

Bajaj Hindustan Ltd 1 50 17,375 250 94,499


Titan Industries 10 85 70,598 65 50,810


Odyssey Video Co 10 100 1,432 100 1,432


Santogen Exp 10 100 493


TATA - CCPS 10 45 4,500


Exide Industries Ltd 10 7 210


Aptech 100 24,426

Arvind Remedies 1,000 6,926

L&T 15 9,609

Moser Baer 6 1,758

SSI Limited 100 16,023

Anik Industries Ltd 100 4,812

Trend Limited 24 21,600

Trend Limited (NCD) 24 -

Trend Limited (Warrants) 24 —

NEPC Micon 650 36,006

EMA India 200 50,340

Balasore Alloys 84 1,413

Integrated Finance 600 6,889

Mawana Sugar 100 12,042

Sterlight Opticals 250 41,455

Marathon Nex 50 63,390

IOC 50 25,870

VSNL 30 11,836

Biocon Ltd 50 24,468

Dhampur Sugar 100 12,110

Suzlon Energy 30 34,539

ICICI Bank Limited 25 16,166

Reliance Comunications Ltd 20 6,978

Total 270,623 751,412

GRAND TOTAL 46,672,923 29,653,712

Market Value of Quoted Investments 264,515 795,222

Note : Provision for diminution in the value of Quoted Investments amounted to Rs.29,873/- ( Previous Year Rs.1,30,175/-) has been provided for.

48


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — G


a) Current Assets

Sundry Debtors ( Unsecured Considered Good )

Outstanding for a period more than 6 Months 5,463,327 24,266

Others 16,116,819 5,755,558

21,580,146 5,779,824


Cash on hand 203,084 196,722

Balance with Scheduled Banks 65,861,544 39,581,007

Fixed Deposits with Banks 18,157,657 8,348,727

Fixed Deposits of Rs.1,00,01,848/- are pledged against Bank Guarantee of Rs. 2,03,00,000/- and Fixed Deposit of Rs.50,00,000/- are pledged against the Term Loan and Over Draft facility of The Catholic Syrian Bank Ltd.

84,222,284 48,126,456


Advances recoverable in cash or kind or for value to be received 1,685,734 528,984

Inter Corporate Deposits 32,640,741 —

Deposits 44,617,923 44,968,223

Advance Tax 1,043,669 289,000

79,988,067 45,786,207

Notes:-

1. The loans and advances in the nature of loans to companies under the same management are interest free

31.03.2008 31.03.2007

(Rs.) (Rs.)

2. Inter Corporate Deposits paid to companies under the same management.

Transwarranty Forex & Commodities Pvt. Ltd. 226,241 —

Transwarranty Credit Care Pvt. Ltd. 32,414,500 —

32,640,741 —

3. Maximum amount outstanding at any time during the year 2007-08 2006-07

Subsidiaries and Companies under same management 37,624,241 —

49


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — H

CURRENT LIABILITIES & PROVISIONS


Expenses Payable 1,403,186 218,297

Other Liabilities 18,550,740 2,628,620

Bank Overdraft 24,921,372 182,983


75,153,107 10,487,070

b) Provisions

Provision for diminution in value of Quoted Investments 29,873 130,175

Provision for Taxation 372,340 218,300

402,213 348,475

SCHEDULE — I

MISCELLANEOUS EXPENDITURE


a) Preliminary Expenditure 440,400 495,450

Less : Written off during the year 55,050 55,050

Total (A) 385,350 440,400

b) Deferred Revenue Expenditure 400,000 450,000


Total (B) 350,000 400,000

Total (A) + (B) 735,350 840,400

50


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — JINCOME FROM OPERATIONSBrokerage Income - Capital Market 12,521,947 6,850,522 Brokerage Income - Mutual Funds & IPO 286,573 117,508 Profit on Arbitrage 1,951,197 — Merchant Banking Fees 3,214,996 100,000

17,974,713 7,068,030

SCHEDULE — KOTHER INCOME Interest & Dividend 1,610,424 541,031 Demat Charges 37,090 30,691 DP Annual Charges & Transaction Charges 226,945 — Auction Charges 1,079 8,790 CTCL/ IML Charges 170,450 — Profit on Share Trading 63,610 133,808 Provision for diminution in value of Quoted Investments—Written back 130,175 94,130

2,239,773 808,450

SCHEDULE — LOTHER EXPENSESAdvertising Expenses 133,892 135,794 Auditors Remuneration 7,500 7,500 Books & Periodical Expenses 6,377 4,990 Bad Debts Written Off 366,943 — Business Development Charges 88,090 — Conveyance 144,921 76,472 Electricity Charges 449,072 315,146 Insurance Charges 78,449 27,993 Legal & Professional Charges 694,712 488,207 Office Expenses 869,639 839,086 Printing & Stationery 292,358 167,692 Rent - Premises 1,237,047 372,200 Rates & Taxes 23,476 4,500 Repairs & Maintenance 103,615 87,114 Telephone & Leased Line Charges 647,957 537,008 Traveling Expenses 75,667 — Preliminary Expenditure Written off 55,050 55,050 Deferred Revenue Expenditure Written off 50,000 50,000 Loss on Sale of Fixed Assets 925 — Provision for diminution in value of Quoted Investments 29,873 130,175

5,355,563 3,298,928

SCHEDulES FORMInG PaRT OF PROFIT & lOSS aCCOunT FOR THE yEaR EnDED 31ST MaRCH 2008

51


SCHEDULE — M

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2008

A) SIGNIFICANT ACCOUNTING POLICIES



(B) Fixed Assets



(C) Current Assets

(i) Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business.


(D) Leases












(iii) Leave encashment liability at the Balance Sheet date is not ascertained and the same is accounted on cash basis.

(G) Taxation

(i) Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961.



52


(H) Fringe Benefit Tax

Provision for fringe Benefit Tax (FBT) has been recognized on the basis of harmonious contextual interpretation of the provisions of Income Tax Act, 1961.

(I) Investments



(J) Earning per Share

Basic and diluted earnings per share is computed by dividing the net profit attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.

(K) Foreign Currency Transactions

Transaction in foreign currencies pertaining to revenue accounts are accounted at approximate exchange rate prevalent on the transaction date. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment / realization in Profit & Loss Account. The amount outstanding at the year end are translated at exchange rate prevailing at year end and the profits / loss so determined are recognized in the Profit and Loss Account.

(L) Provisions



The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the asset’s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognized impairment loss is further provided or reversed depending on changes in circumstances.



B NOTES ON ACCOUNTS

1) Contingent Liabilities

Contingent liability in respect of Bank Guarantee outstanding for Rs. 2,03,00,000/- ( P.Y. Rs.18,00,000/-) .


31.03.2008(Rs.)

31.03.2007(Rs.)

(I) As Auditors 5,000 5,000


— Taxation matters Nil Nil

— Tax Audit Fees Nil Nil

— Others 2,500 2,500

7,500 7,500

53



2007-08(Rs)

2006-07(Rs)

(i) Net Profit as per Profit & Loss Account 908,092 (1,654,131)

(ii) Weighted average number of Equity Shares used as a denominator for calculating EPS 9,471,665 9,471,665

(iii) Basic earnings per share of face value of Rs.10/- each 0.10 (0.17)

4) Previous years figures are regrouped or rearranged wherever necessary to correspond with the current year figures.

5) Due to carry forward losses, there is a net Deferred Tax Asset as on 31st March, 2007 as well as for the year ended 31st March, 2008, in pursuance of Accounting Standard 22 on “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India. However, as a matter of prudence the net Deferred Tax Assets has not been recognised in the accounts in view of the losses incurred by the company.


As per Accounting Standard (AS-18) on Related Party Disclosures issued by the Institute of Chartered Accounts of India, the disclosure of transactions with the related party as defined in the Accounting Standard are given below:-

(I) List of Related parties

(a) Holding Company : Transwarranty Finance Limited

(b) Key Management Personnel : Mr. Kumar Nair (Director)

(c) Companies controlled by Directors/ : Transwarranty Credit Care Pvt Ltd, Transwarranty -

Relatives Advisors Pvt Ltd, Transwarranty Forex & Commodities Pvt Ltd

Transwarranty Pvt Ltd.


S. No.

Particulars Holding Company


Key Management Personnel

Companies controlled

by Directors/ Relatives

1 Inter Corporate Deposits Received 536.13 Nil Nil Nil

2 Inter Corporate Deposits Paid Nil Nil Nil 326.41





54


SCHEDULE— N

Addition Information Pursuant to the provisions of Part -IV of Schedule VI of Companies Act, 1956



Registration No. 674 State Code : Balance Sheet Date : Date Month Year




Paid -Up Capital 9749 Reserves & Surplus: 54 Share Application Money NIL Unsecured Loans : 565 Secured Loans : 57 APPLICATION OF FUNDS :

Net Fixed Assets : 47 Investments : 4667 Net Current Assets : 5 Misc.Expenditure : 75IV. PERFORMANCE OF THE COMPANY: (Amount in Rs.Thousands)

Total Income 4 Total Expenditure : 949 Profit before Tax : 65 Profit /Loss after Tax: 9 Basic Earnings Per Share in Rs. . Dividend Rate (%) : nilV. GENERIC NAME OF THE THREE PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY

Item Code No. N. Product Description IN


For and on behalf of For and on behalf of Board of Directors

Haridas Associates Chartered Accountants

Vasant M. Shah Kumar Nair K.Unnikrishnan Proprietor Director Director Membership No:-37523


55


To

The Members ofTranswarranty Forex & Commodities Pvt Ltd

The Directors take pleasure in presenting their 12th Annual Report together with audited statement of accounts for the financial year ended 31st March, 2008.

Financial Result :

The performance of the Company during the year under report is as under

Current yearRs.

Previous yearRs.

Income 13,08,850 99,057

Profit/Loss before depreciation 2,49,170 (30,154)


Provision for taxation — —

Profit / Loss after Tax 1,95,653 (48,855)

Balance brought forward from Previous year

(19,71,609) (19,22,754)

Balance transferred to Balance Sheet

(17,75,956) (19,71,609)

Operations and future prospects:

During the year under review, the income of the Company from forex-broking was Rs.11.59 lakhs. During the financial year 2008-09 the Company expects an income of about Rs.15.5 lakhs from forex-broking.

Other income of Rs.1.49 lakhs during the year under review includes Rs.1.44 lakhs from interest on fixed deposits.

As reported last year, the Company has been awarded inter-bank foreign exchange broking accreditation by the Foreign Dealers Association of India (FEDAI). During the year 2007-08 the Company was awarded empanelment by 10 banks. The Company is expecting to Secure empanelment from about 30 banks during the financial year 2008-09

The Company is also a member of MCX and NCDEX. The Company proposes to do business actively in commodities during the current financial year.

Dividend:


Fixed Deposits:


Auditors:

M/s. Haridas Associates, Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a certificate from the retiring auditors U/s. 224(1)(B) of the Companies Act, 1956 confirming their eligibility for reappointment. Members are requested to appoint the auditors and fix their remuneration



(i) In the preparation of the Annual Accounts for the year 2007-08, the applicable Accounting Standards have been followed and there are no material departures;

(ii) The accounting policies selected and applied are consistent and the judgment and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the financial year;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The annual accounts have been prepared on a going concern basis.







Acknowledgements:



Mumbai Kumar NairJune 26, 2008 Chairman

DIRECTOR’S REPORT

56

TRANSWARRANTY FOREX & COMMODITIES PVT. LTD.

auDITORS’ REPORT

To,

The Members of

Transwarranty Forex & Commodities Pvt. Ltd.,

1. We have audited the attached Balance Sheet of Transwarranty Forex & Commodities Pvt. Ltd. as on 31st March, 2008, the Profit and Loss Account 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 statements based on our audit.

2. We conducted our audit in accordance with the 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 our opinion.



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 audit;

II. 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 books;

III. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

IV. 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 to the extent applicable;

V. On the basis of representations received from the directors as on 31st March, 2008 and taken on record by the Board of Directors, we report that no director is disqualified from being appointed as a director of the company as on 31st March, 2008 under clause (g) of sub section (1) of 274 of the Companies Act, 1956.

VI. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together 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 the Balance Sheet, of the state of affairs of the Company as at 31st March, 2008

b. in the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

c. In the case of Cash Flow Statement , of the cash flows for the year ended on that date.


Vasant M. ShahMumbai. ProprietorJune 26, 2008 Membership No:- 37523




(b) All the assets have been physically verified by the management at the end of the year, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c) There was no substantial disposal of fixed assets during the year.


iii) a) The company has taken unsecured loans from companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.59,70,627/- and the year end balance of the loans taken was Rs.56,04,391/-. The company had granted interest-free unsecured loans to companies and directors covered under section 301 of the Companies Act during the year. The maximum amount involved during the year was Rs.4,54,77,240/- and the year end balance of the

57


(x) In our opinion the company has accumulated losses of Rs. 17,75,956/-at the end of the financial year (Previous Year Rs. 19,71,607/-). The company has not incurred any cash losses during the financial year.














loans granted is Rs.Rs.52,08,741/-.

b) In our opinion the rate of interest and other terms and conditions of said interest-free unsecured loans were not, prima facie, prejudicial to the interest of the company.










(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears as at 31st March, 2008 for a 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 sales Tax and income tax, which have not been deposited on account of any dispute.

58


BalanCE SHEET aS aT 31ST MaRCH, 2008

Schedule 31.03.2008(Rs)

31.03.2007(Rs)

SOURCES OF FUNDS


(a) Share Capital A 46,775,200 46,775,200

46,775,200 46,775,200

(2) Loan Funds

(a) Unsecured Loans B 5,604,391 3,111,045



(1) Fixed Assets C

(a) Gross Block 679,460 679,460

(b) Less: Depreciation 240,140 213,807

(c) Net Block 439,320 465,653

(2) Investments D 52,326 52,326

(3) Current Assets, Loans & Advances E

(a) Current Assets

Sundry Debtors 1,128,037 78,031



49,902,664 46,951,418

Less : Current Liabilities & Provisions F

(a) Current Liabilities 216,012 94,828

(b) Provisions 148,592 115,853

364,604 210,681


(4) Miscellaneous Expenditure G 573,930 655,920

(5) Profit & Loss Account H 1,775,956 1,971,609


NOTES FORMING PART OF ACCOUNTS L

BALANCE SHEET ABSTRACT M




Vasant M. Shah Kumar Nair Haridas T.V. Proprietor Director Director Membership No:-37523


59


Schedule 31.03.2008(Rs)

31.03.2007(Rs)

INCOME

Income from Operations I 1,159,549 84,406

Other Income J 149,301 14,651

TOTAL INCOME 1,308,850 99,057

EXPENDITURE

Operational Expenses 163,020 7,650

Personnel Expenses 423,677 —

Interest and Bank Charges 56,734 11,985

Other Expenses K 416,248 109,576

TOTAL EXPENDITURE 1,059,679 129,211

Profit/(Loss) before depreciation and tax 249,170 (30,154)


Profit /(Loss) before tax 222,837 (48,855)


Current Tax 21,800 Nil

Fringe Benefit Tax 5,384 Nil

Profit/(Loss) after Tax 195,653 (48,855)

Net Profit Brought forward (1,971,609) (1,922,754)

Profit/(Loss) carried to Balance Sheet (1,775,956) (1,971,609)







60



2006-07Amount (Rs.)

CASH FLOW FROM OPERATING ACTIVITIESNet Profit before Tax and Extraordinary items 222,837 (48,855)Add:Non Operating Expenses/ Non Cash ExpensesDepreciation & Amortisation 26,333 18,701 Provision for diminution in value of quoted investments 9,261 3,706 Deferred Revenue Expenses Written off 50,100 50,100 Miscellaneous Expenses Written off 31,890 31,890

117,584 104,397 Less : Interest / Dividend/ Other Non Operating Income AdjustmentsDividend Received 300 250 Profit on share trading — — Provisions no longer required 3,706 8,206

4,006 8,456 Operating Profit before Working Capital Changes 336,415 47,086 Adjusted for:(Increase)/Decrease in Sundry Debtors (1,050,006) 162,230 (Increase)/Decrease in Loans & Advances (941,839) (532,617)Increase /(Decrease) in Current Liabilities 121,185 92,205 Increase /(Decrease) in Provisions 5,555 (4,500)Cash Generated from Operation (1,528,690) (235,596)Income Tax Paid (41,434) (1,238)Net Cash From Operating activities (1,570,124) (236,834)CASH FLOW FROM INVESTING ACTIVITY(Purchase)/ Sale of Fixed Assets — (445,000)(Purchase)/ Sale of Investments (Net) (5,255) 4,750 (Increase)/ Decrease in Miscellaneous ExpenditureInter Corporate Deposits Received / (Given) (5,208,741)Dividend ReceivedNet Cash used in Investing Activities (5,213,996) (440,250)CASH FLOW FROM FINANCING ACTIVITIESIssue of Equity Shares at par — — Equity Share Application Money — (20,000,000)Increase/ (Decrease) in Unsecured Loan 2,493,346 3,111,045 Interest Paid — — Net Cash from / (used in) Financing Activities 2,493,346 (16,888,955)Net Increase / (Decrease) in Cash & Cash Equivalent (4,290,775) (17,566,039)Opening Balance of Cash and Cash Equivalent 24,602,267 42,168,306 Closing Balance of Cash and Cash Equivalent 20,311,493 24,602,267


As per our attached report of even date For and on behalf of For and on behalf of Board of Directors




61


31.03.2008(Rs)

31.03.2007(Rs)

SCHEDULE — A

SHARE CAPITAL


50,00,000 Equity Shares of Rs.10/- each 50,000,000 50,000,000


46,77,520 Equity Shares of Rs.10/- each fully paid 46,775,200 46,775,200

46,775,200 46,775,200

SCHEDULE — B

UNSECURED LOANS


5,604,391 3,111,045

SCHEDulES FORMInG PaRT OF BalanCE SHEET aS On 31ST MaRCH, 2008

SCHEDULE — C

FIXED ASSETS

Sr. No

Description GROSS BLOCK DEPRECIATION NET BLOCK

As on1.4.2007

AdditionsDuring

the Year

Sale During

theyear

As on 31.3.2008

Up to 31.3.2007

For the Year

On Sale During

the Year

Up to 31.3.2008

As on 31.3.2008

As on 31.3.2007

Rs Rs Rs Rs Rs Rs Rs Rs Rs Rs

1 Goodwill 400,000 — — 400,000 — — — — 400,000 400,000

2 Computer 242,020 — — 242,020 195,113 18,814 — 213,927 28,093 46,907

3 Computer Software 37,440 — 37,440 18,694 7,519 26,213 11,227 18,746

TOTAL 679,460 — — 679,460 213,807 26,333 — 240,140 439,320 465,653

PREVIOUS YEAR 234,460 445,000 — 679,460 195,106 18,701 — 213,807 465,653

62


SCHEDULE — D

INVESTMENTS

31.03.2008 31.03.2007

Face Value No Of Shares Amount(Rs.)

No Of Shares Amount(Rs.)

A SHORT TERM INVESTMENTS

a) Short Term (Trade)

Biocon(Market Value Rs.43,065/- )

5 100 52,326 52,326

TOTAL 52,326 52,326

Market Value of Quoted Investments 43,065 48,620

Note :- The diminution in the value of Quoted Investments amounted to Rs.9,261/- (P.Y Rs. 3,706/-) has been provided for.

31.03.2008(Rs)

31.03.2007(Rs)

SCHEDULE — E


a) Current Assets


Outstanding for a period exceeding six months — —

Other Debts 1,128,037 —

Transwarranty Capital Pvt Ltd — 78,031

(A company under the same management )

1,128,037 78,031


Cash on Hand 27 —

Balance with Scheduled Banks in current account 18,663,777 23,519,185

Fixed Deposits With Banks 1,647,690 1,083,082

(Fixed Deposit of Rs. 5,73,728/- is pledged against Bank Guarantee of Rs. 17,50,000/-)

20,311,493 24,602,267

63


31.03.2008(Rs)

31.03.2007(Rs)

b) Loans and Advances

Advances recoverable in cash or kind or value to be received 81,029 139,190

Advance Income Tax 171,364 129,930

Inter Corporate Deposits 5,208,741 —

Deposits 23,002,000 22,002,000

(Paid to Transwarranty Advisors Pvt Ltd, a company under the same management Rs.2,12,52,000/- (P.Y. Rs.2,12,52,000/- ) )

28,463,134 22,271,120

Notes:-

1. The loans and advances in the nature of loans to holding company and companies under the same management are interest free

31.03.2008(Rs.)

31.03.2007(Rs.)

2. Inter Corporate Deposits paid to companies under the same management.

Transwarranty Credit Care Pvt. Ltd. 5,208,741 —

5,208,741 —

2007-08 2006-07

(Rs.) (Rs.)

3. Maximum amount outstanding at any time during the year Nil

Holding Company and Companies under same management 45,477,240 —

SCHEDULE — F



Outstanding Liabilities 207,350 2,916

Margin Payable-MCX — 91,912

Sundry Creditors 8,662

Bank Overdraft — —

216,012 94,828

b) Provisions

Provision for Taxation 139,331 112,147

Provision for Diminution in value of Quoted Investments 9,261 3,706

148,592 115,853

64


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — G


(To the extent not written off or adjusted )

a) Preliminary Expenditure 255,120 287,010


Toal (A) 223,230 255,120

b) Deferred Revenue Expenditure 400,800 450,900


Toal (B) 350,700 400,800

Total (A) + (B) 573,930 655,920

SCHEDULE — H

PROFIT & LOSS ACCOUNT

Balance as per last Balance Sheet 1,971,609 1,922,754

Add:- Net Loss / (Profit) for the Period (195,653) 48,855

1,775,956 1,971,609

SCHEDulES FORMInG PaRT OF PROFIT & lOSS aCCOunT FOR THE yEaR EnDED 31ST MaRCH 2008

31.03.2008(Rs)

31.03.2007(Rs)

SCHEDULE — I

INCOME FROM OPERATIONS

Brokerage Income 1,159,549 84,406

1,159,549 84,406

SCHEDULE — J

OTHER INCOME

Dividend 300 250

Interest on Fixed Deposits 144,545 6,195

Account Opening Charges 750 —

Provision for Diminution in value of Quoted Investments Written Back 3,706 8,206

149,301 14,651

65


SCHEDULE — K

OTHER EXPENSES


Business Promotion Expenses 16,758 680

Computer Expenses 120,843 —

Conveyance 952 378

General Expenses 41,629 2,971

Insurance Charges 1,840 920

Legal & Professional Fees 2,000 7,611


Rates & Taxes 11,624 4,929

Rent 60,000 —

Repairs & Maintenance — 110

Telephone Charges 52,775 —

Traveling Expenses 1,950 973

Deferred Revenue Expenses Written off 50,100 50,100

Preliminary Expenses Written off 31,890 31,890

Provision for Diminution in value of Quoted Investments 9,261 3,706

416,248 109,576

SCHEDULE — LSIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2008

A) SIGNIFICANT ACCOUNTING POLICIES(A) Basis of Preparation of Financial Statements The Financial Statements are prepared and presented under the historical cost convention, on the accrual basis of accounting

in accordance with the accounting principles generally accepted in India and comply with Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and relevant provisions of Companies Act, 1956 to the extent applicable.

(B) Fixed Assets



(C) Current Assets(i) Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of

business.


(D) Leases



66










(ii) The company contributes the employers share of the Provident Fund and the Employees Pension Scheme with he Regional Provident Fund Commissioner and the charges all such amounts to the Profit and Loss Account on an accrual basis


(G) Taxation




(H) Fringe Benefit Tax Provision for fringe Benefit Tax (FBT) has been recognized on the basis of harmonious contextual interpretation of the provisions

of Income Tax Act, 1961.

(I) Investments



(J) Earning per Share Basic and diluted earnings per share is computed by dividing the net profit attributable to equity shareholders for the year,

by the weighted average number of equity shares outstanding during the year.



(L) Provisions



The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the asset’s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognized impairment loss is further provided or reversed depending on changes in circumstances.



67


B NOTES ON ACCOUNTS1) Contingent Liabilities

Contingent liability in respect of Bank Guarantee outstanding for Rs. 17,50,000/- ( P.Y. Rs.2,50,000/-) .


31.03.2008(Rs.)

31.03.2007(Rs.)

(I) As Auditors 2,500 2,500(II) In other capacities

— Taxation matters Nil Nil — Tax Audit Fees Nil Nil

2,500 2,500


2007-08 2006-07(i) Net Profit as per Profit & Loss Account 195,653 (48,855)(ii) Weighted average number of Equity Shares used as a denominator for calculating

EPS 4,677,520 4,677,520

(iii) Basic earnings per share of face value of Rs.10/- each 0.04 (0.01)

4) Previous years figures are regrouped or rearranged wherever necessary to correspond with the current year figures.5) Due to carry forward losses, there is a net Deferred Tax Asset as on 31st March, 2007 as well as for the year ended 31st March,

2008, in pursuance of Accounting Standard 22 on “ Accounting for Taxes on Income” issuedby the Institute of Chartered Accountants of India. However, as a matter of prudence the net Deferred Tax Assets has not been recognised in the accounts in view of the losses incurred by the company.

6) Related Party Disclosures As per Accounting Standard (AS-18) on Related Party Disclosures issued by the Institute of Chartered Accounts of India, the

disclosure of transactions with the related party as defined in the Accounting Standard are given below:- (I) List of Related parties

(a) Holding Company : Transwarranty Finance Limited (b) Key Management Personnel : Mr. Kumar Nair (Director) (c) Companies controlled by Directors/ : Transwarranty Credit Care Pvt. Ltd., Transwarranty -

Relatives Advisors Pvt. Ltd., Transwarranty Capital Pvt. Ltd. Transwarranty Pvt. Ltd. (II) Summary of Transactions (Rs in Lakhs)

S. No.






1 Inter Corporate Deposits Received 53.78 Nil Nil 2.26

2 Inter Corporate Deposits Paid Nil Nil Nil 52.09






68


SCHEDULE— M








Paid -Up Capital 46775 Reserves & Surplus: NIL Share Application Money NIL Unsecured Loans : 564 Secured Loans : NIL APPLICATION OF FUNDS :

Net Fixed Assets : 49 Investments : 5 Net Current Assets : 495 Misc.Expenditure : 574 Accumulated Losses : 776IV. PERFORMANCE OF THE COMPANY: (Amount in Rs.Thousands)

Total Income 9 Total Expenditure : 6 Profit before Tax : Profit /Loss after Tax: 96 Basic Earnings Per Share in Rs. .4 Dividend Rate (%) : NILV. GENERIC NAME OF THE THREE PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY

Item Code No. N. Product Description II IN






69


To,

The Members,

Transwarranty Credit Care Private. Limited.

The Directors take pleasure in presenting their 12th Annual Report together with audited statement of accounts for the financial year ended 31st March, 2008.

Financial Results:

The financial performance of the Company during the year under report is as under:

Particulars Current YearRs.

Previous Year

Rs.

Total Income 22,56,285 13,36,300

Profit Before Tax 1,29,292 5,429

Provision for Tax 44,000 —

Prior Period Adjustments — 4,572

Profit after Tax 85,292 857

Add / Less : Profit brought forward (2,00,770) (2,01,627)

Balance Carried to Balance Sheet (1,15,478) (2,00,770)

Dividend:


Fixed Deposits:


Auditors:

M/s. Haridas Associates, statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a certificate from the retiring auditors U/s. 224(1)(B) of the Companies Act, 1956 confirming their eligibility for reappointment. Members are requested to appoint the auditors and fix their remuneration.



(i) in the preparation of the Annual Accounts for the year 2007-08, the applicable Accounting Standards have been followed and there are no material departures;

(ii) the accounting policies selected and applied are consistent and the judgment and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the financial year;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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







Acknowledgements:



Mumbai Kumar Nair June 26, 2008 Chairman

DIRECTORS’ REPORT

70

TRANSWARRANTY CREDIT CARE PVT. LTD.

auDITORS’ REPORTTo,

The Members of Transwarranty Credit Care Pvt. Ltd.,

1. We have audited the attached Balance Sheet of Transwarranty Credit Care Pvt. Ltd.. as on 31st March, 2008, the Profit and Loss Account 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 statements based on our audit.

2. We conducted our audit in accordance with the 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 our opinion.



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 audit;

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 books;

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, 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 to the extent applicable;

e. On the basis of representations received from the directors as on 31st March, 2008 and taken on record by the Board of Directors, we report that no director is disqualified from being appointed as a director of the company as on 31st March, 2008 under clause (g) of sub section (1) of 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 together 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:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2008

ii. in the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

iii. In the case of Cash Flow Statement , of the cash flows for the year ended on that date.





i) (a) The company had no fixed assets during the year. Since the company has no fixed assets, clauses 4 (i) (a), (b) & (c) of the order are not applicable.


iii) a) The company has taken unsecured loans from companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.4,43,23,241/- and the year end balance of the

loans taken is Rs. Rs. 3,76,23,241/-. The company had granted interest-free unsecured loans to companies covered under section 301 of the Companies Act during the year. The maximum amount involved during the year was Rs.5,27,13,615/- and the year end balance of the loans granted is Rs.Nil.

b) In our opinion the rate of interest and other terms and conditions of said interest-free unsecured loans were not, prima facie, prejudicial to the interest of the company.

71











(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax , customs duty, excise duty and cess were in arrears as at 31st March, 2008 for a period of more than six months from the date they become payable except the following

Name of the statute

Nature of the Dues

Amount (Rs) Period to which the amount relates

Forum where dispute

is pending

Income Tax Act,

1961

Tax and Interest

Rs. 3,46,464/-

A.Y. 2005-06

Commissioner of

Income Tax (Appeals)

(c) According to the information and explanations given to us, there are no dues of sales Tax and income tax,

which have not been deposited on -account of any dispute.

(x) In our opinion the company has accumulated losses of Rs. 1,15,479/-at the end of the financial year (Previous Year Rs.2,00,771/-). The company has not incurred any cash losses during the financial year and the immediately preceding the financial year.






(xvi) In our opinion, the term loans if any have been applied for the purpose for which they were raised.







Mumbai Vasant M. ShahJune 26, 2008 Proprietor

Membership No. 37523

72


BalanCE SHEET aS On 31ST MaRCH 2008


31.03.2007(Rs.)

SOURCES OF FUNDS

Shareholders Funds

(a) Share Capital A 50,100,000 50,100,000

(b) Reserves & Surplus B 21,729 21,729

50,121,729 50,121,729

Loan Funds

(a) Unsecured Loans C 80,623,241 18,719,375



Current Assets, Loans & Advances D

(a) Cash and Bank Balances 58,543,760 27,449,732


131,737,806 68,665,273

Less : Current Liabilities & Provisions E

(a) Current Liabilities 1,362,667 373,778

(b) Provisions 99,050 55,050

1,461,717 428,828


Miscellaneous Expenditure F 353,402 403,888

Profit & Loss Account G 115,479 200,771


NOTES TO THE ACCOUNTS J

BALANCE SHEET ABSTRACT K




Vasant M. Shah Kumar Nair K.J. Abraham Proprietor Director Director Membership No:- 37523


73



31.03.2007(Rs.)

INCOME

Other Income H 2,256,285 1,336,300

TOTAL INCOME 2,256,285 1,336,300

EXPENDITURE


Other Expenses I 91,832 56,942


Profit before tax 129,292 5,429

Prior Period Tax Adjustment — 4,572

Provision for Taxation 44,000 Nil

Profit after Tax 85,292 857

Net Loss Brought forward (200,770) (201,627)

Profit available for appropriation (115,478) (200,770)

PROFIT anD lOSS aCCOunT FOR THE yEaR EnDED 31ST MaRCH 2008






74


CaSH FlOw STaTEMEnT FOR THE yEaR EnDED 31ST MaRCH, 2008Particulars 2007-08

Amount (Rs)2006-07

Amount (Rs)


Net Profit before Tax and Extraordinary items 85,292 5,428

Add: Non Operating Expenses / Non Cash Expenses

Miscellaneous Expenses 50,486 50,486

Interest Paid on ICD and Loans 2,033,890 1,268,527

2,169,668 1,324,441

Less: Interest / Dividend/ Other Income Adjustments

Dividend Received — —

Interest received on ICD and Loans 2,256,285 1,336,299

2,256,285 1,336,299

Operating Profit before Working Capital Changes (86,617) (11,858)

Adjusted for:


Increase /(Decrease) in Current Liabilities 988,889 351,338

Cash Generated from Operation (30,219,028) (12,341,039)

Income Tax Paid (813,205) (166,591)

Net Cash From Operating Activities (31,032,233) (12,507,630)


(Purchase)/ Sale of Investments — —

Miscellaneous Expenditure — —

Interest received on ICD and Loans 2,256,285 1,336,299

Net Cash used in Investing Activities 2,256,285 1,336,299


Increase/ (Decrease) in Unsecured Loans 61,903,866 13,219,375

Interest Paid (2,033,890) (1,268,527)

Net Cash from / (used in) Financing Activitites 59,869,976 11,950,848

Net Increase / (Decrease) in Cash & Cash Equivalent 31,094,028 779,517

Opening Balance Cash and Cash Equivalent 27,449,732 26,670,215

Closing Balance Cash and Cash Equivalent 58,543,760 27,449,732






75


SCHEDulES FORMInG PaRT OF THE BalanCE SHEET aS On 31ST MaRCH, 2008

31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — A

SHARE CAPITAL


53,00,000 Equity Shares of Rs.10/- each 53,000,000 53,000,000


50,10,000 Equity Shares of Rs.10/- each fully paid up 50,100,000 50,100,000

50,100,000 50,100,000

SCHEDULE — B

RESERVES & SURPLUS

General Reserves

Balance as per last Balance Sheet 21,729

Transferred from Profit & Loss Account NIL 21,729 21,729

21,729 21,729

SCHEDULE — C

UNSECURED LOANS


80,623,241 18,719,375

SCHEDULE — D


a) Current Assets


Cash Balance 10,004 10,004

Balance with Scheduled Banks in Current Accounts 58,533,755 27,439,728

58,543,760 27,449,732

b) Loans and Advances

Advances recoverable in cash or kind or for value to be received 2,775,959 4,154,659


Security Deposit 21,250,000 21,250,000

(Paid to Transwarranty Advisors Pvt Ltd, a company under the same management Rs.2,12,50,000/- (P.Y.Rs.2,12,50,000/-)

Advance Income Tax (Including Tax Deducted at Source) 1,418,087 560,882

73,194,046 41,215,541

76


Notes:-

1. The loans and advances in the nature of loans to holding company and companies under the same management are interest free

31.03.2008(Rs.)

31.03.2007(Rs.)

2. Inter Corporate Deposits paid to companies under the same management

Nil Nil

— —

2007-08(Rs.)

2006-07(Rs.)

3. Maximum amount outstanding at any time during the year Holding Company and Companies under same management

52,713,615 39,768,115

SCHEDULE — E



Other liabilities 1,362,667 373,778

1,362,667 373,778

b) Provisions

Provision for taxation 99,050 55,050

99,050 55,050

SCHEDULE — F



a) Deferred Revenue Expenses 403,888

Less:- Written off during the year 50,486 353,402 403,888

353,402 403,888

SCHEDULE — G

PROFIT & LOSS ACCOUNT


Balance as per the last Balance Sheet 200,771 201,627

Less:- Net Profit for the year 85,292 856

115,479 200,771

77


SCHEDulES FORMInG PaRT OF PROFIT & lOSS aCCOunT FOR THE yEaR EnDED 31ST MaRCH, 2008

31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — H

OTHER INCOME

Interest on ICD 2,256,285 1,303,696

Interest on Loan — 32,603

2,256,285 1,336,300

SCHEDULE — I

OTHER EXPENSES


Conveyance — 23

Legal & Professional Charges 4,500 3,500

Office Expenses 33,312 112

Printing & Stationery 416 —

Miscellaneous Expenses Written off 50,486 50,486

Service Tax 618 321

91,832 56,942

SCHEDULE — JSIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2008I SIGNIFICANT ACCOUNTING POLICIES (A) Basis of Preparation of Financial Statements


(B) Fixed Assets

(i) Fixed assets if any have been stated at cost less depreciation. Cost includes cost of purchase and other costs attributable to bringing the assets to working condition for intended use.

(ii) Fixed assets if any are adequately depreciated on written down value basis in accordance with the provisions of Section 205(2)(a) and at the rates specified in Schedule XIV to the Companies Act,1956

(C) Current Assets



(D) Leases


(i) The company have not entered into any Lease agreements during the year




78




(F) Retirement Benefits(i) Gratuity is accounted for on accrual basis by way of contribution to Group Gratuity Scheme of Life Insurance Corporation

of India.



(G) Taxation (i) Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance

with the Income Tax Act, 1961





(I) Investments







(L) Provisions



The carrying amount of assets if any are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the asset’s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognized impairment loss is further provided or reversed depending on changes in circumstances.


Goodwill is considered as an Intangible Asset. No depreciation or write off has been provided on the same.

II NOTES ON ACCOUNTS 1) Contingent Liability

As per the Assessment Order issued by the Joint Commissioner of Income Tax , (OSD) Range 3 (3) Mumbai, balance amount of tax payable for the Assessment Year 2005-06 was Rs.6,92,929/-. The company had paid tax amount of Rs. 3,46,464/- against this liability and had filed an Appeal before the Commissioner of Income Tax (Appeals) against the Order. Proceedings of the said Appeal has not yet been started.

79



31.03.2008(Rs.)

31.03.2007(Rs.)

(I) As Auditors 2,500 2,500(II) In other capacities

— Taxation matters Nil Nil— Tax Audit Fees Nil Nil

2,500 2,500


31.03.2008(Rs.)

31.03.2007(Rs.)

(a) Net Profit as per Profit & Loss Account 85,292 857 (b) Weighted average number of Equity Shares used as a 5,010,000 5,010,000

denominator for calculating EPS(c) Basic earnings per share of face value of Rs.10/- each 0.02 0.00

4) Previous Year figures are regrouped or rearranged wherever necessary to correspond with the current years figures.

5) Due to carry forward losses, there is a net Deferred Tax Asset as on 31st March, 2007 as well as for the year ended 31st March, 2008, in pursuance of Accounting Standard 22 on “ Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India. However, as a matter of prudence the net Deferred Tax Assets has not been recognised in the accounts in view of the losses incurred by the company and as there is no likelihood of recovery in the near future.




(a) Holding Company : Transwarranty Finance Limited

(b) Key Management Personnel : Mr. Kumar Nair (Director)

(c) Companies controlled by Directors/ : Transwarranty Capital Pvt Ltd, Transwarranty -

Relatives Advisors Pvt Ltd, Transwarranty Forex & Commodities Pvt Ltd

Transwarranty Pvt Ltd.


S. No.






1 Inter Corporate Deposits Received NIL Nil Nil 376.23

2 Inter Corporate Deposits Paid 86.87 Nil Nil NIL






80


SCHEDULE—K








Paid -Up Capital 5 Reserves & Surplus: Share Application NIL Unsecured Loans : 6 Secured Loans : NIL

APPLICATION OF FUNDS :

Net Fixed Assets : NIL Investments : NIL Net Current Assets : 76 Misc.Expenditure : 5 Accumulated Losses : 6IV. PERFORMANCE OF THE COMPANY: (Amount in Rs.Thousands)

Total Income 56 Total Expenditure : 7 Profit before Tax : 9 Profit /Loss after Tax: 5 Basic Earnings Per Share in Rs. . Dividend Rate (%) : NILV. GENERIC NAME OF THE THREE PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY

Item Code No. N Product Description NN






81


Consolidated Financial Statement

auDITORS’ REPORT

To,

The Members of

Transwarranty Finance Limited,

1) We have audited the attached Consolidated Balance Sheet of Transwarranty Finance Limited and its subsidiaries as on 31st March, 2008, and also the consolidated profit and loss account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These consolidated financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these consolidated statements based on our audit.

2) We conducted our audit in accordance with the 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 our opinion.

3) We report that the consolidated financial statements have been prepared by the management of Transwarranty Finance Limited in accordance with the requirements of Accounting Standard (AS)21- Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India.

4) Based on our audit and the management’s certification, in our opinion, the consolidated financial statements, give a true and fair view in confirmity with the accounting principles generally accepted in India.

a. in the case of the Consolidated Balance Sheet, of the state of affairs of the Company as at 31st March, 2008

b. in the case of the Consolidated Profit & Loss Account, of the consolidated results of operations for the year ended on that date; and

c. in the case of the Consolidated Cash Flow Statement, of the consolidated results of operations for the year ended on that date.



82


COnSOlIDaTED BalanCE SHEET aS aT 31ST MaRCH, 2008

The Schedules referred to above form an integral part of the Balance Sheet



Vasant M.Shah Suresh N. Talwar Kumar Nair Raghu R. Palat Proprietor Chairman Managing Director Director Membership No:-37523

Mumbai U. Ramchandran G.K. Prem Kumar June 26, 2008 Chief Financial Officer Company Secretary


31.03.2007(Rs.)

I SOURCES OF FUNDS(1) Shareholders Funds

(a) Share Capital A 140,000,000 140,000,000 (b) Reserves and Surplus B 248,413,098 284,329,835

388,413,098 424,329,835

(2) Loan Funds(a) Secured Loans C 4,442,775 18,973,434 (b) Unsecured Loans D 51,049,074 22,584,074

(3) Deferred Tax Liability 142,830 159,550

(4) Minority Interest E 68,321,758 67,824,619 Total Funds Employed 512,369,535 533,871,512

II APPLICATION OF FUNDS(1) Fixed Assets F

(a) Gross Block 13,242,629 9,479,085 (b) Less : Depreciation 5,740,264 5,195,749 (c) Net Block 7,502,365 4,283,336

(2) Investments G 129,954,632 204,066,240

(3) Current Assets, Loans & Advances H(a) Current Assets

Sundry Debtors 48,951,081 27,641,250 Cash and Bank Balances 180,174,624 126,452,286

(b) Loans and Advances 257,690,531 194,410,998 486,816,236 348,504,534

Less : Current Liabilities & Provisions I(a) Current Liabilities 73,907,316 35,222,686 (b) Provisions 41,230,544 28,451,456

115,137,860 63,674,142 Net Current Assets 371,678,376 284,830,392

(4) Miscellaneous Expenses J 3,234,162 40,691,544 Total Utilisation of Funds 512,369,535 533,871,512

NOTES TO THE ACCOUNTS N

83



31.03.2007(Rs.)

INCOME

Income From Operations K 76,318,618 62,676,250

Other Income L 12,436,417 3,735,530

TOTAL INCOME 88,755,035 66,411,780

EXPENDITURE

Operational Expenses 4,734,190 1,364,636



Other Expenses M 17,839,587 9,943,571


Profit before depreciation and tax 39,948,011 37,523,469

Depreciation 2,316,501 1,322,720

Profit before tax 37,631,510 36,200,749


Current Tax 12,576,100 12,600,000


Deferred Tax Liability/(Asset) (16,720) (56,549)

Profit after Tax 24,668,556 23,389,298

Prior Period Tax Adjustment — (4,572)

Net Profit Brought forward 12,453,224 10,697,339


APPROPRIATION

Reserve u/s 45 IC of RBI Act 4,695,903 5,017,371

Proposed Dividend on Equity Shares 14,000,000 14,000,000

Corporate Dividend Tax Equity Shares 2,379,300 2,379,300


Net Profit carried to Balance Sheet 15,046,577 12,453,224

37,121,780 34,849,895

COnSOlIDaTED PROFIT anD lOSS aCCOunT FOR THE yEaR EnDED 31ST MaRCH, 2008






84


Particulars 2007-08 Amount (Rs.)

2006-07Amount (Rs.)


Net Profit before Tax and Extraordinary items 37,631,510 36,200,749

Add : Non Operating Expenses/ Non Cash Expenses

Depreciation & Amortisation 2,316,501 1,322,720


Loss in Commodity Trading 400,053 55,543

Miscellaneous Expenses / Deferred Revenue Expenses Written off 237,526 237,526

Interest Paid 3,677,091 3,420,522

Loss on Sale of Fixed Assets 44,078

6,695,544 5,298,270


Interest & Dividend Received 11,639,862 2,837,896

Profit on Share trading 99,030 248,000

Profit on F&O — 22,389

Prior Period Tax Adjustment — 4,572


12,000,851 3,328,731

Operating Profit before Working Capital Changes 32,326,203 38,170,288

Adjusted for:

(Increase)/Decrease in Sundry Debtors (21,309,831) 16,290,791


Increase /(Decrease) in Current Liabilities 22,305,331 (10,678,878)


Cash Generated from Operation (1,287,019) 27,553,456

Income Tax Paid (28,868,398) (15,228,546)

Net Cash From Operating activities (30,155,417) 12,324,910

Consolidated Cash Flow Statement for the year ended 31st March, 2008

85







Particulars 2007-08 Amount (Rs.)

2006-07Amount (Rs.)


Purchase of Fixed Assets 5,740,306 (53,519,915)

Sale of Fixed Assets 160,700 —

(Purchase)/ Sale of Investments (Net) 85,670,278 (177,659,487)

(Increase)/ Decrease in Miscellaneous Expenditure (1,571,480) (38,791,336)

Net Cash used in Investing Activities 89,999,804 (269,970,738)


Issue of Equity Shares at par — 60,000,000

Increase in Share Premium — 252,000,000

Repayment of Share Application Money - Transwarranty Forex & — (20,000,000)

Commodities Pvt. Ltd.

Increase/ (Decrease) in Secured Loans (14,530,659) 3,562,044

Increase/ (Decrease) in Bank Borrowings (Unsecured) 28,465,000 9,899,074

Dividend Paid ( including tax thereon) (16,379,300) (16,379,300)

Interest Paid (3,677,091) (3,420,522)

Net Cash from / (used in) Financing Activities (6,122,050) 285,661,296

Net Increase / (Decrease) in Cash & Cash Equivalent 53,722,337 28,015,468

Opening Balance of Cash and Cash Equivalent 126,452,286 98,436,818

Closing Balance of Cash and Cash Equivalent 180,174,624 126,452,286

86


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — A

SHARE CAPITAL




1,40,00,000 Equity Shares of Rs.10/- each fully paid up 140,000,000 140,000,000

140,000,000 140,000,000

SCHEDULE — B

RESERVES AND SURPLUS

Capital Reserve (Consolidation) 651,055 651,055

Share Premium Account


Less:- IPO Expenses Adjusted 43,708,856 208,291,144 252,000,000.00

Reserve U/S 45 IC of RBI Act


Transferred from Profit & Loss Account 4,695,903 15,532,432 10,836,528

General Reserve


Add:-Transferred from Profit & Loss Account 1,000,000 9,389,028 8,389,028


Balance as per the annexed Profit & Loss Account 15,046,577

Less : Share of Profit of Minority Interest 497,139 14,549,438 12,453,224

248,413,098 284,329,835

SCHEDULE - C

MINORITY INTEREST

Transwarranty Capital Pvt. Ltd. 48,115,275 47,705,725

Transwarranty Forex & Commodities Pvt. Ltd. 20,106,661 20,019,243

Transwarranty Credit Care Pvt. Ltd. 99,822 99,651

68,321,758 67,824,619

SCHEDulES FORMInG PaRT OF COnSOlIDaTED BalanCE SHEET

87


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — D

SECURED LOANS

From Banks

Term Loan Account 2,784,964 3,758,327

(Secured against Fixed Deposit of Rs.50,00,000/-)

Overdraft Account — 14,067,396

(Secured against hypothecation of Office Premises

owned by Transwarranty Pvt. Ltd. and

Guarantee given by the Managing Director)

Car Loan Account 1,657,811 1,147,711


4,442,775 18,973,434

SCHEDULE — E

UNSECURED LOANS



51,049,074 22,584,074

SCHEDULE — F

FIXED ASSETS

Sr. No.

Description GROSS BLOCK DEPRECIATION NET BLOCK

As on 1.04.2007

AdditionsDuring the

year

Sale During the year

As on31.3.2008

As on 31.3.2007

For the Year

On Sale During the

Year

Upto31.3.2008

As on 31.3.2008

As on 31.3.2007

(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)

1 Goodwill 400,000 — 400,000 — — — — 400,000 400,000

2 Furniture 575,430 804,715 270,766 1,109,379 322,308 151,881 231,959 242,230 867,149 253,122

3 Computers 2,727,573 2,048,823 351,625 4,424,771 1,503,905 1,018,326 325,894 2,196,337 2,228,434 1,223,668

4 Office Equipments 368,338 857,018 31,044 1,194,312 198,262 112,085 24,561 285,787 908,525 170,076

5 Vehicles 3,308,784 1,134,742 1,323,327 3,120,199 1,822,234 582,772 1,189,570 1,215,436 1,904,763 1,486,550

6 Computer Software 2,098,960 895,008 — 2,993,968 1,349,041 451,436 — 1,800,477 1,193,491 749,919

Total 9,479,085 5,740,306 1,976,762 13,242,629 5,195,750 2,316,500 1,771,984 5,740,267 7,502,362 4,283,335

Previous Year 6,519,022 2,960,063 — 9,479,085 3,873,029 1,322,719 — 5,195,749 4,283,336 —

88


SCHEDULE — G

INVESTMENTS 31.03.2008 31.03.2007

Avg.Price(Rs.)

Quantity(Nos)

Value(Rs.)

Quantity(Nos)

Value(Rs.)

1 LONG TERM INVESTMENTS

(a) In Government Securities

National Savings Certificate VIII issue 5,000 1 5,000 1 5,000

(b) In Equity Shares

(Unquoted & Fully Paid up)

i Others

Cochin Stock Exchange Nil 1 2,501,150 2,501,150

Cochin Stock Exchange- Right Shares 10 655 6,550 6,550

Nawani Corp (India) Ltd. 10 350,000 17,500,000 —

Catholic Syrian Bank Ltd. 10 500 16,000 500 16,000

Total- (A) 20,028,700 2,528,700

2 SHORT TERM INVESTMENTS


(Quoted & Fully Paid up)

South Indian Bank (Right Share) 10 1 40 1 40


NEPC Micon 10 2,000 85,156 2,000 85,156


Rama Newsprints 10 5,000 86,838 5,000 86,838


Anil Products Ltd 10 34,000 680,000


Motul Mafatlal Ltd. — 100 370 100 370


Satyam Computers 2 270 115,056 270 115,056

(Market Value Rs.1,06,528/- )

Pentamedia 10 294 3,207 294 3,207


89


31.03.2008 31.03.2007

Avg.Price(Rs.)

Quantity(Nos)

Value(Rs.)

Quantity(Nos)

Value(Rs.)

Prudential Sugar 10 100 700 100 700


Usha India 10 1 304 1 304


Centurion Bank 1 30 120 30 120


Sanghvi Movers 10 200 45,849 200 45,849


Easun Reyrol 10 50 8,297 50 8,297


Lloyd Finance 10 500 1,631 500 1,632


JSW Steel 10 3 480 3 480


Bajaj Hindustan Ltd 1 50 17,375 250 94,499


Titan Industries 10 85 70,598 65 50,810


Odyssey Video Co 10 100 1,432 100 1,432

(Market Value Not Available)

Santogen Exp 10 100 493


TATA - CCPS 10 45 4,500

(Market Value Not Available)

Exide Industries Ltd 10 7 210


Biocon 5 100 52,326 100 52,326


Nitco Tiles 10 — — 500 98,077

Reliance Petrolium 10 — — 5,000 449,746

Aptech 100 24,426

90


31.03.2008 31.03.2007

Avg.Price(Rs.)

Quantity(Nos)

Value(Rs.)

Quantity(Nos)

Value(Rs.)

Arvind Remedies 1,000 6,926

L&T 15 9,609

Moser Baer 6 1,758

SSI Limited 100 16,023

Anik Industries Limited 100 4,812

Trend Limited 24 21,600

Trend Limited(NCD) 24 —

Trend Limited(Warrants) 24 —

NEPC Micon 650 36,006

EMA India 200 50,340

Balasore Alloys 84 1,413

Integrated Finance 600 6,889

Mawana Sugar 100 12,042

Sterlight Opticals 250 41,455

Marathon Nex 50 63,390

IOC 50 25,870

VSNL 30 11,836

Biocon Ltd 50 24,468

Dhampur Sugar 100 12,110

Suzlon Energy 30 34,539

ICICI Bank Limited 25 16,166

Reliance Communication Ltd 20 6,978

(b) in Mutual Funds

SBI Mutual Fund 93,546,013

UTI Mutual Fund 6,053,527

(c) Others

ICICI Bank CD 100,000 — — 2,000 200,000,000

UTI Master Share — 1,000 13,945 1,000 13,945

Total- (B) 100,788,467 201,537,540

91


31.03.2008 31.03.2007

Avg.Price(Rs.)

Quantity(Nos)

Value(Rs.)

Quantity(Nos)

Value(Rs.)

3 INVESTMENTS HELD AS STOCK IN TRADE

Reliance Petroleum 10 13,400 2,096,429


Reliance Industries 10 1,500 3,404,100


BHEL 10 375 772,013


Essar Oil 10 4,236 860,120


HDFC 10 75 179,378


Tata Consultancy 1 2,250 1,825,425


Total - (C) 9,137,465 —

GRANT TOTAL - (A) + (B) + (C) 129,954,632 204,066,240

Market Value of Quoted Investments 13,349,037 1,552,741

Note:- Provision for diminution in the value of Quoted Investments amounted to Rs.64,373/- ( Previous Year Rs.2,61,959/-) has been provided for.

92


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — H


a) Current Assets


Outstanding for a period exceeding six months 24,711,481 24,266

Other Debts 24,239,600 27,616,984

48,951,081 27,641,250


Cash Balance 802,901 1,292,575

Balance with Scheduled Banks in current account 149,506,737 113,227,902

Fixed Deposit with Banks 29,864,986 11,931,809

(Fixed Deposit of Rs.1,05,75,576/- are pledged against bank guarantee of Rs. 2,20,50,000/-, Fixed deposit of Rs. 50,00,000/- are pledged against Term Loan and OD Facility of The Catholic Syrian Bank Limited and Fixed Deposit of Rs. 1,00,59,639/- are kept in the Escrow Account with Federal Bank Ltd. in compliance of SEBI Takeover Code Guidelines in respect of acquisition of promoters stake of Vertex Securities Ltd.)

180,174,624 126,452,286


Advances recoverable in cash or kind or for value to be received 52,533,228 21,930,292

Advance against Capital Expenditure 43,300,000 50,607,592

Staff Loans 1,082,500 1,064,950

Deposits 112,518,474 101,420,233

Advance Income Tax ( Including Tax Deducted at Source) 48,256,329 19,387,931

257,690,531 194,410,998

93


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — I



Other Liabilities 19,850,406 2,850,208


(Due to small scale industrial undertakings Rs. Nil (P.Y. Rs.Nil) — —



Book Overdraft 25,045,030 332,393

73,907,316 35,222,686

b) Provisions

Provision for taxation 41,166,171 28,189,497

Provision for Depreciation on Quoted Investments 64,373 261,959

41,230,544 28,451,456

SCHEDULE — J



a) Preliminary expenditure 695,520 782,460


Total (A) 608,580 695,520

b) Deferred Revenue Expenditure 2,776,168 40,146,610


Total (B) 2,625,582 39,996,024

Total (A) + (B) 3,234,162 40,691,544

94


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — K

INCOME FROM OPERATIONS

Trade Finance 11,165,988 6,350,645

Corporate Finance 24,674,973 15,262,500

Investment Banking 19,813,990 27,591,429

Financial Services-BPO 3,480,600 6,319,240

Brokerage Income 13,968,070 7,052,435

Merchant Banking Fees 3,214,996 100,000

76,318,618 62,676,250

SCHEDULE — L

OTHER INCOME

Interest & Dividend 11,639,862 3,209,786

Demat /Auction Charges 38,169 39,481

Provision for Quoted Investment Written Back 261,959 215,874


Profit on Share Trading 99,030 248,000

CTCL/IML Charges 170,450 —

DP-Annual Charges & Transaction Charges 226,945 —

12,436,417 3,735,530

SCHEDulES FORMInG PaRT OF COnSOlIDaTED PROFIT & lOSS aCCOunT FOR THE yEaR EnDED 31ST MaRCH 2008

95


31.03.2008(Rs.)

31.03.2007(Rs.)

SCHEDULE — M

OTHER EXPENSES

Advertisement Expenses 515,368 275,472


Business Promotion 788,133 804,772

Bad Debts Written Off 366,943 —

Conveyance 488,641 451,617

Directors Commission

2006-07 385,000 —

2007-08 388,000 —

Directors Sitting Fees 526,000 60,000

Electricity 961,210 808,515

Legal & Professional Charges 2,818,639 1,019,146

Office Expenses 2,504,380 1,982,170


Rent 2,719,847 437,017

Rates & Taxes 548,275 197,262

Repairs & Maintenance 443,098 183,250

Subscription & Membership 8,500 6,500

Telephone & Lease Line Expenses 2,150,235 2,185,868

Traveling Expenses 646,886 430,293

Loss on sale of Fixed Assets 44,078 —

Loss in Commodities Trading 400,053 55,543

Provision for Quoted Investments 64,373 261,959

Deferred Revenue Expenses Written off 150,586 150,586

Preliminary Expenses Written Off 86,940 86,940

17,839,587 9,943,570

96


SCHEDULE — N

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH, 2008

I SIGNIFICANT ACCOUNTING POLICIES


The Financial Statements are prepared and presented under the historical cost convention, on the accrual basis ofaccounting in accordance with the accounting principles generally accepted in India and comply with Accounting standards issued by the Institute of Chartered Accountants of India (ICAI) and relevant provisions of Companies Act, 1956 to the extent applicable.

(B) Fixed Assets



(C) Current Assets



(D) Leases





(i) The company’s income from operations is accounted for on accrual basis.




(v) Profit or loss arising on account of sale of trade investments in forward contract in respect of firm commitment were booked as income or expenditure as on the date of such contract entered.




(G) Taxation




97




(I) Investments



(iii) Trade investments are valued at cost or fair value whichever is lower determined on an individual investment basis.




Transaction in foreign currencies pertaining to revenue accounts are accounted at approximate exchange rate prevalent on the transaction date. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment / realization in Profit & Loss Account. The amount outstanding at the year end are translated at exchange rate prevailing at year end and the profits / loss so determined are recognized in the Profit & Loss Account.

(L) Provisions



The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the asset’s net selling price and value in use.

In assessing the value in use, the estimated future cash flows are discounted to the present value using the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognized impairment loss is further provided or reversed depending on changes in circumstances.

N) Intangible Assets


II NOTES ON ACCOUNTS

1) (a) Guarantees issued by the company on behalf of its subsidiaries and associates is Rs. 4,06,00,000/- (P.Y. Rs. 3,50,00,000/-)

(b) In Transwarranty Finance Limited ,As per the Assessment Order issued by the Joint Commissioner of Income Tax, (OSD) Range 3 (3) Mumbai, balance amount of tax payable for the Assessment Year 2005-06 was Rs.4,59,986/-. The company had paid tax amount of Rs. 2,29,993/- against this liability and had filed an Appeal before the Commissioner of Income Tax (Appeals) against the Order. Proceedings of the said Appeal has not yet been started.

(c) In Transwarranty Credit Care Pvt. Ltd., As per the Assessment Order issued by the Joint Commissioner of Income Tax, (OSD) Range 3 (3) Mumbai, balance amount of tax payable for the Assessment Year 2005-06 was Rs.6,92,929/-. The company had paid tax amount of Rs.3,46,464/- against this liability and had filed an Appeal before the Commissioner of Income Tax (Appeals) against the Order. Proceedings of the said Appeal has not yet been started.

(d) Contingent liability in respect of Bank Guarantee outstanding for Rs. 2,20,50,000/- ( P.Y. Rs.20,50,000/-) .

98



31.03.2008

(Rs.)

31.03.2007

(Rs.)

(I) As Auditors 60,000 40,000


— Taxation matters 20,000 10,000

— Tax Audit fees 20,000 10,000

— For Other Matters 12,500 7,500

112,500 67,500

3) EARNING / EXPENDITURE IN FOREIGN CURRENCY

Earnings in Foreign Exchange as fees for Professional Services rendered Nil 572,728

Expenditure incurred in Foreign Currency Nil 112,437

4) The Deferred Tax liability/(Assets) at the year end comprises of timing differences arising on account of :-

31.3.2008(Rs.)

31.3.2007(Rs.)

Depreciation (16,720) (56,549)

5) the company is primarily engaged In a single segment viz. Financial Services and related activites, therefore the Accounting Standard (AS-17) on Segment Reporting issued by ICAI is not applicable.




(a) Subsidiary of the company : Transwarranty Capital Pvt. Ltd., Transwarranty Credit Care

Pvt. Ltd., Transwarranty Forex & Commodites Pvt. Ltd.

(b) Key Management Personnel : Mr. Kumar Nair (Managing Director)

(c) Companies controlled by Directors/ Relatives : Transwarranty Pvt. Ltd. & Transwarranty Advisors Pvt. Ltd.

99


(II) Summary of Transactions during the Year Ended on 31st March, 2008

(Rs in Lakhs)

S. No.


Subsidiary Company


Key Management

Personnel



1 Salary and other Allowances to Key Management Personnel

Nil Nil Nil 12.00 Nil

2 ICD Received from holding Company

Nil 824.5 Nil Nil Nil

3 ICD Paid to Subsidiary Company

824.5 Nil Nil Nil Nil

7) Principal of Consolidation :

a) The consolidated financial statements relate to Transwarranty Finance Limited, the holding company and its majority owned subsidiaries. The consolidation of accounts of the Company with its subsidiaries has been prepared in accordance with Accounting Standard (AS) 21 ‘Consolidated Financial Statements’. The financial statements of the parent and its subsidiaries are combined on a line by line basis and intra group balances, intra group transactions and unrealised profits or losses are fully eliminated.

b) In the consolidated financial statements, ‘Goodwill’ represents the excess of the cost to the Company of its investment in the subsidiaries and/or joint ventures over its share of equity, at the respective dates on which the investments are made. Alternatively, where the share of equity as on the date of investment is in excess of cost of investment, it is recognised as ‘Capital Reserve’ in the consolidated financial statements.

c) Minority interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable to the minority shareholders at the respective dates on which investments are made by the Company in the subsidiary companies and further movements in their share in the equity, subsequent to the dates of investment as stated above.

d) Investments in Associates are dealt with in accordance with Accounting Standard (AS) 23 ‘Accounting for Investments in Associates in Consolidated Financial Statements’ issued by the Institute of Chartered Accountants of India. As on the reporting date the company does not have any associate company.

e) The financial statements of the subsidiaries used in the consolidation are drawn upto the same reporting date as of the Company i.e., for the year ended March 31, 2008

8) The status of utilization of IPO proceeds up to 31.03.2008 is as under:

(Rs. In Lakhs)

Sr. Proposed utilization Estimated Expenditure

1 Capital expenditure on different projects 2,230.00 1,118.44

2 Working Capital Requirement 560.00 560.00

3 Public Issue Expenses 330.00 437.09

Total 3,120.00 2,115.53

The unutilized amount of IPO proceeds has been kept in Bank Deposits & Mutual Funds

100


9) The company had written off Share Issue Expenses of Rs. 4,37,08,856/- against Share Premium Account as per the Provisions of Section 78 of The Companies Act, 1956.


2007-08 2006-07

(a) Net Profit as per Profit & Loss Account (Rs. In Lakhs) 246.69 233.85

(b) Weighted average number of Equity Shares used as a denominator for calculating EPS

14,000,000 9,000,000

(c) Basic earnings per share of face value of Rs.10/- each 1.76 2.60

11) Previous Year figures are regrouped or rearranged wherever necessary to correspond with the current year figures

12) During the year the company and Mr. Kumar Nair, Promoter of the company had entered into a share purchase agreement with the Promoters of “Vertex Securities Ltd” (VSL), a listed share broking company with its Registered office at Kochi, Kerala, for acquisition of 28,50,343 Equity Shares comprising 55.05% (includes acquisition of 200000 shares comprising 3.86% by Mr. Kumar Nair) of the paid up capital of the Company at a price of Rs.25/- per share on 2nd November, 2007. The Company had to seek approvals from Securities and Exchange Board of India (SEBI) as per SEBI (substantial acquisition of shares and takeover) Regulation 1997 and Stock Exchanges under their guidlines. All the required approvals from SEBI and the Stock Exchange have been received and the open offer to the Public Shareholders as per SEBI guidlines was opened on June 18, 2008 and the process is expected to be completed in July 2008. On completion of the acquisition formalities, VSL would become a subsidiary company of Transwarranty Finance Limited.

13) The Company has Deferred the expenditure incurred for Advertisement and Other expnditures of Rs. 15,71,480/- for acquisition of Equity Shares of Vertex Securities Ltd. (P.Y. Rs. Nil)

14) (a) Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business.

(b) Debit and Credit balances are subject to confirmation of parties

15) A) MANAGING DIRECTOR’S REMUNERATION UNDER SECTION 198 OF THE COMPANIES ACT, 1956.

31.03.2008(Rs.)

31.03.2007(Rs.)

Salary 1,016,400 732,000

Contribution to provident fund 43,200 72,000

Other Allowances 140,500 25,000

1,200,100 829,000

101







B) Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956, and calculation of commission to Non Executive Directors

S. No.

Particulars 2007-08 2006-07

Amount (Rs) Amount (Rs) Amount (Rs) Amount (Rs)

Net Profit for the year Before Tax 36,214,242 7,850,311 Add:-

1 Depreciation provided in the Accounts 787,430 590,048 2 Remuneration to Managing Director (Section 198) 1,200,100 829,000 3 Directors Fees (Section 198) 100,000 4 Commission to Non Executive Directors (2006-07) 385,000 — 5 Commission to Non Executive Directors (2007-08) 388,000 — 6 Directors Sitting Fees (Section 309 (2) ) 526,000 60,000 7 Loss on Sale of Fixed Assets 43,153 —

3,329,683 1,579,048 39,543,925 39,429,359

Less:-1 Depreciation Under Section 350 of the Act 639,223 590,048 2 Profit on Sale of Investments ( Section 349 (3) © ) 35,420 114,192

674,643 704,240 Net Profit for Section 198 of the Act 38,869,282 38,725,119 Maximum remuneration payable to Non Executive 388,693 387,251 Directors @1%Commission Expense in Profit & Loss Account in 388,000 385,000 respect of Non Executive Directors

Note:- During the year the company has accounted commission of Rs. 7,73,000/- to non executive Directors for the year 2006-07 and 2007-08 for which approval was obtained from the share holders in the Annual General Meeting held on 1st August, 2007.

16) Open interest in Equity Index / Stock Futures as at the Balance Sheet date

S. No.

Name of the Future Series of Future No. Of. Contracts Number of Units involved

1 BHEL 24-Apr-08 5 375

2 Essar Oil 24-Apr-08 3 4,236

3 HDFC 24-Apr-08 1 75

4 Reliance 24-Apr-08 20 1,500

5 Reliance Petroleum 24-Apr-08 8 13,400

6 TCS 24-Apr-08 9 2,250

102


For and on behalf of Board of Directors

Suresh N. Talwar Kumar Nair Raghu R. Palat Chairman Managing Director Director

Mumbai U. Ramachandran G.K. Prem Kumar June 26, 2008 Chief Financial Officer Company Secretary

S. No

Name of the subsidiary Company Transwarranty Capital-Pvt. Ltd

Transwarranty Forex & - Commodities Pvt

Ltd

Transwarranty Credit -Care Pvt Ltd

1 Financial Year of the subsidiary ended on 31/03/2008 31/03/2008 31/03/2008

2 Date on which they become subsidiary 31/03/2006 31/03/2006 31/03/2006

3 Holding Company’s Interest

a) Number of Shares Fully paid 52,00,000 23,85,540 50,00,000

b) % of Shares held by Transwarranty Finance Ltd and its subsidiaries

54.90% 55.32% 99.80%

4 Net aggregate Profit /(Loss) of the Subsidiary Companies so far as they concern members of Transwarranty Finance Ltd.

i) For the Financial Year of the subsidiary

a) Dealt with in the accounts of the Holding Company

4.98 1.09 0.84

b) Not Dealt with in the accounts of the Holding Company

4.10 0.87 0.01

ii) for the previous Financial Years of the Subsidiary Company since it become the Holding Company’s Subsidiary

a) Dealt with in the accounts of the Holding Company

(0.61) (1.45) 2.63

b) Not Dealt with in the accounts of the Holding Company

(0.50) (0.74) 0.03

STaTEMEnT PuRSuanT TO SECTIOn 212 OF THE COMPanIES aCT, 1956, RElaTInG TO SuBSIDIaRy COMPanIES

Note:-

1) 24,37,500 Equity Shares of Rs.10 each fully paid up in Transwarranty Creditcare Pvt. Ltd. are held by Transwarranty Capital Pvt. Ltd., another Subsidiary company

2) 2,01,960 Equity Shares of Rs.10 each fully paid up in Transwarranty Forex & Commodities Pvt. Ltd. are held by Transwarranty Capital Pvt. Ltd., another Subsidiary company.

103


Transwarranty Finance LimitedRegistered Office: 403, Regent Chambers, Nariman Point, Mumbai – 400 021.

aTTEnDanCE SlIPRegd. Folio No./Client ID ………………………….……………………

I hereby record my presence at the FORTEENTH ANNUAL GENERAL MEETING of the Company at M C Ghia Hall, Bhogilal Hargovindas Building, 2nd Floor, 18/20, Kaikhushru Dubash Marg, Mumbai – 400 001, at 11.00 a.m. on Thursday, 7th August, 2008.

______________________________________________________________________________ ______________________________________________________________________________ Name of the Shareholder/Proxy/Authorised Signature of the Shareholder/Proxy/ Representative of Body Corporate Authorised Representative of (in BLOCK letters) Body Corporate

Note: Please fill in this attendance slip and hand it over at the ENTRANCE OF THE MEETING HALL.

PLEASE BRING YOUR COPY OF THE ANNUAL REPORT TO THE MEETING.

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Transwarranty Finance LimitedRegistered Office: 403, Regent Chambers, Nariman Point, Mumbai – 400 021.

PROXy FORM

I/We _________________________________________________________________________________________________________________ of ____________________________________________________________________________________________________

____________________________________________________________________________________________________ being a member/members of the above-named Company hereby appoint

__________________________________________________________________________________________________________________________________ of _____________________________________________________________________________________________

________________________________________________________________________________________________________ or failing him ___________________________________________________________________________________________________

of _________________________________________________________________________________ as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held at M C Ghia Hall, Bhogilal Hargovindas Building, 2nd Floor, 18/20, Kaikhushru Dubash Marg, Mumbai – 400 001, at 11.00 a.m. on Thursday, 7th August, 2008. and at any adjournment thereof.

Signed this _________________________________ day of ___________________________ 2008 Affix Re.1 Revenue Stamp

Shareholder

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